Document:

First Amendment to Lease

 

EXHIBIT 10.1

FIRST AMENDMENT

TO LEASE AGREEMENT

(Lawton Oklahoma Correction and Detention Facility)

     THIS FIRST AMENDMENT TO LEASE AGREEMENT (this “First Amendment”) is made as of the
27th day of May, 2005, between CPT OPERATING PARTNERSHIP L.P., a Delaware limited
partnership (“Landlord”) and THE GEO GROUP, INC., a Florida corporation, f/k/a Wackenhut
Corrections Corporation (“Tenant”).

PRELIMINARY STATEMENTS

     A. Landlord and Tenant entered into that certain Master Agreement to Lease dated April 28,
1998 (the “Master Lease”), which sets forth certain agreements of the parties with respect to the
lease of various properties, including the property that is the subject of the Oklahoma Facility
Lease (as defined below).

     B. Pursuant to the Master Lease, Landlord and Tenant entered into that certain Lease Agreement
dated January 15, 1999 (the “Oklahoma Facility Lease”) whereby Improvements (as defined in the
Master Lease) containing 1,500 inmate beds and commonly known as the Lawton, Oklahoma Correction
and Detention Facility and located on the land situated in Comanche County, Oklahoma, as more
particularly described on Exhibit A attached hereto, together with the Fixtures and
Personal Property (as such terms are defined in the Master Lease) described in the Oklahoma
Facility Lease (the “Existing Leased Property”), were leased by Landlord to Tenant for an initial
term of ten (10) years.

     C. Subsequent to entering into the Oklahoma Facility Lease, the Tenant exercised its right to
make a Capital Addition (as defined in the Master Lease) to the Existing Leased Property by
constructing, with Tenant’s own funds, an annexed building to the existing Improvements to
accommodate an additional 300 inmate beds together with certain Fixtures and Personal Property (as
such terms are defined in the Master Lease) located therein or thereon. The annexed building
together with the Fixtures therein or thereon are referred to collectively as the “Completed
Expansion.” A schedule of the Fixtures included as part of the Completed Expansion is set forth in
Exhibit B and a schedule of the Personal Property is set forth on Exhibit C, both
attached hereto and made a part hereof. The Existing Leased Property and the Completed Expansion
may be referred to herein collectively as the “Leased Property.”

     D. Landlord and Tenant desire to enter into this First Amendment for the purpose of, among
other things, amending the Oklahoma Facility Lease to (i) provide for Landlord to purchase and
lease back to Tenant the Completed Expansion; (ii) provide for Landlord to advance up to a maximum
amount of $23,000,000.00 for the construction of a Capital Addition (as defined in Section 8.01 of
the Master Lease) to the Leased Property to accommodate an additional 604 inmate beds and certain
other Tenant Improvements to the real property which are necessary to accommodate the increased
capacity of the Leased Property (collectively, the “New Expansion”) and to contain certain other
Fixtures and Personal Property agreed to by Landlord and Tenant, all as contemplated in Section
8.09(b) of the Master Lease; and (iii) provide for modifications to the Base Rent, Additional Rent
and Fixed Term and for other modifications to the Oklahoma Facility Lease as more particularly set
forth hereinbelow.

 

 

TERMS

     NOW, THEREFORE, for Ten Dollars ($10.00) and for the covenants and conditions of this
Agreement, the receipt and sufficiency of which are hereby conclusively acknowledged, Landlord and
Tenant agree as follows:

     1. Recitals. The above recitals are true and correct and are agreed to by Landlord
and Tenant as if such recitals were fully set forth herein.

     2. Undefined Terms. All undefined capitalized terms used herein shall have the same
meanings as defined in the Master Lease or the Oklahoma Facility Lease, as appropriate.

     3. Purchase and Sale of Completed Expansion. Simultaneously with the execution and
delivery of this First Amendment by Landlord and Tenant (the “Effective Date”), Tenant shall
deliver to Landlord a bill of sale for the Completed Expansion along with an amended Memorandum of
Lease in recordable form and Landlord shall purchase the Completed Expansion for the sum of Three
Million Five Hundred Thousand and No/100 Dollars ($3,500,000.00) (the “Completed Expansion Purchase
Price”), less the actual out of pocket expenses (as approved by Landlord and Tenant in the closing
statement executed of even date herewith) of Landlord and Landlord’s lender incurred in connection
with such purchase and this First Amendment including, without limitation, attorneys’ fees incurred
by Landlord to purchase the Completed Expansion and amend the Oklahoma Facility Lease and the
Memorandum of Lease, perform title examinations, recording and filing fees, mortgage taxes and
mortgage certificate fees incurred to amend Landlord’s mortgages, deeds of trust and credit lines
affecting the Leased Property, title insurance costs and premiums to amend Landlord’s and
Landlord’s lender’s respective title insurance policies to increase the coverage amount to include
the Completed Expansion Purchase Price, Landlord’s and lender’s appraisers’ fees, consultants and
other professional fees, deed stamps or other transfer taxes to the extent Oklahoma law requires
such fees to be paid by the purchaser of property and any other customary costs and expenses
incurred by Landlord or lender in connection with the purchase of the Completed Expansion and lease
thereof to Tenant. The above payment constitutes full consideration for the sale and purchase of
the Completed Expansion, and notwithstanding the provisions of Section 8.05 of the Master Lease,
from and after the Effective Date, the Completed Expansion shall be the sole and absolute property
of Landlord and Landlord will be entitled to all federal and state income tax benefits associated
with the Completed Expansion. Simultaneously with Tenant’s execution and delivery of this Lease
Amendment, Tenant shall execute and deliver any and all documents and certifications required by
First American Title Insurance Company to amend existing loan and owner’s title insurance policies
to include the Completed Expansion Purchase Price.

     4. Lease of Completed Expansion. From and after the Effective Date , Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord, in accordance with and subject to the
terms and provisions of the Oklahoma Facility Lease (as amended hereby) and the Master Lease, the
Completed Expansion. Tenant agrees that the Completed Expansion is hereby leased by Landlord to
Tenant in its presently existing “as is, where is” condition “with all faults” (regardless of
whether any defects are known or unknown and regardless of whether any defects are latent or
patent) and that Landlord does not and shall not make any warranty or

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representation, expressed or implied, with respect thereto, including any warranty of fitness
for a specific purpose.

     5. Amendment to Definitions of Fixtures, Personal Property and Leased Property; Revised
Exhibit D. From and after the Effective Date, the descriptions of the Fixtures and Personal
Property set forth in Exhibit B and Exhibit C, respectively, of the Oklahoma
Facility Lease shall be deemed amended and supplemented to include the additional Fixtures and
Personal Property listed on Exhibit B and Exhibit C, respectively, attached to this
First Amendment and the definition of Leased Property in the Oklahoma Facility Lease shall be
deemed amended and supplemented to include the Completed Expansion. From and after the date
hereof, Exhibit D of the Oklahoma Facility Lease is deleted in its entirety and Exhibit
D attached to this First Amendment shall be substituted in place thereof.

     6. Base Rent and Additional Rent Adjustment for Completed Expansion. In addition to
the Base Rent and Additional Rent due under the Oklahoma Facility Lease for the Existing Leased
Property, Tenant shall pay to Landlord during the Fixed Term annual Base Rent for the Completed
Expansion from and after the Effective Date at the rate of nine and one-half percent (9.5%) of the
Completed Expansion Purchase Price in advance on the first day of each month in accordance with the
Completed Expansion Base Rent Schedule attached hereto as
Exhibit E-1. Monthly Base Rent
for the Completed Expansion from the Effective Date through the last day of May, 2005 shall be
prorated and paid by Tenant concurrently herewith. Notwithstanding the provisions of Section
2.02(c) of the Master Lease to the contrary, the first Lease Year with respect to the Completed
Expansion shall commence on the first day of June, 2005 and run for the successive twelve month
period thereafter until the partial year adjustment described in Section 10 of this First Amendment
whereupon the Lease Years for the Existing Leased Property, the Completed Expansion and the New
Expansion shall all be adjusted to thereafter run coterminously. From and after the first day of
June, 2006, and on the first day of the first month of each Lease Year for the Completed Expansion
thereafter, Tenant shall pay to Landlord Additional Rent (as defined in the Master Lease) under
Section 2.02 of the Master Lease for the Completed Expansion based upon the Total Rent applicable
to the Completed Expansion and calculated pursuant to Section 2.02(b) of the Master Lease but with
respect to the Additional Rent due for the Completed Expansion calculated as if the second Lease
Year for the Completed Expansion were the fourth Lease Year of the Fixed Term (i.e. the formula for
Additional Rent set forth in Section 2.02(a) of the Master Lease shall not be applicable to the
Completed Expansion).

     7. Construction and Financing of Tenant Improvements.

          (a) Tenant shall design and construct the New Expansion in accordance with and subject to the
terms of Section 8.09 of the Master Lease, Exhibit F of this First Amendment and all
applicable Legal Requirements. Subject to, and in accordance with, the terms and provisions of
Exhibit F to this First Amendment, Landlord agrees to advance up to a maximum of
$23,000,000.00 (the “Maximum Contribution Amount”) toward the costs incurred by Tenant in
connection with the design, permitting and construction of the New Expansion, which Maximum
Contribution Amount shall include, without limitation, all Construction Period Interest (as
hereinafter defined) accrued on the amounts disbursed from time to time by Landlord. Tenant shall
be solely responsible for any and all costs in excess of the Maximum

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Contribution Amount which are incurred in connection with the design, permitting and
completion of construction of the New Expansion. Interest shall accrue on the amount from time to
time disbursed by Landlord under this First Amendment and Exhibit F as part of the Maximum
Contribution Amount at the rate of 8% per annum or 200 basis points over Landlord’s borrowing rate,
whichever is greater (“Construction Period Interest”) from the date disbursed until the New
Expansion Rent Commencement Date occurs. Any and all such Construction Period Interest shall be
included in the calculation of the total amount determined hereunder as the Maximum Contribution
Amount.

          (b) Landlord shall have no obligation to advance more than the Maximum Contribution Amount
towards any costs to design and construct the New Expansion and perform the Expansion Work (as
defined in Exhibit F). Landlord may, without any obligation to do so, advance more than
$23,000,000 towards the costs to design and construct the New Expansion and perform the Expansion
Work and, if Landlord so elects, the Maximum Contribution Amount shall be increased to equal the
total amount expended or advanced by Landlord in connection with the design and construction of the
New Expansion plus Construction Period Interest as provided in paragraph (a) above. Any and all
costs paid by Tenant in excess of the Maximum Contribution Amount in connection with the New
Expansion shall not entitle Tenant to any credits or offsets against Base Rent, Additional Rent or
any other amounts payable to Landlord under the Oklahoma Facility Lease or the Master Lease, except
as expressly set forth below with respect to Construction Period Interest. If Tenant has not
utilized the entire Maximum Contribution Amount to be made available by Landlord pursuant to
Exhibit F to this First Amendment, by the New Expansion Rent Commencement Date (as defined
in Section 9), then the Maximum Contribution Amount shall be decreased to equal the sum actually
advanced by Landlord as of the New Expansion Rent Commencement Date plus Construction Period
Interest financed by Landlord as provided in paragraph (a) above, and Landlord shall have no
further obligation to advance any unexpended balance of the Maximum Contribution Amount thereafter
unless otherwise expressly agreed to in writing by Landlord and Tenant.

     8. Lease of New Expansion. From and after the earlier date (the “New Expansion
Commencement Date”) to occur of (i) the Substantial Completion of the Expansion Work (as defined in
Exhibit F), or (ii) the New Expansion Rent Commencement Date (as defined in Section 9),
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, in accordance with and
subject to the terms and provisions of the Oklahoma Facility Lease (as amended hereby) and the
Master Lease, the New Expansion and the Fixtures therein or thereon. Tenant agrees that the New
Expansion is leased by Landlord to Tenant in its then constructed, then existing “as is, where is”
condition “with all faults” (regardless of whether any defects are known or unknown and regardless
of whether any defects are latent or patent) and that Landlord does not and shall not make any
warranty or representation, express or implied, with respect thereto, including any warranty of
fitness for a specific purpose. From and after the New Expansion Commencement Date, the term
Leased Property shall be deemed amended and supplemented to include the Leased Property and the New
Expansion. Notwithstanding the provisions of Section 8.05 of the Master Lease, the New Expansion
and the Fixtures therein or thereon shall at all times be the sole and absolute property of
Landlord.

     9. Base Rent and Additional Rent Adjustment for New Expansion. Effective as of the
earlier date to occur of: (i) sixty (60) days following the date the first inmate is accepted

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for housing in the New Expansion (“New Expansion Facility Opening Date”) or (ii) subject to
the provisions of Section 11 of this First Amendment, December 4, 2006 (the “Outside Date” and the
earlier of the dates in (i) and (ii) above are hereinafter referred to as the “New Expansion Rent
Commencement Date”), Tenant shall pay annual Base Rent for the New Expansion at the rate of nine
and one-half percent (9.5%) of the Maximum Contribution Amount as the Maximum Contribution Amount
may be decreased or, in Landlord’s sole discretion, increased pursuant to Section 7 of this First
Amendment. Base Rent for the New Expansion shall be payable in advance by Tenant in consecutive
monthly installments from the New Expansion Base Rent Commencement Date through and including the
expiration of the Fixed Term (as extended pursuant to Section 12 of this First Amendment).
Promptly following the New Expansion Rent Commencement Date, Landlord and Tenant agree to promptly
execute and deliver to Landlord a Confirmation Agreement in the form attached hereto as Exhibit
G which will (a) confirm the date of the Substantial Completion of the Expansion Work, the New
Expansion Commencement Date, the New Expansion Rent Commencement, and the new Expiration Date; (b)
confirm the final Maximum Contribution Amount after any adjustments thereto pursuant to Section 7
of this First Amendment; (c) contain an Exhibit E-2 to become a part of the Oklahoma
Facility Lease and establish the Base Rent Schedule due for the New Expansion; and (d) contain a
completed Exhibit B with a schedule of New Expansion Fixtures, and a completed Exhibit
C containing a Schedule of New Expansion Personal Property, if any, which exhibits shall become
a part of and supplement the respective Exhibit B and Exhibit C of the Oklahoma
Facility Lease. Notwithstanding the provisions of Section 2.02(b) of the Master Lease to the
contrary, the first Lease Year with respect to the New Expansion shall commence on the first day of
the first month following the New Expansion Rent Commencement Date (except if the New Expansion
Rent Commencement Date is the first day of the calendar month, in which case the first Lease Year
shall commence on the New Expansion Rent Commencement Date) and run for the successive twelve month
period thereafter and, in accordance with Section 10 of this First Amendment, the Lease Years with
respect to the Existing Leased Property and the Completed Expansion shall thereupon be adjusted to
run coterminously with the Lease Years for the New Expansion. From and after the first day of the
second Lease Year for the New Expansion and on the first day of each Lease Year for the New
Expansion thereafter, Tenant shall pay to Landlord Additional Rent under Section 2.02 of the Master
Lease for the New Expansion based upon the Total Rent applicable to the New Expansion and
calculated pursuant to Section 2.02(b) of the Master Lease as if the second Lease Year for the New
Expansion were the fourth Lease Year of the Fixed Term (i.e. the formula for Additional Rent set
forth in Section 2.02(a) of the Master Lease shall not be applicable to the New Expansion).

     10. Adjustment to Additional Rent and Lease Year. From and after the occurrence of
the New Expansion Rent Commencement Date, the Lease Years for the Completed Expansion and the
Existing Leased Property will be made coterminous with the Lease Years for the New Expansion. In
order to accomplish this, Additional Rent (as calculated in accordance with Section 2.02(b) of the
Master Lease) for the Completed Expansion and Existing Leased Property will be adjusted on a
one-time, partial year basis to reflect any increase in the Consumer Price Index as defined in
Section 2.02(d) of the Master Lease, from the date of the most recent Additional Rent determination
through the New Expansion Rent Commencement Date. For example, assuming the Completed Expansion is
sold to Landlord on May 15, 2005, Base Rent for the Completed Expansion will be subject to its
first Additional Rent adjustment on June 1, 2006. The Existing Leased Property will have received
its most recent Additional Rent

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adjustment on February 1, 2006. Assuming the New Expansion Rent Commencement Date begins
August 1, 2006, the Base Rent for the Completed Expansion and the Existing Leased Property will
have an additional, one-time, partial year Additional Rent adjustment on August 1, 2006 based on
increases to the Consumer Price Index from June 1, 2006 through August 1, 2006 and from February 1,
2006 through August 1, 2006, respectively. In the above example, August 1 would be the first day
of each Lease Year thereafter and would be the date on which Additional Rent (as calculated in
accordance with Section 2.02(b) of the Master Lease) for the entire aggregate Base Rent payable
under the Oklahoma Facility Lease would be determined beginning on August 1, 2007 through the Fixed
Term expiration on July 31, 2016.

     11. Extension of Outside Date. Notwithstanding anything to the contrary contained
herein or in Exhibit F, in the event the New Expansion Facility Opening Date has not
occurred by October 4, 2006, due solely to either Force Majeure or Landlord Delay (as such terms
are defined in Exhibit F), then Tenant may elect to extend the Outside Date one day for
each day of actual delay in the New Expansion Facility Opening Date caused solely by such Force
Majeure or Landlord Delay, provided that if the delay is due to Force Majeure, the Outside Date may
only be extended up to a maximum extended period of sixty (60) additional days. Tenant shall first
provide Landlord with written notice of the exercise by Tenant of its right to extend the Outside
Date pursuant to this Section 11, which such notice must be furnished to Landlord at least fifteen
(15) business days prior to the originally scheduled Outside Date. Any delay caused solely by a
Landlord Delay shall not be included in the above 60-day limitation on the Outside Date extension.

     12. Amendment of Term. Effective as of the New Expansion Rent Commencement Date, the
Fixed Term set forth in Section 1.02 of the Oklahoma Facility Lease shall be extended for an
additional period of one hundred twenty (120) months from the first day of the calendar month (the
“Additional Term Trigger Date”) immediately following the month in which the New Expansion Rent
Commencement Date occurs and the term “Expiration Date” shall thereafter mean midnight on the last
day of the one hundred twentieth (120th) month following the Additional Term Trigger Date. Tenant
shall continue to have all of its renewal rights set forth in Section 1.02 of the Oklahoma Facility
Lease from and after the Expiration Date set forth in this Section 12.

     13. Insurance Certificates. Simultaneously with Tenant’s execution and delivery of
this First Amendment, Tenant shall deliver to Landlord insurance certificates or policies, or
endorsements to existing insurance policies, evidencing that all coverages required under Article
IV of the Master Lease are in effect with respect to the Leased Property, including without
limitation, the Completed Expansion.

     14. State of Oklahoma Purchase Option; Tenant Indemnification. Landlord and Tenant
hereby acknowledge and agree that the State of Oklahoma (the “State”) has an option to purchase the
Leased Property at the beginning of each fiscal year at a predetermined price (the “State of
Oklahoma Purchase Option”), which price has been negotiated and specified in Section 2.3 of the
facility operating agreement dated July 1, 2003 by and between Tenant and the State of Oklahoma
(the “Facility Operating Agreement”), the terms of which Section 2.3 are stated in Exhibit
H attached hereto. Tenant shall not amend, modify, cancel, delete or terminate the provisions
for determining the purchase price of the State of Oklahoma Purchase Price in

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Section 2.3 of the Facility Operating Agreement without Landlord’s prior written consent in
Landlord’s sole and unfettered discretion.

     15. Estoppel. Tenant hereby acknowledges that, to its knowledge, (i) Landlord has no
undischarged obligations under the Lease to perform any work or improvements to the Leased
Property, or, to Tenant’s actual knowledge, otherwise; (ii) there are no offsets or defenses that
Tenant has against the full enforcement of the Oklahoma Facility Lease or the Master Lease by
Landlord; (iii) neither Landlord nor Tenant is in any respect in default under the Oklahoma
Facility Lease, the Master Lease or the Facility Operating Agreement; and (iv) Tenant has not
assigned, transferred or hypothecated the Oklahoma Facility Lease or the Master Lease or any
interest therein or in the Completed Expansion.

     16. Representations and Warranties of Tenant. Tenant hereby represents and warrants
to Landlord as of the date of the Effective Date as follows:

          (a) This First Amendment has been duly authorized, executed and delivered by Tenant and all
consents required under Tenant’s organizational documents or by law have been obtained. All
documents that are to be executed by Tenant and delivered to Landlord on the Effective Date have
been, or on the Effective Date will be, duly executed, authorized and delivered by Tenant. This
First Amendment and all such documents are, and on the Effective Date will be, legal, valid and
binding obligations of Tenant, enforceable in accordance with their terms and do not violate any
provisions of any agreement or judicial or administrative order to which Tenant is a party or to
which Tenant or the Leased Property (or any portion thereof) is subject.

          (b) There are no actions, suits or proceedings (including arbitration proceedings) pending or
to the best of Tenant’s knowledge, threatened against Tenant which could have a material adverse
effect on any portion of the Leased Property, Tenant’s interest therein, or Tenant’s ability to
perform its obligations hereunder, at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or instrumentality.

          (c) The Leased Property complies with all zoning, building, environmental, ecology, health and
public safety, subdivision, land sales or similar law, rule, ordinance or regulation, pertaining to
the Leased Property or any portion thereof. No consent or approval is required from any
governmental agency for Landlord to own or operate the Leased Property, or any tenant to occupy the
Leased Property, as the same is currently operated and used. No governmental, fire, life safety or
other inspection is required in connection with the transfer and no new certificates of occupancy
are required to be issued in connection with the transfer of the Completed Expansion.

          (d) The Completed Expansion was constructed in compliance with and does not violate any of the
easements, rights, restrictions, covenants and other agreements of record affecting the Leased
Property and Tenant hereby acknowledges that Tenant has received a copy of all such recorded
easements, rights, restrictions, covenants and other agreements.

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          (e) There are no leases, licenses, occupancy or related agreements or tenancies affecting the
Leased Property except the Facility Operating Agreement. The Facility Operating Agreement is in
full force and effect according to the terms set forth therein and, has not been modified, amended
or altered except as previously disclosed in writing to Landlord and, to the best of Tenant’s
knowledge, there are no defaults by either party under the Facility Operating Agreement.

          (f) No material licenses, permits and/or other approvals required for the ownership of the
existing use and operation of the Leased Property or any portion thereof, have been terminated,
suspended or otherwise are not in full force and effect.

          (g) Tenant has not received any notice that it is in default under any of the covenants,
easements or restrictions affecting or encumbering the Leased Property or any constituent or
portion thereof.

          (h) Except as disclosed in the Mactec Phase I Report of Phase I Environmental Site Assessment
– Building 3, dated April 13, 2005 and previously delivered by Tenant to Landlord, Tenant has not
generated, stored or disposed of any oil, petroleum products, or “Hazardous Materials”, as defined
under Oklahoma or United States laws or regulations, (collectively, “Hazardous Materials”) at the
Leased Property and Tenant has no actual knowledge of any previous or present generation, storage,
disposal or existence thereof, except for de minimis amounts of materials such as cleaning supplies
typically found at properties similar to the Leased Property. Tenant has not entered into any
consent decree or administrative order for any alleged violation of laws relating to so called
Hazardous Materials; (ii) Tenant has not received any written request for information or a demand
letter from any party with respect to a violation of laws pertaining to Hazardous Materials; and
(iii) to the best of Tenant’s knowledge and belief, no Tenant or occupant of the Leased Property
has generated, stored or disposed of any Hazardous Materials at the Leased Property or transported
any Hazardous Materials off site from the Leased Property except in accordance with applicable law.
No portion of the Leased Property contains lead based paint or lead plaster, asbestos or urea foam
formaldehyde insulation.

          (i) Except for the State of Oklahoma Purchase Option, Tenant has not entered into any other
contracts for the sale of the Leased Property or any constituent or portion thereof. No lease or
other agreement affecting the Leased Property contains any rights of first refusal or options to
purchase the Leased Property or any portion thereof or any other rights of others that might
prevent the consummation of this Agreement.

          (j) Tenant owns the Leased Property free and clear of all liens and encumbrances.

          (k) No portion of the income from the Leased Property is derived from other than “rent from
real property” as that term is defined in the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.

     All representations and warranties contained herein are material and shall survive the
Effective Date.

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     17. Representations and Warranties of Landlord. Landlord hereby represents and
warrants to Tenant as of the date of the Effective Date as follows:

          (a) This First Amendment has been duly authorized, executed and delivered by Landlord and all
consents required under Landlord’s organizational documents or by law have been obtained. All
documents that are to be executed by Landlord and delivered to Tenant on the Effective Date have
been, or on the Effective Date will be, duly executed, authorized and delivered by Landlord. This
First Amendment and all such documents are, and on the Effective Date will be, legal, valid and
binding obligations of Landlord, enforceable in accordance with their terms and do not violate any
provisions of any agreement or judicial or administrative order to which Landlord is a party or to
which Landlord or the Leased Property (or any portion thereof) is subject.

          (b) There are no actions, suits or proceedings (including arbitration proceedings) pending or
to the best of Landlord’s knowledge, threatened against Landlord which could have a material
adverse effect on any portion of the Leased Property, Landlord’s interest therein, or Landlord’s
ability to perform its obligations hereunder, at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, bureau, agency or
instrumentality.

     All representations and warranties contained herein are material and shall survive the
Effective Date.

     18. 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 First Amendment. 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 on Tenant’s behalf. 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 First Amendment.

     19. No Partnership or Joint Venture. Nothing contained in the Master Lease, the
Oklahoma Facility Lease or this First Amendment, and no approval of Landlord to any Construction
Documents or the Design/Build Contract or any related documents (as such terms are defined in
Exhibit F) shall constitute or be construed to be or create a partnership or joint venture
between Landlord and Tenant or their respective successors or assigns.

     20. Ratification of Oklahoma Facility Lease and Master Lease. Unless expressly
modified herein, all terms and conditions of the Oklahoma Facility Lease and the Master Lease are
hereby ratified and reaffirmed in their entirety.

     21. Lease in Full Force and Effect. Landlord and Tenant each represents, warrants and
acknowledges that the Oklahoma Facility Lease and the Master Lease are unmodified, other than
pursuant to the terms of this First Amendment, and in full force and effect as modified herein;
that all Rent has been paid through the date hereof; that as of the date hereof to Landlord’s and
Tenant’s actual knowledge, as of the date hereof, neither party is in default in the

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performance of any covenant, agreement or condition contained in the Master Lease and the
Oklahoma Facility Lease, as amended hereby.

     22. Governing Law; Interpretation and Partial Invalidity. This First Amendment shall
be governed and construed in accordance with the laws of the State of Oklahoma. If any term of
this First Amendment, or the application thereof to any person or circumstances, shall to any
extent be invalid or unenforceable, the remainder of this First Amendment, or the application of
such term to persons or circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each term of this First Amendment shall be valid and enforceable
to the fullest extent permitted by law. The titles for the paragraphs are for convenience only and
not to be considered in construing this First Amendment. This First Amendment contains all of the
agreements of the parties with respect to the subject matter hereof, and supersedes all prior
dealings between them with respect to such subject matter. No delay or omission on the part of
either party to this First Amendment in requiring performance by the other party or exercising any
right hereunder shall operate as a waiver of any provision hereof or any rights hereunder, and no
waiver, omission or delay in requiring performance or exercising any right hereunder on any one
occasion shall be construed as a bar to or waiver of such performance or right on any future
occasion.

     23. Counterparts and Authority. This First Amendment may be executed in multiple
counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Landlord and Tenant each warrant to the other that the person or persons
executing this First Amendment on its behalf has or have authority to do so and that such execution
has fully obligated and bound such party to all terms and provisions of this First Amendment.

[Intentionally short page; signatures appear on the following page.]

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     IN WITNESS WHEREOF, the parties have executed this First Amendment as of the day and year
first written above.

	 	 	 	 	 
	Executed in the Presence of:	 	“TENANT”
	 
	 	 	 	 
	 	 	THE GEO GROUP, INC.
	 
	 	 	 	 
	 	 	 
	 	 
	Signature
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	John G. O’Rourke, Senior Vice President
	 	 	 
	 	 
	Print Name
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Signature
	 	 	 	 
	 	 	 	 	 
	Print Name
	 	 	 	 
	 
	 	 	 	 
	Executed in the Presence of:	 	“LANDLORD”
	 
	 	 	 	 
	 	 	CPT OPERATING PARTNERSHIP L.P.
	 
	 	 	 	 
	 	 	 	 	 
	Signature

	 	By:
	 	Correctional Properties Trust,
	 

	 	 	 	its general partner
	 	 	 	 	 
	Print Name
	 	 	 	 
	 
	 	 	 	 
	 

	 	        By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Charles R. Jones
	 

	 	 	 	Title:
	 

	 	 	 	 
	Signature
	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	Print Name
	 	 	 	 

H-11Form of Restricted Shares Award Agreement

 

EXHIBIT 10.2

CORRECTIONAL PROPERTIES TRUST

FORM
OF RESTRICTED SHARES AWARD AGREEMENT

FOR

 

     This RESTRICTED SHARES AWARD AGREEMENT (the “Agreement”) is made and entered into effective as
of ___, by and between CORRECTIONAL PROPERTIES TRUST, a Maryland real estate
investment trust (the “Company”), and ___(the “Recipient”).

RECITALS

     The Committee appointed by the Board of Trustees of the Company pursuant to the Plan (the
“Committee”) has determined that it is in the best interests of the Company to recognize the
Recipient’s performance and to provide incentive to the Recipient to remain with the Company and
its Subsidiaries by making this grant of Restricted Shares in accordance with the terms of this
Agreement; and

     The Restricted Shares is granted pursuant to the Correctional Properties Trust Amended and
Restated 2002 Stock Plan (the “Plan”) which is incorporated herein for all purposes. The Recipient
hereby acknowledges receipt of a copy of the Plan. Unless otherwise provided herein, terms used
herein that are defined in the Plan and not defined herein shall have the meanings attributable
thereto in the Plan.

     NOW, THEREFORE, for and in consideration of the mutual premises, covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

     1. Award of Restricted Shares. The Committee hereby grants, as of ___(the
“Date of Grant”), to the Recipient, ___restricted Common Shares, par value $.001 per share, of
the Company (collectively the “Restricted Shares”), which shares are and shall be subject to the
terms, provisions and restrictions set forth in this Agreement and in the Plan. As a condition to
entering into this Agreement, and as a condition to the issuance of any Common Shares (or any other
securities of the Company), the Recipient agrees to be bound by all of the terms and conditions
herein and in the Plan.

     2. Vesting of Restricted Shares.

          (a) Except as otherwise provided in Sections 2(b) and 2(c) hereof, the Restricted Shares shall
become vested in the following amounts, at the following times and upon

 

 

the following conditions, provided that the Continuous Service of the Recipient continues
through and on the applicable Vesting Date:

	 	 	 
	Number of Restricted Shares	 	Vesting Date
	 
	 	 

          There shall be no proportionate or partial vesting of Restricted Shares in or during the
months, days or periods prior to each Vesting Date, and all vesting of Restricted Shares shall
occur only on the applicable Vesting Date. Upon the termination or cessation of Recipient’s
Continuous Service, for any reason whatsoever, any portion of the Restricted Shares which is not
yet then vested shall automatically and without notice terminate, be forfeited and be and become
null and void.

          (b) Notwithstanding any other term or provision of this Agreement, in the event of a “Change
in Control” or a “Potential Change in Control” (in each case as defined in the Plan) of the
Company, the Restricted Shares subject to this Agreement shall become immediately vested as of the
date of the Change in Control or the Potential Change in Control.

          (c) In the event of the Recipient’s Retirement, Disability or death during the term of this
Agreement, all of the Restricted Shares subject to this Agreement shall be immediately vested as of
the date of such Retirement, Disability or death, whichever applicable, and shall be delivered,
subject to any requirements under this Agreement, to the Recipient, in the event of his or her
Retirement or Disability, or in the event of the Recipient’s death, to the beneficiary or
beneficiaries designated by the Recipient, or if the Recipient has not so designated any
beneficiary(ies), or no designated beneficiary survives the Recipient, such shares shall be
delivered to the personal representative of the Recipient’s estate.

          (d) For purposes of this Agreement, the following terms shall have the meanings indicated:

               (i) “Continuous Service” means the continuous service to the Company and any Subsidiary or
Affiliate, without interruption or termination, in any capacity of employee, member of the Board of
Trustees or consultant. Continuous Service shall not be considered interrupted in the case of (i)
any approved leave of absence, (ii) transfers among the Company and any Subsidiary or Affiliate, or
any successor, in any capacity of employee, member of the Board of Trustees or consultant, or (iii)
any change in status as long as the individual remains in the service of the Company and any
Subsidiary or Affiliate in any capacity of employee, member of the Board of Trustees or consultant
(except as otherwise provided in this Agreement). An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave.

2

 

               (ii) “Non-Vested Shares” means any portion of the Restricted Shares subject to this Agreement
that has not become vested pursuant to this Section 2.

               (iii) “Vested Shares” means any portion of the Restricted Shares subject to this Agreement
that is and has become vested pursuant to this Section 2.

     3. Delivery of Restricted Shares.

          (a) One or more stock certificates evidencing the Restricted Shares shall be issued in the
name of the Recipient but shall be held and retained by the Records Administrator of the Company
until the date on which the shares (or a portion thereof) subject to this Restricted Shares award
become Vested Shares pursuant to Section 2 hereof, subject to the provisions of Section 4 hereof
(the “Applicable Date”). All such stock certificates shall bear the following legends, along with
such other legends that the Board or the Committee shall deem necessary and appropriate or which
are otherwise required or indicated pursuant to any applicable stockholders agreement:

     THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL
VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE RESTRICTED SHARES
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING
CONDITIONS WHICH MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.

          (b) The Recipient shall deposit with the Company stock powers or other instruments of transfer
or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each
certificate representing Restricted Shares until such shares become Vested Shares. If the
Recipient shall fail to provide the Company with any such stock power or other instrument of
transfer or assignment, the Recipient hereby irrevocably appoints the Secretary of the Company as
his attorney-in-fact, with full power of appointment and substitution, to execute and deliver any
such power or other instrument which may be necessary to effectuate the transfer of the Restricted
Shares (or assignment of distributions thereon) on the books and records of the Company.

          (c) On or after each Applicable Date, upon written request to the Company by the Recipient,
the Company shall promptly cause a new certificate or certificates to be issued for and with
respect to all shares that become Vested Shares on that Applicable Date, which certificate(s) shall
be delivered to the Recipient within fifteen (15) business days of the date of receipt by the
Company of the Recipient’s written request. The Company may elect to satisfy the foregoing
requirement by electronic book entries.

     4. Termination of Employment. If the Recipient’s Continuous Service with the Company
is terminated by the Company or by the Recipient prior to satisfaction of the vesting

3

 

conditions in Section 2, any Non-Vested Shares shall be forfeited immediately upon such
termination of Continuous Service and revert back to the Company without any payment to the
Recipient. The Committee shall have the power and authority to enforce on behalf of the Company
any rights of the Company under this Agreement in the event of the Recipient’s forfeiture of
Non-Vested Shares pursuant to this Section 4.

     5. Rights with Respect to Restricted Shares.

          (a) Except as otherwise provided in this Agreement, the Recipient shall have, with respect to
all the Restricted Shares, whether Vested Shares or Non-Vested Shares, all the rights of a holder
of shares of common stock of the Company, including without limitation (i) the right to vote such
Restricted Shares, (ii) the right to receive dividends, if any, as may be declared from time to
time, and (iii) the rights available to all holders of Common Shares of the Company upon any
merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend
or recapitalization undertaken by the Company; provided, however, that all of such
rights shall be subject to the terms, provisions, conditions and restrictions set forth in this
Agreement (including without limitation conditions under which all such rights shall be forfeited).
Any Common Shares issued to the Recipient as a dividend with respect to Restricted Shares shall
have the same status and bear the same legend as the Restricted Shares and shall be held by the
Company, if the Restricted Shares that such dividend is attributed to is being so held, unless
otherwise determined by the Committee.

          (b) If at any time while this Agreement is in effect (or shares granted hereunder shall be or
remain unvested while Recipient’s Continuous Service continues and has not yet terminated or ceased
for any reason), there shall be any increase or decrease in the number of issued and outstanding
Common Shares of the Company through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of such shares, then and in
that event, the Committee shall make any adjustments in view of such change, in the number of
Restricted Shares then subject to this Agreement that are necessary to maintain the proportionate
interest that the Restricted Shares bear to the total number of issued and outstanding Common
Shares of the Company. If any such adjustment shall result in a fractional share, such fraction
shall be disregarded.

          (c) Notwithstanding any term or provision of this Agreement to the contrary, the existence of
this Agreement, or of any outstanding Restricted Shares awarded hereunder, shall not affect in any
manner the right, power or authority of the Company to make, authorize or consummate: (i) any or
all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business; (ii) any merger, consolidation or similar transaction by or of the
Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company,
including any equity or debt securities, or preferred or preference stock that would rank prior to
or on parity with the Restricted Shares and/or that would include, have or possess other rights,
benefits and/or preferences superior to those that the Restricted Shares include, have or
possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the
dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part

4

 

of the stock, assets or business of the Company; or (vi) any other corporate transaction, act
or proceeding (whether of a similar character or otherwise).

     6. Non-Transferability. The Restricted Shares are not transferable until and unless
they become Vested Shares in accordance with this Agreement. The terms of this Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the Recipient. Any
attempt to effect a Transfer of any Restricted Shares prior to the date on which the shares become
Vested Shares shall be void ab initio. For purposes of this Agreement, “Transfer” shall mean any
sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation, or other
disposition, whether similar or dissimilar to those previously enumerated, whether voluntary or
involuntary, and including, but not limited to, any disposition by operation of law, by court
order, by judicial process, or by foreclosure, levy or attachment.

     7. Tax Matters; Section 83(b) Election.

          (a) If the Recipient properly elects, within thirty (30) days of the Date of Grant, to include
in gross income for federal income tax purposes an amount equal to the fair market value (as of the
Date of Grant) of the Restricted Shares pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended (the “Code”), the Recipient shall make arrangements satisfactory to the Company to
pay to the Company any federal, state or local income taxes required to be withheld with respect to
the Restricted Shares. If the Recipient shall fail to make such tax payments as are required, the
Company shall, to the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Recipient any federal, state or local taxes of any kind required by law
to be withheld with respect to the Restricted Shares.

          (b) If the Recipient does not properly make the election described in Subsection 7(a) above,
the Recipient shall, no later than the date or dates as of which the restrictions referred to in
this Agreement hereof shall lapse, pay to the Company, or make arrangements satisfactory to the
Committee for payment of, any federal, state or local taxes of any kind required by law to be
withheld with respect to the Restricted Shares (including without limitation the vesting thereof),
and the Company shall, to the extent permitted by law, have the right to deduct from any payment of
any kind otherwise due to Recipient any federal, state, or local taxes of any kind required by law
to be withheld with respect to the Restricted Shares.

          (c) Tax consequences on the Recipient (including without limitation federal, state, local and
foreign income tax consequences) with respect to the Restricted Shares (including without
limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the
Recipient. The Recipient shall consult with his or her own personal accountant(s) and/or tax
advisor(s) regarding these matters, the making of a Section 83(b) election, and the Recipient’s
filing, withholding and payment (or tax liability) obligations.

     8. Amendment, Modification & Assignment. This Agreement may only be modified or
amended in a writing signed by the parties hereto. No promises, assurances, commitments,
agreements, undertakings or representations, whether oral, written, electronic or otherwise, and
whether express or implied, with respect to the subject matter hereof, have been made by either

5

 

party which are not set forth expressly in this Agreement. The rights and obligations created
hereunder shall be binding on the Recipient and his heirs and legal representatives and on the
successors and assigns of the Company.

     9. Complete Agreement. This Agreement (together with those agreements and documents
expressly referred to herein, for the purposes referred to herein) embody the complete and entire
agreement and understanding between the parties with respect to the subject matter hereof, and
supersede any and all prior promises, assurances, commitments, agreements, undertakings or
representations, whether oral, written, electronic or otherwise, and whether express or implied,
which may relate to the subject matter hereof in any way.

     10. Miscellaneous.

          (a) No Right to (Continued) Employment or Service. This Agreement and the grant of
Restricted Shares hereunder shall not shall confer, or be construed to confer, upon the Recipient
any right to employment or service, or continued employment or service, with the Company.

          (b) No Limit on Other Compensation Arrangements. Nothing contained in this Agreement
shall preclude the Company from adopting or continuing in effect other or additional compensation
plans, agreements or arrangements, and any such plans, agreements and arrangements may be either
generally applicable or applicable only in specific cases or to specific persons.

          (c) Severability. If any term or provision of this Agreement is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or under any applicable law,
rule or regulation, then such provision shall be construed or deemed amended to conform to
applicable law (or if such provision cannot be so construed or deemed amended without materially
altering the purpose or intent of this Agreement and the grant of Restricted Shares hereunder, such
provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the
award hereunder shall remain in full force and effect).

          (d) No Trust or Fund Created. Neither this Agreement nor the grant of Restricted
Shares hereunder shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and the Recipient or any other person. To the extent
that the Recipient or any other person acquires a right to receive payments from the Company
pursuant to this Agreement, such right shall be no greater than the right of any unsecured general
creditor of the Company.

          (e) Law Governing. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Maryland (without reference to the conflict of
laws rules or principles thereof).

          (f) Interpretation. The Recipient accepts the Restricted Shares subject to all the
terms, provisions and restrictions of this Agreement and the Plan. The undersigned Recipient

6

 

hereby accepts as binding, conclusive and final all decisions or interpretations of the Board
or the Committee upon any questions arising under this Agreement.

          (g) Headings. Section, paragraph and other headings and captions are provided solely
as a convenience to facilitate reference. Such headings and captions shall not be deemed in any
way material or relevant to the construction, meaning or interpretation of this Agreement or any
term or provision hereof.

          (h) Notices. Any notice under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered personally or when deposited in the United States mail,
registered, postage prepaid, and addressed, in the case of the Company, to the Company’s President
at 3300 PGA Boulevard, Suite 750, Palm Beach Gardens, Florida 33410, or if the Company should move
its principal office, to such principal office, and, in the case of the Recipient, to the
Recipient’s last permanent address as shown on the Company’s records, subject to the right of
either party to designate some other address at any time hereafter in a notice satisfying the
requirements of this Section.

          (i) Non-Waiver of Breach. The waiver by any party hereto of the other party’s prompt
and complete performance, or breach or violation, of any term or provision of this Agreement shall
be effected solely in a writing signed by such party, and shall not operate nor be construed as a
waiver of any subsequent breach or violation, and the waiver by any party hereto to exercise any
right or remedy which he or it may possess shall not operate nor be construed as the waiver of such
right or remedy by such party, or as a bar to the exercise of such right or remedy by such party,
upon the occurrence of any subsequent breach or violation.

          (j) Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which shall be an original, and all of which together shall constitute one
and the same agreement.

7

 

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this
Agreement as of the date first written above.

	 	 	 	 	 
	 	CORRECTIONAL PROPERTIES TRUST

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

Agreed and Accepted:

RECIPIENT:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 

8

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