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EXHIBIT 10.158
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LETTER OF CREDIT FACILITY AGREEMENT
dated as of September 6, 1996,
by and among
Corrections Corporation of America,
as Borrower
and
FIRST UNION NATIONAL BANK OF TENNESSEE
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Issuing Lender
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
LETTER OF CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.1. L/C Commitment . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2. Procedure for Issuance of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.3. Commissions and Other Charges . . . . . . . . . . . . . 4
SECTION 2.4. Reimbursement Obligation of the Borrower . . . . . . . . 4
SECTION 2.5. Obligations Absolute . . . . . . . . . . . . . . . . . . 4
SECTION 2.6. Effect of Application . . . . . . . . . . . . . . . . . 5
SECTION 2.7. Existing Letter of Credit. . . . . . . . . . . . . . . . 5
ARTICLE III
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.1. Manner of Payment . . . . . . . . . . . . . . . . . . . 5
SECTION 3.2. Increased Costs . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.3. Capital Requirements . . . . . . . . . . . . . . . . . . 6
SECTION 3.4. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.5. Collateral. . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND ISSUING LETTERS OF CREDIT . . . . . . . 8
SECTION 4.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.2. Conditions to Closing and Initial Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.3. Conditions to All Letters of Credit. . . . . . . . . . . 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER . . . . . . . . . . . . . . 9
SECTION 5.1. Representations and Warranties . . . . . . . . . . . . . 9
SECTION 5.2. Survival of Representations and
Warranties, Etc . . . . . . . . . . . . . . . . . . . . 9
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ARTICLE VI
FINANCIAL INFORMATION AND NOTICES . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VII
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VIII
DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 8.1. Events of Default . . . . . . . . . . . . . . . . . . . 10
SECTION 8.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 8.3. Rights and Remedies Cumulative; Non-
Waiver; etc. . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.2. Expenses; Indemnity . . . . . . . . . . . . . . . . . . 14
SECTION 9.3. Set-off . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 9.4. Governing Law. . . . . . . . . . . . . . . . . . . . . 15
SECTION 9.5. Consent to Jurisdiction. . . . . . . . . . . . . . . . 15
SECTION 9.6. Binding Arbitration; Waiver of Jury
Trial. . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.7. Reversal of Payments . . . . . . . . . . . . . . . . . 17
SECTION 9.8. Injunctive Relief . . . . . . . . . . . . . . . . . . . 17
SECTION 9.9. Accounting Matters . . . . . . . . . . . . . . . . . . 17
SECTION 9.10. Successors and Assigns . . . . . . . . . . . . . . . . 18
SECTION 9.11. Amendments, Waivers and Consents . . . . . . . . . . . 18
SECTION 9.12. Performance of Duties . . . . . . . . . . . . . . . . . 18
SECTION 9.13. All Powers Coupled with Interest . . . . . . . . . . . 18
SECTION 9.14. Survival of Indemnities . . . . . . . . . . . . . . . . 18
SECTION 9.15. Titles and Captions . . . . . . . . . . . . . . . . . . 18
SECTION 9.16. Severability of Provisions . . . . . . . . . . . . . . 19
SECTION 9.17. Counterparts . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.18. Term of Agreement . . . . . . . . . . . . . . . . . . . 19
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LETTER OF CREDIT FACILITY AGREEMENT, dated as of the 6th day of
September, 1996, by and among Corrections Corporation of America, a corporation
organized under the laws of Delaware (the "Borrower"), FIRST UNION NATIONAL
BANK OF TENNESSEE and FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(collectively, the "Issuing Lender").
STATEMENT OF PURPOSE
The Borrower has entered into the Credit Agreement of even date (as
amended or supplemented from time to time, the "Revolving Credit Agreement") by
and among the Borrower, the lenders who are or may become party thereto (the
"Revolving Credit Lenders") and First Union National Bank of Tennessee, as
Administrative Agent for the Revolving Credit Lenders, pursuant to which the
Revolving Credit Lenders have agreed to extend certain credit facilities to the
Borrower in the aggregate principal amount of up to $170,000,000.
The Borrower has requested, and the Issuing Lender has agreed, to
extend a letter of credit facility to the Borrower on the terms and conditions
of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Revolving Credit
Agreement. In addition, the following terms when used in this Agreement shall
have the meanings assigned to them below:
"Agreement" means this Letter of Credit Agreement, as amended or
supplemented from time to time.
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Borrower" means Corrections Corporation of America in its capacity as
borrower hereunder.
"Closing Date" means the date of this Agreement.
"Default" means any of the events specified in Section 8.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
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"Event of Default" means any of the events specified in Section 8.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Letters of Credit" means the First Union Letters of Credit
as defined in the Revolving Credit Agreement.
"Issuing Lender" means First Union National Bank of Tennessee or First
Union National Bank of North Carolina, each in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C Facility" means the letter of credit facility established
pursuant to Article II hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 2.4.
"Letter of Credit Termination Date" shall mean August __, 1999 or such
earlier date upon which the Credit Facility under the Revolving Credit
Agreement has been terminated.
"Letters of Credit" shall have the meaning assigned thereto in Section
2.1.
"Other Taxes" shall have the meaning assigned thereto in Section
3.4(b).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 2.4 for amounts drawn under
Letters of Credit.
"Taxes" shall have the meaning assigned thereto in Section 3.4(a).
"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina.
SECTION 1.2. Miscellaneous
(a) General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Nashville time" shall refer
to
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the applicable time of day in Nashville, Tennessee. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(b) Revolving Credit Agreement. The terms and conditions of the
Revolving Credit Agreement, a copy of which is attached hereto as Exhibit A, are
hereby incorporated herein by this reference as if fully set forth herein and
such terms and conditions shall continue irrespective of any termination
thereof.
ARTICLE II
LETTER OF CREDIT FACILITY
SECTION 2.1. L/C Commitment. Subject to the terms and conditions
hereof, the Issuing Lender agrees to issue standby letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day from the Closing
Date through but not including the Letter of Credit Termination Date in such
form as may be approved from time to time by the Issuing Lender; provided, that
the Issuing Lender shall have no obligation to issue any Letter of Credit if,
after giving effect to such issuance, the L/C Obligations (exluding the L/C
Obligations with respect to the Existing Letters of Credit) would exceed
$2,500,000. Each Letter of Credit shall (i) be denominated in Dollars in an
amount less than $1,000,000, (ii) be a standby letter of credit issued to
support obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, incurred in the ordinary course of business, (iii) expire on a date
satisfactory to the Issuing Lender, which date shall be no later than the Letter
of Credit Termination Date and (iv) be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the State of North Carolina.
The Issuing Lender shall not at any time be obligated to issue any Letter of
Credit hereunder if such issuance would conflict with, or cause the Issuing
Lender to exceed any limits imposed by, any Applicable Law. References herein
to "issue" and derivations thereof with respect to Letters of Credit shall also
include extensions or modifications of any existing Letters of Credit, unless
the context otherwise requires.
SECTION 2.2. Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender an Application therefor, completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 2.1 and Article IV hereof, promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
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of the Application therefor and all such other certificates, documents and
other papers and information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by
the Issuing Lender and the Borrower. The Issuing Lender shall furnish to the
Borrower a copy of such Letter of Credit promptly following the issuance of
such Letter of Credit.
SECTION 2.3. Commissions and Other Charges.
(a) The Borrower shall pay to the Issuing Lender, a letter of credit
fee with respect to each Letter of Credit in an amount equal to the greater of
(i) the product of (A) a per annum fee equal to the Applicable Margin in effect
with respect to LIBOR Rate Loans as set forth in Section 4.1(c) of the Revolving
Credit Agreement and (B) the face amount of such Letter of Credit or (ii) the
minimum fee required in accordance the Issuing Lender's standard policy in
connection with standby letters of credit. Such fee shall be payable quarterly
in arrears on the last Business Day of each fiscal quarter of the Borrower and
on the Letter of Credit Termination Date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
SECTION 2.4. Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender in lawful
money of the United States and in immediately available funds. Interest shall
be payable on any and all amounts remaining unpaid by the Borrower under this
Article II from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue
under the Revolving Credit Agreement.
SECTION 2.5. Obligations Absolute. The Borrower's obligations under
this Article II (including without limitation the Reimbursement Obligation)
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit. The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 2.4 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute
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between or among the Borrower and any beneficiary of any Letter of Credit or
any other party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such Letter of Credit or
any such transferee. The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC
shall be binding on the Borrower and shall not result in any liability of the
Issuing Lender to the Borrower. The responsibility of the Issuing Lender to
the Borrower in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
SECTION 2.6. Effect of Application. To the extent that any provision
of any Application related to any Letter of Credit is inconsistent with the
provisions of this Article II, the provisions of this Article II shall apply.
SECTION 2.7. Existing Letters of Credit. As of the Closing Date, the
Existing Letters of Credit shall be deemed to be a Letters of Credit issued
pursuant to and subject to the terms and conditions of this Agreement.
ARTICLE III
GENERAL PROVISIONS
SECTION 3.1. Manner of Payment. Each payment by the Borrower on
account of any fee, commission or other amounts (including the Reimbursement
Obligation) payable to the Issuing Lender under this Agreement shall be made not
later than 2:00 p.m. (Nashville time) on the date specified for payment under
this Agreement to the Lender in Dollars, in immediately available funds and
shall be made without any set-off, counterclaim or deduction whatsoever. Any
payment received after such time but before 3:00 p.m. (Nashville time) on such
day shall be deemed a payment on such date for the purposes of Section 8.1, but
for all other purposes shall be deemed to have been made on the next succeeding
Business Day. Any payment received after 3:00 p.m. (Nashville time) shall be
deemed to have been made on the next succeeding Business Day for all purposes.
SECTION 3.2. Increased Costs. If, after the date hereof, the
introduction of, or any change in, any Applicable Law, or in the interpretation
or administration thereof by any Governmental
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Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Issuing Lender with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject the Issuing Lender to any tax, duty or other
charge with respect to any Letter of Credit or Application or shall change the
basis of taxation of payments to the Issuing Lender of the principal of or
interest on any Letter of Credit or Application or any other amounts due under
this Agreement in respect thereof (except for changes in the rate of tax on the
overall net income of the Lender imposed by the jurisdiction in which the
Issuing Lender is organized or is or should be qualified to do business); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by the Issuing Lender or shall impose on the Issuing Lender any other
condition affecting any Letter of Credit or Application;
and the result of any of the foregoing is to increase the costs to the Issuing
Lender of issuing Letters of Credit or to reduce the yield or amount of any sum
received or receivable by the Issuing Lender under this Agreement, then the
Issuing Lender shall promptly notify the Borrower of such fact and demand
compensation therefor and, within fifteen (15) days after such notice by the
Issuing Lender, the Borrower shall pay to the Issuing Lender such additional
amount or amounts as will compensate the Issuing Lender for such increased cost
or reduction. The Issuing Lender will promptly notify the Borrower of any
event of which it has knowledge which will entitle the Issuing Lender to
compensation pursuant to this Section 3.2; provided, that the Issuing Lender
shall incur no liability whatsoever to the Borrower in the event it fails to do
so. A certificate of the Issuing Lender setting forth the basis for
determining such amount or amounts necessary to compensate the Issuing Lender
shall be forwarded to the Borrower and shall be conclusively presumed to be
correct save for manifest error.
SECTION 3.3. Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, the Issuing Lender or any corporation controlling the Issuing Lender as a
consequence of, or with reference to the commitments of this type, below the
rate which the Issuing Lender or such other corporation could have achieved but
for such introduction, change or compliance, then within five (5) Business Days
after written demand by the Issuing Lender, the Borrower shall
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pay to the Lender from time to time as specified by the Issuing Lender
additional amounts sufficient to compensate the Issuing Lender or other
corporation for such reduction. A certificate as to such amounts submitted to
the Borrower by the Issuing Lender, shall, in the absence of manifest error, be
presumed to be correct and binding for all purposes.
SECTION 3.4. Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Letters of Credit shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, income and franchise taxes imposed by the jurisdiction under the
laws of which the Issuing Lender is organized or is or should be qualified to
do business or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being herein
after referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Letter of Credit, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.4) the Issuing Lender receives
an amount equal to the amount such party would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (iv) the Borrower shall
deliver to the Issuing Lender evidence of such payment to the relevant taxing
authority or other authority in the manner provided in Section 3.4(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Letters of Credit or the perfection of any rights or security interest in
respect thereto (hereinafter referred to as "Other Taxes").
(c) Indemnity. The Borrower shall indemnify the Issuing Lender for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.4) paid by the Issuing Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be made within thirty (30) days from the date the Issuing
Lender makes written demand therefor.
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(d) Evidence of Payment. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrower shall furnish to the Issuing
Lender the original or a certified copy of a receipt evidencing payment thereof
or other evidence of payment satisfactory to the Issuing Lender.
(e) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.4 shall survive the payment in full of the
L/C Obligations and the termination of the L/C Facility.
SECTION 3.5. Collateral. The L/C Obligations shall be guaranteed and
secured by the Loan Documents executed in connection with the Revolving Credit
Agreement.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND ISSUING LETTERS OF CREDIT
SECTION 4.1. Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ at 10:00 a.m. on September 6, 1996, or on such other date as the
parties hereto shall mutually agree.
SECTION 4.2. Conditions to Closing and Initial Letters of Credit. The
obligation of the Issuing Lender to close this Agreement and to issue the
initial Letter of Credit is subject to the satisfaction of each of the
conditions set forth in Section 5.2 of the Revolving Credit Agreement.
SECTION 4.3. Conditions to All Letters of Credit. The obligations of
the Issuing Lender to issue any Letter of Credit is subject to the satisfaction
of the following conditions precedent on the relevant issuance date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article V shall be true and
correct on and as of such issuance date with the same effect as if made on and
as of such date.
(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing hereunder on the issuance date with respect to
such Letter of Credit or after giving affect to such Letters of Credit on such
date.
(c) Officer's Compliance Certificate; Additional Documents.
The Issuing Lender shall have received the financial statements and Officer's
Compliance Certificate required pursuant to Sections 7.1 and 7.2 respectively
of the Revolving Credit Agreement and each additional document, instrument,
legal opinion or other item of information reasonably requested by it.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 5.1. Representations and Warranties. To induce the Issuing
Lender to enter into this Agreement and to issue the Letters of Credit, the
Borrower hereby represents and warrants to the Issuing Lender that each and
every representation and warranty of the Borrower set forth in Article VI of the
Revolving Credit Agreement is true, correct and complete.
SECTION 5.2. Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article V and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Issuing Lender or any issuance hereunder.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
Until all the L/C Obligations have been finally and indefeasibly paid
and satisfied in full and the L/C Facility terminated, the Borrower will
furnish or cause to be furnished to the Issuing Lender each and every financial
statement, certificate or other document or instrument required to be delivered
to the Lenders pursuant to Article VII of the Revolving Credit Agreement.
ARTICLE VII
COVENANTS
Until all of the L/C Obligations have been finally and indefeasibly
paid and satisfied in full and the L/C Facility terminated, the Borrower will,
and will cause each of its Subsidiaries to comply with each and every covenant
and agreement set forth in Articles VIII, IX and X of the Revolving Credit
Agreement.
ARTICLE VIII
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DEFAULT AND REMEDIES
SECTION 8.1. Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of the principal of the
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on the Reimbursement Obligation or the payment of any other obligation
hereunder, and such default shall continue unremedied for five (5) Business
Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Borrower or any of its Subsidiaries under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Sections 7.4(e) or Articles IX or X of the Revolving Credit Agreement, as
incorporated herein.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
8.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Issuing Lender.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement and such amount is not paid within five (5)
Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Reimbursement Obligation)
the aggregate outstanding amount of which is in excess of $1,000,000 beyond the
period of grace if any, provided in the instrument or agreement under which such
Debt was created, or (ii) default in the observance or performance of any other
agreement or condition relating to any Debt (other than the Reimbursement
Obligation) the aggregate outstanding amount of which is in excess of $1,000,000
or contained in any instrument or agreement evidencing, securing or relating
thereto or any other
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event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such Debt
(or a trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, any such Debt to become due prior to its stated
maturity (any applicable grace period having expired).
(h) Other Cross-Defaults. The Borrower or any of its Subsidiaries
shall default in the payment when due, or in the performance or observance, of
any obligation or condition of any Material Contract unless, but only as long
as, the existence of any such default is being contested by the Borrower or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of the Borrower or such
Subsidiary to the extent required by GAAP.
(i) Change in Control. (a) Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of more
than twenty-five percent (25%) of the voting power of the Borrower entitled to
vote in the election of members of the board of directors of the Borrower or
there shall have occurred under any indenture or other instrument evidencing any
Debt in excess of $1,000,000 any "change in control" (as defined in such
indenture or other evidence of Debt) obligating the Borrower to repurchase,
redeem or repay all or any part of the Debt or capital stock provided for
therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their
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respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive days,
or an order granting the relief requested in such case or proceeding
(including, but not limited to, an order for relief under such federal
bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any provision of this Agreement or of any
other Loan Document shall for any reason cease to be valid and binding on the
Borrower or Subsidiary party thereto or any such Person shall so state in
writing, or this Agreement or any other Loan Document shall for any reason cease
to create a valid and perfected first priority Lien on, or security interest in,
any of the collateral purported to be covered thereby, in each case other than
in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following
events: (i) the Borrower or any ERISA Affiliate fails to make full payment
when due of all amounts which, under the provisions of any Pension Plan or
Section 412 of the Code, the Borrower or any ERISA Affiliate is required to
pay as contributions thereto, (ii) an accumulated funding deficiency in excess
of $1,000,000 occurs or exists, whether or not waived, with respect to any
Pension Plan, or (iii) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $1,000,000.
(n) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of such judgments to exceed $1,000,000 in any Fiscal
Year shall be entered against the Borrower or any of its Subsidiaries by any
court and such judgment or order shall continue undischarged or unstayed for a
period of thirty (30) days.
(o) Revolving Credit Agreement. An Event of Default shall have
occurred and be continuing under the Revolving Credit Agreement.
SECTION 8.2. Remedies. Upon the occurrence of an Event of Default, the
Issuing Lender may, by notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Reimbursement Obligations at the time outstanding, and all
other amounts owed to the Issuing Lender under this Agreement or any of the
other Loan Documents (including, without limitation, all L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder), to be forthwith due and
payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the L/C Facility and any right of the
Borrower to request
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Letters of Credit hereunder; provided, that upon the occurrence of an Event of
Default specified in Section 8.1(j) or (k), the L/C Facility shall be
automatically terminated and all obligations hereunder shall automatically
become due and payable.
(b) Collateral Account. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Issuing Lender an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Issuing Lender to the payment of drafts drawn under such Letters of Credit, and
the unused portion thereof after all such Letters of Credit shall have expired
or been fully drawn upon, if any, shall be applied to repay the other
obligations due hereunder. After all such Letters of Credit shall have expired
or been fully drawn upon, the Reimbursement Obligation shall have been satisfied
and all other obligations hereunder shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower.
(c) Rights of Collection. Exercise all of its other rights and
remedies under this Agreement, the other Loan Documents and Applicable Law, in
order to satisfy all of the Borrower's obligations hereunder.
SECTION 8.3. Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Issuing Lender set forth in this
Agreement is not intended to be exhaustive and the exercise by the Issuing
Lender of any right or remedy shall not preclude the exercise of any other
rights or remedies, all of which shall be cumulative, and shall be in addition
to any other right or remedy given hereunder or under the Loan Documents or that
may now or hereafter exist in law or in equity or by suit or otherwise. No
delay or failure to take action on the part of the Issuing Lender in exercising
any right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude other
or further exercise thereof or the exercise of any other right, power or
privilege or shall be construed to be a waiver of any Event of Default. No
course of dealing between the Borrower, the Issuing Lender or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or any of the other Loan Documents or to constitute
a waiver of any Event of Default.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to
be received by a party hereto (i) on the date of delivery if delivered by hand
or sent by telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the
date sent by certified mail, return receipt requested. A telephonic notice to
the Issuing Lender as understood by the Issuing Lender will be deemed to be the
controlling and proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: Corrections Corporation of America
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇ and Bartholemew
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Issuing Lender:First Union National Bank
of Tennessee
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.2. Expenses; Indemnity. The Borrower will pay all
out-of-pocket expenses of the Issuing Lender in connection with: (a) the
preparation, execution and delivery of this Agree-
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ment and each other Loan Document, whenever the same shall be executed and
delivered, including without limitation all out-of-pocket due diligence
expenses and reasonable fees and disbursements of counsel for the Issuing
Lender, (b) the preparation, execution and delivery of any waiver, amendment or
consent by the Issuing Lender relating to this Agreement or any other Loan
Document, including without limitation reasonable fees and disbursements of
counsel for the Issuing Lender, (c) the administration and enforcement of any
rights and remedies of the Issuing Lender under the L/C Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the Issuing
Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (d) defend, indemnify
and hold harmless the Issuing Lender, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Issuing
Lender is a party thereto) and the prosecution and defense thereof, arising
out of or in any way connected with the Agreement, any other Loan Document or
the Letters of Credit, including without limitation reasonable attorney's and
consultant's fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 9.3. Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Issuing Lender and any assignee or participant of the Issuing
Lender are hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Issuing Lender, or
any such assignee or participant to or for the credit or the account of the
Borrower against and on account of the obligations due hereunder irrespective of
whether or not (a) the Issuing Lender shall have made any demand under this
Agreement or any of the other Loan Documents or (b) the Issuing Lender shall
have declared any or all of the obligations hereunder to be due and payable as
permitted by Section 8.2 and although such obligations shall be contingent or
unmatured.
SECTION 9.4. Governing Law. This Agreement, unless otherwise expressly
set forth therein, shall be governed by, construed and enforced in accordance
with the laws of the State of North Carolina, without reference to the conflicts
or choice of law principles thereof.
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SECTION 9.5. Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement or the Letters of
Credit, any rights or obligations hereunder or thereunder, or the performance of
such rights and obligations. The Borrower hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by the Issuing Lender in connection with this Agreement or
any Letter of Credit, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its property,
in the manner specified in Section 9.1. Nothing in this Section 9.5 shall
affect the right of the Issuing Lender to serve legal process in any other
manner permitted by Applicable Law or affect the right of the Issuing Lender to
bring any action or proceeding against the Borrower or its properties in the
courts of any other jurisdictions.
SECTION 9.6. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Letters of Credit
or any other Loan Documents ("Disputes"), between or among parties to the
Letters of Credit or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a
party does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from Loan Documents executed in the
future, or claims concerning any aspect of the past, present or future
relationships arising out or connected with the Loan Documents. Arbitration
shall be conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, North Carolina. The expedited procedures set forth in
Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less
than $1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to
any Hedging Agreement that is a Loan Document.
(B) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ISSUING LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN
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CONNECTION WITH THIS AGREEMENT, THE LETTERS OF CREDIT OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property, collection of rents and
set off, (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and in
filing an involuntary bankruptcy proceeding, and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.
SECTION 9.7. Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Issuing Lender or the Issuing Lender receives any
payment or proceeds of the collateral which payments or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds repaid, the obligations
hereunder or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or proceeds had not been
received by the Issuing Lender.
SECTION 9.8. Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Issuing Lender to the
contrary agreed to by the Borrower, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Issuing Lender shall have amended this Agreement to the extent necessary to
reflect any such
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changes in the financial covenants and other terms and conditions of this
Agreement.
SECTION 9.9. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Issuing Lender, and their
respective successors and assigns, except that the Borrower shall not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Issuing Lender.
SECTION 9.10. Amendments, Waivers and Consents. Any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived by the Issuing Lender, and any consent given by the
Issuing Lender, if, but only if, such amendment, waiver or consent is in
writing signed by the Issuing Lender and, in the case of an amendment, signed
by the Borrower.
SECTION 9.11. Performance of Duties. The Borrower's obligations
under this Agreement and each of the Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 9.12. All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Issuing Lender and any Persons
designated by the Issuing Lender pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the obligations hereunder remain unpaid
or unsatisfied or the L/C Facility has not been terminated.
SECTION 9.13. Survival of Indemnities. Notwithstanding any
termination of this Agreement, the indemnities to which the Issuing Lender are
entitled under the provisions of this Article IX and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Issuing Lender against events arising after such
termination as well as before.
SECTION 9.14. Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 9.15. Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 9.16. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 9.17. Term of Agreement. This Agreement shall remain in
effect from the Closing Date through and including the date upon which all
obligations hereunder shall have been indefeasibly and irrevocably paid and
satisfied in full. No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] CORRECTIONS CORPORATION OF AMERICA
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
FIRST UNION NATIONAL BANK OF TENNESSEE
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
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