Corrections Corp. of America Contracts
Sample Business Contracts
Lease - Corrections Corporation of America and CCA of Tennessee Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
MASTER AGREEMENT TO LEASE
BETWEEN
CORRECTIONS CORPORATION OF AMERICA, LANDLORD
AND
CCA OF TENNESSEE, INC., TENANT
DATED: DECEMBER 31, 2000
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TABLE OF CONTENTS
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ARTICLE I LEASED PROPERTY; TERM.................................... 1
1.01 Leased Property.......................................... 1
1.02 Term..................................................... 2
1.03 Holding Over............................................. 2
1.04 Surrender................................................ 2
1.05 Renewal.................................................. 3
ARTICLE II RENT; DEFERRAL........................................... 3
2.01 Base Rent................................................ 3
2.02 Additional Rent.......................................... 3
2.03 Place(s) of Payment of Rent; Direct Payment of
Additional Rent.......................................... 3
2.04 Net Lease................................................ 3
2.05 No Termination, Abatement, Etc........................... 3
ARTICLE III IMPOSITIONS AND UTILITIES................................ 4
3.01 Payment of Impositions................................... 4
3.02 Definition of Impositions................................ 5
3.03 Utilities................................................ 6
3.04 Discontinuance of Utilities.............................. 6
ARTICLE IV INSURANCE................................................ 6
4.01 Property Insurance....................................... 6
4.02 Liability Insurance...................................... 7
4.03 Insurance Requirements................................... 7
4.04 Replacement Cost......................................... 8
4.05 Blanket Policy........................................... 8
4.06 No Separate Insurance.................................... 8
4.07 Waiver of Subrogation.................................... 9
4.08 Mortgages................................................ 9
ARTICLE V INDEMNITY; HAZARDOUS SUBSTANCES.......................... 9
5.01 Tenant's Indemnification................................. 9
5.02 Hazardous Substances or Materials....................... 10
5.03 Limitation of Landlord's Liability...................... 11
ARTICLE VI USE AND ACCEPTANCE OF PREMISES.......................... 11
6.01 Use of Leased Property.................................. 11
6.02 Acceptance of Leased Property........................... 12
6.03 Conditions of Use and Occupancy......................... 12
ARTICLE VII REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS..... 12
7.01 Maintenance............................................. 12
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7.02 Compliance with Laws.................................... 13
7.03 Required Alterations.................................... 13
7.04 Mechanics' Liens........................................ 13
7.05 Replacements of Fixtures................................ 14
ARTICLE VIII ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL
ADDITIONS TO THE LEASED PROPERTY........................ 14
8.01 Tenant's Right to Construct............................. 14
8.02 Commencement of Construction............................ 15
8.03 Rights in Tenant Improvements........................... 16
8.04 Personal Property....................................... 16
8.05 Requirements for Personal Property...................... 16
8.06 Signs................................................... 17
ARTICLE IX DEFAULTS AND REMEDIES................................... 17
9.01 Events of Default....................................... 17
9.02 Remedies................................................ 19
9.03 Right of Set-Off........................................ 21
9.04 Performance of Tenant's Covenants....................... 21
9.05 Late Charge............................................. 21
9.06 Litigation; Attorneys' Fees............................. 21
9.07 Remedies Cumulative..................................... 22
9.08 Escrows and Application of Payments..................... 22
9.09 Power of Attorney....................................... 22
ARTICLE X DAMAGE AND DESTRUCTION.................................. 22
10.01 General................................................. 22
10.02 Landlord's Inspection................................... 23
10.03 Landlord's Costs........................................ 24
10.04 Substantial Damage During Lease Term.................... 24
10.05 Mortgages............................................... 24
ARTICLE XI CONDEMNATION............................................ 24
11.01 Total Taking............................................ 24
11.02 Partial Taking.......................................... 25
11.03 Restoration............................................. 25
11.04 Landlord's Inspection................................... 26
11.05 Award Distribution...................................... 26
11.06 Temporary Taking........................................ 26
11.07 Mortgages............................................... 26
ARTICLE XII ASSIGNMENT AND SUBLETTING; ATTORNMENT................... 27
12.01 Prohibition Against Subletting and Assignment........... 27
12.02 Changes of Control...................................... 28
12.03 Operating/Service Agreements............................ 28
12.03.01 Permitted Agreements.................................... 28
12.03.02 Terms of Agreements..................................... 28
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12.03.03 Copies.................................................. 28
12.03.04 Assignment of Rights in Agreements...................... 28
12.03.05 Licenses, Etc........................................... 28
12.04 Assignment.............................................. 28
12.05 Attornment.............................................. 29
ARTICLE XIII QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL
CERTIFICATES............................................ 29
13.01 Quiet Enjoyment......................................... 29
13.02 Landlord Mortgages; Subordination....................... 29
13.03 Attornment; Non-Disturbance............................. 30
13.04 Estoppel Certificates................................... 30
13.05 Performance by Lender................................... 31
ARTICLE XIV MISCELLANEOUS........................................... 31
14.01 Notices................................................. 31
14.02 Advertisement of Leased Property........................ 32
14.03 Landlord's Access....................................... 32
14.04 Entire Agreement........................................ 32
14.05 Severability............................................ 32
14.06 Captions and Headings................................... 33
14.07 Governing Law........................................... 33
14.08 Memorandum of Lease..................................... 33
14.09 Waiver.................................................. 33
14.10 Binding Effect.......................................... 33
14.11 Authority............................................... 33
14.12 Transfer of Permits, Etc................................ 33
14.13 Modification............................................ 34
14.14 Incorporation by Reference.............................. 34
14.15 No Merger............................................... 34
14.16 Laches.................................................. 34
14.17 Waiver of Jury Trial.................................... 34
14.18 Permitted Contests...................................... 34
14.19 Construction of Lease................................... 35
14.20 Limitations of Landlord's Liability..................... 35
14.21 Additional Provisions Relating to Particular Facilities. 35
14.22 Counterparts............................................ 38
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MASTER AGREEMENT TO LEASE
THIS MASTER AGREEMENT TO LEASE ("Agreement") dated as of the 31st day
of December, 2000 by and between CORRECTIONS CORPORATION OF AMERICA, a Maryland
corporation ("Landlord"), and CCA OF TENNESSEE, INC., a Tennessee corporation
("Tenant").
RECITALS
WHEREAS, Landlord currently owns those certain correctional and
detention facilities listed on Schedule A, attached hereto which Tenant desires
to lease in order to engage in the business of managing and operating
correctional and detention facilities;
WHEREAS, Landlord and Tenant desire to set forth in this Agreement
certain terms and conditions applicable to all of the Leased Property;
NOW, THEREFORE, in consideration of the premises and of their
respective agreements and undertakings herein, Landlord and Tenant agree as
follows:
ARTICLE I
LEASED PROPERTY; TERM
1.01 Leased Property. The property that is the subject of this
Agreement and that shall be considered as leased by the Landlord to the Tenant
hereunder shall consist of:
(a) The facilities and related land described in Schedule A,
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,
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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 located on the Land and owned by Landlord (the "Personal
Property").
The Land, Improvements, Fixtures and Personal Property are hereinafter referred
to as the "Leased Property."
Notwithstanding the foregoing, in the event that Landlord sells,
transfers, conveys, leases or otherwise disposes of any portion of the Leased
Property, or in the event any portion of the Leased Property is foreclosed upon
by the holder of a mortgage thereon, this Agreement shall continue in full force
and effect as to the remaining Leased Property, and thereafter, the term "Leased
Property" shall refer to such remaining Leased Property, and the Base Rent (as
defined below) shall be reduced in such equitable manner as the parties shall
reasonably agree.
SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions,
agreements, and other title matters existing as of date of this Agreement.
1.02 Term. The term of this Agreement (the "Term") shall commence on
January 1, 2001, (the "Commencement Date"), and shall expire on December 31,
2001 (the "Expiration Date").
1.03 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
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.
1.04 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
(iii) casualty, taking or other damage and destruction not required to be
repaired by Tenant, Tenant shall surrender and deliver up the Leased Property,
at the expiration or termination of the Term broom clean, free of all Tenant's
personal property, and in as good order and condition as of the Commencement
Date.
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1.05 Renewal. This Agreement may be renewed by the parties upon such
terms as are mutually agreeable to the parties may agree in writing.
ARTICLE II
RENT
2.01 Base Rent. Tenant shall pay Landlord annual base rent for the
Leased Property without notice, demand, set-off or counterclaim, in advance, in
lawful money of the United States of America, in an amount equal to One Hundred
Thirty-Eight Million Dollars ($138,000,000) (the "Base Rent") in consecutive
monthly installments of Eleven Million Five Hundred Thousand Dollars
($11,500,000) each, payable on the last day of each month during the Term.
2.02 Additional Rent. In addition to Base Rent, Tenant shall pay all
other amounts, liabilities, obligations and Impositions (as hereinafter defined)
which Tenant assumes or agrees to pay under this Agreement and any fine,
penalty, interest, charge and cost which may be added for nonpayment or late
payment of such items (collectively the "Additional Rent").
2.03 Place(s) of Payment of Rent; Direct Payment of Additional Rent.
The Base Rent and 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, or by statute or otherwise in the
case of nonpayment of the Rent. Tenant shall make all payments of Base Rent at
Landlord's principal place of business or as Landlord may otherwise from time to
time direct in writing, and all payments of 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. The lease contemplated by this Agreement shall be
deemed and construed to be an "absolute net lease" or "triple net lease," and
Tenant shall pay all Rent, Impositions (as hereinafter defined), 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, Tenant shall remain bound by this Agreement in
accordance with its terms. Except as otherwise specifically provided in the
Agreement, Tenant shall not, without the prior written consent of Landlord,
modify, surrender or terminate the Agreement, 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, 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
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any warranty by Landlord under this Agreement 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, 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 any occurrence whatsoever, which may now or
hereafter be conferred upon it by law (a) to modify, surrender or terminate this
Agreement 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
by termination of this Agreement 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 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, before the same becomes delinquent.
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
Agreement as personal property, Landlord and Tenant shall file all personal
property tax returns in such jurisdictions where they may legally so file with
respect to their respective owned personal property. Tenant shall promptly
reimburse Landlord for all personal property taxes paid by Landlord upon receipt
of billings accompanied by copies of a bill therefor and payments thereof which
identify the personal property with respect to which such payments are made.
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Impositions imposed in respect to 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
Date or date of earlier termination of this Agreement, whether or not such
Imposition is imposed before or after such commencement, expiration or
termination, and Tenant's obligation to pay its prorated share thereof shall
survive such expiration or 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
unforeseen, 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).
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3.03 Utilities. Tenant shall contract for, in its own name, and will
pay, as 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 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 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 Agreement.
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:
(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 X 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.
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(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.
(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
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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 ten (10) 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.
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
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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 Agreement 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. Notwithstanding any provision to the contrary herein,
the following provisions shall apply if the Leased Property or any part thereof
is subject to any mortgage placed upon it by Landlord: (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 or which is otherwise required by
the terms of the mortgage or any documents executed in connection therewith (it
being understood and agreed that Tenant shall comply with the terms and
conditions of any such mortgage regarding insurance coverage required
thereunder).
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 (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, or maintenance or repair by Tenant 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 Property, including claims alleging breach or
violation of such
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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 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; (vii) and any accident, injury to or death of persons or
loss or damage to any item of property occurring at the Leased Property; and
(viii) any Impositions; (x) any liability Landlord may incur or suffer as a
result of any permitted contest by Tenant hereunder. 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 ("SARA"), 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 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
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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 and any holder of a mortgage, deed of trust or other security agreement
on the Lease Property 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
6.01 Use of Leased Property. Tenant shall use and occupy the 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
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consents needed to use 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.
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 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
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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 Property 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 Agreement, 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 Property. 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.
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.
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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 hereunder;
(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") (Capital Additions, and such other alterations, additions,
changes and/or improvements are individually, a "Tenant Improvement," or
collectively, "Tenant Improvements") with the prior written consent of the
Landlord, which may be granted or withheld in Landlord's sole and absolute
discretion. "Capital Additions" shall mean the construction of one or more new
buildings or one or more additional structures annexed to any portion 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
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Tenant's sole expense and shall become the property of Landlord upon termination
of this Agreement. 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 Leased Property 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 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,
materialmen'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) 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 (which may be given
or withheld in Landlord's sole and absolute discretion), 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.
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8.03 Rights in Tenant Improvements. Notwithstanding anything to the
contrary in this Agreement, 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 hereof. Upon the Expiration Date or earlier termination hereof, 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.
8.04 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.
8.05 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.
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(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 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.
8.06 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.
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:
(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 thirty (30) days after the date such payment is due;
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(b) Tenant fails to observe and perform any other covenant,
condition or agreement under this Agreement to be performed by Tenant
(except those described in Section 9.01(a) of this Agreement) and such
failure continues for a period of sixty (60) 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 sixty (60) 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 sixty (60) 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 sixty (60) 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 this
Agreement or in any certificate, demand or request made pursuant hereto
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 ninety (90) 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
Fifteen Million Dollars ($15,000,000) 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") and such default is not discharged
within ninety (90) days after written notice thereof is given to
Tenant, 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 and such default is not
discharged within ninety (90) days after written notice thereof is
given to Tenant; or
(h) A final, non-appealable judgment or judgments for the payment
of money in excess of Five Million Dollars ($5,000,000) 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 after written notice thereof is given to Tenant.
(i) Tenant ceases operations at a Leased Property for a period in
excess of forty-five (45) days during the Term.
9.02 Remedies. Landlord may exercise any one or more of the following
remedies upon the occurrence of an Event of Default:
(a) Landlord may terminate this Agreement and exclude Tenant from
possession of the Leased Property. If this Agreement 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 hereunder for the balance of
the Term if this Agreement had not been so 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
hereunder if this Agreement had not been so terminated, and Landlord
will be entitled to receive such damages from Tenant on each such day.
Alternatively, at the option of Landlord, if this Agreement is so
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
this Agreement had not been so 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
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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 herein will be deemed to be the sum of
the following: (i) the Base Rent computed pursuant to Section 2.01; and
(ii) the Additional Rent computed pursuant to Section 2.02. Such
computation of Additional Rent shall be based on the Additional Rent
paid for the Lease Year preceding the date of termination, increased by
4% per year thereafter.
(b) (1) Without demand or notice, Landlord may re-enter and take
possession of the Leased Property or any part of 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 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 this
Agreement, 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 Agreement) 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 the Leased Property. Landlord will not be
responsible or liable for any failure to re-let such Leased Property,
or any part of such Leased Property, or for any failure to collect any
Rent due upon such re-letting. No such re-entry or taking possession of
such Leased Property by Landlord will be construed as an election on
Landlord's part to terminate this Agreement unless a written notice of
such intention is given to Tenant. No notice from Landlord hereunder or
under a forcible entry and detainer statute or similar law will
constitute an election by Landlord to terminate this Agreement unless
such notice specifically says so. Landlord reserves the right following
any such re-entry or re-letting, or both, to exercise its right to
terminate this Agreement giving Tenant such written notice, and, in
that event such 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 this
Agreement, 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,
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brokerage commissions, legal expense, attorneys' fees, expense of
employees, alteration, remodeling, repair costs, and expense of
preparation for such re-letting.
(c) Landlord may re-enter the Leased Property and have, repossess
and enjoy the Leased Property as if the Leased Property were not
subject to the terms hereof, 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 hereunder then due and thereafter to become due, or to enforce
performance and observance of any obligations, agreements or covenants
of Tenant hereunder.
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 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 the provisions of Section 9.01). Tenant
shall reimburse Landlord on demand, as 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 any Leased Property to secure or recover possession thereof, or
that may affect the title to or the interest of Landlord in such 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, 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,
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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 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 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 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 any 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
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.
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
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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 for
the detention of inmates at such Leased Property 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.
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.
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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 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 10.04, if, at any time during the Term hereof, 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 after such damage, give notice of its
election to terminate this Agreement as it relates to the particular Leased
Property and, subject to the further provisions of this Section, this Agreement
shall be so terminated as of the tenth (10th) day after the delivery of such
notice. If this Agreement 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 this Agreement is not so terminated, Tenant
shall rebuild the Leased Property in accordance with Section 10.01. If Tenant
elects to terminate this Agreement pursuant to this Section 10.04, 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.
10.05 Mortgages. Notwithstanding anything to the contrary herein (other
than the provisions of Section 14.21 hereof), if the Leased Property, or any
part thereof is subject to any mortgage placed upon it by Landlord, then all
insurance proceeds shall be applied in manner required pursuant to such
mortgage. The provisions of Section 10.01 hereof requiring Landlord to make
certain insurance proceeds available to Tenant for the repair or restoration of
the Leased Property shall apply only to the extent permitted pursuant to the
terms of any such mortgage.
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"),
this Agreement shall terminate as to such Leased Property 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 this
Agreement shall not so terminate if the Condemnation occurred due to the failure
of Tenant to
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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, this Agreement shall remain in effect as to such Leased Property
if such Leased Property is not thereby rendered Unsuitable for its Primary
Intended Use (which shall mean that the Leased Property is in such a state or
condition such that in the good faith judgment of Tenant, reasonably exercised,
the 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, this Agreement shall terminate
as to such Leased Property 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.
11.03 Restoration. If there is a partial taking of any Leased Property
and this Agreement remains in full force and effect as to such Leased Property
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.
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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 value, if any, of: (i) any Tenant Improvements, and (ii) the
leasehold interest of Tenant hereunder; 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 Agreement (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 hereof 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 hereof, whether paid by way of
damages, rent or otherwise, shall be paid to Tenant.
11.07 Mortgages. Notwithstanding anything to the contrary herein (other
than the provisions of Section 14.21 hereof), if the Leased Property or any part
thereof is subject to any mortgage placed upon it by Landlord, then all
condemnation proceeds shall be applied in the manner required pursuant to such
mortgage. The provisions of Section 11.03 hereof requiring Landlord to make
certain condemnation proceeds available to Tenant for the restoration of the
Leased Property shall apply only to the extent permitted pursuant to the terms
of any such mortgage.
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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, sublease, mortgage, pledge, hypothecate, encumber or otherwise transfer
this Agreement or any interest herein, 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. No assignment shall in any
way impair the continuing primary liability of Tenant hereunder. 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.
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, 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.
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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 hereof. No agreement made as permitted by Section 12.02.01 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
hereunder.
12.03.03 Copies. Tenant shall, within ten (10) days after the execution
and delivery of any operating/service agreement permitted by Section 12.02.01,
deliver a duplicate original thereof to Landlord.
12.03.04 Assignment of Rights in Agreements. As security for
performance of its obligations hereunder, 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 applicable 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 any of such 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 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 12.02, 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
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deemed to be a waiver of the prohibition set forth in Article XII. Any
assignment shall be solely of Tenant's entire interest herein as it relates to
the subject Leased Property. Any assignment or other transfer of all or any
portion of Tenant's interest in this Agreement in contravention of Article XII
shall be voidable at Landlord's option.
12.05 Attornment. Tenant shall insert in each sublease permitted under
Section 12.02.01 provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of this Agreement and to the
rights of Landlord hereunder, (b) in the event this Agreement shall terminate as
to the subject Leased Property 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 such termination of this Agreement, 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 hereunder, 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
hereunder.
ARTICLE XIII
QUIET ENJOYMENT, SUBORDINATION,
ATTORNMENT, ESTOPPEL CERTIFICATES
13.01 Quiet Enjoyment. So long as Tenant performs all of its
obligations under this Agreement, Tenant's possession of the Leased Property
will not be disturbed by or through Landlord.
13.02 Landlord Mortgages; Subordination. Subject to Section 13.03,
without the consent of Tenant, Landlord may, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrance 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. Except as set forth in Section 14.21 hereof, this Agreement and
Tenant's rights hereunder are subordinate to any ground lease or underlying
lease, mortgage, deed of trust, or other 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 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.
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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.
13.03 Attornment; Non-Disturbance. If any holder of any mortgage,
indenture, deed of trust, or other similar instrument described in Section 13.02
succeeds to Landlord's interest in any Leased Property, Tenant will pay to such
holder all Rent for such Leased Property subsequently payable hereunder. 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 this Agreement. 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 this Agreement 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. Landlord and Tenant shall not enter into any modification
or amendment of this Agreement without the prior written consent of such holder.
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 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 hereunder and provided that if such
non-disturbance agreement has been obtained and no Event of Default by Tenant
exists, such party will not disturb Tenant's possession, use or occupancy of the
Leased Property.
13.04 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 this Agreement 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
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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) this Agreement is in full force and effect and has not been
modified, or that this Agreement 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.
13.05 Performance by Lender. Tenant acknowledges and agrees that the
holder or beneficiary of a mortgage, indenture, deed of trust or similar
instrument described in Section 13.02 hereof, may perform, but shall not be
required to perform, any of the obligations of Landlord hereunder, and Tenant
agrees to accept performance by any such holder or beneficiary as fully as
though performed by Landlord.
ARTICLE XIV
MISCELLANEOUS
14.01 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 Agreement shall be in writing and shall be
addressed as follows:
If to Landlord: Corrections Corporation of America
10 Burton Hills Boulevard
Nashville, Tennessee 37215
Attention: President
With a copy to: Lehman Commercial Paper, Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
And to: Latham & Watkins
885 Third Avenue
New York, New York 10022
Attention: Christopher R. Plaut
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If to Tenant: CCA of Tennessee, Inc.
10 Burton Hills Boulevard
Nashville, Tennessee 37215
Attention: President
In each case, with a copy to: Stokes Bartholomew Evans & Petree, P.A.
424 Church Street, Suite 2800
Nashville, Tennessee 37219
Attention: Elizabeth E. Moore
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.
14.02 Advertisement of Leased Property. In the event the parties hereto
have not executed a renewal of this Agreement as to 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.
14.03 Landlord's Access. Landlord and Landlord's lenders 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 and Landlord's lenders or 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.
14.04 Entire Agreement. This Agreement contains the entire agreement
between Landlord and Tenant with respect to the subject matter hereof. No
representations, warranties, and agreements have been made by Landlord except as
set forth in this Agreement.
14.05 Severability. If any term or provision of this Agreement is held
or deemed by Landlord to be invalid or unenforceable, such holding shall not
affect the remainder of this Agreement and the same shall remain in full force
and effect, unless such holding substantially deprives Tenant of the use of the
Leased Property or Landlord of the Rents therefor, in which event this Agreement
as it relates to such Leased Property shall forthwith terminate as if by
expiration of the Term.
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14.06 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.
14.07 Governing Law. This Agreement shall be construed under the laws
of the State of Tennessee.
14.08 Memorandum of Lease. Landlord and Tenant agree that a record of
this Agreement may be recorded by either party in a memorandum of lease approved
by Landlord and Tenant with respect to each Leased Property.
14.09 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 exercise any other remedy granted herein on
account of such existing default.
14.10 Binding Effect. This Agreement will be binding upon and inure to
the benefit of the heirs, successors, personal representatives, and permitted
assigns of Landlord and Tenant.
14.11 Authority. The persons executing this Agreement on behalf of
Tenant warrant that (i) Tenant has the power and authority to enter into this
Agreement; (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 on behalf of Tenant. Tenant shall, at the request of Landlord, provide
evidence satisfactory to Landlord confirming these representation.
14.12 Transfer of Permits, Etc. Upon the expiration or earlier
termination of the Term hereof, 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 and contracts which are held
in Landlord's name now or at the termination hereof 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
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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.
14.13 Modification. This Agreement may only be modified by a writing
signed by both Landlord and Tenant.
14.14 Incorporation by Reference. All schedules and exhibits referred
to in this Agreement are incorporated into this Agreement.
14.15 No Merger. The surrender of this Agreement by Tenant or the
cancellation of this Agreement by agreement of Tenant and Landlord or the
termination of this Agreement 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.
14.16 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.
14.17 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.
14.18 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 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
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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 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.
14.19 Construction of Lease. This Agreement has been reviewed by
Landlord and Tenant and their respective professional advisors. Landlord,
Tenant, and their advisors believe that this Agreement is 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.
14.20 Limitations of Landlord's Liability. Tenant agrees to look solely
to Landlord's equity interest in the Leased Property for the recovery of any
monetary judgment against Landlord, it being agreed that Landlord (and its
officers, directors and shareholders) shall never be reasonably liable for any
such judgment.
14.21 Additional Provisions Relating to Particular Facilities. (a) EDEN
DETENTION CENTER. The following additional provisions apply with respect to the
Eden Detention Center located in Eden, Concho County, Texas (the "Eden Detention
Center"):
(i) Leased Property. The Personal Property comprising the Leased
Property with respect to the Eden Detention Center will also include all those
items of personal property described on Exhibit _____, attached hereto and made
a part hereof, and all renewals or replacements thereof. The government surplus
property described on Exhibit _____, attached hereto and made a part hereof,
which is located at the Eden Detention Center, is not owned by Landlord but is
on loan as part of the U.S. Government Surplus Program. Tenant agrees to assume
the control of said property and be fully responsible for all care and
obligations in connection therewith during the Term of this Agreement.
(ii) Subordination. This Agreement with respect to the Eden Detention
Center is subject and subordinate to the terms and provisions of that certain
U.S. Government Lease for
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Real Property (Short Form Lease), Lease Number GS-07B-14594 (the "USA Lease"),
between Landlord, as successor by merger, and the United States of America
("USA"), as the same may be amended, modified, supplemented or replaced from
time to time; a copy of which has been delivered to Tenant and Tenant hereby
acknowledges receipt thereof.
(iii) Consent to Subletting. To the extent, if any, required under
Article XII of the Agreement, Landlord consents to the subletting of all or any
portion of the Eden Detention Center by Tenant to the City of Eden, Texas (the
"City"), as the same may be amended, modified, supplemented or replaced from
time to time, and/or as may otherwise be reasonable, necessary or desirable in
connection with that certain Intergovernmental Agreement, Contract Number 010-9,
between the City and the U.S. Department of Justice, Federal Bureau of Prisons,
as the same may be amended, modified, supplemented or replaced from time to
time, and/or any other agreements with any other governmental entities which may
contract with the City to transfer their inmates for incarceration in the Eden
Detention Center.
(iv) Additional Defaults and Remedies. In addition to the Events of
Default set forth in this Agreement, it shall also be an Event of Default under
this Agreement in the event that certain Residential Services Agreement, dated
as of April 15, 1999, between Tenant and the City, as the same may be amended,
modified, supplemented or replaced from time to time, is terminated for any
reason, and Landlord may, at its option, exercise any one or more of the
remedies set forth in the Agreement upon the occurrence and during the
continuance of such Event of Default.
(b) WEBB COUNTY CORRECTIONAL CENTER. The following additional provisions apply
with respect to the Webb County Correctional Center in Laredo, Webb County,
Texas (the "Webb County Correctional Center"):
(i) Master Lease and Sublease Incorporated Herein. All provisions of
that certain Lease Agreement with an Option to Purchase between the Webb County
Correctional Center Public Facility Corporation, as assignee of Municipal
Capital Markets Corporation, as lessor, and Webb County, Texas, as lessee, dated
as of October 1, 1997, as amended by amendment, dated as of December 29, 1998
(the "Master Lease"), with the exception of those provisions listed as
exceptions in the Sublease (as hereinafter defined), and all provisions of that
certain Sublease Agreement between Webb County, Texas, as sublessor
("Sublessor") and Landlord, as sublessee, dated as of December 29, 1998 (the
"Sublease"), are hereby incorporated in and are a part of this Agreement with
respect to the Webb County Correctional Center.
(ii) Subordination. This Agreement with respect to the Webb County
Correctional Center is subject and subordinate to the terms, provisions,
conditions and obligations of (i) the Master Lease, and (ii) the Sublease,
copies of which have been provided to Tenant and Tenant hereby acknowledges
receipt thereof. All of the terms, provisions, conditions and obligations of the
Master Lease and the Sublease (with the exception of those provisions listed as
exceptions in the Sublease), to the extent not inconsistent with the terms,
provisions, conditions and obligations of this Agreement, shall be applicable to
this Agreement with the same force and
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effect as if the Landlord were the sublessor under the Sublease and the Tenant
were the sublessee thereunder, and in the case of any breach thereof by Tenant,
the Landlord shall have all the rights against Tenant as would be available to
the sublessor against the sublessee under the Sublease if such breach were by
the sublessee thereunder. For purposes of this Agreement, a breach by Tenant
under the Sublease shall be deemed an Event of Default by Tenant under this
Agreement, subject to any applicable grace or notice and cure periods provided
herein. Notwithstanding anything to the contrary contained in this Agreement,
this Agreement shall not terminate upon the termination of the Master Lease and
the Sublease due to the transfer of fee simple title to the Webb County
Correctional Center to Landlord.
Any representations or warranties of the Landlord under the Sublease
which are deemed to be made by Tenant hereunder shall only be made with respect
to facts and circumstances existing as of the commencement of the Term of this
Agreement, and then only as to those facts or circumstances of which Tenant has
actual knowledge. Any covenants of the Landlord under the Sublease which are
deemed to be made by Tenant hereunder shall only apply to matters arising or
occurring from and after the commencement of the Term of this Agreement and then
only during the term of this Agreement. In no event shall Tenant be deemed to
make any representations, warranties or covenants with respect to facts,
circumstances, or matters arising or occurring prior to the commencement of the
Term of this Agreement, or be obligated to keep, observe, or perform any
covenants, representations, or warranties under the Sublease with respect to
matters arising or occurring prior to the commencement of the Term of this
Agreement. Landlord represents and warrants to Tenant that as of the
commencement of the Term of this Agreement all terms, provisions, conditions,
representations, warranties and covenants to be kept, observed or performed by
Landlord under the Sublease prior to the commencement of the Term of this
Agreement have been kept, observed, or performed by Landlord in all material
respects. Landlord certifies that, as of the date of the commencement of the
Term of this Agreement, neither Landlord nor Sublessor is in default under the
Sublease, nor has Landlord given or received any notice of default or breach of
any of the provisions of the Sublease, nor, to the knowledge of Landlord, has
any act or omission occurred by or on the part of either Landlord or Sublessor
which with the giving of notice, the passage of time, or both, would constitute
an "Event of Default" under the Sublease.
(iii) Management Agreement/Assignment Agreement. (A) During the Term of
this Agreement and until the Transfer Date (as defined in the Management
Agreement hereinafter defined), Landlord hereby delegates to the Tenant, and the
Tenant hereby agrees to perform, all of the duties, responsibilities, and
obligations of the Landlord under that certain Management Agreement, dated as of
December 29, 1998, between Webb County Correctional Center Public Facility
Corporation ("PFC") and Landlord (the "Management Agreement"), together with the
right to exercise such rights and remedies conferred on the Landlord under the
Management Agreement with respect to such delegated duties, responsibilities and
obligations.
(B) From and after the Transfer Date (as defined in the
Assignment Agreement hereinafter defined) and during the Term of this Agreement,
Landlord hereby delegates to the Tenant, and the Tenant hereby agrees to
perform, all of the duties,
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responsibilities, and obligations of the Landlord under that certain Assignment
Agreement, dated as of December 29, 1998, between the PFC, Municipal Capital
Markets Corporation and Landlord (the "Assignment Agreement"), together with the
right to exercise such rights and remedies conferred on the Landlord under the
Assignment Agreement with respect to such delegated duties, responsibilities and
obligations.
14.22 Counterparts. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original hereof or thereof.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY,
SIGNATURES PAGE TO FOLLOW.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.
LANDLORD:
CORRECTIONS CORPORATION OF AMERICA
By: /s/ John D. Ferguson
----------------------------------------
Title: President
-------------------------------------
TENANT:
CCA OF TENNESSEE, INC.
By: /s/ Brent Turner
----------------------------------------
Title: Treasurer
-------------------------------------
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SCHEDULE A
THE FACILITIES
<TABLE>
<CAPTION>
LOCATION
FACILITY NAME (CITY, STATE)
------------- -------------
<S> <C>
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 Facility Milan, New Mexico
Cimarron Correctional Facility Cushing, Oklahoma
Coffee Correctional Facility Nicholls, Georgia
Davis Correctional Facility Holdenville, Oklahoma
Diamondback Correctional Facility Watonga, Oklahoma
Eden Detention Center Eden, Texas
Eloy Detention Center Eloy, Arizona
Florence Correctional Center Florence, Arizona
Houston Processing Center Houston, Texas
Huerfano County Correctional Facility Walsenburg, Colorado
Kit Carson Correctional Center Burlington, Colorado
Laredo Processing Center Laredo, Texas
Leavenworth Detention Center Leavenworth, Kansas
Lee Adjustment Center Beattyville, Kentucky
Marion Adjustment Center St. Mary, Kentucky
Mendota Correctional Facility Mendota, California
McRae Correctional Facility McRae, Georgia
Mineral Wells Pre-Parole Transfer Facility Mineral Wells, Texas
</TABLE>
<PAGE> 45
<TABLE>
<S> <C>
Montana Correctional Facility Shelby, Montana
New Mexico Women's Correctional Facility Grants, New Mexico
North Fork Correctional Center Sayre, Oklahoma
Northeast Ohio Correction Center Youngstown, Ohio
Otter Creek Correctional Center Wheelwright, Kentucky
Pamlico Correctional Institution Bayboro, North Carolina
Prairie Correctional Facility Appleton, Minnesota
San Diego Correctional Facility San Diego, California
Shelby Training Center Memphis, Tennessee
Southern Nevada Women's Correctional Facility Las Vegas, Nevada
Stewart County Detention Center Lumpkin, Georgia
T. Don Hutto Correctional Center Taylor, Texas
Tallahatchie County Correctional Center Tutwiler, Mississippi
Torrance County Detention Facility Estancia, New Mexico
Webb County Correctional Center Laredo, Texas
West Tennessee Detention Center Mason, Tennessee
Wheeler Correctional Facility Alamo, Georgia
Whiteville Correctional Facility Whiteville, Tennessee
</TABLE>