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EXHIBIT 10.2
MASTER AGREEMENT TO LEASE
BETWEEN
CCA PRISON REALTY TRUST, LANDLORD
AND
CORRECTIONS CORPORATION OF AMERICA, TENANT
DATED: ____________, 1997
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TABLE OF CONTENTS
ARTICLE I SEPARATE LEASE AGREEMENTS; PREMISES AND TERM . . . . . . . . . . . . . . . . . . . . . . . . . .
1.01 Separate Lease Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.02 Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.03 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.04 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.05 Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.01 Xxxx Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.02 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.02.01 Other Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.03 Place(s) of Payment of Rent; Direct Payment of Other Additional Rent . . . . . . . . . . . . . .
2.04 Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.05 No Termination, Abatement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE III IMPOSITIONS AND UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.01 Payment of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.02 Definition of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.03 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.04 Escrow of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.05 Discontinuance of Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE IV INSURANCE . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.01 Property Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.02 Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.03 Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.04 Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.05 Blanket Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.06 No Separate Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.07 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.08 Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE V INDEMNITY; HAZARDOUS SUBSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.01 Tenant's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.02 Hazardous Substances or Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.03 Limitation of Landlord's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI USE AND ACCEPTANCE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.01 Use of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.02 Acceptance of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.03 Conditions of Use and Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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6.04 Financial Statements and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS . . . . . . . . . . . . . . . . . . . . . . .
7.01 Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.02 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.03 Required Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.04 Mechanics' Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.05 Replacements of Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VIII ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL
ADDITIONS TO THE LEASED PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.01 Tenant's Right to Construct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.02 Scope of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.03 Cooperation of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.04 Commencement of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.05 Rights in Tenant Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.06 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.07 Requirements for Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.08 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.09 Financings of Capital Additions to a Leased Property . . . . . . . . . . . . . . . . . . . . . .
ARTICLE IX DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.03 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.04 Performance of Tenant's Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.05 Late Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.06 Litigation; Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.07 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.08 Escrows and Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.09 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE X DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.01 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.02 Landlord's Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.03 Landlord's Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.04 Rent Abatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.05 Substantial Damage During Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.06 Damage Near End of Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XI CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.01 Total Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.02 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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11.03 Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.04 Landlord's Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.05 Award Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.06 Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XII TENANT'S RIGHT OF FIRST REFUSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.01 Rights of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.02 Restriction on Exercise of Purchase Refusal Right . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XIII ASSIGNMENT AND SUBLETTING; ATTORNMENT . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .
13.01 Prohibition Against Subletting and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .
13.02 Changes of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03 Operating/Service Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03.01 Permitted Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03.02 Terms of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03.03 Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03.04 Assignment of Rights in Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.03.05 Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.04 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.05 REIT Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.06 Attornment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XIV ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.01 Controversies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.02 Appointment of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.03 Arbitration Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.04 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.05 Enforcement of the Arbitration Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XV QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL
CERTIFICATES . . . . . . . . . . . . . . . . . . . . .
15.01 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.02 Landlord Mortgages; Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.03 Attornment; Non-Disturbance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.04 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XVI MISCELLANEOUS . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.02 Advertisement of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.03 Landlord's Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.04 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.05 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.06 Captions and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XVII NONDISCLOSURE AND RELATED MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.01 Covenant Not to Disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.02 Non-Interference Covenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.03 Business Materials and Property Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.04 Breach by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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16.07 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.08 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.09 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.10 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.11 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.12 Transfer of Permits, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.13 Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.14 Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.15 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.16 Laches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.17 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.18 Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.19 Construction of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.20 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.21 Relationship of Landlord and Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.22 Landlord's Status as a REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.23 Sale of Real Estate Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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MASTER AGREEMENT TO LEASE
This Master Agreement to Lease ("Agreement") dated as of the ______
day of _______________________, 1997 by and between CCA PRISON REALTY TRUST, a
Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION
OF AMERICA, a Delaware corporation ("Tenant").
RECITALS
WHEREAS, Tenant (or one or more of Tenant's affiliates) has
concurrently conveyed to Landlord various properties upon which Tenant engages
in the business of the development and management of correctional and detention
facilities, which properties are listed on Schedule A attached hereto (the
"Real Estate Conveyance"), and Landlord and Tenant desire to provide for the
lease by Landlord back to the Tenant of such properties; and
WHEREAS, Landlord may from time to time lease additional properties
that Landlord may acquire to Tenant; and
WHEREAS, Landlord and Tenant desire that each of the properties listed
on Schedule A and each additional property that Landlord may lease to Tenant
shall be the subject of a separate and individual lease agreement describing
said property, the rent and various other terms of said lease (each such lease
agreement referred to individually as a "Lease," and the property that is the
subject of an individual Lease being referred to as "Leased Property"); and
WHEREAS, Landlord and Tenant desire to set forth in this Agreement
certain terms and conditions applicable to all Leases of all Leased Properties,
except as any individual Lease with respect to a particular Leased Property may
otherwise provide;
NOW, THEREFORE, in consideration of the premises and of their
respective agreements and undertakings herein and in each Lease, Landlord and
Tenant agree as follows:
ARTICLE I
SEPARATE LEASE AGREEMENTS; PREMISES AND TERM
1.01 Separate Lease Agreements. Landlord and Tenant are
concurrently entering into a separate Lease for each of the Leased Properties
referred to in Schedule A hereto, and may in the future enter into one or more
additional separate Leases for one or more additional Leased Properties.
Except as specifically set forth in a separate Lease, or any amendment,
supplement, schedule or exhibit thereto, all of the provisions of this
Agreement shall be deemed to be incorporated into and made a part of each such
separate Lease made between the Landlord as landlord (or Lessor) and the Tenant
as tenant (or Lessee) during the term of such separate Lease.
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1.02 Leased Property. Except as set forth in an individual Lease
(including any schedule or exhibit thereto), the property that is the subject
of each Lease and that shall be considered as leased by the Landlord to the
Tenant thereunder shall consist of:
(a) The land described in the Lease, together with all
rights, titles, appurtenant interests, covenants, licenses, privileges
and benefits thereto belonging, and any easements, rights-of-way,
rights of ingress or egress or other interests in, on, or to any land,
highway, street, road or avenue, open or proposed, in, on, across, in
front of, abutting or adjoining such real property including, without
limitation, any strips and gores adjacent to or lying between such
real property and any adjacent real property (the "Land");
(b) All buildings, improvements, structures and Fixtures
now located or to be located or to be constructed on the Land,
including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground
utility structures, equipment systems and other so-called
"infrastructure" improvements (the "Improvements");
(c) All equipment, machinery, fixtures, and other items
of real and/or personal property, including all components thereof,
located in, on or used in connection with, and permanently affixed to
or incorporated into, the Improvements, including, without limitation,
all furnaces, boilers, heaters, electrical equipment, heating,
plumbing, lighting, ventilating, refrigerating, incineration, air and
water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and
theft protection equipment, and similar systems, all of which, to the
greatest extent permitted by law, are hereby deemed to constitute real
estate, together with all replacements, modifications, alterations and
additions thereto (collectively the "Fixtures");
(d) All furniture, equipment, inventory and other
personal property identified on Schedule B attached hereto and
incorporated herein by reference (the "Personal Property"). For
purposes hereof, (i) Personal Property shall include all items of
property which Tenant is obligated to install, place, use,
maintain, repair and/or replace pursuant to the provisions of Sections
8.06 and 8.07 hereof, however, such Personal Property is and shall
remain the property of Tenant until the expiration or termination of
this Lease, and (ii) Personal Property shall not include certain
proprietary property of Tenant as set forth on Schedule C.
The Land, Improvements, Fixtures and Personal Property are hereinafter referred
to as the "Leased Property."
SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions,
agreements, and other title matters listed or specifically referred to in any
individual Lease ("Permitted Exceptions").
1.03 Term. The term of each Lease shall be as set forth in the
individual Lease for a particular Leased Property.
1.04 Holding Over. Should Tenant, without the express consent of
Landlord, continue to hold and occupy the Leased Property after the expiration
of the Term, such holding over beyond the
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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.
1.05 Surrender. Except as a result of (i) Tenant Improvements and
Capital Additions (as such terms are defined in Section 8.01 hereof); (ii)
normal and reasonable wear and tear (subject to the obligation of Tenant to
maintain the Leased Property in good order and repair during the Term); and
(iii) casualty, taking or other damage and destruction not required to be
repaired by Tenant, Tenant shall surrender and deliver up the Leased Property,
including all Personal Property and replacements thereof required to be
provided by Tenant pursuant to the terms of Sections 8.06 and 8.07 hereof, at
the expiration or termination of the Term broom clean, free of all Tenant's
personal property (but not the Personal Property), and in as good order and
condition as of the Commencement Date.
ARTICLE II
RENT
2.01 Base Rent. Unless otherwise provided in an individual Lease,
Tenant shall pay Landlord annual base rent for each Leased Property that is the
subject of a Lease without notice, demand, set-off or counterclaim in advance,
in lawful money of the United States of America in the amount specified therein
(the "Base Rent") for the Term in consecutive monthly installments payable in
advance on the Commencement Date of each Lease and thereafter on the first day
of each month during the Term, in accordance with the Base Rent Schedule set
forth in or attached to each individual Lease.
2.02 Additional Rent. Beginning on the first day of the month
following the first anniversary date of each Lease, the Tenant shall pay
Landlord an amount (the "Additional Rent") each year equal to a percentage of
the prior year Total Rent (for the purposes hereof, Total Rent is Base Rent
plus Additional Rent) under such Lease, such percentage being the greater of
(i) four percent (4%) or (ii) the percentage which is twenty-five percent (25%)
of the percentage increase in gross management revenues realized by Tenant from
its operations at the applicable Leased Property for such prior year exclusive
of any such increase as is attributable to an expansion in the size or number
of beds in such Leased Property. The Additional Rent shall be payable monthly,
in advance, along with Base Rent, and otherwise in the manner as set forth in
Section 2.01 above. Tenant shall provide to Landlord, not later than thirty
(30) days following each anniversary date of each Lease, Tenant's statement,
certified by Tenant's chief financial officer, setting forth such percentage
increase in gross management revenues realized by Tenant for the applicable
Leased Facility for the prior year.
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2.02.01 Other Additional Rent. In addition to Base Rent and
Additional Rent, Tenant shall pay all other amounts, liabilities, obligations
and Impositions (as hereinafter defined ) which Tenant assumes or agrees to pay
under this Agreement or any Lease and any fine, penalty, interest, charge and
cost which may be added for nonpayment or late payment of such items
(collectively the "Other Additional Rent").
2.03 Place(s) of Payment of Rent; Direct Payment of Other
Additional Rent. The Base Rent, Additional Rent and Other Additional Rent are
hereinafter referred to as "Rent." Landlord shall have all legal, equitable
and contractual rights, powers and remedies provided either in this Agreement,
in any Lease or by statute or otherwise in the case of nonpayment of the Rent.
Tenant shall make all payments of Base Rent and Additional Rent at Landlord's
principal place of business or as Landlord may otherwise from time to time
direct in writing, and all payments of Other Additional Rent directly to the
person or persons to whom such amount is owing at the time and times when such
payments are due, and shall give to Landlord such evidence of such direct
payments as Landlord shall reasonably request.
2.04 Net Lease. Each Lease shall be deemed and construed to be an
"absolute net lease" or "triple net lease," and Tenant shall pay all Rent,
Impositions, and other charges and expenses in connection with each Leased
Property throughout the Term, without abatement, deduction or set-off.
2.05 No Termination, Abatement, Etc. Except as otherwise
specifically provided in this Agreement or a particular Lease, Tenant shall
remain bound by this Agreement or such Lease in accordance with its terms.
Except as otherwise specifically provided in the Agreement or a particular
Lease, Tenant shall not, without the prior written consent of Landlord, modify,
surrender or terminate the Agreement or such Lease, nor seek nor be entitled to
any abatement, deduction, deferment or reduction of Rent, or set-off against
the Rent. Except as specifically provided in this Agreement or a particular
Lease, the obligations of Landlord and Tenant shall not be affected by reason
of (i) the lawful or unlawful prohibition of, or restriction upon, Tenant's use
of the Leased Property, or any part thereof, the interference with such use by
any person, corporation, partnership or other entity, or by reason of eviction
by paramount title; (ii) any claim which Tenant has or might have against
Landlord or by reason of any default or breach of any warranty by Landlord
under this Agreement or a particular Lease or any other agreement between
Landlord and Tenant, or to which Landlord and Tenant are parties; (iii) any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceeding affecting Landlord or any assignee
or transferee of Landlord; or (iv) any other cause, whether similar or
dissimilar to any of the foregoing, other than a discharge of Tenant from any
such obligations as a matter of law. Except as otherwise specifically provided
in this Agreement or a particular Lease, and to the maximum extent permitted by
law, Tenant hereby specifically waives all rights, including but not limited to
any rights under any statute relating to rights of tenants in any state in
which any Leased Property is located, arising from any occurrence whatsoever,
which may now or hereafter be conferred upon it by law (a) to modify, surrender
or terminate any Lease or quit or surrender the Leased Property or any portion
thereof; or (b) entitling Tenant to any abatement, reduction, suspension or
deferment of the Rent or other sums payable by Tenant hereunder. The
obligations of Landlord and Tenant
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hereunder shall be separate and agreements and the Rent and all other sums
shall continue to be payable in all events unless the obligations to pay the
same shall be terminated pursuant to the express provisions of this Agreement
or a particular Lease or by termination of this Agreement or a particular Lease
other than by reason of an Event of Default.
ARTICLE III
IMPOSITIONS AND UTILITIES
3.01 Payment of Impositions. Subject to the adjustments set forth
herein, Tenant shall pay, as Other Additional Rent, all Impositions (as
hereinafter defined) that may be levied or become a lien on the Leased Property
or any part thereof at any time (whether prior to or during the Term), without
regard to prior ownership of said Leased Property, 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 Lease as personal property,
Landlord and Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file with respect to their respective
owned personal property. Landlord, to the extent it possesses the same, and
Tenant, to the extent it possess the same, will provide the other party, upon
request, with cost and depreciation records necessary for filing returns for
any property so classified as personal property. Where Landlord is legally
required to file personal property tax returns, Tenant will be provided with
copies of assessment notices indicating a value in excess of the reported value
in sufficient time for Tenant to file a protest. Tenant may, upon notice to
Landlord, at Tenant's option and at Tenant's sole cost and expense, protest,
appeal, or institute such other proceedings as Tenant may deem appropriate to
effect a reduction of real estate or personal property assessments and
Landlord, at Tenant's expense as aforesaid, shall fully cooperate with Tenant
in such protest, appeal, or other action. Tenant shall provide Landlord copies
of all materials filed or presented in connection with any such proceeding.
Tenant shall promptly reimburse Landlord for all personal property taxes paid
by Landlord upon receipt of xxxxxxxx accompanied by copies of a xxxx therefor
and payments thereof which identify the personal property with respect to which
such payments are made. Impositions imposed in respect to the tax-fiscal
period during which the Term commences
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and terminates shall be adjusted and prorated between Landlord and Tenant on a
per diem basis, with Tenant being obligated to pay its pro rata share from
and including the Commencement Date to and including the expiration or
termination date of the Term, whether or not such Imposition is imposed before
or after such commencement or termination, and Tenant's obligation to pay its
prorated share thereof shall survive such termination. Tenant shall also pay
to Landlord a sum equal to the amount which Landlord may be caused to pay of
any privilege tax, sales tax, gross receipts tax, rent tax, occupancy tax or
like tax (excluding any tax based on net income), hereinafter levied, assessed,
or imposed by any federal, state, county or municipal governmental authority,
or any subdivision thereof, upon or measured by rent or other consideration
required to be paid by Tenant under this Agreement.
3.02 Definition of Impositions. "Impositions" means, collectively,
(i) taxes (including without limitation, all real estate and personal property
ad valorem (whether assessed as part of the real estate or separately assessed
as unsecured personal property, sales and use, business or occupation, single
business, gross receipts, transaction, privilege, rent or similar taxes, but not
including income or franchise or excise taxes payable with respect to
Landlord's receipt of Rent); (ii) assessments (including without limitation,
all assessments for public improvements or benefits, whether or not commenced
or completed prior to the date hereof and whether or not to be completed with
in the Term); (iii) ground rents, water, sewer or other rents and charges,
excises, tax levies, and fees (including without limitation, license, permit,
inspection, authorization and similar fees); (iv) to the extent they may become
a lien on the Leased Property all taxes imposed on Tenant's operations of the
Leased Property including without limitation, employee withholding taxes,
income taxes and intangible taxes; and (v) all other governmental charges, in
each case whether general or special, ordinary or extraordinary, or foreseen or
unforseen, of every character in respect of the Leased Property or any part
thereof and/or the Rent (including all interest and penalties thereon due to
any failure in payment by Tenant), which at any time prior to, during or in
respect of the Term hereof may be assessed or imposed on or in respect of or be
a lien upon (a) Landlord or Landlord's interest in the Leased Property or any
part thereof; (b) the Leased Property or any part thereof or any rent therefrom
or any estate, right, title or interest therein; or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Leased Property or the leasing or use of the Leased
Property or any part thereof. Tenant shall not, however, be required to pay
(i) any tax based on net income (whether denominated as a franchise or capital
stock or other tax) imposed on Landlord; or (ii) except as provided in Section
13.01, any tax imposed with respect to the sale, exchange or other disposition
by Landlord of any Leased Property or the proceeds thereof; provided, however,
that if any tax, assessment, tax levy or charge which Tenant is obligated to
pay pursuant to the first sentence of this definition and which is in effect at
any time during the Term hereof is totally or partially repealed, and a tax,
assessment, tax levy or charge set forth in clause (i) or (ii) immediately
above is levied, assessed or imposed expressly in lieu thereof Tenant shall
then pay such tax, levy, or charge set forth in said clause (i) or (ii).
3.03 Utilities. Tenant shall contract for, in its own name, and
will pay, as Other Additional Rent all taxes, assessments, charges/deposits,
and bills for utilities, including without limitation charges for water, gas,
oil, sanitary and storm sewer, electricity, telephone service, trash
collection,
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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 Escrow of Impositions. In the event Tenant persistently fails
to timely pay Impositions with respect to any Leased Facility, then, upon
thirty (30) days written notice from Landlord to Tenant, Tenant shall
thereafter deposit with Landlord on the first day of each month during the
remaining Term hereof and any extended Term, a sum equal to one-twelfth
(1/12th) of the Impositions assessed against such Leased Property which sums
shall be used by Landlord toward payment of such Impositions. If, at the end
of any applicable tax year, any such funds held by Landlord are insufficient to
make full payment of taxes or other Impositions for which such funds are held,
Tenant, on demand, shall pay to Landlord any additional funds necessary to pay
and discharge the obligations of Tenant pursuant to the provisions of this
section. If, however, at the end of any applicable tax year, such funds held
by Landlord are in excess of the total payment required to satisfy taxes or
other Impositions for which such funds are held, Landlord shall apply such
excess amounts to Tenant's tax and Imposition escrow fund for the next tax
year. If any such excess exists following the expiration or earlier
termination of any Lease, and subject to Section 9.08 below, Landlord shall
promptly refund such excess amounts to Tenant. The receipt by Landlord of the
payment of such Impositions by and from Tenant shall only be as an
accommodation to Tenant and the taxing authorities, and shall not be construed
as rent or income to Landlord, Landlord serving, if at all, only as a conduit
for delivery purposes. All such deposits by Tenant shall be held in an
interest-bearing account with one or more national banks having total assets of
not less than $1,000,000,000, with all interest thereon accruing in favor of
Tenant. In lieu of making escrow deposits as aforesaid, Tenant may elect to
provide Landlord with a letter of credit, or a payment bond, in the face amount
of one year's Impositions on the subject Leased Property, issued by a national
bank or reputable bonding or surety company, in all respects reasonably
acceptable to Landlord. Said letter of credit or payment bond shall be
drawable or callable, as the case may be, upon Tenant's failure to timely pay
any such Impositions, for the sole purpose of providing the funds necessary to
pay such Impositions, and shall otherwise be in form and substance reasonably
satisfactory to Landlord.
For purposes hereof, "persistently fails to timely pay Impositions"
shall mean failure to timely pay any Imposition with respect to any Leased
Premises for any two (2) Lease Years in any five (5) Lease Year Period,
notwithstanding Tenant's subsequent payment of such Impositions.
3.05 Discontinuance of Utilities. Landlord will not be liable for
damages to person or property or for injury to, or interruption of, business
for any discontinuance of utilities nor will such discontinuance in any way be
construed as an eviction of Tenant or cause an abatement of Rent or operate to
release Tenant from any of Tenant's obligations under this Lease.
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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.
(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,
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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 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.
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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 additional policies. The term "mortgages" as used in
this Agreement includes Deeds of Trust and the term "mortgagees" includes
trustees and beneficiaries under a Deed of Trust.
4.07 Waiver of Subrogation. Each party hereto hereby waives any
and every claim which arises or may arise in its favor and against the other
party hereto during the Term or any extension or renewal thereof, for any and
all loss of, or damage to, any of its property located within or upon, or
constituting a part of, the Leased Property, which loss or damage is covered by
valid and collectible insurance policies, to the extent that such loss or
damage is recoverable under such policies. Said mutual waiver shall be in
addition to, and not in limitation or derogation of, any other waiver or
release contained in this Lease with respect to any loss or damage to property
of the parties hereto. Inasmuch as the said waivers will preclude the
assignment of any aforesaid claim by way of subrogation (or otherwise) to an
insurance company (or any other person), each party hereto agrees immediately
to give each insurance company which has issued to it policies of insurance,
written notice of the terms of said mutual waivers, and to have such insurance
policies properly endorsed, if necessary, to prevent the invalidation of said
insurance coverage by reason of said waivers, so long as such endorsement is
available at a reasonable cost.
4.08 Mortgages. The following provisions shall apply if Landlord
now or hereafter places a mortgage on the Leased Property or any part thereof:
(i) Tenant shall obtain a standard form of mortgage clause insuring the
interest of the mortgagee; (ii) Tenant shall deliver evidence of insurance to
such mortgagee; (iii) loss adjustment shall require the consent of the
mortgagee; and
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(iv) Tenant shall obtain such other coverages and provide such other
information and documents as may be reasonably required by the mortgagee.
ARTICLE V
INDEMNITY; HAZARDOUS SUBSTANCES
5.01 Tenant's Indemnification. Subject to Section 4.07, Tenant
hereby agrees to indemnify and hold harmless Landlord, its agents, and
employees from and against any and all demands, claims, causes of action,
fines, penalties, damages (including consequential damages), losses,
liabilities (including strict liability), judgments, and expenses (including,
without limitation, attorneys' fees, court costs, and the costs set forth in
Section 9.06) incurred in connection with or arising from: (i) the use,
condition, operation or occupancy of each Leased Property; (ii) any activity,
work, or thing done, or permitted or suffered by Tenant in or about the Leased
Property; (iii) any acts, omissions, or negligence of Tenant or any person
claiming under Tenant, or the contractors, agents, employees, invitees, or
visitors of Tenant or any such person; (iv) any claim of any person
incarcerated in the Leased Premises, including claims alleging breach or
violation of such person's civil or legal rights; (v) any breach, violation,
or nonperformance by Tenant or any person claiming under Tenant or the
employees, agents, contractors, invitees, or visitors of Tenant or of any such
person, of any term, covenant, or provision of this Agreement or any Lease or
any law, ordinance, or governmental requirement of any kind; (vi) any injury or
damage to the person, property or business of Tenant, its employees, agents,
contractors, invitees, visitors, or any other person entering upon the Leased
Property under the express or implied invitation of Tenant; and (vii) and any
accident, injury to or death of persons or loss of damage to any item of
property occurring at the Leased Property. If any action or proceeding is
brought against Landlord, its employees, or agents by reason of any such claim,
Tenant, upon notice from Landlord, will defend the claim at Tenant's expense
with counsel reasonably satisfactory to Landlord. In the event Landlord
reasonably determines that its interests and the interests of Tenant in any
such action or proceeding are not substantially the same and that Tenant's
counsel cannot adequately represent the interests of Landlord therein, Landlord
shall have the right to hire separate counsel in any such action or proceeding
and the reasonable costs thereof shall be paid for by Tenant.
5.02 Hazardous Substances or Materials. Tenant shall not, either
with or without negligence, injure, overload, deface, damage or otherwise harm
any Leased Property or any part or component thereof; commit any nuisance;
permit the emission of any hazardous agents or substances; allow the release or
other escape of any biologically or chemically active or other hazardous
substances or materials so as to impregnate, impair or in any manner affect,
even temporarily, any element or part of any Leased Property, or allow the
storage or use of such substances or materials in any manner not sanctioned by
law or by the highest standards prevailing in the industry for the storage and
use of such substances or materials; nor shall Tenant bring onto any Leased
Property any such materials or substances; permit the occurrence of
objectionable noise or odors; or make, allow or suffer any waste whatsoever to
any Leased Property. Landlord may inspect the Leased Property from time to
time, and Tenant will cooperate with such inspections.
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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 ("XXXX"), 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
materials inspections, personal interviews, and federal, state and local agency
listings. In addition, Tenant shall execute affidavits, representations and
the like from time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence or absence of hazardous materials
on the Leased Property. Other than for circumstances involving Landlord's
gross negligence or intentional misconduct, Tenant shall indemnify and hold
harmless Landlord from and against all liabilities (including punitive
damages), costs and expenses (including reasonable attorneys' fees) imposed
upon or asserted against the Landlord or the Leased Property on account of,
among other things, any applicable federal, state or local law, ordinance,
regulation, order, permit, decree or similar items relating to hazardous
substances, human health or the environment (collectively, "Environmental
Laws") (irrespective of whether there has occurred any violation of any
Environmental Law ), in respect of the Leased Property, including (a) liability
for response costs and for costs of removal and remedial action incurred by the
United States Government, any state or local governmental unit to any other
person or entity, or damages from injury to or destruction or loss of natural
resources, including the reasonable costs of assessing such injury, destruction
or loss, incurred pursuant to any Environmental Law, (b) liability for costs
and expenses of abatement, investigation, removal, remediation, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any Environmental Law, (c) liability for personal injury or
property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance
or for carrying on of a dangerous activity or (d) by reason of a breach of an
environmental representation or warranty by Tenant.
5.03 Limitation of Landlord's Liability. Landlord, its agents and
employees, will not be liable for any loss, injury, death, or damage (including
consequential damages) to persons, property, or Tenant's business occasioned by
theft, act of God, public enemy, injunction, riot, strike, insurrection, war,
court order, requisition, order of governmental body or authority, fire,
explosion, falling objects, steam, water, rain or snow, leak or flow of water
(including water from the elevator system), rain or snow from any Leased
Property or into any Leased Property or from the roof, street, subsurface or
from any other place, or by dampness or from the breakage, leakage,
obstruction, or
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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 each
Leased Property exclusively as a correctional or detention facility or other
purpose for which the Leased Property is being used at the Commencement Date of
the Term, and for no other purpose without the prior written consent of the
Landlord. Tenant shall obtain and maintain all approvals, licenses, and
consents needed to use 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.
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6.04 Financial Statements and Other Information. Within ten (10)
days following Tenant's filing of quarterly and annual reports with the
Securities and Exchange Commission, Tenant shall deliver to Landlord copies of
such reports. Tenant shall provide Landlord at the same time Tenant provides
copies of its quarterly and annual reports as aforesaid (or more often as may
be reasonably requested by Landlord in writing), the following additional
financial information for each calendar quarter hereafter, with respect to each
Leased Property: gross revenues, average occupancy rates and total cash flow
(i.e., operating income plus depreciation and amortization plus Base Rent plus
Additional Rent hereunder). Tenant shall also deliver to Landlord such
additional financial information as Landlord may reasonably request, provided
the same is of a type normally maintained by Tenant or can be obtained without
undue cost or burden on Tenant's personnel and does not constitute information
which Tenant reasonably determines to be proprietary or confidential.
Additionally, upon Landlord's request, Tenant shall provide Landlord with
copies of Tenant's annual capital expenditure budgets for each Leased Property
and any reports generated by Tenant regarding maintenance and repairs of the
Leased Property.
ARTICLE VII
REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS
7.01 Maintenance. Tenant shall maintain each Leased Property in
good order, repair and appearance, and repair each Leased Property, including
without limitation, all interior and exterior, structural and nonstructural
repairs and replacements to the roof, foundations, exterior walls, building
systems, HVAC systems, parking areas, sidewalks, water, sewer and gas
connections, pipes, and mains. Tenant shall pay as Other Additional Rent the
full cost of maintenance, repairs, and replacements. Tenant shall maintain all
drives, sidewalks, parking areas, and lawns on or about the Leased Property in
a clean and orderly condition, free of accumulations of dirt, rubbish, snow and
ice. Tenant shall permit Landlord to inspect the Leased Property at all
reasonable times, and shall implement all reasonable suggestions of the
Landlord as to the maintenance and replacement of the Leased Property.
7.02 Compliance with Laws. Tenant shall comply with all laws,
ordinances, orders, rules, regulations, and other governmental requirements
relating to the use, condition, or occupancy of each Leased Property, whether
now or hereafter enacted and in force including without limitation, (i)
licensure requirements for operation as a correctional or detention facility,
(ii) requirements of any board of casualty insurance underwriters or insurance
service office for any other similar body having jurisdiction over the Leased
Property, and (iii) all zoning and building codes and Environmental Laws. At
Landlord's request, from time to time, Tenant shall deliver to Landlord copies
of certificates or permits evidencing compliance with such laws, including
without limitation, copies of the correctional or detention facility licenses,
certificates of occupancy and building permits. Tenant shall provide Landlord
with copies of any notice from any governmental authority alleging any
non-compliance by Tenant or any Leased Facility with any of the foregoing
requirements and such evidence as Landlord may reasonably require of Tenant's
remediation thereof. Tenant hereby agrees to defend, indemnify and hold
Landlord harmless from and against
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any loss, liability (including strict liability), claim, damage (including
consequential damages), cost and expense (including attorneys' fees) resulting
from any failure by Tenant to comply with any laws, ordinances, rules,
regulations, and other governmental requirements.
7.03 Required Alterations. Tenant shall, at Tenant's sole cost and
expense, make any additions, changes, improvements or alterations to each
Leased Property, including structural alterations, which may be required by any
governmental authorities, including those required to continue licensure
requirements as a correctional or detention facility, whether such changes are
required by Tenant's use, changes in the law, ordinances, or governmental
regulations, defects existing as of the date of this Lease, or any other cause
whatsoever. Tenant shall provide prior written notice to Landlord of any
changes to each Leased Property pursuant to this Section 7.03 which involve
changes to the structural integrity of such Leased Property or materially
affect the operational capabilities or rated capacity of the Leased Facility.
All such additions, changes, improvements or alterations shall be deemed to be
a Tenant Improvement and shall comply with all laws requiring such alterations
and with the provisions of Section 8.01.
7.04 Mechanics' Liens. Tenant shall have no authority to permit or
create a lien against Landlord's interest in the Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in the Leased property against liens. Tenant hereby agrees
to defend, indemnify, and hold Landlord harmless from and against any
mechanics' liens against the Leased Property by reason of work, labor services
or materials supplied or claimed to have been supplied on or to the Leased
Property. Tenant shall immediately remove, bond-off, or otherwise obtain the
release of any mechanics' lien filed against the Leased Property. Tenant shall
pay all expenses in connection therewith, including without limitation,
damages, interest, court costs and reasonable attorneys' fees.
7.05 Replacements of Fixtures. Tenant shall not remove Fixtures
from any Leased Property except to replace the Fixtures by other similar items
of equal quality and value. Items being replaced by Tenant may be removed and
shall become the property of Tenant and items replacing the same shall be and
remain the property of the Landlord. Tenant shall execute, upon written
request from Landlord, any and all documents necessary to evidence Landlord's
ownership of the Fixtures and replacements therefor. Tenant may finance
replacements for the Fixtures by equipment lease or by a security agreement and
financing statement; provided, however, that for any item of Fixtures or
Personal Property having a cost greater than or equal to Twenty Thousand
Dollars ($20,000.00), Tenant may not finance replacements by security agreement
or equipment lease unless (i) Landlord has consented to the terms and
conditions of the equipment lease or security agreement; (ii) the equipment
lessor or lender has entered into a nondisturbance agreement with the Landlord
upon terms and conditions acceptable to Landlord, including without limitation,
the following: (a) Landlord shall have the right (but not the obligation) to
assume such security agreement or equipment lease upon the occurrence of an
Event of Default by Tenant under any Lease; (b) the equipment lessor or lender
shall notify Landlord of any default by Tenant under the equipment lease or
security agreement and give Landlord a reasonable opportunity to cure such
default; and (c) Landlord shall have the right to assign its rights under the
equipment lease, security agreement, or
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nondisturbance agreement; and (iii) Tenant shall, within thirty (30) days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing and approving the equipment lease, security
agreement, and nondisturbance agreement, including without limitation,
reasonable attorneys' fees and costs.
ARTICLE VIII
ALTERATIONS AND SIGNS; TENANT'S PROPERTY;
CAPITAL ADDITIONS TO THE LEASED PROPERTY
8.01 Tenant's Right to Construct. During the Term of this
Agreement, so long as no Event of Default shall have occurred and be continuing
as to the Leased Property that is the subject of such improvements, Tenant may
make Capital Additions (as defined herein), or other alterations, additions,
changes and/or improvements to any Leased Property as deemed necessary or
useful to operate the Leased Property as a correction or detention facility
(the "Primary Intended Use") (individually, a "Tenant Improvement," or
collectively, "Tenant Improvements"). "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 Tenant's sole expense and shall become
the property of Landlord upon termination of this Lease. Unless made on an
emergency basis to prevent injury to person or property, Tenant will submit
plans to Landlord for Landlord's prior approval, such approval not to be
unreasonably withheld or delayed, for any Tenant Improvement which is not a
Capital Addition and which has a cost of more than $500,000 or a cost which,
when aggregated with the costs of all such Tenant Improvements for any
individual Leased Facility in the same Lease Year, would cause the total costs
of all such Tenant Improvements to exceed $1,000,000. Such $500,000 and
$1,000,000 amounts shall be increased by four percent (4%) per annum,
cumulatively for each subsequent Lease Year. Additionally, in connection with
any Tenant Improvement, including any Capital Addition, Tenant shall provide
Landlord with copies of any plans and specification therefor, Tenant's budget
relating thereto, any required government permits or approvals, any
construction contracts or agreements relating thereto, and any other
information relating to such Tenant Improvement as Landlord shall reasonably
request.
8.02 Scope of Right. Subject to Section 8.01 herein and Section
7.03 concerning required alterations, at Tenant's cost and expense, Tenant
shall have the right to:
(a) seek any governmental approvals, including building
permits, licenses, conditional use permits and any certificates of need
that Tenant requires to construct any Tenant Improvement;
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(b) erect upon the Leased Property such Tenant
Improvements as Tenant deems desirable;
(c) make additions, alterations, changes and improvements
in any Tenant Improvement so erected; and
(d) engage in any other lawful activities that Tenant
determines are necessary or desirable for the development of the Leased
Property in accordance with its Primary Intended Use;
provided, however, Tenant shall not make any Tenant Improvement which would, in
Landlord's reasonable judgment, impair the value or Primary Intended Use of any
Leased Property without Landlord's prior written consent and provided, further
that Tenant shall not be permitted to create a mortgage, lien or any other
encumbrance on any individual Leased Property without Landlord's prior written
consent.
8.03 Cooperation of Landlord. Landlord shall cooperate with Tenant
and take such actions, including the execution and delivery to Tenant of any
applications or other documents, reasonably requested by Tenant in order to
obtain any governmental approvals sought by Tenant to construct any Tenant
Improvement within ten (10) business days following the later of (a) the date
Landlord receives Tenant's request, or (b) the date of delivery of any such
application or document to Landlord, so long as the taking of such action,
including the execution of said applications or documents, shall be without
cost to Landlord (or if there is a cost to Landlord, such cost shall be
reimbursed by Tenant), and will not cause Landlord to be in violation of any
law, ordinance or regulation.
8.04 Commencement of Construction. Tenant agrees that:
(a) Tenant shall diligently seek all governmental
approvals relating to the construction of any Tenant Improvement;
(b) Once Tenant begins the construction of any Tenant
Improvement, Tenant shall diligently prosecute any such construction
to completion in accordance with applicable insurance requirements and
the laws, rules and regulations of all governmental bodies or agencies
having jurisdiction over the Leased Property;
(c) Landlord shall have the right at any time and from
time to time to post and maintain upon the Leased Property such
notices as may be necessary to protect Landlord's interest from
mechanics' liens, 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 of
construction of any Tenant Improvement to be enforced against the
Leased Property or any part thereof, and Tenant agrees to hold
Landlord and said
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Leased Property free and harmless from all liability from any
such liens, claims or demands, together with all costs and
expenses in connection therewith;
(e) All work shall be performed in a good and
workmanlike manner consistent with standards in the industry;
and
(f) Subject to Section 8.09 in the case of
Capital Additions, Tenant shall not secure any construction or
other financing for the Tenant Improvements which is secured
by a portion of the Leased Property without Landlord's prior
written consent, and any such financing (i) shall not exceed
the cost of the Tenant Improvements, (ii) shall be subordinate
to any mortgage or encumbrance now existing or hereinafter
created with respect to the Leased Property, and (iii) shall
be limited solely to Tenant's interest in the Leased Property
that is the subject of the improvements.
8.05 Rights in Tenant Improvements. Notwithstanding
anything to the contrary in this Lease, all Tenant Improvements constructed
pursuant to Section 8.01, any and all subsequent additions thereto and
alterations and replacements thereof, shall be the sole and absolute property
of Tenant during the Term of the particular Lease. Upon the expiration or
early termination of any Lease, all such Tenant Improvements shall become the
property of Landlord. Without limiting the generality of the foregoing, Tenant
shall be entitled to all federal and state income tax benefits associated with
any Tenant Improvement during the Term of this Agreement.
8.06 Personal Property. Tenant shall install, place, and
use on the Leased Property such fixtures, furniture, equipment, inventory and
other personal property in addition to the Fixtures as may be required or as
Tenant may, from time to time, deem necessary or useful to operate the Leased
Property as a correctional or detention facility.
8.07 Requirements for Personal Property. Tenant shall
comply with all of the following requirements in connection with Personal
Property:
(a) With respect to each Leased Property, Tenant
shall notify Landlord within one hundred twenty (120) days
after each Lease Year of any additions, substitutions, or
replacements of an item of Personal Property at such Leased
Property which individually has a cost of more than
$25,000.00 and shall furnish Landlord with such other
information as Landlord may reasonably request from time to
time.
(b) The Personal Property shall be installed in
a good and workmanlike manner, in compliance with all
governmental laws, ordinances, rules, and regulations and all
insurance requirements, and be installed free and clear of any
mechanics' liens.
(c) Tenant shall, at Tenant's sole cost and
expense, maintain, repair, and replace the Personal Property.
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(d) Tenant shall, at Tenant's sole cost and
expense, keep Personal Property insured against loss or damage
by fire, vandalism and malicious mischief, sprinkler leakage,
and other physical loss perils commonly covered by fire and
extended coverage, boiler and machinery, and difference in
conditions insurance in an amount not less than ninety percent
(90%) of the then full replacement cost thereof. Tenant shall
use the proceeds from any such policy for the repair and
replacement of Personal Property. The insurance shall meet
the requirements of Section 4.03.
(e) Tenant shall pay all taxes applicable to
Personal Property.
(f) If Personal Property is damaged or destroyed
by fire or any other case, Tenant shall promptly repair or
replace Personal Property unless Tenant is entitled to and
elects to terminate the Lease pursuant to Section 10.05.
(g) Unless an Event of Default (or any event
which, with the giving of notice of lapse of time, or both,
would constitute an Event of Default) has occurred and
remains uncured beyond any applicable grace period, Tenant may
remove Personal Property from the Leased Property from time to
time provided that (i) the items removed are not required to
operate the Leased Property as a licensed correctional or
detention facility (unless such items are being replaced by
Tenant); and (ii) Tenant repairs any damage to the Leased
Property resulting from the removal of Personal Property.
(h) Tenant shall remove any of Tenant's personal
property which does not constitute Personal Property
hereunder, upon the termination or expiration of the
Lease and 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.
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 notwithstanding that
such Personal Property or Tenant installs, places, uses,
maintains, repairs, and/or replaces pursuant to the provisions
of Section 8.06 hereof and this Section 8.07 will be the
exclusive property of Tenant during the term until such
expiration or termination of the Lease.
(i) Tenant shall perform its obligations under any
equipment lease or security agreement for Personal Property.
8.08 Signs. Tenant may, at its own expense, erect and
maintain identification signs at the Leased Property, provided such signs
comply with all laws, ordinances, and regulations. Upon the occurrence of an
Event of Default or the termination or expiration of a Lease, Tenant shall,
within thirty (30) days after notice from Landlord, remove the signs and
restore the applicable Leased Property to its original condition.
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8.09 Financings of Capital Additions to a Leased Property.
(a) Landlord may, but shall be under no obligation to,
provide or arrange construction, permanent or other financing for a
Capital Addition proposed to be made to any Leased Property by Tenant.
Within thirty (30) days of receipt of such a request by Tenant,
Landlord shall notify Tenant as to whether it will finance the
proposed Capital Addition and, if so, the terms and conditions upon
which it would do so, including the terms of any amendment to an
individual Lease or a new lease agreement for such proposed Capital
Addition.
(b) If Landlord agrees to finance the proposed Capital
Addition of Tenant, Tenant shall provide Landlord with the following:
(i) all customary or other required loan
documentation which may be required;
(ii) any information, certificates, licenses,
permits or documents requested by either Landlord or any
lender with whom Landlord has agreed or may agree to provide
financing which are necessary to confirm that Tenant will be
able to use the Capital Addition upon completion thereof in
accordance with the Primary Intended Use (as defined in
Section 8.01), including all required, federal, state or local
government licenses and approvals;
(iii) a certificate from Tenant's architect,
setting forth in reasonable detail the projected (or actual,
if available) cost of the proposed Capital Addition;
(iv) an amendment to this Lease, or a new lease
agreement, duly executed and acknowledged, in form and
substance satisfactory to Landlord and Tenant, and containing
such provisions as may be necessary or appropriate, including
without limitation, any appropriate changes in the legal
description of the Land, the Rent, and other changes with
respect to the Capital Addition;
(v) a deed conveying title to Landlord to any
land acquired for the purpose of constructing the Capital
Addition, free and clear of any liens or encumbrances except
those approved by Landlord and, both prior to and following
completion of the Capital Addition, an as-built survey thereof
satisfactory to Landlord;
(vi) endorsements to any outstanding policy of
title insurance covering the Leased Property or a supplemental
policy of title insurance covering the Leased Property
satisfactory in form and substance to Landlord (a) updating
the same without any additional exceptions, except as may be
permitted by Landlord; and (b)
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increasing the coverage thereof by an amount equal to the fair
market value of the Capital Addition;
(vii) if required by Landlord, (a) an owner's
policy of title insurance insuring fee simple title to
any land conveyed to Landlord pursuant to subparagraph (v),
free and clear of all liens and encumbrances except those
approved by Landlord and (b) a lender's policy of title
insurance satisfactory in form and substance to Landlord and
any lending institution advancing a portion of the cost of the
Capital Addition;
(viii) if required by Landlord, upon completion of
the Capital Addition, an M.A.I. appraisal of the Leased
Property indicating that the value of the Leased Property upon
completion of the Capital Addition exceeds the fair market
value of the Leased Property prior thereto by an amount not
less than ninety-five percent (95%) of the cost of such
Capital Addition; and
(ix) such other certificates (including, but not
limited to, endorsements, increasing the insurance coverage,
if any, at the time required), documents, opinions of counsel,
appraisals, surveys, certified copies of duly adopted
resolutions of the board of directors of Tenant authorizing
the execution and delivery of any amendment to an individual
Lease or new lease agreement and any other instruments as may
be reasonably required by Landlord and any lending institution
advancing any portion of the cost of the Capital Addition.
(c) Upon making a request to finance a Capital Addition,
whether or not such financing is actually consummated, Tenant shall
pay or agree to pay, upon demand, all reasonable costs and expenses of
Landlord and any lending institution which has committed to finance
such Capital Addition which have been paid or incurred by them in
connection with the financing of the Capital Addition, including, but
not limited to, (i) the fees and expenses of their respective counsel,
(ii) all printing expenses, (iii) the amount of any filing,
registration and recording taxes and fees, (iv) documentary stamp
taxes, if any, (v) title insurance charges, appraisal fees, if any,
rating agency fees, if any, (vi) commitment fees, if any, and (vii)
costs of obtaining regulatory and governmental approvals for the
construction, operation, use or occupancy of the Capital Addition.
(d) (i) If Landlord and Tenant are unable to agree on
the terms of the financing of a Capital Addition by Landlord, Tenant
may undertake the cost of any such Capital Addition and seek
construction, permanent or other financing from other sources.
(ii) In the event Tenant shall construct any
Capital Addition and shall have obtained construction, permanent or
other financing in connection therewith from sources other than
Landlord, as set forth in the foregoing Section 8.09(d)(i), Landlord
shall have the
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option to acquire such Capital Addition for a period of three
(3) years following the date Tenant first receives inmates in such
Capital Addition ("Service Commencement Date"). The price at which
Landlord may acquire such Capital Addition shall be the fair market
value of the Capital Addition, as reasonably and mutually determined
by Landlord and Tenant, provided, Landlord and Tenant agree that for
the first two (2) years following the Service Commencement Date the
fair market value of such Capital Addition shall be deemed to be equal
to Tenant's actual costs and expenses to acquire, develop, design,
construct and equip such Capital Addition ("Tenant's Cost"), as
reflected on the books of Tenant, plus five percent (5%) of Tenant's
Cost. Landlord's exercise of such option shall require Landlord to
acquire such Capital Addition on such terms and conditions as Landlord
and Tenant shall reasonably agree, which shall be generally consistent
with the terms and conditions of Landlord's initial acquisition of the
related Leased Property from Tenant. Upon such acquisition, Landlord
shall lease such Capital Addition to Tenant on the terms and
conditions set forth herein, and Landlord and Tenant shall execute a
new Lease, or an amendment to the existing Lease, with respect
thereto. In such case, for acquisitions of Capital Additions within
five (5) years of the date hereof, the annual Base Rent shall be the
greater of (i) the fair market rental value of the Capital
Addition, as reasonably and mutually determined by Landlord and Tenant
and (ii) eleven percent (11%) of the purchase price of such Capital
Addition. For Capital Additions thereafter, the Base Rent shall be the
fair market rental value of the Capital Addition, as reasonably and
mutually determined by Landlord and Tenant. Regardless of whether the
foregoing option is exercised, all Capital Additions shall become the
property of Landlord upon the expiration or termination of this Lease.
ARTICLE IX
DEFAULTS AND REMEDIES
9.01 Events of Default. The occurrence of any one or more of the
following shall be an event of default ("Event of Default") hereunder:
(a) Tenant fails to pay in full any installment of Rent,
or any other monetary obligation payable by Tenant to Landlord under a
Lease, within fifteen (15) days after notice of nonpayment from
Landlord;
(b) Tenant fails to observe and perform any other
covenant, condition or agreement under this Agreement or a Lease to be
performed by Tenant (except those described in Section 9.01(a) of this
Agreement) and such failure continues for a period of thirty (30) days
after written notice thereof is given to Tenant by Landlord; or if, by
reason of the nature of such default, the same cannot with due
diligence be remedied within said thirty (30) days, such failure will
not be deemed to continue if Tenant proceeds promptly and with due
diligence to remedy the failure and diligently completes the remedy
thereof; provided, however, said cure period will not extend beyond
thirty (30) days if the facts or circumstances giving rise to the
default are creating a further harm to Landlord or the Leased Property
and Landlord makes a good faith determination that Tenant is not
undertaking remedial steps that Landlord would cause to be taken if
such Lease were then to terminate;
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(c) If Tenant: (a) admits in writing its inability to pay
its debts generally as they become due, (b) files a petition in
bankruptcy or a petition to take advantage of any insolvency act, (c)
makes an assignment for the benefit of its creditors, (d) is unable to
pay its debts as they mature, (e) consents to the appointment of a
receiver of itself or of the whole or any substantial part of its
property, or (f) files a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable
law or statute of the United States of America or any state thereof;
(d) If Tenant, on a petition in bankruptcy filed against
it, is adjudicated as bankrupt or a court of competent jurisdiction
enters an order or decree appointing, without the consent of Tenant, a
receiver of Tenant of the whole or substantially all of its property,
or approving a petition filed against it seeking reorganization or
arrangement of Tenant under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
thereof, and such judgment, order or decree is not vacated or set
aside or stayed within ninety (90) days from the date of the entry
thereof;
(e) If the estate or interest of Tenant in any Leased
Property or any part thereof is levied upon or attached in any
proceeding and the same is not vacated or discharged within the later
of ninety (90) days after commencement thereof or thirty (30) days
after receipt by Tenant of notice thereof from Landlord (unless Tenant
is contesting such lien or attachment in accordance with this
Agreement);
(f) Any representation or warranty made by Tenant in the
Agreement or any Lease or in any certificate, demand or request made
pursuant to any Lease proves to be incorrect, in any material respect
and any adverse effect on Landlord of any such misrepresentation or
breach of warranty has not been corrected to Landlord's satisfaction
within thirty (30) days after Tenant becomes aware of, or is notified
by the Landlord of the fact of, such misrepresentation or breach of
warranty;
(g) A default by Tenant in any payment of principal or
interest on any obligations for borrowed money having a principal
balance of Twenty-Five Million Dollars ($25,000,000) or more in the
aggregate (excluding obligations which are limited in recourse to
specific property of Tenant provided that such property is not a
substantial portion of the assets of Tenant and excluding any debt
which is denominated as "subordinated debt"), or in the performance of
any other provision contained in any instrument under which any such
obligation is created or secured (including the breach of any covenant
thereunder), if an effect of such default is that the holder(s) of
such obligation cause such obligation to become due prior to its
stated maturity; or
(h) A final, non-appealable judgment or judgments for the
payment of money in excess of Ten Million Dollars ($10,000,000) in the
aggregate not fully covered (excluding deductibles) by insurance is
rendered against Tenant and the same remains undischarged, unvacated,
unbonded or unstayed for a period of one hundred twenty (120)
consecutive days.
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Notwithstanding the foregoing, an Event of Default under the foregoing
subsections (a), (c), (d), (g) and (h) shall constitute an Event of Default
under all of the Leases and an Event of Default under the foregoing subsections
(b), (e) and (f) shall constitute an Event of Default only with respect to the
specific Lease and Leased Property to which such Event of Default applies.
Provided, with respect to the Events of Default under the foregoing subsections
(b), (e) and (f), if such Events of Default shall at any time be applicable to
Leased Properties for which the monthly Base Rent constitutes, in the
aggregate, greater than twenty-five percent (25%) of the monthly Base Rent for
all of the Leased Properties, then such Events of Default shall constitute
Events of Default under all of the Leases.
9.02 Remedies. To the extent any Event of Default is applicable
only to a specific Lease or Leases, or a specific Leased Property or Leased
Properties (in accordance with Section 9.01 above), the remedies set forth
herein shall be exercisable solely with respect to such Lease or Leases, or
Leased Property or Leased Properties, and shall not be exercisable with respect
to any other Leases or Leased Property. To the extent any Event of Default
constitutes an Event of Default under all of the Leases (in accordance with
Section 9.01 above), the remedies set forth herein shall be exercisable with
respect to all of the Leases and all of the Leased Properties. Subject to the
foregoing provisions, Landlord may exercise any one or more of the following
remedies upon the occurrence of an Event of Default:
(a) Landlord may terminate the applicable Lease, exclude
Tenant from possession of the subject Leased Property and use
reasonable efforts to lease such Leased Property to others. If any
Lease is terminated pursuant to the provisions of this subparagraph
(a), Tenant will remain liable to Landlord for damages in an amount
equal to the Rent and other sums which would have been owing by Tenant
under such Lease for the balance of the Term if the Lease had not been
terminated, less the net proceeds, if any, of any re-letting of the
subject Leased Property by Landlord subsequent to such termination,
after deducting all Landlord's expenses in connection with such
re-letting, including without limitation, the expenses set forth in
Section 9.02(b)(2) below. Landlord will be entitled to collect such
damages from Tenant monthly on the days on which the Rent and other
amounts would have been payable under the subject Lease if such Lease
had not been terminated and Landlord will be entitled to receive such
damages from Tenant on each such day. Alternatively, at the option of
Landlord, if such Lease is terminated, Landlord will be entitled to
recover from Tenant (a) all unpaid Rent then due and payable, and (b)
the worth at the time of the award (as hereafter defined) of the Rent
which would have been due and payable from the date of termination
through the Expiration Date as if the Lease had not been terminated.
The "worth at the time of award" of the amount referred to in clause
(b) is computed at "present value" using New York Prime Rate. For
purposes of this Agreement, "New York Prime Rate" shall mean that rate
of interest identified as prime or national prime by the Wall Street
Journal, or if not published or found, then the rate of interest
charged by the American bank with the greatest number of assets on
ninety (90) day unsecured notes to its preferred customers. For the
purpose of determining unpaid Rent under clause (b), the Rent reserved
in the Lease will be deemed to be the sum of the following: (i) the
Base Rent computed pursuant to Section 2.01;
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(ii) the Additional Rent computed pursuant to Section 2.02; and
(iii) the Other Additional Rent computed pursuant to Section 2.02.01.
Such computation of Other Additional Rent shall be based on the Other
Additional Rent paid for the Lease Year preceding the date of
termination, increased by 4% per year thereafter. Following payments
by Tenant of the foregoing amounts, Landlord shall deliver and pay
over to Tenant all rent, income, and other proceeds of any nature
realized from the sale, lease or other disposition or utilization of
the Leased Premises, if any, actually received by Landlord, up to the
amounts so paid by Tenant less Landlord's reasonably incurred costs
and expenses of maintaining and re-leasing or selling the Leased
Premises.
(b) (1) Without demand or notice, Landlord may re-enter
and take possession of the applicable Leased Property or any part of
such Leased Property; and repossess such Leased Property as of the
Landlord's former estate; and expel the Tenant and those claiming
through or under Tenant from such 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 such Leased Property pursuant to legal proceedings or
pursuant to any notice provided by law, Landlord may, from time to
time, without terminating the subject Lease, re-let such Leased
Property or any part of such Leased Property, either alone or in
conjunction with other portions of the Improvements of which such
Leased Property are a part, in Landlord's name but for the account of
Tenant, for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Term
of this Lease) and on such terms and conditions (which may include
concessions of free rent, and the alteration and repair of such Leased
Property) as Landlord, in its uncontrolled discretion, may determine.
Landlord may collect and receive the Rents for such 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 Lease
unless a written notice of such intention is given to Tenant. No
notice from Landlord under this Lease or under a forcible entry and
detainer statute or similar law will constitute an election by
Landlord to terminate this Lease unless such notice specifically says
so. Landlord reserves the right following any such re-entry or
re-letting, or both, to exercise its right to terminate this Lease by
giving Tenant such written notice, and, in that event such Lease will
terminate as specified in such notice.
(2) If Landlord elects to take possession of such
Leased Property according to this subparagraph (b) without terminating
such Lease, Tenant will pay Landlord (i) the Rent, Additional Rent and
other sums which would be payable under such Lease if such
repossession had not occurred, less (ii) the net proceeds, if any, of
any re-letting of such Leased Property after deducting all of
Landlord's expenses incurred in connection with such re-letting,
including without limitation, all repossession costs, brokerage
commissions, legal
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expense, attorneys' fees, expense of employees, alteration,
remodeling, repair costs, and expense of preparation for such
re-letting. If, in connection with any re-letting, the new Lease term
extends beyond the existing Term or such Leased Property covered by
such re-letting includes areas which are not part of such Leased
Property, a fair apportionment of the Rent received from such
re-letting and the expenses incurred in connection with such
re-letting will be made in determining the net proceeds received from
such re-letting. In addition, in determining the net proceeds from
such re-letting, any rent concessions will be apportioned over the
term of the new Lease. Tenant will pay such amounts to Landlord
monthly on the days on which the Rent and all other amounts owing
under this Agreement or such Lease would have been payable if
possession had not been retaken, and Landlord will be entitled to
receive the rent and other amounts from Tenant on each such day.
(c) Landlord may re-enter the applicable Leased Property
and have, repossess and enjoy such Leased Property as if such Lease
had not been made, and in such event, Tenant and its successors and
assigns shall remain liable for any contingent or unliquidated
obligations or sums owing at the time of such repossession.
(d) Landlord may take whatever action at law or in equity
as may appear necessary or desirable to collect the Rent and other
amounts payable under the applicable Lease then due and thereafter to
become due, or to enforce performance and observance of any
obligations, agreements or covenants of Tenant under such Lease.
9.03 Right of Set-Off. Landlord may, and is hereby authorized by
Tenant, at any time and from time to time, after advance notice to Tenant, to
set-off and apply any and all sums held by Landlord, including all sums held in
any escrow for Impositions, any indebtedness of Landlord to Tenant, and any
claims by Tenant against Landlord, against any obligations of Tenant under this
Agreement or any Lease and against any claims by Landlord against Tenant,
whether or not Landlord has exercised any other remedies hereunder. The rights
of Landlord under this Section are in addition to any other rights and remedies
Landlord may have against Tenant.
9.04 Performance of Tenant's Covenants. Landlord may perform any
obligation of Tenant which Tenant has failed to perform within two (2) days
after Landlord has sent a written notice to Tenant informing it of its specific
failure (provided no such notice shall be required if Landlord has previously
notified Tenant of such failure under the provisions of Section 9.01). Tenant
shall reimburse Landlord on demand, as Other Additional Rent, for any
expenditures thus incurred by Landlord and shall pay interest thereon at the
New York Prime Rate (as herein defined).
9.05 Late Charge. Any payment not made by Tenant for more than ten
(10) days after the due date shall be subject to a late charge payable by
Tenant as Rent of three percent (3%) of the amount of such overdue payment.
9.06 Litigation; Attorneys' Fees. Within ten (10) days after
Tenant has knowledge of any litigation or other proceeding that may be
instituted against Tenant, against any Leased Property to
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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 and
each Lease, whether or not an Event of Default has actually occurred or has
been declared and thereafter cured, including without limitation, (i) the fees,
expenses, and costs of any litigation, receivership, administrative,
bankruptcy, insolvency or other similar proceeding; (ii) reasonable attorney,
paralegal, consulting and witness fees and disbursements; and (iii) the
expenses, including without limitation, lodging, meals, and transportation,
of Landlord and its employees, agents, attorneys, and witnesses in preparing
for litigation, administrative, bankruptcy, insolvency or other similar
proceedings and attendance at hearings, depositions, and trials in connection
therewith. All such costs, charges and fees as incurred shall be deemed to be
Other Additional Rent under this Agreement.
9.07 Remedies Cumulative. The remedies of Landlord herein are
cumulative to and not in lieu of any other remedies available to Landlord at
law or in equity. The use of any one remedy shall not be taken to exclude or
waive the right to use any other remedy.
9.08 Escrows and Application of Payments. As security for the
performance of its obligations hereunder, Tenant hereby assigns to Landlord all
its right, title and interest in and to all monies escrowed with Landlord under
this Agreement or under any Lease and all deposits with utility companies,
taxing authorities, and insurance companies; provided, however, that Landlord
shall not exercise its rights hereunder until an Event of Default has occurred.
Any payments received by Landlord under any provisions of this Agreement or
under any Lease during the existence, or continuance of an Event of Default
shall be applied to Tenant's obligations in the order which Landlord may
determine.
9.09 Power of Attorney. Tenant hereby irrevocably and
unconditionally appoints Landlord, or Landlord's authorized officer, agent,
employee or designee, as Tenant's true and lawful attorney-in-fact, to act,
after an Event of Default, for Tenant in Tenant's name, place, and stead, and
for Tenant's and Landlord's use and benefit, to execute, deliver and file all
applications and any and all other necessary documents or things, to effect a
transfer, reinstatement, renewal and/or extension of any and all licenses and
other governmental authorizations issued to Tenant in connection with Tenant's
operation of 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 and each Lease.
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ARTICLE X
DAMAGE AND DESTRUCTION
10.01 General. Tenant shall notify Landlord if any of the Leased
Property is damaged or destroyed by reason of fire or any other cause. Tenant
shall promptly repair, rebuild, or restore the Leased Property, at Tenant's
expense, so as to make the Leased Property at least equal in value to the
Leased Property existing immediately prior to such occurrence and as nearly
similar to it in character as is practicable and reasonable. Before beginning
such repairs or rebuilding, or letting any contracts in connection with such
repairs or rebuilding, Tenant will submit for Landlord's approval, which
approval Landlord will not unreasonably withhold or delay, complete and
detailed plans and specifications for such repairs or rebuilding. Promptly
after receiving Landlord's approval of the plans and specifications, Tenant
will begin such repairs or rebuilding and will prosecute the repairs and
rebuilding to completion with diligence, subject, however, to strikes,
lockouts, acts of God, embargoes, governmental restrictions, and other causes
beyond Tenant's reasonable control. Landlord will make available to Tenant the
net proceeds of any fire or other casualty insurance paid to Landlord for such
repair or rebuilding as the same progresses, after deduction of any costs of
collection, including attorneys' fees. Payment will be made against properly
certified vouchers of a competent architect in charge of the work and approved
by Landlord. Prior to commencing the repairing or rebuilding, Tenant shall
deliver to Landlord for Landlord's approval a schedule setting forth the
estimated monthly draws for such work. Landlord will contribute to such
payments out of the insurance proceeds an amount equal to the proportion that
the total net amount received by Landlord from insurers bears to the total
estimated cost of the rebuilding or repairing, multiplied by the payment by
Tenant on account of such work. Landlord may, however, withhold ten percent
(10%) from each payment until (i) the work of repairing or rebuilding is
completed and proof has been furnished to Landlord that no lien or liability
has attached or will attach to the Leased Property or to Landlord in connection
with such repairing or rebuilding, (ii) Tenant has obtained a certificate of
use and occupancy (or its functional equivalent) for the portion of the Leased
Premises repaired or rebuilt and (iii) if Tenant has an agreement with any
governmental authority 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
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to such repairs or rebuilding. Tenant will keep all plans, shop drawings,
and specifications available, and Landlord and its architects and engineers
may examine them at all reasonable times. If, during such repairs or
rebuilding, Landlord and its architects and engineers determine that the
repairs or rebuilding are not being done in accordance with the approved plans
and specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such repairs or rebuilding do not accord with the
approved plans and specifications. Upon the receipt of any such notice, Tenant
will cause corrections to be made to any deficiencies, omissions, or such other
respect. Tenant's obligations to supply insurance, according to Article IV,
will be applicable to any repairs or rebuilding under this Section.
10.03 Landlord's Costs. Tenant shall, within thirty (30) days after
receipt of an invoice from Landlord, pay the reasonable costs, expenses, and
fees of any architect or engineer employed by Landlord to review any plans and
specifications and to supervise and approve any construction, or for any
services rendered by such architect or engineer to Landlord as contemplated by
any of the provisions of this Agreement, or for any services performed by
Landlord's attorneys in connection therewith; provided, however, that Landlord
will consult with Tenant and notify Tenant of the estimated amount of such
expenses.
10.04 Rent Abatement. In the event that the provisions of Section
10.01 above shall become applicable, the Rent, real estate taxes and other
Impositions shall be abated or reduced proportionately during any period in
which, by reason of such damage or destruction, there is substantial
interference with the operation of the business of Tenant in the Leased
Property, having regard to the extent to which Tenant may be required to
discontinue its business in the Leased Property, and such abatement or
reduction shall continue for the period commencing with such destruction or
damage and ending with the substantial completion (defined below) by Tenant of
such work or repair and/or reconstruction. In the event that only a portion
of any Leased Property is rendered untenantable or incapable of such use, the
Base Rent and all real estate taxes and other Impositions payable hereunder
shall be reduced on a pro rata basis for the amount that the correctional or
detention facility at a particular Leased Property is rendered incapable of
occupancy because of such damage or destruction in proportion to the total size
of the Leased Property prior to such damage or destruction. For purposes of
this paragraph, substantial completion shall occur upon the earlier of (i) nine
(9) months from the date of the first disbursement of insurance proceeds, or
(ii) the issuance of a certificate of occupancy for the Leased Property.
Notwithstanding any other provision hereof, such rental abatement shall be
limited to the amount of any rental or business interruption insurance proceeds
actually received by Landlord.
10.05 Substantial Damage During Lease Term. Provided Tenant has
fully complied with Section 4.01 hereof (including actually maintaining in
effect rental value insurance or business interruption insurance provided for
in clause (c) thereof) and has satisfied the conditions of the last sentence of
this Section 10.05, if, at any time during the Term of the particular Lease,
the Leased Property is so damaged by fire or otherwise that more than fifty
percent (50%) of the correctional or detention facility at the Leased Property
is rendered unusable, Tenant may, within thirty (30) days after such damage,
give notice of its election to terminate the Lease subject to the particular
Leased
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Property and, subject to the further provisions of this Section, such
Lease will cease on the tenth (10th ) day after the delivery of such notice.
If the Lease is so terminated, Tenant will have no obligation to repair,
rebuild or replace the Leased Property, and the entire insurance proceeds will
belong to Landlord. If the Lease is not so terminated, Tenant shall rebuild
the Leased Property in accordance with Section 10.01. If Tenant elects to
terminate any Lease pursuant to this Section 10.05, Tenant will pay (or cause
to be paid) to Landlord, an amount equal to the difference between the amount
of all insurance proceeds received by Landlord, and the net book value of such
Leased Property as shown in Landlord's financial statements as of the date of
such termination.
10.06 Damage Near End of Term. Notwithstanding any provisions of
Section 10.01 to the contrary, if damage to or destruction of the Leased
Property occurs during the last twenty-four (24) months of the Term, and if
such damage or destruction cannot be fully repaired and restored within six (6)
months immediately following the date of loss, either party shall have the
right to terminate this Lease by giving notice to the other within thirty (30)
days after the date of damage or destruction, in which event Landlord shall be
entitled to retain the insurance proceeds and Tenant shall pay to Landlord on
demand the amount of any deductible or uninsured loss arising in connection
therewith; provided, however, that any such notice given by Landlord shall be
void and of no force and effect if Tenant exercises an available option to
extend the Term pursuant to provisions of the Lease for such Leased Property
within thirty (30) days following receipt of such termination notice.
ARTICLE XI
CONDEMNATION
11.01 Total Taking. If at any time during the Term any Leased
Property is totally and permanently taken by right of eminent domain or by
conveyance made in response to the threat of the exercise of such right
("Condemnation"), the applicable Lease shall terminate on the Date of Taking
(which shall mean the date the condemning authority has the right to possession
of the property being condemned), and Tenant shall promptly pay all outstanding
rent and other charges through the date of termination, provided, however the
applicable Lease shall not so terminate if the Condemnation occurred due to the
failure of Tenant to maintain the Leased Property as required by Article VII of
this Agreement or other applicable provision of this Agreement, whether or not
such failure on the part of Tenant constituted an Event of Default under an
individual Lease at the time of the Condemnation.
11.02 Partial Taking. If a portion of any Leased Property is taken
by Condemnation, the subject Lease shall remain in effect if such Leased
Property is not thereby rendered Unsuitable for its Primary Intended Use (which
shall mean that 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, such Lease shall
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terminate on the Date of Taking, provided such Condemnation was not as a
result of Tenant's failure to maintain the Leased Property as provided for in
Section 11.01.
11.03 Restoration. If there is a partial taking of any Leased
Property and the subject Lease remains in full force and effect pursuant to
Section 11.02, Landlord shall furnish to Tenant the amount of the Award payable
to Landlord, as provided herein, in order for Tenant to accomplish all
necessary restoration. If Tenant receives an Award under Section 11.05, Tenant
shall repair or restore any Tenant Improvements up to but not exceeding the
amount of the Award payable to Tenant therefor. Before beginning such
restoration, or letting any contracts in connection with such restoration,
Tenant will submit for Landlord's approval, which approval Landlord will not
unreasonably withhold or delay, complete and detailed plans and specifications
for such restoration. Promptly after receiving Landlord's approval of the
plans and specifications,Tenant will begin such restoration and will prosecute
the repairs and rebuilding to completion with diligence, subject, however, to
strikes, lockouts, acts of God, embargoes, governmental restrictions, and other
causes beyond Tenant's reasonable control. Landlord will make available to
Tenant the net proceeds of any Award paid to Landlord for such restoration,
after deduction of any costs of collection, including attorneys' fees. Payment
will be made against properly certified vouchers of a competent architect in
charge of the work and approved by Landlord. Prior to commencing the
restoration, Tenant shall deliver to Landlord for Landlord's approval a
schedule setting forth the estimated monthly draws for such work. Landlord
may, however, withhold ten percent (10%) from each payment until the work of
restoration is completed and proof has been furnished to Landlord that no lien
or liability has attached or will attach to the Leased Property or to Landlord
in connection with such restoration. Upon the completion of restoration and
the furnishing of such proof, the balance of the Award will be paid to Tenant.
Tenant will obtain and deliver to Landlord a temporary or final certificate of
occupancy before the Leased Property is reoccupied for any purpose. Tenant
shall complete such restoration free and clear of mechanic's or other liens,
and in accordance with the building codes and all applicable laws, ordinances,
regulations, or orders of any state, municipal, or other public authority
affecting the restoration, and also in accordance with all requirements of the
insurance rating organization, or similar body. Any remaining proceeds of the
Award after such restoration will be Tenant's property.
11.04 Landlord's Inspection. During the progress of such
restoration, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such
restoration. Tenant will keep all plans, shop drawings, and specifications
available, and Landlord and its architects and engineers may examine them at
all reasonable times. If, during such restoration, Landlord and its architects
and engineers determine that the restoration is not being done in accordance
with the approved plans and specifications, Landlord will give prompt notice in
writing to Tenant, specifying in detail the particular deficiency, omission, or
other respect in which Landlord claims such restoration does not accord with the
approved plans and specifications. Upon the receipt of any such notice, Tenant
will cause corrections to be made to any deficiencies, omissions, or such other
respect. Tenant's obligations to supply insurance, according to Article IV,
will be applicable to any restoration under this Section.
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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 under the subject Lease; provided, however,
that if the amount received by Landlord and said mortgagee is less than the
Condemnation Threshold (which shall mean, as of any given date, an amount equal
to the net book value of such Leased Property as shown on the financial
statements of Landlord as of the date of the Condemnation), then the amount of
the Award otherwise payable to Tenant for the value of its leasehold interest
under this Lease (and not any other funds of Tenant) shall instead be paid over
to Landlord up to the amount of the shortfall.
11.06 Temporary Taking. The taking of any Leased Property, or any
part thereof, by military or other public authority shall constitute a taking
by Condemnation only when the use and occupancy by the taking authority has
continued for longer than six (6) months. During any such six (6) month
period, which shall be a temporary taking, all the provisions of the subject
Lease shall remain in full force and effect with no abatement of rent payable
by Tenant hereunder. In the event of any such temporary taking, the entire
amount of any such Award made for such temporary taking allocable to the Term
of such Lease, whether paid by way of damages, rent or otherwise, shall be paid
to Tenant.
ARTICLE XII
TENANT'S RIGHT OF FIRST REFUSAL
12.01 Rights of First Refusal. Subject to the terms and conditions
set forth in this Section 12.01 and provided that no Event of Default with
respect to the subject Leased Property has occurred and is continuing at such
time or at the expiration of this Agreement or the individual Lease, Tenant
shall have a right of first refusal (the "Purchase Refusal Right") to purchase
any Leased Property (including any Leased Property owned by an Affiliate [as
defined in Section 13.01 hereof] of Landlord). If during the Term or for a
period of ninety (90) days following termination of any Lease, Landlord or any
Affiliate of Landlord receives a bona fide third party offer to Transfer any
Leased Property, then, prior to accepting such third party offer, Landlord
shall send written notice and a copy thereof to Tenant ("Landlord's Notice").
Tenant shall have ninety (90) days after receipt of Landlord's Notice to
exercise Tenant's Purchase Refusal Right, by giving Landlord written notice
thereof. Failure of Tenant to exercise the Purchase Refusal Right within such
time period set forth above shall be deemed to extinguish the Purchase Refusal
Right for a period of one hundred eighty (180) days. Thereafter, prior to the
expiration of such one hundred eighty (180) days, Landlord or its Affiliates
may Transfer such Leased Property provided however, that the Transfer of the
Leased Property is at a price equal to or greater than the price contained in
the Landlord's Notice, and otherwise consistent in all material respects with
the terms and conditions set forth in Landlord's Notice. Tenant's Purchase
Refusal Right shall revive in the event that Landlord fails to Transfer the
Leased Property within said one hundred eighty (180) days. In the event that
Tenant elects to
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exercise the Purchase Refusal Right and to acquire the Leased Property
thereby, (a) Tenant shall acquire such Leased Property on the same terms and
conditions and subject to all time periods and other limitations as provided in
Landlord's Notice (provided, however, Tenant shall in all events have not less
than ninety (90) days to close its acquisition of the Leased Property following
its written notice exercising its Purchase Refusal Right), and (b) concurrently
with such acquisition, the Lease of such Leased Property shall terminate (but
Tenant shall remain liable to pay any unpaid Rent with respect to such Leased
Property and all indemnifications and other provisions that survive the
expiration of the individual Lease or of this Agreement shall continue in
effect), and this Agreement shall be appropriately amended to reflect the
termination of such Lease.
Notwithstanding the foregoing provisions, the Purchase Refusal Right
shall not be applicable to any Transfer of a Leased Property to any Affiliate
of Landlord, so long as such Affiliate acquires such Leased Property subject to
the Purchase Refusal Right.
A "Transfer" is any direct or indirect sale, conveyance or other
disposition, including any transfer of a controlling ownership interest in any
owning partnership, limited liability company or corporation, and including any
lease with a term in excess of five (5) years.
12.02 Restriction on Exercise of Purchase Refusal Right.
Notwithstanding any other provision of this Article XII, Landlord shall not be
required to Transfer any Leased Property, or any portion thereof, which is a
real estate asset as defined in Section 856(c) (6) (B), or functionally
equivalent successor provision, of the Code, to Tenant if Landlord's counsel
advises Landlord that such Transfer may not be a sale of property described in
Section 857(b) (6) (C), or functionally equivalent successor provision of the
Code. If Landlord determines not to Transfer such property pursuant to the
above sentence, Tenant's right, if any, to acquire any or all of such property
shall continue and be exercisable, upon and subject to all applicable terms and
conditions set forth in this Lease, at such time as the transaction, upon the
advise of Landlord's tax counsel, would be a sale of property described in
Section 857(b) (6) (C) of the Code, or functionally equivalent successor
provision, and until such time Tenant shall lease the Leased Property for the
lesser of the rent otherwise called for in the Lease or fair market rental. If
the Transfer of the Leased Property is delayed pursuant to this section,
Landlord will use its reasonable best efforts to Transfer such Leased Property
to Tenant as soon as practicable in the next calendar year.
ARTICLE XIII
ASSIGNMENT AND SUBLETTING; ATTORNMENT
13.01 Prohibition Against Subletting and Assignment. Subject to
Section 13.03, Tenant shall not, without the prior written consent of Landlord
(which consent Landlord may grant or withhold in its sole and absolute
discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer (except to an Affiliate of Tenant) (as defined) this Agreement or any
Lease or any interest herein or therein, or all or any part of the Leased
Property, or suffer or permit any Lease or the leasehold estate created thereby
or any other rights arising under any Lease to be assigned,
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transferred, mortgaged, pledged, hypothecated or encumbered, in whole or
in part, whether voluntarily, involuntarily or by operation of law (except to
an Affiliate of Tenant). For purposes of this Section 13.01, an assignment of
any Lease shall be deemed to include any Change of Control of Tenant, as if
such Change of Control were an assignment of the Lease. No assignment shall in
any way impair the continuing primary liability of Tenant hereunder.
An "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under common control with that Person.
A "Person" shall mean and include natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts, Indian tribes or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
13.02 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.
13.03 Operating/Service Agreements.
13.03.01 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.
13.03.02 Terms of Agreements. Each operating/service agreement
concerning any of the Leased Property shall be subject and subordinate to the
provisions of the applicable Lease. No agreement made as permitted by Section
13.03.01 shall affect or reduce any of the obligations of
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Tenant hereunder, and all such obligations shall continue in full force and
effect as if no agreement had been made. No agreement shall impose any
additional obligations on Landlord under the applicable Lease.
13.03.03 Copies. Tenant shall, within ten (10) days after the
execution and delivery of any operating/service agreement permitted by Section
13.03.01, deliver a duplicate original thereof to Landlord.
13.03.04 Assignment of Rights in Agreements. As security for
performance of its obligations under each Lease, Tenant hereby grants, conveys
and assigns to Landlord all right, title and interest of Tenant in and to all
operating/service agreements now in existence or hereinafter entered into for
any or all of the 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.
13.03.05 Licenses, Etc. For purposes of Section 13.03, the
operating/service agreements shall mean any licenses, concession arrangements,
or other arrangements relating to the possession or use of all or any part of
any Leased Property but specifically excluding any management agreement,
facility operating agreement or other agreement for the housing or detention of
inmates.
13.04 Assignment. No assignment shall in any way impair the
continuing primary liability of Tenant hereunder, and no consent to any
assignment in a particular instance shall be deemed to be a waiver of the
prohibition set forth in Article XIII. Any assignment shall be solely of
Tenant's entire interest in the subject Lease. Any assignment or other
transfer of all or any portion of Tenant's interest in any Lease in
contravention of Article XIII shall be voidable at Landlord's option.
13.05 REIT Limitations. Anything contained in this Agreement to the
contrary notwithstanding, Tenant shall not (i) sublet or assign any Leased
Property or any Lease on any basis such that the rental or other amounts to be
paid by the sublessee or assignee thereunder would be based, in whole or in
part, on the income or profits derived by the business activities of the
sublessee or assignee; (ii) sublet or assign any Leased Property or any Lease
to any person that Landlord owns, directly or indirectly (by applying
constructive ownership rules set forth in Section 856(d) (5) of the Code), a
ten percent (10%) or greater interest; or (iii) sublet or assign any Leased
Property or any
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Lease in any other manner or otherwise derive any income which could cause any
portion of the amounts received by Landlord pursuant to any Lease or any
sublease to fail to qualify as "rents from real property" within the meaning
of Section 856(d) of the Code, or which could cause any other income received
by Landlord to fail to qualify as income described in Section 856(c) (2) of
the Code. The requirements of this Section 13.05 shall likewise apply to any
further subleasing by any subtenant.
13.06 Attornment. Tenant shall insert in each sublease permitted
under Section 13.03.01 provisions to the effect that (a) such sublease is
subject and subordinate to all of the terms and provisions of the applicable
Lease (including this Agreement) and to the rights of Landlord hereunder, (b)
in the event such Lease shall terminate before the expiration of such sublease,
the sublessee thereunder will, at Landlords' option, attorn to Landlord and
waive any right the sublessee may have to terminate the sublease or to
surrender possession thereunder, as a result of the termination of such Lease,
and (c) in the event the sublessee receives a written notice from Landlord or
Landlord's assignees, if any, stating that Tenant is in default under such
Lease, the sublessee shall thereafter be obligated to pay all rentals accruing
under said sublease directly to the party giving such notice, or as such party
may direct. All rentals received from the sublessee by Landlord or Landlord's
assignees, if any, as the case may be, shall be credit against the amounts
owing by Tenant under such Lease.
ARTICLE XIV
ARBITRATION
14.01 Controversies. Except with respect to the payment of Rent
hereunder, which shall be subject to the provisions of Section 9.02, in the
case a controversy arises between the parties as to any of the requirements of
this Agreement or of any individual Lease or the performance thereunder which
the parties are unable to resolve, the parties agree to waive the remedy of
litigation (except for extraordinary relief in an emergency situation) and
agree that such controversy or controversies shall be determined by arbitration
as hereafter provided in this Article.
14.02 Appointment of Arbitrators. The party or parties requesting
arbitration shall serve upon the other a demand therefor, in writing,
specifying in detail the controversy and matter(s) to be submitted to
arbitration. The selection of arbitrators shall be conducted pursuant to the
rules for resolution of commercial disputes promulgated by the American
Arbitration Association. The party or parties giving notice shall request a
listing of available arbitrators from the American Arbitration Association, and
each party shall respond in the selection process within fifteen (15) days
after each receipt of such listings until a panel of three (3) arbitrators has
been designated. If either party fails to respond within fifteen (15) days, it
is agreed that the American Arbitration Association may make such selections as
are necessary to complete the panel of three (3) arbitrators.
14.03 Arbitration Procedure. Within fifteen (15) days after the
selection of the arbitration panel, the arbitrators shall give written notice
to each party as to the time and the place of each
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meeting, which shall be held in Nashville, Tennessee, at which the parties
may appear and be heard, which shall be no later than sixty (60) days
after certification of the arbitration panel. The parties specifically waive
discovery, and further waive the applicability of rules of evidence or rules of
procedure in the proceedings. The applicable rules shall be those in effect at
the time for the resolution of commercial disputes promulgated by the American
Arbitration Association. Notwithstanding the foregoing, the substantive law
governing the arbitration shall be the laws of the State of Tennessee. The
arbitrators shall take such testimony and make such examination and
investigations as the arbitrators reasonably deem necessary. The decision of
the arbitrators shall be in writing signed by a majority of the panel which
decision shall be final and binding upon the parties to the controversy.
Provided, however, in rendering their decisions and making awards, the
arbitrators shall not add to, subtract from or otherwise modify the provisions
of this Agreement.
14.04 Expenses. The expenses of the arbitration shall be assessed
by the arbitrators and specified in the written decision. In the absence of a
determination or assessment of expenses of the arbitration procedure in the
award, all of the expenses of such arbitration shall be divided equally between
Landlord and Tenant. Each party in interest shall be responsible for and pay
the fees, costs and expenses of its own counsel, unless the arbitration award
provides for an assessment of reasonable attorneys' fees and costs.
14.05 Enforcement of the Arbitration Award. There shall be no
appeal from the decision of the arbitrators, and upon the rendering of an
award, any party thereto may file the arbitrators' decision in the United
States District Court for the Middle District of Tennessee for enforcement as
provided by applicable law.
ARTICLE XV
QUIET ENJOYMENT, SUBORDINATION,
ATTORNMENT, ESTOPPEL CERTIFICATES
15.01 Quiet Enjoyment. So long as Tenant performs all of its
obligations under this Agreement and each Lease, Tenant's possession of the
Leased Property will not be disturbed by or through Landlord.
15.02 Landlord Mortgages; Subordination. Subject to Section 15.03,
without the consent of Tenant, Landlord may, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrances or title
retention agreement on the Leased Properties, or any portion thereof or any
interest therein, whether to secure any borrowing or other means of financing
or refinancing. This Agreement and each Lease and Tenant's rights under this
Agreement and each Lease are subordinate to any ground lease or underlying
lease, first mortgage, first deed of trust, or other first lien against any
Leased Property, together with any renewal, consolidation, extension,
modification or replacement thereof, which now or at any subsequent time
affects any Leased Property or any interest of Landlord in any Leased Property,
except to the extent that any such instrument expressly provides that this
Agreement and each Lease is superior. This provision will be self-operative,
and
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no further instrument or subordination will be required in order to effect
it. However, Tenant shall execute, acknowledge and deliver to Landlord, at any
time and from time to time upon demand by Landlord, such documents as may be
requested by Landlord or any mortgagee or any holder of any mortgage or other
instrument described in this Section, to confirm or effect any such
subordination. If Tenant fails or refuses to execute, acknowledge, and deliver
any such document within twenty (20) days after written demand, Landlord may
execute, acknowledge and deliver any such document on behalf of Tenant as
Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints
Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any documents described in this
Section. This power of attorney is coupled with an interest and is irrevocable.
15.03 Attornment; Non-Disturbance. If any holder of any mortgage,
indenture, deed of trust, or other similar instrument described in Section
15.02 succeeds to Landlord's interest in any Leased Property, Tenant will pay
to such holder all Rent subsequently payable under the subject Lease. Tenant
shall, upon request of anyone succeeding to the interest of Landlord,
automatically become the tenant of, and attorn to, such successor in interest
without changing such Lease. The successor in interest will not be bound by
(i) any payment of Rent for more than one (1) month in advance; (ii) any
amendment or modification of such Lease made without its written consent; (iii)
any claim against Landlord arising prior to the date on which the successor
succeeded to Landlord's interest; or (iv) any claim or offset of Rent against
the Landlord. Upon request by Landlord or such successor in interest and
without cost to Landlord or such successor in interest, Tenant will execute,
acknowledge and deliver an instrument or instruments confirming the attornment.
If Tenant fails or refuses to execute, acknowledge and deliver any such
instrument within twenty (20) days after written demand, then Landlord or such
successor in interest will be entitled to execute, acknowledge, and deliver any
document on behalf of Tenant as Tenant's attorney-in-fact. Tenant hereby
constitutes and irrevocably appoints Landlord, its successors and assigns, as
Tenant's attorney-in-fact to execute, acknowledge, and deliver on behalf of
Tenant any such document. This power of attorney is coupled with an interest
and is irrevocable.
Landlord shall use reasonable efforts to obtain a non-disturbance
agreement from any such party referred to above which provides that in the
event such party succeeds to Landlord's interest under the Lease and provided
that no Event of Default by Tenant exists, such party will not disturb Tenant's
possession, use or occupancy of the Leased Property.
15.04 Estoppel Certificates. At the request of Landlord or any
mortgagee or purchaser of any Leased Property, Tenant shall execute,
acknowledge, and deliver an estoppel certificate, in recordable form, in favor
of Landlord or any mortgagee or purchaser of such Leased Property certifying
the following: (i) that the subject Lease is unmodified and in full force and
effect, or if there have been modifications that the same is in full force and
effect as modified and stating the modifications; (ii) the date to which Rent
and other charges have been paid; (iii) that neither Tenant nor Landlord is in
default nor is there any fact or condition which, with notice or lapse of time,
or both, would constitute a default, if that be the case, or specifying any
existing default; (iv) that Tenant has accepted and occupies such Leased
Property; (v) that Tenant has no defenses, set-offs,
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deductions, credits, or counterclaims against Landlord, if that be the case,
or specifying such that exist; (vi) that the Landlord has no outstanding
construction or repair obligations; and (vii) such other information as may
reasonably be requested by Landlord or any mortgagee or purchaser. Any
purchaser or mortgagee may rely on this estoppel certificate. If Tenant fails
to deliver the estoppel certificates to Landlord within ten (10) days after the
request of the Landlord, then Tenant shall be deemed to have certified that (a)
such Lease is in full force and effect and has not been modified, or that such
Lease has been modified as set forth in the certificate delivered to Tenant;
(b) Tenant has not prepaid any Rent or other charges except for the current
month; (c) Tenant has accepted and occupies such Leased Property; (d) neither
Tenant nor Landlord is in default nor is there any fact or condition which,
with notice or lapse of time, or both, would constitute a default; (e) Landlord
has no outstanding construction or repair obligation; and (f) Tenant has no
defenses, set-offs, deductions, credits, or counterclaims against Landlord.
Tenant hereby irrevocably appoints Landlord as Tenant's attorney-in-fact to
execute, acknowledge and deliver on Tenant's behalf any estoppel certificate
which Tenant does not object to within twenty (20) days after Landlord sends
the certificate to Tenant. This power of attorney is coupled with an interest
and is irrevocable.
ARTICLE XVI
MISCELLANEOUS
16.01 Notices. Landlord and Tenant hereby agree that all notices,
demands, requests, and consents (hereinafter "Notices") required to be given
pursuant to the terms of this Lease shall be in writing and shall be addressed
as follows:
If to Tenant: Corrections Corporation of America
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
With a copy to: Xxxxxx & Xxxxxxxxxxx, P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
If to Landlord: CCA Prison Realty Trust
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
With a copy to: Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxx
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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.
16.02 Advertisement of Leased Property. In the event the parties
hereto have not executed a renewal lease of any Leased Property within one (1)
year prior to the expiration of the Term, then Landlord or its agent shall have
the right to enter such Leased Property at all reasonable times for the purpose
of exhibiting such Leased Property to others and to place upon such Leased
Property for and during the period commencing two hundred ten (210) days prior
to the expiration of the Term "for sale" or "for rent" notices or signs.
16.03 Landlord's Access. Landlord shall have the right to enter
upon the Leased Property, upon reasonable prior notice to Tenant, for purposes
of inspecting the same and assuring Tenant's compliance with this Agreement
provided, any such entry by Landlord shall be subject to all rules, guidelines
and procedures prescribed by Tenant in connection therewith. Landlord shall
not be allowed entry to the Leased Premises unless accompanied by such of
Tenant's personnel as Tenant shall require.
16.04 Entire Agreement. This Agreement and the individual Leases
contain the entire agreement between Landlord and Tenant with respect to the
subject matter hereof and thereof. No representations, warranties, and
agreements have been made by Landlord except as set forth in this Agreement and
the Leases.
16.05 Severability. If any term or provision of this Agreement or
any Lease is held or deemed by Landlord to be invalid or unenforceable, such
holding shall not affect the remainder of this Agreement or any Lease and the
same shall remain in full force and effect, unless such holding substantially
deprives Tenant of the use of the Leased Property or Landlord of the Rents
therefor, in which event the Lease for such Leased Property shall forthwith
terminate as if by expiration of the Term.
16.06 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.
16.07 Governing Law. This Agreement and each of the Leases shall be
construed under the laws of the State of Tennessee.
16.08 Memorandum of Lease. Landlord and Tenant agree that a record
of this Agreement or any Lease may be recorded by either party in a memorandum
of lease approved by Landlord and Tenant with respect to each Leased Property.
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16.09 Waiver. No waiver by Landlord of any condition or covenant
herein contained, or of any breach of any such condition or covenant, shall be
held or take to be a waiver of any subsequent breach of such covenant or
condition, or to permit or excuse its continuance or any future breach thereof
or of any condition or covenant, nor shall the acceptance of Rent by Landlord
at any time when Tenant is in default in the performance or observance of any
condition or covenant herein be construed as a waiver of such default, or of
Landlord's right to terminate this Agreement or any Lease or exercise any other
remedy granted herein on account of such existing default.
16.10 Binding Effect. This Agreement and each Lease will be binding
upon and inure to the benefit of the heirs, successors, personal
representatives, and permitted assigns of Landlord and Tenant.
16.11 Authority. The persons executing this Agreement or any Lease
on behalf of Tenant warrant that (i) Tenant has the power and authority to
enter into this Agreement or such Lease; (ii) Tenant is qualified to do
business in the state in which the Leased Property is located; and (iii) they
are authorized to execute this Agreement and each Lease on behalf of Tenant.
Tenant shall, at the request of Landlord, provide evidence satisfactory to
Landlord confirming these representation.
16.12 Transfer of Permits, Etc. Upon the expiration or earlier
termination of the Term of any Lease (whether pursuant to the provisions of
this Agreement or of such Lease), Tenant shall, at the option of Landlord,
transfer to and relinquish to Landlord or Landlord's nominee and to cooperate
with Landlord or Landlords' nominee in connection with the processing by
Landlord or such nominee of all licenses, operating permits, and other
governmental authorization and all contracts, including without limitation, the
correctional or detention facility license, and any other contracts with
governmental or quasi-governmental entities which may be necessary or
appropriate for the operation by Landlord or such nominee of the subject Leased
Property for the purposes of operating a correctional or detention facility;
provided that the costs and expenses of any such transfer or the processing of
any such application shall be paid by Landlord or Landlord's nominee; and
provided further that any management agreement, facility operating agreement or
other agreement for the housing or detention of inmates shall be expressly
excluded. Any such permits, licenses, certificates and contracts which are
held in Landlord's name now or at the termination of such Lease shall remain
the property of Landlord. To the extent permitted by law, Tenant hereby
irrevocably appoints Landlord, its successors and assigns and any nominee or
nominees specifically designated by Landlord or any successor or assign as
Tenant's attorney-in-fact to execute, acknowledge, deliver and file all
documents appropriate to such transfer or processing of any such application on
behalf of Tenant; this power of attorney is coupled with an interest and is
irrevocable.
16.13 Modification. This Agreement and any Lease may only be
modified by a writing signed by both Landlord and Tenant.
16.14 Incorporation by Reference. All schedules and exhibits
referred to in this Agreement are incorporated into this Agreement, and all
schedules and exhibits referred to in any Lease (as well as the provisions of
this Agreement, except to the extent specifically excluded from or inconsistent
with the terms of such Lease) are incorporated into such Lease.
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16.15 No Merger. The surrender of this Agreement or of any Lease by
Tenant or the cancellation of this Agreement or of any Lease by agreement of
Tenant and Landlord or the termination of this Agreement or of any Lease on
account of Tenant's default will not work a merger, and will, at Landlord's
option, terminate any subleases or operate as an assignment to Landlord of any
subleases. Landlord's option under this paragraph will be exercised by notice
to Tenant and all known subtenants of any applicable Leased Property.
16.16 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.
16.17 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 XIV 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.
16.18 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 reasonable security as may
be demanded by Landlord to insure ultimate payment of the same and to prevent
any sale or forfeiture of the affected Leased Property or the Rent by reason of
such nonpayment or noncompliance; provided, however, the provisions of this
Section shall not be construed to permit Tenant to contest the payment of Rent
(except as to contests concerning the method of computation or the basis of
levy of any Imposition or the basis for the assertion of any other claim) or
any other sums payable by Tenant to Landlord hereunder; (vi) in the case of an
insurance requirement, the coverage required by Article IV shall be maintained;
and (vii) if such contest be finally resolved against Landlord or Tenant,
Tenant shall, as Other Additional Rent due hereunder, promptly pay the amount
required to be paid, together with all interest and penalties accrued thereon,
or comply with the applicable legal requirement
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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.
16.19 Construction of Lease. This Agreement and each of the Leases
for Leased Properties have been reviewed by Landlord and Tenant and their
respective professional advisors. Landlord, Tenant, and their advisors believe
that this Agreement and such Leases are the product of all their efforts, that
they express their agreement, and agree that they shall not be interpreted in
favor of either Landlord or Tenant or against either Landlord or Tenant merely
because of any party's efforts in preparing such documents.
16.20 Counterparts. This Agreement and each Lease may be executed in
duplicate counterparts, each of which shall be deemed an original hereof or
thereof.
16.21 Relationship of Landlord and Tenant. The relationship of
Landlord and Tenant is the relationship of lessor and lessee. Landlord and
Tenant are not partners, joint venturers, or associates.
16.22 Landlord's Status as a REIT. Tenant acknowledges that
Landlord intends to elect to be taxed as a real estate investment trust
("REIT") under the Code. Tenant shall not do anything which would adversely
affect Landlord's status as a REIT. Tenant hereby agrees to modifications of
this Agreement which do not materially adversely affect Tenant's rights and
liabilities if such modifications are required to retain or clarify Landlord's
status as a REIT.
16.23 Sale of Real Estate Assets. Notwithstanding any other
provision of this Agreement or of any Lease, Landlord shall not be required to
sell or transfer Leased Property, or any portion thereof, which is a real
estate asset as defined in Section 856(c)(6) of the Code, to Tenant if
Landlord's counsel advises Landlord that such sale or transfer may not be a
sale of property described in Section 857(b)(6)(C) of the Code. If Landlord
determines not to sell such property pursuant to the above sentence, Tenant's
right, if any, to purchase the Leased Property shall continue and be
exercisable at such time as the transaction, upon the advice of Landlord's
counsel, would be a sale of property described in Section 857(b)(6)(C) of the
Code.
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17.01 Covenant Not to Disclose. Landlord agrees that, by virtue
of the relationship of trust and confidence between Landlord and Tenant, it
possesses and will possess certain data and knowledge of operations of the
Landlord which are proprietary in nature and confidential. Landlord covenants
and agrees that it will not knowingly, at any time, directly or indirectly, for
whatever reason, without Tenant's prior written consent, which may be given or
withheld in Tenants's sole discretion, reveal, divulge or make known to any
person or entity, any confidential or proprietary record, data, trade secret,
pricing policy, bid amount, pricing strategy, personnel policy, method or
practice of obtaining or doing business, or any other confidential or
proprietary information whatever (the "Confidential Information"), whether or
not obtained with the knowledge and permission of the Tenant and whether or not
developed, devised or otherwise created in whole or in part by the efforts of
Landlord, nor shall Landlord use such Confidential Information for its own
account. Confidential Information shall not include any information generally
available to the public other than as a result of a disclosure of such
information by Landlord. Notwithstanding anything to the contrary provided
herein, a disclosure of Confidential Information by Landlord will not be
considered a violation of this Article XVII in the event such disclosure is
involuntarily compelled by a final, non-appealable, order from a court of
competent jurisdiction.
17.02. Non-Interference Covenant. Landlord covenants and agrees
that it will not, at any time, directly or indirectly, for whatever reason,
whether for its own account or for the account of any other person, firm,
corporation or other organization, without Tenant's prior written consent,
which may be given or withheld in Tenant's sole discretion: (i) solicit,
employ, deal with or
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otherwise interfere with any of the Tenant's contracts or relationships with
any employee, officer, director or any independent contractor, whether the
person is employed by or associated with the Tenant on the date of this
Agreement or at any time hereafter; or (ii) solicit, accept, deal with or
otherwise interfere with any of the Tenant's contracts or relationships with
any independent contractor, customer, client or supplier. Notwithstanding the
foregoing, (i) Landlord may offer employment to the current employees of the
Tenant who are terminated by the Tenant subsequent to the date hereof, (ii)
Landlord shall in no way be liable for any actions by any entity leasing or
managing any facility owned by Landlord, and (iii) nothing provided herein
shall prevent Landlord from soliciting relationships with an entity or entities
to lease, license, manage or otherwise use any facility leased to the Tenant
subsequent to the termination of such lease with the Tenant.
17.03 Business Materials and Property Disclosure. All written
materials, records and documents made by Landlord or coming into its possession
concerning the business or affairs of the Tenant shall be the sole property of
the Tenant and, upon request by the Tenant, Landlord shall deliver the same to
the Tenant and shall retain no copies. The foregoing restrictions shall not be
applicable to any written materials, records and documents generally available
to the public other than as a result of a disclosure of such written materials,
records and documents by Landlord.
17.04 Breach by Landlord. It is expressly understood,
acknowledged and agreed by Landlord that: (i) the restrictions contained in
this Article XVII represent a reasonable and necessary protection of the
legitimate interests of the Tenant and that its failure to observe and comply
with its covenants and agreements in this Article XVII will cause irreparable
harm to the Tenant; (ii) it is and will continue to be difficult to ascertain
the nature, scope and extent of the harm; and (iii) a remedy at law for such
failure by Landlord will be inadequate. Accordingly, it is the intention of the
parties that, in addition to any other rights and remedies which the Tenant may
have in the event of any breach by Landlord of this Article XVII, the Tenant
shall be entitled, and is expressly and irrevocably authorized by Landlord, to
demand and obtain specific performance, including, without limitation,
temporary and permanent injunctive relief, and all other appropriate equitable
relief against Landlord in order to enforce against Landlord any of the
covenants and agreements contained in this Article XVII, and/or to prevent any
breach or any threatened breach by Landlord of the covenants and agreements of
Landlord contained in this Article XVII.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.
CCA PRISON REALTY TRUST
By:
------------------------------
Title:
---------------------------
CORRECTIONS CORPORATION OF AMERICA
By:
------------------------------
Title:
---------------------------
44
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SCHEDULE A
The Facilities
Location
Facility Name (City, State)
------------- -------------
Bridgeport Pre-Parole Transfer Facility Bridgeport, Texas
Central Arizona Detention Center Florence, Arizona
Houston Processing Center Houston, Texas
Laredo Processing Center Laredo, Texas
Leavenworth Detention Center Leavenworth, Texas
Mineral Xxxxx Pre-Parole Transfer Facility Mineral Wells, Texas
West Tennessee Detention Facility Mason, Tennessee
Xxxx Detention Facility Eloy, Arizona
T. Xxx Xxxxx Correctional Facility Taylor, Texas
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SCHEDULE B
Personal Property
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SCHEDULE C
[Tenant's Proprietary Property]
