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EXHIBIT 10.2
BUSINESS DEVELOPMENT AGREEMENT
This BUSINESS DEVELOPMENT AGREEMENT (the "Agreement") is entered into
on this 4th day of May, 1999, by and between PRISON REALTY CORPORATION, a
Maryland corporation (the "Company"), and CORRECTIONAL MANAGEMENT SERVICES
CORPORATION, a Tennessee corporation ("Operating Company").
WITNESSETH:
WHEREAS, the Company, the owner of various correctional and detention
facilities which are leased to certain government entities and to certain
private prison management companies, including Operating Company, desires to
construct additional correctional and detention facilities (the "New
Facilities") for lease to its current, and potentially future, tenants and to
construct additions to certain correctional and detention facilities it
currently owns (the "Additions");
WHEREAS, the Company wishes to engage Operating Company to perform
certain services, on an as-needed basis, designed to assist the Company in
identifying and contracting for new business, specifically including: (i)
marketing and other business development services designed to increase awareness
of the Company and the services it offers to government entities; (ii)
identifying potential facility sites and pursuing all applicable zoning
approvals related thereto; (iii) identifying potential tenants for the Company's
facilities; (iv) negotiating certain agreements related to the acquisition of
new facility management contracts for the Company's tenants; and (v) such other
services as may be requested by the Company from time to time (collectively, the
"Business Development Services"), and to reimburse Operating Company for certain
expenses incurred by Operating Company in providing the Business Development
Services, specifically including expenses related to the retention of lobbying
firms, consulting firms and other third-party entities providing government and
community relations services to Operating Company;
WHEREAS, Operating Company wishes to provide the Business Development
Services to the Company.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements of the parties herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Services; Consideration.
(a) Services. Operating Company agrees to provide the Business
Development Services to the Company, at such times as, and to the
extent that, the Company may request such services. Operating Company
shall make such expenditures, and take such other actions, as the
Company may deem necessary or desirable to carry out the performance of
the Business Development Services.
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(b) Consideration. In consideration for the performance of the
Business Development Services by Operating Company, the Company shall
pay, and Operating Company is entitled to receive, a fee equal to four
and one-half percent (4 1/2%) of the total capital expenditures
(excluding the amount of the tenant incentive fee described in that
certain Tenant Incentive Agreement, dated as of January 1, 1999, by and
between the Company and Operating Company, as amended, the amount of
fees described in that certain Services Agreement, dated as of January
1, 1999, by and between the Company and Operating Company and the
amount of the 4 1/2% fee herein referred to) incurred in connection
with the construction and development of each New Facility, or the
construction and development of each Addition, for which Operating
Company performed Business Development Services for and on behalf of
the Company. The fees payable hereunder shall be payable in cash or by
such other means as approved by Operating Company.
2. Term. This Agreement shall terminate on the fourth (4th) anniversary
of the date of this Agreement, unless extended upon the written agreement of the
parties.
3. Authorization. Each party to this Agreement hereby represents and
warrants that: the execution, delivery and performance of this Agreement are
within the powers of each party and have been duly authorized by each party and
its board of directors; the execution and performance of this Agreement by each
party have been duly authorized by all applicable laws and regulations; and this
Agreement constitutes the valid and enforceable obligation of each party in
accordance with its terms.
4. Amendment. This Agreement may be amended only with the written
consent of both parties hereto.
5. Notices. Any notice required or permitted herein to be given shall
be given in writing and shall be delivered by United States mail, first class
postage prepaid, return receipt requested, as set forth below:
If to the Company:
10 Burton Hills Boulevard, Suite 100
Nashville, TN 37215
Attn: Michael W. Devlin, Chief Operating Officer
If to Operating Company:
10 Burton Hills Boulevard
Nashville, TN 37215
Attn: Darrell K. Massengale, Chief Financial Officer
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6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one agreement.
7. Headings. Section headings are for convenience or reference only and
shall not be used to construe the meaning of any provision in this Agreement.
8. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Tennessee.
9. Severability. Should any part of this Agreement be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
and enforceability of the remaining portion.
10. Successors. This Agreement shall be binding upon and inure to the
benefit of the respective parties and their permitted assigns and successors in
interest.
11. Waivers. No waiver of any breach of any of the terms or conditions
of this Agreement shall be held to be a waiver of any other or subsequent
breach; nor shall any waiver be valid or binding unless the same shall be in
writing and signed by the party alleged to have granted the waiver.
12. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto and supersedes all prior agreements and presentations with
respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PRISON REALTY CORPORATION, a
Maryland corporation
By: /s/ D. Robert Crants, III
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Its: President
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CORRECTIONAL MANAGEMENT
SERVICES CORPORATION, a Tennessee
corporation
By: /s/ Doctor R. Crants
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Its: Chief Executive Officer
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