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EXHIBIT 10.2
STOCK ACQUISITION AGREEMENT
THIS STOCK ACQUISITION AGREEMENT (the "Agreement"), dated as of
September 11, 2000, is made by and among SODEXHO ALLIANCE, S.A., a French
societe anonyme ("Sodexho"); JUVENILE AND JAIL FACILITY MANAGEMENT SERVICES,
INC., a Tennessee corporation ("JJFMS") and successor by merger to Juvenile and
Jail Facility Services, LLC, a Tennessee limited liability company ("JJFMS
LLC"); CORRECTIONS CORPORATION OF AMERICA (U.K.) LIMITED, a company incorporated
in England and Wales whose registered number is 2147489 ("CCA UK" and together
with JJFMS, "Sellers"); PRISON REALTY TRUST, INC., a Maryland corporation,
formerly known as Prison Realty Corporation ("Prison Realty") and successor by
merger to Corrections Corporation of America, a Tennessee corporation ("Old
CCA"); CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation formerly
known as Correctional Management Services Corporation ("CCA"), and PRISON
MANAGEMENT SERVICES, INC., a Tennessee corporation ("PMSI") and successor by
merger to Prison Management Services, LLC, a Tennessee limited liability
company.
R E C I T A L S:
A. On December 31, 1998, Old CCA contributed certain assets to JJFMS LLC
in consideration for 100% of the non-voting membership interests of JJFMS LLC.
The terms and conditions of such exchange were set forth in certain Contribution
Agreements dated December 31, 1998 (the "Contribution Agreements"). Included
among the assets contributed to JJFMS LLC pursuant to the Contribution
Agreements were: (i) 22,500 "C" class shares in the capital of Corrections
Corporation of Australia Pty. Ltd. A.C.N. 010 921 641, an Australia corporation
("CCA Australia"), which shares collectively represent fifty percent (50%) of
the issued and outstanding shares of CCA Australia (the "CCA Australia Shares");
and (ii) one hundred percent (100%) of the capital stock of CCA UK. The assets
of CCA UK included: (i) 5000 "A" Ordinary Shares and 2500 "B" Ordinary Shares in
the capital stock of U.K. Detention Services Limited, a company incorporated in
England and Wales ("UKDS") whose registered number is 2147491, which shares
collectively represent fifty percent (50%) of the issued and outstanding shares
of UKDS (collectively, the "UKDS Shares"); and (ii) 50% of the issued and
outstanding shares in the capital of Agecroft Prison Management Limited, a
company incorporated in England and Wales ("APM").
B. On December 31, 1998, JJFMS LLC was merged with and into JJFMS, with
JJFMS being the surviving corporation, pursuant to which the non-voting
membership interests of JJFMS LLC were converted into shares of non-voting
common stock of JJFMS.
C. On December 31, 1998, Old CCA was merged with and into Prison Realty,
with Prison Realty being the surviving corporation. As the result of the merger
of Old CCA with Prison Realty, Prison Realty owns one hundred percent (100%) of
the non-voting stock of JJFMS. Prison Realty has undertaken a comprehensive
restructuring designed to address its current liquidity and capital constraints,
simplify its corporate structure and satisfy certain conditions of its recently
amended bank credit indebtedness which restructuring contemplates a merger of
each of JJFMS, PMSI and CCA with and into wholly-owned subsidiaries of Prison
Realty.
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D. Sodexho desires to acquire from CCA UK, and CCA UK desires to sell to
Sodexho, the UKDS Shares, upon and subject to the terms and conditions contained
in this Agreement.
E. Sodexho desires to acquire from JJFMS, and JJFMS desires to sell to
Sodexho, the CCA Australia Shares, upon and subject to the terms and conditions
contained int his Agreement.
F. In order to facilitate the purchase and sale of the CCA Australia
Shares and the UKDS Shares, JJFMS, CCA UK and Sodexho have entered into that
certain Escrow Agreement of even date herewith and attached hereto as Exhibit A
(the "Escrow Agreement") providing for the delivery and deposit of the Purchase
Price, as hereinafter defined, and the certificates representing the CCA
Australia Shares and the UKDS Shares with the Escrow Agents set forth therein
(the "Escrow Agents"), pending the Closing, as hereinafter defined, of the
purchase and sale.
G. In connection with the purchase and sale of the CCA Australia Shares
and the UKDS Shares, immediately after such purchase and sale, Sodexho desires
to grant to JJFMS and JJFMS desires to accept the grant of: (i) an option to
purchase fifty percent(50%) of the UKDS Shares which would represent twenty-five
percent (25%) of the aggregate issued and outstanding shares of UKDS (the "UKDS
Option Shares"); and (ii) an option to purchase fifty percent (50%) of the CCA
Australia Shares which would represent twenty-five percent (25%) of the
aggregate issued and outstanding shares of CCA Australia (the "CCA Option
Australia Shares" and, collectively with the UKDS Option Shares, the "Option
Shares"), pursuant to the terms and conditions of that certain Option Agreement
attached hereto as Exhibit B.
In consideration of the mutual promises, covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
ESCROW; PURCHASE AND SALE OF SHARES
1.01. ESCROW. Within five (5) business days from the date hereof,
Sodexho agrees to deliver and deposit the Purchase Price, and each of JJFMS and
CCA UK agrees to deliver the CCA Australia Shares and the UKDS Shares,
respectively, to the Escrow Agents in accordance with the Escrow Agreement. The
parties hereto agree to make such reasonable changes to the Escrow Agreement as
maybe required by the Escrow Agents.
1.02. TRANSFER OF UKDS SHARES. Subject to all of the terms and
conditions of this Agreement, at the Closing, CCA UK hereby agrees to sell,
transfer and convey to Sodexho, and Sodexho hereby agrees to purchase and
acquire from CCA UK, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges and encumbrances of any kind, the
UKDS Shares in exchange for the Purchase Price set forth in Section 2.01 hereof.
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1.03. TRANSFER OF CCA AUSTRALIA SHARES. Subject to all of the terms and
conditions of this Agreement, at the Closing, JJFMS hereby agrees to sell,
transfer and convey to Sodexho, and Sodexho agrees to purchase and acquire from
JJFMS, free and clear of all liens, claims, charges, restrictions, security
interests, equities, proxies, pledges and encumbrances of any kind, the CCA
Australia Shares in exchange for the Purchase Price set forth in Section 2.01
hereof (the UKDS Shares and the CCA Australia Shares are hereinafter
collectively referred to as the "Shares").
ARTICLE II
CONSIDERATION
2.01. PURCHASE PRICE. The aggregate purchase price for the Shares shall
be Six Million Four Hundred Thousand Dollars, U.S. ($6,400,000) (U.S.) (the
"Purchase Price") of which (i) Three Million Two Hundred Thousand Dollars
($3,200,000) (U.S.) shall be allocated to the UKDS Shares and (ii) Three Million
Two Hundred Thousand Dollars ($3,200,000) (U.S.) shall be allocated to the CCA
Australia Shares. The Purchase Price shall be paid by Sodexho to JJFMS at the
Closing, by bank wire transfer or in other immediately available funds.
2.02. COMPANY OBLIGATIONS. By entering into this Agreement, Sodexho
understands and agrees that, from and after the Closing, Sodexho shall discharge
any liability incurred by JJFMS, CCA UK, Prison Realty or CCA under the
documents described in Schedule 2.02 hereof, shall cooperate with CCA UK, JJFMS
and CCA in obtaining from the requisite governmental consents to the assumption
by Sodexho of such liability and shall indemnify JJFMS, CCA UK and/or CCA in
respect thereof.
ARTICLE III
CLOSING; OBLIGATIONS OF THE PARTIES
3.01. CLOSING DATE. The closing (the "Closing") shall take place and be
effective for all purposes at 10:00 a.m., local time, on October 16, 2000 at the
offices of JJFMS or at such other time, sooner or later than October 16, 2000
but prior to March 31, 2001, as all the conditions to Closing set forth in
Articles VIII and IX herein have been satisfied or at such other time and place
as the parties hereto mutually agree (the "Closing Date").
3.02. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, Sodexho, JJFMS and CCA UK shall provide the
Escrow Agents with joint written notice directing said Escrow
Agents to complete the actions set out in the following clauses
(i) through (iii):
(i) The payment of the Purchase Price as specified in Section
2.01 hereof to JJFMS.
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(ii) The delivery of the share certificate(s) issued by UKDS
representing the UKDS Shares, with duly executed stock
powers, to Sodexho.
(iii) The delivery of the share certificate(s) issued by CCA
Australia representing the CCA Australia Shares, with
duly executed stock powers, to Sodexho.
(b) At the Closing, the following events set out in clauses (i)
through (iv) shall occur:
(i) Sellers shall procure the delivery to Sodexho of duly
executed transfers of all of the Shares in favor of
Sodexho or its nominee(s).
(ii) Sellers shall deliver to Sodexho any waiver, consent or
other document which Sodexho may require to obtain a good
title to the Shares registered in the name of Sodexho or
its nominee(s), including any Power of Attorney under
which any document required to be delivered under this
Agreement has been executed.
(iii) JJFMS shall deliver signed resignations of all persons
who are CCA-designated directors and officers (other
than T. Xxx Xxxxx) of UKDS and CCA Australia.
(iv) Sellers, Prison Realty, CCA and Sodexho shall deliver
certified copies of resolutions of their respective board
of directors and of the majority of the voting
shareholders of JJFMS approving execution and delivery of
this Agreement and consummation of the transactions
contemplated hereby.
(v) Copies of all consents of third parties and governmental
bodies and agencies necessary for the transfer of the
UKDS Shares and all such consents necessary for the
transfer of the CCA Australia Shares shall have been
furnished to Sodexho, it being understood that once the
consents necessary for the transfer of the UKDS Shares
have been obtained the Closing shall proceed with respect
to the transfer of said UKDS Shares (assuming the other
conditions to the transfer of said UKDS Shares shall have
been satisfied) and it being understood that once the
consents necessary for the transfer of the CCA Australia
Shares have been obtained, the Closing shall proceed with
respect to the transfer of said CCA Australia Shares
(assuming the other conditions to the transfer of said
Shares shall have been satisfied), and if at any time the
third parties and governmental consents for the transfer
of all the Shares have been obtained and all other
conditions have been satisfied, then the Closing shall
occur with respect to the transfer of all the Shares of
UKDS and CCA Australia.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
In order to induce Sodexho to enter in this Agreement and consummate the
transactions contemplated hereby, Sellers hereby represent and warrant to
Sodexho as follows:
4.01. ORGANIZATION AND GOOD STANDING. JJFMS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Tennessee, United States and has full corporate power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby. CCA
UK is a corporation duly incorporated, validly existing and in good standing
under the laws of England and has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.
4.02. OWNERSHIP OF UKDS SHARES; VALIDITY AND ENFORCEABILITY. Sellers
represent and warrant that: (i) CCA UK is the legal and beneficial owner of the
UKDS Shares, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges or encumbrances of any kind; (ii)
CCA UK has the full right, power, authority and capacity to sell and transfer
the UKDS Shares owned by CCA UK; and (iii) by virtue of the transfer of the UKDS
Shares to Sodexho at the Closing, Sodexho will obtain full title to such Shares,
free and clear of all liens, claims, charges, restrictions, security interests,
equities, proxies, pledges, or encumbrances of any kind.
4.03. OWNERSHIP OF CCA AUSTRALIA SHARES; VALIDITY AND ENFORCEABILITY.
Sellers represent and warrant that: (i) JJFMS is the legal and beneficial owner
of the CCA Australia Shares, free and clear of all liens, claims, charges,
restrictions, security interests, equities, proxies, pledges or encumbrances of
any kind; (ii) JJFMS has the full right, power, authority and capacity to sell
and transfer the CCA Australia Shares owned by JJFMS; and (iii) by virtue of the
transfer of the CCA Australia Shares to Sodexho at the Closing, Sodexho will
obtain full title to such Shares, free and clear of all liens, claims, charges,
restrictions, security interests, equities, proxies, pledges, or encumbrances of
any kind, provided, however, that where any governmental consent, approval,
authorization or order is required, as contemplated herein, then any
representation or warranty by Sellers is deemed to be subject to the obtaining
of such consent, approval, authorization or order.
4.04. CORPORATE POWER AND AUTHORITY: DUE AUTHORIZATION. Each of JJFMS
and CCA UK has full corporate power and authority, acting through its officers
who sign this Agreement, to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The board of directors of each of JJFMS
(and by a majority vote of the shareholders of JJFMS) and CCA UK has duly
approved and authorized the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and no other corporate
proceedings on the part of JJFMS or CCA UK are necessary to approve and
authorize the execution and delivery of this Agreement and each of the documents
to which JJFMS and/or CCA UK is a party constitutes, or will constitute when
executed and delivered, a valid and binding agreement of JJFMS and/or CCA UK, as
applicable, in each case enforceable in accordance with its terms.
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4.05. NO VIOLATION. The execution and delivery of this Agreement by each
of JJFMS and CCA UK does not, and the consummation of the transactions
contemplated hereby will not: (a) violate or be in conflict with, or constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) with, or result in the termination of, or accelerate the
performance required by, or excuse performance by any person of any of its
obligations under, or cause the performance required by, or excuse performance
by any person of any of its liabilities under, any provision of, or result in
the creation of any lien or security interest under, any agreement, indenture,
instrument, lease, security agreement, mortgage or lien to which JJFMS or CCA UK
is a party or by which any of JJFMS's or CCA UK's assets or properties are
bound; (b) violate or be in conflict with any provision of the Charter or Bylaws
of JJFMS or the Articles of Association of CCA UK; (c) violate any order,
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to JJFMS or CCA UK; or (d) violate any other contractual
or legal obligation or restriction to which JJFMS and/or CCA UK is subject.
4.06. CONSENTS AND APPROVALS. Sellers have obtained or will have
obtained prior to Closing, all consents, approvals, authorizations or orders of
third parties, including governmental authorities, necessary for the
authorization, execution and performance of this Agreement by Sellers.
4.07. LITIGATION. There is no litigation at law or in equity pending or,
to the knowledge of any of the Sellers, threatened against any of the Sellers or
their respective subsidiaries with respect to the Shares or the consummation of
the transactions contemplated by this Agreement. To the knowledge of each of the
Sellers, there is no litigation at law or in equity threatened against Sodexho
or the Shares or the consummation of the transactions contemplated by this
Agreement except as disclosed by Prison Realty in documents filed with the U.S.
Securities and Exchange Commission prior to the date hereof.
4.08. FULL DISCLOSURE. Neither the representations appearing in Article
IV of this Agreement, nor any schedule, exhibit, list, certificate or other
instrument and document furnished or to be furnished by Sellers to Sodexho
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PRISON REALTY AND CCA
In order to induce Sodexho to enter in this Agreement and consummate the
transactions contemplated hereby, each of Prison Realty and CCA hereby represent
and warrant severally to Sodexho as follows:
5.01. AUTHORITY. Each of Prison Realty and CCA has full power and
authority, acting through its officer or officers who signed this Agreement, to
execute, deliver, enter into and perform this Agreement and all agreements,
instruments and documents contemplated hereby and to carry
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out the transactions contemplated thereby. This Agreement is a valid and binding
obligation of each of Prison Realty and CCA enforceable against each in
accordance with its terms, subject to the limitations imposed by bankruptcy,
insolvency, moratorium or similar laws or provisions of general application, and
to the availability of equitable remedies (whether enforcement is sought in a
court of law or equity).
5.02. NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the carrying out of any of the transactions contemplated hereby,
will result in any violation of or be in conflict with any term of any agreement
or instrument or memorandum of understanding regarding settlement of litigation
to which either Prison Realty or CCA is a party or by which either is bound, or
of any law or governmental order, rule or regulation which is applicable to
Prison Realty or CCA or will result in the creation or imposition of any
security interest, mortgage, lien, encumbrance or charge upon any of the
properties or assets of Prison Realty or CCA. No consents or approvals of any
persons or entities, governmental or otherwise, are required which have not been
obtained (or which will not have been obtained on or prior to the Closing) in
respect of the execution and delivery of this Agreement on the part of Prison
Realty or CCA. The consummation of the transfer of the Shares pursuant to this
Agreement will not adversely affect Prison Realty's status as a real estate
investment trust under the Internal Revenue Code of 1986, as amended.
5.03. LITIGATION. There is no litigation at law or in equity pending or,
to the knowledge of Prison Realty or CCA, threatened against Prison Realty or
CCA or their respective subsidiaries with respect to the Shares or the
consummation of the transactions contemplated by this Agreement. To the
knowledge of Prison Realty or CCA, there is no litigation at law or in equity
threatened against Sodexho or the Shares or the consummation of the transactions
contemplated by this Agreement except as disclosed by Prison Realty in documents
filed with the U.S. Securities and Exchange Commission prior to the date hereof.
5.04. FULL DISCLOSURE. Neither the representations appearing in Article
V of this Agreement, nor any schedule, exhibit, list, certificate or other
instrument and document furnished or to be furnished by Prison Realty and CCA to
Sodexho pursuant to this Agreement, contains any untrue statement of a material
fact or omits to state any material fact required to be stated herein or therein
or necessary to make the statements and information contained herein or therein
not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SODEXHO
In order to induce Seller to enter in this Agreement and consummate the
transactions contemplated hereby, Sodexho hereby represents and warrants to
Sellers, Prison Realty and CCA as follows:
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6.01. ORGANIZATION AND GOOD STANDING. Sodexho is a societe anonyme duly
organized, validly existing and in good standing under the laws of France and
has full corporate power and authority to enter into this Agreement and to carry
out the transactions contemplated hereby.
6.02. AUTHORIZATION. The board of directors of Sodexho has taken all
action required to authorize the execution and delivery by Sodexho of this
Agreement and the consummation of the transactions contemplated hereby, and no
other corporate proceedings on the part of Sodexho are necessary to approve or
authorize the execution and delivery of this Agreement.
6.03. VALID AND BINDING AGREEMENT. This Agreement and each of the
documents to which Sodexho is a party constitutes, or will constitute when
executed and delivered, a valid and binding agreement of Sodexho, enforceable
against Sodexho in accordance with its terms.
6.04. NO VIOLATION. The execution and delivery of this Agreement by
Sodexho does not, and the consummation of the transactions contemplated hereby
will not: (a) violate or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
with, or result in the termination of, or accelerate the performance required
by, or excuse performance by any person of any of its obligations under, or
cause the performance required by, or excuse performance by any person of any of
its liabilities under any provision of, or result in the creation of any lien or
security interest under, any agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which Sodexho is a party or by which it is bound;
(b) violate any order, arbitration award, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Sodexho; or (c) violate any other
contractual or legal obligation or restriction to which Sodexho is subject.
6.05. PURCHASE FOR INVESTMENT. Sodexho understands and agrees that the
Shares have not been registered under the securities laws of any jurisdiction.
Sodexho is acquiring the Shares of its own account and not with a view to, or
present intention of, distribution thereof in violation of the securities laws
of the United States or England or any state securities or blue sky law, and the
Shares will not be disposed of in contravention of such laws.
6.06. PROFESSIONAL FEES. Sodexho has taken no action which would result
in the incurrence of any liability for investment banking, brokerage, finders,
agents or other fees, commissions, expenses or charges in connection with the
negotiation, preparation, execution and performance of this Agreement or the
consummation of the transactions contemplated hereby, and Sodexho does not know
of any claim for such a commission or fee.
6.07. CONSENTS AND APPROVALS. Assuming the best efforts of Prison
Realty, JJFMS and CCA UK to cooperate in obtaining the requisite consents,
Sodexho has obtained, or will have obtained prior to Closing, all consents,
approvals, authorizations or orders of third parties, including governmental
authorities, necessary for the authorization, execution and performance of this
Agreement by Sodexho. Sodexho agrees that it will comply with the provisions of
the Stamp Act and
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the regulations thereunder of the State of Queensland and to pay to the office
of State Revenue any stamp duty payable on this Agreement with respect to the
CCA Australia Shares.
6.08 FULL DISCLOSURE. Neither the representations appearing in Article
VI of this Agreement, nor any certificate or other instrument and document
furnished or to be furnished by Sodexho to the Sellers, Prison Realty or CCA
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein not
misleading.
ARTICLE VII
COVENANTS AND AGREEMENTS OF PARTIES
The parties hereto agree that from the date hereof until the Closing,
and thereafter if so specified, each party will fulfill the following covenants
and agreements unless otherwise consented to by the other parties in writing:
7.01. FURTHER ASSURANCES. At any time and from time to time after the
Closing, at the request of the other parties hereto and without further
consideration, each of Sellers, Prison Realty, and Sodexho will execute and
deliver such other instruments of sale, transfer, conveyance, assignment and
delivery and take such action as may reasonably be required by another party
hereto in order more effectively to transfer, convey and assign to Sodexho and
to place Sodexho in possession and control of, and to confirm Sodexho's title
to, the Shares, and to assist Sodexho in exercising all rights enjoying all
benefits with respect thereto.
7.02. CONSENTS AND APPROVALS. Each of Sellers, Prison Realty and Sodexho
shall, in a timely, accurate and complete manner, take all necessary corporate
and other action and use all reasonable efforts to obtain all consents,
approvals, permits, licenses and amendments of agreements required to carry out
the transactions contemplated in this Agreement.
7.03. OPTION. Sodexho agrees that immediately upon the acquisition of
the Shares pursuant hereto, it shall grant to JJFMS (i) an option to purchase
the UKDS Option Shares, and (ii) an option to purchase the CCA Australia Shares
pursuant to the Option Agreement.
7.04 AMENDMENT OF AUSTRALIAN SHAREHOLDERS' AGREEMENT. The CCA Australia
Shareholders' Agreement is hereby amended, effective upon the Closing under this
Agreement, as follows:
(a) The provisions of Sections 3 and 4 shall not apply to the purchase
of the shares of CCA Australia by Sodexho under this Agreement or the purchase
by JJFMS, its successor, or Prison Realty of shares of CCA Australia upon
exercise of the CCA Australia Option hereunder.
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(b) The provisions of Sections 9 and 14 are hereby deleted.
(c) The provisions of Section 10 (Non-Competition) are hereby amended to
read in their entirety as follows:
"Section 10. Non-Competition
(a) For all purposes of this Section 10, the term "Shareholder"
shall include (in addition to all persons actually holding stock in the
Corporation), for a period of three years from the date of the closing
of the transactions contemplated by the Stock Acquisition Agreement as
defined herein, (i) Juvenile and Jail Facility Management Services, Inc.
("JJFMS") and any Affiliate of JJFMS as the selling shareholder under
the Stock Acquisition Agreement dated as of September 11, 2000 (the
"Stock Acquisition Agreement") and as the holder of an option to
purchase twenty five percent of the aggregate issued and outstanding
shares of the Corporation (sometimes referred to as "CCA Australia")
pursuant to that certain Option Agreement executed in connection with
the closing of the transactions contemplated by the Stock Acquisition
Agreement (the "CCA Australia Option"), and (ii) Prison Realty or any
Affiliate of Prison Realty or any Affiliate of JJFMS (whether or not
JJFMS is an Affiliate of Prison Realty at any time).
(b) Each Shareholder agrees that except as otherwise provided
herein, each will conduct all of its business with respect to the Prison
Management Business in Australia exclusively with each other. For
purposes of this Agreement, Prison Management Business means the (i)
design, construction, financing and "full management" of detention or
correctional facilities with or without custodial services, or any one
of the four major activities of design, construction, financing and
"full management," and/or (ii) the transportation of prisoners, and
(iii) shall mean the design, construction, financing and "full
management," or any of said four major activities, of immigration
custodial facilities, police custodial facilities, court custodial
facilities or services and secure training centers and facilities (such
as juvenile training centers or facilities); it being understood that
Sodexho may continue to provide food service, laundry, housekeeping,
maintenance, etc. outside of the Corporation and that the provisions of
such services by Sodexho at a rate of less than $12.00 (U.S.) (obtained
by applying 3% inflation a year for six years) per inmate per day (as
such amount may be increased by the Board of the Corporation from time
to time) shall not constitute "full management" and shall not constitute
the Prison Management Business. In order to give effect to this
decision, the Shareholders agree that unless approved by the Board of
Directors of the Corporation in writing or except as otherwise permitted
pursuant to this Agreement as amended:
(A) neither Shareholders nor any of their respective
Affiliates (each as defined in the CCA Australia Shareholders'
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Agreement) will compete with the Corporation in the Prison
Management Business in Australia.
(B) any third-party approach towards any Shareholder in
relation to a Project (as defined in the CCA Australia
Shareholders' Agreement) in Australia, whether in its individual
capacity or as a Shareholder shall be immediately introduced to
the Corporation. For purposes of this Section, a Project means
any opportunity related to the Prison Management Business in
Australia, such as requests (with respect to a particular
facility) for proposals and bids to governmental agencies and
consulting agencies with respect to the Prison Management
Business.
(C) neither Shareholders nor any of their respective
Affiliates, shall alone or jointly with others acquire any
material interest (more than 10%) in any company which is a
competitor of the Corporation in the Prison Management Business
in Australia (other than competitors for which the revenues
related to the prison management business constitute less than
10% of the total revenues for such competitors).
(c) The Shareholders agree that in the event of a breach of the
provisions contained in this Section 10, in addition to any other
remedies available to any Shareholder in breach of any such provision,
the Shareholder in breach shall pay to the other Shareholder an amount
equal to one year's annual revenues generated by the Prison Management
Business which is the subject of such breach.
(d) If any of the restrictions set forth in this Section 10
(including, without limitation the provisions of clause (c) above)
should for any reason be declared invalid by a court of competent
jurisdiction, the validity or enforcement of the remainder of such
restrictions and covenants shall not thereby be adversely affected. If
any provision of this Section shall be adjudicated to be invalid or
unenforceable, such provision shall be deemed deleted, but only to the
operation of such provision in the particular jurisdiction in which such
adjudication was made; provided, that, to the extent any such provision
may be made valid and enforceable, in such jurisdiction by limitations
on the scope of the activities, geographical area or time period
covered, such provision shall be deemed limited to the extent, and only
to that extent, necessary to make such provision enforceable to the
fullest extent permissible under the laws and public policies applied in
such jurisdiction.
It is understood that the provisions of this Section 10 shall be
binding upon Prison Realty and Sodexho, regardless of whether the
provisions of this Section are agreed to in writing by CCA Australia;
provided, however, that Prison Realty,
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Sodexho and JJFMS agree to cause CCA Australia to give a written
undertaking of its agreement to be bound by this Section.
(e) The use by CCA Australia or its shareholders of special
purpose vehicles involving third party partners of CCA Australia or its
shareholders for the purpose of facilitating the design, construction or
development of a facility or Project to be managed by CCA Australia
shall not be deemed a violation of the non-competition provisions of
this Section 10, provided, however that such special purpose vehicle
shall not engage in the full management portion of the Prison Management
Business. In the event that Prison Realty or JJFMS or any permitted
Affiliate of either purchases shares in CCA Australia, it shall be
entitled to obtain a partnership interest or shares in each such special
purpose vehicle formed after the date of such purchase of shares in CCA
Australia, to the same extent of its percentage holding of capital stock
in CCA Australia and at a purchase cost per share or partnership
interest equal to the purchase cost per share or partnership interest
paid by Sodexho, provided that after consultation with Sodexho, Prison
Realty, JJFMS or any permitted Affiliate shall give joint and several
guarantees of such projects (prospectively when it becomes such a
shareholder) in connection with projects undertaken by such special
purpose vehicle when Sodexho determines to give a guarantee (or had
previously determined to give a guarantee prior to the date JJFMS or its
successor becomes a shareholder), provided that Sodexho shall give a
written undertaking that, as between Sodexho and such shareholder, such
shareholder shall be responsible ultimately only for the percentage of
such guarantee as is equal to such shareholder's percentage of the
outstanding stock (or partnership interest) in the special purpose
vehicle and Sodexho shall be responsible for the balance.
(f) Sodexho will not form other companies in Australia to
perform management services in the Prison Management Business, or if
such formation is essential from a legal or business perspective, then
JJFMS, its successor, or Prison Realty will have the right, if and when
it becomes a shareholder in CCA Australia by exercising the CCA
Australia Option, to acquire 25% of any such new management company at a
purchase cost per share or partnership interest equal to any capital put
in by Sodexho in any such company, provided that after consultation with
Sodexho, JJFMS, its successor, or Prison Realty, as applicable shall
give joint and several guarantees (both prospectively and retroactively
when it becomes such a shareholder) in connection with projects
undertaken by such companies (and not by any special purpose vehicle)
when Sodexho determines to give a guarantee (or had previously
determined to give a guarantee prior to the date Prison Realty becomes
such a shareholder), and provided further that Sodexho shall give a
written undertaking that, as between Sodexho and such shareholder, such
shareholder shall be responsible ultimately only for the percentage of
all such prospective and retroactive guarantees as is equal to such
shareholder's percentage of the outstanding stock (or partnership
interest) in such company, and Sodexho shall be responsible for the
balance."
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(d) The provisions of Sections 10 and 11 shall apply to the parties
hereto for a period of three years from the Closing and shall thereafter apply
to all of Prison Realty, JJFMS or its successor and their Affiliates in each
case only if either or an Affiliate of either is a shareholder of CCA Australia.
If neither of them and none of their Affiliates is a shareholder in CCA
Australia after said three year period, then the provisions of Section 10 shall
not apply to any of them. Prison Realty and JJFMS shall be deemed a shareholder
for the purposes of Section 15 of the CCA Australia Shareholders' Agreement for
a period of three years from the Closing and the proviso to Section 15 of the
CCA Australia Shareholders' Agreement is hereby deleted.
(e) The provisions of Section 13 (Board of Directors) are hereby amended
to read in their entirety as follows:
"Section 13. Board of Directors. In the event of the exercise of
the CCA Australia Option by JJFMS or its successor, JJFMS or its
successor shall be entitled to one (1) nominee to the Board of Directors
reasonably satisfactory to Sodexho. In the event of the exercise of the
CCA Australia Option by JJFMS or its successor, Sodexho agrees (i) that
in all elections for directors during the term of this Agreement,
Sodexho shall vote all shares owned by it for the nominee of JJFMS or
its successor."
(f) A new Section 26 entitled "Miscellaneous" shall be added as follows:
"Effective upon the Closing under the Stock Acquisition Agreement,
and notwithstanding any other agreement to which Sodexho is a party or
the charter or by-laws of CCA Australia, no management fee shall be
payable to Prison Realty or any subsidiary or to JJFMS or any
subsidiary. If Prison Realty or JJFMS becomes a shareholder in CCA
Australia, after consultation with Sodexho (i) it shall give joint and
several guarantees of Projects of CCA Australia (both prospectively and
retroactively when it becomes a shareholder) in connection with Projects
undertaken by CCA Australia (and not by any special purpose vehicle)
when Sodexho determines to give a guarantee (or had previously
determined to give a guarantee prior to the date JJFMS or its successor
becomes a shareholder) and provided further that Sodexho shall give a
written undertaking that, as between Sodexho and JJFMS or such other
shareholder, JJFMS, or such other shareholder shall be responsible
ultimately only for the percentage of such guarantee as is equal to
JJFMS's or such other shareholder's percentage of the outstanding stock
in CCA Australia, and Sodexho shall be responsible for the balance of
such guarantee, and (ii) JJFMS or such other shareholder shall agree in
writing to reimburse Sodexho for that percentage of any liability
Sodexho may have with respect to then-still outstanding guarantees that
were given while Prison Realty or JJFMS or any Affiliate of either holds
the CCA Australia Option (prior to its exercise) as is equal to the
percentage of the outstanding stock of CCA Australia held by JJFMS (or
such other shareholder) after giving effect to the exercise of the CCA
Australia Option)." Prison Realty
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agrees to guarantee the obligations of JJFMS (or whatever Affiliate
exercises the CCA Australia Option and becomes a shareholder in CCA
Australia) to deliver guarantees under the CCA Australia Shareholders
Agreement.
(g) JJFMS, by its signature to this Agreement, and each of Prison Realty
and PMSI by its signature to this Agreement, agree to be bound by the CCA
Australia Shareholders' Agreement, as amended, to the extent provided in this
Section 7.04, as if it were an original signatory thereof.
7.05 AMENDMENT OF U.K. SHAREHOLDERS' AGREEMENT. The UKDS Shareholders'
Agreement is hereby amended, effective upon the Closing under this Agreement, as
follows:
(a) The provisions of Sections 3 and 4 shall not apply to the purchase
of the shares of UKDS by Sodexho under this Agreement or the purchase by JJFMS,
its successor, or Prison Realty of shares of UKDS upon exercise of the UKDS
Option hereunder.
(b) The provisions of Sections 8, 12 and 13 are hereby deleted.
(c) The provisions of new Section 8 are hereby added as follows:
"Section 8. Non-Competition
(a) For all purposes of this Section 8, the term "Shareholder"
shall include (in addition to all persons actually holding stock in the
Corporation), for a period of three years from the date of the closing
of the transactions contemplated by the Stock Acquisition Agreement as
defined herein, (i) Juvenile and Jail Facility Management Services, Inc.
("JJFMS") and any Affiliate of JJFMS as the parent of a selling
shareholder under the Stock Acquisition Agreement dated as of September
11, 2000 (the "Stock Acquisition Agreement") and as the holder of an
option to purchase twenty five percent of the aggregate issued and
outstanding shares of the Corporation (sometimes referred to as "UKDS")
pursuant to that certain Option Agreement executed in connection with
the closing of the transactions contemplated by the Stock Acquisition
Agreement (the "UKDS Option"), and (ii) Prison Realty or any Affiliate
of Prison Realty or any Affiliate of JJFMS (whether or not JJFMS is an
Affiliate of Prison Realty at any time), and (ii) CCA U.K., the
subsidiary of JJFMS as the selling shareholder of stock in UKDS.
(b) Each Shareholder agrees that except as otherwise provided
herein, each will conduct all of its business with respect to the Prison
Management Business in the United Kingdom exclusively with each other.
For purposes of this Section, Prison Management Business means the (i)
design, construction, financing and "full management" of detention or
correctional facilities with or without custodial services, or any one
of the four major activities of design, construction, financing and
"full management," and/or (ii) the transportation of prisoners, and
(iii) shall
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mean the design, construction, financing and "full management," or any
of said four major activities, of immigration custodial facilities,
police custodial facilities, court custodial facilities or services and
secure training centers and facilities (such as juvenile training
centers or facilities); it being understood that Sodexho may continue to
provide food service, laundry, housekeeping, maintenance, etc. outside
of the Corporation and that the provisions of such services by Sodexho
at a rate of less than $12.00 (U.S.) (obtained by applying 3% inflation
a year for six years) per inmate per day (as such amount may be
increased by the Board of the Corporation from time to time) shall not
constitute "full management" and shall not constitute the Prison
Management Business. In order to give effect to this decision, the
Shareholders agree that unless approved by the Board of Directors of the
Corporation in writing or except as otherwise permitted pursuant to this
Agreement as amended:
(A) neither Shareholders nor any of their respective
Affiliates (each as defined in the UKDS Shareholders' Agreement
as amended) will compete with the Corporation in the Prison
Management Business in the United Kingdom.
(B) any third-party approach towards any Shareholder in
relation to a Project (as defined in the UKDS Shareholders'
Agreement) in the United Kingdom, whether in its individual
capacity or as a Shareholder, shall be immediately introduced to
the Corporation. For purposes of this Section, a Project means
any opportunity related to the Prison Management Business in the
United Kingdom such as requests (with respect to a particular
facility) for proposals and bids to governmental agencies and
consulting agencies with respect to the Prison Management
Business.
(C) neither Shareholders nor any of their respective
Affiliates, shall alone or jointly with others acquire any
material interest (more than 10%) in any company which is a
competitor of the Corporation in the Prison Management Business
in the United Kingdom (other than competitors for which the
revenues related to the prison management business constitute
less than 10% of the total revenues for such competitors).
(c) The Shareholders agree that in the event of a breach of the
provisions contained in this Section 8, in addition to any other
remedies available to any Shareholder for breach of any such provision,
the Shareholder in breach shall pay to the other Shareholder an amount
equal to one year's annual revenues generated by the Prison Management
Business which is the subject of such breach.
(d) If any of the restrictions set forth in this Section 8
(including, without limitation, the provisions of clause (c) above)
should for any reason be declared
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invalid by a court of competent jurisdiction, the validity or
enforcement of the remainder of such restrictions and covenants shall
not thereby be adversely affected. If any provision of this Section
shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed deleted, but only to the operation of such provision in
the particular jurisdiction in which such adjudication was made;
provided, that, to the extent any such provision may be made valid and
enforceable, in such jurisdiction by limitations on the scope of the
activities, geographical area or time period covered, such provision
shall be deemed limited to the extent, and only to that extent,
necessary to make such provision enforceable to the fullest extent
permissible under the laws and public policies applied in such
jurisdiction.
(e) Nothing in Section 8 shall be deemed to preclude Agecroft
Project Management Ltd. ("APM") from carrying on its business with
respect to the Agecroft facility in the United Kingdom.
(f) The use by UKDS or its Shareholders of special purpose
vehicles involving third party partners of UKDS or its Shareholders for
the purpose of facilitating the design, construction or development of a
facility or Project to be managed by UKDS, shall not be deemed a
violation of the non-competition provisions of this Section 8; provided,
however, that such special purpose vehicle shall not engage in the full
management portion of the Prison Management Business. In the event that
Prison Realty or JJFMS or any permitted Affiliate of either exercises
the UKDS Option to purchase shares in UKDS, it shall be entitled to
obtain a partnership interest or shares in each such special purpose
vehicle formed after the date of such purchase of shares in UKDS, to the
same extent of its percentage holding of capital stock in UKDS and at a
purchase cost per share or partnership interest equal to the purchase
cost per share or partnership interest paid by Sodexho, provided that,
after consultation with Sodexho, Prison Realty, JJFMS or any permitted
Affiliate shall give joint and several guarantees of such projects
(prospectively when it becomes such a shareholder) in connection with
projects undertaken by such companies when Sodexho determines to give a
guarantee (or had previously determined to give a guarantee prior to the
date JJFMS or its successor become a shareholder), and provided further,
that Sodexho shall give a written undertaking that, as between Sodexho
and such shareholder, such shareholder shall be responsible ultimately
only for the percentage of such guarantee as is equal to such
shareholder's percentage of the outstanding stock (or partnership
interest) in the special purpose vehicle and Sodexho shall be
responsible for the balance.
(g) Sodexho will not form other companies in United Kingdom to
perform management services in the Prison Management Business, or if
such formation is essential from a legal or business perspective, then
JJFMS, its successor, or Prison Realty will have the right, if and when
it becomes a shareholder in UKDS by exercising the UKDS Option, to
acquire 25% of any such new management
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company at a purchase cost per share or partnership interest equal to
any capital put in by Sodexho in any such company, provided that after
consultation with Sodexho, JJFMS, its successor, or Prison Realty, as
applicable shall give joint and several guarantees (both prospectively
and retroactively when it becomes such a shareholder) in connection with
projects undertaken by such companies (and not by any special purpose
vehicle) when Sodexho determines to give a guarantee (or had previously
determined to give a guarantee prior to the date Prison Realty becomes
such a shareholder), and provided further that Sodexho shall give a
written undertaking that, as between Sodexho and such shareholder, such
shareholder shall be responsible ultimately only for the percentage of
all such prospective and retroactive guarantees as is equal to such
shareholder's percentage of the outstanding stock (or partnership
interest) in such company, and Sodexho shall be responsible for the
balance."
(d) The provisions of Sections 8 and 9 shall apply to the parties hereto
for a period of three years from the Closing and shall thereafter apply to all
of Prison Realty, JJFMS, its successor and their Affiliates in each case, or CCA
U.K. if any of them or their Affiliates is a shareholder of UKDS. If none of
them and none of their Affiliates is a shareholder in UKDS after said three year
period, then the provisions of Section 8 shall not apply to any of them. Prison
Realty, JJFMS and CCA U.K. shall be deemed a shareholder for the purposes of
Section 14 of the UKDS Shareholders' Agreement for a period of three years from
the Closing.
(e) The provisions of Section 11 (Board of Directors) are hereby amended
to read in their entirety as follows:
"Section 11. Board of Directors. In the event of the exercise of the
UKDS Option by JJFMS or its successor, JJFMS or its successor shall be
entitled to one (1) nominee to the Board of Directors reasonably
satisfactory to Sodexho. In the event of the exercise of the UKDS Option
by JJFMS or its successor, Sodexho agrees that in all elections for
directors during the term of this Agreement, Sodexho shall vote all
shares owned by it for the nominee of JJFMS or its successor."
(f) A new Section 24 entitled "Miscellaneous" shall be added as follows:
"Effective upon the Closing under the Stock Acquisition Agreement,
and notwithstanding any other agreement to which Sodexho is a party or
the charter or by-laws of UKDS, no management fee shall be payable to
Prison Realty or any subsidiary or to JJFMS or any subsidiary. If JJFMS,
its successor, or Prison Realty becomes a shareholder in UKDS, after
consultation with Sodexho (i) it shall give joint and several guarantees
of projects of UKDS (both prospectively and retroactively when it
becomes such a shareholder) in connection with Projects undertaken by
UKDS (and not by any special purpose vehicle) when Sodexho determines to
give a guarantee (or had previously determined to give a guarantee prior
to the date JJFMS or its successor becomes a Shareholder), and provided
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further that Sodexho shall give a written undertaking that, as between
Sodexho and JJFMS or such other shareholder, JJFMS or such other
shareholder shall be responsible ultimately only for the percentage of
such guarantee as is equal to JJFMS's or such other shareholder's
percentage of the outstanding stock in UKDS, and Sodexho shall be
responsible for the balance of such guarantee, and (ii) JJFMS (or such
other shareholder) shall agree in writing to reimburse Sodexho for that
percentage of any liability Sodexho may have with respect to then-still
outstanding guarantees that were given while JJFMS or any Affiliate of
JJFMS holds the UKDS Option (prior to its exercise) as is equal to the
percentage of the outstanding stock of UKDS held by JJFMS (or such other
shareholder) after giving effect to the exercise of the Option." Prison
Realty agrees to guarantee the obligations of JJFMS (or whatever
Affiliate exercises the UKDS Options and becomes a shareholder in UKDS)
to deliver guarantees under the UKDS Shareholders Agreement.
(g) JJFMS, by its signature to this Agreement, and each of Prison Realty
and PMSI, by its signature to this Agreement, agree to be bound by the UKDS
Shareholders Agreement, as amended, as if it were an original signatory thereof,
and CCA U.K., by its signature to this Agreement, and each of Prison Realty and
PMSI by its signature to this Agreement, agree to be bound by the UKDS
Shareholder Agreement as if it were an original signature thereto, and in each
case to the extent provided in this Section 7.05.
7.06. RELEASE OF CLAIMS BY SODEXHO. Effective upon completion of the
Closing, and for so long as there is full compliance by the Sellers, Prison
Realty, CCA and PMSI with their obligations under this Agreement, Sodexho on
behalf of itself and each of its successors, assigns, affiliates, agents,
officers, directors, employees and representatives, hereby knowingly and
voluntarily releases, acquits and forever discharges Prison Realty, JJFMS and
their respective successors and assigns, affiliates, agents, officers,
directors, employees and representatives from any and all actions, causes of
action, claims, suits, damages, costs, judgments, and any and all other
liabilities of any, either in law or in equity, which have arisen or may arise
as a result of or related to the UKDS Shareholders' Agreement and/or the CCA
Australia Shareholders' Agreement prior to the date hereof and provided that
this section shall not affect the indemnification provisions of Article X
hereof.
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ARTICLE VIII
CONDITIONS TO SODEXHO'S OBLIGATIONS
All obligations of Sodexho hereunder are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
8.01. REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Sellers, Prison Realty and CCA in this Agreement shall be true when
made and at and as of the time of the Closing as though such representations and
warranties were made at and as of such date.
8.02. PERFORMANCE. Sellers, Prison Realty and CCA shall have performed
and complied with all agreements, obligations and conditions required by this
Agreement to be so complied with or performed by the Closing, and the events
described in Section 3.02 shall have occurred to the reasonable satisfaction of
Sodexho and counsel for Sodexho in the United Kingdom and Australia.
8.03. OFFICER'S CERTIFICATE. Sellers, Prison Realty and CCA shall have
delivered to Sodexho a certificate of an officer of each of Sellers, Prison
Realty and CCA dated the Closing Date, certifying as to the fulfillment of the
conditions specified in Sections 8.01 and 8.02 hereof.
8.04. CONSENTS. All third party consents, including governmental and
governmental agency consents, shall have been obtained.
8.05. LEGAL OPINION. Sodexho shall have received an opinion of counsel
to the Sellers, Prison Realty and CCA in the forms attached hereto as Exhibit
8.05 with such reasonable additions, if any, as may be required or advised by
legal counsel to Sodexho.
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
All obligations of Sellers hereunder are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
9.01. REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Sodexho in this Agreement shall be true when made and at and as of the
time of the Closing as though such representations and warranties were made at
and as of such date.
9.02. PERFORMANCE. Sodexho shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be so
complied with or performed by the Closing.
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9.03. OFFICER'S CERTIFICATE. Sodexho shall have delivered to Sellers a
certificate of an officer of Sodexho, dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 9.01 and 9.02 hereof.
9.04. CONSENTS. Sellers shall have received all consents required for
the consummation of the transactions contemplated hereby, all of which consents
shall be in form and substance satisfactory to Sellers.
9.05 CERTAIN AUSTRALIAN GOVERNMENT APPROVALS. The purchase of the CCA
Australia Shares by Sodexho shall have been approved by the States of Victoria,
Queensland and Western Australia governments or any other governmental agency or
person in Australia as required by existing contracts by and between CCA
Australia and such governments.
9.06 LEGAL OPINION. Sellers shall have received an opinion of counsel to
Sodexho in the form attached hereto as Exhibit 9.05 with such reasonable
additions, if any, as may be required or advised by legal counsel to Sellers.
ARTICLE X
INDEMNIFICATION
10.01. INDEMNIFICATION BY SELLERS AND PRISON REALTY. Each Seller and
Prison Realty, jointly and severally, hereby agrees to defend, indemnify and
hold harmless Sodexho, its directors, officers, employees, affiliates and
agents, and shall reimburse Sodexho and any affiliate for, from and against each
claim, loss, diminution in value, damages, liability, costs and expenses
(including, without limitation, interest, penalties, costs of preparation and
investigation, and the reasonable fees, disbursements and expenses of attorneys,
accountants and other professional advisors) (collectively, "Losses"), directly
or indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, undertaking, agreement or other obligation by or
of Sellers or Prison Realty contained herein, including the obligations assumed
by the Sellers and Prison Realty herein with regard to obtaining all necessary
consents of third parties and governmental approvals to the sale of the Shares
to Sodexho, or in any certificate, schedule, document or instrument delivered to
Sodexho pursuant hereto;
(b) Any claims, causes of actions, demands or the like brought by JJFMS,
its officers or directors with respect to the Shares or the purchase of the
Shares by Sodexho, or otherwise pertaining to this Agreement and the
transactions contemplated by this Agreement or the transactions between Prison
Realty (or its predecessor) and JJFMS with respect to the transfer of the Shares
to JJFMS; and
(c) Any other Loss incidental to any of the foregoing.
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10.02. INDEMNIFICATION BY CCA. CCA hereby agrees to defend, indemnify
and hold harmless Sodexho, its directors, officers, employees, affiliates and
agents, and shall reimburse Sodexho for, from and against Losses directly or
indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, undertaking, agreement or other obligation by or
of each contained herein, or in any certificate, schedule, document or
instrument delivered to Sodexho pursuant hereto; and
(b) Any other Loss incidental to any of the foregoing.
10.03. INDEMNIFICATION BY SODEXHO. Sodexho hereby agrees to defend,
indemnify and hold harmless Sellers, Prison Realty and CCA, their directors,
officers, employees, affiliates and agents, and shall reimburse Sellers, Prison
Realty and CCA for, from and against Losses directly or indirectly relating to,
resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, undertaking, agreement or other obligation by
Sodexho contained herein, including the obligations assumed herein by Sodexho
with regard to obtaining consents of third parties and governmental approvals to
the purchase of the Shares by Sodexho, or in any certificate, document or
instrument delivered to Sellers pursuant hereto; and
(b) Any other Loss incidental to any of the foregoing.
10.04. PROCEDURE. (a) The indemnified party shall promptly notify the
indemnifying party of any claim, demand, action or proceeding for which
indemnification will be sought under Sections 10.01, 10.02 or 10.03 of this
Agreement (but the failure to so notify shall not relieve the indemnifying party
from its obligations hereunder unless such failure irrevocably prejudices the
indemnifying party), and, if such claim, demand, action or proceeding is a third
party claim, demand, action or proceeding, the indemnifying party will have the
right at its expense to assume the defense there of using counsel reasonably
acceptable to the indemnified party. The indemnified party shall have the right
to participate, at its own expense, with respect to any such third party claim,
demand, action or proceeding. In connection with any such third party claim,
demand, action or proceeding, Sodexho, Sellers, Prison Realty and PMSI shall
cooperate with each other and provide each other with access to relevant books
and records in their possession. No such third party claim, demand, action or
proceeding shall be settled without the prior written consent of the indemnified
party. If a firm written offer is made to settle any such third party claim,
demand, action or proceeding and the indemnifying party proposes to accept such
settlement and the indemnified party refuses to consent to such settlement,
then: (i) the indemnifying party shall be excused from, and the indemnified
party shall be solely responsible for, all further defense of such third party
claim, demand, action or proceeding; and (ii) the maximum liability of the
indemnifying party relating to such third party claim, demand, action or
proceeding shall be the amount of the proposed settlement
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if the amount thereafter recovered from the indemnified party on such third
party claim, demand, action or proceeding is greater than the amount of the
proposed settlement.
(b) If the indemnified party reasonably determines: (i) that there may
be a conflict between the positions of the indemnifying party and the
indemnified party in defending such claim or action; or (ii) that there may be
legal defenses available to such indemnified party different from or in addition
to those available to the indemnifying party, then separate counsel for the
indemnified party shall be entitled to participate in and conduct the defense,
or such different defenses, and the indemnifying party shall be liable for any
reasonable legal or other expenses incurred by the indemnified party in
connection with the defense.
(c) Judgments against and settlements entered into by the indemnified
party pursuant to Section 10.04(a) shall unconditionally release the
indemnifying party from liability for the particular claim, demand, action or
proceeding for which indemnification was sought, except as otherwise provided.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS
11.01. SURVIVAL OF REPRESENTATIONS. All representations, warranties,
covenants, indemnities and agreements by the parties contained in this Agreement
shall survive the Closing and any investigation at any time made by or on behalf
of any party hereto, and shall expire on the third anniversary of the Closing,
except for the representations and warranties set forth in Sections 4.02, 4.03,
4.04, 5.01, 6.02, and 6.05 and the covenants and agreements set forth in
Sections 7.01, 7.04, 7.05, 7.06 and Article X, Sections 11.01, 13.02 and 13.06
which shall not expire.
11.02. STATEMENTS AS REPRESENTATIONS. All statements contained in any
certificate, schedule, list, document or other writing delivered pursuant hereto
or in connection with the transactions contemplated hereby shall be deemed
representations and warranties for all purposes of this Agreement.
11.03. REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude the assertion by any party hereto of any other
rights or the seeking of any other remedies against the other party hereto.
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ARTICLE XII
TERMINATION OF AGREEMENT
12.01. TERMINATION. This Agreement may be terminated at any time prior
to the Closing:
(a) By Sodexho, if there has been a material violation or breach by
Prison Realty, CCA, JJFMS or CCA UK of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in writing, or
if any of the conditions set forth in Article VIII hereof have not been
satisfied by the Closing or have not been waived in writing by Sodexho.
(b) By Sellers, if there has been a material violation or breach by
Sodexho of any of the agreements, representations or warranties contained in
this Agreement which has not been waived in writing, or if any of the conditions
set forth in Article IX hereof have not been satisfied by the Closing or have
not been waived in writing by either of the Sellers.
(c) By either Sodexho or Sellers if the transactions contemplated by
this Agreement shall not have been consummated on or before March 31, 2001.
(d) By either Sodexho or Sellers, as applicable, if either Sodexho or
any Seller makes an assignment of the benefit of creditors, files a voluntary
petition in bankruptcy or seeks or consents to any reorganization or similar
relief under any present or future bankruptcy act or similar law, or is
adjudicated as bankrupt or insolvent, or if a third party commences any
bankruptcy, insolvency, reorganization or similar proceeding involving either
Sodexho or any Seller.
12.02. EFFECT OF TERMINATION. In the absence of fraud or willful breach
on the part of Sellers, or on the part of Sodexho, then Sellers will not have
any liability to Sodexho, or Sodexho will not have any liability to Sellers, as
the case may be, under this Agreement if Sellers or Sodexho terminate this
Agreement pursuant to Section 12.01.
ARTICLE XIII
MISCELLANEOUS
13.01. EXPENSES. All fees and expenses incurred by Sellers, including,
without limitation, legal fees and expenses, in connection with this Agreement
will be borne by Sellers and all fees and expenses incurred by Sodexho,
including, without limitation, legal fees and expenses, in connection with this
Agreement will be borne by Sodexho, provided, however, that Sodexho shall be
responsible for all stamp duty which may be due to any jurisdiction or
governmental entity as a result of the purchase of the Shares.
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13.02. ASSIGNABILITY; PARTIES IN INTEREST.
(a) The parties hereto may assign any and all of its rights hereunder to
a wholly-owned subsidiary and such assigning party shall advise the other
parties hereto of any such assignment and shall designate such party as the
assignee of this Agreement. Any such assignee shall assume all of such assigning
party's duties, obligations and undertakings hereunder, but such assigning party
shall remain liable hereunder.
(b) All the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
transferees, heirs, successors, assigns and legal or personal representatives of
the parties hereto.
13.03. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the
exhibits, schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto (including without limitation the Escrow Agreement
and the Option Agreement), contains the entire understanding of the parties with
respect to its subject matter. There are no restrictions, agreements, promises,
warranties, covenants or undertakings other than those expressly set forth
herein or therein. Except as provided herein, this Agreement supersedes all
prior agreements and undertakings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by all parties or their respective transferees, heirs, successors,
assigns or legal personal representatives. Any condition to a party's
obligations hereunder maybe waived, but only by a written instrument signed by
the party entitled to the benefits thereof. The failure or delay of any party at
any time or times to require performance of any provision or to exercise its
rights with respect to any provisions hereof, shall in no manner operate as a
waiver of or affect such party's right at a later time to enforce the same.
13.04. HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
13.05. SEVERABILITY. The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement, which shall remain
in full force and effect.
13.06. NOTICES. All notices, request, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand; mailed (registered or certified mail, postage
prepaid, return receipt requested); or by nationally recognized courier service
as follows:
If to CCA UK:
Corrections Corporation of America (U.K.) Limited
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
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With a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
If to JJFMS:
Juvenile and Jail Facility Management Services, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
If to PMSI:
Prison Management Services, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
If to Sodexho:
Sodexho Alliance, S.A.
0, xxxxxx xxxxxx
00000 Xxxxxxxx-xx-Xxxxxxxxxx
XXXXXX
Attention: Xxxx-Xxxxxx Cuny
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With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to Prison Realty:
Prison Realty Trust, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
If to CCA:
Corrections Corporation of America
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxxx Xxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
13.07. GOVERNING LAW. This Agreement shall be governed by and be
interpreted under the laws of Tennessee (except as matters relating to the
transfer of shares may be governed by the laws of the United Kingdom or
Australia) without regard to the conflicts of law principles thereof. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the Tennessee
courts, the non-exclusive jurisdiction of the United States District Court for
the Southern District of New York, the
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English courts and the Australian courts over any action or proceeding to
enforce any right under this Agreement.
13.08. COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, with the same effect as if the signatories executing
the several counterparts had executed one counterpart, provided, however, that
the several executed counterparts shall together have been signed by Sodexho and
the Sellers. All such executed counterparts shall together constitute one and
the same instrument.
[signatures continued on the following page]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first above
written.
SODEXHO ALLIANCE, S.A.
By: /s/ Xxxx-Xxxxxx Cuny
----------------------------------------
Title: Senior Vice President
-------------------------------------
PRISON REALTY TRUST, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Title: President/Chief Executive Officer
-------------------------------------
CORRECTIONS CORPORATION OF AMERICA
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Title: President/Chief Executive Officer
-------------------------------------
PRISON MANAGEMENT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Title: President/Chief Executive Officer
-------------------------------------
SELLERS:
CORRECTIONS CORPORATION OF AMERICA
(U.K.) LIMITED
By: /s/ Gay X. Xxxx
----------------------------------------
Title: Director
-------------------------------------
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(Signature Page Continued)
JUVENILE AND JAIL FACILITY MANAGEMENT
SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Title: President/Chief Executive Officer
-------------------------------------
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SCHEDULE 2.02
(Intentionally Omitted)
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EXHIBIT A
ESCROW AGREEMENT
(Intentionally Omitted)
31
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EXHIBIT B
OPTION AGREEMENT
(Intentionally Omitted)
Included in this filing as Exhibit 10.3
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EXHIBIT 8.05
FORM OF OPINION
(Intentionally Omitted)
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EXHIBIT 8.05
FORM OF OPINION
(Intentionally Omitted)
34
35
EXHIBIT 9.05
FORM OF OPINION
(Intentionally Omitted)
35
