EXHIBIT 10.2
AMENDMENT TO NOTE PURCHASE AGREEMENT AND NOTE
THIS AMENDMENT TO NOTE PURCHASE AGREEMENT AND NOTE, dated as of April
28, 2003 (this "Agreement"), is entered into between CORRECTIONS CORPORATION OF
AMERICA, a Maryland corporation ("Company"), and PMI MEZZANINE FUND, L.P., a
Delaware limited partnership ("PMI"), in light of the following:
WHEREAS, Company and PMI are parties to that certain Note Purchase
Agreement, dated as of December 31, 1998, as amended by (i) that certain Waiver
and Amendment, dated as of June 30, 2000, (ii) that certain Waiver and Amendment
dated as of March 5, 2001, and as further amended, supplemented, or otherwise
modified from time to time (the "Note Agreement") pursuant to which Company
issued to PMI its $30,000,000 8.0% convertible, extendable, subordinated note
due February 28, 2005 (as amended by that certain Waiver and Amendment dated as
of March 5, 2001, the "Note");
WHEREAS, in connection with original delivery of the Note Purchase
Agreement, the parties hereto entered into that certain Registration Rights
Agreement dated as of December 31, 1998, as amended by that certain Amendment to
Registration Rights Agreement dated as of March 5, 2001 (as so amended, the
"Registration Rights Agreement");
WHEREAS, PMI has the unilateral right pursuant to the Note to extend
the Maturity Date of the Note to February 28, 2007;
WHEREAS, Company has requested that PMI agree to certain amendments to
the Note Agreement and the Note, as more particularly described below;
WHEREAS, subject to the terms and conditions set forth below, PMI is
willing to agree to certain amendments, as more particularly described below;
WHEREAS, as a condition precedent to the effectiveness of such
amendments contained in this Agreement, the parties hereto intend to enter into
that certain Amendment No. 2 to Registration Rights Agreement in the form
attached hereto as Exhibit A hereto ("Amendment No. 2 to Registration Rights
Agreement");
NOW THEREFORE, in consideration of the above premises and the mutual
covenants, conditions, and provisions hereinafter set forth, the parties hereto
agree as follows:
1. DEFINITIONS; CONSTRUCTION.
(a) Any and all initially capitalized terms used herein shall have the
meanings ascribed thereto in the Note Agreement or the Note, as applicable,
unless specifically defined herein. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the part includes the whole, the terms
"include" and "including" are not limiting, and the term "or" has the inclusive
meaning represented by the phrase "and/or".
(b) As used herein, the following terms shall have the following
definitions:
"Amendment Documents" means this Agreement and Amendment No. 2 to
Registration Rights Agreement, collectively, and each of the foregoing
agreements shall be referred to herein as an "Amendment Document".
"Material Adverse Effect" means, a material adverse effect on (i) the
business, assets, prospects or condition (financial or otherwise) of the Company
and its subsidiaries taken as a whole, (ii) the validity or enforceability of
any of the Amendment Documents, or any of the Transaction Documents as amended
by the Amendment Documents, or (iii) the Company's ability to pay or otherwise
perform its obligations under any of the Amendment Documents, or any of the
Transaction Documents as amended by the Amendment Documents.
"Senior Notes Indentures" means, collectively, (i) the Company's
Indenture, dated as of June 10, 1999, between Company and State Street Bank and
Trust Company, as trustee, as amended and supplemented by that certain First
Supplemental Indenture, dated as of June 11, 1999, between Company and State
Street Bank and Trust Company, as trustee, and as further supplemented by that
certain Second Supplemental Indenture, dated as of April 24, 2002, between
Company and State Street Bank and Trust Company, as trustee, and (ii) the
Company's Indenture, dated as of May 3, 2002, between Company and State Street
Bank and Trust Company, as trustee.
"Senior Credit Agreement" means that certain Third Amended and Restated
Credit Agreement, dated as of May 3, 2002, by and among Company, the Lenders (as
defined therein), Xxxxxx Brothers Inc., as advisor, sole lead arranger and sole
book manager, Deutsche Bank Securities Inc. and UBS Warburg LLC, as
co-syndication agents, Societe Generale, as documentation agent, and Xxxxxx
Commercial Paper Inc., as administrative agent.
"Senior Credit Documents" means, collectively, the Senior Credit
Agreement, the Senior Notes Indentures, the notes issued under the Senior Notes
Indentures, and any other agreement entered into now or in the future by and
among any of the Company, any of the Company's subsidiaries, the Lenders (as
defined in the Senior Credit Agreement), Xxxxxx Brothers Inc., as advisor, sole
lead arranger and sole book manager, Deutsche Bank Securities Inc. and UBS
Warburg LLC, as co-syndication agents, Societe Generale, as documentation agent,
or Xxxxxx Commercial Paper Inc., as administrative agent, in connection with the
Senior Credit Agreement.
2. REPRESENTATIONS AND WARRANTIES.
Company hereby represents and warrants to PMI that:
(a) Authority. Company has the requisite corporate power and authority
to execute and deliver the Amendment Documents and to perform its obligations
thereunder, under the Note Agreement (as modified hereby), under the Note (as
modified hereby) and under the Registration Rights Agreement (as modified by
Amendment No. 2 to Registration Rights Agreement). The execution, delivery and
performance by Company of the Amendment Documents, the Note Agreement (as
modified hereby), the Note (as modified hereby), the
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Registration Rights Agreement (as modified by Amendment No. 2 to Registration
Rights Agreement), and the transactions contemplated hereby and thereby have
been duly approved by all necessary corporate action of Company and no other
corporate proceedings on the part of Company are necessary to consummate such
transactions.
(b) Enforceability. This Agreement has been duly executed and delivered
by Company, and Amendment No. 2 to Registration Rights Agreement, when
delivered, will have been duly executed and delivered by Company. Each of this
Agreement, Amendment No. 2 to Registration Rights Agreement (when delivered),
and, after giving effect to the Amendment Documents, the Note Agreement, the
Note, and the other Transaction Documents, is the legal, valid and binding
obligation of Company, enforceable against Company in accordance with its terms,
and is in full force and effect.
(c) No Conflicts. Neither the execution and delivery of the Amendment
Documents, nor the consummation of the transactions contemplated thereby, nor
performance of and compliance with the terms and provisions thereof by Company
will, at the time of such performance, (i) violate or conflict with any
provision of its charter or bylaws, (ii) violate, contravene or materially
conflict with any requirement of law or any other law, regulation, order, writ,
judgment, injunction, decree or permit applicable to it, except for any
violation, contravention or conflict which could not reasonably be expected to
have a Material Adverse Effect, or (iii) assuming the receipt of the Bank
Consent (defined below), violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound (including, without limitation,
the Senior Credit Agreement, the Senior Notes Indentures or the notes issued
under the Senior Notes Indentures), except for any violation, contravention or
conflict which could not reasonably be expected to have a Material Adverse
Effect.
(d) No Default. No Unmatured Event of Default or Event of Default has
occurred and is continuing under the Note Agreement, the Note, or any other
Transaction Document, and no default or event of default exists under the Senior
Credit Documents, after giving effect to the Bank Consent.
The foregoing representations and warranties shall be deemed made as of
the date of the execution and delivery hereof and as of the date of the
effectiveness of the amendments to the Transaction Documents contained in
Sections 3 and 4 of this Agreement.
3. AMENDMENTS TO NOTE AGREEMENT.
Subject to the satisfaction of the conditions contained herein, Company
and PMI hereby amend the Note Agreement as follows:
(a) The following definitions set forth in Section 3.1 of the Note
Agreement hereby are, in each case, amended and restated in their entirety to
read as follows:
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"Coupon Rate" means (i) prior to and excluding May 1, 2003, eight
percent (8.0%) per annum, and (ii) from and including May 1, 2003 and
thereafter, four percent (4.0%) per annum.
"Triggering Event Rate" means the sum of (i) the Coupon Rate then in
effect, and (ii) two percent (2.0%) per annum.
4. AMENDMENTS TO NOTE.
Subject to the satisfaction of the conditions contained herein, Company
and PMI hereby amend the Note as follows:
(a) The title of the Note, appearing directly beneath the two legends
on page 1 thereof, hereby is amended and restated in its entirety to read as
follows:
"CONVERTIBLE, SUBORDINATED NOTE
DUE FEBRUARY 28, 2007"
(b) The following definitions set forth in Section 2 of the Note hereby
are, in each case, amended and restated in their entirety to read as follows:
"Coupon Rate" means (i) prior to and excluding May 1, 2003, eight
percent (8.0%) per annum, and (ii) from and including May 1, 2003 and
thereafter, four percent (4.0%) per annum.
"Maturity Date" means February 28, 2007.
"Notes" means this convertible subordinated note issued by the
Corporation.
"Triggering Event Rate" means the sum of (i) the Coupon Rate then in
effect, and (ii) two percent (2.0%) per annum.
(c) Section 5(a) of the Note hereby is amended by deleting the phrase
"At any time after February 28, 2004," at the beginning thereof, and by
substituting in lieu thereof the phrase "At any time after February 28, 2005,".
5. CONDITIONS PRECEDENT.
5.1 The effectiveness of the amendments to the Transaction Documents
contained in Sections 3 and 4 of this Agreement (but not the effectiveness of
this Agreement, which will be effective upon the satisfaction of the terms
contained in Section 6.2(b)) is subject to the fulfillment, to the reasonable
satisfaction of PMI and its counsel, of each of the following conditions:
(a) PMI shall have received a counterpart of this Agreement duly
executed and delivered by Company, and the same shall be in full force and
effect;
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(b) PMI and Company shall have entered into Amendment No. 2 to
Registration Rights Agreement. In this regard, from and after the date of the
effectiveness of the amendments to the Transaction Documents contained in
Sections 3 and 4 of this Agreement, PMI and Company agree that all references in
the Note Agreement to the Registration Rights Agreement automatically shall be
deemed to be references to the Registration Rights Agreement, as amended by
Amendment No. 2 to Registration Rights Agreement, and that the Registration
Rights Agreement, as so amended, shall evidence, for all purposes, the
agreements between PMI and Company relating to the registration of shares of
Registrable Stock, as defined in the Registration Rights Agreement;
(c) no Unmatured Event of Default or Event of Default shall have
occurred and be continuing;
(d) PMI shall have received an opinion of legal counsel to the Company
in form and substance satisfactory to PMI and its legal counsel, and containing
the opinions set forth in Exhibit B hereto;
(e) PMI shall have received payment of all of its costs and expenses
(including attorneys fees' and costs) incurred in connection with the
preparation, negotiation, execution and delivery of this Agreement and Amendment
No. 2 to Registration Rights Agreement; and
(f) each of the representations and warranties contained herein shall
be true and correct in all respects on and as of the effectiveness of the
amendments to the Transaction Documents contained in Sections 3 and 4 of this
Agreement, as though made on and as of such date.
5.2 In addition, the effectiveness of the amendments to the Transaction
Documents contained in Sections 3 and 4 of this Agreement (but not the
effectiveness of this Agreement, which will be effective upon the satisfaction
of the terms contained in Section 6.2(b)) is subject to the fulfillment, to the
reasonable satisfaction of the Company and its counsel, of the following
condition:
(a) The Company's receipt of the consent of the lenders under the
Senior Credit Agreement (the "Bank Consent") whose consent to this Agreement and
the Company's financing transactions as described in its Registration Statement
and related Prospectus Supplements filed with the Securities and Exchange
Commission on April 2, 2003, is required.
6. MISCELLANEOUS.
6.1 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN XXX XXXX XX XXX XXXX, XXXXX XX XXX XXXX. COMPANY
AND PMI WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
(c) COMPANY AND PMI HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. COMPANY AND PMI REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
WAIVER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
6.2 COUNTERPARTS; TELEFACSIMILE EXECUTION; EFFECTIVENESS.
(a) This Agreement may be executed in any number of counterparts, each
of which, when so executed and delivered, shall be deemed an original. All of
such counterparts shall constitute but one and the same instrument. Delivery of
an executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement.
(b) This Agreement shall be effective as of the date first written
above when one or more counterparts hereof shall have been executed by Company
and PMI and shall have been delivered to PMI.
6.3 LIMITED AMENDMENT.
Except as expressly amended hereby, the Note Agreement and the Note
shall remain unchanged and in full force and effect. The modifications herein
are limited to the specific terms hereof, shall not apply with respect to any
facts or occurrences other than those on which the same are based, shall not
excuse future non-compliance with the Note Agreement or the Note, and except as
expressly set forth herein, shall not operate as a waiver or an amendment of any
right, power or remedy of PMI, nor as a consent to any further or other matter,
under the Note Agreement or the Note.
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6.4 OBTAINING THE BANK CONSENT.
The Company shall use commercially reasonable efforts to obtain the
Bank Consent no later than May 10, 2003 in order to effectuate the transactions
contemplated by the Amendment Documents.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
CORRECTIONS CORPORATION OF AMERICA,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxxxxx
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Its Vice President-Treasurer
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PMI MEZZANINE FUND, L.P.,
a Delaware limited partnership
By: Pacific Mezzanine Investors, LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Xxxxxx Xxxxxxxxxxx
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Its Managing Principal
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