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Exhibit 10.11
FORM OF CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement"), dated as of the __ day
of December, 1998, is by and among Corrections Corporation of America, a
Tennessee corporation, and certain of its subsidiaries listed on the signature
pages hereto, located at 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000
(collectively, "CCA"), and Prison Management Services, LLC, a Delaware limited
liability company, located at 00 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 ("Prison Management").
WHEREAS, CCA is a party to that certain Amended and Restated Agreement
and Plan of Merger, dated as of September 29, 1998 (the "Merger Agreement"), by
and between CCA and CCA Prison Realty Trust, a Maryland real estate investment
trust ("Prison Realty"), pursuant to which CCA will merge with and into Prison
Realty Corporation, a newly formed Maryland corporation ("New Prison Realty"),
with New Prison Realty being the surviving corporation, and Prison Realty will
merge with and into New Prison Realty with New Prison Realty being the surviving
corporation (collectively, the "Merger");
WHEREAS, pursuant to the terms of the Merger and in order that New
Prison Realty may comply with the rules and regulations governing the
qualification and operation of a real estate investment trust (a "REIT"), at the
Closing (as hereinafter defined), prior to the consummation of the Merger, CCA
desires to transfer, convey, and assign all right, title and interest in and to
certain contracts with government entities related to the management and
operation of correction and detention facilities by CCA together with certain
accounts receivable and accounts payable related thereto and certain other net
assets used in connection therewith to Prison Management in exchange for the
consideration described herein, and will enter into certain other agreements and
undertake certain other actions all related thereto;
WHEREAS, the parties intend that the foregoing transactions qualify for
non-recognition treatment under Section 721 of the Internal Revenue Code of
1986, as amended; and
WHEREAS, the parties wish to confirm certain of the transactions
contemplated by the Merger and described herein and certain other matters.
NOW, THEREFORE, in consideration of these premises and the mutual
promises set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the parties
hereto hereby agrees as follows:
1. Transfer and Assignment of Management Contracts and Related Assets.
Subject to the terms and conditions of this Agreement, at the Closing (as
hereinafter defined), CCA shall transfer, convey, and assign to Prison
Management all of CCA's right, title and interest in and to those certain
management contracts (the "Management Contracts") and those certain accounts
receivable and accounts payable and other net assets exclusively related to the
management and operation of the correction and detention facilities listed on
Exhibit A attached hereto and
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incorporated herein by this reference (the Management Contracts, together with
the accounts receivable and accounts payable and other net assets are defined,
collectively, as the "Management Contract Assets").
2. Consideration. As consideration for the transfer, conveyance and
assignment of the Management Contract Assets to Prison Management, CCA shall
receive from Prison Management one hundred percent (100%) of the non-voting
limited liability company membership interest of Prison Management (the
"Membership Interest"). The Membership Interest shall obligate Prison Management
to distribute to the holder thereof ninety-five percent (95%) of Prison
Management's net income, as determined in accordance with generally accepted
accounting principles.
3. Liabilities to be Assumed by Prison Management. Prison Management
shall assume at the Closing (as hereinafter defined) all liabilities related to
the Management Contract Assets, including the related accounts payable, as
additional consideration to CCA hereunder.
4. Closing. The closing of the transactions contemplated hereby (the
"Closing") shall occur prior to the Merger on a date designated by CCA and
acceptable to Prison Management. At the Closing, CCA shall deliver the
Management Contract Assets and the rights set forth in paragraph 2 hereof shall
take effect. Prison Management shall deliver evidence of ownership of the
Membership Interest to CCA.
5. Conditions to Closing. The following shall be a condition of CCA's
obligation to close the transactions contemplated hereby:
The fulfillment or waiver of all conditions to CCA's and Prison
Realty's obligations under the Merger Agreement (except section 6.01(h)
of the Merger Agreement).
6. Accounts Receivable. If CCA shall receive payment for accounts
billed before the Closing or otherwise, then CCA shall pay the same to Prison
Management by check endorsement to Prison Management, delivered in three
business days after the receipt by CCA. If an endorsement is not possible, CCA
shall pay appropriate sums to Prison Management promptly after receipt.
7. Further Assurances. The parties agree that this Agreement should be
supplemented by such further documents in form and substance reasonably
satisfactory to the parties and as may be reasonably requested by the parties or
their counsel to give effect to the foregoing and the general
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intent thereof. Such agreements will contain, in addition to the terms and
conditions set forth in this Agreement, such terms and conditions deemed
necessary to effectuate the transactions contemplated thereby. The parties
hereto hereby agree to act in good faith and use reasonable efforts to
consummate the transactions contemplated herein and to take such other actions
as may be required to facilitate the consummation of the Merger and to ensure
that New Prison Realty shall continue to qualify and operate as a REIT after the
Merger.
8. Termination. This Agreement shall cease to be effective if the
Merger is not consummated on or before December 31, 1999. This Agreement may be
terminated at any time prior to the Closing by mutual agreement of CCA and
Prison Management.
9. Confidentiality. Except as required by applicable law or legal
process or as approved by CCA, Prison Management and its representatives shall
maintain in confidence and not disclose to any third party any information
related to CCA, its subsidiaries, or Prison Management or its representatives
obtained in the course of the transaction. The above restrictions shall not
apply to information that (i) is or becomes public (other than by reason of this
paragraph) or (ii) was known or available to Prison Management or its
representatives from a third party having a lawful right to disclose such
information.
10. Successors. This Agreement shall be binding upon each of the
parties and shall also be binding upon their respective successors or assigns,
including a transferee of all or substantially all its assets.
11. Governing Law. This Agreement shall be governed by laws of the
State of Tennessee as to interpretation, construction and performance,
regardless of the choice of law provisions of Tennessee or any other
jurisdiction.
12. Amendments. This Agreement may not be modified or amended except by
a duly executed instrument in writing signed by CCA and Prison Management.
13. Severability. If any provision of this Agreement shall be held
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by facsimile shall be equally effective as
delivery of a manually executed counterpart. Any party delivering an unexecuted
counterpart of this Agreement by facsimile shall also deliver a manually
executed counterpart, but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability and binding effect of this
Agreement.
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15. Interpretation. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intentions of the parties and
this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officer on the day first above written.
CCA:
CORRECTIONS CORPORATION OF AMERICA,
a Tennessee corporation
By:
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Its:
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CORRECTION PARTNERS, INC.,
a Delaware corporation
By:
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Its:
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GADSDEN CORRECTIONAL INSTITUTION, INC.,
a Kentucky corporation
By:
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Its:
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PRISON MANAGEMENT:
PRISON MANAGEMENT SERVICES, LLC,
a Delaware limited liability company
By:
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Its:
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EXHIBIT A
Bay Correctional Facility
Delta Correctional Facility
Gadsden Correctional Institution
Guayama Correctional Center
Xxxxxxxx County Correctional Facility
Idaho Correctional Facility
Lawrenceville Correctional Center
Xxxxx Adult Correctional Facility
South Central Correctional Facility
Xxxxxxxxx County Correctional Facility
Xxxx Correctional Center
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