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EXHIBIT 4.16
7.5% CONVERTIBLE SUBORDINATED NOTE
MODIFICATION AGREEMENT
This 7.5% CONVERTIBLE, SUBORDINATED NOTE MODIFICATION AGREEMENT, dated
December 30, 1998 (the "Modification Agreement"), is entered into by and between
Sodexho Alliance, S.A., a French societe anonyme and successor in interest to
Sodexho S.A., a French societe anonyme (the "Purchaser"), and Corrections
Corporation of America, a Tennessee corporation and successor in interest to a
Delaware corporation of the same name (the "Corporation").
W I T N E S S E T H:
WHEREAS, the Corporation and the Purchaser are parties to that certain
Note Purchase Agreement, dated as of April 5, 1996 (the "Note Purchase
Agreement"), pursuant to which the Corporation offered and sold to Purchaser its
7.5% Convertible, Subordinated Note, dated as of April 5, 1996, in the aggregate
principal amount of $20,000,000 (the "7.5% Note");
WHEREAS, the Corporation and CCA Prison Realty Trust, a Maryland real
estate investment trust ("Prison Realty"), have entered into an Amended and
Restated Agreement and Plan of Merger, dated September 29, 1998 (the "Merger
Agreement"), pursuant to which: (i) CCA will merge with and into Prison Realty
Corporation, a Maryland corporation ("New Prison Realty"), with New Prison
Realty as the surviving entity (the "CCA Merger"); and (ii) Prison Realty will
merge with and into New Prison Realty, with New Prison Realty as the surviving
entity (the "Prison Realty Merger") (collectively, the "Merger");
WHEREAS, in connection with the Merger and in order that New Prison
Realty will qualify and operate as a real estate investment trust for federal
income tax purposes under all applicable laws, rules and regulations after
completion of the Merger, immediately prior to completion of the Merger, CCA
will, among other things, (i) sell all of the issued and outstanding capital
stock of certain of its wholly-owned corporate subsidiaries to Correctional
Management Services Corporation, a Tennessee corporation ("CMSC"), and (ii)
sell, transfer, assign and convey all right, title and interest in and to
certain contracts with government entities relating to the management and
operation of correctional and detention facilities by CCA, together with certain
accounts receivable and accounts payable related thereto and certain other net
assets used in connection therewith, to CMSC;
WHEREAS, Purchaser, together with Baron Asset Fund, a Massachusetts
business trust, on behalf of the Baron Asset Fund Series ("Baron"), has entered
into a Stock Purchase Agreement, dated as of even date herewith (the "Stock
Purchase Agreement"), with CMSC, pursuant to which each of Purchaser and Baron
has agreed to purchase one million seven hundred forty-nine thousand five
hundred thirty-two (1,749,532) shares of common stock, $0.01 par value per
share, of CMSC in accordance with the terms and conditions thereof; and
WHEREAS, in connection with the Merger and the Stock Purchase
Agreement, the Purchaser now desires, and the Corporation has agreed, to amend
the 7.5% Note to provide that the
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ability of the Purchaser to effect the conversion of the 7.5% Note is
conditioned upon completion of the Merger, but that, upon completion of the
Merger, the 7.5% Note shall be convertible upon its original terms.
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises, covenants and conditions set forth in this Modification Agreement and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Corporation and the Purchaser hereby agree as follows:
1. Amendment of Section 2. Section 2 of the 7.5% Note is hereby amended
by inserting the following:
"MERGER" means, collectively, the mergers of the Corporation
and CCA Prison Realty Trust, a Maryland real estate investment
trust ("Prison Realty"), with and into Prison Realty
Corporation, a Maryland corporation ("New Prison Realty"),
pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of September 29, 1998, by and among the
Corporation, Prison Realty and New Prison Realty.
"NEW PRISON REALTY OWNERSHIP LIMIT" means, with respect to
shares of New Prison Realty common stock, $0.01 par value per
share (the "New Prison Realty Common Stock"), 9.8% of the
outstanding shares of New Prison Realty Common Stock.
2. Amendment of Section 3(a). The first sentence of Section 3(a) of the
7.5% Note is hereby amended by deleting such sentence from the 7.5% Note in its
entirety, and by substituting in lieu thereof the following:
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; provided, however, that: (i) the
Corporation shall not be entitled to call all or any portion
of this Note and the Holder shall not be entitled to convert
all or a portion of this Note into fully paid and
nonassessable shares of Common Stock unless and until the
Merger is consummated; and (ii) the Holder shall not be
entitled to convert all or a portion of this Note into fully
paid and nonassessable shares of New Prison Realty Common
Stock if such conversion would result in the Holder
beneficially (through the application of Section 544 of the
Internal Revenue Code of 1986, as amended (the "Code"), as
modified by Section 856(h)(1)(B) of the Code) or
constructively (through the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code) owning,
directly or indirectly, shares of New Prison Realty Common
Stock in excess of the New Prison Realty Ownership Limit.
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3. Amendment of Other Documents. All other provisions contained in the
7.5% Note, the Note Purchase Agreement, any exhibits or attachments thereto, and
any documents or instruments referred to therein, shall be hereby amended, where
appropriate and the context permits, to reflect the amendments contained in
Sections 1 and 2 above.
4. Effectiveness of this Modification Agreement. This Modification
Agreement shall become effective immediately upon the effectiveness of the CCA
Merger.
5. Corporate Power and Authorization. The Corporation hereby warrants
and represents to Purchaser that: (i) it has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Modification Agreement; (ii) the execution and delivery by the Corporation of
this Modification Agreement and the consummation of the transactions
contemplated hereby (a) have been duly authorized by all necessary corporate
action on the part of the Corporation and (b) do not and will not require any
authorization, consent, approval or license from or any registration,
qualification, designation, declaration or filing with, any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign; and (iii) this Modification Agreement has been duly and
validly executed and delivered by the Corporation and constitutes the legal,
valid and binding obligation of the Corporation, enforceable in accordance with
its terms.
6. Miscellaneous.
6.1. Amendment to Note Purchase Agreement. The Note Purchase Agreement
is hereby, and shall henceforth be deemed to be, amended, modified and
supplemented in accordance with the provisions hereof, and the
respective rights, duties and obligations under the Note Purchase
Agreement shall hereafter be determined, exercised and enforced under
the Note Purchase Agreement, as amended, subject in all respects to
such amendments, modifications and supplements and all terms and
conditions of this Modification Agreement. Initially capitalized terms
used in this Modification Agreement shall have the meanings ascribed
thereto in the Note Purchase Agreement, as amended hereby, unless
otherwise defined herein.
6.2. Ratification of the Note Purchase Agreement. Except as expressly
set forth in this Modification Agreement, all agreements, covenants,
undertakings, provisions, stipulations and promises contained in the
Note Purchase Agreement and the 7.5% Note are hereby ratified,
re-adopted, approved and confirmed and remain in full force and effect.
6.3. No Implied Waiver. The execution, delivery and performance of this
Modification Agreement shall not, except as expressly provided herein,
constitute a waiver or modification of any provision of, or operate as
a waiver of any right, power or remedy of the Purchaser under, the Note
Purchase Agreement or prejudice any right or remedy that the Purchaser
may have or may have in the future under or in connection with the Note
Purchase Agreement or any instrument or agreement referred to therein.
The Corporation acknowledges and agrees that the representations and
warranties of the Corporation contained in the Note Purchase Agreement
and in this Modification Agreement shall survive the execution and
delivery of this Modification Agreement and the effectiveness hereof.
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6.4. Governing Law. The parties hereby expressly agree that this
Modification Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York. The English
language version of all documents relating to the transactions
contemplated hereby will govern.
6.5. Counterparts; Facsimile Execution. This Modification Agreement may
be executed in counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument. Delivery of an executed counterpart of this Modification
Agreement by facsimile shall be equally as effective as delivery of a
manually executed counterpart. Any party delivering an executed
counterpart of this Modification Agreement by facsimile shall also
deliver a manually executed counterpart, but the failure to deliver a
manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Modification Agreement.
6.6. Successors and Assigns. This Modification Agreement, and all
covenants contained herein, shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
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IN WITNESS WHEREOF, the undersigned have caused this Modification
Agreement to be executed by their duly authorized officers as of the date first
written above.
PURCHASER:
SODEXHO ALLIANCE, S.A.
By: /s/ Xxxx-Xxxxxx Cuny
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Its: Senior Vice President
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CORPORATION:
CORRECTIONS CORPORATION OF AMERICA
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Its: Chief Financial Officer and Secretary
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