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EXHIBIT 10.1
FORM OF MASTER AGREEMENT TO LEASE
BETWEEN
PRISON REALTY CORPORATION, LANDLORD
AND
CORRECTIONAL MANAGEMENT SERVICES CORPORATION, TENANT
DATED: JANUARY ___, 1999
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TABLE OF CONTENTS
ARTICLE I SEPARATE LEASE AGREEMENTS; PREMISES AND TERM....................................1
1.01 Separate Lease Agreements.......................................................1
1.02 Leased Property.................................................................1
1.03 Term............................................................................2
1.04 Holding Over....................................................................2
1.05 Surrender.......................................................................3
ARTICLE II RENT............................................................................3
2.01 Base Rent.......................................................................3
2.02 Additional Rent.................................................................3
2.02.01 Other Additional Rent...........................................................4
2.03 Place(s) of Payment of Rent; Direct Payment of Other Additional Rent............4
2.04 Net Lease.......................................................................4
2.05 No Termination, Abatement, Etc..................................................4
ARTICLE III IMPOSITIONS AND UTILITIES.......................................................5
3.01 Payment of Impositions..........................................................5
3.02 Definition of Impositions.......................................................6
3.03 Utilities.......................................................................6
3.04 Escrow of Impositions...........................................................7
3.05 Discontinuance of Utilities.....................................................7
ARTICLE IV INSURANCE.......................................................................7
4.01 Property Insurance..............................................................7
4.02 Liability Insurance.............................................................8
4.03 Insurance Requirements..........................................................9
4.04 Replacement Cost................................................................9
4.05 Blanket Policy.................................................................10
4.06 No Separate Insurance..........................................................10
4.07 Waiver of Subrogation..........................................................10
4.08 Mortgages......................................................................10
ARTICLE V INDEMNITY; HAZARDOUS SUBSTANCES................................................10
5.01 Tenant's Indemnification.......................................................10
5.02 Hazardous Substances or Materials..............................................11
5.03 Limitation of Landlord's Liability.............................................12
ARTICLE VI USE AND ACCEPTANCE OF PREMISES.................................................12
6.01 Use of Leased Property.........................................................12
6.02 Acceptance of Leased Property..................................................13
6.03 Conditions of Use and Occupancy................................................13
6.04 Financial Statements and Other Information.....................................13
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ARTICLE VII REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS............................14
7.01 Maintenance....................................................................14
7.02 Compliance with Laws...........................................................14
7.03 Required Alterations...........................................................14
7.04 Mechanics' Liens...............................................................15
7.05 Replacements of Fixtures.......................................................15
ARTICLE VIII ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL ADDITIONS TO THE
LEASED PROPERTY................................................................15
8.01 Tenant's Right to Construct....................................................15
8.02 Scope of Right.................................................................16
8.03 Cooperation of Landlord........................................................16
8.04 Commencement of Construction...................................................17
8.05 Rights in Tenant Improvements..................................................17
8.06 Personal Property..............................................................18
8.07 Requirements for Personal Property.............................................18
8.08 Signs..........................................................................19
8.09 Financings of Capital Additions to a Leased Property...........................19
ARTICLE IX DEFAULTS AND REMEDIES..........................................................21
9.01 Events of Default..............................................................21
9.02 Remedies.......................................................................23
9.03 Right of Set-Off...............................................................25
9.04 Performance of Tenant's Covenants..............................................25
9.05 Late Charge....................................................................26
9.06 Litigation; Attorneys' Fees....................................................26
9.07 Remedies Cumulative............................................................26
9.08 Escrows and Application of Payments............................................26
9.09 Power of Attorney..............................................................26
ARTICLE X DAMAGE AND DESTRUCTION.........................................................27
10.01 General........................................................................27
10.02 Landlord's Inspection..........................................................28
10.03 Landlord's Costs...............................................................28
10.04 Rent Abatement.................................................................28
10.05 Substantial Damage During Lease Term...........................................28
10.06 Damage Near End of Term........................................................29
ARTICLE XI CONDEMNATION...................................................................29
11.01 Total Taking...................................................................29
11.02 Partial Taking.................................................................29
11.03 Restoration....................................................................30
11.04 Landlord's Inspection..........................................................30
11.05 Award Distribution.............................................................30
11.06 Temporary Taking...............................................................31
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ARTICLE XII ASSIGNMENT AND SUBLETTING; ATTORNMENT..........................................31
12.01 Prohibition Against Subletting and Assignment..................................31
12.02 Changes of Control.............................................................31
12.03 Operating/Service Agreements...................................................32
12.03.01 Permitted Agreements...........................................................32
12.03.02 Terms of Agreements............................................................32
12.03.03 Copies.........................................................................32
12.03.04 Assignment of Rights in Agreements.............................................32
12.03.05 Licenses, Etc..................................................................33
12.04 Assignment.....................................................................33
12.05 REIT Limitations...............................................................33
12.06 Attornment.....................................................................33
ARTICLE XIII ARBITRATION....................................................................34
13.01 Controversies..................................................................34
13.02 Appointment of Arbitrators.....................................................34
13.03 Arbitration Procedure..........................................................34
13.04 Expenses.......................................................................34
13.05 Enforcement of the Arbitration Award...........................................34
ARTICLE XIV QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATES..............35
14.01 Quiet Enjoyment................................................................35
14.02 Landlord Mortgages; Subordination..............................................35
14.03 Attornment; Non-Disturbance....................................................35
14.04 Estoppel Certificates..........................................................36
ARTICLE XV MISCELLANEOUS..................................................................36
15.01 Notices........................................................................36
15.02 Advertisement of Leased Property...............................................37
15.03 Landlord's Access..............................................................37
15.04 Entire Agreement...............................................................37
15.05 Severability...................................................................37
15.06 Captions and Headings..........................................................38
15.07 Governing Law..................................................................38
15.08 Memorandum of Lease............................................................38
15.09 Waiver.........................................................................38
15.10 Binding Effect.................................................................38
15.11 Authority......................................................................38
15.12 Transfer of Permits, Etc.......................................................38
15.13 Modification...................................................................39
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15.14 Incorporation by Reference.....................................................39
15.15 No Merger......................................................................39
15.16 Laches.........................................................................39
15.17 Waiver of Jury Trial...........................................................39
15.18 Permitted Contests.............................................................39
15.19 Construction of Lease..........................................................40
15.20 Counterparts...................................................................40
15.21 Relationship of Landlord and Tenant............................................40
15.22 Landlord's Status as a REIT....................................................40
15.23 Sale of Real Estate Assets.....................................................40
ARTICLE XVI NONDISCLOSURE AND RELATED MATTERS..............................................41
16.01 Covenant Not to Disclose.......................................................41
16.02 Non-Interference Covenant......................................................41
16.03 Business Materials and Property Disclosure.....................................41
16.04 Breach by Landlord.............................................................42
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MASTER AGREEMENT TO LEASE
THIS MASTER AGREEMENT TO LEASE ("Agreement") dated as of the ____ day
of January, 1999 by and between PRISON REALTY CORPORATION, a Maryland
corporation ("Landlord"), and CORRECTIONAL MANAGEMENT SERVICES CORPORATION, a
Tennessee corporation ("Tenant").
RECITALS
WHEREAS, Landlord currently owns certain correctional and detention
facilities which Tenant desires to lease in order to engage in the business of
managing and operating correctional and detention facilities;
WHEREAS, Landlord may from time to time lease additional properties
that Landlord may acquire to Tenant;
WHEREAS, Landlord and Tenant desire that each of the properties listed
on Schedule A and each additional property that Landlord may lease to Tenant
shall be the subject of a separate and individual lease agreement describing
said property, the rent and various other terms of said lease (each such lease
agreement referred to individually as a "Lease," and the property that is the
subject of an individual Lease being referred to either individually or
collectively as "Leased Property"); and
WHEREAS, Landlord and Tenant desire to set forth in this Agreement
certain terms and conditions applicable to all Leases of all Leased Properties,
except as any individual Lease with respect to a particular Leased Property may
otherwise provide;
NOW, THEREFORE, in consideration of the premises and of their
respective agreements and undertakings herein and in each Lease, Landlord and
Tenant agree as follows:
ARTICLE I
SEPARATE LEASE AGREEMENTS; PREMISES AND TERM
1.01 Separate Lease Agreements. Landlord and Tenant are concurrently
entering into a separate Lease for each of the Leased Properties referred to in
Schedule A hereto, and may in the future enter into one or more additional
separate Leases for one or more additional Leased Properties. Except as
specifically set forth in a separate Lease, or any amendment, supplement,
schedule or exhibit thereto, all of the provisions of this Agreement shall be
deemed to be incorporated into and made a part of each such separate Lease made
between the Landlord as landlord (or Lessor) and the Tenant as tenant (or
Lessee) during the term of such separate Lease.
1.02 Leased Property. Except as set forth in an individual Lease
(including any schedule or exhibit thereto), the property that is the subject of
each Lease and that shall be considered as leased by the Landlord to the Tenant
thereunder shall consist of:
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(a) The land described in the Lease, together with all rights,
titles, appurtenant interests, covenants, licenses, privileges and
benefits thereto belonging, and any easements, rights-of-way, rights of
ingress or egress or other interests in, on, or to any land, highway,
street, road or avenue, open or proposed, in, on, across, in front of,
abutting or adjoining such real property including, without limitation,
any strips and gores adjacent to or lying between such real property
and any adjacent real property (the "Land");
(b) All buildings, improvements, structures and Fixtures now
located or to be located or to be constructed on the Land, including,
without limitation, landscaping, parking lots and structures, roads,
drainage and all above ground and underground utility structures,
equipment systems and other so-called "infrastructure" improvements
(the "Improvements");
(c) All equipment, machinery, fixtures, and other items of
real and/or personal property, including all components thereof,
located in, on or used in connection with, and permanently affixed to
or incorporated into, the Improvements, including, without limitation,
all furnaces, boilers, heaters, electrical equipment, heating,
plumbing, lighting, ventilating, refrigerating, incineration, air and
water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and
theft protection equipment, and similar systems, all of which, to the
greatest extent permitted by law, are hereby deemed to constitute real
estate, together with all replacements, modifications, alterations and
additions thereto (collectively the "Fixtures");
(d) All furniture, equipment, inventory and other personal
property identified on Schedule B attached hereto and incorporated
herein by reference (the "Personal Property"). For purposes hereof,
(i) Personal Property shall include all items of property which Tenant
is obligated to install, place, use, maintain, repair and/or replace
pursuant to the provisions of Sections 8.06 and 8.07 hereof however,
such Personal Property is and shall remain the property of Tenant until
the expiration or termination of this Lease, and (ii) Personal
Property shall not include certain proprietary property of Tenant as
set forth on Schedule C.
The Land, Improvements, Fixtures and Personal Property are hereinafter referred
to as the "Leased Property."
SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions,
agreements, and other title matters listed or specifically referred to in any
individual Lease ("Permitted Exceptions").
1.03 Term. The term of each Lease shall be as set forth in the
individual Lease for a particular Leased Property, and the date on which the
term of each lease commences is referred to as the Commencement Date.
1.04 Holding Over. Should Tenant, without the express consent of
Landlord, continue to hold and occupy the Leased Property after the expiration
of the Term, such holding over beyond the Term and the acceptance or collection
of Rent by the Landlord shall operate and be construed as creating a tenancy
from month-to-month and not for any other term whatsoever. During any such
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holdover period Tenant shall pay to Landlord for each month (or portion thereof)
Tenant remains in the Leased Property one hundred fifty percent (150%) of the
Base Rent in effect on the expiration date. Said month-to-month tenancy may be
terminated by Landlord by giving Tenant ten (10) days written notice, and at any
time thereafter Landlord may re-enter and take possession of the Leased
Property.
1.05 Surrender. Except as a result of (i) Tenant Improvements and
Capital Additions (as such terms are defined in Section 8.01 hereof); (ii)
normal and reasonable wear and tear (subject to the obligation of Tenant to
maintain the Leased Property in good order and repair during the Term); and (ii)
casualty, taking or other damage and destruction not required to be repaired by
Tenant, Tenant shall surrender and deliver up the Leased Property, including all
Personal Property and replacements thereof required to be provided by Tenant
pursuant to the terms of Sections 8.06 and 8.07 hereof, at the expiration or
termination of the Term broom clean, free of all Tenant's personal property (but
not the Personal Property), and in as good order and condition as of the
Commencement Date.
ARTICLE II
RENT
2.01 Base Rent. Unless otherwise provided in an individual Lease,
Tenant shall pay Landlord annual base rent for each Leased Property that is the
subject of a Lease, without notice, demand, set-off or counterclaim, in advance,
in lawful money of the United States of America, in the amount specified therein
(the "Base Rent") for the Term in consecutive monthly installments payable in
advance on the Commencement Date of each Lease and thereafter on the first day
of each month during the Term, in accordance with the Base Rent Schedule set
forth in or attached to each individual Lease. The Base Rent for each Leased
Property shall be based on the fair market value of such property.
2.02 Additional Rent. Beginning on the first day of the month following
the first anniversary date of each Lease, the Tenant shall pay Landlord an
amount (the "Additional Rent") each year equal to a percentage of the prior year
Total Rent (for the purposes hereof, Total Rent is Base Rent plus Additional
Rent) under such Lease, such percentage being the greater of (i) four percent
(4%) or (ii) the percentage which is twenty-five percent (25%) of the percentage
increase in gross management revenues realized by Tenant from its operations at
the applicable Leased Property for such prior year exclusive of any such
increase as is attributable to an expansion in the size or number of beds in
such
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Leased Property. The Additional Rent shall be payable monthly, in advance, along
with Base Rent, and otherwise in the manner as set forth in Section 2.01 above.
Tenant shall provide to Landlord, not later than thirty (30) days following each
anniversary date of each Lease, Tenant's statement, certified by Tenant's chief
financial officer, setting forth such percentage increase in gross management
revenues realized by Tenant for the applicable Leased Facility for the prior
year.
2.02.01 Other Additional Rent. In addition to Base Rent and Additional
Rent, Tenant shall pay to the party to whom they are owed all other amounts,
liabilities, obligations and Impositions (as hereinafter defined ) which Tenant
assumes or agrees to pay under this Agreement or any Lease and any fine,
penalty, interest, charge and cost which may be added for nonpayment or late
payment of such items (collectively the "Other Additional Rent").
2.03 Place(s) of Payment of Rent; Direct Payment of Other Additional
Rent. The Base Rent, Additional Rent and Other Additional Rent are hereinafter
referred to as "Rent." Landlord shall have all legal, equitable and contractual
rights, powers and remedies provided either in this Agreement, in any Lease or
by statute or otherwise in the case of nonpayment of the Rent. Tenant shall make
all payments of Base Rent and Additional Rent at Landlord's principal place of
business or as Landlord may otherwise from time to time direct in writing, and
all payments of Other Additional Rent directly to the person or persons to whom
such amount is owing at the time and times when such payments are due, and shall
give to Landlord such evidence of such direct payments as Landlord shall
reasonably request.
2.04 Net Lease. Each Lease shall be deemed and construed to be an
"absolute net lease" or "triple net lease," and Tenant shall pay all Rent,
Impositions, and other charges and expenses in connection with each Leased
Property throughout the Term, without abatement, deduction or set-off.
2.05 No Termination, Abatement, Etc. Except as otherwise specifically
provided in this Agreement or a particular Lease, Tenant shall remain bound by
this Agreement or such Lease in accordance with its terms. Except as otherwise
specifically provided in the Agreement or a particular Lease, Tenant shall not,
without the prior written consent of Landlord, modify, surrender or terminate
the Agreement or such Lease, nor seek nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent. Except
as specifically provided in this Agreement or a particular Lease, the
obligations of Landlord and Tenant shall not be affected by reason of (i) the
lawful or unlawful prohibition of, or restriction upon, Tenant's use of the
Leased Property, or any part thereof, the interference with such use by any
person, corporation, partnership or other entity, or by reason of eviction by
paramount title; (ii) any claim which Tenant has or might have against Landlord
or by reason of any default or breach of any warranty by Landlord under this
Agreement or a particular Lease or any other agreement between Landlord and
Tenant, or to which Landlord and Tenant are parties; (iii) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceeding affecting Landlord or any assignee or transferee
of Landlord; or (iv) any other cause, whether similar or dissimilar to any of
the foregoing, other than a discharge of Tenant from any such obligations as a
matter of law. Except as otherwise specifically provided in this Agreement or a
particular Lease, and to the maximum extent permitted by law, Tenant hereby
specifically waives all rights, including but not limited to any rights under
any statute relating to rights of tenants in any state in which any Leased
Property is located, arising from
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any occurrence whatsoever, which may now or hereafter be conferred upon it by
law (a) to modify, surrender or terminate any Lease or quit or surrender the
Leased Property or any portion thereof; or (b) entitling Tenant to any
abatement, reduction, suspension or deferment of the Rent or other sums payable
by Tenant hereunder. The obligations of Landlord and Tenant hereunder shall be
separate agreements and the Rent and all other sums shall continue to be payable
in all events unless the obligations to pay the same shall be terminated
pursuant to the express provisions of this Agreement or a particular Lease or by
termination of this Agreement or a particular Lease other than by reason of an
Event of Default.
ARTICLE III
IMPOSITIONS AND UTILITIES
3.01 Payment of Impositions. Subject to the adjustments set forth
herein, Tenant shall pay, as Other Additional Rent, all Impositions (as
hereinafter defined) that may be levied or become a lien on the Leased Property
or any part thereof at any time (whether prior to or during the Term), without
regard to prior ownership of said Leased Property, on or before the date due.
Tenant shall furnish to Landlord on an annual basis copies of official receipts
or other satisfactory proof evidencing such payments. Tenant's obligation to pay
such Impositions shall be deemed absolutely fixed upon the date such Impositions
become a lien upon the Leased Property or any part thereof. Tenant, at its
expense, shall prepare and file all tax returns and reports in respect of any
Imposition as may be required by governmental authorities, provided, Landlord
shall be responsible for the preparation and filing of any such tax returns or
reports in respect of any real or personal property owned by Landlord. Tenant
shall be entitled to any refund due from any taxing authority if no Event of
Default (as hereinafter defined) shall have occurred hereunder and be
continuing. Landlord shall be entitled to any refund from any taxing authority
if an Event of Default has occurred and is continuing. Any refunds retained by
Landlord due to an Event of Default shall be applied as provided in Section
9.08. Landlord and Tenant shall, upon request of the other, provide such data as
is maintained by the party to whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports.
In the event governmental authorities classify any property covered by this
Lease as personal property, Landlord and Tenant shall file all personal property
tax returns in such jurisdictions where they may legally so file. Landlord, to
the extent it possesses the same, and Tenant, to the extent it possess the same,
will provide the other party, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal
property. Where Landlord is legally required to file personal property tax
returns, Tenant will be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Tenant to file a
protest. Tenant may, upon notice to Landlord, at Tenant's option and at Tenant's
sole cost and expense, protest, appeal, or institute such other proceedings as
Tenant may deem appropriate to effect a reduction of real estate or personal
property assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action. Tenant shall
provide Landlord copies of all materials filed or presented in connection with
any such proceeding. Tenant shall promptly reimburse Landlord for all personal
property taxes paid by Landlord upon receipt of ▇▇▇▇▇▇▇▇ accompanied by copies
of a ▇▇▇▇ therefor and payments thereof which identify the personal property
with respect to which such payments are made. Impositions imposed in respect to
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the tax-fiscal period during which the Term commences and terminates shall be
adjusted and prorated between Landlord and Tenant on a per diem basis, with
Tenant being obligated to pay its pro rata share from and including the
Commencement Date to and including the expiration or termination date of the
Term, whether or not such Imposition is imposed before or after such
commencement or termination, and Tenant's obligation to pay its prorated share
thereof shall survive such termination. Tenant shall also pay to Landlord a sum
equal to the amount which Landlord may be caused to pay of any privilege tax,
sales tax, gross receipts tax, rent tax, occupancy tax or like tax (excluding
any tax based on net income), hereinafter levied, assessed, or imposed by any
federal, state, county or municipal governmental authority, or any subdivision
thereof, upon or measured by rent or other consideration required to be paid by
Tenant under this Agreement.
3.02 Definition of Impositions. "Impositions" means, collectively, (i)
taxes (including without limitation, all real estate and personal property ad
valorem (whether assessed as part of the real estate or separately assessed as
unsecured personal property), sales and use, business or occupation, single
business, gross receipts, transaction, privilege, rent or similar taxes, but not
including income or franchise or excise taxes payable with respect to Landlord's
receipt of Rent); (ii) assessments (including without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not to be completed within the
Term); (iii) ground rents, water, sewer or other rents and charges, excises, tax
levies, and fees (including without limitation, license, permit, inspection,
authorization and similar fees); (iv) to the extent they may become a lien on
the Leased Property all taxes imposed on Tenant's operations of the Leased
Property including without limitation, employee withholding taxes, income taxes
and intangible taxes; and (v) all other governmental charges, in each case
whether general or special, ordinary or extraordinary, or foreseen or unforseen,
of every character in respect of the Leased Property or any part thereof and/or
the Rent (including all interest and penalties thereon due to any failure in
payment by Tenant), which at any time prior to, during or in respect of the Term
hereof may be assessed or imposed on or in respect of or be a lien upon (a)
Landlord or Landlord's interest in the Leased Property or any part thereof; (b)
the Leased Property or any part thereof or any rent therefrom or any estate,
right, title or interest therein; or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Leased Property or the leasing or use of the Leased Property or any part
thereof. Tenant shall not, however, be required to pay (i) any tax based on net
income (whether denominated as a franchise or capital stock or other tax)
imposed on Landlord; or (ii) except as provided in Section 13.01, any tax
imposed with respect to the sale, exchange or other disposition by Landlord of
any Leased Property or the proceeds thereof; provided, however, that if any tax,
assessment, tax levy or charge which Tenant is obligated to pay pursuant to the
first sentence of this definition and which is in effect at any time during the
Term hereof is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (i) or (ii) immediately above is levied, assessed or
imposed expressly in lieu thereof Tenant shall then pay such tax, levy, or
charge set forth in said clause (i) or (ii).
3.03 Utilities. Tenant shall contract for, in its own name, and will
pay, as Other Additional Rent all taxes, assessments, charges/deposits, and
bills for utilities, including without limitation charges for water, gas, oil,
sanitary and storm sewer, electricity, telephone service, trash collection, and
all other utilities which may be charged against the occupant of the
Improvements during the Term. Tenant shall at all times maintain that amount of
heat necessary to ensure against the freezing
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of water lines. Tenant hereby agrees to indemnify and hold Landlord harmless
from and against any liability or damages to the utility systems and the Leased
Property that may result from Tenant's failure to maintain sufficient heat in
the Improvements.
3.04 Escrow of Impositions. In the event Tenant persistently fails to
timely pay Impositions with respect to any Leased Facility, then, upon thirty
(30) days written notice from Landlord to Tenant, Tenant shall thereafter
deposit with Landlord, on the first day of each month during the remaining Term
hereof and any extended Term, a sum equal to one-twelfth (1/12th) of the
Impositions assessed against such Leased Property which sums shall be used by
Landlord toward payment of such Impositions. If, at the end of any applicable
tax year, any such funds held by Landlord are insufficient to make full payment
of taxes or other Impositions for which such funds are held, Tenant, on demand,
shall pay to Landlord any additional funds necessary to pay and discharge the
obligations of Tenant pursuant to the provisions of this section. If, however,
at the end of any applicable tax year, such funds held by Landlord are in excess
of the total payment required to satisfy taxes or other Impositions for which
such funds are held, Landlord shall apply such excess amounts to Tenant's tax
and Imposition escrow fund for the next tax year. If any such excess exists
following the expiration or earlier termination of any Lease, and subject to
Section 9.08 below, Landlord shall promptly refund such excess amounts to
Tenant. The receipt by Landlord of the payment of such Impositions by and from
Tenant shall only be as an accommodation to Tenant and the taxing authorities,
and shall not be construed as rent or income to Landlord, Landlord serving, if
at all, only as a conduit for delivery purposes. All such deposits by Tenant
shall be held in a non-interest-bearing account with one or more national banks
having total assets of not less than $1,000,000,000, with all interest thereon
accruing in favor of Tenant. In lieu of making escrow deposits as aforesaid,
Tenant may elect to provide Landlord with a letter of credit, or a payment bond,
in the face amount of one year's Impositions on the subject Leased Property,
issued by a national bank or reputable bonding or surety company, in all
respects reasonably acceptable to Landlord. Said letter of credit or payment
bond shall be drawable or callable, as the case may be, upon Tenant's failure to
timely pay any such Impositions, for the sole purpose of providing the funds
necessary to pay such Impositions, and shall otherwise be in form and substance
reasonably satisfactory to Landlord.
For purposes hereof, "persistently fails to timely pay Impositions"
shall mean failure to timely pay any Imposition with respect to any Leased
Premises for any two (2) Lease Years in any five (5) Lease Year Period,
notwithstanding Tenant's subsequent payment of such Impositions.
3.05 Discontinuance of Utilities. Landlord will not be liable for
damages to person or property or for injury to, or interruption of, business for
any discontinuance of utilities nor will such discontinuance in any way be
construed as an eviction of Tenant or cause an abatement of Rent or operate to
release Tenant from any of Tenant's obligations under this Lease.
ARTICLE IV
INSURANCE
4.01 Property Insurance. Tenant shall, at Tenant's expense, keep the
Improvements, Fixtures, and other components of the Leased Property insured
against the following risks:
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(a) Loss or damage by fire, vandalism and malicious mischief,
sprinkler leakage and all other physical loss perils commonly covered
by "All Risk" insurance in an amount not less than one hundred percent
(100%) of the then full replacement cost thereof (as hereinafter
defined). Such policy shall include an agreed amount endorsement if
available at a reasonable cost. Such policy shall also include
endorsements for contingent liability for operation of building laws,
demolition costs, and increased cost of construction.
(b) Loss or damage by explosion of steam boilers, pressure
vessels, or similar apparatus, now or hereafter installed on the Leased
Property, in commercially reasonable amounts acceptable to Landlord.
(c) Loss of rent under a rental value or business interruption
insurance policy covering risk of loss during the first six (6) months
of reconstruction necessitated by the occurrence of any hazards
described in Sections 4.01(a) or 4.01(b), above, and which causes an
abatement of Rent as provided in Article 8 hereof in an amount
sufficient to prevent Landlord or Tenant from becoming a co-insurer,
containing endorsements for extended period of indemnity and premium
adjustment, and written with an agreed amount clause, if the insurance
provided for in this clause (c) is available.
(d) If the Land is located in whole or in part within a
designated flood plain area, loss or damage caused by flood in
commercially reasonable amounts acceptable to Landlord.
(e) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper currency,
depositor's forgery, and loss of property accepted by Tenant for
safekeeping, in commercially reasonable amounts acceptable to Landlord.
(f) In connection with any repairs or rebuilding by Tenant
under Article X hereof, Tenant shall maintain (or cause its contractor
to maintain) appropriate builder's risk insurance covering any loss or
casualty to the subject Improvements during the course of such repairs
or rebuilding.
4.02 Liability Insurance. Tenant shall, at Tenant's expense, maintain
liability insurance against the following:
(a) Claims for personal injury or property damage commonly
covered by comprehensive general liability insurance with endorsements
for blanket, contractual, personal injury, owner's protective
liability, real property, fire damage, legal liability, broad form
property damage, and extended bodily injury, with commercially
reasonable amounts for bodily injury and property damage acceptable to
Landlord, but with a combined single limit of not less than Five
Million Dollars ($5,000,000.00) per occurrence and Ten Million Dollars
($10,000,000.00) in the aggregate. At Landlord's request, such
$5,000,000.00 and $10,000,000.00 minimum requirements shall be
increased by up to four percent (4%) per year.
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(b) Claims commonly covered by worker's compensation insurance
for all persons employed by Tenant on the Leased Property. Such
worker's compensation insurance shall be in accordance with the
requirements of all applicable local, state, and federal law.
4.03 Insurance Requirements. The following provisions shall apply to
all insurance coverages required hereunder:
(a) The carriers of all policies shall have a Best's Rating of
"A-" or better and a Best's Financial Category of XII or larger and
shall be authorized to do insurance business in the state in which the
Leased Property is located.
(b) Tenant shall be the "named insured" and Landlord and any
mortgagee of Landlord shall be an "additional named insured" on each
policy.
(c) Tenant shall deliver to Landlord certificates or policies
showing the required coverages and endorsements. The policies of
insurance shall provide that the policy may not be canceled or not
renewed, and no material change or reduction in coverage may be made,
without at least thirty (30) days' prior written notice to Landlord.
(d) The policies shall contain a severability of interest
and/or cross-liability endorsement, provide that the acts or omissions
of Tenant will not invalidate the Landlord's coverage, and provide that
Landlord shall not be responsible for payment of premiums.
(e) All loss adjustment shall require the written consent of
Landlord and Tenant, as their interests may appear.
(f) At least thirty (30) days prior to the expiration of each
policy, Tenant shall deliver to Landlord a certificate showing renewal
of such policy and payment of the annual premium therefor.
Landlord shall have the right to review the insurance coverages
required hereunder with Tenant from time to time, to obtain the input of third
party professional insurance advisors (at Landlord's expense) with respect to
such insurance coverages, and to consult with Tenant in Tenant's annual review
and renewal of such insurance coverages. All insurance coverages hereunder shall
be in such form, substance and amounts as are customary or standard in Tenant's
industry.
4.04 Replacement Cost. The term "full replacement cost" means the
actual replacement cost thereof from time to time including increased cost of
construction, with no reductions or deductions. Tenant shall, not later than
thirty (30) days after the anniversary of each policy of insurance, of the Term,
increase the amount of the replacement cost endorsement for the Improvements. If
Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased
Property, Landlord may have such full replacement cost redetermined at any time
after such Permitted Alterations are made, regardless of when the full
replacement cost was last determined.
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4.05 Blanket Policy. Tenant may carry the insurance required by this
Article under a blanket policy of insurance, provided that the coverage afforded
Tenant will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all of the requirements of
this Agreement.
4.06 No Separate Insurance. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or increase the amounts of any then existing insurance
by securing an additional policy or additional policies, unless all parties
having an insurable interest in the subject matter of the insurance, including
Landlord and any mortgagees, are included therein as additional named insureds
or loss payees, the loss is payable under said insurance in the same manner as
losses are payable under this Agreement, and such additional insurance is not
prohibited by the existing policies of insurance. Tenant shall immediately
notify Landlord of the taking out of such separate insurance or the increasing
of any of the amounts of the existing insurance by securing an additional policy
or additional policies. The term "mortgages" as used in this Agreement includes
Deeds of Trust and the term "mortgagees" includes trustees and beneficiaries
under a Deed of Trust.
4.07 Waiver of Subrogation. Each party hereto hereby waives any and
every claim which arises or may arise in its favor and against the other party
hereto during the Term or any extension or renewal thereof, for any and all loss
of, or damage to, any of its property located within or upon, or constituting a
part of, the Leased Property, which loss or damage is covered by valid and
collectible insurance policies, to the extent that such loss or damage is
recoverable under such policies. Said mutual waiver shall be in addition to, and
not in limitation or derogation of, any other waiver or release contained in
this Lease with respect to any loss or damage to property of the parties hereto.
Inasmuch as the said waivers will preclude the assignment of any aforesaid claim
by way of subrogation (or otherwise) to an insurance company (or any other
person), each party hereto agrees immediately to give each insurance company
which has issued to it policies of insurance, written notice of the terms of
said mutual waivers, and to have such insurance policies properly endorsed, if
necessary, to prevent the invalidation of said insurance coverage by reason of
said waivers, so long as such endorsement is available at a reasonable cost.
4.08 Mortgages. The following provisions shall apply if Landlord now or
hereafter places a mortgage on the Leased Property or any part thereof: (i)
Tenant shall obtain a standard form of mortgage clause insuring the interest of
the mortgagee; (ii) Tenant shall deliver evidence of insurance to such
mortgagee; (iii) loss adjustment shall require the consent of the mortgagee; and
(iv) Tenant shall obtain such other coverages and provide such other information
and documents as may be reasonably required by the mortgagee.
ARTICLE V
INDEMNITY; HAZARDOUS SUBSTANCES
5.01 Tenant's Indemnification. Subject to Section 4.07, Tenant hereby
agrees to indemnify and hold harmless Landlord, its agents, and employees from
and against any and all demands, claims, causes of action, fines, penalties,
damages (including consequential damages), losses, liabilities
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(including strict liability), judgments, and expenses (including, without
limitation, attorneys' fees, court costs, and the costs set forth in Section
9.06) incurred in connection with or arising from: (i) the use, condition,
operation or occupancy of each Leased Property; (ii) any activity, work, or
thing done, or permitted or suffered by Tenant in or about the Leased Property;
(iii) any acts, omissions, or negligence of Tenant or any person claiming under
Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant
or any such person; (iv) any claim of any person incarcerated in the Leased
Premises, including claims alleging breach or violation of such person's civil
or legal rights; (v) any breach, violation, or nonperformance by Tenant or any
person claiming under Tenant or the employees, agents, contractors, invitees, or
visitors of Tenant or of any such person, of any term, covenant, or provision of
this Agreement or any Lease or any law, ordinance, or governmental requirement
of any kind; (vi) any injury or damage to the person, property or business of
Tenant, its employees, agents, contractors, invitees, visitors, or any other
person entering upon the Leased Property under the express or implied invitation
of Tenant; and (vii) and any accident, injury to or death of persons or loss or
damage to any item of property occurring at the Leased Property. If any action
or proceeding is brought against Landlord, its employees, or agents by reason of
any such claim, Tenant, upon notice from Landlord, will defend the claim at
Tenant's expense with counsel reasonably satisfactory to Landlord. In the event
Landlord reasonably determines that its interests and the interests of Tenant in
any such action or proceeding are not substantially the same and that Tenant's
counsel cannot adequately represent the interests of Landlord therein, Landlord
shall have the right to hire separate counsel in any such action or proceeding
and the reasonable costs thereof shall be paid for by Tenant.
5.02 Hazardous Substances or Materials. Tenant shall not, either with
or without negligence, injure, overload, deface, damage or otherwise harm any
Leased Property or any part or component thereof; commit any nuisance; permit
the emission of any hazardous agents or substances; allow the release or other
escape of any biologically or chemically active or other hazardous substances or
materials so as to impregnate, impair or in any manner affect, even temporarily,
any element or part of any Leased Property, or allow the storage or use of such
substances or materials in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such substances
or materials; nor shall Tenant bring onto any Leased Property any such materials
or substances; permit the occurrence of objectionable noise or odors; or make,
allow or suffer any waste whatsoever to any Leased Property. Landlord may
inspect the Leased Property from time to time, and Tenant will cooperate with
such inspections. Without limitation, "hazardous substances" for the purpose of
this Section 5.02 shall include any substances regulated by any local, state or
federal law relating to environmental conditions and industrial hygiene,
including, without limitation, the Resource Conservation and Recovery Act of
1976 ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), the Hazardous Materials Transportation
Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean Water
Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and all
similar federal, state and local environmental statutes, ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
Notwithstanding the foregoing, Tenant anticipates using, storing and disposing
of certain hazardous substances in connection with operation of correctional or
detention facilities which are not in violation of the foregoing laws. Such
substances include, but are not limited to the following: medical wastes, diesel
fuel, maintenance and janitorial supplies, and waste
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from reprographic activities. Upon request by Landlord, Tenant shall submit to
Landlord annual reports regarding Tenant's use, storage, and disposal of any of
the foregoing materials, said reports to include information regarding continued
hazardous materials inspections, personal interviews, and federal, state and
local agency listings. In addition, Tenant shall execute affidavits,
representations and the like from time to time at Landlord's request concerning
Tenant's best knowledge and belief regarding the presence or absence of
hazardous materials on the Leased Property. Other than for circumstances
involving Landlord's gross negligence or intentional misconduct, Tenant shall
indemnify and hold harmless Landlord from and against all liabilities (including
punitive damages), costs and expenses (including reasonable attorneys' fees)
imposed upon or asserted against the Landlord or the Leased Property on account
of, among other things, any applicable federal, state or local law, ordinance,
regulation, order, permit, decree or similar items relating to hazardous
substances, human health or the environment (collectively, "Environmental Laws")
(irrespective of whether there has occurred any violation of any Environmental
Law ), in respect of the Leased Property, including (a) liability for response
costs and for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit to any other person or entity,
or damages from injury to or destruction or loss of natural resources, including
the reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to any Environmental Law, (b) liability for costs and expenses of
abatement, investigation, removal, remediation, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any
Environmental Law, (c) liability for personal injury or property damage arising
under any statutory or common-law tort theory, including damages assessed for
the maintenance of a public or private nuisance or for carrying on of a
dangerous activity or (d) by reason of a breach of an environmental
representation or warranty by Tenant.
5.03 Limitation of Landlord's Liability. Landlord, its agents and
employees, will not be liable for any loss, injury, death, or damage (including
consequential damages) to persons, property, or Tenant's business occasioned by
theft, act of God, public enemy, injunction, riot, strike, insurrection, war,
court order, requisition, order of governmental body or authority, fire,
explosion, falling objects, steam, water, rain or snow, leak or flow of water
(including water from the elevator system), rain or snow from any Leased
Property or into any Leased Property or from the roof, street, subsurface or
from any other place, or by dampness or from the breakage, leakage, obstruction,
or other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, or lighting fixtures of the Leased Property, or from construction,
repair, or alteration of the Leased Property or from any acts or omissions of
any other occupant or visitor of the Leased Property, or from the presence or
release of any hazardous substance or material on or from the Leased Property or
from any other cause beyond Landlord's control.
ARTICLE VI
USE AND ACCEPTANCE OF PREMISES; FINANCIAL INFORMATION
6.01 Use of Leased Property. Tenant shall use and occupy each Leased
Property exclusively as a correctional or detention facility or other purpose
for which the Leased Property is being used at the Commencement Date of the
Term, and for no other purpose without the prior written consent of the
Landlord. Tenant shall obtain and maintain all approvals, licenses, and consents
needed to use
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and operate each Leased Property for such purposes. Tenant shall promptly
deliver to Landlord complete copies of surveys, examinations, certification and
licensure inspections, compliance certificates, and other similar reports issued
to Tenant by any governmental agency.
6.02 Acceptance of Leased Property. Except as otherwise specifically
provided in this Agreement or in any individual Lease, Tenant acknowledges that
(i) Tenant and its agents have had an opportunity to inspect the Leased
Property; (ii) Tenant has found the Leased Property fit for Tenant's use; (iii)
delivery of the Leased Property to Tenant is in an "as-is" condition; (iv)
Landlord is not obligated to make any improvements or repairs to the Leased
Property; and (v) the roof, walls, foundation, heating, ventilating, air
conditioning, telephone, sewer, electrical, mechanical, utility, plumbing, and
other portions of the Leased Property are in good working order. Tenant waives
any claim or action against Landlord with respect to the condition of the Leased
Property. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR
USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO
QUALITY OR THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.
6.03 Conditions of Use and Occupancy. Tenant agrees that during the
Term it shall use and keep the Leased Property in a careful, safe and proper
manner; not commit or suffer waste thereon; not use or occupy the Leased
Property for any unlawful purposes; not use or occupy the Leased Property or
permit the same to be used or occupied, for any purpose or business deemed extra
hazardous on account of fire or otherwise; keep the Leased Property in such
repair and condition as may be required by the local board of health, or other
city, state or federal authorities, free of all cost to Landlord; not permit any
acts to be done which will cause the cancellation, invalidation, or suspension
of any insurance policy; and permit Landlord and its agents to enter upon the
Leased Property at all reasonable times after notice to Tenant to examine the
condition thereof.
6.04 Financial Statements and Other Information. Tenant shall provide
Landlord certain financial information and other information as follows:
(a) As soon as practicable and in any event within forty-five
(45) days after the end of each fiscal quarter, an unaudited
consolidated balance sheet of the Tenant and its subsidiaries as of the
close of such fiscal quarter and unaudited consolidated statements of
income and cash flows for the fiscal quarter then ended and that
portion of the fiscal year then ended, including the notes thereto, all
in reasonable detail setting forth in comparative form the
corresponding figures for the preceding fiscal year and prepared by the
Tenant in accordance with generally accepted accounting principles
consistently applied ("GAAP") and, if applicable, containing disclosure
of the effect on the financial position or results of operations of any
change in the application of accounting principles and practices during
the period, and certified by the chief financial officer of Tenant to
present fairly in all material respects the financial condition of the
Tenant as of their respective dates and the results of operations of
the Tenant for the respective periods then ended, subject to normal
year-end adjustments.
(b) Additionally, as soon as practicable and in any event
within ninety (90) days after the end of each fiscal year, an audited
consolidated balance sheet of the Tenant and its subsidiaries as of the
close of such fiscal year and audited consolidated statements of
income, retained earnings and cash flows for the fiscal year then
ended, including the notes thereto, all in reasonable detail setting
forth in comparative form the corresponding figures for the preceding
fiscal year and prepared by an independent certified public
accounting firm acceptable to the Landlord in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial
position or results of operation of any change in the application of
accounting principles and practices during the year, and accompanied by
a report thereon by such certified public accountants that is not
qualified with respect to scope or limitations imposed by Tenant with
respect to accounting principles followed by Tenant not in accordance
with GAAP.
(c) Prompt (but in no event later than ten (10) days after an
officer of Tenant obtains knowledge thereof) telephonic and written
notice of:
(i) any notice of any violation relative to any
Leased Property received by Tenant or any
subsidiary of Tenant from any governmental
authority including, without limitation, any
notice of violation of Environmental Laws;
(ii) any attachment, judgment, lien, levy or
order relating to any Leased Property that
may be assessed against or threatened
against Tenant or any subsidiary thereof;
(iii) any Event of Default or any event which
constitutes or which with the passage of
time or giving of notice or both would
constitute an Event of Default; and
(iv) any event which makes any of the
representations or warranties of Tenant set
forth herein inaccurate in any material
respect.
(d) Prior to commencement of operations in each Leased
Property, a capital and operating budget for the Leased Property for
its first fiscal year (or portion thereof) of operations; and after
commencement of operations in the leased property:
(i) prior to the beginning of each fiscal year
of Borrower, a capital and operating budget
for the Leased Property; and
(ii) for each month (and for the fiscal year
through the end of that month) a statement
of all income and expenses in connection
with the Leased Property, all certified in
writing as true and correct by an authorized
officer of Tenant.
(e) Such other information regarding the operations, business
affairs and financial condition of the Tenant or any of its
subsidiaries as the Landlord or any lender for Landlord may reasonably
request.
(f) All written information, reports, statements and other
papers and data furnished by or on behalf of Tenant to the Landlord
whether pursuant to this Article VI or any other provision of this
Agreement, shall be, at the time the same is so furnished, complete and
correct in all material respects to the extent necessary to give the
Landlord or any lender for Landlord complete, true and accurate
knowledge of the subject matter based on the Tenant's knowledge
thereof.
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ARTICLE VII
REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS
7.01 Maintenance. Tenant shall maintain each Leased Property in good
order, repair and appearance, and repair each Leased Property, including without
limitation, all interior and exterior, structural and nonstructural repairs and
replacements to the roof, foundations, exterior walls, building systems, HVAC
systems, parking areas, sidewalks, water, sewer and gas connections, pipes, and
mains. Tenant shall pay as Other Additional Rent the full cost of maintenance,
repairs, and replacements. Tenant shall maintain all drives, sidewalks, parking
areas, and lawns on or about the Leased Property in a clean and orderly
condition, free of accumulations of dirt, rubbish, snow and ice. Tenant shall
permit Landlord to inspect the Leased Property at all reasonable times, and
shall implement all reasonable suggestions of the Landlord as to the maintenance
and replacement of the Leased Property.
7.02 Compliance with Laws. Tenant shall comply with all laws,
ordinances, orders, rules, regulations, and other governmental requirements
relating to the use, condition, or occupancy of each Leased Property, whether
now or hereafter enacted and in force including without limitation, (i)
licensure requirements for operation as a correctional or detention facility,
(ii) requirements of any board of casualty insurance underwriters or insurance
service office for any other similar body having jurisdiction over the Leased
Property, and (iii) all zoning and building codes and Environmental Laws. At
Landlord's request, from time to time, Tenant shall deliver to Landlord copies
of certificates or permits evidencing compliance with such laws, including
without limitation, copies of the correctional or detention facility licenses,
certificates of occupancy and building permits. Tenant shall provide Landlord
with copies of any notice from any governmental authority alleging any
non-compliance by Tenant or any Leased Facility with any of the foregoing
requirements and such evidence as Landlord may reasonably require of Tenant's
remediation thereof. Tenant hereby agrees to defend, indemnify and hold Landlord
harmless from and against any loss, liability (including strict liability),
claim, damage (including consequential damages), cost and expense (including
attorneys' fees) resulting from any failure by Tenant to comply with any laws,
ordinances, rules, regulations, and other governmental requirements.
7.03 Required Alterations. Tenant shall, at Tenant's sole cost and
expense, make any additions, changes, improvements or alterations to each Leased
Property, including structural alterations, which may be required by any
governmental authorities, including those required to continue licensure
requirements as a correctional or detention facility, whether such changes are
required by Tenant's use, changes in the law, ordinances, or governmental
regulations, defects existing as of the date of this Lease, or any other cause
whatsoever. Tenant shall provide prior written notice to Landlord of any changes
to each Leased Property pursuant to this Section 7.03 which involve changes to
the structural integrity of such Leased Property or materially affect the
operational capabilities or rated capacity of the Leased Facility. All such
additions, changes, improvements or alterations shall be deemed to be a Tenant
Improvement and shall comply with all laws requiring such alterations and with
the provisions of Section 8.01.
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7.04 Mechanics' Liens. Tenant shall have no authority to permit or
create a lien against Landlord's interest in the Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in the Leased property against liens. Tenant hereby agrees
to defend, indemnify, and hold Landlord harmless from and against any mechanics'
liens against the Leased Property by reason of work, labor services or materials
supplied or claimed to have been supplied on or to the Leased Property. Tenant
shall immediately remove, bond-off, or otherwise obtain the release of any
mechanics' lien filed against the Leased Property. Tenant shall pay all expenses
in connection therewith, including without limitation, damages, interest, court
costs and reasonable attorneys' fees.
7.05 Replacements of Fixtures. Tenant shall not remove Fixtures from
any Leased Property except to replace the Fixtures by other similar items of
equal quality and value. Items being replaced by Tenant may be removed and shall
become the property of Tenant and items replacing the same shall be and remain
the property of the Landlord. Tenant shall execute, upon written request from
Landlord, any and all documents necessary to evidence Landlord's ownership of
the Fixtures and replacements therefor. Tenant may finance replacements for the
Fixtures by equipment lease or by a security agreement and financing statement;
provided, however, that for any item of Fixtures or Personal Property having a
cost greater than or equal to Twenty Thousand Dollars ($20,000.00), Tenant may
not finance replacements by security agreement or equipment lease unless (i)
Landlord has consented to the terms and conditions of the equipment lease or
security agreement; (ii) the equipment lessor or lender has entered into a
nondisturbance agreement with the Landlord upon terms and conditions acceptable
to Landlord, including without limitation, the following: (a) Landlord shall
have the right (but not the obligation) to assume such security agreement or
equipment lease upon the occurrence of an Event of Default by Tenant under any
Lease; (b) the equipment lessor or lender shall notify Landlord of any default
by Tenant under the equipment lease or security agreement and give Landlord a
reasonable opportunity to cure such default; and (c) Landlord shall have the
right to assign its rights under the equipment lease, security agreement, or
nondisturbance agreement; and (iii) Tenant shall, within thirty (30) days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing and approving the equipment lease, security
agreement, and nondisturbance agreement, including without limitation,
reasonable attorneys' fees and costs.
ARTICLE VIII
ALTERATIONS AND SIGNS; TENANT'S PROPERTY;
CAPITAL ADDITIONS TO THE LEASED PROPERTY
8.01 Tenant's Right to Construct. During the Term of this Agreement, so
long as no Event of Default shall have occurred and be continuing as to the
Leased Property that is the subject of such improvements, Tenant may make
Capital Additions (as defined herein), or other alterations, additions, changes
and/or improvements to any Leased Property as deemed necessary or useful to
operate the Leased Property as a correction or detention facility (the "Primary
Intended Use") (individually, a "Tenant Improvement," or collectively, "Tenant
Improvements") with the prior written consent of the Landlord, which will not be
unreasonably withheld or delayed, may be given or withheld in Landlord's
discretion. "Capital Additions" shall mean the construction of one or more new
buildings or one or more additional structures annexed to any portion
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of any of the Improvements on a particular Leased Property, which are
constructed on any parcel of land or portion of the Land of a particular Leased
Property during the Term of any individual Lease, including the construction of
a new floor, or the repair, replacement, restoration, remodeling or rebuilding
of the Improvements or any portion thereof on any Leased Property which are not
normal, ordinary or recurring to maintain the Leased Property. Except as
otherwise agreed to by Landlord in writing, any such Tenant Improvement shall be
made at Tenant's sole expense and shall become the property of Landlord upon
termination of this Lease. Unless made on an emergency basis to prevent injury
to person or property, Tenant will submit plans to Landlord for Landlord's prior
approval, such approval not to be unreasonably withheld or delayed, for any
Tenant Improvement which is not a Capital Addition and which has a cost of more
than $500,000 or a cost which, when aggregated with the costs of all such Tenant
Improvements for any individual Leased Facility in the same Lease Year, would
cause the total costs of all such Tenant Improvements to exceed $1,000,000. Such
$500,000 and $1,000,000 amounts shall be increased by four percent (4%) per
annum, cumulatively for each subsequent Lease Year. Additionally, in connection
with any Tenant Improvement, including any Capital Addition, Tenant shall
provide Landlord with copies of any plans and specification therefor, Tenant's
budget relating thereto, any required government permits or approvals, any
construction contracts or agreements relating thereto, and any other information
relating to such Tenant Improvement as Landlord shall reasonably request.
8.02 Scope of Right. Subject to Section 8.01 herein and Section 7.03
concerning required alterations, at Tenant's cost and expense, Tenant shall have
the right to:
(a) seek any governmental approvals, including building
permits, licenses, conditional use permits and any certificates of need
that Tenant requires to construct any Tenant Improvement;
(b) erect upon the Leased Property such Tenant Improvements as
Tenant deems desirable;
(c) make additions, alterations, changes and improvements in
any Tenant Improvement so erected; and
(d) engage in any other lawful activities that Tenant
determines are necessary or desirable for the development of the Leased
Property in accordance with its Primary Intended Use;
provided, however, Tenant shall not make any Tenant Improvement which would, in
Landlord's reasonable judgment, impair the value or Primary Intended Use of any
Leased Property without Landlord's prior written consent and provided, further
that Tenant shall not be permitted to create a mortgage, lien or any other
encumbrance on any individual Leased Property without Landlord's prior written
consent.
8.03 Cooperation of Landlord. Landlord shall cooperate with Tenant and
take such actions, including the execution and delivery to Tenant of any
applications or other documents, reasonably requested by Tenant in order to
obtain any governmental approvals sought by Tenant to construct any
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Tenant Improvement within ten (10) business days following the later of (a) the
date Landlord receives Tenant's request, or (b) the date of delivery of any such
application or document to Landlord, so long as the taking of such action,
including the execution of said applications or documents, shall be without cost
to Landlord (or if there is a cost to Landlord, such cost shall be reimbursed by
Tenant), and will not cause Landlord to be in violation of any law, ordinance or
regulation.
8.04 Commencement of Construction. Tenant agrees that:
(a) Tenant shall diligently seek all governmental approvals
relating to the construction of any Tenant Improvement;
(b) Once Tenant begins the construction of any Tenant
Improvement, Tenant shall diligently prosecute any such construction to
completion in accordance with applicable insurance requirements and the
laws, rules and regulations of all governmental bodies or agencies
having jurisdiction over the Leased Property;
(c) Landlord shall have the right at any time and from time to
time to post and maintain upon the Leased Property such notices as may
be necessary to protect Landlord's interest from mechanics' liens,
material men's liens or liens of a similar nature;
(d) Tenant shall not suffer or permit any mechanics' liens or
any other claims or demands arising from the work or construction of
any Tenant Improvement to be enforced against the Leased Property or
any part thereof, and Tenant agrees to hold Landlord and said Leased
Property free and harmless from all liability from any such liens,
claims or demands, together with all costs and expenses in connection
therewith;
(e) All work shall be performed in a good and workmanlike
manner consistent with standards in the industry; and
(f) Subject to Section 8.09 in the case of Capital Additions,
Tenant shall not secure any construction or other financing for the
Tenant Improvements which is secured by a portion of the Leased
Property without Landlord's prior written consent, and any such
financing (i) shall not exceed the cost of the Tenant Improvements,
(ii) shall be subordinate to any mortgage or encumbrance now existing
or hereinafter created with respect to the Leased Property, and (iii)
shall be limited solely to Tenant's interest in the Leased Property
that is the subject of the improvements.
8.05 Rights in Tenant Improvements. Notwithstanding anything to the
contrary in this Lease, all Tenant Improvements constructed pursuant to Section
8.01, any and all subsequent additions thereto and alterations and replacements
thereof, shall be the sole and absolute property of Tenant during the Term of
the particular Lease. Upon the expiration or early termination of any Lease, all
such Tenant Improvements shall become the property of Landlord. Without limiting
the generality of the foregoing, Tenant shall be entitled to all federal and
state income tax benefits associated with any Tenant Improvement during the Term
of this Agreement.
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8.06 Personal Property. Tenant shall install, place, and use on the
Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Fixtures as may be required or as Tenant
may, from time to time, deem necessary or useful to operate the Leased Property
as a correctional or detention facility.
8.07 Requirements for Personal Property. Tenant shall comply with all
of the following requirements in connection with Personal Property:
(a) With respect to each Leased Property, Tenant shall notify
Landlord within one hundred twenty (120) days after each Lease Year of
any additions, substitutions, or replacements of an item of Personal
Property at such Leased Property which individually has a cost of more
than $25,000.00 and shall furnish Landlord with such other information
as Landlord may reasonably request from time to time.
(b) The Personal Property shall be installed in a good and
workmanlike manner, in compliance with all governmental laws,
ordinances, rules, and regulations and all insurance requirements, and
be installed free and clear of any mechanics' liens.
(c) Tenant shall, at Tenant's sole cost and expense, maintain,
repair, and replace the Personal Property.
(d) Tenant shall, at Tenant's sole cost and expense, keep
Personal Property insured against loss or damage by fire, vandalism and
malicious mischief, sprinkler leakage, and other physical loss perils
commonly covered by fire and extended coverage, boiler and machinery,
and difference in conditions insurance in an amount not less than
ninety percent (90%) of the then full replacement cost thereof. Tenant
shall use the proceeds from any such policy for the repair and
replacement of Personal Property. The insurance shall meet the
requirements of Section 4.03.
(e) Tenant shall pay all taxes applicable to Personal
Property.
(f) If Personal Property is damaged or destroyed by fire or
any other case, Tenant shall promptly repair or replace Personal
Property unless Tenant is entitled to and elects to terminate the Lease
pursuant to Section 10.05.
(g) Unless an Event of Default (or any event which, with the
giving of notice of lapse of time, or both, would constitute an Event
of Default) has occurred and remains uncured beyond any applicable
grace period, Tenant may remove Personal Property from the Leased
Property from time to time provided that (i) the items removed are not
required to operate the Leased Property as a licensed correctional or
detention facility (unless such items are being replaced by Tenant);
and (ii) Tenant repairs any damage to the Leased Property resulting
from the removal of Personal Property.
(h) Tenant shall remove any of Tenant's personal property
which does not constitute Personal Property hereunder, upon the
termination or expiration of the Lease and
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shall repair any damage to the Leased Property resulting from the
removal of Tenant's personal property. If Tenant fails to remove
Tenant's personal property within ninety (90) days after the
termination or expiration of the Lease, then Tenant shall be deemed to
have abandoned Tenant's personal property, Tenant's personal property
shall become the property of Landlord, and Landlord may remove, store
and dispose of Tenant's personal property. In such event, Tenant shall
have no claim or right against Landlord for such property or the value
thereof regardless of the disposition thereof by Landlord. Tenant shall
pay Landlord, upon demand, all expenses incurred by Landlord in
removing, storing, and disposing of Tenant's personal property and
repairing any damage caused by such removal. Tenant's obligations
hereunder shall survive the termination or expiration of the Lease.
Notwithstanding the foregoing, it is understood and agreed that all
property constituting Personal Property hereunder shall be and/or
become the sole and exclusive property of Landlord upon the expiration
or termination of the Lease.
(i) Tenant shall perform its obligations under any equipment
lease or security agreement for personal property.
8.08 Signs. Tenant may, at its own expense, erect and maintain
identification signs at the Leased Property, provided such signs comply with all
laws, ordinances, and regulations. Upon the occurrence of an Event of Default or
the termination or expiration of a Lease, Tenant shall, within thirty (30) days
after notice from Landlord, remove the signs and restore the applicable Leased
Property to its original condition.
8.09 Financings of Capital Additions to a Leased Property.
(a) Landlord may, but shall be under no obligation to, provide
or arrange construction, permanent or other financing for a Capital
Addition proposed to be made to any Leased Property by Tenant. Within
thirty (30) days of receipt of such a request by Tenant, Landlord shall
notify Tenant as to whether it will finance the proposed Capital
Addition and, if so, the terms and conditions upon which it would do
so, including the terms of any amendment to an individual Lease or a
new lease agreement for such proposed Capital Addition.
(b) If Landlord agrees to finance the proposed Capital
Addition of Tenant, Tenant shall provide Landlord with the following:
(i) all customary or other required loan
documentation which may be required by the Landlord;
(ii) any information, certificates, licenses, permits
or documents requested by either Landlord or any lender with
whom Landlord has agreed or may agree to provide financing
which are necessary to confirm that Tenant will be able to use
the Capital Addition upon completion thereof in accordance
with the Primary Intended Use (as defined in Section 8.01),
including all required federal, state or local government
licenses and approvals;
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(iii) a certificate from Tenant's architect, setting
forth in reasonable detail the projected (or actual, if
available) cost of the proposed Capital Addition;
(iv) an amendment to this Lease, or a new lease
agreement, duly executed and acknowledged, in form and
substance satisfactory to Landlord and Tenant, and containing
such provisions as may be necessary or appropriate, including
without limitation, any appropriate changes in the legal
description of the Land, the Rent, and other changes with
respect to the Capital Addition;
(v) a deed conveying title to Landlord to any land
acquired for the purpose of constructing the Capital Addition,
free and clear of any liens or encumbrances except those
approved by Landlord and, both prior to and following
completion of the Capital Addition, an as-built survey thereof
satisfactory to Landlord;
(vi) endorsements to any outstanding policy of title
insurance covering the Leased Property or a supplemental
policy of title insurance covering the Leased Property
satisfactory in form and substance to Landlord (a) updating
the same without any additional exceptions, except as may be
permitted by Landlord; and (b) increasing the coverage thereof
by an amount equal to the fair market value of the Capital
Addition;
(vii) if required by Landlord, (a) an owner's policy
of title insurance insuring fee simple title to any land
conveyed to Landlord pursuant to subparagraph (v), free and
clear of all liens and encumbrances except those approved by
Landlord and (b) a lender's policy of title insurance
satisfactory in form and substance to Landlord and any lending
institution advancing a portion of the cost of the Capital
Addition;
(viii) if required by Landlord, upon completion of
the Capital Addition, an M.A.I. appraisal of the Leased
Property indicating that the value of the Leased Property upon
completion of the Capital Addition exceeds the fair market
value of the Leased Property prior thereto by an amount not
less than ninety-five percent (95%) of the cost of such
Capital Addition; and
(ix) such other certificates (including, but not
limited to, endorsements, increasing the insurance coverage,
if any, at the time required), documents, opinions of counsel,
appraisals, surveys, certified copies of duly adopted
resolutions of the board of directors of Tenant authorizing
the execution and delivery of any amendment to an individual
Lease or new lease agreement and any other instruments as may
be reasonably required by Landlord and any lending institution
advancing any portion of the cost of the Capital Addition.
(c) Upon making a request to finance a Capital Addition,
whether or not such financing is actually consummated, Tenant shall pay
or agree to pay, upon demand, all reasonable costs and expenses of
Landlord and any lending institution which has committed to finance
such Capital Addition which have been paid or incurred by them in
connection with
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the financing of the Capital Addition, including, but not limited to,
(i) the fees and expenses of their respective counsel, (ii) all
printing expenses, (iii) the amount of any filing, registration and
recording taxes and fees, (iv) documentary stamp taxes, if any, (v)
title insurance charges, appraisal fees, if any, rating agency fees, if
any, (vi) commitment fees, if any, and (vii) costs of obtaining
regulatory and governmental approvals for the construction, operation,
use or occupancy of the Capital Addition.
(d) (i) If Landlord and Tenant are unable to agree on the
terms of the financing of a Capital Addition by Landlord, Tenant may
undertake the cost of any such Capital Addition and seek construction,
permanent or other financing from other sources.
(ii) In the event Tenant shall construct any Capital
Addition and shall have obtained construction, permanent or other
financing in connection therewith from sources other than Landlord, as
set forth in the foregoing Section 8.09(d)(i), Landlord shall have the
option to acquire such Capital Addition for a period of three (3) years
following the date Tenant first receives inmates in such Capital
Addition ("Service Commencement Date"). The price at which Landlord may
acquire such Capital Addition shall be the fair market value of the
Capital Addition, as reasonably and mutually determined by Landlord and
Tenant, provided, Landlord and Tenant agree that for the first two (2)
years following the Service Commencement Date the fair market value of
such Capital Addition shall be deemed to be equal to Tenant's actual
costs and expenses to acquire, develop, design, construct and equip
such Capital Addition ("Tenant's Cost"), as reflected on the books of
Tenant, plus five percent (5%) of Tenant's Cost. Landlord's exercise of
such option shall require Landlord to acquire such Capital Addition on
such terms and conditions as Landlord and Tenant shall reasonably
agree, which shall be generally consistent with the terms and
conditions of Landlord's initial acquisition of the related Leased
Property from Tenant. Upon such acquisition, Landlord shall lease such
Capital Addition to Tenant on the terms and conditions set forth
herein, and Landlord and Tenant shall execute a new Lease, or an
amendment to the existing Lease, with respect thereto. In such case,
for acquisitions of Capital Additions within five (5) years of the date
hereof, the annual Base Rent shall be the greater of (i) the fair
market rental value of the Capital Addition, as reasonably and mutually
determined by Landlord and Tenant and (ii) eleven percent (11%) of the
purchase price of such Capital Addition. For Capital Additions
thereafter, the Base Rent shall be the fair market rental value of the
Capital Addition, as reasonably and mutually determined by Landlord and
Tenant. Regardless of whether the foregoing option is exercised, all
Capital Additions shall become the property of Landlord upon the
expiration or termination of this Lease.
ARTICLE IX
DEFAULTS AND REMEDIES
9.01 Events of Default. The occurrence of any one or more of the
following shall be an event of default ("Event of Default") hereunder and under
each Lease:
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(a) Tenant fails to pay in full any installment of Rent, or
any other monetary obligation payable by Tenant to Landlord under a
Lease, within fifteen (15) days after notice of nonpayment from
Landlord;
(b) Tenant fails to observe and perform any other covenant,
condition or agreement under this Agreement or a Lease to be performed
by Tenant (except those described in Section 9.01(a) of this Agreement)
and such failure continues for a period of thirty (30) days after
written notice thereof is given to Tenant by Landlord; or if, by reason
of the nature of such default, the same cannot with due diligence be
remedied within said thirty (30) days, such failure will not be deemed
to continue if Tenant proceeds promptly and with due diligence to
remedy the failure and diligently completes the remedy thereof;
provided, however, said cure period will not extend beyond thirty (30)
days if the facts or circumstances giving rise to the default are
creating a further harm to Landlord or the Leased Property and Landlord
makes a good faith determination that Tenant is not undertaking
remedial steps that Landlord would cause to be taken if such Lease were
then to terminate;
(c) If Tenant (a) admits in writing its inability to pay its
debts generally as they become due, (b) files a petition in bankruptcy
or a petition to take advantage of any insolvency act, (c) makes an
assignment for the benefit of its creditors, (d) is unable to pay its
debts as they mature, (e) consents to the appointment of a receiver of
itself or of the whole or any substantial part of its property, or (f)
files a petition or answer seeking reorganization or arrangement under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state thereof;
(d) If Tenant, on a petition in bankruptcy filed against it,
is adjudicated as bankrupt or a court of competent jurisdiction enters
an order or decree appointing, without the consent of Tenant, a
receiver of Tenant of the whole or substantially all of its property,
or approving a petition filed against it seeking reorganization or
arrangement of Tenant under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
thereof, and such judgment, order or decree is not vacated or set aside
or stayed within ninety (90) days from the date of the entry thereof;
(e) If the estate or interest of Tenant in any Leased Property
or any part thereof is levied upon or attached in any proceeding and
the same is not vacated or discharged within the later of ninety (90)
days after commencement thereof or thirty (30) days after receipt by
Tenant of notice thereof from Landlord (unless Tenant is contesting
such lien or attachment in accordance with this Agreement);
(f) Any representation or warranty made by Tenant in the
Agreement or any Lease or in any certificate, demand or request made
pursuant to any Lease proves to be incorrect, in any material respect
and any adverse effect on Landlord of any such misrepresentation or
breach of warranty has not been corrected to Landlord's satisfaction
within thirty (30) days after Tenant becomes aware of, or is notified
by the Landlord of the fact of, such misrepresentation or breach of
warranty;
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(g) A default by Tenant in any payment of principal or
interest on any obligations for borrowed money having a principal
balance of Twenty-Five Million Dollars ($25,000,000) or more in the
aggregate (excluding obligations which are limited in recourse to
specific property of Tenant provided that such property is not a
substantial portion of the assets of Tenant and excluding any debt
which is denominated as "subordinated debt"), or in the performance of
any other provision contained in any instrument under which any such
obligation is created or secured (including the breach of any covenant
thereunder), if an effect of such default is that the holder(s) of such
obligation cause such obligation to become due prior to its stated
maturity; or
(h) A final, non-appealable judgment or judgments for the
payment of money in excess of Ten Million Dollars ($10,000,000) in the
aggregate not fully covered (excluding deductibles) by insurance is
rendered against Tenant and the same remains undischarged, unvacated,
unbonded or unstayed for a period of one hundred twenty (120)
consecutive days.
(i) The failure of Landlord to qualify as a real estate
investment trust under the Internal Revenue Code of 1986, as amended.
(j) Tenant ceases operations at a Leased Property for a period
in excess of forty-five (45) days during the Term.
Notwithstanding the foregoing, an Event of Default under the foregoing
subsections (a), (c), (d), (g), (h) and (i) shall constitute an Event of Default
under all of the Leases and an Event of Default under the foregoing subsections
(b), (e), (f) and (j) shall constitute an Event of Default only with respect to
the specific Lease and Leased Property to which such Event of Default applies.
Provided, with respect to the Events of Default under the foregoing subsections
(b), (e) and (f), if such Events of Default shall at any time be applicable to
Leased Properties for which the monthly Base Rent constitutes, in the aggregate,
greater than twenty-five percent (25%) of the monthly Base Rent for all of the
Leased Properties, then such Events of Default shall constitute Events of
Default under all of the Leases.
9.02 Remedies. To the extent any Event of Default is applicable only to
a specific Lease or Leases, or a specific Leased Property or Leased Properties
(in accordance with Section 9.01 above), the remedies set forth herein shall be
exercisable solely with respect to such Lease or Leases, or Leased Property or
Leased Properties, and shall not be exercisable with respect to any other Leases
or Leased Property. To the extent any Event of Default constitutes an Event of
Default under all of the Leases (in accordance with Section 9.01 above), the
remedies set forth herein shall be exercisable with respect to all of the Leases
and all of the Leased Properties. Subject to the foregoing provisions, Landlord
may exercise any one or more of the following remedies upon the occurrence of an
Event of Default:
(a) Landlord may terminate the applicable Lease, exclude
Tenant from possession of the subject Leased Property and use
reasonable efforts to lease such Leased Property to others. If any
Lease is terminated pursuant to the provisions of this subparagraph
(a), Tenant will remain liable to Landlord for damages in an amount
equal to the Rent and other sums which would have been owing by Tenant
under such Lease for the balance of the Term if the Lease had not been
terminated, less the net proceeds, if any, of any re-letting of the
subject Leased Property by Landlord subsequent to such termination,
after deducting all Landlord's expenses in connection with such
re-letting, including without limitation, the expenses set forth in
Section 9.02(b)(2) below. Landlord will be entitled to collect such
damages from Tenant monthly on the days on which the Rent and other
amounts would have been payable
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under the subject Lease if such Lease had not been terminated, and
Landlord will be entitled to receive such damages from Tenant on each
such day. Alternatively, at the option of Landlord, if such Lease is
terminated, Landlord will be entitled to recover from Tenant (a) all
unpaid Rent then due and payable, and (b) the worth at the time of the
award (as hereafter defined) of the Rent which would have been due and
payable from the date of termination through the Expiration Date as if
the Lease had not been terminated. The "worth at the time of award" of
the amount referred to in clause (b) is computed at "present value"
using New York Prime Rate. For purposes of this Agreement, "New York
Prime Rate" shall mean that rate of interest identified as prime or
national prime by the Wall Street Journal, or if not published or
found, then the rate of interest charged by the American bank with the
greatest number of assets on ninety (90) day unsecured notes to its
preferred customers. For the purpose of determining unpaid Rent under
clause (b), the Rent reserved in the Lease will be deemed to be the sum
of the following: (i) the Base Rent computed pursuant to Section 2.01;
(ii) the Additional Rent computed pursuant to Section 2.02; and (iii)
the Other Additional Rent computed pursuant to Section 2.02.01. Such
computation of Other Additional Rent shall be based on the Other
Additional Rent paid for the Lease Year preceding the date of
termination, increased by 4% per year thereafter. Following payments by
Tenant of the foregoing amounts, Landlord shall deliver and pay over to
Tenant all rent, income, and other proceeds of any nature realized from
the sale, lease or other disposition or utilization of the Leased
Premises, if any, actually received by Landlord, up to the amounts so
paid by Tenant less Landlord's reasonably incurred costs and expenses
of maintaining and re-leasing or selling the Leased Premises.
(b) (1) Without demand or notice, Landlord may re-enter and
take possession of the Leased Property or any part of the Leased
Property; and repossess the Leased Property as of the Landlord's former
estate; and expel the Tenant and those claiming through or under Tenant
from the Leased Property; and, remove the effects of both or either,
without being deemed guilty of any manner of trespass and without
prejudice to any remedies for arrears of Rent or preceding breach of
covenants or conditions. If Landlord elects to re-enter, as provided in
this paragraph (b), or if Landlord takes possession of the Leased
Property pursuant to legal proceedings or pursuant to any notice
provided by law, Landlord may, from time to time, without terminating
the subject Lease, re-let the Leased Property or any part of the Leased
Property, either alone or in conjunction with other portions of the
Improvements of which the Leased Property are a part, in Landlord's
name but for the account of Tenant, for such term or terms (which may
be greater or less than the period which would otherwise have
constituted the balance of the Term of this Lease) and on such terms
and conditions (which may include concessions of free rent, and the
alteration and repair of the Leased Property) as Landlord, in its
uncontrolled discretion, may determine. Landlord may collect and
receive the Rents for Leased Property. Landlord will not be responsible
or liable for any failure to re-let the Leased Property, or any part of
the Leased Property, or for any failure to collect any Rent due upon
such re-letting. No such re-entry or taking possession of the Leased
Property by Landlord will be construed as an election on Landlord's
part to terminate this Lease unless a written notice of such intention
is given to Tenant. No notice from Landlord under this Lease or under a
forcible entry and detainer statute or similar law will constitute an
election by Landlord to terminate this Lease unless such notice
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specifically says so. Landlord reserves the right following any such
re-entry or re-letting, or both, to exercise its right to terminate
this Lease by giving Tenant such written notice, and, in that event
the Lease will terminate as specified in such notice.
(2) If Landlord elects to take possession of the
Leased Property according to this subparagraph (b) without terminating
the Lease, Tenant will pay Landlord (i) the Rent, Additional Rent and
other sums which would be payable under the Lease if such repossession
had not occurred, less (ii) the net proceeds, if any, of any re-letting
of the Leased Property after deducting all of Landlord's expenses
incurred in connection with such re-letting, including without
limitation, all repossession costs, brokerage commissions, legal
expense, attorneys' fees, expense of employees, alteration, remodeling,
repair costs, and expense of preparation for such re-letting. If, in
connection with any re-letting, the new Lease term extends beyond the
existing Term or the Leased Property covered by such re-letting
includes areas which are not part of the Leased Property, a fair
apportionment of the Rent received from such re-letting and the
expenses incurred in connection with such re-letting will be made in
determining the net proceeds received from such re-letting. In
addition, in determining the net proceeds from such re-letting, any
rent concessions will be apportioned over the term of the new Lease.
Tenant will pay such amounts to Landlord monthly on the days on which
the Rent and all other amounts owing under this Agreement or the Lease
would have been payable if possession had not been retaken, and
Landlord will be entitled to receive the rent and other amounts from
Tenant on each such day.
(c) Landlord may re-enter the Leased Property and have,
repossess and enjoy the Leased Property as if the Lease had not been
made, and in such event, Tenant and its successors and assigns shall
remain liable for any contingent or unliquidated obligations or sums
owing at the time of such repossession.
(d) Landlord may take whatever action at law or in equity as
may appear necessary or desirable to collect the Rent and other amounts
payable under the applicable Lease then due and thereafter to become
due, or to enforce performance and observance of any obligations,
agreements or covenants of Tenant under the Lease.
9.03 Right of Set-Off. Landlord may, and is hereby authorized by
Tenant, at any time and from time to time, after advance notice to Tenant, to
set-off and apply any and all sums held by Landlord, including all sums held in
any escrow for Impositions, any indebtedness of Landlord to Tenant, and any
claims by Tenant against Landlord, against any obligations of Tenant under this
Agreement or the Lease and against any claims by Landlord against Tenant,
whether or not Landlord has exercised any other remedies hereunder. The rights
of Landlord under this Section are in addition to any other rights and remedies
Landlord may have against Tenant.
9.04 Performance of Tenant's Covenants. Landlord may perform any
obligation of Tenant which Tenant has failed to perform within two (2) days
after Landlord has sent a written notice to Tenant informing it of its specific
failure (provided no such notice shall be required if Landlord has previously
notified Tenant of such failure under provisions of Section 9.01). Tenant shall
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reimburse Landlord on demand, as Other Additional Rent, for any expenditures
thus incurred by Landlord and shall pay interest thereon at the New York Prime
Rate (as herein defined).
9.05 Late Charge. Any payment not made by Tenant for more than ten (10)
days after the due date shall be subject to a late charge payable by Tenant as
Rent of three percent (3%) of the amount of such overdue payment.
9.06 Litigation; Attorneys' Fees. Within ten (10) days after Tenant has
knowledge of any litigation or other proceeding that may be instituted against
Tenant, against the Leased Property to secure or recover possession thereof, or
that may affect the title to or the interest of Landlord in the Leased
Property, Tenant shall give written notice thereof to Landlord. Within thirty
(30) days of Landlord's presentation of an invoice, Tenant shall pay all
reasonable costs and expenses incurred by Landlord in enforcing or preserving
Landlord's rights under this Agreement and each Lease, whether or not an Event
of Default has actually occurred or has been declared and thereafter cured,
including without limitation, (i) the fees, expenses, and costs of any
litigation, receivership, administrative, bankruptcy, insolvency or other
similar proceeding; (ii) reasonable attorney, paralegal, consulting and witness
fees and disbursements; and (iii) the expenses, including without limitation,
lodging, meals, and transportation, of Landlord and its employees, agents,
attorneys, and witnesses in preparing for litigation, administrative,
bankruptcy, insolvency or other similar proceedings and attendance at hearings,
depositions, and trials in connection therewith. All such costs, charges and
fees as incurred shall be deemed to be Other Additional Rent under this
Agreement.
9.07 Remedies Cumulative. The remedies of Landlord herein are
cumulative to and not in lieu of any other remedies available to Landlord at law
or in equity. The use of any one remedy shall not be taken to exclude or waive
the right to use any other remedy.
9.08 Escrows and Application of Payments. As security for the
performance of its obligations hereunder, Tenant hereby assigns to Landlord all
its right, title and interest in and to all monies escrowed with Landlord under
this Agreement or under any Lease and all deposits with utility companies,
taxing authorities, and insurance companies; provided, however, that Landlord
shall not exercise its rights hereunder until an Event of Default has occurred.
Any payments received by Landlord under any provisions of this Agreement or
under any Lease during the existence, or continuance of an Event of Default
shall be applied to Tenant's obligations in the order which Landlord may
determine.
9.09 Power of Attorney. Tenant hereby irrevocably and unconditionally
appoints Landlord, or Landlord's authorized officer, agent, employee or
designee, as Tenant's true and lawful attorney-in-fact, to act, after an Event
of Default, for Tenant in Tenant's name, place, and stead, and for Tenant's and
Landlord's use and benefit, to execute, deliver and file all applications and
any and all other necessary documents or things, to effect a transfer,
reinstatement, renewal and/or extension of any and all licenses and other
governmental authorizations issued to Tenant in connection with Tenant's
operation of the Leased Property, and to do any and all other acts incidental to
any of the foregoing. Tenant irrevocably and unconditionally grants to Landlord
as its attorney-in-fact full power and authority to do and perform, after an
Event of Default, every act necessary and proper to be done in the exercise of
any of the foregoing powers as fully as Tenant might or could do if personally
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present or acting, with full power of substitution, hereby ratifying and
confirming all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and is
irrevocable prior to the full performance of the Tenant's obligations under this
Agreement and each Lease.
ARTICLE X
DAMAGE AND DESTRUCTION
10.01 General. Tenant shall notify Landlord if any of the Leased
Property is damaged or destroyed by reason of fire or any other cause. Tenant
shall promptly repair, rebuild, or restore the Leased Property, at Tenant's
expense, so as to make the Leased Property at least equal in value to the Leased
Property existing immediately prior to such occurrence and as nearly similar to
it in character as is practicable and reasonable. Before beginning such repairs
or rebuilding, or letting any contracts in connection with such repairs or
rebuilding, Tenant will submit for Landlord's approval, which approval Landlord
will not unreasonably withhold or delay, complete and detailed plans and
specifications for such repairs or rebuilding. Promptly after receiving
Landlord's approval of the plans and specifications, Tenant will begin such
repairs or rebuilding and will prosecute the repairs and rebuilding to
completion with diligence, subject, however, to strikes, lockouts, acts of God,
embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any fire or other casualty insurance paid to Landlord for such repair or
rebuilding as the same progresses, after deduction of any costs of collection,
including attorneys' fees. Payment will be made against properly certified
vouchers of a competent architect in charge of the work and approved by
Landlord. Prior to commencing the repairing or rebuilding, Tenant shall deliver
to Landlord for Landlord's approval a schedule setting forth the estimated
monthly draws for such work. Landlord will contribute to such payments out of
the insurance proceeds an amount equal to the proportion that the total net
amount received by Landlord from insurers bears to the total estimated cost of
the rebuilding or repairing, multiplied by the payment by Tenant on account of
such work. Landlord may, however, withhold ten percent (10%) from each payment
until (i) the work of repairing or rebuilding is completed and proof has been
furnished to Landlord that no lien or liability has attached or will attach to
the Leased Property or to Landlord in connection with such repairing or
rebuilding, (ii) Tenant has obtained a certificate of use and occupancy (or its
functional equivalent) for the portion of the Leased Premises repaired or
rebuilt and (iii) if Tenant has an agreement with any governmental authority
which requires such governmental authority to approve such repairs or
rebuilding, such approval shall have been obtained. Upon the completion of
rebuilding or repairing and the furnishing of such proof, the balance of the net
proceeds of such insurance payable to Tenant on account of such repairing or
rebuilding will be paid to Tenant. Tenant will obtain and deliver to Landlord a
temporary or final certificate of occupancy before the Leased Property is
reoccupied for any purpose. Tenant shall complete such repairs or rebuilding
free and clear of mechanic's or other liens, and in accordance with the building
codes and all applicable laws, ordinances, regulations, or orders of any state,
municipal, or other public authority affecting the repairs or rebuilding, and
also in accordance with all requirements of the insurance rating organization,
or similar body. Any remaining proceeds of insurance after such restoration will
be Tenant's property.
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10.02 Landlord's Inspection. During the progress of such repairs or
rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such repairs
or rebuilding. Tenant will keep all plans, shop drawings, and specifications
available, and Landlord and its architects and engineers may examine them at all
reasonable times. If, during such repairs or rebuilding, Landlord and its
architects and engineers determine that the repairs or rebuilding are not being
done in accordance with the approved plans and specifications, Landlord will
give prompt notice in writing to Tenant, specifying in detail the particular
deficiency, omission, or other respect in which Landlord claims such repairs or
rebuilding do not accord with the approved plans and specifications. Upon the
receipt of any such notice, Tenant will cause corrections to be made to any
deficiencies, omissions, or such other respect. Tenant's obligations to supply
insurance, according to Article IV, will be applicable to any repairs or
rebuilding under this Section.
10.03 Landlord's Costs. Tenant shall, within thirty (30) days after
receipt of an invoice from Landlord, pay the reasonable costs, expenses, and
fees of any architect or engineer employed by Landlord to review any plans and
specifications and to supervise and approve any construction, or for any
services rendered by such architect or engineer to Landlord as contemplated by
any of the provisions of this Agreement, or for any services performed by
Landlord's attorneys in connection therewith; provided, however, that Landlord
will consult with Tenant and notify Tenant of the estimated amount of such
expenses.
10.04 Rent Abatement. In the event that the provisions of Section 10.01
above shall become applicable, the Rent, real estate taxes and other Impositions
may be abated or reduced proportionately during any period in which, by reason
of such damage or destruction, there is substantial interference with the
operation of the business of Tenant in the Leased Property, having regard to the
extent to which Tenant may be required to discontinue its business in the Leased
Property, and such abatement or reduction shall continue for the period
commencing with such destruction or damage and ending with the substantial
completion (defined below) by Tenant of such work or repair and/or
reconstruction. In the event that only a portion of any Leased Property is
rendered untenantable or incapable of such use, the Base Rent and all real
estate taxes and other Impositions payable hereunder may be abated or reduced on
a pro rata basis for the amount that the correctional or detention facility at a
particular Leased Property is rendered incapable of occupancy because of such
damage or destruction in proportion to the total size of the Leased Property
prior to such damage or destruction. For purposes of this paragraph, substantial
completion shall occur upon the earlier of (i) nine (9) months from the date of
the first disbursement of insurance proceeds, or (ii) the issuance of a
certificate of occupancy for the Leased Property. Notwithstanding any other
provision hereof, any such rental abatement shall be limited to the amount of
any rental or business interruption insurance proceeds actually received by
Landlord.
10.05 Substantial Damage During Lease Term. Provided Tenant has fully
complied with Section 4.01 hereof (including actually maintaining in effect
rental value insurance or business interruption insurance provided for in clause
(c) thereof) and has satisfied the conditions of the last sentence of this
Section 10.05, if, at any time during the Term of the particular Lease, the
Leased Property is so damaged by fire or otherwise that more than fifty percent
(50%) of the correctional or detention facility at the Leased Property is
rendered unusable, Tenant may, within thirty (30) days
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after such damage, give notice of its election to terminate the Lease subject to
the particular Leased Property and, subject to the further provisions of this
Section, such Lease will cease on the tenth (10th) day after the delivery of
such notice. If the Lease is so terminated, Tenant will have no obligation to
repair, rebuild or replace the Leased Property, and the entire insurance
proceeds will belong to Landlord. If the Lease is not so terminated, Tenant
shall rebuild the Leased Property in accordance with Section 10.01. If Tenant
elects to terminate any Lease pursuant to this Section 10.05, Tenant will pay
(or cause to be paid) to Landlord, an amount equal to the difference between the
amount of all insurance proceeds received by Landlord, and the net book value of
such Leased Property as shown in Landlord's financial statements as of the date
of such termination.
10.06 Damage Near End of Term. Notwithstanding any provisions of
Section 10.01 to the contrary, if damage to or destruction of the Leased
Property occurs during the last twenty-four (24) months of the Term, and if such
damage or destruction cannot be fully repaired and restored within six (6)
months immediately following the date of loss, either party shall have the right
to terminate this Lease by giving notice to the other within thirty (30) days
after the date of damage or destruction, in which event Landlord shall be
entitled to retain the insurance proceeds and Tenant shall pay to Landlord on
demand the amount of any deductible or uninsured loss arising in connection
therewith; provided, however, that any such notice given by Landlord shall be
void and of no force and effect if Tenant exercises an available option to
extend the Term pursuant to provisions of the Lease for such Leased Property
within thirty (30) days following receipt of such termination notice.
ARTICLE XI
CONDEMNATION
11.01 Total Taking. If at any time during the Term any Leased Property
is totally and permanently taken by right of eminent domain or by conveyance
made in response to the threat of the exercise of such right ("Condemnation"),
the applicable Lease shall terminate on the Date of Taking (which shall mean the
date the condemning authority has the right to possession of the property being
condemned), and Tenant shall promptly pay all outstanding Rent and other charges
through the date of termination, provided, however the applicable Lease shall
not so terminate if the Condemnation occurred due to the failure of Tenant to
maintain the Leased Property as required by Article VII of this Agreement or
other applicable provision of this Agreement, whether or not such failure on the
part of Tenant constituted an Event of Default hereunder at the time of the
Condemnation.
11.02 Partial Taking. If a portion of any Leased Property is taken by
Condemnation, the subject Lease shall remain in effect if such Leased Property
is not thereby rendered Unsuitable for its Primary Intended Use (which shall
mean that such Leased Property is in such a state or condition such that in the
good faith judgment of Tenant, reasonably exercised, such Leased Property
cannot be operated on a commercially practicable basis as a correctional or
detention facility), but if such Leased Property is thereby rendered Unsuitable
for its Primary Intended Use, such Lease shall terminate on the Date of Taking,
provided such Condemnation was not as a result of Tenant's failure to maintain
the Leased Property as provided for in Section 11.01.
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11.03 Restoration. If there is a partial taking of any Leased Property
and the subject Lease remains in full force and effect pursuant to Section
11.02, Landlord shall furnish to Tenant the amount of the Award payable to
Landlord, as provided herein, in order for Tenant to accomplish all necessary
restoration. If Tenant receives an Award under Section 11.05, Tenant shall
repair or restore any Tenant Improvements up to but not exceeding the amount of
the Award payable to Tenant therefor. Before beginning such restoration, or
letting any contracts in connection with such restoration, Tenant will submit
for Landlord's approval, which approval Landlord will not unreasonably withhold
or delay, complete and detailed plans and specifications for such restoration.
Promptly after receiving Landlord's approval of the plans and specifications,
Tenant will begin such restoration and will prosecute the repairs and rebuilding
to completion with diligence, subject, however, to strikes, lockouts, acts of
God, embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any Award paid to Landlord for such restoration, after deduction of any costs of
collection, including attorneys' fees. Payment will be made against properly
certified vouchers of a competent architect in charge of the work and approved
by Landlord. Prior to commencing the restoration, Tenant shall deliver to
Landlord for Landlord's approval a schedule setting forth the estimated monthly
draws for such work. Landlord may, however, withhold ten percent (10%) from each
payment until the work of restoration is completed and proof has been furnished
to Landlord that no lien or liability has attached or will attach to the Leased
Property or to Landlord in connection with such restoration. Upon the completion
of restoration and the furnishing of such proof, the balance of the Award will
be paid to Tenant. Tenant will obtain and deliver to Landlord a temporary or
final certificate of occupancy before the Leased Property is reoccupied for any
purpose. Tenant shall complete such restoration free and clear of mechanic's or
other liens, and in accordance with the building codes and all applicable laws,
ordinances, regulations, or orders of any state, municipal, or other public
authority affecting the restoration, and also in accordance with all
requirements of the insurance rating organization, or similar body. Any
remaining proceeds of the Award after such restoration will be Tenant's
property.
11.04 Landlord's Inspection. During the progress of such restoration,
Landlord and its architects and engineers may, from time to time, inspect the
Leased Property and will be furnished, if required by them, with copies of all
plans, shop drawings, and specifications relating to such restoration. Tenant
will keep all plans, shop drawings, and specifications available, and Landlord
and its architects and engineers may examine them at all reasonable times. If,
during such restoration, Landlord and its architects and engineers determine
that the restoration is not being done in accordance with the approved plans and
specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such restoration does not accord with the approved plans
and specifications. Upon the receipt of any such notice, Tenant will cause
corrections to be made to any deficiencies, omissions, or such other respect.
Tenant's obligations to supply insurance, according to Article IV, will be
applicable to any restoration under this Section.
11.05 Award Distribution. The entire compensation, sums or anything of
value awarded, paid or received on a total or partial Condemnation (the "Award")
shall belong to and be paid to Landlord, except that, subject to the rights of
any mortgagee of Tenant, Tenant shall be entitled to receive from the Award, if
and to the extent such Award specifically includes such items, a sum
attributable to the
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value, if any, of: (i) any Tenant Improvements, and (ii) the leasehold interest
of Tenant under the subject Lease; provided, however, that if the amount
received by Landlord and said mortgagee is less than the Condemnation Threshold
(which shall mean, as of any given date, an amount equal to the net book value
of such Leased Property as shown on the financial statements of Landlord as of
the date of the Condemnation), then the amount of the Award otherwise payable to
Tenant for the value of its leasehold interest under this Lease (and not any
other funds of Tenant) shall instead be paid over to Landlord up to the amount
of the shortfall.
11.06 Temporary Taking. The taking of any Leased Property, or any part
thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has
continued for longer than six (6) months. During any such six (6) month period,
which shall be a temporary taking, all the provisions of the subject Lease shall
remain in full force and effect with no abatement of rent payable by Tenant
hereunder. In the event of any such temporary taking, the entire amount of any
such Award made for such temporary taking allocable to the Term of such Lease,
whether paid by way of damages, rent or otherwise, shall be paid to Tenant.
ARTICLE XII
ASSIGNMENT AND SUBLETTING; ATTORNMENT
12.01 Prohibition Against Subletting and Assignment. Subject to Section
12.03, Tenant shall not, without the prior written consent of Landlord (which
consent Landlord may grant or withhold in its sole and absolute discretion),
assign, mortgage, pledge, hypothecate, encumber or otherwise transfer (except to
an Affiliate of Tenant) (as defined) this Agreement or any Lease or any interest
herein or therein, or all or any part of the Leased Property, or suffer or
permit any Lease or the leasehold estate created thereby or any other rights
arising under any Lease to be assigned, transferred, mortgaged, pledged,
hypothecated or encumbered, in whole or in part, whether voluntarily,
involuntarily or by operation of law (except to an Affiliate of Tenant). For
purposes of this Section 12.01, an assignment of any Lease shall be deemed to
include any Change of Control of Tenant, as if such Change of Control were an
assignment of the Lease. No assignment shall in any way impair the continuing
primary liability of Tenant hereunder.
An "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under common control with that Person.
A "Person" shall mean and include natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts, Indian tribes or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
12.02 Changes of Control. A Change of Control requiring the consent of
Landlord shall mean:
(a) the issuance and/or sale by Tenant or the sale by
any stockholder of Tenant of a Controlling (which shall mean,
as applied to any Person, the possession,
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directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person,
whether through the ownership of voting securities, by
contract or otherwise) interest in Tenant to a Person other
than an Affiliate of Tenant, other than in either case a
distribution to the public pursuant to an effective
registration statement under the Securities Act of 1933, as
amended (a "Registered Offering");
(b) the sale, conveyance or other transfer of all or
substantially all of the assets of Tenant (whether by
operation of law or otherwise); or
(c) any transaction pursuant to which Tenant is
merged with or consolidated into another entity (other than an
entity owned and Controlled by an Affiliate of Tenant), and
Tenant is not the surviving entity.
12.03 Operating/Service Agreements.
12.03.01 Permitted Agreements. Tenant shall, without Landlord's prior
approval, be permitted to enter into certain operating/service agreements for
portions of any Leased Property to various licensees in connection with Tenant's
operation of correctional or detention facilities as is customarily associated
with or incidental to the operation of such Leased Property, which agreements
may be in the nature of a sublease agreement.
12.03.02 Terms of Agreements. Each operating/service agreement
concerning any of the Leased Property shall be subject and subordinate to the
provisions of the applicable Lease. No agreement made as permitted by Section
13.03.01 shall affect or reduce any of the obligations of Tenant hereunder, and
all such obligations shall continue in full force and effect as if no agreement
had been made. No agreement shall impose any additional obligations on Landlord
under the applicable Lease.
12.03.03 Copies. Tenant shall, within ten (10) days after the execution
and delivery of any operating/service agreement permitted by Section 12.03.01,
deliver a duplicate original thereof to Landlord.
12.03.04 Assignment of Rights in Agreements. As security for
performance of its obligations under each Lease, Tenant hereby grants, conveys
and assigns to Landlord all right, title and interest of Tenant in and to all
operating/service agreements now in existence or hereinafter entered into for
any or all of the Leased Property, and all extensions, modifications and
renewals thereof and all rents, issues and profits therefrom, to the extent the
same are assignable by Tenant. Landlord hereby grants to Tenant a license to
collect and enjoy all rents and other sums of money payable under any such
agreement concerning the Leased Property; provided, however, that Landlord shall
have the absolute right at any time after the occurrence and continuance of an
Event of Default upon notice to Tenant and any vendors or licensees to revoke
said license and to collect such rents and sums of money and to retain the same.
Tenant shall not (i) after the occurrence and continuance of an Event of
Default, consent to, cause or allow any material modification or alteration of
any of the terms, conditions or covenants of any of the agreements or the
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termination thereof, without the prior written approval of Landlord nor (ii)
accept any rents (other than customary security deposits) more than ninety (90)
days in advance of the accrual thereof nor permit anything to be done, the doing
of which, nor omit or refrain from doing anything, the omission of which, will
or could be a breach of or default in the terms of any of the agreements.
12.03.05 Licenses, Etc. For purposes of Section 12.03, the
operating/service agreements shall mean any licenses, concession arrangements,
or other arrangements relating to the possession or use of all or any part of
any Leased Property but specifically excluding any management agreement,
facility operating agreement or other agreement for the housing or detention of
inmates.
12.04 Assignment. No assignment shall in any way impair the continuing
primary liability of Tenant hereunder, and no consent to any assignment in a
particular instance shall be deemed to be a waiver of the prohibition set forth
in Article XII. Any assignment shall be solely of Tenant's entire interest in
the subject Lease. Any assignment or other transfer of all or any portion of
Tenant's interest in any Lease in contravention of Article XII shall be voidable
at Landlord's option.
12.05 REIT Limitations. Anything contained in this Agreement to the
contrary notwithstanding, Tenant shall not (i) sublet or assign any Leased
Property or any Lease on any basis such that the rental or other amounts to be
paid by the sublessee or assignee thereunder would be based, in whole or in
part, on the income or profits derived by the business activities of the
sublessee or assignee; (ii) sublet or assign any Leased Property or any Lease to
any person that Landlord owns, directly or indirectly (by applying constructive
ownership rules set forth in Section 856(d) (5) of the Code), a ten percent
(10%) or greater interest; or (iii) sublet or assign any Leased Property or any
Lease in any other manner or otherwise derive any income which could cause any
portion of the amounts received by Landlord pursuant to any Lease or any
sublease to fail to qualify as "rents from real property" within the meaning of
Section 856(d) of the Code, or which could cause any other income received by
Landlord to fail to qualify as income described in Section 856(c) (2) of the
Code. The requirements of this Section 12.05 shall likewise apply to any further
subleasing by any subtenant.
12.06 Attornment. Tenant shall insert in each sublease permitted
hereunder provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of the applicable Lease
(including this Agreement) and to the rights of Landlord hereunder, (b) in the
event such Lease shall terminate before the expiration of such sublease, the
sublessee thereunder will, at Landlords' option, attorn to Landlord and waive
any right the sublessee may have to terminate the sublease or to surrender
possession thereunder, as a result of the termination of such Lease, and (c) in
the event the sublessee receives a written notice from Landlord or Landlord's
assignees, if any, stating that Tenant is in default under such Lease, the
sublessee shall thereafter be obligated to pay all rentals accruing under said
sublease directly to the party giving such notice, or as such party may direct.
All rentals received from the sublessee by Landlord or Landlord's assignees, if
any, as the case may be, shall be credit against the amounts owing by Tenant
under such Lease.
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ARTICLE XIII
ARBITRATION
13.01 Controversies. Except with respect to the payment of Rent
hereunder, which shall be subject to the provisions of Section 9.02, in the case
a controversy arises between the parties as to any of the requirements of this
Agreement or of any individual Lease or the performance thereunder which the
parties are unable to resolve, the parties agree to waive the remedy of
litigation (except for extraordinary relief in an emergency situation) and agree
that such controversy or controversies shall be determined by arbitration as
hereafter provided in this Article.
13.02 Appointment of Arbitrators. The party or parties requesting
arbitration shall serve upon the other a demand therefor, in writing, specifying
in detail the controversy and matter(s) to be submitted to arbitration. The
selection of arbitrators shall be conducted pursuant to the rules for resolution
of commercial disputes promulgated by the American Arbitration Association. The
party or parties giving notice shall request a listing of available arbitrators
from the American Arbitration Association, and each party shall respond in the
selection process within fifteen (15) days after each receipt of such listings
until a panel of three (3) arbitrators has been designated. If either party
fails to respond within fifteen (15) days, it is agreed that the American
Arbitration Association may make such selections as are necessary to complete
the panel of three (3) arbitrators.
13.03 Arbitration Procedure. Within fifteen (15) days after the
selection of the arbitration panel, the arbitrators shall give written notice to
each party as to the time and the place of each meeting, which shall be held in
Nashville, Tennessee, at which the parties may appear and be heard, which shall
be no later than sixty (60) days after certification of the arbitration panel.
The parties specifically waive discovery, and further waive the applicability of
rules of evidence or rules of procedure in the proceedings. The applicable rules
shall be those in effect at the time for the resolution of commercial disputes
promulgated by the American Arbitration Association. Notwithstanding the
foregoing, the substantive law governing the arbitration shall be the laws of
the State of Tennessee. The arbitrators shall take such testimony and make such
examination and investigations as the arbitrators reasonably deem necessary. The
decision of the arbitrators shall be in writing signed by a majority of the
panel which decision shall be final and binding upon the parties to the
controversy. Provided, however, in rendering their decisions and making awards,
the arbitrators shall not add to, subtract from or otherwise modify the
provisions of this Agreement.
13.04 Expenses. The expenses of the arbitration shall be assessed by
the arbitrators and specified in the written decision. In the absence of a
determination or assessment of expenses of the arbitration procedure in the
award, all of the expenses of such arbitration shall be divided equally between
Landlord and Tenant. Each party in interest shall be responsible for and pay the
fees, costs and expenses of its own counsel, unless the arbitration award
provides for an assessment of reasonable attorneys' fees and costs.
13.05 Enforcement of the Arbitration Award. There shall be no appeal
from the decision of the arbitrators, and upon the rendering of an award, any
party thereto may file the arbitrators' decision
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in the United States District Court for the Middle District of Tennessee for
enforcement as provided by applicable law.
ARTICLE XIV
QUIET ENJOYMENT, SUBORDINATION,
ATTORNMENT, ESTOPPEL CERTIFICATES
14.01 Quiet Enjoyment. So long as Tenant performs all of its
obligations under this Agreement and each Lease, Tenant's possession of the
Leased Property will not be disturbed by or through Landlord.
14.02 Landlord Mortgages; Subordination. Subject to Section 14.03,
without the consent of Tenant, Landlord may, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrances or title
retention agreement on the Leased Properties, or any portion thereof or any
interest therein, whether to secure any borrowing or other means of financing or
refinancing. This Agreement and each Lease and Tenant's rights under this
Agreement and each Lease are subordinate to any ground lease or underlying
lease, first mortgage, first deed of trust, or other first lien against any
Leased Property, together with any renewal, consolidation, extension,
modification or replacement thereof, which now or at any subsequent time affects
any Leased Property or any interest of Landlord in any Leased Property, except
to the extent that any such instrument expressly provides that this Agreement
and each Lease is superior. This provision will be self-operative, and no
further instrument or subordination will be required in order to effect it.
However, Tenant shall execute, acknowledge and deliver to Landlord, at any time
and from time to time upon demand by Landlord, such documents as may be
requested by Landlord or any mortgagee or any holder of any mortgage or other
instrument described in this Section, to confirm or effect any such
subordination. If Tenant fails or refuses to execute, acknowledge, and deliver
any such document within twenty (20) days after written demand, Landlord may
execute, acknowledge and deliver any such document on behalf of Tenant as
Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints
Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any documents described in this
Section. This power of attorney is coupled with an interest and is irrevocable.
14.03 Attornment; Non-Disturbance. If any holder of any mortgage,
indenture, deed of trust, or other similar instrument described in Section 14.02
succeeds to Landlord's interest in any Leased Property, Tenant will pay to such
holder all Rent subsequently payable under the subject Lease. Tenant shall, upon
request of anyone succeeding to the interest of Landlord, automatically become
the tenant of, and attorn to, such successor in interest without changing such
Lease. The successor in interest will not be bound by (i) any payment of Rent
for more than one (1) month in advance; (ii) any amendment or modification of
such Lease made without its written consent; (iii) any claim against Landlord
arising prior to the date on which the successor succeeded to Landlord's
interest; or (iv) any claim or offset of Rent against the Landlord. Upon request
by Landlord or such successor in interest and without cost to Landlord or such
successor in interest, Tenant will execute, acknowledge and deliver an
instrument or instruments confirming the attornment. If Tenant fails or refuses
to execute, acknowledge and deliver any such instrument within twenty (20) days
after written demand, then
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Landlord or such successor in interest will be entitled to execute, acknowledge,
and deliver any document on behalf of Tenant as Tenant's attorney-in-fact.
Tenant hereby constitutes and irrevocably appoints Landlord, its successors and
assigns, as Tenant's attorney-in-fact to execute, acknowledge, and deliver on
behalf of Tenant any such document. This power of attorney is coupled with an
interest and is irrevocable.
Landlord shall use reasonable efforts to obtain a non-disturbance
agreement from any such party referred to above which provides that in the event
such party succeeds to Landlord's interest under the Lease and provided that no
Event of Default by Tenant exists, such party will not disturb Tenant's
possession, use or occupancy of the Leased Property.
14.04 Estoppel Certificates. At the request of Landlord or any
mortgagee or purchaser of any Leased Property, Tenant shall execute,
acknowledge, and deliver an estoppel certificate, in recordable form, in favor
of Landlord or any mortgagee or purchaser of such Leased Property certifying the
following: (i) that the subject Lease is unmodified and in full force and
effect, or if there have been modifications that the same is in full force and
effect as modified and stating the modifications; (ii) the date to which Rent
and other charges have been paid; (iii) that neither Tenant nor Landlord is in
default nor is there any fact or condition which, with notice or lapse of time,
or both, would constitute a default, if that be the case, or specifying any
existing default; (iv) that Tenant has accepted and occupies such Leased
Property; (v) that Tenant has no defenses, set-offs, deductions, credits, or
counterclaims against Landlord, if that be the case, or specifying such that
exist; (vi) that the Landlord has no outstanding construction or repair
obligations; and (vii) such other information as may reasonably be requested by
Landlord or any mortgagee or purchaser. Any purchaser or mortgagee may rely on
this estoppel certificate. If Tenant fails to deliver the estoppel certificates
to Landlord within ten (10) days after the request of the Landlord, then Tenant
shall be deemed to have certified that (a) such Lease is in full force and
effect and has not been modified, or that such Lease has been modified as set
forth in the certificate delivered to Tenant; (b) Tenant has not prepaid any
Rent or other charges except for the current month; (c) Tenant has accepted and
occupies such Leased Property; (d) neither Tenant nor Landlord is in default nor
is there any fact or condition which, with notice or lapse of time, or both,
would constitute a default; (e) Landlord has no outstanding construction or
repair obligation; and (f) Tenant has no defenses, set-offs, deductions,
credits, or counterclaims against Landlord. Tenant hereby irrevocably appoints
Landlord as Tenant's attorney-in-fact to execute, acknowledge and deliver on
Tenant's behalf any estoppel certificate which Tenant does not object to within
twenty (20) days after Landlord sends the certificate to Tenant. This power of
attorney is coupled with an interest and is irrevocable.
ARTICLE XV
MISCELLANEOUS
15.01 Notices. Landlord and Tenant hereby agree that all notices,
demands, requests, and consents (hereinafter "Notices") required to be given
pursuant to the terms of this Lease shall be in writing and shall be addressed
as follows:
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If to Tenant: Correctional Management Services Corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chief Financial
Officer
If to Landlord: Prison Realty Corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and shall be served by (i) personal delivery, (ii) certified mail, return
receipt requested, postage prepaid, or (iii) nationally recognized overnight
courier. All notices shall be deemed to be given upon the earlier of actual
receipt or three (3) days after mailing, or one (1) business day after deposit
with the overnight courier. Any Notices meeting the requirements of this Section
shall be effective, regardless of whether or not actually received. Landlord or
Tenant may change its notice address at any time by giving the other party
Notice of such change.
15.02 Advertisement of Leased Property. In the event the parties hereto
have not executed a renewal lease of any Leased Property within one (1) year
prior to the expiration of the Term, then Landlord or its agent shall have the
right to enter such Leased Property at all reasonable times for the purpose of
exhibiting such Leased Property to others and to place upon such Leased Property
for and during the period commencing two hundred ten (210) days prior to the
expiration of the Term "for sale" or "for rent" notices or signs.
15.03 Landlord's Access. Landlord shall have the right to enter upon
the Leased Property, upon reasonable prior notice to Tenant, for purposes of
inspecting the same and assuring Tenant's compliance with this Agreement
provided, any such entry by Landlord shall be subject to all rules, guidelines
and procedures prescribed by Tenant in connection therewith. Landlord shall not
be allowed entry to the Leased Premises unless accompanied by such of Tenant's
personnel as Tenant shall require.
15.04 Entire Agreement. This Agreement and the individual Leases
contain the entire agreement between Landlord and Tenant with respect to the
subject matter hereof and thereof. No representations, warranties, and
agreements have been made by Landlord except as set forth in this Agreement and
the Leases.
15.05 Severability. If any term or provision of this Agreement or any
Lease is held or deemed by Landlord to be invalid or unenforceable, such holding
shall not affect the remainder of this Agreement or any Lease and the same shall
remain in full force and effect, unless such holding
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substantially deprives Tenant of the use of the Leased Property or Landlord of
the Rents therefor, in which event the Lease for such Leased Property shall
forthwith terminate as if by expiration of the Term.
15.06 Captions and Headings. The captions and headings are inserted
only as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Agreement or the intent of any provision hereof.
15.07 Governing Law. This Agreement and each of the Leases shall be
construed under the laws of the State of Tennessee.
15.08 Memorandum of Lease. Landlord and Tenant agree that a record of
this Agreement or any Lease may be recorded by either party in a memorandum of
lease approved by Landlord and Tenant with respect to each Leased Property.
15.09 Waiver. No waiver by Landlord of any condition or covenant herein
contained, or of any breach of any such condition or covenant, shall be held or
take to be a waiver of any subsequent breach of such covenant or condition, or
to permit or excuse its continuance or any future breach thereof or of any
condition or covenant, nor shall the acceptance of Rent by Landlord at any time
when Tenant is in default in the performance or observance of any condition or
covenant herein be construed as a waiver of such default, or of Landlord's right
to terminate this Agreement or any Lease or exercise any other remedy granted
herein on account of such existing default.
15.10 Binding Effect. This Agreement and each Lease will be binding
upon and inure to the benefit of the heirs, successors, personal
representatives, and permitted assigns of Landlord and Tenant.
15.11 Authority. The persons executing this Agreement or any Lease on
behalf of Tenant warrant that (i) Tenant has the power and authority to enter
into this Agreement or such Lease; (ii) Tenant is qualified to do business in
the state in which the Leased Property is located; and (iii) they are authorized
to execute this Agreement and each Lease on behalf of Tenant. Tenant shall, at
the request of Landlord, provide evidence satisfactory to Landlord confirming
these representation.
15.12 Transfer of Permits, Etc. Upon the expiration or earlier
termination of the Term of any Lease (whether pursuant to the provisions of this
Agreement or of such Lease), Tenant shall, at the option of Landlord, transfer
to and relinquish to Landlord or Landlord's nominee and to cooperate with
Landlord or Landlords' nominee in connection with the processing by Landlord or
such nominee of all licenses, operating permits, and other governmental
authorization and all contracts, including without limitation, the correctional
or detention facility license, and any other contracts with governmental or
quasi-governmental entities which may be necessary or appropriate for the
operation by Landlord or such nominee of the subject Leased Property for the
purposes of operating a correctional or detention facility; provided that the
costs and expenses of any such transfer or the processing of any such
application shall be paid by Landlord or Landlord's nominee; and provided
further that any management agreement, facility operating agreement or other
agreement for the housing or detention of inmates shall be expressly excluded.
Any such permits, licenses, certificates
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and contracts which are held in Landlord's name now or at the termination of
such Lease shall remain the property of Landlord. To the extent permitted by
law, Tenant hereby irrevocably appoints Landlord, its successors and assigns and
any nominee or nominees specifically designated by Landlord or any successor or
assign as Tenant's attorney-in-fact to execute, acknowledge, deliver and file
all documents appropriate to such transfer or processing of any such application
on behalf of Tenant; this power of attorney is coupled with an interest and is
irrevocable.
15.13 Modification. This Agreement and any Lease may only be modified
by a writing signed by both Landlord and Tenant.
15.14 Incorporation by Reference. All schedules and exhibits referred
to in this Agreement are incorporated into this Agreement, and all schedules and
exhibits referred to in any Lease (as well as the provisions of this Agreement,
except to the extent specifically excluded from or inconsistent with the terms
of such Lease) are incorporated into such Lease.
15.15 No Merger. The surrender of this Agreement or of any Lease by
Tenant or the cancellation of this Agreement or of any Lease by agreement of
Tenant and Landlord or the termination of this Agreement or of any Lease on
account of Tenant's default will not work a merger, and will, at Landlord's
option, terminate any subleases or operate as an assignment to Landlord of any
subleases. Landlord's option under this paragraph will be exercised by notice to
Tenant and all known subtenants of any applicable Leased Property.
15.16 Laches. No delay or omission by either party hereto to exercise
any right or power accruing upon any noncompliance or default by the other party
with respect to any of the terms hereof shall impair any such right or power or
be construed to be a waiver thereof.
15.17 Waiver of Jury Trial. To the extent that there is any claim by
one party against the other that is not to be settled by arbitration as provided
in Article XIII hereof, Landlord and Tenant waive trial by jury in any action,
proceeding or counterclaim brought by either of them against the other on all
matters arising out of this Agreement or the use and occupancy of the Leased
Property (except claims for personal injury or property damage). If Landlord
commences any summary proceeding for nonpayment of Rent, Tenant will not
interpose, and waives the right to interpose, any counterclaim in any such
proceeding.
15.18 Permitted Contests. Tenant, on its own or on Landlord's behalf
(or in Landlord's name), but at Tenant's expense, may contest, by appropriate
legal proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any legal
requirement or insurance requirement or any lien, attachment, levy, encumbrance,
charge or claim provided that (i) in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Landlord and from the Leased Property; (ii) neither the Leased Property nor any
Rent therefrom nor any part thereof or interest therein would be in any
immediate danger of being sold, forfeited, attached or lost; (iii) in the case
of a legal requirement, Landlord would not be in any immediate danger of civil
or criminal liability for failure to comply therewith pending the outcome of
such proceedings; (iv) in the event that any such contest shall involve a sum of
money or potential
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loss in excess of Fifty Thousand Dollars ($50,000.00), Tenant shall deliver to
Landlord and its counsel an opinion of Tenant's counsel to the effect set forth
in clauses (i), (ii) and (iii), to the extent applicable; (v) in the case of a
legal requirement and/or an Imposition, lien, encumbrance, or charge, Tenant
shall give such reasonable security as may be demanded by Landlord to insure
ultimate payment of the same and to prevent any sale or forfeiture of the
affected Leased Property or the Rent by reason of such nonpayment or
noncompliance; provided, however, the provisions of this Section shall not be
construed to permit Tenant to contest the payment of Rent (except as to contests
concerning the method of computation or the basis of levy of any Imposition or
the basis for the assertion of any other claim) or any other sums payable by
Tenant to Landlord hereunder; (vi) in the case of an insurance requirement, the
coverage required by Article IV shall be maintained; and (vii) if such contest
be finally resolved against Landlord or Tenant, Tenant shall, as Other
Additional Rent due hereunder, promptly pay the amount required to be paid,
together with all interest and penalties accrued thereon, or comply with the
applicable legal requirement or insurance requirement. Landlord, at Tenant's
expense, shall execute and deliver to Tenant such authorizations and other
documents as may be reasonably required in any such contest, and, if reasonably
requested by Tenant or if Landlord so desires, Landlord shall join as a party
therein. Tenant hereby agrees to indemnify and save Landlord harmless from and
against any liability, cost or expense of any kind that may be imposed upon
Landlord in connection with any such contest and any loss resulting therefrom.
15.19 Construction of Lease. This Agreement and each of the Leases for
Leased Properties have been reviewed by Landlord and Tenant and their respective
professional advisors. Landlord, Tenant, and their advisors believe that this
Agreement and such Leases are the product of all their efforts, that they
express their agreement, and agree that they shall not be interpreted in favor
of either Landlord or Tenant or against either Landlord or Tenant merely because
of any party's efforts in preparing such documents.
15.20 Counterparts. This Agreement and each Lease may be executed in
duplicate counterparts, each of which shall be deemed an original hereof or
thereof.
15.21 Relationship of Landlord and Tenant. The relationship of Landlord
and Tenant is the relationship of lessor and lessee. Landlord and Tenant are not
partners, joint venturers, or associates.
15.22 Landlord's Status as a REIT. Tenant acknowledges that Landlord
intends to elect to be taxed as a real estate investment trust ("REIT") under
the Code. Tenant shall not do anything which would adversely affect Landlord's
status as a REIT. Tenant hereby agrees to modifications of this Agreement which
do not materially adversely affect Tenant's rights and liabilities if such
modifications are required to retain or clarify Landlord's status as a REIT.
15.23 Sale of Real Estate Assets. Notwithstanding any other provision
of this Agreement or of any Lease, Landlord shall not be required to sell or
transfer Leased Property, or any portion thereof, which is a real estate asset
as defined in Section 856(c)(6) of the Code, to Tenant if Landlord's counsel
advises Landlord that such sale or transfer may not be a sale of property
described in Section 857(b)(6)(C) of the Code. If Landlord determines not to
sell such property pursuant to the above sentence, Tenant's right, if any, to
purchase the Leased Property shall continue and be exercisable at
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such time as the transaction, upon the advice of Landlord's counsel, would be a
sale of property described in Section 857(b)(6)(C) of the Code.
ARTICLE XVI
NONDISCLOSURE AND RELATED MATTERS
16.01 Covenant Not to Disclose. Landlord agrees that, by virtue of the
relationship of trust and confidence between Landlord and Tenant, it possesses
and will possess certain data and knowledge of operations of the Tenant which
are proprietary in nature and confidential. Landlord covenants and agrees that
it will not knowingly, at any time, directly or indirectly, for whatever reason,
without Tenant's prior written consent, which may be given or withheld in
Tenant's sole discretion, reveal, divulge or make known to any person or entity,
any confidential or proprietary record, data, trade secret, pricing policy, bid
amount, pricing strategy, personnel policy, method or practice of obtaining or
doing business, or any other confidential or proprietary information whatever
(the "Confidential Information"), whether or not obtained with the knowledge and
permission of the Tenant and whether or not developed, devised or otherwise
created in whole or in part by the efforts of Landlord, nor shall Landlord use
such Confidential Information for its own account. Confidential Information
shall not include any information generally available to the public other than
as a result of a disclosure of such information by Landlord. Notwithstanding
anything to the contrary provided herein, a disclosure of Confidential
Information by Landlord will not be considered a violation of this Article XVI
in the event such disclosure is involuntarily compelled by a final,
non-appealable, order from a court of competent jurisdiction.
16.02 Non-Interference Covenant. Landlord covenants and agrees that it
will not, at any time, directly or indirectly, for whatever reason, whether for
its own account or for the account of any other person, firm, corporation or
other organization, without Tenant's prior written consent, which may be given
or withheld in Tenant's sole discretion: (i) solicit, employ, deal with or
otherwise interfere with any of the Tenant's contracts or relationships with any
employee, officer, director or any independent contractor, whether the person is
employed by or associated with the Tenant on the date of this Agreement or at
any time hereafter; or (ii) solicit, accept, deal with or otherwise interfere
with any of the Tenant's contracts or relationships with any independent
contractor, customer, client or supplier. Notwithstanding the foregoing, (i)
Landlord may offer employment to the current employees of the Tenant who are
terminated by the Tenant subsequent to the date hereof, (ii) Landlord shall in
no way be liable for any actions by any entity leasing or managing any facility
owned by Landlord, and (iii) nothing provided herein shall prevent Landlord from
soliciting relationships with an entity or entities to lease, license, manage or
otherwise use any facility leased to the Tenant subsequent to the termination of
such lease with the Tenant.
16.03 Business Materials and Property Disclosure. All written
materials, records and documents made by Landlord or coming into its possession
concerning the business or affairs of the Tenant shall be the sole property of
the Tenant and, upon request by the Tenant, Landlord shall deliver the same to
the Tenant and shall retain no copies. The foregoing restrictions shall not be
applicable to any written materials, records and documents generally available
to the public other than as a result of a disclosure of such written materials,
records and documents by Landlord.
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16.04 Breach by Landlord. It is expressly understood, acknowledged and
agreed by Landlord that: (i) the restrictions contained in this Article XVI
represent a reasonable and necessary protection of the legitimate interests of
the Tenant and that its failure to observe and comply with its covenants and
agreements in this Article XVI will cause irreparable harm to the Tenant; (ii)
it is and will continue to be difficult to ascertain the nature, scope and
extent of the harm; and (iii) a remedy at law for such failure by Landlord will
be inadequate. Accordingly, it is the intention of the parties that, in addition
to any other rights and remedies which the Tenant may have in the event of any
breach by Landlord of this Article XVI, the Tenant shall be entitled, and is
expressly and irrevocably authorized by Landlord, to demand and obtain specific
performance, including, without limitation, temporary and permanent injunctive
relief, and all other appropriate equitable relief against Landlord in order to
enforce against Landlord any of the covenants and agreements contained in this
Article XVI, and/or to prevent any breach or any threatened breach by Landlord
of the covenants and agreements of Landlord contained in this Article XVI.
Should the Tenant prevail in any action to enforce this Article XVI, the Tenant
shall be entitled to recover all of its costs and expenses relating thereto,
including reasonable attorney's fees and expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Lease or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.
LANDLORD:
PRISON REALTY CORPORATION
By:
---------------------------------------
Title:
------------------------------------
TENANT:
CORRECTIONAL MANAGEMENT SERVICES
CORPORATION
By:
---------------------------------------
Title:
------------------------------------
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SCHEDULE A
THE FACILITIES
LOCATION
FACILITY NAME (CITY, STATE)
------------- -------------
Bent County Correctional Facility Las Animas, Colorado
Bridgeport Pre-Parole Transfer Facility Bridgeport, Texas
California City Correctional Facility California City, California
Central Arizona Detention Center Florence, Arizona
Cibola County Corrections Center Milan, New Mexico
Cimarron Correctional Facility Cushing, Oklahoma
Coffee Correctional Facility Nicholls, ▇▇▇▇▇▇▇
▇▇▇▇▇ Correctional Facility Holdenville, Oklahoma
Diamondback Correctional Facility Watonga, Oklahoma
Eden Detention Center Eden, Texas
▇▇▇▇ Detention Center Eloy, Arizona
Houston Processing Center Houston, Texas
Huerfano County Correctional Facility Walsenburg, Colorado
Kit ▇▇▇▇▇▇ Correctional Center Burlington, Colorado
Laredo Processing Center Laredo, Texas
Leavenworth Detention Center Leavenworth, Kansas
▇▇▇ Adjustment Center Beatyville, Kentucky
▇▇▇▇▇▇ Adjustment Center St. ▇▇▇▇, Kentucky
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Detention Facility Frostproof, Florida
Mendota Correctional Facility Mendota, California
Mineral ▇▇▇▇▇ Pre-Parole Transfer Facility Mineral Wells, Texas
Montana Correctional Facility Shelby, Montana
New Mexico Women's Correctional Facility Grants, New Mexico
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North Fork Correctional Center Sayre, Oklahoma
Northeast Ohio Correction Center Youngstown, Ohio
Otter Creek Correctional Center Wheelwright, Kentucky
Prairie Correctional Facility Appleton, Minnesota
River City Correctional Center Louisville, Kentucky
San Diego Correctional Facility San Diego, California
Shelby Training Center Memphis, Tennessee
T. ▇▇▇ ▇▇▇▇▇ Correctional Center Taylor, Texas
Torrance County Detention Facility Estancia, New Mexico
West Tennessee Detention Center Mason, Tennessee
▇▇▇▇▇▇▇ Correctional Facility Alamo, Georgia
Whiteville Correctional Facility Whiteville, Tennessee
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SCHEDULE B
PERSONAL PROPERTY
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SCHEDULE C
EXCLUDED PERSONAL PROPERTY