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EXHIBIT 10.6
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement"), dated as of
___________________, 1997, is by and between CORRECTIONS CORPORATION OF AMERICA
(the "Corporation"), a Delaware corporation, and CCA PRISON REALTY TRUST ("CCA
Prison Realty Trust"), a Maryland real estate investment trust.
W I T N E S S E T H:
WHEREAS, the Corporation has agreed (i) to sell certain of its
correctional and detention facilities (the "Facilities"), on the terms and
conditions set forth in that certain Agreement of Sale and Purchase, of even
date herewith, by and between the Corporation and CCA Prison Realty Trust (the
"Facility Purchase Agreement"), and (ii) to grant options to purchase certain
of its other correctional and detention facilities (the "Option Facilities")
pursuant to the terms and conditions contained in those certain Option
Agreements, of even date herewith, by and between the Corporation and CCA
Prison Realty Trust (collectively, the "Option Agreements") (the Facility
Purchase Agreement and the Option Agreements are sometimes collectively
referred to herein as the "Agreements"); and
WHEREAS, concurrent with the acquisition of the Facilities by CCA
Prison Realty Trust, CCA Prison Realty Trust has agreed to lease the Facilities
to the Corporation pursuant to the terms of that certain Master Agreement to
Lease, of even date herewith, by and between CCA Prison Realty Trust, as
landlord, and the Corporation, as tenant (the "Master Lease"), and those
certain Lease Agreements, of even date herewith, by and between CCA Prison
Realty Trust and the Corporation and, as provided in the Option Agreements, CCA
Prison Realty Trust has agreed to lease the Option Facilities to the
Corporation pursuant to the terms of the Master Lease and Lease Agreements to
be entered into by and between CCA Prison Realty Trust and the Corporation (the
Master Lease and such Lease Agreements for the Facilities and the Option
Facilities are sometimes collectively referred to herein as the "Leases". The
term "Leases", as used herein, shall also be deemed to refer to and include any
future leases of correctional or detention facilities between CCA Prison Realty
Trust and the Corporation.); and
WHEREAS, as a result of said Agreements and Leases, CCA Prison Realty
Trust has (i) become the owner of certain assets of the Corporation and the
landlord to Corporation, and (ii) gained knowledge of the Corporation
concerning its business affairs and its unique business methods. The parties
hereto acknowledge that the use by CCA Prison Realty Trust of this information
in competing with or aiding others in competing with the Corporation could have
a detrimental effect on future operations of the Corporation;
NOW, THEREFORE, in consideration of the agreement by the Corporation
to enter into the Agreements and Leases, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, CCA
Prison Realty Trust has agreed to restrict its ability to compete with the
Corporation as herein provided.
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1. Noncompetition Agreement. CCA Prison Realty Trust absolutely
and unconditionally covenants and agrees with the Corporation that, from the
period commencing on the date of this Agreement and continuing thereafter until
the date on which all of the Leases shall have either expired or terminated,
CCA Prison Realty Trust will not, either directly or indirectly, solely or
jointly with any other person, persons or entity, as a consultant or advisor
(whether or not engaged in business for profit), or as a partner, shareholder,
joint venturer, investor, lender, financier, or in any other capacity, acquire
or finance a Competing Prison Facility (as defined below), without CCA's prior
written consent, which may be given or withheld in CCA's sole discretion.
"Competing Prison Facility" shall mean any correctional or detention facility
located within a 300-mile radius of a CCA Facility (as defined below) if such
Competing Prison Facility houses inmates from one or more of the same
contracting entities as the CCA Facility. "CCA Facility" shall mean all
facilities now or hereafter owned, managed or leased by the Corporation,
including, but not limited to, those facilities identified on Exhibit A hereto,
as such exhibit may be amended from time to time. The parties hereto
acknowledge that Exhibit A shall be automatically amended to include any
correctional or detention facility now or hereafter owned, managed or leased by
the Corporation, including, but not limited to, any correctional or detention
facility now or hereafter leased to the Corporation by CCA Prison Realty Trust
or financed for the Corporation by CCA Prison Realty Trust. Notwithstanding
the foregoing, nothing herein shall prevent CCA Prison Realty Trust from
engaging in the real estate investment trust business in any location for other
types of facilities other than a Competing Prison Facility.
2. Covenant Not to Disclose. CCA Prison Realty Trust agrees
that, by virtue of the relationship of trust and confidence between CCA Prison
Realty Trust and the Corporation, it possesses and will possess certain data
and knowledge of operations of the Corporation which are proprietary in nature
and confidential. CCA Prison Realty Trust covenants and agrees that it will
not knowingly, at any time, directly or indirectly, for whatever reason,
without CCA's prior written consent, which may be given or withheld in CCA's
sole discretion, reveal, divulge or make known to any person or entity, any
confidential or proprietary record, data, trade secret, pricing policy, bid
amount, pricing strategy, personnel policy, method or practice of obtaining or
doing business, or any other confidential or proprietary information whatever
(the "Confidential Information"), whether or not obtained with the knowledge
and permission of the Corporation and whether or not developed, devised or
otherwise created in whole or in part by the efforts of CCA Prison Realty
Trust, nor shall CCA Prison Realty Trust use such Confidential Information for
its own account in violation of the noncompetition covenants set forth in
Paragraph 1 hereof. Confidential Information shall not include any information
generally available to the public other than as a result of a disclosure of
such information by CCA Prison Realty Trust. Notwithstanding anything to the
contrary provided herein, a disclosure of Confidential Information by CCA
Prison Realty Trust will not be considered a violation of this Agreement in the
event such disclosure is involuntarily compelled by a final, non-appealable,
order from a court of competent jurisdiction.
3. Non-Interference Covenant. CCA Prison Realty Trust covenants
and agrees that it will not, at any time, directly or indirectly, for whatever
reason, whether for its own account or for the account of any other person,
firm, corporation or other organization, without CCA's prior written consent,
which may be given or withheld in CCA's sole discretion: (i) solicit, employ,
deal with or
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otherwise interfere with any of the Corporation's contracts or relationships
with any employee, officer, director or any independent contractor, whether the
person is employed by or associated with the Corporation on the date of this
Agreement or at any time hereafter; or (ii) solicit, accept, deal with or
otherwise interfere with any of the Corporation's contracts or relationships
with any independent contractor, customer, client or supplier. Notwithstanding
the foregoing, (i) CCA Prison Realty Trust may offer employment to the current
employees of the Corporation who are terminated by the Corporation subsequent
to the date hereof, provided that the terms of such employment offered by the
CCA Prison Realty Trust do not violate the noncompetition covenants set forth
in Paragraph 1 hereof, (ii) CCA Prison Realty Trust shall in no way be liable
for any actions by any entity leasing or managing any facility owned by CCA
Prison Realty Trust, and (iii) nothing provided herein shall prevent CCA Prison
Realty Trust from soliciting relationships with an entity or entities to lease,
license, manage or otherwise use any facility leased to the Corporation
subsequent to the termination of such lease with the Corporation.
4. Business Materials and Property Disclosure. All written
materials, records and documents made by CCA Prison Realty Trust or coming into
its possession concerning the business or affairs of the Corporation shall be
the sole property of the Corporation and, upon request by the Corporation, CCA
Prison Realty Trust shall deliver the same to the Corporation and shall retain
no copies. The foregoing restrictions shall not be applicable to any written
materials, records and documents generally available to the public other than
as a result of a disclosure of such written materials, records and documents by
CCA Prison Realty Trust.
5. Breach by CCA Prison Realty Trust. It is expressly
understood, acknowledged and agreed by CCA Prison Realty Trust that: (i) the
restrictions contained in this Agreement represent a reasonable and necessary
protection of the legitimate interests of the Corporation and that its failure
to observe and comply with its covenants and agreements in this Agreement will
cause irreparable harm to the Corporation; (ii) it is and will continue to be
difficult to ascertain the nature, scope and extent of the harm; and (iii) a
remedy at law for such failure by CCA Prison Realty Trust will be inadequate.
Accordingly, it is the intention of the parties that, in addition to any other
rights and remedies which the Corporation may have in the event of any breach
by CCA Prison Realty Trust of this Agreement, the Corporation shall be
entitled, and is expressly and irrevocably authorized by CCA Prison Realty
Trust, to demand and obtain specific performance, including, without
limitation, temporary and permanent injunctive relief, and all other
appropriate equitable relief against CCA Prison Realty Trust in order to
enforce against CCA Prison Realty Trust any of the covenants and agreements
contained in this Agreement, and/or to prevent any breach or any threatened
breach by CCA Prison Realty Trust of the covenants and agreements of CCA Prison
Realty Trust contained in this Agreement. Should the Corporation prevail in
any action to enforce this Agreement, the Corporation shall be entitled to
recover all of its costs and expenses relating thereto, including reasonable
attorney's fees and expenses.
6. General Provisions. (a) All notices required by this
Agreement shall be in writing and shall be sufficiently given if delivered or
mailed by registered or certified mail, return receipt requested, to the
parties at their respective addresses set forth below. Any party may specify a
different address by written notice to the other, in accordance with this
Paragraph. All notices shall be deemed to have been given as of the dates they
were delivered or mailed.
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To the Corporation:
Corrections Corporation of America
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
With a copy to:
Xxxxxx & Xxxxxxxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
To CCA Prison Realty Trust:
CCA Prison Realty Trust
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
With a copy to:
Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxx, Esq.
(b) This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof, and there are no other
representations, warranties, conditions or agreements relating to the subject
matter of this Agreement.
(c) This Agreement shall be binding upon and inure to the
benefit of the Corporation and CCA Prison Realty Trust and its respective
successors, assigns, heirs and legal representatives. Insofar as CCA Prison
Realty Trust is concerned, this Agreement may not be assigned by CCA Prison
Realty Trust.
(d) This Agreement shall be governed by and construed
pursuant to and in accordance with the substantive laws of the State of
Tennessee.
(e) If a term or a provision of this Agreement is held or
deemed to be invalid or unenforceable, in whole or in part, by a court of
competent jurisdiction, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
CORRECTIONS CORPORATION OF AMERICA
By:
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Its:
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CCA PRISON REALTY TRUST
By:
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Its:
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EXHIBIT A
CCA FACILITIES
[to be provided]
