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EXHIBIT 4(w)
CORRECTIONS CORPORATION OF AMERICA
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NOTE PURCHASE AGREEMENT
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7.5% Convertible, Subordinated Notes
due February 28, 2002
($20,000,000)
Dated as of April 5, 1996
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TABLE OF CONTENTS
PAGE
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1. Authorization of Issue of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Sale and Purchase of the Notes; Closing Date; Conditions for Closing . . . . . . . . . . . . . . . . . . . . 1
2.1 Sale and Purchase of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Conditions for Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Definitions; Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Changes in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations and Warranties of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Actions Pending; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Title to Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Governmental Consents, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Holding Corporation Act and Investment Corporation Act Status . . . . . . . . . . . . . . . . . . . 13
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.11 Conflicting Agreements and Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.12 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.13 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.14 Status of Conversion Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.15 Registration Under Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.16 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.17 Possession of Franchises, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.18 Environmental and Other Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.19 Offering of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.20 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.21 Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.22 Regulations G, T, U, and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5. Representations and Warranties of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Acquisition for Investment; Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.5 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Use of Proceeds; Regulations G, T, U, and X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Consolidated Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Consolidated Senior Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Performance of Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Notice to Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Waiver of Stay, Extension, or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Amendments or Waivers of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Limitation on Issuance of Other Subordinated Indebtedness Senior to the Notes . . . . . . . . . . . 22
6.15 Limitation on Subsidiary Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Events Of Default; Remedies Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Acceleration of Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8. Agreements of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Transfer of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 No General Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 No Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 Transfer Restrictions; Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.5 Restrictions on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.6 Further Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. Nondisclosure of Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Survival of Covenants, Representations, and Warranties . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.7 Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.8 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.10 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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10.12 Execution in Counterparts; Telecopy Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.14 Direct Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
LIST OF EXHIBITS
Exhibit L - 1 Legal Opinion
Exhibit N - 1 Form of Subordinated Note
Exhibit R - 1 Registration Rights Agreement
LIST OF SCHEDULES
Schedule 4.3 Subsidiaries
Schedule 4.6 Pending Actions
Schedule 4.11 Conflicts
Schedule 4.12 Options/Warrants
Schedule 10.14 Purchaser's Schedule
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This NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of
April 5, 1996, between SODEXHO S.A. a French corporation ("Purchaser"), and
CORRECTIONS CORPORATION OF AMERICA, a Delaware corporation (the "Corporation").
WHEREAS, the Corporation has duly authorized the issuance of
convertible, subordinated notes in the aggregate principal amount of
$20,000,000 that are to be convertible into shares of the Corporation's common
stock;
WHEREAS, Purchaser wishes to purchase the convertible,
subordinated notes from the Corporation, and the Corporation wishes to sell
such convertible, subordinated notes to Purchaser; and
WHEREAS, Purchaser and the Corporation are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein set forth, the parties hereto agree as follows:
1. AUTHORIZATION OF ISSUE OF THE NOTES. The Corporation has duly
authorized the issuance of convertible, subordinated notes (the "Notes") in the
aggregate principal amount of $20,000,000, to be dated the date of issuance
thereof, to bear interest on the unpaid balance thereof from the date thereof
quarterly at the Coupon Rate and, upon the occurrence of a Triggering Event and
until the date on which such Triggering Event is cured or waived or until the
date that is ninety (90) days from the initial occurrence of Triggering Event,
whichever is later, at the Triggering Event Rate, until the principal thereof
shall become due and payable. The indebtedness evidenced by the Notes shall be
convertible into shares of the Corporation's common stock, $1.00 par value,
upon such terms and at a conversion rate as set forth in the Notes. The Notes
shall be substantially in the form attached hereto as Exhibit N-1 and shall be
issued to Purchaser on the Closing Date.
2. SALE AND PURCHASE OF THE NOTES; CLOSING DATE; CONDITIONS FOR
CLOSING.
2.1 Sale and Purchase of the Notes. Subject to the terms
and conditions of this Agreement, Purchaser agrees to purchase, and the
Corporation agrees to sell and issue to Purchaser, on the Closing Date, the
Notes for an aggregate purchase price of Twenty Million Dollars ($20,000,000).
2.2 Closing Date. The closing of the sale and purchase
of the Notes shall take place at the offices of Ropes & Gray, New York, New
York, at 10:00 a.m., local time, on April 5, 1996 or at such other time, date,
or place as the Corporation and Purchaser shall mutually agree (which time,
date, and place are referred to in this Agreement as the "Closing Date").
2.3 Conditions for Closing. Purchaser's obligation to
purchase the Notes on the Closing Date shall be subject to the performance by
the Corporation of its agreements hereunder that
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by the terms hereof are to be performed at or prior to the time of delivery of
the Notes and to the following further conditions precedent:
(i) Closing Date. The Closing Date shall
occur on or before April 5, 1996;
(ii) Closing Certificate. Purchaser shall have
received a certificate dated the Closing Date, signed by the President
or a Vice President of the Corporation, to the effect that: (i) the
representations and warranties of the Corporation set forth in
Sections 4.1 through 4.22 are true and
correct in all material respects on and with respect to the Closing
Date; (ii) the Corporation has performed all of its obligations
hereunder that are to be performed on or prior to the Closing Date;
and (iii) no Unmatured Event of Default or Event of Default has
occurred and is continuing;
(iii) Legality. The Notes shall qualify as a
legal investment for Purchaser under the laws and regulations of each
jurisdiction to which Purchaser is subject (without reference to any
so-called "basket" provision which permits the making of an investment
without restrictions to the character of the particular investment
being made) and the purchase of and payment for the Notes shall not be
prohibited by any applicable law or governmental regulation.
(iv) Satisfactory Proceedings. All corporate
proceedings taken in connection with the transactions contemplated by
this Agreement, and all documents necessary to the consummation
thereof, shall be satisfactory in form and substance to Purchaser and
special counsel to Purchaser, and Purchaser shall have received a copy
(executed or certified as may be appropriate) of all documents or
corporate proceedings taken in connection with the consummation of
said transactions, including the following:
a. Certified copies of the
Certificate of Incorporation and By-laws of the Corporation;
b. Certified copies of resolutions
of the Board of Directors of the Corporation authorizing the
execution, delivery, and performance of the Transaction
Documents, and any other documents provided for in this
Agreement; and
c. A certificate of the Secretary of
the Corporation certifying the names of the officer or
officers of the Corporation authorized to sign the Transaction
Documents and any other documents provided for in this
Agreement, together with a sample of the true signature of
each such officer;
(v) Legal Opinion. Purchaser shall have
received from Stokes & Bartholomew, counsel to the Corporation, an
opinion letter dated the Closing Date, in form
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and substance satisfactory to Purchaser and its counsel, and covering
the matters set forth in Exhibit L-1 hereto;
(vi) Issuance of the Notes. The Corporation
shall have executed and delivered the Notes to Purchaser or its
nominee;
(vii) Registration Rights Agreement. The
Corporation and Purchaser shall have entered into a registration
rights agreement in the form of Exhibit R-1 hereto (the "Registration
Rights Agreement");
(viii) Arrangement Fee. The Corporation shall
pay to Purchaser an arrangement fee of $300,000 by wire transfer of
immediately available funds;
(ix) No Material Adverse Change. No material
adverse change in the business, condition, or operations (financial or
otherwise) of the Corporation and its Subsidiaries taken as a whole
from that set forth in the balance sheet as of December 31, 1995,
included in the SEC Reports, other than changes disclosed to Purchaser
in writing prior to the execution and delivery by Purchaser of this
Agreement, shall have occurred;
(x) Approvals and Consents. The Corporation
shall have duly received all authorizations, consents, approvals,
licenses, franchises, permits, and certificates by or of all federal,
state, and local governmental authorities necessary for the issuance
of the Notes;
(xi) Payment of Legal Fees. The Corporation
shall have reimbursed Purchaser in full for the fees and expenses of
its counsel, Ropes & Gray, incurred in connection with the
preparation, negotiation, and execution of the Transaction Documents,
and any other documents executed in connection herewith;
(xii) Representations and Warranties. The
representations and warranties of the Corporation contained in this
Agreement shall be true and correct in all respects on and as of the
Closing Date, as though made on and as of such date (except to the
extent that such representations and warranties relate solely to an
earlier date);
(xiii) Events of Default. No Unmatured Event of
Default or Event of Default shall have occurred and be continuing on
the Closing Date, nor shall either result from the purchase and sale
of the Notes; and
2.4 Waiver of Conditions. If, on the Closing Date, the
Corporation fails to deliver the Notes to Purchaser or if any of the other
conditions specified in Section 2.3 have not been satisfied, Purchaser shall be
relieved of all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in Section 2.3 have not been satisfied,
Purchaser may waive compliance by the Corporation with any such condition to
such extent as it may in its sole discretion determine. Nothing in this
Section 2.4 shall operate to relieve the Corporation of any of its
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obligations hereunder or to waive any of Purchaser's rights against the
Corporation occasioned by any such breach.
3. DEFINITIONS; CONSTRUCTION.
3.1 Definitions. For purposes of this Agreement,
the following terms shall have the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement), it being understood
that any limited partner of a partnership shall not be an Affiliate of such
partnership solely by virtue of its status as such a limited partner.
"Agreement" shall have the meaning ascribed thereto in the preamble.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday, or Friday that is not a day on which banking institutions in
Nashville, Tennessee are authorized or obligated by law or executive order to
close.
"Capital Lease" means as to any Person any lease or rental of
real or personal property that, under generally accepted accounting principles,
is or will be required to be capitalized on the balance sheet of such Person.
"Capital Lease Obligation" means any rental obligation in
respect of a Capital Lease taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with generally accepted
accounting principles.
"Closing Date" shall have the meaning ascribed thereto in
Section 2.2 hereof.
"Code" means the Internal Revenue Code of 1986, or any
successor statute thereto, as the same may be amended from time to time.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the common stock of the Corporation, par
value $l.00 per share.
"Concept" means Concept Incorporated, a Delaware corporation.
"Concept Acquisition" means the acquisition by the Corporation
of Concept pursuant to the terms and conditions of the Concept Share Exchange
Agreement.
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"Concept Acquired Indebtedness" means Funded Debt of
Concept existing immediately prior to the consummation of the Concept
Acquisition; provided, however, that the foregoing shall not include the United
Concept Partnership Funded Debt.
"Concept Share Exchange Agreement" means a share exchange
agreement, containing such terms and conditions reasonably acceptable to
Purchaser, involving the exchange of shares between the Corporation and the
stockholders of Concept.
"Confidential Information" shall have the meaning ascribed
thereto in Section 9.1 hereof.
"Consolidated Fixed Charge Coverage" means at the end of any
fiscal quarter the quotient of (a) twice the Consolidated Operating Cash Flow
for such fiscal quarter and the immediately preceding fiscal quarter, divided
by (b) Consolidated Fixed Charges for the next succeeding four fiscal quarters.
"Consolidated Fixed Charges" means, for any period, the sum of
Consolidated Rentals and Consolidated Interest Expense for such period. In the
event that Consolidated Fixed Charges are to be determined for any future
period or periods and any component of Consolidated Rentals or Consolidated
Interest Expense may fluctuate or is determined on the basis of a rate or
criterion that may fluctuate during such period, Consolidated Rentals or
Consolidated Interest Expense, as the case may be, shall be calculated assuming
that such amount, rate, or criterion in effect on the date such calculation is
made shall be in effect throughout such period.
"Consolidated Interest Expense" means, for any period, total
interest, whether paid or accrued (including that attributable to Capital
Leases), of the Corporation and the Restricted Subsidiaries on a consolidated
basis, including all amounts payable on the First Mortgage Notes and all
commissions, discounts, and other fees and charges owed with respect to letters
of credit and banker's acceptance financing and net costs under interest rate
exchange or cap agreements providing interest rate protection, all as
determined in conformity with generally accepted accounting principles.
"Consolidated Net Income" means, for any period, the net
earnings (or losses) of the Corporation and the Restricted Subsidiaries, on a
consolidated basis, for such period taken as a single accounting period
determined in conformity with generally accepted accounting principles
consistently applied, but excluding:
a. any gain that under generally accepted accounting
principles consistently applied would be properly classified
as an extraordinary gain;
b. any gain arising from a sale of capital assets that
is not made in the ordinary course of business of the
Corporation or its Restricted Subsidiaries;
c. any gain arising from any write-up of assets;
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d. the proceeds of any life insurance policy;
e. earnings of any Person substantially all of the
assets of that have been acquired in any manner (whether
through merger or otherwise) to the extent that such earnings
were realized prior to the date of such acquisition; and
f. earnings of any Person to which substantially all the
assets of the Corporation shall have been sold or transferred,
into which the Corporation shall have been merged, or with
which the Corporation shall have been consolidated, to the
extent that such earnings were realized prior to the date of
such transfer, merger, or consolidation.
All losses (including any loss that, under generally accepted accounting
principles consistently applied, would be properly classified as an
extraordinary loss) shall be included in determining such net earnings (or
losses).
"Consolidated Net Worth" means, as of the time of any
determination thereof, the excess of (a) the sum of (i) the par value (or value
stated on the books of the Corporation) of the capital stock of all classes of
the Corporation, plus (or minus in the case of surplus deficit) (ii) the amount
of consolidated surplus, whether capital or earned, of the Corporation and the
Restricted Subsidiaries, plus (iii) the face amount of the Subordinated Funded
Debt, over (b) the amount of all treasury stock; all determined on a
consolidated basis for the Corporation and the Restricted Subsidiaries in
accordance with generally accepted accounting principles consistent with those
followed in the preparation of the financial statements referred to in Section
4.5, including the making of appropriate deductions for minority interests, if
any, in the Restricted Subsidiaries.
"Consolidated Operating Cash Flow" means for any period,
without duplication, (a) Consolidated Net Income plus (b) to the extent
deducted in computing Consolidated Net Income, depreciation and amortization
and other similar non-cash charges, accrued income tax expense, and interest
expense of the Corporation and the Restricted Subsidiaries for such period.
"Consolidated Rentals" means, for any period, all amounts
payable by the Corporation and any Restricted Subsidiary as lessee or sublessee
relating to Operating Leases.
"Consolidated Senior Funded Debt" means all Funded Debt other
than Subordinated Funded Debt.
"Consolidated Total Capitalization" means, as of the time of
any determination thereof, the sum of Consolidated Senior Funded Debt and
Consolidated Net Worth.
"Conversion Shares" means the shares of Common Stock issuable
upon conversion of the indebtedness evidenced by the Notes.
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"Convertible Notes" means the Corporation's (a) $7,000,000
aggregate principal amount 8.5% Convertible Subordinated Notes due November 7,
1999, (b) $7,500,000 aggregate principal amount 8.5% Convertible, Extended,
Subordinated Notes due on September 30, 1998 or, if extended, on various dates,
the latest of which is September 30, 2000, (c) $20,000,000 aggregate principal
amount 7.5% Convertible Subordinated Notes due February 28, 2002, (d) option to
purchase the Floating Rate Notes, and (e) the Floating Rate Notes when issued.
"Corporation" shall have the meaning ascribed thereto in the
preamble to this Agreement and shall include the Corporation's permitted
successors and assigns.
"Coupon Rate" means seven and one-half percent (7.5%) per
annum.
"Eloy Facility" means the Bureau of Prisons facility that is
located in Eloy, Arizona and owned by United Concept Partnership.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"Event of Default" shall have the meaning set forth in Section
7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include reference
to the comparable section, if any, of any successor federal statute.
"Federal Government Contract" means a contract between the
Corporation and the federal government of the United States of America or any
subdivision or agency thereof.
"Floating Rate Notes" shall have the meaning set forth in the
Sodexho Agreement.
"Foreign Government Contract" means a contract between the
Corporation and any foreign (other nation) government or any subdivision or
agency thereof.
"First Mortgage Note Purchase Agreement" means the Note
Purchase Agreement dated as of December 6, 1990, as amended, between the
Corporation and the purchasers of the First Mortgage Notes listed therein.
"First Mortgage Notes" means the Corporation's $20,000,000
aggregate principal amount of 11.08% first mortgage notes due November 30, 2000
issued pursuant to the First Mortgage Note Purchase Agreement.
"Funded Debt" means and includes without duplication (a) any
obligation payable more than one year from the date of the creation thereof
(including the current portion of Funded Debt), that under generally accepted
accounting principles is shown on the balance sheet as a liability
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(including obligations under Capital Leases and excluding reserves for deferred
income taxes and other reserves to the extent that such reserves do not
constitute an obligation), (b) guarantees, endorsements (other than
endorsements of negotiable instruments for collection in the ordinary course of
business), and other contingent liabilities (whether direct or indirect) in
connection with the obligations, stock, or dividends of any Person, including
obligations under contracts to supply funds to or in any other manner invest in
any Person, (c) obligations under any contract to purchase, sell, or lease (as
lessee or lessor) property or to purchase or sell services, primarily for the
purpose of enabling a Person to make payment of obligations or to assure the
holder of such obligations against loss including obligations under any
contract for the purchase of materials, supplies, or other property or services
if such contract (or any related document) requires that payment for such
materials, supplies, or other property or services shall be made regardless of
whether delivery of such materials, supplies, or other property or services is
ever made or tendered, (d) obligations under any contract to pay or purchase
obligations of a Person, or to advance or supply funds for the payment or
purchase of such obligations, and (e) any agreement to assure a creditor of a
Person against loss. For all purposes of this Agreement (other than for
purposes of calculating United Concept Partnership Funded Debt), all United
Concept Partnership Funded Debt shall be deemed to constitute "Funded Debt."
"Government Contract" means any Federal Government Contract,
Foreign Government Contract, or any State Government Contract.
"indemnified party" shall have the meaning ascribed thereto in
Section 10.1 hereof.
"indemnifying party" shall have the meaning ascribed thereto
in Section 10.1 hereof.
"Margin Stock" shall have the meaning given such term in
Regulation G (12 CFR part 207) of the Board of Governors of the Federal Reserve
System.
"Notes" shall have the meaning ascribed thereto in Section 1
hereof.
"Operating Lease" means any lease of real, personal, or mixed
property that is not a Capital Lease.
"Permitted Businesses" means the design, construction,
ownership, start up, management, or operation of detention and correctional
facilities, and the operation of services involving the transportation and
extradition of prisoners, together with associated consulting and educational
services.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government, or department or
agency of a government.
"Purchaser" shall mean Sodexho S.A. and shall include
Sodexho's permitted successors and assigns.
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"Registration Rights Agreement" shall have the meaning
ascribed thereto in Section 2.3(vii) hereof.
"Representative" shall have the meaning ascribed thereto in
Section 7.1 hereof.
"Restricted Subsidiary" means a Subsidiary of the Corporation
that is (a) organized under the laws of any state of the United States of
America and at least 80% of the total combined voting power of all classes of
Voting Stock shall at the time as of which any determination is being made, be
owned by the Corporation either directly or through any Restricted Subsidiary,
(b) engaged in a Permitted Business, and (c) whose assets and operations are
located within the United States of America.
"Security" or "Securities" means the Notes or the Conversion
Shares.
"SEC Reports" shall have the meaning ascribed thereto in
Section 4.4 hereof.
"Securities Act" means the Securities Act of 1933.
"Senior Indebtedness" shall have the meaning ascribed to such
term in the Notes.
"Sodexho Agreement" means that certain Securities Purchase
Agreement, dated as of June 23, 1994, between Sodexho S.A., a French
corporation, or its designee and the Corporation, as amended by that certain
Amendment No. 1 to Securities Purchase Agreement, dated as of July 11, 1995.
"State Government Contract" means a contract between the
Corporation or any of its Subsidiaries and the government of any state, county,
or municipality or any political subdivision or agency thereof.
"Subordinated Funded Debt" means the indebtedness of the
Corporation evidenced by the Convertible Notes and the Notes.
"Subsidiary" means any corporation, partnership, or other
entity of which a majority of the total combined voting power of all classes of
Voting Stock at the time as of which any determination is being made, is owned
by a Person either directly, through one or more Subsidiaries, or both.
"Transaction Documents" means this Agreement, the Notes, and
the Registration Rights Agreement.
"Transfer" shall have the meaning ascribed thereto in Section
8.4 hereof.
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"Triggering Event" means the occurrence of any Unmatured Event
of Default of Event of Default described in clauses (i), (ii), and (iv) through
(x), inclusive, of Section 7.1. For purposes of determining the period during
which the Triggering Event Rate shall be in effect, a Triggering Event shall
not be deemed to have occurred until the date on which Purchaser shall have
given notice of the occurrence thereof to the Corporation.
"Triggering Event Rate" means nine and one-half percent (9.5%)
per annum.
"UCI" means United Concept, Inc., a Delaware corporation, one
hundred percent (100%) of the issued and outstanding common stock of which is
owned by Concept.
"United Concept Partnership" means United Concept Limited
Partnership, a Delaware limited partnership of which UCI is the managing
general partner.
"United Concept Partnership Funded Debt" means (a) the
approximately $20,000,000 of indebtedness of United Concept Partnership that is
secured by a first mortgage lien upon the Eloy Facility, and (b) any and all
other indebtedness of United Concept Partnership that constitutes Funded Debt
(without giving effect to the last sentence of such definition).
"Unmatured Event of Default" shall mean any event or
condition, the occurrence of which would, with the lapse of time or the giving
of notice, or both, constitute an Event of Default.
"Voting Stock" means, when used with respect to any Person,
any shares of stock or other ownership interests of such Person having general
voting power under ordinary circumstances to elect a majority of the board of
directors of such Person (irrespective of whether at the time stock or
ownership interests of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
3.2 Construction. Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, the part includes the whole,
the terms "include" and "including" are not limiting, and the term "or" has,
except where otherwise indicated, the inclusive meaning represented by the
phrase "and/or". The words "hereof," "herein," "hereby," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Section, subsection, clause,
exhibit, and schedule references are to this Agreement unless otherwise
specified. Any reference herein to the Transaction Documents includes any and
all alterations, amendments, changes, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable.
3.3 Changes in Accounting Principles. If any changes in
accounting principles from those in effect at the time of preparation of the
financial statements referred to in Section 4.5 are hereafter occasioned by the
promulgation of rules, regulations, pronouncements, and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or organizations with
similar functions) result in a change in the
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method of calculation of financial covenants, standards, or terms found in this
Agreement or there is any change in the Corporation's fiscal quarters or fiscal
year, the parties hereto agree to enter into negotiations to amend this
Agreement so as to equitably reflect such changes with the desired result that
the criteria for evaluating the financial condition of the Corporation shall be
the same after such changes as if such changes had not been made.
4. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The
Corporation represents and warrants to Purchaser, as of the date hereof and as
of the Closing Date, that:
4.1 Organization and Qualification. Each of
the Corporation and its Subsidiaries is a corporation duly organized
and existing in good standing under the laws of the jurisdiction in
which it is incorporated and has the power to own its respective
property and to carry on its respective business as now being
conducted. Each of the Corporation and its Subsidiaries is duly
qualified as a foreign corporation to do business and in good standing
in every jurisdiction in which the nature of the respective business
conducted or property owned by it makes such qualification necessary
and where the failure so to qualify would have a material adverse
effect on the business or financial position of the Corporation and
its Subsidiaries taken as a whole.
4.2 Due Authorization. The execution and
delivery of this Agreement, the Registration Rights Agreement, and the
other Transaction Documents, and the issuance and sale of the Notes
and the Conversion Shares by the Corporation and compliance by the
Corporation with all the provisions of the Transaction Documents and
the Conversion Shares (i) are within the corporate power and authority
of the Corporation; (ii) do not require the approval or consent of any
stockholders of the Corporation; and (iii) have been authorized by all
requisite corporate proceedings on the part of the Corporation. The
Transaction Documents have been duly executed and delivered by the
Corporation and constitute valid and binding agreements of the
Corporation enforceable in accordance with their respective terms,
except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors rights, and (ii) the remedy
of specific performance and injunctive and other form of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. The
Corporation has furnished to Purchaser true and correct copies of the
Corporation's current Certificate of Incorporation and By-laws.
4.3 Subsidiaries. The Subsidiaries of the
Corporation, together with their jurisdiction of incorporation, are
set forth on Schedule 4.3 hereto.
4.4 SEC Reports. The Corporation has filed
all proxy statements, reports, and other documents required to be
filed by it under the Exchange Act and the Corporation has furnished
Purchaser copies of its Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, and all proxy statements and reports under
the Exchange Act filed by the Corporation after such date, each as
filed with the Commission (collectively, the
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"SEC Reports"). Each SEC Report was in substantial compliance with
the requirements of its respective report form and did not, on the
date of filing, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
4.5 Financial Statements. The financial
statements (including any related schedules or notes) included in the
SEC Reports have been prepared in accordance with generally accepted
accounting principles consistently followed (except as indicated in
the notes thereto) throughout the periods involved and fairly present
the consolidated financial condition, results of operations, and
changes in stockholders' equity of the Corporation and its
Subsidiaries as of the dates thereof and for the periods ended on such
dates (in each case subject, as to interim statements, to changes
resulting from year-end adjustments (none of which will be material in
amount or effect)), and the Corporation has no material liabilities,
contingent or otherwise, not reflected in the balance sheet as of
December 31, 1995 included in the SEC Reports or otherwise referred to
in the SEC Reports or otherwise disclosed to Purchaser in writing
prior to the execution by Purchaser of this Agreement, other than any
such liabilities incurred in the ordinary course of business since
December 31, 1995. There has been no material adverse change in the
business, condition, or operations (financial or otherwise) of the
Corporation and its Subsidiaries taken as a whole from that set forth
in the balance sheet as of December 31, 1995 included in the SEC
Reports, other than changes disclosed or referred to in the SEC
Reports, or otherwise disclosed to Purchaser in writing prior to the
execution by Purchaser of this Agreement.
4.6 Actions Pending; Compliance with Law.
Except as disclosed on Schedule 4.6 hereto, there is no action, suit,
criminal investigation, or proceeding pending or, to the knowledge of
the Corporation, threatened by any public official or governmental
authority, against the Corporation or any of its Subsidiaries or any
of their respective properties or assets by or before any court,
arbitrator, or governmental body, department, commission, board,
bureau, agency, or instrumentality, which questions the validity of
the Transaction Documents or the Conversion Shares or any action taken
or to be taken pursuant hereto or thereto, or, except as set forth in
the SEC Reports, that are reasonably likely to result in any material
adverse change in the business or financial condition of the
Corporation, and neither the Corporation nor any of its Subsidiaries
is in default in any material respect with respect to any judgment,
order, writ, injunction, decree, or award, and, except as disclosed in
the SEC Reports, the businesses of the Corporation and its
Subsidiaries are in compliance in all material respects with
applicable federal, state, local, and foreign governmental laws and
regulations and all Government Contracts, all to the extent necessary
to avoid any material adverse effect on the business, properties, or
condition (financial or otherwise) of the Corporation and its
Subsidiaries, taken as a whole.
4.7 Title to Properties; Insurance. The
Corporation and its Subsidiaries have good and valid title to their
respective properties and assets, free of all liens and
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encumbrances other than those referred to in the financial statements
of the Corporation (or the notes thereto) for the quarter ended
December 31, 1995, included in the SEC Reports, except in each case
for such defects in title and such other liens and encumbrances that
are otherwise disclosed or referred to in the SEC Reports or that do
not in the aggregate materially detract from the value to the
Corporation of the properties and assets of the Corporation and its
Subsidiaries taken as a whole. The Corporation and its Subsidiaries
maintain insurance in such amounts (to the extent available in the
public market), including self-insurance, retainage, and deductible
arrangements, and of such a character as the Corporation believes is
reasonable for companies engaged in the same or similar business.
4.8 Governmental Consents, Etc. The
Corporation is not required to obtain any consent, approval, or
authorization of, or to make any declaration or filing with, any
governmental authority as a condition to or in connection with the
valid execution, delivery, and performance of the Transaction
Documents and the valid offer, issue, sale, or delivery of the Notes
or the Conversion Shares, or the performance by the Corporation of its
obligations in respect thereof, except for any filings required to
effect any registration pursuant to the Registration Rights Agreement,
and filings required pursuant to state and federal securities laws
that will be timely made after the Closing Date.
4.9 Holding Corporation Act and Investment
Corporation Act Status. The Corporation is not a "holding company" or
a "public utility company" as such terms are defined in the Public
Utility Holding Corporation Act of 1935. The Corporation is not an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Corporation Act of
1940.
4.10 Taxes. The Corporation and its
Subsidiaries have filed or caused to be filed all income tax returns
that are required to be filed and have paid or caused to be paid all
taxes as shown on said returns and on all assessments received by it
to the extent that such taxes have become due, except taxes the
validity or amount of which is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
have been set aside. The federal income tax returns of the
Corporation and its Subsidiaries have been examined and reported on by
the Internal Revenue Service (or closed by applicable statutes) and
all tax liabilities including additional assessments have been
satisfied for all fiscal years prior to and including the fiscal year
ended December 31, 1991. The Corporation and its Subsidiaries have
paid or caused to be paid, or have established reserves that the
Corporation reasonably believes to be adequate in all material
respects, for all federal income tax liabilities and state income tax
liabilities applicable to the Corporation and its Subsidiaries for all
fiscal years that have not been examined and reported on by the taxing
authorities (or closed by applicable statutes).
4.11 Conflicting Agreements and Charter
Provisions. Neither the Corporation nor its Subsidiaries is a party
to any contract or agreement or subject to any charter or other
corporate restriction that materially and adversely affects its
business,
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property, or assets or financial condition. Except as set forth on
Schedule 4.11 attached hereto, neither the execution and delivery of
the Transaction Documents nor the issuance of the Conversion Shares
nor fulfillment of or compliance with the terms and provisions hereof
or thereof or the prepayment of the Notes as contemplated hereby and
by the Notes, and the conversion of the indebtedness evidenced by the
Notes into the Conversion Shares as contemplated hereby and by the
Notes will conflict with or result in a breach of the terms,
conditions, or provisions of, or give rise to a right of termination
under, or constitute a default under, or result in any violation of,
the Certificate of Incorporation or By-laws of the Corporation or any
mortgage, agreement, instrument, order, judgment, decree, statute,
law, rule, or regulations to which the Corporation or any of its
Subsidiaries or any of their respective properties is subject.
Neither the Corporation nor any of its Subsidiaries is in default
under any outstanding indenture or other debt instrument or with
respect to the payment of the principal of or interest on any
outstanding obligations for borrowed money, or is in default under any
of their respective contracts or agreements, or under any instrument
by which the Corporation or any of its Subsidiaries is bound, in each
case that materially and adversely affects the business, operations,
or financial condition of the Corporation and its Subsidiaries, taken
as a whole.
4.12 Capitalization. The authorized capital
stock of the Corporation consists of (i) 50,000,000 shares of Common
Stock, of which, as of the date hereof, 33,881,485 shares are
outstanding and 8,722 shares are held in its treasury; and (ii)
1,000,000 shares of preferred stock, $1.00 par value, of which, as of
the date hereof, no shares are outstanding; all of such outstanding
shares have been validly issued and are fully paid and nonassessable.
Except as set forth on Schedule 4.12 hereto, no shares of Common Stock
of the Corporation are entitled to preemptive rights. Except for the
options and warrants listed on Schedule 4.12 hereto and except for
the Convertible Notes, there are no outstanding options, warrants,
scrip, rights to subscribe to, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into,
shares of any capital stock of the Corporation, or contracts,
commitments, understandings, or arrangements by which the Corporation
is or may become bound to issue additional shares of its capital
stock. Since September 30, 1995, the Corporation has not changed the
amount of its authorized capital stock or subdivided or otherwise
changed any shares of any class of its capital stock, whether by way
of reclassification, recapitalization, stock split, or otherwise, or
issued or reissued, or agreed to issue or reissue, any of its capital
stock, except as disclosed in this Section 4.12 and has not since such
date declared or paid any dividend in cash or stock or made any other
distribution of assets to its stockholders.
4.13 Disclosure. Neither this Agreement nor
the SEC Reports nor the financial statements included in the SEC
Reports nor any certificate or written disclosure statement referred
to herein and furnished to Purchaser by or on behalf of the
Corporation in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained
herein and therein not misleading. There is no fact peculiar to the
Corporation or
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any of its Subsidiaries that the Corporation has not disclosed to
Purchaser in writing that materially affects adversely or, so far as
the Corporation can now reasonably foresee, will materially affect
adversely the properties, business, or condition (financial or
otherwise) of the Corporation and its Subsidiaries, taken as a whole,
or the ability of the Corporation to perform this Agreement, the
Notes, the Registration Rights Agreement, or its obligations in
respect of the Conversion Shares.
4.14 Status of Conversion Shares. The
Conversion Shares have been duly authorized by all necessary corporate
action on the part of the Corporation (no consent or approval of
stockholders being required by law, the Certificate of Incorporation
or the By-laws of the Corporation, or otherwise), and such shares of
Common Stock have been validly reserved for issuance, and upon
issuance, will be validly issued and outstanding, fully paid, and
nonassessable.
4.15 Registration Under Exchange Act. The
Conversion Shares will not be registered as a class pursuant to
Section 12 of the Exchange Act and such registration is not required
except as otherwise required by the provisions of the Registration
Rights Agreement.
4.16 ERISA. No accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code),
irrespective of whether waived, exists with respect to any Plan (as
defined below) (other than a Multiemployer Plan (as defined below)).
No liability to the Pension Benefit Guaranty Corporation has been
incurred with respect to any Plan (other than a Multiemployer Plan) by
the Corporation or any of its Subsidiaries that is or would be
materially adverse to the Corporation and its Subsidiaries, taken as a
whole. Neither the Corporation nor any of its Subsidiaries has
incurred any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan that is or would be materially adverse to
the Corporation and its Subsidiaries, taken as a whole. The execution
and delivery of this Agreement and the Registration Rights Agreement
and the issuance and sale of the Notes and the conversion of the
indebtedness evidenced by the Notes into the Conversion Shares will
not involve any transaction that is subject to the prohibitions of
Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975 of the Code. The representation by
the Corporation in the immediately preceding sentence is made in
reliance upon and subject to the accuracy of Purchaser's
representation in Section 5.3 as to the source of the funds to be used
to pay the purchase price of the Conversion Shares. As used in this
Section 4.16, the term "Plan" shall mean an "employee pension benefit
plan" (as defined in Section 3(2) of ERISA) that is or has been
established or maintained, or to which contributions are or have been
made, by the Corporation or by any trade or business, irrespective of
whether incorporated, that, together with the Corporation, is under
common control, as described in Section 414(b) or (c) of the Code,
and the term "Multiemployer Plan" shall mean any Plan that is a
"multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA).
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4.17 Possession of Franchises, Licenses, Etc.
The Corporation and its Subsidiaries possess all franchises,
certificates, licenses, permits, and other authorizations from
governmental or political subdivisions or regulatory authorities and
all patents, trademarks, service marks, trade names, copyrights,
licenses, and other rights, free from burdensome restrictions, that
are necessary in any material respect to the Corporation and its
Subsidiaries, taken as a whole for the ownership, maintenance, and
operation of their respective properties and assets, and neither the
Corporation nor any of its Subsidiaries is in violation of any thereof
in any material respect.
4.18 Environmental and Other Regulations. The
Corporation and its Subsidiaries are in compliance in all material
respects with all laws and regulations, including those relating to
environmental control, equal employment opportunity, and employee
safety, in all jurisdictions in which the Corporation and its
Subsidiaries are presently doing business and where the failure to
effect such compliance would have a material adverse effect on the
business, operations, or financial condition of the Corporation and
its Subsidiaries, taken as a whole.
4.19 Offering of Securities. Neither the
Corporation nor any Person acting on its behalf has offered the
Securities or any similar securities of the Corporation for sale to,
solicited any offers to buy the Securities or any similar securities
of the Corporation from, or otherwise approached or negotiated with
respect to the Corporation with any Person other than Purchaser and a
limited number of other "accredited investors" (as defined in Rule
501(a) under the Securities Act). Neither the Corporation nor any
Person acting on its behalf has taken or will take any action
(including any offering of any securities of the Corporation under
circumstances that would require the integration of such offering with
the offering of the Securities under the Securities Act and the rules
and regulations of the Commission thereunder) that might subject the
offering, issuance, or sale of the Securities to the registration
requirements of Section 5 of the Securities Act.
4.20 Brokers or Finders. No agent, broker,
investment banker, or other firm or Person is or will be entitled to
any broker's fee or any other commission or similar fee as a result of
the activities of the Corporation or its Subsidiaries, agents, or
employees undertaken in connection with any of the transactions
contemplated by this Agreement or the Registration Rights Agreement.
4.21 Offering of Notes. Neither the
Corporation nor, to the best knowledge of the Corporation, any person
authorized to act on behalf of the Corporation has taken or will take
any action that would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or violate the
provisions of any securities, "blue sky", or similar law of any
applicable jurisdiction.
4.22 Regulations G, T, U, and X. Neither the
Corporation nor any of its Subsidiaries owns or has any present
intention of acquiring any Margin Stock. Neither the
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Corporation, any of its Subsidiaries, nor any agent acting on its
behalf has taken take any action that might cause this Agreement to
violate Regulations G, T, U, or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Exchange
Act.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Corporation, as of the date hereof and
as of the Closing Date, as follows:
5.1 Due Authorization. Purchaser has all
right, power, and authority to enter into the Transaction Documents to
which it is a party and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Purchaser of the
Transaction Documents to which it is a party and the consummation by
Purchaser of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on behalf of
Purchaser. The Transaction Documents to which Purchaser is a party
have been duly executed and delivered by Purchaser and constitute
valid and binding agreements of Purchaser enforceable in accordance
with their terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights, and
(ii) the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
5.2 Conflicting Agreements and Other Matters.
Neither the execution and delivery of the Transaction Documents to
which Purchaser is a party nor the performance by Purchaser of its
obligations hereunder or thereunder will conflict with, result in a
breach of the terms, conditions, or provisions of, constitute a
default under, result in the creation of any mortgage, security
interest, encumbrance, lien, or charge of any kind upon any of the
properties or assets of Purchaser pursuant to, or require any consent,
approval, or other action by or any notice to or filing with any court
or administrative or governmental body pursuant to the organizational
documents or agreements of Purchaser or any agreement, instrument,
order, judgment, decree, statute, law, rule, or regulation by which
Purchaser is bound, except, possibly, for filings after the Closing
Date, as applicable, under Section 13(d) of the Exchange Act.
5.3 Acquisition for Investment; Source of
Funds. The Purchaser is acquiring the Notes (and its rights with
respect to the Conversion Shares) for its own account for the purpose
of investment and not with a view to or for sale in connection with
any distribution thereof, and the Purchaser has no present intention
or plan to effect any distribution of the Conversion Shares. No
portion of the funds to be used by the Purchaser to purchase the
Notes, as of the Closing Date, are "plan assets," within the meaning
of 29 CFR Section 2510.3-101, of an "employee benefit plan," as
defined in Section 3(3) of ERISA, subject to Part 4 of Title I of
ERISA, or a "plan," as defined in Section 4975(e)(1) of the Code,
subject to Section 4975 of the Code.
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5.4 Brokers or Finders. No agent, broker,
investment banker, or other firm or Person is or will be
entitled to any broker's fee or any other commission or
similar fee as a result of the activities of Purchaser or its
Subsidiaries, agents, or employees undertaken in connection
with any of the transactions contemplated by this Agreement or
the Registration Rights Agreement.
5.5 Accredited Investor. Purchaser is an
"accredited investor" within the meaning of Regulation D under the
Securities Act.
6. COVENANTS.
The Corporation covenants that so long as any amount due or to
become due under the Notes or this Agreement remains unpaid:
6.1 Financial Statements and Other Reports.
(i) it will, as soon as practicable
and in any event within 45 days after the end of each quarterly period
(other than the last quarterly period) in each fiscal year, furnish to
Purchaser statements of consolidated net income and cash flows and a
statement of changes in consolidated stockholders equity of the
Corporation and its Subsidiaries for the period from the beginning of
the then current fiscal year to the end of such quarterly period, and
a consolidated balance sheet of the Corporation and its Subsidiaries
as of the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period or date in the
preceding fiscal year, all in reasonable detail and certified by an
authorized financial officer of the Corporation, subject to changes
resulting from year-end adjustments; provided, however, that delivery
pursuant to clause (iii) below of a copy of the Quarterly Report on
Form 10-Q of the Corporation for such quarterly period filed with the
Commission shall be deemed to satisfy the requirements of this clause
(i);
(ii) it will, as soon as practicable
and in any event within 90 days after the end of each fiscal year,
furnish to Purchaser statements of consolidated net income and cash
flows and a statement of changes in consolidated stockholders' equity
of the Corporation and its Subsidiaries for such year, and a
consolidated balance sheet of the Corporation and its Subsidiaries as
of the end of such year, setting forth in each case in comparative
form the corresponding figures from the preceding fiscal year, all in
reasonable detail and examined and reported on by independent public
accountants of recognized standing selected by the Corporation;
provided, however, that delivery pursuant to clause (iii) below of a
copy of the Annual Report on Form 10-K of the Corporation for such
fiscal year filed with the Commission shall be deemed to satisfy the
requirements of this clause (ii);
(iii) it will, promptly upon transmission
thereof, furnish to Purchaser copies of all financial statements,
proxy statements, notices, and reports as it shall send to its
stockholders and copies of all registration statements (without
exhibits), other than
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registration statements relating to employee benefit or dividend
reinvestment plans, and all regular and periodic reports as it shall
file with the Commission; and
(iv) it will, with reasonable promptness,
furnish to Purchaser such other financial and other data of the
Corporation and its Subsidiaries as Purchaser may request, including
operating financial information for each facility owned or operated by
the Corporation or any of its Subsidiaries.
Together with each delivery of financial statements
required by clauses (i) and (ii) above, the Corporation will deliver
to Purchaser a certificate of an authorized financial officer of the
Corporation regarding compliance by the Corporation with the
covenants set forth in Sections 6.4., 6.5, and 6.6. At such other
time or times that the Corporation delivers a compliance certificate
to any other holder of Funded Debt, the Corporation will deliver such
certificate, and any supporting detail, to Purchaser.
6.2 Inspection of Property. The Corporation
will permit representatives of Purchaser to visit and inspect, at
Purchaser's expense, any of the properties of the Corporation and its
Subsidiaries, to examine the corporate books and make copies or
extracts therefrom and to discuss the affairs, finances, and accounts
of the Corporation and its Subsidiaries with the principal officers of
the Corporation, all at such reasonable times, upon reasonable notice,
and as often as Purchaser may reasonably request; provided, however,
that the foregoing shall be subject to compliance with reasonable
safety requirements and shall not require the Corporation or any of
its Subsidiaries to permit any inspection that, in the reasonable
judgment of the Corporation, would result in the violation of any
statute or regulation with respect to confidentiality or security.
Purchaser agrees that the information received pursuant to this
Section 6.2 or Section 6.1(iv) is subject to Section 9 hereof.
6.3 Use of Proceeds; Regulations G, T, U, and
X. All of the proceeds of the sale of the Notes will be used by the
Corporation for general corporate purposes. None of such proceeds
will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock or for the purpose of reducing or retiring
any indebtedness that was originally incurred to purchase or carry
Margin Stock or for any other purpose that might constitute this
transaction a "purpose credit" within the meaning of Regulations G, T,
U, or X.
6.4 Consolidated Net Worth. The Corporation
will not permit Consolidated Net Worth at any time to be less than the
sum of (a) Ninety-Five Million Dollars ($95,000,000) at December 31,
1995, plus (b) an amount during each fiscal quarter thereafter equal
to the sum of (i) the amount of Consolidated Net Worth required
hereunder for the immediately preceding fiscal quarter, plus (ii) if
positive, fifty percent (50%) of Consolidated Net Income for such
immediately preceding fiscal quarter.
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6.5 Consolidated Fixed Charges.
a. The Corporation shall not permit
Consolidated Fixed Charge Coverage to be less than (i) 2.00 as at the
end of any fiscal quarter occurring in 1996, (ii) 2.25 as at the end
of any fiscal quarter occurring in 1997, and (iii) 2.50 as at the end
of any fiscal quarter occurring thereafter.
b. The Corporation will not, and
will not permit any Restricted Subsidiary to, incur, assume, or suffer
to exist any obligation under Operating Leases or under any
transaction giving rise to Consolidated Interest Expense after the
Closing Date unless, after giving effect on a pro forma basis to such
obligation or transaction, the Corporation will be in compliance with
Section 6.5(a) (calculated as at the end of the most recently
completed fiscal quarter).
6.6 Consolidated Senior Funded Debt. The
Corporation will not permit Consolidated Senior Funded Debt to exceed
eighty percent (80%) of Consolidated Total Capitalization.
6.7 Compliance with Laws. The Corporation at
all times will, and will cause each of its Subsidiaries to, observe
and comply in all material respects with all laws (including
environmental laws applicable to the Corporation and its
Subsidiaries), ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions, and
requirements of all governmental authorities that are now and may at
any time be applicable to the Corporation or its Subsidiaries, a
violation of which could reasonably be expected to have a material
adverse effect on the business, assets, operations, prospects, or
condition (financial or otherwise) of the Corporation and its
Subsidiaries, taken as a whole, except such thereof as shall be
contested in good faith and by appropriate proceedings promptly
instituted and diligently conducted by the Corporation or its
Subsidiaries, as the case may be, so long as adequate reserves or
other appropriate provisions as shall be required in accordance with
generally accepted accounting principles shall have been made
therefor.
6.8 Maintenance of Properties; Insurance. The
Corporation will maintain and will cause its Subsidiaries to maintain
in good repair, working order, and condition (normal wear and tear
excepted) all properties used or useful in the business of the
Corporation and its Subsidiaries and from time to time will make or
cause to be made all appropriate repairs, renewals, and replacements
thereof. The Corporation will maintain and will cause its
Subsidiaries to maintain in full force and effect, with financially
sound and reputable insurers acceptable to Purchaser, insurance
(subject to customary deductibles and retentions) with respect to its
properties and business and the properties and business of its
Subsidiaries against hazards, contingencies, loss, or damage of the
kinds customarily insured against by corporations of established
reputation or similar size engaged in the same or similar business and
similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other
corporations; provided, however, in no event shall
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the coverage and amount of such insurance be less than the coverage
and amount of insurance in force on the Closing Date. Without
limiting the generality of the foregoing, the Corporation will
maintain (i) public liability insurance against claims for personal
injury, death, or property damage occurring upon, in, about, or in
connection with the use of any property owned, occupied, or controlled
by the Corporation or any of its Subsidiaries in an amount per
occurrence of at least $10,000,000, (ii) workers' compensation and
business interruption insurance covering loss of rents and builders'
all risk insurance, and (iii) such other insurance for the Corporation
and its Subsidiaries as may be required by law.
6.9 Performance of Government Contracts. The
Corporation will and will cause each of its Subsidiaries to perform
each and every term and condition of the Government Contracts relating
to the facilities owned or operated by the Corporation or such
Subsidiary and will not, and will not permit any Subsidiary to consent
to any termination, cancellation, or material amendment, modification,
or supplement to any Government Contract relating to the facilities
owned or operated by the Corporation or any of its Subsidiaries which
termination, cancellation, amendment, modification, or supplement
could reasonably be expected to have a material adverse effect on the
business, assets, operations, prospects, or condition (financial or
otherwise) of the Corporation and its Subsidiaries, taken as a whole.
6.10 Notice to Purchaser. When any Unmatured
Event of Default or Event of Default has occurred, the Corporation
agrees to give written notice thereof to Purchaser within three (3)
days of the Corporation's discovery of such event.
6.11 Waiver of Stay, Extension, or Usury Laws.
The Corporation covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of any stay or
extension law or any usury law or other law which would prohibit or
forgive the Corporation from paying all or any portion of the
principal of, or interest, or premium, if any, on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this
Agreement; and (to the extent that it may lawfully do so) the
Corporation hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay, or impede the
execution of any power herein granted to the holders of the Notes, but
will suffer and permit the execution of every such power as though no
such law had been enacted.
6.12 Conduct of Business. The Corporation will
not, and will not permit any of its Subsidiaries to, engage in any
business other than the construction and management of prisons and
other correctional facilities for governmental agencies, the ownership
and operation of a proprietary school, the operation of services
involving the transportation and extradition of prisoners, and other
businesses or activities substantially similar or related thereto.
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6.13 Amendments or Waivers of Certain Documents.
The Corporation will not agree to any material amendment,
modification, supplement to, or waiver of any agreement related to the
Convertible Notes that would increase the interest rates thereof,
shorten the average maturities thereof, or alter financial covenants
contained therein in a manner that could be expected to be materially
adverse to the interests of Purchaser. The Corporation acknowledges
and confirms the registration rights of Purchaser contained in that
certain Registration Rights Agreement dated June 23, 1994 by and
between the Corporation and Purchaser. Promptly after the Closing,
the Corporation will use its best efforts to obtain an amendment to
Section 6(b) of its 1996 Registration Rights Agreement with PMI
Mezzanine Fund, L.P. to add the following sentence to the end of that
paragraph: Notwithstanding the foregoing, the Corporation may include
shares of Registrable Stock pursuant to Section 5 only to the extent
that such shares do not reduce the amount of securities that Sodexho
S.A., or its designee, could include in such Registration pursuant to
its June 23, 1994 Registration Rights Agreement with the Corporation.
6.14 Limitation on Issuance of Other
Subordinated Indebtedness Senior to the Notes. The Corporation will
not create, incur, assume, guarantee, or in any other manner become
liable with respect to any indebtedness that is subordinate in right
of payment to any Senior Indebtedness unless such indebtedness is also
pari passu with, or subordinate pursuant to provisions substantially
similar to those contained in the Notes, in right of payment to the
Notes.
6.15 Limitation on Subsidiary Funded Debt. The
Corporation shall not permit any of its Subsidiaries to incur, create,
assume, or guarantee any Funded Debt (which shall be deemed to include
preferred stock issued by a Subsidiary of the Corporation that is not
held by the Corporation), unless, after giving effect thereto, (a) the
total amount of Funded Debt of the Corporation's Subsidiaries does not
exceed 10% of Consolidated Total Capitalization, and (b) the
Corporation would be entitled to incur at least $1.00 of additional
Consolidated Senior Funded Debt under Section 6.6. The foregoing to
the contrary notwithstanding, Concept shall be entitled to be
obligated with respect to (and there shall be excluded from the above
calculation) the United Concept Partnership Funded Debt and the
Concept Acquired Indebtedness, so long as the aggregate amount of
Funded Debt of the Corporation incurred, assumed, or acquired in
connection with the Concept Acquisition (inclusive of the United
Concept Partnership Funded Debt and the Concept Acquired Indebtedness
does not exceed Forty Million Dollars ($40,000,000).
7. EVENTS OF DEFAULT; REMEDIES THEREFOR.
7.1 Events of Default. Any one or more of the
following shall constitute an "Event of Default":
(i) default in the payment of any interest due
under the Notes when it becomes due and payable, and continuance of
such default for a period of ten (10) days; or
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(ii) default in the payment of the principal of
the Notes when due (whether at scheduled maturity, as a result of a
mandatory prepayment requirement, by acceleration, or otherwise); or
(iii) default under any bond, debenture, note,
or other evidence of indebtedness for money borrowed in excess of
$100,000 by the Corporation or any of its Subsidiaries, whether such
indebtedness now exists or shall hereafter be created, which default
(i) shall consist of a failure to pay such indebtedness at final
maturity and after the expiration of any applicable grace period, or
(ii) shall have resulted in such indebtedness (A) becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without such acceleration having been
rescinded or annulled, or (B) having been discharged within a period
of ten (10) days after there shall have been given, by registered or
certified mail, to the Corporation or such Subsidiary, as applicable,
by any holder of such indebtedness a written notice specifying such
default and requiring the Corporation or such Subsidiary, as
applicable, to cause such indebtedness to be discharged; or
(iv) default shall occur in the observance or
performance of any covenant or agreement or any other provision of
this Agreement or the Notes that is not remedied within twenty (20)
days after receipt by the Corporation of written notice of such
default from Purchaser;
(v) any representation or warranty made by the
Corporation herein, or made by the Corporation in any statement or
certificate furnished by the Corporation in connection with the
consummation of the issuance and delivery of the Notes or thereafter
pursuant to the terms of this Agreement, is untrue in any material
respect as of the date of the issuance or making thereof; or
(vi) a final judgment or judgments entered by a
court of competent jurisdiction for the payment of money aggregating
in excess of $1,000,000 is or are outstanding against the Corporation
or any of its Subsidiaries and any one such judgment in excess of
$1,000,000 has, or such judgments aggregating in excess of $1,000,000
have remained unpaid, unvacated, unbonded, or unstayed by appeal or
otherwise for a period of thirty (30) days from the date of entry; or
(vii) a court or other governmental authority or
agency having jurisdiction in the premises shall enter a decree or
order (a) for the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Corporation or
any Subsidiary of the Corporation or of a material portion of the
assets of either, or for the winding-up or liquidation of its affairs,
and such decree or order shall remain in force, undischarged and
unstayed for a period of more than thirty (30) days, or (b) for the
sequestration or attachment of any material portion of the assets of
the Corporation or any Subsidiary of the Corporation, without its
unconditional return to the possession of the
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Corporation or such Subsidiary, or its unconditional release from such
sequestration or attachment, within thirty (30) days thereafter; or
(viii) the Corporation or any Subsidiary of the
Corporation makes an assignment for the benefit of creditors, or the
Corporation or any Subsidiary of the Corporation applies for or
consents to the appointment of a custodian, liquidator, trustee, or
receiver for the Corporation or such Subsidiary or for a material
portion of the assets of either; or
(ix) the entry of a decree or order by a court
having jurisdiction in the premises adjudging the Corporation or any
of its Subsidiaries a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Corporation under federal
bankruptcy law or any other applicable federal or state law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator, or
other similar official for the Corporation or any of its Subsidiaries
or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of sixty (60) consecutive
days or until an order for relief has been entered; or
(x) the institution by the Corporation or any
of its Subsidiaries of proceedings to be adjudicated a debtor or
insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law or the
consent by it to the filing such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, or similar
official for the Corporation or any of its Subsidiaries or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Corporation or any of its Subsidiaries in
furtherance of any such action.
7.2 Acceleration of Maturities. When any Event of
Default described in clauses (i) through (vi), inclusive, of
Section 7.1 has occurred and is continuing, Purchaser may, by notice
in writing sent to the Corporation, declare the entire principal and
all interest accrued on the Notes to be, and the Notes shall
thereupon become, forthwith due and payable, without any presentment,
demand, protest, or other notice of any kind, all of which are hereby
expressly waived. When any Event of Default described in clauses
(vii) through (x), inclusive, of Section 7.1 has occurred, then the
Notes shall immediately become due and payable without presentment,
demand, protest, or notice of any kind. When any Event of Default
described in clause (iv) of Section 7.1 has occurred and is
continuing as a result of the Corporation's breach of its obligation
to convert the indebtedness evidenced by the Notes into Conversion
Shares in accordance with the terms and conditions of the Notes,
Purchaser shall be entitled to specific performance of such
obligation of the Corporation; it being expressly acknowledged and
agreed by the Corporation that no adequate remedy at law exists for any
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such breach and that Purchaser will be irreparably harmed by any such
breach by the Corporation. Upon the Notes becoming due and payable as
a result of any Event of Default as aforesaid, the Corporation shall
forthwith pay to Purchaser the entire principal and interest accrued
on the Notes. No course of dealing on the part of Purchaser nor any
delay or failure on the part of Purchaser to exercise any right shall
operate as a waiver of such right or otherwise prejudice Purchaser's
rights, powers, and remedies. The Corporation further agrees, to the
extent permitted by law, to pay to Purchaser all costs and expenses
(including attorneys' fees) incurred by it in the collection of the
Notes upon any default hereunder or thereon (including such costs and
expenses incurred in connection with a workout or an insolvency or
bankruptcy proceeding).
8. AGREEMENTS OF PURCHASER. Purchaser agrees with the
Corporation as follows:
8.1 Transfer of the Notes. Purchaser will not attempt to
sell, transfer, convey, exchange, or otherwise dispose of all or any
part of the Notes, except in accordance with applicable law.
8.2 No General Solicitation. Purchaser acknowledges and
agrees that it has not received nor is it aware of any general
solicitation or general advertising of the Notes, including any
advertisement, article, notice, or other communication published in
any newspaper, magazine, or similar media or broadcast over television
or radio, and that it was not invited to attend any seminar or meeting
by means of any such general solicitation or general advertising.
8.3 No Registration. Purchaser understands and agrees
that, neither the Notes nor, except as provided in the Registration
Rights Agreement, any Conversion Shares will be registered under the
Securities Act or any state securities law, that the Notes and
Conversion Shares may be required to be held until they are
subsequently registered under the Securities Act and any applicable
state securities law, or any corresponding provisions of succeeding
laws, unless an exemption from the registration requirements of such
laws is available, and that the Corporation is under no obligation to
register the Notes or, except as provided in the Registration Rights
Agreement, any Conversion Shares, for resale.
8.4 Transfer Restrictions; Legends. Purchaser
understands and agrees that the Notes and, when issued, the Conversion
Shares have not been registered under the Securities Act or the
securities laws of any state and that they may be sold or otherwise
disposed of only in one or more transactions registered under the
Securities Act and, where applicable, such laws unless an exemption
from the registration requirements of the Securities Act and, where
applicable, such laws is available. Purchaser acknowledges that,
except as provided in the Registration Rights Agreement, Purchaser has
no right to require the Corporation to register the Conversion Shares.
Purchaser understands and agrees that each certificate representing
Conversion Shares shall bear the following legends:
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"THE TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED BY AN AGREEMENT
ON FILE AT THE OFFICES OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
ACT OR SUCH LAWS."
Purchaser will not, directly or indirectly, sell, transfer, pledge,
encumber, or otherwise dispose of (collectively, "Transfers") any
Conversion Shares except for (i) Transfers to any Affiliate of
Purchaser, (ii) Transfers to other institutional investors that are
not competitors of the Corporation in blocks of not less than 10,000
shares (or such lesser number as may then be outstanding), (iii)
Transfers pursuant to any bona fide tender or exchange offer to
acquire Voting Stock of the Corporation or pursuant to any merger,
consolidation, or other business combination of the Corporation with
any other Person; or (iv) the redemption of the Conversion Shares.
8.5 Restrictions on Conversion. Purchaser further
understands and agrees that any conversion of the indebtedness
evidenced by the Notes into Conversion Shares must comply with all
applicable securities laws, including the Securities Act and any
applicable state securities laws, as such laws exist on the date
hereof and on such future dates that the indebtedness evidenced by the
Notes, or any portion thereof, may be converted into Conversion
Shares.
8.6 Further Cooperation. Purchaser will do all acts and
things reasonably requested of it by the Corporation in connection
with any attempt by the Corporation to achieve compliance with federal
and state securities laws in connection with the offering and sale of
the Notes or the conversion of all or any portion of the indebtedness
evidenced by the Notes into Conversion Shares.
9. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
9.1 Without the prior written consent of the Corporation,
any information relating to the Corporation provided to Purchaser in
connection with its acquisition of the Notes or the Conversion Shares
that is either confidential, proprietary, or otherwise not generally
available to the public (but excluding information Purchaser has
obtained independently from third-party sources without Purchaser's
knowledge that the source has violated any fiduciary or other duty not
to disclose such information (the "Confidential Information") will be
kept
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confidential by Purchaser and their directors, officers, employees,
agents, auditors, participants, transferees, assignees, and
representatives (collectively, "Representatives"), using the same
standard of care in safeguarding the Confidential Information as
Purchaser employs in protecting its own proprietary information that
Purchaser desires not to disseminate or publish. It is understood (a)
that such Representatives shall be informed by Purchaser of the
confidential nature of the Confidential Information, (b) that such
Representatives shall be bound by the provisions of this Section 9.1
as a condition of receiving the Confidential Information, and (c)
that, in any event, Purchaser shall be responsible for any breach of
Sections 9.1, 9.2, or 9.3 of this Agreement by any of its
Representatives (other than Purchaser's participants, transferees, or
assignees).
9.2 Without the prior consent of the Corporation, other
than as required by applicable law, Purchaser will not, and will
direct its Representatives not to disclose to any Person (other than
its Representatives) either the fact that the Confidential Information
has been made available to Purchaser or that Purchaser has inspected
any portion of the Confidential Information.
9.3 If Purchaser or its Representatives are requested or
required (by oral question, interrogatories, requests for information
or documents, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, Purchaser will, as
soon as practicable, notify the Corporation of such request or
requirement so that the Corporation may seek an appropriate protective
order. If, in the absence of a protective order or the receipt of a
waiver hereunder, Purchaser or its Representatives are, in the opinion
of Purchaser's counsel, compelled to disclose the Confidential
Information or else stand liable for contempt or suffer other censure
or significant penalty, Purchaser, or its Representative, as the case
may be, may disclose only such of the Confidential Information to the
party compelling disclosure as is required by law. Purchaser shall
not be liable for the disclosure of Confidential Information pursuant
to the preceding sentence. Purchaser will exercise all reasonable
efforts to assist the Corporation in obtaining a protective order or
other reliable assurance that confidential treatment will be accorded
the Confidential Information.
10. MISCELLANEOUS.
10.1 Indemnification. Each party (an "indemnifying
party") hereto agrees to indemnify and hold harmless the other parties
(an "indemnified party") against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including reasonable attorneys' fees,
that such indemnified party and each of its officers and directors
shall incur or suffer, that arise, result from, or relate to any
breach of, or failure by such indemnifying party to perform, any of
its representations, warranties, covenants, or agreements set forth in
the Transaction Documents.
10.2 Survival of Covenants, Representations, and
Warranties. All covenants, representations, and warranties contained
herein and in any certificates delivered pursuant hereto in connection
with the transactions occurring on the Closing Date shall survive the
closing and the delivery of the Transaction Documents, regardless of
any investigation made by or on behalf of any party.
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10.3 Successors and Assigns. This Agreement shall be
binding upon the Corporation and its successors and assigns and shall inure to
Purchaser's benefit and to the benefit of its successors and assigns, including
each successive holder or holders of the Notes or any interest therein.
10.4 Notices. Unless otherwise provided in this
Agreement, all notices or demands by any party relating to this Agreement or
any other agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which may be
sent by first-class mail, postage prepaid) shall be personally delivered or
sent by registered or certified mail, postage prepaid, return receipt
requested, or by prepaid telex, telefacsimile, or telegram (with messenger
delivery specified) to the Corporation or to Purchaser, as the case may be, at
the addresses set forth below:
If to Purchaser, to: Sodexho S.A
3 avenue Newton
78180 Montigny-le-Bretonneux
FRANCE
Attention: Jean-Pierre Cuny
With a copy to: ROPES & GRAY
One International Place
Boston, Massachusetts 02110
Attention: Jane D. Goldstein, Esq.
If to the Corporation, to:
CORRECTIONS CORPORATION OF
AMERICA
The CCA Building
102 Woodmont Boulevard
Nashville, Tennessee 37205
Attention: Doctor R. Crants, Jr.
With a copy to: STOKES & BARTHOLOMEW, P.A.
424 Church Street, Suite 2800
Nashville, Tennessee 37219
Attention: Elizabeth Enoch Moore, Esq.
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner
given to the other. The failure of the Corporation or Purchaser to
send a copy of any notice to the individuals who are shown above as
being required to receive such copies shall not invalidate or otherwise
affect the validity of a notice that is otherwise effectively given.
All notices or demands sent in accordance with this Section 10.4 shall
be deemed received on the earlier of the date of actual receipt or
three (3) days after the deposit thereof in the mail or the
transmission thereof by telefacsimile or other similar method as set
forth above.
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10.5 Expenses. In addition to the payments provided for
in Section 2.3(xi), the Corporation agrees to pay Purchaser for
all fees and all out-of-pocket expenses incurred by Purchaser arising
in connection with the Transaction Documents and the transactions
hereby and thereby contemplated, including the conversion of the
indebtedness evidenced by the Notes into Conversion Shares, all stamp
and other taxes payable (other than taxes based on income) with respect
to the issuance of the Conversion Shares, filing fees, reasonable fees
and expenses of counsel, and all such expenses incurred with respect to
the preparation, execution, delivery, or enforcement of any provision
of such agreement or instrument, or any amendment or waivers requested
by the Corporation (irrespective of whether the same become effective)
under or in respect of any such agreement, including costs and expenses
in any bankruptcy proceeding.
10.6 Descriptive Headings. The descriptive headings of
the various Sections or parts of this Agreement are for convenience
only and shall not affect the meaning or construction of any of the
provisions hereof.
10.7 Satisfaction Requirement. If any agreement,
certificate, or other writing, or any action taken or to be taken, is
by the terms of this Agreement required to be satisfactory to
Purchaser, the determination of such satisfaction shall be made by
Purchaser in its sole and exclusive judgment exercised reasonably and
in good faith.
10.8 Remedies. In case any one or more of the covenants
or agreements set forth in the Transaction Documents shall have been
breached by the Corporation or Purchaser, the Corporation or
Purchaser, as applicable, may proceed to protect and enforce its
rights either by suit in equity or by action at law, including an
action for damages as a result of any such breach or an action for
specific performance of any such covenant or agreement contained in
the Transaction Documents.
10.9 Entire Agreement. The Transaction Documents and the
other writings referred to herein or delivered pursuant hereto contain
the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto.
10.10 Amendments. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only
with) the written consent of the Corporation and Purchaser.
10.11 Severability. Should any part of this Agreement, for
any reason, be determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any
remaining portion, which remaining portion shall remain in full force
and effect as if this Agreement had been executed with the invalid or
unenforceable part hereof eliminated, and it is hereby declared the
intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such
part which may, for any reason, be hereafter declared invalid or
unenforceable.
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10.12 Execution in Counterparts; Telecopy Execution. This
Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall
constitute but one and the same Agreement. This Agreement shall
become effective upon the execution of a counterpart hereof by each of
the parties hereto. Delivery of an executed counterpart of the
signature page(s) of this Agreement by telecopier shall be equally
effective as delivery of a manually executed counterpart. Any party
delivering an executed counterpart of the signature page(s) of this
Agreement by telecopier shall thereafter also promptly deliver a
manually executed counterpart, but the failure to deliver such
manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
10.13 Governing Law. The Transaction Documents shall be
governed by, and construed and enforced in accordance with, the laws
of the State of New York. The Corporation and the Purchaser each
hereby irrevocably submit to the jurisdiction of said court and agree
that neither will sue in connection with any matter covered under this
Agreement in any other court. The English language version of all
documents related to the transaction contemplated hereby will govern.
10.14 Direct Payment. Anything in this Agreement or the
Notes to the contrary notwithstanding, the Corporation will punctually
pay when due the principal of the Notes, and any interest thereon,
without any presentment thereof, directly to Purchaser or to the
nominee of Purchaser at the address set forth in Schedule 10.14 or
such other address as Purchaser or Purchaser's nominee may from time
to time designate in writing to the Corporation, or, if a bank account
with a United States bank is designated for Purchaser or Purchaser's
nominee on Schedule 10.14 hereto or in any written notice to the
Corporation from Purchaser or Purchaser's nominee, the Corporation
will make such payments in immediately available funds to such bank
account, marked for attention as indicated. Purchaser agrees that in
the event that it shall sell or transfer any Notes, it will, prior to
the delivery of such Notes, make a notation thereon of all principal,
if any, prepaid on such Notes and will also note thereon the date to
which interest has been paid on such Notes. The Corporation agrees
that transferees of Notes shall be entitled to the benefits of this
Section 10.14 so long as any such transferee has made the same
agreements relating to the transferred Notes as Purchaser has made
in this Section 10.14. The Corporation shall be entitled to presume
conclusively that Purchaser or any subsequent noteholders remain the
holders of the Notes until such Notes shall have been presented to
the Corporation as evidence of the transfer of such Notes.
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The execution hereof by the Corporation and Purchaser
shall constitute a contract between them for the uses and purposes
hereinabove set forth.
CORRECTIONS CORPORATION OF
AMERICA,
a Delaware corporation
By: /s/
-----------------------------
Title:
---------------------------
SODEXHO S.A.
By: /s/
-----------------------------
Title:
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