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EXHIBIT 10.26
ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
CORRECTIONAL MANAGEMENT SERVICES CORPORATION
AND
PRISON MANAGEMENT SERVICES, INC.
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made and
entered into as of the 1st day of January, 1999, by and between Correctional
Management Services Corporation, a Tennessee corporation (the "Company") and
Prison Management Services, Inc., a Tennessee corporation (the "Service
Company").
RECITALS:
A. The Company is a corporation duly organized and validly existing
under the laws of the State of Tennessee and engaged in the business of
operating and managing correction and detention facilities for both private
prison owners and government entities.
B. The Service Company is a corporation duly organized and validly
existing under the laws of the State of Tennessee and engaged in the business of
operating and managing correction and detention facilities for government
entities.
C. The Company and the Service Company desire that the Company
undertake the duties and responsibilities hereinafter set forth on behalf of and
subject to the supervision of the Board of Directors of the Service Company (the
"Board").
D. The Company also desires to grant to the Service Company the
non-exclusive right to the use of the "Service Xxxx and Trade Name" (as defined
hereinafter) in connection with the performance of such duties;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Company and the Service Company hereby agree as
follows:
1. Duties of the Company.
(a) General. The Company shall perform each of the duties set forth
in this Agreement and shall have the authority to take all actions and to
execute all documents and instruments that it deems necessary or advisable in
connection with the management of the Service Company and the fulfillment of its
duties as set forth herein, subject in each matter to the supervision of the
Board and the investment policies of the Service Company, and, as appropriate,
to the prior approval of the Board.
(b) General Administrative Duties. The Company shall perform, or
supervise the performance of, the necessary administrative functions in the
day-to-day management of the Service Company and its operations, including,
without limitation, internal and external financial reporting, property
accounting, shareholder relations, supervision of stock registrar and transfer
services and
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other necessary services, all in a manner consistent with the Service Company's
current practice, subject to changes approved by the Board.
(c) Agency. The Company shall act as agent of the Service Company
in making, disbursing and collecting the Service Company's funds, paying the
debts and fulfilling the obligations of the Service Company, handling,
prosecuting and settling any claims of, or against, the Service Company, the
Board, holders of the Service Company's securities or the Service Company's
representatives or properties.
(d) Office and Personnel. The Company shall maintain on behalf of
the Service Company such office space, equipment and personnel, including
officers and employees of the Company, as it deems necessary or advisable in
connection with the management and operations of the correctional and detention
facilities managed by the Service Company and the fulfillment of the Company's
duties as set forth herein.
(e) Bank Accounts. The Company may establish one or more bank
accounts in the name of each of the Service Company or its own name and may
deposit into and disburse from such accounts any monies on behalf of the Service
Company, and the Company shall as requested by the Board render appropriate
accountings to the Board of such deposits and disbursements.
(f) Books And Records. The Company shall maintain all accounting
and reporting systems, books and records of the Service Company, including books
of account and records relating to services performed by the Company, in form
and quality at least equivalent to the Service Company's current practice, and
shall make such books and records accessible for inspection by the Board at any
time during ordinary business hours.
(g) Reports, Etc. The Company shall prepare, or cause to be
prepared, all reports and other communications to the holders of the Service
Company's securities, including, without limitation, proxy solicitation
materials, and all tax returns and any other reports or other materials to be
filed with any governmental body or agency, and shall prepare, or cause to be
prepared, all materials and data necessary to complete such reports and other
materials including, without limitation, an annual audit of the Service
Company's books of account.
(h) Financing And Securities Issuances. The Company shall provide
services to the Service Company in connection with negotiations by the Service
Company with investment banking firms, securities brokers or dealers and other
institutions or investors in connection with the sale of securities of the
Service Company and the securing of loans for the Service Company, provided,
however, that the Company shall not share in any fees paid by the Service
Company to third parties for such services.
(i) Additional Services. The Company shall perform such additional
services as from time to time may be requested by the Board and agreed to by the
Company, provided, however,
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that nothing herein shall require the Company to agree to any such request or to
perform any additional services to which it has not previously agreed.
(j) License. The Company shall enter into a separate agreement with
the Service Company in which the Company shall grant to the Service Company the
non-exclusive right to the use of the service xxxx and trade name "Corrections
Corporation of America", its abbreviation "CCA", and the logo and/or designs
incorporating the same with respect to, and only with respect to, the correction
and detention facilities operated by the Company.
2. Compensation.
(a) Management Fee. For and in consideration of the Company's
performance of its duties under this Agreement, and the granting of the license
described in subparagraph (j) of Section 1, the Service Company shall pay to the
Company, no later then the tenth (10th) day following the first (1st) day of
each calendar quarter, a management fee equal to two hundred fifty thousand
dollars ($250,000) per month. Such management fee shall be escalated annually at
the rate of four percent (4.0%) per annum.
(b) Payment for Additional Services. If the Board shall request the
Company to render services to the Service Company other than those required to
be rendered by the Company hereunder, such additional services, if performed,
shall be compensated separately on terms to be agreed upon from time to time
between the Company and the Service Company.
(c) Reimbursable Expenses. If the Company pays on behalf of the
Service Company interest expense, regulatory filing fees, legal and accounting
fees or other similar expenses, it shall be entitled to reimbursement by the
Service Company therefor.
3. Termination; Term.
(a) Termination. Notwithstanding any other provision to the
contrary, this Agreement may be terminated with or without cause by either party
upon 30 days written notice to the other. In the event of termination of this
Agreement, the Company will cooperate with the Service Company and take all
reasonable steps requested to assist the Board in making an orderly transition
of the management function.
(b) Term. This Agreement shall continue in force for an initial term
beginning on the date hereof and ending on December 31, 2004, and shall be
renewable upon agreement of the Company and the Service Company annually
thereafter.
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4. Miscellaneous Provisions.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. Any
modification or amendment of this Agreement shall be in writing executed by each
of the parties.
(b) Assignment. This Agreement may not be assigned by either party
except with the written consent of the other.
(c) Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
that term or provision to persons or circumstances other than those as to which
the term or provision is held invalid or unenforceable, shall not be affected
thereby, and each term or provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
(d) Notices. Any notices and other communications to be given by any
party hereunder shall be in writing delivered at the address of the respective
party set forth on the signature page hereof, or at such other address as a
party shall have specified to the other party in writing as the address for
notices hereunder. Any such notice or other communication shall be deemed to
have been given when personally delivered or one business day after being
forwarded by overnight courier or five days after being sent by registered or
certified United States mail, postage prepaid.
(e) Headings. The section headings used herein have been inserted
for convenience of reference only and shall not be considered in interpreting
this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee, without giving effect to
the principles of conflict of laws thereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by each of the parties hereto on separate counterparts; all
such counterparts shall together constitute but one and the same instrument.
[signatures on following page]
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IN WITNESS WHEREOF, the Company and the Service Company have executed
this Agreement as of the day and year first above written.
COMPANY:
CORRECTIONAL MANAGEMENT SERVICES
CORPORATION, a Tennessee corporation
By: /s/ Doctor X. Xxxxxx
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Its: Chief Executive Officer
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SERVICE COMPANY:
PRISON MANAGEMENT SERVICES, INC., a
Tennessee corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Its: Chief Executive Officer
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