Exhibit 10.23

 

FACILITIES LEASE AGREEMENT

 

BETWEEN

INLAND PPD HUDSON ASSOCIATES, L.L.C.

AND

CORNELL CORRECTIONS OF CALIFORNIA, INC.

 

DATED AS OF SEPTEMBER 24, 2008

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS AND CONSTRUCTION

2

 

1.01

 

Defined Terms

2

 

1.02

 

Incorporation of Defined Terms

6

 

1.03

 

Rules of Construction

6

 

 

 

 

 

ARTICLE II

PREMISES AND TERM

7

 

2.01

 

Leased Property

7

 

2.02

 

Term

7

 

2.03

 

Option to Renew

8

 

2.04

 

Holding Over

9

 

2.05

 

Surrender

9

 

 

 

 

 

ARTICLE III

RENT

9

 

3.01

 

Base Rent

9

 

3.02

 

Additional Rent

9

 

3.03

 

Place(s) of Direct Payment of Base Rent and Additional Rent

10

 

3.04

 

Net Lease

10

 

3.05

 

No Termination, Abatement, etc

10

 

 

 

 

 

ARTICLE IV

IMPOSITIONS AND UTILITIES

11

 

4.01

 

Payment of Impositions

11

 

4.02

 

Definition of Impositions

11

 

4.03

 

Utilities

12

 

4.04

 

Escrow of Impositions

12

 

4.05

 

Discontinuance of Utilities

13

 

4.06

 

Non-Duplication of Additional Rent

13

 

 

 

 

 

ARTICLE V

INSURANCE

13

 

5.01

 

Property Insurance

13

 

5.02

 

Liability Insurance

14

 

5.03

 

Insurance Requirements

14

 

5.04

 

Replacement Cost

15

 

5.05

 

Blanket Policy

15

 

5.06

 

No Separate Insurance

16

 

5.07

 

Waiver of Subrogation

16

 

5.08

 

Mortgages

16

 

 

 

 

 

ARTICLE VI

INDEMNITY; HAZARDOUS SUBSTANCES; DANGEROUS CONDITIONS

16

 

6.01

 

Tenant’s Indemnification

16

 

6.02

 

Hazardous Materials

17

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

6.03

 

Tenant’s Compliance/Indemnities

17

 

6.04

 

Definitions

19

 

6.05

 

Tenant’s Risk: Limitation of Landlord’s Liability

19

 

6.06

 

Dangerous Condition

19

 

 

 

 

 

ARTICLE VII

USE AND ACCEPTANCE OF LEASED PROPERTY

20

 

7.01

 

Use of Leased Property

20

 

7.02

 

Acceptance of Leased Property

20

 

7.03

 

Conditions of Use and Occupancy

20

 

7.04

 

Financial Reports

21

 

 

 

 

 

ARTICLE VIII

REPAIR, COMPLIANCE WITH LAWS: MECHANICS’ OR CONSTRUCTION LIENS: MAINTENANCE OF
SERVICE CONTRACTS

21

 

8.01

 

Repair and Maintenance

21

 

8.02

 

[Intentionally Omitted.]

22

 

8.03

 

Compliance with Laws

22

 

8.04

 

Required Alterations

22

 

8.05

 

Mechanics’ or Construction Liens

22

 

8.06

 

Replacements of Fixtures

23

 

8.07

 

Maintenance of Service Agreements

23

 

 

 

 

 

ARTICLE IX

ALTERATIONS; TENANT’S PROPERTY; CAPITAL ADDITIONS TO THE LEASED PROPERTY

24

 

9.01

 

Tenant’s Right to Construct

24

 

9.02

 

Scope of Right

24

 

9.03

 

Cooperation of Landlord

25

 

9.04

 

Commencement of Construction

25

 

9.05

 

Rights in Tenant Improvements

26

 

9.06

 

[Intentionally Omitted.]

26

 

9.07

 

Requirements for Personal Property

26

 

9.08

 

Signs

26

 

9.09

 

Financings of Capital Additions to a Leased Property

27

 

9.10

 

Financings of Capital Additions to Adjacent Land of Leased Property

29

 

 

 

 

 

ARTICLE X

DEFAULTS AND REMEDIES

29

 

10.01

 

Events of Default

29

 

10.02

 

Remedies

30

 

10.03

 

Right of Set-Off

32

 

10.04

 

Performance of Tenant’s Covenants

32

 

10.05

 

Interest on past Due Payments

33

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

10.06

 

Litigation; Attorneys’ Fees

33

 

10.07

 

Remedies Cumulative

33

 

10.08

 

Escrows and Application of Payments

33

 

10.09

 

Power of Attorney

33

 

 

 

 

 

ARTICLE XI

DAMAGE AND DESTRUCTION

34

 

11.01

 

General

34

 

11.02

 

Landlord’s Inspection

35

 

11.03

 

Landlord’s Costs

35

 

11.04

 

Rent Abatement

35

 

11.05

 

Substantial Damage During Lease Term

36

 

11.06

 

Damage Near End of Term

36

 

11.07

 

Assignment of Insurance Proceeds

36

 

 

 

 

 

ARTICLE XII

CONDEMNATION

37

 

12.01

 

Definition

37

 

12.02

 

Apportionment of Compensation

37

 

12.03

 

Effect on Lease Obligations

37

 

12.04

 

[Intentionally Omitted.]

38

 

12.05

 

Restoration of Premises

38

 

12.06

 

Landlord’s Inspection

39

 

 

 

 

 

ARTICLE XIII

TENANT’S RIGHT OF FIRST REFUSAL

39

 

13.01

 

Rights of First Refusal

39

 

 

 

 

 

ARTICLE XIV

ASSIGNMENT AND SUBLETTING: ATTORNMENT

41

 

14.01

 

[Intentionally Omitted.]

41

 

14.02

 

Permitted Transfers

41

 

14.03

 

[Intentionally Omitted.]

43

 

14.04

 

Permitted Subleases

43

 

14.05

 

Effect of Assignment

43

 

 

 

 

 

ARTICLE XV

QUIET ENJOYMENT; SUBORDINATION, ATTORNMENT AND ESTOPPEL CERTIFICATES

43

 

15.01

 

Quiet Enjoyment

43

 

15.02

 

Landlord Mortgages: Subordination

44

 

15.03

 

Attornment: Non-Disturbance

44

 

15.04

 

Estoppel Certificate

45

 

 

 

 

 

ARTICLE XVI

MISCELLANEOUS

46

 

16.01

 

Notices

46

 

16.02

 

Advertisement of Leased Property

46

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

16.03

 

Landlord’s Access

47

 

16.04

 

Entire Agreement

47

 

16.05

 

Severability

47

 

16.06

 

Captions and Headings

47

 

16.07

 

Governing Law

47

 

16.08

 

Waiver

47

 

16.09

 

Binding Effect

48

 

16.10

 

Authority

48

 

16.11

 

Transfer of Permits, Etc

48

 

16.12

 

Modification

48

 

16.13

 

Incorporation by Reference

48

 

16.14

 

[Intentionally Omitted.]

48

 

16.15

 

Laches

48

 

16.16

 

Permitted Contests

48

 

16.17

 

Construction of Lease

49

 

16.18

 

Counterparts

49

 

16.19

 

Relationship of Landlord and Tenant

49

 

16.20

 

Submission to Jurisdiction

49

 

16.21

 

Appraisal

50

 

16.22

 

Brokers

51

 

16.23

 

Warranties

51

 

 

SCHEDULE A [Description of Property]

 

 

 

 

 

 

SCHEDULE B [Permitted Exceptions]

 

 

 

 

 

 

SCHEDULE C [Example of Calculation of Monthly Rental Amount]

 

 

 

 

 

 

SCHEDULE D [Example of Calculation of Adjustment to Designated Rate in
connection with Extended Term]

 

 

iv

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FACILITIES LEASE AGREEMENT

 

This Facilities Lease Agreement (this “Lease Agreement”) is entered into and
effective as of the 24th day of September, 2008, by and between INLAND PPD
HUDSON ASSOCIATES, L.L.C., a Delaware limited liability company (“Landlord”),
and CORNELL CORRECTIONS OF CALIFORNIA, INC., a California corporation
(“Tenant”).

 

RECITALS

 

A.            Landlord and Tenant are parties to that certain Development
Agreement dated as of August 4, 2008 (as amended and in effect from time to
time, the “Development Agreement”).

 

B.            Pursuant to the Development Agreement and that certain Purchase
Agreement dated as August 4, 2008, entered by Landlord and WBP Leasing, Inc., a
Delaware corporation (the “Purchase Agreement”), Landlord acquired fee title to
that certain real property located in the Town of Hudson, County of Weld, State
of Colorado, and described in Schedule A, attached hereto (the “Property”).

 

C.            Pursuant to the Development Agreement, Landlord and Tenant entered
into a ground lease agreement of such Property dated as September 24, 2008 (the
“Ground Lease Agreement” and, together with this Lease Agreement, collectively,
the “Lease Agreements”).

 

D.            Tenant and Colorado Department of Corrections (the “Governmental
Entity”) have entered into that certain Implementation Agreement dated August 5,
2008 (the “Operating Agreement”) governing certain operations and services to be
provided by Tenant in connection with the housing and detention of inmates or
detainees at the Facility (as defined in the Development Agreement) to be
constructed on the Property.

 

E.            Landlord and Tenant desire to provide for the lease by Landlord to
Tenant of the Facility and the other Leased Property (as defined below).

 

F.             Landlord and Tenant desire to set forth in this Lease Agreement
the terms and conditions applicable to such lease of the Facility and other
Leased Property.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and
conditions set forth in this Lease Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Landlord and Tenant agree as follows:

 

ARTICLE I

DEFINITIONS AND CONSTRUCTION

 

1.01        DEFINED TERMS.  THE FOLLOWING TERMS SHALL HAVE THE RESPECTIVE
MEANINGS ASSIGNED BELOW:

 

“Additional Rent” shall have the meaning assigned to such term in Section 3.02
hereof.

 

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“Affiliate” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“Aggregate Leased Property” shall have the meaning assigned to such term in
Section 12.01 hereof.

 

“Allocated Price” shall have the meaning assigned to such term in Section 13.01
hereof.

 

“Award” shall have the meaning assigned to such term in Section 12.02 hereof.

 

“Base Rent” shall have the meaning assigned to such term in Section 3.01 hereof.

 

“Capital Additions” shall have the meaning assigned to such term in Section 9.01
hereof.

 

“CERCLA” shall have the meaning assigned to such term in Section 6.04 hereof.

 

“Commencement Date” shall have the meaning assigned to such term in Section 2.02
hereof.

 

“Condemnation” shall have the meaning assigned to such term in Section 12.01
hereof.

 

“CPI-U” means the Consumer Price Index for All Urban Consumers published by the
United States Bureau of Labor Statistics.

 

“Designated Rate” means a fixed, annual rate equal to ten and one-half percent
(10.5%), as such rate may be adjusted in accordance with Section 2.03(c) hereof.

 

“Development Agreement” shall have the meaning assigned to such term in the
recitals.

 

“Environmental Laws” shall have the meaning assigned to such term in
Section 6.03(a) hereof.

 

“Estoppel Certificate” shall have the meaning assigned to such term in
Section 15.04(a) hereof.

 

“Event of Default” shall have the meaning assigned to such term in
Section 10.01(a) hereof.

 

“Expiration Date” shall have the meaning assigned to such term in Section 2.02
hereof.

 

“Extended Term” shall have the meaning assigned to such term in
Section 2.03(a) hereof.

 

“Financially Responsible Test” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“First Extension Designated Rate” shall have the meaning assigned to such term
in Section 2.03(c) hereof.

 

3

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“Fixtures” shall have the meaning assigned to such term in
Section 2.01(b) hereof.

 

“Governmental Entity” shall have the meaning assigned to such term in the
recitals.

 

“Ground Lease Agreement” shall have the meaning assigned to such term in the
recitals.

 

“Hazardous Materials” shall have the meaning assigned to such term in
Section 6.04 hereof.

 

“Hazardous Materials Law” shall have the meaning assigned to such term in
Section 6.04 hereof.

 

“Impositions” shall have the meaning assigned to such term in Section 4.02
hereof.

 

“Improvements” shall have the meaning assigned to such term in
Section 2.01(a) hereof.

 

“Initial Term” shall have the meaning assigned to such term in Section 2.02
hereof.

 

“Land” means the Property, together with all rights, titles, appurtenant
interests, covenants, licenses, privileges and benefits thereto belonging, and
any easements, rights-of-way, rights of ingress or egress or other interests in,
on, or to any land, highway, street, road or avenue, open or proposed, in, on,
across, in front of, abutting or adjoining such real property including, without
limitation, any strips and gores adjacent to or lying between such real property
and any adjacent real property.

 

“Landlord” shall have the meaning assigned to such term in the introductory
paragraph.

 

“Landlord Change of Control” shall have the meaning assigned to such term in
Section 13.01 hereof.

 

“Landlord Designee” shall have the meaning assigned to such term in
Section 10.02 hereof.

 

“Landlord Financing Terms” shall have the meaning assigned to such term in
Section 9.09(a) hereof.

 

“Landlord’s Notice” shall have the meaning assigned to such term in
Section 13.01 hereof.

 

“Lease Agreement” shall have the meaning assigned to such term in the
introductory paragraph.

 

“Lease Agreements” shall have the meaning assigned to such term in the recitals.

 

“Lease Year” shall have the meaning assigned to such term in
Section 2.03(d) hereof.

 

“Leased Property” shall have the meaning assigned to such term in Section 2.01
hereof.

 

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“Letter of Credit” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“Monthly Rental Amount” means, as determined for each Rental Payment Date, an
amount equal to the quotient obtained upon dividing (i) the product obtained
upon multiplying (a) the aggregate amount of Construction Funds (as defined in
the Development Agreement) outstanding under the Development Agreement on such
Rental Payment Date, times (b) the Designated Rate (expressed in decimal form),
by (ii) 12.  An example illustrating calculation of the Monthly Rental Amount is
attached hereto as Schedule C.

 

“Multiple Property Transfer” shall have the meaning assigned to such term in
Section 13.01 hereof.

 

“New York Prime Rate” shall have the meaning assigned to such term in
Section 10.02(a) hereof.

 

“Notices” shall have the meaning assigned to such term in Section 16.01 hereof.

 

“Offer” shall have the meaning assigned to such term in Section 13.01 hereof.

 

“Operating Agreement” shall have the meaning assigned to such term in the
recitals.

 

“Person” means any natural person, partnership, corporation, limited liability
company, association, trust or other legal entity

 

“Permitted Exceptions” shall have the meaning assigned to such term in
Section 2.01 hereof.

 

“Permitted Transferee” shall have the meaning assigned to such term in
Section 14.02 hereof.

 

“Primary Intended Use” shall have the meaning assigned to such term in
Section 9.01 hereof.

 

“Property” shall have the meaning assigned to such term in the recitals.

 

“Purchase Agreement” shall have the meaning assigned to such term in the
recitals.

 

“Purchase Refusal Right” shall have the meaning assigned to such term in
Section 13.01 hereof.

 

“RCRA” shall have the meaning assigned to such term in Section 6.04 hereof.

 

“Rent” shall have the meaning assigned to such term in Section 3.03 hereof.

 

“Rental Commencement Date” means the first day of the calendar month that
immediately follows the calendar month during which there occurs the Deemed
Completion Date.

 

5

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“Rental Payment Date” means each date on which Base Rent is payable in
accordance with Section 3.01 hereof.

 

“Return Date” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“RFP’s” shall have the meaning assigned to such term in Section 14.04 hereof.

 

“SARA” shall have the meaning assigned to such term in Section 6.04 hereof.

 

“Security Amount” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“Service Agreements” shall have the meaning assigned to such term in
Section 14.04 hereof.

 

“SNDA” shall have the meaning assigned to such term in Section 15.03 hereof.

 

“Sublease Agreements” shall have the meaning assigned to such term in
Section 14.04 hereof.

 

“Substantial Repairs” shall have the meaning assigned to such term in
Section 11.01 hereof.

 

“Tenant” shall have the meaning assigned to such term in the introductory
paragraph.

 

“Tenant Parent” shall have the meaning assigned to such term in
Section 7.04(b) hereof.

 

“Tenant Improvement” and “Tenant Improvements” shall have the meaning assigned
to such term in Section 9.01 hereof.

 

“Term” shall have the meaning assigned to such term in Section 2.03(d) hereof.

 

“Test Period” shall have the meaning assigned to such term in
Section 14.02(a) hereof.

 

“Transfer” shall have the meaning assigned to such term in Section 13.01 hereof.

 

1.02        INCORPORATION OF DEFINED TERMS.  CAPITALIZED TERMS NOT OTHERWISE
DEFINED HEREIN AND WHICH ARE DEFINED IN THE DEVELOPMENT AGREEMENT SHALL HAVE THE
RESPECTIVE MEANINGS ASSIGNED TO SUCH TERMS IN THE DEVELOPMENT AGREEMENT.

 

1.03        RULES OF CONSTRUCTION.

 

(A)           WORDS IN ANY AGREEMENT OR DOCUMENT IMPORTING THE SINGULAR SHALL
INCLUDE THE PLURAL AND VICE VERSUS;

 

(B)           UNLESS OTHERWISE INDICATED, ANY REFERENCE IN ANY AGREEMENT OR
DOCUMENT TO ANY PERSON SHALL BE CONSTRUED SO AS TO INCLUDE SUCH PERSON AND ANY
SUBSEQUENT SUCCESSORS, TRANSFEREES AND ASSIGNEES THEREOF IN ACCORDANCE WITH THE
RESPECTIVE INTERESTS;

 

6

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(C)           UNLESS OTHERWISE INDICATED, ANY REFERENCE IN ANY AGREEMENT OR
DOCUMENT TO SUCH AGREEMENT OR DOCUMENT OR ANY OTHER AGREEMENT OR DOCUMENT SHALL
BE CONSTRUED AS A REFERENCE TO EACH SUCH AGREEMENT OR DOCUMENT OR, AS THE CASE
MAY BE, SUCH OTHER AGREEMENT OR DOCUMENT, TOGETHER WITH ANY RECITALS, SCHEDULES
OR ANNEXES THERETO, ALL AS AMENDED, SUPPLEMENTED, RESTATED, NOVATED OR REPLACED;

 

(D)           ANY REFERENCE IN ANY AGREEMENT OR DOCUMENT TO A STATUTE OR
ENACTMENT OR ORDER SHALL BE CONSTRUED AS A REFERENCE TO SUCH STATUTE, ENACTMENT
OR ORDER AS FROM TIME TO TIME AMENDED OR REENACTED; AND

 

(E)           CLAUSE AND SCHEDULE HEADINGS CONTAINED, AND ANY INDEX OR TABLE OF
CONTENTS TO, ANY AGREEMENT OR DOCUMENT OR FOR EASE OF REFERENCE ONLY AND SHALL
BE IGNORED IN CONSTRUING SUCH AGREEMENT OR DOCUMENT.

 

ARTICLE II

PREMISES AND TERM

 

2.01        LEASED PROPERTY.  LANDLORD HEREBY LEASES TO TENANT AND TENANT LEASES
FROM LANDLORD THE IMPROVEMENTS AND FIXTURES LOCATED OR TO BE LOCATED ON THE LAND
(EACH AS MORE PARTICULARLY DESCRIBED AND DEFINED BELOW, AND THE FOREGOING SHALL
COLLECTIVELY BE KNOWN AND REFERRED TO AS THE “LEASED PROPERTY”).  SUCH LEASED
PROPERTY SHALL CONSIST OF:

 

(A)           ALL BUILDINGS, IMPROVEMENTS, STRUCTURES AND FIXTURES NOW LOCATED
OR TO BE LOCATED OR TO BE CONSTRUCTED ON THE LAND, INCLUDING, WITHOUT
LIMITATION, THE FACILITY AND ALL LANDSCAPING, PARKING LOTS AND STRUCTURES,
ROADS, DRAINAGE AND ALL ABOVE GROUND AND UNDERGROUND UTILITY STRUCTURES, AND
OTHER SO-CALLED “INFRASTRUCTURE” IMPROVEMENTS (COLLECTIVELY, THE
“IMPROVEMENTS”); AND

 

(B)           ALL EQUIPMENT, MACHINERY, FIXTURES, AND OTHER ITEMS OF REAL AND/OR
PERSONAL PROPERTY, INCLUDING ALL COMPONENTS THEREOF, LOCATED IN, ON OR USED IN
CONNECTION WITH, AND PERMANENTLY AFFIXED TO OR INCORPORATED INTO, THE
IMPROVEMENTS INCLUDING, WITHOUT LIMITATION, ALL FURNACES, BOILERS, HEATERS,
ELECTRICAL EQUIPMENT, ELECTRONIC SECURITY EQUIPMENT, HEATING, PLUMBING,
LIGHTING, VENTILATING, REFRIGERATING, INCINERATION, AIR AND WATER POLLUTION
CONTROL, WASTE DISPOSAL, AIR-COOLING AND AIR-CONDITIONING SYSTEMS AND APPARATUS,
SPRINKLER SYSTEMS AND FIRE AND THEFT PROTECTION EQUIPMENT, AND SIMILAR SYSTEMS,
ALL OF WHICH, TO THE GREATEST EXTENT PERMITTED BY LAW, ARE HEREBY DEEMED TO
CONSTITUTE REAL ESTATE, TOGETHER WITH ALL REPLACEMENTS, MODIFICATIONS,
ALTERATIONS AND ADDITIONS THERETO (COLLECTIVELY, THE “FIXTURES”);

 

SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions,
agreements, and other title matters listed or specifically referred to or listed
in Schedule B hereto (collectively, “Permitted Exceptions”).

 

2.02        TERM.  THE INITIAL TERM (THE “INITIAL TERM”) OF THIS LEASE AGREEMENT
SHALL BE FOR A FIXED TERM COMMENCING ON THE DATE HEREOF (THE “COMMENCEMENT
DATE”), AND ENDING ON EXPIRATION AT MIDNIGHT TEN YEARS AFTER THE DEEMED
COMPLETION DATE, UNLESS EARLIER TERMINATED OR EXTENDED AS PROVIDED HEREIN (THE
“EXPIRATION DATE”).

 

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2.03        OPTION TO RENEW.

 

(A)           PROVIDED THAT, AT THE TIME OF SUCH EXERCISE, (I) THIS LEASE
AGREEMENT IS IN FULL FORCE AND EFFECT, AND (II) NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING (EITHER AT THE TIME OF EXERCISE OR AT THE
COMMENCEMENT OF AN EXTENDED TERM), TENANT SHALL HAVE THE EXCLUSIVE RIGHT AND
OPTION TO EXTEND THE TERM OF THIS LEASE AGREEMENT FOR UP TO TWO (2) ADDITIONAL
TERMS (EACH AN “EXTENDED TERM” AND COLLECTIVELY, THE “EXTENDED TERMS”) OF TEN
(10) YEARS EACH BY GIVING WRITTEN NOTICE TO LANDLORD NOT LATER THAN THREE
(3) MONTHS NOR EARLIER THAN TWELVE (12) MONTHS PRIOR TO THE EXPIRATION DATE OF
THE TERM THEN IN EFFECT.  THE EFFECTIVE GIVING OF SUCH NOTICE OF EXTENSION BY
TENANT SHALL AUTOMATICALLY EXTEND THE TERM OF THIS LEASE AGREEMENT FOR THE
APPLICABLE EXTENDED TERM, AND NO INSTRUMENT OF RENEWAL OR EXTENSION NEED BE
EXECUTED, IN THE EVENT THAT TENANT FAILS TIMELY TO GIVE SUCH NOTICE TO LANDLORD,
THIS LEASE AGREEMENT SHALL AUTOMATICALLY TERMINATE AT THE END OF THE TERM THEN
IN EFFECT, AND TENANT SHALL HAVE NO FURTHER OPTION TO EXTEND THE TERM OF THIS
LEASE AGREEMENT, UNLESS LANDLORD ACCEPTS SUCH UNTIMELY NOTICE IN WRITING.  EACH
EXTENDED TERM SHALL COMMENCE ON THE DAY IMMEDIATELY SUCCEEDING THE EXPIRATION
DATE OF THE TERM THEN IN EFFECT, AND SHALL END ON THE DAY IMMEDIATELY PRECEDING
THE TENTH (10TH) ANNIVERSARY OF THE FIRST DAY OF SUCH EXTENDED TERM.  EACH
EXTENDED TERM SHALL BE ON ALL THE TERMS AND CONDITIONS OF THIS LEASE AGREEMENT,
EXCEPT: (I) DURING THE SECOND EXTENDED TERM, TENANT SHALL HAVE NO FURTHER OPTION
TO EXTEND THE TERM, AND (II) THE BASE RENT FOR EACH EXTENDED TERM SHALL BE
ADJUSTED IN ACCORDANCE WITH PARAGRAPH (C), BELOW, BASED ON THE CPI-U AS OF THE
COMMENCEMENT OF THE APPLICABLE EXTENDED TERM.

 

(B)           AFTER RECEIPT BY LANDLORD OF A NOTICE FROM TENANT ELECTING TO
EXTEND THE TERM OF THIS LEASE AGREEMENT UNDER SUBSECTIONS 2.03(A) ABOVE,
LANDLORD AND TENANT SHALL THEREAFTER AS SOON AS PRACTICABLE DETERMINE AND SET
FORTH IN A WRITTEN ACKNOWLEDGEMENT ANY ADJUSTMENT TO THE BASE RENT IN ACCORDANCE
WITH PARAGRAPH (C) BELOW IN CONNECTION TO SUCH EXTENSION.

 

(C)           IN THE EVENT TENANT ELECTS TO EXTEND THE INITIAL TERM, THE
DESIGNATED RATE TO BE APPLICABLE DURING THE INITIAL EXTENDED TERM WILL BE
ADJUSTED TO REFLECT THE NET CHANGE IN CONSUMER PRICES DURING THE PERIOD
COMMENCING WITH THE RENTAL COMMENCEMENT DATE AND ENDING ON THE EXPIRATION OF THE
INITIAL TERM, SUCH NET CHANGE AND RESULTING ADJUSTMENT TO BE DETERMINED BY
REFERENCE TO THE CPI-U AS OF THE BEGINNING AND END OF SUCH PERIOD.  THE
RESULTING ADJUSTED DESIGNATED RATE (THE “FIRST EXTENSION DESIGNATED RATE”) WILL
BE USED FOR THE FIRST EXTENDED TERM.  IN THE EVENT TENANT ELECTS TO EXTEND THE
TERM FOR A SECOND TEN YEAR PERIOD, THE FIRST EXTENSION DESIGNATED RATE WILL BE
ADJUSTED IN THE SAME MANNER TO REFLECT THE NET CHANGE IN CONSUMER PRICES DURING
THE PERIOD COMMENCING WITH THE FIRST DAY OF THE INITIAL EXTENDED TERM AND ENDING
ON THE EXPIRATION OF SUCH INITIAL EXTENDED TERM, SUCH NET CHANGE AND RESULTING
ADJUSTMENT TO BE DETERMINED BY REFERENCE TO THE CPI-U AS OF THE BEGINNING AND
END OF SUCH PERIOD.  THE RESULTING ADJUSTED FIRST EXTENSION DESIGNATED RATE WILL
BE USED FOR THE SECOND EXTENDED TERM.  IN APPLYING THE CPI-U FOR PURPOSES OF
CALCULATING THE DESIGNATED RATE TO BE APPLICABLE DURING AN EXTENDED TERM, THE
CPI-U FOR THE MONTHS IN WHICH THERE OCCURRED THE FIRST AND LAST RENTAL PAYMENT
DATES OF THE IMMEDIATELY PRECEDING TERM SHALL BE USED.  ATTACHED AS SCHEDULE D
IS AN EXAMPLE ILLUSTRATING CALCULATION OF AN ADJUSTMENT TO THE DESIGNATED RATE
IN CONNECTION WITH A HYPOTHETICAL EXTENDED TERM.

 

(D)           THE TERM “TERM” USED IN THIS LEASE AGREEMENT MEANS THE INITIAL
TERM, AND ANY EXTENDED TERM EXERCISED HEREUNDER, AS APPROPRIATE.  THE TERM
“LEASE YEAR” MEANS EACH TWELVE

 

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(12) MONTH PERIOD DURING THE TERM COMMENCING ON THE COMMENCEMENT DATE OR, IF THE
COMMENCEMENT DATE IS NOT THE FIRST DAY OF A CALENDAR MONTH, THE FIRST LEASE YEAR
SHALL CONSIST OF THE PARTIAL CALENDAR MONTH FOLLOWING THE COMMENCEMENT DATE AND
THE SUCCEEDING TWELVE FULL CALENDAR MONTHS, AND EACH SUCCESSIVE TWELVE MONTH
PERIOD THEREAFTER DURING THE TERM, PROVIDED THAT THE LAST LEASE YEAR SHALL END
ON THE EXPIRATION OR EARLIER TERMINATION OF THE TERM.

 

2.04        HOLDING OVER.  SHOULD TENANT, WITHOUT THE EXPRESS CONSENT OF
LANDLORD, CONTINUE TO HOLD AND OCCUPY THE LEASED PROPERTY AFTER THE EXPIRATION
OF THE TERM, SUCH HOLDING OVER BEYOND THE TERM AND THE ACCEPTANCE OR COLLECTION
OF RENT (AS DEFINED BELOW) BY LANDLORD SHALL OPERATE AND BE CONSTRUED AS
CREATING A TENANCY FROM MONTH-TO-MONTH AND NOT FOR ANY OTHER TERM WHATSOEVER. 
TENANT SHALL BE LIABLE FOR ALL DAMAGES INCURRED BY LANDLORD AS A RESULT OF ANY
SUCH HOLDOVER AND, IN ADDITION TO SUCH DAMAGES, DURING ANY SUCH HOLDOVER PERIOD,
TENANT SHALL PAY TO LANDLORD FOR EACH MONTH (OR PORTION THEREOF) TENANT REMAINS
IN THE LEASED PROPERTY, ONE HUNDRED AND FIFTY PERCENT (150%) OF THE BASE RENT IN
EFFECT ON THE EXPIRATION DATE AND ALL ADDITIONAL RENT APPLICABLE TO SUCH
HOLDOVER PERIOD.  SUCH MONTH-TO-MONTH TENANCY MAY BE TERMINATED BY LANDLORD BY
GIVING TENANT THIRTY (30) DAYS WRITTEN NOTICE, AND AT ANY TIME AFTER SUCH
TERMINATION, LANDLORD MAY RE-ENTER AND TAKE POSSESSION OF THE LEASED PROPERTY IN
ACCORDANCE WITH APPLICABLE LAW.

 

2.05        SURRENDER.  EXCEPT AS A RESULT OF (I) TENANT IMPROVEMENTS AND
CAPITAL ADDITIONS, (II) NORMAL WEAR AND TEAR, TAKING INTO CONSIDERATION THE
PURPOSE FOR WHICH THE LEASED PROPERTY IS TO BE USED AND THE DEGREE OF WEAR AND
TEAR ON PHYSICAL PLANT FACILITIES AND SYSTEMS IN OTHER SIMILAR
CORRECTIONAL/DETENTION FACILITIES, AND (III) CASUALTY, TAKING OR OTHER DAMAGE
AND DESTRUCTION NOT REQUIRED TO BE REPAIRED BY TENANT, TENANT SHALL SURRENDER
AND DELIVER UP THE LEASED PROPERTY AT THE EXPIRATION OR TERMINATION OF THE TERM
(INCLUDING ANY EXTENDED TERMS), IN GENERALLY GOOD ORDER AND CONDITION.

 

ARTICLE III

RENT

 

3.01        BASE RENT.  TENANT SHALL PAY LANDLORD BASE RENT FOR THE LEASED
PROPERTY, WITHOUT NOTICE, DEMAND, SET-OFF OR COUNTERCLAIM, IN ADVANCE, IN LAWFUL
MONEY OF THE UNITED STATES OF AMERICA IN THE AMOUNT SPECIFIED BELOW (THE “BASE
RENT”) FOR THE TERM, IN CONSECUTIVE MONTHLY INSTALLMENTS, EACH IN AN AMOUNT
EQUAL TO THE MONTHLY RENTAL AMOUNT FOR THE RENTAL PAYMENT DATE ON WHICH SUCH
MONTHLY RENTAL AMOUNT IS PAYABLE, PAYABLE IN ADVANCE ON THE RENTAL COMMENCEMENT
DATE AND THEREAFTER ON THE FIRST CALENDAR DAY OF EACH SUCCEEDING MONTH DURING
THE TERM.  NO BASE RENT SHALL BE PAYABLE PRIOR TO THE RENTAL COMMENCEMENT DATE. 
ANY BASE RENT PAYABLE FOR A PORTION OF A MONTH SHALL BE PRORATED BASED UPON THE
NUMBER OF DAYS IN THE APPLICABLE MONTH AND AN APPROPRIATE PAYMENT OR REFUND, AS
THE CASE MAY BE, SHALL BE MADE IN ACCORDANCE WITH THE TERMS HEREIN, SO AS TO
CHARGE TENANT ONLY FOR THE FRACTIONAL MONTH FALLING WITHIN THE TERM.

 

3.02        ADDITIONAL RENT.  IN ADDITION TO BASE RENT, TENANT SHALL PAY ALL
OTHER AMOUNTS, LIABILITIES, OBLIGATIONS AND IMPOSITIONS (AS HEREINAFTER DEFINED
) WHICH TENANT ASSUMES OR AGREES TO PAY UNDER THIS LEASE AGREEMENT AND ANY FINE,
PENALTY, INTEREST, CHARGE AND COST WHICH MAY BE ADDED FOR NONPAYMENT OR LATE
PAYMENT OF SUCH ITEMS (COLLECTIVELY, THE “ADDITIONAL RENT”).

 

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3.03        PLACE(S) OF DIRECT PAYMENT OF BASE RENT AND ADDITIONAL RENT.  THE
BASE RENT AND ADDITIONAL RENT ARE HEREINAFTER COLLECTIVELY REFERRED TO AS
“RENT.”  LANDLORD SHALL HAVE ALL LEGAL, EQUITABLE AND CONTRACTUAL RIGHTS, POWERS
AND REMEDIES PROVIDED EITHER IN THIS LEASE AGREEMENT OR BY STATUTE, RULE OR
REGULATION OR OTHERWISE WITH RESPECT TO NONPAYMENT OF THE RENT.  TENANT SHALL
MAKE ALL PAYMENTS OF BASE RENT AT LANDLORD’S PRINCIPAL PLACE OF BUSINESS OR AS
LANDLORD MAY OTHERWISE FROM TIME TO TIME DIRECT IN WRITING, AND ALL PAYMENTS OF
ADDITIONAL RENT DIRECTLY TO THE PERSON OR PERSONS TO WHOM SUCH AMOUNT IS OWING
AT THE TIME AND TIMES WHEN SUCH PAYMENTS ARE DUE, AND SHALL GIVE TO LANDLORD
SUCH EVIDENCE OF SUCH DIRECT PAYMENTS AS LANDLORD SHALL REQUEST.

 

3.04        NET LEASE.  THIS LEASE AGREEMENT SHALL BE DEEMED AND CONSTRUED TO BE
AN “ABSOLUTE NET LEASE” OR “TRIPLE NET LEASE,” AND TENANT SHALL PAY ALL RENT,
IMPOSITIONS, AND OTHER CHARGES AND EXPENSES IN CONNECTION WITH THE LEASED
PROPERTY THROUGHOUT THE TERM, WITHOUT ABATEMENT, DEDUCTION OR SET-OFF.

 

3.05        NO TERMINATION, ABATEMENT, ETC.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS LEASE AGREEMENT, TENANT SHALL REMAIN BOUND BY THIS LEASE
AGREEMENT IN ACCORDANCE WITH ITS TERMS.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS LEASE AGREEMENT, TENANT SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF LANDLORD, MODIFY, SURRENDER OR TERMINATE THIS LEASE AGREEMENT, NOR
SEEK NOR BE ENTITLED TO ANY ABATEMENT, DEDUCTION, DEFERMENT OR REDUCTION OF
RENT, OR SET-OFF AGAINST THE RENT.  EXCEPT AS SPECIFICALLY PROVIDED IN THIS
LEASE AGREEMENT, THE OBLIGATIONS OF LANDLORD AND TENANT SHALL NOT BE AFFECTED BY
REASON OF (I) THE LAWFUL OR UNLAWFUL PROHIBITION OF, OR RESTRICTION UPON,
TENANT’S USE OF THE LEASED PROPERTY, OR ANY PART THEREOF, THE INTERFERENCE WITH
SUCH USE BY ANY PERSON, CORPORATION, PARTNERSHIP OR OTHER ENTITY, OR BY REASON
OF EVICTION BY PARAMOUNT TITLE, IN EACH CASE NOT RESULTING DUE TO ACTIONS TAKEN
BY, OR CLAIMS ASSERTED AGAINST, LANDLORD, (II) ANY CLAIM WHICH TENANT HAS OR
MIGHT HAVE AGAINST LANDLORD OR BY REASON OF ANY DEFAULT OR BREACH OF ANY
WARRANTY BY LANDLORD UNDER THIS LEASE AGREEMENT OR ANY OTHER AGREEMENT BETWEEN
LANDLORD AND TENANT, OR TO WHICH LANDLORD AND TENANT ARE PARTIES; (III) ANY
BANKRUPTCY, INSOLVENCY, REORGANIZATION, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION, WINDING UP OR OTHER PROCEEDING AFFECTING LANDLORD OR ANY ASSIGNEE
OR TRANSFEREE OF LANDLORD; (IV) ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, WINDING UP OR OTHER
PROCEEDING AFFECTING LANDLORD OR ANY ASSIGNEE OR TRANSFEREE OF LANDLORD; OR
(V) ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION, COMPOSITION, READJUSTMENT,
LIQUIDATION, DISSOLUTION, WINDING UP OR OTHER PROCEEDING AFFECTING TENANT, ANY
AFFILIATE, OR ANY ASSIGNEE OR TRANSFEREE OF TENANT.  EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED IN THIS LEASE AGREEMENT, AND TO THE MAXIMUM EXTENT
PERMITTED BY LAW, TENANT HEREBY SPECIFICALLY WAIVES ALL RIGHTS, INCLUDING, BUT
NOT LIMITED TO, ANY RIGHTS UNDER ANY STATUTE RELATING TO RIGHTS OF TENANTS IN
ANY STATE IN WHICH THE LEASED PROPERTY IS LOCATED, ARISING FROM ANY OCCURRENCE
WHATSOEVER, WHICH MAY NOW OR HEREAFTER BE CONFERRED UPON IT BY LAW (A) TO
MODIFY, SURRENDER OR TERMINATE THIS LEASE AGREEMENT OR QUIT OR SURRENDER THE
LEASED PROPERTY OR ANY PORTION THEREOF; OR (B) ENTITLING TENANT TO ANY
ABATEMENT, REDUCTION, SUSPENSION OR DEFERMENT OF THE RENT OR OTHER SUMS PAYABLE
BY TENANT HEREUNDER.  THE OBLIGATIONS OF LANDLORD AND TENANT HEREUNDER SHALL BE
SEPARATE AGREEMENTS, AND THE RENT AND ALL OTHER SUMS SHALL CONTINUE TO BE
PAYABLE IN ALL EVENTS UNLESS THE OBLIGATIONS TO PAY THE SAME SHALL BE TERMINATED
PURSUANT TO THE EXPRESS PROVISIONS OF THIS LEASE AGREEMENT OR BY TERMINATION OF
THIS LEASE AGREEMENT.

 

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ARTICLE IV

IMPOSITIONS AND UTILITIES

 

4.01        PAYMENT OF IMPOSITIONS.  SUBJECT TO THE ADJUSTMENTS SET FORTH
HEREIN, TENANT SHALL PAY, AS ADDITIONAL RENT, ALL IMPOSITIONS THAT MAY BE LEVIED
OR BECOME A LIEN ON THE LEASED PROPERTY OR ANY PART THEREOF AT ANY TIME DURING
THE TERM, BEFORE THE SAME BECOME DELINQUENT.  TENANT SHALL FURNISH TO LANDLORD
ON AN ANNUAL BASIS COPIES OF OFFICIAL RECEIPTS OR OTHER SATISFACTORY PROOF
EVIDENCING SUCH PAYMENTS.  TENANT’S OBLIGATION TO PAY SUCH IMPOSITIONS SHALL BE
DEEMED ABSOLUTELY FIXED UPON THE DATE SUCH IMPOSITIONS ARE ASSESSED UPON THE
LEASED PROPERTY OR ANY PART THEREOF.  TENANT, AT ITS EXPENSE, SHALL PREPARE AND
FILE ALL TAX RETURNS AND REPORTS IN RESPECT OF ANY IMPOSITION AS MAY BE REQUIRED
BY GOVERNMENTAL AUTHORITIES; PROVIDED, HOWEVER, LANDLORD SHALL BE RESPONSIBLE
FOR THE PREPARATION AND FILING OF ANY SUCH TAX RETURNS OR REPORTS IN RESPECT OF
ANY REAL OR PERSONAL PROPERTY OWNED BY LANDLORD.  TENANT SHALL BE ENTITLED TO
ANY REFUND DUE FROM ANY TAXING AUTHORITY ATTRIBUTABLE TO IMPOSITIONS FOR WHICH
TENANT HAS PAID.  LANDLORD AND TENANT SHALL, UPON REQUEST OF THE OTHER, PROVIDE
SUCH DATA AS IS MAINTAINED BY THE PARTY TO WHOM THE REQUEST IS MADE WITH RESPECT
TO THE LEASED PROPERTY AS MAY BE NECESSARY TO PREPARE ANY REQUIRED RETURNS AND
REPORTS.  IN THE EVENT GOVERNMENTAL AUTHORITIES CLASSIFY ANY PROPERTY COVERED BY
THIS LEASE AGREEMENT AS PERSONAL PROPERTY, LANDLORD AND TENANT SHALL FILE ALL
PERSONAL PROPERTY TAX RETURNS IN SUCH JURISDICTIONS WHERE IT MAY LEGALLY SO FILE
WITH RESPECT TO THEIR RESPECTIVE OWNED PERSONAL PROPERTY.  LANDLORD, TO THE
EXTENT IT POSSESSES THE SAME, AND TENANT, TO THE EXTENT IT POSSESS THE SAME,
WILL PROVIDE THE OTHER PARTY, UPON REQUEST, WITH COST AND DEPRECIATION RECORDS
NECESSARY FOR FILING RETURNS FOR ANY PROPERTY SO CLASSIFIED AS PERSONAL
PROPERTY.  WHERE LANDLORD IS LEGALLY REQUIRED TO FILE PERSONAL PROPERTY TAX
RETURNS, TENANT WILL BE PROVIDED WITH COPIES OF ASSESSMENT NOTICES INDICATING A
VALUE IN EXCESS OF THE REPORTED VALUE IN SUFFICIENT TIME FOR TENANT TO FILE A
PROTEST.  TENANT MAY, UPON NOTICE TO LANDLORD, AT TENANT’S OPTION AND AT
TENANT’S SOLE COST AND EXPENSE, PROTEST, APPEAL, OR INSTITUTE SUCH OTHER
PROCEEDINGS AS TENANT MAY DEEM APPROPRIATE TO EFFECT A REDUCTION OF REAL ESTATE
OR PERSONAL PROPERTY ASSESSMENTS AND LANDLORD, AT TENANT’S EXPENSE AS AFORESAID,
SHALL FULLY COOPERATE WITH TENANT IN SUCH PROTEST, APPEAL, OR OTHER ACTION. 
TENANT SHALL PROVIDE LANDLORD COPIES OF ALL MATERIALS FILED OR PRESENTED IN
CONNECTION WITH ANY SUCH PROCEEDING.  TENANT SHALL PROMPTLY REIMBURSE LANDLORD
FOR ALL PERSONAL PROPERTY TAXES PAID BY LANDLORD UPON RECEIPT OF BILLINGS
ACCOMPANIED BY COPIES OF A BILL THEREFOR AND PAYMENTS THEREOF WHICH IDENTIFY THE
PERSONAL PROPERTY WITH RESPECT TO WHICH SUCH PAYMENTS ARE MADE.  IMPOSITIONS
IMPOSED IN RESPECT TO THE TAX-FISCAL PERIOD DURING WHICH THE TERM COMMENCES AND
TERMINATES SHALL BE ADJUSTED AND PRORATED BETWEEN LANDLORD AND TENANT ON A PER
DIEM BASIS, WITH TENANT BEING OBLIGATED TO PAY ITS PRO RATA SHARE FROM AND
INCLUDING THE COMMENCEMENT DATE TO AND INCLUDING THE EXPIRATION OR TERMINATION
DATE OF THE TERM, AND TENANT’S OBLIGATION TO PAY ITS PRORATED SHARE THEREOF
SHALL SURVIVE SUCH TERMINATION.  TENANT SHALL HAVE NO OBLIGATION TO PAY ANY SUCH
IMPOSITION THAT IS IMPOSED FOR PERIODS BEFORE OR AFTER SUCH COMMENCEMENT OR
TERMINATION.

 

4.02        DEFINITION OF IMPOSITIONS.  “IMPOSITIONS” MEANS, COLLECTIVELY, THE
FOLLOWING: (A) TAXES (INCLUDING, WITHOUT LIMITATION, ALL REAL ESTATE AND
PERSONAL PROPERTY AD VALOREM (WHETHER ASSESSED AS PART OF THE REAL ESTATE OR
SEPARATELY ASSESSED AS UNSECURED PERSONAL PROPERTY), SALES AND USE, BUSINESS OR
OCCUPATION, SINGLE BUSINESS, GROSS RECEIPTS, TRANSACTION, PRIVILEGE, RENT OR
SIMILAR TAXES, BUT NOT INCLUDING INCOME OR EXCISE TAXES PAYABLE WITH RESPECT TO
LANDLORD’S RECEIPT OF RENT), (B) ASSESSMENTS (INCLUDING WITHOUT LIMITATION, ALL
ASSESSMENTS FOR PUBLIC IMPROVEMENTS OR BENEFITS, PROVIDED SUCH ASSESSMENTS ARE
PAYABLE DURING THE TERM); (C) GROUND RENTS, WATER,

 

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SEWER OR OTHER RENTS, FEES AND CHARGES, EXCISES, TAX LEVIES, AND FEES
(INCLUDING, WITHOUT LIMITATION, LICENSE, PERMIT, INSPECTION, AUTHORIZATION AND
SIMILAR FEES); (D) ALL TAXES IMPOSED ON TENANT’S OPERATION OF THE LEASED
PROPERTY, INCLUDING, WITHOUT LIMITATION, EMPLOYEE WITHHOLDING TAXES, INCOME
TAXES AND INTANGIBLE TAXES, SALES AND USE TAXES; (E) ANY TAXES ARISING OUT OF OR
INCURRED AS A RESULT OF ANY SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION BY
TENANT OF ITS INTEREST IN THE LEASED PROPERTY OR THIS LEASE AGREEMENT, WHETHER
OR NOT PERMITTED UNDER THIS LEASE AGREEMENT; AND (F) ALL OTHER GOVERNMENTAL
CHARGES, IN EACH CASE WHETHER GENERAL OR SPECIAL, ORDINARY OR EXTRAORDINARY, OR
FORESEEN OR UNFORESEEN, OF EVERY CHARACTER IN RESPECT OF THE LEASED PROPERTY OR
ANY PART THEREOF (INCLUDING ALL INTERESTS AND PENALTIES THEREON DUE TO ANY
FAILURE IN PAYMENT BY TENANT), WHICH AT ANY TIME DURING OR IN RESPECT OF THE
TERM HEREOF MAY BE ASSESSED OR IMPOSED ON OR IN RESPECT OF OR BE A LIEN UPON ANY
OF THE FOLLOWING: (I) LANDLORD OR LANDLORD’S INTEREST IN THE LEASED PROPERTY OR
ANY PART THEREOF; (II) THE LEASED PROPERTY OR ANY PART THEREOF OR ANY RENT
THEREFROM OR ANY ESTATE, RIGHT, TITLE OR INTEREST THEREIN; OR (III) ANY
OCCUPANCY, OPERATION, USE OR POSSESSION OF, OR SALES FROM, OR ACTIVITY CONDUCTED
ON, OR IN CONNECTION WITH THE LEASED PROPERTY OR THE LEASING OR USE OF THE
LEASED PROPERTY OR ANY PART THEREOF.  TENANT SHALL NOT, HOWEVER, BE REQUIRED TO
PAY (Y) ANY TAX BASED ON NET INCOME (WHETHER DENOMINATED AS A FRANCHISE OR
CAPITAL STOCK OR OTHER TAX) IMPOSED ON LANDLORD, OR (Z) ANY INCOME, FRANCHISE,
TRANSFER, DOCUMENTARY STAMP, INTANGIBLE, GROSS RECEIPTS, INHERITANCE,
DEVOLUTION, GIFT, ESTATE, PAYROLL, STAMP ACT, OR REASSESSMENT OR SUPPLEMENTAL
ASSESSMENTS OF AD VALOREM REAL OR PERSONAL PROPERTY TAXES DUE TO THE SALE,
TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE TITLE, ESTATE OR INTEREST OF
LANDLORD IN THE LEASED PROPERTY OR THIS LEASE AGREEMENT.

 

4.03        UTILITIES.  TENANT SHALL BE RESPONSIBLE TO PROCURE THE SUPPLY OF ANY
AND ALL UTILITIES NECESSARY FOR TENANT’S USE AND OCCUPATION OF THE LEASED
PROPERTY AND LANDLORD WILL HAVE ABSOLUTELY NO RESPONSIBILITY OR OBLIGATION TO
PROVIDE ANY UTILITY OR OTHER SERVICE TO THE LEASED PROPERTY.  TENANT SHALL
CONTRACT FOR, IN ITS OWN NAME, AND WILL PAY, AS ADDITIONAL RENT ALL TAXES,
ASSESSMENTS, CHARGES/DEPOSITS, FEES AND BILLS FOR UTILITIES INCLUDING, WITHOUT
LIMITATION, CHARGES FOR WATER, GAS, OIL, SANITARY AND STORM SEWER, ELECTRICITY,
TELEPHONE SERVICE, TRASH COLLECTION, INTERNET ACCESS AND ALL OTHER UTILITIES
THAT MAY BE CHARGED AGAINST ANY OCCUPANT OR USER OF THE IMPROVEMENTS DURING THE
TERM.  TENANT SHALL AT ALL TIMES MAINTAIN THAT AMOUNT OF HEAT NECESSARY TO
ENSURE AGAINST THE FREEZING OF WATER LINES.

 

4.04        ESCROW OF IMPOSITIONS.  IN THE EVENT TENANT FAILS TO TIMELY PAY ANY
OR ALL OF THE IMPOSITIONS WITH RESPECT TO THE FACILITY TWO (2) TIMES IN ANY ONE
(1) TAX PERIOD OR THREE (3) TIMES IN ANY TWO (2) CONSECUTIVE TAX PERIODS, THEN,
UPON TEN (10) DAYS WRITTEN NOTICE FROM LANDLORD TO TENANT, TENANT SHALL
THEREAFTER DEPOSIT WITH LANDLORD ON THE FIRST DAY OF EACH MONTH DURING THE
REMAINING TERM HEREOF AND ANY EXTENDED TERM, A SUM EQUAL TO ONE-TWELFTH (L/12TH)
OF LANDLORD’S REASONABLE ESTIMATE OF THE IMPOSITIONS ASSESSED OR TO BE ASSESSED
AGAINST SUCH LEASED PROPERTY DURING THE TAX YEAR OF THE THEN APPLICABLE LEASE
YEAR, WHICH SUM SHALL BE USED BY LANDLORD TOWARD PAYMENT OF SUCH IMPOSITIONS. 
IF AT THE END OF ANY APPLICABLE TAX YEAR, ANY SUCH FUNDS HELD BY LANDLORD ARE
INSUFFICIENT TO MAKE FULL PAYMENT OF TAXES OR OTHER IMPOSITIONS FOR WHICH SUCH
FUNDS ARE HELD, TENANT, ON DEMAND, SHALL PAY TO LANDLORD ANY ADDITIONAL FUNDS
NECESSARY TO PAY AND DISCHARGE THE OBLIGATIONS OF TENANT PURSUANT TO THE
PROVISIONS OF THIS PARAGRAPH.  IF, HOWEVER, AT THE END OF ANY APPLICABLE TAX
YEAR, SUCH FUNDS HELD BY LANDLORD ARE IN EXCESS OF THE TOTAL PAYMENT REQUIRED TO
SATISFY TAXES OR OTHER IMPOSITIONS FOR WHICH SUCH FUNDS ARE HELD, LANDLORD SHALL
APPLY SUCH EXCESS AMOUNTS TO TENANT’S TAX AND IMPOSITION ESCROW FUND FOR THE
NEXT TAX YEAR.  IF ANY SUCH EXCESS EXISTS FOLLOWING THE EXPIRATION OR EARLIER
TERMINATION OF

 

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THIS LEASE AGREEMENT, LANDLORD SHALL PROMPTLY REFUND SUCH EXCESS AMOUNTS TO
TENANT.  THE RECEIPT BY LANDLORD OF THE PAYMENT OF SUCH IMPOSITIONS BY AND FROM
TENANT SHALL ONLY BE AS AN ACCOMMODATION TO TENANT AND THE TAXING AUTHORITIES,
AND SHALL NOT BE CONSTRUED AS RENT OR INCOME TO LANDLORD, AND SHALL NOT BE
DEEMED AS THE ASSUMPTION BY LANDLORD TO PAY SUCH IMPOSITIONS OR BE DEEMED A
WAIVER BY LANDLORD OF TENANT’S OBLIGATION TO PAY SUCH IMPOSITIONS, LANDLORD
SERVING, IF AT ALL, ONLY AS A CONDUIT FOR DELIVERY PURPOSES.

 

4.05        DISCONTINUANCE OF UTILITIES.  LANDLORD WILL NOT BE LIABLE FOR
DAMAGES TO PERSON OR PROPERTY OR FOR INJURY TO, OR INTERRUPTION OF, BUSINESS,
WHETHER THE BUSINESS OF TENANT OR ANY OTHER PERSON, FOR ANY FAILURE OR
INTERRUPTION IN THE SUPPLY OF UTILITIES, OR DISCONTINUANCE OF UTILITIES NOR WILL
SUCH FAILURE, INTERRUPTION OR DISCONTINUANCE IN ANY WAY BE CONSTRUED AS AN
EVICTION OF TENANT OR CAUSE AN ABATEMENT OF RENT OR OPERATE TO RELEASE TENANT
FROM ANY OF TENANT’S OBLIGATIONS UNDER THIS LEASE AGREEMENT.

 

4.06        NON-DUPLICATION OF ADDITIONAL RENT.  NOTWITHSTANDING TENANT’S
OBLIGATION TO PAY ALL IMPOSITIONS AND OTHER ADDITIONAL RENT IN ACCORDANCE WITH
THE TERMS HEREOF, TENANT SHALL NOT PAY ANY AMOUNT OWED THAT IS DUPLICATIVE OF AN
OBLIGATION THAT TENANT IS REQUIRED TO PAY AS AN IMPOSITION OR OTHER CATEGORY OF
ADDITIONAL RENT UNDER THE GROUND LEASE AGREEMENT.

 

ARTICLE V

INSURANCE

 

5.01        PROPERTY INSURANCE.  TENANT, AT TENANT’S EXPENSE, SHALL KEEP, OR
CAUSE THERE TO BE KEPT, THE LEASED PROPERTY, INCLUDING THE IMPROVEMENTS,
FIXTURES, AND OTHER COMPONENTS OF THE LEASED PROPERTY INSURED AGAINST THE
FOLLOWING RISKS:

 

(A)           LOSS OR DAMAGE BY FIRE, VANDALISM AND MALICIOUS MISCHIEF,
SPRINKLER LEAKAGE AND ALL OTHER PHYSICAL LOSS PERILS COMMONLY COVERED BY
“SPECIAL PERILS” OR “SPECIAL FORM” INSURANCE (FORMERLY KNOWN AS “ALL RISK”
INSURANCE) IN AN AMOUNT NOT LESS THAN ONE HUNDRED PERCENT (100%) OF THE THEN
FULL REPLACEMENT COST THEREOF (AS HEREINAFTER DEFINED).  SUCH POLICY SHALL
INCLUDE AN AGREED-AMOUNT ENDORSEMENT IN FORM AND AMOUNT ACCEPTABLE TO LANDLORD. 
SUCH POLICY SHALL ALSO INCLUDE ENDORSEMENTS FOR CONTINGENT LIABILITY FOR
ORDINANCE OR LAW COVERAGE WITH WORDING PROVIDED TO COVER THE ENFORCEMENT OF
OPERATION OF BUILDING AND ZONING LAWS, DEMOLITION AND REMOVAL COSTS OF UNDAMAGED
PARTS OF THE STRUCTURE, AND INCREASED COST OF REPAIRS OR RECONSTRUCTION.

 

(B)           LOSS OR DAMAGE BY EXPLOSION OF STEAM BOILERS, PRESSURE VESSELS, OR
SIMILAR APPARATUS, NOW OR HEREAFTER INSTALLED ON THE LEASED PROPERTY, IN
COMMERCIALLY REASONABLE AMOUNTS REASONABLY ACCEPTABLE TO LANDLORD.

 

(C)           LOSS OF 100% OF THE RENT PAYABLE BY TENANT UNDER A RENTAL VALUE
COVERAGE OR ENDORSEMENT TO PROPERTY POLICY COVERING RISK OF LOSS FOR A PERIOD OF
AT LEAST THE FIRST TWELVE (12) MONTHS OF THE TERM TO COMPENSATE LANDLORD FOR ANY
RENT ABATEMENT NECESSITATED BY THE OCCURRENCE OF ANY HAZARDS DESCRIBED IN
SECTIONS 5.01(A) OR 5.01(B), ABOVE, AND WHICH CAUSES AN ABATEMENT OF RENT AS
PROVIDED IN ARTICLE XI HEREOF, IN AN AMOUNT SUFFICIENT TO PREVENT LANDLORD OR
TENANT FROM BECOMING A CO-INSURER, CONTAINING ENDORSEMENTS FOR EXTENDED PERIOD
OF INDEMNITY AND PREMIUM ADJUSTMENT, AND WRITTEN WITH AN AGREED-AMOUNT CLAUSE.

 

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(D)           IF THE LAND IS LOCATED IN WHOLE OR IN PART WITHIN A DESIGNATED
FLOOD PLAIN AREA, LOSS OR DAMAGE CAUSED BY FLOOD IN COMMERCIALLY REASONABLE
AMOUNTS ACCEPTABLE TO LANDLORD.

 

(E)           IF THE LAND IS LOCATED IN WHOLE OR IN PART WITHIN AN EARTHQUAKE
ZONE AREA, LOSS OR DAMAGE CAUSED BY EARTHQUAKE IN COMMERCIALLY REASONABLY
AMOUNTS ACCEPTABLE TO LANDLORD.

 

(F)            LOSS OR DAMAGE COMMONLY COVERED BY BLANKET CRIME INSURANCE
INCLUDING EMPLOYEE DISHONESTY, LOSS OF MONEY ORDERS OR PAPER CURRENCY,
DEPOSITOR’S FORGERY, AND LOSS OF PROPERTY ACCEPTED BY TENANT FOR SAFEKEEPING, IN
COMMERCIALLY REASONABLE AMOUNTS ACCEPTABLE TO LANDLORD.

 

(G)           IN CONNECTION WITH ANY REPAIRS OR REBUILDING BY TENANT UNDER
ARTICLE XI HEREOF, TENANT SHALL MAINTAIN (OR CAUSE ITS CONTRACTOR TO MAINTAIN)
APPROPRIATE BUILDER’S RISK INSURANCE OR EQUIVALENT POLICY FORM COVERING ANY LOSS
OR CASUALTY TO THE SUBJECT IMPROVEMENTS DURING THE COURSE OF SUCH REPAIRS OR
REBUILDING.

 

5.02        LIABILITY INSURANCE.  TENANT SHALL, AT TENANT’S EXPENSE, MAINTAIN
DURING THE TERM LIABILITY INSURANCE AGAINST THE FOLLOWING:

 

(A)           CLAIMS FOR PERSONAL INJURY OR PROPERTY DAMAGE COMMONLY COVERED BY
COMPREHENSIVE GENERAL LIABILITY INSURANCE WITH ENDORSEMENTS FOR BLANKET,
CONTRACTUAL, PERSONAL INJURY, OWNER’S PROTECTIVE LIABILITY, REAL PROPERTY, FIRE
DAMAGE, LEGAL LIABILITY, BROAD FORM PROPERTY DAMAGE, AND EXTENDED BODILY INJURY,
WITH COMMERCIALLY REASONABLE AMOUNTS FOR BODILY INJURY AND PROPERTY DAMAGE
ACCEPTABLE TO LANDLORD, BUT WITH A COMBINED SINGLE LIMIT OF NOT LESS THAN FIVE
MILLION DOLLARS ($5,000,000) PER OCCURRENCE AND TEN MILLION DOLLARS
($10,000,000) IN THE AGGREGATE.

 

(B)           CLAIMS COMMONLY COVERED BY WORKER’S COMPENSATION AND EMPLOYERS
LIABILITY INSURANCE FOR ALL PERSONS EMPLOYED BY TENANT ON THE LEASED PROPERTY. 
SUCH WORKER’S COMPENSATION INSURANCE SHALL BE IN ACCORDANCE WITH THE
REQUIREMENTS OF ALL APPLICABLE LOCAL, STATE, AND FEDERAL LAW.

 

5.03        INSURANCE REQUIREMENTS.  THE FOLLOWING PROVISIONS SHALL APPLY TO ALL
INSURANCE COVERAGE REQUIRED UNDER THIS LEASE AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, THE INSURANCE REQUIRED UNDER SECTIONS 5.01 AND 5.02 ABOVE:

 

(A)           THE CARRIERS OF ALL POLICIES SHALL HAVE A BEST’S RATING OF “A-” OR
BETTER AND A BEST’S FINANCIAL CATEGORY OF VII OR HIGHER AND SHALL BE AUTHORIZED
TO DO BUSINESS IN AND LICENSED TO ISSUE INSURANCE POLICIES OF THE TYPE SO ISSUED
TO TENANT IN THE STATE OF COLORADO.

 

(B)           TENANT SHALL BE THE “NAMED INSURED” AND LANDLORD SHALL BE AN
“ADDITIONAL INSURED” ON EACH LIABILITY INSURANCE POLICY REQUIRED UNDER
SECTION 5.01, EXCEPT THAT IF SUCH COVERAGE IS UNDER A BLANKET POLICY, LANDLORD,
SHALL EACH BE DESIGNATED AN “ADDITIONAL INSURED” ONLY WITH RESPECT TO THE LEASED
PROPERTY COVERED UNDER ANY SUCH POLICY OR POLICIES AND THE OPERATIONS AND
SERVICES CONDUCTED THEREON.  LANDLORD AND ANY MORTGAGEE OF LANDLORD SHALL BE
DESIGNATED “LOSS PAYEE” OR “MORTGAGEE LOSS PAYEE” ON EACH PROPERTY INSURANCE
POLICY REQUIRED UNDER SECTION 5.01 AND THE RENT LOSS INSURANCE COVERAGE REQUIRED
UNDER SECTION 5.01(C), EXCEPT THAT IF SUCH COVERAGE IS UNDER A BLANKET INSURANCE
POLICY, EACH SHALL BE DESIGNATED A “LOSS PAYEE”

 

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OR “MORTGAGEE LOSS PAYEE” ONLY WITH RESPECT TO THE LEASED PROPERTY SUBJECT TO
THIS LEASE AGREEMENT.

 

(C)           TENANT SHALL DELIVER TO LANDLORD CERTIFICATES SHOWING THE REQUIRED
COVERAGE AND ENDORSEMENTS.  THE CERTIFICATES OF INSURANCE SHALL PROVIDE THAT THE
POLICY MAY NOT BE CANCELED OR NOT RENEWED, AND NO MATERIAL CHANGE OR REDUCTION
IN COVERAGE MAY BE MADE, WITHOUT AT LEAST THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE
TO LANDLORD.

 

(D)           THE POLICIES SHALL CONTAIN A SEVERABILITY OF INTEREST AND/OR
CROSS-LIABILITY ENDORSEMENT, PROVIDING THAT THE ACTS OR OMISSIONS OF TENANT WILL
NOT INVALIDATE THE LANDLORD’S COVERAGE, AND PROVIDING THAT LANDLORD SHALL NOT BE
RESPONSIBLE FOR PAYMENT OF PREMIUMS.

 

(E)           ALL LOSS ADJUSTMENT SHALL REQUIRE THE WRITTEN CONSENT OF LANDLORD
AND TENANT, AS THEIR INTERESTS MAY APPEAR, EXCEPT THAT IF THIS LEASE AGREEMENT
IS TERMINATED PURSUANT TO THE EXERCISE OF ANY RIGHTS OF THE PARTIES SET FORTH IN
ARTICLE X OF THIS LEASE AGREEMENT, LANDLORD SHALL BE ENTITLED TO DISBURSEMENT OF
ALL PROPERTY INSURANCE COVERAGES REQUIRED UNDER SECTION 5.01 AND RENT LOSS
INSURANCE PROCEEDS, IF ANY, UNDER SECTION 5.01(C), WITHOUT ANY NEED FOR THE
CONSENT OR AUTHORIZATION OF TENANT.

 

(F)            AT LEAST FIVE (5) DAYS PRIOR TO THE EXPIRATION OF EACH POLICY,
TENANT SHALL DELIVER TO LANDLORD A CERTIFICATE SHOWING RENEWAL OF SUCH POLICY.

 

(G)           LANDLORD SHALL HAVE THE RIGHT TO REVIEW THE INSURANCE COVERAGE
REQUIRED HEREUNDER WITH TENANT FROM TIME TO TIME WITH RESPECT TO SUCH INSURANCE
COVERAGE REQUIRED HEREUNDER FROM TIME TO TIME, TO OBTAIN THE INPUT OF THIRD
PARTY PROFESSIONAL INSURANCE ADVISORS (AT LANDLORD’S EXPENSE EXCEPT IF AN EVENT
OF DEFAULT SHALL HAVE OCCURRED AND THEN BE CONTINUING) WITH RESPECT TO SUCH
INSURANCE COVERAGE, AND TO PROVIDE INPUT TO TENANT IN TENANT’S ANNUAL REVIEW AND
RENEWAL OF SUCH INSURANCE COVERAGE.  ALL INSURANCE COVERAGE HEREUNDER SHALL BE
IN SUCH FORM, SUBSTANCE AND AMOUNTS AS ARE CUSTOMARY OR STANDARD IN TENANT’S
INDUSTRY.

 

(H)           PRIOR TO THE ANNUAL RENEWAL OF COVERAGE THAT OCCURS DURING THE
FIRST YEAR OF ANY EXTENDED TERM, LANDLORD SHALL HAVE THE RIGHT TO REQUIRE
REASONABLE ADJUSTMENTS TO THE MINIMUM INSURANCE REQUIREMENTS SET FORTH IN
SECTION 5.02(A), SUCH ADJUSTMENTS (IF ANY) TO BE EFFECTIVE SIXTY (60) DAYS
FOLLOWING LANDLORD’S WRITTEN NOTICE TO TENANT SPECIFYING THE REQUIRED
ADJUSTMENTS.

 

5.04        REPLACEMENT COST.  THE TERM “FULL REPLACEMENT COST” MEANS THE ACTUAL
REPLACEMENT COST THEREOF FROM TIME TO TIME, INCLUDING INCREASED COST OF
CONSTRUCTION, WITH NO REDUCTIONS OR DEDUCTIONS.  IF, AS REASONABLY DETERMINED BY
LANDLORD AFTER CONSULTATION WITH LANDLORD’S THIRD PARTY PROFESSIONAL INSURANCE
ADVISORS, THERE HAS BEEN AN INCREASE IN THE REPLACEMENT COST OF THE
IMPROVEMENTS, THEN, UPON REQUEST OF LANDLORD, TENANT SHALL, NOT LATER THAN
THIRTY (30) DAYS AFTER THE ANNIVERSARY OF EACH APPLICABLE INSURANCE POLICY,
ADJUST THE AMOUNT OF THE REPLACEMENT COST ENDORSEMENT TO REFLECT ANY SUCH
INCREASE.  IF TENANT MAKES ANY PERMITTED ALTERATIONS TO THE LEASED PROPERTY,
LANDLORD MAY HAVE SUCH FULL REPLACEMENT COST RE-DETERMINED AT ANY TIME AFTER
SUCH PERMITTED ALTERATIONS ARE MADE, REGARDLESS OF WHEN THE FULL REPLACEMENT
COST WAS LAST DETERMINED.

 

5.05        BLANKET POLICY.  TENANT MAY CARRY THE INSURANCE REQUIRED BY THIS
ARTICLE UNDER A BLANKET POLICY OF INSURANCE, PROVIDED THAT THE COVERAGE AND
LIMITS AFFORDED TENANT WILL NOT BE

 

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REDUCED OR DIMINISHED OR OTHERWISE BE DIFFERENT FROM THAT WHICH WOULD EXIST
UNDER A SEPARATE POLICY MEETING ALL OF THE REQUIREMENTS OF THIS LEASE AGREEMENT.

 

5.06        NO SEPARATE INSURANCE.  TENANT SHALL NOT TAKE OUT SEPARATE INSURANCE
CONCURRENT IN FORM OR CONTRIBUTING IN THE EVENT OF LOSS WITH THAT REQUIRED IN
THIS ARTICLE V, OR INCREASE THE AMOUNTS OF ANY THEN EXISTING INSURANCE
PERTAINING TO A PARTICULAR LEASED PROPERTY BY SECURING AN ADDITIONAL POLICY OR
ADDITIONAL POLICIES WITH RESPECT TO SUCH LEASED PROPERTY, UNLESS ALL PARTIES
HAVING AN INSURABLE INTEREST IN THE SUBJECT MATTER OF THE INSURANCE, INCLUDING
LANDLORD, ARE INCLUDED THEREIN AS ADDITIONAL INSUREDS OR LOSS PAYEES, THE LOSS
IS PAYABLE UNDER SUCH INSURANCE IN THE SAME MANNER AS LOSSES ARE PAYABLE UNDER
THIS LEASE AGREEMENT, AND SUCH ADDITIONAL INSURANCE IS NOT PROHIBITED BY THE
EXISTING POLICIES OF INSURANCE.  TENANT SHALL IMMEDIATELY NOTIFY LANDLORD OF THE
TAKING OUT OF SUCH SEPARATE INSURANCE OR THE INCREASING OF ANY OF THE AMOUNTS OF
THE EXISTING INSURANCE BY SECURING AN ADDITIONAL POLICY OR ADDITIONAL POLICIES.

 

5.07        WAIVER OF SUBROGATION.  EACH PARTY HERETO HEREBY WAIVES ANY AND
EVERY CLAIM THAT ARISES OR MAY ARISE IN ITS FAVOR AND AGAINST THE OTHER PARTY
HERETO DURING THE TERM OR ANY EXTENSION OR RENEWAL THEREOF, FOR ANY AND ALL LOSS
OF OR DAMAGE TO, ANY OF ITS PROPERTY LOCATED WITHIN OR UPON, OR CONSTITUTING A
PART OF, THE LEASED PROPERTY, WHICH LOSS OR DAMAGE IS COVERED (OR, UNDER THE
TERMS OF THIS LEASE AGREEMENT, SHOULD HAVE BEEN COVERED) BY VALID AND
COLLECTIBLE INSURANCE POLICIES, TO THE EXTENT THAT SUCH LOSS OR DAMAGE IS
RECOVERABLE UNDER SUCH POLICIES.  THIS MUTUAL WAIVER SHALL BE IN ADDITION TO,
AND NOT IN LIMITATION OR DEROGATION OF ANY OTHER WAIVER OR RELEASE CONTAINED IN
THIS LEASE AGREEMENT WITH RESPECT TO ANY LOSS OR DAMAGE TO PROPERTY OF THE
PARTIES HERETO.  INASMUCH AS SUCH WAIVERS WILL PRECLUDE THE ASSIGNMENT OF ANY
SUCH CLAIM BY WAY OF SUBROGATION (OR OTHERWISE) TO AN INSURANCE COMPANY (OR ANY
OTHER PERSON), EACH PARTY HERETO AGREES IMMEDIATELY TO GIVE EACH INSURANCE
COMPANY WHICH HAS ISSUED TO IT POLICIES OF INSURANCE, WRITTEN NOTICE OF THE
TERMS OF SUCH MUTUAL WAIVERS, AND TO HAVE SUCH INSURANCE POLICIES PROPERLY
ENDORSED, IF NECESSARY, TO PREVENT THE INVALIDATION OF SUCH INSURANCE COVERAGE
BY REASON OF SUCH WAIVERS.

 

5.08        MORTGAGES.  THE FOLLOWING PROVISIONS SHALL APPLY IF LANDLORD NOW OR
HEREAFTER PLACES A MORTGAGE ON THE LEASED PROPERTY OR ANY PART THEREOF AND IF
REQUESTED BY LANDLORD IN WRITING: (I) TENANT SHALL OBTAIN A STANDARD FORM OF
MORTGAGEE CLAUSE INSURING THE INTEREST OF THE MORTGAGEE; (II) TENANT SHALL
DELIVER EVIDENCE OF INSURANCE TO SUCH MORTGAGEE; AND (III) TENANT SHALL PROVIDE
SUCH OTHER INFORMATION AND DOCUMENTS AS MAY BE REASONABLY REQUIRED BY THE
MORTGAGEE.

 

ARTICLE VI

INDEMNITY; HAZARDOUS SUBSTANCES; DANGEROUS CONDITIONS

 

6.01        TENANT’S INDEMNIFICATION.  SUBJECT TO SECTION 5.07 AND OTHER THAN
FOR CIRCUMSTANCES INVOLVING LANDLORD’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
TENANT SHALL INDEMNIFY, DEFEND, SAVE AND HOLD HARMLESS LANDLORD, ITS AGENTS,
PARTNERS, MANAGERS AND EMPLOYEES OF, FROM AND AGAINST ANY AND ALL DEMANDS,
CLAIMS, CAUSES OF ACTION, FINES, PENALTIES, DAMAGES, LOSSES, LIABILITIES
(INCLUDING, BUT NOT LIMITED TO, STRICT LIABILITY), JUDGMENTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES, COURT
COSTS, AND THE COSTS SET FORTH IN SECTION 10.06 INCURRED IN CONNECTION WITH OR
ARISING FROM ANY OF THE FOLLOWING: (A) THE USE, CONDITION, OPERATION OR
OCCUPANCY OF THE LEASED PROPERTY; (B) ANY ACTIVITY,

 

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WORK, OR THING DONE, OR PERMITTED OR SUFFERED BY OR THROUGH TENANT IN OR ABOUT
THE LEASED PROPERTY; (C) ANY ACTS, OMISSIONS, OR NEGLIGENCE OF TENANT OR ANY
PERSON CLAIMING UNDER TENANT, OR THE CONTRACTORS, AGENTS, EMPLOYEES, INVITEES OR
VISITORS OF TENANT OR ANY SUCH PERSON; (D) ANY CLAIM OF ANY PERSON INCARCERATED,
HELD OR DETAINED IN THE LEASED PROPERTY, INCLUDING CLAIMS ALLEGING BREACH OR
VIOLATION OF SUCH PERSON’S CIVIL OR LEGAL RIGHTS; (E) ANY BREACH, VIOLATION, OR
NONPERFORMANCE BY TENANT OR ANY PERSON CLAIMING UNDER TENANT OR THE EMPLOYEES,
AGENTS, CONTRACTORS, INVITEES OR VISITORS OF TENANT OR OF ANY SUCH PERSON, OF
ANY TERM, COVENANT, OR PROVISION OF THIS LEASE AGREEMENT OR ANY LAW, ORDINANCE,
RULE, REGULATION OR GOVERNMENTAL REQUIREMENT OF ANY KIND; (F) ANY INJURY OR
DAMAGE TO THE PERSON, PROPERTY OR BUSINESS OF TENANT, ITS EMPLOYEES, AGENTS,
CONTRACTORS, INVITEES, OR VISITORS, OR ANY OTHER PERSON ENTERING UPON THE LEASED
PROPERTY UNDER THE EXPRESS OR IMPLIED INVITATION OF TENANT; AND (G) AND ANY
ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OR DAMAGE TO ANY ITEM OF
PROPERTY OCCURRING AT THE LEASED PROPERTY.  IF ANY ACTION OR PROCEEDING IS
BROUGHT AGAINST LANDLORD, ITS EMPLOYEES, PARTNERS, MANAGERS OR AGENTS BY REASON
OF ANY SUCH CLAIM, TENANT, UPON NOTICE FROM LANDLORD, WILL DEFEND THE CLAIM AT
TENANT’S SOLE COST AND EXPENSE WITH COUNSEL SELECTED BY TENANT AND REASONABLY
SATISFACTORY TO LANDLORD.  IN THE EVENT LANDLORD REASONABLY DETERMINES THAT ITS
OR ITS EMPLOYEES’, PARTNERS’, MANAGERS’ OR AGENTS’ INTERESTS AND THE INTERESTS
OF TENANT IN ANY SUCH ACTION OR PROCEEDING ARE IN MATERIAL CONFLICT AND THAT
TENANT’S COUNSEL CANNOT ADEQUATELY REPRESENT THE INTERESTS OF LANDLORD OR SUCH
PERSONS THEREIN, LANDLORD SHALL HAVE THE RIGHT TO HIRE SEPARATE COUNSEL IN ANY
SUCH ACTION OR PROCEEDING AND THE REASONABLE COSTS AND EXPENSES THEREOF,
INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES, SHALL BE PAID FOR BY
TENANT.

 

6.02        HAZARDOUS MATERIALS.  TENANT, SUBJECT TO THE FACTS DISCLOSED IN ANY
PHASE I ENVIRONMENTAL REPORT OBTAINED BY LANDLORD WITH RESPECT TO THE
ACQUISITION OF THE LEASED PROPERTY, WARRANTS AND REPRESENTS TO LANDLORD AS OF
THE DATE OF THIS LEASE AGREEMENT THE FOLLOWING: (A) NO ACTIVITY HAS BEEN
UNDERTAKEN WITH RESPECT TO THE LEASED PROPERTY TO TENANT’S KNOWLEDGE WHICH WOULD
CAUSE A VIOLATION UNDER ANY HAZARDOUS MATERIALS LAW; (B) TO TENANT’S KNOWLEDGE,
NO INVESTIGATION, ADMINISTRATIVE ORDER, LITIGATION OR SETTLEMENT WITH RESPECT TO
ANY HAZARDOUS MATERIALS IS IN EXISTENCE WITH RESPECT TO THE LEASED PROPERTY,
NOR, TO TENANT’S KNOWLEDGE, IS ANY OF THE FOREGOING THREATENED; AND (C) TO
TENANT’S KNOWLEDGE, NO NOTICE HAS BEEN RECEIVED BY TENANT FROM ANY PERSON
CLAIMING ANY VIOLATION OF ANY HAZARDOUS MATERIALS LAW, OR REQUIRING COMPLIANCE
WITH ANY HAZARDOUS MATERIALS LAW, OR DEMANDING PAYMENT OR CONTRIBUTION FOR
ENVIRONMENTAL DAMAGE OR INJURY TO NATURAL RESOURCES WITH RESPECT TO THE LEASED
PROPERTY.

 

6.03        TENANT’S COMPLIANCE/INDEMNITIES.

 

(A)           DURING THE TERM, TENANT WILL NOT STORE, USE, OR DISPOSE OF ANY
HAZARDOUS MATERIALS, EXCEPT IN SUCH QUANTITIES AS ALLOWED AND IN SUCH CONTAINERS
AS PERMITTED UNDER AND ONLY IN MATERIAL ACCORDANCE WITH ALL APPLICABLE HAZARDOUS
MATERIALS LAWS.  NOTWITHSTANDING THE FOREGOING, TENANT ANTICIPATES USING,
STORING AND DISPOSING OF CERTAIN HAZARDOUS MATERIALS IN CONNECTION WITH THE
OPERATION OF CORRECTIONAL OR DETENTION FACILITIES ON THE LEASED PROPERTY, WHICH
ACTIVITIES ARE NOT IN VIOLATION OF HAZARDOUS MATERIALS LAWS.  SUCH SUBSTANCES
INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: MEDICAL WASTES, DIESEL FUEL,
MAINTENANCE AND JANITORIAL SUPPLIES, AND WASTE FROM REPROGRAPHIC ACTIVITIES. 
DURING THE TERM, TENANT SHALL NOT ALLOW THE STORAGE OR USE OF HAZARDOUS
MATERIALS ON THE LEASED PROPERTY IN ANY MANNER NOT PERMITTED BY LAW AND BY THE
STANDARDS PREVAILING IN THE INDUSTRY FOR THE STORAGE AND USE OF SUCH SUBSTANCES
OR MATERIALS.

 

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UPON REQUEST BY LANDLORD, TENANT SHALL SUBMIT TO LANDLORD ANNUAL REPORTS
REGARDING TENANT’S USE, STORAGE, AND DISPOSAL OF ANY OF THE HAZARDOUS MATERIALS,
SUCH REPORTS TO INCLUDE INFORMATION REGARDING CONTINUED HAZARDOUS MATERIALS
INSPECTIONS, PERSONAL INTERVIEWS, AND FEDERAL, STATE AND LOCAL AGENCY LISTINGS. 
IN ADDITION, TENANT SHALL EXECUTE AFFIDAVITS, REPRESENTATIONS AND THE LIKE FROM
TIME TO TIME AT LANDLORD’S REQUEST CONCERNING TENANT’S BEST KNOWLEDGE AND BELIEF
REGARDING THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS ON THE LEASED
PROPERTY.  UNLESS CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD,
TENANT SHALL INDEMNIFY, DEFEND, SAVE AND HOLD LANDLORD HARMLESS OF, FROM AND
AGAINST ANY AND ALL CLAIMS, COSTS, AND LIABILITIES, INCLUDING, BUT NOT LIMITED
TO, REASONABLE ATTORNEYS’ FEES AND EXPENSES AND COSTS OF LITIGATION, INCURRED AS
A RESULT OF A RELEASE OR THREATENED RELEASE ON THE LEASED PROPERTY OF HAZARDOUS
MATERIALS OR THE VIOLATION, OR THE ALLEGED VIOLATION, BY TENANT OF ANY LAW,
ORDINANCE, REGULATION, ORDER, PERMIT, DECREE OR SIMILAR ITEMS, INCLUDING, BUT
NOT LIMITED TO ANY HAZARDOUS MATERIALS LAWS, RELATING TO HAZARDOUS SUBSTANCES,
HUMAN HEALTH OR THE ENVIRONMENT (COLLECTIVELY, “ENVIRONMENTAL LAWS”)
(IRRESPECTIVE OF WHETHER THERE HAS OCCURRED ANY VIOLATION OF ANY ENVIRONMENTAL
LAW ), IN RESPECT OF THE LEASED PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE
FOLLOWING: (A) LIABILITY FOR RESPONSE COSTS AND FOR COSTS OF REMOVAL AND
REMEDIAL ACTION INCURRED BY THE UNITED STATES GOVERNMENT, ANY STATE OR LOCAL
GOVERNMENTAL OR QUASI-GOVERNMENTAL BODY, AGENCY, BOARD OR UNIT OR ANY OTHER
PERSON OR ENTITY, OR DAMAGES FROM INJURY TO OR DESTRUCTION OR LOSS OF NATURAL
RESOURCES, INCLUDING THE REASONABLE COSTS OF ASSESSING SUCH INJURY, DESTRUCTION
OR LOSS, INCURRED PURSUANT TO ANY ENVIRONMENTAL LAW, (B) LIABILITY FOR COSTS AND
EXPENSES OF ABATEMENT, INVESTIGATION, REMOVAL, REMEDIATION, CORRECTION OR
CLEAN-UP, FINES, DAMAGES, RESPONSE COSTS OR PENALTIES WHICH ARISE FROM THE
PROVISIONS OF ANY ENVIRONMENTAL LAW, (C) LIABILITY FOR PERSONAL INJURY OR
PROPERTY DAMAGE ARISING UNDER ANY STATUTORY OR COMMON-LAW TORT THEORY, INCLUDING
DAMAGES ASSESSED FOR THE MAINTENANCE OF A PUBLIC OR PRIVATE NUISANCE OR FOR
CARRYING ON OF A DANGEROUS ACTIVITY OR (D) BY REASON OF A BREACH OF AN
ENVIRONMENTAL REPRESENTATION OR WARRANTY GIVEN BY TENANT TO LANDLORD.  THE
FOREGOING INDEMNIFICATION OF LANDLORD BY TENANT INCLUDES, WITHOUT LIMITATION,
ALL COSTS INCURRED BY OR IMPOSED UPON LANDLORD IN CONNECTION WITH ANY JUDGMENTS,
DAMAGES, PENALTIES, FINES, LIABILITIES OR LOSSES (INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR THE LOSS OR RESTRICTION ON USE OF ANY SPACE OR OF ANY AMENITY IN OR
AROUND THE LEASED PROPERTY, AND SUMS PAID IN SETTLEMENT OF CLAIMS, REASONABLE
ATTORNEYS’ FEES AND COSTS, REASONABLE CONSULTANT FEES AND REASONABLE EXPERT
FEES) OR IN CONNECTION WITH THE INVESTIGATION OF SITE CONDITIONS OR ANY CLEAN
UP, OR REMEDIAL REMOVAL OR RESTORATION WORK REQUIRED BY ANY FEDERAL, STATE OR
LOCAL GOVERNMENTAL AGENCY OR POLITICAL SUBDIVISION OCCURRING AS A RESULT OF THE
PRESENCE OF ANY HAZARDOUS MATERIAL IN, ON OR UNDER THE LEASED PROPERTY CAUSED BY
TENANT OR FOR WHICH TENANT IS LEGALLY LIABLE.  TENANT’S OBLIGATIONS UNDER THIS
SECTION 6.02 WILL SURVIVE THE TERMINATION (INCLUDING THE EARLY EXPIRATION) OF
THIS LEASE AGREEMENT.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 16.03, LANDLORD OR ANY
REPRESENTATIVES, CONTRACTORS OR AGENTS OF LANDLORD MAY INSPECT, INCLUDING, BUT
NOT LIMITED TO, IF LANDLORD DETERMINES THE SAME IS WARRANTED, CAUSING A PHASE I
AND/OR PHASE II ENVIRONMENTAL ASSESSMENT TO BE PERFORMED AT, THE LEASED PROPERTY
FROM TIME TO TIME TO DETERMINE COMPLIANCE BY TENANT WITH THE ENVIRONMENTAL
REPRESENTATIONS AND COVENANTS SET FORTH IN THIS SECTION 6.02, AND TENANT WILL
COOPERATE WITH SUCH INSPECTIONS, WHICH MUST BE CONDUCTED BY LANDLORD IN
ACCORDANCE WITH ALL APPLICABLE RULES AND REGULATIONS AND SUBJECT TO THE APPROVAL
OF ALL FEDERAL, STATE AND LOCAL CORRECTIONAL AND OTHER AUTHORITIES WITH INMATES
INCARCERATED AT, OR SUPERVISORY RESPONSIBILITY OVER, THE LEASED PROPERTY.  SUCH
INSPECTIONS SHALL BE PERFORMED AT LANDLORD’S EXPENSE UNLESS AN EVENT OF DEFAULT
HAS OCCURRED OR LANDLORD HAS A REASONABLE BASIS TO CONTEND THAT TENANT HAS
VIOLATED ITS

 

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REPRESENTATIONS OR COVENANTS UNDER THIS ARTICLE VI AND SUCH INSPECTION IS
REASONABLY NECESSARY TO DETERMINE WHETHER SUCH VIOLATION IS IN EXISTENCE. 
LANDLORD SHALL PROVIDE TENANT NOT LESS THAN THIRTY (30) DAYS PRIOR NOTICE OF THE
DATE AND TIME OF ANY PHASE II ENVIRONMENTAL DRILLING, SAMPLING OR TESTING
INVOLVING INTRUSIVE PROCEDURES AND COORDINATE WITH TENANT SUCH PROCEDURES SO
THAT THEY DO NOT UNREASONABLY INTERFERE WITH TENANT’S OPERATIONS AT THE
FACILITY.  ALL SUCH INSPECTIONS SHALL BE PERFORMED IN ACCORDANCE WITH ALL
ENVIRONMENTAL LAWS.

 

6.04        DEFINITIONS.  WITHOUT LIMITATION, “HAZARDOUS MATERIALS” FOR THE
PURPOSE OF THIS ARTICLE VI SHALL INCLUDE ANY SUBSTANCES REGULATED BY ANY LOCAL,
STATE OR FEDERAL LAW RELATING TO ENVIRONMENTAL CONDITIONS AND INDUSTRIAL
HYGIENE, INCLUDING, WITHOUT LIMITATION, THE RESOURCE CONSERVATION AND RECOVERY
ACT OF 1976 (“RCRA”), THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT OF 1980 (“CERCLA”), AS AMENDED BY THE SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT OF 1986 (“SARA”), THE HAZARDOUS MATERIALS TRANSPORTATION
ACT, THE FEDERAL WATER POLLUTION CONTROL ACT, THE CLEAN AIR ACT, THE CLEAN WATER
ACT, THE TOXIC SUBSTANCES CONTROL ACT, THE SAFE DRINKING WATER ACT, AND ALL
SIMILAR FEDERAL, STATE AND LOCAL ENVIRONMENTAL STATUTES, ORDINANCES AND THE
REGULATIONS, ORDERS, OR DECREES NOW OR HEREAFTER PROMULGATED THEREUNDER
(COLLECTIVELY, “HAZARDOUS MATERIALS LAW”).

 

6.05        TENANT’S RISK: LIMITATION OF LANDLORD’S LIABILITY.  TENANT AGREES
THAT THE LEASED PROPERTY AND ALL FURNISHINGS, FIXTURES, EQUIPMENT, EFFECTS AND
PROPERTY OF EVERY KIND, NATURE AND DESCRIPTION OF TENANT AND OF ALL PERSONS
CLAIMING BY, THROUGH OR UNDER TENANT WHICH, DURING THE CONTINUANCE OF THIS LEASE
AGREEMENT OR ANY OCCUPANCY OF THE LEASED PROPERTY BY TENANT OR ANYONE CLAIMING
UNDER TENANT, MAY BE ON THE LEASED PROPERTY, SHALL, UNLESS CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, BE AT THE SOLE RISK AND HAZARD OF
TENANT, AND, SUBJECT TO THE FOREGOING, IF THE WHOLE OR ANY PART THEREOF SHALL BE
DESTROYED OR DAMAGED BY FIRE, WATER OR OTHERWISE, OR BY THE LEAKAGE OR BURSTING
OF WATER PIPES, STEAM PIPES, OR OTHER PIPES, BY THEFT OR FROM ANY OTHER CAUSE,
NO PART OF SAID LOSS OR DAMAGE IS TO BE CHARGED TO OR BE BORNE BY LANDLORD,
EXCEPT THAT LANDLORD SHALL IN NO EVENT BE EXONERATED FROM ANY LIABILITY TO
TENANT OR TO ANY PERSON, FOR ANY INJURY, LOSS, DAMAGE OR LIABILITY TO THE EXTENT
SUCH EXONERATION IS PROHIBITED BY LAW.  LANDLORD SHALL NOT BE RESPONSIBLE OR
LIABLE TO TENANT, OR TO THOSE CLAIMING BY, THROUGH OR UNDER TENANT, FOR ANY LOSS
OR DAMAGE THAT MAY BE OCCASIONED BY OR THROUGH THE ACTS OR OMISSIONS OF PERSONS
OCCUPYING OR OWNING PROPERTY ADJOINING OR ADJACENT TO THE LEASED PROPERTY. 
LANDLORD, ITS AGENTS, PARTNERS, MANAGERS AND EMPLOYEES, WILL NOT BE LIABLE FOR
ANY LOSS, INJURY, DEATH, OR DAMAGE (INCLUDING CONSEQUENTIAL DAMAGES) TO PERSONS,
PROPERTY, OR TENANT’S BUSINESS OCCASIONED BY THEFT, ACT OF GOD, PUBLIC ENEMY,
TERRORISTIC THREAT OR ACT, INJUNCTION, RIOT, STRIKE, INSURRECTION, WAR, COURT
ORDER, REQUISITION, ORDER OF GOVERNMENTAL BODY OR AUTHORITY, FIRE, EXPLOSION,
FALLING OBJECTS, STEAM, WATER, RAIN OR SNOW, LEAK OR FLOW OF WATER (INCLUDING
WATER FROM THE ELEVATOR SYSTEM), RAIN OR SNOW FROM THE LEASED PROPERTY OR INTO
THE LEASED PROPERTY OR FROM THE ROOF, STREET, SUBSURFACE OR FROM ANY OTHER
PLACE, OR BY DAMPNESS OR FROM THE BREAKAGE, LEAKAGE, OBSTRUCTION, OR OTHER
DEFECTS OF THE PIPES, SPRINKLERS, WIRES, APPLIANCES, PLUMBING, AIR CONDITIONING,
OR LIGHTING FIXTURES OF THE LEASED PROPERTY, OR FROM CONSTRUCTION, REPAIR, OR
ALTERATION OF THE LEASED PROPERTY OR FROM ANY ACTS OR OMISSIONS OF ANY OTHER
OCCUPANT OR VISITOR OF THE LEASED PROPERTY, OR FROM THE PRESENCE OR RELEASE OF
ANY HAZARDOUS SUBSTANCE OR MATERIAL ON OR FROM THE LEASED PROPERTY OR FROM ANY
OTHER CAUSE BEYOND LANDLORD’S REASONABLE CONTROL.

 

6.06        DANGEROUS CONDITION.  TENANT SHALL USE COMMERCIALLY REASONABLE
EFFORTS IN ACCORDANCE WITH INDUSTRY STANDARDS TO KEEP THE LEASED PROPERTY FREE
FROM MOLD, MILDEW, LEAD

 

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BASED PAINT AND ANY AND ALL OTHER BACTERIA, FUNGI, SUBSTANCES AND MATERIALS IN
QUANTITIES OR CONCENTRATIONS THAT COULD BE REASONABLY EXPECTED TO BE HARMFUL TO
THE HEALTH OR SAFETY OF ANY OCCUPANTS OR INMATES AT THE FACILITY OR ANY
EMPLOYEES OR OTHER INVITEES OF TENANT OR ANY OTHER PERSON COMING ONTO OR IN THE
FACILITY.

 

ARTICLE VII

USE AND ACCEPTANCE OF LEASED PROPERTY

 

7.01        USE OF LEASED PROPERTY.  THE LEASED PROPERTY SHALL BE USED AND
OCCUPIED EXCLUSIVELY AS A CORRECTIONAL OR DETENTION FACILITY TOGETHER WITH USES
RELATED OR INCIDENTAL TO THE OPERATION OF A CORRECTIONAL OR DETENTION FACILITY
OR REQUIRED PURSUANT TO THE OPERATING AGREEMENT OR ANY OTHER GOVERNMENTAL
OPERATING AGREEMENT, SUPPORT AGREEMENT OR SUBLEASE, INCLUDING, BUT NOT LIMITED
TO, ANY SERVICE AGREEMENTS (AS DEFINED BELOW), OR ANY OTHER PURPOSE FOR WHICH
THE LEASED PROPERTY IS BEING USED AT THE COMMENCEMENT DATE OF THE TERM OR THE
RENTAL COMMENCEMENT DATE, AND FOR NO OTHER PURPOSE WITHOUT THE PRIOR WRITTEN
CONSENT OF THE LANDLORD, WHICH SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED.  TENANT SHALL OBTAIN AND MAINTAIN ALL APPROVALS, LICENSES, AND
CONSENTS NEEDED TO USE AND OPERATE EACH LEASED PROPERTY FOR SUCH PURPOSES.  IF
REQUESTED BY LANDLORD, TENANT SHALL PROMPTLY DELIVER TO LANDLORD COMPLETE COPIES
OF SURVEYS, EXAMINATIONS, CERTIFICATION AND LICENSURE INSPECTIONS, COMPLIANCE
CERTIFICATES, AND OTHER SIMILAR REPORTS ISSUED TO TENANT BY ANY GOVERNMENTAL
AGENCY FOR THE USE AND OCCUPANCY OF THE LEASED PROPERTY.

 

7.02        ACCEPTANCE OF LEASED PROPERTY.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS LEASE AGREEMENT, TENANT ACKNOWLEDGES THAT (I) TENANT AND ITS
AGENTS HAVE HAD AN OPPORTUNITY TO INSPECT THE LEASED PROPERTY, (II) TENANT HAS
FOUND THE LEASED PROPERTY FIT FOR TENANT’S USE, (III) DELIVERY OF THE LEASED
PROPERTY TO TENANT IS IN AN “AS-IS” CONDITION, (IV) EXCEPT FOR LANDLORD’S
OBLIGATIONS UNDER THE DEVELOPMENT AGREEMENT WITH RESPECT TO PROVIDING FUNDS TO
FINANCE THE DEVELOPMENT OF THE PROJECT, LANDLORD IS NOT OBLIGATED TO MAKE ANY
IMPROVEMENTS OR REPAIRS TO THE LEASED PROPERTY AND (V) AS OF THE RENTAL
COMMENCEMENT DATE, THE ROOF, WALLS, FOUNDATION, HEATING, VENTILATING, AIR
CONDITIONING, TELEPHONE, SEWER, ELECTRICAL, MECHANICAL, UTILITY, PLUMBING,
FIXTURES, IMPROVEMENTS AND OTHER PORTIONS OF THE LEASED PROPERTY WILL BE IN GOOD
WORKING ORDER.  TENANT WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD WITH RESPECT
TO THE CONDITION OF THE LEASED PROPERTY.

 

LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR THE PRESENCE OR ABSENCE OF
ANY DEFECT THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO
BE BORNE BY TENANT.

 

7.03        CONDITIONS OF USE AND OCCUPANCY.  DURING THE TERM, TENANT SHALL USE
AND KEEP THE LEASED PROPERTY IN A CAREFUL, SAFE AND PROPER MANNER; NOT INJURE,
PHYSICALLY OVERLOAD, DEFACE, DAMAGE OR OTHERWISE COMMIT NUISANCE OR SUFFER WASTE
THEREON; NOT USE OR OCCUPY THE LEASED PROPERTY FOR ANY UNLAWFUL PURPOSES; NOT
USE OR OCCUPY THE LEASED PROPERTY OR PERMIT THE SAME TO

 

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BE USED OR OCCUPIED, FOR ANY PURPOSE OR BUSINESS DEEMED EXTRA HAZARDOUS ON
ACCOUNT OF FIRE OR POTENTIAL FIRE OR OTHER HAZARD OR OTHERWISE; KEEP THE LEASED
PROPERTY IN SUCH REPAIR AND CONDITION AS MAY BE REQUIRED BY THE LOCAL BOARD OF
HEALTH, FIRE MARSHAL, OR OTHER CITY, STATE OR FEDERAL AUTHORITIES, FREE OF ALL
COST TO LANDLORD; AND NOT PERMIT ANY ACTS TO BE DONE THAT WILL CAUSE THE
CANCELLATION, INVALIDATION, OR SUSPENSION OF ANY INSURANCE POLICY, PROVIDED THAT
THE FOREGOING SHALL BE SUBJECT TO THE NORMAL WEAR AND TEAR CONTEMPLATED IN
SECTION 2.05.

 

7.04        FINANCIAL REPORTS.

 

(A)           WITHIN TEN (10) BUSINESS DAYS FOLLOWING LANDLORD’S REQUEST, TENANT
SHALL DELIVER TO LANDLORD THE QUARTERLY AND ANNUAL AVERAGE OCCUPANCY RATES FOR
THE LEASED PROPERTY.

 

(B)           IF AT ANY TIME DURING THE TERM, THE FINANCIAL STATEMENTS OF
CORNELL COMPANIES, INC. (“TENANT PARENT”) CEASE TO BE PUBLICLY AVAILABLE OR
TENANT PARENT CEASES TO BE A PUBLIC COMPANY REQUIRED TO FILE ITS FINANCIAL
STATEMENTS WITH THE SECURITIES AND EXCHANGE COMMISSION, TENANT SHALL DELIVER TO
LANDLORD (TO THE EXTENT NOT PREVIOUSLY DELIVERED OR AVAILABLE TO LANDLORD),
WITHIN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT OF A REQUEST BY LANDLORD, COPIES
OF TENANT PARENT’S AUDITED ANNUAL FINANCIAL STATEMENT FOR ITS TWO (2) MOST
RECENT FISCAL YEARS FOR WHICH AUDITED FINANCIALS HAVE OTHERWISE BEEN PREPARED,
IF ANY.  IN ADDITION, IF REQUESTED BY LANDLORD IN CONNECTION WITH ANY EXISTING
OR PROPOSED FINANCING OR SALE OF THE LEASED PROPERTY, TENANT SHALL DELIVER TO
LANDLORD, WITHIN TEN (10) BUSINESS DAYS OF A REQUEST FROM LANDLORD, COPIES OF
TENANT PARENT’S QUARTERLY FINANCIAL STATEMENTS FOR ITS MOST RECENT FISCAL
QUARTER FOR WHICH SUCH STATEMENTS HAVE BEEN PREPARED AND ARE AVAILABLE.  SUCH
FINANCIAL STATEMENTS OF TENANT PARENT SHALL INCLUDE, IF AVAILABLE, A BALANCE
SHEET, AN INCOME STATEMENT, AND A STATEMENT OF CHANGE IN FINANCIAL POSITION OR
SOURCES AND USES OF CASH, TOGETHER WITH ANY ACCOMPANYING NOTES.  IN THE EVENT
THAT TENANT PARENT’S MOST RECENT QUARTERLY OR ANNUAL FINANCIAL STATEMENTS, AS
APPLICABLE, HAVE NOT BEEN COMPLETED AND FILED PUBLICLY AS OF THE DATE OF
LANDLORD’S REQUEST THEREFORE, TENANT PARENT SHALL DELIVER TO LANDLORD COPIES OF
THE MOST RECENT FINANCIAL STATEMENTS THEN PREPARED AND COMPLETED BY OR ON BEHALF
OF TENANT PARENT WITHIN TEN (10) BUSINESS DAYS FOLLOWING LANDLORD’S REQUEST AND
SHALL DELIVER UPDATED FINANCIAL STATEMENTS WHEN FILED PUBLICLY.

 

ARTICLE VIII

REPAIR: COMPLIANCE WITH LAWS:

MECHANICS’ OR CONSTRUCTION LIENS: MAINTENANCE OF SERVICE

CONTRACTS

 

8.01        REPAIR AND MAINTENANCE.  TENANT SHALL, AT TENANT’S SOLE COST AND
EXPENSE, MAINTAIN THE LEASED PROPERTY IN GOOD ORDER, REPAIR AND APPEARANCE, AND
REPAIR THE LEASED PROPERTY, INCLUDING WITHOUT LIMITATION, ALL INTERIOR AND
EXTERIOR, STRUCTURAL AND NONSTRUCTURAL REPAIRS AND REPLACEMENTS TO THE ROOF,
FOUNDATIONS, EXTERIOR WALLS, BUILDING SYSTEMS, HVAC SYSTEMS, PARKING AREAS,
SIDEWALKS, WATER, SEWER AND GAS CONNECTIONS, PIPES, AND MAINS.  IN DETERMINING
TENANT’S OBLIGATIONS TO MAINTAIN THE LEASED PROPERTY HEREUNDER, THE PARTIES
SHALL TAKE INTO CONSIDERATION THE PURPOSE OF THE LEASED PROPERTY AS A
CORRECTIONAL/DETENTION FACILITY AND ANY MAINTENANCE REQUIREMENTS OR STANDARD
CONTAINED IN ANY OPERATING AGREEMENT.  TENANT SHALL PAY AS ADDITIONAL RENT, IN
ACCORDANCE WITH SECTION 3.02, THE FULL COST OF MAINTENANCE, REPAIRS, AND
REPLACEMENTS TO THE LEASED PROPERTY AND ALL FIXTURES AND IMPROVEMENTS.  TENANT
SHALL MAINTAIN ALL DRIVES, SIDEWALKS, PARKING AREAS, AND LAWNS ON OR ABOUT THE
LEASED PROPERTY IN

 

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A CLEAN AND ORDERLY CONDITION, FREE OF ACCUMULATIONS OF DIRT, RUBBISH, SNOW AND
ICE.  TENANT SHALL PERMIT LANDLORD OR ANY REPRESENTATIVES OR AGENTS OF LANDLORD
TO INSPECT THE LEASED PROPERTY AS PROVIDED IN SECTION 16.03.  NOTWITHSTANDING
THE FOREGOING, LANDLORD HAS NO OBLIGATION TO INSPECT THE LEASED PROPERTY, AND
LANDLORD WILL HAVE NO LIABILITY TO TENANT OR ANY OTHER PARTY WITH RESPECT TO THE
CONDITION OF THE LEASED PROPERTY WHETHER OR NOT LANDLORD INSPECTS THE SAME.

 

8.02        [INTENTIONALLY OMITTED.]

 

8.03        COMPLIANCE WITH LAWS.  TENANT SHALL, AT TENANT’S SOLE COST AND
EXPENSE, COMPLY IN ALL MATERIAL RESPECTS, AND SHALL CAUSE THE LEASED PROPERTY TO
COMPLY IN ALL MATERIAL RESPECTS, WITH ALL LAWS, CODES, ORDINANCES, ORDERS,
RULES, REGULATIONS, AND OTHER GOVERNMENTAL REQUIREMENTS RELATING TO THE USE,
CONDITION, OR OCCUPANCY OF THE LEASED PROPERTY, WHETHER NOW OR HEREAFTER ENACTED
AND IN FORCE INCLUDING WITHOUT LIMITATION, (A) LICENSURE REQUIREMENTS FOR
OPERATION AS A CORRECTIONAL OR DETENTION FACILITY OR ANY OTHER USE PERMITTED
HEREUNDER, (B) REQUIREMENTS OF ANY BOARD OF CASUALTY INSURANCE UNDERWRITERS OR
INSURANCE SERVICE OFFICE OR ANY OTHER SIMILAR BODY HAVING JURISDICTION OVER THE
LEASED PROPERTY, AND (C) ALL ZONING AND BUILDING CODES AND ENVIRONMENTAL LAWS. 
AT LANDLORD’S REQUEST, FROM TIME TO TIME, TENANT SHALL DELIVER TO LANDLORD
COPIES OF CERTIFICATES OR PERMITS EVIDENCING COMPLIANCE WITH SUCH LAWS
INCLUDING, WITHOUT LIMITATION, COPIES OF THE CORRECTIONAL OR DETENTION FACILITY
LICENSES, CERTIFICATES OF OCCUPANCY AND BUILDING PERMITS.  TENANT SHALL PROMPTLY
PROVIDE LANDLORD WITH COPIES OF ANY NOTICE FROM ANY GOVERNMENTAL AUTHORITY
ALLEGING ANY NON-COMPLIANCE BY TENANT OR THE LEASED PROPERTY WITH ANY OF THE
FOREGOING REQUIREMENTS AND SUCH EVIDENCE AS LANDLORD MAY REASONABLY REQUIRE WITH
RESPECT TO TENANT’S REMEDIATION THEREOF.

 

8.04        REQUIRED ALTERATIONS.  TENANT SHALL, AT TENANT’S SOLE COST AND
EXPENSE, MAKE ANY ADDITIONS, CHANGES, IMPROVEMENTS OR ALTERATIONS TO THE LEASED
PROPERTY, INCLUDING STRUCTURAL ALTERATIONS, WHICH MAY BE REQUIRED BY ANY
GOVERNMENTAL AUTHORITIES, INCLUDING THOSE REQUIRED TO CONTINUE LICENSURE OF THE
IMPROVEMENTS AS A CORRECTIONAL OR DETENTION FACILITY AND ALL ALTERATIONS AND
ADDITIONS NECESSARY TO MAKE THE LEASED PROPERTIES COMPLIANT IN ALL MATERIAL
RESPECTS UNDER THE AMERICANS WITH DISABILITIES ACT AND ALL APPLICABLE STATE AND
LOCAL LAWS, ORDINANCES AND REGULATIONS GOVERNING THE ACCESSIBILITY OF THE LEASED
PROPERTIES TO PERSONS WITH DISABILITIES, WHETHER SUCH CHANGES ARE REQUIRED BY
TENANT’S USE, CHANGES IN THE LAW, ORDINANCES, OR GOVERNMENTAL REGULATIONS,
DEFECTS EXISTING AS OF THE DATE OF THIS LEASE, OR ANY OTHER CAUSE WHATSOEVER. 
TENANT SHALL PROVIDE PRIOR WRITTEN NOTICE TO LANDLORD OF ANY CHANGES TO THE
LEASED PROPERTY PURSUANT TO THIS SECTION 8.04 WHICH INVOLVE CHANGES TO THE
STRUCTURAL INTEGRITY OF SUCH LEASED PROPERTY OR MATERIALLY AFFECT THE
OPERATIONAL CAPABILITIES OR RATED CAPACITY OF THE LEASED PROPERTY.  ALL SUCH
ADDITIONS, CHANGES, IMPROVEMENTS OR ALTERATIONS SHALL BE DEEMED TO BE A TENANT
IMPROVEMENT (AS DEFINED BELOW) AND SHALL COMPLY IN ALL MATERIAL RESPECTS WITH
ALL LAWS REQUIRING SUCH ALTERATIONS AND WITH THE PROVISIONS OF SECTION 9.01.

 

8.05        MECHANICS’ OR CONSTRUCTION LIENS.  TENANT SHALL INDEMNIFY, DEFEND,
SAVE AND HOLD LANDLORD HARMLESS OF, FROM AND AGAINST ANY AND ALL MECHANICS’ OR
CONSTRUCTION LIENS FILED AGAINST THE LEASED PROPERTY BY REASON OF WORK, LABOR
SERVICES OR MATERIALS SUPPLIED OR CLAIMED TO HAVE BEEN SUPPLIED ON OR TO THE
LEASED PROPERTY.  TENANT SHALL CAUSE TO BE REMOVED, BONDED-OFF, OR OTHERWISE
RELEASED ANY MECHANICS’ OR CONSTRUCTION LIEN FILED AGAINST THE LEASED PROPERTY
WITHIN FORTY-FIVE (45) DAYS OF THE DATE OF FILING OF SUCH LIEN.  IF TENANT SHALL
FAIL TO DISCHARGE ANY SUCH LIEN, LANDLORD MAY, AT ITS OPTION, AFTER TEN
(10) BUSINESS DAYS NOTICE TO TENANT OF ITS INTENT TO

 

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DO SO, DISCHARGE SUCH LIEN AND TREAT THE COST THEREOF (INCLUDING REASONABLE
ATTORNEYS’ FEES INCURRED IN CONNECTION THEREWITH) AS ADDITIONAL RENT PAYABLE
UPON DEMAND, IT BEING EXPRESSLY AGREED THAT SUCH DISCHARGE BY LANDLORD SHALL NOT
BE DEEMED TO WAIVE OR RELEASE THE EVENT OF DEFAULT IN NOT DISCHARGING SUCH
LIEN.  TENANT SHALL PAY ALL COST AND EXPENSES IN CONNECTION WITH THE REMOVAL OF
SUCH LIENS, WHETHER INCURRED BY LANDLORD OR TENANT, INCLUDING, WITHOUT
LIMITATION, DAMAGES, INTEREST, COURT COSTS AND REASONABLE ATTORNEYS’ FEES AND
EXPENSES.

 

8.06        REPLACEMENTS OF FIXTURES.  TENANT SHALL NOT REMOVE FIXTURES FROM THE
LEASED PROPERTY EXCEPT TO REPLACE THE FIXTURES BY OTHER SIMILAR ITEMS OF
COMPARABLE QUALITY AND FUNCTIONALITY.  ITEMS BEING REPLACED BY TENANT MAY BE
REMOVED AND SHALL BECOME THE PROPERTY OF TENANT, AND ITEMS REPLACING THE SAME
SHALL BE AND REMAIN THE PROPERTY OF THE LANDLORD.  TENANT SHALL EXECUTE, UPON
WRITTEN REQUEST FROM LANDLORD, ANY AND ALL DOCUMENTS NECESSARY TO EVIDENCE
LANDLORD’S OWNERSHIP OF THE FIXTURES AND REPLACEMENTS THEREFOR.  TENANT MAY
FINANCE REPLACEMENTS FOR THE FIXTURES BY EQUIPMENT LEASE OR BY A SECURITY
AGREEMENT AND FINANCING STATEMENT; PROVIDED, HOWEVER, THAT FOR ANY ITEM OF
FIXTURES HAVING A COST GREATER THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS
($100,000) (OR THIRTY THOUSAND DOLLARS ($30,000) IN THE CASE OF A FINANCING THAT
IS PROPOSED WITHIN THE LAST THIRTY-SIX (36) MONTHS OF A TERM), TENANT MAY NOT
FINANCE REPLACEMENTS BY SECURITY AGREEMENT OR EQUIPMENT LEASE UNLESS
(A) LANDLORD HAS CONSENTED TO THE TERMS AND CONDITIONS OF THE EQUIPMENT LEASE OR
SECURITY AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE AMOUNT TO BE FINANCED AND
THE AMORTIZATION SCHEDULE REGARDING THE PRINCIPAL AMOUNT OF ANY SUCH FINANCING,
(B) THE EQUIPMENT LESSOR OR LENDER HAS ENTERED INTO A NON-DISTURBANCE AGREEMENT
WITH THE LANDLORD UPON TERMS AND CONDITIONS ACCEPTABLE TO LANDLORD, INCLUDING
WITHOUT LIMITATION, THE FOLLOWING: (I) LANDLORD SHALL HAVE THE RIGHT (BUT NOT
THE OBLIGATION) TO ASSUME SUCH SECURITY AGREEMENT OR EQUIPMENT LEASE UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT BY TENANT UNDER THIS LEASE AGREEMENT, (II) THE
EQUIPMENT LESSOR OR LENDER SHALL NOTIFY LANDLORD OF ANY DEFAULT BY TENANT UNDER
THE EQUIPMENT LEASE OR SECURITY AGREEMENT AND GIVE LANDLORD A REASONABLE
OPPORTUNITY TO CURE SUCH DEFAULT, AND (III) LANDLORD SHALL HAVE THE RIGHT TO
ASSIGN ITS RIGHTS UNDER THE EQUIPMENT LEASE, SECURITY AGREEMENT, OR
NON-DISTURBANCE AGREEMENT, AND (C) TENANT SHALL, WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF AN INVOICE FROM LANDLORD, REIMBURSE LANDLORD FOR ALL REASONABLE COSTS
AND EXPENSES INCURRED IN REVIEWING AND APPROVING THE EQUIPMENT LEASE, SECURITY
AGREEMENT, AND NON-DISTURBANCE AGREEMENT, INCLUDING WITHOUT LIMITATION,
ATTORNEYS’ FEES, EXPENSES AND COSTS.

 

8.07        MAINTENANCE OF SERVICE AGREEMENTS.  TENANT SHALL KEEP IN FULL FORCE
AND EFFECT AND SHALL PERFORM ALL MATERIAL OBLIGATIONS REQUIRED TO BE PERFORMED
BY TENANT UNDER, ANY AND ALL MATERIAL CONTRACTS, AGREEMENTS, LEASES, OR
COMMITMENTS OR DOCUMENTS APPLICABLE TO THE LEASED PROPERTY OR THE OPERATION OF
THE FACILITY, INCLUDING BUT NOT LIMITED TO, SERVICE AGREEMENTS (AS DEFINED
BELOW).  TENANT SHALL IMMEDIATELY NOTIFY LANDLORD IN WRITING IF TENANT OR ANY
OTHER PARTY TO ANY SUCH MATERIAL CONTRACT, AGREEMENT, LEASE, OR COMMITMENT OR
DOCUMENT APPLICABLE TO THE LEASED PROPERTY OR THE OPERATION OF THE FACILITY,
INCLUDING, BUT NOT LIMITED TO, THE SERVICE AGREEMENTS, IS IN MATERIAL DEFAULT
THEREUNDER, OR IF ANY SERVICE AGREEMENT HAS BEEN TERMINATED BY ANY PARTY
THERETO.

 

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ARTICLE IX

ALTERATIONS; TENANT’S PROPERTY;

CAPITAL ADDITIONS TO THE LEASED PROPERTY

 

9.01        TENANT’S RIGHT TO CONSTRUCT.  TENANT SHALL HAVE THE EXCLUSIVE RIGHT
AND ACCESS TO CONSTRUCT, OR CAUSE THERE TO BE CONSTRUCTED, THE FACILITY AND TO
OTHERWISE DEVELOP, CONSTRUCT AND EQUIP THE PROJECT, AND TO IMPLEMENT THE
DEVELOPMENT PLAN.  TENANT SHALL ALSO HAVE THE EXCLUSIVE RIGHT AND ACCESS TO MAKE
CAPITAL ADDITIONS, OR OTHER ALTERATIONS, ADDITIONS, CHANGES AND/OR IMPROVEMENTS
TO THE LEASED PROPERTY OR THE LAND AS DEEMED NECESSARY OR USEFUL BY TENANT TO
OPERATE THE LEASED PROPERTY AS A CORRECTIONAL OR DETENTION FACILITY OR OTHER USE
APPROVED BY LANDLORD (THE “PRIMARY INTENDED USE”) (EXCLUDING ANY SUCH
ALTERATIONS, ADDITIONS, CHANGES AND/OR IMPROVEMENTS IN CONNECTION WITH THE
PROJECT OR THAT ARE CONTEMPLATED BY THE DEVELOPMENT PLAN, INDIVIDUALLY, A
“TENANT IMPROVEMENT,” OR COLLECTIVELY, “TENANT IMPROVEMENTS”).  “CAPITAL
ADDITIONS” SHALL MEAN A TENANT IMPROVEMENT CONSISTING OF THE CONSTRUCTION OF ONE
OR MORE NEW BUILDINGS OR ONE OR MORE ADDITIONAL STRUCTURES ANNEXED TO ANY
PORTION OF ANY OF THE IMPROVEMENTS ON THE LEASED PROPERTY, WHICH ARE CONSTRUCTED
ON ANY PARCEL OF LAND OR PORTION OF THE LEASED PROPERTY OR THE LAND DURING THE
TERM OF THIS LEASE AGREEMENT, INCLUDING THE CONSTRUCTION OF A NEW FLOOR, WHICH
IN EACH CASE ARE NOT CONSTRUCTED PURSUANT TO OR IN CONNECTION WITH THE PROJECT
OR CONTEMPLATED BY THE DEVELOPMENT PLAN.  EXCEPT AS OTHERWISE AGREED TO BY
LANDLORD IN WRITING PURSUANT TO SECTION 9.09 BELOW, ANY TENANT IMPROVEMENT SHALL
BE MADE AT TENANT’S SOLE EXPENSE AND SHALL BECOME THE PROPERTY OF LANDLORD UPON
TERMINATION OF THIS LEASE AGREEMENT.  UNLESS MADE ON AN EMERGENCY BASIS TO
PREVENT INJURY TO PERSON OR PROPERTY, TENANT WILL SUBMIT PLANS TO LANDLORD FOR
LANDLORD’S REVIEW PRIOR APPROVAL, SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD
OR DELAYED, FOR ANY TENANT IMPROVEMENT WHICH IS NOT A CAPITAL ADDITION AND WHICH
HAS A COST OF MORE THAN FIVE HUNDRED THOUSAND DOLLARS ($500,000) OR A COST
WHICH, WHEN AGGREGATED WITH THE COSTS OF ALL SUCH TENANT IMPROVEMENTS FOR THE
LEASED FACILITY IN THE SAME LEASE YEAR, WOULD CAUSE THE TOTAL COSTS OF ALL SUCH
TENANT IMPROVEMENTS TO EXCEED ONE MILLION DOLLARS ($1,000,000).  SUCH $500,000
AND $1,000,000 AMOUNTS SHALL BE INCREASED BY THREE PERCENT (3%) PER ANNUM,
CUMULATIVELY FOR EACH SUBSEQUENT LEASE YEAR.  ADDITIONALLY, IN CONNECTION WITH
ANY TENANT IMPROVEMENT, INCLUDING ANY CAPITAL ADDITION, TENANT SHALL PROVIDE
LANDLORD WITH COPIES OF ANY PLANS AND SPECIFICATION THEREFOR, TENANT’S BUDGET
RELATING THERETO, ANY REQUIRED GOVERNMENT PERMITS OR APPROVALS, ANY CONSTRUCTION
CONTRACTS OR AGREEMENTS RELATING THERETO, AND ANY OTHER INFORMATION RELATING TO
SUCH TENANT IMPROVEMENT AS LANDLORD SHALL REASONABLY REQUEST.

 

9.02        SCOPE OF RIGHT.  SUBJECT TO SECTION 9.01 HEREIN AND SECTION 8.04
CONCERNING REQUIRED ALTERATIONS, AT TENANT’S COST AND EXPENSE, TENANT SHALL HAVE
THE EXCLUSIVE RIGHT TO DO THE FOLLOWING:

 

(A)           SEEK ANY GOVERNMENTAL APPROVALS, INCLUDING BUILDING PERMITS,
LICENSES, CONDITIONAL USE PERMITS AND ANY CERTIFICATES OF NEED THAT TENANT
REQUIRES TO CONSTRUCT ANY TENANT IMPROVEMENT;

 

(B)           ERECT UPON THE LEASED PROPERTY OR THE LAND SUCH TENANT
IMPROVEMENTS AS TENANT DEEMS DESIRABLE INCLUDING BUT NOT LIMITED TO NEW
FACILITIES OR EXPANSIONS TO EXISTING FACILITIES;

 

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(C)           MAKE ADDITIONS, ALTERATIONS, CHANGES AND IMPROVEMENTS IN ANY
TENANT IMPROVEMENT SO ERECTED; AND

 

(D)           ENGAGE IN ANY OTHER LAWFUL ACTIVITIES THAT TENANT DETERMINES ARE
NECESSARY OR DESIRABLE FOR THE DEVELOPMENT OF THE LEASED PROPERTY OR THE LAND IN
ACCORDANCE WITH ITS PRIMARY INTENDED USE;

 

provided, however, Tenant shall not make any Tenant Improvement which would
impair the value or Primary Intended Use of the Leased Property or the Land
without Landlord’s prior written consent.

 

9.03        COOPERATION OF LANDLORD.  LANDLORD SHALL COOPERATE WITH TENANT AND
TAKE SUCH ACTIONS, INCLUDING THE EXECUTION AND DELIVERY TO TENANT OF ANY
APPLICATIONS OR OTHER DOCUMENTS, REASONABLY REQUESTED BY TENANT IN ORDER TO
OBTAIN ANY GOVERNMENTAL APPROVALS SOUGHT BY TENANT THAT HAVE EITHER BEEN
APPROVED BY LANDLORD OR FOR WHICH LANDLORD’S APPROVAL IS NOT REQUIRED TO
CONSTRUCT ANY TENANT IMPROVEMENT WITHIN TEN (10) BUSINESS DAYS FOLLOWING THE
LATER OF (A) THE DATE LANDLORD RECEIVES TENANT’S REQUEST TOGETHER WITH ALL
INFORMATION REASONABLY REQUESTED BY LANDLORD REGARDING THE TENANT IMPROVEMENTS,
OR (B) THE DATE OF DELIVERY OF ANY SUCH APPLICATION OR DOCUMENT TO LANDLORD
TOGETHER WITH ALL INFORMATION REASONABLY REQUESTED BY LANDLORD REGARDING THE
TENANT IMPROVEMENTS, SO LONG AS THE TAKING OF SUCH ACTION, INCLUDING THE
EXECUTION OF SUCH APPLICATIONS OR DOCUMENTS, SHALL BE WITHOUT COST TO LANDLORD
(OR IF THERE IS A COST TO LANDLORD, SUCH COST SHALL BE REIMBURSED BY TENANT),
AND WILL NOT CAUSE LANDLORD TO BE IN VIOLATION OF ANY LAW, ORDINANCE, RULE OR
REGULATION.

 

9.04        COMMENCEMENT OF CONSTRUCTION.  TENANT SHALL PERFORM ALL OF THE
FOLLOWING IN CONNECTION WITH THE TENANT IMPROVEMENTS:

 

(A)           TENANT SHALL DILIGENTLY SEEK ALL GOVERNMENTAL APPROVALS RELATING
TO THE CONSTRUCTION OF ANY TENANT IMPROVEMENT;

 

(B)           ONCE TENANT BEGINS THE CONSTRUCTION OF ANY TENANT IMPROVEMENT,
TENANT SHALL DILIGENTLY PROSECUTE ANY SUCH CONSTRUCTION TO COMPLETION MATERIALLY
IN ACCORDANCE WITH APPLICABLE INSURANCE REQUIREMENTS, THE REQUIREMENTS OF ANY
GOVERNMENTAL APPROVAL OR PERMIT RELATING THERETO AND THE LAWS, RULES AND
REGULATIONS OF ALL GOVERNMENTAL BODIES OR AGENCIES HAVING JURISDICTION OVER THE
LEASED PROPERTY;

 

(C)           PERMIT LANDLORD AT ANY TIME AND FROM TIME TO TIME TO POST AND
MAINTAIN UPON THE LEASED PROPERTY OR THE LAND SUCH NOTICES AS MAY BE NECESSARY
TO PROTECT LANDLORD’S INTEREST FROM MECHANICS’ LIENS, MATERIALMEN’S LIENS,
CONSTRUCTION LIENS, OR LIENS OF A SIMILAR NATURE;

 

(D)           TENANT SHALL NOT SUFFER OR PERMIT ANY MECHANICS’ OR CONSTRUCTION
LIENS OR ANY OTHER CLAIMS OR DEMANDS ARISING FROM THE WORK OR CONSTRUCTION OF
ANY TENANT IMPROVEMENT TO BE ENFORCED AGAINST THE LEASED PROPERTY OR THE LAND OR
ANY PART THEREOF AND TENANT SHALL INDEMNIFY, DEFEND, SAVE AND HOLD LANDLORD
HARMLESS OF, FROM AND AGAINST ANY AND ALL LIABILITY FROM ANY SUCH LIENS, CLAIMS
OR DEMANDS, TOGETHER WITH ALL REASONABLE COSTS AND EXPENSES IN CONNECTION
THEREWITH, INCLUDING, BUT NOT LIMITED TO, REASONABLE ATTORNEYS’ FEES AND
EXPENSES;

 

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(E)           ALL WORK SHALL BE PERFORMED IN A GOOD AND WORKMANLIKE MANNER
CONSISTENT WITH GENERALLY ACCEPTED CONSTRUCTION STANDARDS IN THE INDUSTRY; AND

 

(F)            SUBJECT TO SECTION 9.09 IN THE CASE OF CAPITAL ADDITIONS, TENANT
SHALL NOT BE PERMITTED TO OBTAIN CONSTRUCTION OR OTHER FINANCING FOR THE TENANT
IMPROVEMENTS SECURED BY TENANT’S LEASEHOLD INTEREST THEREIN WITHOUT LANDLORD’S
PRIOR WRITTEN CONSENT, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED, AND ANY SUCH FINANCING (I) SHALL NOT EXCEED THE COST OF THE TENANT
IMPROVEMENTS, (II) SHALL BE SUBORDINATE TO ANY MORTGAGE OR ENCUMBRANCE NOW
EXISTING OR HEREINAFTER CREATED BY LANDLORD WITH RESPECT TO THE LEASED PROPERTY,
AND (III) SHALL BE LIMITED SOLELY TO TENANT’S INTEREST IN THE LEASED PROPERTY OR
THE LAND THAT IS THE SUBJECT OF THE IMPROVEMENTS.

 

9.05        RIGHTS IN TENANT IMPROVEMENTS.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS LEASE, ALL TENANT IMPROVEMENTS CONSTRUCTED PURSUANT TO
SECTION 9.01, ANY AND ALL SUBSEQUENT ADDITIONS THERETO AND ALTERATIONS AND
REPLACEMENTS THEREOF, SHALL BE THE SOLE AND ABSOLUTE PROPERTY OF LANDLORD UPON
THE EXPIRATION OR EARLY TERMINATION OF THIS LEASE AGREEMENT.  TENANT SHALL BE
ENTITLED TO ALL FEDERAL AND STATE INCOME TAX BENEFITS ASSOCIATED WITH ANY TENANT
IMPROVEMENT (OTHER THAN A CAPITAL ADDITION PURCHASED OR FINANCED BY LANDLORD)
DURING THE TERM OF THIS LEASE AGREEMENT.

 

9.06        [INTENTIONALLY OMITTED.]

 

9.07        REQUIREMENTS FOR PERSONAL PROPERTY.  TENANT SHALL COMPLY WITH ALL OF
THE FOLLOWING REQUIREMENTS IN CONNECTION WITH PERSONAL PROPERTY:

 

(A)           TENANT SHALL REMOVE ANY OF TENANT’S PERSONAL PROPERTY, UPON THE
TERMINATION OR EXPIRATION OF THIS LEASE AGREEMENT AND SHALL REPAIR ANY DAMAGE TO
THE LEASED PROPERTY RESULTING FROM THE REMOVAL OF TENANT’S PERSONAL PROPERTY. 
IF TENANT FAILS TO REMOVE TENANT’S PERSONAL PROPERTY WITHIN THIRTY (30) DAYS
AFTER THE TERMINATION OR EXPIRATION OF THE LEASE AGREEMENT, THEN TENANT SHALL BE
DEEMED TO HAVE ABANDONED TENANT’S PERSONAL PROPERTY, TENANT’S PERSONAL PROPERTY
SHALL BECOME THE PROPERTY OF LANDLORD (AT NO COST TO LANDLORD), AND LANDLORD MAY
REMOVE, STORE AND DISPOSE OF TENANT’S PERSONAL PROPERTY.  IN SUCH EVENT, TENANT
SHALL HAVE NO CLAIM OR RIGHT AGAINST LANDLORD FOR SUCH PROPERTY OR THE VALUE
THEREOF REGARDLESS OF THE DISPOSITION THEREOF BY LANDLORD.  TENANT SHALL PAY
LANDLORD, UPON DEMAND, ALL REASONABLE EXPENSES INCURRED BY LANDLORD IN REMOVING
AND DISPOSING OF TENANT’S PERSONAL PROPERTY AND REPAIRING ANY DAMAGE TO THE
LEASED PROPERTY CAUSED BY SUCH REMOVAL.  TENANT’S OBLIGATIONS HEREUNDER SHALL
SURVIVE THE TERMINATION OR EXPIRATION OF THIS LEASE AGREEMENT.

 

9.08        SIGNS.  TENANT MAY, AT ITS OWN EXPENSE, ERECT AND MAINTAIN
IDENTIFICATION SIGNS AT THE LEASED PROPERTY, PROVIDED SUCH SIGNS COMPLY IN ALL
MATERIAL RESPECTS WITH ALL LAWS, ORDINANCES, RULES, PERMITS, APPROVALS AND
REGULATIONS.  ON THE TERMINATION OR EXPIRATION OF THIS LEASE AGREEMENT, TENANT,
WITHIN THIRTY (30) DAYS AFTER NOTICE FROM LANDLORD, SHALL REMOVE THE SIGNS AND
REPAIR ANY DAMAGE TO THE LEASED PROPERTY OR THE LAND RESULTING FROM SUCH
REMOVAL, WHICH OBLIGATION SHALL SURVIVE THE EXPIRATION OR TERMINATION HEREOF.

 

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9.09        FINANCINGS OF CAPITAL ADDITIONS TO A LEASED PROPERTY.

 

(A)           PRIOR TO SEEKING CONSTRUCTION, PERMANENT OR OTHER FINANCING FROM A
THIRD PARTY FOR A CAPITAL ADDITION PROPOSED TO BE MADE BY TENANT TO THE LEASED
PROPERTY OR THE LAND, TENANT SHALL SUBMIT TO LANDLORD A WRITTEN REQUEST FOR SUCH
FINANCING.  LANDLORD MAY, BUT SHALL BE UNDER NO OBLIGATION TO, OFFER TO PROVIDE
OR ARRANGE SUCH FINANCING.  WITHIN THIRTY (30) DAYS AFTER RECEIPT OF SUCH A
REQUEST FROM TENANT, LANDLORD SHALL NOTIFY TENANT IN WRITING AS TO WHETHER IT
WILL FINANCE THE PROPOSED CAPITAL ADDITION AND, IF SO, THE TERMS AND CONDITIONS
(“LANDLORD FINANCING TERMS”) UPON WHICH IT WOULD BE WILLING TO DO SO, INCLUDING
THE TERMS OF ANY AMENDMENT TO THIS LEASE AGREEMENT FOR SUCH PROPOSED CAPITAL
ADDITION.

 

(B)           IF LANDLORD AGREES TO FINANCE THE PROPOSED CAPITAL ADDITION OF
TENANT ON TERMS SATISFACTORY TO TENANT, TENANT SHALL PROVIDE LANDLORD, UNLESS
LANDLORD WAIVES ANY OF THE CLAUSES BELOW, WITH THE FOLLOWING:

 

(I)            ALL CUSTOMARY OR OTHER REQUIRED LOAN DOCUMENTATION WHICH MAY BE
REQUIRED;

 

(II)           ANY INFORMATION, CERTIFICATES, LICENSES, PERMITS OR DOCUMENTS
REQUESTED BY EITHER LANDLORD OR ANY LENDER WITH WHOM LANDLORD HAS AGREED OR MAY
AGREE TO PROVIDE FINANCING, WHICH ARE NECESSARY TO CONFIRM THAT TENANT WILL BE
ABLE TO USE THE CAPITAL ADDITION UPON COMPLETION THEREOF IN ACCORDANCE WITH THE
PRIMARY INTENDED USE, INCLUDING ALL REQUIRED, FEDERAL, STATE OR LOCAL GOVERNMENT
LICENSES, PERMITS AND APPROVALS;

 

(III)          A CERTIFICATE FROM TENANT’S ARCHITECT, SETTING FORTH IN
REASONABLE DETAIL THE PROJECTED (OR ACTUAL, IF AVAILABLE) COST OF THE PROPOSED
CAPITAL ADDITION;

 

(IV)          AN AMENDMENT TO THIS LEASE AGREEMENT, OR A NEW LEASE AGREEMENT,
DULY EXECUTED AND ACKNOWLEDGED, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LANDLORD, AND CONTAINING SUCH PROVISIONS AS MAY BE NECESSARY OR APPROPRIATE,
INCLUDING WITHOUT LIMITATION, ANY APPROPRIATE CHANGES IN THE LEGAL DESCRIPTION
OF THE LAND, THE RENT, ANY SECURITY DEPOSIT OR OTHER ESCROW REQUIRED HEREUNDER
AND OTHER CHANGES WITH RESPECT TO THE CAPITAL ADDITION;

 

(V)           A DEED CONVEYING TITLE TO LANDLORD TO ANY LAND ACQUIRED FOR THE
PURPOSE OF CONSTRUCTING THE CAPITAL ADDITION, FREE AND CLEAR OF ANY LIENS OR
ENCUMBRANCES EXCEPT THOSE APPROVED BY LANDLORD AND, BOTH PRIOR TO AND FOLLOWING
COMPLETION OF THE CAPITAL ADDITION, AN AS-BUILT SURVEY THEREOF SATISFACTORY TO
LANDLORD;

 

(VI)          ENDORSEMENTS TO ANY OUTSTANDING POLICY OF TITLE INSURANCE COVERING
THE LEASED PROPERTY OR THE LAND OR A SUPPLEMENTAL POLICY OF TITLE INSURANCE
COVERING THE LEASED PROPERTY OR THE LAND SATISFACTORY IN FORM AND SUBSTANCE TO
LANDLORD (A) UPDATING THE SAME WITHOUT ANY ADDITIONAL EXCEPTIONS, EXCEPT AS MAY
BE PERMITTED BY LANDLORD; AND (B) INCREASING THE COVERAGE THEREOF BY AN AMOUNT
EQUAL TO THE FAIR MARKET VALUE OF THE CAPITAL ADDITION;

 

(VII)         IF REQUIRED BY LANDLORD, (A) AN OWNER’S POLICY OF TITLE INSURANCE
INSURING FEE SIMPLE TITLE TO ANY LAND CONVEYED TO LANDLORD PURSUANT TO
SECTION 9.09(B)(V), FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES EXCEPT THOSE
APPROVED BY LANDLORD AND (B) A LENDER’S POLICY OF TITLE

 

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INSURANCE SATISFACTORY IN FORM AND SUBSTANCE TO LANDLORD AND ANY LENDING
INSTITUTION ADVANCING A PORTION OF THE COST OF THE CAPITAL ADDITION;

 

(VIII)        IF REQUIRED BY LANDLORD, UPON COMPLETION OF THE CAPITAL ADDITION;
AN MAI APPRAISAL OF THE LEASED PROPERTY AND THE LAND INDICATING THAT THE VALUE
OF THE LEASED PROPERTY AND THE LAND UPON COMPLETION OF THE CAPITAL ADDITION
EXCEEDS THE FAIR MARKET VALUE OF THE LEASED PROPERTY AND THE LAND PRIOR THERETO
BY AN AMOUNT NOT LESS THAN NINETY-FIVE PERCENT (95%) OF THE COST OF SUCH CAPITAL
ADDITION; AND

 

(IX)          SUCH OTHER CERTIFICATES (INCLUDING, BUT NOT LIMITED TO,
ENDORSEMENTS, INCREASING THE INSURANCE COVERAGE, IF ANY, AT THE TIME REQUIRED),
DOCUMENTS, OPINIONS OF COUNSEL, APPRAISALS, SURVEYS, CERTIFIED COPIES OF DULY
ADOPTED RESOLUTIONS OF THE BOARD OF DIRECTORS OF TENANT AUTHORIZING THE
EXECUTION AND DELIVERY OF ALL LOAN DOCUMENTS AND ANY AMENDMENT TO AN THIS LEASE
AGREEMENT AND ANY OTHER INSTRUMENTS AS MAY BE REASONABLY REQUIRED BY LANDLORD
AND ANY LENDING INSTITUTION ADVANCING ANY PORTION OF THE COST OF THE CAPITAL
ADDITION.

 

(C)           UPON MAKING A REQUEST TO FINANCE A CAPITAL ADDITION, WHETHER OR
NOT SUCH FINANCING IS ACTUALLY CONSUMMATED, TENANT SHALL PAY OR AGREE TO PAY,
UPON DEMAND, ALL REASONABLE COSTS AND EXPENSES OF LANDLORD PAID OR INCURRED BY
IT IN CONNECTION WITH THE FINANCING OF THE CAPITAL ADDITION, INCLUDING, BUT NOT
LIMITED TO, (I) THE REASONABLE FEES AND EXPENSES OF ITS COUNSEL, (II) ALL
PRINTING EXPENSES, (III) THE AMOUNT OF ANY FILING, REGISTRATION AND RECORDING
TAXES AND FEES, (IV), (V) APPRAISAL FEES, IF ANY, AND (VI) COSTS OF OBTAINING
REGULATOR AND GOVERNMENTAL APPROVALS FOR THE CONSTRUCTION, OPERATION, USE OR
OCCUPANCY OF THE CAPITAL ADDITION.

 

(D)           (I)  IF LANDLORD AND TENANT ARE UNABLE TO AGREE ON THE TERMS OF
THE FINANCING BY LANDLORD OF A CAPITAL ADDITION, TENANT MAY, SUBJECT TO THE
TERMS OF THIS SECTION 9.09, UNDERTAKE THE COST OF ANY SUCH CAPITAL ADDITION AND
SEEK CONSTRUCTION, PERMANENT OR OTHER FINANCING FROM OTHER SOURCES, PROVIDED
THAT TENANT SHALL NOT USE FINANCING FOR SUCH CAPITAL ADDITION OBTAINED FROM SUCH
OTHER SOURCES UNLESS THE TERMS AND CONDITIONS OF SUCH FINANCING FROM OTHER
SOURCES ARE OFFERED BY SUCH THIRD PARTY WITHIN NINETY (90) DAYS AFTER THE DATE
TENANT IS NOTIFIED OF THE LANDLORD FINANCING TERMS, AND THE TERMS AND CONDITIONS
OF SUCH OTHER FINANCING PROVIDE OVERALL FINANCIAL TERMS THAT ARE MORE FAVORABLE
TO THE TENANT THAN THOSE PROVIDED BY THE LANDLORD FINANCING TERMS (AS REASONABLY
DETERMINED BY TENANT AFTER COMPARISON OF THE TRUE INTEREST OR CAPITALIZATION
RATES, AMORTIZATION AND OTHER MATERIAL FACTORS).  IN THE EVENT TENANT SHALL
REACH AN AGREEMENT TO OBTAIN FINANCING FOR A CAPITAL ADDITION FROM A THIRD
PARTY, TENANT SHALL PROVIDE A COPY TO LANDLORD OF THE FINAL SET OF TERMS AGREED
UPON BY TENANT WITH SUCH THIRD PARTY.  LANDLORD SHALL COOPERATE WITH TENANT IN
OBTAINING ALL NECESSARY APPROVALS FOR SUCH CAPITAL ADDITION, AT NO COST OR
EXPENSE TO LANDLORD.

 

(II)           IF TENANT OBTAINS ANY CONSTRUCTION, PERMANENT OR OTHER FINANCING
IN CONNECTION WITH ANY CAPITAL ADDITION, SUCH FINANCING MAY BE SECURED BY
TENANT’S LEASEHOLD INTERESTS IN THIS LEASE AGREEMENT AND THE GROUND LEASE
AGREEMENT AND BY TENANT’S LEASEHOLD INTEREST IN THE LEASED PROPERTY AND THE LAND
AND/OR THE CAPITAL ADDITION, PROVIDED THAT TENANT MAY NOT FINANCE ANY CAPITAL
ADDITION WITH ANY SUCH LIEN OR ENCUMBRANCE ON TENANT’S LEASEHOLD INTEREST UNDER
THIS LEASE AGREEMENT OR THE GROUND LEASE AGREEMENT OR ON TENANT’S LEASEHOLD
INTEREST IN THE LEASED PROPERTY OR THE LAND OR CAPITAL ADDITION, UNLESS (A) THE
LEASEHOLD MORTGAGEE OR LENDER HAS ENTERED INTO A NON-DISTURBANCE AGREEMENT WITH
THE LANDLORD UPON TERMS

 

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AND CONDITIONS REASONABLY ACCEPTABLE TO LANDLORD AND TENANT INCLUDING, WITHOUT
LIMITATION, THE FOLLOWING: (I) LANDLORD SHALL HAVE THE RIGHT (BUT NOT THE
OBLIGATION) TO ASSUME SUCH FINANCING OR SECURITY AGREEMENT UPON THE OCCURRENCE
OF AN EVENT OF DEFAULT BY TENANT UNDER THIS LEASE AGREEMENT, (II) THE LEASEHOLD
MORTGAGEE OR LENDER SHALL NOTIFY LANDLORD OF ANY DEFAULT BY TENANT UNDER THE
LEASEHOLD MORTGAGE OR SECURITY AGREEMENT AND GIVE LANDLORD A REASONABLE
OPPORTUNITY TO CURE SUCH DEFAULT, AND (III) LANDLORD SHALL HAVE THE RIGHT TO
ASSIGN ITS RIGHTS UNDER THE LEASEHOLD MORTGAGE, SECURITY AGREEMENT, OR
NON-DISTURBANCE AGREEMENT, AND (B) TENANT SHALL, WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF AN INVOICE FROM LANDLORD, REIMBURSE LANDLORD FOR ALL REASONABLE COSTS
AND EXPENSES INCURRED IN REVIEWING THE LEASEHOLD MORTGAGE, SECURITY AGREEMENT,
AND NON-DISTURBANCE AGREEMENT INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES,
EXPENSES AND COSTS.

 

9.10        FINANCINGS OF CAPITAL ADDITIONS TO ADJACENT LAND OF LEASED
PROPERTY.  NOTWITHSTANDING ANY PROVISION HEREIN CONTAINED TO THE CONTRARY,
TENANT SHALL HAVE THE RIGHT TO INDEPENDENTLY CONDUCT ADDITIONAL DEVELOPMENT
(INCLUDING, BUT WITHOUT LIMITATION, DEVELOPMENT THAT INCLUDES THE CONSTRUCTION
AND OPERATION OF PROJECTS OR FACILITIES THAT ARE COMPETITIVE WITH THE PROJECT
AND THE FACILITY) ON PROPERTY ADJACENT TO OR NEAR THE LAND IF IT SHOULD SO
ELECT, WITHOUT ANY OBLIGATION ON THE PART OF TENANT TO NOTIFY LANDLORD OF SUCH
DEVELOPMENT OR TO PROVIDE ANY RIGHT TO LANDLORD TO PARTICIPATE IN SUCH
DEVELOPMENT.

 

ARTICLE X

DEFAULTS AND REMEDIES

 

10.01      EVENTS OF DEFAULT.

 

(A)           TENANT DEFAULTS.  THE OCCURRENCE OF ANY ONE OR MORE OF THE
FOLLOWING SHALL BE AN EVENT OF DEFAULT (EACH, AN “EVENT OF DEFAULT”) HEREUNDER:

 

(I)            TENANT FAILS TO MAKE PAYMENT WHEN DUE OF ANY INSTALLMENT OF RENT
PAYABLE BY TENANT TO LANDLORD UNDER THIS LEASE AGREEMENT AND SUCH FAILURE SHALL
CONTINUE FOR TEN (10) CALENDAR DAYS AFTER WRITTEN NOTICE OF SUCH FAILURE IS
GIVEN TO TENANT BY LANDLORD;

 

(II)           TENANT FAILS, FOR THE THIRD OR SUBSEQUENT TIME WITHIN A GIVEN
CALENDAR YEAR, TO MAKE PAYMENT WHEN DUE OF ANY INSTALLMENT OF RENT PAYABLE BY
TENANT TO LANDLORD UNDER THIS LEASE AGREEMENT;

 

(III)          TENANT FAILS TO OBSERVE AND PERFORM, IN ANY MATERIAL RESPECT, ANY
OTHER MATERIAL COVENANT, CONDITION OR AGREEMENT UNDER THIS LEASE AGREEMENT TO BE
PERFORMED BY TENANT (EXCEPT THOSE DESCRIBED IN SECTION 10.01(A)(I) OF THIS LEASE
AGREEMENT) THAT IS NOT CURED WITHIN THIRTY (30) DAYS FOLLOWING RECEIPT OF
WRITTEN NOTICE FROM LANDLORD; PROVIDED, HOWEVER, THAT IF SUCH DEFAULT CANNOT BE
CURED WITHIN SUCH THIRTY (30) DAY PERIOD THROUGH THE USE OF DILIGENT EFFORTS,
SUCH PERIOD SHALL BE EXTENDED FOR SO LONG AS TENANT CONTINUES TO EXERCISE
DILIGENT EFFORTS TO CURE SUCH DEFAULT;

 

(IV)          IF TENANT: (A) ADMITS IN WRITING ITS INABILITY TO PAY ITS DEBTS
GENERALLY AS THEY BECOME DUE, (B) FILES A PETITION IN BANKRUPTCY OR A PETITION
TO TAKE ADVANTAGE OF ANY INSOLVENCY ACT, (C) MAKES AN ASSIGNMENT FOR THE BENEFIT
OF ITS CREDITORS, (D) IS UNABLE TO PAY ITS DEBTS AS THEY MATURE, (E) CONSENTS TO
THE APPOINTMENT OF A RECEIVER OF ITSELF OR OF THE WHOLE OR ANY SUBSTANTIAL PART
OF ITS PROPERTY, OR (F) FILES A PETITION OR ANSWER SEEKING REORGANIZATION OR

 

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ARRANGEMENT UNDER THE FEDERAL BANKRUPTCY LAWS OR ANY OTHER APPLICABLE LAW OR
STATUTE OF THE UNITED STATES OF AMERICA OR ANY STATE THEREOF;

 

(V)           IF TENANT, ON A PETITION IN BANKRUPTCY FILED AGAINST IT, IS
ADJUDICATED AS BANKRUPT OR A COURT OF COMPETENT JURISDICTION ENTERS AN ORDER OR
DECREE APPOINTING, WITHOUT THE CONSENT OF TENANT, A RECEIVER OF TENANT OF THE
WHOLE OR SUBSTANTIALLY ALL OF ITS PROPERTY, OR APPROVING A PETITION FILED
AGAINST IT SEEKING REORGANIZATION OR ARRANGEMENT OF TENANT UNDER THE FEDERAL
BANKRUPTCY LAWS OR ANY OTHER APPLICABLE LAW OR STATUTE OF THE UNITED STATES OF
AMERICA OR ANY STATE THEREOF, AND SUCH JUDGMENT, ORDER OR DECREE IS NOT VACATED
OR SET ASIDE OR STAYED WITHIN SIXTY (60) DAYS FROM THE DATE OF THE ENTRY
THEREOF;

 

(VI)          IF THE ESTATE OR INTEREST OF TENANT IN ANY MATERIAL PORTION OF THE
LEASED PROPERTY IS LEVIED UPON OR ATTACHED IN ANY PROCEEDING AND THE SAME IS NOT
VACATED OR DISCHARGED WITHIN THE EARLIER OF SIXTY (60) DAYS AFTER COMMENCEMENT
THEREOF OR THIRTY (30) DAYS AFTER RECEIPT BY TENANT OF NOTICE THEREOF FROM
LANDLORD (UNLESS TENANT IS DILIGENTLY CONTESTING SUCH LIEN OR ATTACHMENT IN GOOD
FAITH); OR

 

(VII)         AN EVENT OF DEFAULT, AS DEFINED IN THE GROUND LEASE AGREEMENT,
SHALL HAVE OCCURRED.

 

10.02      REMEDIES.  LANDLORD, IN ITS OWN NAME OR THROUGH A DESIGNEE OR
ASSIGNEE INCLUDING, BUT NOT LIMITED TO, LANDLORD’S MORTGAGEE (THE “LANDLORD
DESIGNEE”), MAY EXERCISE ANY ONE OR MORE OF THE FOLLOWING REMEDIES UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT AND WHILE IT IS CONTINUING:

 

(A)           LANDLORD MAY TERMINATE THIS LEASE AGREEMENT, EXCLUDE TENANT FROM
POSSESSION OF THE LEASED PROPERTY AND USE REASONABLE EFFORTS TO LEASE SUCH
LEASED PROPERTY TO OTHERS, INCLUDING ANY LANDLORD DESIGNEE.  IF THIS LEASE
AGREEMENT IS TERMINATED PURSUANT TO THE PROVISIONS OF THIS SECTION 10.02(A),
TENANT WILL REMAIN LIABLE TO LANDLORD FOR DAMAGES IN AN AMOUNT EQUAL TO THE RENT
AND OTHER SUMS WHICH WOULD HAVE BEEN OWING BY TENANT UNDER THE LEASE AGREEMENT
FOR THE BALANCE OF THE TERM IF THE LEASE AGREEMENT HAD NOT BEEN TERMINATED, LESS
THE NET PROCEEDS, IF ANY, RECEIVED ON ANY RE-LETTING OF THE LEASED PROPERTY BY
LANDLORD SUBSEQUENT TO SUCH TERMINATION, AND ANY OTHER INCOME OR OTHER PROCEEDS
OF ANY NATURE REALIZED FROM THE SALE, LEASE OR OTHER DISPOSITION OR UTILIZATION
OF THE LEASED PROPERTY BY LANDLORD, IN EACH CASE AFTER DEDUCTING ALL OF
LANDLORD’S EXPENSES IN CONNECTION WITH SUCH RE-LETTING.  LANDLORD WILL BE
ENTITLED TO COLLECT SUCH DAMAGES FROM TENANT MONTHLY ON THE DAYS ON WHICH THE
RENT AND OTHER AMOUNTS WOULD HAVE BEEN PAYABLE UNDER THIS LEASE AGREEMENT IF IT
HAD NOT BEEN TERMINATED AND LANDLORD WILL BE ENTITLED TO RECEIVE SUCH DAMAGES
FROM TENANT ON EACH SUCH DAY.  ALTERNATIVELY, AT THE OPTION OF LANDLORD, IF THIS
LEASE AGREEMENT IS TERMINATED, AND AT ANY TIME THEREAFTER, LANDLORD WILL BE
ENTITLED, IN LIEU OF PROCEEDING TO COLLECT DAMAGES ON A MONTHLY BASIS AS SET
FORTH IN THE PRECEDING SENTENCE, TO RECOVER FROM TENANT (I) ALL ACCRUED UNPAID
RENT THEN DUE AND PAYABLE, AND (II) THE WORTH AT THE TIME OF THE AWARD (AS
HEREAFTER DEFINED) OF THE FUTURE RENT WHICH WOULD HAVE BEEN DUE AND PAYABLE FROM
THE DATE OF TERMINATION THROUGH THE EXPIRATION DATE AS IF THIS LEASE AGREEMENT
HAD NOT BEEN TERMINATED.  THE “WORTH AT THE TIME OF AWARD” OF THE AMOUNT
REFERRED TO IN CLAUSE (II) MEANS THE “PRESENT VALUE”, DISCOUNTED USING THE NEW
YORK PRIME RATE (AS DEFINED BELOW), OF THE FUTURE RENT THAT WOULD HAVE BEEN DUE
AND PAYABLE IN THE ABSENCE OF SUCH TERMINATION.  FOR PURPOSES OF THIS LEASE
AGREEMENT, THE “NEW

 

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YORK PRIME RATE” SHALL MEAN THE LESSER OF (A) THAT RATE OF INTEREST IDENTIFIED
AS PRIME OR NATIONAL PRIME BY THE WALL STREET JOURNAL, AS OF THE APPLICABLE DATE
OF TERMINATION OF THIS LEASE AGREEMENT, OR IF NOT PUBLISHED OR FOUND, THEN THE
AVERAGE RATE OF INTEREST THEN CHARGED BY JPMORGAN CHASE BANK, N.A. ON NINETY
(90) DAY UNSECURED NOTES TO ITS PREFERRED CUSTOMERS AND (B)THE MAXIMUM, LAWFUL
RATE OF INTEREST ALLOWED BY APPLICABLE LAW.  FOR THE PURPOSE OF DETERMINING
UNPAID FUTURE RENT UNDER CLAUSE (II), SUCH RENT WILL BE DEEMED TO BE THE SUM OF
THE FOLLOWING: (A) THE BASE RENT COMPUTED PURSUANT TO SECTION 3.01; AND (B) THE
ADDITIONAL RENT COMPUTED PURSUANT TO SECTION 3.02.  SUCH COMPUTATION OF
ADDITIONAL RENT SHALL BE BASED ON THE ADDITIONAL RENT PAID FOR THE LEASE YEAR
PRECEDING THE DATE OF TERMINATION, INCREASED BY FOUR (4%) PERCENT PER YEAR
THEREAFTER.  FOLLOWING PAYMENTS BY TENANT OF THE FOREGOING AMOUNTS, LANDLORD
SHALL DELIVER AND PAY OVER TO TENANT ALL RENT, INCOME, AND OTHER PROCEEDS OF ANY
NATURE REALIZED FROM THE SALE, LEASE OR OTHER DISPOSITION OR UTILIZATION OF THE
LEASED PROPERTY, IF ANY, ACTUALLY RECEIVED BY LANDLORD, LESS LANDLORD’S
REASONABLY INCURRED COSTS AND EXPENSES OF MAINTAINING AND RE-LEASING OR SELLING
THE LEASED PROPERTY.

 

(B)           (I)            WITHOUT DEMAND OR NOTICE, LANDLORD OR ANY LANDLORD
DESIGNEE MAY RE-ENTER AND TAKE POSSESSION OF THE APPLICABLE LEASED PROPERTY; AND
REPOSSESS SUCH LEASED PROPERTY AS OF THE LANDLORD’S FORMER ESTATE; AND, TO THE
EXTENT PERMITTED BY LAW WITH RESPECT TO A CORRECTIONAL OR DETENTION FACILITY,
EXPEL TENANT AND THOSE CLAIMING THROUGH OR UNDER TENANT FROM SUCH LEASED
PROPERTY; AND, REMOVE THE EFFECTS OF BOTH OR EITHER, WITHOUT BEING DEEMED GUILTY
OF ANY MANNER OF TRESPASS AND WITHOUT PREJUDICE TO ANY REMEDIES FOR ARREARS OF
RENT OR PRECEDING BREACH OF COVENANTS OR CONDITIONS.  IF LANDLORD OR LANDLORD’S
DESIGNEE ELECTS TO RE-ENTER THE LEASED PROPERTY AS PROVIDED IN THIS
SECTION 10.02(B) OR IF LANDLORD OR LANDLORD’S DESIGNEE TAKES POSSESSION OF SUCH
LEASED PROPERTY PURSUANT TO LEGAL PROCEEDINGS OR PURSUANT TO ANY NOTICE PROVIDED
BY LAW, LANDLORD OR LANDLORD’S DESIGNEE, FROM TIME TO TIME, WITHOUT TERMINATING
THIS LEASE AGREEMENT, MAY RE-LET SUCH LEASED PROPERTY OR ANY PART OF SUCH LEASED
PROPERTY, EITHER ALONE OR IN CONJUNCTION WITH OTHER PORTIONS OF THE IMPROVEMENTS
OF WHICH SUCH LEASED PROPERTY ARE A PART, IN LANDLORD’S OR LANDLORD’S DESIGNEE’S
NAME BUT FOR THE ACCOUNT OF TENANT, FOR SUCH TERM OR TERMS (WHICH MAY BE GREATER
OR LESS THAN THE PERIOD WHICH WOULD OTHERWISE HAVE CONSTITUTED THE BALANCE OF
THE TERM OF THIS LEASE AGREEMENT) AND ON SUCH TERMS AND CONDITIONS (WHICH MAY
INCLUDE CONCESSIONS OF FREE RENT, AND THE ALTERATION AND REPAIR OF SUCH LEASED
PROPERTY) AS LANDLORD OR LANDLORD’S DESIGNEE, IN ITS DISCRETION, MAY REASONABLY
DETERMINE.  LANDLORD OR LANDLORD’S DESIGNEE MAY COLLECT AND RECEIVE THE RENTS,
INCLUDING THE RENT, FOR SUCH LEASED PROPERTY.  LANDLORD OR LANDLORD’S DESIGNEE
WILL NOT BE RESPONSIBLE OR LIABLE FOR ANY FAILURE TO RE-LET SUCH LEASED
PROPERTY, OR ANY PART OF SUCH LEASED PROPERTY, OR FOR ANY FAILURE TO COLLECT ANY
RENT, INCLUDING THE RENT, DUE UPON SUCH RE-LETTING.  NO SUCH RE-ENTRY OR TAKING
POSSESSION OF SUCH LEASED PROPERTY BY LANDLORD OR LANDLORD’S DESIGNEE WILL BE
CONSTRUED AS AN ELECTION ON LANDLORD’S OR LANDLORD’S DESIGNEE’S PART TO
TERMINATE THIS LEASE AGREEMENT UNLESS A WRITTEN NOTICE OF SUCH INTENTION IS
GIVEN TO TENANT.  NO NOTICE FROM LANDLORD OR LANDLORD’S DESIGNEE UNDER THIS
LEASE AGREEMENT OR UNDER A FORCIBLE ENTRY AND DETAINER STATUTE OR SIMILAR LAW
WILL CONSTITUTE AN ELECTION BY LANDLORD TO TERMINATE THIS LEASE AGREEMENT UNLESS
SUCH NOTICE SPECIFICALLY SO STATES.  LANDLORD AND/OR LANDLORD’S DESIGNEE
RESERVES THE RIGHT FOLLOWING ANY SUCH RE-ENTRY OR RE-LETTING, OR BOTH, TO
EXERCISE ITS RIGHT TO TERMINATE THIS LEASE AGREEMENT BY GIVING TENANT SUCH
WRITTEN NOTICE, AND, IN THAT EVENT THIS LEASE AGREEMENT WILL TERMINATE AS
SPECIFIED IN SUCH NOTICE.

 

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(II)           IF LANDLORD OR LANDLORD’S DESIGNEE ELECTS TO TAKE POSSESSION OF
SUCH LEASED PROPERTY ACCORDING TO THIS SECTION 10.02(B) WITHOUT TERMINATING THIS
LEASE AGREEMENT, TENANT WILL PAY LANDLORD (A) THE RENT, ADDITIONAL RENT AND
OTHER SUMS WHICH WOULD BE PAYABLE UNDER THIS LEASE AGREEMENT IF SUCH
REPOSSESSION HAD NOT OCCURRED, LESS (B) THE NET PROCEEDS, IF ANY, OF ANY
RE-LETTING OF SUCH LEASED PROPERTY AFTER DEDUCTING ALL OF LANDLORD’S OR
LANDLORD’S DESIGNEE’S EXPENSES INCURRED IN CONNECTION WITH SUCH RE-LETTING,
INCLUDING WITHOUT LIMITATION, ALL REASONABLE AND CUSTOMARY REPOSSESSION COSTS,
BROKERAGE COMMISSIONS, LEGAL EXPENSE, ATTORNEYS’ FEES AND EXPENSES, EXPENSE OF
EMPLOYEES, ALTERATION, REMODELING AND REPAIR COSTS, AND EXPENSES OF PREPARATION
FOR SUCH RE-LETTING.  IF, IN CONNECTION WITH ANY RE-LETTING, THE NEW LEASE TERM
EXTENDS BEYOND THE EXISTING TERM OR SUCH LEASED PROPERTY COVERED BY SUCH
RE-LETTING INCLUDES AREAS WHICH ARE NOT PART OF SUCH LEASED PROPERTY, A FAIR
APPORTIONMENT OF THE RENT RECEIVED FROM SUCH RE-LETTING AND THE EXPENSES
INCURRED IN CONNECTION WITH SUCH RE-LETTING WILL BE MADE IN DETERMINING THE NET
PROCEEDS RECEIVED FROM SUCH RE-LETTING.  IN ADDITION, IN DETERMINING THE NET
PROCEEDS FROM SUCH RE-LETTING OVER THE TERM OF THIS LEASE AGREEMENT, ANY RENT
CONCESSIONS WILL BE APPORTIONED OVER THE TERM OF THE NEW LEASE.  TENANT WILL PAY
SUCH AMOUNTS TO LANDLORD MONTHLY ON THE DAYS ON WHICH THE RENT AND ALL OTHER
AMOUNTS OWING UNDER THIS LEASE AGREEMENT WOULD HAVE BEEN PAYABLE IF POSSESSION
HAD NOT BEEN RETAKEN, AND LANDLORD OR LANDLORD’S DESIGNEE WILL BE ENTITLED TO
RECEIVE THE RENT AND OTHER AMOUNTS FROM TENANT ON EACH SUCH DAY.

 

(C)           LANDLORD OR LANDLORD’S DESIGNEE MAY RE-ENTER THE APPLICABLE LEASED
PROPERTY AND HAVE, REPOSSESS AND ENJOY THE LEASED PROPERTY AS IF SUCH LEASE
AGREEMENT HAD NOT BEEN MADE, AND IN SUCH EVENT, TENANT AND ITS SUCCESSORS AND
ASSIGNS SHALL REMAIN LIABLE FOR ANY CONTINGENT OR UNLIQUIDATED OBLIGATIONS OR
SUMS OWING AT THE TIME OF SUCH REPOSSESSION.

 

(D)           LANDLORD MAY EXERCISE ANY REMEDY WITH RESPECT TO ANY COLLATERAL
GIVEN BY TENANT OR ITS AFFILIATES IN CONNECTION WITH THIS LEASE AGREEMENT.

 

(E)           LANDLORD OR LANDLORD’S DESIGNEE MAY TAKE WHATEVER ACTION AT LAW OR
IN EQUITY AS MAY APPEAR NECESSARY OR DESIRABLE TO COLLECT THE RENT AND OTHER
AMOUNTS PAYABLE UNDER THIS LEASE AGREEMENT THEN DUE AND THEREAFTER TO BECOME
DUE, OR TO ENFORCE PERFORMANCE AND OBSERVANCE OF ANY OBLIGATIONS, AGREEMENTS OR
COVENANTS OF TENANT UNDER THIS LEASE AGREEMENT.

 

(F)            LANDLORD OR LANDLORD’S DESIGNEE MAY EXERCISE ANY REMEDY
SPECIFICALLY PROVIDED FOR IN THIS LEASE AGREEMENT.

 

10.03      RIGHT OF SET-OFF.  WHILE AN EVENT OF DEFAULT IS CONTINUING, LANDLORD
MAY, AND IS HEREBY AUTHORIZED BY TENANT, AT ANY TIME AND FROM TIME TO TIME,
AFTER TEN (10) BUSINESS DAYS PRIOR WRITTEN NOTICE TO TENANT, TO SET-OFF AND
APPLY ANY AND ALL SUMS HELD BY LANDLORD, INCLUDING ALL SUMS HELD IN ANY ESCROW
FOR IMPOSITIONS, ANY INDEBTEDNESS OF LANDLORD TO TENANT, AND ANY CLAIMS BY
TENANT AGAINST LANDLORD, AGAINST ANY OBLIGATIONS OF TENANT UNDER THIS LEASE
AGREEMENT AND AGAINST ANY CLAIMS BY LANDLORD AGAINST TENANT, WHETHER OR NOT
LANDLORD HAS EXERCISED ANY OTHER REMEDIES HEREUNDER.  THE RIGHTS OF LANDLORD
UNDER THIS SECTION 10.03 ARE IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES
LANDLORD MAY HAVE AGAINST TENANT.

 

10.04      PERFORMANCE OF TENANT’S COVENANTS.  EXCEPT IN CASES OF EMERGENCY, IN
WHICH EVENT LANDLORD MAY PROCEED WITHOUT NOTICE, LANDLORD MAY, BUT IS NOT
OBLIGATED TO, PERFORM ANY OBLIGATION OF TENANT WHICH TENANT HAS FAILED TO
PERFORM WITHIN THIRTY (30) BUSINESS DAYS AFTER

 

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LANDLORD HAS SENT A WRITTEN NOTICE TO TENANT INFORMING IT OF ITS SPECIFIC
FAILURE (PROVIDED NO SUCH NOTICE SHALL BE REQUIRED IF SUCH FAILURE IS COVERED
UNDER THE PROVISIONS OF SECTION 10.01).  TENANT SHALL REIMBURSE LANDLORD ON
DEMAND, AS ADDITIONAL RENT, FOR ANY EXPENDITURES THUS INCURRED BY LANDLORD AND
SHALL PAY INTEREST THEREON AT THE NEW YORK PRIME RATE.

 

10.05      INTEREST ON PAST DUE PAYMENTS.  ANY PAYMENT NOT MADE BY TENANT FOR
MORE THAN FIVE (5) DAYS AFTER THE SAME IS DUE SHALL BEAR INTEREST AT THE NEW
YORK PRIME RATE FROM THE DUE DATE THEREOF THROUGH THE DATE SUCH PAYMENT IS
ACTUALLY RECEIVED BY LANDLORD, PROVIDED THAT IN THE EVENT TENANT FAILS TO MAKE
THREE OR MORE PAYMENTS WHEN DUE DURING ANY SINGLE CALENDAR YEAR, SUCH THIRD OR
ANY SUBSEQUENT PAYMENTS NOT PAID WHEN DUE DURING SUCH YEAR SHALL BEAR INTEREST
FROM THE DUE DATE THEREOF UNTIL PAYMENT IS RECEIVED BY LANDLORD WITHOUT REGARD
TO WHETHER SUCH PAYMENT IS MADE WITHIN FIVE (5) DAYS OF SUCH DUE DATE.

 

10.06      LITIGATION; ATTORNEYS’ FEES.  WITHIN TEN (10) DAYS AFTER TENANT HAS
KNOWLEDGE OF ANY MATERIAL LITIGATION OR OTHER PROCEEDING THAT MAY BE INSTITUTED
AGAINST TENANT, IN RELATION TO THE LEASED PROPERTY OR TO SECURE OR RECOVER
POSSESSION THEREOF, OR THAT MAY AFFECT THE TITLE TO OR THE INTEREST OF LANDLORD
IN THE LEASED PROPERTY, TENANT SHALL GIVE WRITTEN NOTICE THEREOF TO LANDLORD. 
WITHIN THIRTY (30) BUSINESS DAYS AFTER LANDLORD’S PRESENTATION OF AN INVOICE,
TENANT SHALL PAY ALL REASONABLE COSTS AND EXPENSES INCURRED BY LANDLORD IN
ENFORCING OR PRESENTING LANDLORD’S RIGHTS UNDER THIS LEASE AGREEMENT, WHETHER OR
NOT AN EVENT OF DEFAULT HAS ACTUALLY OCCURRED OR HAS BEEN DECLARED AND
THEREAFTER CURED, INCLUDING WITHOUT LIMITATION, (I) THE REASONABLE FEES,
EXPENSES, AND COSTS OF ANY LITIGATION, RECEIVERSHIP, ADMINISTRATIVE, BANKRUPTCY,
INSOLVENCY OR OTHER SIMILAR PROCEEDING; (II) REASONABLE ATTORNEY, PARALEGAL,
CONSULTING AND WITNESS FEES AND DISBURSEMENTS INCURRED BY LANDLORD WHETHER OR
NOT ANY SUIT OR PROCEEDING HAS COMMENCED; AND (III) THE REASONABLE EXPENSES,
INCLUDING WITHOUT LIMITATION, LODGING, MEALS, AND TRANSPORTATION, OF LANDLORD
AND ITS EMPLOYEES, AGENTS, ATTORNEYS, AND WITNESSES IN PREPARING FOR LITIGATION,
ADMINISTRATIVE, BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR PROCEEDINGS AND
ATTENDANCE AT HEARINGS, DEPOSITIONS, AND TRIALS IN CONNECTION THEREWITH.  ALL
SUCH COSTS, CHARGES AND FEES AS INCURRED SHALL BE DEEMED TO BE ADDITIONAL RENT
UNDER THIS LEASE AGREEMENT.

 

10.07      REMEDIES CUMULATIVE.  THE RESPECTIVE REMEDIES OF LANDLORD AND TENANT
UNDER THIS LEASE AGREEMENT ARE CUMULATIVE TO AND NOT IN LIEU OF ANY OTHER
REMEDIES AVAILABLE TO LANDLORD OR TENANT, AT LAW OR IN EQUITY.  THE USE OF ANY
ONE REMEDY SHALL NOT BE TAKEN TO EXCLUDE OR WAIVE THE RIGHT TO USE ANY OTHER
REMEDY.

 

10.08      ESCROWS AND APPLICATION OF PAYMENTS.  AS SECURITY FOR THE PERFORMANCE
OF ITS OBLIGATIONS HEREUNDER, TENANT HEREBY ASSIGNS TO LANDLORD ALL ITS RIGHT,
TITLE AND INTEREST IN AND TO ALL MONIES ESCROWED WITH LANDLORD UNDER THIS LEASE
AGREEMENT AND ALL DEPOSITS WITH UTILITY COMPANIES, TAXING AUTHORITIES, AND
INSURANCE COMPANIES; PROVIDED, HOWEVER, THAT LANDLORD SHALL NOT EXERCISE ITS
RIGHTS HEREUNDER UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.  ANY
PAYMENTS RECEIVED BY LANDLORD UNDER ANY PROVISIONS OF THIS LEASE AGREEMENT
DURING THE EXISTENCE, OR CONTINUANCE OF AN EVENT OF DEFAULT SHALL BE APPLIED TO
TENANT’S OBLIGATIONS IN THE ORDER THAT LANDLORD MAY DETERMINE.

 

10.09      POWER OF ATTORNEY.  TENANT HEREBY IRREVOCABLY AND UNCONDITIONALLY
APPOINTS LANDLORD, OR LANDLORD’S AUTHORIZED OFFICER, AGENT, EMPLOYEE OR
DESIGNEE, AS TENANT’S TRUE AND LAWFUL ATTORNEY-IN-FACT, TO ACT, WHILE AN EVENT
OF DEFAULT IS CONTINUING, FOR TENANT IN TENANT’S

 

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NAME, PLACE, AND STEAD, AND FOR TENANT’S AND LANDLORD’S USE AND BENEFIT, TO
EXECUTE, DELIVER AND FILE ALL APPLICATIONS AND ANY AND ALL OTHER NECESSARY
DOCUMENTS OR THINGS, TO EFFECT A TRANSFER, REINSTATEMENT, RENEWAL AND/OR
EXTENSION OF ANY AND ALL LICENSES AND OTHER GOVERNMENTAL AUTHORIZATIONS ISSUED
TO TENANT IN CONNECTION WITH TENANT’S OPERATION OF THE LEASED PROPERTY, AND TO
DO ANY AND ALL OTHER ACTS INCIDENTAL TO ANY OF THE FOREGOING.  TENANT
IRREVOCABLY AND UNCONDITIONALLY GRANTS TO LANDLORD AS ITS ATTORNEY-IN-FACT FULL
POWER AND AUTHORITY TO DO AND PERFORM, WHILE AN EVENT OF DEFAULT IS CONTINUING,
EVERY ACT NECESSARY AND PROPER TO BE DONE IN THE EXERCISE OF ANY OF THE
FOREGOING POWERS AS FULLY AS TENANT MIGHT OR COULD DO IF PERSONALLY PRESENT OR
ACTING, WITH FULL POWER OF SUBSTITUTION, HEREBY RATIFYING AND CONFIRMING ALL
THAT SUCH ATTORNEY SHALL LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.  THIS
POWER OF ATTORNEY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE PRIOR TO THE
FULL PERFORMANCE OF THE TENANT’S OBLIGATIONS UNDER THIS LEASE AGREEMENT.

 

ARTICLE XI

DAMAGE AND DESTRUCTION

 

11.01      GENERAL.  TENANT SHALL NOTIFY LANDLORD IF THE LEASED PROPERTY IS
DAMAGED OR DESTROYED BY REASON OF FIRE OR ANY OTHER CASUALTY OR CAUSE.  TENANT
SHALL USE AVAILABLE INSURANCE PROCEEDS TO PROMPTLY REPAIR, REBUILD, OR RESTORE
THE LEASED PROPERTY SO AS TO MAKE THE LEASED PROPERTY AS NEARLY SIMILAR IN
CHARACTER AND FUNCTIONALITY TO THE LEASED PROPERTY EXISTING PRIOR TO SUCH
OCCURRENCE AS IS PRACTICABLE AND REASONABLE.  TENANT WILL BEGIN SUCH REPAIRS OR
REBUILDING AND WILL PROSECUTE THE REPAIRS AND REBUILDING TO COMPLETION WITH
DILIGENCE, SUBJECT, HOWEVER, TO STRIKES, LOCKOUTS, ACTS OF GOD, EMBARGOES,
GOVERNMENTAL RESTRICTIONS, AND OTHER CAUSES BEYOND TENANT’S REASONABLE CONTROL. 
LANDLORD WILL MAKE AVAILABLE TO TENANT THE NET PROCEEDS OF ANY FIRE OR OTHER
CASUALTY INSURANCE RECEIVED BY LANDLORD FOR ANY SUCH REPAIR OR REBUILDING AFTER
DEDUCTION OF ANY COSTS OF COLLECTION, INCLUDING ATTORNEYS’ FEES AND EXPENSES. 
BEFORE BEGINNING SUCH REPAIRS OR REBUILDING, OR LETTING ANY CONTRACTS IN
CONNECTION WITH SUCH REPAIRS OR REBUILDING THAT ARE ESTIMATED TO EXCEED IN THE
AGGREGATE $5,000,000 (WHICH AMOUNT SHALL BE INCREASED BY THREE PERCENT (3%) PER
ANNUM CUMULATIVELY FOR EACH SUBSEQUENT LEASE YEAR (“SUBSTANTIAL REPAIRS”),
TENANT WILL SUBMIT FOR LANDLORD’S APPROVAL, WHICH APPROVAL LANDLORD WILL NOT
UNREASONABLY WITHHOLD OR DELAY, COMPLETE AND DETAILED PLANS AND SPECIFICATIONS
FOR SUCH SUBSTANTIAL REPAIRS AND THE PROPOSED CONSTRUCTION CONTRACT FOR SUCH
RESTORATION WORK.  PAYMENT ON ACCOUNT OF SUBSTANTIAL REPAIRS WILL BE MADE OUT OF
AVAILABLE INSURANCE PROCEEDS, AS WORK SATISFACTORILY PROGRESSES, AGAINST
PROPERLY CERTIFIED VOUCHERS OF THE CONTRACTORS RESPONSIBLE FOR THE WORK.  PRIOR
TO COMMENCING SUBSTANTIAL REPAIRS, TENANT SHALL DELIVER TO LANDLORD FOR
LANDLORD’S APPROVAL A SCHEDULE SETTING FORTH THE ESTIMATED MONTHLY DRAWS FOR
SUCH WORK.  UPON THE COMPLETION OF REBUILDING OR REPAIRING AND THE FURNISHING OF
SUCH PROOF, THE BALANCE OF THE NET PROCEEDS OF SUCH INSURANCE PAYABLE TO TENANT
ON ACCOUNT OF SUCH REPAIRING OR REBUILDING WILL BE PAID TO TENANT.  TENANT WILL
OBTAIN AND DELIVER TO LANDLORD A TEMPORARY OR FINAL CERTIFICATE OF OCCUPANCY
BEFORE THE LEASED PROPERTY IS REOCCUPIED FOR ANY PURPOSE.  TENANT SHALL COMPLETE
ALL SUCH REPAIRS OR REBUILDING FREE AND CLEAR OF MECHANIC’S, CONSTRUCTION OR
OTHER LIENS, AND IN ACCORDANCE WITH THE BUILDING CODES AND ALL APPLICABLE LAWS,
ORDINANCES, RULES, REGULATIONS, OR ORDERS OF ANY STATE, MUNICIPAL, OR OTHER
PUBLIC AUTHORITY AFFECTING OR WITH JURISDICTION OVER THE LEASED PROPERTY AND
SUCH REPAIRS OR REBUILDING, AND ALSO IN ACCORDANCE WITH ALL REQUIREMENTS OF THE
INSURANCE RATING ORGANIZATION, OR SIMILAR BODY, AFFECTING THE LEASED PROPERTY. 
ANY REMAINING PROCEEDS OF INSURANCE AFTER SUCH RESTORATION WILL BE TENANT’S
PROPERTY.  NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 11.01, IN
THE CASE OF DAMAGE TO OR DESTRUCTION OF THE LEASED

 

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PROPERTY THAT OCCURS PRIOR TO THE OCCURRENCE OF SUBSTANTIAL COMPLETION (AS
DEFINED IN THE DEVELOPMENT AGREEMENT), (I) THE ENTIRE AMOUNT OF NET AVAILABLE
INSURANCE PROCEEDS SHALL BE DEPOSITED IN THE LOSS PROCEEDS ACCOUNT (OR HELD FOR
DEPOSIT THEREIN IN THE EVENT THE LOSS PROCEEDS ACCOUNT HAS NOT YET BEEN
ESTABLISHED), (II) THE REPAIRS AND RENOVATIONS TO BE CONDUCTED AS A RESULT OF
SUCH DAMAGE OR DESTRUCTION AND THE TIMELINE THEREFOR SHALL BE DEEMED A
SUPPLEMENT TO, AND A PART OF, THE DEVELOPMENT PLAN, AND EACH COST IN RESPECT
THEREOF SHALL BE DEEMED A PROJECT COST AND (III) TENANT SHALL BE ENTITLED TO USE
FUNDS DEPOSITED IN THE LOSS PROCEEDS ACCOUNT IN ACCORDANCE WITH ARTICLE 9 OF THE
DEVELOPMENT AGREEMENT TO PAY SUCH COSTS INCURRED IN CONNECTION TO SUCH REPAIRS
AND RESTORATION.

 

11.02      LANDLORD’S INSPECTION.  DURING THE PROGRESS OF SUBSTANTIAL REPAIRS,
LANDLORD AND ITS ARCHITECTS AND ENGINEERS, FROM TIME TO TIME, MAY INSPECT THE
LEASED PROPERTY AND WILL BE FURNISHED, IF REQUIRED BY THEM, WITH COPIES OF ALL
PLANS, SHOP DRAWINGS, AND SPECIFICATIONS RELATING TO SUCH REPAIRS OR
REBUILDING.  TENANT WILL KEEP ALL PLANS, SHOP DRAWINGS, AND SPECIFICATIONS
AVAILABLE, AND LANDLORD AND ITS ARCHITECTS AND ENGINEERS MAY EXAMINE THEM AT ALL
REASONABLE TIMES, AT THE LEASED PROPERTY OR SUCH OTHER LOCATION AS LANDLORD AND
TENANT SHALL AGREE.  IF, DURING SUCH REPAIRS OR REBUILDING, LANDLORD AND ITS
ARCHITECTS AND ENGINEERS REASONABLY DETERMINE THAT THE REPAIRS OR REBUILDING ARE
NOT BEING DONE IN ACCORDANCE WITH THE APPROVED PLANS AND SPECIFICATIONS,
LANDLORD WILL GIVE PROMPT NOTICE IN WRITING TO TENANT, SPECIFYING IN DETAIL THE
PARTICULAR DEFICIENCY, OMISSION, OR OTHER RESPECT IN WHICH LANDLORD CLAIMS SUCH
REPAIRS OR REBUILDING DO NOT ACCORD WITH THE APPROVED PLANS AND SPECIFICATIONS. 
UPON THE RECEIPT OF ANY SUCH NOTICE, TENANT WILL CAUSE CORRECTIONS TO BE MADE TO
ANY DEFICIENCIES, OMISSIONS, OR SUCH OTHER RESPECT.  TENANT’S OBLIGATIONS TO
SUPPLY BUILDER’S RISK INSURANCE, ACCORDING TO ARTICLE V, WILL BE APPLICABLE TO
ANY REPAIRS OR REBUILDING UNDER THIS ARTICLE XI.

 

11.03      LANDLORD’S COSTS.  TENANT SHALL, WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF AN INVOICE FROM LANDLORD, PAY THE REASONABLE COSTS, EXPENSES, AND
FEES OF ANY ARCHITECT OR ENGINEER EMPLOYED BY LANDLORD TO REVIEW ANY PLANS AND
SPECIFICATIONS AND TO SUPERVISE AND APPROVE ANY CONSTRUCTION, OR FOR ANY
SERVICES RENDERED BY SUCH ARCHITECT OR ENGINEER TO LANDLORD AS CONTEMPLATED BY
ANY OF THE PROVISIONS OF THIS LEASE AGREEMENT, OR FOR ANY SERVICES PERFORMED BY
LANDLORD’S ATTORNEYS IN CONNECTION THEREWITH; PROVIDED, HOWEVER, THAT LANDLORD
WILL CONSULT WITH TENANT AND NOTIFY TENANT OF THE ESTIMATED AMOUNT OF SUCH
EXPENSES.

 

11.04      RENT ABATEMENT.  IN THE EVENT THAT THE PROVISIONS OF SECTION 11.01
ABOVE SHALL BECOME APPLICABLE, THE RENT, INCLUDING ADDITIONAL RENT CONSISTING OF
REAL ESTATE TAXES AND OTHER IMPOSITIONS SHALL BE ABATED OR REDUCED
PROPORTIONATELY DURING ANY PERIOD IN WHICH, BY REASON OF SUCH DAMAGE OR
DESTRUCTION, THERE IS SUBSTANTIAL INTERFERENCE WITH THE OPERATION OF THE
BUSINESS OF TENANT IN THE LEASED PROPERTY, HAVING REGARD TO THE EXTENT TO WHICH
TENANT MAY BE REQUIRED TO DISCONTINUE ITS BUSINESS IN THE LEASED PROPERTY, AND
SUCH ABATEMENT OR REDUCTION SHALL CONTINUE FOR THE PERIOD COMMENCING WITH SUCH
DESTRUCTION OR DAMAGE AND ENDING WITH THE SUBSTANTIAL COMPLETION (AS DEFINED
BELOW) BY TENANT OF SUCH WORK OR REPAIR AND/OR RECONSTRUCTION.  IN THE EVENT
THAT ONLY A PORTION OF THE LEASED PROPERTY IS RENDERED UNTENANTABLE OR INCAPABLE
OF SUCH USE, THE BASE RENT AND ALL REAL ESTATE TAXES AND OTHER IMPOSITIONS
PAYABLE HEREUNDER SHALL BE REDUCED ON A PRO RATA BASIS IN THE SAME PROPORTION AS
THE SQUARE FOOTAGE CONTAINED IN THE LEASED PROPERTY AFTER THE DAMAGE OR
DESTRUCTION BEARS TO THE SQUARE FOOTAGE CONTAINED IN THE LEASED PROPERTY
IMMEDIATELY PRIOR THERETO.  FOR PURPOSES OF THIS SECTION 11.04, “SUBSTANTIAL
COMPLETION” SHALL OCCUR UPON THE ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR THE
SUBSTANTIAL

 

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REPAIRS TO THE LEASED PROPERTY.  NOTWITHSTANDING THE FOREGOING, SUCH RENTAL
ABATEMENT SHALL BE LIMITED TO THE AMOUNT OF ANY RENTAL OR BUSINESS INTERRUPTION
INSURANCE PROCEEDS ACTUALLY RECEIVED BY LANDLORD.

 

11.05      SUBSTANTIAL DAMAGE DURING LEASE TERM.  PROVIDED TENANT HAS COMPLIED
WITH SECTION 5.01 HEREOF (INCLUDING ACTUALLY MAINTAINING IN EFFECT RENTAL VALUE
INSURANCE OR BUSINESS INTERRUPTION INSURANCE PROVIDED FOR IN CLAUSE (C) OF
SECTION 5.01), IF AT ANY TIME THE LEASED PROPERTY IS SO DAMAGED BY FIRE OR OTHER
CASUALTY THAT MORE THAN FIFTY PERCENT (50%) OF THE SQUARE FOOTAGE CONTAINED IN
THE LEASED PROPERTY ARE RENDERED UNUSABLE, AND SUCH LEASED PROPERTY WILL NOT BE
RENDERED USABLE WITHIN NINE (9) MONTHS AFTER THE DATE THE RESTORATION WORK WILL
COMMENCE, TENANT MAY, WITHIN SIXTY (60) DAYS AFTER RECEIPT OF LANDLORD’S NOTICE
OF THE ANTICIPATED RESTORATION PERIOD, GIVE NOTICE OF ITS ELECTION TO TERMINATE
THIS LEASE AGREEMENT AND, SUBJECT TO THE FURTHER PROVISIONS OF THIS
SECTION 11.05, THIS LEASE AGREEMENT WILL CEASE ON THE TENTH (10TH) DAY AFTER THE
DELIVERY OF SUCH NOTICE.  IF THIS LEASE AGREEMENT IS SO TERMINATED, TENANT WILL
HAVE NO OBLIGATION TO REPAIR, REBUILD OR REPLACE THE LEASED PROPERTY, BUT WILL
HAVE THE OBLIGATION TO PAY TO LANDLORD UPON DEMAND THE AMOUNT OF ANY DEDUCTIBLE
ARISING IN CONNECTION THEREWITH AND THE ENTIRE INSURANCE PROCEEDS (UP TO THE
AMOUNT OF DAMAGES SUFFERED BY LANDLORD AS A RESULT OF SUCH TERMINATION) WILL
BELONG TO LANDLORD.  IF THIS LEASE AGREEMENT IS NOT SO TERMINATED, TENANT SHALL
USE THE INSURANCE PROCEEDS TO REBUILD THE LEASED PROPERTY IN ACCORDANCE WITH
SECTION 11.01.

 

11.06      DAMAGE NEAR END OF TERM.  NOTWITHSTANDING ANY PROVISIONS OF
SECTION 11.01 TO THE CONTRARY, IF SUBSTANTIAL DAMAGE TO OR DESTRUCTION OF THE
LEASED PROPERTY OCCURS DURING THE LAST TWENTY-FOUR (24) MONTHS OF THE TERM, AND
IF SUCH DAMAGE OR DESTRUCTION CANNOT BE FULLY REPAIRED AND RESTORED WITHIN SIX
(6) MONTHS IMMEDIATELY FOLLOWING THE DATE OF LOSS, TENANT SHALL HAVE THE RIGHT
TO TERMINATE THIS LEASE AGREEMENT BY GIVING NOTICE TO THE OTHER WITHIN THIRTY
(30) DAYS AFTER THE DATE OF DAMAGE OR DESTRUCTION, IN WHICH EVENT LANDLORD SHALL
BE ENTITLED TO RETAIN THE ENTIRE INSURANCE PROCEEDS (UP TO THE AMOUNT OF DAMAGES
SUFFERED BY LANDLORD AS A RESULT OF SUCH TERMINATION) AND TENANT SHALL PAY TO
LANDLORD ON DEMAND THE AMOUNT OF ANY DEDUCTIBLE ARISING IN CONNECTION THEREWITH;
PROVIDED, HOWEVER, THAT ANY SUCH NOTICE GIVEN BY LANDLORD SHALL BE VOID AND OF
NO FORCE AND EFFECT IF TENANT BINDS ITSELF IN WRITING TO TIMELY EXERCISE A
FUTURE AVAILABLE OPTION TO EXTEND THE TERM PURSUANT TO PROVISIONS OF THIS LEASE
AGREEMENT WITHIN THIRTY (30) DAYS FOLLOWING RECEIPT OF SUCH TERMINATION NOTICE.

 

11.07      ASSIGNMENT OF INSURANCE PROCEEDS.  IN THE EVENT OF TERMINATION
PURSUANT TO THIS ARTICLE XI, LANDLORD SHALL BE ENTITLED TO AND TENANT HEREBY
UNCONDITIONALLY ASSIGNS ALL OF TENANT’S RIGHT, TITLE AND INTEREST IN ALL
PROCEEDS OF INSURANCE AND RIGHTS OF RECOVERY (UP TO THE AMOUNT OF DAMAGES
SUFFERED BY LANDLORD AS A RESULT OF SUCH TERMINATION) AGAINST INSURERS ON
POLICIES COVERING THE LEASED PROPERTY, AND ALL IMPROVEMENTS, FIXTURES, TENANT
IMPROVEMENTS (INCLUDING WITHOUT LIMITATION, ANY CAPITAL ADDITIONS) FROM SUCH
DESTRUCTION, EXCEPT FOR SUCH INSURANCE PROCEEDS THAT TENANT IS ENTITLED TO
RECEIVE FOR OUT-OF-POCKET EXPENSES SUCH AS REPAIRS FOR WHICH TENANT HAS NOT BEEN
REIMBURSED, AND THIS ASSIGNMENT SHALL SURVIVE THE TERMINATION OF THIS LEASE. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT SHALL BE A CONDITION TO
TENANT’S RIGHT TO TERMINATE THIS LEASE AGREEMENT PURSUANT TO THIS ARTICLE XI
THAT TENANT FIRST EXECUTE AND DELIVER TO LANDLORD ANY AND ALL NECESSARY
DOCUMENTS REQUIRED BY TENANT’S PROPERTY INSURANCE CARRIER TO ASSIGN IN
ACCORDANCE WITH THE FOREGOING ALL OF TENANT’S RIGHTS TO THE PROCEEDS OF
INSURANCE AND RIGHTS OF RECOVERY AGAINST INSURERS ON POLICIES COVERING THE
LEASED PROPERTY, AND

 

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ALL IMPROVEMENTS, FIXTURES, PERSONAL PROPERTY AND TENANT IMPROVEMENTS (INCLUDING
WITHOUT LIMITATION, ANY CAPITAL ADDITIONS).

 

ARTICLE XII

CONDEMNATION

 

12.01      DEFINITION.  FOR PURPOSES OF THIS LEASE AGREEMENT: (I) THE TERM
“CONDEMNATION” SHALL MEAN THE PERMANENT OR TEMPORARY TAKING OF THE LEASED
PROPERTY OR THE LAND, OR ANY PORTION THEREOF, BY RIGHT OF EMINENT DOMAIN, OR BY
CONVEYANCE MADE IN RESPONSE TO A THREAT OF THE EXERCISE OF SUCH RIGHT, OR BY
CONVEYANCE IN SETTLEMENT OF EMINENT DOMAIN LITIGATION, IN EACH CASE AFTER THE
OCCURRENCE OF SUBSTANTIAL COMPLETION (AS DEFINED IN THE DEVELOPMENT AGREEMENT),
AND (II) THE TERM “AGGREGATE LEASED PROPERTY” SHALL MEAN COLLECTIVELY THE LEASED
PROPERTY AND THE LAND.

 

12.02      APPORTIONMENT OF COMPENSATION.  IN THE EVENT OF CONDEMNATION OF THE
AGGREGATE LEASED PROPERTY, OR ANY PART THEREOF, EXCEPT AS OTHERWISE PROVIDED IN
THIS ARTICLE XII, LANDLORD SHALL BE ENTITLED TO ALL COMPENSATION PAYABLE BY THE
CONDEMNING AUTHORITY UNDER APPLICABLE LAW (HEREINAFTER REFERRED TO AS AN
“AWARD”) FOR (A) THE REAL PROPERTY, OR PART THEREOF TAKEN, (B) THE VALUE OF
TENANT’S LEASEHOLD ESTATE, (C) FOR ALL IMPROVEMENTS THERETO WHICH ARE TAKEN
(EXCEPT TENANT IMPROVEMENTS WHICH ARE NOT CAPITAL ADDITIONS PURCHASED OR
FINANCED BY LANDLORD AND THEN, ONLY THE PORTION OF ANY AWARD THEREFOR ALLOCABLE
TO THE REMAINING TERM OF THIS LEASE AGREEMENT), (D) FOR ALL SEVERANCE DAMAGES TO
THE REMAINDER PROPERTY CAUSED BY THE CONDEMNATION, INCLUDING SEVERANCE DAMAGES
TO THE FIXTURES AND PERSONAL PROPERTY, AND (E) ATTORNEYS FEES AND EXPENSES,
EXPERT FEES AND COSTS OF LANDLORD.  TENANT SHALL BE ENTITLED TO ALL COMPENSATION
PAYABLE BY THE CONDEMNING AUTHORITY UNDER APPLICABLE LAW, IF ANY, BY A SEPARATE
AWARD FOR (W) PERSONAL PROPERTY OF TENANT; TRADE FIXTURES OF TENANT AND TENANT
IMPROVEMENTS TAKEN (SUBJECT TO THE LIMITATIONS SET FORTH ABOVE), (X) BUSINESS
DAMAGES SUFFERED BY TENANT, AND (Y) ATTORNEYS FEES AND EXPENSES, EXPERT FEES AND
COSTS OF TENANT.  THE FOREGOING NOTWITHSTANDING, IN THE EVENT OF A TEMPORARY
TAKING BY CONDEMNATION FOR A PERIOD OF SIX (6) MONTHS OR LESS, COMPENSATION
PAYABLE BY THE CONDEMNING AUTHORITY SHALL BE PAYABLE SOLELY TO THE TENANT,
SUBJECT TO TENANT HAVING PAID TO LANDLORD ALL RENT AND OTHER CHARGES PAYABLE
UNDER THE LEASE AGREEMENTS FOR THE PERIOD OF THE TEMPORARY TAKING.  IN THE EVENT
THE CONDEMNING AUTHORITY IS NOT REQUIRED UNDER APPLICABLE LAW TO PAY
COMPENSATION FOR AN ELEMENT OF DAMAGE OR LOSS SUFFERED BY A PARTY HERETO, THAT
PARTY, TO THAT EXTENT, SHALL BE WITHOUT A REMEDY, UNLESS OTHERWISE EXPRESSLY AND
SPECIFICALLY PROVIDED HEREIN, IT BEING THE INTENT OF THE PARTIES THAT, IN THE
ABSENCE OF AN EXPRESS AND SPECIFIC AGREEMENT TO THE CONTRARY, NO PARTY HERETO
SHALL BE OBLIGATED TO COMPENSATE THE OTHER FOR ANY DAMAGE OR LOSS SUFFERED AS A
CONSEQUENCE OF CONDEMNATION THAT IS NOT COMPENSABLE BY THE CONDEMNING AUTHORITY
UNDER APPLICABLE LAW.  NO PARTY SHALL HAVE THE RIGHT TO NEGOTIATE A SETTLEMENT
OF ANY CLAIM FOR COMPENSATION MADE OR POSSESSED BY ANOTHER PARTY, NOR MAY ANY
PARTY ENTER INTO AN AGREEMENT WITH A CONDEMNING AUTHORITY WHICH WAIVES OR
LIMITS, EXPRESSLY OR IMPLICITLY, THE ENTITLEMENT OF ANOTHER PARTY TO FULL
COMPENSATION IN ACCORDANCE WITH THE PROVISIONS HEREOF.

 

12.03      EFFECT ON LEASE OBLIGATIONS.

 

(A)           TOTAL TAKING.  IN THE EVENT OF CONDEMNATION OF THE ENTIRE
AGGREGATE LEASED PROPERTY (BUT SUBJECT TO THE LEASE AGREEMENTS), THE LEASE
AGREEMENTS SHALL REMAIN IN EFFECT,

 

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WITH THE CONDEMNING AUTHORITY TAKING THE AGGREGATE LEASED PROPERTY SUBJECT TO
THE LEASE AGREEMENTS, UNLESS THE CONDEMNING AUTHORITY ALSO SHALL HAVE CONDEMNED
THE LEASEHOLD INTERESTS OF TENANT.  IN THE EVENT OF CONDEMNATION OF THE ENTIRE
AGGREGATE LEASED PROPERTY AND THE LEASEHOLD INTERESTS OF TENANT, THE PARTIES
SHALL BE RELIEVED FROM CONTINUING PERFORMANCE UNDER THE LEASE AGREEMENTS AND
TENANT SHALL BE RELIEVED FROM PAYMENT OF RENT UNDER THE LEASE AGREEMENTS OR
OTHER CHARGES AS OF THE DATE OF CHANGE OF OWNERSHIP AND TERMINATION OF SUCH
LEASEHOLD ESTATE DUE TO CONDEMNATION.  THE PARTIES SHALL PERFORM THOSE
OBLIGATIONS ACCRUING UNDER THE LEASE AGREEMENTS PRIOR TO THE CHANGE IN
OWNERSHIP, INCLUDING SUCH PAYMENT OF RENT AND OTHER CHARGES WHICH BECOME PAYABLE
PRIOR TO THE CHANGE IN OWNERSHIP AND SHALL REMAIN LIABLE FOR ALL OBLIGATIONS
(INCLUDING INDEMNITY OBLIGATIONS) WHICH EXPRESSLY SURVIVE THE DATE OF THE
CONDEMNATION.  TO THE EXTENT RENT HAS BEEN PAID UNDER A LEASE AGREEMENT OR HAS
BEEN PAID IN ADVANCE UNDER A LEASE AGREEMENT, LANDLORD SHALL REFUND TO THE
TENANT A PRORATED PORTION THEREOF BASED ON THE NUMBER OF DAYS OF TENANT’S
OCCUPANCY UNDER THE LEASE AGREEMENTS FOR THE RENTAL PERIOD IN QUESTION, COMPARED
TO THE NUMBER OF DAYS IN THE RENTAL PERIOD FOR WHICH SUCH RENT WAS PAID IN
ADVANCE.

 

(B)           PARTIAL TAKING.  IN THE EVENT THE CONDEMNATION IS OF A PORTION OF
THE AGGREGATE LEASED PROPERTY, OR OF AN EASEMENT OR SIMILAR INTEREST IN THE
AGGREGATE LEASED PROPERTY, THE OBLIGATIONS OF THE PARTIES UNDER THE LEASE
AGREEMENTS SHALL BE UNAFFECTED UNLESS THE EFFECT OF THE CONDEMNATION IS TO
RENDER THE AGGREGATE LEASED PROPERTY UNSUITABLE FOR ITS PRIMARY INTENDED USE. 
THE AGGREGATE LEASED PROPERTY SHALL BE DEEMED “UNSUITABLE FOR ITS PRIMARY
INTENDED USE” IF THE STATE OR CONDITION OF THE AGGREGATE LEASED PROPERTY HAS
BEEN SO AFFECTED BY THE CONDEMNATION THAT, IN THE GOOD FAITH JUDGMENT OF TENANT,
REASONABLY EXERCISED, THE AGGREGATE LEASED PROPERTY CANNOT BE OPERATED ON A
COMMERCIALLY PRACTICABLE BASIS (TAKING INTO ACCOUNT THE ECONOMIC TERMS OF THE
LEASE AGREEMENTS) AS A CORRECTIONAL OR DETENTION FACILITY.  IF CONDEMNATION
RENDERS THE AGGREGATE LEASED PROPERTY UNSUITABLE FOR ITS PRIMARY INTENDED USE,
TENANT MAY TERMINATE THE LEASE AGREEMENTS AS OF THE DATE OF THE TAKING, OR AS OF
THE DATE OF LOSS OF OCCUPANCY OF THE CONDEMNED PORTION (IF THE DATE FOR VACATING
THE AGGREGATE LEASED PROPERTY IS DIFFERENT FROM THE DATE OF TAKING), OR WITHIN
THIRTY (30) DAYS FOLLOWING EITHER THE DATE OF TAKING OR THE DATE OF LOSS OF
OCCUPANCY OF THE CONDEMNED PORTION.  TERMINATION OF THE LEASE AGREEMENTS SHALL
NOT AFFECT THE APPORTIONMENT OF COMPENSATION AS OTHERWISE AGREED HEREINABOVE.

 

(C)           TEMPORARY TAKING.  IN THE EVENT OF A CONDEMNATION OF ALL OR ANY
PART OF THE AGGREGATE LEASED PROPERTY FOR A PERIOD OF SIX (6) MONTHS OR LESS,
THE PARTIES SHALL BE RELIEVED FROM THEIR OBLIGATIONS UNDER THE LEASE AGREEMENTS
ONLY TO THE EXTENT PERFORMANCE IS RENDERED IMPRACTICABLE OR IMPOSSIBLE AND
TENANT SHALL REMAIN OBLIGATED TO PAY RENT AND OTHER CHARGES DUE UNDER THE LEASE
AGREEMENTS TO LANDLORD FOR THE PERIOD OF SUCH TEMPORARY TAKING.  IN THE EVENT OF
SUCH A TEMPORARY TAKING, THE ENTIRE AMOUNT OF COMPENSATION PAYABLE FOR THE
TEMPORARY TAKING, WHETHER PAID BY THE CONDEMNING AUTHORITY AS DAMAGES, RENT OR
OTHERWISE, SHALL BE PAYABLE TO TENANT, SUBJECT TO TENANT HAVING PAID TO LANDLORD
ALL RENT AND OTHER CHARGES PAYABLE UNDER THE LEASE AGREEMENTS FOR THE PERIOD OF
SUCH TEMPORARY TAKING.

 

12.04      [INTENTIONALLY OMITTED.]

 

12.05      RESTORATION OF PREMISES.  IF THERE IS A CONDEMNATION OF THE AGGREGATE
LEASED PROPERTY AND THE LEASE AGREEMENTS REMAIN IN FULL FORCE AND EFFECT IN
ACCORDANCE HEREWITH, LANDLORD SHALL FURNISH TO TENANT THE AMOUNT OF THE AWARD
ACTUALLY RECEIVED BY LANDLORD, IN

 

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ORDER FOR TENANT TO ACCOMPLISH ALL NECESSARY RESTORATION AS REASONABLY
DETERMINED BY TENANT IN CONSULTATION WITH LANDLORD.  IF TENANT RECEIVES AN
AWARD, TENANT SHALL REPAIR OR RESTORE ANY TENANT IMPROVEMENTS UP TO BUT NOT
EXCEEDING THE AMOUNT OF THE AWARD PAYABLE TO TENANT THEREFOR.  BEFORE BEGINNING
SUCH RESTORATION, OR LETTING ANY CONTRACTS IN CONNECTION WITH SUCH RESTORATION,
TENANT WILL SUBMIT FOR LANDLORD’S APPROVAL, WHICH APPROVAL LANDLORD WILL NOT
UNREASONABLY WITHHOLD OR DELAY, COMPLETE AND DETAILED PLANS AND SPECIFICATIONS
FOR SUCH RESTORATION.  PROMPTLY AFTER RECEIVING LANDLORD’S APPROVAL OF THE PLANS
AND SPECIFICATIONS, TENANT WILL BEGIN SUCH RESTORATION AND WILL PROSECUTE THE
REPAIRS AND REBUILDING TO COMPLETION WITH DILIGENCE, SUBJECT, HOWEVER, TO
STRIKES, LOCKOUTS, ACTS OF GOD, EMBARGOES, GOVERNMENTAL RESTRICTIONS,
TERRORISTIC THREATS OR ACTIONS, AND OTHER CAUSES BEYOND TENANT’S REASONABLE
CONTROL.  LANDLORD WILL MAKE AVAILABLE TO TENANT THE NET PROCEEDS OF ANY AWARD
PAID TO LANDLORD FOR SUCH RESTORATION, AFTER DEDUCTION OF ANY COSTS OF
COLLECTION, INCLUDING ATTORNEYS’ FEES AND EXPENSES.  PAYMENT WILL BE MADE
AGAINST PROPERLY CERTIFIED VOUCHERS OF A COMPETENT ARCHITECT IN CHARGE OF THE
WORK AND APPROVED BY LANDLORD.  PRIOR TO COMMENCING THE RESTORATION, TENANT
SHALL DELIVER TO LANDLORD FOR LANDLORD’S APPROVAL A SCHEDULE SETTING FORTH THE
ESTIMATED MONTHLY DRAWS FOR SUCH WORK.  UPON THE COMPLETION OF RESTORATION AND
THE FURNISHING OF SUCH PROOF, THE BALANCE OF THE AWARD WILL BE PAID TO TENANT. 
TENANT WILL OBTAIN AND DELIVER TO LANDLORD A TEMPORARY OR FINAL CERTIFICATE OF
OCCUPANCY BEFORE THE AGGREGATE LEASED PROPERTY IS REOCCUPIED FOR ANY PURPOSE. 
TENANT SHALL COMPLETE SUCH RESTORATION FREE AND CLEAR OF MECHANIC’S,
CONSTRUCTION OR OTHER LIENS, AND IN ACCORDANCE WITH THE BUILDING CODES AND ALL
APPLICABLE LAWS, ORDINANCES, RULES, REGULATIONS, PERMITS, APPROVALS OR ORDERS OF
ANY STATE, MUNICIPAL, OR OTHER PUBLIC AUTHORITY AFFECTING THE RESTORATION, AND
ALSO IN ACCORDANCE WITH ALL REQUIREMENTS OF THE INSURANCE RATING ORGANIZATION,
OR SIMILAR BODY APPLICABLE TO THE AGGREGATE LEASED PROPERTY.  ANY REMAINING
PROCEEDS OF THE AWARD OTHERWISE PAYABLE AFTER SUCH RESTORATION IS COMPLETED WILL
BE TENANT’S PROPERTY.

 

12.06      LANDLORD’S INSPECTION.  DURING THE PROGRESS OF SUCH RESTORATION,
LANDLORD AND ITS ARCHITECTS AND ENGINEERS MAY, FROM TIME TO TIME, INSPECT THE
AGGREGATE LEASED PROPERTY AND WILL BE FURNISHED, IF REQUIRED BY THEM, WITH
COPIES OF ALL PLANS, SHOP DRAWINGS, AND SPECIFICATIONS RELATING TO SUCH
RESTORATION.  TENANT WILL KEEP ALL PLANS, SHOP DRAWINGS, AND SPECIFICATIONS
AVAILABLE, AND LANDLORD AND ITS ARCHITECTS AND ENGINEERS MAY EXAMINE THEM AT ALL
REASONABLE TIMES.  IF, DURING SUCH RESTORATION, LANDLORD AND ITS ARCHITECTS AND
ENGINEERS DETERMINE THAT THE RESTORATION IS NOT BEING DONE IN ACCORDANCE WITH
THE APPROVED PLANS AND SPECIFICATIONS, LANDLORD WILL GIVE PROMPT NOTICE IN
WRITING TO TENANT, SPECIFYING IN DETAIL THE PARTICULAR DEFICIENCY, OMISSION, OR
OTHER RESPECT IN WHICH LANDLORD CLAIMS SUCH RESTORATION DOES NOT ACCORD WITH THE
APPROVED PLANS AND SPECIFICATIONS.  UPON THE RECEIPT OF ANY SUCH NOTICE, TENANT
WILL CAUSE CORRECTIONS TO BE MADE TO ANY DEFICIENCIES, OMISSIONS, OR SUCH OTHER
RESPECT.  TENANT’S OBLIGATIONS TO SUPPLY INSURANCE, ACCORDING TO ARTICLE V, WILL
BE APPLICABLE TO ANY RESTORATION UNDER THIS ARTICLE XII.  TENANT SHALL BE
RESPONSIBLE TO PAY THE COSTS FOR ALL SUCH ARCHITECTS AND ENGINEERS PURSUANT TO
SECTION 11.03.

 

ARTICLE XIII

TENANT’S RIGHT OF FIRST REFUSAL

 

13.01      RIGHTS OF FIRST REFUSAL.  SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH IN THIS SECTION 13.01 AND PROVIDED THAT NO EVENT OF DEFAULT UNDER SECTIONS
10.01(A)(I), (III), (IV), (V), OR (VI) WITH RESPECT TO THE LEASED PROPERTY HAS
OCCURRED AND IS CONTINUING AT THE TIME OF SUCH

 

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EXERCISE OR AT THE EXPIRATION OF THIS LEASE AGREEMENT, TENANT SHALL HAVE A RIGHT
OF FIRST REFUSAL (THE “PURCHASE REFUSAL RIGHT”) TO PURCHASE THE LEASED PROPERTY
(INCLUDING ANY LEASED PROPERTY OWNED BY AN AFFILIATE OF LANDLORD).  SO LONG AS
NO EVENT OF DEFAULT UNDER SECTIONS 10.01(A)(I), (III), (IV), (V), OR (VI) WITH
RESPECT TO THE SUBJECT LEASED PROPERTY HAS OCCURRED AND IS CONTINUING AT THE
TIME OF SUCH EXERCISE OR AT THE EXPIRATION OF THIS LEASE AGREEMENT), IF, DURING
THE TERM OR ANY RENEWAL TERM AND FOR A PERIOD OF THIRTY (30) DAYS FOLLOWING
TERMINATION OF THIS LEASE AGREEMENT (OTHER THAN AS A RESULT OF THE EXERCISE BY
LANDLORD OF ITS REMEDIES UNDER THIS LEASE AGREEMENT), LANDLORD OR ANY AFFILIATE
OF LANDLORD RECEIVES A BONA FIDE THIRD PARTY OFFER TO TRANSFER THE LEASED
PROPERTY (THE “OFFER”), INCLUDING, WITHOUT LIMITATION, A TRANSFER CONSISTING OF
A PROPOSED LANDLORD CHANGE OF CONTROL, THEN, PRIOR TO ACCEPTING SUCH OFFER,
LANDLORD SHALL SEND WRITTEN NOTICE AND A COPY THEREOF TO TENANT AND TO ANY OTHER
PARTY SO DESIGNATED BY TENANT (“LANDLORD’S NOTICE”), WHICH NOTICE SHALL CONTAIN
THE IDENTITY OF THE THIRD PARTY PURCHASER OR SURVIVOR, AS THE CASE MAY BE, THE
PRICE AND OTHER MATERIAL TERMS OF THE PROPOSED TRANSACTION.  IN THE CASE OF A
PROPOSED TRANSFER OF THE LEASED PROPERTY AS A PART OF A LARGER TRANSACTION
INVOLVING THE TRANSFER OF OTHER PROPERTIES OF LANDLORD (“MULTIPLE PROPERTY
TRANSFER”), LANDLORD SHALL INCLUDE WITH THE LANDLORD’S NOTICE AN INDICATION OF
THAT PORTION OF THE AGGREGATE PURCHASE PRICE TO BE PAID IN SUCH MULTIPLE
PROPERTY TRANSFER THAT LANDLORD REASONABLY ALLOCATES TO THE LEASED PROPERTY (THE
“ALLOCATED PRICE”), WHICH ALLOCATED PRICE SHALL BE SUPPORTED BY WRITTEN ANALYSIS
AND DOCUMENTATION INCLUDED WITH SUCH LANDLORD’S NOTICE DEMONSTRATING A
REASONABLE BASIS FOR SUCH ALLOCATION.  TENANT SHALL HAVE THIRTY (30) DAYS AFTER
RECEIPT OF LANDLORD’S NOTICE TO EXERCISE TENANT’S PURCHASE REFUSAL RIGHT, BY
GIVING LANDLORD WRITTEN NOTICE THEREOF.  FAILURE OF TENANT TO EXERCISE THE
PURCHASE REFUSAL RIGHT WITHIN SUCH TIME PERIOD SET FORTH ABOVE SHALL BE DEEMED
TO EXTINGUISH THE PURCHASE REFUSAL RIGHT WITH RESPECT TO THAT PARTICULAR OFFER
AND THEREAFTER, LANDLORD OR ITS AFFILIATES MAY TRANSFER SUCH LEASED PROPERTY;
PROVIDED, HOWEVER, THAT THE TRANSFER OF THE LEASED PROPERTY IS AT A PRICE EQUAL
TO OR GREATER THAN THE PRICE CONTAINED IN THE LANDLORD’S NOTICE, AND OTHERWISE
CONSISTENT IN ALL MATERIAL RESPECTS WITH THE TERMS AND CONDITIONS SET FORTH IN
LANDLORD’S NOTICE (INCLUDING THE THIRD PARTY PURCHASER).  TENANT’S PURCHASE
REFUSAL RIGHT SHALL REVIVE IN THE EVENT THAT LANDLORD FAILS TO TRANSFER THE
LEASED PROPERTY PURSUANT TO THE OFFER WITHIN ONE YEAR FOLLOWING THE DATE OF
LANDLORD’S NOTICE; IT BEING UNDERSTOOD THAT THE REFUSAL RIGHT SHALL AT ALL TIMES
REMAIN IN EXISTENCE WITH RESPECT TO ANY OTHER OFFER FOR WHICH THE REFUSAL RIGHT
HAS NOT BEEN DEEMED EXTINGUISHED HEREUNDER.  IN THE EVENT THAT TENANT ELECTS TO
EXERCISE THE PURCHASE REFUSAL RIGHT AND TO ACQUIRE THE LEASED PROPERTY THEREBY,
(A) TENANT SHALL ACQUIRE SUCH LEASED PROPERTY ON THE SAME TERMS AND CONDITIONS
AND SUBJECT TO ALL TIME PERIODS AND OTHER LIMITATIONS AS PROVIDED IN LANDLORD’S
NOTICE ,PROVIDED, HOWEVER, (X) TENANT SHALL IN ALL EVENTS HAVE NOT LESS THAN ONE
HUNDRED TWENTY (120) DAYS TO CLOSE ITS ACQUISITION OF THE LEASED PROPERTY
FOLLOWING ITS WRITTEN NOTICE EXERCISING ITS PURCHASE REFUSAL RIGHT), (Y) IN THE
CASE OF A MULTIPLE PROPERTY TRANSFER, THE PURCHASE PRICE TO BE PAID BY TENANT
FOR THE LEASED PROPERTY SHALL BE THE ALLOCATED PRICE, AND (Z) IN THE CASE OF A
LANDLORD CHANGE OF CONTROL, THE PURCHASE PRICE TO BE PAID BY TENANT FOR THE
LEASED PROPERTY SHALL BE THE FAIR MARKET VALUE OF THE LEASED PROPERTY, AS
DETERMINED BY THE APPRAISAL PROCEDURES SET FORTH IN SECTION 16.21 HEREOF, AND
TENANT SHALL HAVE THIRTY (30) DAYS FOLLOWING THE DETERMINATION OF A FINAL
APPRAISED VALUE PURSUANT TO SUCH SECTION 16.21 TO CLOSE ITS ACQUISITION OF THE
LEASED PROPERTY, AND (B) CONCURRENTLY WITH SUCH ACQUISITION, THIS LEASE
AGREEMENT SHALL TERMINATE (BUT TENANT SHALL REMAIN LIABLE TO PAY ANY ACCRUED
RENT DUE AND PAYABLE ON THE CLOSING DATE WITH RESPECT TO SUCH LEASED PROPERTY
AND ALL INDEMNIFICATIONS AND OTHER PROVISIONS THAT SURVIVE THE EXPIRATION OF
THIS LEASE AGREEMENT SHALL CONTINUE IN EFFECT).  NOTWITHSTANDING THE FOREGOING
PROVISIONS, THE PURCHASE REFUSAL RIGHT SHALL

 

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NOT BE APPLICABLE TO (I) ANY TRANSFER OF LEASED PROPERTY TO (A) ANY AFFILIATE OF
LANDLORD OR (B) ANY JOINT VENTURE IN WHICH LANDLORD (OR AN AFFILIATE OF
LANDLORD) AT ALL TIMES MAINTAINS MANAGEMENT CONTROL AND AN EQUITY INTEREST OF AT
LEAST TEN PERCENT (10%), SO LONG AS SUCH AFFILIATE OR JOINT VENTURE ACQUIRES
SUCH LEASED PROPERTY SUBJECT TO THE PURCHASE REFUSAL RIGHT, OR (II) ANY TRANSFER
(DIRECTLY OR INDIRECTLY, INCLUDING A TRANSFER BY MEANS OF A LANDLORD CHANGE OF
CONTROL), IN A SINGLE TRANSACTION OR SERIES OF RELATED TRANSACTIONS, OF MULTIPLE
PROPERTIES (INCLUDING THE AGGREGATE LEASED PROPERTY) HAVING AN AGGREGATE FAIR
MARKET VALUE (INCLUDING THE FAIR MARKET VALUE OF THE AGGREGATE LEASED PROPERTY)
OF WHICH THE FAIR MARKET VALUE OF THE AGGREGATE LEASED PROPERTY REPRESENTS NO
MORE THAN FIFTY PERCENT (50%) OF THE TOTAL FAIR MARKET VALUE AT THE TIME OF
TRANSFER.  A “TRANSFER” SHALL MEAN EITHER (I) ANY CONVEYANCE OF FEE SIMPLE TITLE
(OTHER THAN CONDITIONAL ASSIGNMENTS FOR SECURITY OR MORTGAGE PURPOSES) OR ANY
LEASE WHICH HAS A TERM IN EXCESS OF ONE (1) YEAR OR (II) A LANDLORD CHANGE OF
CONTROL.  A “LANDLORD CHANGE OF CONTROL” SHALL MEAN THE ACQUISITION BY ANY
PERSON OF THE BENEFICIAL OWNERSHIP (DIRECTLY OR INDIRECTLY) OF THE VOTING
MEMBERSHIP INTERESTS IN THE LANDLORD, WHETHER THROUGH PURCHASE, MERGER,
CONSOLIDATION OR OTHERWISE, UNLESS AN AFFILIATE OF THE LANDLORD (AS CONSTITUTED
IMMEDIATELY PRIOR TO SUCH TRANSACTION) IS THE SURVIVING OR ACQUIRING PERSON AND
SUCH AFFILIATE ACQUIRES SUCH LEASED PROPERTY SUBJECT TO THE PURCHASE REFUSAL
RIGHT.

 

ARTICLE XIV

ASSIGNMENT AND SUBLETTING: ATTORNMENT

 

14.01      [INTENTIONALLY OMITTED.]

 

14.02      PERMITTED TRANSFERS.

 

(A)           LANDLORD’S CONSENT WILL NOT BE REQUIRED IN CONNECTION WITH AN
ASSIGNMENT OF THIS LEASE AGREEMENT OR SUBLET OF ALL OR ANY PART OF THE LEASED
PROPERTY TO (I) AN AFFILIATE OF TENANT FOR SO LONG AS SUCH ENTITY REMAINS AN
AFFILIATE OF TENANT, OR (II) ANY ENTITY SUCCEEDING TO SUBSTANTIALLY ALL OF THE
ASSETS OF TENANT AS A RESULT OF CONSOLIDATION OR MERGER, OR (III) ANY ENTITY TO
WHICH ALL OR SUBSTANTIALLY ALL OF TENANT’S STOCK OR ASSETS HAVE BEEN SOLD OR
TRANSFERRED, OR (IV) ANY OTHER TRANSFEREE EXPERIENCED IN THE BUSINESS OF THE
MANAGEMENT AND OPERATION OF CORRECTIONAL FACILITIES (EACH, A “PERMITTED
TRANSFEREE”); PROVIDED, HOWEVER, THAT NO SUCH ASSIGNMENT OR SUBLETTING SHALL
RESULT IN TENANT BEING RELEASED OR DISCHARGED FROM ANY LIABILITY UNDER THIS
LEASE AGREEMENT, UNLESS (1) THE PERMITTED TRANSFEREE AGREES DIRECTLY WITH
LANDLORD, BY WRITTEN INSTRUMENT IN FORM SATISFACTORY TO LANDLORD IN ITS
REASONABLE DISCRETION, TO BE BOUND BY ALL THE OBLIGATIONS OF TENANT HEREUNDER,
INCLUDING, WITHOUT LIMITATION, THE COVENANT AGAINST FURTHER ASSIGNMENT AND
SUBLETTING, AND (2) IN THE CASE OF A PERMITTED TRANSFEREE THAT IS NOT AN
AFFILIATE OF TENANT, EITHER (X) TENANT DEMONSTRATES TO LANDLORD’S REASONABLE
SATISFACTION THAT THE PERMITTED TRANSFEREE SATISFIES THE FINANCIALLY RESPONSIBLE
TEST (AS HEREINAFTER DEFINED) OR (Y) TENANT OR THE PERMITTED TRANSFEREE DEPOSITS
WITH LANDLORD AN UNCONDITIONAL, IRREVOCABLE LETTER OF CREDIT (THE “LETTER OF
CREDIT”) IN FORM AND SUBSTANCE SATISFACTORY TO LANDLORD AND SATISFYING THE
REQUIREMENTS OF THIS LEASE AGREEMENT IN A FACE AMOUNT EQUAL TO TWENTY-FOUR (24)
MONTHS (OR SUCH LESSER AMOUNT AS LANDLORD MAY APPROVE IN LANDLORD’S SOLE
DISCRETION) OF THE BASE RENT THEN PAYABLE UNDER THIS LEASE AGREEMENT (SUCH
AMOUNT REFERRED TO AS THE “SECURITY AMOUNT”) AND PROOF REASONABLY SATISFACTORY
TO LANDLORD THAT SUCH PERMITTED TRANSFEREE SATISFIES THE FINANCIALLY RESPONSIBLE
TEST OR THE LETTER OF CREDIT SHALL HAVE BEEN DELIVERED TO LANDLORD AT LEAST
FIFTEEN (15) DAYS PRIOR TO THE EFFECTIVE DATE OF ANY SUCH TRANSACTION.  FOR
PURPOSES OF THIS LEASE

 

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AGREEMENT, AN “AFFILIATE” OF AN ENTITY MEANS ANY ENTITY THAT CONTROLS, IS
CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH SUCH ENTITY.  FOR THE PURPOSES OF
THE FOREGOING DEFINITION OF AN AFFILIATE, “CONTROL” MEANS THE DIRECT OR INDIRECT
OWNERSHIP OF MORE THAN FIFTY PERCENT (50%) OF THE VOTING SECURITIES OF AN ENTITY
OR POSSESSION OF THE RIGHT TO VOTE MORE THAN FIFTY PERCENT (50%) OF THE VOTING
INTEREST IN THE ORDINARY DIRECTION OF THE ENTITY’S AFFAIRS.  FOR PURPOSES OF
THIS LEASE AGREEMENT, THE TERM “FINANCIALLY RESPONSIBLE TEST” SHALL MEAN THAT
THE PERMITTED TRANSFEREE HAS A SHAREHOLDERS’ EQUITY, DETERMINED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED, AT LEAST
EQUAL TO $100,000,000.  NOTWITHSTANDING THE FOREGOING BUT PROVIDED THAT THERE IS
NO EVENT OF DEFAULT IS IN EXISTENCE UNDER THIS LEASE AGREEMENT AT ANY TIME
DURING THE TEST PERIOD (AS HEREINAFTER DEFINED) OR AS OF THE RETURN DATE (AS
HEREINAFTER DEFINED) AND LANDLORD HAS NOT DELIVERED TO TENANT OR THE PERMITTED
TRANSFEREE ANY NOTICE OF ANY UNCURED DEFAULT UNDER THIS LEASE AGREEMENT FOR
WHICH THE CURE PERIOD HAS NOT EXPIRED AS OF THE RETURN DATE, IN THE EVENT THAT
FOLLOWING THE DEPOSIT OF THE LETTER OF CREDIT WITH LANDLORD AS REQUIRED BY THIS
SECTION 14.02(A), THE PERMITTED TRANSFEREE SATISFIES THE FINANCIALLY RESPONSIBLE
TEST SET FORTH ABOVE FOR FOUR (4) CONSECUTIVE FISCAL QUARTERS OF SUCH PERMITTED
TRANSFEREE (THE “TEST PERIOD”) AND PROOF REASONABLY SATISFACTORY TO LANDLORD
THAT SUCH PERMITTED TRANSFEREE HAS SATISFIED SUCH FINANCIALLY RESPONSIBLE TEST
DURING THE TEST PERIOD IS DELIVERED TO LANDLORD, LANDLORD WILL RELEASE THE
LETTER OF CREDIT WITHIN THIRTY (30) DAYS AFTER LANDLORD DETERMINES THAT SUCH
FINANCIALLY RESPONSIBLE TEST HAS BEEN SATISFIED BY THE PERMITTED TRANSFEREE
DURING THE TEST PERIOD (THE “RETURN DATE”).

 

(B)           THE LETTER OF CREDIT SHALL HAVE A STATED DURATION OF AND SHALL BE
EFFECTIVE FOR AT LEAST ONE YEAR, WITH PROVISION FOR AUTOMATIC SUCCESSIVE ANNUAL
ONE-YEAR EXTENSIONS, AND SHALL INCLUDE THE RIGHT OF LANDLORD TO DRAW THEREON IF
THE ISSUER OF THE LETTER OF CREDIT AT ANY TIME NOTIFIES LANDLORD THAT THE LETTER
OF CREDIT WILL NOT BE AUTOMATICALLY RENEWED.  THE LETTER OF CREDIT SHALL (I) BE
AT ALL TIMES IN THE AMOUNT OF THE SECURITY AMOUNT, (II) SHALL PERMIT MULTIPLE
AND PARTIAL DRAWS, (III) SHALL BE MADE PAYABLE TO LANDLORD AND BE EXPRESSLY
TRANSFERABLE BY AND ASSIGNABLE AT NO CHARGE TO LANDLORD, TO ITS SUCCESSORS OR
ASSIGNS OF THIS LEASE AGREEMENT; AND (IV) SHALL BE PAYABLE AT SIGHT UPON
PRESENTMENT TO THE ISSUER OF A SIMPLE SIGHT DRAFT SIGNED BY LANDLORD ACCOMPANIED
BY A CERTIFICATE STATING THAT LANDLORD IS PERMITTED TO DRAW UPON THE LETTER OF
CREDIT PURSUANT TO THE TERMS OF THIS LEASE AGREEMENT AND SETTING FORTH THE
AMOUNT THAT LANDLORD IS PERMITTED TO DRAW.  THE LETTER OF CREDIT SHALL BE KEPT
IN FORCE THROUGHOUT THE THEN REMAINING TERM OF THIS LEASE AGREEMENT AND FOR
SIXTY (60) DAYS FOLLOWING THE EXPIRATION OF THIS LEASE AGREEMENT, AS IT MAY BE
EXTENDED, EXCEPT THAT IF SUCH EARLIER TERMINATION IS BASED ON TENANT’S DEFAULT,
THE LETTER OF CREDIT SHALL BE KEPT IN FORCE UNTIL SIXTY (60) DAYS AFTER THE DATE
WHEN THE TERM WOULD HAVE EXPIRED HAD THIS LEASE AGREEMENT NOT BEEN EARLIER
TERMINATED.  A RENEWAL LETTER OF CREDIT SHALL BE PROVIDED NO LATER THAN THIRTY
(30) DAYS PRIOR TO THE EXPIRATION DATE OF ANY LETTER OF CREDIT ISSUED HEREUNDER,
AND IF NOT SO PROVIDED, LANDLORD MAY DRAW THE ENTIRE AMOUNT OF THE EXPIRING
LETTER OF CREDIT AND HOLD THE PROCEEDS IN A SEGREGATED ACCOUNT IN CASH FOR THE
SAME PURPOSES AS THE LETTER OF CREDIT.  THE LETTER OF CREDIT SHALL BE ISSUED BY
A COMMERCIAL BANK REASONABLY SATISFACTORY TO AND APPROVED BY LANDLORD IN WRITING
WHICH HAS CAPITAL ASSETS OF AT LEAST $1,000,000,000 AND CAPITAL RESERVES OF AT
LEAST $100,000,000, AND WHICH IS A MEMBER OF THE FEDERAL RESERVE SYSTEM.

 

(C)           LANDLORD SHALL HOLD THE LETTER OF CREDIT THROUGHOUT THE THEN
REMAINING TERM OF THIS LEASE AGREEMENT AS SECURITY FOR THE PERFORMANCE BY THE
PERMITTED TRANSFEREE OF ALL OBLIGATIONS HEREUNDER.  IF THERE IS AN EVENT OF
DEFAULT, LANDLORD SHALL HAVE THE RIGHT FROM TIME TO

 

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TIME, WITHOUT PREJUDICE TO ANY OTHER REMEDY LANDLORD MAY HAVE ON ACCOUNT THEREOF
AND WHETHER BEFORE OR AFTER ENFORCING ITS REMEDIES TO DRAW UPON THE LETTER OF
CREDIT OR ANY PART THEREOF AND RETAIN, USE OR APPLY THE PROCEEDS TO LANDLORD’S
DAMAGES ARISING FROM, OR TO CURE, ANY EVENT OF DEFAULT.  THE APPLICATION OF ANY
PROCEEDS OF THE LETTER OF CREDIT IS NOT A PREREQUISITE TO LANDLORD’S RIGHT TO
RESORT TO ITS REMEDIES HEREUNDER OR AT LAW OR IN EQUITY.  LANDLORD SHALL RETURN
THE BALANCE OF THE SECURITY AMOUNT, OR SO MUCH THEREOF AS SHALL HAVE THERETOFORE
NOT BEEN APPLIED OR RELEASED IN ACCORDANCE WITH THE TERMS OF THIS SECTION 14.02
TO TENANT WITHIN THIRTY (30) DAYS OF THE EXPIRATION OR EARLIER TERMINATION OF
THE TERM OF THIS LEASE AGREEMENT AND SURRENDER OF POSSESSION OF THE PROPERTY BY
TENANT TO LANDLORD AT SUCH TIME, PROVIDED THAT THERE IS THEN EXISTING NO EVENT
OF DEFAULT (NOR ANY CIRCUMSTANCE WHICH, WITH THE PASSAGE OF TIME OR THE GIVING
OF NOTICE, OR BOTH, WOULD CONSTITUTE AN EVENT OF DEFAULT).

 

14.03      [INTENTIONALLY OMITTED.]

 

14.04      PERMITTED SUBLEASES.  LANDLORD ACKNOWLEDGES THAT FROM TIME TO TIME
TENANT MAY RESPOND TO REQUESTS FOR PROPOSALS (“RFP’S”) FROM GOVERNMENTAL
ENTITIES SEEKING (A) GOVERNMENT OPERATING AGREEMENTS, SUPPORT AGREEMENTS AND/OR
SERVICE AGREEMENTS (OR AMENDMENTS THERETO) IN CONNECTION WITH THE HOUSING OR
DETENTION OF INMATES OR DETAINEES AT ALL OF ANY PORTIONS OF THE LEASED PROPERTY
INCLUDING, BUT NOT LIMITED TO, THE OPERATING AGREEMENT (COLLECTIVELY, THE
“SERVICE AGREEMENTS”) OR (B) AGREEMENTS WITH LICENSEES IN CONNECTION WITH
TENANT’S OPERATION OF CORRECTIONAL OR DETENTION FACILITIES AS IS CUSTOMARILY
ASSOCIATES WITH OR INCIDENTAL TO THE OPERATION OF SUCH LEASED PROPERTY, WHICH
AGREEMENTS MAY BE IN THE NATURE OF A SUBLEASE AGREEMENT (COLLECTIVELY, “SUBLEASE
AGREEMENTS”) FOR THE HOUSING OR DETENTION OF INMATES OR DETAINEES AT THE LEASED
PROPERTY.  TENANT AGREES TO DELIVER TO LANDLORD COPIES OF ALL SERVICE AGREEMENTS
OR SUBLEASE AGREEMENTS IN EFFECT WITH RESPECT TO THE LEASED PROPERTY, TOGETHER
WITH ANY AMENDMENTS THEREOF AND ANY NOTICES OF TERMINATION OR DEFAULT RECEIVED
FROM THE RELEVANT CONTRACTING GOVERNMENTAL ENTITIES, REGARDLESS OF WHETHER ANY
SUCH SERVICE AGREEMENT OR SUBLEASE AGREEMENT IS DEEMED A SUBLEASE HEREUNDER. 
NOTWITHSTANDING ANY PROVISION HEREUNDER CONTAINED TO THE CONTRARY, LANDLORD
SHALL HAVE NO RIGHT TO APPROVE OR REJECT A SERVICE AGREEMENT OR SUBLEASE
AGREEMENT, AND EACH SERVICE AGREEMENT AND SUBLEASE AGREEMENT SHALL BE DEEMED
PERMITTED HEREUNDER, PROVIDED THAT THE TERM THEREOF DOES NOT EXTEND BEYOND THE
TERM (INCLUDING ALL RENEWALS TERMS) OF THIS LEASE AGREEMENT.

 

14.05      EFFECT OF ASSIGNMENT.  NO ASSIGNMENT OR SUBLEASE, INCLUDING WITHOUT
LIMITATION, ANY SUBLEASE AGREEMENT, SHALL IN ANY WAY IMPAIR THE CONTINUING
PRIMARY LIABILITY OF TENANT HEREUNDER.  ANY ASSIGNMENT SHALL BE LIMITED TO
TENANT’S INTEREST IN THIS LEASE AGREEMENT.  ANY ASSIGNMENT, SUBLEASE OR OTHER
TRANSFER OF ALL OR ANY PORTION OF TENANT’S INTEREST HEREIN IN CONTRAVENTION OF
THIS ARTICLE XIV SHALL BE VOIDABLE AT LANDLORD’S OPTION.

 

ARTICLE XV

QUIET ENJOYMENT; SUBORDINATION,

ATTORNMENT AND ESTOPPEL CERTIFICATES

 

15.01      QUIET ENJOYMENT.  SO LONG AS TENANT PERFORMS ALL OF ITS OBLIGATIONS
UNDER THIS LEASE AGREEMENT, TENANT’S POSSESSION OF THE LEASED PROPERTY WILL NOT
BE DISTURBED BY OR THROUGH LANDLORD.

 

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15.02      LANDLORD MORTGAGES: SUBORDINATION.  WITHOUT THE CONSENT OF TENANT,
BUT SUBJECT TO SECTION 15.03, AND PROVIDED THAT LANDLORD OBTAINS AN SNDA IN
ACCORDANCE WITH SECTION 15.03, THAT PROVIDES THAT IN THE EVENT ANY PARTY
SUCCEEDS TO LANDLORD’S INTEREST UNDER THIS LEASE AGREEMENT WHEN NO EVENT OF
DEFAULT EXISTS, SUCH PARTY WILL NOT DISTURB TENANT’S POSSESSION, USE OR
OCCUPANCY OF THE LEASED PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THIS LEASE
AGREEMENT AND WILL OTHERWISE HONOR THIS LEASE AGREEMENT UNCHANGED, LANDLORD MAY,
FROM TIME TO TIME, DIRECTLY OR INDIRECTLY, CREATE OR OTHERWISE CAUSE TO EXIST
ANY LIEN, ENCUMBRANCES OR TITLE RETENTION AGREEMENT ON THE LEASED PROPERTY, OR
ANY PORTION THEREOF OR ANY INTEREST THEREIN, WHETHER TO SECURE ANY BORROWING OR
OTHER MEANS OF FINANCING OR REFINANCING.  TENANT’S RIGHTS UNDER THIS LEASE
AGREEMENT SHALL BE SUBORDINATE TO ANY GROUND LEASE OR UNDERLYING LEASE, FIRST
MORTGAGE, FIRST DEED OF TRUST, OR OTHER FIRST LIEN AGAINST ANY LEASED PROPERTY,
TOGETHER WITH ANY RENEWAL, CONSOLIDATION, EXTENSION, MODIFICATION OR REPLACEMENT
THEREOF, WHICH NOW OR AT ANY SUBSEQUENT TIME AFFECTS ANY LEASED PROPERTY OR ANY
INTEREST OF LANDLORD IN ANY LEASED PROPERTY, EXCEPT TO THE EXTENT THAT ANY SUCH
INSTRUMENT EXPRESSLY PROVIDES THAT THIS LEASE AGREEMENT IS SUPERIOR.  THIS
PROVISION WILL BE SELF-OPERATIVE, AND NO FURTHER INSTRUMENT OR SUBORDINATION
WILL BE REQUIRED IN ORDER TO EFFECT IT.  HOWEVER, TENANT SHALL EXECUTE,
ACKNOWLEDGE AND DELIVER TO LANDLORD, AT ANY TIME AND FROM TIME TO TIME UPON
DEMAND BY LANDLORD, SUCH DOCUMENTS AS MAY BE REQUESTED BY LANDLORD OR ANY
MORTGAGEE OR ANY HOLDER OF ANY MORTGAGE OR OTHER INSTRUMENT DESCRIBED IN THIS
SECTION, TO CONFIRM OR EFFECT ANY SUCH SUBORDINATION.  IF TENANT FAILS OR
REFUSES TO EXECUTE, ACKNOWLEDGE, AND DELIVER ANY SUCH DOCUMENT WITHIN TWENTY
(20) DAYS AFTER WRITTEN DEMAND, AND LANDLORD IS NOT IN BREACH OF THIS LEASE
AGREEMENT, LANDLORD MAY EXECUTE, ACKNOWLEDGE AND DELIVER ANY SUCH DOCUMENT ON
BEHALF OF TENANT AS TENANT’S ATTORNEY-IN-FACT, TENANT HEREBY CONSTITUTES AND
IRREVOCABLY APPOINTS LANDLORD, ITS SUCCESSORS AND ASSIGNS, AS TENANT’S
ATTORNEY-IN-FACT TO EXECUTE, ACKNOWLEDGE, AND DELIVER ON BEHALF OF TENANT ANY
DOCUMENTS DESCRIBED IN THIS SECTION.  THIS POWER OF ATTORNEY IS COUPLED WITH AN
INTEREST AND IS IRREVOCABLE.

 

15.03      ATTORNMENT: NON-DISTURBANCE.  IF ANY HOLDER OF ANY MORTGAGE,
INDENTURE, DEED OF TRUST, OR OTHER SIMILAR INSTRUMENT DESCRIBED IN SECTION 15.02
SUCCEEDS TO LANDLORD’S INTEREST IN THE LEASED PROPERTY, TENANT WILL PAY TO SUCH
HOLDER ALL RENT SUBSEQUENTLY PAYABLE UNDER THIS LEASE AGREEMENT.  TENANT, UPON
REQUEST OF ANY PERSON SUCCEEDING TO THE INTEREST OF LANDLORD, INCLUDING ANY
LANDLORD’S DESIGNEE, SHALL AUTOMATICALLY BECOME THE TENANT OF, AND ATTORN TO,
SUCH SUCCESSOR IN INTEREST WITHOUT CHANGING THIS LEASE AGREEMENT.  UPON REQUEST
BY LANDLORD, LANDLORD’S DESIGNEE OR SUCH SUCCESSOR IN INTEREST, TENANT WILL
EXECUTE, ACKNOWLEDGE AND DELIVER A SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT (“SNDA”) IN A COMMERCIALLY REASONABLE FORM REQUIRED BY THE MORTGAGEE
OR HOLDER, PROVIDED THAT THE FORM OF SNDA TENANT IS REQUIRED TO EXECUTE DOES NOT
AMEND OR MODIFY THE TERMS OF THIS LEASE AGREEMENT AND PROVIDES THAT IN THE EVENT
ANY PARTY SUCCEEDS TO LANDLORD’S INTEREST UNDER THIS LEASE AGREEMENT WHEN NO
EVENT OF DEFAULT EXISTS, SUCH PARTY WILL NOT DISTURB TENANT’S POSSESSION, USE OR
OCCUPANCY OF THE LEASED PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THIS LEASE
AGREEMENT AND WILL OTHERWISE HONOR THIS LEASE AGREEMENT UNCHANGED.  IF TENANT
FAILS OR REFUSES TO EXECUTE, ACKNOWLEDGE, AND DELIVER ANY SUCH DOCUMENT WITHIN
TWENTY (20) DAYS AFTER WRITTEN DEMAND, AND LANDLORD IS NOT IN BREACH OF THIS
LEASE AGREEMENT, LANDLORD MAY EXECUTE, ACKNOWLEDGE AND DELIVER ANY SUCH DOCUMENT
ON BEHALF OF TENANT AS TENANT’S ATTORNEY-IN-FACT.  TENANT HEREBY CONSTITUTES AND
IRREVOCABLY APPOINTS LANDLORD, ITS SUCCESSORS AND ASSIGNS, AS TENANT’S
ATTORNEY-IN-FACT TO EXECUTE, ACKNOWLEDGE, AND DELIVER ON BEHALF OF TENANT ANY
DOCUMENTS DESCRIBED IN THIS SECTION.  THIS POWER OF ATTORNEY IS COUPLED WITH AN
INTEREST AND IS IRREVOCABLE.

 

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15.04      ESTOPPEL CERTIFICATE.

 

(A)           AT THE REQUEST OF TENANT OR LANDLORD, THE OTHER PARTY SHALL
EXECUTE, ACKNOWLEDGE AND DELIVER AN ESTOPPEL CERTIFICATE (“ESTOPPEL
CERTIFICATE”), IN RECORDABLE FORM, IN FAVOR OF THE REQUESTING PARTY AND, IF
APPLICABLE, SUCH REQUESTING PARTY’S LENDER, MORTGAGEE OR PURCHASER, AS THE CASE
MAY BE, PERTAINING TO MATTERS REASONABLY AND CUSTOMARILY REQUESTED IN SUCH
CERTIFICATES, INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING:

 

(I)            THAT THIS LEASE AGREEMENT IS UNMODIFIED AND IN FULL FORCE AND
EFFECT, OR IF THERE HAVE BEEN MODIFICATIONS THAT THE SAME IS IN FULL FORCE AND
EFFECT AS MODIFIED AND STATING THE MODIFICATIONS;

 

(II)           THE DATE TO WHICH RENT AND OTHER CHARGES HAVE BEEN PAID;

 

(III)          THAT THE REQUESTING PARTY IS NOT IN DEFAULT NOR IS THERE ANY FACT
OR CONDITION WHICH, WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD CONSTITUTE A
DEFAULT, IF THAT BE THE CASE, OR SPECIFYING ANY EXISTING DEFAULT;

 

(IV)          IF APPLICABLE, THAT THE TENANT HAS ACCEPTED AND OCCUPIES SUCH
LEASED PROPERTY;

 

(V)           IF APPLICABLE, THAT TENANT HAS NO DEFENSES, SET-OFF’S, DEDUCTIONS,
CREDITS, OR COUNTERCLAIMS AGAINST LANDLORD, IF THAT BE THE CASE, OR SPECIFYING
SUCH THAT EXIST;

 

(VI)          IF APPLICABLE, THAT THE LANDLORD HAS NO OUTSTANDING CONSTRUCTION
OR REPAIR OBLIGATIONS; AND

 

(VII)         SUCH OTHER INFORMATION AS MAY BE REASONABLY REQUESTED.

 

Neither party will be required to execute an Estoppel Certificate that
materially amends or materially modifies the terms of this Lease Agreement.

 

(B)           ANY PURCHASER, LENDER OR MORTGAGEE MAY RELY ON THE ESTOPPEL
CERTIFICATE.

 

(C)           IF TENANT FAILS TO DELIVER AN ESTOPPEL CERTIFICATE TO LANDLORD
WITHIN TEN (10) DAYS AFTER THE REQUEST OF THE LANDLORD, THEN TENANT SHALL BE
DEEMED TO HAVE CERTIFIED THAT THE FACTS SET FORTH IN THE CERTIFICATE ARE TRUE
AND CORRECT.  FURTHER, IF TENANT FAILS OR REFUSES TO EXECUTE, ACKNOWLEDGE, AND
DELIVER ANY SUCH DOCUMENT WITHIN TWENTY (20) DAYS AFTER WRITTEN DEMAND, AND
LANDLORD IS NOT IN BREACH OF THIS LEASE AGREEMENT, LANDLORD MAY EXECUTE,
ACKNOWLEDGE AND DELIVER ANY SUCH DOCUMENT ON BEHALF OF TENANT AS TENANT’S
ATTORNEY-IN-FACT, TENANT HEREBY CONSTITUTES AND IRREVOCABLY APPOINTS LANDLORD,
LANDLORD’S DESIGNEE AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AS
TENANT’S ATTORNEY-IN-FACT TO EXECUTE, ACKNOWLEDGE, AND DELIVER ON BEHALF OF
TENANT ANY DOCUMENTS DESCRIBED IN THIS SECTION.  THIS POWER OF ATTORNEY IS
COUPLED WITH AN INTEREST AND IS IRREVOCABLE.

 

(D)           IF LANDLORD FAILS TO DELIVER THE ESTOPPEL CERTIFICATES TO TENANT
WITHIN TEN (10) DAYS AFTER THE REQUEST OF THE TENANT, THEN LANDLORD SHALL BE
DEEMED TO HAVE CERTIFIED THAT THE FACTS SET FORTH IN THE CERTIFICATE ARE TRUE
AND CORRECT.  FURTHER, IF LANDLORD FAILS OR REFUSES TO EXECUTE,

 

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ACKNOWLEDGE, AND DELIVER ANY SUCH DOCUMENT WITHIN TWENTY (20) DAYS AFTER WRITTEN
DEMAND, AND TENANT IS NOT IN BREACH OF THIS LEASE AGREEMENT, TENANT MAY EXECUTE,
ACKNOWLEDGE AND DELIVER ANY SUCH DOCUMENT ON BEHALF OF LANDLORD AS LANDLORD’S
ATTORNEY-IN-FACT.  LANDLORD HEREBY CONSTITUTES AND IRREVOCABLY APPOINTS TENANT
AS LANDLORD’S ATTORNEY-IN-FACT SOLELY FOR THE LIMITED AND EXCLUSIVE PURPOSE TO
EXECUTE, ACKNOWLEDGE, AND DELIVER ON BEHALF OF LANDLORD THE ESTOPPEL CERTIFICATE
DESCRIBED IN THIS SECTION 15.04.  THIS POWER OF ATTORNEY IS COUPLED WITH AN
INTEREST AND IS IRREVOCABLE.

 

ARTICLE XVI

MISCELLANEOUS

 

16.01      NOTICES.  LANDLORD AND TENANT HEREBY AGREE THAT ALL NOTICES, DEMANDS,
REQUESTS, AND CONSENTS (HEREINAFTER “NOTICES”) REQUIRED TO BE GIVEN PURSUANT TO
THE TERMS OF THIS LEASE SHALL BE IN WRITING AND SHALL BE ADDRESSED AS FOLLOWS:

 

If to Tenant:

 

Cornell Corrections of California, Inc.

 

 

c/o Cornell Companies, Inc.

 

 

1700 W. Loop South, Suite 1500

 

 

Houston, Texas 77027

 

 

Fax: (713)622-2853

 

 

Attention: General Counsel

 

 

 

If to Landlord:

 

Inland PPD Hudson Associates, L.L.C.

 

 

c/o Inland Public Properties Development, Inc.

 

 

211 E. 7th Street, Suite 1120

 

 

Austin, TX 78701 Fax: (512)236-9701

 

 

Attn: Charles R. Jones

 

 

 

With a copy to:

 

Inland Public Properties Development, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60181

 

 

Fax:(630)218-4900

 

 

Attn: General Counsel

 

and shall be served by (i) personal delivery, (ii) certified mail, return
receipt requested, postage prepaid, (iii) nationally recognized overnight
courier, or (iv) by facsimile.  All Notices shall be deemed to be given upon the
earlier of actual receipt or three (3) days after mailing, one (1) business day
after deposit with the overnight courier or by a facsimile receipt.  Any Notices
meeting the requirements of this Section shall be effective, regardless of
whether or not actually received.  Landlord or Tenant may change its notice
address at any time by giving the other party notice of such charge.

 

16.02      ADVERTISEMENT OF LEASED PROPERTY.  IN THE EVENT THE PARTIES HERETO
HAVE NOT EXECUTED A RENEWAL LEASE OF THE LEASED PROPERTY WITHIN TWELVE (12)
MONTHS PRIOR TO THE EXPIRATION OF THE TERM, AND TENANT HAS NOT GIVEN NOTICE OF
EXTENSION OF THE TERM UNDER SECTION 2.03(A), THEN LANDLORD OR ITS AGENT SHALL
HAVE THE RIGHT TO ENTER SUCH LEASED PROPERTY AT ALL

 

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REASONABLE TIMES AND IN ACCORDANCE WITH SECTION 16.03 FOR THE PURPOSE OF
EXHIBITING SUCH LEASED PROPERTY TO OTHERS.

 

16.03      LANDLORD’S ACCESS.  LANDLORD SHALL HAVE THE RIGHT TO ENTER UPON THE
LEASED PROPERTY, UPON REASONABLE PRIOR NOTICE TO TENANT AND AT REASONABLE TIMES
SO AS NOT TO INTERRUPT TENANT’S OPERATION OF THE LEASED PROPERTY, FOR PURPOSES
OF INSPECTING THE SAME AND ASSURING TENANT’S COMPLIANCE WITH THIS LEASE
AGREEMENT; PROVIDED, ANY SUCH ENTRY BY LANDLORD SHALL BE SUBJECT TO ALL
REASONABLE RULES, GUIDELINES AND PROCEDURES PRESCRIBED BY TENANT OR OTHERWISE
REQUIRED BY LAW OR ANY APPLICABLE GOVERNMENT AUTHORITY.  SO LONG AS NO EVENT OF
DEFAULT HAS OCCURRED, ALL SUCH INSPECTIONS SHALL BE AT LANDLORD’S SOLE COST AND
EXPENSE.  SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED, IF, PURSUANT TO THIS
SECTION 16.03, LANDLORD’S INSPECTIONS ARE COMPLETED THROUGH AN AGENT OR
CONTRACTOR OF LANDLORD, LANDLORD SHALL REQUIRE SUCH AGENT OR CONTRACTOR TO
OBTAIN AND MAINTAIN GENERAL LIABILITY INSURANCE IN AN AMOUNT NOT LESS THAN
$1,000,000 PER OCCURRENCE, NAMING LANDLORD AND TENANT AS ADDITIONAL INSUREDS AT
ALL TIMES WHILE SUCH INSPECTIONS ARE CONDUCTED.  LANDLORD SHALL DELIVER EVIDENCE
OF SUCH INSURANCE TO TENANT PRIOR TO COMMENCING SUCH INSPECTIONS.  SO LONG AS NO
EVENT OF DEFAULT IS CONTINUING UNDER THIS LEASE AGREEMENT AND EXCEPT IN THE
EVENT OF AN EMERGENCY, LANDLORD SHALL NOT BE ALLOWED ENTRY TO THE LEASED
PROPERTY UNLESS ACCOMPANIED BY SUCH OF TENANT’S PERSONNEL AS TENANT SHALL
REQUIRE PROVIDED TENANT MAKES SUCH PERSONNEL AVAILABLE TO LANDLORD AT REASONABLE
TIMES.

 

16.04      ENTIRE AGREEMENT.  THIS LEASE AGREEMENT, THE DEVELOPMENT AGREEMENT
AND THE PURCHASE AGREEMENT CONSTITUTE THE ENTIRE AGREEMENT BETWEEN LANDLORD AND
TENANT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF.

 

16.05      SEVERABILITY.  IF ANY TERM OR PROVISION OF THIS LEASE AGREEMENT IS
HELD TO BE INVALID OR UNENFORCEABLE, SUCH HOLDING SHALL NOT AFFECT THE REMAINDER
OF THIS LEASE AGREEMENT AND THE SAME SHALL REMAIN IN FULL FORCE AND EFFECT,
UNLESS SUCH HOLDING SUBSTANTIALLY DEPRIVES TENANT OF THE USE OF THE LEASED
PROPERTY OR LANDLORD OF THE RENTS THEREFOR, IN WHICH EVENT THIS LEASE AGREEMENT
SHALL FORTHWITH TERMINATE AS IF BY EXPIRATION OF THE TERM.

 

16.06      CAPTIONS AND HEADINGS.  THE CAPTIONS AND HEADINGS ARE INSERTED ONLY
AS A MATTER OF CONVENIENCE AND FOR REFERENCE AND IN NO WAY DEFINE, LIMIT OR
DESCRIBE THE SCOPE OF THIS LEASE AGREEMENT OR THE INTENT OF ANY PROVISION
HEREOF.

 

16.07      GOVERNING LAW.  THIS LEASE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF COLORADO.

 

16.08      WAIVER.  NO WAIVER BY EITHER PARTY OF ANY CONDITION OR COVENANT
HEREIN CONTAINED, OR OF ANY BREACH OF ANY SUCH CONDITION OR COVENANT, SHALL BE
HELD OR TAKEN TO BE A WAIVER OF ANY SUBSEQUENT BREACH OF SUCH COVENANT OR
CONDITION, OR TO PERMIT OR EXCUSE ITS CONTINUANCE OR ANY FUTURE BREACH THEREOF
OR OF ANY CONDITION OR COVENANT, NOR SHALL THE ACCEPTANCE OF RENT BY LANDLORD AT
ANY TIME WHEN TENANT IS IN DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY
CONDITION OR COVENANT HEREIN BE CONSTRUED AS A WAIVER OF SUCH DEFAULT, OR OF
LANDLORD’S RIGHT TO TERMINATE THIS LEASE AGREEMENT OR EXERCISE ANY OTHER REMEDY
GRANTED HEREIN ON ACCOUNT OF SUCH EXISTING DEFAULT.

 

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16.09      BINDING EFFECT.  THIS LEASE AGREEMENT WILL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE HEIRS, SUCCESSORS, PERSONAL REPRESENTATIVES, AND PERMITTED
ASSIGNS OF LANDLORD AND TENANT.

 

16.10      AUTHORITY.  THE PERSONS EXECUTING THIS LEASE AGREEMENT ON BEHALF OF
LANDLORD AND TENANT EACH WARRANT TO THE OTHER THAT (A) EACH HAS THE POWER AND
AUTHORITY TO ENTER INTO THIS LEASE AGREEMENT; (B) EACH IS QUALIFIED TO DO
BUSINESS IN THE STATE IN WHICH THE LEASED PROPERTY IS LOCATED; AND (C) EACH OF
SUCH PERSONS IS AUTHORIZED TO EXECUTE THIS LEASE AGREEMENT ON BEHALF OF LANDLORD
OR TENANT, AS APPLICABLE.  LANDLORD AND TENANT SHALL EACH, UPON REQUEST, PROVIDE
EVIDENCE SATISFACTORY TO THE OTHER CONFIRMING THESE REPRESENTATIONS.

 

16.11      TRANSFER OF PERMITS, ETC.  UPON THE EXPIRATION OR EARLIER TERMINATION
OF THE TERM OF THIS LEASE AGREEMENT, TENANT SHALL, AT THE OPTION OF LANDLORD,
USE REASONABLE EFFORTS TO TRANSFER TO AND RELINQUISH TO LANDLORD OR LANDLORD’S
DESIGNEE AND COOPERATE WITH LANDLORD OR LANDLORD’S DESIGNEE IN CONNECTION WITH
THE PROCESSING BY LANDLORD OR LANDLORD’S DESIGNEE OF ALL LICENSES, OPERATING
PERMITS, AND OTHER GOVERNMENTAL AUTHORIZATION AND ALL CONTRACTS, INCLUDING
WITHOUT LIMITATION, THE CORRECTIONAL OR DETENTION FACILITY LICENSE, ALL SERVICE
AGREEMENTS AND SUBLEASE AGREEMENTS AND ANY OTHER CONTRACTS WITH GOVERNMENTAL OR
QUASI-GOVERNMENTAL ENTITIES, IN EACH CASE WHICH MAY BE TRANSFERRED AND WHICH MAY
BE NECESSARY OR APPROPRIATE FOR THE OPERATION BY LANDLORD OR LANDLORD’S DESIGNEE
OF THE SUBJECT LEASED PROPERTY FOR THE PURPOSES OF OPERATING A CORRECTIONAL OR
DETENTION FACILITY; PROVIDED THAT THE COSTS AND EXPENSES OF ANY SUCH TRANSFER OR
THE PROCESSING OF ANY SUCH APPLICATION SHALL BE PAID BY LANDLORD OR LANDLORD’S
DESIGNEE.  ANY SUCH PERMITS, LICENSES, CERTIFICATES AND CONTRACTS WHICH ARE HELD
IN LANDLORD’S NAME NOW OR AT THE TERMINATION OF THIS LEASE AGREEMENT SHALL
REMAIN THE PROPERTY OF LANDLORD OR LANDLORD’S DESIGNEE.  TO THE EXTENT PERMITTED
BY LAW, TENANT HEREBY IRREVOCABLY APPOINTS LANDLORD, ITS SUCCESSORS AND ASSIGNS
AND ANY NOMINEE OR NOMINEES SPECIFICALLY DESIGNATED BY LANDLORD OR ANY SUCCESSOR
OR ASSIGN AS TENANT’S ATTORNEY IN FACT TO EXECUTE, ACKNOWLEDGE, DELIVER AND FILE
ALL DOCUMENTS APPROPRIATE TO SUCH TRANSFER OR PROCESSING OF ANY SUCH APPLICATION
ON BEHALF OF TENANT. THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST AND IS
IRREVOCABLE.

 

16.12      MODIFICATION.  THIS LEASE AGREEMENT MAY ONLY BE MODIFIED BY A WRITING
SIGNED BY BOTH LANDLORD AND TENANT.

 

16.13      INCORPORATION BY REFERENCE.  ALL SCHEDULES AND EXHIBITS REFERRED TO
IN THIS LEASE AGREEMENT ARE INCORPORATED INTO THIS LEASE AGREEMENT.

 

16.14      [INTENTIONALLY OMITTED.]

 

16.15      LACHES.  NO DELAY OR OMISSION BY EITHER PARTY HERETO TO EXERCISE ANY
RIGHT OR POWER ACCRUING UPON ANY NONCOMPLIANCE OR DEFAULT BY THE OTHER PARTY
WITH RESPECT TO ANY OF THE TERMS HEREOF SHALL IMPAIR ANY SUCH RIGHT OR POWER OR
BE CONSTRUED TO BE A WAIVER THEREOF.

 

16.16      PERMITTED CONTESTS.  TENANT, ON ITS OWN OR ON LANDLORD’S BEHALF (OR
IN LANDLORD’S NAME), BUT AT TENANT’S EXPENSE, MAY CONTEST, BY APPROPRIATE LEGAL
PROCEEDINGS CONDUCTED IN GOOD FAITH AND WITH DUE DILIGENCE, THE AMOUNT OR
VALIDITY OR APPLICATION, IN WHOLE OR IN PART, OF ANY IMPOSITION OR ANY LEGAL
REQUIREMENT OR INSURANCE REQUIREMENT OR ANY LIEN, ATTACHMENT, LEVY, ENCUMBRANCE,
CHARGE OR CLAIM PROVIDED THAT, (A) IN THE CASE OF AN UNPAID

 

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IMPOSITION, LIEN, ATTACHMENT, LEVY, ENCUMBRANCE, CHARGE OR CLAIM, THE
COMMENCEMENT AND CONTINUATION OF SUCH PROCEEDINGS SHALL SUSPEND THE COLLECTION
THEREOF FROM LANDLORD AND FROM THE LEASED PROPERTY, (B) NEITHER THE LEASED
PROPERTY NOR ANY RENT THEREFROM NOR ANY PART THEREOF OR INTEREST THEREIN WOULD
BE IN ANY IMMEDIATE DANGER OF BEING SOLD, FORFEITED, ATTACHED OR LOST, (C) IN
THE CASE OF A LEGAL REQUIREMENT, LANDLORD WOULD NOT BE SUSCEPTIBLE TO POSSIBLE
CIVIL OR CRIMINAL LIABILITY FOR FAILURE TO COMPLY THEREWITH PENDING THE OUTCOME
OF SUCH PROCEEDINGS, (D) IN THE EVENT THAT ANY SUCH CONTEST SHALL INVOLVE A SUM
OF MONEY OR POTENTIAL LOSS IN EXCESS OF FIVE HUNDRED THOUSAND DOLLARS
($500,000), TENANT SHALL DELIVER TO LANDLORD AND ITS COUNSEL AN OPINION OF
TENANT’S COUNSEL TO THE EFFECT SET FORTH IN CLAUSES (A), (B) AND (C), TO THE
EXTENT APPLICABLE, (E) IN THE CASE OF A LEGAL REQUIREMENT AND/OR AN IMPOSITION,
LIEN, ENCUMBRANCE, OR CHARGE, TENANT SHALL GIVE SUCH REASONABLE SECURITY AS MAY
BE DEMANDED BY LANDLORD TO INSURE ULTIMATE PAYMENT OF THE SAME AND TO PREVENT
ANY SALE OR FORFEITURE OF THE AFFECTED LEASED PROPERTY OR THE RENT BY REASON OF
SUCH NONPAYMENT OR NONCOMPLIANCE; PROVIDED, HOWEVER, THE PROVISIONS OF THIS
SECTION SHALL NOT BE CONSTRUED TO PERMIT TENANT TO CONTEST THE PAYMENT OF RENT
(EXCEPT AS TO CONTESTS CONCERNING THE METHOD OF COMPUTATION OR THE BASIS OF LEVY
OF ANY IMPOSITION) OR ANY OTHER SUMS PAYABLE BY TENANT TO LANDLORD HEREUNDER,
(F) IN THE CASE OF AN INSURANCE REQUIREMENT, THE COVERAGE REQUIRED BY ARTICLE V
SHALL BE MAINTAINED, (G) NO CONTEST MAY EXTEND BEYOND THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE AGREEMENT AND (H) IF SUCH CONTEST BE FINALLY RESOLVED
AGAINST TENANT, TENANT, AS ADDITIONAL RENT DUE HEREUNDER, SHALL PROMPTLY PAY THE
AMOUNT REQUIRED TO BE PAID, TOGETHER WITH ALL INTEREST AND PENALTIES ACCRUED
THEREON, OR COMPLY WITH THE APPLICABLE LEGAL REQUIREMENT OR INSURANCE
REQUIREMENT.  LANDLORD, AT TENANT’S EXPENSE, SHALL EXECUTE AND DELIVER TO TENANT
SUCH AUTHORIZATIONS AND OTHER DOCUMENTS AS MAY BE REASONABLY REQUIRED IN ANY
SUCH CONTEST, AND, IF REASONABLY REQUESTED BY TENANT OR IF LANDLORD SO DESIRES,
LANDLORD SHALL JOIN AS A PARTY THEREIN.  TENANT SHALL INDEMNIFY, DEFEND, SAVE
AND HOLD LANDLORD HARMLESS OF, FROM AND AGAINST ANY AND ALL LIABILITY, COST OR
EXPENSE OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, ATTORNEYS’ FEES AND
EXPENSES, THAT MAY BE IMPOSED UPON LANDLORD IN CONNECTION WITH ANY SUCH CONTEST
AND ANY LOSS RESULTING THEREFROM.

 

16.17      CONSTRUCTION OF LEASE.  THIS LEASE AGREEMENT HAS BEEN REVIEWED BY
LANDLORD AND TENANT AND THEIR RESPECTIVE PROFESSIONAL ADVISORS.  LANDLORD,
TENANT, AND THEIR ADVISORS BELIEVE THAT THIS LEASE AGREEMENT IS THE PRODUCT OF
ALL THEIR EFFORTS, THAT THEY EXPRESS THEIR AGREEMENT, AND AGREE THAT THEY SHALL
NOT BE INTERPRETED IN FAVOR OF EITHER LANDLORD OR TENANT OR AGAINST EITHER
LANDLORD OR TENANT MERELY BECAUSE OF ANY PARTY’S EFFORTS IN PREPARING SUCH
DOCUMENTS.

 

16.18      COUNTERPARTS.  THIS LEASE AGREEMENT MAY BE EXECUTED IN DUPLICATE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH, WHEN
TAKEN TOGETHER, SHALL BE DEEMED ONE AND THE SAME INSTRUMENT.

 

16.19      RELATIONSHIP OF LANDLORD AND TENANT.  THE RELATIONSHIP OF LANDLORD
AND TENANT IS THE RELATIONSHIP OF LANDLORD AND LESSEE.  LANDLORD AND TENANT ARE
NOT PARTNERS, JOINT VENTURERS, OR ASSOCIATES.

 

16.20      SUBMISSION TO JURISDICTION.

 

(A)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS LEASE
AGREEMENT AND THE OTHER ANCILLARY DOCUMENTS MAY BE BROUGHT IN

 

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THE COURTS SITUATED IN HARRIS COUNTY, TEXAS OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS LEASE
AGREEMENT, EACH PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, UNCONDITIONALLY, THE NON EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING.  EACH PARTY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN
SECTION 16.01, SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING. 
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION.

 

(B)           EACH OF THE LOAN PARTIES HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS LEASE
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

 

16.21      APPRAISAL.  IF IT BECOMES NECESSARY TO DETERMINE THE FAIR MARKET
VALUE OF THE LEASED PROPERTY IN CONNECTION WITH THE EXERCISE OF AN OPTION TO
PURCHASE WITH RESPECT THERETO, THE LANDLORD AND TENANT SHALL ATTEMPT TO AGREE
UPON A SINGLE APPRAISER TO MAKE SUCH DETERMINATION WITHIN THIRTY (30) DAYS AFTER
A DEMAND FOR AN APPRAISAL HAS BEEN MADE BY EITHER THE LANDLORD OR TENANT IN
ACCORDANCE WITH THIS SECTION 16.21.  IF THE LANDLORD AND TENANT ARE UNABLE TO
AGREE UPON A SINGLE APPRAISER WITHIN THIRTY (30) DAYS THEREAFTER, THEN THE PARTY
GIVING THE NOTICE OF DEMAND FOR APPRAISAL SHALL GIVE NOTICE TO THE OTHER OF A
PERSON SELECTED TO ACT AS APPRAISER ON ITS BEHALF.  WITHIN TEN (10) DAYS AFTER
SUCH NOTICE, LANDLORD (OR TENANT, AS THE CASE MAY BE) SHALL BY NOTICE TO THE
TENANT (OR LANDLORD, AS THE CASE MAY BE) APPOINT A SECOND PERSON AS APPRAISER ON
ITS BEHALF.  THE APPRAISERS THUS APPOINTED, EACH OF WHOM MUST BE A MEMBER OF THE
AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS (OR ANY SUCCESSOR ORGANIZATION
THERETO) AND HAVE HAD PRIOR EXPERIENCE IN APPRAISING CORRECTIONAL AND DETENTION
FACILITIES (OR REASONABLY SIMILAR FACILITIES), SHALL, WITHIN FORTY FIVE (45)
DAYS AFTER THE DATE OF THE NOTICE APPOINTING THE FIRST APPRAISER, PROCEED TO
APPRAISE THE LEASED PROPERTY TO DETERMINE THE FAIR MARKET VALUE THEREOF AS OF
THE RELEVANT DATE (GIVING EFFECT TO THE IMPACT, IF ANY, OF INFLATION FROM THE
DATE OF THEIR DECISION TO THE RELEVANT DATE); PROVIDED, HOWEVER, THAT IF ONLY
ONE APPRAISER HAS BEEN SO APPOINTED, OR IF TWO APPRAISERS HAVE BEEN SO APPOINTED
BUT ONLY ONE SUCH APPRAISER HAS MADE SUCH DETERMINATION WITHIN THE LATER TO
OCCUR OF 10 BUSINESS DAYS FOLLOWING DELIVERY OF SUCH APPRAISAL TO THE OTHER
PARTY OR FIFTY (50) DAYS AFTER THE MAKING OF TENANT’S OR LANDLORD’S REQUEST,
THEN THE DETERMINATION OF SUCH APPRAISER SHALL BE FINAL AND BINDING UPON THE
PARTIES.  IF TWO APPRAISERS HAVE BEEN APPOINTED AND HAVE MADE THEIR
DETERMINATIONS WITHIN THE RESPECTIVE REQUISITE PERIODS SET FORTH ABOVE AND IF
THE DIFFERENCE BETWEEN THE AMOUNTS SO DETERMINED DOES NOT EXCEED TEN PERCENT
(10%) OF THE LESSER OF SUCH AMOUNTS, THEN THE FAIR MARKET VALUE SHALL BE AN
AMOUNT EQUAL

 

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TO FIFTY PERCENT (50%) OF THE SUM OF THE AMOUNTS SO DETERMINED.  IF THE
DIFFERENCE BETWEEN THE AMOUNTS SO DETERMINED EXCEEDS TEN PERCENT (10%) OF THE
LESSER OF SUCH AMOUNTS, THEN SUCH TWO APPRAISERS SHALL HAVE TWENTY (20) DAYS TO
APPOINT A THIRD APPRAISER.  IF NO SUCH APPRAISER HAS BEEN APPOINTED WITHIN SUCH
TWENTY (20) DAYS OR WITHIN NINETY (90) DAYS OF THE ORIGINAL REQUEST FOR A
DETERMINATION OF FAIR MARKET VALUE, WHICHEVER IS EARLIER, EITHER LANDLORD OR
TENANT MAY APPLY TO ANY COURT HAVING JURISDICTION TO HAVE SUCH APPOINTMENT MADE
BY SUCH COURT.  ANY APPRAISER APPOINTED BY THE ORIGINAL APPRAISERS OR BY SUCH
COURT SHALL BE INSTRUCTED TO DETERMINE THE FAIR MARKET VALUE WITHIN FORTY FIVE
(45) DAYS AFTER APPOINTMENT OF SUCH APPRAISER.  THE DETERMINATION OF THE
APPRAISER WHICH DIFFERS MOST IN TERMS OF DOLLAR AMOUNT FROM THE DETERMINATIONS
OF THE OTHER TWO APPRAISERS SHALL BE EXCLUDED, AND THE AVERAGE OF THE SUM OF THE
REMAINING TWO DETERMINATIONS SHALL BE FINAL AND BINDING UPON LANDLORD AND TENANT
AS THE FAIR MARKET VALUE OF THE LEASED PROPERTY.  THIS PROVISION FOR DETERMINING
BY APPRAISAL SHALL BE SPECIFICALLY ENFORCEABLE TO THE EXTENT SUCH REMEDY IS
AVAILABLE UNDER APPLICABLE LAW, AND ANY DETERMINATION HEREUNDER SHALL BE FINAL
AND BINDING UPON THE PARTIES AND JUDGMENT MAY BE ENTERED UPON SUCH DETERMINATION
IN ANY COURT HAVING JURISDICTION OF THE MATTER.  LANDLORD AND TENANT SHALL EACH
PAY THE FEES AND EXPENSES OF THE APPRAISER APPOINTED BY IT AND EACH SHALL PAY
ONE HALF (½) OF THE FEES AND EXPENSES OF THE THIRD APPRAISER AND ONE HALF (½) OF
ALL OTHER COSTS AND EXPENSES INCURRED IN CONNECTION WITH EACH APPRAISAL.

 

16.22      BROKERS.  LANDLORD AND TENANT EACH REPRESENT AND WARRANT ONE TO THE
OTHER THAT NEITHER OF THEM HAS EMPLOYED OR DEALT WITH ANY BROKER, AGENT OR
FINDER IN CARRYING ON THE NEGOTIATIONS RELATING TO THIS LEASE AGREEMENT.  TENANT
SHALL INDEMNIFY AND HOLD LANDLORD HARMLESS FROM AND AGAINST ANY CLAIM OR CLAIMS
FOR BROKERAGE OR OTHER COMMISSIONS ASSERTED BY ANY BROKER, AGENT OR FINDER
ENGAGED BY TENANT OR WITH WHOM TENANT HAS DEALT IN CONNECTION WITH THIS LEASE
AGREEMENT.  LANDLORD SHALL INDEMNIFY AND HOLD TENANT HARMLESS FROM AND AGAINST
ANY CLAIM OR CLAIMS FOR BROKERAGE OR OTHER COMMISSIONS ASSERTED BY ANY BROKER,
AGENT OR FINDER ENGAGED BY LANDLORD OR WITH WHOM LANDLORD HAS DEALT IN
CONNECTION WITH THIS LEASE AGREEMENT.

 

16.23      WARRANTIES.  NOTWITHSTANDING THE ASSIGNMENT TO LANDLORD OF THE
CONSTRUCTION AND MANUFACTURERS’ WARRANTIES WITH RESPECT TO THE LEASED PROPERTY
OR ANY CAPITAL ADDITION IN CONNECTION WITH THE ACQUISITION THEREOF FROM TENANT,
LANDLORD SHALL COOPERATE WITH TENANT IN TENANT’S ENFORCEMENT, AT TENANT’S SOLE
COST AND EXPENSE, OF ANY EXPRESS OR IMPLIED WARRANTIES OR GUARANTIES OF
WORKMANSHIP OR MATERIALS GIVEN BY CONTRACTORS, SUBCONTRACTORS, ARCHITECTS,
DRAFTSMEN, MATERIALMEN OR MANUFACTURERS THAT GUARANTEE OR WARRANT AGAINST
DEFECTIVE DESIGN, WORKMANSHIP OR MATERIALS IN CONNECTION WITH THE CONSTRUCTION
OF, OR ANY ALTERATION OR IMPROVEMENT TO, THE LEASED PROPERTY.  LANDLORD WILL
EXECUTE SUCH DOCUMENTS AS TENANT MAY REASONABLY REQUIRE IN ORDER TO EVIDENCE THE
AUTHORITY OF TENANT TO ENFORCE SUCH GUARANTIES AND WARRANTIES IN LANDLORD’S NAME
OR ON LANDLORD’S BEHALF.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.

 

 

 

TENANT:

 

 

 

CORNELL CORRECTIONS OF CALIFORNIA, INC., a California corporation

 

 

 

 

 

By:

/s/ William Turcotte

 

 

Name: William Turcotte

 

 

Title: Vice President

 

 

 

 

 

LANDLORD:

 

 

 

INLAND PPD HUDSON ASSOCIATES, L.L.C., a Delaware limited liability company

 

 

 

By: Inland Public Properties Development, Inc., a Delaware corporation, its sole
member

 

 

 

 

 

By:

/s/ Charles R. Jones

 

 

Charles R. Jones, President and Chief Executive Officer

 

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