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EXHIBIT 10.11
INDUSTRY WORK PROGRAM AGREEMENT
This agreement is entered into effective this 22 day of April, 1998, by
and between The Wackenhut Corrections Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ hereinafter OPERATOR, and Labor-to-Industry Inc.
whose principal office is located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter "INDUSTRY CONTRACTOR," the Texas Department of
Criminal Justice, Parole Division, hereinafter DIVISION, and the City of
Lockhart, Texas, hereinafter referred to as "CITY".
WHEREAS, Subchapter C of Chapter 497 of the Government Code authorizes
the establishment and operation of a prison work program by a private facility
operator under subcontract to a city or county; and
WHEREAS, the City of Lockhart, Texas in conjunction with the Texas
Department of Criminal Justice, has built a five hundred (500) bed work program
facility pursuant to the above statutory authority and has in turn
subcontracted, responsibilities to OPERATOR; and
WHEREAS, OPERATOR desires to continue to provide a work program area
to the INDUSTRY CONTRACTOR for the purpose of establishing and maintaining a
resident (inmate) work program in accordance with all applicable laws and
regulations;
NOW, therefore, in consideration of mutual benefits and covenants
hereinafter set forth, the parties hereby agree as follows:
1. Initial Term
This agreement shall become effective upon its execution and delivery
and shall continue in full force and effect, for an initial term
ending January 31, 2001 unless earlier terminated pursuant to Section
11, below. In the event the contract between OPERATOR and the City of
▇▇▇▇▇▇▇▇ terminates or expires, this contract will terminate also.
2. Renewal Term
This agreement shall automatically be extended for successive
subsequent terms of three (3) years each, unless either OPERATOR or
INDUSTRY CONTRACTOR terminates this agreement by written notice to the
other at least six (6) months prior to the expiration date of the then
current term, or this agreement is otherwise earlier terminated,
pursuant to the provisions of Section II below.
3. Right of Occupancy/Occupancy Fee
A. OPERATOR hereby grants to the INDUSTRY CONTRACTOR a right of
occupancy in the designated Industries Building and agrees to provide
the INDUSTRY
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CONTRACTOR with approximately 28,700 sq. ft. for Work Program
activities, hereinafter referred to as the AREA.
B. During the this Term and the first renewal term thereafter,
INDUSTRY CONTRACTOR shall pay to OPERATOR the sum of One Dollar
($1.00) per year. Occupancy fees for the Renewal Term(s) shall be
negotiated and approved by written agreement of the parties hereto at
least one (1) year prior to the expiration of the then current term.
4. Occupancy Restrictions
Nothing herein shall be construed as creating either a rental
agreement or a lease; the INDUSTRY CONTRACTOR may not sublet,
sublease, assign, or transfer this agreement or any of its rights or
obligation hereunder, nor may INDUSTRY CONTRACTOR enter into any other
agreement regarding the occupancy herein granted, without the express
prior written agreement of OPERATOR. The occupancy of the AREA shall
at all times be consistent with the terms of this agreement regarding
work authorized and work hours. Work hours and type of industry shall
be subject to OPERATOR approval.
5. INDUSTRY CONTRACTOR Obligations
INDUSTRY CONTRACTOR hereby agrees:
A. To provide OPERATOR at their request, a description of the
product and/or services INDUSTRY CONTRACTOR intends to produce and/or
deliver, in the intended market for products and/or services.
B. Upon approval by OPERATOR of INDUSTRY CONTRACTOR'S submitted
plan, to make all required improvements and install all necessary
furnishings, equipment and fixtures, at INDUSTRY CONTRACTOR'S cost,
without damage to the AREA or surrounding property.
C. That all materials personal property, inventory items,
equipment, and/or fixtures or other property of any kind or
description whatsoever (exclusive of those items specified in Appendix
B) installed or brought into the AREA by INDUSTRY CONTRACTOR, it
agents or employees, shall be at INDUSTRY CONTRACTOR'S sole risk and
neither the STATE, OPERATOR, CITY OF ▇▇▇▇▇▇▇▇, or any employees or
agents thereof, shall be liable for any damage or loss suffered thereto
except such damage or loss as may be caused by the intentional act or
gross negligence of the STATE, OPERATOR, CITY OF ▇▇▇▇▇▇▇▇ or any other
their agents or employees;
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D. That all permanent improvements or fixtures permanently
attached to the AREA shall become the property of the real
owner-in-interest of the building in which the AREA is located, unless
otherwise agreed in writing between all applicable parties.
E. That no additional alternations to the AREA may be made by
INDUSTRY CONTRACTOR without the prior written approval of OPERATOR,
which approval shall not be unreasonably withheld.
F. That INDUSTRY CONTRACTOR, its employees and agents will
comply with all OPERATOR policies and procedures as well as all
applicable federal, state, and local laws, ordinances, and
regulations, with particular emphasis on federal and state wage and
hour laws regarding payment for work and other rules and regulations
of the federal and state agencies having jurisdiction over employment
relations. The INDUSTRY CONTRACTOR warrant that the OPERATOR is not a
secondary employer. The INDUSTRY CONTRACTOR agrees that no goods
produced under this Agreement shall be placed in commerce in violation
of the laws of the State of Texas or the United States as they relate
to the utilization of prison labor and Prison Industry Certification
requirements.
G. That all deliveries, shipments, and employees are subject to
search before entering or leaving the Facility premises;
H. To keep the AREA clean, neat and orderly and to promptly
report any damage to the building structure, interior fixture(s), or
unsafe conditions to OPERATOR;
I. To properly maintain in safe working condition all INDUSTRY
CONTRACTOR installed equipment and fixtures;
J. That throughout the term of this agreement, INDUSTRY
CONTRACTOR shall be responsible for the cost of all utilities and
telephone service to INDUSTRY CONTRACTOR'S provided AREA, which
utilities shall be sub-metered and billed directly to INDUSTRY
CONTRACTOR;
K. That all INDUSTRY CONTRACTOR'S employees and agents assigned
to the AREA shall be subject to background security checks by
OPERATOR, and that OPERATOR shall have the right to deny entrance to
the AREA to any INDUSTRY CONTRACTOR employee or agent reasonably
deemed by OPERATOR to present a security risk;
L. That all INDUSTRY CONTRACTOR'S employees assigned to the AREA
shall be obligated to successfully complete the security training
provided by OPERATOR;
M. To interview, hire and train its Resident employees except as
otherwise provided herein;
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N. In the hiring of all Resident employees, to comply with all
requirements of federal, state, and local non-discrimination statutes
and/or regulations. The INDUSTRY CONTRACTOR shall provide the OPERATOR
with job descriptions and personnel procedures for all inmate jobs in
the industry work program.
O. To provide an on-site supervisor at all times Residents are
working in the AREA and to provide for job supervision and instruction
to all hired Resident employees;
P. To pay Resident employees at a rate prevailing in the area
for similar work; at no time shall the pay rate be less than the
Federal Minimum Wage.
Q. To make Resident employee wage payments to OPERATOR as
trustee of Resident pay accounts, with assurances that the withholding
for and the payment of applicable social security, income,
unemployment, or other taxes based on the wages and earnings of an
employee or otherwise will be timely made and paid in accordance with
applicable law. INDUSTRY CONTRACTOR shall provide OPERATOR with a
written earnings and wage distribution report on a monthly basis on
all resident employees. All Resident employee wage payments to
OPERATOR shall be made on a bi-weekly basis, unless otherwise agreed
to by OPERATOR;
R. That work hour schedules for all Resident employees assigned
to the industry work program shall be established by OPERATOR, through
the request of INDUSTRY CONTRACTOR. OPERATOR shall use its best
efforts to comply with INDUSTRY CONTRACTOR'S scheduling requests.
Overtime hours may be arranged, at the request of the INDUSTRY
CONTRACTOR, with prior approval of OPERATOR. If resident employees
work overtime, INDUSTRY CONTRACTOR will share in the expense of paying
OPERATOR employees overtime wages.
S. That INDUSTRY CONTRACTOR shall, effective ninety (90) days
after the execution of this agreement, employ not fewer than
one-hundred (125) Resident employees working a minimum of thirty-five
(35) hours per week on a continuing basis, unless otherwise agreed to
in writing by OPERATOR and subject to the availability of qualified
Resident employees within the facility. All work performed by
Residents shall be performed in accordance with the prevailing working
conditions within the CITY.
T. That the employment of Residents will not result in the
displacement of employed workers within the CITY, that the Residents
will not be employed as strikebreakers or in impairing existing
contracts at other industries wherever situated, and that the Resident
will not be exploited in any form which might adversely affect the
community, the Residents, or the DIVISION;
U. That the STATE, CITY OF ▇▇▇▇▇▇▇▇, OPERATOR, and their
employees or agents shall not be held liable for any damage to
INDUSTRY CONTRACTOR or any
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third party arising from or related to any work stoppage or resident
lock downs regardless of the reasons therefor;
V. To protect, defend, indemnify and hold harmless the STATE,
CITY OF ▇▇▇▇▇▇▇▇, OPERATOR, and their employees or agents, from any
liability claims and damages arising from or relating to this
agreement except such liability claims and damages arising from or
related to the actions or (when under an obligation to act) failure to
act of the STATE, CITY OF ▇▇▇▇▇▇▇▇, OPERATOR or any of their employees
or agents;
W. To comply with all state and local license requirements and
pay all local personal property taxes.
X. The INDUSTRY CONTRACTOR shall maintain insurance coverage for
its equipment, supplies and materials located in the prison industries
building against casualty occurrences. Further the INDUSTRY CONTRACTOR
shall maintain liability insurance coverage on itself, its agents,
servants and employees in an amount no less than $250,000 per person
per claim, $500,000 aggregate. The INDUSTRY CONTRACTOR shall also
maintain workers' compensation insurance on its employees in
accordance with the laws of the State of Texas and the PIE
Certification requirements. The INDUSTRY CONTRACTOR shall deliver to
OPERATOR a duly authenticated certificate evidencing such insurance,
within seven (7) days of execution of this agreement, and upon each
insurance renewal date.
Y. INDUSTRY CONTRACTOR shall indemnify and hold harmless
OPERATOR, CITY, and DIVISION from any and all liability arising out of
or in connection with INDUSTRY CONTRACTOR'S use, production, storage,
or disposal of any "hazardous materials" or "hazardous waste"
hereinafter defined. OPERATOR shall have the right to inspect and
approve all storage and disposal procedures.
"HAZARDOUS MATERIAL" shall mean any substance which is or contains (i)
any "hazardous substance" as now or hereafter defined in 101(14) of
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended ("CERCLA") (42 U.S.C. 9601 et seq.) or any
regulations promulgated under CERCLA; (ii) any "hazardous waste" as
now or hereafter defined in the Resource Conservation and Recovery Act
(42 U.S.C. 6901 et seq. ("RCRA") or regulations promulgated under
RCRA; (iii) any substance regulated by the Toxic Substances Control
Act (15 U.S.C. 2601 et seq.); (iv) gasoline, diesel fuel, or other
petroleum hydrocarbons; (v) asbestos and asbestos containing
materials, in any for, whether friable or non-friable; (vi)
polychlorinated biphenyls; (vii) radon gas; and any additional
substances or materials which are now or hereafter classified or
considered to be hazardous or toxic under Environmental Requirements
(as hereinafter defined) or the common law, or any other applicable
laws relating to the Property. "Hazardous waste" shall mean a solid
waste, or combination of solid wastes, which because of its quantity,
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concentration, or physical, chemical, or infectious characteristics
may (a) cause, or significantly contribute to an increase in mortality
or an increase in serious irreversible, or incapacitating reversible,
illness; or (b) pose a substantial present or potential hazard to
human health or the environment when improperly treated, stored,
transported, or disposed of, or otherwise managed. 42 U.S.C. 6903, as
amended. INDUSTRY CONTRACTOR shall be in compliance and current on all
changes to the above-referenced statutes and shall immediately comply
with any amendments to those sections or any statutes promulgated by
the State of Texas.
Z. Certificate of Good Standing. INDUSTRY CONTRACTOR shall, on an
annual basis, deliver to OPERATOR a Certificate of Good Standing from
the State of Texas Comptroller's Office that indicates that INDUSTRY
CONTRACTOR is current on all taxes due.
AA. ACA Assistance. Where ACA accreditation is being sought by
OPERATOR INDUSTRY CONTRACTOR shall comply with all ACA standards
applicable to the Industry Program and shall collect and maintain the
required documentation to assist OPERATOR to achieve and maintain
accreditation.
6. OPERATOR'S Obligations
OPERATOR agrees to:
A. Provide INDUSTRY CONTRACTOR with the AREA described in
Section 3, and provide for project management and supervision for all
improvements in the AREA.
B. Provide orientation training regarding OPERATOR security
procedures for INDUSTRY CONTRACTOR'S staff, employees, and/or agents
located at or regularly frequenting the AREA;
C. Provide security for the AREA and to provide other resident
custody support as determined by OPERATOR;
D. Provide INDUSTRY CONTRACTOR with resident employee referrals
through OPERATOR'S classification system in a timely manner;
E. Serve as Trustee of resident employee payroll accounts and to
apply the proceeds of such accounts in accordance with the terms of
all applicable State laws, regulations, and contract provisions;
F. Use its best efforts to assign this agreement to any
subsequent private or public OPERATOR;
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G. Provide a mutually agreeable Vocational/Educational training
tailored to INDUSTRY CONTRACTOR'S needs for initial pre-hire training
through the OPERATOR'S Vocational/Educational Program.
H. Assist in provision of Hazcom Training for residents and
INDUSTRY CONTRACTOR'S employees utilizing course materials to be
supplied by INDUSTRY CONTRACTOR. However, such assistance will not
reduce, diminish or otherwise waive any legal liabilities, properly
and legally the responsibility of INDUSTRY CONTRACTOR.
7. DIVISION Obligations
A. DIVISION agrees that in the event of the termination of
OPERATOR'S services prior to the expiration of the then
current INDUSTRY CONTRACTOR'S term, DIVISION, should it
become the OPERATOR of the project, will continue to meet the
OPERATOR'S obligations hereunder, including the ongoing
requirements of classification and assignment of appropriate
inmates to allow INDUSTRY CONTRACTOR to continue its Work
Program for the remainder of such then current term, either
through the services of another contracted private Operator,
or through direct DIVISION operation of the Facility.
Notwithstanding the foregoing provision, the DIVISION
reserves the right to terminate this agreement upon six (6)
months prior written notice to the parties hereto based upon
a determination by the Texas Board of Criminal Justice that
the Project shall no longer be dedicated to the Work Program
facility; provided however, that INDUSTRY CONTRACTOR shall be
allowed one extension of three (3) months prior to the
termination under this provision if INDUSTRY CONTRACTOR is, in
good faith, unable to obtain a new facility and relocate its
operations thereto in an orderly and business like manner in
such initial six (6) month period.
8. CITY Obligations
CITY agrees that in the event of the termination of OPERATOR'S
services prior to the expiration of the then current INDUSTRY
CONTRACTOR'S term, and CITY'S assumption of such Operator management
and operation duties and responsibilities, CITY will continue to meet
the OPERATOR'S obligations hereunder, including the ongoing assignment
of appropriate inmates to allow INDUSTRY CONTRACTOR to continue its
Work Program for the remainder of such then current term, either
through the services of another contracted private OPERATOR or through
direct CITY operation of the Facility.
9. DIVISION Rights
The parties hereto agree that the DIVISION shall have the right, in
its own name, to enforce the terms and provisions of this agreement.
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10. Contingencies and other Obligations
This agreement shall be subject to the contingencies and additional
obligations set forth in Appendix A, a copy of which is attached
hereto.
11. Termination
A. Either OPERATOR or INDUSTRY CONTRACTOR may terminate this
agreement upon one hundred (180) days prior written notice to the
other. Provided, however, that if this Agreement is terminated by
OPERATOR, that INDUSTRY CONTRACTOR shall be allowed one extension of
three (3) months prior to the termination under this provision if
INDUSTRY CONTRACTOR is, in good faith, unable to obtain a new facility
and relocate its operations thereto in an orderly and business like
manner in such initial six (6) month period. However, this agreement
may be terminated or suspended on an immediate basis by OPERATOR if in
its sole discretion its continuance would constitute a safety or
security risk to inmates, employees, third parties, or the public.
OPERATOR shall not unreasonably exercise this authority and shall
provide INDUSTRY CONTRACTOR a reasonable time, within the time limits
stated above, to relocate its operations.
B. The DIVISION may terminate this Agreement upon six (6) months
prior written notice to the parties hereto based upon a determination
by the Texas Board of Criminal Justice that the facility shall no
longer be dedicated to a Work Program Facility. Provided, however,
that if this Agreement is terminated by DIVISION, that INDUSTRY
CONTRACTOR shall be allowed one extension of three (3) months prior to
termination under this provision if INDUSTRY CONTRACTOR is in good
faith unable to obtain a new facility and relocate its operations
thereto in an orderly and business like manner in such initial six (6)
month period.
12. Default by INDUSTRY CONTRACTOR
A material failure to keep, perform, meet or comply with any covenant,
agreement, term or provision of this Agreement to be kept, observed,
met, performed, or complied with by INDUSTRY CONTRACTOR hereunder,
which such failure continues for a period of sixty (60) days after
INDUSTRY CONTRACTOR has written notice thereof, shall constitute an
Event of Default on the part of INDUSTRY CONTRACTOR.
13. Opportunity to Cure
In an Event of Default by INDUSTRY CONTRACTOR that INDUSTRY CONTRACTOR
reasonably believes (i) cannot be cured within the sixty (60) days
allowed to cure such Event of Default and (ii) that such Event of
Default can be cured through a diligent, on-going, and conscientious
effort on the part of INDUSTRY CONTRACTOR within a reasonable period
not to exceed six (6) months, unless extended by OPERATOR,
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then INDUSTRY CONTRACTOR may, within the sixty (60) day cure period,
submit a plan for curing the Event of Default to OPERATOR. Upon
receipt of any such plan for curing an Event of Default, OPERATOR
shall promptly review such plan and at its discretion, which must be
reasonable in the circumstances, may allow, or not allow, INDUSTRY
CONTRACTOR to pursue such plan of cure. The decision of OPERATOR will
be communicated in writing to INDUSTRY CONTRACTOR. OPERATOR agrees
that it will not exercise its remedies hereunder with respect to such
Event of Default for so long as INDUSTRY CONTRACTOR diligently,
conscientiously, and timely undertakes to cure the Event of Default in
accordance with the approved plan. If OPERATOR does not allow an
extension of the cure period, the sixty (60) day time period shall be
tolled during the period of time the request is pending before the
OPERATOR.
14. Use or Lose Space
In the event that the INDUSTRY CONTRACTOR does not utilize the AREA in
the most efficient manner to maximize work production and the number
of resident employees to be employed, the OPERATOR may, in its
discretion, remove from INDUSTRY CONTRACTOR'S use that amount of space
in the AREA not being utilized. In the event of this circumstance,
OPERATOR shall give INDUSTRY CONTRACTOR written notice of its
intention to reduce the work space made available to INDUSTRY
CONTRACTOR. INDUSTRY CONTRACTOR shall have ninety days after it has
received written notice thereof to more efficiently utilize the space
to be removed from it by OPERATOR, and at the same time, submit a plan
to OPERATOR as to how that space will be more efficiently utilized. If
after the ninety days, the INDUSTRY CONTRACTOR is still not utilizing
the space in the most efficient manner in accordance with OPERATOR'S
expectations, that space will be taken away from INDUSTRY CONTRACTOR
and, in the discretion of the OPERATOR, made available to itself or
other INDUSTRY CONTRACTORS. This provision of paragraph 14 shall apply
only in the event that the INDUSTRY CONTRACTOR is unable to comply
with paragraph 5(s), otherwise this paragraph 14 will not be
applicable.
15. Default by OPERATOR
A material failure to keep, perform, meet or comply with any covenant,
agreement, term or provision of this Agreement to be kept, observed,
met, performed, or complied with by OPERATOR hereunder, which such
failure continues for a period of sixty (60) days after OPERATOR has
written notice thereof, shall constitute an Event of Default on the
part of the OPERATOR.
16. Opportunity to Cure
In the Event of Default by OPERATOR that OPERATOR reasonably believes
(i) cannot be cured within the sixty (60) days allowed to cure such
Event of Default and (ii) that such
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Event of Default can be cured through a diligent, on-going, and
conscientious effort on the part of OPERATOR within a reasonable
period not to exceed six (6) months, unless extended by INDUSTRY
CONTRACTOR, then OPERATOR may, within the sixty (60) day cure period,
submit a plan for curing the Event of Default to INDUSTRY CONTRACTOR.
Upon receipt of any such plan for curing an Event of Default, INDUSTRY
CONTRACTOR shall promptly review such plan and at its discretion,
which must be reasonable in the circumstances, may allow, or not
allow, OPERATOR to pursue such plan of cure. The decision of INDUSTRY
CONTRACTOR will be communicated in writing to OPERATOR. INDUSTRY
CONTRACTOR agrees that it will not exercise its remedies hereunder
with respect to such Event of Default for so long as OPERATOR
diligently, conscientiously, and timely undertakes to cure the Event of
Default in accordance with the approved plan. If INDUSTRY CONTRACTOR
does not allow an extension of the cure period, the sixty (60) day
time period shall be tolled during the period of time the request is
pending before the INDUSTRY CONTRACTOR.
17. All parties agree that in the event of a non-appropriation of
funds by the Texas legislature for The Lockhart Work Program
Correctional Facility, this Agreement will terminate at such time as
appropriations are no longer available to operate this facility.
18. This Agreement may be executed in one or more separate
counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
19. Complete Agreement
This Agreement contains all of the terms and conditions agreed to by
the parties involved. No other understandings, oral or otherwise,
regarding the subject matter of this Agreement shall be deemed to
exist or to be binding upon any party hereto.
20. Modifications
This Agreement may not be modified, altered or amended except by
written agreement executed by all the parties hereto.
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IN WITNESS WHEREOF, the parties hereto affix their respective authorization
signatures effective the date first set forth above.
Wackenhut Corrections Corporation (OPERATOR):
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Persante
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Persante
Sr. Vice President
U.S. Technologies Inc. (INDUSTRY CONTRACTOR)
By: /s/ ▇.▇. ▇▇▇▇▇
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▇.▇. ▇▇▇▇▇, President
[Signatures continued on the following page]
Texas Department of Criminal Justice (STATE)
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Director of Parole Division
City of ▇▇▇▇▇▇▇▇ (CITY)
By:
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▇▇▇▇ ▇▇▇▇▇▇
Mayor, City of ▇▇▇▇▇▇▇▇
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APPENDIX A
CONTINGENCIES AND OTHER OBLIGATIONS
OPERATOR shall provide INDUSTRY CONTRACTOR the following:
1. Three reserved parking spaces in close proximity to the main entrance,
to be marked as specified for INDUSTRY CONTRACTOR from time to time.
Additional parking will be made available for INDUSTRY CONTRACTOR'S
non resident employees.
2. OPERATOR'S medical staff shall be available to INDUSTRY CONTRACTOR for
emergencies incurred in the AREA to the same extent the staff would be
available to the OPERATORS employees.
3. OPERATOR will use its best efforts to assist INDUSTRY CONTRACTOR in
obtaining and maintaining a tax abatement from the CITY and from
▇▇▇▇▇▇▇▇ County.
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