ASSET PURCHASE AGREEMENT
*****
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION,
NOT INDIVIDUALLY BUT SOLELY AS OWNER TRUSTEE UNDER
THE CSC TRUST 1997-1
a trust existing under the laws of the State of Utah
as Buyer
AND
THE COUNTY OF XXXXXXX
a Political Subdivision of the State of Texas
as Seller
Dated: July 14, 1998
TABLE OF CONTENTS
1. Transfer of Assets 1
1.1 Transferred Assets 1
1.2 Retained Assets 3
2. Purchase Price, Inmate Fee, County Beds and Closing 3
2.1 Purchase Price 3
2.2 Inmate Fee and County Beds 3
2.3 Closing 4
3. Assumption of Obligations of Seller 4
4. Representations and Warranties of Seller 4
4.1 Organization of Seller 4
4.2 Authority 5
4.3 Title to Transferred Assets 5
4.4 Third Party Consents 5
4.5 Hazardous Materials 5
4.6 Litigation 6
4.7 Licenses and Permits 6
4.8 Compliance with Laws 7
4.9 Employee Relations 7
4.10 Brokerage and Finder's Fees 8
4.11 U.S. Persons 8
4.12 Real Property 8
4.13 Physical Condition of Transferred Assets 9
4.14 Inventory 9
4.15 Insurance 9
4.16 Changes Since Request for Proposals 9
4.17 Indebtedness Matters 10
4.18 Taxes 10
4.19 Adverse Action 11
4.20 Absence of Undisclosed Liabilities 11
4.21 Accuracy of Documents; Delivery and Inspection 11
4.22 Statements Not Misleading 11
4.23 Powers of Attorney 12
5. Representations and Warranties of Buyer 12
5.1 Organization and Good Standing 12
5.2 Authority 12
5.3 Third Party Consents 12
5.4 Brokerage and Finder's Fees 13
5.5 Discoveries Since Management Date 13
6. Conditions Precedent to Obligations of Buyer 13
6.1 Termination of Agreements 13
6.2 Title Insurance 13
6.3 Instruments of Transfer 13
6.4 Certified Resolutions 14
6.5 Opinion of Seller's Counsel 14
6.6 Tax Matters 14
6.7 Payment of Certain Obligations 14
6.8 Intentionally omitted 14
6.9 Performance of Obligations 14
6.10 Officer's Certificate 14
6.11 Liens Released 14
6.12 Other Documents 15
6.13 Payment of Taxes 15
6.14 Compliance With Governmental Requirements 15
7. Conditions Precedent to Obligations of Seller 15
7.1 Payment of Purchase Price 15
7.2 Trustee's Affidavit 15
7.3 Officer's Certificate 15
7.4 Other Documents 15
7.5 Compliance With Governmental Requirements 16
7.6 Insurance Coverage 16
8. Additional Covenants 16
8.1 Further Assurances 16
8.2 Expansion of Facility 17
8.3 Execution of Inmate Contracts 17
8.4 Cooperation of Seller and Sheriff 18
8.5 Approvals and Permits 18
8.6 No Special Fees or Taxes 18
8.7 Litigation Cooperation 18
8.8 Allocation of Purchase Price 19
8.9 Confidentiality 19
8.10 Excluded Assets 19
8.11 Employee Matters 19
8.12 Right of First Refusal 20
8.13 Post-Closing Taxes 22
8.14 Post-Closing Conduct of Seller 22
9. Trigger Event 22
10. Survival of Representations 22
11. Indemnification 23
11.1 Indemnification of Seller by Buyer 23
11.2 Indemnification of Buyer by Seller 24
12. General Provisions 26
12.1 Dispute Resolution 26
12.2 Notices 26
12.3 Form of Instruments 27
12.4 Attorneys' Fees 27
12.5 Remedies Not Exclusive 28
12.6 Successors and Assigns; Third Party Rights 28
12.7 Counterparts 28
12.8 Article and Section Headings 28
12.9 Entirety of Agreement, Amendments 28
12.10 Expenses and Prorations 29
12.11 Construction 29
12.12 Waiver 29
12.13 Severability 29
12.14 Certain Definitions 30
12.15 Consents Not Unreasonably Withheld 32
12.16 Time Is of the Essence 32
12.17 Governing Law 32
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (as it may be amended, restated and modified,
the "Agreement") is made and entered into as of July 14, 1998, by and between
THE COUNTY OF XXXXXXX, a political subdivision of the State of Texas ("Seller"),
and FIRST SECURITY BANK, NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION,
NOT INDIVIDUALLY BUT SOLELY AS OWNER TRUSTEE UNDER THE CSC TRUST 1997-1, a trust
existing under the laws of the State of Utah ("Buyer"), with reference to the
following facts:
A. Seller owns that certain fully licensed and operational correctional
facility consisting of 479 licensed beds currently known as the Xxxxxxx County
Correctional Facility in Xxxxxxx County, Texas (the "Facility") and the other
activities and businesses related thereto (collectively, together with the
Facility, but excluding the Retained Assets referred to in Sections 1.2(a)
through (c), the "Facility Business").
B. CSC is currently the operator of the Facility and the Facility
Business under that certain Agreement (the "Management Agreement") dated June
17, 1998 (the "Management Date"), by and between Seller, CSC and Manager.
C. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, the Facility Business, and all of the equipment, fixtures and other real
and personal property owned by Seller which are directly or indirectly related
to, used in, necessary for or contribute to the operation of the Facility
Business (other than the Retained Assets), on the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and the
representations, warranties and covenants herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
1. Transfer of Assets
1.1 Transferred Assets
For the consideration hereinafter provided and in reliance
upon the representations and warranties of the parties set forth herein, Seller
hereby sells, transfers, conveys and assigns to Buyer, and Buyer hereby
purchases from Seller, all of Seller's assets and businesses which are related
to, used in, necessary for or contribute to the operation of the Facility
Business (whether within, adjacent to or completely outside and removed from the
Facility) (collectively, the "Transferred Assets"), including, without limiting
the generality of the foregoing, the following assets (but excluding all
Retained Assets):
(a) The surface estate of the real property owned by Seller
upon which the Facility is situated (including the real property on which the
correctional facility known as "Xxxxxxx County Correctional Facility" is
located), together with all structures, construction work-in-progress, buildings
and other improvements thereon, and any and all of Seller's rights, privileges
and easements appurtenant thereto (collectively, the "Real Property"), all of
which Real Property is identified on Schedule 1.1(a).
(b) All equipment and other tangible personal property
related to the Facility Business owned by Seller.
(c) All inventories of supplies, food, janitorial, medical
supplies and office supplies, maintenance and shop supplies and other
disposables related to the Facility Business which are existing as of the
Closing and which are not obsolete (the "Inventory").
(d) To the extent lawfully transferable, all accreditations,
registrations, licenses, permits and other governmental consents or approvals
necessary to or intended for the operation of the Facility Business as presently
conducted by Seller.
(e) All advance payments, prepayments, prepaid expenses,
deposits and the like related to the Facility Business (the "Prepaids"), the
categories and amounts as of the date hereof are set forth on Schedule 1.1(e).
(f) To the extent lawfully transferable, all of Seller's
right, title and interest in and to any and all business names, marks and logos
now or ever used by Seller in connection with the Facility Business and any and
all names and logos under which Seller (in connection with the Facility
Business) or any Facility Business has ever done business or offered programs,
together with all abbreviations and variations thereof and all applications and
registrations relating to any of the foregoing, including, without limitation,
the business names and logos set forth on Schedule 1.1(f), and all goodwill
associated therewith and with the Facility Business.
(g) All unexpired warranties and covenants that are
transferable to Buyer, which Seller has received from third parties with respect
to the Transferred Assets, including, without limitation, such warranties and
covenants as are set forth in any construction agreement, lease agreement,
equipment purchase agreement, consulting agreement, agreement for architectural
and engineering services or purchase and sale agreement.
(h) All records relating to the operation or management of
the Facility.
(i) All materials, documents, information, media, methods,
processes, inventions and technology owned by Seller related to the Facility
Business (except those that are privileged or proprietary and are not used in or
necessary for the business) and any and all rights to use the same, including,
but not limited to, all telephone numbers, intangible assets of an intellectual
property nature, all proprietary computer software, all clinical and policy and
procedure manuals and all promotional, marketing and recruiting materials, and
all applications or registrations relating to any of the foregoing.
(j) Any and all rights respecting computer and data processing
hardware that is related to the Facility Business, and any computer
and data processing hardware, whether or not located at the Facility, that is
part of a computer system used by any of the Facility Business, whether or not
the central processing unit for such system is located at the Facility.
(k) To the extent they may be legally conveyed, all of
Seller's right, title and interest in and to all Inmate Contracts relating to
the housing of inmates at the Facility.
1.2 Retained Assets
At the Closing, Seller shall retain only the following assets
(the "Retained Assets"):
(a) All written contracts, agreements, obligations and
commitments related to the Facility Business existing on the Closing Date.
(b) The accounts, notes or other amounts receivable from any
Person arising from or in connection with the operation of the Facility Business
on or prior to the Closing Date.
(c) Such other assets owned by Seller which are not related
to, used in, necessary for, or contribute to the operation of the Facility or
Facility Business.
2. Purchase Price, Inmate Fee, County Beds and Closing
2.1 Purchase Price
The purchase price (the "Purchase Price") to be paid by Buyer
to Seller for the Transferred Assets shall be $9,250,000.
2.2 Inmate Fee and County Beds
Additionally, for so long as Buyer or an Affiliate of Buyer
owns and operates the Facility, Buyer agrees (i) to pay to Seller, beginning
July 15, 1998, (a) $150,000 (the "Yearly Fee") on or before July 15 of each
year, and (b) $1.25 per day per inmate for all inmates housed for a fee
(excluding the inmates occupying the County Beds) at the Facility, as the
Facility may be expanded by Buyer, during the preceding calendar month (the
"Monthly Fee") (the Yearly Fee and the Monthly Fee, collectively the "Inmate
Fee"), which payment shall be made by Buyer within fifteen days of receipt by
Buyer of payment for such month from the provider(s) of inmates at the Facility
during such month, and (ii) to provide, at no charge to Seller, five (5) beds
(the "County Beds") as designated by Buyer at the Facility for use by Seller.
2.3 Closing
The closing (the "Closing") shall take place at Xxxxxx Title
Company, on July 15, 1998, (the "Closing Date") at Dickens, Texas, or at such
other time and place that is mutually agreeable to the parties. At Closing,
Buyer shall
(a) pay $7,133,102.28 to Seller by wire transfer of
immediately available funds; and
(b) pay $2,116,897.72 to The Bank of New York Trust Company of
Florida N.A., as successor to NCNB Texas National Bank ("Escrow Agent"), by wire
transfer of immediately available funds to be held and distributed pursuant to
an Escrow/Paying Agent Agreement Relating to a County Jail and Detention
Facility Project dated April 1, 1990, between the County, the Escrow Agent and
Consolidated Financial Resources, Inc.; and
Seller shall
(a) execute and deliver the Special Warranty Deed (the
"Special Warranty Deed") substantially in the form attached hereto as Exhibit A;
and
(b) execute and deliver the Xxxx of Sale (the "Xxxx of Sale")
substantially in the form attached hereto as Exhibit B.
3. Assumption of Obligations of Seller
Buyer shall not assume or become obligated with respect to any
obligation or liability of Seller of any nature whatsoever (whether express or
implied, fixed or contingent, liquidated or unliquidated, known or unknown, due
or to become due) (the "Seller's Liabilities"). Seller's Liabilities shall
remain the sole responsibility of Seller. Without limiting the generality of
the foregoing, Seller is retaining all rights and obligations related to, and
Buyer assumes no liability for and acquires no rights to, (a) obligations and
liabilities arising under or relating to any Retained Assets; (b) the rights,
obligations and liabilities of Seller under any pending litigation or asserted
or unasserted claims (to the extent arising from acts or omissions of Seller
before the Closing Date) against any Person.
4. Representations and Warranties of Seller
Seller represents and warrants to Buyer as of the Closing as
follows:
4.1 Organization of Seller
Seller is a political subdivision of the State of Texas, duly
and validly existing under the laws of, and is authorized to exercise its
powers, rights and privileges and is in good standing in, the State of Texas.
Seller has full legal power to carry on the Facility Business.
4.2 Authority
Seller has the full legal power and the authority to execute
and deliver this Agreement and each Related Agreement to which it is a party, to
perform the obligations and covenants set forth herein and therein and to carry
out the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements by Seller and the
consummation of the transactions contemplated hereby or thereby have been duly
authorized by all necessary legal action on the part of Seller, including
approval by the County Commissioners of Xxxxxxx County, Texas. This Agreement
and the Related Agreements are valid and binding upon and enforceable against
Seller in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar Laws now
or hereafter in effect relating to creditors' rights generally and, except for
Sections 8.2 and 8.3, the remedy of specific performance and injunctive and
other forms of equitable relief may not be available. The execution, delivery
and performance of this Agreement and all Related Agreements and the
consummation of the transactions contemplated hereby and thereby will not
violate any Law applicable to Seller.
4.3 Title to Transferred Assets
Except as set forth on Schedule 4.3, Seller has good title to
the Transferred Assets free and clear of all Liens.
4.4 Third Party Consents
Except as disclosed on Schedule 4.4, Seller may transfer and
assign to Buyer all of its right, title and interest in and to the Transferred
Assets without obtaining the consent or approval of any other Person, and no
consent, approval, authorization or order of, and no exemption by or filing
with, any court or Person is required on behalf of Seller in connection with the
execution and delivery of this Agreement or any Related Agreement, or the
consummation and fulfillment by Seller of the transactions contemplated hereby
or thereby, or the performance by Seller of its obligations hereunder or
thereunder.
4.5 Hazardous Materials
Schedule 4.5 contains a list of all surveys or reports obtained
by or otherwise in the possession of Seller or, to Seller's knowledge, any other
Person, which relate to the environmental condition of the Facility Business
(including the Facility and the Real Property), and Seller has provided or will
provide to Buyer copies of all such reports and surveys. Except as disclosed on
Schedule 4.5, and except for matters that would not, individually or in the
aggregate, have a material adverse effect on the Real Property or on the
Facility Business and matters caused by Buyer since the Management Date, to
Seller's knowledge: (a) there has been no Release, treatment or disposal by
Seller, by any agent or representative of Seller or by any other Person of any
Hazardous Materials on or from the Real Property, or any migration of Hazardous
Materials to or from the Real Property, (b) Seller's and all other Persons'
operation and use of the Real Property and the Facility Business are not now,
nor ever were, in violation of any Environmental Regulations, (c) neither Seller
nor any other Person has caused any condition on the Real Property (nor has
Seller or any other Person caused any condition on any real property previously
owned or leased by Seller on which the Facility Business were conducted) which
constitutes or causes a health, safety, or environmental hazard on, under, or
about the Real Property (or real property previously owned or leased by Seller
on which the Facility Business were conducted) or requires remediation under any
Environmental Regulations, (d) there are no violations or alleged violations of
any Laws or Environmental Regulations relating to Hazardous Materials,
including, without limitation, those Laws or Environmental Regulations
establishing or regulating, or both, the levels of permissible human exposure to
asbestos and airborne asbestos fibers, (e) there is no Environmental Claim or
other proceeding or action pending or threatened by any Person or governmental
agency regarding the environmental condition of any of the Facility Business or
the Real Property, (f) no Hazardous Materials have been transported from the
Real Property to an off-site location which is or ever was subject to an
administrative order or other Environmental Claim or which has been, or is
proposed to be, placed on any federal or state cleanup list, (g) no portion of
the Real Property contains or has ever contained any underground storage tank,
surface impoundment, hazardous waste storage, treatment or disposal facility or
similar structure or device, (h) Seller has not received and to Seller's
knowledge no other Person has received any written notice that any of the Real
Property is the subject of a deed restriction, title-transfer restriction, other
material land-use restriction, or lien arising in each case under any
Environmental Regulation, and (i) Seller has not improperly disturbed or
encroached upon any flood plain areas, waters or wetlands associated with any of
the Real Property in violation of any Environmental Regulations.
4.6 Litigation
Except as set forth on Schedule 4.6, and except for allegations
made by inmates of the Facility, there are no actions, suits, claims or
proceedings pending or, to the knowledge of Seller, threatened against or
affecting the Transferred Assets or relating to the operations of the Facility
Business, at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, agency or instrumentality. Seller is
not, and to Seller's knowledge no other Person is, subject to any continuing
judgment, decree, injunction, rule or order of any court, arbitrator or
administrative or governmental body with respect to the operation of the
Facility Business or the Transferred Assets. Seller has made available to Buyer
for inspection, review and analysis a list of the incident reports and other
similar reports with respect to incidents related to the Facility Business which
have occurred since January 1, 1996, irrespective of whether a lawsuit has been
instituted or a claim asserted.
4.7 Licenses and Permits
Except as set forth on Schedule 4.7, Seller possess all
licenses, permits and other governmental consents and approvals (the "Permits")
that are necessary to enable Seller to operate the Facility Business in all
material respects as operated on the Closing Date at the locations and in the
manner presently operated and the completion of all capital projects of Seller
in process or planned as of the Closing, except those the absence of which,
individually or in the aggregate, would not have a material adverse effect on
the operation of the Facility Business. There is no pending proceeding and
Seller has not received any notice and has no knowledge of any threatened
proceeding or any allegation by any governmental or quasi governmental entity
that could adversely affect the Facility Business or any of the Permits except
as disclosed on Schedule 4.6. Schedule 4.7 contains a list of all Permits held
or applied for by Seller which have an effect on the operation of any of the
Facility Business and indicates thereon the number and types of beds the
Facility is permitted to operate and whether any such beds are in suspense.
Except as set forth on Schedule 4.7, (a) Seller has complied and is in full
compliance in all material respects with the terms and conditions of all such
Permits, (b) all such Permits, are unconditionally in full force and effect, and
(c) there has occurred no event nor is any event, action, investigation or
proceeding pending or, to Seller's knowledge, threatened which could cause or
permit revocation or suspension of or otherwise adversely affect the maintenance
of any such Permits except as disclosed on Schedule 4.6. To Seller's knowledge,
the Facility complies with all requirements of the Texas Department of Criminal
Justice and the Texas Commission on Jail standards, and Seller shall promptly
correct any deficiencies noted by the Texas Department of Criminal Justice or
the Texas Commission on Jail Standards. Seller discloses to Buyer that the
Texas Commission on Jail Standards has indicated the electric lines in the
recreational yard of the Facility may be too low, but has not requested that any
action be taken with respect to the electric lines. Seller has previously
delivered to Buyer true and complete copies of the most recent state licensing
report and list of deficiencies, if any; the most recent fire marshal's survey
and deficiency list, if any; the most recent health department report and list
of deficiencies, if any; and the corresponding plans of correction or other
responses to all such reports and surveys. The aggregate amount of capital
expenditures required under all such reports and surveys does not exceed
$10,000. Seller has taken or is in the process of taking all reasonable steps to
correct all deficiencies noted therein, and a description of any uncorrected
deficiency is included in Schedule 4.7. There are no provisions in, or other
agreements to which Seller is a party relating to, any Permits which would
preclude or limit Buyer from operating the Transferred Assets substantially as
they are now operated and using the beds of the Facility substantially as they
are currently classified.
4.8 Compliance with Laws
Except as disclosed on Schedule 4.6 and Schedule 4.8 and except
for alleged violations of laws made by inmates of the Facility (other than
allegations relating to the structural integrity of the Facility and violations
of the Americans With Disabilities Act of 1990, 42 U.S.C. Sec. 12101, et seq.,
as amended, and similar statutes relating to public facilities), Seller is in
compliance in all material respects with all applicable Laws, including, but not
limited to, Laws relating to the incarceration of inmates.
4.9 Employee Relations
Neither Seller nor any Affiliate of Seller is a party to any
agreement with any union, trade association or other employee organization with
respect to the employees of the Facility Business. To Seller's Knowledge, no
demand has been made for recognition by a labor organization with respect to any
employees of the Facility Business; no union organizing activities by or with
respect to any employees of the Facility Business are taking, or within the past
five years have taken place; the Facility Business have not suffered any strikes
(including wildcat strikes), slowdowns, walkouts, lockouts or any other
interruptions or disruptions of operations as a result of labor disturbances
with respect to employees of the Facility Business; no union representation
question exists with respect to any employees of the Facility Business; and no
collective bargaining agreement is currently being negotiated with respect to
any employees of the Facility Business. Seller does not currently employ, and
has not employed at any time, any individual in the Facility Business.
4.10 Brokerage and Finder's Fees
Other than ABN AMRO Incorporated, neither Seller nor any of its
employees or representatives has employed or contracted for the services of any
broker, finder or investment banker with respect to the negotiations leading up
to the execution of this Agreement or any Related Agreement or the consummation
of the transactions contemplated hereby, and other than ABN AMRO Incorporated,
Seller shall be solely responsible for any fees or commissions payable to any
broker, finder or investment banker by reason of the actions (or alleged
actions) of Seller, or any of its employees or representatives.
4.11 U.S. Persons
Seller is not a "foreign person" for purposes of Section 1445
of the Internal Revenue Code of 1986, as amended (the "Code"), or any other Laws
requiring withholding of amounts paid to foreign Persons.
4.12 Real Property
Schedule 4.12 contains any qualifications or other exceptions
of Seller to all or any of the statements contained in this Section.
No real property used in or necessary for the Facility Business
is leased. Except for the Real Property, there is no real property used in or
necessary for the Facility Business.
The Real Property is properly zoned for use as a correctional
facility and no zoning changes or variances will be required by Buyer for Buyer
to operate the Facility after Closing substantially as it is currently operated
in its present location.
All improvements on any of the Real Property have been
constructed substantially in accordance with the plans and specifications
submitted to any governmental authority, and substantially in accordance with
any zoning change applications and any applications for building permits related
thereto. To Seller's knowledge, all such improvements currently satisfy all
Laws (including, but not limited to, those relating to safety, building, fire,
land use, parking or access), and the continued use, occupancy and operation of
such improvements by Buyer as currently used, occupied and operated does not
constitute a prior nonconforming use permitted under such Laws. Seller has not
received any notice and has no knowledge of any proceeding or action pending to
change the zoning of, or other land use (including parking) restrictions
affecting, the Real Property. There is no pending proceeding (including,
without limitation, any condemnation proceeding), and, to the knowledge of
Seller, there is no pending study or investigation by or before any governmental
agency or authority, administrative or otherwise, which, in any way, if
concluded, could, individually or in the aggregate, have a material adverse
effect on the Facility Business or the continued use of the Facility as a
correctional facility or the composition of its licensed beds, except as
disclosed on Schedule 4.6.
4.13 Physical Condition of Transferred Assets
Except as disclosed on Schedule 4.13 (or in Schedule 4.12 with
respect to the Real Property improvements), (a) the real property improvements
described in Section 1.1(a) are free of material structural or engineering
defects and are in all material respects in good condition and repair to operate
the Facility Business as now being operated, subject to ordinary wear and tear
and routine maintenance, and (b) the tangible personal property described in
Section 1.1(c) is in all material respects in good working order to operate the
Facility Business as now being operated, subject to ordinary wear and tear and
routine maintenance.
4.14 Inventory
All of the Inventory consists of items actually on hand of a
quality and quantity useable in the ordinary course of business of the Facility
Business as currently operated, consistent with past practices.
4.15 Insurance
Schedule 4.15 contains a list and brief description (including
retentions, policy limits and coverage) of all policies of insurance relating to
the Facility Business or the Transferred Assets held by (or programs of self-
insurance maintained by) Seller and currently in effect (the "Insurance
Policies"). The Insurance Policies are in full force and effect, and to the
best of Seller's knowledge the insurers have no right to terminate or reduce the
coverage thereunder. Seller has not received any written notice of any defaults
thereunder. Except as set forth on Schedule 4.15, there have been no
reservations of rights by any of the insurers under the Insurance Policies.
Schedule 4.15 specifies for each Insurance Policy whether it is a "claims made"
or an "occurrence basis" policy and whether, after the Closing, Seller will be
entitled to the benefits of such policies in accordance with their terms for
claims arising out of occurrences prior to the Closing.
4.16 Changes Since Request for Proposals
Since the date of the Seller's March 1998 Request For Proposals
to manage or acquire the Facility, other than as contemplated or permitted by
this Agreement, Seller has, and to Seller's knowledge the Manager has, conducted
the Facility Business and the Transferred Assets only in the ordinary and normal
course and, except as shown on Schedule 4.16, there has not been with respect to
the Facility Business or the Transferred Assets (but excluding the Retained
Assets):
(a) Any condemnation, casualty, or material physical damage,
destruction or loss respecting the Real Property, or the tangible personal
property described in Section 1.1(b).
(b) Other than in the ordinary course of business consistent
with past practice, Seller has not engaged in (i) any sale or other disposition
of
any asset having a net book value in excess of $1,000 individually (including
a series of related dispositions) or $5,000 in the aggregate, (ii) any material
mortgage, pledge or imposition of any Lien on any such asset, or (iii) any
extraordinary sale or other disposition of inventory.
(c) Any material amendment or reduction in coverage (other
than general amendments which the carrier makes for a category of policy) or
termination of any Insurance Policy or failure to renew any Insurance Policy.
(d) Any agreement by Seller or, to the knowledge of Seller by
the Manager, whether in writing or otherwise, to take any action described in
this Section 4.16.
4.17 Indebtedness Matters
(a) Neither the Facility Business nor Seller have received any
loans, grants or loan guarantees pursuant to any federal, state or local statute
or regulation or government program whatsoever, and the transactions
contemplated hereby will not result in any obligation on the part of Buyer to
repay any such loans, grants or loan guarantees.
(b) There are no outstanding letters of credit issued at the
request of the Facility Business or Seller to any suppliers or obligees of the
Facility Business or any other party.
(c) The Facility Business have not guaranteed the obligations
of any other Person, which guarantees will survive the Closing.
4.18 Taxes
All tax returns of every kind that are due to have been filed
in accordance with applicable Laws by Seller with respect to the Facility
Business or the Transferred Assets in fact have been duly filed, and all Taxes
shown to be due and payable on such returns have been paid in full and correctly
reflect the liabilities of Seller for Taxes with respect to the Facility
Business and the Transferred Assets for the period covered by each tax return.
There is no action, suit, proceeding, investigation, audit, claim, lien or
assessment pending or, to Seller's knowledge, proposed with respect to any Taxes
or tax return, and there are no waivers or extensions of any applicable statute
of limitations for the assessment or collection of Taxes with respect to any tax
return which remain in effect. All Taxes required to be withheld and paid over
by or with respect to the Facility Business and the Transferred Assets to any
relevant taxing authority in connection with payments to independent
contractors, creditors, stockholders or to third parties have been so withheld
and paid over. Seller shall pay all Taxes due by it with respect to the
transactions closed related to this Agreement.
4.19 Adverse Action
No action or proceeding is pending or threatened wherein an
unfavorable judgment, decree or order would prevent or make unlawful the
carrying out of the transactions contemplated by this Agreement, would compel
Buyer's divestiture of all or any part of the Transferred Assets or any other
assets of Buyer or its Affiliates or otherwise restrict Buyer's operation of the
Transferred Assets except as discussed in Schedule 4.6; and no governmental
agency has notified Seller that the consummation of the transactions
contemplated by this Agreement would constitute a violation of the Laws of any
jurisdiction, would compel Buyer's divestiture of all or any part of the
Transferred Assets or any other assets of Buyer or its Affiliates, would
otherwise restrict in any material respect Buyer's operation of the Transferred
Assets as they are currently operated or that it has commenced or intends to
commence proceedings to restrain the consummation of the transactions
contemplated hereunder.
4.20 Absence of Undisclosed Liabilities
With respect to the ownership of the Facility Business and the
Transferred Assets, except as set forth on Schedule 4.20 and except for alleged
violations of laws made by inmates of the Facility (other than allegations
relating to the structural integrity of the Facility and violations of the
Americans With Disabilities Act of 1990, 42 U.S.C. Sec. 12101, et seq., as
amended, and similar statutes relating to public facilities), neither Seller,
the Facility Business nor any of the Transferred Assets is subject to, any
liabilities, whether known or unknown, contingent or absolute.
4.21 Accuracy of Documents; Delivery and Inspection
Seller has furnished to Buyer true and complete copies of all
agreements, documents and other items listed in the Schedules hereto and
requested by Buyer. All documents delivered to Buyer for Buyer's review pursuant
to the terms of this Agreement and any Related Agreement are true and complete
copies of all such documents. All of the contract files, correspondence files
and other records of Seller relating to the Facility Business and the
Transferred Assets are in all material respects correct and complete.
4.22 Statements Not Misleading
No representation or warranty by Seller in this Agreement or
any Related Agreement, or in any statement, certificate or schedule furnished or
to be furnished to Buyer pursuant to this Agreement or any Related Agreement, or
in connection with the transactions contemplated hereunder or thereunder
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein and therein not
misleading. Except as disclosed in this Agreement or listed in the Schedules
hereto and except for allegations made by inmates of the Facility, to Seller's
knowledge, there have been no events, transactions or facts which could,
individually or in the aggregate, have a material adverse effect on the
Transferred Assets or the Facility Business or on the ownership, use or
operation thereof by Buyer after the Closing or which should be disclosed in
order to make any statement, representation or warranty contained herein or in
any Related Agreement or Schedule delivered pursuant hereto not misleading. This
warranty is limited to events, transactions or facts which specifically affect
the operation of the Facility Business and the Transferred Assets and does not
apply to general changes in the laws or economy of the United States or matters
affecting the jail industry in general.
4.23 Powers of Attorney
The Facility Business have not granted to any Person a power of
attorney that will survive the Closing.
5. Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as of the Closing as
follows:
5.1 Organization and Good Standing
Buyer is a trust in effect and validly existing under the laws
of the State of Utah.
5.2 Authority
Buyer has the full legal power and the authority to execute and
deliver this Agreement and each Related Agreement to which it is a party, to
perform the obligations and covenants set forth herein and therein and to carry
out the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements by Buyer and the
consummation of the transactions contemplated hereby or thereby have been duly
authorized by all necessary legal action on the part of Buyer. This Agreement
and the Related Agreements are valid and binding upon and enforceable against
Buyer in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or
hereafter in effect relating to creditors' rights generally and except that the
remedy of specific performance and injunctive and other forms of equitable
relief may not be available. The execution, delivery and performance of this
Agreement and all Related Agreements and the consummation of the transactions
contemplated hereby and thereby will not violate any Law applicable to Buyer.
5.3 Third Party Consents
Except as disclosed on Schedule 5.3, no consent, approval,
authorization or order of, and no exemption by or filing with, any court or
Person is required on behalf of Buyer in connection with the execution and
delivery of this Agreement or any Related Agreement, or the consummation and
fulfillment by Buyer of the transactions contemplated hereby or thereby, or the
performance by Buyer of its obligations hereunder or thereunder.
5.4 Brokerage and Finder's Fees
None of Buyer, its Affiliates or any of their officers,
directors or trustees has employed or contracted for the services of any broker,
finder or investment banker with respect to the negotiations leading up to the
execution of this Agreement or any Related Agreement or the consummation of the
transactions contemplated hereby, and Buyer shall be solely responsible for any
fees or commissions payable to any broker, finder or investment banker by reason
of the actions (or alleged actions) of Buyer, its Affiliates or any of their
officers, directors or trustees. Buyer shall pay $121,000 of the fees of ABN
AMRO Incorporated, Xxxxxx Xxxxxxxx Xxxxxxx XxXxxxxxx and Hand, and Xxxxxxxx
Financial Consulting LLC relating to payment of the tax exempt obligations
referenced in Section 6.7 hereof.
5.5 Discoveries Since Management Date
Except as disclosed on Schedule 5.5, since the Management Date,
Buyer has not discovered any information or engaged in any activity that would
make the representations of Seller herein untrue.
6. Conditions Precedent to Obligations of Buyer
The obligations of Buyer under this Agreement are, except as may be
waived in writing by Buyer, subject to the fulfillment by Seller of each of the
following additional conditions on or prior to the Closing:
6.1 Termination of Agreements
Except for the Management Agreement and the Inmate Contracts,
Seller shall have terminated all contracts and agreements relating to the
Facility Business to which Seller is a party. Additionally, if any such
contract or agreement imposes a Lien on any of the Transferred Assets, Seller
shall have filed or caused to be filed in the appropriate place or places, all
such documents required to fully release such Lien.
6.2 Title Insurance
At the Closing, an owner's policy of title insurance (the
"Title Policy") shall be issued to Buyer in a form acceptable to Buyer.
6.3 Instruments of Transfer
At the Closing, Seller shall execute and deliver to Buyer the
Special Warranty Deed and the Xxxx of Sale, which shall be effective to transfer
to Buyer Seller's right, title and interest in the Transferred Assets consistent
with the terms of this Agreement, free and clear of all Liens except (i)
statutory liens for property taxes and assessments not yet delinquent and (ii)
the Permitted Exceptions.
6.4 Certified Resolutions
Seller shall have delivered to Buyer: (a) the resolutions of
the Board of County Commissioners of Xxxxxxx County, Texas, authorizing the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby which shall be certified as true, correct and effective as
of the Closing Date by the Xxxxxxx County Clerk, and (b) an incumbency
certificate from Seller which shall be certified as true, correct and effective
as of the Closing Date by the Xxxxxxx County Clerk.
6.5 Opinion of Seller's Counsel
Buyer shall have received an opinion from Xxxxxxx, Xxxxx &
Xxxxxx, P.C., dated as of the Closing Date and addressed to Buyer, regarding the
matters in 4.1, 4.2 and 4.4 and whether or not Seller is required to make a
filing under the Xxxx-Xxxxx-Xxxxxx Act, subject to customary conditions and
limitations.
6.6 Tax Matters
Seller shall have delivered to Buyer a duly executed
certificate of non-foreign status in the form required by Code Sec. 1445.
6.7 Payment of Certain Obligations
Seller shall have provided for the payment of all existing
tax-exempt obligations incurred in connection with the Transferred Assets or
otherwise encumbering the Transferred Assets or the revenues of the Facility
Business and shall have obtained the release of all liens created in connection
therewith and encumbering the Transferred Assets.
6.8 Intentionally omitted
6.9 Performance of Obligations
Seller shall have performed all agreements and covenants
required by this Agreement to be performed by it on or prior to the Closing.
6.10 Officer's Certificate
Seller shall have delivered to Buyer a certificate, dated on
the Closing Date, executed by Judge Xxxxxx XxXxxxxx, County Judge of Xxxxxxx
County, Texas, on behalf of Seller, stating that as of the Closing (a) Seller
has duly performed all conditions precedent to Buyer's obligations under
Sections 6.1, 6.9, 6.11 and 6.13 hereof, (b) Seller knows of no facts except as
specifically disclosed in writing in such certificate which would cause Seller
to be in breach of any of its representations and warranties hereunder, and (c)
Seller has duly performed all obligations and covenants to be performed by it
hereunder.
6.11 Liens Released
Each and every lien or encumbrance of any nature, if any,
relating to the Transferred Assets shall have been terminated and released and
proof thereof delivered to the Buyer (except for liens, encumbrances and
obligations, if any, specifically assumed by Buyer pursuant to this Agreement).
6.12 Other Documents
Seller shall have delivered or caused to be delivered all
other documents, agreements, resolutions, certificates or declarations as Buyer
or its attorneys may have reasonably requested.
6.13 Payment of Taxes
All unpaid Taxes of the Seller, whether or not due, relating
to the Transferred Assets or the Facility Business shall have been paid prior to
the Closing, and Seller shall have furnished Buyer with evidence of such
payment, in form and substance satisfactory to Buyer.
6.14 Compliance With Governmental Requirements
Compliance by the parties with all governmental requirements
necessary for the consummation of the transactions contemplated by this
Agreement.
7. Conditions Precedent to Obligations of Seller
The obligations of Seller under this Agreement are, except as may be
waived by Seller in writing, subject to the fulfillment by Buyer of each of the
following additional conditions on or prior to the Closing:
7.1 Payment of Purchase Price
Buyer shall have delivered, or caused to be delivered, the
Purchase Price to Seller by wire transfer of immediately available funds.
7.2 Trustee's Affidavit
Buyer shall have delivered an affidavit of the Trustee of
Buyer.
7.3 Officer's Certificate
Buyer shall have delivered to Seller a certificate, dated on
the Closing Date, executed by Xxx Xxxxxx, Executive Vice President of CSC, on
behalf of Buyer, stating that as of the Closing (a) Buyer knows of no facts
except as specifically disclosed in writing in such certificate which would
cause Buyer to be in breach of any of its representations and warranties
hereunder, and (b) Buyer has duly performed all obligations, agreements and
covenants to be performed by it hereunder on or prior to the Closing.
7.4 Other Documents
Buyer shall have delivered or caused to be delivered all other
documents, agreements, resolutions, certificates or declarations as Seller or
its attorneys may have reasonably requested.
7.5 Compliance With Governmental Requirements
Compliance by the parties with all governmental requirements
necessary for the consummation of the transactions contemplated by this
Agreement.
7.6 Insurance Coverage
At the Closing, Buyer will deliver to Seller written proof
that Buyer has obtained comprehensive general liability insurance coverage with
respect to all claims attributable to or arising out of the operation of the
Facility Business or the Transferred Assets after the Closing, in the following
amounts, limits and deductibles:
Buyer will acquire base insurance covering general liability
having limits of $1,000,000 per occurrence and in the aggregate and having a
$50,000 deductible per occurrence. Additionally, Buyer will acquire umbrella
insurance for general liability having limits of $10,000,000 per occurrence and
in the aggregate.
At the Closing, Buyer shall cause the insurer to issue and
deliver to Seller a certificate of insurance evidencing each insurance policy
obtained and maintained by Buyer pursuant to the terms of this Section, naming
Seller as an additional insured thereunder, and Buyer shall cause each such
insurance policy to contain a clause requiring the insurer to give not less than
30 days prior written notice to Seller as a condition to any cancellation or
modification of such policy for any reason whatsoever.
8. Additional Covenants
The following provisions shall apply, and the following actions
shall be taken, at or subsequent to the Closing:
8.1 Further Assurances
From time to time, at the request of either party, without
further consideration, each party, at its expense and within a reasonable amount
of time after request hereunder is made, shall (i) cooperate in the preparation
and filing, if necessary, of any documents or other materials that may be
required by any governmental authority in connection with the transactions
contemplated hereby, and (ii) execute and deliver all other documents and
instruments, with acknowledgement or affidavit if required, and perform all such
further acts as may be reasonably required to more effectively assign and
transfer the Transferred Assets to Buyer in a manner consistent with the terms
and conditions of this Agreement, confirm Seller's ownership of the Retained
Assets or otherwise carry out the purposes of any provision of this Agreement.
8.2 Expansion of Facility
Seller will approve and will not oppose any reasonable
expansion plan for the Facility or modification of the Facility proposed by
Buyer or a successor or assign of Buyer. Additionally, Seller will provide
reasonable assistance requested by Buyer and will cooperate with Buyer in
obtaining all approvals, consents, licenses, certificates and permits necessary
for the proposed expansion or modification.
The parties agree that money damages or other remedies at law
would not be a sufficient or adequate remedy for any breach or violation of, or
a default under, this Section by Seller and that in addition to all other
remedies available, Buyer and CSC shall be entitled, without the necessity to
post any bond, to an injunction from a court or pursuant to the dispute
resolution procedures set forth in Annex III hereto, in Buyer's discretion,
restraining such breach, violation or default or threatened breach, violation or
default by Seller and to any other equitable relief against Seller, including
without limitation specific performance.
8.3 Execution of Inmate Contracts
To the extent not conveyed to Buyer, Seller agrees to maintain
all Inmate Contracts in force and to continue to serve as the contracting party
under any and all Inmate Contracts which are not assigned to Buyer at Closing.
Thereafter, Seller shall at the request of Buyer, its Affiliates, successors or
assigns enter into any and all Inmate Contracts for the housing of inmates at
the Facility, including any expansion of the Facility and any amendment or
modification to an Inmate Contract, upon terms and conditions reasonably
acceptable to Buyer, such Affiliates or assigns; provided that no such contract
shall require Seller to expend any funds or require Seller to undertake any
obligation that imposes an affirmative duty on Seller to perform any task that
cannot be assigned to and assumed by the operator of the Facility Business,
other than obligations imposed upon Seller pursuant to this Agreement or any
Related Agreement. For any Inmate Contract that Seller serves as the
contracting party, Seller shall assign, subcontract, license and otherwise
agree, as requested by Buyer, to have the inmates housed in the Facility in
accordance with the terms of such Inmate Contract. Seller's exclusive
compensation for entering into such Inmate Contracts shall be the payments
required pursuant to Sections 2.1 and 2.2 of this Agreement. Seller shall
diligently process and enter into all lawful and necessary agreements with any
prisoner transfer sources as may be necessary to facilitate the receipt and
incarceration of eligible high-risk and non-high-risk prisoners in the Facility.
The parties acknowledge that for purposes of the Inmate
Contracts, this Agreement shall constitute a contract under Subchapter F,
Chapter 351, Local Government Code, as amended, between Seller and Buyer for
Buyer to operate the Facility, as the Facility may be expanded. The parties
agree that money damages or other remedies at law would not be a sufficient or
adequate remedy for any breach or violation of, or a default under, this Section
by Seller and that in addition to all other remedies available, Buyer and CSC
shall be entitled, without the necessity to post any bond, to an injunction from
a court or pursuant to the dispute resolution procedures set forth in Annex III
hereto, in Buyer's discretion, restraining such breach, violation or default or
threatened breach, violation or default by Seller and to any other equitable
relief against Seller, including without limitation specific performance.
8.4 Cooperation of Seller and Sheriff
Seller shall, and shall cause its Sheriff to, cooperate with
Buyer in all matters of law enforcement, security and communications. Seller
shall, and shall cause its Sheriff to, assist Buyer in the training, at Buyer's
expense, of Buyer's employees hired to operate the Facility. Seller shall cause
its Sheriff to assist and cooperate with Buyer for purposes of obtaining such
licensing as may be required by State or federal law for the aforementioned
Buyer employees. Seller shall, and shall cause its Sheriff to, assist and
cooperate with Buyer in providing information requested by Buyer in the
screening of candidates for employment to the extent such information may be
lawfully obtained or released under federal or State law. Seller will, and
shall cause its Sheriff to, assist Buyer in verifying that all Buyer employees
undertaking jailer duties are certified, as required, by law.
8.5 Approvals and Permits
Seller will cooperate with Buyer to obtain all necessary
approvals for operation of the Facility, including but not limited to securing
use permits, licensing and certificates.
8.6 No Special Fees or Taxes
Seller agrees that it will not impose any taxes, levies, fees
or other impositions upon Buyer, the Facility Business or the Transferred
Assets, other than nondiscriminatory taxes created under state, county or
municipal law which apply generally to all commercial businesses in Xxxxxxx
County, Texas.
8.7 Litigation Cooperation
After the Closing, upon reasonable written request, each party
shall cooperate with the other, at the requesting party's expense (but including
only the costs incurred by any party for the wages or other benefits paid to its
officers, directors, or employees and not any out-of-pocket expenses), in
furnishing information, testimony and other assistance in connection with any
actions, tax audits, proceedings, arrangements or disputes involving either of
the parties hereto (other than in connection with disputes between the parties
hereto) and which relate to the Facility Business or the Transferred Assets,
including, without limitation, arranging discussions with, and the calling as
witnesses of, commissioners, elected official, officers, directors, employees,
agents and representatives of Buyer and Seller; provided, that nothing in this
Section shall require any such commissioner, elected official, officer,
director, employee, agent or representative to take actions that would
materially interfere with the performance of his or her duties.
8.8 Allocation of Purchase Price
The Purchase Price shall be allocated among each of the
Transferred Assets as set forth on Schedule 8.8. Except as otherwise required
by law, Seller and Buyer hereby agree to allocate the Purchase Price in
accordance with such schedule, to be bound by such allocations for all purposes,
to account for and report the purchase and sale of the Transferred Assets
contemplated hereby for all purposes (including, without limitation, financial,
accounting, and federal, state and local tax purposes) in accordance with such
allocations, and not to take any position (whether in financial statements, tax
returns, tax audits or otherwise), which is inconsistent with such allocations
without the prior written consent of the other party.
8.9 Confidentiality
Subject to applicable Law, Seller shall at all times keep
confidential all information pertaining to the Transferred Assets and the
Facility Business.
8.10 Excluded Assets
Except as provided elsewhere herein, any asset (including all
remittances and all mail and other communications) that is determined by the
parties' agreement, or, absent such agreement, determined by the dispute
resolution procedures set forth in this Agreement, to be or otherwise relate to
a Retained Asset and that is or comes into the possession, custody or control of
Buyer or any of its Affiliates shall forthwith be transferred, assigned or
conveyed by Buyer or such Affiliate to Seller, and, until such transfer,
assignment and conveyance, Buyer and its Affiliates shall not have any right,
title or interest in such asset, but instead shall hold such asset in trust for
the benefit of Seller. Any asset (including all remittances and mail and other
communications) that is determined by the parties' agreement or, absent such
agreement, determined by the dispute resolution procedures set forth in this
Agreement, to be or otherwise relate to a Transferred Asset and that is or comes
into the possession, custody or control of Seller shall forthwith be
transferred, assigned and conveyed by Seller to Buyer, and, until such transfer,
assignment and conveyance, Seller shall not have any right, title or interest in
such asset, but instead shall hold such asset in trust for the benefit of Buyer.
Additionally, if any such asset is or comes into the possession, custody or
control of the Manager, Seller shall, upon request of Buyer, cooperate with and
assist Buyer in obtaining such asset from the Manager.
8.11 Employee Matters
For the purpose of defining the obligations between Buyer and
Seller with respect to the individuals employed in the operation of the Facility
Business as of the Closing, this Agreement shall not be construed as (i)
creating any employment contract or other contract between either Buyer or
Seller, on the one hand, and any such employee, on the other, (ii) restricting
Buyer's right to terminate, create or modify any employee benefit plan or (iii)
creating or imposing any obligation on the part of Buyer to the Manager or
giving the Manager any right as to Buyer. All such employees shall remain
terminable at will by Buyer, Seller or the Manager, as the case may be, except
to the extent otherwise required by Law.
8.12 Right of First Refusal
(a) Notice. If Buyer receives an offer from, or desires to
enter into an agreement with, a Person to acquire in one or more related
transactions all or substantially all of the Facility Business (whether by means
of a sale of stock or merger of an entity owning all or substantially all of the
assets comprising the Facility Business, a sale or lease of all or substantially
all of the assets comprising the Facility Business or other similar
transaction), and Buyer desires to transfer the Facility Business to such
Person, Buyer shall not accept such offer or enter into such agreement (unless
such offer or agreement is conditioned on Buyer's compliance with the provisions
of this Section), or complete such disposition to such Person, unless and until
Buyer first shall have given to Seller written notice of such offer or
agreement, which notice shall contain the following:
(i) A description of the securities or the assets and
properties of the Facility Business that Buyer intends to transfer (the "Offered
Assets");
(ii) A statement indicating the identity and address of
the proposed purchaser (the "Proposed Purchaser");
(iii) A statement indicating the proposed purchase price
(the "Proposed Price") and the other material terms and conditions of the
proposed transfer; which terms shall require the Proposed Purchaser to assume
Buyer's obligations under this Agreement (the "Proposed Terms"); and
(iv) An offer (the "Offer") to sell the Offered Assets
to Seller at the Proposed Price and on the Proposed Terms.
(b) Procedures.
(i) Seller shall have 30 days after delivery of such
notice in which to accept or reject the Offer. Such acceptance shall be in
writing and must be received by Buyer prior to the expiration of such 30 day
period. If Seller does not accept the Offer within such 30 day period, Seller
shall be deemed to have rejected the Offer, and Buyer thereupon shall be free,
for a period of 12 months following the expiration of such 30 day period, to
transfer the Offered Assets to the Proposed Purchaser at the Proposed Price and
on the Proposed Terms. If the Offered Assets are not so transferred within said
12 month period, or if there is any material change in the Proposed Purchaser,
the Proposed Price, the Offered Assets or the Proposed Terms, then the Offered
Assets shall again be subject to the provisions of this Section.
(ii) If Seller accepts the Offer within the 30 day
period hereinabove provided, Buyer and Seller shall use their best efforts to
consummate the sale of the Offered Assets to Seller at the Proposed Price and on
the Proposed Terms as soon as practicable thereafter. If Seller does not
complete the purchase of the Offered Assets within 120 days after the date of
its acceptance of the Offer, all rights of Seller to acquire the Offered Assets,
and the requirements of this Section applicable to the Facility Business, shall
automatically terminate and be of no further force or effect, and Buyer
thereafter shall be free to sell any or all of the assets comprising the
Facility Business at any time and at such price and on such terms as Buyer may,
in its sole discretion, determine, without any further right of Seller to
purchase or prevent the sale of the same.
(iii) If Buyer proposes to sell the Offered Assets for a
consideration consisting, in whole or in part, of property other than cash or
cash equivalents, then the Purchase Price to be paid by Seller for the Offered
Assets shall be equal to the fair market value of such non-cash consideration as
determined in good faith by an independent third party mutually agreed upon by
Seller and Buyer (provided that if the parties are unable to agree upon such
third party within 10 days of a request by either party, either party may
initiate the dispute resolution proceedings attached hereto as Annex III), plus
the amount of any cash consideration, and the full amount of the Purchase Price
shall be payable in cash by Seller at the closing of the sale of the Offered
Assets.
(c) Permitted Transfers. Anything herein to the contrary
notwithstanding, the provisions of this Section shall not apply: (i) to any
transaction (whether or not for value) with respect to any or all of the
Facility Business, or any of the assets thereof, entered into by Buyer with any
one or more of CSC's Affiliates or CSC, (ii) any transaction involving only the
transfer of the Real Property, provided Buyer, CSC or an Affiliate of CSC
remains the manager of the Facility or (iii) to any transaction that may
constitute a Change in Control of CSC; provided that such transferee agrees to
assume all of the obligations of Buyer hereunder.
(d) Change in Control Defined. For purposes of this
Section, a "Change in Control" of CSC means any of the transactions or events
described below, but only if the transaction results in or causes a change in
more than a majority of the members of CSC's Board of Directors or a change in
the ownership of more than 50% of the then issued and outstanding stock of CSC,
in each case as constituted immediately prior to the execution of the definitive
agreements providing for such transaction (but taking into account any changes
made in contemplation or related to the consummation of the transaction). The
transactions that may result in a Change in Control are:
(i) A merger of CSC or its Affiliate with or into any
other Person in which CSC or its Affiliate is not the surviving corporation or
in which CSC or its Affiliate survives as a subsidiary of another Person;
(ii) The sale, transfer or other disposition of all or
substantially all of the assets of CSC or its Affiliate; or
(iii) The acquisition by any Person of beneficial
ownership (as defined in Rule 13(d)-3 under the Securities Exchange Act of 1934)
of securities of CSC representing 50% or more of the combined voting power of
CSC's then outstanding securities;
provided, however, in no event shall a transaction with or between any one or
more of CSC's Affiliates be deemed to constitute a Change in Control.
8.13 Post-Closing Taxes
Seller covenants and agrees that each year, during which Buyer,
CSC or a CSC Affiliate owns the Facility, Seller shall refund, within 30 days of
assessment, the portion of the Yearly Fee equal to the amount of ad valorem
taxes assessed during such year by all taxing entities within Xxxxxxx County,
Texas against the Facility Business, excluding any ad valorem taxes attributable
to expansions of the Facility Business, to the extent such taxes are based on a
value for the taxable assets of the Facility Business that is greater than the
Maximum Value.
As used in this Section, "Maximum Value" means $6,100,000 as
such amount may be increased or decreased each year by the average percentage
increase or decrease for all real and personal property subject to ad valorem
taxes in Xxxxxxx County, Texas for such year.
8.14 Post-Closing Conduct of Seller
Seller will not engage in any activity or transaction that
might materially adversely affect the Transferred Assets or the Facility
Business or their value.
9. Trigger Event.
Seller hereby covenants and agrees that during the occurrence of a
Trigger Event and for a period of 90 days after such Trigger Event is cured,
Buyer (or its Permitted Transferee) shall not be obligated to pay the Inmate Fee
set forth in Section 2.2. Seller further covenants and agrees that upon the
occurrence of a Trigger Event, Seller shall promptly refund to Buyer a pro rated
portion of the Yearly Fee equal to the Yearly Fee divided by 365 multiplied by
the number of days during which Seller is in breach of Sections 8.2 or 8.3
hereof. Additionally, Seller covenants and agrees that during the occurrence of
a Trigger Event, Seller shall timely pay all principal, interest, premium,
penalty and other amounts owed for borrowed money indebtedness secured by a
mortgage on the Real Property. The remedy set forth in this Section shall not
be Buyer's exclusive remedy, but shall be in addition to any other rights and
remedies at law, in equity or under this Agreement to which Buyer may be
entitled.
"Trigger Event" means a breach by Seller of any of the covenants
contained in Sections 8.2 or 8.3 hereof.
10. Survival of Representations
Notwithstanding any investigation made by Seller or Buyer, any
distribution in liquidation or dissolution, or any voluntary or involuntary act
of Seller or Buyer, the representation warranties, covenants, agreements and
indemnifications made by the parties shall survive the Closing for the
applicable statutory period of limitations and shall be deemed to be material
and to have been relied upon by Buyer and Seller. If a party elects to close
hereunder notwithstanding actual awareness of any default or breach of the
foregoing, the closing shall constitute a waiver of any rights or remedies which
such party may have with respect thereto, provided the party asserting such
waiver demonstrates or proves such actual awareness. All statements contained
in any certificate, Schedule or other instrument delivered pursuant hereto by or
on behalf of Seller, or by or on behalf of Buyer, shall be deemed to be
representations and warranties made pursuant to this Agreement by the delivering
party.
11. Indemnification
11.1 Indemnification of Seller by Buyer
11.1.1 Indemnification
Buyer shall, to the extent permitted by law, indemnify
and hold Seller harmless from and against all losses, liabilities, damages,
costs and expenses including reasonable attorneys' fees ("Seller's Losses")
incurred, paid or required to be paid by Seller, resulting in whole or in part
from (a) any breach of any representation, warranty or covenant made herein by
Buyer or (b) any obligation, liability or claim relating to the Inmate
Contracts, the Transferred Assets or the operations of the Facility Business,
but (for purposes of subpart (b) of this Section) only to the extent such
obligation, liability or claim is based upon acts or omissions of Buyer
occurring, or any event or circumstance occurring or existing, after the Closing
Date (and not associated with or related to any act, omission, event or
circumstance occurring or existing on or prior to the Closing Date), is not due
to the fraud, gross negligence or intentional misconduct of Seller or any
Affiliate or agent of Seller, and is not an Excluded Liability or a Retained
Asset (including, without limitation, any Environmental Claim based upon any
event or circumstance occurring after the Closing Date and not associated with
or related to any event or circumstance occurring or existing on or prior to the
Closing Date); provided that Buyer shall not be liable for any costs or
expenses, including attorney's fees, relating to Seller's review or approval of
any Inmate Contracts.
11.1.2 Notification and Settlement of Claims
Buyer shall not be required to indemnify Seller with
respect to any claim unless Seller shall, within 60 days after its receipt
of actual knowledge of the claim, notify Buyer of such claim (the "Seller
Indemnification Notice"), shall provide Buyer with a copy of such claim or other
documents received, and shall upon request otherwise make available to Buyer all
relevant nonprivileged information material to the defense of such claim and
within Seller's possession. Notwithstanding the foregoing, if the Seller
Indemnification Notice is not sent within the time period specified in the
preceding sentence and if Buyer has not suffered material prejudice as a result
thereof, then Seller may provide a Seller Indemnification Notice, Buyer shall
not be relieved or released from its indemnification obligation to Seller with
respect to such claim and the Seller Indemnification Notice will be deemed to
have been timely delivered. Buyer shall notify Seller in writing, within thirty
days after a Seller Indemnification Notice is given to Buyer, whether Seller is
entitled to indemnification hereunder or defense with respect to such claim. If
Buyer determines that Seller is not entitled to indemnification hereunder, or
the 30 day period expires without Buyer having assumed Seller's defense, Seller
may defend itself and seek to enforce this section against Buyer at law or in
equity. If Buyer determines that Seller is entitled to indemnification
hereunder, then Buyer shall have the right by notice given to Seller within 30
days after the date of the Seller Indemnification Notice to assume and control
the defense thereof, including the employment of counsel selected by Buyer, and
Buyer shall pay all expenses of such defense. Seller shall have the right to
employ separate counsel in any such proceeding and to participate in (but not
control) the defense of such claim, but the fees and expenses of such counsel
shall be borne by Seller unless the employment thereof has been specifically
authorized by Buyer in writing; provided, however, if the named parties to any
such proceeding (including any impleaded parties) include both Seller and Buyer,
and if Buyer requires that the same counsel represent both Seller and Buyer and
if representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them, then Seller shall have
the right to retain its own counsel at the cost and expense of Buyer. If Buyer
shall have failed to assume the defense of any claim in accordance with the
provisions of this Section, then Seller shall have the absolute right to control
the defense of such claim, and the fees and expenses of Seller's counsel shall
be borne by Buyer but Buyer shall be entitled, at its own expense, to
participate in (but not control) such defense. Where Buyer has assumed control
of the defense as provided above, Buyer shall have the right to settle or
compromise any such claim in its sole and absolute discretion and without
consultation with Seller so long as such settlement or compromise does not
impose any obligations on Seller (except with respect to providing releases of
the third party). Seller shall not settle or compromise the claim without
satisfying one of the following conditions (otherwise Buyer shall be released
from all indemnification obligations hereunder to Seller with respect to such
claim): (a) Seller shall first obtain the written consent of Buyer (which
consent shall not be unreasonably withheld or delayed), or (b) Buyer shall have
failed, after written notice to it of such suit, to take action to defend the
same within the 30-day period described above.
11.1.3 Calculation of Losses
In computing Seller's Losses, such amount shall be
computed net of any related recoveries which Seller actually received under
insurance policies or from any other Person and net of any tax benefits actually
received (through a receipt of a refund, credit or offset) by Seller, taking
into account the income tax treatment of the receipt of indemnification.
11.2 Indemnification of Buyer by Seller
11.2.1 Indemnification
Seller shall, to the extent permitted by law, indemnify
and hold Buyer harmless from and against all losses, liabilities, damages, costs
and expenses including reasonable attorneys' fees ("Buyer's Losses") incurred,
paid or required to be paid by Buyer, resulting in whole or in part from (a) any
breach of any representation, warranty or covenant made herein by Seller, (b)
any obligations, liability or claim relating to any Retained Asset, or (c) any
obligation, liability or claim relating to the Transferred Assets or the
operations of the Facility Business, but (for purposes of subpart (c) of this
Section) only to the extent such obligation, liability or claim is based upon
acts or omissions of Seller occurring, or any event or circumstance occurring or
existing, on or prior to the Closing Date.
11.2.2 Notification and Settlement of Claims
Seller shall not be required to indemnify Buyer with
respect to any claim unless Buyer shall, within 60 days after its receipt of
actual knowledge of the claim, notify Seller of such claim (the "Buyer
Indemnification Notice"), shall provide Seller with a copy of such claim or
other documents received, and shall upon request otherwise make available to
Seller all relevant nonprivileged information material to the defense of such
claim and within Buyer's possession. Notwithstanding the foregoing, if the Buyer
Indemnification Notice is not sent within the time period specified in the
preceding sentence and if Seller has not suffered material prejudice as a result
thereof, then Buyer may provide a Buyer Indemnification Notice, Seller shall not
be relieved or released from its indemnification obligation to Buyer with
respect to such claim and the Buyer Indemnification Notice will be deemed to
have been timely delivered. Seller shall notify Buyer in writing, within thirty
days after a Buyer Indemnification Notice is given to Seller, whether Buyer is
entitled to indemnification hereunder or defense with respect to such claim. If
Seller determines that Buyer is not entitled to indemnification hereunder, or
the 30 days period expires without Seller having assumed Buyer's defense, Buyer
may defend itself and seek to enforce this section against Seller at law or in
equity. If Seller determines that Buyer is entitled to indemnification
hereunder, then Seller shall have the right by notice given to Buyer within 30
days after the date of the Buyer Indemnification Notice to assume and control
the defense thereof, including the employment of counsel selected by Seller, and
Seller shall pay all expenses of such defense. Buyer shall have the right to
employ separate counsel in any such proceeding and to participate in (but not
control) the defense of such claim, but the fees and expenses of such counsel
shall be borne by Buyer unless the employment thereof has been specifically
authorized by Seller in writing; provided, however, if the named parties to any
such proceeding (including any impleaded parties) include both Seller and Buyer,
and if Seller requires that the same counsel represent both Seller and Buyer and
if representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them, then Buyer shall have
the right to retain its own counsel at the cost and expense of Seller. If
Seller shall have failed to assume the defense of any claim in accordance with
the provisions of this Section, then Buyer shall have the absolute right to
control the defense of such claim, and the fees and expenses of Buyer's counsel
shall be borne by Seller but Seller shall be entitled, at its own expense, to
participate in (but not control) such defense. Where Seller has assumed control
of the defense as provided above, Seller shall have the right to settle or
compromise any such claim in its sole and absolute discretion and without
consultation with Buyer so long as such settlement or compromise does not impose
any obligations on Buyer (except with respect to providing releases of the third
party). Buyer shall not settle or compromise the claim without satisfying one
of the following conditions (otherwise Seller shall be released from all
indemnification obligations hereunder to Buyer with respect to such claim): (a)
Buyer shall first obtain the written consent of Seller (which consent shall not
be unreasonably withheld or delayed), or (b) Seller shall have failed, after
written notice to it of such suit, to take action to defend the same within the
30-day period described above.
11.2.3 Calculation of Losses
In computing Buyer's Losses, such amount shall be
computed net of any related recoveries which Buyer actually received under
insurance policies or from any other Person and net of any tax benefits actually
received (through a receipt of a refund, credit or offset) by Buyer, taking into
account the income tax treatment of the receipt of indemnification.
12. General Provisions
12.1 Dispute Resolution
Notwithstanding the provisions of Section 12.5 hereof and
except as set forth in Section 8.2 and 8.3 hereof, any claim, dispute or
controversy of any nature whatsoever, including but not limited to tort claims
or contract disputes, among the parties to this Agreement or their respective
successors and assigns, arising out of or relating to the terms and conditions
of this Agreement, including the implementation, applicability and
interpretation thereof, shall be resolved in accordance with the dispute
resolution procedures set forth on Annex III attached to this Agreement.
12.2 Notices
All notices, requests, demands, waivers, consents and other
communications hereunder shall be in writing, shall be delivered either in
person, by facsimile or other electronic means, by overnight air courier or by
mail, and shall be deemed to have been duly given and to have become effective
(a) upon receipt if delivered in person or by facsimile or other electronic
means calculated to arrive on any business day prior to 5:00 p.m. local time at
the address of the addressee, or on the next succeeding business day if
delivered on a non-business day or after 5:00 p.m. local time, (b) one business
day after having been delivered to an air courier for overnight delivery, or (c)
three business days after having been deposited in the mails as certified or
registered mail, return receipt requested, all fees prepaid, directed to the
parties or their assignees at the following addresses (or at such other address
as shall be given in writing by a party hereto):
If to Buyer, addressed to:
First Security Bank, National Association,
as Owner Trustee for CSC Trust 1997-1
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxx X. Xxxxx
Facsimile: 000-000-0000
and
Correctional Services Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, President and CEO
Facsimile: (000) 000-0000
with a simultaneous copy to counsel for Buyer:
Xxxxx Xxxx
Correctional Services Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
and
Xxxxx X. Xxxxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Seller, addressed to:
Xxxxxxx County
Xxxxxxxxxx Street & U.S. 82
Courthouse
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000
Attention: The Xxxxxxxxx Xxxxxx XxXxxxxx, Xx., County Judge
Facsimile: (000) 000-0000
with a simultaneous copy to counsel for Seller:
Xxxx X. Xxxxxxxxxx
Xxxxxxx, Xxxxx & Xxxxxx
000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
12.3 Form of Instruments
Each document required to be delivered hereunder shall be in
form and substance, and shall be executed and delivered in a manner, reasonably
satisfactory to the recipient thereof and consistent with the provisions of this
Agreement.
12.4 Attorneys' Fees
In any litigation or other proceeding relating to this
Agreement or any Related Agreement, or any transactions contemplated herein or
therein, the prevailing party shall be entitled to recover its out-of-pocket
costs and reasonable attorneys' fees.
12.5 Remedies Not Exclusive
Except as otherwise expressly set forth in this Agreement or a
Related Agreement, no remedy conferred by any of the specific provisions of this
Agreement or such Related Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by a
party shall not, except as otherwise expressly provided for herein, constitute a
waiver of the right to pursue other available remedies.
12.6 Successors and Assigns; Third Party Rights
The rights under this Agreement shall not be assignable nor the
duties delegable by any party without the written consent of the other; and
nothing contained in this Agreement, express or implied, is intended to confer
upon any Person or entity, other than the parties hereto and their permitted
successors-in-interest and permitted assignees, any rights or remedies under or
by reason of this Agreement unless expressly so stated to the contrary.
Notwithstanding the foregoing, so long as Buyer complies with the provisions of
Section 8.12, Buyer may assign this Agreement and Buyer's rights and obligations
hereunder to any Person.
12.7 Counterparts
This Agreement and each of the Related Agreements may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
12.8 Article and Section Headings
Article and section headings used herein or in any Related
Agreement are for convenience only and are not a part of this Agreement or such
Related Agreement and shall not be used in construing it.
12.9 Entirety of Agreement, Amendments
This Agreement (including the Schedules and Exhibits hereto)
and the Related Agreements and other documents and instruments specifically
provided for in this Agreement contain the entire understanding between the
parties concerning the subject matter of this Agreement and such other documents
and instruments and, except as expressly provided for herein, supersede all
prior understandings and agreements, whether oral or written, between them with
respect to the subject matter hereof and thereof. There are no representations,
warranties, agreements, arrangements or understandings, oral or written, between
the parties hereto relating to the subject matter of this Agreement and such
other documents and instruments which are not fully expressed herein or therein.
This Agreement and each of the Related Agreements may be amended or modified
only by an agreement in writing signed by all of the parties hereto.
12.10 Expenses and Prorations
(a) Each party shall bear and pay its own costs and expenses
relating to the transactions contemplated by, or the performance of or
compliance with any condition or covenant set forth in, this Agreement. In
determining the costs and expenses of each party hereunder, the following rules
shall apply: (a) Buyer shall pay all costs and expenses for the issuance of the
Title Policy, the Title Survey and all documentary transfer taxes and recording
fees; (b) all filing fees payable in connection with submissions to governmental
agencies relating to the approval of the transactions contemplated hereby shall
be paid by the party filing the same; (c) all fees and charges in connection
with the submissions made to any governmental agency and advice in connection
therewith respecting the approval of the transactions contemplated hereby will
be borne one-half by Seller and one-half by Buyer; and (d) all other charges and
fees shall be paid by the party incurring such charge or fee. Each party will
pay its own attorneys fees incurred in the negotiation and review of this
Agreement and the closing documents and the closing of this transaction. Fees
or charges payable or earned under the Inmate Contracts, charges for utilities
serving the Facility, and other items of income or expense shall be apportioned
between the parties as of the date of Closing in accordance with the Management
Agreement.
(b) Any deposits by Seller with utility companies will be
refunded to Seller at Closing. Municipal or other governmental taxes or
assessments for improvements assessed before the Closing date shall be paid by
Seller in full.
12.11 Construction
This Agreement, the Related Agreements and any other documents
or instruments delivered pursuant hereto shall be construed without regard to
the identity of the Person who drafted the various provisions of the same. Each
and every provision of this Agreement, the Related Agreements and such other
documents and instruments shall be construed as though the parties participated
equally in the drafting of the same. Consequently, the parties acknowledge and
agree that any rule of construction that a document is to be construed against
the drafting party shall not be applicable to this Agreement, the Related
Agreements or such other documents and instruments.
12.12 Waiver
Except as provided herein, the failure of any party to insist,
in any one or more instances, on performance of any of the terms, covenants and
conditions of this Agreement or any Related Agreement shall not be construed as
a waiver or relinquishment of any rights granted hereunder or thereunder or of
the future performance of any such term, covenant or condition, but the
obligations of the parties with respect thereto shall continue in full force and
effect.
12.13 Severability
The provisions of this Agreement and each Related Agreement
are severable, and if any one or more provisions may be determined to be
judicially unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provisions, to the extent enforceable, shall
nevertheless be binding upon and enforceable against the parties hereto.
12.14 Certain Definitions
(a) Newly Defined Terms. For purposes of this Agreement
(including the Annex attached hereto), and the Related Agreements except as may
be otherwise expressly stated therein, the following terms shall have the
following meanings:
"Affiliate" of a specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the Person specified. The term
"control" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person.
"CSC" means Correctional Services Corporation, a Delaware
corporation, and its successors and assigns.
"Environmental Claim" means any claim, action or cause of
action, suit, Lien, judgment, demand or other written communication by any
Person (including the parties hereto and their respective Affiliates) alleging
or asserting potential liability (including, without limitation, potential
liability for investigatory costs, clean-up costs, governmental response costs,
natural resources damages, property damages, personal injuries, fees or
penalties) arising out of, based on or resulting from, in whole or in part, the
presence or Release into the environment of any Hazardous Materials.
"Environmental Regulations" means all Laws relating to the
use, handling, treatment, storage, transportation or Release of Hazardous
Materials, or exposure to Hazardous Materials or otherwise relating to the
protection of the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or industrial
hygiene, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., or any
analogous state statute.
"Hazardous Materials" means any substance, material or waste
which is now listed, identified or defined in or pursuant to any Law as
"hazardous substances", "hazardous waste", "toxic substances", "toxic
pollutant", "infectious waste" or similarly identified substances, materials or
mixtures (including, without limitation, medical wastes, asbestos in any form,
formaldehyde, radon, radioactive substances, hydrocarbons, petroleum, gasoline,
crude oil or any products, by-products or fractions thereof, polychlorinated
biphenyls, industrial solvents, flammables, or explosives) or which is either
now or anytime in the future: (i) potentially injurious to the public health,
safety or welfare or to the environment, (ii) potentially injurious to, or may
impair the value or beneficial use of, the Real Property (or any improvements
thereon), (iii) regulated or monitored by, or required to be remediated at the
behest of, any governmental agency, or (iv) a basis for a claim or liability of
any owner, manager or operator of the Real Property to any Person under any
applicable Law (including the Environmental Regulations).
"Inmate Contract" means an agreement (including interlocal
government agreements) between Seller and any governmental entity for the
housing of inmates at the Facility.
"Knowledge" or "knowledge", means the actual or constructive
knowledge of a Person and what the person should have known given the facts
available to the Person, without conducting a due diligence investigation at the
Facility. In addition, when used with respect to a Person other than a natural
person, the term includes the "knowledge" of its commissioners, elected
officials, officers, directors, managers, partners, trustees, administrators,
executors, employees, consultants and agents.
"Laws" means the common law, statutes, rules, regulations,
ordinances, orders, codes, permits, licenses of any federal, state or local
governmental or regulatory authorities and any order, writ, injunction or decree
issued by any court, arbitrator or governmental agency or in connection with any
judicial, administrative or other non-judicial proceeding (including, without
limitation, arbitration or reference).
"Liens" means all liens, encumbrances (including security
interests of any kind whatsoever), covenants, conditions, restrictions,
easements, encroachments, rights of way, charges or other rights, options,
claims or interests of any third party whatsoever.
"Manager" means BRG Operations of Xxxxxxx County, Inc., a
Texas corporation, the former manager of the Facility.
"Permitted Exceptions" means the standard printed exceptions
shown on a title commitment or title policy in the State of Texas and such other
exceptions approved by Buyer.
"Person" means any individual, partnership, corporation,
limited liability company, trust, unincorporated association, joint venture or
any other entity of any kind whatsoever, whether for profit or not for profit,
and any governmental agency.
"Related Agreements" means any and all other agreements,
documents and instruments which may be entered into by and between or among the
parties hereto under, related to or in connection with this Agreement or the
transactions contemplated hereby, including, without limitation, the agreements
and documents referred to herein or attached hereto as Exhibits, and the
Management Agreement.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment or as otherwise defined in or pursuant to any
Environmental Regulation.
"Taxes" means (i) all federal, state, county and local income,
franchise, sales, use, property, payroll, recordation and transfer taxes
(including estimated taxes), (ii) all federal, state, county and local taxes,
levies, fees, assessments and surcharges (however designated, including
privilege taxes, room or bed taxes and user fees) which are based on the gross
receipts or net operating revenues of the Facility Business for a period ending
on, before or including the Closing Date or a formula taking any one of the
foregoing into account, and (iii) any interest, penalties and additions to tax
attributable to any of the foregoing.
12.15 Consents Not Unreasonably Withheld
Wherever the consent or approval of any party is required
under this Agreement or any Related Agreement, such consent or approval shall
not be unreasonably withheld, delayed or conditioned, unless such consent or
approval is expressly stated to be at the sole and absolute discretion of such
party or is otherwise similarly qualified.
12.16 Time Is of the Essence
(a) Time is of the essence in the performance of the
obligations contained herein.
(b) Notwithstanding the foregoing, in the event that any
action or performance shall be due hereunder or under any Related Agreement on a
Saturday, Sunday or any legal holiday for banks in the jurisdiction in which
such action or performance is due or where the party required to provide the
same is located, the time for such performance shall automatically be extended
until the end of the next business day.
12.17 Governing Law
This Agreement and each Related Agreement shall be construed
and enforced in accordance with the laws of the State of Texas as applied
between residents of that state entering into contracts to be performed wholly
within the State of Texas.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
Buyer:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION, NOT
INDIVIDUALLY BUT SOLELY AS OWNER TRUSTEE
UNDER THE CSC TRUST 1997-1
By: Xxxx X. Xxxxxx
Title: Vice President
Seller:
COUNTY OF XXXXXXX, TEXAS
By: Board of Xxxxxxx County Commissioners
By: Xxxxxx XxXxxxxx, Xx.
County Judge
ATTEST:
By: Xxxxxxx County Clerk
