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EXHIBIT 4.6
LEASE AGREEMENT
Dated as of June 19, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as Owner Trustee
under the Wackenhut Corrections Trust 1997-1
as Lessor
and
WACKENHUT CORRECTIONS CORPORATION, as Lessee
--------------------------------------------------------------------------------
This Lease Agreement is subject to a security interest in favor of NationsBank,
National Association, as Administrative Agent (the "Agent") under a Security
Agreement dated as of June 19, 1997, among First Security Bank, National
Association, not individually except as expressly stated therein, but solely as
Owner Trustee under the Wackenhut Corrections Trust 1997-1, the Lenders and the
Agent, as amended, modified, supplemented, restated or replaced from time to
time. This Lease Agreement has been executed in several counterparts. To the
extent, if any, that this Lease Agreement constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease Agreement may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefor executed by the Agent on the
signature page hereof.
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TABLE OF CONTENTS
ARTICLE I.........................................................................................................1
1.1 Definitions.................................................................................1
ARTICLE II........................................................................................................2
2.1 Property....................................................................................2
2.2 Lease Term..................................................................................2
2.3 Title.......................................................................................2
2.4 Lease Supplements...........................................................................2
2.5 Controlled Affiliates as Lessee.............................................................2
ARTICLE III.......................................................................................................3
3.1 Rent........................................................................................3
3.2 Payment of Basic Rent.......................................................................3
3.3 Supplemental Rent...........................................................................3
3.4 Performance on a Non-Business Day...........................................................4
3.5 Rent Payment Provisions.....................................................................4
ARTICLE IV........................................................................................................4
4.1 Utility Charges; Taxes......................................................................4
ARTICLE V.........................................................................................................5
5.1 Quiet Enjoyment.............................................................................5
ARTICLE VI........................................................................................................5
6.1 Net Lease...................................................................................5
6.2 No Termination or Abatement.................................................................6
ARTICLE VII.......................................................................................................6
7.1 Ownership of the Properties.................................................................6
ARTICLE VIII......................................................................................................7
8.1 Condition of the Properties.................................................................7
8.2 Possession and Use of the Properties........................................................8
ARTICLE IX........................................................................................................9
9.1 Compliance with Legal Requirements and Insurance
Requirements................................................................................9
ARTICLE X.........................................................................................................9
10.1 Maintenance and Repair; Return..............................................................9
10.2 Environmental Inspection...................................................................11
ARTICLE XI.......................................................................................................11
11.1 Modifications..............................................................................11
ARTICLE XII......................................................................................................12
12.1 Warranty of Title..........................................................................12
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ARTICLE XIII.....................................................................................................13
13.1 Permitted Contests Other Than in Respect of
Indemnities................................................................................13
ARTICLE XIV......................................................................................................13
14.1 Public Liability and Workers' Compensation
Insurance..................................................................................13
14.2 Hazard and Other Insurance.................................................................14
14.3 Coverage...................................................................................15
ARTICLE XV.......................................................................................................16
15.1 Casualty and Condemnation..................................................................16
15.2 Environmental Matters......................................................................17
15.3 Notice of Environmental Matters............................................................18
ARTICLE XVI......................................................................................................18
16.1 Termination Upon Certain Events............................................................18
16.2 Procedures.................................................................................19
ARTICLE XVII.....................................................................................................19
17.1 Lease Events of Default....................................................................19
17.2 Surrender of Possession....................................................................22
17.3 Reletting..................................................................................22
17.4 Damages....................................................................................22
17.5 Final Liquidated Damages...................................................................23
17.6 Waiver of Certain Rights...................................................................24
17.7 Assignment of Rights Under Contracts.......................................................24
17.8 Environmental Costs........................................................................24
17.9 Remedies Cumulative........................................................................25
17.10 Notice of Default or Event of Default......................................................25
17.11 Option to Purchase or Sell All Properties Upon
Certain Changes of Control.................................................................25
ARTICLE XVIII....................................................................................................25
18.1 Lessor's Right to Cure Lessee's Lease Defaults.............................................25
ARTICLE XIX......................................................................................................26
19.1 Provisions Relating to Lessee's Exercise of its
Purchase Option............................................................................26
19.2 No Termination With Respect to Less than All of a
Property...................................................................................26
ARTICLE XX.......................................................................................................26
20.1 Individual Purchase Option.................................................................26
20.2 Purchase or Sale Option....................................................................27
20.3 Accounting Changes.........................................................................28
ARTICLE XXI......................................................................................................29
21.1 Renewal....................................................................................29
ARTICLE XXII.....................................................................................................29
22.1 Sale Procedure.............................................................................29
22.2 Application of Proceeds of Sale............................................................32
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22.3 Indemnity for Excessive Wear...............................................................32
22.4 Appraisal Procedure........................................................................32
22.5 Certain Obligations Continue...............................................................33
ARTICLE XXIII....................................................................................................33
23.1 Holding Over...............................................................................33
ARTICLE XXIV.....................................................................................................34
24.1 Risk of Loss...............................................................................34
ARTICLE XXV......................................................................................................34
25.1 Assignment.................................................................................34
25.2 Subleases..................................................................................34
ARTICLE XXVI.....................................................................................................35
26.1 No Waiver..................................................................................35
ARTICLE XXVII....................................................................................................35
27.1 Acceptance of Surrender....................................................................35
27.2 No Merger of Title.........................................................................36
ARTICLE XXVIII...................................................................................................36
28.1 Incorporation of Covenants.................................................................36
ARTICLE XXIX.....................................................................................................37
29.1 Notices....................................................................................37
ARTICLE XXX......................................................................................................38
30.1 Miscellaneous..............................................................................38
30.2 Amendments and Modifications...............................................................38
30.3 Successors and Assigns.....................................................................38
30.4 Headings and Table of Contents.............................................................38
30.5 Counterparts...............................................................................38
30.6 GOVERNING LAW..............................................................................38
30.7 Calculation of Rent........................................................................38
30.8 Memoranda of Lease and Lease Supplements...................................................39
30.9 Allocations between the Lenders and the Holders............................................39
30.10 Limitations on Recourse....................................................................39
30.11 WAIVERS OF JURY TRIAL......................................................................39
30.12 Original Leases............................................................................39
30.13 Mortgage Grant and Remedies................................................................40
30.14 Exercise of Lessor Rights..................................................................40
EXHIBITS
EXHIBIT A Lease Supplement No. __ .................................................................. 43
EXHIBIT B Other Names And Locations of Lessee....................................................... 53
EXHIBIT C-1 Form of Memorandum of Lease............................................................... 54
EXHIBIT C-2 Form of Memorandum of Lease and Lease Supplement.......................................... 55
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LEASE AGREEMENT
THIS LEASE AGREEMENT (as amended, supplemented or modified from time to
time, this "Lease"), dated as of June 19, 1997, is between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, having its principal
office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, not individually,
but solely as Owner Trustee under the Wackenhut Corrections Trust 1997-1, as
lessor (the "Lessor"), and WACKENHUT CORRECTIONS CORPORATION, a Florida
corporation, having its principal place of business at 0000 Xxxxxxxxx Xxxxx,
#000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000-0000 as lessee (the "Lessee") provided
that in the case of a Property with an alternate Lessee, as described in Section
2.5 below, such alternate Lessee shall also be deemed a "Lessee" with respect to
such Property).
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and Agency Agreement, Lessor will (i) purchase or ground lease various
parcels of real property, some of which may have existing Improvements thereon,
from one or more third parties designated by the Construction Agent and (ii)
fund the development, refurbishment, installation and construction by the
Construction Agent of Improvements on such real property; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the earlier to occur of the Completion of such Property or if such Property
is a Construction Period Property as of the date of any Agency Agreement Event
of Default, the date of such Agency Agreement Event of Default; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions. Capitalized terms used but not otherwise defined in
this Lease have the respective meanings specified in Appendix A to the
Participation Agreement of even date herewith (as such may be amended, modified,
supplemented, restated and/or replaced from time to time, the "Participation
Agreement") among Wackenhut Corrections Corporation, as Construction Agent, the
Lessee, First Security Bank, National Association, not individually, except as
expressly stated therein, as Owner Trustee under the Wackenhut Corrections Trust
1997-1, the Holders party thereto, the Lenders party thereto, and the Agent.
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ARTICLE II
2.1 Property. Subject to the terms and conditions hereinafter set forth
and contained in the respective Lease Supplement relating to each Property,
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each
Property.
2.2 Lease Term. The term of this Lease with respect to each Property
(the "Basic Term") shall begin upon the earlier to occur of (i) the Completion
Date for such Property or (ii) if such Property is a Construction Period
Property as of the date of any Agency Agreement Event of Default, the date of
such Agency Agreement Event of Default (in each case the "Basic Term
Commencement Date") and shall end on June 19, 1999 (the "Basic Term Expiration
Date"), unless the Term is extended in accordance with Article XXI of this
Lease, or earlier terminated in accordance with the provisions of this Lease.
2.3 Title. Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including, without
limitation, the Permitted Exceptions) and all applicable Legal Requirements.
Lessee shall in no event have any recourse against Lessor for any defect in
Lessor's title to any Property other than for Lessor Liens.
2.4 Lease Supplements. On or prior to each Basic Term Commencement
Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for
the Property to be leased effective as of such Basic Term Commencement Date in
substantially the form of Exhibit A hereto. Lessee hereby irrevocably appoints
Lessor as Lessee's attorney-in-fact, with power of substitution, in the name of
Lessor or the name of Lessee or otherwise, to execute any Lease Supplement which
Lessee fails or refuses to sign in accordance with the terms of this Section 2.4
(including specifically without limitation any Lease Supplement required in
connection with any Construction Period Property upon the occurrence of an
Agency Agreement Event of Default).
2.5 Controlled Affiliates as Lessee. Subject to the consent of the
Administrative Agent and the delivery of such agreements and documents as the
Administrative Agent may require (including without limitation the Guaranty,
documents perfecting the liens of the Owner Trustee, Agent, Lenders and Holders
under the Operative Agreements and written opinions of counsel for the Lessee
and Wackenhut Corrections or any applicable Controlled Affiliate), any
Controlled Affiliate of Wackenhut Corrections may become party to this Lease as
a Lessee (each as "alternative Lessee") of a Property, and shall be liable
(jointly and severally with Wackenhut Corrections) for all obligations as
Lessee. The foregoing notwithstanding, (a) Wackenhut Corrections shall remain
fully liable for all obligations as Lessee and Construction Agent with
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respect to each Property, and (b) Wackenhut Corrections shall have the right to
give any notice, consent or waiver, to exercise any option permitted under any
Operative Agreement, and to agree to any amendment or modification with respect
to Operative Agreement or any Property, as and on behalf of the Lessee with
respect to each Property (and each alternate Lessee hereby grants to Wackenhut
Corrections an irrevocable power of attorney to take any such actions), and any
other party to the Operative Agreements shall be fully protected in relying on
any such actions taken by Wackenhut Corrections or (with respect to the
applicable Property) by any alternate Lessee.
ARTICLE III
3.1 Rent.
(a) Lessee shall pay Basic Rent on each Payment Date, and on
any date on which this Lease shall terminate with respect to any or all
Properties during the Term; provided, however, with respect to each
individual Property Lessee shall have no obligation to pay Basic Rent
with respect to such Property until the Basic Term has commenced with
respect to such Property.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid in immediately available funds on the
due date therefor (or within the applicable grace period) to such
account or accounts as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of the Lessor, the Construction
Agent, Lessee, or any other Person, or for any other reason whatsoever,
shall not delay or otherwise affect Lessee's obligation to pay Rent for
such Property in accordance with the terms of this Lease.
3.2 Payment of Basic Rent. Basic Rent shall be paid absolutely net to
Lessor or its designee, so that this Lease shall yield to Lessor the full amount
of Basic Rent, without setoff, deduction or reduction.
3.3 Supplemental Rent. Lessee shall pay to Lessor or its designee or to
the Person entitled thereto any and all Supplemental Rent promptly as the same
shall become due and payable, and if Lessee fails to pay any Supplemental Rent,
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. Without limiting
the generality of the definition of "Supplemental Rent," Lessee shall pay to
Lessor as Supplemental Rent, among other things, on demand, to the extent
permitted by applicable Legal Requirements, (a) any and all unpaid fees,
charges, payments and
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other obligations (except the obligations of Lessor to pay the principal amount
of the Loans and the Holder Amount) due and owing by Lessor under the Credit
Agreement, the Trust Agreement or any other Operative Agreement (including
specifically without limitation any amounts owing to the Lenders under Section
2.11 or Section 2.12 of the Credit Agreement and any amounts owing to the
Holders under Section 3.9 or Section 3.10 of the Trust Agreement) and (b)
interest at the applicable Overdue Rate on any installment of Basic Rent not
paid when due (subject to the applicable grace period) for the period for which
the same shall be overdue and on any payment of Supplemental Rent not paid when
due or demanded by the appropriate Person for the period from the due date or
the date of any such demand, as the case may be, until the same shall be paid.
The expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any Supplemental
Rent as and when due, Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added, pursuant to any
Operative Agreement or otherwise, in each case for nonpayment or late payment of
such Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4 Performance on a Non-Business Day. If any Basic Rent is required
hereunder on a day that is not a Business Day, then such Basic Rent shall be due
on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent
is required hereunder on a day that is not a Business Day, then such
Supplemental Rent shall be due on the next succeeding Business Day.
3.5 Rent Payment Provisions. Lessee shall make payment of all Basic
Rent and Supplemental Rent when due regardless of whether any of the Operative
Agreements pursuant to which same is calculated and is owing shall have been
rejected, avoided or disavowed in any bankruptcy or insolvency proceeding
involving any of the parties to any of the Operative Agreements. Such provisions
of such Operative Agreements and their related definitions are incorporated
herein by reference and shall survive any termination, amendment or rejection of
any such Operative Agreements.
ARTICLE IV
4.1 Utility Charges; Taxes. Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on a Property and related
real property during the Term. Lessee shall be entitled to receive any credit or
refund with respect to any utility charge paid by Lessee, provided that Lessee
must collect any such credit or refund from Lessor or the respective utility
company (as the case may be) and shall not be entitled to offset any such amount
owed to Lessee against Rent payable by the Lessee hereunder. Unless a Lease
Default or Lease
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Event of Default shall have occurred and be continuing, the amount of any credit
or refund received by Lessor on account of any utility charges paid by Lessee,
net of the costs and expenses incurred by Lessor in obtaining such credit or
refund, shall be promptly paid over to Lessee. In addition, Lessee shall pay or
cause to be paid all taxes or taxes assessments against a Property. All charges
for utilities and all taxes or tax assessments imposed with respect to a
Property for a billing period (or in the cases of tax assessments, a tax period)
during which this Lease expires or terminates shall be adjusted and prorated on
a daily basis between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment. Subject to the rights of Lessor contained in
Sections 17.2 and 17.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Lease Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Basic Term
Commencement Date.
ARTICLE VI
6.1 Net Lease. This Lease shall constitute a net lease. Any present or
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (a) any damage to or destruction of any Property or any part thereof;
(b) any taking of any Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of any Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f) any
default by Lessor hereunder; (g) any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding relating to or
affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of any Property; (k) breach of
any warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or
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dissimilar to the foregoing and whether or not Lessee shall have notice or
knowledge of any of the foregoing. The foregoing clause (j) shall not prevent
the termination of the Lease in accordance with the terms hereof if the Lessee
purchases all of the Properties pursuant to Section 20.2, or the termination of
the Lease with respect to an individual Property if the Lessee purchases such
Property pursuant to Section 20.1. The parties intend that the obligations of
Lessee hereunder shall be covenants, agreements and obligations that are
separate and independent from any obligations of Lessor hereunder and shall
continue unaffected unless such covenants, agreements and obligations shall have
been modified or terminated in accordance with an express provision of this
Lease. Lessor and Lessee acknowledge and agree that the provisions of this
Section 6.1 have been specifically reviewed and subject to negotiation.
6.2 No Termination or Abatement. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, any other Person or any Governmental Authority, or
any action with respect to this Lease or any Operative Agreement which may be
taken by any trustee, receiver or liquidator of Lessor, any other Person or any
Governmental Authority or by any court with respect to Lessor, any other Person
or any Governmental Authority. Lessee hereby waives all right (a) to terminate
or surrender this Lease (except as permitted under the terms of the Operative
Agreements) or (b) to avail itself of any abatement, suspension, deferment,
reduction, setoff, counterclaim or defense with respect to any Rent. Lessee
shall remain obligated under this Lease in accordance with its terms and Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 Ownership of the Properties.
(a) Lessor and Lessee intend that for federal and all state
and local income tax purposes and other tax purposes, for bankruptcy
purposes, creditor's rights purposes, environmental law purposes, for
purposes of exercising remedies against the Lessee, the Construction
Agent or the Properties, and for the purposes of any other laws
governing any right or obligation of any party under any Operative
Agreement (A) this Lease will be treated as a loan and financing
arrangement and not a true lease, (B) Lessee will be treated as the
owner of the Properties and will be entitled to all tax benefits
ordinarily available to owners of property
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similar to the Properties for such tax purposes, and (C) all payments
of Basic Rent shall be deemed to be interest payments. Consistent with
the foregoing, Lessee intends to claim depreciation and cost recovery
deductions associated with the Property, and Lessor agrees not to take
any inconsistent position on its income tax returns. Neither Lessor,
the Agent, any Lender, any Holder nor NCMI makes any representation or
warranty with respect to the foregoing matters described in this
Section 7.1 and will assume no liability for the Lessee's accounting
treatment of this transaction.
(b) Lessor and Lessee further intend and agree that, for the
purpose of securing Lessee's obligations hereunder, (i) this Lease
shall be deemed to be a security agreement and financing statement
within the meaning of Article 9 of the Uniform Commercial Code
respecting each of the Properties to the extent such is personal
property and an irrevocable grant and conveyance of a lien and mortgage
on each of the Properties to the extent such is real property; (ii) the
acquisition of title (or to the extent applicable, a leasehold
interest) in each Property referenced in Article II shall be deemed to
be (A) a grant by Lessee to Lessor of a lien on and security interest
in all of Lessee's right, title and interest in and to each Property
and all proceeds (including without limitation insurance proceeds) of
any of the Property, whether in the form of cash, investments,
securities or other property, (B) an assignment by Lessee to Lessor of
all rents, profits and income produced by any of the Property and (C)
an assignment by Lessee to Lessor of all proceeds of any operating
agreements or other agreements between Lessee and any Governmental
Authority relating to any Property; and (iii) notifications to Persons
holding such property, and acknowledgments, receipts or confirmations
from financial intermediaries, bankers or agents (as applicable) of
Lessee shall be deemed to have been given for the purpose of perfecting
such security interest under applicable law. Lessor and Lessee shall
promptly take such actions as may be necessary or advisable in either
party's opinion (including without limitation the filing of Uniform
Commercial Code Financing Statements or Uniform Commercial Code Fixture
Filings) to ensure that the lien and security interest in each Property
will be deemed to be a perfected lien and security interest of first
priority under applicable law and will be maintained as such throughout
the Term.
ARTICLE VIII
8.1 Condition of the Properties. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING
STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY
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STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, (D)
ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH
MAY EXIST ON THE DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE
AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY
(OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART
THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL
BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. THE LESSEE
HAS OR WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE
IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS THE LESSOR, THE AGENT,
EACH LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS
INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE
PRECEDING SENTENCE, AS BETWEEN THE LESSOR, THE AGENT, THE LENDERS AND THE
HOLDERS, ON THE ONE HAND, AND THE LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY
LESSEE.
8.2 Possession and Use of the Properties.
(a) At all times during the Term with respect to each
Property, such Property shall be used by Lessee in the ordinary course
of its business. Lessee shall pay, or cause to be paid, all charges and
costs required in connection with the use of the Properties as
contemplated by this Lease. Lessee shall not commit or permit any waste
of the Properties or any part thereof.
(b) Lessee represents and warrants that the address stated in
Section 29.1 of this Lease is the chief place of business and chief
executive office of Lessee (as such terms are used in Section 9-103 of
the Uniform Commercial Code of any applicable jurisdiction), and Lessee
will provide Lessor with prior written notice of any change of location
of its chief place of business or chief executive office. Regarding
each Property, Lessee represents and warrants that each Lease
Supplement correctly identifies the initial location of the related
Equipment and Improvements and contains an accurate legal description
for the related parcel of Land. Lessee has no other places of business
where the Equipment or Improvements will be located other than those
identified on the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property (except the Land identified in the Lease
Supplement in which such Equipment is
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also described) in a manner that could give rise to the assertion of
any Lien (other than a Permitted Lien) on such item of Equipment by
reason of such attachment or the assertion of a claim that such item of
Equipment has become a fixture and is subject to a Lien in favor of a
third party that is prior to the Liens thereon created by the Operative
Agreements.
(d) Each Lease Supplement delivered under the terms of this
Lease shall contain, in regard to the relevant Property, an Equipment
Schedule that has a complete description of each item of Equipment, an
Improvement Schedule that has a complete description of each
Improvement and a legal description of the Land, to be leased hereunder
as of such date. Simultaneously with the execution and delivery of each
Lease Supplement, such Equipment, Improvements and Land shall be deemed
to have been accepted by Lessee for all purposes of this Lease and to
be subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under, and (to the
extent no Event of Default has occurred and is continuing and provided
that such exercise will not impair the value of such Property) shall be
permitted to exercise all rights and remedies under, all operation and
easement agreements and related or similar agreements applicable to
such Property.
ARTICLE IX
9.1 Compliance with Legal Requirements and Insurance Requirements.
Subject to the terms of Article XIII relating to permitted contests, Lessee, at
its sole cost and expense, shall (i) comply with all material Legal Requirements
(including without limitation all Environmental Laws), and all Insurance
Requirements relating to the Properties, including the use, development,
construction, operation, maintenance, repair, refurbishment and restoration
thereof, whether or not compliance therewith shall require structural or
extraordinary changes in the Improvements or interfere with the use and
enjoyment of the Properties, and (ii) procure, maintain and comply with all
material licenses, permits, orders, approvals, consents and other authorizations
required for the construction, use, maintenance and operation of the Properties
and for the use, development, construction, operation, maintenance, repair and
restoration of the Improvements.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and make all necessary
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repairs thereto, of every kind and nature whatsoever, whether interior
or exterior, ordinary or extraordinary, structural or nonstructural, or
foreseen or unforeseen, in each case as required by all Legal
Requirements, Insurance Requirements, and manufacturer's specifications
and standards and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property and in compliance with standard industry
practice, subject, however, to the provisions of Article XV with
respect to Condemnation and Casualty.
(b) Lessee shall not use or locate any component of any
Property outside of any Approved State. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the
Land described in the applicable Lease Supplement without Lessor's
prior written consent, which consent shall not be unreasonably withheld
or delayed.
(c) If any material component of any Property becomes worn
out, lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, Lessee, at its own expense, will within a
reasonable time replace such component with a replacement component
which is free and clear of all Liens (other than Permitted Liens) and
has a value, utility and useful life at least equal to the component
replaced. All components which are added to any Property shall
immediately become the property of, and title thereto shall vest in,
Lessor, and shall be deemed incorporated in such Property and subject
to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not materially disrupt the business of Lessee.
(e) If, at any time, because of a condemnation, casualty or
other event or condition, Lessor has reason to believe that the
appraised value of any Property has materially decreased, then the
Lessor or the Agent (at Lessee's sole expense) may cause an additional
Appraisal (addressed to the Lessor and the Agent) to be prepared. In
addition, Lessor or the Agent (at Lessee's sole expense) may cause to
be prepared (at Lessee's sole expense) any additional Appraisals (or
reappraisals) as Lessor or the Agent may deem appropriate (i) if an
Event of Default has occurred and is continuing, (ii) if any one of
Lessor, the Agent, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such an Appraisal (or
reappraisal), or (iii) at any time upon the request of the Agent or the
Lessor, such a request pursuant to this clause (iii) not to be made
more frequently than once every three (3) years for the same Property.
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(f) Lessor shall under no circumstances be required to build
any improvements on any Property, make any repairs, replacements,
alterations or renewals of any nature or description to any Property,
make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild
all or any part of any Property (unless such repairs are needed to cure
damage to a Property caused by the gross negligence or willful
misconduct of the Lessor), or (ii) make repairs at the expense of
Lessor pursuant to any Legal Requirement, Insurance Requirement,
contract, agreement, covenants, condition or restriction at any time in
effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property, surrender
such Property to Lessor, or the third party purchaser, as the case may
be, subject to Lessee's obligations under this Lease (including without
limitation Sections 9.1, 10.1(a)-(f), 10.2, 11.1, 12.1, 22.1 and 23.1).
10.2 Environmental Inspection. If (a) Lessee has not given
notice of the exercise of its Purchase Option on the Expiration Date pursuant
to Section 20.1, or (b) Lessee has given notice, pursuant to Section 20.1 of
its election to remarket the Properties on the Expiration Date or a Payment
Date pursuant to Section 22.1 then, in either case, not more than 120 days nor
less than 60 days prior to such Expiration Date or Payment Date, Lessee shall,
at its sole cost and expense, provide to Lessor and the Agent a report by a
reputable environmental consultant selected by Lessee, which report shall be in
form and substance reasonably satisfactory to Lessor and the Agent and shall
include without limitation a "Phase I" environmental report (or update of a
prior "Phase I" report that was previously delivered to the Lessor and the
Agent) on each of the Properties. If the report delivered pursuant to the
preceding sentence recommends that a "Phase II" report or other supplemental
report be obtained, the Lessee shall, at its own cost and expense, not less
than 30 days prior to such Expiration Date or Payment Date, provide to Lessor
and the Agent such "Phase II" or other report, in form and substance reasonably
satisfactory to Lessor and the Agent.
ARTICLE XI
11.1 Modifications.
(a) Lessee at its sole cost and expense, at any time and
from time to time without the consent of Lessor may make alterations,
renovations, improvements and additions to any Property or any part
thereof and substitutions and
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replacements therefor (collectively, "Modifications"); provided, that:
(i) except for any Modification required to be made pursuant to a Legal
Requirement, no Modification shall materially impair the value, utility
or useful life of any Property from that which existed immediately
prior to such Modification; (ii) the Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) Lessee shall
comply with all material Legal Requirements (including all
Environmental Laws) and Insurance Requirements applicable to the
Modification, including without limitation the obtaining of all permits
and certificates of occupancy, and the structural integrity of any
Property shall not be adversely affected; (iv) to the extent required
by Section 14.2(a), Lessee shall maintain builders' risk insurance at
all times when a Modification is in progress; (v) subject to the terms
of Article XIII relating to permitted contests, Lessee shall pay all
costs and expenses and discharge any Liens (other than Permitted Liens)
arising with respect to the Modification; (vi) such Modification shall
comply with the requirements of this Lease (including without
limitation Sections 8.2 and 10.1); and (vii) no Improvements shall be
demolished unless Lessee shall finance the proposed Modification
outside of this lease facility. All Modifications shall become property
of the Lessor and shall be subject to this Lease, and title to any
component of any Property comprising any such Modifications shall
immediately vest in Lessor.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor and the Agent to be consistent with
and in compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 Warranty of Title.
(a) Lessee agrees that, except as otherwise provided herein
and subject to the terms of Article XIII relating to permitted
contests, Lessee shall not directly or indirectly create or allow to
remain, and shall promptly discharge at its sole cost and expense, (i)
any Lien, defect, attachment, levy, title retention agreement or claim
upon any Property or any Modifications or (ii) any Lien, attachment,
levy or claim with respect to the Rent or with respect to any amounts
held by the Agent pursuant to the Credit Agreement, in each case other
than Permitted Liens and Lessor Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted Lien or Lessor Lien has occurred with respect to a
Property, and Lessee represents and warrants to, and covenants with,
Lessor that the Liens in favor of the Lessor created by the Operative
Agreements are first priority perfected Liens subject only to Permitted
Liens.
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(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities. Except to
the extent otherwise provided for in Section 13 of the Participation Agreement,
Lessee, on its own or on Lessor's behalf but at Lessee's sole cost and expense,
may contest, by appropriate administrative or judicial proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any Legal Requirement, or utility charges payable pursuant to
Section 4.1 or any Lien, attachment, levy, encumbrance or encroachment, and
Lessor agrees not to pay, settle or otherwise compromise any such item, provided
that (a) the commencement and continuation of such proceedings shall suspend the
collection of any such contested amount from, and suspend the enforcement
thereof against, the applicable Properties, Lessor, each Holder, the Agent and
each Lender; (b) there shall not be imposed a Lien (other than Permitted Liens)
on any Property and no part of any Property nor any Rent shall be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance. During the
Term of each Property, Lessee shall procure and carry, at Lessee's sole cost and
expense, commercial general liability insurance for claims for injuries or death
sustained by persons or damage to property while on the Properties or the
premises where
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the Equipment is located and such other public liability coverages as are then
customarily carried by similarly situated companies conducting business similar
to that conducted by Lessee. Such insurance shall be on terms and in amounts
(and with deductibles and limitations on coverage) that are no less favorable
than insurance maintained by Lessee with respect to similar properties and
equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies shall be
endorsed to name Lessor (for itself and on behalf of the Holders) and the Agent
(for itself and on behalf of the Lenders) as additional insureds. The policies
shall also specifically provide that such policies shall be considered primary
insurance which shall apply to any loss or claim before any contribution by any
insurance which Lessor, any Holder, the Agent or any Lender may have in force.
Lessee shall, in the operation of the Properties, comply with the applicable
workers' compensation laws and protect Lessor, each Holder, the Agent and each
Lender against any liability under such laws.
14.2 Hazard and Other Insurance.
(a) During the Term for each Property, Lessee shall keep, or
cause to be kept, such Property insured against loss or damage by fire
and other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in amounts not less
than the Termination Value from time to time of such Property and on
terms that (a) are no less favorable than insurance covering other
similar properties owned by Lessee and (b) are then carried by
similarly situated companies conducting business similar to that
conducted by Lessee. Lessee shall not be required to maintain separate
builder's insurance solely by reason of the Modifications to a Property
if the cost of such Modifications will not exceed $100,000 in the
aggregate. The policies shall be endorsed to name Lessor (for itself
and on behalf of the Holders) and the Agent (for itself and on behalf
of the Lenders), to the extent of their respective interests, as
additional loss payees; provided, that so long as no Lease Event of
Default has occurred and is continuing, any loss payable under the
insurance policies required by this Section will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood- prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto, then Lessee shall comply with the
National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973. In addition, Lessee will fully comply with the
requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from time to
time, and with any other Legal Requirement concerning
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flood insurance to the extent that it may apply to any such
Property.
14.3 Coverage.
(a) As of the date of this Lease and annually thereafter,
Lessee shall furnish Lessor and the Agent with certificates prepared by
the insurers or insurance broker of Lessee showing the insurance
required under Sections 14.1 and 14.2 to be in effect, naming (except
with respect to workers' compensation insurance) Lessor (for itself and
on behalf of the Holders) and the Agent (for itself and on behalf of
the Lenders) as additional insureds and loss payees and evidencing the
other requirements of this Article XIV. All such insurance shall be at
the cost and expense of Lessee and provided by nationally recognized,
financially sound insurance companies. Such certificates shall include
a provision for thirty (30) days' advance written notice by the insurer
to Lessor and the Agent in the event of cancellation or material
alteration of such insurance. If a Lease Event of Default has occurred
and is continuing and Lessor so requests, Lessee shall deliver to
Lessor copies of all insurance policies required by Sections 14.1 and
14.2.
(b) Lessee agrees that any insurance policy required by
Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate
provision that such policy will not be invalidated should Lessee waive,
at any time, any or all rights of recovery against any party for losses
covered by such policy or due to any breach of warranty, action or
inaction by Lessee or any Person acting on behalf of Lessee. Lessee
hereby waives any and all such rights against the Lessor, the Holders,
the Agent and the Lenders to the extent of payments made to any such
Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof, and shall
otherwise maintain the coverage required by such Sections without any
lapse in coverage.
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ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of this Article XV and Article
XVI (in the event Lessee delivers, or is obligated to deliver, a
Termination Notice), and prior to the occurrence and continuation of a
Lease Default or Lease Event of Default, Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any award, compensation or
insurance proceeds under Sections 14.2(a) or (b) hereof to which Lessee
or Lessor may become entitled by reason of their respective interests
in a Property (i) if all or a portion of such Property is damaged or
destroyed in whole or in part by a Casualty or (ii) if the use, access,
occupancy, easement rights or title to such Property or any part
thereof is the subject of a Condemnation; provided, however, if a Lease
Default or Lease Event of Default shall have occurred and be continuing
such award, compensation or insurance proceeds shall be paid directly
to Lessor or, if received by Lessee, shall be held in trust for Lessor,
and shall be paid over by Lessee to Lessor and held in accordance with
the terms of this paragraph (a). All amounts held by Lessor hereunder
on account of any award, compensation or insurance proceeds either paid
directly to Lessor or turned over to Lessor shall be held as security
for the performance of Lessee's obligations hereunder.
(b) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a possible
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed ten percent (10%) of
the Property Cost of such Property, Lessee shall give notice thereof to
the Lessor and to the Agent promptly after the receipt of such notice.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor and the Agent a Termination Notice
to such effect.
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(e) If, pursuant to this Section 15.1, this Lease shall
continue in full force and effect following a Casualty or Condemnation
with respect to the affected Property, Lessee shall, at its sole cost
and expense and using, if available, the proceeds of any award,
compensation or insurance with respect to such Casualty or Condemnation
(including, without limitation, any such award, compensation or
insurance which has been received by the Agent and which should be
turned over to Lessee pursuant to the terms of the Operative
Agreements, and if not available or sufficient, using its own funds),
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built plans and
specifications or manufacturer's specifications for the applicable
Improvements or Equipment (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all
applicable Legal Requirements), so as to restore the applicable
Property to substantially the same condition, operation, function and
value as existed immediately prior to such Casualty or Condemnation. In
such event, title to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation with respect
to which this Lease remains in full force and effect under this Section
15.1 affect Lessee's obligations to pay Rent pursuant to Section 3.1.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, (i) the applicable Property
cannot reasonably be restored, repaired or replaced on or before the
180th day prior to the Expiration Date (if such Casualty or
Condemnation occurs during the Term) to substantially the same
condition as existed immediately prior to such Casualty or
Condemnation, or (ii) on or before such day such Property is not in
fact so restored, repaired or replaced, then Lessee shall be required
to purchase such Property on the next Payment Date and pay Lessor the
Termination Value for such Property, plus any and all Rent then due and
owing, plus all other amounts then due and owing (including without
limitation amounts described in clause FIRST of Section 22.2).
15.2 Environmental Matters. Promptly upon Lessee's actual knowledge of
the presence of Hazardous Substances in any portion of any Property (or in any
other property that is not subject to this Lease if Lessee has reason to believe
that such Hazardous Substances may be caused by an emission from or on, or a
condition on, any Property) in concentrations and conditions that constitute an
Environmental Violation and as to which, in the reasonable
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opinion of Lessee, the cost to undertake any legally required response, clean
up, remedial or other action might result in a cost to Lessee or loss in the
value of such Property of more than $100,000, Lessee shall notify Lessor in
writing of such condition. In the event of any Environmental Violation
(regardless of whether notice thereof must be given to Lessor pursuant to the
preceding sentence), Lessee shall, not later than sixty (60) days after Lessee
has actual knowledge of such Environmental Violation, either deliver to Lessor a
Termination Notice with respect to the applicable Property or Properties
pursuant to Section 16.1, if applicable, or, at Lessee's sole cost and expense,
promptly and diligently undertake and complete any response, clean up, remedial
or other action necessary to remove, cleanup or remediate the Environmental
Violation in accordance with all Environmental Laws. If Lessee does not deliver
a Termination Notice with respect to such Property pursuant to Section 16.1,
Lessee shall, upon completion of remedial action by Lessee, cause to be prepared
by a reputable environmental consultant acceptable to Lessor a report describing
the Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in full compliance with applicable
Environmental Law.
15.3 Notice of Environmental Matters. Promptly, but in any event within
thirty (30) days from the date Lessee has actual knowledge thereof, Lessee shall
provide to Lessor written notice of any pending or threatened Environmental
Claim involving any Environmental Law or any Release on or in connection with
any Property. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
Environmental Claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 Termination Upon Certain Events. If any of the following occur:
(i) if the requirements of Section 15.1(c) are satisfied, or (ii) if the
requirements of Section 15.1(d) are satisfied and Lessee has determined pursuant
to such section that following the applicable Casualty or Condemnation this
Lease shall terminate with respect to the affected Property, or (iii) Lessee has
determined pursuant to the second sentence of Section 15.2 that, due to the
occurrence of an Environmental Violation, this Lease shall terminate with
respect to the affected Property, then Lessee shall be obligated to deliver,
within sixty (60) days of its receipt of notice of the applicable Condemnation
or the occurrence of the applicable Casualty or Environmental Violation, a
written notice to
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the Lessor in the form described in Section 16.2(a) (a "Termination Notice") of
the termination of this Lease with respect to the applicable Property.
16.2 Procedures.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property, any and all Rent then due and owing and all
other amounts then due and owing from Lessee under any of the Operative
Agreements (including without limitation amounts described in clause
FIRST of Section 22.2) and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, any and all Rent then
due and owing and all other amounts then due and owing from Lessee
under any of the Operative Agreements (including without limitation
amounts described in clause FIRST of Section 22.2), and Lessor shall
convey such Property, or the remaining portion thereof, if any, to
Lessee (or Lessee's designee), all in accordance with Section 19.1.
ARTICLE XVII
17.1 Lease Events of Default. If any one or more of the
following events (each a "Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after the
same has become due and payable or (ii) any Termination Value, on the
date any such payment is due, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of
Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17(a)(ii)) due and
payable within three (3) days after receipt of notice that such payment
is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease;
(d) Lessee or Guarantor shall fail to observe or perform any
term, covenant or provision (including without limitation the
Incorporated Covenants) of Lessee or Guarantor under this Lease or any
other Operative Agreement to which Lessee or Guarantor is a party other
than those set forth in Sections
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17.1(a), (b) (c) or (g) hereof, and such failure shall remain uncured
for a period of thirty (30) days after the earlier of receipt of
written notice from Lessor thereof or a Responsible Officer of Lessee
becomes aware of such failure;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) (i) Any default, which is not waived, in the payment of
any principal, interest, premium or other amount with respect to any
Indebtedness or Rate Hedging Obligation (as defined in the Existing
Wackenhut Corrections Credit Agreement) (other than obligations under
the Operative Agreements) of Lessee in an amount not less than
$2,500,000 in the aggregate outstanding, or (ii) any default, which is
not waived, in the performance, observance or fulfillment of any term
or covenant contained in any agreement or instrument under or pursuant
to which any such Indebtedness or Rate Hedging Obligation referred to
in clause (i) may have been issued, created, assumed, guaranteed or
secured by Lessee, or (iii) any other event of default as specified in
any agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by Lessee, and any such default or event
of default specified in clauses (i), (ii) or (iii) shall continue for
more than the period of grace, if any, therein specified, or such
default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; or
(g) The breach of any financial covenant incorporated by
reference in Article XXVIII hereof or Section 12 of the
Guaranty;
(h) The Lessee shall be unable to pay its debts generally as
they become due; file a petition to take advantage of any insolvency
statute; make an assignment for the benefit of its creditors; commence
a proceeding for the appointment of a receiver, trustee, liquidator or
conservator of itself or of the whole or any substantial part of its
property; file a petition or answer seeking liquidation, reorganization
or arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute;
(i) A court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Lessee or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Lessee seeking liquidation,
reorganization or
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arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of debtors,
a court of competent jurisdiction shall assume custody or control of
the Lessee or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there
is commenced against the Lessee any proceeding or petition seeking
liquidation, reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Lessee
takes any action to indicate its consent to or approval of any such
proceeding or petition;
(j) The entering of any order in any proceedings against
Lessee decreeing the dissolution, divestiture or split-up of Lessee,
and such order remains in effect for more than sixty (60) days;
(k) Any representation, warranty or statement of fact
contained in any Operative Agreement in any writing, report,
certificate, or statement at any time furnished to Lessor, the Agent,
any Holder or any Lender by or on behalf of Lessee pursuant to or in
connection with this Lease or any other Operative Agreement or
otherwise shall be false or misleading in any material respect when
given;
(l) One or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer) is found
not to be liable for) is in excess of $500,000 is rendered against
Lessee, or (ii) there is any attachment, injunction or execution
against any of the Lessee's properties for any amount in excess of
$500,000 in the aggregate; and such judgment, attachment, injunction or
execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of thirty (30) days; or
(m) Any material Environmental Violation shall have occurred
and be continuing;
(n) Any Wackenhut Corrections Credit Agreement Event of
Default shall have occurred and be continuing; or
(o) Any Operative Agreement shall cease to be in full
force and effect;
then, in any such event, (i) all Construction Period Properties shall
automatically become Properties subject to the terms of this Lease as more
specifically provided in Section 2.2 and thereafter all references hereunder to
"Property" or "Properties" and all
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obligations of the Lessee with respect to the Properties (including specifically
without limitation the obligations of the Lessee contained in this Article XVII)
shall be deemed to include such Construction Period Properties, and (ii) Lessor
may, in addition to the other rights and remedies provided for in this Article
XVII and in Section 18.1, terminate this Lease by giving Lessee fifteen (15)
days notice of such termination, and this Lease shall terminate, and all rights
of Lessee under this Lease shall cease. Lessee shall, to the fullest extent
permitted by law, pay as Supplemental Rent all costs and expenses incurred by or
on behalf of Lessor, including without limitation reasonable fees and expenses
of counsel, as a result of any Lease Event of Default hereunder.
17.2 Surrender of Possession. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to Section 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Properties. Lessor may enter upon
and repossess the Properties by such means as are available at law or in equity,
and may remove Lessee and all other Persons and any and all personal property
and Lessee's equipment and personalty and severable Modifications from the
Properties. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, Lessee shall return the Properties promptly to Lessor,
in the manner and condition required by, and otherwise in accordance with the
provisions of, Section 22.1(c) hereof.
17.3 Reletting. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 Damages. Neither (a) the termination of this Lease as to all or
any of the Properties pursuant to Section 17.1; (b) the repossession of all or
any of the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including the
date of
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such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
Section 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1,
provided that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in Section 17.5. The amount of
Lessee's liabilities and obligations under this Lease shall not be reduced or
offset by any proceeds Lessor may receive from any reletting of any Property,
except that the net proceeds, if any, which are actually received by Lessor from
reletting of any Property shall be offset against the final liquidated damages
amount specified in Section 17.5. In calculating the amount of such net proceeds
from reletting, there shall be deducted all of Lessor's, any Holder's, the
Agent's and any Lender's reasonable expenses in connection therewith, including
repossession costs, brokerage or sales commissions, fees and expenses of counsel
and any necessary repair or alteration costs and expenses incurred in
preparation for such reletting. To the extent Lessor receives any damages
pursuant to this Section 17.4, such amounts shall be regarded as amounts paid on
account of Rent. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.4 shall be absolute and unconditional under
any and all circumstances and shall be paid or performed, as the case may be,
without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.5 Final Liquidated Damages. If a Lease Event of Default shall have
occurred and be continuing, whether or not this Lease shall have been terminated
pursuant to Section 17.1 and whether or not Lessor shall have collected any
current liquidated damages pursuant to Section 17.4, Lessor shall have the right
to recover, by demand to Lessee and at Lessor's election, and Lessee shall pay
to Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 13 of the Participation Agreement, and in lieu of all
current liquidated damages beyond the date of such demand (it being agreed that
it would be impossible accurately to determine actual damages) the sum of (a)
the Termination Value for all Properties remaining under this Lease, plus (b)
all other amounts owing in respect of Rent, Supplemental Rent and other amounts
then due and payable under this Lease or any other Operative Agreement. It is
intended and agreed that the foregoing amount is and will be liquidated damages
and not a penalty. Upon payment of the amount specified pursuant to the first
sentence of this Section 17.5, Lessee shall be entitled to receive from Lessor,
either at Lessee's request or upon Lessor's
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election, in either case at Lessee's cost, an assignment of Lessor's entire
right, title and interest in and to the Properties, the Improvements, Fixtures,
Modifications and Equipment, in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of this Lease
(including the release of any memoranda of Lease or the Lease Supplement
recorded in connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS IS" and in their then present physical condition. If any
statute or rule of law shall limit the amount of such final liquidated damages
to less than the amount agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law; provided, however, Lessee
shall not be entitled to receive an assignment of Lessor's interest in the
Properties, the Improvements, Fixtures, Modifications or Equipment or documents
unless Lessee shall have paid in full the Termination Value and all other
amounts due and owing hereunder and under the other Operative Agreements. Lessee
specifically acknowledges and agrees that its obligations under this Section
17.5 shall be absolute and unconditional under any and all circumstances and
shall be paid or performed, as the case may be, without notice or demand (except
as otherwise specifically provided herein) and without any abatement, reduction,
diminution, setoff, defense, counterclaim or recoupment whatsoever.
17.6 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or possession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might otherwise
limit or modify any of Lessor's rights or remedies under this Article XVII.
17.7 Assignment of Rights Under Contracts. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessee shall upon Lessor's demand
immediately assign, transfer and set over to Lessor all of Lessee's right, title
and interest in and to each agreement executed by Lessee in connection with the
purchase, construction, development, use or operation of the Properties
(including, without limitation, all right, title and interest of Lessee with
respect to all warranty, performance, service and indemnity provisions), as and
to the extent that the same relate to the purchase, construction, use and
operation of the Properties.
17.8 Environmental Costs. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to Section 17.1, Lessee shall pay directly to any third
party (or at Lessor's election, reimburse Lessor) for the cost of any
environmental testing or remediation work undertaken respecting any Property as
such testing or work is
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deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such payment.
17.9 Remedies Cumulative. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise, including, without limitation, any
mortgage foreclosure remedies.
17.10 Notice of Default or Event of Default. Lessee shall promptly
notify the Lessor and the Agent if any Responsible Officer of Lessee has
received notice, or has actual knowledge, of any Default or Event of Default.
17.11 Option to Purchase or Sell All Properties Upon Certain Changes of
Control. If (a) a Change of Control has occurred and is continuing, (b) such
Change of Control has not been consented to by, and is not otherwise within the
control of, any Wackenhut Control Group Member, and (c) no Lease Event of
Default (other than such Change of Control) has occurred and is continuing on
the date of the applicable Election Notice or Sale Date, then notwithstanding
anything to the contrary in this Article XVII, Lessee may within ten (10) days
of such Change of Control give the Lessor and the Agent the Election Notice
pursuant to Section 20.1, and may (on a Payment Date occurring not more than 180
and not less than 120 days after such Election Notice) purchase or remarket all
of the Properties in accordance with, and subject to the conditions set forth
in, Section 20.1 and Article XXII. Provided no Lease Event of Default (other
than such Change of Control) has occurred and is continuing, then during the
10-day period described in this paragraph for delivery of Lessee's Election
Notice, Lessor shall not remarket the Properties without Lessee's consent.
17.12 Lessee's Purchase Option During Default. If a Lease Event of
Default that is not within the control of Lessee has occurred and is continuing,
and such Lease Event of Default could not reasonably be cured by Lessee within
any applicable grace period, and Lessee exercises its option to purchase a
Property (the "affected Property") in accordance with Section 20.1 (without
regard to the limitations contained in the first sentence of Section 20.1
regarding the absence of Lease Events of Default) within fifteen (15) days of
the occurrence of such Lease Event of Default, the purchase of the affected
Property within such 15-day period shall be deemed to have cured such Lease
Event of Default to the extent such Lease Event of Default is no longer
continuing with respect to any other Property remaining subject to this Lease
after such purchase of the affected Property.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults. Lessor,
without waiving or releasing any obligation or Lease Event of
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Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
the failure by Lessee to maintain the insurance required by Article XIV, and
may, to the fullest extent permitted by law, and notwithstanding any right of
quiet enjoyment in favor of Lessee, enter upon any Property, or real property
owned or leased by Lessee and take all such action thereon as may be necessary
or appropriate therefor. No such entry shall be deemed an eviction of any
lessee. All reasonable out-of-pocket costs and expenses so incurred (including
without limitation reasonable fees and expenses of counsel), together with
interest thereon at the Overdue Rate from the date on which such sums or
expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
Subject to Section 19.2, in connection with any termination of this Lease with
respect to any Property pursuant to the terms of Section 16.2, or in connection
with Lessee's exercise of its Purchase Option or its option to purchase a
Property pursuant to Section 20.1, upon the date on which this Lease is to
terminate with respect to a Property or all of the Properties, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b), 20.1 or 20.2, as
applicable, Lessor shall execute and deliver to Lessee (or to Lessee's designee)
at Lessee's cost and expense an assignment of Lessor's entire interest in the
applicable Property, in each case in recordable form and otherwise in conformity
with local custom and free and clear of the Lien of this Lease and any Lessor
Liens attributable to Lessor but without any other warranties (of title or
otherwise) from the Lessor. The applicable Property shall be conveyed to Lessee
"AS IS" "WHERE IS" and in then present physical condition. In addition, Lessor
shall, upon Lessee's request and at Lessee's expense, execute and deliver any
documents (including any appropriate releases of or amendments to financing
statements or recorded memoranda of this Lease) necessary to release the Lien of
this Lease on the applicable Property.
19.2 No Termination With Respect to Less than All of a Property. Lessee
shall not be entitled to exercise its Purchase Option separately with respect to
Property consisting of Land, Equipment and Improvements but shall be required to
exercise its Purchase Option with respect to an entire Property.
ARTICLE XX
20.1 Individual Purchase Option. Subject to the restrictions set forth
in this paragraph and provided no Default or Event of Default shall have
occurred and be continuing and provided that the Election Notice referred to in
Section 20.2 has not been delivered, Lessee shall have the option, exercisable
by giving the Agent and Lessor no more than one hundred twenty (120) days and no
less than sixty (60) days irrevocable written notice of Lessee's election to
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exercise such option, to purchase any Property (whether or not the Basic Term
shall have commenced for such Property) on a Scheduled Interest Payment Date as
identified in such written notice, at a price equal to the Termination Value for
such Property and all Rent then due and owing and all other amounts then due and
owing (by the Lessee or the Construction Agent) under this Lease or under any
other Operative Agreement (including without limitation amounts, if any,
described in clause FIRST of Section 22.2) (which the parties do not intend to
be a "bargain" purchase price); and, upon receipt of such amount, Lessor shall
transfer to Lessee all of Lessor's right, title and interest in and to such
Property in accordance with Section 19.1 as of the Scheduled Interest Payment
Date on which such purchase occurs. The foregoing notwithstanding, Lessee may
not purchase any Property or Properties pursuant to this Section 20.1 if the
Property Cost of the Property or Properties then under consideration for
purchase (collectively, the "Intended Acquisition Properties") plus the
aggregate Property Cost of all Properties then or previously purchased by Lessee
or the Construction Agent (including without limitation purchases pursuant to,
as a result of or otherwise relating to any exercise of the purchase option
pursuant to this Section 20.1, any Default, any Event of Default, any Casualty,
any Condemnation or any Environmental Violation) on a cumulative basis exceeds
20% of the aggregate of the Maximum Expected Property Costs (as of the date of
determination) of all properties that have at any time been Properties
(including without limitation any Intended Acquisition Properties and any other
Properties then or previously purchased by the Lessee or retained by the
Lessor), unless the Agent (at Lessee's sole expense) obtains Appraisals of the
remaining Properties (excluding any Intended Acquisition Properties) showing an
aggregate appraised value equal to or greater than 85% of the aggregate Maximum
Expected Property Costs of such remaining Properties. For the purposes of this
paragraph, "Maximum Expected Property Cost" with respect to any Property, as of
the date of determination, shall mean (A) with respect to any Property then
subject to the Lease, the Property Cost of such Property, or (B) with respect to
any Construction Period Property, the greater of the Property cost or expected
maximum Property Cost (based on the applicable Construction Budgets) for such
Property, or (C) with respect to any property that was previously, but is not
then, a Property, the highest Property Cost of such property when it was a
Property.
20.2 Purchase or Sale Option. Not less than 120 days and no more than
180 days prior to the Expiration Date or any Payment Date occurring after the
Construction Period Termination Date, Lessee may give Lessor and Agent
irrevocable written notice (the "Election Notice") that Lessee is electing to
exercise either (a) the option to purchase all, but not less than all, of the
Properties on such Expiration Date or Payment Date (the "Purchase Option") or
(b) the option to remarket all of the Properties and cause a sale of all of the
Properties pursuant to the terms of Section 22.1 (the "Sale Option"), such sale
to occur on such Expiration Date or Payment
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Date. If Lessee does not give an Election Notice indicating the Sale Option at
least 120 days and not more than 180 days prior to the Expiration Date, then
Lessee shall be deemed to have elected the Purchase Option for the Expiration
Date. Lessor shall have no obligation to sell any Property unless all of the
Properties are sold on the respective Expiration Date or Payment Date. If Lessee
shall (i) elect (or be deemed to elect) to exercise the Purchase Option, or (ii)
elect to remarket all of the Properties pursuant to Section 22.1 and fail to
deliver the environmental report required by Section 10.2 at the time specified
in such Section, or (iii) elect to remarket all of the Properties pursuant to
Section 22.1 and fail to cause all of the Properties to be sold in accordance
with the terms of Section 22.1 on the respective Expiration Date or Payment Date
on which such a sale of all of the Properties is required in connection with
such election, then in each case, Lessee shall pay to Lessor on such Expiration
Date or Payment Date an amount (the "Purchase Option Price") equal to the
Termination Value for all the Properties (which the parties do not intend to be
a "bargain" purchase) plus all Rent and other amounts then due and payable under
this Lease or under any other Operative Agreement (including without limitation
the amounts described in clause FIRST of Section 22.2), and, upon receipt of
such amount, Lessor shall transfer to Lessee all of Lessor's right, title and
interest in and to the Properties in accordance with Section 19.1. Lessee may
not elect the Sale Option, and Lessor shall have no obligation to sell any
Property pursuant to Section 22.1, if a Lease Event of Default has occurred and
is continuing on the date of the Election Notice or the Sale Date. Upon any
purchase or sale of all the Properties pursuant to this Section 20.2 or Section
22.1, the Expiration Date shall be deemed to have occurred on the date of such
purchase or sale.
20.3 Accounting Changes. Although neither Lessor, the Agent, NCMI, nor
any Lender or Holder makes any representation or warranty with respect to the
Lessee's accounting treatment of this transaction, Lessee represents that a
material incentive for Lessee to enter into this Lease is the advice of the
Lessee's independent auditors that this Lease may be treated as an operating
lease for financial accounting purposes under the applicable rules and
interpretations of the Financial Accounting Standards Board and/or the
Securities Exchange Commission (the "Lease Accounting Rules") in effect as of
the date of this Lease. In the event that Lessee's independent auditors shall
determine that any subsequent change in the Lease Accounting Rules will preclude
the Lessee (or raise a substantial question as to whether the Lessee is
precluded) from continuing to account for this Lease as an operating lease with
substantially the same financial accounting benefits as before the change in
Lease Accounting Rules, then the Lessee shall so notify the Lessor and the Agent
in writing of such determination by its auditors; and Lessee may elect (by
delivery of irrevocable written notice of such election to the Lessor and the
Agent) to purchase all of the Properties or to cause all of the Properties to be
transferred to a third party transferee designated by Lessee
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(such purchase or transfer to be consummated on a date (the "Accounting
Change Transfer Date") specified by Lessee in such notice and in any event
within sixty (60) days after the date of such notice). On the Accounting Change
Transfer Date (whether the Properties are to be purchased by Lessee or
transferred to a third party), Lessee shall pay to Lessor an amount equal to
the Termination Value for all the Properties (which the parties do not intend
to be a "bargain" purchase) plus all Rent and other amounts then due and
payable under this Lease or under any other Operative Agreement (including
without limitation the amounts described in clause FIRST of Section 22.2), and,
upon receipt of such amount, Lessor shall transfer to Lessee (or to the third
party designated by Lessee) all of Lessor's right, title and interest in and to
the Properties in accordance with Section 19.1 and the Expiration Date shall be
deemed to have occurred on the date of such transfer (without giving Lessee the
right to remarket Properties pursuant to Section 22.1).
ARTICLE XXI
21.1 Renewal.
(a) Provided that no Lease Event of Default shall have
occurred and be continuing at the Basic Term Expiration Date or at the
expiration of any Extended Term, Lessee may renew this Lease (the
"Renewal Option") for an Extended Term of one year upon not more than
one hundred eighty (180) days and not less than one hundred twenty
(120) days prior written notice to Lessor, with respect to all, but not
less than all Properties (excluding Properties previously repurchased
by Lessee pursuant to Section 20.1), provided further that the Term
shall not be extended pursuant to this Section 21.1(a) beyond June 19,
2002. If Lessee will not have given an Election Notice pursuant to
Section 20.2 at least one hundred twenty (120) days and not more than
one hundred eighty (180) days prior to the final day of the Basic Term
or the first or second Extended Term, then Lessee shall be deemed to
have elected the Renewal Option for the Basic Term Expiration Date.
(b) Each renewal of this Lease for an Extended Term pursuant
to Section 21.1(a) shall be on the same terms and conditions as those
set forth in this Lease for the original Basic Term (which the parties
do not intend to be "bargain" renewals).
ARTICLE XXII
22.1 Sale Procedure.
(a) During the Marketing Period, Lessee, on behalf of
the Lessor, shall obtain bids for the cash purchase of all of
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the Properties in connection with a sale to one or more purchasers
(other than Lessee or any Affiliate of Lessee) to be consummated on
the applicable Expiration Date or Payment Date for the highest
price available, shall notify Lessor promptly of the name and address
of each prospective purchaser and the cash price which each
prospective purchaser shall have offered to pay for any Property and
shall provide Lessor with such additional information about the bids
and the bid solicitation procedure as Lessor may reasonably request
from time to time. Lessor may reject any and all bids and may assume
sole responsibility for obtaining bids by giving Lessee written notice
to that effect; provided, however, that notwithstanding the foregoing,
Lessor may not reject the highest bids for the Properties submitted by
the Lessee if (i) such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all of the
Properties, plus all reasonable costs and expenses referred to in
clause FIRST of Section 22.2 and represent bona fide offers from one
or more third party purchasers, and (ii) prior to Lessor's acceptance
of any such bid, Lessee has delivered to the Agent cash collateral in
an amount not less than the anticipated Deficiency Balance (as defined
in Section 22.1(b) below) as determined by the Agent. If the price
which a prospective purchaser or purchasers shall have offered to pay
for the Properties is less than the sum of the Limited Recourse Amount
plus all reasonable costs and expenses referred to in clause FIRST of
Section 22.2, Lessor may elect to retain the Properties by giving
Lessee prior written notice of Lessor's election to retain the
Properties, and upon receipt of such notice, Lessee shall surrender
the Properties to Lessor pursuant to Section 10.1. Unless Lessor shall
have elected to retain the Properties pursuant to the preceding
sentence, Lessee shall arrange for Lessor to sell the Properties free
and clear of the Lien of this Lease and any Lessor Liens attributable
to it, without recourse or warranty (of title or otherwise), for cash
on the last day of the Marketing Period (such date being hereafter
referred to as the "Sale Date") to the purchaser or purchasers
identified by Lessee or Lessor, as the case may be; provided, however,
solely as to Lessor or the Trust Company, in its individual capacity,
any Lessor Lien shall not constitute a Lessor Lien so long as Lessor
or the Trust Company, in its individual capacity, is diligently
contesting such Lessor Lien by appropriate proceedings in good faith;
and provided further that (except as expressly permitted by Section
17.11) Lessor shall have no obligation to sell any Property if a Lease
Event of Default has occurred and is continuing on the Date of the
Election Notice or the Sale Date. Lessee shall surrender the Property
so sold or subject to such documents to each purchaser in the
condition specified in Section 10.1. Lessee shall not take or fail to
take any action which would have the effect of unreasonably
discouraging bona fide third party bids for any Property. Lessor shall
have no obligation to sell any
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Property on the Sale Date unless all of the Properties are sold (and
Lessor has received full payment therefor in cash in the amount
required pursuant to this Section 22.1) on the Sale Date. If all of
the Properties are not either (i) sold on the Sale Date in accordance
with the terms of this Section 22.1, or (ii) retained by the Lessor
pursuant to an affirmative election made by the Lessor pursuant to the
third sentence of this Section 22.1(a), then the Lessee shall be
obligated to pay the Lessor on the Sale Date an amount equal to the
Termination Value for all of the Properties (plus all Rent and other
amounts then due and payable under this Lease and any other Operative
Agreements) in accordance with the terms of Section 20.2.
(b) If the Properties are sold on the Sale Date to one or more
third party purchasers in accordance with the terms of Section 22.1(a)
and the aggregate purchase price paid for the Properties minus the sum
of all costs and expenses referred to in clause FIRST of Section 22.2
is less than the sum of the aggregate Termination Values for all of the
Properties plus all Rent and other amounts then due and payable under
this Lease and under any other Operative Agreements (hereinafter such
difference shall be referred to as the "Deficiency Balance"), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date the lesser of (i) the Deficiency Balance, or (ii) the Maximum
Residual Guarantee Amount for all of the Properties. If the Properties
are retained by the Lessor pursuant to an affirmative election made by
the Lessor pursuant to the third sentence of Section 22.1(a), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date an amount equal to the Maximum Residual Guarantee Amount for all
of the Properties.
(c) In the event that the Properties are either sold to one or
more third party purchasers on the Sale Date or retained by the Lessor
in connection with an affirmative election made by the Lessor pursuant
to the third sentence of Section 22.1(a), then in either case on the
Sale Date the Lessee shall provide Lessor or such third party
purchasers with (i) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use and operate
such Property for its intended purposes, (ii) such easements, licenses,
rights-of-way and other rights and privileges in the nature of an
easement as are reasonably necessary or desirable in connection with
the use, repair, access to or maintenance of such Property for its
intended purpose or otherwise as the Lessor shall reasonably request,
and (iii) a services agreement covering such services as Lessor or such
third party purchaser may request in order to use and operate a
Property for its intended purposes at such rates (not in excess of
arm's-length fair market rates) as shall be acceptable to Lessee and
Lessor or such third party purchaser. All
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assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to the Lessor or such third party purchaser, as
applicable, and shall be fully assignable (including both primary
assignments and assignments given in the nature of security) without
payment of any fee, cost or other charge.
22.2 Application of Proceeds of Sale. The Lessor shall apply
the proceeds of sale of any Property in the following order of
priority:
(i) FIRST, to pay or to reimburse Lessor for the
payment of all reasonable costs and expenses incurred by
Lessor in connection with the sale;
(ii) SECOND, so long as the Participation
Agreement, the Credit Agreement or the Trust Agreement is in
effect and any Loan, Holder Advance or any other amount is
owing to the Lenders, the Holders or any other Person under
any Operative Agreement, to the Agent to be applied pursuant
to inter-creditor provisions between the Lenders and the
Holders contained in the Operative Agreements; and
(iii) THIRD, to the Lessee.
22.3 Indemnity for Excessive Wear. If the proceeds of the sale
described in Section 22.1 with respect to the Properties, less all expenses
incurred by Lessor in connection with such sale, shall be less than the Limited
Recourse Amount with respect to the Properties, and at the time of such sale it
shall have been reasonably determined (pursuant to the Appraisal Procedure) that
the Fair Market Sales Value of the Properties, shall have been impaired by
greater than expected wear and tear during the term of the Lease, Lessee shall
pay to Lessor within ten (10) days after receipt of Lessor's written statement
(i) the amount of such excess wear and tear determined by the Appraisal
Procedure or (ii) the amount of the Net Sale Proceeds Shortfall, whichever
amount is less.
22.4 Appraisal Procedure. For determining the Fair Market Sales Value
of any Property or any other amount which may, pursuant to any provision of any
Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee
shall use the following procedure (the "Appraisal Procedure"). Lessor and Lessee
shall endeavor to reach a mutual agreement as to such amount for a period of ten
(10) days from commencement of the Appraisal Procedure under the applicable
section of the Lease, and if they cannot agree within ten (10) days, then two
qualified appraisers, one chosen by Lessee and one chosen by Lessor, shall
mutually agree thereupon, but if either party shall fail to choose an appraiser
within twenty (20) days after notice from the other party of the selection of
its appraiser, then the appraisal by such appointed appraiser shall be
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binding on Lessee and Lessor. If the two appraisers cannot agree within twenty
(20) days after both shall have been appointed, then a third appraiser shall be
selected by the two appraisers or, failing agreement as to such third appraiser
within (30) days after both shall have been appointed, by the American
Arbitration Association. The decisions of the three appraisers shall be given
within twenty (20) days of the appointment of the third appraiser and the
decision of the appraiser most different from the average of the other two shall
be discarded and such average shall be binding on Lessor and Lessee; provided
that if the highest appraisal and the lowest appraisal are equidistant from the
third appraisal, the third appraisal shall be binding on Lessor and Lessee. The
fees and expenses of the appraiser appointed by Lessee shall be paid by Lessee;
the fees and expenses of the appraiser appointed by Lessor shall be paid by
Lessor (such fees and expenses not being indemnified pursuant to Section 13 of
the Participation Agreement); and the fees and expenses of the third appraiser
shall be divided equally between Lessee and Lessor.
22.5 Certain Obligations Continue. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to the Properties (including the
installment of Basic Rent due on the applicable Expiration Date or Payment Date)
shall continue undiminished until payment in full to Lessor of the sale
proceeds, if any, the Maximum Residual Guarantee Amount, the amount due under
Section 22.3, if any, and all other amounts due to Lessor with respect to all
Properties. Lessor shall have the right, but shall be under no duty, to solicit
bids, to inquire into the efforts of Lessee to obtain bids or otherwise to take
action in connection with any such sale, other than as expressly provided in
this Article XXII.
ARTICLE XXIII
23.1 Holding Over. If Lessee shall for any reason remain in possession
of a Property after the expiration or earlier termination of this Lease as to
such Property (unless such Property is conveyed to Lessee), such possession
shall be as a tenancy at sufferance during which time Lessee shall continue to
pay Supplemental Rent that would be payable by Lessee hereunder were the Lease
then in full force and effect with respect to the Property and Lessee shall
continue to pay Basic Rent at 110% of the Basic Rent that would otherwise be due
and payable at such time. Such Basic Rent shall be payable from time to time
upon demand by Lessor and such additional 10% amount shall be applied by the
Lessor to the payment of the Loans pursuant to the Credit Agreement and the
Holder Advances pursuant to the Trust Agreement pro rata between the Loans and
the Holder Advances. During any period of tenancy at sufferance, Lessee shall,
subject to the first sentence of this paragraph, be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have
no rights hereunder other than the right, to the extent given by law to tenants
at sufferance, to continue their occupancy and use of
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such Property. Nothing contained in this Article XXIII shall constitute the
consent, express or implied, of Lessor to the holding over of Lessee after the
expiration or earlier termination of this Lease as to any Property (unless such
Property is conveyed to Lessee) and nothing contained herein shall be read or
construed as preventing Lessor from maintaining a suit for possession of such
Property or exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss. During the Term, unless Lessee shall not be in
actual possession of the Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under Article XVII, the risk of loss
or decrease in the enjoyment and beneficial use of such Property as a result of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise is assumed by Lessee, and Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XXV
25.1 Assignment.
(a) Subject to Section 2.5 above, Lessee may not assign this
Lease or any of its rights or obligations hereunder in whole or in part
to any Person without the prior written consent of the Agent and the
Lessor, with such consent to be given or withheld in the sole
discretion of each such party.
(b) No such assignment or other relinquishment of possession to
any Property shall in any way discharge or diminish any of the
obligations of Lessee to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease.
25.2 Subleases.
(a) Promptly but in any event within five (5) days following
the execution and delivery of any sublease permitted by this Article
XXV, Lessee shall notify Lessor and the Agent of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Properties described in such Lease Supplement from
Lessor, and any existing tenant respecting such Property shall
automatically be deemed to be a subtenant of Lessee and not a tenant of
Lessor.
(b) Lessee may, without the consent of Lessor, sublet not more
than twenty percent (20%) of the square footage of the Improvements on
any specific Property to sublessees who use the sublet portion of the
Improvements only for educational purposes, job training, food and
commissary
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services or maintenance purposes; provided that in any event, Lessee
shall remain fully liable for all obligations (including without
limitation all Rent and other obligations with respect to such
subleased Properties and any other Properties) under this Lease, each
Lease Supplement and the other Operative Agreements. Any such sublease
of any Property shall be on commercially reasonable terms and at market
rates, and such Property shall continue to be used for the purposes set
forth in this paragraph and in the definition of "Property." Except as
set forth in this Section 25.2(b), Lessee may not sublet any Property
or portion thereof without first obtaining the prior written consent of
the Lessor and the Agent, which consent may be given or withheld in the
sole discretion of each such party.
(c) No such sublease or other relinquishment of possession to any
Property shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease as to the Property, or portion
thereof, so sublet.
(d) Any sublease of any Property or portion thereof shall be
subject, and expressly subordinate to the rights of the Lessor, the
Agent, the Lenders and the Holders under this Lease, the Security
Agreement, each Mortgage Instrument and all other Operative Agreements.
Each insurance policy carried by Lessee pursuant to Article XIV hereof
shall be endorsed to name each sublessee under any such sublease as an
additional insured. Prior to the effectiveness of any such sublease,
Lessee shall deliver a copy thereof to the Lessor and the Agent.
ARTICLE XXVI
26.1 No Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
ARTICLE XXVII
27.1 Acceptance of Surrender. No surrender to Lessor of this Lease or
of all or any portion of any Property or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by Lessor and the Agent, and no act by Lessor or the Agent or any
representative or agent of Lessor or the Agent, other than a written acceptance,
shall constitute an acceptance of any such surrender.
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27.2 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) any right, title or interest in any Property, (c) any
Notes, or (d) a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 Incorporation of Covenants.
(a) Reference is made to that certain Credit Agreement dated
as of June 19, 1997 (the "Existing Wackenhut Corrections Credit
Agreement") among Wackenhut Corrections, the lenders party thereto, and
NationsBank, National Association, as Agent. Further reference is made
to the covenants contained in Article VII and Article VIII of the
Existing Wackenhut Corrections Credit Agreement (hereinafter referred
to as the "Incorporated Covenants"). The Lessee agrees with the Lessor
that, effective as of the date hereof (whether or not the Basic Term
has commenced with respect to any Property), the Incorporated Covenants
(and all other relevant provisions of the Existing Wackenhut
Corrections Credit Agreement related thereto) are hereby incorporated
by reference into this Lease and into the Guaranty Agreement to the
same extent and with the same effect as if set forth fully herein and
therein and shall inure to the benefit of the Lessor, without giving
effect to any waiver, amendment, modification or replacement of the
Existing Wackenhut Corrections Credit Agreement or any term or
provision of the Incorporated Covenants occurring subsequent to the
date of this Lease, except to the extent otherwise specifically
provided in the following provisions of this paragraph. In the event a
waiver is granted under the Existing Wackenhut Corrections Credit
Agreement or an amendment or modification is executed with respect to
the Existing Wackenhut Corrections Credit Agreement, and such waiver,
amendment or modification affects the Incorporated Covenants, then such
waiver, amendment or modification shall be effective with respect to
the Incorporated Covenants as incorporated by reference into this Lease
only if consented to in writing by the Majority Lenders and the Agent.
In the event of any replacement of the Existing Wackenhut Corrections
Credit Agreement with a similar credit facility (the "New Facility")
the covenants contained in the New Facility which correspond to the
covenants contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement shall become the Incorporated Covenants
hereunder only if consented to in writing by the Majority Lenders and
the Agent, and, if such consent is not granted, then the covenants
contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or
amendments approved in accordance with this paragraph) shall
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continue to be the Incorporated Covenants hereunder. If the Existing
Wackenhut Corrections Credit Agreement (or any such New Facility, as
the case may be) is terminated and not replaced, then the covenants
contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or
amendments thereto, or covenants of the New Facility, in each case
approved in accordance with this paragraph) shall continue to be the
Incorporated Covenants hereunder.
(b) Financial Information, Reports, Notices, Etc. Without
limiting the generality of the foregoing, from and after the date
hereof (whether or not the Basic Term has commenced with respect to any
Property), to the extent that the Incorporated Covenants require
Wackenhut Corrections or any of its Subsidiaries to deliver any
financial statement, certificate, notice, report, or other document or
information to the Existing Credit Agent (or any other agent under the
applicable credit facility), the Lessee shall, and shall cause
Wackenhut Corrections to, simultaneously deliver a copy of such
financial statement, certificate, notice, report, document or
information to the Agent, each Lender and (upon Lessor's request) the
Lessor.
ARTICLE XXIX
29.1 Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and delivered personally or
by a nationally recognized overnight courier service or mailed (by registered or
certified mail, return receipt requested, postage prepaid) or telecopied with a
confirming notice, addressed to the respective parties, as follows:
If to Lessee:
Wackenhut Corrections Corporation
0000 Xxxxxxxxx Xxxxx, #000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000-0000
Attention: Mr. Xxxxx Xxxxxx, Controller
and Chief Accounting Officer
Telephone No.: (000) 000-0000 Ext. 6646
Telecopy No.: (000) 000-0000
If to Lessor:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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with a copy to the Agent:
NationsBank, National Association
000 Xxxxxxxxx 0xx Xxxxxx
XX0-000-00-00
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or such additional parties or other address as such party may hereafter
designate, and shall be effective upon receipt or refusal thereof.
ARTICLE XXX
30.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
30.2 Amendments and Modifications. Neither this Lease, any Lease
Supplement nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by
Lessor and Lessee.
30.3 Successors and Assigns. All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
30.4 Headings and Table of Contents. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
30.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
30.7 Calculation of Rent. All calculation of Rent payable hereunder
shall be computed based on the actual number of days elapsed over a year of 360
days.
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30.8 Memoranda of Lease and Lease Supplements. This Lease shall not be
recorded; provided Lessor and Lessee shall promptly record (a) a memorandum of
this Lease (in substantially the form of Exhibit C-1 attached hereto) regarding
each Property (that is not then a Completed Property) promptly after the
acquisition thereof in the local filing office with respect thereto and (b) a
memorandum of this Lease and the applicable Lease Supplement (in substantially
the form of Exhibit C-2 attached hereto) regarding each Property that is (at the
time of acquisition) or subsequently becomes a Completed Property, promptly
after the date of acquisition or Completion thereof (as the case may be) in the
local filing office with respect thereto, in all cases at Lessee's cost and
expense, and as required under applicable law to sufficiently evidence this
Lease or any such Lease Supplement in the applicable real estate filing records.
30.9 Allocations between the Lenders and the Holders. Notwithstanding
any other term or provision of this Lease to the contrary, the allocations of
the proceeds of the Properties and any and all other Rent and other amounts
received hereunder shall be subject to the inter-creditor provisions between the
Lenders and the Holders contained in the Operative Agreements (or as otherwise
agreed among the Lenders and the Holders from time to time).
30.10 Limitations on Recourse. Notwithstanding anything contained in
this Lease to the contrary, Lessee agrees to look solely to Lessor's estate and
interest in the Properties for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the foregoing shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lessee under or
with respect to this Lease, the relationship of Lessor and Lessee hereunder or
Lessee's use of the Properties or any other liability of Lessor to Lessee,
except to the extent expressly provided in Section 14.11(b) of the Participation
Agreement. Nothing in this Section shall be interpreted so as to limit the terms
of Sections 6.1 or 6.2.
30.11 WAIVERS OF JURY TRIAL. THE LESSOR AND THE LESSEE IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS LEASE OR ANY COUNTERCLAIM THEREIN.
30.12 Original Leases. The single executed original of this Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt of the Agent therefor on or following
the signature page thereof shall be the original executed counterpart of this
Lease (the "Original Executed Counterpart"). To the extent that this Lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code as in effect in any applicable
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jurisdiction, no security interest in this Lease may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
30.13 Mortgage Grant and Remedies. Without limiting any other remedies
set forth in this Lease, in the event that a court of competent jurisdiction
rules that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the Lessor and the
Lessee agree that the Lessee hereby grants, bargains, sells, conveys, mortgages,
and grants a security interest in each Property to Lessor WITH POWER OF SALE to
secure the payment of all sums due and owing by Lessee or the Construction Agent
hereunder or under any other Operative Agreement, and that, upon the occurrence
of any Event of Default, the Lessor shall have the power and authority, to the
extent provided by law or the Operative Agreements, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of any Property, to appoint or
obtain the appointment of a receiver for all or any part of the Property, and to
exercise any other right or remedy that may be available under applicable law to
the holder of a mortgage, deed of trust, security deed or other secured
financing.
30.14 Exercise of Lessor Rights. The Lessee hereby acknowledges and
agrees that the rights and powers of the Lessor under this Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
(a) In the event that a court of competent jurisdiction rules
that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the
Lessor and the Lessee agree that the Lessor's collateral assignment of
this Lease to the Agent shall be deemed to be a collateral assignment
of such mortgage, deed of trust, security deed or other secured
financing, and the Agent as such collateral assignee shall be entitled
to exercise any and all rights and remedies of the Lessor set forth
herein during the existence of any Event of Default, including without
limitation the Lessor's rights to obtain a receiver, to obtain
possession of the Properties and the rents and revenues thereof, to
foreclose this Lease, to sell the Lessee's interest in the Properties,
and to exercise any other rights or remedies that may then be available
to the Lessor under applicable law on account of such Event of Default.
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(b) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under this Lease.
(c) During the existence of an Event of Default, the Agent as
holder of the Mortgage Instruments and as collateral assignee of this
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
this Lease (regardless of whether this Lease shall be deemed a
mortgage, deed of trust, security deed or other secured financing) even
if Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
WITNESS: WACKENHUT CORRECTIONS
CORPORATION, as Lessee
By: By:
------------------------------ -----------------------------------
Name: Name: Xxxxxx X. Xxxxx
---------------------------- Title: Chief Executive Officer
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not individually, but
solely as Owner
Trustee under the
Wackenhut Corrections
WITNESS: Trust 1997-1, as Lessor
By: By:
------------------------------ ----------------------------------
Name: Name: Xxx X. Xxxxx
---------------------------- Title: Vice President
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as of the date hereof
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:
-------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
SIGNATURE PAGE 1 OF 1
47
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of
[__________] between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as Owner Trustee under the Wackenhut Corrections Trust
1997-1, as lessor (the "Lessor"), and WACKENHUT CORRECTIONS CORPORATION, as
lessee (the "Lessee").
WHEREAS, the Lessor is the owner or will be the owner of the Property
described on Schedule I hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of June 19, 1997, among the WACKENHUT CORRECTIONS CORPORATION, as
Construction Agent, Lessee, the Lessor, not individually, except as expressly
stated therein, but solely as Owner Trustee under the Wackenhut Corrections
Trust 1997-1, the Holders party thereto, the Lenders party thereto, and
NationsBank, National Association, as Agent for the Lenders (as such agreement
may be amended, modified, supplemented or restated from time to time).
SECTION 2. THE PROPERTIES. Attached hereto as Schedule I is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule I-A, an Improvement Schedule attached hereto as Schedule I-B and a
legal description of the Land for such Project attached hereto as Schedule I-C.
Effective upon the execution and delivery of this Lease Supplement by the Lessor
and the Lessee, the Leased Property shall be subject to the terms and provisions
of the Lease.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default has occurred and is continuing and provided that such
exercise will not impair the value of such Property) shall be permitted to
exercise all rights and remedies under, all operation and easement agreements
and related or similar agreements applicable to such Property.
SECTION 4. RATIFICATION. Except as specifically modified
hereby, the terms and provisions of the Lease and the Operative
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Agreements are hereby ratified and confirmed and remain in full
force and effect.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF ________________ WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS.
SECTION 7. MORTGAGE GRANT AND REMEDIES. Without limiting any other
remedies set forth in the Lease, in the event that a court of competent
jurisdiction rules that the Lease constitutes a mortgage, deed of trust,
security deed or other secured financing as is the intent of the parties, then
the Lessor and the Lessee agree that the Lessee hereby grants, bargains, sells,
conveys, mortgages, and grants a security interest in each Property to Lessor
WITH POWER OF SALE to secure the payment of all sums due and owing by Lessee or
the Construction Agent hereunder or under any other Operative Agreement, and
that, upon the occurrence of any Event of Default, the Lessor shall have the
power and authority, to the extent provided by law or the Operative Agreements,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of any Property, to appoint or obtain the appointment of a receiver for all
or any part of the Property, and to exercise any other right or remedy that may
be available under applicable law to the holder of a mortgage, deed of trust,
security deed or other secured financing.
SECTION 8. EXERCISE OF LESSOR RIGHTS. The Lessee hereby acknowledges
and agrees that the rights and powers of the Lessor under the Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
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(i) In the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust, security
deed or other secured financing as is the intent of the parties, then
the Lessor and the Lessee agree that the Lessor's collateral
assignment of the Lease to the Agent shall be deemed to be a
collateral assignment of such mortgage, deed of trust, security deed
or other secured financing, and the Agent as such collateral assignee
shall be entitled to exercise any and all rights and remedies of the
Lessor set forth herein during the existence of any Event of Default,
including without limitation the Lessor's rights to obtain a receiver,
to obtain possession of the Properties and the rents and revenues
thereof, to foreclose the Lease, to sell the Lessee's interest in the
Properties, and to exercise any other rights or remedies that may then
be available to the Lessor under applicable law on account of
such Event of Default.
(ii) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under the Lease.
(iii) During the existence of an Event of Default, the Agent
as holder of the Mortgage Instruments and as collateral assignee of the
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
the Lease (regardless of whether the Lease shall be deemed a mortgage,
deed of trust, security deed or other secured financing) even if
Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
SECTION 9. COUNTERPART EXECUTION. This Lease Supplement may
be executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one and
the same instrument.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
[IF NECESSARY, MODIFY TO PUT IN RECORDABLE FORM.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1,
as Lessor
By:
---------------------------------------
Name:Xxx X.Xxxxx
Title: Vice President
LESSEE:
WACKENHUT CORRECTIONS CORPORATION,
as Lessee
By:
---------------------------------------
Name:Xxxxxx X. Xxxxx
Title: Chief Executive Officer
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Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
NATIONSBANK, NATIONAL ASSOCIATION, as
Agent
By:
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
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STATE OF NORTH CAROLINA )
) ss:
COUNTY OF XXXXXX )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County Mecklenburg of this 19th day of June,
1997, by XXX X. XXXXX, as VICE PRESIDENT of FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, but solely as
Owner Trustee under the Wackenhut Corrections Trust 1997-1, on behalf of the
Owner Trustee.
----------------------------------------
[Notarial Seal] Notary Public
My commission expires:
------------------
STATE OF NORTH CAROLINA )
) ss:
COUNTY OF XXXXXX )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of Mecklenburg this 19th day of June,
1997, by XXXXXX X. XXXXX, as CHIEF EXECUTIVE OFFICER of WACKENHUT CORRECTIONS
CORPORATION, a Florida corporation, on behalf of the corporation.
[Notarial Seal] ----------------------------------------
Notary Public
My commission expires:
-----------------
STATE OF NORTH CAROLINA )
) ss:
COUNTY OF XXXXXX )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of Mecklenburg this 19th day of June,
1997 by XXXXX XXXXXX, as SENIOR VICE PRESIDENT of NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent.
[Notarial Seal]
-------------------------------------
Notary Public
My commission expires:
-----------------
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SCHEDULE I
TO LEASE SUPPLEMENT NO. ___
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SCHEDULE I-A
TO LEASE SUPPLEMENT NO. ___
(Equipment)
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SCHEDULE I-B
TO LEASE SUPPLEMENT NO. ___
(Improvements)
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SCHEDULE I-C
TO LEASE SUPPLEMENT NO. ___
(Land)
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EXHIBIT B TO THE LEASE
[OTHER NAMES AND LOCATIONS OF LESSEE]
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EXHIBIT C-1 TO THE LEASE
FORM OF MEMORANDUM OF LEASE
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EXHIBIT C-2 TO THE LEASE
FORM OF MEMORANDUM OF LEASE AND LEASE SUPPLEMENT
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ACKNOWLEDGMENT OF EXECUTION ON BEHALF OF
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS
OWNER TRUSTEE FOR THE WACKENHUT CORRECTIONS TRUST 0000-0
XXXXX XX XXXXX XXXXXXXX
XXXXXX XX XXXXXX
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Xxx X. Xxxxx,
known to be the Vice President of First Security Bank, National Association, as
Owner Trustee for the Wackenhut Corrections Trust 1997-1 (the "Lessor"), who,
being by me duly sworn, says he works at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx,
Xxxx 00000, and that by authority duly given by, and as the act of, the Lessor,
the foregoing and annexed Lease Agreement dated June 19, 1997, was executed by
him in the State and County aforesaid as said __________ on behalf of the
Lessor.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My commission expires:
----------------------
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ACKNOWLEDGMENT OF EXECUTION ON BEHALF OF
WACKENHUT CORRECTIONS CORPORATION
STATE OF NORTH CAROLINA
COUNTY OF XXXXXX
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Xxxxxx X. Xxxxx
known to be the Chief Executive Officer of Wackenhut Corrections Corporation
(the "Lessee"), who being by me duly sworn, says he works at 0000 Xxxxxxxxx
Xxxxx, Xxxxx #000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000-0000, and that by authority
duly given by, and as the act of, the Lessee, the foregoing and annexed Lease
Agreement dated June 19, 1997, was executed by him as said __________ on behalf
of the Lessee, in the aforesaid State and County.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My commission expires:
----------------------
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AFFIDAVIT OF XXX X. XXXXX
The undersigned, being first duly sworn, deposes and says that:
1. He is a Vice President of First Security Bank, National
Association, and works at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx,
Xxxx, 00000.
2. Reference is made to the Lease Agreement (the "Lease") dated as of
June 19, 1997, of First Security Bank, National Association, as Owner Trustee
for the Wackenhut Corrections Trust 1997-1 (the "Lessor") and Wackenhut
Corrections Corporation (the "Lessee").
3. The Lease was executed by the undersigned on behalf of the Lessor
and delivered by the Lessor to NationsBank, National Association as collateral
assignee of the Lease, both execution and delivery occurring in Charlotte, North
Carolina as of June 19, 1997.
This the 19th day of June, 1997.
--------------------------------------
Name: Xxx X. Xxxxx
Title:Vice President
Acknowledgment of Execution
STATE OF
----------------
COUNTY OF
---------------
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Xxx X. Xxxxx who
before me affixed his signature to the above Affidavit.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My Commission Expires:
------------------
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AFFIDAVIT OF XXXXXX X. XXXXX
The undersigned, being first duly sworn, deposes and says that:
1. He is a Chief Executive Officer of Wackenhut Corrections
Corporation, and works at 0000 Xxxxxxxxx Xxxxx, Xxxxx #000, Xxxx Xxxxx Xxxxxxx,
Xxxxxxx 00000-0000.
2. Reference is made to the Lease Agreement (the "Lease") dated as of
June 19, 1997, of First Security Bank, National Association, as Owner Trustee
for the Wackenhut Corrections Trust 1997-1 (the "Lessor") and Wackenhut
Corrections Corporation (the "Lessee").
3. The Lease was executed by the undersigned on behalf of the Lessee
and delivered by the Lessee to the Lessor, both execution and delivery occurring
in Charlotte, North Carolina as of June 19, 1997.
This the 19th day of June, 1997.
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title:Chief Executive Officer
Acknowledgment of Execution
STATE OF NORTH CAROLINA
COUNTY OF XXXXXX
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Xxxxxx X. Xxxxx
who before me affixed his signature to the above Affidavit.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My Commission Expires:
------------------
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