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EXHIBIT 10.161
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of September
6, 1996, is made by CORRECTIONS CORPORATION OF AMERICA, a corporation organized
under the laws of Delaware (the "Pledgor"), in favor of FIRST UNION NATIONAL
BANK OF TENNESSEE, a national banking association, as Administrative Agent (the
"Administrative Agent"), for the ratable benefit of itself and the financial
institutions (the "Lenders") as are, or may from time to time become, parties
to the Credit Agreement (as hereinafter defined), the Issuing Lender (as
defined in the Credit Agreement) and any Affiliate of a Lender party to a
Hedging Agreement permitted pursuant to Section 10.1 of the Credit Agreement.
STATEMENT OF PURPOSE
Pursuant to the terms of the Credit Agreement of even date among the
Pledgor, as Borrower, the Lenders party thereto, and the Administrative Agent
(as amended, restated, modified or otherwise supplemented from time to time,
the "Credit Agreement"), the Lenders extended certain credit facilities to the
Borrower as more particularly described therein.
The Pledgor is the legal and beneficial owner of the shares of Pledged
Stock (as hereinafter defined) issued by the certain corporations as specified
on Schedule I attached hereto and incorporated herein by reference
(collectively, the "Issuers") and (b) the Partnership Interests (as hereinafter
defined) in the partnerships and limited liability companies listed on Schedule
I hereto (collectively, the "Partnerships").
In connection with the transactions contemplated by the Credit
Agreement and as a condition precedent thereto, the Lenders have requested, and
the Pledgor has agreed to execute and deliver, this Pledge Agreement with the
Pledged Stock to the Administrative Agent, for the ratable benefit of itself,
the Lenders, the Issuing Lender and any Affiliate of a Lender party to a
Hedging Agreement permitted pursuant to Section 10.1 of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into and make available Loans
pursuant to the Credit Agreement, the Pledgor hereby agrees with the
Administrative Agent, for the ratable benefit of itself, the Lenders, the
Issuing Lender and any Affiliate of a Lender party to a Hedging Agreement
permitted pursuant to Section 10.1 of the Credit Agreement, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which
are defined in the Credit Agreement and used herein are so used as so defined,
and the following terms shall have the following meanings:
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"Code" means the Uniform Commercial Code from time to time in
effect in the State of North Carolina.
"Collateral" means the Stock Collateral and the Partnership
Collateral.
"Partnership Collateral" means all of the Partnership
Interests of the Pledgor in the Partnerships and all Proceeds
therefrom.
"Partnership Interests" means the entire partnership or
membership interest of the Pledgor in each Partnership listed on
Schedule I hereto, including, without limitation, Pledgor's capital
account, its or his interest as a partner or member in the net cash
flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of the Partnerships, its interest in all
distributions made or to be made by the Partnerships to the Pledgor
and all of the other economic rights, titles and interests of the
Pledgor as a partner or member of the Partnerships, whether set forth
in the partnership agreement or membership agreement of the
Partnerships, by separate agreement or otherwise.
"Pledge Agreement" means this Pledge Agreement, as amended or
modified.
"Pledged Stock" means the shares of capital stock of each
Issuer listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by such Issuer to the Pledgor while this Pledge
Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event,
shall include, without limitation, all dividends or other income from
the Pledged Stock and Partnership Interests, collections thereon,
proceeds of sale thereof or distributions with respect thereto.
"Stock Collateral" means the Pledged Stock and all Proceeds
therefrom.
2. Pledge and Grant of Security Interest. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of itself, the
Lenders, the Issuing Lender and any Affiliate of a Lender party to a Hedging
Agreement permitted pursuant to Section 10.1 of the Credit Agreement, all the
Pledged Stock and hereby grants to the Administrative Agent, for the ratable
benefit of itself, the Lenders, the Issuing Lender and any Affiliate of a
Lender party to a Hedging Agreement permitted
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pursuant to Section 10.1 of the Credit Agreement, a first priority security
interest in the Pledged Stock and all other Collateral, as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by the Pledgor with, if the Administrative
Agent so requests, signature guaranteed.
4. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Pledgor shall remain liable to perform all of its
duties and obligations as a partner of the Partnerships to the same extent as
if this Pledge Agreement had not been executed, (b) the exercise by the
Administrative Agent or any Lender of any of its rights hereunder shall not
release the Pledgor from any of its duties or obligations as a partner of the
Partnerships, and (c) neither the Administrative Agent nor any Lender shall
have any obligation or liability as a partner of the Partnerships by reason of
this Pledge Agreement.
5. Representations and Warranties. To induce the Administrative
Agent and the Lenders to execute the Credit Agreement and make any Loans and to
accept the security contemplated hereby, the Pledgor hereby represents and
warrants that:
(a) the Pledgor has the corporate power, authority and
legal right to execute and deliver, to perform its obligations under,
and to grant the Lien on the Collateral pursuant to, this Pledge
Agreement and has taken all necessary corporate action to authorize
its execution, delivery and performance of, and grant of the Lien on
the Collateral pursuant to, this Pledge Agreement;
(b) this Pledge Agreement constitutes a legal, valid and
binding obligation of the Pledgor enforceable against the Pledgor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(c) the execution, delivery and performance of this
Pledge Agreement will not violate any provision of any Applicable Law
or contractual obligation of the Pledgor and will not result in the
creation or imposition of any Lien on any of the properties or
revenues of the Pledgor pursuant to
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any Applicable Law or contractual obligation, except as contemplated
hereby and by the Credit Agreement;
(d) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority and
no consent of any other Person (including, without limitation, any
stockholder or creditor of the Pledgor or any Issuer or any general or
limited partner of any Partnership), is required in connection with
the execution, delivery, performance, validity or enforceability
against the Pledgor of this Pledge Agreement, except (i) as may be
required in connection with the disposition of the Pledged Stock and
the Partnership Interests by laws affecting the offering and sale of
securities generally, and (ii) filings under the Uniform Commercial
Code;
(e) no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Pledgor, threatened by or against the Pledgor or
against any of its properties or revenues with respect to this Pledge
Agreement or any of the transactions contemplated hereby;
(f) the shares of Pledged Stock listed on Schedule I
constitute all the issued and outstanding shares owned by the Pledgor
of all classes of the capital stock of each of the Issuers;
(g) all the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable;
(h) the Pledgor is the record and beneficial owner of,
and has good and marketable title to, the Pledged Stock and
Partnership Interests listed on Schedule I, free of any and all Liens
or options in favor of, or claims of, any other Person, except the
Credit Agreement and the Lien created by this Pledge Agreement;
(i) upon delivery to the Administrative Agent of the
stock certificates evidencing the Pledged Stock, the Lien granted
pursuant to this Pledge Agreement will constitute a valid, perfected
first priority Lien on the Collateral, enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of
the Collateral from the Pledgor; and
(j) the Pledgor has delivered to the Administrative Agent
true and complete copies of the partnership agreements for each of the
Partnerships which partnership agreements are currently in full force
and effect and have not been amended or modified except as disclosed
to the Administrative Agent in writing.
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6. Certain Covenants. The Pledgor covenants and agrees with the
Administrative Agent, for the ratable benefit of itself, the Lenders, the
Issuing Lender and any Affiliate of a Lender party to a Hedging Agreement
permitted pursuant to Section 10.1 of the Credit Agreement, that, from and
after the date of this Pledge Agreement until the Obligations are paid in full
and the Commitments are terminated:
(a) On or before the date of execution of this Pledge
Agreement, the Pledgor shall cause each of the partners of each of the
Partnerships to execute a consent in the form attached hereto
evidencing the consent of the partners to the pledge of the
Partnership Interests pursuant to this Pledge Agreement.
(b) The Pledgor agrees that as a partner in the
Partnerships it will abide by, perform and discharge each and every
obligation, covenant and agreement to be abided by, performed or
discharged by Pledgor under the terms of the partnership agreements of
the Partnerships, at no cost or expense to the Administrative Agent
and the Lenders.
(c) If the Pledgor shall, as a result of its ownership of
the Collateral, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in
exchange for any of the Collateral, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Administrative
Agent, hold the same in trust for the Administrative Agent and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by the Pledgor to the Administrative Agent, if
required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by
the Administrative Agent, subject to the terms hereof, as additional
collateral security for the Obligations. In addition, any sums paid
upon or in respect of the Collateral upon the liquidation or
dissolution of any Issuer or Partnership shall be held by the
Administrative Agent as additional collateral security for the
Obligations.
(d) Without the prior written consent of the
Administrative Agent, the Pledgor will not (i) vote to enable, or take
any other action to permit, any Issuer or Partnership to issue any
stock, partnership interests, limited liability company interests or
other equity securities of any nature or to issue any other securities
convertible into or granting the
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right to purchase or exchange for any stock, partnership interests,
limited liability company interests or other equity securities of any
nature of such Issuer or Partnership, (ii) except as expressly
provided to the contrary herein, consent to any modification,
extension or alteration of the terms of any partnership agreement of
the Partnerships, (iii) accept a surrender of any partnership
agreement of any of the Partnerships or waive any breach of or default
under any partnership agreement of any of the Partnerships by any
other party thereto, (iv) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the
Collateral, or (v) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the Lien provided for
by this Pledge Agreement. The Pledgor will defend the right, title
and interest of the Administrative Agent in and to the Collateral
against the claims and demands of all Persons whomsoever.
(e) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under
or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered
to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this
Pledge Agreement.
(f) The Pledgor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated
by this Pledge Agreement.
(g) On or prior to the formation or acquisition of any
Subsidiary of the Pledgor, the Pledgor agrees to execute such
amendments and supplements to this Pledge Agreement, including,
without limitation, the Pledge Agreement Supplement attached hereto,
and such other documents and instruments and to take any and all
actions, all as shall be necessary, in the reasonable judgment of the
Administrative Agent, to pledge the Pledgor's interest therein to the
Administrative Agent, for the ratable benefit of itself, the Lenders,
the Issuing Lender
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and any Affiliate of a Lender party to a Hedging Agreement permitted
pursuant to Section 10.1 of the Credit Agreement.
7. Cash Dividends and Distributions; Voting Rights. Unless an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have given notice to the Pledgor of the Administrative Agent's intent to
exercise its rights pursuant to Paragraph 8 below, the Pledgor shall be
permitted to receive all cash dividends and shareholder and partnership
distributions paid in accordance with the terms of the Credit Agreement in
respect of the Collateral and to exercise all voting and corporate or
partnership rights, as applicable, with respect to the Collateral; provided,
that no vote shall be cast or corporate or partnership right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, the Notes, any other Loan Documents or this Pledge Agreement.
8. Rights of the Administrative Agent.
(a) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Pledgor, (i) the Administrative Agent shall have the right to receive any
and all cash dividends paid in respect of the Pledged Stock and partnership
distributions in respect of the Partnership Interests and make application
thereof to the Obligations in the order set forth in Section 4.5 of the Credit
Agreement and (ii) all shares of the Pledged Stock shall be registered in the
name of the Administrative Agent or its nominee, and the Administrative Agent
or its nominee may thereafter exercise (A) all voting, corporate and other
rights pertaining to such shares of the Pledged Stock at any meeting of
shareholders of the applicable Issuer or otherwise and (B) any and all rights
of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the applicable Issuer, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such
shares of the Pledged Stock, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
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(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the Pledgor
or against any other Person which may be or become liable in respect of all or
any part of the Obligations or against any collateral security therefor,
guarantee therefor or right of offset with respect thereto. Neither the
Administrative Agent nor any Lender shall be liable for any failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so, nor shall the Administrative Agent be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
9. Remedies. If an Event of Default shall occur and be
continuing, with the consent of the Required Lenders, the Administrative Agent
may, and upon the request of the Required Lenders, the Administrative Agent
shall, exercise on behalf of itself and the Lenders, all rights and remedies
granted in this Pledge Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, and in addition thereto,
all rights and remedies of a secured party under the Code. Without limiting
the generality of the foregoing with regard to the scope of the Administrative
Agent's remedies, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon the Pledgor, any
Issuer, any Partnership or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter market, at
any exchange, broker's board or office of the Administrative Agent or any
Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or
any Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity is hereby waived or released.
The Administrative Agent shall apply any Proceeds from time to time held by it
and the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or the rights of
the Administrative Agent and the
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Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements of counsel thereto, to the payment in whole or in part of the
Obligations, in the order set forth in Section 4.5 of the Credit Agreement, and
only after such application and after the payment by the Administrative Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to the Pledgor. To the extent permitted by
applicable law, the Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or
other disposition. The Pledgor further waives and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of the Code.
10. Private Sales. The Pledgor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the applicable Issuer
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the applicable Issuer would agree to
do so.
11. Amendments, etc. With Respect to the Obligations. The Pledgor
shall remain obligated hereunder, and the Collateral shall remain subject to
the Lien granted hereby, notwithstanding that, without any reservation of
rights against the Pledgor, and without notice to or further assent by the
Pledgor, any demand for payment of any of the Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of the Pledgor or any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by the Administrative Agent or any Lender, and the Credit Agreement,
the Notes, any other
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Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or
part, as the Lenders (or the Required Lenders, as the case may be) may deem
advisable from time to time, and any guarantee, right of offset or other
collateral security at any time held by the Administrative Agent or any Lender
for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any other Lien at any time
held by it as security for the Obligations or any property subject thereto.
The Pledgor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Pledge Agreement; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred in reliance upon this Pledge Agreement; and all dealings between
the Pledgor, on the one hand, and the Administrative Agent and the Lenders, on
the other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Pledge Agreement. The Pledgor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Pledgor with respect to the Obligations.
12. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. Neither the Administrative Agent, any Lender nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
13. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral constitute irrevocable
powers coupled with an interest.
14. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not
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to affect the construction hereof or be taken into consideration in the
interpretation hereof.
16. No Waiver; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Paragraph 17 hereof) be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in any breach of
any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
17. Waivers and Amendments; Successors and Assigns; Governing Law.
None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent; provided that any consent by the
Administrative Agent to any waiver, amendment, supplement or modification
hereto shall be subject to approval thereof by the Lenders or Required Lenders,
as applicable, in accordance with Section 13.10 of the Credit Agreement. This
Pledge Agreement shall be binding upon the successors and assigns of the
Pledgor and shall inure to the benefit of the Administrative Agent, the
Lenders, the Issuing Lender and any Affiliate of a Lender party to a Hedging
Agreement permitted pursuant to Section 10.1 of the Credit Agreement, and their
respective successors and assigns. This Pledge Agreement shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
North Carolina.
18. Notices. All notices and communications hereunder shall be
given to the addresses and otherwise in accordance with Section 13.1 of the
Credit Agreement.
19. Irrevocable Authorization and Instruction to Issuers. The
Pledgor hereby authorizes and instructs each Issuer and Partnership to comply
with any instruction received by it from the Administrative Agent in writing
that (a) states that an Event of Default has occurred and is continuing and (b)
is otherwise in accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Pledgor, and the Pledgor agrees that
such Issuer and Partnership shall be fully protected in so complying.
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20. Authority of Administrative Agent. The Pledgor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Pledge Agreement with respect to any action taken by the Administrative Agent
or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
itself and the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer or Partnership shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
21. Consent to Jurisdiction. The Pledgor hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of or any dispute in connection with this Pledge Agreement, any
rights or obligations hereunder, or the performance of such rights and
obligations. The Pledgor hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Pledge Agreement, any rights or obligations hereunder, or the performance of
such rights and obligations, on behalf of itself or its property, in the manner
provided in Section 13.1 of the Credit Agreement. Nothing in this Paragraph 21
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding
against the Pledgor or its properties in the courts of any other jurisdictions.
22. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Pledge Agreement
or any other Loan Documents ("Disputes"), between or among parties to this
Pledge Agreement or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a
party does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from Loan Documents executed in the
future, or claims concerning any aspect of the past, present or future
relationships arising out or connected with the Loan Documents. Arbitration
shall be conducted under and governed by the Commercial Financial Disputes
Arbitration
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Rules (the "Arbitration Rules") of the American Arbitration Association and
Title 9 of the U.S. Code. All arbitration hearings shall be conducted in
Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et
seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute.
A judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted.
(B) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE PLEDGOR HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS PLEDGE
AGREEMENT OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property and collection of rents,
set off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
23. Entire Agreement; Term of Agreement. This Agreement, together
with the other Loan Documents, constitutes the entire agreement with respect to
the subject matter hereof and supersedes all prior agreements with respect to
the subject matter hereof. This Agreement shall remain in effect from the
Closing Date through and including the date upon which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full and the
Commitments terminated.
13
14
IN WITNESS WHEREOF, the undersigned has caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
[CORPORATE SEAL] CORRECTIONS CORPORATION OF AMERICA
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
14
15
ACKNOWLEDGEMENT AND CONSENT
Each Issuer of Pledged Stock referred to in the foregoing Pledge
Agreement hereby acknowledges receipt of a copy thereof and agrees to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. Each Issuer agrees to notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in
Paragraph 6(c) of the Pledge Agreement.
CCA INTERNATIONAL, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
TECHNICAL AND BUSINESS INSTITUTE OF
AMERICA, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
TRANSCOR AMERICA, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CONCEPT INCORPORATED
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CORRECTION MANAGEMENT AFFILIATES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CORRECTIONAL SERVICES GROUP, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
16
ACKNOWLEDGEMENT AND CONSENT BY EACH PARTNERSHIP
The undersigned partners of the Partnership referred to in the
foregoing Pledge Agreement (a) hereby acknowledge receipt of a copy thereof,
(b) hereby acknowledge and consent to the pledge of the Pledgor's interest in
the Partnership pursuant thereto and upon exercise by the Administrative Agent
of its remedies thereunder and at the option of the Administrative Agent, the
substitution of the Administrative Agent as a partner in the Partnership, and
(c) agree that the Administrative Agent may freely assign its interest
thereunder without further consent of the partners.
----------------------------, ----------------------------,
Partner of Partner of
------------------ ------------------
--------------------------- ---------------------------
17
SCHEDULE I
To Pledge
Agreement
----------
DESCRIPTION OF PLEDGED STOCK
Subsidiaries
------------
Issuer Class of Stock Certificate No. No. of Shares
------ -------------- --------------- -------------
CCA Inter- Common Stock
national, Inc. $.01 per value 01 1,000
Concept Common Stock
Incorporated $10.00 per value 100 20,882
Correction
Management Common Stock
Affiliates, Inc. no par value 006 100
Correctional
Services Group, Common Stock
Inc. $1.00 par value 003 100
Technical and
Business
Institute of Common Stock
America, Inc. no par value 1 1,000
Transcor Common Stock
America, Inc. $.01 par value 100 1,300,000
DESCRIPTION OF PARTNERSHIP INTEREST
Partnerships
------------
Partnership Partnership Interest
----------- --------------------
NONE
18
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT, dated as of _______________, 1996 (the
"Supplement"), made by CORRECTIONS CORPORATION OF AMERICA, a corporation
organized under the laws of Delaware (the "Pledgor"), in favor of FIRST UNION
NATIONAL BANK OF TENNESSEE, a national banking corporation, as Administrative
Agent (in such capacity, the "Administrative Agent"), under the Credit
Agreement (as defined in the Pledge Agreement referred to below), for the
benefit of itself, the Lenders, the Issuing Lender and any Affiliate of a
Lender party to a Hedging Agreement permitted pursuant to Section 10.1 of the
Credit Agreement..
1. Reference is hereby made to that Pledge Agreement, dated as of
Septemeber 6, 1996, made by the Pledgor in favor of the Administrative Agent
(as amended, supplemented or otherwise modified as of the date hereof, the
"Pledge Agreement"). This Supplement supplements the Pledge Agreement, forms a
part thereof and is subject to the terms thereof. Terms defined in the Pledge
Agreement are used herein as therein defined.
[2. The Pledgor hereby confirms and reaffirms the security
interest in the Collateral granted to the Administrative Agent, for the ratable
benefit of itself, the Lenders, the Issuing Lender and any Affiliate of a
Lender party to a Hedging Agreement permitted pursuant to Section 10.1 of the
Credit Agreement, under the Pledge Agreement, and, as additional collateral
security for the prompt and complete payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations and in order to
induce the Lenders to make their Loans under the Credit Agreement, the Pledgor
hereby delivers to the Administrative Agent, for the ratable benefit of itself,
the Lenders, the Issuing Lender and any Affiliate of a Lender party to a
Hedging Agreement permitted pursuant to Section 10.1 of the Credit Agreement,
all of the issued and outstanding shares of capital stock of [INSERT NAME OF
NEW SUBSIDIARY] (the "New Issuer") listed below, together with all stock
certificates, options, or rights of any nature whatsoever which may be issued
or granted by the New Issuer in respect of such stock which the Pledge
Agreement, as supplemented hereby, is in force (the "Additional Pledged Stock";
as used in the Pledge Agreement as supplemented by this Supplement, "Pledged
Stock" shall be deemed to include the Additional Pledged Stock) and hereby
grants to the Administrative Agent, for the ratable benefit of itself, the
Lenders, the Issuing Lender and any Affiliate of a Lender party to a Hedging
Agreement permitted pursuant to Section 10.1 of the Credit Agreement, a first
priority security interest in the Additional Pledged Stock and all Proceeds
thereof.]
or
[2. The Pledgor hereby confirms and reaffirms the security
interest in the Collateral granted to the Administrative Agent, for the ratable
benefit of itself, the Lenders, the Issuing Lender and
19
any Affiliate of a Lender party to a Hedging Agreement permitted pursuant to
Section 10.1 of the Credit Agreement, under the Pledge Agreement, and, as
additional collateral security for the prompt and complete payment when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations
and in order to induce the Lenders to make their Loans under the Credit
Agreement, the Pledgor hereby grants to the Administrative Agent, for the
ratable benefit of itself, the Lenders, the Issuing Lender and any Affiliate of
a Lender party to a Hedging Agreement permitted pursuant to Section 10.1 of the
Credit Agreement, a first priority security interest in the entire partnership
interest of Pledgor (the "Additional Partnership Interest") in [INSERT NAME OF
NEW SUBSIDIARY] (the "New Partnership") listed below and all Proceeds thereof;
as used in the Pledge Agreement as supplemented by this Supplement,
"Partnership Interests" shall be deemed to include the Additional Partnership
Interest).]
3. The Pledgor hereby represents and warrants that the
representations and warranties contained in Paragraph 5 of the Pledge Agreement
are true and correct on the date of this Supplement with references therein to
the ["Pledged Stock" to include the Additional Pledged Stock] or ["Partnership
Interests" to include the Additional Partnership Interest], with references
therein to the ["Issuer" to include the New Issuer] or ["Partnership" to
include the New Partnership], and with references to the "Pledge Agreement" to
mean the Pledge Agreement as supplemented by this Supplement.
4. The Pledgor shall deliver to the Administrative Agent the
Acknowledgement and Consent attached hereto duly executed by the [New Issuer]
or [New Partnership]. The Additional [Pledged Stock or Partnership Interest]
pledged hereby is as follows which [Pledged Stock or Partnership Interest]
shall be deemed part of Schedule I thereto:
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock Certificate No. No. of Shares
------ -------------- --------------- -------------
New Issuer
DESCRIPTION OF PARTNERSHIP INTEREST
Partnership Partnership Interest
----------- --------------------
New Partnership
5. The Pledgor hereby agrees to deliver to the Administrative
Agent such certificates and other documents and take such other action as shall
be reasonably requested by the
20
Administrative Agent in order to effectuate the terms hereof and the Pledge
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed under seal and delivered as of the date first above written.
[CORPORATE SEAL] CORRECTIONS CORPORATION OF
AMERICA
By:
----------------------------
Name:
-----------------------
Title:
----------------------
21
ACKNOWLEDGEMENT AND CONSENT OF NEW ISSUER
The undersigned hereby acknowledges receipt of a copy of the foregoing
Supplement and the Pledge Agreement referred to therein (the "Pledge
Agreement"). The undersigned agrees for the benefit of the Administrative
Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned.
2. The undersigned will notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in Paragraph 6(c)
of the Pledge Agreement.
3. The Issuer further agrees that the terms of Paragraph 10 of
the Pledge Agreement shall apply to it with respect to all actions that may be
required of it under or pursuant to or arising out of Paragraph 10 of the
Pledge Agreement.
[NAME OF NEW ISSUER]
By:
----------------------------
Name:
-----------------------
Title:
----------------------
22
ACKNOWLEDGEMENT AND CONSENT OF PARTNERS
OF NEW PARTNERSHIP
The undersigned partners of _________________________ (the "New
Partnership") (a) hereby acknowledge receipt of a copy of the foregoing
Supplement and the Pledge Agreement referred to therein (the "Pledge
Agreement"), (b) hereby acknowledge and consent to the pledge of the Pledgor's
interest in the New Partnership pursuant thereto, and (c) agree that the
Administrative Agent may freely assign its interest thereunder without further
consent of the partners.
----------------------------, ----------------------------,
Partner of Partner of
------------------ ------------------
---------------------------- -----------------------------
