Exhibit 10.2
MASTER LEASE AGREEMENT
Dated August 14, 2001
between
MUNICIPAL CORRECTIONS FINANCE, L.P.,
as Landlord
and
CORNELL COMPANIES, INC.,
as Tenant
CERTAIN OF THE RIGHT, TITLE AND INTEREST OF LANDLORD IN AND TO THIS LEASE AND
THE TOTAL RENT DUE AND TO BECOME DUE HEREUNDER HAVE BEEN ASSIGNED AS COLLATERAL
SECURITY TO, AND ARE SUBJECT TO A FIRST PRIORITY SECURITY INTEREST IN FAVOR OF,
THE CHASE MANHATTAN BANK, AS INDENTURE TRUSTEE AND SECURITIES INTERMEDIARY UNDER
AN INDENTURE DATED AS OF AUGUST 1, 2001, BETWEEN SAID INDENTURE TRUSTEE, AS
SECURED PARTY, AND LANDLORD, AS ISSUER. SEE SECTION 1 OF ARTICLE XIV HEREOF FOR
INFORMATION CONCERNING THE RIGHTS OF THE ORIGINAL HOLDER AND THE HOLDERS OF THE
VARIOUS COUNTERPARTS HEREOF
TABLE OF CONTENTS
Page
ARTICLE I PREMISES............................................................1
1. Premises...............................................................1
2. Subleased Premises.....................................................1
ARTICLE II TERM...............................................................2
1. Term...................................................................2
2. Extension Option.......................................................2
ARTICLE III RENT..............................................................3
1. Base Rent..............................................................3
2. Security Deposit.......................................................4
3. Overdue Rate...........................................................5
4. Manner of Payments.....................................................5
5. Net Lease..............................................................6
ARTICLE IV FINANCIAL STATEMENTS...............................................6
1. Quarterly Financial Statements.........................................6
2. Quarterly Compliance Certificate.......................................7
3. Annual Financial Statements............................................7
4. Monthly Financial Statements...........................................7
5. Monthly Compliance Certificate.........................................7
6. GAAP...................................................................8
7. Budgets................................................................8
8. Standard Operating Procedure Audit Reports.............................8
9. SEC Filings............................................................8
10. Inspection Rights.....................................................8
ARTICLE V USE; TRANSFER RESTRICTIONS; CONDITION AND
QUIET ENJOYMENT..............................................9
1. Use....................................................................9
2. Transfer Restrictions..................................................9
3. Condition..............................................................9
4. Quiet Enjoyment.......................................................10
ARTICLE VI TAXES, INSURANCE AND UTILITIES....................................10
1. Property Taxes........................................................10
2. Insurance.............................................................10
3. Utilities.............................................................13
ARTICLE VII INDEMNITY AND WAIVER OF SUBROGATION..............................13
1. Indemnity.............................................................13
2. Waiver of Subrogation Rights..........................................14
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Page
ARTICLE VIII MAINTENANCE; CONSTRUCTION, ALTERATION
AND DEMOLITION AND FIXTURES.................................14
1. Maintenance...........................................................14
2. Construction, Alteration, Demolition..................................14
3. Mechanics' Liens......................................................15
4. Fixtures..............................................................15
ARTICLE IX ASSIGNMENT AND SUBLETTING.........................................15
1. Sublease or Assignment by Tenant......................................15
2. Assignment by Landlord................................................16
ARTICLE X CONDEMNATION AND CASUALTY..........................................17
1. Event of Loss.........................................................17
2. Tenant's Obligation to Restore or Rebuild.............................17
3. Net Proceeds Disbursements............................................18
4. Purchase of Premises and Termination of Lease.........................18
5. Rebuild...............................................................19
6. Partial Casualty or Condemnation......................................19
7. Certifications by Tenant..............................................20
ARTICLE XI ENVIRONMENTAL MATTERS.............................................20
1. Certain Definitions...................................................20
2. Environmental Covenants...............................................23
3. Environmental Indemnity...............................................25
ARTICLE XII DEFAULT AND REMEDIES.............................................27
1. Base Rent Payment Default.............................................27
2. Security Deposit Payment Default......................................27
3. Purchase Price Payment Default........................................27
4. Bankruptcy Default....................................................27
5. Other Default.........................................................27
6. Remedies for Payment Default..........................................28
7. Remedies for Other Default............................................29
8. Remedies Exclusive....................................................29
9. Unavoidable Default or Delay; Waiver..................................29
10. Waiver...............................................................29
ARTICLE XIII EXPIRATION AND TERMINATION......................................29
1. Tenant's Duty to Surrender............................................29
2. Holding Over..........................................................30
ARTICLE XIV LANDLORD'S MORTGAGEE.............................................30
1. Landlord's Mortgagee..................................................30
2. Cure Rights for Landlord Default......................................30
3. Estoppel Certificate or Three-Party Agreement.........................31
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Page
ARTICLE XV CONSTRUCTION PROJECTS.............................................31
1. Construction Projects.................................................31
2. Plans and Specifications..............................................31
3. Construction Requirements.............................................32
4. Requests for Advance..................................................33
5. Completion Certificate................................................34
ARTICLE XVI MISCELLANEOUS PROVISIONS.........................................34
1. Attorneys' Fees and Other Expenses....................................34
2. Notice................................................................34
3. Limitation of Liability...............................................35
4. Prior Agreements Superseded; Entire Agreement; Amendment..............36
5. Time of the Essence...................................................36
6. Counterparts..........................................................36
7. Brokerage.............................................................36
8. Successors and Assigns................................................36
9. Memoranda of Lease; Further Assurances................................36
10. Governing Law; Legal Interpretation..................................36
11. Estoppel Certificates................................................36
12. Negation of Partnership..............................................37
13. Inspection Rights....................................................37
14. Lease Characterization...............................................37
15. No Petition..........................................................37
16. Landlord Acting through Administrator................................38
17. Provident's Charitable Activities and Programs on the Premises.......38
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EXHIBITS AND SCHEDULES
Exhibit A Total Base Rent by Month
Exhibit B Total Base Rent by Month Broken Out by Premises
Exhibit C Definition of EBITDAR
Exhibit D Form of Refund Certificate
Exhibit E Compliance Certificate
Exhibit F Determination of Purchase Price
Exhibit G Form of Requisition For Renewal Fund
Schedule A - Schedule A to Requisition No.____
Exhibit H Form of Completion Certificate for Renewal Fund
Exhibit I Form of Request for Advance from Construction Account
Schedule A - Schedule A to Request for Advance No. _____
Schedule B - Affidavit and Partial Waiver of Lien
Schedule C - Construction Consultant Certification
Exhibit J Form of Completion Certificate for Construction Account
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MASTER LEASE AGREEMENT
THIS
MASTER LEASE AGREEMENT (this "LEASE") is executed effective August
14, 2001 (the "EFFECTIVE DATE"), by and between MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership, whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("LANDLORD"), and CORNELL COMPANIES, INC., a
Delaware corporation, whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("TENANT"). Subject to all of the terms, provisions,
covenants and conditions of this Lease, and in consideration of the mutual
covenants, obligations and agreements contained in this Lease, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant agree as follows:
Capitalized terms used in this Lease and not otherwise defined herein,
which are defined in that certain Indenture dated as of August 1, 2001, between
Landlord, as Issuer, and The Chase Manhattan Bank, as Indenture Trustee and
Securities Intermediary (as the same may from time to time be amended, modified,
restated or supplemented, the "INDENTURE"), shall have the respective meanings
given them in the Indenture as of the date hereof, without giving effect to any
subsequent amendment, supplement or termination of the Indenture. Any of the
terms used in this Lease (including but not limited to those terms now defined
by reference to the Indenture) may hereafter be amended as provided in Section 4
of Article XVI of this Lease.
ARTICLE I
PREMISES
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases and takes from Landlord each of those certain premises more particularly
described and defined as the "Premises" on each of the Addendum attached hereto
from time to time and incorporated herein by reference for all purposes. The
Addendum attached hereto may change from time to time by written agreement of
Landlord and Tenant, and each time the parties hereto execute an Addendum, such
Addendum shall become a part of this Lease for all purposes, regardless of
whether or not same shall then or thereafter be attached to this Lease.
2. SUBLEASED PREMISES. With respect to any "Premises" described
and defined as a "Subleased Premises" on the Addendum hereto, which Landlord
does not own, but leases or subleases from a Lessor (as defined in each Addendum
hereto) under the terms of an existing lease or sublease (each, a "MAIN LEASE"),
this Lease shall be a sublease of such Premises. Each such Premises constitutes
all or a portion of the Demised Premises (as defined in each Addendum attached
hereto) leased by Landlord, as lessee or sublessee, under the terms of the
applicable Main Lease. Tenant hereby assumes and agrees to pay and perform all
of the obligations of Landlord, as lessee or sub-lessee, under the Main Leases;
PROVIDED, HOWEVER, Tenant shall not be bound by those provisions of a Main Lease
which may be specifically excepted in the "Special Provisions" section of the
Addendum related to such Main Lease, if applicable. Tenant has received and
reviewed, or shall receive and review, as appropriate, a copy of each Main Lease
prior to the execution of the applicable Addendum hereto relating to such Main
Lease. Tenant shall not commit or permit to be committed on any of the Premises
which are subject to a Main Lease any act or omission which would violate any
term or condition of the Main Lease covering such Premises. All of the terms and
conditions contained in the Main Leases with respect to the Premises covered
thereby are incorporated herein as terms and conditions of this Lease (with each
reference therein to lessor and lessee, however denominated, to be deemed to
refer to Landlord and Tenant). In the event of any conflict or dispute with
regard to the rights or obligations of Landlord and Tenant under or arising out
of this Lease and under the terms of any Main Lease, the terms and provisions of
this Lease shall control. Notwithstanding anything to the contrary contained
herein, in the event of any termination or any expiration of a Main Lease,
howsoever brought about, (i) the Base Rent (hereinafter defined) shall be
reduced by the Base Rent Component (hereinafter defined) attributable to the
Premises covered thereby, (ii) this Lease shall terminate with respect to the
Premises covered thereby, and (iii) neither Landlord nor Tenant shall have any
further rights or obligations under this Lease with respect thereto (except with
respect to any rights or obligations accrued as of the date of such expiration
or termination, and except for any claim for damages where the expiration or
termination of the Main Lease was caused by the failure of Landlord or Tenant to
pay or perform their respective obligations in regards to such Main Lease, or
this Lease, all of which accrued rights and obligations and damage claims shall
survive termination of this Lease with respect to such Premises).
ARTICLE II
TERM
1. TERM. The term of this Lease (the "TERM") and the
"Commencement Date" and "Expiration Date" for such Term with respect to each of
the Premises is provided in the appropriate Addendum hereto for such Premises.
2. EXTENSION OPTION. Tenant shall have four (4) options to extend
the Term of this Lease for each of the Premises, the first such option to be for
a period of ten (10) years, the next two such options to be for a period of five
(5) years each and the last such option to be for a period of four (4) years and
eleven (11) months (each an "OPTION TERM"), upon the same terms and conditions
as are set forth herein, except that the annual Base Rent (as hereinafter
defined) for a Premises during any Option Term shall be determined by
multiplying the Average Base Rent (defined below) for such Premises by a
fraction, the numerator of which is the then Remaining Useful Life (defined
below) of such Premises and the denominator of which is the Total Useful Life
(defined below) of such Premises.
AVERAGE BASE RENT. shall mean (a) the total Base Rent paid by Tenant
for such Premises during the initial Term of this Lease, divided by (b)
the number of years in such initial Term.
REMAINING USEFUL LIFE. shall mean the difference between (a) the Total
Useful Life for such Premises and (b) the sum of (i) the number of
years in the initial Term of this Lease and (ii) the number of years
elapsed in any Option Terms.
TOTAL USEFUL LIFE shall mean the Total Useful Life for such Premises as
shown on the Addendum hereto for such Premises.
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For example, if the total Base Rent paid by Tenant for a Premises
during the initial Term of this Lease is $30,000,000, the initial Term of this
Lease with respect to such Premises was twenty (20) years and the Total Useful
Life of such Premises is fifty (50) years, the annual Base Rent to be paid by
Tenant with respect to such Premises during the first year of the first Option
Term would be as follows:
($30,000,000/20) multiplied by (50-20) = $900,000
-------
50
The annual Base Rent to be paid by Tenant with respect to such Premises
during the second year of the first Option Term would be as follows:
($30,000,000/20) multiplied by (50-21) = $870,000
-------
50
Landlord shall send Tenant a written reminder notice not less than two
hundred seventy (270) days, and not more than three hundred sixty (360) days,
prior to the expiration of the initial Term or the applicable Option Term, as
the case may be, advising Tenant of the pending Option Term. In order to
exercise such option, Tenant shall give Landlord written notice not later than
one hundred eighty (180) days prior to the expiration of the initial Term or the
applicable Option Term, as the case may be; PROVIDED, that if Landlord does not
provide a written reminder notice to Tenant at least two hundred seventy (270)
days prior to the expiration of the initial Term or the applicable Option Term,
as the case may be, Tenant may exercise such option at any time on or before the
latter of (i) one hundred eighty (180) days prior to the expiration of the
initial Term or the applicable Option Term, as the case may be, or (ii) five (5)
business days after it receives such notice from Landlord. In the event Tenant
exercises such option with respect to any of the Premises, (a) the annual Base
Rent for each Premises shall be calculated as of the first day of the Option
Term for such Premises and as of each one (1) year anniversary thereof, and (b)
the annual Base Rent for such Premises (determined as set forth above) shall be
divided by twelve (12) for purposes of determining the monthly Base Rent to be
paid by Tenant hereunder. All references herein to the "Term" of this Lease with
respect to any Premises shall be understood to apply to the original Term set
forth in SECTION 1 of this Article and also to the Option Terms referred to in
this SECTION 2, unless, in any case, such interpretation is expressly negated.
ARTICLE III
RENT
1. Base Rent.
(a) Tenant shall pay to Landlord as base rent ("BASE RENT")
for all Premises for each month during the Term of this Lease the amount set
forth on EXHIBIT A hereto with respect to such Premises. The Base Rent is
divided among and allocable to each such Premises ("BASE RENT COMPONENT") for
each month during the Term of this Lease in the amounts set forth on EXHIBIT B
hereto with respect to such Premises. The aggregate of each of the Base Rent
Components equals the Base Rent reflected on EXHIBIT A.
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(b) The Exhibits attached hereto may change from time to
time by written agreement of Landlord and Tenant each time a new Addendum is
added hereto, and each time the parties hereto execute an Exhibit, such Exhibit
and the new Addendum related thereto shall become a part of this Lease for all
purposes, regardless of whether or not same shall then or thereafter be attached
to this Lease.
(c) Base Rent for the first (1st) month of the Term
shall be due and payable on the last Business Day of the month in which the
Effective Date falls and Base Rent for each and every month thereafter shall be
due and payable on the last day of each month thereafter (or if such day is not
a Business Day, on the immediately preceding Business Day) (each a "RENT PAYMENT
DATE"). Base Rent for any partial month shall be prorated based upon the number
of days in such month. All Base Rent to be paid pursuant to this Section shall
be payable in the manner set forth in SECTION 4 of this Article III.
2. SECURITY DEPOSIT.
(a) At all times until the Bonds have been paid in full,
Tenant shall from time to time hereafter pay to Landlord the Security Deposit
(as defined in and calculated pursuant to SECTION 2(b) of this Article III) to
secure the faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease. Tenant agrees that the Security Deposit may, at the
option of Landlord, be increased in accordance with SECTION 2(b) of this Article
III. All amounts to be paid pursuant to this Section shall be payable in the
manner set forth in SECTION 4 of this Article, accompanied by notice to Landlord
(with a copy to the Indenture Trustee and Cornell Escrow Agent) designating the
type and amounts so paid. Tenant agrees that Landlord may apply any portion of
the Security Deposit to any Total Rent (as defined in SECTION 4 of Article III)
due and owing but unpaid hereunder and any portion of the Security Deposit so
applied shall be credited to any Total Rent payable to Landlord hereunder.
However, if Tenant shall fully comply with all of its obligations under this
Lease and no Payment Default shall have occurred and be continuing, then the
Security Deposit shall be returned to Tenant within thirty (30) days after the
date the Bonds shall have been paid in full, if not sooner refunded pursuant to
SECTION 2(b) of this Article III.
(b) Tenant shall have and maintain a Coverage Ratio of not
less than 1.35 to 1.00 for each twelve (12) month period ending on the last day
of each fiscal quarter of Tenant (or from and after Tenant's failure to meet the
Monthly Reporting Coverage Ratio (as defined in SECTION 4 of Article IV hereof)
until such failure is cured, for the twelve (12) month period ending on the last
day of each calendar month) prior to the expiration or termination of this Lease
(the "MINIMUM COVERAGE RATIO"). As used herein, "Coverage Ratio" shall mean
EBITDAR (as defined in EXHIBIT C) to the total Base Rent, for such period which
came due under this Lease. In the event that the Coverage Ratio for any such
period shall ever be less than the Minimum Coverage Ratio, Tenant shall pay to
Landlord monthly on each Rent Payment Date the amount set forth opposite the
actual Coverage Ratio below (the "SECURITY DEPOSIT") for the period from and
after the determination of Tenant's noncompliance until the determination of
Tenant's compliance; provided, however, that notwithstanding anything in this
Lease to the contrary, the total aggregate payments of Security Deposits
required hereunder to be paid by Tenant to and held by or on behalf of Landlord
at any one time shall never exceed thirty-five percent (35%) of the maximum
annual amount of Base Rent due in any year remaining during
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the Term of this Lease. All amounts to be paid pursuant to this Section shall be
payable in the manner set forth in SECTION 4 of this Article, accompanied by
notice to Landlord (with a copy to Indenture Trustee and Cornell Escrow Agent)
designating the type and amounts so paid.
ACTUAL COVERAGE RATIO AMOUNT OF SECURITY DEPOSIT
--------------------------------------------------------------------------------
1.25 to 1.3499 25% of the additional EBITDAR which would have been
required to achieve 1.35 Minimum Coverage Ratio
--------------------------------------------------------------------------------
1.0 to 1.2499 50% of the additional EBITDAR which would have been
required to achieve 1.35 Minimum Coverage Ratio
--------------------------------------------------------------------------------
Below 1.0 100% of the additional EBITDAR which would have
been required to achieve 1.35 Minimum Coverage Ratio
--------------------------------------------------------------------------------
If any Total Rent due hereunder is not timely paid by Tenant,
Landlord may apply all or any portion of the Security Deposit, and upon notice
of such application from Landlord to Tenant, Tenant shall reinstate the Security
Deposit to the amount required pursuant to this Section. If, after having failed
to meet the Minimum Coverage Ratio, Tenant should subsequently achieve the
Minimum Coverage Ratio, and provided further that no Payment Default has
occurred and is continuing, then any Security Deposit previously paid by Tenant
hereunder, less any portion thereof previously applied by or on behalf of
Landlord to Total Rent (including any Overdue Rent) due hereunder, shall be
refunded to Tenant. In order to obtain such periodic refunds, Tenant shall
complete and file with Landlord (with a copy to Indenture Trustee and Cornell
Escrow Agent) a certification in substantially the form attached hereto as
EXHIBIT D.
3. OVERDUE RATE. Tenant shall also pay as Base Rent an amount
equal to interest at the Overdue Rate set forth on the Addendum hereto with
respect to such Premises for which any part of any payment of Base Rent is not
paid when due (whether on demand or otherwise) for the period from such due date
until the same shall be paid (such overdue Base Rent, together with interest at
the Overdue Rate from the date due until paid, being referred to as "OVERDUE
RENT").
4. MANNER OF PAYMENTS.
(a) The Total Rent payable from time to time hereunder
to, on behalf of or for the benefit of Landlord shall be paid by Tenant in
lawful money of the United States of America in immediately available funds to
and from its Cornell Escrow Account. Landlord shall not be deemed to have been
paid by Tenant for any purpose hereunder until the Cornell Escrow Agent shall
have made disbursements from the Cornell Escrow Agreement in accordance with its
terms.
(b) Each payment of Base Rent shall be accompanied by a
certification by Tenant to Landlord (with a copy to Indenture Trustee and
Cornell Escrow Agent) setting forth the amount of Base Rent paid and all other
payments of any kind or nature whatsoever due by Tenant hereunder to Landlord
under this Lease, including without limitation, any Security Deposit, Overdue
Rent and Purchase Price (all such amounts being hereinafter collectively
5
referred to as the "TOTAL RENT"), providing a designation for such payment and
certifying that such amount so paid has been calculated in compliance with this
Lease and is in all respects correct.
(c) Tenant agrees to cause all payments owed to it
under or pursuant to any contract related to any Premises covered or to be
covered by this Lease (as amended, modified, restated or replaced with any
similar contract from time to time, the "CORRECTIONAL AND DETENTION FACILITY
CONTRACTS") with a municipal, state or federal government, or agency,
instrumentality or political subdivision thereof, relating to the management by
Tenant of a correctional and/or detention facility or to other related lines of
business, to be remitted directly into the Cornell Escrow Account.
5. NET LEASE. This Lease is a "net lease" and shall, except as
otherwise specifically provided herein, be absolutely net to Landlord, free of
any charges, assessments, impositions or deductions of any kind. Tenant's
obligation to pay the Total Rent payable hereunder shall be absolute and
unconditional under any and all circumstances, except as otherwise specifically
provided herein, and shall not be terminated, extinguished, diminished, lost or
otherwise impaired by any circumstance of any character, except as otherwise
specifically provided herein. Accordingly, except as provided herein, all costs,
expenses and obligations of every kind and character whatsoever relating to the
Premises, or any improvements thereon, which may arise or become due during the
Term shall be paid by Tenant, and Landlord shall be indemnified and held
harmless by Tenant from and against the same. Except as otherwise specifically
provided herein, the Total Rent shall not be subject to any abatement and the
payments thereof shall not be subject to any setoff, deduction, reduction or
diminution for any reason whatsoever, including any present or future claims of
Tenant against Landlord under this Lease or otherwise. To the extent permitted
by applicable law, Tenant hereby waives any and all rights which it may now have
or which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease with respect to
any of the Premises except in accordance with the express provisions hereof. If
for any reason whatsoever this Lease shall terminate in whole or in part by
operation of law or otherwise, except as specifically provided herein, Tenant
nonetheless agrees, to the extent permitted by applicable law, to pay to
Landlord an amount equal to each installment of Total Rent due and owing, at the
time such payment would have become due and payable in accordance with the terms
hereof had this Lease not been so terminated. Nothing contained herein (other
than SECTION 2 of Article XIV) shall be construed to waive any claim which
Tenant might have under this Lease or otherwise or to limit the right of Tenant
to make any claim it might have against Landlord or to pursue such claim, right
or remedy in such manner as Tenant shall deem appropriate.
ARTICLE IV
FINANCIAL STATEMENTS
1. QUARTERLY FINANCIAL STATEMENTS. Tenant shall furnish or
cause to be furnished to Landlord (with a copy to Indenture Trustee) as soon as
available but in any event within ninety (90) days after the end of each fiscal
quarter (except the last fiscal quarter) of Tenant, Quarterly Financial
Statements of Tenant. As used herein, the term "QUARTERLY FINANCIAL STATEMENTS"
shall mean the quarterly financial statements of Tenant, including all notes
thereto, which statements shall include a balance sheet as of the end of such
fiscal quarter and an income statement and a
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statement of cash flows for such fiscal quarter, and for the fiscal year to
date, subject to normal year-end adjustments, all setting forth in comparative
form the corresponding figures for the corresponding fiscal quarter of the
preceding year, prepared in accordance with GAAP and certified as true and
correct by an appropriate officer of Tenant.
2. QUARTERLY COMPLIANCE CERTIFICATE. Concurrently with the
Quarterly Financial Statements, Tenant shall also furnish to Landlord (with a
copy to Indenture Trustee) computations and other information, in reasonable
detail, reflecting the Minimum Coverage Ratio for the twelve (12) month period
ending on the last day of such calendar quarter, all certified and signed by an
appropriate officer of Tenant and a compliance certificate in the form of
EXHIBIT E hereto ("COMPLIANCE CERTIFICATE"), duly executed by such officer,
together with supporting schedules on a consolidated basis covering all Premises
covered by this Lease.
3. ANNUAL FINANCIAL STATEMENTS. Tenant shall furnish or cause to be
furnished to Landlord (with a copy to Indenture Trustee) as soon as available
but in any event within ninety (90) days after the end of each fiscal year of
Tenant, Annual Financial Statements of Tenant. As used herein, the term "ANNUAL
FINANCIAL STATEMENTS" shall mean the annual financial statements of Tenant,
including all notes thereto, which statements shall include a balance sheet as
of the end of such fiscal year and an income statement, retained earnings
statement and statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in accordance with GAAP and accompanied by (i) a report and opinion of
independent certified public accountants of recognized national standing
reasonably satisfactory to Landlord, which shall state that such financial
statements, in the opinion of such accountants, present fairly, in all material
respects, the financial position of Tenant as of the date thereof and the
results of its operations for the period covered thereby in conformity with
GAAP, and (ii) a Compliance Certificate, duly executed by an appropriate officer
of Tenant.
4. MONTHLY FINANCIAL STATEMENTS. Tenant shall not be required to
provide Landlord with Monthly Financial Statements until such time, if any, as
Tenant shall have failed to meet a Coverage Ratio of not less than 1.50 to 1.00
for any twelve (12) month period ending on the last day of any fiscal quarter of
Tenant (the "MONTHLY REPORTING COVERAGE RATIO"). Upon any such failure of Tenant
to meet the Monthly Reporting Coverage Ratio, Tenant shall thereafter furnish or
cause to be furnished to Landlord (until such time, if any, as Tenant shall
again meet the Monthly Reporting Coverage Ratio), as soon as available (with a
copy to Indenture Trustee) but in any event within thirty (30) days after the
end of each calendar month (except the last calendar month) of each fiscal year
of Tenant, Monthly Financial Statements of Tenant. As used herein, the term
"MONTHLY FINANCIAL STATEMENTS" shall mean the monthly financial statements of
Tenant, including all notes thereto, which statements shall include a balance
sheet as of the end of such calendar month and an income statement and a
statement of cash flows for such calendar month, and for the fiscal year to
date, subject to normal year-end adjustments, all setting forth in comparative
form the corresponding figures for the corresponding calendar month of the
preceding year, prepared in accordance with GAAP and certified as true and
correct by an appropriate officer of Tenant.
5. MONTHLY COMPLIANCE CERTIFICATE. Tenant shall furnish to Landlord
(with a copy to Indenture Trustee) a Compliance Certificate, duly executed by an
appropriate officer of Tenant,
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concurrently with any Monthly Financial Statement that Tenant may be required to
provide to Landlord hereunder.
6. GAAP. As used herein, "GAAP" shall mean such accounting practice
as, in the opinion of the independent certified public accountants of recognized
national standing regularly retained by Tenant and reasonably acceptable to
Landlord, conforms at the time to generally accepted accounting principles,
consistently applied. GAAP means those principles and practices (i) which are
recognized as such by the Financial Accounting Standards Board, (ii) which are
applied for all periods after the date hereof in a manner consistent with the
manner in which such principles and practices were applied to the most recent
audited financial statements of Tenant furnished to Landlord, and (iii) which
are consistently applied for all periods after the date hereof so as to reflect
properly the financial condition, and results of operations and changes in
financial position, of Tenant. If any change in any accounting principle or
practice is required by the Financial Accounting Standards Board in order for
such principle or practice to continue as a GAAP principle or practice, all
reports and financial statements required hereunder may be prepared in
accordance with such change only after written notice of such change is given to
Landlord.
7. BUDGETS. Tenant shall furnish or cause to be furnished to
Landlord as soon as available but in any event on or before January 15 of each
year, an annual budget for each of the Premises and a consolidated budget for
all of the Premises, containing such information and presented in a format
reasonably acceptable to Landlord.
8. STANDARD OPERATING PROCEDURE AUDIT REPORTS. Tenant shall furnish
or cause to be furnished to Landlord, promptly after the filing thereof with the
Federal Bureau of Prisons or applicable state or local prison authorities,
copies of all required audit reports for the Premises that Tenant is required to
file with the Federal Bureau of Prisons or such other applicable authorities,
and promptly after receipt thereof from the Federal Bureau of Prisons or such
other applicable authorities, all notices of non-compliance or exception
received by Tenant, and any and all notices of default under any Main Lease,
promptly after receipt thereof.
9. SEC FILINGS. Tenant shall furnish or cause to be furnished to
Landlord copies of all Annual Reports of Tenant on Form 10-K and Quarterly
Reports of Tenant on Form 10-Q that Tenant is required to file with the
Securities and Exchange Commission.
10. INSPECTION RIGHTS. Landlord shall have the right, but not more
than twice during any twelve (12) month period, to cause an inspection, at
Landlord's sole cost and expense, of Tenant to be made by Landlord or a
certified public accountant selected by Landlord to determine Tenant's
compliance with the Minimum Coverage Ratio. For purposes of such inspection,
Landlord or its accountant shall have the right, upon at least three (3) days
prior written notice to Tenant, to enter Tenant's corporate office during normal
business hours to examine Tenant's books and records, PROVIDED that Landlord or
such accountant does not unreasonably interfere with the operation of Tenant's
business thereon.
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ARTICLE V
USE; TRANSFER RESTRICTIONS; CONDITION AND QUIET ENJOYMENT
1. USE. The Premises will be used only (i) as correctional
facilities and/or detention facilities, juvenile facilities, pre-release
facilities, substance abuse rehabilitation facilities or related facilities and
(ii) for such other purposes as are permitted under Section501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "PERMITTED USE"), and for no
other purpose without Landlord's prior written consent, which consent may be
granted or withheld in Landlord's sole and absolute discretion. In connection
with its use of, and activities in, upon or about the Premises, Tenant will
comply at all times during the Term with any and all federal, state, county,
city, local and municipal laws, statutes, ordinances, codes, permits, orders,
decrees, licenses, guidelines, rules and regulations in any way applicable to
Tenant or the Premises, or to the use and occupancy thereof, and in a manner
which does not violate the Correctional and Detention Facility Contracts. Tenant
will not commit waste or suffer or permit waste to be committed in, on or about
any of the Premises.
2. TRANSFER RESTRICTIONS. Tenant shall not transfer inmates
from a Premises to any other facility that is not owned by Landlord without
Landlord's prior written consent; provided, that such restriction shall not
prohibit Tenant from transferring inmates from one Premises to another, as long
as such transfer does not cause a violation of, or breach of, any Correctional
and Detention Facility Contract.
3. CONDITION. TENANT STIPULATES THAT IT HAS EXAMINED EACH OF
THE PREMISES, INCLUDING ALL BUILDINGS, IMPROVEMENTS AND FIXTURES LOCATED ON OR
SURROUNDING EACH OF THE PREMISES, ALONG WITH ALL RELATED PUBLIC RECORDS, AND
TENANT ACCEPTS EACH OF THE PREMISES, INCLUDING ALL BUILDINGS, IMPROVEMENTS AND
SURROUNDINGS, IN ITS "AS IS, WHERE IS" CONDITION WITHOUT ANY WARRANTY
WHATSOEVER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TENANT HEREBY
WAIVES ANY EXPRESS OR IMPLIED WARRANTY AS TO THE CONDITION OF THE PREMISES AND
WAIVES ANY AND ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, WRITTEN
OR VERBAL, AS TO THE MERCHANTABILITY, DURABILITY, SUITABILITY, CONDITION, VALUE
OR QUALITY OF THE PREMISES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY
OF MERCHANTABILITY, USAGE OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE
WHETHER IMPOSED BY CONTRACT, LAW OR EQUITY. TENANT FURTHER WAIVES ANY AND ALL
CLAIMS OR CAUSES OF ACTION FOR THE COST OF REPAIRS, RESCISSION OF THIS LEASE OR
REDUCTION OF TOTAL RENT RESULTING IN WHOLE OR IN PART FROM CONDITIONS, DEFECTS
OR VICES IN THE PREMISES, OR ANY PART THEREOF, INCLUDING ANY DEFECTS IN THE
PUBLIC RECORDS. The taking of possession of each Premises by Tenant shall be
conclusive evidence of the satisfactory condition of such Premises and no
subsequent discovery of latent or patent defects shall constitute grounds for
abatement of Total Rent or any other remedy by or for the benefit of Tenant.
Tenant acknowledges that Landlord specifically disclaims, and Tenant waives any
and all warranties, express or implied, whether granted at law, by contract, in
equity or otherwise, with respect to each of the Premises, the condition
thereof, and its fitness for occupancy for the Permitted Use.
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4. QUIET ENJOYMENT. Landlord covenants that Tenant shall and
may peaceably have, hold, and enjoy exclusive possession and use of the Premises
for the Term of this Lease, subject to the other terms, provisions, agreements
and conditions of this Lease, PROVIDED that Tenant pays the Total Rent to be
paid by Tenant under this Lease and complies with each and every other
obligation of Tenant under this Lease.
ARTICLE VI
TAXES, INSURANCE AND UTILITIES
1. PROPERTY TAXES. Tenant shall pay, prior to delinquency, all
real property taxes, general and special assessments and other charges of every
description levied on or assessed against the Premises, or the pro rata portion
thereof attributable to the Term, which accrue during the Term of this Lease
(the "PROPERTY TAXES"); PROVIDED, that the term "Property Taxes" shall not be
deemed to include, and Tenant shall not be obligated to pay, any income taxes or
franchise taxes imposed upon Landlord or its income or receipts. With respect to
any Property Taxes that may be paid in installments, only the amount of
installments which become due during the Term hereof shall be included in the
term "Property Taxes" for the purposes hereof. Notwithstanding the foregoing
provisions of this Section, Tenant shall have the right to contest such taxes in
good faith by appropriate proceedings conducted diligently by Tenant, provided
that (1) Tenant maintains appropriate reserves or posts an appropriate bond or
other security for the payment of such taxes during the period of such contest,
(2) Tenant pays any amounts owed by Tenant in respect of such taxes promptly
after such contest is finally concluded by non-appealable judgment and (3) the
Premises is not placed in imminent danger of being seized or forfeited. Tenant
shall be responsible for all costs and expenses associated with any such contest
and all interest and penalties imposed as a result of the delay in payment of
the Property Taxes associated with such contest.
Tenant shall not pay any Property Taxes required hereunder
directly, but shall instead use all reasonable efforts to arrange with each
taxing governmental authority to send all invoices for such Property Texas to
Cornell Escrow Agent for payment. If such arrangements are not possible, Tenant
shall forward any Property Tax statements to Cornell Escrow Agent within 10
Business Days of receipt; provided that if Tenant contests such taxes in good
faith, it shall deliver an Officer's Certificate, together with such Property
Tax statement if received directly by Tenant, to Cornell Escrow Agent certifying
that (1) Tenant is contesting such taxes in good faith and (2) upon the
conclusion of such contest by non-appealable judgment, Tenant will promptly
notify Cornell Escrow Agent of the final amount of Property Tax to be paid by
Cornell Escrow Agent.
2. INSURANCE.
(a) Throughout the Term of this Lease, Tenant, at Tenant's
sole cost and expense, shall keep and maintain so-called "all-risk" insurance
covering any buildings and improvements now or hereafter located on any of the
Premises, for the full replacement cost thereof and providing protection against
perils included in the standard form of so-called "all-risk" insurance coverage
for the state in which such Premises are located, together with insurance
against sprinkler damage, vandalism and malicious mischief. In addition, Tenant
shall carry and maintain, at Tenant's sole cost and expense, commercial general
liability insurance for
10
each of the Premises with minimum limits of $10,000,000.00 for bodily injury and
property damage per occurrence and with a $2,000,000.00 general aggregate.
Tenant also agrees to secure and maintain rental interruption insurance covering
the Base Rent for any period during which any Premises is not usable as a result
of damage insured against under the so-called "all-risk" insurance required to
be maintained by Tenant hereunder. Tenant further agrees to carry and maintain
workers' compensation insurance, disability benefits insurance and such other
forms of insurance which Tenant is required by law to provide covering loss
resulting from injury, sickness, disability or death of the employees of Tenant,
or any contractor or subcontractor performing work with respect to the Premises;
Tenant shall require that all said contractors and subcontractors shall maintain
all forms of types of insurance with respect to their employees required by law.
To the extent that any Main Lease requires Landlord, as lessee, to maintain
insurance coverage in addition to that required hereunder with respect to the
Premises covered thereby, Tenant shall, at all times throughout the Term of this
Lease (or if lesser, the term of such Main Lease), maintain in full force and
effect such additional insurance coverage with respect to such Premises. Tenant
shall not pay the premiums for the insurance coverage required hereunder
directly, but shall instead arrange with each insurance company providing such
coverage to send all invoices for such premiums to Cornell Escrow Agent for
payment.
(b) Notwithstanding the foregoing, Tenant shall have the
right (i) to provide such insurance under a blanket policy of insurance covering
any or all of the Premises and other property of Tenant, and (ii) so long as and
only during the period that Tenant has a net worth of $20,000,000 or more as
determined in accordance with GAAP, to self insure against the risks which would
be covered by such insurance in lieu of providing such insurance. Tenant agrees
to provide, upon request of Landlord at any time while Tenant is self-insuring
as aforesaid, evidence reasonably satisfactory to Landlord that Tenant's net
worth is $20,000,000 or more.
(c) All insurance required by this Section shall be
procured and maintained in financially sound and generally recognizable
responsible insurance companies authorized to write such insurance in the state
in which the Premises are located and having a rating at least equal to "XII/A"
by A.M. Best & Co.
(d) Each of the insurance policies or binders evidencing
the insurance required in this Section to be maintained by Tenant on any
Premises covered by this Lease or any Main Lease shall:
(i) designate (except in the case of worker
compensation insurance) Indenture Trustee (as long as the Bonds are
outstanding), Landlord and the "Lessor" (as defined in the appropriate
Addendum attached hereto) as additional insureds as their respective
interests may appear;
(ii) provide that all insurance proceeds with
respect to loss or damage to the Premises be endorsed and made payable
to Indenture Trustee (or if all Bonds have been paid in full, to
Landlord) and such Lessor and shall name Indenture Trustee (or
Landlord, as the case may be) and such Lessor as a loss payee under the
standard loss payee clause and Indenture Trustee (or Landlord, as the
case may be) under the terms of a standard mortgagee clause, which
insurance
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proceeds shall be paid over to Landlord in the manner set forth in
SECTION 4 of Article III and applied in accordance with Article X;
(iii) provide that there shall be no recourse
against Indenture Trustee (or Landlord, as the case may be) or such
Lessor for the payment of premiums or commissions or (if such policies
or binders provide for the payment thereof) additional premiums or
assessments;
(iv) provide that in respect of the respective
interests of Indenture Trustee (and Landlord, as the case may be) and
such Lessor in such policies, the insurance shall not be invalidated by
any action or inaction of Tenant or any other person or entity and
shall insure Indenture Trustee (as long as the Bonds are outstanding),
Landlord and such Lessor regardless of, and any losses shall be payable
notwithstanding, any such action or inaction;
(v) provide that such insurance shall be
primary insurance without any right of contribution from any other
insurance carrier carried by Indenture Trustee (or Landlord, as the
case may be) or such Lessor to the extent that such other insurance
provides Indenture Trustee (or Landlord, as the case may be) or such
Lessor, as the case may be, with contingent and/or excess liability
insurance with respect to its respective interests as such in the
Premises;
(vi) provide that if the insurers cancel such
insurance for any reason whatsoever, including the insured's failure to
pay any accrued premium, or the same is allowed to lapse or expire, or
there be any reduction in amount, or any material change is made in the
coverage, such cancellation, lapse, expiration, reduction or change
shall not be effective as to Indenture Trustee (or Landlord, as the
case may be) or such Lessor until at least thirty (30) days after
receipt by Indenture Trustee (or Landlord, as the case may be) and such
Lessor, respectively, of written notice by such insurers of such
cancellation, lapse, expiration, reduction or change; and
(vii) waive any right of subrogation of the
insurers thereunder against any person or entity insured under such
policy, and waive any right of the insurers to any setoff or
counterclaim or any other deduction, whether by attachment or
otherwise, in respect of any liability of any person or entity insured
under such policy.
(e) The proceeds of any insurance or casualty received
with respect to any loss or damage to the Premises remaining after payment of
all expenses incurred in the collection thereof (the "NET PROCEEDS") shall be
paid to Landlord in the manner contemplated by Section 4 of Article III and be
applied in accordance with Article X.
(f) Tenant shall furnish to Landlord (with a copy to
Indenture Trustee) certificates evidencing the above-described insurance
coverages which certificates shall contain a provision whereby the insurer
agrees to notify Indenture Trustee (as long as the Bonds are
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outstanding) and Landlord not less than fifteen (15) days in advance of any
cancellation or modification thereof.
(g) Tenant shall, at its own cost and expense, for and on
behalf of the loss payees, make all proofs of loss and take all other steps
necessary or reasonably requested by Indenture Trustee (as long as the Bonds are
outstanding), Landlord or Lessor to collect from insurers for any loss covered
by any insurance required to be obtained by this Section. Tenant shall not do
any act, or suffer or permit any act to be done, whereby any insurance required
by this Section would or might be suspended or impaired.
3. UTILITIES. Tenant shall pay for all connection charges, usage
charges and other charges incurred for all utility and other services used in,
upon or about the Premises, including, but not limited to, electricity, gas,
energy, light, heat, air conditioning, power, telephone and other
telecommunication, digital and other communication systems, garbage or trash
removal and disposal, sewage or effluent removal or disposal, and water, all
such charges to be paid by Tenant to the utility company, municipality or other
entity furnishing such services before such charges shall become delinquent,
together with any required deposits. Notwithstanding anything to the contrary
contained herein, Tenant shall not be entitled to permit or cause any of the
Premises to be reliant upon any other building, improvements, other
constructions, facility, plant, location, person or entity for the provision of
utility services (other than a public or private utility company), without
Landlord's prior written consent, which may be granted or withheld at Landlord's
sole discretion. Utilities to the Premises shall at all times during the Term be
provided to the Premises by independent public or private utility companies or
other service providers. Landlord shall have no responsibility to Tenant to
provide utility connections to the Premises, or for the quality or availability
of any such utilities or services. Tenant shall be solely responsible, at its
sole cost and expense, to procure and pay for all such utilities and services to
the Premises as are necessary to operate the same for the Permitted Use.
ARTICLE VII
INDEMNITY AND WAIVER OF SUBROGATION
1. INDEMNITY. Except for claims as to which Landlord shall have
waived rights of subrogation as provided in SECTION 2 below, Tenant hereby
indemnifies and agrees to hold Landlord harmless from and to defend Landlord
against any and all claims of liability for any injury (including death) or
damage to any person or property whatsoever occurring in, on or about any of the
Premises when such injury or damage is caused in whole or in part by the act or
omission constituting negligence or willful misconduct on the part of Tenant or
its agents, servants, contractors or employees. Tenant further indemnifies and
agrees to hold Landlord harmless from and to defend Landlord against any and all
claims of liability arising from any failure of Tenant, or its agents, servants
or employees to perform any obligation on Tenant's part to be performed under
the terms of this Lease, any Main Lease or the Correctional and Detention
Facility Contracts. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
LANDLORD WITH RESPECT TO ANY INJURY OR DAMAGE WHICH IN WHOLE OR IN PART IS
CAUSED BY OR ARISES OUT OF THE SOLE, JOINT OR CONCURRENT NEGLIGENCE OR THE
STRICT LIABILITY OF LANDLORD, BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF LANDLORD.
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2. WAIVER OF SUBROGATION RIGHTS. Anything in this Lease to the
contrary notwithstanding, Landlord and Tenant each hereby waives any and all
rights of recovery, claims, actions or causes of action, against the other, its
agents, servants, representatives, directors, officers, partners, shareholders,
or employees, for any loss or damage that may occur to any of the Premises, or
any improvements thereto, or any personal property of such party therein, which
is insured against under the terms of any insurance policies maintained by
either Landlord or Tenant, regardless of cause or origin, including, without
limitation, the sole, contributory, partial, joint, comparative or concurrent
negligence of the other party hereto, its agents, servants, representatives,
directors, partners, shareholders, officers or employees, and covenants that no
insurer shall hold any right of subrogation against such other party or its
respective agents, servants, representatives, directors, partners, shareholders,
officers or employees. If the respective insurer of Landlord and Tenant does not
permit such a waiver without an appropriate endorsement to such party's
insurance policy, then Landlord and Tenant each covenant and agree to notify its
insurer of the waiver set forth herein and to use its best efforts to secure
from such insurer an appropriate endorsement to its respective insurance policy
with respect to such waiver. All insurance carried by either Landlord or Tenant
shall provide for a waiver of rights of subrogation against Landlord and Tenant
on the part of the insurance carrier, to the extent that the same is permitted
under the laws and regulations governing the writing of insurance within the
state in which the applicable Premises are located.
ARTICLE VIII
MAINTENANCE; CONSTRUCTION, ALTERATION
AND DEMOLITION AND FIXTURES
1. MAINTENANCE. Tenant shall, at its sole expense, at all times
during the Term, maintain each of the Premises in such condition as meets the
requirements, if any, of any applicable Main Lease for such Premises and the
Correctional and Detention Facility Contract for such Premises, ordinary wear
and tear, casualty and condemnation damage, and alterations and other actions
permitted by SECTION 2 below, excepted. Landlord shall have no duty whatsoever
with respect to the repair and maintenance of the Premises.
2. CONSTRUCTION, ALTERATION, DEMOLITION. Subject to Article XV,
Tenant may alter, add to, or modify the improvements located on any of the
Premises so long as the same does not result in the breach of any of the
provisions of the Correctional and Detention Facility Contacts; provided, that
any alteration, addition or modification which is structural in nature may not
be undertaken without Landlord's prior written consent, which shall not be
unreasonably withheld or delayed. Tenant may not remove any of the improvements
located on the Premises without Landlord's prior written consent, which shall
not be unreasonably withheld or delayed, unless replaced with improvements of
the same or similar quality. In the event a request for consent is made under
this Section, Landlord shall respond to the same within ten (10) days after
receipt of such request, failing which Landlord shall be deemed to have approved
such request. In the event Landlord disapproves the proposed alteration,
addition, or modification, or removal, such notice of disapproval must set forth
the reasons therefor with specificity. Tenant shall not have any obligation at
the end of the Term of this Lease to remove any alterations, additions or
modifications permitted by this Section or to restore any improvements removed
in accordance with this Section.
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3. MECHANICS' LIENS.
(a) Tenant will pay or cause to be paid all costs and
charges for work (i) done by Tenant or caused to be done by Tenant in or to the
Premises and (ii) for all materials furnished for or in connection with such
work. Tenant will indemnify Landlord against and hold Landlord and the Premises
free, clear and harmless of and from all mechanics' and/or materialmen's liens
and claims of liens, and all other liabilities, liens, claims and demands on
account of such work by or on behalf of Tenant, other than work performed by
Landlord.
(b) If any such lien, at any time, is filed against the
Premises or any part thereof, unless agreed to by Landlord in writing, Tenant
shall within thirty (30) days of the filing thereof, cause such lien to be
bonded in accordance with applicable law, or provide security reasonably
satisfactory to Landlord of at least 125% of the amount of the lien, plus
estimated costs and interest. If a final nonappealable judgment establishing the
validity or existence of a lien for any amount is entered, Tenant will pay and
satisfy the same immediately upon demand. However, Tenant shall not be required
to pay such lien and in such event shall have the right to contest the filing of
the lien, and the validity and amount thereof in good faith and by appropriate
proceedings, provided that the Premises have been released from the lien and
such contest stays any execution against the Premises, and such contest is
diligently pursued to completion.
(c) If Tenant fails to pay any charge for which a
mechanics' and/or materialmen's lien has been filed as set forth in SECTION 3(b)
of this Article above, or has not timely given Landlord security as described
above, or has not complied with such statutory procedures as may be available to
release the Premises from the lien, Landlord may, at its option, pay such charge
and related costs, and the amount so paid, together with reasonable attorneys'
fees incurred in connection with such lien, will be immediately due from Tenant
to Landlord. Nothing contained in this Lease will be deemed the consent or
agreement of Landlord to subject Landlord's interest in the Premises to
liability under any mechanics', materialmen's or other lien law. If Tenant
receives written notice that a lien has been or is about to be filed against the
Premises, or that any action affecting title to the Premises has been commenced
on account of work done by or for materials furnished to or for Tenant, it will
promptly provide Landlord with a copy of such notice.
4. FIXTURES. Subject to Article XV, Tenant shall have the right
at any time and from time to time to remove any and all of its trade fixtures,
equipment and property stored or placed in or installed at any of the Premises,
provided that Tenant will repair any damage to such Premises caused by such
removal. Landlord shall not have the right to mortgage any of the trade
fixtures, equipment or property of Tenant stored or placed in or installed in
any of the Premises by Tenant. Tenant shall have the right to place in any of
the Premises such furniture, trade fixtures, equipment and other property as
Tenant deems necessary or desirable for the conduct of its business.
ARTICLE IX
ASSIGNMENT AND SUBLETTING
1. SUBLEASE OR ASSIGNMENT BY TENANT. Tenant shall not, without
Landlord's prior written consent (which consent shall not be unreasonably
withheld): (i) assign, convey,
15
mortgage, encumber, or otherwise transfer (whether voluntarily, by operation of
law, or otherwise) this Lease or any interest of Tenant hereunder; (ii) allow
any lien to be placed upon this Lease or any interest of Tenant hereunder; (iii)
sublet the premises or any part thereof; or (iv) permit the use or occupancy of
the Premises or any part thereof by anyone other than Tenant, except pursuant to
SECTION 17 of Article XVI hereof and except in connection with the Correction
and Detention Facility Contracts. Any attempt to consummate any of the foregoing
without Landlord's consent shall be of no force or effect. For purposes hereof,
the transfer of the ownership or voting rights in a controlling interest of the
voting stock of Tenant (if Tenant is a corporation), or the transfer of a
majority of the membership interests in Tenant (if Tenant is a limited liability
company), or the transfer of a general partnership interest or a majority of the
limited partnership interest in Tenant (if Tenant is a partnership), at any time
throughout the term of this Lease, shall not be deemed to be an assignment of
this Lease.
(a) Notwithstanding the giving by Landlord of its
consent to any subletting, assignment or occupancy as provided hereunder or any
language contained in such sublease, assignment or occupancy agreement to the
contrary, unless this Lease is expressly terminated by Landlord, Tenant shall
not be relieved of any of Tenant's obligations under this Lease and Tenant shall
remain fully liable hereunder; provided however, that Tenant shall be relieved
of all of Tenant's obligations under this Lease and not remain so liable if
Tenant obtains both Landlord's consent and evidence of satisfaction of the
Rating Agency Condition.
(b) If, with the consent of Landlord, any Premises, or
any part thereof is sublet to or occupied by any person or entity other than
Tenant or if Tenant's interest in this Lease is assigned, Landlord may collect
rent from the subtenant, assignee or occupant, and apply the net amount
collected to the Total Rent required to be paid by Tenant under this Lease. No
such subletting, assignment, occupancy, or collection shall be deemed (i) a
waiver of any of Tenant's obligations contained in this Lease, (ii) a release of
Tenant from further performance by Tenant of any of its obligations contained in
this Lease, or (iii) a waiver of any of Landlord's other rights hereunder.
(c) Notwithstanding the foregoing, with respect to any
Construction Project (hereinafter defined) that Tenant constructs on a Premises
covered, or proposed to be covered by, this Lease, for which Landlord is not
required to issue Additional Bonds to finance the construction thereof, Tenant
may (a) maintain title to the improvements constructed on such Premises and (b)
lease such improvements and sublease the portion of the Premises upon which such
improvements are located pursuant to a lease financing transaction, all without
Landlord's consent.
2. ASSIGNMENT BY LANDLORD. During the Term, and so long as no
Payment Default or Other Default by Tenant hereunder has occurred and is
continuing, Landlord, its successors and assigns, shall not assign, convey or
otherwise transfer, in whole or in part, any of their right, title or interest
in (i) this Lease, (ii) any of the Premises, (iii) any of the Main Leases, or
(iv) any other property referred to herein, to any Competitor, without the prior
written consent of Tenant, which consent may be withheld by Tenant in its sole
and absolute discretion. As used herein, "COMPETITOR" shall mean a Person who is
engaged in the business of operating correctional and/or detention facilities,
juvenile facilities, pre-release facilities, substance abuse rehabilitation
facilities or related facilities. Otherwise, Landlord, its successors and
assigns, shall have the
16
right, subject to the provisions of the Indenture, to assign, convey or
otherwise transfer, in whole or in part, any of their right, title or interest
in (i) this Lease, (ii) any of the Premises, (iii) any of the Main Leases, or
(iv) any other property referred to herein, without the prior written consent of
Tenant. In the event of, and upon, any such assignment, conveyance or transfer
(any such transferee to have the benefit of the provisions of this Lease), no
further liability or obligation shall thereafter accrue against Landlord or such
successor or assign hereunder; provided, however, that Landlord or such
successor or assign shall remain responsible for any liability or obligation
thereof arising prior to the date of such assignment, conveyance or transfer.
ARTICLE X
CONDEMNATION AND CASUALTY
1. EVENT OF LOSS. If any of the Premises, in whole or in part,
should be destroyed or damaged by fire or other casualty (a "CASUALTY") and such
damage is so extensive, in Tenant's commercially reasonable judgment, as to
render such Premises unfit for normal use by Tenant, or if all of the Premises
should be taken by, or conveyed under threat of, condemnation or eminent domain
proceedings or by, under or through the exercise of Contractual Condemnation
Rights (as defined in Section 2 of the Premises Transfer Agreement) or if any
part of the Premises, or the temporary use of the Premises, shall be taken by
condemnation or eminent domain, by a competent authority for any public use or
purpose (a "CONDEMNATION"), and after the taking of such part or temporary use,
the balance is, in Tenant's commercially reasonable judgment, unfit or wholly
inadequate for operation of its business thereon (each, an "EVENT OF LOSS"),
(a) Landlord may, but shall have no obligation to
rebuild, replace, repair or restore such Premises;
(b) except as otherwise specified in this Article X, there
shall be no abatement, postponement or reduction in the Total Rent or any other
amounts payable by Tenant under this Lease; and
(c) Tenant shall promptly give notice of such Event of Loss
to Landlord and Indenture Trustee, in writing generally describing the nature
and extent thereof.
2. TENANT'S OBLIGATION TO RESTORE OR REBUILD. Upon the occurrence
of an Event of Loss, Tenant shall direct that the Net Proceeds and the Net
Condemnation Proceeds derived therefrom be paid directly at all times to
Landlord for application in accordance with Article X and, if no Payment Default
or Other Default shall have occurred, Tenant shall, in connection with a
Casualty or a partial Condemnation, either:
(a) subject to the satisfaction of the conditions set forth
in SECTION 5 of this Article, be obligated to rebuild or restore such Premises
so that the Premises shall have a current and residual value, remaining useful
life and utility at least equal to that of such Premises prior to such
rebuilding or restoration; or
(b) with the prior written consent of the Landlord (which
consent shall not be unreasonably withheld), purchase the related Premises by
paying the Purchase Price (as defined in EXHIBIT F) with respect to such
Premises and terminate this Lease with respect to such Premise pursuant to
SECTION 4 of this Article.
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Not later than ninety (90) days after the occurrence of an
Event of Loss, Tenant shall advise Landlord (and until the Bonds have been paid
in full, Indenture Trustee) in writing of Tenant's obligation under this
Section. If Tenant shall fail to give such timely notification of its election,
Tenant shall be deemed to have elected to rebuild or restore the remaining
Premises in accordance with clause (a) of the second preceding sentence.
3. NET PROCEEDS DISBURSEMENTS. If Tenant shall otherwise be
required to rebuild, replace, repair or restore the Premises as set forth in
SECTIONS 5 OR 6 of this Article and upon compliance by Tenant with SECTION 7 of
this Article, at any time before the Bonds shall have been paid in full, the
Landlord shall (or until the Bonds have been paid in full, Landlord shall cause
the Indenture Trustee) to disburse the Net Proceeds to Tenant, to pay or
reimburse Tenant, at the election of Tenant, either as such work progresses or
upon the completion thereof; PROVIDED, that the amounts so disbursed to Tenant
shall not exceed the actual cost of such work, and Tenant shall submit to
Landlord (with a copy to Indenture Trustee) such invoices, receipts and other
documents as are reasonably requested to evidence the cost and expenditure.
4. PURCHASE OF PREMISES AND TERMINATION OF LEASE.
(a) If Tenant shall not be obligated to rebuild or restore
such Premises pursuant to SECTION 2 of this Article following any Event of Loss
due to Casualty or partial Condemnation, then not later than thirty (30) days
after receipt by Landlord, Indenture Trustee or Tenant of the Net Proceeds or
the Net Condemnation Proceeds, as the case may be, in respect of such Event of
Loss, Tenant shall purchase the related Premises and shall terminate this Lease
with respect to such Premise by payment to Landlord of the Purchase Price if
agreed upon and, if not, Landlord and Tenant shall immediately proceed to
determine such Purchase Price in accordance with the procedures set forth in
EXHIBIT F. As used herein, the "TERMINATION DATE" shall be the date on which
Tenant shall have paid the Purchase Price in full to Landlord in the manner set
forth in Section 4 of Article III. Promptly following receipt of payment of the
Purchase Price following any Event of Loss due to Casualty or partial
Condemnation and promptly following receipt of payment of the Net Condemnation
Proceeds following an Event of Loss due to a total Condemnation of the entire
Premises, this Lease shall terminate with respect to such affected Premises, the
Base Rent shall be reduced by the Base Rent Component attributable to such
Premises, and neither Landlord nor Tenant shall have any further rights, duties
or obligations hereunder with respect to such Premises. If requested by either
party, Landlord and Tenant agree to amend EXHIBITS A AND B to reflect such
reduction.
(b) So long as no Payment Default or Other Default shall
have occurred and be continuing, any Net Proceeds or any Net Condemnation
Proceeds, as the case may be, from an Event of Loss due to Casualty or partial
Condemnation, respectively, received by Landlord, Indenture Trustee or Tenant
with respect to any Premises that Tenant has elected not to rebuild or restore
pursuant to SECTION 2 of this Article shall be applied as follows:
(i) all such payments, if any, received by
Tenant in error shall be promptly paid to Landlord in the
manner set forth in SECTION 4 of Article III for application
pursuant to the following provisions of SECTION 4 of this
Article;
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(ii) so much of such Net Proceeds or Net
Condemnation Proceeds, as the case may be (after payment of
the portion thereof required to be made to the Lessors (as
defined in the applicable Addendum) pursuant to the Main Lease
if applicable), exceeds the Purchase Price required to be paid
by Tenant pursuant to SECTION 4(a) of this Article shall be
refunded to Tenant; and
(iii) an amount of such Net Proceeds or Net
Condemnation Proceeds, as the case may be (after payment of
the portion thereof required to be made to the Lessors (as
defined in the applicable Addendum) pursuant to the Main Lease
if applicable), up to the Purchase Price to be paid by Tenant
pursuant to SECTION 4(a) of this Article shall be paid to and
credited by Landlord in reduction of such Purchase Price
otherwise owed by Tenant.
5. REBUILD. Tenant's obligation to rebuild or restore the
Premises affected by any Event of Loss pursuant to SECTION 2(a) of this Article
shall be subject to the fulfillment, at Tenant's sole cost and expense, of the
following conditions:
(a) Within ninety (90) days after the date Tenant shall
notify Landlord (with a copy to Indenture Trustee) pursuant to SECTION 2(a) of
this Article of its election to rebuild or restore such Premises in accordance
with this Section, but prior to the commencement of such rebuilding or
restoration, Tenant shall deliver to Landlord (with a copy to Indenture
Trustee), an appraisal of an independent appraiser selected by Landlord and
reasonably acceptable to Tenant to the effect that such Premises upon completion
of such rebuilding or restoration will have at least the same value, residual
value, utility and useful life as such Premises had immediately prior to the
Event of Loss; PROVIDED, that a DE MINIMUS reduction, as set forth in such
appraisal, in the value, residual value, utility or useful life of such Premises
shall nevertheless be deemed to satisfy the requirements of this subparagraph
(a);
(b) Within ninety (90) days after the date Tenant shall
notify Landlord pursuant to SECTION 2(a) of this Article of its election to
rebuild or restore such Premises in accordance with this Section, but prior to
the commencement of such rebuilding or restoration, Tenant shall demonstrate to
the reasonable satisfaction of Landlord adequate financial resources, from Net
Proceeds or otherwise, to complete such rebuilding or restoration; and
(c) Tenant shall cause the rebuilding or restoration of
such Premises to commence as soon as reasonably practicable after notifying
Landlord (with a copy to Indenture Trustee) of its obligation to rebuild or
restore such Premises in accordance with this Section and in all events within a
reasonable period of time after the occurrence of such Event of Loss and will
cause work on such rebuilding or restoration to proceed diligently thereafter.
In the event of a rebuilding or restoration of the Premises, Tenant shall comply
with SECTION 7 of this Article.
6. PARTIAL CASUALTY OR CONDEMNATION. Within thirty (30) days after
the occurrence of partial damage to, or partial condemnation of, or sale under
threat of condemnation, any part of
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the Premises (a "PARTIAL CASUALTY OR CONDEMNATION"), Tenant shall give notice to
Landlord (with a copy to Indenture Trustee) of such occurrence. Tenant shall
have the obligation to rebuild or restore the affected or remaining portion of
such Premises, at its sole cost and expense, following any Partial Casualty or
Condemnation, such rebuilding or restoration to commence within ninety (90) days
after the occurrence of such Partial Casualty or Condemnation and to be
completed within a reasonable period of time thereafter; PROVIDED, that Tenant
shall not be obligated to rebuild or restore the affected or remaining portion
of such Premises if as of the date such rebuilding or restoration would
otherwise be required to commence, there do not remain at least twelve (12)
months prior to the end of the Term of this Lease. The Total Rent payable by
Tenant hereunder shall not be reduced as a result of any Partial Casualty or
Condemnation; PROVIDED, that any Net Proceeds or Net Condemnation Proceeds with
respect to such Premises received at any time by Landlord, Indenture Trustee or
Tenant as a result of any partial damage to, or condemnation of, or sale under
threat of condemnation of, any part of such Premises shall, upon compliance by
Tenant with SECTION 7 of this Article, be paid to Tenant, and may at Tenant's
option be used to reimburse Tenant for its costs incurred in rebuilding and
restoring such Premises.
7. CERTIFICATIONS BY TENANT. In order to be reimbursed any Net
Proceeds upon the election (or deemed election) by Tenant to rebuild or restore
the Premises, Tenant shall complete and file with Landlord (with a copy to
Indenture Trustee) a Requisition in substantially the form attached hereto as
EXHIBIT G and, upon completion and as a condition to the final disbursement by
or on behalf of Landlord, a Completion Certificate in substantially the form
attached hereto as EXHIBIT H.
ARTICLE XI
ENVIRONMENTAL MATTERS
1. CERTAIN DEFINITIONS. When used in this Article, the
following capitalized terms shall have the meanings set forth below:
(a) "ABOVEGROUND STORAGE TANK" means a nonvehicular device
constructed of nonearthen materials located above the ground surface or above
the floor of a structure that is below the ground and is designed to contain
liquids.
(b) "ACM" means asbestos or any material containing more
than one percent (1%) asbestos (as determined under Environmental Laws) that is
friable or which bears a risk of becoming friable if not abated.
(c) "CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 ET. SEQ.
(d) "COSTS" means all liabilities, losses, costs, damages,
punitive damages, expenses, claims, loss of lien priority, diminution in value,
attorneys' fees, experts' fees, consultants' fees, penalties, fines,
obligations, judgments and disbursements, as well as expenses of Remediation and
any other remedial, removal, response, abatement, cleanup, legal, investigative,
monitoring, or record keeping costs and all expenses related thereto.
(e) "DISPOSAL" (or "DISPOSED") shall have the meaning
specified in RCRA.
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(f) "ENVIRONMENTAL AUDIT" means a comprehensive analysis
prepared by consultants approved by Landlord, the form, scope, and substance of
which shall be acceptable to Landlord in its reasonable discretion of (i)
Tenant's compliance with Environmental Laws, and (ii) Tenant's activities or any
activities conducted at the Premises for the purpose of determining whether
there exists any condition that could give rise to any Environmental Claim
against Tenant, the Premises or any operator thereof.
(g) "ENVIRONMENTAL CLAIM" means any claim; demand; action;
cause of action; suit; loss; cost; damage; punitive damage; fine, penalty,
expense, liability, criminal liability, judgment, governmental or private
investigation relating to Remediation or compliance with Requirements of
Environmental Laws; proceeding; lien; personal injury, or property damage,
whether threatened, sought, brought or imposed, that is related to or that seeks
to recover Costs related to, or seeks to impose liability regarding Tenant, the
Premises or operations conducted at any of the Premises for (i) improper use or
treatment of wetlands, pinelands or other protected land or wildlife; (ii)
noise; (iii) radioactive materials (including naturally occurring radioactive
materials); (iv) explosives; (v) pollution, contamination, preservation,
protection, Remediation or clean-up of the air, surface water, ground water,
soil or wetlands; (vi) solid, gaseous or liquid waste generation, handling,
discharge, release, threatened release, treatment, storage, disposal or
transportation; (vii) exposure of persons or property to Hazardous Substances
and the effects thereof; (viii) the manufacture, processing, distribution in
commerce, use, treatment, storage, disposal or Remediation of Hazardous
Substances; (ix) injury to, death of or threat to the health or safety of any
person or persons caused directly or indirectly by Hazardous Substances; (x)
destruction caused directly or indirectly by Hazardous Substances or the release
of any Hazardous Substance on any property (whether real or personal); (xi) the
implementation of spill prevention and/or disaster plans relating to Hazardous
Substances; (xii) community right-to-know and other disclosure laws or (xiii)
maintaining, disclosing or reporting information to governmental authorities
under any Environmental Law. The term "Environmental Claim" also includes any
Costs incurred in responding to efforts to require Remediation and any claim
based upon any asserted or actual breach or violation of any Requirements of
Environmental Law, or upon any event, occurrence or condition as a consequence
of which, pursuant to any Requirements of Environmental Law, (y) any owner,
operator or person having any interest in any of the Premises, including any
mortgagee of any of the Premises or the beneficiary of any deed of trust of any
of the Premises, shall be liable with respect to any Environmental Claim or
otherwise suffer any loss or disability or (z) any of the Premises shall be
subject to any restriction on use, ownership or transferability. An
"Environmental Claim" further includes a proceeding to issue, modify, revoke or
terminate an Environmental Permit, or to adopt or amend a regulation to the
extent that such a proceeding or occurrence attempts to redress violations of
any applicable Environmental Permit or will materially impair the value of any
of the Premises, Tenant's current financial condition or Tenant's ability to
conduct its business operations or to continue in business as a going concern.
(h) "ENVIRONMENTAL LAWS" means any and all laws, rules,
regulations, ordinances, orders or guidance documents now or hereafter in effect
of any federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority or any judicial or administrative
decision relating thereto that relate to (i) wetlands, pinelands or other
protected land or wildlife species; (ii) noise; (iii) radioactive materials
(including naturally occurring radioactive materials); (iv) explosives; (v)
pollution, contamination, preservation,
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protection, or clean-up of the air, surface water, ground water, soil or
wetlands; (vi) solid, gaseous or liquid waste generation, handling, discharge,
release, threatened release, treatment, storage, disposal or transportation;
(vii) exposure of persons or property to Hazardous Substances and the effects
thereof; (viii) injury to, death of or threat to the safety or health of
employees and any other persons; (ix) the manufacture, processing, distribution
in commerce, use, treatment, storage, disposal or Remediation of Hazardous
Substances; (x) destruction, contamination of, or the release onto any property
(whether real or personal) directly or indirectly connected with Hazardous
Substances; (xi) the implementation of spill prevention and/or disaster plans
relating to Hazardous Substances; (xii) community right-to-know and other
disclosure laws or (xiii) maintaining, disclosing or reporting information to
governmental authorities under any Environmental Law.
(i) "ENVIRONMENTAL PERMITS" means any permit, license,
registration, waste identification number, approval or other authorization
relating to Tenant, Tenant's business or operations, or any of the Premises
required by any Environmental Law.
(j) "HAZARDOUS SUBSTANCES" means (i) those substances
included within the statutory and/or regulatory definitions of "hazardous
substance," "hazardous waste," "extremely hazardous substance," "regulated
substance," "contaminant," "hazardous materials" or "toxic substances," under
any Environmental Law, (ii) those substances listed in 49 C.F.R. 172.101 and in
40 C.F.R. Part 302; (iii) any material, waste or substance which is (A)
petroleum, oil or a fraction thereof, (B) ACM, (C) polychlorinated biphenyls,
(D) formaldehyde, (E) designated as a "hazardous substance" pursuant to 33
U.S.C. Section 1321 or listed pursuant to 33 U.S.C. Section 1317; (F) explosives
or (G) radioactive materials (including naturally occurring radioactive
materials); (iv) Solid Wastes that pose imminent and substantial endangerment to
health or the environment; (v) radon gas in an ambient air concentration
exceeding four picocuries per liter (4 pCi/l); (vi) such other substances,
materials, or wastes that are or become classified or regulated as hazardous or
toxic under any federal, state or local law or regulation and (vii) any
Underground Storage Tank. For the purposes of this definition, Hazardous
Substances shall not include any substance of a nature, quantity or
concentration that is customarily used, stored or disposed as part of or
incidental to the operation and maintenance of any of the Premises in the
ordinary course of Tenant's business currently conducted (or currently
contemplated to be conducted following completion of construction of
improvements, if applicable) at any of the Premises so long as (x) such use,
storage or disposal complies fully with applicable Environmental Laws and good
and safe business practice, (y) any disposal takes place in accordance with
applicable Environmental Laws at disposal facilities and locations other than
the Premises and which are fully permitted in accordance with Environmental Laws
and (z) such use, storage or disposal does not require Tenant, any agent or
employee of Tenant or any operator of any of the Premises to have a hazardous
waste generator identification number or any other Environmental Permit based
primarily on or related primarily to the Hazardous Substance in question.
(k) "LANDLORD AND INDENTURE TRUSTEE INDEMNITEES" means
Landlord and Indenture Trustee, their respective shareholders, directors,
officers, employees, counsel and agents, and all successors to any of the
foregoing, any affiliate, successor, assign or subsidiary of Landlord or
Indenture Trustee and each of their respective shareholders, directors,
officers, employees, counsel, agents and contractors, as well as their
respective heirs and personal and legal representatives.
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(l) "RCRA" means the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901, ET. SEQ.
(m) "RELEASE" (or "RELEASED") shall have the meaning
specified in CERCLA.
(n) "REMEDIATION" means any action necessary to ensure
compliance with the Requirements of Environmental Law including (i) the removal
and disposal or containment (if containment is practical under the circumstances
and is permissible within Requirements of Environmental Law) or monitoring of
any and all Hazardous Substances at any of the Premises; (ii) the taking of
reasonably necessary precautions to protect against the release or threatened
release of Hazardous Substances at, on, in, about, under, within or near the
air, soil, surface water, groundwater or soil vapor at any of the Premises or
any public domain affected by any of the Premises or any surrounding areas
thereof; (iii) any action necessary to mitigate the usurpation of wetlands,
pinelands or other protected land or reclaim the same or to protect and preserve
wildlife species; (iv) any action necessary to meet the requirements of an
Environmental Permit or (v) any other action reasonably required to satisfy
Requirements of Environmental Law imposed upon Tenant, any of the Premises
and/or any operation thereon.
(o) "REQUIREMENTS OF ENVIRONMENTAL LAW" means all
requirements, conditions, restrictions or stipulations of Environmental Laws
imposed upon or related to Tenant, any of the Premises and/or any operation
conducted on any of the Premises.
(p) "SOLID WASTE" shall have the meaning ascribed to it
in RCRA.
(q) "UNDERGROUND STORAGE TANK" shall have the meaning
ascribed to it in RCRA.
Notwithstanding the foregoing, if any Environmental Law is amended so as to
broaden the meaning of any term defined in it, such broader meaning shall apply
subsequent to the effective date of such amendment. Where a defined term in this
Article derives its meaning from a statutory reference, for the purposes of this
Article any regulatory definition promulgated pursuant to the applicable statute
shall be deemed to be applicable to the extent its definition is broader than
the statutory reference and any reference or citation to a statute or regulation
shall be deemed to include any amendments to that statute or regulation and
judicial and administrative interpretations of it. Any specific references to a
law shall include any amendments to it promulgated from time to time.
2. ENVIRONMENTAL COVENANTS. Tenant agrees and covenants as follows:
(a) Tenant shall notify Landlord in writing within
three (3) business days upon receipt by Tenant from any person of any inquiry,
notice, claim, charge, cause of action or demand relating to Requirements of
Environmental Laws or an Environmental Claim, including any notice of inspection
or assertion of noncompliance with Requirements of Environmental Laws, stating
the basis of such inquiry or notification. Tenant shall promptly deliver to
Landlord any and all documentation or records as Landlord may request in
connection with such notice or inquiry, and shall keep Landlord advised of any
subsequent developments at all times.
(b) Tenant will obtain, comply with and properly maintain
all Environmental Permits required for the Premises and any operations conducted
thereon.
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(c) Tenant will not do or permit anything that will cause
Tenant or to be in violation of any Requirements of Environmental Laws, or do or
permit anything to be done that might subject Tenant or any of the Premises to
any Remediation obligations that would materially and adversely affect the
financial condition of Tenant or the value or marketability of any of the
Premises or to any enforcement actions under any Environmental Laws or any other
Environmental Claim.
(d) If any release of Hazardous Substances should exist or
occur at any of the Premises or if Tenant should be ordered or directed by any
governmental authority to undertake Remediation of any Hazardous Substances at
any of the Premises or take any other action to satisfy Requirements of
Environmental Law, Tenant, at no cost or expense to the Landlord and Indenture
Trustee Indemnitees, shall comply with all Environmental Laws, conduct and
complete all required sampling, testing and monitoring and undertake such
Remediation promptly upon discovery or notice thereof and thereafter diligently
and continuously pursue such Remediation, completing each element, phase or
stage of it within each applicable period established by any agency or bureau
empowered to enforce any applicable Environmental Law (or if no such period or
schedule is established, in accordance with a reasonable schedule consistent
with prudent business practice taking into account potentially adverse effects
to the environment and individuals' health and safety), but in any case before
any lien is created on the applicable Premises. If Tenant undertakes any
Remediation, or causes it to be undertaken, Tenant shall conduct and complete
such Remediation (i) in compliance with Requirements of Environmental Laws, (ii)
in accordance with the directives and orders of all appropriate federal, state
and local governmental authorities and (iii) in accordance with sound business
practice taking into account potentially adverse effects to the environment and
individuals' health and safety.
(e) If any Remediation fails to comply with Requirements of
Environmental Laws because of changes to said Environmental Laws, Tenant shall
promptly undertake such Remediation and other work as is necessary to comply
with the then-current Environmental Laws in the manner set forth in this
Section.
(f) Upon the occurrence of any Payment Default and upon
Landlord's request, at any time and from time to time, Tenant will provide, at
no cost or expense to the Landlord and Indenture Trustee Indemnitees, an
Environmental Audit; PROVIDED, that unless required by any governmental
authority, Landlord may not request more than one (1) Environmental Audit for
any Premises in any twelve (12) calendar month period. If Tenant fails to
provide an Environmental Audit within thirty (30) days after Landlord's written
request, Landlord may order one, and Tenant grants to Landlord and its agents,
employees, contractors and consultants access to the Premises and a license to
perform such inspections and tests as are reasonable under the circumstances. At
Landlord's option, the cost of such inspections and tests actually incurred by
Landlord shall be payable by Tenant to Landlord upon demand.
(g) Tenant will not install any ACM or permit any ACM to be
installed in or introduced onto any of the Premises; and if any ACM exists in or
on any of the Premises in violation of Environmental Laws, whether installed by
Tenant or others, Tenant will, at no cost or expense to the Landlord and
Indenture Trustee Indemnitees, remove it (or if removal is prohibited by law or
in Tenant's reasonable judgment is impractical, take whatever action is required
by law or
24
reasonably necessary to mitigate adverse impact to the environment and
individuals' health and safety, including encapsulation of the ACM or
implementation of an operation and maintenance program).
3. ENVIRONMENTAL INDEMNITY.
(a) Tenant hereby agrees unconditionally, absolutely and
irrevocably, to indemnify, defend and hold harmless each Landlord and Indenture
Trustee Indemnitee from and against any Costs which at any time or from time to
time may be claimed, suffered or incurred in connection with any Environmental
Claim, the violation of any Requirements of Environmental Law, the breach of any
representation or warranty of Tenant set forth herein or the failure of Tenant
to perform any obligation herein required to be performed by Tenant, in each
case occurring prior to the expiration or termination of this Lease. Such
indemnification obligations are herein called the "ENVIRONMENTAL
INDEMNIFICATIONS."
(b) The provisions of and undertakings and indemnifications
set out in this Article shall survive the expiration or termination of this
Lease and shall thereafter continue to be the personal liability, obligation and
indemnification of Tenant, binding upon Tenant.
(c) Tenant's liability under the indemnification provisions
contained in this Article shall accrue upon the earlier of an Environmental
Claim being asserted against any Landlord and Indenture Trustee Indemnitee or
upon a Landlord and Indenture Trustee Indemnitee's receipt of notice or
acquiring knowledge of any of the events specified in SECTION 3(a). In no event
shall any Landlord and Indenture Trustee Indemnitee be required to make any
expenditure or bring any cause of action to enforce Tenant's obligations and
liability under and pursuant to the indemnifications set forth in this Article.
In addition, actual threatened action by governmental authority is not a
condition or prerequisite to Tenant's obligations under this Lease. Within five
(5) days after notification from Landlord supported by reasonable documentation
setting forth the nature of the Environmental Claim, Tenant, at no cost or
expense to Landlord and Indenture Trustee Indemnitees, shall diligently commence
resolution of the Environmental Claim in a manner reasonably acceptable to
Landlord and shall diligently and timely prosecute such resolution to
completion. Provided, however, with respect to those claims that may be
satisfied by payment of a liquidated sum of money, Tenant shall promptly pay the
amount so claimed (to the extent supported by reasonable documentation). If
Remediation is required, the provisions of SECTION 2(d) shall control and if
litigation or any administrative proceeding is commenced the provisions of
SECTION 3(h) shall control.
(d) TENANT SHALL INDEMNIFY THE LANDLORD AND INDENTURE
TRUSTEE INDEMNITEES REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS,
CIRCUMSTANCES OR CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN
WHOLE OR IN PART BY LANDLORD'S OR INDENTURE TRUSTEE'S (OR ANY LANDLORD AND
INDENTURE TRUSTEE INDEMNITEE'S) SIMPLE (BUT NOT GROSS) NEGLIGENCE.
(e) Notwithstanding any provision contained to the contrary
in this Lease, Tenant shall bear the burden of proof by preponderance of the
evidence that the indemnification contained in this Article is inapplicable to
any claim or assertion made hereunder.
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(f) The provisions of this Article shall govern and control
over any inconsistent provision of this Lease.
(g) If at any time any Landlord and Indenture Trustee
Indemnitee employs counsel for advice or other representation (i) with respect
to this Article; (ii) except as otherwise expressly provided herein, to
represent any such Landlord and Indenture Trustee Indemnitee in any litigation,
contest, dispute, suit or proceeding (whether instituted by a Landlord and
Indenture Trustee Indemnitee, Tenant or any other party) in any way or respect
relating to this Article; (iii) to evaluate the existence of an Environmental
Claim hereunder; (iv) to defend an Environmental Claim or (v) to enforce
Tenant's obligations hereunder, then and in any of such events, all of such
Landlord and Indenture Trustee Indemnitee's reasonable attorneys' fees and
expenses arising from such services and all other reasonable expenses, costs and
charges in any way or respect arising in connection therewith or relating
thereto shall be paid by Tenant to Landlord on demand.
(h) If any Environmental Claim shall be brought against
any Landlord and Indenture Trustee Indemnitee for which indemnification is
provided pursuant to this Section, then after notification to Tenant thereof as
provided in SECTION 3(c), Tenant shall be entitled to participate in all related
proceedings and negotiations and to assume the defense thereof at the expense of
Tenant with counsel reasonably acceptable to Landlord and to settle and
compromise any such claim or action; PROVIDED, that Landlord may elect to be
represented by separate counsel, at Tenant's expense, and if Landlord so elects,
any settlement or compromise shall be effected only with the consent of
Landlord, which consent shall not be unreasonably withheld. Tenant's right to
participate in the defense or response to any Environmental Claim should not be
deemed to limit or otherwise modify its obligations under this Article.
(i) Tenant shall make any payment required to be made
under this Article in cash and on demand.
(j) Any Costs and other payments required to be paid by
Tenant under this Article which are not paid within five (5) business days of
receipt by Tenant of Landlord's demand therefor shall thereafter be deemed
"Delinquent." In addition to all other rights and remedies of Landlord against
Tenant provided herein or under any applicable law, Tenant shall pay to Landlord
immediately upon demand interest at the highest lawful rate permitted by
applicable federal or state law from the date such payment becomes Delinquent to
the date of payment of such Delinquent sums.
(k) Landlord shall be subrogated to any rights Tenant may
have under any indemnifications from any present, future or former owners,
tenants or other occupants or users of any of the Premises or any other person
relating to the matters covered by this Article.
(l) Without limiting any other provision of this Lease,
in the event of a dissolution of Tenant or the disposition of all or
substantially all of Tenant's assets to one or more persons or entities, the
surviving entity or transferee of assets as the case may be shall deliver to
Landlord an acknowledged instrument specifically assuming all obligations,
covenants and responsibilities of Tenant under this Article.
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(m) The representations, warranties and covenants and
indemnities of Tenant set forth in this Article shall continue in effect and, to
the extent permitted by law, shall survive the expiration or termination of this
Lease.
ARTICLE XII
DEFAULT AND REMEDIES
1. BASE RENT PAYMENT DEFAULT. If Tenant should fail to pay to
Landlord any Base Rent Component when due, Landlord shall give Tenant written
notice specifying such default and Tenant shall then have five (5) days within
which to cure the same. If after such five (5) day period Tenant shall not have
cured such default after such notice, then such failure shall constitute a "BASE
RENT PAYMENT DEFAULT."
2. SECURITY DEPOSIT PAYMENT DEFAULT. If Tenant shall fail to
pay any Security Deposit at the time and in the amount required by SECTION 2 of
Article III hereof, Landlord shall give Tenant written notice specifying such
default and Tenant shall then have fifteen (15) Business Days from the date
Landlord gave such written notification to Tenant in which to cure the same. If
after such fifteen (15) Business Day period Tenant shall not have cured such
default, then Landlord shall give Tenant a second and final notice specifying
such default. If Tenant shall fail to cure such default within five (5) days
after such second and final notice, then such failure shall constitute a
"SECURITY DEPOSIT PAYMENT DEFAULT."
3. PURCHASE PRICE PAYMENT DEFAULT. If Tenant shall fail to make
payment of the Purchase Price in the amount and at the time required pursuant to
SECTION 4 of Article X, Landlord shall give Tenant written notice specifying
such default and Tenant shall then fifteen (15) Business Days from the date
Landlord gave such written notification to Tenant in which to cure the same. If
after such fifteen (15) Business Day period Tenant shall not have cured such
default, then Landlord shall give Tenant a second and final notice specifying
such default. If Tenant shall fail to cure such default within five (5) days
after such second and final notice, then such failure shall constitute a
"PURCHASE PRICE PAYMENT DEFAULT."
4. BANKRUPTCY DEFAULT. If any petition in bankruptcy or other
insolvency proceedings shall be filed by or against Tenant, or any petition
shall be filed or other action taken to declare Tenant a bankrupt or to appoint
a trustee, receiver or liquidator of Tenant or any property of Tenant, or any
proceeding or other action shall be commenced or taken by any governmental
authority for the dissolution or liquidation of Tenant, and if such petition or
action was not filed or taken by Tenant, same shall not have been dismissed or
stayed within sixty (60) days after the institution thereof, then such filing,
action or proceeding shall constitute a "BANKRUPTCY DEFAULT".
5. OTHER DEFAULT. If Tenant fails to use the Premises for the
Permitted Use at all times during the Term of this Lease, or if Tenant fails to
comply with any covenant, condition or requirement of this Lease (other than as
set forth in SECTIONS 1, 2 AND 3 of this Article XII), then Landlord shall give
Tenant written notice specifying with particularity such default and Tenant
shall then have thirty (30) days within which to cure such default or to
commence to cure such default if the same cannot with the exercise of reasonable
diligence be cured within such thirty (30) day period. If after such thirty (30)
day period, Tenant shall not have cured such default, or
27
commenced reasonable efforts to cure such default in the case of a default which
cannot with the exercise of reasonable diligence be cured within thirty (30)
days, or if Tenant shall not continue such curative efforts after said thirty
(30) days period until such default is completely cured, then such failure shall
constitute an "OTHER DEFAULT".
6. REMEDIES FOR PAYMENT DEFAULT. Upon the occurrence of any Base
Rent Payment Default, Security Deposit Payment Default, Purchase Price Payment
Default or Bankruptcy Default (collectively, the "PAYMENT DEFAULT") and at any
time thereafter so long as Tenant shall not have remedied all outstanding
Payment Defaults, Landlord may do one or more of the following as Landlord may
in its sole discretion elect (provided, that with respect to any Base Rent
Payment Default or Purchase Price Payment Default, so long as Tenant satisfies
the Minimum Coverage Ratio, Landlord may only exercise the remedies set forth
below with respect to the Premises to which such Base Rent Payment Default or
Purchase Price Payment Default relates):
(i) Terminate this Lease, whereupon Landlord may,
without breach of the peace and in accordance with applicable law,
repossess the Premises and be entitled to recover as damages a sum of
money equal to the total of (a) the reasonable cost of recovering
possession of the Premises, (b) the reasonable cost of removing and
storing Tenant's or any other occupant's property, (c) the unpaid Total
Rent and any other reasonable sums accrued hereunder at the date of
termination, and (d) any other damages owed by Tenant to Landlord under
applicable law which are caused by such default; or
(ii) Without having terminated this Lease, enter
upon and take possession of the Premises, whereupon Landlord may,
without breach of the peace and in accordance with applicable law,
repossess the Premises by forcible entry or detainer suit, without
terminating this Lease and without becoming liable for damages or
guilty of trespass, in which event Landlord shall use reasonable
efforts to relet the Premises for the account of Tenant. Upon
termination of Tenant's right of possession to the Premises as provided
herein, Tenant shall be liable for and shall pay to Landlord all Base
Rent (and, if applicable, Overdue Rent) payable by Tenant under this
Lease (monthly, without acceleration) plus an amount equal to (a) the
reasonable cost of recovering possession of the Premises, (b) the
reasonable cost of removing and storing any of Tenant's or any other
occupant's property left on the Premises after re-entry, (c) the
reasonable cost of any reletting and of the collection of the rent
accruing from such reletting, (d) any other reasonable costs incurred
by Landlord in connection with any such reletting, and (e) any other
damages owed by Tenant to Landlord under applicable law, all reduced by
any sums received by Landlord through reletting the Premises; PROVIDED,
HOWEVER, that in no event shall Tenant be entitled to any excess of any
sums obtained by reletting over and above the Total Rent provided in
this Lease to be paid by Tenant to Landlord. Landlord may file suit to
recover any sums falling due under the terms of this subparagraph (ii)
from time to time. No reletting shall be construed as an election on
the part of Landlord to terminate this Lease unless a written notice of
such intention is given to Tenant by Landlord. Notwithstanding any
other provision of this Lease to the contrary, in the event
28
Landlord incurs any costs in connection with reletting the Premises for
a period which extends beyond the Term of this Lease, Tenant shall have
no responsibility for such prorated portion of such cost as pertains to
the period after the expiration or earlier termination of this Lease.
7. REMEDIES FOR OTHER DEFAULT. Upon the occurrence of any Other
Default and at any time thereafter so long as Tenant shall not have remedied all
outstanding Other Defaults, Landlord may (but shall not be obligated to), at
Landlord's election and upon prior written notice to Tenant, either (i) make any
such payment that is required to be made by Tenant hereunder or enter upon the
Premises and cause performance or compliance in a reasonable manner with any
covenant, condition or requirement of this Lease, and the amount of such payment
and of the reasonable expenses of Landlord incurred in connection with such
payment or the performance of or compliance with such covenant, condition or
requirement, as the case may be, shall be payable by Tenant to Landlord on
demand or (ii) proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by Tenant, at Tenant's sole cost and expense,
of the applicable covenants, conditions or requirements of this Lease or to
recover damages for the breach thereof. No action taken by Landlord under this
Section shall relieve Tenant from any of its obligations under this Lease or
from any consequences or liabilities from the failure to perform such
obligations.
8. REMEDIES EXCLUSIVE. The remedies of Landlord set forth in
SECTIONS 7 AND 8 of Article XII hereof shall be Landlord's sole and exclusive
remedies in the event of any default by Tenant which is not cured within the
hereinabove stated cure periods.
9. UNAVOIDABLE DEFAULT OR DELAY; WAIVER. Any prevention, delay, or
stoppage due to any of the following causes shall excuse performance for the
period of any such prevention, delay, nonperformance, or stoppage, except the
obligations imposed by this Lease for the payment of Total Rent, taxes,
insurance or utilities. The causes referred to above are strikes, lockouts,
labor disputes, failure of power, acts of God, acts of public enemies of the
state or of the United States, riots, insurrections, civil commotion, inability
to obtain labor or materials or reasonable substitutes for either, governmental
restrictions or regulations or controls, casualties or other causes beyond the
reasonable control of the party obligated to perform.
10. WAIVER. No waiver of any breach or default shall constitute a
waiver of any other breach or default, whether of the same or any other covenant
or condition. No waiver, benefit, privilege, or service voluntarily given or
performed by either party shall give the other any contractual right by custom,
estoppel or otherwise.
ARTICLE XIII
EXPIRATION AND TERMINATION
1. TENANT'S DUTY TO SURRENDER. At the expiration or earlier
termination of the Term, Tenant shall surrender to Landlord the possession of
the related Premises in the condition required under SECTION 1 of Article VIII
hereof. All property that Tenant is entitled to remove but that Tenant does not
remove from the related Premises within thirty (30) days after expiration or
earlier termination of this Lease shall, at Landlord's election, become
Landlord's property at expiration or earlier termination of the Lease (without
any obligation to pay or
29
otherwise compensate Tenant for such property) or Landlord may compel Tenant to
remove the same so long as Landlord provides Tenant notice to such effect within
ten (10) days following the expiration or earlier termination hereof. All
improvements, alterations and other construction made by Tenant during the Term
shall belong to Landlord upon the expiration or earlier termination of this
Lease, without any obligation to compensate Tenant for the same.
2. HOLDING OVER. This Lease, with respect to the related Premise,
shall terminate without further notice at expiration of the Term. Any holding
over by Tenant after the expiration or termination of this Lease with respect to
the related Premise without the execution of a new lease shall constitute a
tenancy at sufferance subject to all terms and provisions of this Lease, except
that for the entire holdover period the Base Rent for such Premises shall be
increased to 150% of the Base Rent which was payable by Tenant immediately prior
to such expiration or termination.
ARTICLE XIV
LANDLORD'S MORTGAGEE
1. LANDLORD'S MORTGAGEE. Tenant acknowledges that Landlord's right,
title and interest in, to and under the Premises, this Lease and the rents
payable hereunder have been pledged and assigned by Landlord to Indenture
Trustee pursuant to the Indenture as collateral security for Bonds issued by
Landlord in connection with Landlord's acquisition, expansion or construction of
the Premises. Tenant hereby consents to the creation of such lien and security
interest and to such assignment. Unless and until Tenant shall have received
written notice from Indenture Trustee that such lien, security interest and
assignment have been fully terminated, Indenture Trustee shall have the right,
but shall not be obligated, following a default by Landlord under such Mortgages
(hereinafter defined) which is not cured within any applicable grace or cure
period, to exercise the rights of Landlord under this Lease to the extent set
forth in and subject in each case to the exceptions set forth in the deeds of
trust and mortgages (with assignments of leases and rents) now or hereafter
executed by Landlord in favor of Indenture Trustee covering and affecting
Landlord's right, title and interest in, to and under this Lease, the Premises
and the Main Leases (collectively, the "MORTGAGES"). TO THE EXTENT, IF ANY, THAT
THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY
COUNTERPART HEREOF OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE
IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY
INDENTURE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
2. CURE RIGHTS FOR LANDLORD DEFAULT. Notwithstanding anything
contained in this Lease to the contrary, in the event of any default by Landlord
in performing its covenants or obligations hereunder which would give Tenant any
right under this Lease, Tenant shall not exercise such right unless and until
(a) Tenant gives written notice of such default (which notice shall specify the
default in reasonable detail) to Landlord (with a copy to Indenture Trustee),
and (b) Landlord or Indenture Trustee fails to commence action to cure said
default within thirty (30) days from the giving of such notice by Tenant, or
having timely commenced such action, fails to prosecute such efforts to
completion with reasonable diligence thereafter. The provisions of
30
SECTION 2 of Article XVI shall govern the manner and effective date of any
notice to be given by Tenant to any such parties. Tenant's sole remedy for any
such default shall be an action against Landlord for damages, and Tenant hereby
WAIVES, to the maximum extent allowed by law, the benefits of any laws granting
Tenant a lien upon property of Landlord, or upon Total Rent due Landlord.
3. ESTOPPEL CERTIFICATE OR THREE-PARTY AGREEMENT. At the request of
Landlord from time to time, Tenant will execute an estoppel certificate
certifying to such facts (if true) as Landlord may reasonably require, and
containing such agreements and acknowledgments as may be reasonably required by
Landlord or Indenture Trustee. In the event Tenant fails to execute and deliver
the same within five (5) business days after request therefor, Landlord shall
have the right (and Tenant hereby empowers Landlord) to execute and deliver such
certificate for and on behalf of and as the binding act of Tenant.
ARTICLE XV
CONSTRUCTION PROJECTS
1. CONSTRUCTION PROJECTS. Should Tenant desire to expand an
existing Premises or construct a new facility on any Premise covered, or
proposed to be covered, by this Lease (each, a "CONSTRUCTION PROJECT"), Tenant
shall submit a proposal for such Construction Project to Landlord, which
proposal shall include (i) a budget for such Construction Project, (ii)
pro-forma computations and other information, in reasonable detail, projecting
the Coverage Ratio for Tenant for the twelve (12) month period immediately
following the date on which such Construction Project is scheduled to be
completed and become operational, assuming for purposes of such calculation that
the Additional Bonds for such Construction Project have been issued and (iii)
such other information as may be reasonably requested by Landlord. If such
proposal demonstrates that Tenant will be in compliance with the Minimum
Coverage Ratio after such Construction Project has been completed and is
operational, Landlord shall conditionally approve such Construction Project, and
shall negotiate in good faith with Tenant with respect to a new Addendum.
Thereafter, Tenant may elect to advance its own funds to expand an existing
Premise or to construct a new facility on any Premise already covered by this
Lease and in such event Landlord shall have no obligation to issue Additional
Bonds until (a) the aggregate amount of all funds advanced by Tenant for all
such Construction Projects, together with estimated transaction expenses
associated with issuance of Additional Bonds, shall be such as to enable
Landlord to issue Additional Bonds in a cost-effective and financially
responsible manner and (b) Tenant and Landlord shall have agreed to revised
EXHIBITS A AND B. Upon satisfaction by Tenant of the conditions precedent set
forth (i) in this Section of ARTICLE XV and (ii) in SECTION 2.1 of the
Indenture, and upon execution and delivery of a new Addendum and revised
EXHIBITS A AND B, Landlord then agrees to use all reasonable efforts to issue
Additional Bonds to finance such construction of such Construction Projects
pursuant to SECTION 2.1 of the Indenture to the extent applicable; provided,
however, that Landlord shall have no liability to Tenant, or be required to
reimburse Tenant for, any expenditures made or costs incurred in the event
Landlord is unable to issue Additional Bonds.
2. PLANS AND SPECIFICATIONS. If Landlord approves such Construction
Project, Tenant shall hire an architect, engineer or other professional to
oversee construction, who shall be acceptable to Landlord (the "CONSTRUCTION
CONSULTANT"); provided that Tenant may use an in-
31
house Construction Consultant with at least 10 years or related experience.
Tenant shall submit the architectural and engineering drawings and
specifications in a manner consistent with Tenant's past practices and
consistent with industry practice (as such plans and specifications may be
developed or revised from time to time (the "PLANS AND SPECIFICATIONS") to
Landlord for its review and approval, which approval shall not be unreasonably
withheld. The Plans and Specifications will include complete sets of
architectural, structural, mechanical, electrical and plumbing working drawings
for the Construction Project. Landlord will either approve or disapprove the
Plans and Specifications within fifteen (15) days after the date Landlord
receives the Plans and Specifications. If Landlord does not approve the Plans
and Specifications, Landlord will inform Tenant in writing of its objections and
Tenant will revise the same and deliver a corrected version to Landlord for its
approval. Tenant shall not commence construction of the Construction Project for
which Tenant seeks prompt reimbursement of advances by Landlord until such time
as Tenant has complied with SECTION 1 of this ARTICLE XV, Landlord has approved
the Plans and Specifications, Landlord and Tenant have executed and delivered a
new Addendum hereto, complete with revised EXHIBITS A AND B, and the proceeds of
Additional Bonds have been deposited into the Construction Account established
under the Indenture; Tenant shall not commence construction of the Construction
Project for which Tenant has elected pursuant to SECTION 1 of this ARTICLE XV to
defer reimbursement of advances by Landlord pending issuance of Additional Bonds
until such time as Tenant has complied with SECTION 1 and SECTION 2 of this
ARTICLE XV, Landlord has approved the Plans and Specifications and Landlord and
Tenant have executed and delivered a new Addendum hereto. Unless otherwise
agreed to in writing by Landlord and Tenant, all work involved in completion of
the Construction Project shall be carried out by Tenant in accordance with the
Plans and Specifications approved by Landlord.
3. CONSTRUCTION REQUIREMENTS. Regardless of whether Additional
Bonds are then being issued, Tenant will enter into such contracts as are
necessary and appropriate to cause the Construction Project to be acquired,
expanded, constructed and installed in accordance with the provisions of this
Lease, the Plans and Specifications and all applicable laws, ordinances, codes,
rules and regulations of any federal state, county or local governmental
authority. Tenant agrees to cause the Construction Project to be constructed in
accordance with the provisions of this Lease, the Plans and Specifications and
in compliance with state and federal laws applicable to the construction of the
Construction Project and to obtain all approvals necessary from all appropriate
governmental authorities. Tenant shall provide, or require that each contractor
provide, Landlord and Indenture Trustee with (i) a general liability and
builder's risk insurance policy of the types, in amounts and in a form
reasonably acceptable to Landlord or as otherwise required by law with respect
to the Construction Project acquired, expanded or constructed and (ii) if the
cost of the applicable Construction Project exceeds $10,000,000 and Landlord has
caused Additional Bonds to be issued for such Construction Project, payment and
performance bonds in amounts and in a form reasonably acceptable to Landlord.
Tenant agrees to pay any amount of the construction costs in excess of the
amount deposited in the Construction Account upon the issuance of Additional
Bonds, regardless of when issued, and if not issued, Tenant agrees to pay for
all construction costs for the Construction Project. Change orders with respect
to the Construction Project that increase the cost of the Construction Project
by more than five percent (5%) may only be made with the prior approval of
Landlord (which approval shall not be unreasonably withheld). All additions or
alterations to any Premise and all materials and other property of any nature
whatsoever incorporated into the Construction Project as a result of
32
approved change orders or otherwise shall become a permanent part of the
Construction Project and the related Premise for all purposes of this Lease and
shall be and become the sole property of Landlord. Landlord shall cooperate with
Tenant and Tenant shall cooperate with Landlord in obtaining all permits and
licenses necessary for the construction and development of the Construction
Project.
4. REQUESTS FOR ADVANCE. The proceeds derived from the issuance
of such Additional Bonds for the construction of the Construction Project (or
for reimbursement of advances by Tenant for the construction of the Construction
Project) shall be deposited on behalf of Landlord by Indenture Trustee into the
Construction Account of the Bond Fund established by SECTION 8.2 of the
Indenture. Each time Tenant desires to receive an advance from the Construction
Account to pay or reimburse Tenant for costs incurred in connection with the
Construction Project, at the election of Tenant, as such work progresses or upon
the completion thereof, Tenant shall deliver to Landlord (with a copy to
Indenture Trustee) in respect thereto a request for advance in the form of
EXHIBIT I attached hereto (a "REQUEST FOR ADVANCE"), true and correct in all
respects, completed in all material respects and signed by Tenant. Each time a
Request for Advance is presented, the amount to be advanced by Indenture Trustee
on behalf of Landlord shall not exceed a sum equal to the aggregate amount of
the "current payment due" as shown in the AIA Form G702 attached to such Request
for Advance; PROVIDED, that as to all such Requests for Advance, if retainage in
the amount required by applicable law ("RETAINAGE") has not been deducted in
calculating such "current payment due", Indenture Trustee on behalf of Landlord
may, at its option, pay only an amount equal to the sum which would have been
shown as the "current payment due" had such Retainage been deducted. Advances
from the Construction Account shall only be used for the purpose of paying the
costs of the Construction Project items set forth in the Construction Project
budget approved by Landlord (the "APPROVED BUDGET"). In no event shall Landlord
(or Indenture Trustee on behalf of Landlord) be required to make any advance for
payment of any item in excess of the amount budgeted for such item in the
Approved Budget or for payment of any item not included in the Approved Budget.
Each Request for Advance shall be accompanied by (1) AIA Forms G702 and G703,
(2) a certificate of the Construction Consultant certifying that, to the best of
its knowledge, information and belief, the work performed or materials purchased
or installed or delivered to the Construction Project site are in compliance
with the Plans and Specifications, and that, based on information currently
available and if applicable, nothing has come to its attention which would make
Tenant unable to complete the Construction Project as provided in this Lease,
(3) copies of billing statements, vouchers and invoices relating to the costs of
the items to be paid from the advance requested, and (4) lien waivers and
affidavits from all contractors and subcontractors, and such other affidavits as
may be reasonably required by the Construction Consultant to satisfy itself that
all bills for labor and materials and other goods and services required to
complete the Construction Project are being currently paid. Each item or portion
thereof to be paid from such advance shall be fully described, itemized and
categorized on the continuation page or pages of such Request for Advance.
Within a reasonable time after receipt of a proper Request for Advance not to
exceed ten (10) days after such receipt and approval, Indenture Trustee on
behalf of Landlord shall advance the amount set forth in such Request for
Advance to the extent of moneys on deposit in the Construction Account;
PROVIDED, HOWEVER, Indenture Trustee shall in no event be obligated to fund
advances more than once each calendar month, but may do so at its election. All
advances made pursuant to a Request for Advance for the payment of any items set
forth in the Approved Budget shall be advanced to or for the account of Tenant,
or, in the
33
alternative shall be (i) advanced directly to the applicable contractor or
supplier or (ii) advanced by check made payable jointly to Tenant and such
contractor or supplier. Each time Tenant receives an advance hereunder, Tenant
shall promptly apply the same toward the payment of the items covered by the
applicable Request for Advance submitted to Landlord (with a copy to Indenture
Trustee). Tenant shall not apply or permit application of any sums advanced
hereunder in payment of any item not included in the Approved Budget.
Notwithstanding anything to the contrary set forth in this
Lease or the Indenture, neither Landlord nor Indenture Trustee shall not be
obligated to make any advance unless all of the following conditions shall be
satisfied at the time of such advance (i) no Payment Default or Other Default
shall have occurred and be continuing, (ii) the applicable Premises shall not
have been condemned, injured or damaged by fire or other casualty, and (iii) if
applicable, there shall have been delivered to Landlord (with a copy to
Indenture Trustee) evidence reasonably satisfactory to Landlord and Indenture
Trustee that the unadvanced portion of the Construction Account will be
sufficient to pay the costs to complete the Construction Project.
5. COMPLETION CERTIFICATE. Upon completion of the Construction
Project, Tenant shall submit to Landlord a completion certificate with respect
to such Construction Project in substantially the form attached hereto as
EXHIBIT J and as a condition of the final disbursement of funds from the
Construction Account, the Construction Consultant shall certify to Landlord
(with a copy to Indenture Trustee) that all work was performed to its
satisfaction in accordance with the Plans and Specifications and that all
necessary certificates, approvals, licenses and permits required to be obtained
from any governmental board, agency or department have been obtained and that
all releases or waivers of mechanic's liens have been obtained; PROVIDED that
Indenture Trustee shall not be required to disburse any Retainage to Tenant or
to any contractor or supplier until the requisite period of time has elapsed
under applicable law after completion of the Construction Project such that no
mechanic's or materialmen's liens can thereafter be filed against such
Construction Project.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
1. ATTORNEYS' FEES AND OTHER EXPENSES. Each party hereto shall
bear its own counsel fees and expenses incurred in connection with the execution
and delivery of this Lease and in connection with any Addenda executed in
connection herewith. In the event either party hereto defaults in the faithful
performance or observance of any of the terms, covenants, provisions, agreements
or conditions contained in this Lease, the party in default shall be liable for
and shall pay to the non-defaulting party all reasonable expenses incurred by
such party in enforcing any of its remedies for any such default, and if the
non-defaulting party places the enforcement of all or any part of this Lease in
the hands of an attorney, the party in default agrees to pay the non-defaulting
party's reasonable attorneys' fees in such connection.
2. NOTICE. Any notice, request, approval, consent or other
communication required or contemplated by this Lease must be in writing, and
may, unless otherwise in this Lease expressly provided, be given or be served by
depositing the same in the United States Postal Service, post-paid and certified
and addressed to the party to be notified, with return receipt requested, or by
delivering the same in person to such party, or by prepaid telegram or express
34
overnight mail service, when appropriate, addressed to the party to be notified.
Notice deposited in the mail in the manner hereinabove described shall be
effective from and after three (3) days (exclusive of Saturdays, Sundays and
postal holidays) after such deposit. Notice given in any other manner shall be
effective only if and when delivered to the party to be notified at such party's
address for purposes of notice as set forth herein. For purposes of notice the
addresses of the parties shall, until changed as herein provided, be as follows:
If to Landlord:
Municipal Corrections Finance, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Administrator
If to Tenant:
Cornell Companies, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Indenture Trustee:
The Chase Manhattan Bank,
as Indenture Trustee
600 ▇▇▇▇▇▇, 49 CTH 382
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Fiduciary Services
However, the parties hereto shall have the right from time to time to
change their respective addresses by giving at least fifteen (15) days' written
notice to the other party in the manner set forth in this Section.
3. LIMITATION OF LIABILITY. Notwithstanding any other provision
hereof, Landlord shall not have any personal liability hereunder. In the event
of any breach or default by Landlord in any term or provision of this Lease,
Tenant agrees to look solely to the equity (other than the MCF Escrow Account)
or interest then owned by Landlord in the land and improvements which constitute
the Premises, regardless of the nature and extent of such breach or default;
however, in no event shall any deficiency judgment be sought or obtained against
Landlord, or any of its partners, or the members, officers, directors, trustees,
agents or employees of Landlord or its partners. Notwithstanding the foregoing
or any contrary provision hereof, in the event that Tenant obtains against
Landlord a final, non-appealable judgment awarding Tenant monetary damages as a
consequence of Landlord's default hereunder (which judgment Tenant shall have
the right to seek and obtain), Tenant may recover the same by offset against
Base Rent then due and thereafter becoming due and payable hereunder. The
provisions contained in the preceding sentences are not intended to and will not
limit any right that Tenant might otherwise have to obtain injunctive relief
against Landlord.
35
4. PRIOR AGREEMENTS SUPERSEDED; ENTIRE AGREEMENT; AMENDMENT. This
Lease supersedes and cancels any and all previous negotiations, arrangements,
agreements and understandings, if any, between Landlord and Tenant with respect
to the subject matter of this Lease or the Premises. This Lease contains the
entire agreement between the parties concerning the subject matter of this
Lease. No promise, representation, warranty or covenant not included in this
Lease has been or is relied on by either party. Each party has relied on its own
examination of this Lease, the counsel of its own advisors and the warranties,
representations and covenants in this Lease itself. This Lease may not be
changed except by written instrument signed by both Landlord and Tenant, with
the prior written consent of Indenture Trustee given in accordance with the
requirements of the Indenture.
5. TIME OF THE ESSENCE. Time is of the essence with respect to this
Lease.
6. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
7. BROKERAGE. Landlord and Tenant each warrant to the other that it
has not dealt with any broker or agent in connection with the negotiation or
execution of this Lease. Tenant shall indemnify Landlord against all costs,
expenses, attorneys' fees, and other liabilities for commissions or other
compensation claimed by any broker or agent claiming the same by, through or
under Tenant in respect of this Lease.
8. SUCCESSORS AND ASSIGNS. Subject to the provisions of this Lease,
all covenants and obligations as contained within this Lease shall bind and
extend and inure to the benefit of Landlord, and its successors and assigns, and
Tenant, and its successors and assigns.
9. MEMORANDA OF LEASE; FURTHER ASSURANCES. Landlord and Tenant
shall each execute a Memorandum of Lease regarding this Lease, and each Addendum
hereto, in recordable form, and otherwise in form and substance as prepared by
Tenant and reasonably satisfactory to Landlord, to provide record notice
regarding the existence and Term of this Lease, promptly after execution of this
Lease or such Addendum, respectively. In addition, each party hereto will
promptly and duly execute and deliver such further documents and assurances, and
will take such further action, as may be reasonably requested by the other party
hereto, provided that same is reasonably necessary to carry out more effectively
the intent and purpose of this Lease.
10. GOVERNING LAW; LEGAL INTERPRETATION. This Lease and the rights
and obligations of the parties hereto with respect to each Premises shall be
interpreted, construed and enforced in accordance with the laws of the state in
which such Premises are situated. The determination that one or more provisions
of this Lease is invalid, void, illegal or unenforceable shall not affect or
invalidate any other provision of this Lease, and this Lease shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
in this Lease. Article and section titles and captions appearing in this Lease
are for convenient reference only and shall not be used to interpret or limit
the meaning of any provision of this Lease.
11. ESTOPPEL CERTIFICATES. In addition to the Estoppel Certificates
referenced in Article XIV, each of Landlord and Tenant shall at any time, within
ten (10) business days after
36
the request of the other, execute, acknowledge and deliver to the other a
statement in writing concerning such matters related to the status of this Lease
as the requesting party may reasonably request, including but not limited to
that this Lease is unmodified and in full force and effect (or if modified
stating the nature of such modification and certifying that the Lease as
modified is in full force and effect), the dates to which the Base Rent has been
paid, and acknowledging that there are not, to such party's knowledge, any
uncured defaults on the part of the other hereunder, or specifying such defaults
if any are claimed.
12. NEGATION OF PARTNERSHIP. Nothing in this Lease shall be
construed to render Landlord in any way or for any purpose a partner, joint
venturer, associate or lender in any relationship with Tenant other than that of
Landlord and Tenant, nor shall this Lease be construed to authorize either to
act as agent for the other except as expressly provided to the contrary in this
Lease.
13. INSPECTION RIGHTS. Landlord (and until the Bonds have been paid
in full, Indenture Trustee) shall have the right to inspect the Premises at
reasonable intervals during the Term of this Lease, upon reasonable prior
written notice to Tenant, to determine Tenant's compliance with the terms and
provisions of this Lease, PROVIDED that (i) Landlord and Indenture Trustee do
not unreasonably interfere with the operation of Tenant's business thereon and
(ii) Landlord and Indenture Trustee observe such security and safety-related
requirements in connection with such inspection as may be reasonably imposed by
Tenant. In addition, to the extent that any contract between Tenant and any
governmental authority providing for the housing of inmates at Tenant's
correctional facility at a Premises shall provide such authority rights to
monitor and inspect Tenant's operations at such Premises, then Landlord and
Indenture Trustee shall have similar rights as such governmental authority to
monitor and inspect Tenant's operations at such Premises during the Term of this
Lease, subject to the qualifications set forth in clauses (i) and (ii) of the
preceding sentence.
14. LEASE CHARACTERIZATION. Landlord and Tenant acknowledge and
agree that (i) Landlord owns, or leases from a Lessor, each of the Premises (and
all additions or alterations to such Premises), (ii) this Lease is a lease or a
sublease of each of the Premises, (iii) Landlord shall be treated as the owner
or lessee of each of the Premises for all purposes, including, without
limitation, federal and state tax purposes and (iv) Landlord and Tenant shall
report their income and deductions in accordance with such federal and state tax
characterization. Landlord and Tenant (i) acknowledge that Section 467 of the
Internal Revenue Code of 1986, as amended, applies to this Lease and (ii) agree
that during the initial Term of this Lease they shall, for federal income tax
purposes only, apply the Base Rent paid by Tenant hereunder in accordance the
Section 467 Agreement dated August 14, 2001, between Landlord and Tenant, as the
same may be amended, supplemented, restated or replaced from time to time.
15. NO PETITION. Tenant hereby covenants and agrees that Tenant will
not prior to the date that is one year and one day after the payment in full of
all outstanding Bonds issued by Landlord institute against Landlord or its
General Partner, or join in any institution against Landlord or its General
Partner of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
this Lease or any Premises hereunder. This Section shall survive termination of
this Lease.
37
16. LANDLORD ACTING THROUGH ADMINISTRATOR. Landlord may contract
with other Persons to assist it in performing its duties under this Lease, the
other Basic Documents and the Indenture, and any performance of such duties by a
Person identified to Tenant in a certificate of the Authorized Representative of
General Partner of Landlord shall be deemed to be action taken by Landlord.
Initially, Landlord has contracted with Administrator to assist Landlord in
performing its duties under this Lease, the other Basic Documents and the
Indenture pursuant to the terms of the Administration Agreement. Tenant hereby
acknowledges and agrees to the appointment by Landlord of Administrator under
the Administration Agreement for the purpose of taking such action and executing
such agreements, instruments and other documents, in the name of Landlord, on
behalf of Landlord, as may be necessary or advisable to accomplish the purposes
of this Lease and the transactions contemplated hereunder and under the other
Basic Documents and the Indenture. All actions required to be taken or performed
by Landlord hereunder or thereunder shall be deemed to have been taken or
performed by Landlord if taken or performed by Administrator on behalf of
Landlord, until such time as Tenant shall have received notice otherwise in
writing from Landlord.
17. PROVIDENT'S CHARITABLE ACTIVITIES AND PROGRAMS ON THE PREMISES.
Tenant acknowledges, with respect to Provident Foundation Inc., a Georgia
nonprofit corporation ("PROVIDENT"), that Provident's sole purpose for acquiring
each of the Premises through the Landlord and causing the Landlord to enter into
this Lease is to further its Charitable Activities (as that term is defined in
the Limited Partnership Agreement of Landlord as of the date hereof) and those
of its Affiliates and their designees, which Charitable Activities will include
the provision of appropriate charitable activities and programs at the Premises
for the benefit of the inmates at the Premises, and to lessen the burdens of
state and local government in connection with their obligations to provide for
the incarcerated. To this end, Provident has earmarked certain of its funds for
use in the first twelve (12) months following the Effective Date, and Tenant, in
its sole and absolute discretion, may match dollar for dollar the amounts (to
the extent and when) so invested by Provident (by making a charitable
contribution to Provident of up to the sum of $100,000.00 during the first
twelve (12) months following the Effective Date), which funds shall be used by
Provident to implement or expand one or more of the following programs or
activities at the Premises:
(a) Religious programs for multiple faiths;
(b) Vocational-technical ("Vo-Tech") training programs
for inmates;
(c) Life skills training programs to prepare inmates
for transition from prison to society, such as job interview skills and
job placement; and
(d) Research on the results of various programs within
the Premises, and the impact of recidivism rates for inmates that are
discharged from the Premises, and the development and implementation of
changes designed to obtain more positive outcome and lower recidivism
rates at the Premises.
Thereafter, Landlord has earmarked certain additional funds for use
during the Term of this Lease, on an annual basis to fund such programs and
activities at the Premises, and Tenant, in its sole and absolute discretion, may
match dollar for dollar on an annual basis any amounts
38
(to the extent and when) so expended by Landlord by making an annual charitable
contribution to Provident for its use in supporting such activities and programs
at the Premises, up to the sum of $50,000.00, during the Term of this Lease.
Notwithstanding anything to the contrary in this Lease (other than the
limitations contained in this Section 17) and for so long as Landlord either
owns, or leases from a Lessor, each of the Premises, and subject to compliance
with the following paragraph, Landlord reserves the right in its sole discretion
to cooperate with Tenant so that Landlord may conduct (and to permit Provident
to conduct) their charitable activities and programs at the Premises (or to
permit Provident to so conduct such activities and programs) for the benefit of
the inmates and the state and local governments, which furthers their Charitable
Activities and purposes, subject to compliance by Landlord with the following
provisions of this Section 17.
Landlord and Tenant acknowledge the specialized and security-sensitive
nature of the Premises, and Tenant's activities conducted thereon, and in
recognition thereof, such activities shall not violate Tenant's security and
safety-related requirements as determined by Tenant in its sole and absolute
discretion and shall be funded solely by Landlord (or Provident), including,
without limitation: (a) the procurement of necessary and appropriate insurance,
bonding and other indemnities from liability (as determined by Tenant in its
sole and absolute discretion) necessary to insure the safety and security of
Tenant, inmates, personnel, contracting agencies and any other affected persons
or organizations; (b) Landlord shall pay all reasonable costs, expenses, and
value incurred or provided by Tenant (which may include an allocation of
Tenant's direct and indirect costs of the Premises for the value of such space
or other items related to such Premises) in connection with such activities and
programs at the Premises, as agreed to by Tenant in its sole and absolute
discretion, including, if necessary, reasonable compensation to Tenant for its
assistance and expertise in the correctional industry with respect to any aspect
of such activities and programs, to the extent utilized by Landlord or Provident
in the conduct of such activity or program. Finally, such activities and
programs shall: (A) not duplicate, interfere or conflict with Tenant's existing
activities and programs, nor violate the provisions of this Lease, any Main
Lease or any Correction and Detention Facility Contracts (as determined by
Tenant in its sole and absolute discretion); (B) not violate Tenant's security
and safety-related requirements imposed by Tenant at the Premises (as determined
by Tenant in its sole and absolute discretion); and (C) be in keeping with
Tenant's mission statement and the "balanced and restorative justice model"
("BARJ") set forth below:
o THE MISSION STATEMENT
o To provide quality correctional, treatment and educational
services to those entrusted to our care;
o To provide safe, secure and cost effective programs, that
provide dignity, hope, safety, and accountability so that
people can change;
o To work in partnership with families, communities and
contracting agencies to provide innovative solutions to the
correctional industry; and
o To provide leadership throughout the correctional industry.
39
o THE BARJ MODEL
o Based on the principles of accountability, competency,
development and community protection, and through this model:
o Clients/offenders learn to become responsible for and
accept the consequences of their actions;
o Clients/offenders participate in educational programs
and/or vocational training; - Clients/offenders learn
skills in decision-making, anger management and
employment etiquette, among many others;
o Clients/offenders make restitution to the community,
and when possible, to the victim, through various means
(i.e., providing financial support or participating in
volunteer service projects);
o Community protection is provided through dedicated
staff and superb use of technology; and
o Community safety is ensured by clients learning
appropriate life skills.
[SIGNATURE PAGE FOLLOWS]
40
IN TESTIMONY WHEREOF, the parties hereto have executed this Lease as of
the Effective Date.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
-------------------- Holdings, LLC,
WITNESS a Delaware limited liability
company,
its General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NOTARY PUBLIC
[SEAL]
Receipt of the original counterpart of the foregoing Lease is hereby
acknowledged on this 14th day of August, 2001.
THE CHASE MANHATTAN BANK, as
Indenture Trustee under the Indenture
By: /s/ ▇▇▇▇ ▇. ▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
EXHIBIT A
TOTAL BASE RENT BY MONTH*
Total Monthly
Date Base Rent
---------------------- -------------------------
8/31/01 2,044,814
9/30/01 2,044,814
10/31/01 2,044,814
11/30/01 2,044,814
12/31/01 2,044,814
1/31/02 1,631,502
2/28/02 2,145,442
3/31/02 2,145,442
4/30/02 2,145,442
5/31/02 2,145,442
6/30/02 2,145,442
7/31/02 1,650,639
8/31/02 2,170,485
9/30/02 2,170,485
10/31/02 2,170,485
11/30/02 2,170,485
12/31/02 2,170,485
1/31/03 1,728,056
2/28/03 2,170,485
3/31/03 2,170,485
4/30/03 2,170,485
5/31/03 2,170,485
6/30/03 2,170,485
7/31/03 1,660,102
8/31/03 2,175,175
9/30/03 2,175,175
10/31/03 2,175,175
11/30/03 2,175,175
12/31/03 2,175,175
1/31/04 1,736,152
2/29/04 2,175,175
3/31/04 2,175,175
4/30/04 2,175,175
5/31/04 2,175,175
6/30/04 2,175,175
7/31/04 1,651,900
8/31/04 2,174,924
9/30/04 2,174,924
10/31/04 2,174,924
11/30/04 2,174,924
12/31/04 2,174,924
1/31/05 1,739,621
A-1
TOTAL BASE RENT BY MONTH
Total Monthly
Date Base Rent
---------------------- -------------------------
2/28/05 2,174,924
3/31/05 2,174,924
4/30/05 2,174,924
5/31/05 2,174,924
6/30/05 2,174,924
7/31/05 1,639,071
8/31/05 2,169,733
9/30/05 2,169,733
10/31/05 2,169,733
11/30/05 2,169,733
12/31/05 2,169,733
1/31/06 1,738,464
2/28/06 2,169,733
3/31/06 2,169,733
4/30/06 2,169,733
5/31/06 2,169,733
6/30/06 2,169,733
7/31/06 1,621,615
8/31/06 2,167,933
9/30/06 2,167,933
10/31/06 2,167,933
11/30/06 2,167,933
12/31/06 2,167,933
1/31/07 1,741,012
2/28/07 2,167,933
3/31/07 2,167,933
4/30/07 2,167,933
5/31/07 2,167,933
6/30/07 2,167,933
7/31/07 1,605,537
8/31/07 2,168,821
9/30/07 2,168,821
10/31/07 2,168,821
11/30/07 2,168,821
12/31/07 2,168,821
1/31/08 1,746,606
2/29/08 2,168,821
3/31/08 2,168,821
4/30/08 2,168,821
5/31/08 2,168,821
6/30/08 2,168,821
7/31/08 1,590,176
8/31/08 2,171,689
9/30/08 2,171,689
10/31/08 2,171,689
11/30/08 2,171,689
12/31/08 2,171,689
1/31/09 1,754,583
2/28/09 2,171,689
3/31/09 2,171,689
4/30/09 2,171,689
5/31/09 2,171,689
6/30/09 2,171,689
A-2
TOTAL BASE RENT BY MONTH
Total Monthly
Date Base Rent
---------------------- -------------------------
7/31/09 1,574,870
8/31/09 2,167,499
9/30/09 2,167,499
10/31/09 2,167,499
11/30/09 2,167,499
12/31/09 2,167,499
1/31/10 1,755,951
2/28/10 2,167,499
3/31/10 2,167,499
4/30/10 2,167,499
5/31/10 2,167,499
6/30/10 2,167,499
7/31/10 1,552,955
8/31/10 2,172,918
9/30/10 2,172,918
10/31/10 2,172,918
11/30/10 2,172,918
12/31/10 2,172,918
1/31/11 1,767,375
2/28/11 2,172,918
3/31/11 2,172,918
4/30/11 2,172,918
5/31/11 2,172,918
6/30/11 2,172,918
7/31/11 1,536,439
8/31/11 2,169,866
9/30/11 2,169,866
10/31/11 2,169,866
11/30/11 2,169,866
12/31/11 2,169,866
1/31/12 1,770,868
2/29/12 2,169,866
3/31/12 2,169,866
4/30/12 2,169,866
5/31/12 2,169,866
6/30/12 2,169,866
7/31/12 1,511,991
8/31/12 2,175,011
9/30/12 2,175,011
10/31/12 2,175,011
11/30/12 2,175,011
12/31/12 2,175,011
1/31/13 1,783,094
2/28/13 2,175,011
3/31/13 2,175,011
4/30/13 2,175,011
5/31/13 2,175,011
6/30/13 2,175,011
7/31/13 1,491,621
8/31/13 2,170,274
9/30/13 2,170,274
10/31/13 2,170,274
11/30/13 2,170,274
A-3
TOTAL BASE RENT BY MONTH
Total Monthly
Date Base Rent
---------------------- -------------------------
12/31/13 2,170,274
1/31/14 1,786,067
2/28/14 2,170,274
3/31/14 2,170,274
4/30/14 2,170,274
5/31/14 2,170,274
6/30/14 2,170,274
7/31/14 1,461,997
8/31/14 2,172,323
9/30/14 2,172,323
10/31/14 2,172,323
11/30/14 2,172,323
12/31/14 2,172,323
1/31/15 1,796,452
2/28/15 2,172,323
3/31/15 2,172,323
4/30/15 2,172,323
5/31/15 2,172,323
6/30/15 2,172,323
7/31/15 1,435,128
8/31/15 191,833
9/30/15 191,833
10/31/15 191,833
11/30/15 191,833
12/31/15 191,833
1/31/16 -
2/29/16 120,777
3/31/16 191,833
4/30/16 191,833
5/31/16 191,833
6/30/16 191,833
7/31/16 7,831,031
8/31/16 -
9/30/16 -
10/31/16 -
11/30/16 -
12/31/16 -
1/31/17 -
2/28/17 -
3/31/17 -
4/30/17 -
5/31/17 -
6/30/17 -
7/31/17 162,000
8/31/17 -
9/30/17 -
10/31/17 -
11/30/17 -
12/31/17 -
1/31/18 -
2/28/18 -
3/31/18 -
4/30/18 -
A-4
TOTAL BASE RENT BY MONTH*
Total Monthly
Date Base Rent
---------------------- -------------------------
5/31/18 -
6/30/18 -
7/31/18 162,000
8/31/18 -
9/30/18 -
10/31/18 -
11/30/18 -
12/31/18 -
1/31/19 -
2/28/19 -
3/31/19 -
4/30/19 -
5/31/19 -
6/30/19 -
7/31/19 162,000
8/31/19 -
9/30/19 -
10/31/19 -
11/30/19 -
12/31/19 -
1/31/20 -
2/29/20 -
3/31/20 -
4/30/20 -
5/31/20 -
6/30/20 -
7/31/20 162,000
8/31/20 -
9/30/20 -
10/31/20 -
11/30/20 -
12/31/20 -
1/31/21 -
2/28/21 -
3/31/21 -
4/30/21 -
5/31/21 -
6/30/21 -
7/31/21 162,000
---------------------
TOTALS $360,165,935
=====================
A-5
EXHIBIT C
DEFINITION OF EBITDAR
"EBITDAR" means, for any period, the following for the Premises
(determined without duplication in accordance with GAAP):
(a) total revenues for such period, LESS
(b) total operating expenses for such period (excluding any
depreciation and amortization expense), PLUS
(c) the aggregate amount of non-cash expenses for such period
associated with the closure and post-closure reserves of a
facility, PLUS
(d) the aggregate amount of all other non-cash expenses for such
period, to the extent not specifically described above in this
definition, PLUS
(e) the aggregate amount of Rent Expense for such period, PLUS
(f) the aggregate amount of Pre-Opening Expenses and Start-up
Expenses for such period;
provided, that with respect to:
(i) any Premise acquisition, expansion or construction
which is made after the date of this Lease and is
subject to this Lease, "EBITDAR" shall include the
actual EBITDAR attributable to the acquired, expanded
or constructed Premise for the 12 month period ending
on the last day of such period, including, if
necessary, EBITDAR prior to consummation of such
acquired, expanded or constructed Premise so that it
represents the equivalent of 12 months of EBITDAR
(and may reflect Pro Forma Adjustments); and
(ii) any new Contract, expansion or construction entered
into after the date of this Lease which is subject to
this Lease, "EBITDAR" shall include the following:
(x) if
Cornell Companies Inc. or any of its
Affiliates (the "Company") will begin
providing services pursuant to such new
Contract, expansion or construction within
eleven months after the end of such period,
an amount equal to one-twelfth (1/12th) of
100% of the estimated annual "EBITDAR"
attributable to the operations resulting
from such new Contract (which may reflect
Pro Form Adjustments) as of the end of such
period, for each calendar month completed
after the date which is twelve months prior
to the date on which services are scheduled
to commence under such new Contract as of
the end of such period,
(y) if the Company has provided services
pursuant to such new Contract for less than
six calendar months after the end of the
Start-up Period, an amount equal to the
estimated "EBITDAR" attributable to the
operations resulting from such new Contract
(and may reflect Pro Forma Adjustments) for
the 12-month period beginning on the date on
which the Company began providing services
pursuant to such new Contract, or
(z) if the Company has provided services
pursuant to such new Contract for six
calendar months or more after the end of the
Start-up Period, an amount equal to actual
EBITDAR attributable to the operations
resulting from such new Contract
C-1
for each complete month that has elapsed
since the date three months after the end of
the Start-up Period (such amount to be
annualized so that it represents the
equivalent of 12 months of EBITDAR).
WHERE THE FOLLOWING TERMS HAVE THE INDICATED MEANINGS:
"CONTRACT" shall mean any acquired, expanded or constructed (or to be
acquired, expanded or constructed) correctional and detention facility contract,
a newly executed correctional and detention facility contract, an amendment to
an existing correctional and detention facility contract or an expansion under
an existing correctional and detention facility contract.
"PRE-OPENING EXPENSES" shall mean operating expenses attributable to
the operations of a new Contract (including, but not limited to, salaries and
wages, fringe benefits, training costs, supplies, and professional fees)
incurred prior to the date on which the Company began providing services
pursuant to such new Contract.
"PRO FORMA ADJUSTMENTS" shall mean reasonable adjustments for (a)
non-recurring or extraordinary expenses, (b) operating efficiencies, (c) census
levels and (d) per diem rates.
"RENT EXPENSE" shall mean, for any period the aggregate amount of rent
determined in accordance with GAAP.
"START-UP EXPENSES" shall mean operating expenses attributable to the
operations of a new Contract incurred during the Start-up Period therefor, net
of the revenues recognized under such new Contract during the Start-up Period.
"START-UP PERIOD" shall mean, with respect to any new Contract, the
period of time, not to exceed six months, commencing on the date the Company
began providing service pursuant to such new Contract until the last day of the
month in which the maximum occupancy under such new Contract was reached.
C-2
ADDENDUM
(Owned Premises)
CORNELL ABRAXAS
(Shelby, Ohio)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: With respect to the Premises, in the sixth line of
Section 2 of EXHIBIT L to the Lease, change (i)
"Southern" to "Northern", (ii) "Texas" to "Ohio",
and (iii) "Houston" to "Eastern".
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
ABRAXAS I FACILITY
(Marienville, Pennsylvania)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
▇▇▇▇ CENTER
(Houston, Texas)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
▇▇▇▇▇▇▇ CENTER
(San Antonio, Texas)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., as Landlord, and Cornell
Companies, Inc., as Tenant. Capitalized terms used herein that are not defined
herein shall have the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021, (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
▇▇▇▇▇▇ CENTER
(Houston, Texas)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇ ▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
TUNDRA CENTER
(Bethel, Alaska)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
CORDOVA CENTER
(Anchorage, Alaska)
Addendum dated August 14, 2001, made a part of that certain
Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
PARKVIEW CENTER
(Anchorage, Alaska)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises)
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ PRISON
(Folkston, Georgia)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
PREMISES: "PREMISES" shall mean the land and the
improvements described on Schedule 1 attached
to this Addendum, and the improvements thereto.
COMMENCEMENT DATE: The Term of the Lease with respect to the Premises
defined above shall commence on August 14, 2001
(the "COMMENCEMENT DATE"), and end on August 13,
2021 (the "EXPIRATION DATE"), unless extended or
sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Subleased Premises)
GREAT PLAINS CORRECTIONAL FACILITY
(Hinton, Oklahoma)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
MAIN LEASE: "MAIN LEASE" shall mean that certain lease
agreement dated December 31, 1999, between the
▇▇▇▇▇▇ Economic Development Authority, a public
trust and agency of the State of Oklahoma, with
the Town of ▇▇▇▇▇▇, Oklahoma, as its beneficiary
("LESSOR"), as lessor, and Cornell Corrections of
Oklahoma, Inc. ("ORIGINAL LESSEE"), as lessee,
covering and affecting the land and improvements
more fully described on Schedule 1 to this
Addendum (the "DEMISED PREMISES"). Original Lessee
assigned all of its right, title and interest in
and to the Main Lease to Landlord pursuant to that
certain Assignment and Assumption of Lease
(Hinton, Oklahoma) dated effective as of August
14, 2001, among Lessor, Original Lessee and
Landlord.
SUBLEASED PREMISES: "SUBLEASED PREMISES" shall mean the Demised
Premises.
COMMENCEMENT DATE: The Term of the Lease with respect to the Subleased
Premises defined above shall commence on August 14,
2001 (the "COMMENCEMENT DATE"), and end on August
13, 2021 (the "EXPIRATION DATE"), unless extended
or sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: In the event of a taking of all or substantially
all of the Subleased Premises, thereby resulting in
a termination of the Main Lease, or in the event
that a casualty occurs entitling lessee to
terminate, following which lessee does so
terminate, the condemnation proceeds or insurance
proceeds (as the case may be) shall be paid as
follows:
(a) first, $43,100,000 plus any increases in
such principal sum, made in connection
with any alterations to the Subleased
Premises, to the trustee for the benefit
of the holders of the bonds as mortgagee
under the leasehold mortgage;
(b) second, to holders of any specified
mortgages or liens created by lessee on
the leasehold estate, to the extent of
amounts required to be paid in reduction
of the secured debt;
(c) third, up to $240,000 to Lessor for the
value of the land;
(d) fourth, the sum of the following to
lessee: (i) an amount sufficient to
compensate lessee for all actual costs in
developing the facility plus (ii) an 18%
rate of return on such costs plus (iii)
the fair market value of the leasehold
estate; and
(e) fifth, the balance to Lessor.
Moreover, while lessee has the right under the Main
Lease to grant a purchase option covering the
Subleased Premises, Lessor is entitled to receive
$240,000 in the event of any exercise of such
option, and the proceeds from a sale to a third
party shall be otherwise distributed as set forth
in (a) through (e) hereinabove. The foregoing
amounts shall be taken into consideration in the
determination of Value for purposes of the Purchase
Price as described in clause (c) of SECTION 4 of
EXHIBIT F of the Lease.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Subleased ▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇
(▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., as Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
MAIN LEASE: "MAIN LEASE" shall mean that certain lease
agreement dated August 7, 1990, and amended
November 26, 1990, between the City of Big Spring
("LESSOR"), as lessor, and ▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇"), as lessee, covering and affecting
the land and improvements more fully described on
Schedule 1 to this Addendum (the "DEMISED
PREMISES"). ▇▇▇▇▇▇▇▇▇, as sublessor, subleased the
Demised Premises to Lessor, as sublessee, pursuant
to that certain Amended Sublease Agreement dated
as of July 1, 1996, and Lessor, as secondary
sublessor, subleased the Demised Premises to
▇▇▇▇▇▇▇▇▇, as secondary sublessee, pursuant to
that certain Secondary Sublease Agreement dated as
of July 1, 1996 (the Amended Sublease Agreement
and the Secondary Sublease Agreement are
collectively referred to herein as the
"SUBLEASES"). On July 1, 1996, ▇▇▇▇▇▇▇▇▇ assigned
all of his right, title and interest in and to the
Main Lease and the Subleases to Cornell
Corrections of Texas, Inc. ("ORIGINAL LESSEE").
The Main Lease and the Subleases were amended in
certain respects by (i) that certain Amendment and
Addendum to Multiple Lease Agreements and
Operating Agreement Relating to Big Spring
Correctional Center dated June 22, 1999, between
Lessor and Original Lessee and (ii) that certain
Amendment to Leases dated effective as of August
14, 2001, between Lessor and Original Lessee.
Original Lessee assigned all of its right, title
and interest in and to the Main Lease and the
Subleases to Landlord pursuant to that certain
Assignment and Assumption of Leases (Big Spring,
Texas) dated effective as of August 14, 2001,
among Lessor, Original Lessee and Landlord.
SUBLEASED PREMISES: "SUBLEASED PREMISES" shall mean the Demised
Premises.
COMMENCEMENT DATE: The Term of the Lease with respect to the
Subleased Premises defined above shall commence on
August 14, 2001 (the "COMMENCEMENT DATE"), and end
on August 13, 2021 (the "EXPIRATION DATE"), unless
extended or sooner terminated as provided for in
the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: In the event of a taking of all or any part of the
Subleased Premises, or a sale to the condemning
authority under threat of condemnation, thereby
entitling secondary sublessee to terminate, or in
the event that a casualty occurs entitling
secondary sublessee to terminate, following which
secondary sublessee does so terminate, the
condemnation proceeds or insurance proceeds (as
the case may be) shall be allocated between Lessor
and secondary sublessee. The allocation shall be
based on a yearly proration over a 35-year period,
E.G., if the condemnation occurs in year 3 of the
Secondary Sublease Agreement term, Lessor shall
receive 3/35 of the proceeds and
secondary sublessee shall receive 32/35 of the
proceeds. The foregoing amounts shall be taken into
consideration in the determination of Value for
purposes of the Purchase Price as described in
clause (c) of SECTION 4 of EXHIBIT F of the Lease.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Subleased Premises)
INTERSTATE UNIT
(Big Spring, Texas)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
MAIN LEASE: "MAIN LEASE" shall mean that certain lease
agreement dated July 1, 1996, between the City of
Big Spring ("LESSOR"), as lessor, and ▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇"), as lessee, covering and affecting
the land and improvements more fully described on
Schedule 1 to this Addendum (the "DEMISED
PREMISES"). On July 1, 1996, ▇▇▇▇▇▇▇▇▇ assigned
all of his right, title and interest in and to the
Main Lease to Cornell Corrections of Texas, Inc.
("ORIGINAL LESSEE"). The Main Lease was amended in
certain respects by (i) that certain Amendment and
Addendum to Multiple Lease Agreements and
Operating Agreement Relating to Big Spring
Correctional Center dated June 22, 1999, between
Lessor and Original Lessee and (ii) that certain
Amendment to Leases dated effective as of August
14, 2001, between Lessor and Original Lessee.
Original Lessee assigned all of its right, title
and interest in and to the Main Lease to Landlord
pursuant to that certain Assignment and Assumption
of Leases (Big Spring, Texas) dated effective as
of August 14, 2001, among Lessor, Original Lessee
and Landlord.
SUBLEASED PREMISES: "SUBLEASED PREMISES" shall mean the Demised
Premises.
COMMENCEMENT DATE: The Term of the Lease with respect to the Subleased
Premises defined above shall commence on August 14,
2001 (the "COMMENCEMENT DATE"), and end on August
13, 2021 (the "EXPIRATION DATE"), unless extended
or sooner terminated as provided for in the Lease.
OVERDUE RATE: August 14, 2001 per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: In the event of a taking of all or any part of the
Subleased Premises, or a sale to the condemning
authority under threat of condemnation, thereby
entitling lessee to terminate, or in the event
that a casualty occurs entitling lessee to
terminate, following which lessee does so
terminate, the condemnation proceeds or insurance
proceeds (as the case may be) shall be allocated
between Lessor and lessee. The allocation shall be
based on a yearly proration over a 35-year period,
E.G., if the condemnation occurs in year 3 of the
Main Lease term, Lessor shall receive 3/35 of the
proceeds and lessee shall receive 32/35 of the
proceeds. The foregoing amounts shall be taken
into consideration in the determination of Value
for purposes of the Purchase Price as described in
clause (c) of SECTION 4 of EXHIBIT F of the Lease.
[Signature Pages Follow]
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Owned Premises and Subleased Premises)
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
(▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
MAIN LEASE: "MAIN LEASE" shall mean that certain lease
agreement dated May 7, 1997, between the City of
Big Spring ("LESSOR"), as lessor, and Cornell
Corrections of Texas, Inc. ("ORIGINAL LESSEE"), as
lessee, covering and affecting the land and
improvements more fully described on Schedule 1A
to this Addendum (the "DEMISED PREMISES"), as the
same was amended in certain respects by (i) that
certain Amendment and Addendum to Multiple Lease
Agreements and Operating Agreement Relating to Big
Spring Correctional Center dated June 22, 1999,
between Lessor and Original Lessee and (ii) that
certain Amendment to Leases dated effective as of
August 14, 2001, between Lessor and Original
Lessee. Original Lessee assigned all of its right,
title and interest in and to the Main Lease to
Landlord pursuant to that certain Assignment and
Assumption of Leases (Big Spring, Texas) dated
effective as of August 14, 2001, among Lessor,
Original Lessee and Landlord.
SUBLEASED PREMISES: "SUBLEASED PREMISES" shall mean the Demised
Premises.
PREMISES: "PREMISES" shall mean that certain Access Easement
(the "ACCESS EASEMENT") from the City of Big
Spring to Cornell Corrections, Inc. recorded in
Volume 752, Page 686 of the Office of the County
Clerk of ▇▇▇▇▇▇ County, Texas, covering and
affecting the land described on Schedule 1B
attached to this Addendum. Cornell Companies, Inc.
(formerly known as Cornell Corrections, Inc.)
assigned all of its right, title and interest in
and to the Access Easement to Landlord pursuant to
that certain Assignment of Access Easement dated
effective as of August 14, 2001, from Cornell
Companies, Inc. to Landlord.
COMMENCEMENT DATE: The Term of the Lease with respect to the Subleased
Premises and the Owned Premises defined above shall
commence on August 14, 2001 (the "COMMENCEMENT
DATE"), and end on August 13, 2021 (the "EXPIRATION
DATE"), unless extended or sooner terminated as
provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: In the event of a taking of all or any part of the
Subleased Premises, or a sale to the condemning
authority under threat of condemnation, thereby
entitling lessee to terminate, or in the event
that a casualty occurs entitling lessee to
terminate, following which lessee does so
terminate, the condemnation proceeds or insurance
proceeds (as the case may be) shall be allocated
between Lessor and lessee. The allocation shall be
based on a yearly proration over a 50-year period,
E.G., if the condemnation occurs in year 3 of the
Main Lease term, Lessor shall receive 3/50 of the
proceeds and lessee
shall receive 47/50 of the proceeds. The foregoing
amounts shall be taken in to consideration in the
determination of Value for purposes of the Purchase
Price as described in clause (c) of SECTION 4 of
EXHIBIT F of the Lease.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]
ADDENDUM
(Subleased Premises)
FLIGHTLINE UNIT
(Big Spring, Texas)
Addendum dated August 14, 2001, made a part of that certain Master Lease
Agreement (the "LEASE") made and entered into effective as of August 14, 2001,
by and between Municipal Corrections Finance, L.P., a Delaware limited
partnership, as Landlord, and Cornell Companies, Inc., a Delaware corporation,
as Tenant. Capitalized terms used herein that are not defined herein shall have
the same meanings given to such terms in the Lease.
MAIN LEASE: "MAIN LEASE" shall mean that certain lease
agreement dated February 18, 1994, and amended
October 1, 1994, between the City of Big Spring
("LESSOR"), as lessor, and ▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇"), as lessee, covering and affecting
the land and improvements more fully described on
Schedule 1 to this Addendum (the "DEMISED
PREMISES"). ▇▇▇▇▇▇▇▇▇, as sublessor, subleased the
Demised Premises to Lessor, as sublessee, pursuant
to that certain Amended Sublease Agreement dated
as of July 1, 1996, and Lessor, as secondary
sublessor, subleased the Demised Premises to
▇▇▇▇▇▇▇▇▇, as secondary sublessee, pursuant to
that certain Secondary Sublease Agreement dated as
of July 1, 1996 (the Amended Sublease Agreement
and the Secondary Sublease Agreement are
collectively referred to herein as the
"SUBLEASES"). On July 1, 1996, ▇▇▇▇▇▇▇▇▇ assigned
all of his right, title and interest in and to the
Main Lease and the Subleases to Cornell
Corrections of Texas, Inc. ("ORIGINAL LESSEE").
The Main Lease and the Subleases were amended in
certain respects by (i) that certain Amendment and
Addendum to Multiple Lease Agreements and
Operating Agreement Relating to Big Spring
Correctional Center dated June 22, 1999, between
Lessor and Original Lessee and (ii) that certain
Amendment to Leases dated effective as of August
14, 2001, between Lessor and Original Lessee.
Original Lessee assigned all of its right, title
and interest in and to the Main Lease and the
Subleases to Landlord pursuant to that certain
Assignment and Assumption of Leases (Big Spring,
Texas) dated effective as of August 14, 2001,
among Lessor, Original Lessee and Landlord.
SUBLEASED PREMISES: "SUBLEASED PREMISES" shall mean the Demised
Premises.
COMMENCEMENT DATE: The Term of the Lease with respect to the Subleased
Premises defined above shall commence on August 14,
2001 (the "COMMENCEMENT DATE"), and end on August
13, 2021 (the "EXPIRATION DATE"), unless extended
or sooner terminated as provided for in the Lease.
OVERDUE RATE: 8.47 % per annum.
TOTAL USEFUL LIFE: 46 years.
SPECIAL PROVISIONS: In the event of a taking of all or any part of the
Subleased Premises, or a sale to the condemning
authority under threat of condemnation, thereby
entitling secondary sublessee to terminate, or in
the event that a casualty occurs entitling
secondary sublessee to terminate, following which
secondary sublessee does so terminate, the
condemnation proceeds or insurance proceeds (as
the case may be) shall be allocated between Lessor
and secondary sublessee. The allocation shall be
based on a yearly proration over a 35-year period,
E.G., if the condemnation occurs in year 3 of the
Secondary Sublease Agreement term, Lessor shall
receive 3/35 of the proceeds and
secondary sublessee shall receive 32/35 of the
proceeds. The foregoing amounts shall be taken into
consideration in the determination of Value for
purposes of the Purchase Price as described in
clause (c) of SECTION 4 of EXHIBIT F of the Lease.
Signed, sealed and delivered in LANDLORD:
the presence of:
MUNICIPAL CORRECTIONS FINANCE,
L.P., a Delaware limited partnership
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Municipal Corrections Finance
--------------------- Holdings, LLC, a
WITNESS Delaware limited liability company,
its General Partner
/s/ ▇▇▇▇▇ ▇▇▇▇ By: Provident Foundation Inc.,
---------------------------------- a Georgia nonprofit corporation,
Printed Name: ▇▇▇▇▇ ▇▇▇▇ its Manager
---------------------
NOTARY PUBLIC
[SEAL]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of
Directors and Chief Executive
Officer
Signed, sealed and delivered in TENANT:
the presence of:
CORNELL COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ---------------------------------------
WITNESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board of Directors
and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------
Printed Name: ▇▇▇▇▇ ▇▇▇▇
---------------------
NOTARY PUBLIC
[SEAL]