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EXHIBIT 10.3
AMENDMENT NUMBER ONE
TO
AMENDED AND RESTATED TENANT INCENTIVE AGREEMENT
This AMENDMENT NUMBER ONE TO AMENDED AND RESTATED TENANT INCENTIVE
AGREEMENT (the "Amendment") is entered into on this 9th day of June, 2000, by
and between PRISON REALTY TRUST, INC. (formerly, Prison Realty Corporation), a
Maryland corporation (the "Company"), and CORRECTIONS CORPORATION OF AMERICA
(formerly Correctional Management Services Corporation), a Tennessee corporation
("CCA"). For purposes of this Amendment, any reference in this Amendment or any
reference in the Tenant Incentive Agreement (as defined) to "CMSC" shall be
deemed to be a reference to CCA.
WITNESSETH:
WHEREAS, the Company and CCA are parties to that certain Amended and
Restated Tenant Incentive Agreement, dated as of May 4, 1999 (the "Tenant
Incentive Agreement"), pursuant to which the Company agreed to make certain
incentive payments to CCA;
WHEREAS, the purpose of the Tenant Incentive Agreement was to induce
CCA to lease from the Company certain operational correctional and detention
facilities (the "Facilities") and certain start-up and additional facilities
(the "Additional Facilities"); and
WHEREAS, the Company and CCA desire to amend certain terms and
provisions of the Services Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Effective January 1, 2000, and subject to the terms and
provisions and the satisfaction of the conditions set forth hereinafter, the
Tenant Incentive Agreement shall be amended by striking out Section 1 of the
Tenant Incentive Agreement, reading as follows:
1. Tenant Incentive. As an incentive to CMSC to lease
and continue to lease the Facilities and Additional Facilities from the
Company, the Company agrees to pay to CMSC a fee equal to (a) $840
multiplied by the total number of beds at each Facility leased by CMSC,
and (b) $4,000 multiplied by the total number of beds at each
Additional Facility leased by CMSC. The amount of such fees shall be
payable in cash upon execution of the applicable lease agreement or at
such other time as agreed upon by the parties. The amount of the
incentive fee referenced in clause (b) of the first sentence hereof is
intended to approximate the cost of preparing each Additional Facility
for use by CMSC, including without limitation costs incurred by CMSC in
ramping the facility to full occupancy.
and substituting therefor the following:
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1. Tenant Incentive. As an incentive to CMSC to lease
and continue to lease the Facilities and Additional Facilities from the
Company, the Company agrees to pay to CMSC a fee equal to (a) $840
multiplied by the total number of beds at each Facility leased by CMSC,
and (b) $4,000 multiplied by the total number of beds at each
Additional Facility leased by CMSC. The amount of such fees shall be
payable in cash upon execution of the applicable lease agreement or at
such other time as agreed upon by the parties. The amount of the
incentive fee referenced in clause (b) of the first sentence hereof is
intended to approximate the cost of preparing each Additional Facility
for use by CMSC, including without limitation costs incurred by CMSC in
ramping the facility to full occupancy.
Notwithstanding the preceding paragraph, the Company shall
make no payment, whether in cash or other consideration, to CMSC in
satisfaction of its obligations under this Agreement prior to the
termination of this Agreement at the time of the consummation of the
Management OPCO Merger ( the "Payment Date"), provided, that, with
respect to any such payments that would otherwise be due to CMSC in
respect of this Agreement on or prior to the Payment Date, interest
shall accrue on all such amounts from the due date to the date of
payment at a rate per annum equal to the applicable non-default rate of
interest that the Company is required to pay from time to time pursuant
to Section 2.1(d) of the Company's Amended and Restated Credit
Agreement, dated as of August 4, 1999, as amended by Waiver and
Amendment dated June 9, 2000 (the "Credit Agreement"), which interest
shall be due and payable on the Payment Date. "Management OPCO Merger"
shall have the meaning set forth in the Credit Agreement.
Reference is made to that certain Second Master Amendment to
Lease Agreements dated June 9, 2000 by and between CMSC, as tenant, and
the Company, as landlord, whereby CMSC's payment of Base Rent for the
period from January 1, 2000 through September 30, 2000 (the "Deferred
Rent") has been deferred until September 30, 2000, except for specific
limited amounts payable from time to time as expressly set forth
therein (the "Limited Rent Payments"). The difference between the
Deferred Rent and the Limited Rent Payments is referred to herein as
the "Net Deferred Rent." Notwithstanding the other provisions hereof,
in the event CMSC pays to Company and Company accepts any portion of
the Net Deferred Rent prior to September 30, 2000 (the "Advance Rent
Payments"), then, in such event, the Company shall pay to CMSC all fees
accruing hereunder, in the same proportion as the Advance Rent Payments
bear to the Net Deferred Rent.
In addition, in the event the Deferred Rent becomes due and
payable in full by reason of the occurrence of a default by the Tenant
under Paragraph 3 of the Second Master Amendment to Lease Agreements,
then all fees which would have been payable by the Company under the
Tenant Incentive Agreement as of the date of the acceleration of such
deferred Rent, had such fees not been deferred pursuant to this
Amendment shall become immediately due and payable to CMSC.
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2. Authorization. Each party to the Amendment hereby
represents and warrants that the execution, delivery, and performance
of the Amendment are within the powers of each party and have been duly
authorized by the party, the execution and performance of this
Amendment by each party have been duly authorized by all applicable
laws and regulations, and this Amendment constitutes the valid and
enforceable obligation of each party in accordance with its terms.
3. Effect of Amendment. Except as modified or amended
herein, all terms and provisions of the Tenant Incentive Agreement
shall continue and remain in full force and effect.
4. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original, and all of
which shall together constitute one agreement.
5. Headings. Section headings are for convenience or
reference only and shall not be used to construe the meaning of any
provision in this Amendment.
6. Governing Law. This Amendment shall be construed in
accordance with the laws of the State of Tennessee.
7. Severability. Should any part of this Amendment be
invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity and enforceability of the remaining portion.
8. Successors. This Amendment shall be binding upon and
inure to the benefit of the respective parties and their permitted
assigns and successors in interest.
9. Waivers. No waiver of any breach of any of the terms
or conditions of this Amendment shall be held to be a waiver of any
other or subsequent breach; nor shall any waiver be valid or binding
unless the same shall be in writing and signed by the party alleged to
have granted the waiver.
10. Entire Agreement. This Amendment constitutes the
entire agreement of the parties hereto and supersedes all prior
agreements and presentations with respect to the subject matter hereof.
11. Condition. It is an express condition of this
Amendment that the provisions hereof shall be effective only upon the
Company's receipt of such resolutions and/or fairness opinions as may
be required pursuant to that certain First Supplemental Indenture
between the Company and State Street Bank and Trust Company, as
trustee, dated as of June 11, 1999. The Company agrees to provide to
CMSC copies of all such resolutions and/or fairness opinions promptly
following receipt thereof by the Company.
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.
PRISON REALTY TRUST, INC.,
a Maryland corporation
By: /s/ Thomas W. Beasley
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Its: Chairman of the Board of Directors
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CORRECTIONS CORPORATION OF
AMERICA,
a Tennessee corporation
By: /s/ Darrell K. Massengale
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Its: Chief Financial Officer and Secretary
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