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Exhibit 10.10
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 Correctional Management Services Corporation, a
Tennessee corporation located at 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 ("Correctional 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 among Prison Realty Corporation, a Maryland corporation ("New Prison
Realty"), CCA and CCA Prison Realty Trust, a Maryland real estate investment
trust ("Prison Realty"), pursuant to which CCA will merge with and into 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 (i) sell to Correctional Management all of the issued and outstanding
shares of capital stock of certain of its wholly-owned corporate subsidiaries,
and (ii) 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 Correctional 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 now 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 of Assets.
1.1. Sale of Capital Stock. CCA shall, at the Closing (as
hereinafter defined), sell all of the issued and outstanding shares of capital
stock of each of the wholly owned corporate subsidiaries of CCA listed on
Exhibit A attached hereto and incorporated herein by this reference
(collectively, the "Purchased Subsidiaries").
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1.2. 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 Correctional
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 B attached hereto and 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. Rights to Trade Name Use. At the Closing, CCA shall grant to
Correctional Management a non-exclusive, non-transferrable license to use the
name "Corrections Corporation of America," the initials "CCA" and all
derivatives thereof (collectively, the "Trade Name") in conformance with
standards reasonably set by CCA. The terms and conditions of such license shall
be set forth in a Trade Name Use Agreement between CCA and Correctional
Management (the "Trade Name Use Agreement"). Under the Trade Name Use Agreement,
Correctional Management will pay to CCA a fee equal to (i) 2.5% of Correctional
Management's gross revenues for the first three years of the agreement, and (ii)
3.0% of Correctional Management's gross revenues for the remaining term of the
agreement, provided that after completion of the Merger the amount of such fee
may not exceed (iii) 2.5% of the gross revenues of New Prison Realty for the
first three years of the agreement, or (iv) 3.25% of the gross revenues of New
Prison Realty for the remaining term of the agreement.
3. Consideration. As consideration for sale of the Purchased
Subsidiaries and for the transfer, conveyance and assignment of the Management
Contract Assets to Correctional Management and the grant of the right to use the
Trade Name, CCA shall receive from Correctional Management (i) an installment
note in the principal amount of $137.0 million (the "Note"), and (ii) one
hundred percent (100%) of the non-voting common stock of Correctional Management
(the "Common Stock"). The terms of the Note shall be substantially as follows:
a. Term. The Note shall be payable over ten (10) years.
b. Interest and Payments. The Note shall bear interest at the rate of
twelve percent (12%) per annum. Interest only shall be payable
for the first four (4) years of the Note, with the principal being
amortized over the following six (6) year period.
c. Pre-Payment. To the extent Correctional Management generates
available cash flow from operations in excess of amounts required to
make payments under any Correctional Management credit facility
or other similar financing arrangement, such funds shall be used
to prepay the principal due under the Note.
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d. Security. Doctor X. Xxxxxx, the Chief Executive Officer of
Correctional Management, shall guarantee payment of ten percent
(10%) of the outstanding principal amount due under the Note.
4. Liabilities to be Assumed by Correctional Management. Correctional
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.
5. Closing. The closing of the transactions contemplated hereby (the
"Closing") shall occur prior to the Merger on a date designated by CCA
acceptable to Correctional Management. At the Closing, CCA shall deliver the
Management Contract Assets and the rights set forth in paragraph 2 hereof shall
take effect. Correctional Management shall deliver the Common Stock to CCA.
6. 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).
7. Accounts Receivable. If CCA shall receive payment for accounts
billed before the Closing or otherwise, then CCA shall pay the same to
Correctional Management by check endorsement to Correctional Management,
delivered in three business days after the receipt by CCA. If an endorsement is
not possible, CCA shall pay appropriate sums to Correctional Management promptly
after receipt.
8. 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 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.
9. 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
Correctional Management.
10. Confidentiality. Except as required by applicable law or legal
process or as approved by CCA, Correctional Management and its representatives
shall maintain in confidence and not disclose to any third party any information
related to CCA, its subsidiaries, or Correctional Management or its
representatives obtained in the course of the transaction. The above
restrictions
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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 Correctional
Management or its representatives from a third party having a lawful right to
disclose such information.
11. 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.
12. Governing Law. This Agreement shall be governed by the 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.
13. Amendments. This Agreement may not be modified or amended except by
a duly executed instrument in writing signed by CCA and Correctional Management.
14. 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.
15. 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.
16. Interpretation. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intentions of the parties and
this Agreement.
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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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XXX ADJUSTMENT CENTER, INC., a Kentucky
corporation
By:
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Its:
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XXXXXX ADJUSTMENT CENTER, INC., a Kentucky
corporation
By:
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Its:
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OTTER CREEK CORRECTIONAL CENTER, INC., a
Kentucky corporation
By:
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Its:
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RIVER CITY CORRECTIONAL CENTER, INC., a
Kentucky corporation
By:
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Its:
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[signatures continue on following page]
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USCC XXXXX/XXXXXXXX MANAGEMENT COMPANY,
INC., a North Carolina corporation
By:
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Its:
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USCC PAMLICO MANAGEMENT COMPANY, INC., a
North Carolina corporation
By:
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Its:
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CORRECTIONAL MANAGEMENT:
CORRECTIONAL MANAGEMENT SERVICES
CORPORATION, a Tennessee corporation
By:
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Its:
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EXHIBIT A
Domestic
CCA International, Inc., a Delaware corporation
Concept Incorporated, a Delaware corporation
Corrections Partners, Inc., a Delaware corporation
Diboll Correctional Center, Inc., a Kentucky corporation
Gadsden Correctional Institution, Inc., a Kentucky corporation
Xxx Adjustment Center, Inc., a Kentucky corporation
Xxxxxx Adjustment Center, Inc., a Kentucky corporation
Otter Creek Correctional Center, Inc., a Kentucky corporation
River City Correctional Center, Inc., a Kentucky corporation
Correctional Services Group, Inc. , a Missouri corporation
USCC Xxxxx/Xxxxxxxx Management Company, Inc., a North Carolina corporation
USCC Pamlico Management Company, Inc., a North Carolina corporation
Technical and Business Institute of America, Inc., a Tennessee corporation
TransCor America, Inc., a Tennessee corporation
Agecroft Property, Inc., a Tennessee corporation
International
Corrections Corporation of Australia, PTY. LTD., a Queensland, Australian
corporation
Viccor Investments PTY. LTD., a Victoria, Australian corporation
Corrections Corporation of Canada, a Canadian corporation
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EXHIBIT B
Bent County Correctional Facility
Bridgeport Pre-Parole Transfer Facility
California City Correctional Facility
Central Arizona Detention Center
Cibola County Corrections Center
Cimarron Correctional Facility
Coffee Correctional Facility
Xxxxx Correctional Facility
DC Correctional Treatment Facility
Diamondback Correctional Facility
Eden Detention Center
Xxxx Detention Center
Houston Processing Center
Huerfano County Correctional Facility
Kit Xxxxxx Correctional Center
Laredo Processing Center
Leavenworth Detention Center
Xxx Adjustment Center
Xxxxxx Adjustment Center
Xxxxxxx Xxxxxx Detention Facility
Mendota Correctional Facility
Mineral Xxxxx Pre-Parole Transfer Facility
Montana Correctional Facility
Mountainview Correctional Institution
New Mexico Women's Correctional Facility
North Fork Correctional Center
Northeast Ohio Correctional Center
Otter Creek Correctional Center
Pamlico Correctional Institution
Prairie Correctional Facility
River City Correctional Center
San Diego Correctional Facility
San Diego Jail
Shelby Training Center
Southern Nevada Women's Correctional Facility
T. Xxx Xxxxx Correctional Center
Torrance County Detention Facility
West Tennessee Detention Center
Xxxxxxx Correctional Facility
Whiteville Correctional Facility
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