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EXHIBIT 2
AGREEMENT OF SALE
(MOUNTAIN VIEW CORRECTIONAL FACILITY)
THIS AGREEMENT OF SALE (the "Agreement") is made in consideration of the mutual
agreements contained herein, to be effective as of the effective date set forth
herein, by and between CORRECTIONS CORPORATION OF AMERICA, a Maryland
corporation (formerly known as Prison Realty Trust, Inc., and Prison Realty
Corporation), successor in interest by merger to U.S. Corrections Leasing (NC)
Xxxxx/Xxxxxxxx Facility, Inc., a North Carolina corporation ("Seller"), and CPT
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Purchaser"). It is
hereby mutually agreed:
1. SALE. The Seller shall sell, assign, transfer and convey to Purchaser, and
Purchaser shall purchase from the Seller, subject to and upon the terms and
conditions contained herein, the interests of the Seller in the following
described property (hereinafter collectively referred to as the "Property"):
(a) That certain real property containing approximately 99.99 acres,
located in Spruce Pine, Xxxxx/Xxxxxxxx Counties, North Carolina, and
being more particularly described on Exhibit A, attached hereto and
incorporated herein by reference, together with all easements, rights
and privileges appurtenant to said real property (the "Land"), and
together with all buildings, structures, improvements and fixtures
owned by Seller located thereon, including a medium security
correctional facility having a design capacity of approximately 528
beds (the "Improvements");
(b) The machinery, equipment, and personal property owned by Seller
located on or installed in the Land or the Improvements described on
Exhibit B, attached hereto and incorporated herein by reference
(collectively, the "Personalty");
(c) The contract rights of the Seller, as lessor, under that certain
Lease Agreement, dated June 19, 1997, by and between U.S. Corrections
Corporation, as lessor, and the State of North Carolina, as lessee, as
assigned to U.S. Corrections Leasing (NC) Xxxxx/Xxxxxxxx Facility,
Inc., pursuant to Assignment of Agreement, dated October 31, 1997 (the
"Lease Agreement"), provided that Purchaser assumes all of the
obligations of Seller under the Lease Agreement from and after the
Closing.
(d) The warranties, guaranties and permits relating to the Land, the
Improvements and/or the Personalty (the "Warranties and Permits"), if
any, but only to the extent that such Warranties and Permits are
transferable by Seller and subject to the rights of the State of North
Carolina in the Warranties and Permits as set forth in the Lease
Agreement, and provided that Purchaser assumes all of the obligations
of Seller under the Warranties and Permits from and after the Closing;
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(e) All rights, if any, which Seller may have to use the name "Mountain
View Correctional Facility";
2. PURCHASE PRICE (a) The purchase price (the "Purchase Price") for the Property
shall be Twenty-Four Million Nine Hundred Fifty Thousand Dollars
($24,950,000.00). The Purchase Price shall be paid by Purchaser to Seller on the
Closing Date, less any Xxxxxxx Money paid to Seller, by federal reserve wire
transfer wired to the account designated by Seller.
The Purchase Price shall be allocated among the Land, the Improvements, the
Personalty, and the other Property as mutually agreed by Seller and Purchaser.
(b) Within three (3) business days following the effective date of this
Agreement, Purchaser will deliver to the Nashville, Tennessee office of
First American Title Insurance Company located at AmSouth Center, Suite
2055, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attn: Xxxxxxx
X. Xxxxxxxxx (the "Escrow Agent") a cashier's check, or federal reserve
wire transfer funds, in the amount of Fifty Thousand Dollars
($50,000.00), as xxxxxxx money (said xxxxxxx money and all interest
earned thereon being collectively referred to as the "Xxxxxxx Money").
The Escrow Agent shall deposit the Xxxxxxx Money in an FDIC insured
interest bearing account at a national bank located in Nashville,
Tennessee. All Xxxxxxx Money shall be held and delivered by the Escrow
Agent in accordance with the terms and provisions of this Agreement.
(c) Seller and Purchaser each acknowledge and agree that the
consideration for the Property set forth herein was negotiated by the
parties at arms length. Purchaser represents that the consideration for
the Property is a fair and reasonable price offered by Purchaser after
reasonable examination of the cost of other like facilities in the
marketplace, and that Purchaser is under no obligation to purchase the
Property. Seller represents that the consideration for the Property is
a fair and reasonable price agreed to by the Seller after reasonable
investigation and calculation, and that the Seller is under no
obligation to sell the Property.
3. SURVEY. Seller shall obtain, at the expense of Purchaser, and provide to
Purchaser prior to the Closing, a survey of the Land and the Improvements (the
"Survey") prepared by an engineer or surveyor licensed in the State in which the
Land is located and reasonably acceptable to Purchaser. The Survey will be
prepared in accordance with the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys" as adopted by ALTA, ACSM and NSPS in 1999. The
surveyor shall certify the Survey to Seller, Purchaser and to such other parties
designated by Purchaser. In the event Purchaser proceeds to close this
transaction on the Closing Date, Purchaser shall be deemed to have accepted all
matters shown on the Survey, which matters shall be deemed to be "Permitted
Exceptions", as such term is hereafter defined.
4. TITLE INSURANCE. (a) Purchaser shall obtain, at its expense, an owner's title
insurance commitment for the Land (the "Title Commitment") to issue an ALTA
Owner's Policy of Title Insurance, or comparable state promulgated policy (the
"Title Policy") from First American Title Insurance Company or another national
title insurance company reasonably
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satisfactory to the parties (the "Title Company"). Purchaser shall provide a
copy of the Title Commitment and copies of all recorded documents referenced
therein to the Seller prior to the Closing. Seller agrees to provide to
Purchaser copies of any owner's title insurance policies issued to Seller
insuring the Land and the Improvements in the possession of Seller at its
Nashville, Tennessee office, but without any representation or warranty by
Seller as to the accuracy or completeness of any such title insurance policies.
In the event Purchaser proceeds to close this transaction on the Closing Date,
Purchaser shall be deemed to have accepted all title exceptions shown in the
Title Commitment, which title exceptions shall be deemed to be "Permitted
Exceptions", as such term is hereinafter defined.
(b) For purposes of this Agreement, the term "Permitted Exceptions"
means (i) any title exceptions shown in the Title Commitment, and any
matters shown on the Survey, which were either not objected to by
Purchaser, or which were timely objected to by Purchaser but such
objections were either resolved or were waived as provided in this
Agreement, and (ii) the standard printed title exceptions included in
the ALTA standard form owner's policy of title insurance, or comparable
state promulgated policy (other than those that are customarily
removable by a title affidavit executed by Seller in customary form and
substance, excluding survey matters). The standard title exception in
the Title Commitment and in the Title Policy for survey matters may, at
the option of and at the expense of Purchaser, be deleted and be
replaced by a title exception for the matters shown on the Survey,
which title exception for the matters shown on the Survey shall be
deemed to be a Permitted Exception. "Permitted Exceptions" shall not
include any liens on the Property securing any indebtedness owing by
Seller, which liens shall be released in connection with the Closing.
5. EXPENSES AND PRORATIONS. (a) In addition to the expenses, adjustments and
prorations set forth elsewhere in this Agreement, the expenses of this
transaction and closing prorations shall be paid, as of the date of Closing, as
follows:
(i) Purchaser will pay the costs and expenses for the Survey
referred to in Paragraph 3; the title insurance examination
fees and premiums for the issuance of the Title Commitment and
the Title Policy referred to in Paragraph 4; the cost, if any,
to delete the standard title exception for survey matters from
the Title Policy; and the cost for the Environmental Report
referred to in Paragraph 23.
(ii) Purchaser will pay the documentary stamp taxes and other
recording or transfer taxes and the recording costs incurred
in recording the deed and the other closing instruments to
Purchaser.
(iii) Purchaser will pay its own attorney's fees incurred in
the negotiation, preparation and review of this Agreement and
the closing documents and the closing of this transaction.
Purchaser will also pay (A) one-half (1/2) of Seller's
attorney's fees incurred on or prior to February 1, 2001 in
the negotiation, preparation and review of the letter of
intent, dated January 15, 2001, the Agreement of Sale
(Mountain View Correctional Facility and Pamlico Correctional
Center), effective February 7, 2001, and/or the letter
agreement, dated February 12, 2001, executed by the parties
(collectively, the "Prior Agreements") and/or this Agreement;
Purchaser's portion of such fees not to exceed Ten Thousand
Dollars ($10,000.00), and (B) all of Seller's attorney's
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fees incurred after February 1, 2001, and through the
effective date of this Agreement in the negotiation,
preparation and review of the Prior Agreements and/or this
Agreement; Purchaser's portion of such fees not to exceed
Twelve Thousand Five Hundred Dollars ($12,500.00). Seller will
pay its own attorney's fees incurred in the negotiation,
preparation and review of the closing documents and the
closing of this transaction.
(iv) Ad valorem and personal property taxes for the year of
closing, charges for utilities serving the Property, and other
items of expense in connection with the use or operation of
the Property, for which Seller is obligated to pay, shall be
apportioned between the parties as of the date of Closing.
Items of income in connection with the use or operation of the
Property, to which Seller is entitled to receive, will be
apportioned between the parties as of the date of Closing.
(v) Seller and Purchaser shall each pay one-half (1/2) of the
escrow fees, if any, to the Escrow Agent in connection with
its serving as the escrow agent under this Agreement.
Purchaser's obligations to pay the costs and expenses described in Paragraph
5(a)(i), (iii) and (v) hereof shall survive the Closing of this transaction or
any termination of this Agreement. Seller's obligations to pay the costs and
expenses described in Paragraph 5(a)(iii) and (v) hereof shall survive the
Closing of this transaction or any termination of this Agreement.
(b) If the Closing occurs before the real estate and personal property
taxes that are being apportioned under this Agreement for the year of
Closing have been determined, such taxes shall be prorated at Closing
on the basis of the tax rate for the preceding calendar year applied to
the latest assessed valuation. In the event the amounts of any other
items of income or expense to be apportioned or allocated between the
parties pursuant to this Agreement are not available as of the date of
Closing, Seller and Purchaser agree to apportion any such items to be
effective as of the date of Closing as soon as the same become
ascertainable. Seller shall cause all utility meters serving the
Property that are being apportioned under this Agreement to be read as
of Closing, or as soon thereafter as reasonably possible, and shall,
within ten (10) days from the receipt of the utility xxxx by Seller,
pay to Purchaser, or to the appropriate utility company, all charges
due to the date of Closing. Any deposits by Seller with utility
companies will be refunded to Seller. Municipal or other governmental
taxes or assessments for improvements assessed before the Closing Date
and which do not relate to tax periods beyond the Closing Date shall be
paid by Seller in full.
(c) For purposes of this Paragraph 5., prorations shall be calculated
to the date of Closing, with items of income and expense for periods
prior to the date of Closing being attributed to and being the
responsibility of Seller, and items of income and expense for periods
on and subsequent to the date of Closing being attributed to and being
the responsibility of Purchaser. Notwithstanding the foregoing, in the
event the Purchase Price is not received by or on behalf of Seller on
the Closing Date prior to the time that Seller incurs an additional day
of interest under its credit facility, then the date for prorations
will be extended to the Business Day on which the Purchase Price is
received by or on behalf of Seller without incurring an additional day
of interest under its credit facility.
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6. BROKER AND COMMISSION. Seller and Purchaser each represents, warrants and
covenants to the other that there are no brokers involved in the transaction
herein, and each will indemnify and hold the other harmless from and against any
claims for brokers' commissions arising from such party's action or agreement.
The provisions of this Paragraph shall survive the Closing, or the termination
of this Agreement.
7. CLOSING. (a) The closing (the "Closing Date" or "Closing", as such date may
be extended from time to time) of the purchase and sale contemplated herein
shall take place at 10:00 A.M. Central Standard Time concurrently at the offices
of the Title Company in Nashville, Tennessee, and in Fort Lauderdale, Florida,
on March 16, 2001, or at such other date, time and place as Purchaser and Seller
may mutually agree. In the event any waiting period (including any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act (the "HSR Act") applicable to the sale
or purchase of the Property has not expired or been terminated as of the Closing
Date, then the Closing Date shall be extended to the date which is five (5)
business days following the expiration or termination of such waiting period.
Notwithstanding anything to the contrary contained in this Agreement, all
objection or termination time periods set forth in Paragraphs 3., 4., 7., 10.,
and 23. hereof, or elsewhere in this Agreement, if not sooner expired, shall be
deemed to expire as of the date and time of the Closing.
(b) At the Closing, the Seller shall:
(i) execute, acknowledge and deliver to Purchaser a Special
Warranty Deed conveying to Purchaser marketable, fee simple
title to the Land and Improvements, subject only to Permitted
Exceptions;
(ii) deliver to Purchaser possession and occupancy of the
Property, subject to the Lease, the Service Contracts and
those rights, if any, of a squatter on the Land;
(iii) execute, acknowledge and deliver to Purchaser a Xxxx of
Sale, with special warranty of title, for all Personalty being
conveyed hereunder, free and clear of all liens and
encumbrances created by Seller;
(iv) execute, acknowledge and deliver to Purchaser an
Assignment and Assumption Agreement assigning all of Seller's
right, title and interest, as lessor, under the Lease
Agreement, provided Purchaser assumes all of the obligations
of Seller under the Lease from and after the Closing.
(v) to the extent transferrable by Seller, execute and deliver
to Purchaser an assignment of the Warranties and Permits,
provided Purchaser assumes all of the obligations of Seller
under the Warranties and Permits from and after the Closing.
Seller agrees to cooperate in good faith with Purchaser in
connection with Purchaser obtaining consents to the transfer
to Purchaser of those Warranties and Permits that are not
transferrable without the consent of the party providing or
issuing such warranty or permit.
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(vi) deliver to the Title Company releases or pay-off letters
with respect to any liens granted by Seller or other
indebtedness of Seller secured by the Property reasonably
satisfactory in form and content to the Title Company;
(vii) deliver such instruments or documents as are necessary,
or reasonably required by Purchaser or by the Title Company,
to evidence the status and capacity of Seller and the
authority of the person or persons who are executing the
various documents on behalf of Seller in connection with the
execution and delivery of this Agreement and the consummation
of the purchase and sale transaction contemplated hereby;
(viii) execute, acknowledge and deliver to Purchaser a
non-foreign affidavit in accordance with the Internal Revenue
Code of 1986, as amended, and the regulations thereunder; and
(ix) execute, acknowledge and deliver a title affidavit, in
customary form and substance, to the Title Company enabling it
to issue the Title Policy to Purchaser without those standard
printed title exceptions which are customarily removable by a
title affidavit executed by Seller, except Permitted
Exceptions and exceptions for survey matters as set forth in
Paragraph 4. hereof.
(x) execute, acknowledge and deliver to Purchaser an
Assignment and Assumption Agreement assigning all of Seller's
rights and obligations under the Service Contracts (as
hereinafter defined), provided Purchaser assumes all of the
obligations of Seller under the Service Contracts from and
after the Closing.
(c) At Closing, Purchaser shall pay the Purchase Price as provided in
Paragraph 2. hereof, and possession of the Property shall pass to
Purchaser as of 12:01 A.M. on the Closing Date. At the Closing,
Purchaser shall execute, acknowledge and deliver to Seller an
Assignment and Assumption Agreement assuming all of the Seller's
obligations, as lessor, under the Lease from and after the Closing, and
an Assignment and Assumption Agreement assuming all of the Seller's
obligations under the Service Contracts from and after the Closing. At
the Closing, Purchaser shall also deliver such instruments or documents
as are necessary, or reasonably required by Seller or by the Title
Company, to evidence the status and capacity of Purchaser and the
authority of the person or persons who are executing the various
documents on behalf of Purchaser in connection with the execution and
delivery of this Agreement and the consummation of the purchase and
sale transaction contemplated hereby.
(d) All closing documents, including, without limitation, the documents
referred to in Paragraphs 7(b) and 7(c), to be executed, acknowledged
and delivered, as applicable, by the parties pursuant to this Agreement
or the requirements of the Title Company shall be reasonably
satisfactory to the parties and their legal counsel. Seller and
Purchaser agree to use reasonable, diligent and good faith efforts to
agree upon the form of the closing documents within the time periods
specified herein, and if no time period is specified, on or before the
Closing. Purchaser shall covenant and agree to assume from and after
the date of Closing all obligations for which Seller is liable under
the contracts, agreements or arrangements to be assigned hereunder to
and assumed by Purchaser. Seller shall covenant and agree to indemnify
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and to hold Purchaser harmless from and against all obligations of
Seller under such contracts, agreements and arrangements prior to the
date of Closing,
(e) Notwithstanding anything to the contrary contained in this
Agreement, the obligations of the Seller under this Agreement are
contingent upon and subject to the satisfaction of each of the
following conditions: (i) Seller obtaining approval of this Agreement
and the transactions contemplated hereunder by the Board of Directors
of Seller, and by all lenders whose approval is required under the
various credit facilities of Seller, and (ii) obtaining an estoppel
certificate from the State of North Carolina as provided in Paragraph
19. of the Lease Agreement, in form and substance reasonably
satisfactory to Seller and Purchaser, and the consent, if required,
from the State of North Carolina to the assignment of the Lease to
Purchaser. Seller represents and warrants to the Purchaser that it will
use reasonable, diligent and good faith efforts to satisfy the
foregoing contingencies prior to the Closing Date. In the event any one
or more of the conditions precedent set forth in this Paragraph 7(e)
are not satisfied on or prior to the Closing Date, Seller shall have
the option to terminate this Agreement by written notice to the
Purchaser given prior to the Closing Date or within three (3) business
days after the Closing Date. In the event Seller fails to exercise its
option to terminate this Agreement within the foregoing time period, or
in the event Seller proceeds to close this transaction on the Closing
Date, then all unsatisfied conditions precedent shall be deemed to have
been waived by Seller.
(f) Notwithstanding anything to the contrary contained in this
Agreement, the obligations of the Purchaser under this Agreement are
contingent upon and subject to the satisfaction of each of the
following conditions: (i) Purchaser obtaining approval of this
Agreement and the transactions contemplated hereunder by the Board of
Trustees of Purchaser, and by all lenders whose approval is required
under the credit facility of Purchaser, (ii) Purchaser obtaining a
commitment from Bank of America or another financial institution
selected by Purchaser for financing for the purchase of the Property on
terms reasonably satisfactory to Purchaser, and (iii) obtaining an
estoppel certificate from the State of North Carolina as provided in
Paragraph 19. of the Lease Agreement, in form and substance reasonably
satisfactory to Seller and Purchaser, and the consent, if required,
from the State of North Carolina to assign the Lease to the Purchaser.
Purchaser represents and warrants to Seller that it will use
reasonable, diligent and good faith efforts to satisfy the foregoing
contingencies prior to the Closing Date. In the event any one or more
of the conditions precedent set forth in this Paragraph 7(f) are not
satisfied on or prior to the Closing Date, Purchaser shall have the
option to terminate this Agreement by written notice to the Seller
given prior to the Closing Date or within three (3) business days after
the Closing Date. In the event Purchaser fails to exercise its option
to terminate this Agreement within the foregoing time period, or in the
event the Purchaser proceeds to close this transaction on the Closing
Date, then all unsatisfied conditions precedent shall be deemed to have
been waived by the Purchaser.
In the event this Agreement is terminated in accordance with Paragraphs
7(e) or 7(f) hereof, the parties shall be relieved from any further
liability hereunder, except for any obligations of the parties which
expressly survive a termination of this Agreement, and the Xxxxxxx
Money shall be paid to Purchaser.
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8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller represents,
warrants and covenants to Purchaser that:
(a) Seller has all requisite corporate power and authority and is duly
authorized to execute and deliver and to perform and observe the terms
and provisions of this Agreement, and all documents to be executed by
Seller pursuant to this Agreement, to transfer title to the Property to
Purchaser, and to consummate the transactions contemplated herein,
without the consent or joinder by any person or entity not already
obtained, other than those approvals and consents set forth in
Paragraph 7(e) hereof, and those consents, if any, required in order to
transfer the rights of Seller in and to the Warranties and Permits
(which consents Seller makes no representation, warranty or covenant
whatsoever).
(b) No person, corporation, firm or entity other than Purchaser has any
right, or option, to acquire the Property from Seller or is entitled to
possession under or through Seller of all or any part thereof, and
Seller has no knowledge and has received no notice that any party has
any such right or option from, under or through any party other than
Seller, except for those rights as are set forth in the Lease and in
the Service Contracts, and those rights, if any, of a squatter on the
Land. Seller shall not provide any information to other interested
purchasers of the Property, or negotiate with other parties, or solicit
or accept offers to sell the Property so long as this Agreement remains
in effect.
(c) Seller will cooperate reasonably and in good faith with Purchaser
in connection with the Purchaser conducting its due diligence review of
the Property.
(d) Seller shall provide to Purchaser such information, and shall
execute, acknowledge and deliver such agreements, documents and
instruments, including opinions of Seller's legal counsel, as may be
reasonably necessary or required in connection with any HSR Act filings
in connection with the sale or purchase of the Property pursuant to
this Agreement.
(e) The Lease is, as of the effective date of this Agreement, in full
force and effect in accordance with its terms, and, to Seller's
knowledge, has no uncured breach or default (nor any claim for breach
or default) by Seller or by the State of North Carolina, as tenant
thereunder, and, to Seller's knowledge, no off-sets or defenses are
available to any party under the Lease. Seller has no knowledge of any
claim or dispute concerning or relating to the validity or binding
effect of the Lease in accordance with its terms or conditions, and has
received no written notice of any such claims or disputes. Seller shall
not amend, modify or terminate the Lease prior to the Closing Date
without the prior written consent of Purchaser, which consent shall not
be unreasonably withheld, conditioned or delayed by Purchaser. Copies
of the Lease and any amendments thereto have been delivered by Seller
to Purchaser on or before the effective date of this Agreement, and
Purchaser acknowledges the receipt of such documents delivered by
Seller.
(f) There are no service contracts, operating agreements or maintenance
agreements entered into by Seller, which are in force and which affect
the Property or the operation or maintenance thereof, except for those
contracts described on Exhibit C, attached hereto and incorporated
herein by reference (the "Service Contracts").
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(g) Seller has no knowledge and has received no written notice that the
construction of the Improvements on the Property violates any provision
of any applicable building codes, fire regulations or other
governmental ordinances, orders or regulations. To the knowledge of
Seller, all material certificates of occupancy, licenses, permits,
authorizations and approvals required by any governmental authority
with respect to the construction of the Improvements as a correctional
facility in accordance with the plans and specifications for the
Improvements and the acceptance of such Improvements by the State of
North Carolina as a tenant under the Lease have been obtained. Copies
of all such certificates, licenses, permits, authorizations and
approvals in the possession of Seller have been delivered by Seller to
Purchaser on or before the effective date of this Agreement, and
Purchaser acknowledges receipt of such documents delivered by Seller.
(h) Seller has received no written notice from any mortgagee, insurance
company, insurance rating board, fire rating board, governmental agency
or authority or from the State of North Carolina as a tenant under the
Lease recommending or requiring any repairs to be done on the
Improvements.
(i) Except for those matters, if any, disclosed in the Environmental
Report to be obtained by Seller pursuant to Paragraph 23. hereof,
Seller has no actual knowledge that any hazardous or toxic substances
have been used, stored or disposed of on the Property during Seller's
ownership of the Property or that other environmental conditions
currently exist on the Property in violation of any applicable local,
state or federal environmental laws, and Seller has not received any
written notification from any local, state or federal regulatory agency
that such a violation exists. Notwithstanding any representation or
warranty of Seller to the contrary contained in this Agreement, Seller
has continuing obligations with respect to mitigation associated with
wetland and stream impacts on the Land resulting from the construction
of the Improvements (the "Mitigation Action"), which obligations shall
be performed by Seller as soon as reasonably possible and shall survive
the Closing. Seller covenants and agrees to indemnify and hold
Purchaser harmless from and against any and all loss, liability, cost,
claim, demand, damage, action, cause of action and suit arising out of
or related to the Mitigation Action, which indemnity and hold harmless
shall survive the Closing. Purchaser covenants and agrees to allow
Seller, its agents, representatives and contractors, access to the Land
at all reasonable times following the Closing for the purposes of
performing, inspecting and/or monitoring the Mitigation Action.
(j) Seller is not a party to any litigation, and Seller knows of no
litigation or threatened litigation of a material nature, affecting the
Property, except as expressly provided herein. Seller has no actual
knowledge of any pending or contemplated condemnation proceedings
affecting the Property or any part thereof. At the time of Closing, no
goods or services will have been contracted by Seller for the Property
which remain unpaid and which might give rise to mechanics' or
materialmen's liens affecting all or any part of the Property, or to
which Purchaser will be bound.
(k) Seller has received no written notice that there are any special
assessments against or relating to the Property, and Seller knows of no
such proposed assessments. Seller has not commenced any tax reduction
proceedings affecting the Property or any part thereof as of the
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effective date of this Agreement, and Seller will not initiate any such
proceedings prior to the Closing.
Notwithstanding anything to the contrary contained in this Agreement,
the representations, warranties and covenants of Seller contained in
this Paragraph 8., or elsewhere in this Agreement, are made expressly
subject to and are qualified by the matters disclosed in (i) the
letter, dated February 28, 2001, from Purchaser to Seller, together
with the Facility Accessment, dated January 22, 2001; the letter, dated
February 23, 2001, from the North Carolina Department of Correction to
X.X. Xxxxxxx with Xxxxxx Building Corporation; and the Mountain View
Correctional Facility Trouble List-14 Feb 2001 enclosed therewith, and
(ii) the memorandum, dated Wednesday, January 24, 2001, 2:33:36 PM from
Xxxxx Xxxxx to Xxxxx Xxxxxxx, Xxx Xxxxx, and Xxxxx Xxxxxx, together
with the North Carolina Department of Correction Procedure for
Performing Physical Alterations, Modifications, Improvements, etc. to
Corrections Corporation of America's Facilities at Bayboro and Spruce
Pine, North Carolina enclosed therewith.
Notwithstanding anything to the contrary contained in this Agreement,
Seller makes no representation or warranty whatsoever concerning the
accuracy or completeness of any due diligence materials or confidential
information provided by Seller pursuant to this Agreement or the
transactions contemplated herein (other than those due diligence
materials or confidential information prepared by employees of Seller).
Any representation, warranty or covenant contained in this Agreement
which is made to Seller's "actual knowledge", or "knowledge", or
"knowledge, information or belief", or other words of similar meaning,
shall be limited to the actual knowledge of Seller. Seller shall have
no obligation to undertake any inquiry or investigation to determine
whether any matter so represented, warranted or covenanted is true.
In the event at any time prior to the Closing the Seller obtains actual
knowledge that any representation, warranty or covenant contained in
this Paragraph 8. or elsewhere in this Agreement, made upon Seller's
actual knowledge, or knowledge, or knowledge, information and belief,
or other words of similar meaning, is no longer accurate in any
material respect, Seller shall promptly notify Purchaser in writing and
specify therein the factors rendering such representation, warranty or
covenant inaccurate. Any such representation, warranty or covenant
shall be deemed to be amended in accordance with such notification.
Purchaser shall have the right following such notification and prior to
the Closing to terminate this Agreement by written notice to the
Seller. In the event this Agreement is terminated in accordance with
this Paragraph 8., the parties shall be relieved from any further
liability hereunder, except for any obligations of the parties which
expressly survive a termination of this Agreement, and the Xxxxxxx
Money shall be paid to Purchaser. In the event Purchaser proceeds to
close this transaction on the Closing Date, Purchaser shall be deemed
to have accepted all representations, warranties and covenants of the
Seller, as so amended.
Except for the representations, warranties and covenants of Seller
contained in this Paragraph 8, or elsewhere in this Agreement or in the
documents to be executed and delivered by Seller in connection with the
Closing, Seller has not made, and does not make, any other
11
representations, warranties or covenants with respect to the Property,
and the Property is being sold in its existing condition.
9. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PURCHASER. Purchaser
represents, warrants and covenants to Seller that:
(a) Purchaser has all requisite corporate power and authority and is
duly authorized to execute and deliver and to perform and observe the
terms and provisions of this Agreement, and all documents to be
executed by Purchaser pursuant to this Agreement, to acquire title to
the Property, and to consummate the transactions contemplated herein,
without the consent or joinder by any person or entity not already
obtained, other than those approvals and consents set forth in
Paragraph 7(f) hereof.
(b) Purchaser will return to Seller promptly following any termination
of this Agreement all due diligence materials and confidential
information provided by Seller to Purchaser pursuant to this Agreement,
which obligation of Purchaser shall survive any termination of this
Agreement.
(c) Purchaser shall provide to Seller such information, and shall
execute, acknowledge and deliver such agreements, documents and
instruments, including opinions of Purchaser's legal counsel, as may be
reasonably necessary or required in connection with any HSR Act filings
in connection with the sale or purchase of the Property pursuant to
this Agreement.
10. INSPECTION OF PROPERTY/CONDITION OF PROPERTY.
(a) During the period commencing upon the effective date of this
Agreement and continuing until the Closing Date or the date of the
termination of this Agreement, as the case may be, the Purchaser, its
agents, employees and representatives, shall have the right, at
Purchaser's expense, to enter upon the Property at all reasonable times
to conduct inspections, investigations and studies of the Property, and
to otherwise conduct due diligence with respect to the physical,
financial and other aspects of the Property, including, but not limited
to, review of the Lease, the Warranties and Permits, the Survey, the
Title Commitment, the Service Contracts, and the Environmental Report,
as Purchaser may deem necessary or desirable under the circumstances to
determine whether the Property is suitable for Purchaser's purposes. In
the event the results of such inspections, investigations, studies and
other due diligence by the Purchaser are unacceptable to the Purchaser,
in Purchaser's sole discretion, then Purchaser shall have the option to
terminate this Agreement for any reason by giving written notice to the
Seller prior to the Closing. In the event this Agreement is terminated
in accordance with this Paragraph 10(a), the parties shall be relieved
from any further liability hereunder, except for any obligations of the
parties which expressly survive a termination of this Agreement, and
the Xxxxxxx Money shall be paid to Purchaser.
(b) In the exercise of the right and privilege of entry herein granted,
neither Purchaser nor its agents, employees or representatives shall
interfere with the use or enjoyment of the Property by Seller or its
activities or operations thereon, or the use or enjoyment of the
Property by the State of North Carolina under the Lease or its
activities or operations thereon.
12
Purchaser hereby covenants and agrees to indemnify and hold Seller
harmless from any and all loss, liability, cost, claim, demand, damage,
action, cause of action and suit arising out of or in any manner
related to the acts or omissions of Purchaser and/or its agents,
employees, representatives and independent contractors in exercising
its rights under Paragraph 10(a). In the event this Agreement is
terminated, Purchaser shall repair any damages resulting from such
inspections and restore the Property to the same condition which
existed prior to the exercise of its rights under Paragraph 10(a).
Purchaser's obligations under this Paragraph 10(b) shall survive the
Closing of this transaction or any termination of this Agreement.
(c) SAVE AND EXCEPT FOR THE MATTERS EXPRESSLY CONTAINED IN THIS
AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER HAS NOT MADE AND IS
NOT MAKING AND SPECIFICALLY DISCLAIMS ANY WARRANTIES, REPRESENTATIONS
OR GUARANTEES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR
WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT TO THE CONDITION OF THE
PROPERTY AND ITS SUITABILITY FOR ANY PARTICULAR PURPOSE OR USE.
PURCHASER ACKNOWLEDGES THAT IT IS GENERALLY FAMILIAR WITH THE PROPERTY,
AND THAT IT IS RELYING UPON ITS OWN EXPERTISE AND THAT OF ITS
CONSULTANTS IN PURCHASING THE PROPERTY, AND THAT IT WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS IT DEEMS NECESSARY
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS OF THE PROPERTY AND SHALL RELY UPON THE SAME. SELLER SHALL
SELL AND CONVEY TO PURCHASER, AND PURCHASER SHALL ACCEPT, THE PROPERTY
"AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT FOR THE MITIGATION ACTION TO
BE COMPLETED BY THE SELLER. THE TERMS AND CONDITIONS OF THIS PARAGRAPH
10(C) SHALL EXPRESSLY SURVIVE THE CLOSING AND SHALL NOT MERGE WITH THE
PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL, AT THE OPTION OF THE
SELLER, BE INCORPORATED INTO THE DEED AND XXXX OF SALE FOR THE
PROPERTY. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY FURNISHED BY ANY AGENT, EMPLOYEE, CONTRACTOR, CONSULTANT,
REPRESENTATIVE OR OTHER PERSON, UNLESS THE SAME ARE EXPRESSLY SET FORTH
OR ARE REFERRED TO HEREIN.
11. DEFAULT. (a) In event that Purchaser defaults, which default is not cured by
Purchaser within ten (10) days following receipt by Purchaser of written notice
of default from Seller, and Seller has not defaulted, Seller shall be entitled,
at Seller's option:
(i) to declare this Agreement terminated, and to receive the
Xxxxxxx Money. Upon any such declaration, the parties shall be
relieved from any further liability hereunder, except for any
obligations of the parties which expressly survive a
termination of this Agreement; or
(ii) to exercise any other right or remedy Seller may have at
law or in equity by reason of such default including, but not
limited to, the recovery of reasonable attorneys' fees
incurred by Seller in connection therewith.
(b) In the event that Seller defaults, which default is not cured by
Seller within ten (10) days following receipt by the Seller of written
notice of default from Purchaser, and Purchaser has not defaulted,
Purchaser shall be entitled, at Purchaser's option:
13
(i) to compel Seller to convey the Property to Purchaser by a
suit for specific performance, and to recover all costs
incidental to such suit, including reasonable attorney's fees;
or,
(ii) to declare this Agreement terminated, and to receive the
Xxxxxxx Money. Upon any such declaration, the parties shall be
relieved from any further liability hereunder, except for any
obligations of the parties which expressly survive a
termination of this Agreement; provided, however, Purchaser
shall not, in such event, be obligated to pay or reimburse the
Seller for the costs and expenses for the Survey referred to
in Paragraph 3., for one-half (1/2) of Seller's attorney's
fees referred to in Paragraph 5(a)(iii), or for the
Environmental Report referred to in Paragraph 23.; or
(iii) to exercise any other right or remedy Purchaser may have
at law or in equity by reason of such default including, but
not limited to, the recovery of reasonable attorneys' fees
incurred by Purchaser in connection therewith.
12. RISK OF LOSS. (a) All risk of loss of or to the Property, in whole or in
part, as a result of any exercise of the power of eminent domain, or by reason
of fire, flood, windstorm or other casualty, shall remain on Seller until the
transfer of legal title to Purchaser. Purchaser shall assume the risk of loss or
damage to the Property from and after the transfer of legal title to the
Purchaser.
(b) If, before the date of Closing, any condemnation (taking by eminent
domain) proceeding is or has been commenced with respect to the
Property, or fire or any other casualty results in material damage to
the Property, Purchaser shall have the option of either terminating
this Agreement or of completing the purchase contemplated herein.
"Material damage" and "material", as used in this paragraph, shall mean
damage to the Property having a cost to repair in excess of $500,000.00
per occurrence. In event the Purchaser shall elect to terminate this
Agreement, Purchaser shall be entitled to receive the Xxxxxxx Money,
and the parties shall be relieved of and discharged from any further
liability hereunder, except for any obligations of the parties which
expressly survive a termination of this Agreement. If, however,
Purchaser shall elect to complete this transaction, or if the damage to
the Property is not material, Purchaser shall be entitled, in the case
of fire or other casualty, to receive from the insurance carrier all
insurance proceeds and to receive a credit for the amount of Seller's
deductible or, in the case of condemnation, to receive the entire award
for the Property, or the portion thereof so taken. Seller shall execute
and deliver to Purchaser on the Closing hereunder all proper
instruments for the assignment and collection of such proceeds and
awards. Seller shall promptly notify Purchaser in writing of any loss,
actual, pending or threatened, to the Property.
13. BINDING EFFECT. This Agreement shall be binding upon and shall inure to the
benefit of all of the parties hereto and their respective successors and
assigns, subject, however, to Paragraph 20. hereof.
14. ENTIRE AGREEMENT; AMENDMENTS. This Agreement embodies and constitutes the
entire understanding between the parties with respect to the transactions
contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements (oral or written), including the
letter of intent, dated January 15, 2001, the Agreement of Sale
14
(Mountain View Correctional Facility and Pamlico Correctional Facility),
effective February 7, 2001, and the letter agreement, dated February 12, 2001,
executed by the parties (collectively, the "Prior Agreements"), are superceded
by and are merged into this Agreement in all respects. For the avoidance of
doubt, Seller and Purchaser acknowledge and agree that the Prior Agreements are
terminated, null and void and of no further force and effect from and after the
effective date of this Agreement. Neither this Agreement nor any provision
hereof may be waived, modified, amended, discharged or terminated except by an
instrument in writing signed by the party against whom the enforcement of such
waiver, modification, amendment, discharge or termination is sought, and then
only to the extent set forth in such instrument.
15. NOTICES. Any notice, request, demand, instruction or other communication
hereunder shall be in writing and shall be either (a) delivered in person, (b)
sent by certified mail, return receipt requested, (c) delivered by a nationally
recognized delivery service, or (d) sent by facsimile transmission, and
addressed as follows:
To Seller: To Purchaser:
Xxxx Xxxxxxxx, President & CEO Xxxxxxx X. Xxxxx, President & CEO
Corrections Corporation of America Correctional Properties Trust
00 Xxxxxx Xxxxx Xxxxxxxxx 0000 XXX Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxx Xxxxx Xxxxxxx, XX 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
With copies to:
D. Xxxx Xxxx, Esq. Xxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A. Josias, Goren, Cherof, Xxxxx & Xxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Ft. Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
or at such other address, and to the attention of such other person, as the
parties shall give notice as herein provided. A notice, request, demand,
instruction and other communication shall be deemed to be duly received: (a) if
delivered in person or by a nationally recognized delivery service, on the date
when delivered to the address of the recipient; (b) if sent by mail, on the date
of receipt by the recipient as shown on the return-receipt card; or (c) if sent
by facsimile, upon receipt by the sender of an acknowledgment or transmission
report generated by the machine from which the facsimile was sent indicating
that the facsimile was sent in its entirety to the recipient's facsimile number;
provided that if a notice, request, demand, instruction or other communication
is served by hand or is received by facsimile on a day which is not a Business
Day, as hereinafter defined, or after 5:00 P.M. at the addressee's location on
any Business Day, such notice or communication shall be deemed to be duly
received by the recipient at 9:00 A.M. at the addressee's location on the first
Business Day thereafter.
15
16. TIME IS OF THE ESSENCE. Time is of the essence of this Agreement. In the
event that the time period for any act to be taken or notice to be given
hereunder expires on a date which is not a Business Day, then such time period
shall be extended to the next day which is a Business Day. For purposes hereof,
a "Business Day" is any calendar day other than a Saturday, Sunday or legal
holiday.
17. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original document, but all of which shall
constitute a single document. This Agreement will not be binding upon or
constitute evidence of a contract between the parties until such time as the
original or a counterpart of this Agreement has been executed by each party.
18. CAPTIONS. The captions contained herein are for purposes of identification
and convenience only and shall not be considered in construing this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
20. ASSIGNMENT. Purchaser shall have the right to assign this Agreement to any
affiliate or subsidiary of Purchaser, and from and after such assignment,
wherever in this Agreement reference is made to Purchaser such reference shall
also mean such assignee who shall succeed to all the rights, duties and
obligations of Purchaser hereunder, however, CPT Operating Partnership, L.P.
shall not be released hereunder. Purchaser agrees to promptly notify Seller of
any such assignment. In all other events, this Agreement shall not be assigned
by Purchaser, in whole or in part, without the prior written consent of Seller,
which consent Seller may give or withhold in its sole and absolute discretion.
21. SURVIVAL. It is understood and agreed by the parties hereto that whether or
not it is specifically so provided herein any term or provision of this
Agreement, which by its nature or effect, is required to be kept, observed or
performed after the Closing and conveyance of title, shall not be merged
therein, but shall be and remain binding upon and for the benefit of the parties
hereto until fully kept, observed or performed. Notwithstanding the foregoing,
any and all liability of Seller for breach of representations, warranties and
covenants of Seller set forth in Paragraph 8. hereof, or elsewhere in this
Agreement, shall only continue for a period of six (6) months after the date of
Closing. In the event Purchaser has not commenced suit in a court of competent
jurisdiction alleging a breach of any such representations, warranties or
covenants within said six (6) month period, then Seller shall be released and
discharged from any and all liability for the breach thereof.
22. FURTHER ASSURANCES/COOPERATION. Seller and Purchaser each agree to cooperate
in good faith with each other and to execute and deliver in connection with the
Closing such other and further agreements, documents and instruments as may be
reasonably necessary or required in order to fully consummate the transactions
contemplated by this Agreement.
23. ENVIRONMENTAL AUDIT. Seller shall obtain, at the expense of Purchaser, and
provide to Purchaser prior to the Closing, a Phase I environmental site
assessment report (and such other environmental studies as Purchaser deems
reasonably necessary based on the results
16
of the Phase I environmental site assessment) of the Land and Improvements (the
"Environmental Report") from an environmental engineer or consultant selected by
Seller and reasonably satisfactory to Purchaser. In the event Purchaser proceeds
to close this transaction on the Closing Date, Purchaser shall be deemed to have
accepted all matters disclosed in the Environmental Report.
24. ESCROW AGENT. In the event that either party to this Agreement makes demand
upon Escrow Agent for tender of the Xxxxxxx Money held by the Escrow Agent,
Escrow Agent shall give written notice to the other party as provided herein.
Such notice shall be given in the manner provided in Paragraph 15. of this
Agreement. If within three (3) business days following delivery of such notice,
Escrow Agent has not received notice of any objection to the disbursement of the
Xxxxxxx Money from the other party, Escrow Agent shall disburse the Xxxxxxx
Money in accordance with the instructions it has received. A party's failure to
object to such disbursement shall not be deemed to be a waiver of its right to
assert a claim against the other party to any Xxxxxxx Money so disbursed,
however, it shall relieve Escrow Agent of any liability for disbursing the funds
by following this procedure. In the event any dispute should arise with regard
to the Xxxxxxx Money tendered to Escrow Agent as provided in Paragraph 2.
hereof, Escrow Agent shall be entitled to deposit the same with a federal court
of competent jurisdiction in Nashville, Tennessee, and thereafter be relieved of
all obligations under this Agreement. In performing any of its duties hereunder,
Escrow Agent shall not incur any liability to any party for any damage, loss or
expense, except for willful default, gross negligence, or breach of trust.
Purchaser and Seller jointly and severally agree to indemnify and hold Escrow
Agent harmless against any and all other losses, claims, damages, liabilities
and expenses including, without limitation, reasonable attorneys' fees, which
may be imposed upon the Escrow Agent or incurred by Escrow Agent in connection
with the performance of its duties hereunder, except for willful default, gross
negligence, or breach of trust. As between Seller and Purchaser, the prevailing
party in any action regarding the Xxxxxxx Money shall be entitled to recover
from the other party all amounts which it has paid under its indemnity in the
preceding sentence and shall further be entitled to recover all court costs and
attorney's fees incurred with respect to the resolution of the dispute. The
obligations of Seller and Purchaser under this Paragraph 24. shall survive the
Closing of this transaction or any termination of this Agreement.
25. CONFIDENTIALITY. Seller and Purchaser each covenant and agree with the other
party that: (a) all discussions and negotiations by the parties with respect to
this Agreement or the transactions contemplated by this Agreement and (b) all
information furnished by or obtained from the other party in connection with
this Agreement or the transactions contemplated by this Agreement are to be kept
confidential and are not to be disclosed to third parties without the prior
written consent of the other party, except (i) as required in the written
opinion of legal counsel by applicable law, regulation or legal process, (ii) to
those directors, officers, employees of the parties hereto, and those
representatives of the parties' legal, accounting and financial advisors, who
need to know of such discussions and negotiations for purposes of evaluating the
transactions contemplated by this Agreement, and (iii) to those third parties as
may be reasonably necessary to facilitate the consummation of the transactions
contemplated by this Agreement. Any disclosure of confidential information
proposed to be made by a party pursuant to (i) above shall only be of such
portion of the confidential information as is legally required to be disclosed
after notice to and consultation with the other party. The obligations of Seller
and
17
Purchaser under this Paragraph 25. shall survive the Closing of this
transaction or any termination of this Agreement.
18
IN WITNESS WHEREOF, each of the parties hereto has signed this
Agreement on the date shown below their respective signatures. This Agreement
shall, for all purposes, be deemed to be fully executed and effective on the
latest of the dates of execution by Seller and Purchaser shown below.
SELLER:
CORRECTIONS CORPORATION OF AMERICA
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Title: President and CEO
----------------------------------
Date: 3-1-01
------
PURCHASER:
CPT OPERATING PARTNERSHIP, L.P.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Title: President and CEO
---------------------------------
Date: 3-1-01
------
19
EXHIBIT A
Description of Land - Mountain View
20
EXHIBIT B
Schedule of Personalty - Mountain View
[To be provided prior to Closing]
21
EXHIBIT C
Schedule of Service Contracts - Mountain View
1. Propane Supply Agreement and Equipment Lease, dated July 10, 1998, between
Corrections Corporation of America and Amerigas Propane, L.P., d/b/a Amerigas.
