<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
Corrections Corporation of America
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
220256101
------------------------------
(CUSIP Number)
Bernard Carton Copy to: Howard Fuguet, Esq.
Sodexho S.A. Ropes & Gray
3 avenue Newton One International Place
78180 Montigny-le-Bretonneux Boston, MA 02110
France (617) 951-7292
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
April 5, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with the statement. / / (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
<PAGE> 2
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
bu shall be subject to all other provisions of the Act (however, see the Notes).
-2-
<PAGE> 3
Corrections Corporation of America
SCHEDULE 13D
Amendment No. 6
Reference is made to the statement on Schedule 13D originally filed
with the Securities and Exchange Commission on July 1, 1994 and amended by
Amendment No. 1 filed on October 19, 1994 (the "Schedule 13D"), Amendment No. 2
filed on November 3, 1994, Amendment No. 3 filed on July 7, 1995, Amendment No.
4 filed on August 7, 1995 and Amendment No. 5 filed on December 20, 1995.
Item 1. Security and Issuer.
This statement relates to the Common Stock, $1.00 par value (the
"Common Stock"), of Corrections Corporation of America, a Delaware corporation
(the "Issuer"), which has its principal executive offices at 102 Woodmont Blvd.,
Nashville, Tennessee 37205.
Item 2. Identity and Background.
This statement is filed by Sodexho S.A. ("Sodexho"), a French
corporation. The principal executive offices of Sodexho are located at 3 avenue
Newton, 78180 Montigny-le- Bretonneux, FRANCE.
Sodexho, directly and through subsidiaries and affiliates, in 60
countries provides contract food and management services, remote site management
services and leisure services, and also engages in the issuance of service
vouchers.
Information relating to the directors and executive officers of Sodexho
is contained in Exhibit A attached hereto and incorporated herein by reference.
During the last five years, neither Sodexho nor, to the best of
Sodexho's knowledge or belief, any of the persons listed in Exhibit A has,
during the past five years, (1) been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or (ii) been party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or other Consideration.
-3-
<PAGE> 4
The amount of the funds used in purchasing the Securities (as defined
below) reported for the first time by this Amendment was approximately
$20,000,000. Sodexho obtained the funds for these transactions from its general
corporate funds.
Item 4. Purpose of Transaction.
All share numbers reported in this Amendment No. 6 reflect a 2-for-1
stock split of the Shares effected in the form of a dividend paid on October 31,
1995.
Pursuant to a Note Purchase Agreement dated April 5, 1996, among
Sodexho and the Issuer, Sodexho purchased, pursuant to an exercise of its
preemptive rights, a 7.5% convertible subordinated note in the aggregate
principal amount of $20,000,000, which is convertible into approximately 375,235
shares of Common Stock at $53.30 per share at any time beginning April 5, 1996,
and ending February 28, 2002 (the "7.5% Note").
Item 5. Interest in Securities of the Issuer.
(a), (b). Sodexho is the beneficial owner of 6,962,407 shares of Common
Stock (approximately 18.07% of the shares of Common Stock of the Issuer.)
(c). Sodexho is the beneficial owner of all of the shares of Common
Stock to which this statement relates held in its name, and has sole power to
vote and dispose of all such shares.
Except for the transactions described in this Item 5(c) Sodexho has not
engaged in any transactions in the Common Stock of the Issuer during the 60-day
period ended April 5, 1996. To the best of Sodexho's knowledge and belief, none
of the directors or executive officers of Sodexho has engaged in any
transactions in the Common Stock during the 60-day period ended April 5, 1996.
(d). No person other than Sodexho has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of the
shares of Common Stock beneficially owned by Sodexho.
(e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer.
Sodexho and the Issuer have entered into a Registration Rights
Agreement dated as of April 5, 1996, in which the Issuer grants to Sodexho
certain demand and piggy-back registration rights with respect to Common Stock
issued upon conversion of the 7.5% Note.
-4-
<PAGE> 5
As part of the Note Purchase Agreement dated as of April 5, 1996
between Sodexho and the Issuer, the Issuer agreed to pay an arrangement fee of
$300,000 to Sodexho as well as pay Sodexho's expenses, including legal and
incidental expenses, incurred in connection with the purchase of the 7.5% Notes.
Item 7. Material to be Filed as Exhibits.
Exhibit A. Information concerning Reporting Persons' officers, directors and
other.
Exhibit B. Note Purchase Agreement dated as of April 5, 1996.
Exhibit C. Schedules to Note Purchase Agreement dated as of April 5, 1996.
Exhibit D. Registration Rights Agreement dated as of April 5, 1996.
Exhibit E. Form of 7.5% Note.
-5-
<PAGE> 6
Signature
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: April 15, 1996
SODEXHO S.A.
By: /s/ Joseph T. Turo, Jr.
-----------------------
Name: Joseph T. Turo, Jr.
Title: Attorney-in-fact for Jean-Pierre Cuny, Senior Vice President
-6-
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page Number in
Number Description sequentially number copy
- ------ ----------- ------------------------
<S> <C> <C>
A Information concerning Reporting Persons' officers,
directors and other.
B Note Purchase Agreement dated as of April 5, 1996.
C Schedules to Note Purchase Agreement dated as of
April 5, 1996.
D Registration Rights Agreement dated as of April 5,
1996.
E Form of 7.5% Note.
</TABLE>
-7-
<PAGE> 8
<TABLE>
EXHIBIT A
Directors and Executive Officers
The names of the directors and executive officers and their business
addresses and present principal occupation or employment are set forth below.
The business address of each director and officer is c/o Sodexho S.A., 3 avenue
Newton, Montigny-le-Bretonneux, FRANCE.
<CAPTION>
I. Directors of Sodexho
--------------------
Name Present Principal Occupation
- ---- ----------------------------
<S> <C>
Pierre Bellon Chairman
Remi Baudin Vice-Chairman of the Board
Astrid Bellon Student
Bernard Bellon Chairman of FINADVANCE S.A. and
BONNASSE GESTION S.A.
Francois-Xavier Bellon Operational Manager, SFRS
Sophie Clamens Manager, strategic and marketing analysis, FBSA
Patrice Douce Senior Vice-President
Nathalie Szabo Manager, FBSA
Francois Perigot Former President of CNPF
Edouard de Royere Former Chairman of L'Air Liquide
Paul Jeanbart Chairman of Rolaco Group
II. Executive Directors of Sodexho (in addition to those listed above under I)
-------------------------------------------------------------------------
Name Office/Position with Sodexho
- ---- ----------------------------
Pierre Bellon* Chairman and Chief Executive Officer
Remi Baudin Vice-Chairman
Bernard Carton* Vice-Chairman - Finance
Clodine Pincemine Vice-President - Communications
Phillipe Taillet Vice-President - Strategy
Patrice Douce* Chief Executive Officer
Garry Hawkes* Chief Executive Officer of Gardner Merchant
Michel Landel Chief Executive Officer - North America
Jean-Michel Dhenain Chief Executive Officer - France
<FN>
*Member of the Chairman's Committee
</TABLE>
-8-
<PAGE> 9
EXHIBIT B
================================================================================
CORRECTIONS CORPORATION OF AMERICA
----------------------------------
NOTE PURCHASE AGREEMENT
----------------------------------
7.5% Convertible, Subordinated Notes
due February 28, 2002
($20,000,000)
Dated as of April 5, 1996
================================================================================
<PAGE> 10
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<S> <C> <C>
1. Authorization of Issue of the Notes ................................... 1
2. Sale and Purchase of the Notes; Closing Date; Conditions for Closing .. 1
2.1 Sale and Purchase of the Notes .................................. 1
2.2 Closing Date .................................................... 1
2.3 Conditions for Closing .......................................... 1
2.4 Waiver of Conditions ............................................ 3
3. Definitions; Construction ............................................. 4
3.1 Definitions ..................................................... 4
3.2 Construction .................................................... 10
3.3 Changes in Accounting Principles ................................ 10
4. Representations and Warranties of the Corporation ..................... 11
4.1 Organization and Qualification .................................. 11
4.2 Due Authorization ............................................... 11
4.3 Subsidiaries .................................................... 11
4.4 SEC Reports ..................................................... 11
4.5 Financial Statements ............................................ 12
4.6 Actions Pending; Compliance with Law ............................ 12
4.7 Title to Properties; Insurance .................................. 12
4.8 Governmental Consents, Etc ...................................... 13
4.9 Holding Corporation Act and Investment Corporation Act Status ... 13
4.10 Taxes ........................................................... 13
4.11 Conflicting Agreements and Charter Provisions ................... 13
4.12 Capitalization .................................................. 14
4.13 Disclosure ...................................................... 14
4.14 Status of Conversion Shares ..................................... 15
4.15 Registration Under Exchange Act ................................. 15
4.16 ERISA ........................................................... 15
4.17 Possession of Franchises, Licenses, Etc. ........................ 15
4.18 Environmental and Other Regulations ............................. 16
4.19 Offering of Securities .......................................... 16
4.20 Brokers or Finders .............................................. 16
4.21 Offering of Notes ............................................... 16
4.22 Regulations G, T, U, and X ...................................... 16
5. Representations and Warranties of Purchaser ........................... 17
5.1 Due Authorization ............................................... 17
5.2 Conflicting Agreements and Other Matters ........................ 17
5.3 Acquisition for Investment; Source of Funds ..................... 17
</TABLE>
i
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C>
5.4 Brokers or Finders .............................................. 17
5.5 Accredited Investor ............................................. 18
6. Covenants ............................................................. 18
6.1 Financial Statements and Other Reports .......................... 18
6.2 Inspection of Property .......................................... 19
6.3 Use of Proceeds; Regulations G, T, U, and X. .................... 19
6.4 Consolidated Net Worth .......................................... 19
6.5 Consolidated Fixed Charges ...................................... 19
6.6 Consolidated Senior Funded Debt ................................. 20
6.7 Compliance with Laws ............................................ 20
6.8 Maintenance of Properties; Insurance ............................ 20
6.9 Performance of Government Contracts ............................. 21
6.10 Notice to Purchaser ............................................. 21
6.11 Waiver of Stay, Extension, or Usury Laws ........................ 21
6.12 Conduct of Business ............................................. 21
6.13 Amendments or Waivers of Certain Documents ...................... 22
6.14 Limitation on Issuance of Other Subordinated Indebtedness
Senior to the Notes ............................................. 22
6.15 Limitation on Subsidiary Funded Debt ............................ 22
7. Events Of Default; Remedies Therefor .................................. 22
7.1 Events of Default ............................................... 22
7.2 Acceleration of Maturities ...................................... 24
8. Agreements of Purchaser ............................................... 25
8.1 Transfer of the Notes ........................................... 25
8.2 No General Solicitation ......................................... 25
8.3 No Registration ................................................. 25
8.4 Transfer Restrictions; Legends .................................. 25
8.5 Restrictions on Conversion ...................................... 26
8.6 Further Cooperation ............................................. 26
9. Nondisclosure of Confidential Information ............................. 27
10. Miscellaneous ......................................................... 27
10.1 Indemnification ................................................. 27
10.2 Survival of Covenants, Representations, and Warranties .......... 28
10.3 Successors and Assigns .......................................... 28
10.4 Notices ......................................................... 28
10.5 Expenses ........................................................ 29
10.6 Descriptive Headings ............................................ 29
10.7 Satisfaction Requirement ........................................ 29
10.8 Remedies ........................................................ 29
10.9 Entire Agreement ................................................ 29
</TABLE>
ii
<PAGE> 12
<TABLE>
<CAPTION>
<S> <C>
10.10 Amendments ...................................................... 29
10.11 Severability .................................................... 30
10.12 Execution in Counterparts; Telecopy Execution ................... 30
10.13 Governing Law ................................................... 30
10.14 Direct Payment .................................................. 30
</TABLE>
LIST OF EXHIBITS
Exhibit L - 1 Legal Opinion
Exhibit N - 1 Form of Subordinated Note
Exhibit R - 1 Registration Rights Agreement
LIST OF SCHEDULES
Schedule 4.3 Subsidiaries
Schedule 4.6 Pending Actions
Schedule 4.11 Conflicts
Schedule 4.12 Options/Warrants
Schedule 10.14 Purchaser's Schedule
iii
<PAGE> 13
This NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of April
5, 1996, between SODEXHO S.A. a French corporation ("Purchaser"), and
CORRECTIONS CORPORATION OF AMERICA, a Delaware corporation (the "Corporation").
WHEREAS, the Corporation has duly authorized the issuance of
convertible, subordinated notes in the aggregate principal amount of $20,000,000
that are to be convertible into shares of the Corporation's common stock;
WHEREAS, Purchaser wishes to purchase the convertible, subordinated
notes from the Corporation, and the Corporation wishes to sell such convertible,
subordinated notes to Purchaser; and
WHEREAS, Purchaser and the Corporation are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto agree as follows:
1. AUTHORIZATION OF ISSUE OF THE NOTES. The Corporation has duly
authorized the issuance of convertible, subordinated notes (the "Notes") in the
aggregate principal amount of $20,000,000, to be dated the date of issuance
thereof, to bear interest on the unpaid balance thereof from the date thereof
quarterly at the Coupon Rate and, upon the occurrence of a Triggering Event and
until the date on which such Triggering Event is cured or waived or until the
date that is ninety (90) days from the initial occurrence of Triggering Event,
whichever is later, at the Triggering Event Rate, until the principal thereof
shall become due and payable. The indebtedness evidenced by the Notes shall be
convertible into shares of the Corporation's common stock, $1.00 par value, upon
such terms and at a conversion rate as set forth in the Notes. The Notes shall
be substantially in the form attached hereto as Exhibit N-1 and shall be issued
to Purchaser on the Closing Date.
2. SALE AND PURCHASE OF THE NOTES; CLOSING DATE; CONDITIONS FOR CLOSING.
--------------------------------------------------------------------
2.1. SALE AND PURCHASE OF THE NOTES. Subject to the terms and
conditions of this Agreement, Purchaser agrees to purchase, and the Corporation
agrees to sell and issue to Purchaser, on the Closing Date, the Notes for an
aggregate purchase price of Twenty Million Dollars ($20,000,000).
2.2. CLOSING DATE. The closing of the sale and purchase of the Notes
shall take place at the offices of Ropes & Gray, New York, New York, at 10:00
a.m., local time, on April 5, 1996 or at such other time, date, or place as the
Corporation and Purchaser shall mutually agree (which time, date, and place are
referred to in this Agreement as the "Closing Date").
2.3. CONDITIONS FOR CLOSING. Purchaser's obligation to purchase the
Notes on the Closing Date shall be subject to the performance by the Corporation
of its agreements hereunder that
<PAGE> 14
by the terms hereof are to be performed at or prior to the time of delivery of
the Notes and to the following further conditions precedent:
(i) Closing Date. The Closing Date shall occur on or before
April 5, 1996;
(ii) Closing Certificate. Purchaser shall have received a
certificate dated the Closing Date, signed by the President or a Vice
President of the Corporation, to the effect that: (i) the representations
and warranties of the Corporation set forth in SECTIONS 4.1 THROUGH 4.22
are true and correct in all material respects on and with respect to the
Closing Date; (ii) the Corporation has performed all of its obligations
hereunder that are to be performed on or prior to the Closing Date; and
(iii) no Unmatured Event of Default or Event of Default has occurred and
is continuing;
(iii) Legality. The Notes shall qualify as a legal investment
for Purchaser under the laws and regulations of each jurisdiction to which
Purchaser is subject (without reference to any so-called "basket"
provision which permits the making of an investment without restrictions
to the character of the particular investment being made) and the purchase
of and payment for the Notes shall not be prohibited by any applicable law
or governmental regulation.
(iv) Satisfactory Proceedings. All corporate proceedings
taken in connection with the transactions contemplated by this Agreement,
and all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to Purchaser and special counsel to
Purchaser, and Purchaser shall have received a copy (executed or
certified as may be appropriate) of all documents or corporate proceedings
taken in connection with the consummation of said transactions, including
the following:
a. Certified copies of the Certificate of
Incorporation and By-laws of the Corporation;
b. Certified copies of resolutions of the Board of
Directors of the Corporation authorizing the execution,
delivery, and performance of the Transaction Documents, and any
other documents provided for in this Agreement; and
c. A certificate of the Secretary of the Corporation
certifying the names of the officer or officers of the
Corporation authorized to sign the Transaction Documents and any
other documents provided for in this Agreement, together with a
sample of the true signature of each such officer;
(v) Legal Opinion. Purchaser shall have received from
Stokes & Bartholomew, counsel to the Corporation, an opinion letter dated
the Closing Date, in form
2
<PAGE> 15
and substance satisfactory to Purchaser and its counsel, and covering the
matters set forth in EXHIBIT L-1 hereto;
(vi) Issuance of the Notes. The Corporation shall have
executed and delivered the Notes to Purchaser or its nominee;
(vii) Registration Rights Agreement. The Corporation and
Purchaser shall have entered into a registration rights agreement in the
form of EXHIBIT R-1 hereto (the "Registration Rights Agreement");
(viii) Arrangement Fee. The Corporation shall pay to
Purchaser an arrangement fee of $300,000 by wire transfer of immediately
available funds;
(ix) No Material Adverse Change. No material adverse change
in the business, condition, or operations (financial or otherwise) of the
Corporation and its Subsidiaries taken as a whole from that set forth in
the balance sheet as of December 31, 1995, included in the SEC Reports,
other than changes disclosed to Purchaser in writing prior to the
execution and delivery by Purchaser of this Agreement, shall have occurred;
(x) Approvals and Consents. The Corporation shall have
duly received all authorizations, consents, approvals, licenses,
franchises, permits, and certificates by or of all federal, state, and
local governmental authorities necessary for the issuance of the Notes;
(xi) Payment of Legal Fees. The Corporation shall have
reimbursed Purchaser in full for the fees and expenses of its counsel,
Ropes & Gray, incurred in connection with the preparation, negotiation, and
execution of the Transaction Documents, and any other documents executd in
connection herewith;
(xii) Representations and Warranties. The representations
and warranties of the Corporation contained in this Agreement shall be
true and correct in all respects on and as of the Closing Date, as though
made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(xiii) Events of Default. No Unmatured Event of Default or
Event of Default shall have occurred and be continuing on the Closing Date,
nor shall either result from the purchase and sale of the Notes; and
2.4 WAIVER OF CONDITIONS. If, on the Closing Date, the Corporation
fails to deliver the Notes to Purchaser or if any of the other conditions
specified in SECTION 2.3 have not been satisfied, Purchaser shall be relieved of
all further obligations under this Agreement. Without limiting the foregoing, if
the conditions specified in SECTION 2.3 have not been satisfied, Purchaser may
waive compliance by the Corporation with any such condition to such extent as it
may in its
3
<PAGE> 16
sole discretion determine. Nothing in this SECTION 2.4 shall operate
to relieve the Corporation of any of its obligations hereunder or to waive any
of Purchaser's rights against the Corporation occasioned by any such breach.
3. DEFINITIONS; CONSTRUCTION.
3.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
"AFFILIATE" has the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement), it being understood
that any limited partner of a partnership shall not be an Affiliate of such
partnership solely by virtue of its status as such a limited partner.
"AGREEMENT" shall have the meaning ascribed thereto in the preamble.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or
Friday that is not a day on which banking institutions in Nashville, Tennessee
are authorized or obligated by law or executive order to close.
"CAPITAL LEASE" means as to any Person any lease or rental of real
or personal property that, under generally accepted accounting principles, is or
will be required to be capitalized on the balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" means any rental obligation in respect of
a Capital Lease taken at the amount thereof accounted for as indebtedness (net
of interest expense) in accordance with generally accepted accounting
principles.
"CLOSING DATE" shall have the meaning ascribed thereto in
SECTION 2.2 hereof.
"CODE" means the Internal Revenue Code of 1986, or any successor
statute thereto, as the same may be amended from time to time.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" means the common stock of the Corporation, par value
$l.00 per share.
"CONCEPT" means Concept Incorporated, a Delaware corporation.
"CONCEPT ACQUISITION" means the acquisition by the Corporation of
Concept pursuant to the terms and conditions of the Concept Share Exchange
Agreement.
4
<PAGE> 17
"CONCEPT ACQUIRED INDEBTEDNESS" means Funded Debt of Concept
existing immediately prior to the consummation of the Concept Acquisition;
provided, however, that the foregoing shall not include the United Concept
Partnership Funded Debt.
"CONCEPT SHARE EXCHANGE AGREEMENT" means a share exchange agreement,
containing such terms and conditions reasonably acceptable to Purchaser,
involving the exchange of shares between the Corporation and the stockholders of
Concept.
"CONFIDENTIAL INFORMATION" shall have the meaning ascribed thereto
in SECTION 9.1 hereof.
"CONSOLIDATED FIXED CHARGE COVERAGE" means at the end of any fiscal
quarter the quotient of (a) twice the Consolidated Operating Cash Flow for such
fiscal quarter and the immediately preceding fiscal quarter, DIVIDED BY (b)
Consolidated Fixed Charges for the next succeeding four fiscal quarters.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of
Consolidated Rentals and Consolidated Interest Expense for such period. In the
event that Consolidated Fixed Charges are to be determined for any future period
or periods and any component of Consolidated Rentals or Consolidated Interest
Expense may fluctuate or is determined on the basis of a rate or criterion that
may fluctuate during such period, Consolidated Rentals or Consolidated Interest
Expense, as the case may be, shall be calculated assuming that such amount,
rate, or criterion in effect on the date such calculation is made shall be in
effect throughout such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest, whether paid or accrued (including that attributable to Capital
Leases), of the Corporation and the Restricted Subsidiaries on a consolidated
basis, including all amounts payable on the First Mortgage Notes and all
commissions, discounts, and other fees and charges owed with respect to letters
of credit and banker's acceptance financing and net costs under interest rate
exchange or cap agreements providing interest rate protection, all as determined
in conformity with generally accepted accounting principles.
"CONSOLIDATED NET INCOME" means, for any period, the net earnings
(or losses) of the Corporation and the Restricted Subsidiaries, on a
consolidated basis, for such period taken as a single accounting period
determined in conformity with generally accepted accounting principles
consistently applied, but excluding:
a. any gain that under generally accepted accounting principles
consistently applied would be properly classified as an extraordinary
gain;
b. any gain arising from a sale of capital assets that is not
made in the ordinary course of business of the Corporation or its
Restricted Subsidiaries;
5
<PAGE> 18
c. any gain arising from any write-up of assets;
d. the proceeds of any life insurance policy;
e. earnings of any Person substantially all of the assets of that
have been acquired in any manner (whether through merger or otherwise)
to the extent that such earnings were realized prior to the date of
such acquisition; and
f. earnings of any Person to which substantially all the assets
of the Corporation shall have been sold or transferred, into which the
Corporation shall have been merged, or with which the Corporation
shall have been consolidated, to the extent that such earnings were
realized prior to the date of such transfer, merger, or consolidation.
All losses (including any loss that, under generally accepted accounting
principles consistently applied, would be properly classified as an
extraordinary loss) shall be included in determining such net earnings (or
losses).
"CONSOLIDATED NET WORTH" means, as of the time of any determination
thereof, the excess of (a) the sum of (i) the par value (or value stated on the
books of the Corporation) of the capital stock of all classes of the
Corporation, PLUS (or MINUS in the case of surplus deficit) (ii) the amount of
consolidated surplus, whether capital or earned, of the Corporation and the
Restricted Subsidiaries, PLUS (iii) the face amount of the Subordinated Funded
Debt, OVER (b) the amount of all treasury stock; all determined on a
consolidated basis for the Corporation and the Restricted Subsidiaries in
accordance with generally accepted accounting principles consistent with those
followed in the preparation of the financial statements referred to in SECTION
4.5, including the making of appropriate deductions for minority interests, if
any, in the Restricted Subsidiaries.
"CONSOLIDATED OPERATING CASH FLOW" means for any period, without
duplication, (a) Consolidated Net Income PLUS (b) to the extent deducted in
computing Consolidated Net Income, depreciation and amortization and other
similar non-cash charges, accrued income tax expense, and interest expense of
the Corporation and the Restricted Subsidiaries for such period.
"CONSOLIDATED RENTALS" means, for any period, all amounts payable by
the Corporation and any Restricted Subsidiary as lessee or sublessee relating to
Operating Leases.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Funded Debt other than
Subordinated Funded Debt.
"CONSOLIDATED TOTAL CAPITALIZATION" means, as of the time of any
determination thereof, the sum of Consolidated Senior Funded Debt and
Consolidated Net Worth.
6
<PAGE> 19
"CONVERSION SHARES" means the shares of Common Stock issuable upon
conversion of the indebtedness evidenced by the Notes.
"CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
principal amount 8.5% Convertible Subordinated Notes due November 7, 1999, (b)
$7,500,000 aggregate principal amount 8.5% Convertible, Extended, Subordinated
Notes due on September 30, 1998 or, if extended, on various dates, the latest of
which is September 30, 2000, (c) $20,000,000 aggregate principal amount 7.5%
Convertible Subordinated Notes due February 28, 2002, (d) option to purchase the
Floating Rate Notes, and (e) the Floating Rate Notes when issued.
"CORPORATION" shall have the meaning ascribed thereto in the
preamble to this Agreement and shall include the Corporation's permitted
successors and assigns.
"COUPON RATE" means seven and one-half percent (7.5%) per annum.
"ELOY FACILITY" means the Bureau of Prisons facility that is located
in Eloy, Arizona and owned by United Concept Partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EVENT OF DEFAULT" shall have the meaning set forth in SECTION 7.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include reference to the
comparable section, if any, of any successor federal statute.
"FEDERAL GOVERNMENT CONTRACT" means a contract between the
Corporation and the federal government of the United States of America or any
subdivision or agency thereof.
"FLOATING RATE NOTES" shall have the meaning set forth in the
Sodexho Agreement.
"FOREIGN GOVERNMENT CONTRACT" means a contract between the
Corporation and any foreign (other nation) government or any subdivision or
agency thereof.
"FIRST MORTGAGE NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement dated as of December 6, 1990, as amended, between the Corporation and
the purchasers of the First Mortgage Notes listed therein.
"FIRST MORTGAGE NOTES" means the Corporation's $20,000,000 aggregate
principal amount of 11.08% first mortgage notes due November 30, 2000 issued
pursuant to the First Mortgage Note Purchase Agreement.
7
<PAGE> 20
"FUNDED DEBT" means and includes without duplication (a) any
obligation payable more than one year from the date of the creation thereof
(including the current portion of Funded Debt), that under generally accepted
accounting principles is shown on the balance sheet as a liability (including
obligations under Capital Leases and excluding reserves for deferred income
taxes and other reserves to the extent that such reserves do not constitute an
obligation), (b) guarantees, endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business), and other
contingent liabilities (whether direct or indirect) in connection with the
obligations, stock, or dividends of any Person, including obligations under
contracts to supply funds to or in any other manner invest in any Person, (c)
obligations under any contract to purchase, sell, or lease (as lessee or lessor)
property or to purchase or sell services, primarily for the purpose of enabling
a Person to make payment of obligations or to assure the holder of such
obligations against loss including obligations under any contract for the
purchase of materials, supplies, or other property or services if such contract
(or any related document) requires that payment for such materials, supplies, or
other property or services shall be made regardless of whether delivery of such
materials, supplies, or other property or services is ever made or tendered, (d)
obligations under any contract to pay or purchase obligations of a Person, or to
advance or supply funds for the payment or purchase of such obligations, and (e)
any agreement to assure a creditor of a Person against loss. For all purposes of
this Agreement (other than for purposes of calculating United Concept
Partnership Funded Debt), all United Concept Partnership Funded Debt shall be
deemed to constitute "Funded Debt."
"GOVERNMENT CONTRACT" means any Federal Government Contract,
Foreign Government Contract, or any State Government Contract.
"INDEMNIFIED PARTY" shall have the meaning ascribed thereto in
SECTION 10.1 hereof.
"INDEMNIFYING PARTY" shall have the meaning ascribed thereto in
SECTION 10.1 hereof.
"MARGIN STOCK" shall have the meaning given such term in Regulation
G (12 CFR part 207) of the Board of Governors of the Federal Reserve System.
"NOTES" shall have the meaning ascribed thereto in SECTION 1 hereof.
"OPERATING LEASE" means any lease of real, personal, or mixed
property that is not a Capital Lease.
"PERMITTED BUSINESSES" means the design, construction, ownership,
start up, management, or operation of detention and correctional facilities, and
the operation of services involving the transportation and extradition of
prisoners, together with associated consulting and educational services.
"PERSON" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government, or department or
agency of a government.
8
<PAGE> 21
"PURCHASER" shall mean Sodexho S.A. and shall include Sodexho's
permitted successors and assigns. "
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning ascribed
thereto in SECTION 2.3(vii) hereof.
"REPRESENTATIVE" shall have the meaning ascribed thereto in SECTION
7.1 hereof.
"RESTRICTED SUBSIDIARY" means a Subsidiary of the Corporation that
is (a) organized under the laws of any state of the United States of America and
at least 80% of the total combined voting power of all classes of Voting Stock
shall at the time as of which any determination is being made, be owned by the
Corporation either directly or through any Restricted Subsidiary, (b) engaged in
a Permitted Business, and (c) whose assets and operations are located within the
United States of America.
"SECURITY" or "SECURITIES" means the Notes or the Conversion Shares.
"SEC REPORTS" shall have the meaning ascribed thereto in SECTION 4.4
hereof.
"SECURITIES ACT" means the Securities Act of 1933.
"SENIOR INDEBTEDNESS" shall have the meaning ascribed to such term
in the Notes.
"SODEXHO AGREEMENT" means that certain Securities Purchase
Agreement, dated as of June 23, 1994, between Sodexho S.A., a French
corporation, or its designee and the Corporation, as amended by that certain
Amendment No. 1 to Securities Purchase Agreement, dated as of July 11, 1995.
"STATE GOVERNMENT CONTRACT" means a contract between the Corporation
or any of its Subsidiaries and the government of any state, county, or
municipality or any political subdivision or agency thereof.
"SUBORDINATED FUNDED DEBT" means the indebtedness of the Corporation
evidenced by the Convertible Notes and the Notes.
"SUBSIDIARY" means any corporation, partnership, or other entity of
which a majority of the total combined voting power of all classes of Voting
Stock at the time as of which any determination is being made, is owned by a
Person either directly, through one or more Subsidiaries, or both.
"TRANSACTION DOCUMENTS" means this Agreement, the Notes, and the
Registration Rights Agreement.
9
<PAGE> 22
"TRANSFER" shall have the meaning ascribed thereto in SECTION 8.4
hereof.
"TRIGGERING EVENT" means the occurrence of any Unmatured Event of
Default of Event of Default described in CLAUSES (i), (ii), AND (iv) THROUGH
(x), inclusive, of SECTION 7.1. For purposes of determining the period during
which the Triggering Event Rate shall be in effect, a Triggering Event shall not
be deemed to have occurred until the date on which Purchaser shall have given
notice of the occurrence thereof to the Corporation.
"TRIGGERING EVENT RATE" means nine and one-half percent (9.5%) per
annum.
"UCI" means United Concept, Inc., a Delaware corporation, one
hundred percent (100%) of the issued and outstanding common stock of which is
owned by Concept.
"UNITED CONCEPT PARTNERSHIP" means United Concept Limited
Partnership, a Delaware limited partnership of which UCI is the managing general
partner.
"UNITED CONCEPT PARTNERSHIP FUNDED DEBT" means (a) the approximately
$20,000,000 of indebtedness of United Concept Partnership that is secured by a
first mortgage lien upon the Eloy Facility, and (b) any and all other
indebtedness of United Concept Partnership that constitutes Funded Debt (without
giving effect to the last sentence of such definition).
"UNMATURED EVENT OF DEFAULT" shall mean any event or condition, the
occurrence of which would, with the lapse of time or the giving of notice, or
both, constitute an Event of Default.
"VOTING STOCK" means, when used with respect to any Person, any
shares of stock or other ownership interests of such Person having general
voting power under ordinary circumstances to elect a majority of the board of
directors of such Person (irrespective of whether at the time stock or ownership
interests of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
3.2 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, the part includes the whole, the terms "include"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or". The words
"hereof," "herein," "hereby," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Section, subsection, clause, exhibit, and schedule references are to
this Agreement unless otherwise specified. Any reference herein to the
Transaction Documents includes any and all alterations, amendments, changes,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable.
3.3 CHANGES IN ACCOUNTING PRINCIPLES . If any changes in accounting
principles from those in effect at the time of preparation of the financial
statements referred to in SECTION 4.5 are hereafter occasioned by the
promulgation of rules, regulations, pronouncements, and opinions
10
<PAGE> 23
by or required by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors thereto or
organizations with similar functions) result in a change in the method of
calculation of financial covenants, standards, or terms found in this Agreement
or there is any change in the Corporation's fiscal quarters or fiscal year, the
parties hereto agree to enter into negotiations to amend this Agreement so as to
equitably reflect such changes with the desired result that the criteria for
evaluating the financial condition of the Corporation shall be the same after
such changes as if such changes had not been made.
4. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
represents and warrants to Purchaser, as of the date hereof and as of the
Closing Date, that:
4.1 ORGANIZATION AND QUALIFICATION. Each of the Corporation
and its Subsidiaries is a corporation duly organized and existing in good
standing under the laws of the jurisdiction in which it is incorporated and
has the power to own its respective property and to carry on its respective
business as now being conducted. Each of the Corporation and its
Subsidiaries is duly qualified as a foreign corporation to do business and
in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such
qualification necessary and where the failure so to qualify would have a
material adverse effect on the business or financial position of the
Corporation and its Subsidiaries taken as a whole.
4.2 DUE AUTHORIZATION. The execution and delivery of this
Agreement, the Registration Rights Agreement, and the other Transaction
Documents, and the issuance and sale of the Notes and the Conversion Shares
by the Corporation and compliance by the Corporation with all the
provisions of the Transaction Documents and the Conversion Shares (i) are
within the corporate power and authority of the Corporation; (ii) do not
require the approval or consent of any stockholders of the Corporation; and
(iii) have been authorized by all requisite corporate proceedings on the
part of the Corporation. The Transaction Documents have been duly executed
and delivered by the Corporation and constitute valid and binding
agreements of the Corporation enforceable in accordance with their
respective terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
now or hereafter in effect relating to creditors rights, and (ii) the
remedy of specific performance and injunctive and other form of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought. The Corporation
has furnished to Purchaser true and correct copies of the Corporation's
current Certificate of Incorporation and By-laws.
4.3 SUBSIDIARIES. The Subsidiaries of the Corporation,
together with their jurisdiction of incorporation, are set forth on
SCHEDULE 4.3 hereto.
4.4 SEC REPORTS. The Corporation has filed all proxy
statements, reports, and other documents required to be filed by it under
the Exchange Act and the
11
<PAGE> 24
Corporation has furnished Purchaser copies of its Annual Report on Form
10-K for the fiscal year ended December 31, 1995, and all proxy statements
and reports under the Exchange Act filed by the Corporation after such date
each as filed with the Commission (collectively, the "SEC Reports"). Each
SEC Report was in substantial compliance with the requirements of its
respective report form and did not, on the date of filing, contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
4.5 FINANCIAL STATEMENTS. The financial statements
(including any related schedules or notes) included in the SEC Reports
have been prepared in accordance with generally accepted accounting
principles consistently followed (except as indicated in the notes thereto)
throughout the periods involved and fairly present the consolidated
financial condition, results of operations, and changes in stockholders'
equity of the Corporation and its Subsidiaries as of the dates thereof and
for the periods ended on such dates (in each case subject, as to interim
statements, to changes resulting from year-end adjustments (none of which
will be material in amount or effect)), and the Corporation has no material
liabilities, contingent or otherwise, not reflected in the balance sheet as
of December 31, 1995 included in the SEC Reports or otherwise referred to
in the SEC Reports or otherwise disclosed to Purchaser in writing prior to
the execution by Purchaser of this Agreement, other than any such
liabilities incurred in the ordinary course of business since December 31,
1995. There has been no material adverse change in the business, condition,
or operations (financial or otherwise) of the Corporation and its
Subsidiaries taken as a whole from that set forth in the balance sheet as
of December 31, 1995 included in the SEC Reports, other than changes
disclosed or referred to in the SEC Reports, or otherwise disclosed to
Purchaser in writing prior to the execution by Purchaser of this Agreement.
4.6 ACTIONS PENDING; COMPLIANCE WITH LAW. Except as
disclosed on SCHEDULE 4.6 hereto, there is no action, suit, criminal
investigation, or proceeding pending or, to the knowledge of the
Corporation, threatened by any public official or governmental authority,
against the Corporation or any of its Subsidiaries or any of their
respective properties or assets by or before any court, arbitrator, or
governmental body, department, commission, board, bureau, agency, or
instrumentality, which questions the validity of the Transaction Documents
or the Conversion Shares or any action taken or to be taken pursuant hereto
or thereto, or, except as set forth in the SEC Reports, that are reasonably
likely to result in any material adverse change in the business or
financial condition of the Corporation, and neither the Corporation nor any
of its Subsidiaries is in default in any material respect with respect to
any judgment, order, writ, injunction, decree, or award, and, except as
disclosed in the SEC Reports, the businesses of the Corporation and its
Subsidiaries are in compliance in all material respects with applicable
federal, state, local, and foreign governmental laws and regulations and
all Government Contracts, all to the extent necessary to avoid any material
adverse effect on the business, properties, or condition (financial or
otherwise) of the Corporation and its Subsidiaries, taken as a whole.
13
<PAGE> 25
4.7 TITLE TO PROPERTIES; INSURANCE. The Corporation and its
Subsidiaries have good and valid title to their respective properties and
assets, free of all liens and encumbrances other than those referred to in
the financial statements of the Corporation (or the notes thereto) for the
quarter ended December 31, 1995, included in the SEC Reports, except in
each case for such defects in title and such other liens and encumbrances
that are otherwise disclosed or referred to in the SEC Reports or that do
not in the aggregate materially detract from the value to the Corporation
of the properties and assets of the Corporation and its Subsidiaries taken
as a whole. The Corporation and its Subsidiaries maintain insurance in such
amounts (to the extent available in the public market), including
self-insurance, retainage, and deductible arrangements, and of such a
character as the Corporation believes is reasonable for companies engaged
in the same or similar business.
4.8 GOVERNMENTAL CONSENTS, ETC. The Corporation is not
required to obtain any consent, approval, or authorization of, or to make
any declaration or filing with, any governmental authority as a condition
to or in connection with the valid execution, delivery, and performance of
the Transaction Documents and the valid offer, issue, sale, or delivery of
the Notes or the Conversion Shares, or the performance by the Corporation
of its obligations in respect thereof, except for any filings required to
effect any registration pursuant to the Registration Rights Agreement, and
filings required pursuant to state and federal securities laws that will be
timely made after the Closing Date.
4.9 HOLDING CORPORATION ACT AND INVESTMENT CORPORATION ACT
STATUS. The Corporation is not a "holding company" or a "public utility
company" as such terms are defined in the Public Utility Holding
Corporation Act of 1935. The Corporation is not an "investment company,"
or a company "controlled" by an "investment company," within the meaning
of the Investment Corporation Act of 1940.
4.10 TAXES. The Corporation and its Subsidiaries have filed
or caused to be filed all income tax returns that are required to be
filed and have paid or caused to be paid all taxes as shown on said
returns and on all assessments received by it to the extent that such
taxes have become due, except taxes the validity or amount of which is
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been set aside. The federal income tax
returns of the Corporation and its Subsidiaries have been examined and
reported on by the Internal Revenue Service (or closed by applicable
statutes) and all tax liabilities including additional assessments have
been satisfied for all fiscal years prior to and including the fiscal year
ended December 31, 1991. The Corporation and its Subsidiaries have paid or
caused to be paid, or have established reserves that the Corporation
reasonably believes to be adequate in all material respects, for all
federal income tax liabilities and state income tax liabilities applicable
to the Corporation and its Subsidiaries for all fiscal years that have not
been examined and reported on by the taxing authorities (or closed by
applicable statutes).
13
<PAGE> 26
4.11 CONFLICTING AGREEMENTS AND CHARTERPROVISIONS . Neither the
Corporation nor its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction that materially and
adversely affects its business, property, or assets or financial condition.
Except as set forth on SCHEDULE 4.11 attached hereto, neither the execution
and delivery of the Transaction Documents nor the issuance of the
Conversion Shares nor fulfillment of or compliance with the terms and
provisions hereof or thereof or the prepayment of the Notes as contemplated
hereby and by the Notes, and the conversion of the indebtedness evidenced
by the Notes into the Conversion Shares as contemplated hereby and by the
Notes will conflict with or result in a breach of the terms, conditions, or
provisions of, or give rise to a right of termination under, or constitute
a default under, or result in any violation of, the Certificate of
Incorporation or By-laws of the Corporation or any mortgage, agreement,
instrument, order, judgment, decree, statute, law, rule, or regulations to
which the Corporation or any of its Subsidiaries or any of their respective
properties is subject. Neither the Corporation nor any of its Subsidiaries
is in default under any outstanding indenture or other debt instrument or
with respect to the payment of the principal of or interest on any
outstanding obligations for borrowed money, or is in default under any of
their respective contracts or agreements, or under any instrument by which
the Corporation or any of its Subsidiaries is bound, in each case that
materially and adversely affects the business, operations, or financial
condition of the Corporation and its Subsidiaries, taken as a whole.
4.12 CAPITALIZATION. The authorized capital stock of the
Corporation consists of (i) 50,000,000 shares of Common Stock, of
which, as of the date hereof, 33,881,485 shares are outstanding and 8,722
shares are held in its treasury; and (ii) 1,000,000 shares of preferred
stock, $1.00 par value, of which, as of the date hereof, no shares are
outstanding; all of such outstanding shares have been validly issued and
are fully paid and nonassessable. Except as set forth on SCHEDULE 4.12
hereto, no shares of Common Stock of the Corporation are entitled to
preemptive rights. Except for the options and warrants listed on SCHEDULE
4.12 hereto and except for the Convertible Notes, there are no outstanding
options, warrants, scrip, rights to subscribe to, calls, or commitments of
any character whatsoever relating to, or securities or rights convertible
into, shares of any capital stock of the Corporation, or contracts,
commitments, understandings, or arrangements by which the Corporation is or
may become bound to issue additional shares of its capital stock. Since
September 30, 1995, the Corporation has not changed the amount of its
authorized capital stock or subdivided or otherwise changed any shares of
any class of its capital stock, whether by way of reclassification,
recapitalization, stock split, or otherwise, or issued or reissued, or
agreed to issue or reissue, any of its capital stock, except as disclosed
in this SECTION 4.12 and has not since such date declared or paid any
dividend in cash or stock or made any other distribution of assets to its
stockholders.
4.13 DISCLOSURE. Neither this Agreement nor the SEC Reports nor the
financial statements included in the SEC Reports nor any certificate or
written disclosure statement referred to herein and furnished to Purchaser
by or on behalf of the Corporation
14
<PAGE> 27
in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein not
misleading. There is no fact peculiar to the Corporation or any of its
Subsidiaries that the Corporation has not disclosed to Purchaser in writing
that materially affects adversely or, so far as the Corporation can now
reasonably foresee, will materially affect adversely the properties,
business, or condition (financial or otherwise) of the Corporation and its
Subsidiaries, taken as a whole, or the ability of the Corporation to
perform this Agreement, the Notes, the Registration Rights Agreement, or
its obligations in respect of the Conversion Shares.
4.14 STATUS OF CONVERSION SHARES. The Conversion Shares have been duly
authorized by all necessary corporate action on the part of the Corporation
(no consent or approval of stockholders being required by law, the
Certificate of Incorporation or the By-laws of the Corporation, or
otherwise), and such shares of Common Stock have been validly reserved for
issuance, and upon issuance, will be validly issued and outstanding, fully
paid, and nonassessable.
4.15 REGISTRATION UNDER EXCHANGE ACT. The Conversion Shares will not
be registered as a class pursuant to Section 12 of the Exchange Act and
such registration is not required except as otherwise required by the
provisions of the Registration Rights Agreement.
4.16 ERISA. No accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), irrespective of whether waived,
exists with respect to any Plan (as defined below) (other than a
Multiemployer Plan (as defined below)). No liability to the Pension Benefit
Guaranty Corporation has been incurred with respect to any Plan (other than
a Multiemployer Plan) by the Corporation or any of its Subsidiaries that is
or would be materially adverse to the Corporation and its Subsidiaries,
taken as a whole. Neither the Corporation nor any of its Subsidiaries has
incurred any withdrawal liability under Title IV of ERISA with respect to
any Multiemployer Plan that is or would be materially adverse to the
Corporation and its Subsidiaries, taken as a whole. The execution and
delivery of this Agreement and the Registration Rights Agreement and the
issuance and sale of the Notes and the conversion of the indebtedness
evidenced by the Notes into the Conversion Shares will not involve any
transaction that is subject to the prohibitions of Section 406 of ERISA or
in connection with which a tax could be imposed pursuant to Section 4975 of
the Code. The representation by the Corporation in the immediately
preceding sentence is made in reliance upon and subject to the accuracy of
Purchaser's representation in SECTION 5.3 as to the source of the funds to
be used to pay the purchase price of the Conversion Shares. As used in this
SECTION 4.16, the term "Plan" shall mean an "employee pension benefit plan"
(as defined in Section 3(2) of ERISA) that is or has been established or
maintained, or to which contributions are or have been made, by the
Corporation or by any trade or business, irrespective of whether
incorporated, that, together with the Corporation, is under common control,
as described in Section 414(b) or (c) of the
15
<PAGE> 28
Code, and the term "Multiemployer Plan" shall mean any Plan that is a
"multiemployer plan" (as such term is defined in Section 4001(a)(3) of
ERISA).
4.17 POSSESSION OF FRANCHISES, LICENSES, ETC. The Corporation and its
Subsidiaries possess all franchises, certificates, licenses, permits, and
other authorizations from governmental or political subdivisions or
regulatory authorities and all patents, trademarks, service marks, trade
names, copyrights, licenses, and other rights, free from burdensome
restrictions, that are necessary in any material respect to the Corporation
and its Subsidiaries, taken as a whole for the ownership, maintenance, and
operation of their respective properties and assets, and neither the
Corporation nor any of its Subsidiaries is in violation of any thereof in
any material respect.
4.18 ENVIRONMENTAL AND OTHER REGULATIONS. The Corporation and its
Subsidiaries are in compliance in all material respects with all laws and
regulations, including those relating to environmental control, equal
employment opportunity, and employee safety, in all jurisdictions in which
the Corporation and its Subsidiaries are presently doing business and where
the failure to effect such compliance would have a material adverse effect
on the business, operations, or financial condition of the Corporation and
its Subsidiaries, taken as a whole.
4.19 OFFERING OF SECURITIES. Neither the Corporation nor any Person
acting on its behalf has offered the Securities or any similar securities
of the Corporation for sale to, solicited any offers to buy the Securities
or any similar securities of the Corporation from, or otherwise approached
or negotiated with respect to the Corporation with any Person other than
Purchaser and a limited number of other "accredited investors" (as defined
in Rule 501(a) under the Securities Act). Neither the Corporation nor any
Person acting on its behalf has taken or will take any action (including
any offering of any securities of the Corporation under circumstances that
would require the integration of such offering with the offering of the
Securities under the Securities Act and the rules and regulations of the
Commission thereunder) that might subject the offering, issuance, or sale
of the Securities to the registration requirements of Section 5 of the
Securities Act.
4.20 BROKERS OR FINDERS. No agent, broker, investment banker, or other
firm or Person is or will be entitled to any broker's fee or any other
commission or similar fee as a result of the activities of the Corporation
or its Subsidiaries, agents, or employees undertaken in connection with any
of the transactions contemplated by this Agreement or the Registration
Rights Agreement.
4.21 OFFERING OF NOTES. Neither the Corporation nor, to the best
knowledge of the Corporation, any person authorized to act on behalf of the
Corporation has taken or will take any action that would subject the
issuance or sale of the Notes to the provisions of Section 5 of the
Securities Act or violate the provisions of any securities, "blue sky", or
similar law of any applicable jurisdiction.
16
<PAGE> 29
4.22 REGULATIONS G, T, U, AND X . Neither the Corporation nor
any of its Subsidiaries owns or has any present intention of acquiring
any Margin Stock. Neither the Corporation, any of its Subsidiaries, nor
any agent acting on its behalf has taken take any action that might
cause this Agreement to violate Regulations G, T, U, or X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Corporation, as of the date hereof and as of the
Closing Date, as follows:
5.1 DUE AUTHORIZATION. Purchaser has all right, power, and
authority to enter into the Transaction Documents to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Purchaser of the Transaction Documents to which
it is a party and the consummation by Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on behalf of Purchaser. The Transaction
Documents to which Purchaser is a party have been duly executed and
delivered by Purchaser and constitute valid and binding agreements of
Purchaser enforceable in accordance with their terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
5.2. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
execution and delivery of the Transaction Documents to which Purchaser is
a party nor the performance by Purchaser of its obligations hereunder or
thereunder will conflict with, result in a breach of the terms,
conditions, or provisions of, constitute a default under, result in the
creation of any mortgage, security interest, encumbrance, lien, or charge
of any kind upon any of the properties or assets of Purchaser pursuant
to, or require any consent, approval, or other action by or any notice to
or filing with any court or administrative or governmental body pursuant
to the organizational documents or agreements of Purchaser or any
agreement, instrument, order, judgment, decree, statute, law, rule, or
regulation by which Purchaser is bound, except, possibly, for filings
after the Closing Date, as applicable, under Section 13(d) of the Exchange
Act.
5.3. ACQUISITION FOR INVESTMENT; SOURCE OF FUNDS. The
Purchaser is acquiring the Notes (and its rights with respect to the
Conversion Shares) for its own account for the purpose of investment and
not with a view to or for sale in connection with any distribution
thereof, and the Purchaser has no present intention or plan to effect any
distribution of the Conversion Shares. No portion of the funds to be used
by the Purchaser to purchase the Notes, as of the Closing Date, are "plan
assets," within the meaning of 29 CFR Section 2510.3-101, of an "employee
benefit plan," as defined in Section 3(3) of
17
<PAGE> 30
ERISA, subject to Part 4 of Title I of ERISA, or a "plan," as defined in
Section 4975(e)(1) of the Code, subject to Section 4975 of the Code.
5.4 BROKERS OR FINDERS. No agent, broker, investment banker,
or other firm or Person is or will be entitled to any broker's fee or
any other commission or similar fee as a result of the activities of
Purchaser or its Subsidiaries, agents, or employees undertaken in
connection with any of the transactions contemplated by this Agreement or
the Registration Rights Agreement.
5.5 ACCREDITED INVESTOR . Purchaser is an "accredited
investor" within the meaning of Regulation D under the Securities Act.
6. COVENANTS.
---------
The Corporation covenants that so long as any amount due or to
become due under the Notes or this Agreement remains unpaid:
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
(i) it will, as soon as practicable and in any event
within 45 days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, furnish to Purchaser statements
of consolidated net income and cash flows and a statement of changes in
consolidated stockholders equity of the Corporation and its Subsidiaries
for the period from the beginning of the then current fiscal year to the
end of such quarterly period, and a consolidated balance sheet of the
Corporation and its Subsidiaries as of the end of such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period or date in the preceding fiscal year, all in
reasonable detail and certified by an authorized financial officer of the
Corporation, subject to changes resulting from year-end adjustments;
PROVIDED, HOWEVER, that delivery pursuant to CLAUSE (iii) below of a copy
of the Quarterly Report on Form 10-Q of the Corporation for such quarterly
period filed with the Commission shall be deemed to satisfy the
requirements of this CLAUSE (i);
(ii) it will, as soon as practicable and in any event
within 90 days after the end of each fiscal year, furnish to Purchaser
statements of consolidated net income and cash flows and a statement of
changes in consolidated stockholders' equity of the Corporation and its
Subsidiaries for such year, and a consolidated balance sheet of the
Corporation and its Subsidiaries as of the end of such year, setting forth
in each case in comparative form the corresponding figures from the
preceding fiscal year, all in reasonable detail and examined and reported
on by independent public accountants of recognized standing selected by the
Corporation; PROVIDED, HOWEVER, that delivery pursuant to CLAUSE (iii)
below of a copy of the Annual Report on Form 10-K of the Corporation for
such fiscal year filed with the Commission shall be deemed to satisfy the
requirements of this CLAUSE (ii);
18
<PAGE> 31
(iii) it will, promptly upon transmission thereof,
furnish to Purchaser copies of all financial statements, proxy
statements, notices, and reports as it shall send to its stockholders and
copies of all registration statements (without exhibits), other than
registration statements relating to employee benefit or dividend
reinvestment plans, and all regular and periodic reports as it shall file
with the Commission; and
(iv) it will, with reasonable promptness, furnish to
Purchaser such other financial and other data of the Corporation and
its Subsidiaries as Purchaser may request, including operating financial
information for each facility owned or operated by the Corporation or any
of its Subsidiaries.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Corporation will deliver to Purchaser a
certificate of an authorized financial officer of the Corporation regarding
compliance by the Corporation with the covenants set forth in SECTIONS
6.4., 6.5, AND 6.6. At such other time or times that the Corporation
delivers a compliance certificate to any other holder of Funded Debt, the
Corporation will deliver such certificate, and any supporting detail, to
Purchaser.
6.2. INSPECTION OF PROPERTY. The Corporation will permit
representatives of Purchaser to visit and inspect, at Purchaser's expense,
any of the properties of the Corporation and its Subsidiaries, to examine
the corporate books and make copies or extracts therefrom and to discuss
the affairs, finances, and accounts of the Corporation and its Subsidiaries
with the principal officers of the Corporation, all at such reasonable
times, upon reasonable notice, and as often as Purchaser may reasonably
request; PROVIDED, HOWEVER, that the foregoing shall be subject to
compliance with reasonable safety requirements and shall not require the
Corporation or any of its Subsidiaries to permit any inspection that, in
the reasonable judgment of the Corporation, would result in the violation
of any statute or regulation with respect to confidentiality or security.
Purchaser agrees that the information received pursuant to this SECTION 6.2
OR SECTION 6.1(iv) is subject to SECTION 9 hereof.
6.3 USE OF PROCEEDS; REGULATIONS G, T, U, AND X. All of the
proceeds of the sale of the Notes will be used by the Corporation for
general corporate purposes. None of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock or
for the purpose of reducing or retiring any indebtedness that was
originally incurred to purchase or carry Margin Stock or for any other
purpose that might constitute this transaction a "purpose credit" within
the meaning of Regulations G, T, U, or X.
6.4 CONSOLIDATED NET WORTH. The Corporation will not permit
Consolidated Net Worth at any time to be less than the sum of (a)
Ninety-Five Million Dollars ($95,000,000) at December 31, 1995, PLUS (b) an
amount during each fiscal quarter
19
<PAGE> 32
thereafter equal to the sum of (i) the amount of Consolidated Net Worth
required hereunder for the immediately preceding fiscal quarter, PLUS (ii)
if positive, fifty percent (50%) of Consolidated Net Income for such
immediately preceding fiscal quarter.
6.5 CONSOLIDATED FIXED CHARGES.
a. The Corporation shall not permit Consolidated Fixed
Charge Coverage to be less than (i) 2.00 as at the end of any fiscal
quarter occurring in 1996, (ii) 2.25 as at the end of any fiscal quarter
occurring in 1997, and (iii) 2.50 as at the end of any fiscal quarter
occurring thereafter.
b. The Corporation will not, and will not permit any
Restricted Subsidiary to, incur, assume, or suffer to exist any
obligation under Operating Leases or under any transaction giving rise to
Consolidated Interest Expense after the Closing Date unless, after giving
effect on a pro forma basis to such obligation or transaction, the
Corporation will be in compliance with SECTION 6.5(a) (calculated as at the
end of the most recently completed fiscal quarter).
6.6 CONSOLIDATED SENIOR FUNDED DEBT. The Corporation will
not permit Consolidated Senior Funded Debt to exceed eighty percent (80%)
of Consolidated Total Capitalization.
6.7 COMPLIANCE WITH LAWS. The Corporation at all times will,
and will cause each of its Subsidiaries to, observe and comply in all
material respects with all laws (including environmental laws applicable to
the Corporation and its Subsidiaries), ordinances, orders, judgments,
rules, regulations, certifications, franchises, permits, licenses,
directions, and requirements of all governmental authorities that are now
and may at any time be applicable to the Corporation or its Subsidiaries, a
violation of which could reasonably be expected to have a material adverse
effect on the business, assets, operations, prospects, or condition
(financial or otherwise) of the Corporation and its Subsidiaries, taken as
a whole, except such thereof as shall be contested in good faith and by
appropriate proceedings promptly instituted and diligently conducted by the
Corporation or its Subsidiaries, as the case may be, so long as adequate
reserves or other appropriate provisions as shall be required in accordance
with generally accepted accounting principles shall have been made
therefor.
6.8 MAINTENANCE OF PROPERTIES; INSURANCE. The Corporation
will maintain and will cause its Subsidiaries to maintain in good
repair, working order, and condition (normal wear and tear excepted) all
properties used or useful in the business of the Corporation and its
Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals, and replacements thereof. The Corporation
will maintain and will cause its Subsidiaries to maintain in full force and
effect, with financially sound and reputable insurers acceptable to
Purchaser, insurance (subject to customary deductibles and
20
<PAGE> 33
retentions) with respect to its properties and business and the properties
and business of its Subsidiaries against hazards, contingencies, loss, or
damage of the kinds customarily insured against by corporations of
established reputation or similar size engaged in the same or similar
business and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations;
PROVIDED, HOWEVER, in no event shall the coverage and amount of such
insurance be less than the coverage and amount of insurance in force on the
Closing Date. Without limiting the generality of the foregoing, the
Corporation will maintain (i) public liability insurance against claims for
personal injury, death, or property damage occurring upon, in, about, or in
connection with the use of any property owned, occupied, or controlled by
the Corporation or any of its Subsidiaries in an amount per occurrence of
at least $10,000,000, (ii) workers' compensation and business interruption
insurance covering loss of rents and builders' all risk insurance, and
(iii) such other insurance for the Corporation and its Subsidiaries as may
be required by law.
6.9 PERFORMANCE OF GOVERNMENT CONTRACTS. The Corporation will
and will cause each of its Subsidiaries to perform each and every term
and condition of the Government Contracts relating to the facilities owned
or operated by the Corporation or such Subsidiary and will not, and will
not permit any Subsidiary to consent to any termination, cancellation, or
material amendment, modification, or supplement to any Government Contract
relating to the facilities owned or operated by the Corporation or any of
its Subsidiaries which termination, cancellation, amendment, modification,
or supplement could reasonably be expected to have a material adverse
effect on the business, assets, operations, prospects, or condition
(financial or otherwise) of the Corporation and its Subsidiaries, taken as
a whole.
6.10 NOTICE TO PURCHASER. When any Unmatured Event of
Default or Event of Default has occurred, the Corporation agrees to give
written notice thereof to Purchaser within three (3) days of the
Corporation's discovery of such event.
6.11 WAIVER OF STAY, EXTENSION, OR USURY LAWS. The
Corporation covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of any stay or extension law or any
usury law or other law which would prohibit or forgive the Corporation
from paying all or any portion of the principal of, or interest, or
premium, if any, on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants
or the performance of this Agreement; and (to the extent that it may
lawfully do so) the Corporation hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay,
or impede the execution of any power herein granted to the holders of the
Notes, but will suffer and permit the execution of every such power as
though no such law had been enacted.
6.12 CONDUCT OF BUSINESS. The Corporation will not, and will
not permit any of its Subsidiaries to, engage in any business other than
the construction and
21
<PAGE> 34
management of prisons and other correctional facilities for governmental
agencies, the ownership and operation of a proprietary school, the
operation of services involving the transportation and extradition of
prisoners, and other businesses or activities substantially similar or
related thereto.
6.13 AMENDMENTS OR WAIVERS OF CERTAIN DOCUMENTS. The
Corporation will not agree to any material amendment, modification,
supplement to, or waiver of any agreement related to the Convertible Notes
that would increase the interest rates thereof, shorten the average
maturities thereof, or alter financial covenants contained therein in a
manner that could be expected to be materially adverse to the interests of
Purchaser. The Corporation acknowledges and confirms the registration
rights of Purchaser contained in that certain Registration Rights
Agreement dated June 23, 1994 by and between the Corporation and
Purchaser. Promptly after the Closing, the Corporation will use its best
efforts to obtain an amendment to Section 6(b) of its 1996 Registration
Rights Agreement with PMI Mezzanine Fund, L.P. to add the following
sentence to the end of that paragraph: Notwithstanding the foregoing, the
Corporation may include shares of Registrable Stock pursuant to Section 5
only to the extent that such shares do not reduce the amount of securities
that Sodexho S.A., or its designee, could include in such Registration
pursuant to its June 23, 1994 Registration Rights Agreement with the
Corporation.
6.14. LIMITATION ON ISSUANCE OF OTHER SUBORDINATED
INDEBTEDNESS SENIOR TO THE NOTES. The Corporation will not create, incur,
assume, guarantee, or in any other manner become liable with respect to
any indebtedness that is subordinate in right of payment to any Senior
Indebtedness unless such indebtedness is also pari passu with, or
subordinate pursuant to provisions substantially similar to those
contained in the Notes, in right of payment to the Notes.
6.15 LIMITATION ON SUBSIDIARY FUNDED DEBT. The
Corporation shall not permit any of its Subsidiaries to incur, create,
assume, or guarantee any Funded Debt (which shall be deemed to include
preferred stock issued by a Subsidiary of the Corporation that is not held
by the Corporation), unless, after giving effect thereto, (a) the total
amount of Funded Debt of the Corporation's Subsidiaries does not exceed
10% of Consolidated Total Capitalization, and (b) the Corporation would be
entitled to incur at least $1.00 of additional Consolidated Senior Funded
Debt under SECTION 6.6. The foregoing to the contrary notwithstanding,
Concept shall be entitled to be obligated with respect to (and there shall
be excluded from the above calculation) the United Concept Partnership
Funded Debt and the Concept Acquired Indebtedness, so long as the
aggregate amount of Funded Debt of the Corporation incurred, assumed, or
acquired in connection with the Concept Acquisition (inclusive of the
United Concept Partnership Funded Debt and the Concept Acquired
Indebtedness does not exceed Forty Million Dollars ($40,000,000).
22
<PAGE> 35
7. EVENTS OF DEFAULT; REMEDIES THEREFOR.
-------------------------------------
7.1 EVENTS OF DEFAULT. Any one or more of the following
shall constitute an "Event of Default":
(i) default in the payment of any interest due under the Notes
when it becomes due and payable, and continuance of such default for a
period of ten (10) days; or
(ii) default in the payment of the principal of the Notes
when due (whether at scheduled maturity, as a result of a mandatory
prepayment requirement, by acceleration, or otherwise); or
(iii) default under any bond, debenture, note, or other
evidence of indebtedness for money borrowed in excess of $100,000 by the
Corporation or any of its Subsidiaries, whether such indebtedness now
exists or shall hereafter be created, which default (i) shall consist of a
failure to pay such indebtedness at final maturity and after the
expiration of any applicable grace period, or (ii) shall have resulted in
such indebtedness (A) becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable, without
such acceleration having been rescinded or annulled, or (B) having been
discharged within a period of ten (10) days after there shall have been
given, by registered or certified mail, to the Corporation or such
Subsidiary, as applicable, by any holder of such indebtedness a written
notice specifying such default and requiring the Corporation or such
Subsidiary, as applicable, to cause such indebtedness to be discharged; or
(iv) default shall occur in the observance or performance of
any covenant or agreement or any other provision of this Agreement or the
Notes that is not remedied within twenty (20) days after receipt by the
Corporation of written notice of such default from Purchaser;
(v) any representation or warranty made by the Corporation
herein, or made by the Corporation in any statement or certificate
furnished by the Corporation in connection with the consummation of the
issuance and delivery of the Notes or thereafter pursuant to the terms of
this Agreement, is untrue in any material respect as of the date of the
issuance or making thereof; or
(vi) a final judgment or judgments entered by a court of
competent jurisdiction for the payment of money aggregating in excess of
$1,000,000 is or are outstanding against the Corporation or any of its
Subsidiaries and any one such judgment in excess of $1,000,000 has, or
such judgments aggregating in excess of $1,000,000 have remained unpaid,
unvacated, unbonded, or unstayed by appeal or otherwise for a period of
thirty (30) days from the date of entry; or
23
<PAGE> 36
(vii) a court or other governmental authority or agency having
jurisdiction in the premises shall enter a decree or order (a) for the
appointment of a receiver, liquidator, assignee, trustee, sequestrator, or
other similar official of the Corporation or any Subsidiary of the
Corporation or of a material portion of the assets of either, or for the
winding-up or liquidation of its affairs, and such decree or order shall
remain in force, undischarged and unstayed for a period of more than
thirty (30) days, or (b) for the sequestration or attachment of any
material portion of the assets of the Corporation or any Subsidiary of the
Corporation, without its unconditional return to the possession of the
Corporation or such Subsidiary, or its unconditional release from such
sequestration or attachment, within thirty (30) days thereafter; or
(viii) the Corporation or any Subsidiary of the Corporation
makes an assignment for the benefit of creditors, or the Corporation or
any Subsidiary of the Corporation applies for or consents to the
appointment of a custodian, liquidator, trustee, or receiver for the
Corporation or such Subsidiary or for a material portion of the assets of
either; or
(ix) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Corporation or any of its
Subsidiaries a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment, or composition
of or in respect of the Corporation under federal bankruptcy law or any
other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator, or other similar official for
the Corporation or any of its Subsidiaries or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for
a period of sixty (60) consecutive days or until an order for relief has
been entered; or
(x) the institution by the Corporation or any of its
Subsidiaries of proceedings to be adjudicated a debtor or insolvent, or
the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under federal bankruptcy law or
any other applicable federal or state law or the consent by it to the
filing such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, or similar official for the Corporation
or any of its Subsidiaries or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Corporation or
any of its Subsidiaries in furtherance of any such action.
7.2 ACCELERATION OF MATURITIES. When any Event of Default
described in clauses (i) THROUGH (vi), inclusive, of SECTION 7.1 has
occurred and is continuing, Purchaser may, by notice in writing sent to
the Corporation, declare the entire principal and all interest accrued on
the Notes to be, and the Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest, or other notice of any
kind, all of which are
24
<PAGE> 37
hereby expressly waived. When any Event of Default described in CLAUSES
(vii) THROUGH (x), inclusive, of SECTION 7.1 has occurred, then the Notes
shall immediately become due and payable without presentment, demand,
protest, or notice of any kind. When any Event of Default described in
CLAUSE (iv) of SECTION 7.1 has occurred and is continuing as a result of
the Corporation's breach of its obligation to convert the indebtedness
evidenced by the Notes into Conversion Shares in accordance with the terms
and conditions of the Notes, Purchaser shall be entitled to specific
performance of such obligation of the Corporation; it being expressly
acknowledged and agreed by the Corporation that no adequate remedy at law
exists for any such breach and that Purchaser will be irreparably harmed by
any such breach by the Corporation. Upon the Notes becoming due and payable
as a result of any Event of Default as aforesaid, the Corporation shall
forthwith pay to Purchaser the entire principal and interest accrued on the
Notes. No course of dealing on the part of Purchaser nor any delay or
failure on the part of Purchaser to exercise any right shall operate as a
waiver of such right or otherwise prejudice Purchaser's rights, powers, and
remedies. The Corporation further agrees, to the extent permitted by law,
to pay to Purchaser all costs and expenses (including attorneys' fees)
incurred by it in the collection of the Notes upon any default hereunder or
thereon (including such costs and expenses incurred in connection with a
workout or an insolvency or bankruptcy proceeding).
8. AGREEMENTS OF PURCHASER. Purchaser agrees with the Corporation as
follows:
8.1 TRANSFER OF THE NOTES. Purchaser will not attempt to sell,
transfer, convey, exchange, or otherwise dispose of all or any part of the
Notes, except in accordance with applicable law.
8.2 NO GENERAL SOLICITATION. Purchaser acknowledges and agrees that it
has not received nor is it aware of any general solicitation or general
advertising of the Notes, including any advertisement, article, notice, or
other communication published in any newspaper, magazine, or similar media
or broadcast over television or radio, and that it was not invited to
attend any seminar or meeting by means of any such general solicitation or
general advertising.
8.3 NO REGISTRATION. Purchaser understands and agrees that, neither
the Notes nor, except as provided in the Registration Rights Agreement, any
Conversion Shares will be registered under the Securities Act or any state
securities law, that the Notes and Conversion Shares may be required to be
held until they are subsequently registered under the Securities Act and
any applicable state securities law, or any corresponding provisions of
succeeding laws, unless an exemption from the registration requirements of
such laws is available, and that the Corporation is under no obligation to
register the Notes or, except as provided in the Registration Rights
Agreement, any Conversion Shares, for resale.
8.4 TRANSFER RESTRICTIONS; LEGENDS. Purchaser understands and agrees
that the Notes and, when issued, the Conversion Shares have not been
registered under the Securities
25
<PAGE> 38
Act or the securities laws of any state and that they may be sold or
otherwise disposed of only in one or more transactions registered under the
Securities Act and, where applicable, such laws unless an exemption from
the registration requirements of the Securities Act and, where applicable,
such laws is available. Purchaser acknowledges that, except as provided in
the Registration Rights Agreement, Purchaser has no right to require the
Corporation to register the Conversion Shares. Purchaser understands and
agrees that each certificate representing Conversion Shares shall bear the
following legends:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICES OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
Purchaser will not, directly or indirectly, sell, transfer, pledge,
encumber, or otherwise dispose of (collectively, "Transfers") any
Conversion Shares except for (i) Transfers to any Affiliate of Purchaser,
(ii) Transfers to other institutional investors that are not competitors
of the Corporation in blocks of not less than 10,000 shares (or such
lesser number as may then be outstanding), (iii) Transfers pursuant to any
bona fide tender or exchange offer to acquire Voting Stock of the
Corporation or pursuant to any merger, consolidation, or other business
combination of the Corporation with any other Person; or (iv) the
redemption of the Conversion Shares.
8.5 RESTRICTIONS ON CONVERSION. Purchaser further understands and
agrees that any conversion of the indebtedness evidenced by the Notes into
Conversion Shares must comply with all applicable securities laws,
including the Securities Act and any applicable state securities laws, as
such laws exist on the date hereof and on such future dates that the
indebtedness evidenced by the Notes, or any portion thereof, may be
converted into Conversion Shares.
8.6 FURTHER COOPERATION. Purchaser will do all acts and things
reasonably requested of it by the Corporation in connection with any
attempt by the Corporation to achieve compliance with federal and state
securities laws in connection with the offering and sale of the Notes or
the conversion of all or any portion of the indebtedness evidenced by the
Notes into Conversion Shares.
26
<PAGE> 39
9. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
------------------------------------------
9.1 Without the prior written consent of the Corporation, any
information relating to the Corporation provided to Purchaser in connection
with its acquisition of the Notes or the Conversion Shares that is either
confidential, proprietary, or otherwise not generally available to the
public (but excluding information Purchaser has obtained independently from
third-party sources without Purchaser's knowledge that the source has
violated any fiduciary or other duty not to disclose such information (the
"Confidential Information") will be kept confidential by Purchaser and
their directors, officers, employees, agents, auditors, participants,
transferees, assignees, and representatives (collectively,
"Representatives"), using the same standard of care in safeguarding the
Confidential Information as Purchaser employs in protecting its own
proprietary information that Purchaser desires not to disseminate or
publish. It is understood (a) that such Representatives shall be informed
by Purchaser of the confidential nature of the Confidential Information,
(b) that such Representatives shall be bound by the provisions of this
SECTION 9.1 as a condition of receiving the Confidential Information, and
(c) that, in any event, Purchaser shall be responsible for any breach of
SECTIONS 9.1, 9.2, OR 9.3 of this Agreement by any of its Representatives
(other than Purchaser's participants, transferees, or assignees).
9.2 Without the prior consent of the Corporation, other than as
required by applicable law, Purchaser will not, and will direct its
Representatives not to disclose to any Person (other than its
Representatives) either the fact that the Confidential Information has been
made available to Purchaser or that Purchaser has inspected any portion of
the Confidential Information.
9.3 If Purchaser or its Representatives are requested or required (by
oral question, interrogatories, requests for information or documents,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, Purchaser will, as soon as practicable, notify
the Corporation of such request or requirement so that the Corporation may
seek an appropriate protective order. If, in the absence of a protective
order or the receipt of a waiver hereunder, Purchaser or its
Representatives are, in the opinion of Purchaser's counsel, compelled to
disclose the Confidential Information or else stand liable for contempt or
suffer other censure or significant penalty, Purchaser, or its
Representative, as the case may be, may disclose only such of the
Confidential Information to the party compelling disclosure as is required
by law. Purchaser shall not be liable for the disclosure of Confidential
Information pursuant to the preceding sentence. Purchaser will exercise all
reasonable efforts to assist the Corporation in obtaining a protective
order or other reliable assurance that confidential treatment will be
accorded the Confidential Information.
10. MISCELLANEOUS.
--------------
10.1 INDEMNIFICATION. Each party (an "indemnifying party") hereto
agrees to indemnify and hold harmless the other parties (an "indemnified
party") against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, recoveries, and
deficiencies, including reasonable attorneys' fees, that such indemnified
party
27
<PAGE> 40
and each of its officers and directors shall incur or suffer, that arise,
result from, or relate to any breach of, or failure by such indemnifying
party to perform, any of its representations, warranties, covenants, or
agreements set forth in the Transaction Documents.
10.2 SURVIVAL OF COVENANTS, REPRESENTATIONS, AND WARRANTIES. All
covenants, representations, and warranties contained herein and in any
certificates delivered pursuant hereto in connection with the transactions
occurring on the Closing Date shall survive the closing and the delivery of
the Transaction Documents, regardless of any investigation made by or on
behalf of any party.
10.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to Purchaser's
benefit and to the benefit of its successors and assigns, including each
successive holder or holders of the Notes or any interest therein.
10.4 NOTICES. Unless otherwise provided in this Agreement, all
notices or demands by any party relating to this Agreement or any other
agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which
may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or by prepaid telex, telefacsimile, or telegram (with
messenger delivery specified) to the Corporation or to Purchaser, as the
case may be, at the addresses set forth below:
If to Purchaser, to: Sodexho S.A
3 avenue Newton
78180 Montigny-le-Bretonneux
FRANCE
Attention: Jean-Pierre Cuny
With a copy to: ROPES & GRAY
One International Place
Boston, Massachusetts 02110
Attention: Jane D. Goldstein, Esq.
If to the Corporation, to: CORRECTIONS CORPORATION OF AMERICA
The CCA Building
102 Woodmont Boulevard
Nashville, Tennessee 37205
Attention: Doctor R. Crants, Jr.
With a copy to: STOKES & BARTHOLOMEW, P.A.
424 Church Street, Suite 2800
Nashville, Tennessee 37219
Attention: Elizabeth Enoch Moore, Esq.
28
<PAGE> 41
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner
given to the other. The failure of the Corporation or Purchaser to send a
copy of any notice to the individuals who are shown above as being
required to receive such copies shall not invalidate or otherwise affect
the validity of a notice that is otherwise effectively given. All notices
or demands sent in accordance with this SECTION 10.4 shall be deemed
received on the earlier of the date of actual receipt or three (3) days
after the deposit thereof in the mail or the transmission thereof by
telefacsimile or other similar method as set forth above.
10.5 EXPENSES. In addition to the payments provided for in SECTION
2.3(xi), the Corporation agrees to pay Purchaser for all fees and all
out-of-pocket expenses incurred by Purchaser arising in connection with the
Transaction Documents and the transactions hereby and thereby contemplated,
including the conversion of the indebtedness evidenced by the Notes into
Conversion Shares, all stamp and other taxes payable (other than taxes
based on income) with respect to the issuance of the Conversion Shares,
filing fees, reasonable fees and expenses of counsel, and all such expenses
incurred with respect to the preparation, execution, delivery, or
enforcement of any provision of such agreement or instrument, or any
amendment or waivers requested by the Corporation (irrespective of whether
the same become effective) under or in respect of any such agreement,
including costs and expenses in any bankruptcy proceeding.
10.6 DESCRIPTIVE HEADINGS. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
10.7 SATISFACTION REQUIREMENT. If any agreement, certificate, or other
writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to Purchaser, the determination of
such satisfaction shall be made by Purchaser in its sole and exclusive
judgment exercised reasonably and in good faith.
10.8 REMEDIES. In case any one or more of the covenants or agreements
set forth in the Transaction Documents shall have been breached by the
Corporation or Purchaser, the Corporation or Purchaser, as applicable, may
proceed to protect and enforce its rights either by suit in equity or by
action at law, including an action for damages as a result of any such
breach or an action for specific performance of any such covenant or
agreement contained in the Transaction Documents.
10.9 ENTIRE AGREEMENT. The Transaction Documents and the other
writings referred to herein or delivered pursuant hereto contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto.
10.10 AMENDMENTS. This Agreement may be amended, and the observance of
any term of this Agreement may be waived, with (and only with) the written
consent of the Corporation and Purchaser.
29
<PAGE> 42
10.11 SEVERABILITY. Should any part of this Agreement, for any reason,
be determined to be invalid or unenforceable, such determination shall not
affect the validity or enforceability of any remaining portion, which
remaining portion shall remain in full force and effect as if this
Agreement had been executed with the invalid or unenforceable part hereof
eliminated, and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement
without including therein any such part which may, for any reason, be
hereafter declared invalid or unenforceable.
10.12 EXECUTION IN COUNTERPARTS; TELECOPY EXECUTION. This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement. This
Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto. Delivery of an executed counterpart of the
signature page(s) of this Agreement by telecopier shall be equally
effective as delivery of a manually executed counterpart. Any party
delivering an executed counterpart of the signature page(s) of this
Agreement by telecopier shall thereafter also promptly deliver a manually
executed counterpart, but the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, and binding
effect of this Agreement.
10.13 GOVERNING LAW. The Transaction Documents shall be governed by,
and construed and enforced in accordance with, the laws of the State of New
York. The Corporation and the Purchaser each hereby irrevocably submit to
the jurisdiction of said court and agree that neither will sue in
connection with any matter covered under this Agreement in any other court.
The English language version of all documents related to the transaction
contemplated hereby will govern.
10.14 DIRECT PAYMENT. Anything in this Agreement or the Notes to the
contrary notwithstanding, the Corporation will punctually pay when due the
principal of the Notes, and any interest thereon, without any presentment
thereof, directly to Purchaser or to the nominee of Purchaser at the
address set forth in SCHEDULE 10.14 or such other address as Purchaser or
Purchaser's nominee may from time to time designate in writing to the
Corporation, or, if a bank account with a United States bank is designated
for Purchaser or Purchaser's nominee on SCHEDULE 10.14 hereto or in any
written notice to the Corporation from Purchaser or Purchaser's nominee,
the Corporation will make such payments in immediately available funds to
such bank account, marked for attention as indicated. Purchaser agrees that
in the event that it shall sell or transfer any Notes, it will, prior to
the delivery of such Notes, make a notation thereon of all principal, if
any, prepaid on such Notes and will also note thereon the date to which
interest has been paid on such Notes. The Corporation agrees that
transferees of Notes shall be entitled to the benefits of this SECTION
10.14 so long as any such transferee has made the same agreements relating
to the transferred Notes as Purchaser has made in this SECTION 10.14. The
Corporation shall be entitled to presume conclusively that Purchaser or any
subsequent noteholders remain the holders of the Notes until such Notes
shall have been presented to the Corporation as evidence of the transfer of
such Notes.
30
<PAGE> 43
The execution hereof by the Corporation and Purchaser shall
constitute a contract between them for the uses and purposes hereinabove set
forth.
CORRECTIONS CORPORATION OF
AMERICA,
a Delaware corporation
By:
--------------------------------
Title:
-----------------------------
SODEXHO S.A.
By:
--------------------------------
Title:
-----------------------------
31
<PAGE> 44
EXHIBIT C
SCHEDULES TO THE
NOTE PURCHASE AGREEMENT
BETWEEN
SODEXHO S.A.
AND
CORRECTIONS CORPORATION OF AMERICA
Dated April 5, 1996
The headings in the schedules are merely for reference purposes only, and
the title or caption of a particular heading shall not restrict or otherwise
affect the adequacy of the disclosure. The information in and attachments to
each of the following schedules are hereby incorporated by reference into each
other schedule. To the extent that an item which would be disclosed on one
schedule is disclosed on another schedule, whether or not specific reference is
made thereto, such item is deemed to be disclosed for all purposes.
Disclosure of a matter that is not required to be made does not require
disclosure or any similar matters not required to be disclosed.
<PAGE> 45
SCHEDULE 4.3
SUBSIDIARIES
Technical and Business Institute of America, Inc. - Tennessee corporation
TransCor America, Inc. - Tennessee corporation
Concept Incorporated - Delaware corporation
Concept Incorporated Overton - Delaware corporation
Mineral Wells R.E. Holding Corp., - Delaware corporation
United-Concept Limited Partnership - Arizona partnership
Correction Management Affiliates, Inc. - Delaware corporation
Staffing Plus, Inc. - Tennessee corporation (45% ownership)
Staffing Plus, Inc. - Texas corporation (80% ownership)
Corrections Partners, Inc. - Delaware corporation (51% ownership)
Correctional Services Group, Inc. - Missouri corporation
Corrections Partners, Inc. - Delaware corporation (49% ownership)
Corrections Corporation of Australia, Pty. Ltd. - Queensland corporation (50%
ownership)
Excor Investments Pty. Ltd. - Queensland corporation
Viccor Investments Pty. Ltd. - Victorian corporation
Corrections Corporation of New Zealand Limited - New Zealand corporation
CCA International, Inc. - Delaware corporation
CCA France - a French corporation
CCA (UK) Limited - United Kingdom corporation
UK Detention Services Limited - United Kingdom joint venture (33-1/3%
ownership)
<PAGE> 46
SCHEDULE 4.6
PENDING ACTIONS
None
<PAGE> 47
SCHEDULE 4.11
CONFLICTS
None
<PAGE> 48
SCHEDULE 4.12
OUTSTANDING COMMON STOCK 33,881,485
TREASURY STOCK (8,722)
<TABLE>
WARRANTS:
<CAPTION>
Date of Number of Exercise Expiration
Issuance Shares Price Date
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Sodexho 6/23/94 2,200,000 $7.900 12/31/99
Publicly Traded Warrants 9/14/92 3,185,006 $4.250 9/14/97
</TABLE>
<TABLE>
CONVERTIBLE SUBORDINATED NOTES:
<CAPTION>
Date of Number of Conversion
Issuance Amount Shares Price Due Date
-------- ------ --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Pacific Mutual 6/22/92 $ 2,500,000 737,896 $3.388 9/30/98
(Tranche A)
Pacific Mutual 12/2/92 $ 1,500,000 422,832 $3.548 9/30/98
(Tranche B)
Pacific Mutual 4/29/93 $ 3,500,000 986,608 $3.548 9/30/98
(Tranche C)
Sodexho 6/23/94 $ 7,000,000 976,970 $7.165 11/7/99
PMI 2/28/96 $30,000,000 562,851 $53.50 2/28/02
</TABLE>
OUTSTANDING OPTIONS: 1,650,605 (See Attached Schedule)
- - In connection with the purchase of securities by Sodexho, S.A.
("Sodexho") the Corporation granted to Sodexho an option to purchase up to
$20 million in convertible notes at a conversion price of $13.65 per
share.
- - In connection with the issuance of securities to Sodexho, the Corporation
granted certain preemptive rights to Sodexho as set forth in Section 9 of
that certain Stockholder's Agreement dated June 23, 1994 by and among
Sodexho, Thomas W. Beasley and Doctor R. Crants, a copy of which has been
provided to Purchaser.
- - In October 1995, the Corporation authorized a 2-for-1 stock split, paid in
the form of a one-share dividend for every share held by stockholders of
record on October 16, 1995. The split was effective
<PAGE> 49
October 30, 1995.
<TABLE>
OUTSTANDING OPTIONS:
<CAPTION>
AVERAGE EXERCISE
ISSUED PRICE OF AVAILABLE
SHARE OPTIONS AND OPTIONS ISSUED EXERCISABLE FOR
LIMIT EXERCISED OUTSTANDING AND OUTSTANDING * ISSUE
----- --------- ----------- --------------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
STOCK OPTION PLAN 553,359 449,184 103,255 $ 3.20 103,255 920
1988 STOCK OPTION PLAN 592,900 223,650 369,250 $ 4.45 369,250 -0-
NON-QUALIFIED OPTION PLAN 540,000 420,000 120,000 $ 2.71 120,000 -0-
1991 STOCK OPTION PLAN 1,131,900 371,000 754,600 $ 6.94 742,100 6,300
NON-QUALIFIED DIRECTORS'
PLAN 290,000 10,000 205,000 $12.42 130,000 75,000
1995 EMPLOYEE STOCK
INCENTIVE PLAN 2,000,000 -0- 171,000 $17.56 -0- 1,829,000
STOCK BONUS PLAN 200,000 -0- 168,512** -0- -0- 31,488
TOTAL
- ----------
<FN>
* ALL OTHER OPTIONS BECOME EXERCISABLE WITHIN ONE YEAR
**DEFERRED SHARES WHICH WILL VEST IN 2005.
</TABLE>
<PAGE> 50
NOTE - ALL SHARE INFORMATION IS AS OF FEBRUARY 15, 1996
<PAGE> 51
EXHIBIT D
CORRECTIONS CORPORATION OF AMERICA
REGISTRATION RIGHTS AGREEMENT
This Agreement is made and dated as of April 5, 1996, by and between
CORRECTIONS CORPORATION OF AMERICA, a Delaware corporation with its principal
office located at 102 Woodmont Boulevard, Nashville, Tennessee 37205 (the
"CORPORATION"), and Sodexho S.A., a French corporation (the "INVESTOR").
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"ACT" means the Securities Act of 1933, as amended, or any federal
statute or code which is a successor thereto.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended, or any federal statute or code which is a successor thereto.
"HOLDER" means a holder of Registrable Stock and any person holding
Registrable Stock to whom registration rights have been transferred pursuant to
this Agreement.
"INITIATING HOLDERS" has the meaning specified in Section 2.
"REGISTER, REGISTERED, AND REGISTRATION" refer to a registration
effected by filing a registration statement in compliance with the Act and the
declaration or ordering by the Commission of the effectiveness of such
registration statement.
"REGISTRABLE STOCK" means all shares of the Corporation's common
stock, $1.00 par value (the "Common Stock"), issued or issuable upon conversion
of the Convertible, Subordinated Notes, originally due February 28, 2002 (the
"Notes"), issued by the Corporation pursuant to that certain Note Purchase
Agreement of even date herewith between the Investor and the Corporation (the
"Note Purchase Agreement"), and held by the original purchaser of such Notes or
by a person to whom Registration rights have been transferred pursuant to the
provisions of this Agreement, all shares of Common Stock issued in lieu of such
shares in any reorganization of the Corporation and all shares of Common Stock
issued in respect of such shares as a result of a stock split, stock dividend,
recapitalization, or combination.
"RULE 144" means Rule 144 issued by the Commission under the Act, as
may be amended from time to time, or any subsequent rule pertaining to the
disposition of securities without registration.
<PAGE> 52
2. REQUIRED REGISTRATION.
---------------------
(a) At any time after June 22, 1997 and from time to time thereafter,
if the Holder or Holders of the then Registrable Stock propose to dispose
of at least twenty-five percent (25%) of the then Registrable Stock (such
Holder or Holders being herein called the "INITIATING HOLDERS"), the
Initiating Holders may request the Corporation in writing to effect such
Registration, stating the number of shares of Registrable Stock to be
disposed of by such Initiating Holders (which shall be not less than
twenty-five percent (25%) of the then Registrable Stock). Any such
Registration will be a registration of a delayed and continuous offering
pursuant to Rule 415 under the Act (a "SHELF REGISTRATION"). Upon receipt
of such request, the Corporation will give prompt written notice thereof to
all other Holders whereupon such other Holders shall give written notice to
the Corporation and the Initiating Holders within fifteen (15) days after
receipt of the Corporation's notice (the "NOTICE PERIOD") if they propose
to dispose of any shares of Registrable Stock pursuant to such
Registration, stating the number of shares of Registrable Stock they
propose to dispose of pursuant thereto, which number shall, subject to the
provisions hereof, be allocated on a pro rata basis to any offerings and
sales of Registrable Stock made pursuant to the Shelf Registration.
(b) Subject to Section 4(c), the Corporation will use its best efforts
to effect promptly after the Notice Period (but in any event within sixty
(60) days following receipt of the request for Registration) the
Registration under the Act of all the shares of Registrable Stock specified
in the requests of the Initiating Holders and the requests of such other
Holders, notice of which is respectively subject, however, to the
limitations set forth in Section 4. If such Registration is a Shelf
Registration, the Corporation shall take all necessary actions, at its
expense, to permit each offer and sale of Registrable Stock requested by
the Initiating Holders (including the offer and sale of any shares of
Registrable Stock of such other Holders) within three (3) Business Days of
receipt of written request therefor, or as soon thereafter as is reasonably
practicable and without unreasonable expense, prior to the expiration of
the Shelf Registration as provided in Section 3(b).
3. REGISTRATION PROCEDURES. Whenever the Corporation is required by
the provisions of Sections 2 or 5 to use its best efforts to effect the
Registration of shares of Registrable Stock under the Act, the Corporation
will:
(a) prepare and file with the Commission a registration statement with
respect to such shares and use its best efforts to cause such registration
statement to become and remain effective as provided herein;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus and any
prospectus supplement used in connection therewith as may be necessary to
keep such registration statement effective and current and to comply with
the provisions of the Act with respect to the disposition of all shares of
Common Stock covered by such registration statement, but for no longer than
six (6) months subsequent to the initial effective date of such
registration statement; PROVIDED, HOWEVER, that any Shelf Registration
shall be kept effective until the earlier of (i) the sale of all
Registrable Stock registered thereunder and (ii)
2
<PAGE> 53
such time as, in the reasonable opinion of counsel to the corporation,
further offers and sales under the Shelf Registration are no longer
permissible pursuant to Rule 415 under the Act and the pronouncements of
the Commission thereunder.
(c) enter into and perform its obligations under an underwriting
agreement with respect to any underwritten offering, in usual and customary
form, with the managing underwriter of such offering, and each Holder
participating in such Registration shall, subject to the terms and
conditions of this Section 3 set forth below, also enter into and perform
its obligations under such an agreement;
(d) furnish to each underwriter and each Holder participating in a
Registration pursuant to Sections 2 or 5 such number of copies of a
prospectus, including a preliminary prospectus and any prospectus
supplement, a registration statement, the exhibits thereto, and all
documents incorporated therein by reference, in conformity with the
requirements of the Act, and such other documents as such underwriter or
Holder may reasonably request in order to facilitate the public sale of the
shares of Common Stock by such underwriter or Holder, as the case may be,
and promptly furnish to each underwriter and Holder notice of any stop
order or similar notice issued by the Commission or state agency charged
with the regulation of securities, and notice of any NASDAQ or other
listing of the shares of Common Stock covered by such Registration
Statement;
(e) use its best efforts (i) to register or qualify the shares of
Common Stock covered by such registration statement under such other
securities or blue sky or other applicable laws of such jurisdictions
within the United States as each Holder selling shares shall reasonably
request, (ii) to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and (iii) to take
any other action which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in such jurisdictions of the
shares of Common Stock owned by such Holder; PROVIDED, HOWEVER, that in no
event shall the Corporation be obligated to qualify to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this paragraph (e) be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(f) use its best efforts to furnish to each Holder selling shares a
signed counterpart, addressed to the Holder selling shares, of (i) an
opinion of counsel to the Corporation, dated the effective date of the
registration statement, and (ii) a "comfort" letter, dated the effective
date of the registration statement, signed by the independent public
accountants who have certified the Corporation's financial statements
included in the registration statement, covering substantially the same
matters with respect to the registration statement (and the prospectus and
any prospectus supplement included therein) and (in the case of the
"comfort" letter) with respect to events subsequent to the date of the
financial statements and with respect to financial data contained in the
prospectus that is not extracted from the Corporation's audited financial
statements, as are customarily covered (at the time of such Registration)
in opinions of issuer's counsel and in "comfort" letters delivered to
underwriters in underwritten public offerings of securities;
3
<PAGE> 54
(g) furnish to each Holder participating in a Registration pursuant to
Sections 2 or 5, upon request of such Holder, copies of all correspondence
between the Corporation, the Commission and any applicable state securities
regulatory agencies relating to such Registration;
(h) permit each Holder participating in a Registration pursuant to
Sections 2 and 5 and the designated representatives of such Holder to
inspect and copy all records of the Corporation reasonably related to such
Registration; PROVIDED, HOWEVER, the Corporation shall not be required to
permit the examination of any portion of its records for which the
Commission has granted a request for confidentiality;
(i) use its best efforts to obtain all approvals required from the
National Association of Securities Dealers, Inc., if any;
(j) during the period referred to in Section 3(b) that the Corporation
is required to keep such registration statement effective, promptly notify
each Holder of Registrable Stock covered by such registration statement at
any time when a prospectus relating thereto is required to be delivered
under the Act, of the happening of any event as a result of which the
prospectus or any prospectus supplement included in such registration
statement, as then in effect, or any material incorporated by reference
therein, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, or if it is necessary to amend or supplement such prospectus or
any prospectus supplement or registration statement or material
incorporated by reference therein to comply with the law, and at the
request of any such Holder, prepare and furnish to such Holder a reasonable
number of copies of a supplement to or an amendment of such prospectus or
any prospectus supplement or material incorporated by reference therein as
may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Stock, such prospectus or any prospectus supplement or material
incorporated by reference therein shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing and so that such prospectus or
prospectus supplement or registration statement or material incorporated by
reference therein, as amended or supplemented, will comply with the law;
(k) upon delivery of the certificates with respect to the Registrable
Stock to be Registered pursuant hereto, issue to any underwriter to which
the Holder may sell such Registrable Stock in connection with any such
Registrations (and to any direct or indirect transferee or any such
underwriter) certificates evidencing such Registrable Stock without any
legend restricting the transferability of the Registrable Stock;
(l) make available, as soon as reasonably practicable, an earnings
statement satisfying the provisions of Section 11(a) of the Act and Rule
158 promulgated thereunder; and
4
<PAGE> 55
(m) that in conjunction with any Registration pursuant to Section 2 or
5, it will, at its expense, use its best efforts to cause the Registrable
Stock covered by such Registration to be listed on the New York Stock
Exchange or such other national securities exchange on which the Common
Stock is listed, subject to notice of issuance, and will provide prompt
notice to such exchange of the issuance thereof from time to time.
If the Corporation fails to keep a Registration requested pursuant to
Section 2 effective for such period as is required by Section 3(b) and all
of the shares of Registrable Stock subject to such Registration are not
sold, the rights of the Holders to request Registration pursuant to Section
2 will not be deemed to have been affected by operation of the provisions
of Section 4(a).
Any Holder dissatisfied with the terms and conditions of the
underwriting agreement referred to in Section 3(c) may withdraw from the
request for Registration made pursuant to Section 5 and may refuse to
execute such underwriting agreement.
4. LIMITATIONS ON REQUIRED REGISTRATION.
-------------------------------------
(a) The Corporation shall not be required to effect more than three
(3) Registrations pursuant to Section 2. A Registration requested pursuant
to Section 2 shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective or (ii) if
after it has become effective, such Registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to the
Holders participating in such Registration and has not thereafter become
effective.
(b) The Corporation shall not Register securities for sale for its own
account in any Registration requested pursuant to Section 2 unless
permitted to do so by the written consent of Holders who hold at least a
majority of the Registrable Stock as to which Registration has been
requested.
(c) The Corporation shall be entitled to postpone for a reasonable
period of time (but not exceeding 90 days) the filing of any registration
statement otherwise required to be prepared and filed by it pursuant to
Section 2(a) if the Corporation determines, in its reasonable judgment,
that such registration and offering would interfere with any financing,
acquisition, corporate reorganization or other material transaction
involving the Corporation or any of its Affiliates or would require
premature disclosure thereof, and promptly gives the holders of
Registrable Stock requesting registration thereof pursuant to Section 2(a)
written notice of such determination, containing a general statement of the
reasons for such postponement and an approximation of the anticipated
delay. If the Corporation shall so postpone the filing of a registration
statement, such holders of Registrable Stock requesting registration
thereof pursuant to Section 2(a) shall have the right to withdraw the
request for registration by giving written notice to the Corporation within
30 days after receipt of the notice of postponement and, in the event of
such withdrawal, such request
5
<PAGE> 56
shall not be counted for purposes of the requests for registration to
which holders of registrable stock are entitled pursuant to section 2(a)
hereof.
5. INCIDENTAL REGISTRATION. If the Corporation at any time after June
22, 1997 proposes to Register any of its securities under the Act (other
than a Registration effected to implement an employee benefit plan, a
transaction to which Rule 145 of the Commission is applicable, or a
Registration required pursuant to Section 2), it will each such time give
written notice to all Holders of its intention to do so not less than
thirty (30) days prior to the intended filing date of such Registration,
together with a list of all jurisdictions in which the Corporation intends
to register the securities to be offered. Upon the written request of a
Holder or Holders given within fifteen (15) days after receipt of any such
notice (stating the number of shares of Registrable Stock to be disposed of
by such Holder or Holders and the intended method of disposition), the
Corporation will use its best efforts to cause all such shares of
Registrable Stock intended to be sold by Holders who or which have
requested Registration thereof, to be Registered under the Act so as to
permit the disposition by such Holder or Holders of the shares so
Registered, subject, however, to the limitations set forth in Section 6.
6. LIMITATIONS ON INCIDENTAL REGISTRATION.
---------------------------------------
(a) If the Registration of which the Corporation gives notice pursuant
to Section 5 is for an underwritten offering, only securities (including,
without limitation, Registrable Stock) which are to be included in the
underwriting may be included in the Registration.
(b) If the managing underwriter of any underwritten offering shall
inform the Corporation by letter of its belief that the number or type of
Registrable Stock requested to be included in a Registration pursuant to
Section 5 would materially adversely affect such offering, then the
Corporation will include in such Registration, to the extent of the number
and type which the Corporation is so advised can be sold in (or during the
time of) such offering, first, all securities proposed by the Corporation
to be sold for its own account and, second, all other registered securities
of the Corporation requested to be included in such Registration pro rata
among such holders on the basis of the estimated gross proceeds of the
securities of such holders requested to be so included.
(c) Subject to the Corporation's complying with the priorities set
forth in Section 6(b), nothing contained in this Section 6 shall prevent
the Corporation from withdrawing any securities requested to be included
for its own account in such a Registration either before or after the
effectiveness of such Registration.
(d) The Corporation shall not be required to effect any registration
of Registrable Stock pursuant to Section 5 if it shall deliver to the
Holder or Holders requesting such registration an opinion (which opinion
shall be reasonably satisfactory to such Holder or Holders) of Stokes and
Bartholomew (or other counsel reasonably satisfactory to such Holder or
Holders) to the effect that all Registrable Stock held by such Holder or
Holders may be sold in the public market without registration under the
Securities Act and any applicable State securities laws.
6
<PAGE> 57
7. DESIGNATION OF MANAGING UNDERWRITER. In the case of any
Registration which is intended to be an underwritten public offering, the
Corporation shall have the right to designate a managing underwriter of
such underwritten offering, which shall be a nationally recognized
investment banking firm.
8. COOPERATION OF PROSPECTIVE SELLERS.
-----------------------------------
(a) Each Holder that is a prospective seller of Registrable Stock will
furnish to the Corporation such information regarding such Holder and the
distribution of such Registrable Stock as the Corporation may from time to
time reasonably request in writing. Such Holder shall not be required to
make any representations or warranties to or agreements with the
Corporation or the underwriters, if any, other than representations,
warranties or agreements regarding such Holder, such Holder's intended
method of distribution and any other representations required by law.
(b) Failure of a Holder that is a prospective seller of Registrable
Stock to furnish the information and agreements described in this Section 8
shall be deemed sufficient reason to exclude any shares of Registrable
Stock to be sold by such Holder. However, such failure shall not affect the
obligations of the Corporation under this Agreement to remaining Holders
who furnish such information and agreements unless, in the opinion of
counsel to the Corporation or the managing underwriter, such failure
impairs or may impair the legality of the registration statement or the
underlying offering.
(c) The Holders of Registrable Stock included in the registration
statement will not (until receipt of a supplemental or amended prospectus
or prospectus supplement) effect sales thereof after receipt of telegraphic
or written notice from the Corporation to suspend sales to permit the
Corporation to correct or update a registration statement or prospectus or
prospectus supplement; but the obligations of the Corporation with respect
to maintaining any registration statement current and effective shall be
extended by a period of days equal to the period such suspension is in
effect.
(d) At the end of the period during which the Corporation is obligated
to keep the registration statement current and effective as described in
paragraph (b) of Section 3 (and any extensions thereof required by the
preceding paragraph), the Holders of Registrable Stock included in the
registration statement shall discontinue sales of Registrable Stock
pursuant to such registration statement upon receipt of notice from the
Corporation of its intention to remove from Registration the Registrable
Stock covered by such registration statement which remain unsold, and such
Holders shall notify the Corporation of the number of Registered shares of
Registrable Stock which remain unsold immediately upon receipt of such
notice from the Corporation.
9. EXPENSES OF REGISTRATION. All expenses (other than underwriting
discounts and commissions incurred pursuant to this Agreement in effecting
any Registration), including, without limitation, all registration and
filing fees, printing and engraving expenses, expenses of compliance with
blue sky laws, registrar, transfer agent, and escrow fees, fees and
disbursements of counsel and public accountants to the Corporation, and
reasonable fees and expenses of a single legal counsel
7
<PAGE> 58
for all selling holders shall be borne by the corporation, provided that
any additional registration and qualification fees and expenses that
directly result from the inclusion of securities held by the Holders in the
case of any Registration effected pursuant to Section 5 shall be borne pro
rata by the Holders in proportion to the number of shares of Registrable
Stock being offered by them.
10. INDEMNIFICATION.
----------------
(a) The Corporation will indemnify each Holder requesting or joining
in a Registration, each officer, director, agent, or partner thereof, and
such Holder's legal counsel and independent accountants, and each person,
if any, who controls any thereof within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and each underwriter of the
securities so Registered, and their respective successors (collectively,
"INDEMNITEES"), against all claims, losses, damages and liabilities, joint
or several, or actions in respect thereof, arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, prospectus supplement, offering
circular or other document prepared by or at the direction of the
Corporation incident to any Registration, qualification or compliance (or
in any related registration statement, notification or the like) or any
omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances in which they were made, or
any violation of any rule or regulation promulgated under the Act or any
state securities law applicable to the Corporation or relating to action or
inaction required of the Corporation in connection with any such
Registration, qualification, or compliance, and will reimburse each such
Indemnitee for any legal and any other expenses reasonably incurred in
connection with investigating, settling or defending any such claim, loss,
damage, liability, or action; PROVIDED, HOWEVER, that the indemnity
agreement contained in this Section 10(a) shall not apply to amounts paid
in settlement of any such claim, loss, damage, liability, or action if such
settlement is effected without the consent of the Corporation (which
consent shall not be unreasonably withheld) nor shall the Corporation be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission in
any such document made in reliance on and in conformity with information
furnished to the Corporation in writing by such Indemnitee(s) specifically
for use therein and except that the foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission)
made in the preliminary prospectus but eliminated or remedied in an amended
prospectus on file with the Commission at the time the registration
statement becomes effective or in an amended or supplemented prospectus
filed with the Commission pursuant to Rule 424(b) (a "FINAL PROSPECTUS"),
such indemnity agreement shall not inure to the benefit of any underwriter,
or any Indemnitee if there is no underwriter, if a copy of such Final
Prospectus was not furnished to the person or entity asserting the loss,
liability, claim, or damage at or prior to the time such furnishing is
required by the Act so long as such Final Prospectus has been furnished to
such underwriter or such Indemnitee prior to such time; PROVIDED, FURTHER,
that this indemnity shall not be deemed to relieve any underwriter of any
of its due diligence obligations.
8
<PAGE> 59
(b) Each Holder of shares of Registrable Stock included in a
Registration which is effected will, severally, but not jointly, indemnify
(and the Corporation and each such Holder will use its best efforts to
cause each underwriter of the securities so registered so to indemnify) the
Corporation and its officers and directors and its legal counsel, and each
person, if any, who controls any of the foregoing within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and their
respective successors, against all claims, losses, damages, and
liabilities, joint or several, or actions in respect thereof, arising out
of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus,
prospectus supplement, offering circular or other document prepared by or
at the direction of the Holder or underwriter incident to any registration,
qualification or compliance (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances in
which they were made and will reimburse the Corporation and each other
person indemnified pursuant to this paragraph (b) for any legal and any
other expenses reasonably incurred in connection with investigating,
settling, or defending any such claim, loss, damage, liability or action;
PROVIDED, HOWEVER, that this paragraph (b) shall apply only if such
statement, alleged statement, omission, or alleged omission was made in
reliance upon and in conformity with information (including, without
limitation, written negative responses to inquiries) furnished to the
Corporation by such Holder or underwriter in writing, specifically for use
therein, and except that the foregoing indemnity agreement is subject to
the condition that, insofar as it relates to any such untrue statement (or
alleged untrue such statement) or omission (or alleged omission) made in
the preliminary prospectus but eliminated or remedied in a Final
Prospectus, such indemnity agreement shall not inure to the benefit of the
Corporation, if a copy of such Final Prospectus was not furnished to the
person or entity asserting the loss, liability, claim, or damage at or
prior to the time such furnishing is required by the Act so long as such
Final Prospectus has been furnished to such Holder or underwriter prior to
such time; PROVIDED, FURTHER, that this indemnity shall not be deemed to
relieve any underwriter of any of its obligations, as to any Holder;
PROVIDED, FURTHER, that the indemnity agreement contained in this Section
10(b) shall not apply, as to any Holder, to amounts paid in settlement of
any such claim, loss, damage, liability, or action if such settlement is
effected without the consent of such Holder, which consent shall not be
unreasonably withheld; PROVIDED, FURTHER, that the liability of any such
holder under this Section 10(b) and Section 10(e) shall be limited in the
aggregate to the total public offering price of the Registrable Stock sold
by such Holder.
(c) Each party entitled to indemnification hereunder (the "INDEMNIFIED
PARTY") shall give notice to the party required to provide indemnification
(the "INDEMNIFYING PARTY") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party (at its expense) to assume the defense of any
claim or any litigation resulting therefrom; PROVIDED, HOWEVER, that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be satisfactory to the Indemnified Party, and
the Indemnified Party may participate in such defense at such party's
expense; PROVIDED, FURTHER, that the omission by any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 10 except to the
9
<PAGE> 60
extent that the omission is materially prejudicial to the ability of
the indemnifying party to defend such claim or litigation. no indemnifying
Party, in defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 10 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
herein, then the Indemnifying Party hereunder shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense, in such proportion as is appropriate
to reflect the relative benefit of the Indemnifying Party on the one hand
and of the Indemnified Party on the other in connection with the statements
or omissions which resulted in such loss, liability, claim, damage, or
expense. If the allocation provided above is held by a court of competent
jurisdiction to be unavailable, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage, or expense, in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other
hand in connection with the statements or omissions which resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties'
relevant intent, knowledge, access to information and opportunities to
correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata
allocation or by any other method of allocation that does not take account
of the equitable considerations referred to above. The amount paid or
payable by an Indemnified Party as a result of the claims, losses, damages,
and liabilities referred to above shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim.
(c) No Holder that is a seller of Registrable Stock covered by such
registration statement or person controlling such seller other than the
Corporation shall be obligated to make contribution hereunder that in the
aggregate exceeds the total public offering price of the Registrable Stock
sold by such Holder, less the aggregate amount of any damages that such
Holder and its controlling persons have otherwise been required to pay
pursuant to this Section 10. The obligations of such Holders to contribute
are several in proportion to their respective ownership of the securities
covered by such registration statement and not joint.
10
<PAGE> 61
(f) The indemnity and contribution provided herein shall be in
addition to, and not in lieu of, any other liability that one party may
have to another.
(g) The obligation of the Corporation under this Section 10 shall
survive the prepayment and/or conversion, if any, of the Notes, the
completion of any offering of Registrable Stock in a registration statement
under this Agreement, or otherwise.
11. RULE 144 REQUIREMENTS. The Corporation shall take all actions
reasonably necessary to enable Holders of Registrable Stock to sell such
securities without registration under the Act within the limitation of the
exemptions provided by Rule 144 including, without limiting the generality
of the foregoing, filing on a timely basis all reports required to be filed
by the Exchange Act. Upon the request of any Holder of Registrable Stock,
the Corporation will deliver to such Holder a written statement as to
whether it has complied with such requirements.
12. "STAND-OFF" AGREEMENT. In consideration for the Corporation
performing its obligations under this Agreement, each Holder severally
agrees for a period of time (not to exceed ninety (90) days) from the
effective date of the Registration of securities of the Corporation (upon
the written request of the Corporation or the underwriters managing any
underwritten offering of the Corporation's securities) not to sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any Registrable Stock, other than shares of Registrable Stock
included in the Registration, without the prior written consent of the
Corporation or of such underwriters, as the case may be.
13. DELAY OF REGISTRATION. Unless jointly exercised by the Holders of
at least 66-2/3% of the Registrable Stock, no Holder shall have any right
to take any action to restrain, enjoin or otherwise delay any Registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
14. MISCELLANEOUS.
(a) AMENDMENT. This Agreement shall not be amended without the written
consent of the Corporation and the Holders of at least 66-2/3% of the
Registrable Stock.
(b) GOVERNING LAW. This Agreement shall be governed in all respects by
and construed in accordance with the local laws of the State of New York
and not the choice of law rules of such state. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of
the State of New York or of the United States of America for the District
of New York and, by execution and delivery of this Agreement, each of the
Corporation and the Purchaser hereby accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Corporation irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Corporation at its address set forth herein,
such
11
<PAGE> 62
service to become effective thirty (30) days after such mailing. the
english language version of all documents related to the transactions
contemplated hereby shall govern.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and, with
respect to the Corporation, its respective successors and assigns, and,
with respect to the Investor, any holder of any Registrable Stock, subject
to the provisions respecting the minimum numbers of percentages of shares
of Registrable Stock required in order to be entitled to certain rights, or
take certain actions, contained herein. The Investor (and not any other
Holder or any other Person) shall be permitted, in connection with a
transfer or disposition of Registrable Stock permitted by the Note Purchase
Agreement, to impose conditions or constraints on the ability of the
transferee, as a Holder, to request a Registration pursuant to Section 2
and shall provide the Corporation with copies of such conditions or
constraints and the identity of such transferees.
(d) NOTICES, ETC. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be mailed, certified
mail, return receipt requested, postage prepaid, or delivered by overnight
courier service, or by telex or telefacsimile transmission, addressed as
follows:
if to the Corporation to the address set forth on the first page
of this Agreement (telefacsimile number (615) 269-8635);
if to a Holder, to the address and telex or telefacsimile
transmission number set forth below such Holder's signature on this
Agreement;
if to any subsequent Holder, to it at such address as may have
been furnished to the Corporation in writing by such Holder;
or, in any such case, at such other address or addresses as shall have
been furnished in writing to the Corporation (in the case of a Holder of
Registrable Stock) or to the Holders of Registrable Stock (in the case of
the Corporation) in accordance with the provisions of this Section; and
shall be deemed to have been given three (3) days after mailing, if mailed,
or one (l) business day after delivery to the courier, if delivered by
overnight courier service or after transmission, if sent by telex or
telefacsimile transmission.
(e) SEVERABILITY. In case any provision of this Agreement shall be
held to be invalid, illegal, or unenforceable, it shall, to the extent
practicable, be modified so as to make it valid, legal, and enforceable and
to retain, as nearly as practicable, the intent of the parties, and the
validity, legality, and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
12
<PAGE> 63
(f) TITLES AND SUBTITLES; SECTIONS. The titles and subtitles of this
Agreement are intended for reference and shall not by themselves determine
the construction or interpretation of this Agreement. References to
Sections herein are to Sections of this Agreement unless otherwise
specified.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(h) ENTIRE AGREEMENT. This Agreement and the other document delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed themselves or by their respective representatives thereunto duly
authorized as of the day and year first above written.
CORRECTIONS CORPORATION OF AMERICA,
a Delaware corporation
By:
--------------------------------
Its:
-------------------------------
SODEXHO S.A.
By:
--------------------------------
Its:
-------------------------------
Address:
Sodexho S.A.
3 avenue Newton
78180 Montigny-le-Bretonneux
FRANCE
Attention: Bernard Carton
13
<PAGE> 64
14
<PAGE> 65
EXHIBIT E
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS
OF A NOTE PURCHASE AGREEMENT DATED AS OF APRIL 5, 1996 BETWEEN THE
CORPORATION AND SODEXHO S.A. AND A REGISTRATION RIGHTS AGREEMENT DATED
AS OF APRIL 5, 1996 BETWEEN THE CORPORATION AND SODEXHO S.A., COPIES
OF WHICH ARE ON FILE AT THE OFFICES OF THE CORPORATION.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND
QUALIFICATION UNDER APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR
PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION
REQUIREMENTS.
CORRECTIONS CORPORATION OF AMERICA
----------------------------------
7.5% CONVERTIBLE, SUBORDINATED NOTE
DUE FEBRUARY 28, 2002
No. 019 April 5, 1996
SECTION 1. PAYMENT OBLIGATION. CORRECTIONS CORPORATION OF AMERICA, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Corporation"), for value received, hereby promises to pay to
Sodexho S.A., a French corporation (herein called "Sodexho"), or registered
assigns (hereinafter referred to as the "Holder"), the principal sum of Twenty
Million Dollars ($20,000,000) on the Maturity Date, and to pay interest thereon
from the date hereof quarterly on March 31, June 30, September 30, and December
31 of each year, commencing June 30, 1996, at (i) the Coupon Rate, or (ii) upon
the occurrence of a Triggering Event and until the date on which such Triggering
Event is cured or waived or until the date that is ninety (90) days from initial
occurrence of the Triggering Event, whichever is later, at the Triggering Event
Rate, until the principal hereof is paid to the person in whose name this Note
is registered at the close of business on the Business Day immediately preceding
the date such payment is due. Any payments due hereunder that fall due on a day
that is not a Business Day shall be payable on the first succeeding Business Day
and such extension of time shall be included in the computation of interest due
hereunder. Payment of the principal of and interest on this Note will be made by
cashiers check or by wire transfer of immediately available funds, in currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts, at such address or to such account, as
applicable, as shall be designated to the Corporation by the Holder.
<PAGE> 66
SECTION 2. DEFINITIONS. As used herein, the following terms will be
deemed to have the meanings set forth below:
"BOARD" means the board of directors of the Corporation.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or Friday
that is not a day on which banking institutions in Nashville, Tennessee are
authorized or obligated by law or executive order to close.
"CHANGE EVENT" shall mean:
(a) the acquisition by any individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of the
combined voting power of the then outstanding voting securities
of the Corporation entitled to vote generally in the election of
directors, but excluding, for this purpose, any such acquisition
by (i) the Corporation or any of its subsidiaries, (ii) any
employee benefit plan (or related trust) of the Corporation or
its subsidiaries, or (iii) any corporation with respect to which,
following such acquisition, more than 50% of the combined voting
power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
individuals and entities who were the beneficial owners of voting
securities of the Corporation immediately prior to such
acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the combined
voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of
directors; or
(b) the Incumbent Board shall cease for any reason to
constitute at fifty percent (50%) of the members of the Board; or
(c) approval by the stockholders of the Corporation of a
reorganization, merger, or consolidation, in each case, with
respect to which all or substantially all the individuals and
entities who were the respective beneficial owners of the voting
securities of the Corporation immediately prior to such
reorganization, merger, or consolidation do not, following such
reorganization, merger, or consolidation beneficially own,
directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation
resulting from such reorganization, merger, or consolidation; or
(d) the sale or other disposition of all or substantially
all the assets or property of the Corporation in one transaction
or a series of related transactions.
2
<PAGE> 67
"CLOSING DATE" shall have the meaning ascribed thereto in SECTION 2.2 of
the Note Purchase Agreement.
"COMMON STOCK" means the common stock of the Corporation, par value $l.00
per share.
"CONVERSION PRICE" means $53.30 per share of Common Stock, subject to
adjustment from time to time as herein set forth.
"CONVERSION RATIO" means the number of Conversion Shares to be delivered
upon conversion of One Hundred Dollars ($100) of principal amount of this
Note. Subject to the provisions for adjustment set forth herein, the
Conversion Ratio shall be determined as the quotient of (i) the principal
amount of this Note to be converted, DIVIDED BY (ii) the Conversion Price.
Subject to the provisions for adjustment set forth herein, the Conversion
Ratio initially shall be 1.8762.
"CONVERSION SHARES" means fully paid and nonassessable shares of Common
Stock issuable upon conversion of the indebtedness evidenced by this Note.
"CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
principal amount 8.5% Convertible Subordinated Notes due November 7, 1999,
(b) $7,500,000 aggregate principal amount 8.5% Convertible, Extendable,
Subordinated Notes due on September 30, 1998 or, if extended, on various
dates, the latest of which is September 30, 2000, (c) $20,000,000 aggregate
principal amount 7.5% Convertible Subordinated Notes due February 28, 2002,
(d) option to purchase the Floating Rate Notes, and (e) the Floating Rate
Notes when issued.
"CONVERTIBLE SECURITIES" means rights, warrants, options or other
securities convertible into or exchangeable for shares of Common Stock.
"COUPON RATE" means seven and one-half percent (7.5%) per annum.
"CURRENT MARKET PRICE" when used with reference to shares of
Common Stock, shall mean the closing price per share of Common Stock on
such date and, when used with reference to shares of Common Stock for any
period shall mean the average of the daily closing prices per share of
Common Stock for such period. If the Common Stock is listed or admitted to
trading on a national securities exchange, the closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Stock
is not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading. If the Common
Stock is not publicly held
3
<PAGE> 68
or so listed or publicly traded, "Current Market Price" shall mean the fair
market value per share of Common Stock as determined in good faith by the
Board based on an opinion of an independent investment banking firm with an
established national reputation as a valuer of securities, which opinion
may be based on such assumptions as such firm shall deem to be necessary
and appropriate.
"EVENT OF DEFAULT" shall have the meaning set forth in SECTION 7.1 of the
Note Purchase Agreement.
"EXCHANGE ACT" shall have the meaning set forth in SECTION 3.1 of the Note
Purchase Agreement.
"FLOATING RATE NOTES" shall have the meaning set forth in the Sodexho
Agreement.
"INCUMBENT BOARD" means the individuals who, as of the Closing Date,
constitute the Board; PROVIDED, HOWEVER, that any individual becoming a
director subsequent to the Closing Date, whose election, or nomination for
election by the Corporation's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall
be deemed to be a member of the Incumbent Board.
"MAJOR TRANSACTION" shall mean:
(a) approval by the stockholders of the Corporation of a
reorganization, merger, or consolidation, in each case, with
respect to which all or substantially all the individuals and
entities who were the respective beneficial owners of the voting
securities of the Corporation immediately prior to such
reorganization, merger, or consolidation do not, following such
reorganization, merger, or consolidation beneficially own,
directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation
resulting from such reorganization, merger, or consolidation; or
(b) the sale or other disposition of all or substantially all the
assets or property of the Corporation in one transaction or a
series of related transactions.
"MANDATORY CONVERSION DATE" means the Business Day specified by the
Corporation, in compliance with the provisions hereof, as the date on which
all or a portion of the indebtedness evidenced by this Note will be
converted into shares of Common Stock pursuant to the Corporation's right
to compel such conversion.
"MANDATORY CONVERSION NOTICE" means a written notice substantially in
the form of the notice attached hereto as EXHIBIT A and incorporated herein
by this reference.
4
<PAGE> 69
"MANDATORY PREPAYMENT DATE" means the Business Day specified by the
Holder, in compliance with the provisions hereof, as the date on which all
or a portion of the indebtedness evidenced by this Note must be prepaid
pursuant to the Holder's right to compel such prepayment.
"MANDATORY PREPAYMENT NOTICE" means a written notice substantially in
the form of the notice attached hereto as EXHIBIT B and incorporated herein
by this reference.
"MATURITY DATE" means February 28, 2002.
"NOTE" means this 7.5% convertible, subordinated note issued by the
Corporation.
"NOTE PURCHASE AGREEMENT" means that certain Note Purchase Agreement,
dated as of April 5, 1996, between the Corporation and Sodexho S.A.
"OPTIONAL CONVERSION NOTICE" means a written notice substantially in
the form of the notice attached hereto as Exhibit C and incorporated herein
by this reference.
"SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
unpaid interest on (a) indebtedness (other than indebtedness evidenced by
the Convertible Notes, indebtedness that is subordinated in right of
payment to one or more item or type of indebtedness of the Corporation, or
indebtedness incurred in violation of the terms and conditions of the Note
Purchase Agreement) of the Corporation, irrespective of whether secured and
whether heretofore or hereafter (i) incurred for borrowed money, or (ii)
evidenced by a note or similar instrument given in connection with the
acquisition by the Corporation of any business, properties, or assets,
including securities (but not including any account payable or other
obligation created or assumed by the Corporation in the ordinary course of
business in connection with the obtaining of materials or services), (b)
any refundings, renewals, extensions, or deferrals of any of the
indebtedness included as Senior Indebtedness by virtue of CLAUSE (a)
hereof, and (c) obligations under capital leases; in each case for the
payment of which the Corporation is liable directly or indirectly by
guarantee, letter of credit, obligation to purchase or acquire, or
otherwise, unless the terms of the instrument evidencing such indebtedness
or capital lease or pursuant to which such indebtedness or capital lease is
outstanding specifically provide that such indebtedness or capital lease is
not superior in right of payment to the indebtedness evidenced by this
Note.
"SODEXHO AGREEMENT" means that certain Securities Purchase Agreement,
dated as of June 23, 1994, between Sodexho S.A., a French corporation, or
its designee and the Corporation, as amended by that certain Amendment No.
1 to Securities Purchase Agreement, dated as of July 11, 1995
5
<PAGE> 70
"TRADING DAY" means, if the Common Stock is listed or admitted to
trading on any national securities exchange, a day on which such exchange
is open for the transaction of business, otherwise, a Business Day.
"TRIGGERING EVENT" means the occurrence of any Unmatured Event of
Default of Event of Default described in CLAUSES (i), (ii), AND (iv)
THROUGH (x), inclusive, of SECTION 7.1 of the Note Purchase Agreement. For
purposes of determining the period during which the Triggering Event Rate
shall be in effect, a Triggering Event shall not be deemed to have occurred
until the date on which the Holder shall have given notice of the
occurrence thereof to the Corporation.
"TRIGGERING EVENT RATE" means nine and one-half percent (9.5%) per annum.
"UNMATURED EVENT OF DEFAULT" shall mean any event or condition, the
occurrence of which would, with the lapse of time or the giving of notice,
or both, constitute an Event of Default.
SECTION 3. OPTIONAL CONVERSION. (a) Subject to and upon compliance
with the provisions of this Note, the Holder is entitled, at its option, at any
time on or before the close of business on the Business Day prior to the
Maturity Date, or in case this Note or a portion hereof is called for conversion
by the Corporation in accordance with the terms hereof, then until and
including, but not after, the close of business on the third Business Day prior
to the Mandatory Conversion Date, to convert all or a portion of the principal
amount of the indebtedness evidenced by this Note into Conversion Shares.
(b) The principal amount of the indebtedness evidenced by this Note
or any portion of the principal amount of the indebtedness evidenced hereby that
is One Thousand Dollars ($1,000), an integral multiple of One Thousand Dollars
($1,000), or the remaining balance of the principal amount of the indebtedness
evidenced by this Note may be converted into Conversion Shares. Subject to the
provisions for adjustment set forth hereinafter, the indebtedness evidenced by
the Note shall be convertible into Conversion Shares at a price per share equal
to the Conversion Price and the number of Conversion Shares to be deliverable to
the Holder upon conversion of One Hundred Dollars ($100) of the principal amount
of this Note shall be equal to the Conversion Ratio.
(c) Conversion of all or a portion of the indebtedness evidenced by
this Note may be effected by the Holder upon the surrender to the Corporation at
the principal office of the Corporation in the State of Tennessee or at the
office of any agent or agents of the Corporation, as may be designated by the
Board, of this Note, duly endorsed or assigned to the Corporation or in blank,
accompanied by a Optional Conversion Notice to the Corporation that the Holder
elects to convert the principal amount of the indebtedness evidenced by this
Note or, if less than the entire principal amount of the indebtedness evidenced
by this Note is to be converted, the portion thereof to be converted. Such
Optional Conversion Notice shall specify the name or names in which the Holder
wishes the certificate or certificates for shares of Common Stock to be issued.
In case such notice shall specify a name or names other than that of the Holder,
such notice shall be accompanied
6
<PAGE> 71
by payment of all transfer taxes payable upon the issuance of shares of
Common Stock in such name or names. Other than such taxes, the Corporation will
pay any and all issue and other taxes (other than taxes based on income) that
may be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the indebtedness evidenced by this Note. No payment or adjustment
shall be made upon any conversion of this Note on account of any dividends or
other distributions payable on the Conversion Shares; PROVIDED, HOWEVER, that
the Holder shall be entitled to receive the full amount of any dividends or
other distributions declared with respect to the Conversion Shares with a record
date on or after the effective date of such conversion.
As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note and the receipt of such notice
relating thereto and, if applicable, payment of all transfer taxes (or the
demonstration to the satisfaction of the Corporation that such taxes have been
paid), the Corporation shall deliver or cause to be delivered, either by
personal delivery or by certified or registered mail or by a recognized
overnight courier service, in any such case, properly insured, to the Holder in
accordance with the written instructions of the Holder (i) certificates
representing the number of Conversion Shares to which the Holder shall be
entitled, and (ii) if less than the entire principal amount of indebtedness
evidenced by this Note is being converted, a new promissory note, in the form of
this Note, for the balance of the indebtedness that is not being so converted.
Such conversion shall be deemed to have been made at the close of business on
the date of giving such notice and of such surrender of this Note so that the
rights of the Holder (as a noteholder) with respect to the principal amount
being converted shall cease, and the person or persons entitled to receive the
Conversion Shares issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock as of such day. All accrued
but unpaid interest through the Business Day immediately preceding the date of
such conversion with respect to the principal amount of the indebtedness
evidenced by this Note being converted shall be payable upon conversion.
The Corporation shall not be required to convert, and no surrender
of this Note shall be effective for that purpose, while the transfer books of
the Corporation for the Common Stock are closed for any purpose (but not for any
period in excess of 15 days); but the surrender of this Note for conversion
during any period while such books are so closed shall become effective for
conversion immediately upon the reopening of such books, as if the conversion
had been made on the date this Note is surrendered, and at the Conversion Ratio
in effect at the date of such surrender.
(d) In case this Note is to be prepaid pursuant to the mandatory
prepayment provisions hereof, such right of conversion shall cease and terminate
as to the portion of this Note that is to be prepaid at the close of business on
the Business Day next preceding the date fixed for mandatory prepayment unless
the Corporation shall default in the payment of the mandatory prepayment amount.
(e) In connection with the conversion of the indebtedness evidenced
by this Note, no fractions of shares of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest
7
<PAGE> 72
multiplied by the Current Market Price per share of Common Stock on the
Trading Day on which such indebtedness evidenced by this Note is deemed to have
been converted. If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.
(f) (i) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the indebtedness evidenced by this
Note, free from any preemptive rights, such number of its authorized but
unissued shares of Common Stock as will from time to time be sufficient to
permit the conversion of all of the indebtedness evidenced by this Note, and
shall take all action required to increase the authorized number of shares of
Common Stock if necessary to permit the conversion of all of the indebtedness
evidenced by this Note.
(ii) If the Corporation shall issue shares of Common Stock upon
conversion of indebtedness evidenced by this Note as contemplated by this
SECTION 3, the Corporation shall issue together with each such share of Common
Stock any rights issued to holders of Common Stock of the Corporation,
irrespective of whether such rights shall be exercisable at such time, but only
if such rights are issued and outstanding and held by other holders of Common
Stock of the Corporation at such time and have not expired.
(g) The Conversion Ratio will be subject to adjustment from time to
time as follows:
(i) In case the Corporation shall at any time or from time
to time after the Closing Date (A) pay a dividend, or make a distribution,
on the outstanding shares of Common Stock in shares of Common Stock, (B)
subdivide the outstanding shares of Common Stock, (C) combine the
outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of the shares of Common Stock any shares of
capital stock of the Corporation, then, and in each such case, the
Conversion Ratio in effect immediately prior to such event or the record
date therefor, whichever is earlier, shall be adjusted so that the Holder
shall be entitled to receive the number of shares of Common Stock (or
other capital stock) of the Corporation that the Holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had the indebtedness evidenced by this Note been
converted immediately prior to the happening of such event or the record
date therefor, whichever is earlier. An adjustment made pursuant to this
CLAUSE (i) shall become effective (x) in the case of any such dividend or
distribution, immediately after the close of business on the record date
for the determination of holders of shares of Common Stock entitled to
receive such dividend or distribution, or (y) in the case of such
subdivision, reclassification, or combination, at the close of business
on the day upon which such corporate action becomes effective. No
adjustment shall be made pursuant to this CLAUSE (i) in connection with
any transaction to which SUBSECTION (h) applies.
8
<PAGE> 73
(ii) In case the Corporation shall issue shares of Common Stock or
Convertible Securities after the Closing Date at a price per share (or
having a conversion price per share) less than the Current Market Price per
share of Common Stock, as of the date of issuance of such shares or of such
Convertible Securities, then, and in each such case, the Conversion Ratio
shall be adjusted so that the Holder shall be entitled to receive, upon the
conversion hereof, the number of shares of Common Stock determined by
multiplying (A) the applicable Conversion Ratio on the day immediately
prior to such date by (B) a fraction, the numerator of which shall be the
sum of (1) the number of shares of Common Stock outstanding on such date,
PLUS (2) the number of additional shares of Common Stock issued (or into
which the Convertible Securities may convert), and the denominator of which
shall be the sum of (a) the number of shares of Common Stock outstanding on
such date, PLUS (b) the number of shares of Common Stock purchasable at the
then Current Market Price per share with the aggregate consideration
received or receivable by the Corporation for the total number of shares of
Common Stock so issued (or into which the Convertible Securities may
convert). Notwithstanding the foregoing, in the event that after the date
hereof the Corporation (x) issues the Floating Rate Notes, or (y) sells up
to 1,000,000 shares (dilution adjustments for future public stock issuances
in excess of 1,000,000 shares after adjustment is made for the first
1,000,000 shares pursuant to this sentence, shall be made in accordance
with the previous sentence) of its Common Stock to the public in a
registered offering or offerings (on Forms other than S-4, S-8, or any
successor Forms or similar Forms) (each such issuance an "Adjustment
Event"), then, and in each such case, the Conversion Ratio shall be
adjusted so that the holder shall be entitled to receive, upon the
conversion hereof, the number of shares of Common Stock determined by
multiplying the applicable Conversion Ratio on the day immediately prior to
such Adjustment Event by a fraction, (i) the numerator of which shall be
the number of shares of Common Stock outstanding, PLUS, in the case of an
Adjustment Event described in CLAUSE (x), the number of shares of Common
Stock into which the Floating Rate Notes may convert, immediately after
such Adjustment Event, and (ii) the denominator of which shall be the
number of shares of Common Stock outstanding, immediately prior to such
Adjustment Event.
An adjustment made pursuant to this CLAUSE (ii) shall be made on the
next Business Day following the date on which any such issuance is made and
shall be effective retroactively to the close of business on the date of
such issuance. For purposes of this CLAUSE (ii), the aggregate
consideration received or receivable by the Corporation in connection with
the issuance of shares of Common Stock or of rights, warrants, or other
securities convertible into shares of Common Stock shall be deemed to be
equal to the sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses payable to third
parties) of all such Common Stock, rights, warrants, and convertible
securities PLUS the minimum aggregate amount, if any, payable upon exercise
of conversion of any such rights, warrants, and convertible securities into
shares of Common Stock. The issuance of any shares of Common Stock (whether
treasury shares or newly issued shares) pursuant to (a) a dividend or
distribution on, or subdivision, combination or reclassification of, the
outstanding shares of Common Stock requiring an adjustment in the
9
<PAGE> 74
conversion ratio pursuant to CLAUSE (i) of this SUBSECTION (g), or (b)
other than as provided in CLAUSE (y) above, the terms of a firmly committed
underwritten public offering, shall not be deemed to constitute an issuance
of Common Stock or Convertible Securities by the Corporation to which this
CLAUSE (ii) applies.
Upon the expiration of any unexercised options, warrants, or rights to
convert any convertible securities for which an adjustment has been made
pursuant to this CLAUSE (ii), the adjustments shall forthwith be reversed
to effect such rate of conversion as would have been in effect at the time
of such expiration or termination had such options, warrants, or rights or
convertible securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued. If the purchase price
provided for in any option, warrant, or rights to convert any convertible
securities for which an adjustment has been made pursuant to this CLAUSE
(ii), the additional consideration, if any, payable upon the conversion or
exchange of any convertible securities for which an adjustment has been
made, or the rate at which any convertible securities referred to above are
convertible into or exchangeable for Common Stock shall, at any time,
increase or decrease (other than under or by reason of provisions designed
to protect against dilution), then, the Conversion Ratio in effect at the
time of such event shall forthwith be readjusted to the Conversion Ratio
that would have been in effect at such time had such options, warrants, or
rights or convertible securities still outstanding provided for such
changed purchase price, additional consideration, or conversion rate, as
the case may be, at the time initially granted, issued, or sold. No
adjustment shall be made pursuant to this CLAUSE (ii) in connection with
any transaction to which SUBSECTION (h) applies.
(iii) In case the Corporation shall at any time or from time to time
after the Closing Date declare, order, pay, or make a dividend or other
distribution (including, without limitation, any distribution of stock or
other securities or property or rights or warrants to subscribe for
securities of the Corporation or any of its subsidiaries by way of dividend
or spinoff), on its Common Stock, other than (A) dividends payable in cash
in an aggregate amount not to exceed 50% of net income from continuing
operations before extraordinary items of the Corporation, determined in
accordance with generally accepted accounting principles, during the period
(treated as one accounting period) commencing on December 31, 1995, and
ending on the date such dividend is paid; PROVIDED, that, to the extent
required by the terms thereof, such dividend shall have been previously
consented to by the holders of the notes issued pursuant to the Note
Purchase Agreement, or (B) dividends or distributions of shares of Common
Stock which are referred to in CLAUSE (i) of this SUBSECTION (g), then, and
in each such case, the Conversion Ratio shall be adjusted so that the
Holder shall be entitled to receive, upon the conversion hereof, the number
of shares of Common Stock determined by multiplying (1) the applicable
Conversion Ratio on the day immediately prior to the record date fixed for
the determination of stockholders entitled to receive such dividend or
distribution by (2) a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock for the period of 30 Trading Days
preceding such record date, and the denominator of which shall be such
Current Market Price per share of Common
10
<PAGE> 75
Stock less the fair market value, as determined in good faith by the
Board, a certified resolution with respect to which shall be mailed to the
Holder, per share of Common Stock of such dividend or distribution. No
adjustment shall be made pursuant to this CLAUSE (iii) in connection with
any transaction to which SUBSECTION (h) applies.
(iv) For purposes of this SUBSECTION (g), the number of shares of
Common Stock at any time outstanding shall not include any shares of
Common Stock then owned or held by or for the account of the Corporation.
(v) The term "dividend," as used in this SUBSECTION (g), shall mean a
dividend or other distribution upon stock of the Corporation.
(vi) Anything in this SUBSECTION (g) to the contrary notwithstanding,
the Corporation shall not be required to give effect to any adjustment in
the Conversion Ratio unless and until the net effect of one or more
adjustments (each of which shall be carried forward), determined as above
provided, shall have resulted in a change of the Conversion Ratio by at
least one one-hundredth (.01) of one share of Common Stock, and when the
cumulative net effect of more than one adjustment so determined shall be to
change the Conversion Ratio by at least one one-hundredth (.01) of one
share of Common Stock, such change in Conversion Ratio shall thereupon be
given effect.
(vii) The certificate of any firm of independent public accountants of
recognized standing selected by the Board (which may be the firm of
independent public accountants regularly employed by the Corporation) shall
be presumptively correct for any computation made under this SUBSECTION
(g).
(viii) If the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment in the number of
shares of Common Stock issuable upon exercise of the right of conversion
granted by this SUBSECTION (g) or in the Conversion Ratio then in effect
shall be required by reason of the taking of such record.
(h) In the case of any Major Transaction occurring at any time, at
the option of the Holder, the indebtedness evidenced by the Note shall
thereafter be convertible into, in whole and in part and in lieu of the Common
Stock issuable upon such conversion prior to consummation of such Major
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Major
Transaction by a holder of that number of shares of Common Stock into which such
indebtedness, or portion thereof, was convertible immediately prior to such
Major Transaction (including, on a pro rata basis, the cash, securities, or
property received by holders of Common Stock in any tender or exchange offer
that is a step in such Major Transaction). In case securities or property other
than Common Stock shall
11
<PAGE> 76
be issuable or deliverable upon conversion as aforesaid, then all references in
this Section 3 shall be deemed to apply, so far as appropriate and nearly as may
be, to such other securities or property.
(i) In case at any time or from time to time the Corporation shall
pay any stock dividend or make any other non-cash distribution to the holders of
its Common Stock, or shall offer for subscription pro rata to the holders of its
Common Stock any additional shares of stock of any class or any other right, or
there shall be any capital reorganization or reclassification of the Common
Stock of the Corporation or consolidation or merger of the Corporation with or
into another corporation or other entity, or any sale or conveyance to another
corporation or other entity of the assets or property of the Corporation as an
entirety or substantially as an entirety, or there shall be a voluntary or
involuntary dissolution, liquidation, or winding up of the Corporation, then, in
any one or more of said cases the Corporation shall give at least 20 days prior
written notice (the time of mailing of such notice shall be deemed to be the
time of giving thereof) to the Holder at the address of the Holder as shown on
the books of the Corporation as of the date of which (i) the books of the
Corporation shall close or a record shall be taken for such stock dividend,
distribution, or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, or winding up shall take place, as the case may be, provided that
in the case of any Major Transaction to which SUBSECTION (h) applies the
Corporation shall give at least 30 days prior written notice as aforesaid. Such
notice also shall specify the date as of which the holders of the Common Stock
of record shall participate in said dividend, distribution, or subscription
rights or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, or conveyance or participate in such dissolution,
liquidation, or winding up, as the case may be. Failure to give such notice
shall not invalidate any action so taken.
(j) Anything herein to the contrary notwithstanding, the issuance or
sale of the following shares of Common Stock or options, warrants, or other
rights to purchase Common Stock shall be excluded from any calculation of, and
shall not be deemed issued or sold for purposes of calculating, any reduction,
adjustment, or readjustment of the Conversion Ratio hereunder: (i) shares of
Common Stock issued upon conversion of the indebtedness evidenced by this Note
or any portion thereof; (ii) shares of Common Stock or options, warrants, or
other rights to purchase Common Stock issuable, reserved for issuance, or issued
pursuant to a stock option plan, employee stock ownership plan, or other
compensatory benefit plan of the Corporation, duly adopted by the Board; (iii)
shares of Common Stock, issuable, reserved for issuance, or issued pursuant to
any currently outstanding warrants or options (other than as provided in CLAUSE
(x) of SUBPARAGRAPH (g)(ii) above), or any options, warrants, or other rights
issuable, reserved for issuance, or issued to officers of the Corporation in the
future for compensatory purposes, if duly authorized by the Board; and (iv)
shares of Common Stock issued upon conversion of the indebtedness evidenced by
the Convertible Notes (other than as provided in CLAUSE (x) of SUBPARAGRAPH
(g)(ii) above).
Section 4. REPORTS AS TO ADJUSTMENTS. Upon any adjustment of the
Conversion Ratio then in effect and any increase or decrease in the number of
shares of Common Stock issuable upon the operation of the conversion set forth
in SECTION 3, then, and in each such case, the
12
<PAGE> 77
Corporation shall promptly deliver to the Holder, a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the Conversion Ratio then in
effect following such adjustment and the increased or decreased number of shares
issuable upon the conversion granted by SECTION 3, and shall set forth in
reasonable detail the method of calculation of each and a brief statement of the
facts requiring such adjustment. Where appropriate, such notice to the Holder
may be given in advance and included as part of the notice required under the
provisions of SECTION 3(i).
SECTION 5. MANDATORY CONVERSION. (a) At any time after the fourth
anniversary of the Closing Date, and so long as at such time the Common Stock is
listed or admitted to trading on a national securities exchange, the Corporation
may require the Holder to convert all or a portion of the principal amount of
the indebtedness evidenced by this Note into shares of Common Stock if, at such
time, the Current Market Price of the Common Stock has equalled or exceeded one
hundred fifty percent (150%) of the Conversion Price (as it may from time to
time be adjusted) for forty-five (45) consecutive Trading Days following the
forty-fifth monthly anniversary of the Closing Date. To exercise such right, the
Corporation must deliver a Mandatory Conversion Notice of the exercise of such
right to the Holder within thirty (30) days of the last day of such forty-five
(45) day period, such Mandatory Conversion Notice must be given at least ten
(10) Business Days, but not more than fifteen (15) Business Days prior to the
proposed Mandatory Conversion Date, and such Mandatory Conversion Notice must
specify the proposed Mandatory Conversion Date and the portion of the principal
amount of the indebtedness evidenced by this Note to be converted into Common
Stock.
(b) All conversions effected pursuant to the preceding paragraph
will be made effective as of the close of business on the Mandatory Conversion
Date at the Conversion Ratio in effect on the Mandatory Conversion Date;
PROVIDED, HOWEVER, that, in order to be able to convert, the Current Market
Price on the Mandatory Conversion Date must equal or exceed one hundred fifty
percent (150%) of the Conversion Price in effect on the Mandatory Conversion
Date. If the Current Market Price on the Mandatory Conversion Date does not
equal or exceed one hundred fifty percent (150%) of the Conversion Price in
effect on the Mandatory Conversion Date, the Corporation's election to require
conversion will be deemed void and no conversion will be effected pursuant to
such notice. Such event will not be deemed, however, to alter or restrict the
Corporation's right to again require conversion at such time as the Current
Market Price equals or exceeds one hundred fifty percent (150%) of the then
current Conversion Price for forty-five (45) consecutive Trading Days prior to
such time. Upon conversion required by the Corporation pursuant to this
paragraph and the immediately preceding paragraph, all accrued but unpaid
interest with respect to the principal amount of the indebtedness evidenced by
this Note being converted shall be payable in accordance with the provisions of
the following paragraph.
(c) Conversions of the indebtedness evidenced by this Note effected
by the exercise of the Corporation's right to require conversion will be deemed
effective as of the close of business
13
<PAGE> 78
on the Mandatory Conversion Date without any action by the Holder and the Holder
will, as of such time, be a stockholder of the Corporation with respect to the
number of shares of Common Stock into which the principal balance evidenced by
this Note (or such portion of the principal balance evidenced by this Note as
the Corporation shall have specified) shall have been converted. The Holder
agrees promptly to surrender this Note for cancellation following mandatory
conversion. Certificates representing the shares of Common Stock issuable by the
Corporation as a result of the mandatory conversion of all or a portion of the
principal balance of the indebtedness evidenced by this Note and all dividends
and other distributions payable with respect to such shares and all accrued but
unpaid interest payable pursuant to the immediately preceding paragraph will be
retained by the Corporation pending surrender of this Note for cancellation. As
promptly as practicable, and in any event within five (5) Business Days after
the surrender of this Note, the Corporation shall deliver or cause to be
delivered, either by personal delivery or by certified or registered mail or by
a recognized overnight courier service, in any such case, properly insured, to
the Holder in accordance with the written instructions of the Holder (i)
certificates representing the number of Conversion Shares to which the Holder
shall be entitled, and (ii) if less than the entire principal amount of
indebtedness evidenced by this Note is being converted, a new promissory note,
in the form of this Note, for the balance of the indebtedness that is not being
so converted.
(d) In connection with the conversion of the indebtedness evidenced
by this Note, no fractions of shares of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Current Market Price per share of Common Stock on the Trading Day on which
such indebtedness evidenced by this Note is deemed to have been converted. If
more than one note shall be surrendered for conversion by the Holder at the same
time, the number of full shares of Common Stock issuable on conversion thereof
shall be computed on the basis of the total amount of indebtedness to be
converted.
SECTION 6. MANDATORY PREPAYMENT. In the case of any Change Event
occurring at any time, at the option of the Holder, the Holder may require the
Corporation to prepay all or a portion of the then outstanding principal amount
of the indebtedness evidenced by this Note. To exercise such right of
prepayment, the Holder must provide the Corporation with a Mandatory Prepayment
Notice at least thirty (30) days prior to the proposed Mandatory Prepayment Date
which Mandatory Prepayment Notice shall specify the portion of the principal
amount of the indebtedness evidenced by this Note (which must be in integral
multiples of One Thousand Dollars ($1,000)) to be prepaid. On the Mandatory
Prepayment Date specified, the Corporation shall prepay the portion of the
principal amount of the indebtedness evidenced by this Note that the Holder has
specified must be prepaid on such date, PLUS accrued interest on such principal
amount to the date of the prepayment. Any prepayment shall be made by cashiers
check or by wire transfer of immediately available funds, in currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts, at such address or to such account, as applicable,
as shall be designated to the Corporation by the Holder.
14
<PAGE> 79
SECTION 7. SUBORDINATION. (a) The Corporation covenants and agrees,
and the Holder likewise covenants and agrees, that no payment shall be made by
the Corporation on account of principal of or interest on this Note, or
otherwise, if there shall have occurred and be continuing, and the Corporation
and the Holder shall have received notice from the holder or holders of, a
default with respect to any Senior Indebtedness (i) permitting the acceleration
thereof and such default is the subject of a judicial proceeding, or (ii) in an
aggregate principal amount of not less than One Million Dollars ($1,000,000)
entitling such holder or holders to compel the acceleration thereof (PROVIDED,
HOWEVER, that in the case of Senior Indebtedness issued pursuant to an
indenture, such notice may be validly given only by the trustee under such
indenture), unless and until such default or Event of Default shall have been
cured or waived or shall have ceased to exist or such notice is withdrawn or
found by a court of competent jurisdiction to be invalid.
(b) Upon any payment by the Corporation or distribution of assets of
the Corporation of any kind or character, whether in cash, property, or
securities, to creditors of the Corporation upon any dissolution or winding up
or liquidation or reorganization of the Corporation, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership, or other similar
proceedings, all amounts due or to become due upon all Senior Indebtedness shall
first be paid in full in money or money's worth, or payment thereof provided
for, before any payment is made on account of the principal of or interest on
this Note and upon such dissolution or winding up or liquidation or
reorganization, any payment by the Corporation, or distribution of assets of the
Corporation of any kind or character, whether in cash, property, or securities,
to which the Holder would be entitled except for the provisions hereof, shall be
paid by the Corporation or by any receiver, trustee in bankruptcy, liquidating
trustee, agent, or other person making such payment or distribution directly to
the holders of Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness,
before any payment or distribution is made to the Holder.
(c) The foregoing notwithstanding, in the event that any payment of
or distribution of assets of the Corporation of any kind or character, whether
in cash, property or securities, prohibited by the foregoing, shall be received
by the Holder before all Senior Indebtedness is paid in full in money or money's
worth, or provision is made for such payment, then and in such event such
payment or distribution shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness (but subject to the power of a
court of competent jurisdiction to make other equitable provision, which shall
have been determined by such court to give effect to the rights conferred herein
upon the Senior Indebtedness and the holders thereof with respect to this Note
or the Holder hereof by a lawful plan or reorganization or readjustment under
applicable bankruptcy law).
15
<PAGE> 80
(d) The holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Holder, without incurring
responsibility to the Holder and without impairing or releasing the obligations
of the Holder to the holders of Senior Indebtedness: (i) change the manner,
place, or terms of payment or change or extend the time of payment of, or renew
or alter Senior Indebtedness, or otherwise amend, in any manner, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; PROVIDED, HOWEVER, that the average
weighted maturity of such Senior Indebtedness shall not be decreased without the
consent of the Holder; (ii) sell, exchange, release, or otherwise deal with any
property pledged, mortgaged, or otherwise securing Senior Indebtedness; (iii)
release any person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Corporation and any other person.
(e) Subject to the payment in full of all amounts then due (whether
by acceleration of the maturity thereof or otherwise) on account of the
principal of, premium, if any, and interest on all Senior Indebtedness at the
time outstanding, the Holder shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions by the Corporation to
the holders of Senior Indebtedness of any cash, property, or securities to which
the Holder would be entitled except for the provisions hereof, and no payments
over pursuant to the provisions hereof to the holders of Senior Indebtedness by
the Holder, shall, as between the Corporation, its creditors other than holders
of Senior Indebtedness, and the Holder, be deemed to be a payment by the
Corporation to or on account of the Senior Indebtedness.
(f) It is understood that the foregoing provisions of this Note are
and are intended solely for the purpose of defining the relative rights of the
Holder on the one hand and the holders of Senior Indebtedness on the other hand.
Nothing contained in this Note is intended to or shall impair, as among the
Corporation, its creditors other than the holders of Senior Indebtedness, and
the Holder, the obligation of the Corporation, which is absolute and
unconditional, to pay to the Holder the principal of and interest on this Note
as and when the same shall become due and payable in accordance with its terms,
or is intended to or shall affect the relative rights of the Holder and
creditors of the Corporation other than the holders of Senior Indebtedness, nor
shall anything herein prevent the Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Note or the Note Purchase
Agreement.
(g) Upon any payment or distribution of assets of the Corporation
referred to herein, the Holder shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation, or reorganization proceedings are pending, or
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent,
or other person making such payment or distribution, delivered to the Holder,
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Corporation, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon, and all other facts pertinent thereto.
16
<PAGE> 81
(h) The Corporation shall give prompt written notice to the Holder
of any fact known to the Corporation that would prohibit the making of any
payment of moneys to or by the Corporation in respect of this Note.
SECTION 8. ACCELERATION. This Note and the indebtedness
evidenced hereby is subject to acceleration under the terms and conditions set
forth in the Note Purchase Agreement.
SECTION 9. NO OPTIONAL PREPAYMENT. This Note and the indebtedness
evidenced hereby shall not be prepaid at the option of the Corporation.
SECTION 10. MISCELLANEOUS. (a) Any notice required by the
provisions of this Note to be given to the Holder or the Corporation shall be
given and deemed received or delivered in accordance with the provisions of
SECTION 10.4 of the Note Purchase Agreement.
(b) In the event of prepayment or conversion of this Note in part
only, a new note or notes for the unpaid or unconverted portion hereof will be
issued in the name or names requested by the Holder upon the cancellation
hereof.
(c) The transfer of this Note is registrable on the books of the
Corporation upon surrender of this Note for registration of transfer at the
offices of the Corporation in Nashville, Tennessee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its attorney duly authorized in
writing, and thereupon one or more new notes of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees. New notes are issuable only in registered form without coupons
in denominations of One Thousand Dollars ($1,000) and any integral multiple
thereof. This Note is exchangeable for a like aggregate principal amount of
notes of a different authorized denomination, as requested by the Holder. No
service charge shall be made for any such registration of transfer or exchange,
but the Corporation may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
(d) Prior to the due presentment of this Note for registration of
transfer, the Corporation and any agent of the Corporation may treat the person
in whose name this Note is registered as the owner hereof for all purposes,
irrespective of whether this Note be overdue, and neither the Corporation nor
any such agent shall be affected by notice to the contrary.
(e) This Note shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be governed by, construed
under, and enforced in accordance with the laws of the State of New York.
(f) The Corporation agrees, to the extent permitted by law, to pay
to the Holder all costs and expenses (including attorneys' fees) incurred by it
in the collection hereof or the enforcement of any right or remedy provided for
herein (including such costs and expenses incurred in connection with a workout
or an insolvency or bankruptcy proceeding).
17
<PAGE> 82
(g) The provisions of the Note Purchase Agreement are hereby
incorporated into this Note by this reference.
IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the date first above written.
CORRECTIONS CORPORATION OF AMERICA,
a Delaware corporation
By:
-------------------------------------
Title:
----------------------------------
ATTEST:
- ---------------
Secretary
18
<PAGE> 83
Exhibit A
---------
[FORM OF MANDATORY CONVERSION NOTICE]
- ----------
- ----------
- ----------
Notice hereby is given that, in accordance with the terms and conditions
of the Note hereinafter described and that certain Note Purchase Agreement,
dated April 5, 1996, between Corrections Corporation of America and
______________, Corrections Corporation of America hereby elects to require
conversion of the 7.5% Convertible, Subordinated Note, due February 28, 2002,
issued by it (the "Note"). The Note to be converted and the principal amount
thereof to be converted are as follows:
Principal Number of
Outstanding Amount to be Shares to
Note Number Principal Amount Converted Be Delivered
- --------------------------------------------------------------------------------
The Mandatory Conversion Date will be .
------------
CORRECTIONS CORPORATION OF AMERICA
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
19
<PAGE> 84
Exhibit B
---------
[FORM OF MANDATORY PREPAYMENT NOTICE]
TO: CORRECTIONS CORPORATION OF AMERICA
---------------
---------------
The undersigned owner of the attached Note hereby gives notice that, in
accordance with the terms and conditions of such Note and that certain Note
Purchase Agreement, dated April 5, 1996, between Corrections Corporation of
America and ___________________ , it hereby exercises its right to require
prepayment of such Note or portion thereof (which is $1,000 or an integral
multiple thereof), PLUS all accrued but unpaid interest with respect to such
principal amount.
The Mandatory Prepayment Date shall be __________________. The principal
amount to be prepaid shall be $ _____________________________.
[Name of Holder]
Dated: By:
--------------- ------------------------------------
Name:
------------------------------
Title:
-----------------------------
20
<PAGE> 85
Exhibit C
---------
[FORM OF OPTIONAL CONVERSION NOTICE]
TO: CORRECTIONS CORPORATION OF AMERICA
------------------
------------------
The undersigned owner of the attached Note hereby gives notice that, in
accordance with the terms and conditions of such Note and the Note Purchase
Agreement, dated April 5, 1996, between Corrections Corporation of America,
______________________, it hereby exercises its right to convert such Note, or
portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Corrections Corporation of America
and directs that the shares issuable and deliverable upon the conversion, and
any notes representing any unconverted principal amount thereof, be issued and
delivered to the registered holder of such Note unless a different name has been
indicated below. If shares or a new note representing unconverted principal are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
[Name of Holder]
Dated: By:
------------------ --------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Principal Amount to be converted (in an
integral multiple of $1,000, if less than
all):
$
-------------------
21
<PAGE> 86
Fill in for registration of shares
of Common Stock and note if to be
issued other than to the
registered Holder.
- -----------------
Name
- -----------------
Address
- -----------------
Please print name and address
(including zip code number)
SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFYING NUMBER
- -----------------
22
