UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): JANUARY 6, 1998
CORNELL CORRECTIONS, INC.
(Exact name of registrant as specified in its charter)
1-14472
(Commission File Number)
DELAWARE 76-0433642
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
4801 WOODWAY, SUITE #100E
HOUSTON, TEXAS 77056
(Address of principal executive offices and zip code)
(713) 623-0790
(Registrants telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 6, 1998, Cornell Corrections, Inc., a Delaware corporation (the
"Company") through its wholly owned subsidiary, Cornell Corrections of Oklahoma,
Inc. ("CCOI"), acquired the Great Plains Correctional Facility, an existing
812-bed medium security prison located in Hinton, Oklahoma. The purchase was
completed pursuant to an Agreement of Purchase and Sale, as amended,
("Agreement") between Foresite Capital Facilities Corporation ("Foresite") and
the Hinton Economic Development Authority ("HEDA"). Foresite had assigned its
rights under the Agreement to CCOI. The Company paid an aggregate purchase price
of $43.0 million, excluding transactions costs. The Company financed the
purchase with $18.8 million of borrowings under its 1997 Credit Facility with
ING (U.S.) Capital Corporation, and the remainder with cash. The acquisition is
being treated as a purchase for accounting purposes.
The Great Plains Correctional Facility is currently operated pursuant to a
one-year contract with nine one-year renewal options between the Oklahoma
Department of Corrections and HEDA; HEDA in turn currently subcontracts the
daily operations of the prison to another operator. The Company will immediately
begin the transition from the current operator and will assume the complete
operations of the prison on or before July 5, 1998.
The aggregate purchase price of $43.0 million included the 812-bed facility
and all surrounding infrastructure, a 30-year operating contract with 4
five-year renewals between HEDA and the Company, plus an additional 20 adjacent
acres of land for potential future expansion of the facility.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
As of the filing date of this Form 8-K, the Company has found it
impracticable to file the required financial statements of the
acquired business. The Company intends to file the required
financial statements as soon as they become available but in any
event no later than 60 days after the deadline for filing this
report on Form 8-K.
(B) PRO FORMA FINANCIAL INFORMATION.
As of the filing date of this Form 8-K, the Company has found it
impracticable to file the required pro forma financial information
for the Acquisition. The Company intends to file the required pro
forma financial information as soon as it becomes available but in
any event no later than 60 days after the deadline for filing this
report on Form 8-K.
(C) EXHIBITS.
2.1 Asset Purchase Agreement dated as of November 17, 1997 by and
between Foresite Capital Facilities Corporation and the Hinton
Economic Development Authority.
2.2 Amendment to Agreement of Purchase and Sale dated December 10, 1997.
2.3 Amendment No. 2 to Agreement of Purchase and Sale dated January 6,
1998.
2.4 Assignment of Agreement of Purchase and Sale dated as of January 5,
1998 by and between Foresite Capital Facilities Corporation and
Cornell Corrections of Oklahoma, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORNELL CORRECTIONS, INC.
Date: JANUARY 21, 1998 By: /s/ STEVEN W. LOGAN
Steven W. Logan
Senior Vice President and
Chief Financial Officer
EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
between
FORESITE CAPITAL FACILITIES CORPORATION
("Purchaser")
and
HINTON ECONOMIC DEVELOPMENT AUTHORITY
("Seller")
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................................1
1.1 Definitions....................................................1
ARTICLE II PURCHASE AND SALE; DEPOSIT; PAYMENT OF PURCHASE PRICE; TITLE
REVIEW PERIOD..................................................9
2.1 Purchase and Sale..............................................9
2.2 Payment of Purchase Price......................................9
2.3 Deposit........................................................9
2.4 Tests and Studies..............................................9
ARTICLE III SELLER'S REPRESENTATIONS AND WARRANTIES.......................13
3.1 Organization and Power........................................13
3.2 Authorization and Execution...................................13
3.3 Non-contravention.............................................13
3.4 Title To Real Property........................................13
3.5 No Special Taxes..............................................14
3.6 Compliance with Existing Laws.................................14
3.7 Personal Property and Inventory...............................14
3.8 Operating Agreements..........................................14
3.9 Insurance.....................................................14
3.10 Condemnation Proceedings; Roadways............................14
3.11 Actions or Proceedings........................................15
3.12 Labor and Employment Matters..................................15
3.13 Financial Information and Submission Matters..................15
3.14 Bankruptcy....................................................15
3.15 Hazardous Substances..........................................15
3.16 Utilities.....................................................16
3.17 Leased Property...............................................16
3.18 Sufficiency of Certain Items..................................16
3.19 Americans With Disabilities Act and Rehabilitation Act........17
3.20 Structural Condition..........................................17
3.21 Zoning........................................................17
3.22 No Other Property Interests...................................18
3.23 Private Prison Contract.......................................18
3.24 Litigation....................................................18
ARTICLE IV PURCHASER'S REPRESENTATIONS AND WARRANTIES....................18
4.1 Organization and Power........................................18
4.2 Non-contravention.............................................18
4.3 Litigation....................................................19
4.4 Bankruptcy....................................................19
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ARTICLE V CONDITIONS PRECEDENT; RIGHT TO TERMINATE......................19
5.1 As to Purchaser's Obligations.................................19
5.2 As to Seller's Obligations....................................21
5.3 Seller's Right to Terminate...................................21
5.4 Purchaser's Right to Terminate................................21
ARTICLE VI COVENANTS OF SELLER...........................................21
6.1 Operating Agreements..........................................21
6.2 Warranties and Guaranties.....................................22
6.3 Insurance.....................................................22
6.4 Operation of Property Prior to Closing........................22
6.5 No Marketing..................................................23
ARTICLE VII CLOSING.......................................................23
7.1 Closing.......................................................23
7.2 Seller's Deliveries...........................................24
7.3 Purchaser's Deliveries........................................26
7.4 Mutual Deliveries.............................................27
7.5 Closing Costs.................................................27
7.6 Revenue and Expense Allocations...............................27
7.7 Acquisition and Payment for Inventory.........................28
ARTICLE VIII GENERAL PROVISIONS.............................................29
8.1 Condemnation..................................................29
8.2 Risk of Loss..................................................29
8.3 Broker........................................................30
8.4 Bulk Sale.....................................................30
8.5 Confidentiality...............................................30
8.6 Seller's Accounts Receivable..................................30
ARTICLE IX LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLER; DEFAULT....31
9.1 Liability of Purchaser........................................31
9.2 Indemnification by Seller.....................................31
9.3 Liability of Seller...........................................32
9.4 Indemnification by Purchaser..................................32
9.5 Default by Seller/Failure of Conditions Precedent.............32
9.6 Default by Purchaser/Failure of Conditions Precedent..........33
9.7 Costs and Attorneys' Fees.....................................33
9.8 Limitation of Liability.......................................33
ARTICLE X MISCELLANEOUS PROVISIONS......................................33
10.1 Completeness; Modification....................................33
10.2 Assignments...................................................34
10.3 Successors and Assigns........................................34
10.4 Days..........................................................34
10.5 Governing Law.................................................34
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10.6 Counterparts..................................................34
10.7 Severability..................................................34
10.8 Costs.........................................................34
10.9 Notices.......................................................34
10.10 Escrow Agent..................................................36
10.11 Incorporation by Reference....................................36
10.12 Survival......................................................36
10.13 Further Assurances............................................36
10.14 No Partnership................................................36
10.15 Time of Essence...............................................37
10.16 Signatory Exculpation.........................................37
10.17 Rules of Construction.........................................37
EXHIBITS
Exhibit A - Land Description
SCHEDULES
Schedule 1 - Authorizations
Schedule 2 - Operating Agreements
Schedule 3 - Pending or Threatened Actions, Suits and Proceedings
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AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "AGREEMENT") is made as of this
17th day of November, 1997, between FORESITE CAPITAL FACILITIES CORPORATION, a
Colorado corporation ("PURCHASER"), and HINTON ECONOMIC DEVELOPMENT AUTHORITY, a
public trust and agency of the State of Oklahoma created pursuant to a Trust
Indenture dated as of June 29, 1987, and Title 60 Oklahoma Statute 1981 Sections
176 to 180.4, as amended and supplemented ("SELLER").
RECITATIONS:
A. Seller is the owner of that certain eight hundred twelve (812) bed
Great Plains Correctional Facility situate, lying and being in Hinton, Oklahoma,
composed of that certain real property described on EXHIBIT A attached hereto
and the improvements situated thereon, together with all fixtures, furniture,
equipment and consumable inventory situated therein.
B. Purchaser is desirous of purchasing such prison property from Seller
and Seller is desirous of selling such prison property to Purchaser, for the
purchase price and upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of premises and in consideration of the
mutual covenants, promises and undertakings of the parties hereinafter set
forth, and for other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged by the parties, it is agreed:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. The following terms shall have the indicated meanings:
"ACT OF BANKRUPTCY" shall mean if a party hereto or any general
partner thereof shall (a) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general assignment for
the benefit of its creditors, (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), (e) be adjudicated a bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if a proceeding or case shall be commenced, without the
application or
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consent of a party hereto or any general partner thereof, in any court of
competent jurisdiction seeking (1) the liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of debts, of such party or
general partner, (2) the appointment of receiver, custodian, trustee or
liquidator for such party or general partner or all or any substantial part of
its assets, or (3) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed; or an order (including
an order for relief entered in an involuntary case under the Federal Bankruptcy
Code, as now or hereafter in effect) judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 consecutive days.
"AFFILIATE" shall mean a person or entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such person or entity, and, in the case of an
individual, includes any relative or spouse of such person, or any relative of
such spouse who has the same home as such person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract, or otherwise.
"APPLICABLE LAWS" shall mean any applicable building, zoning,
subdivision, environmental, health, safety or other governmental laws, statutes,
ordinances, resolutions, rules, codes, regulations, orders or determinations of
any Governmental Authority or of any insurance boards of underwriters (or other
body exercising similar functions), or any restrictive covenants or deed
restrictions affecting the Property or the ownership, operation, use,
maintenance or condition thereof.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean one or more
assignment and assumption agreements whereby (a) Seller (1) assigns and
Purchaser and/or its operator, lessee or other designee (as Purchaser shall
specify) assumes the Operating Agreements that have not been terminated prior to
Closing in accordance herewith, (2) assigns all of Seller's right, title and
interest in and to the Intangible Personal Property, to the extent assignable,
and (3) indemnifies, defends and holds Purchaser and/or its operator, lessee or
other designee harmless with respect to all defaults, liabilities, claims, costs
and expenses (including, without limitation, reasonable attorneys' fees)
relating to acts or omissions accruing under such Operating Agreements before
the Closing Date; and (b) Purchaser and/or its operator, lessee or other
designee indemnifies, defends and holds Seller harmless with respect to all
defaults, liabilities, claims, costs and expenses (including, without
limitation, reasonable attorneys' fees) relating to acts or omissions accruing
under such Operating Agreements after the Closing Date.
"AUTHORIZATIONS" shall mean all licenses, permits and approvals
required by any governmental or quasi-governmental agency, body, department,
commission, board, bureau, instrumentality or officer, or otherwise appropriate
with respect to the construction, ownership, operation, leasing, maintenance, or
use of the Property or any part thereof, which Authorizations are more
particularly described on SCHEDULE 1 attached hereto and made a part hereof.
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"BILL OF SALE - INVENTORY" shall mean that certain bill of sale
conveying title to the Inventory to Purchaser or Purchaser's operator, lessee or
other designee (as Purchaser shall specify).
"BILL OF SALE - PERSONAL PROPERTY" shall mean one or more bills of
sale conveying title to the Tangible Personal Property and the Intangible
Personal Property, if necessary, from Seller to Purchaser or its operator,
lessee or other designee (as Purchaser shall specify).
"BROKER" shall mean Mr. Robert C. Potts of Midwest Associates
Real Estate.
"CCA CONTRACT" shall mean that certain Management Agreement dated as
of June 1, 1996, by and between Operator and Seller.
"CLOSING" shall mean the settlement on the purchase and sale of the
Property pursuant to this Agreement and shall be deemed to occur on the Closing
Date.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CLOSING DOCUMENTS" shall mean the documents defined as such in
SECTION 7.1 hereof.
"DEED" shall mean that certain deed conveying title to the Real
Property with general warranty covenants of title, in recordable form, and
subject only to Permitted Title Exceptions. If there is any difference between
the description of the Land, as shown on EXHIBIT A attached hereto and the
description of the Land as shown on the Survey, the description of the Land to
be contained in the Deed shall conform to the description shown on the Survey.
"DEMAND NOTE" shall mean the demand note defined as such in SECTION
2.3 hereof.
"DEPOSIT" shall mean Demand Note deposited with Escrow Agent by
Purchaser pursuant to SECTION 2.3 hereof, and any proceeds therefrom. The
Deposit shall be held and disbursed by Escrow Agent in strict accordance with
the terms and provisions of this Agreement.
"EMPLOYMENT AGREEMENTS" shall mean all employment agreements,
written or oral, between Seller or Operator and the persons employed with
respect to the Property.
"ENVIRONMENTAL DAMAGES" shall mean all third-party claims,
judgments, damages, losses, penalties, fines, liabilities (including, without
limitation, punitive damages and strict liability), encumbrances, liens, costs
and expenses of investigation and defense of any claim, whether or not such is
ultimately defeated, and of any settlement or judgment, of whatever kind or
nature, contingent or otherwise, matured or unmatured, including, without
limitation, attorneys' fees and disbursements and consultants' fees, any of
which arise as a result of the
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existence of Hazardous Materials upon, about or beneath the Property or
migrating or threatening to migrate from the Property, or as a result of the
existence of a violation of Environmental Requirements pertaining to the
Property.
"ENVIRONMENTAL REQUIREMENTS" shall mean (i) all applicable statutes,
regulations, rules, policies, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, and similar items, of all Governmental
Authorities, and (ii) all judicial, administrative and regulatory decrees,
judgments and orders, in each case of (i) and (ii) relating to the protection of
human health or the environment from Hazardous Materials, including, without
limitation: (a) all requirements thereof, including, without limitation, those
pertaining to reporting, licensing, permitting, investigation and remediation of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials; and (b) all requirements
pertaining to the protection of the health and safety of employees or the public
from Hazardous Materials.
"ESCROW AGENT" shall mean First American Title Insurance Company.
"FINANCIAL INFORMATION" shall mean the financial information defined
as such in SECTION 3.13 hereof.
"FIRPTA CERTIFICATE" shall mean the affidavit of Seller under
Section 1445 of the Internal Revenue Code, as amended, certifying that Seller is
not a foreign corporation, foreign partnership, foreign trust, foreign estate or
foreign person (as those terms are defined in the Internal Revenue Code and
regulations promulgated thereunder), in form and substance satisfactory to
Purchaser.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, county,
municipal or other government or any governmental or quasi-governmental agency,
department, commission, board, bureau, officer or instrumentality, foreign or
domestic, or any of them.
"HAZARDOUS MATERIALS" shall mean any chemical substance: (i) which
is or becomes defined as a "hazardous substance," "hazardous waste," "hazardous
material," "pollutant," "contaminant," or "toxic," "explosive," "corrosive,"
"flammable," "infectious," "radioactive," "carcinogenic," or "mutagenic"
material under any law, regulation, rule, order, or other authority of the
federal, state or local governments, or any agency, department, commission,
board, or instrumentality thereof, regarding the protection of human health or
the environment from such chemical substances including, but not limited to, the
following federal laws and their amendments, analogous state and local laws, and
any regulations promulgated thereunder: the Clean Air Act, the Clean Water Act,
the Oil Pollution Control Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1986, the Emergency Planning and Community
Right to Know Act, the Solid Waste Disposal Act, the Resource Conservation and
Recovery Act, the Safe Drinking Water Act, the Federal Insecticide, Fungicide
and Rodenticide Act, and the Toxic Substances Control Act, including, without
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limitation, asbestos and gasoline and other petroleum products (including crude
oil or any fraction thereof); (ii) without limitation, which contains gasoline,
diesel fuel or other petroleum hydrocarbons; (iii) without limitation, which
contains drinking biphenyls or asbestos or asbestos-containing materials or urea
formaldehyde foam insulation; or (iv) without limitation, radon gas.
"IMPROVEMENTS" shall mean the Prison and all other buildings,
improvements, fixtures and other items of real estate located on the Land.
"INSURANCE POLICIES" shall mean all policies of insurance maintained
by or on behalf of Seller pertaining to the Property, its operation, or any part
thereof.
"INTANGIBLE PERSONAL PROPERTY" shall mean all intangible personal
property owned or possessed by Seller and used in connection with the ownership,
operation, leasing, occupancy or maintenance of the Property, including, without
limitation, (1) the Authorizations, (2) escrow accounts, utility and development
rights and privileges, general intangibles, business records, plans and
specifications pertaining to the Real Property and the Personal Property, and
(3) any unpaid award for taking by condemnation or any damage to the Land by
reason of a change of grade or location of or access to any street or highway.
It shall not mean any accounts and reserve funds held by Liberty Bank and Trust
Company of Oklahoma City, National Association pursuant to that certain Amended
and Restated Trust Agreement dated as of May 1, 1994.
"INVENTORY" shall mean all inventories described in SECTION 7.7
hereof.
"KNOWLEDGE" shall mean the current actual knowledge of the Trustees
and officers of the Seller and shall not include constructive knowledge, imputed
knowledge or inquiry knowledge.
"LAND" shall mean that certain parcel of real estate lying and being
in Caddo County, Oklahoma, as more particularly described on EXHIBIT A attached
hereto, LESS AND EXCEPT AND SUBJECT TO any water rights, oil, gas or other
minerals previously reserved or conveyed of record, together with all easements,
rights, privileges, remainders, reversions and appurtenances thereunto belonging
or in any way appertaining, and all of the estate, right, title, interest, claim
or demand whatsoever of Seller therein, in the streets and ways adjacent thereto
and in the beds thereof, either at law or in equity, in possession or
expectancy, now or hereafter acquired.
"LEASED PROPERTY" shall mean all leased items of Tangible
Personal Property.
"OPERATING AGREEMENTS" shall mean all management, operating,
service, supply and maintenance contracts, if any, in effect with respect to the
Property and all other contracts (other than Employment Agreements) that affect
the Property or are otherwise related to the construction, ownership, operation,
occupancy or maintenance of the Property, including, but not limited to,
agreements and contracts to house inmates at the Prison (other than the Private
Prison Contract), food service and equipment agreements, inmate pay telephone
service agreements,
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medical and pharmaceutical service and supply agreements, drug testing service
agreements, public performance and licensing agreements for motion picture video
cassettes, inmate educational and institutional service agreements, refuse
service agreements, pest control service agreements and machinery, equipment and
uniform rental and service agreements.
"OPERATOR" shall mean Corrections Corporation of America, Inc., a
Delaware corporation.
"OPERATOR ESTOPPEL CERTIFICATE" shall mean an estoppel certificate
from Operator, in form reasonably satisfactory to Purchaser, certifying that the
CCA Contract is in full force and effect and that, to Operator's knowledge,
there are no defaults thereunder on the part of Operator or Seller.
"OWNER'S TITLE POLICY" shall mean an owner's policy of title
insurance issued to Purchaser by the Title Company, pursuant to which the Title
Company insures Purchaser's ownership of fee simple marketable title to the Real
Property in accordance with the Title Standards, subject only to Permitted Title
Exceptions. The Owner's Title Policy shall insure Purchaser in the amount of the
Purchase Price and shall be acceptable in form and substance to Purchaser.
Purchaser may require such deletions of standard exceptions and such title
endorsements as are legally available and customarily required by institutional
investors purchasing property comparable to the Property in the state where the
Property is situated. The description of the Land in the Owner's Title Policy
shall be by courses and distances or by reference to a legal, subdivided lot and
shall be identical to the description shown on the Survey.
"PERMITTED TITLE EXCEPTIONS" shall mean those exceptions to title to
the Real Property that are satisfactory to Purchaser as determined pursuant to
SECTION 2.4(D) hereof.
"PERSONAL PROPERTY" shall mean collectively the Tangible Personal
Property and the Intangible Personal Property.
"PRISON" shall mean the eight hundred twelve (812) bed correctional
facility and related amenities located on the Land.
"PRIVATE PRISON CONTRACT" shall mean that certain Private Prison
Contract dated July 1, 1997 by and between Seller and the State.
"PRIVATE PRISON CONTRACT ASSIGNMENT" shall mean an assignment
agreement whereby (a) Seller assigns to Purchaser and/or its operator, lessee or
other designee (as Purchaser shall specify) all of Seller's right, title and
interest in and to all revenue (from State rental or otherwise) generated from
the Private Prison Contract, (b) Seller agrees to use commercially reasonable
efforts to ensure the continuation of the Private Prison Contract and the
availability of prisoners to the Prison, (c) Purchaser agrees to cause Seller to
be paid the sum of One and 25/100 Dollars ($1.25) per diem for each inmate at
any time housed in the Prison or in any other similar facility located in Caddo
County, Oklahoma, owned or operated
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by or on behalf of Purchaser or any Affiliate of Purchaser, which amount shall
be paid to Seller upon Purchaser's receipt of monthly payments from the party or
parties for whom such inmates are being housed and before Purchaser uses such
funds to pay other operating expenses related to the Prison, (d) Seller agrees
to use commercially reasonable efforts to assist Purchaser and/or its operator,
lessee or other designee (as Purchaser shall specify) in obtaining the State's
approval of any third party operator selected by Purchaser or Purchaser's
lessee, (e) Seller agrees to use commercially reasonable efforts to assist
Purchaser and/or its operator, lessee or other designee (as Purchaser shall
specify) to expand the term of the Private Prison Contract so as to permit an
expansion of the Prison facility, (f) Seller agrees to cooperate with Purchaser
and/or its operator, lessee or other designee (as Purchaser shall specify) to
accommodate any other sources of inmates which Purchaser and/or its operator,
lessee or other designee may identify, which may allow for an additional
expansion of the Prison facility, (g) Purchaser agrees to use commercially
reasonable efforts to design, build and finance an expansion of the Prison
facility if the Private Prison Contract is expanded and/or additional sources
for inmates are secured, (h) Seller agrees to use commercially reasonable
efforts to negotiate favorable annual adjustment in the rental to be paid by the
State under the terms of the Private Prison Contract, (i) Seller indemnifies,
defends and holds Purchaser and/or its operator, lessee or other designee (as
the case may be) harmless with respect to all defaults, liabilities, claims,
costs and expenses (including, without limitation, reasonable attorneys' fees)
relating to acts or omissions of Seller accruing under the Private Prison
Contract prior to the Closing Date, and (j) Seller and Purchaser provide each
other with appropriate indemnities and releases regarding such parties'
respective obligations with regard to the Private Prison Contract arising after
the Closing Date..
"PROPERTY" shall mean collectively the Real Property, the
Inventory, the Tangible Personal Property and the Intangible Personal
Property.
"PURCHASE PRICE" shall mean Forty-Three Million and No/100 Dollars
($43,000,000.00) payable in the manner described in SECTION 2.2 hereof.
"PURCHASER'S OBJECTIONS" shall mean the objections defined as such
in SECTION 2.4(D) hereof.
"REAL PROPERTY" shall mean the Land and the Improvements.
"SELLER'S ORGANIZATIONAL DOCUMENTS" shall mean the trust indenture,
all other organizational documents and all amendments thereto, of Seller, true
and correct copies of which shall be provided to Purchaser prior to Closing.
"STATE" shall mean the State of Oklahoma Department of
Corrections.
"SUBMISSION MATTERS" shall mean all items Seller is required to
deliver or make available to Purchaser pursuant to SECTION 2.4(B) hereof. For
the purpose of this Agreement, any
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Submission Matters in the possession of Seller's operator shall be deemed to be
"reasonably available to Seller."
"SURVEY" shall mean the survey defined as such in and prepared
pursuant to SECTION 2.4(D) hereof.
"TANGIBLE PERSONAL PROPERTY" shall mean the items of tangible
personal property consisting of all furniture, fixtures, equipment, machinery
and other personal property of every kind and nature (including cash-on-hand and
petty cash funds) located on or used or useful in the operation of the Prison
and owned by Seller, including, without limitation, Seller's interest as lessee
with respect to any such Tangible Personal Property.
"TITLE COMMITMENT" shall mean the commitment for a policy of owner's
title insurance issued by the Title Company pursuant to Section 2.4(d) hereof.
"TITLE COMPANY" shall mean First American Title Company.
"TITLE REVIEW PERIOD" shall mean the period commencing on the date
the last of the Survey, the Title Commitment and the UCC Reports are delivered
to Seller and ending thirty (30) days thereafter.
"TITLE STANDARDS" shall mean the Title Examination Standards adopted
by the Oklahoma Bar Association, together with applicable Oklahoma statutes.
"UCC REPORTS" shall mean the reports defined as such in SECTION
2.4(D) hereof.
"UTILITIES" shall mean public sanitary and storm sewers, natural
gas, telephone, public water facilities, electrical facilities and all other
utility facilities and services necessary or appropriate for the operation and
occupancy of the Property as a correctional facility.
"WARRANTIES AND GUARANTIES" shall mean all warranties and guaranties
relating to the Improvements or the Tangible Personal Property or any part
thereof.
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ARTICLE II
PURCHASE AND SALE; DEPOSIT; PAYMENT
OF PURCHASE PRICE; TITLE REVIEW PERIOD
2.1 PURCHASE AND SALE. Seller agrees to sell and Purchaser agrees to
purchase the Property for the Purchase Price and in accordance with and subject
to the other terms and conditions set forth herein.
2.2 PAYMENT OF PURCHASE PRICE. Purchaser shall pay the Purchase Price, as
adjusted in the manner specified in ARTICLE VII and as set forth below, to
Seller or other applicable party at Closing by making a wire transfer of
immediately available federal funds to the account of Seller or other applicable
party as specified in writing by Seller. The parties agree that the Purchase
Price shall be allocated between the Real Property and Personal Property in
accordance with the appraisal of the Personal Property to be obtained by
Purchaser prior to the Closing.
2.3 DEPOSIT. Simultaneously with the execution hereof by both Seller and
Purchaser and as a condition precedent to the effectiveness of this Agreement,
Purchaser shall deliver to Escrow Agent a demand promissory note in the amount
of One Hundred Thousand and No/100 Dollars ($100,000.00) executed by Purchaser
and the Durrant Group, Inc., payable to the order of Seller (the "Demand Note").
Escrow Agent shall return the Demand Note to Purchaser if (i) Purchaser
completes the purchase of the Property, (ii) Purchaser terminates this Agreement
in accordance with the provisions of Sections 2.4(d), 5.1(b), 5.4 or 9.5 hereof,
(iii) Seller fails to complete the sale of the Property as required by this
Agreement and such failure is not due to the actions or inactions of Purchaser,
who shall be ready, willing and able to proceed to Closing hereunder, or (iv)
Seller terminates this Agreement in accordance with the provisions of Section
5.3 of this Agreement. Escrow Agent shall deliver the Demand Note to Seller if
(i) Seller terminates this Agreement in accordance with the provisions of
Section 9.6 hereof, due to a default by Purchaser, or (ii) Purchaser fails to
complete the purchase of the Property as required by this Agreement and such
failure is not due to the actions or inactions of Seller, who shall be ready,
willing and able to proceed to Closing hereunder. The Demand Note and the
proceeds to be paid thereunder, if owed, shall constitute full and complete
liquidated damages arising under this Agreement for Purchaser's failure to
complete the purchase of the Property as contemplated herein.
2.4 TESTS AND STUDIES.
(a) Purchaser shall have the right, from the effective date of this
Agreement through the Closing Date, to enter upon the Real Property and to
perform, at Purchaser's expense, such economic, surveying, engineering,
topographic, environmental and other tests, studies and investigations as
Purchaser may deem appropriate.
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(b) Within ten (10) days after executing this Agreement, Seller
shall deliver (or, if so noted, make available to Purchaser on site) the
following to Purchaser, unless such items have previously been delivered to
Purchaser:
(1) To the extent in Seller's possession or reasonably
available to Seller, copies of all Authorizations including, without
limitation, all certificates of occupancy, permits, authorizations,
approvals and licenses issued by Governmental Authorities having
jurisdiction over the Property and copies of all certificates issued by
the local board of fire underwriters (or other body exercising similar
functions) relating to the Property. The foregoing items shall be made
available to Purchaser on site.
(2) A complete list of all Operating Agreements in effect as
of the date of this Agreement, to be attached hereto as SCHEDULE 2 and
made a part hereof, and complete copies of all such Operating Agreements.
(3) A schedule setting forth the type and amounts of insurance
coverage maintained by Seller with respect to the Property as of the date
of this Agreement and complete copies of all such Insurance Policies.
(4) To the extent in Seller's possession or reasonably
available to Seller, financial and operating statements for the Property
for the previous three (3) calendar years and the year to date.
(5) The operating and capital expenditure budget for the
Property for the current calendar year and, to the extent in Seller's
possession or reasonably available to Seller, for the previous three (3)
calendar years.
(6) A complete list of all Tangible Personal Property.
(7) A complete list of all Leased Property and complete copies
of all lease agreements related thereto.
(8) To the extent in Seller's possession or reasonably
available to Seller, copies of statements for Utilities payable for the
current calendar year and prior three calendar years.
(9) SCHEDULE 3, as described in Section 3.11, to be attached
hereto and made a part hereof.
(10) A complete list of all Warranties and Guaranties in
effect as of the date of this Agreement and complete copies of all such
Warranties and Guaranties. The copies of such Warranties and Guaranties
shall be made available to Purchaser on site.
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(11) Copies of all soil tests, structural engineering tests,
masonry tests, percolation tests, water, oil, gas, mineral, radon,
formaldehyde, PCB or other environmental tests, audits or reports, market
studies and site plans related to the Property in Seller's possession or
reasonably available to Seller.
(12) If in Seller's possession or reasonably available to
Seller, copies of complete sets of all architectural, mechanical,
structural and/or electrical plans and specifications used in connection
with the construction of or alterations or repairs to the Property. The
foregoing items shall be made available to Purchaser on site.
(13) If in Seller's possession or reasonably available to
Seller, copies of as-built plans and specifications for the Property. The
foregoing items shall be made available to Purchaser on site.
(14) Structural, mechanical or other engineering reports or
studies related to the Property, if any, in Seller's possession or
reasonably available to Seller. The foregoing items shall be made
available to Purchaser on site.
(15) If in Seller's possession or reasonably available to
Seller, copies of any surveys of all or any portion of the Property.
Seller hereby represents to Purchaser that all Submission Matters delivered to
Purchaser shall be true, accurate and complete in all material respects;
provided, however, that Seller's representations with respect to items furnished
pursuant to Sections 2.4(a)(11), (12), (13), (14) and (15) shall be limited to a
representation that such items are true, accurate and complete copies of items
furnished to Seller by others. From the effective date of this Agreement through
the Closing Date, Seller shall make available to Purchaser, its agents,
auditors, engineers, attorneys, potential lessees and other designees, for
inspection and/or copying, copies of all existing architectural and engineering
studies, surveys, title insurance policies, zoning and site plan materials,
correspondence, environmental audits and reviews, books, records and any and all
other materials or information relating to the Property which are in, or come
into, Seller's possession or control or are otherwise reasonably available to
Seller.
(c) Purchaser shall indemnify and defend Seller against any loss,
damage or claim for personal injury or property damage arising from the
negligent or willful acts upon the Real Property by Purchaser or any agents,
contractors or employees of Purchaser. Purchaser, at its own expense, shall
restore any damage to the Property caused by any of the tests or studies made by
Purchaser. This provision shall survive any termination of this Agreement and a
closing of the transaction contemplated hereby.
(d) Within ten (10) days following the full execution of this
Agreement, Seller shall deliver to Purchaser, at Seller's sole cost and expense,
with two (2) copies to Purchaser's attorneys, Peabody & Brown, a Survey of the
Land and the Improvements, prepared by a surveyor licensed to practice as such
in the state where the Land is located and reasonably
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acceptable to Purchaser, bearing a date not earlier then thirty (30) days from
the date of its delivery, containing a certificate reasonably acceptable to
Purchaser. Within ten (10) days following the full execution of this Agreement,
Seller shall cause to be furnished to Purchaser, at Seller's sole cost and
expense, (i) the Title Commitment, with an effective date of this Agreement,
showing marketable title to be held by Seller in accordance with the Title
Standards, together with legible copies of all documents identified in such
Title Commitment as exceptions to title (collectively, the "TITLE COMMITMENT"),
and (ii) reports of searches of the Uniform Commercial Code records of both the
county and State in which the Property is located (collectively, the "UCC
REPORTS") with respect to the state of title to the Property. Prior to the
expiration of the thirty (30) days from the date the last of the Survey, the UCC
Reports and the Title Commitment are delivered to Purchaser (the "TITLE REVIEW
PERIOD"), Purchaser shall notify Seller of any matters shown on the Survey or
identified in the Title Commitment or the UCC Reports that Purchaser is
unwilling to accept (collectively, "PURCHASER'S OBJECTIONS"). In the event that
any of the Survey, the Title Commitment and/or the UCC Reports are not delivered
to Purchaser within the required ten (10) day period, the Title Review Period
shall be extended by a period of time equal to the number of days after the
expiration of the required ten (10) day period Seller takes to deliver the
Survey, the Title Commitment and/or the UCC Reports. If any of Purchaser's
Objections consist of mortgages, deeds of trust, security agreements,
construction or mechanics' liens or other liens or charges in a fixed sum or
capable of computation as a fixed sum, then, to that extent, notwithstanding
anything herein to the contrary, Seller shall be obligated to pay and discharge
(or bond against in a manner sufficient to cause the Title Company to insure
over such Purchaser's Objections) any such Purchaser's Objections and Escrow
Agent is authorized to pay and discharge at Closing such Purchaser's Objections
to the extent not paid and discharged or bonded against at Closing. For such
purposes, Seller may use all or a portion of the cash to close. Seller shall not
be obligated to incur any expenses to cure any non-monetary Purchaser's
Objections unless Seller agrees to cure such non-monetary Purchaser's Objections
as hereinafter provided. Seller shall notify Purchaser within five (5) days
after receipt of notice of Purchaser's Objections whether Seller agrees to cure
such non-monetary Purchaser's Objections. If Seller notifies Purchaser in
writing within such five (5) day period that Seller agrees to cure such
non-monetary Purchaser's Objections, Seller shall correct such non-monetary
Purchaser's Objections no later than the Closing Date to the reasonable
satisfaction of Purchaser. If Seller does not notify Purchaser within such five
(5) day period of Seller's agreement to cure such non-monetary Purchaser's
Objections, Seller shall be deemed to have elected not to cure such non-monetary
Purchaser's Objections, and Purchaser shall elect (1) to waive such non-monetary
Purchaser's Objections without any abatement in the Purchase Price or (2) to
terminate this Agreement, in which case the Deposit shall be promptly returned
to Purchaser and the parties hereto shall be released from all further
obligations hereunder except those which expressly survive a termination of this
Agreement. Seller shall not, after the date of this Agreement, subject the Real
Property to or permit or suffer to exist any liens, encumbrances, covenants,
conditions, restrictions, easements or other title matters or seek any zoning
changes or take any other action which may affect or modify the status of title
without Purchaser's prior written consent. All title matters revealed by the
Title Commitment, UCC Reports and Survey and not objected to by Purchaser as
provided above (other than those rendering title defeasible and delinquent
mortgages, deeds of trust, security agreements and other liens and charges that
are to
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be paid at Closing as provided above) shall be deemed Permitted Title
Exceptions. Notwithstanding the foregoing, Purchaser shall not be required to
take title to the Real Property subject to any matters (other than those
attributable to Purchaser's acts) which may arise subsequent to the effective
date of the Title Commitment, UCC Reports and Survey examined by Purchaser
during the Study Period.
ARTICLE III
SELLER'S REPRESENTATIONS AND WARRANTIES
To induce Purchaser to enter into this Agreement and to purchase the
Property, and to pay the Purchase Price therefor, Seller hereby makes the
following representations and warranties with respect to the Property, upon each
of which Seller acknowledges and agrees that Purchaser is entitled to rely and
has relied:
3.1 ORGANIZATION AND POWER. Seller is a public trust and agency of the
State of Oklahoma created pursuant to a Trust Indenture dated as of June 29,
1987, and Title 60 Oklahoma Statute 1981 Sections 176 to 180.4, as amended and
supplemented, and has all requisite powers and all governmental licenses,
authorizations, consents and approvals to carry on its business as now conducted
and to enter into and perform its obligations hereunder and under any document
or instrument required to be executed and delivered on behalf of Seller
hereunder.
3.2 AUTHORIZATION AND EXECUTION. This Agreement has been duly authorized
by all necessary action on the part of Seller, has been duly executed and
delivered by Seller, constitutes the valid and binding agreement of Seller and
is enforceable in accordance with its terms. There is no other person or entity
who has an ownership interest in the Property or whose consent is required in
connection with Seller's performance of its obligations hereunder. The person
executing this Agreement on behalf of Seller has the authority to do so.
3.3 NON-CONTRAVENTION. The execution and delivery of, and the performance
by Seller of its obligations under, this Agreement do not and will not
contravene, or constitute a default under, any provision of applicable law or
regulation, Seller's Organizational Documents or any agreement, judgment,
injunction, order, decree or other instrument binding upon Seller or to which
the Property is subject, or result in the creation of any lien or other
encumbrance on any asset of Seller. There are no outstanding agreements (written
or oral) pursuant to which Seller (or any predecessor to or representative of
Seller) has agreed to sell or has granted an option or right of first refusal to
purchase the Property or any part thereof.
3.4 TITLE TO REAL PROPERTY. To Seller's Knowledge, Seller is the sole
owner of fee simple marketable title to the Real Property.
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3.5 NO SPECIAL TAXES. Seller has no Knowledge of any planned special taxes
or assessments that may relate to the Property or any part thereof or any
planned public improvements that may result in a special tax or assessment
against the Property.
3.6 COMPLIANCE WITH EXISTING LAWS. To Seller's Knowledge, Seller possesses
all Authorizations, each of which is valid and in full force and effect, and no
provision, condition or limitation of any of the Authorizations has been
breached or violated. To Seller's Knowledge, Seller has not misrepresented or
failed to disclose any relevant fact in obtaining any Authorizations, and Seller
has no Knowledge of any change in the circumstances under which those
Authorizations were obtained that result in their termination, suspension,
modification or limitation. Seller has no Knowledge, nor has it received notice
within the past three years, of any existing or threatened violation of any
provision of any Applicable Laws including, but not limited to, those of
environmental agencies or insurance boards of underwriters with respect to the
ownership, operation, use, maintenance or condition of the Property or any part
thereof, or requiring any repairs or alterations to the Property other than
those that have been made prior to the date hereof.
3.7 PERSONAL PROPERTY AND INVENTORY. All of the Personal Property and
Inventory being conveyed by Seller hereunder are free and clear of all liens and
encumbrances except for those which will be discharged by Seller at Closing, and
Seller has good and merchantable title thereto and the right to convey same in
accordance with the terms of this Agreement.
3.8 OPERATING AGREEMENTS. There are no management, service, supply or
maintenance contracts in effect with respect to the Property other than the
Operating Agreements described on SCHEDULE 2 hereto, to be provided by Seller
within ten (10) days after executing this Agreement. To Seller's Knowledge,
Seller has performed all of its obligations under each of the Operating
Agreements and no fact or circumstance has occurred which, by itself or with the
passage of time or the giving of notice or both, would constitute a default
under any of the Operating Agreements. To Seller's Knowledge, all other parties
to the Operating Agreements have performed all of their obligations thereunder
in all material respects, and are not in default thereunder in any material
respect. Seller has received no notice of any intention by any of the parties to
any of the Operating Agreements to cancel the same, nor has Seller canceled any
of same.
3.9 INSURANCE. To Seller's Knowledge, all of Seller's Insurance Policies
are valid and in full force and effect and Seller has complied with all
requirements or recommendations of the carriers of the Insurance Policies.
3.10 CONDEMNATION PROCEEDINGS; ROADWAYS. Seller has received no notice of
any condemnation or eminent domain proceeding pending or threatened against the
Property or any part thereof. Seller has no Knowledge of any change or proposed
change in the route, grade or width of, or otherwise affecting, any street,
creek or road adjacent to or serving the Real Property.
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3.11 ACTIONS OR PROCEEDINGS. Other than as set forth on SCHEDULE 3 hereto,
to be provided by Seller within ten (10) days after executing this Agreement,
there is no action, suit or proceeding pending or known to Seller to be
threatened against or affecting Seller in any court, before any arbitrator or
before or by any Governmental Authority which (a) in any manner raises any
question affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which Seller is a party or by which it is bound and
that is or is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of Seller or the Property, (c) could
materially and adversely affect the ability of Seller to perform its obligations
hereunder, or under any document to be delivered pursuant hereto, (d) could
create a lien on the Property, any part thereof or any interest therein, (e)
concerns any past or present employee of Seller or its managing agent or (f)
could otherwise adversely affect the Property, any part thereof or any interest
therein or the use, operation, condition or occupancy thereof.
3.12 LABOR AND EMPLOYMENT MATTERS. Seller is not a party to any Employment
Agreement, written or oral, with respect to the Property. All individuals
involved in the operation of the Prison or otherwise related to the Property are
employees of Operator or another third party. Operator's relationship with
Seller is that of an independent contractor. Seller hereby indemnifies, defends
and holds Purchaser and its operator, lessee or other designee (as Purchaser
shall specify) harmless with respect to all defaults, liabilities, claims, costs
and expenses (including, without limitation, reasonable attorneys' fees) arising
as a result of any inaccuracy or breach of the foregoing representations and
warranties.
3.13 FINANCIAL INFORMATION AND SUBMISSION MATTERS. To Seller's Knowledge,
all of Seller's financial information, including, without limitation, all books
and records and financial statements ("FINANCIAL INFORMATION") is correct and
complete in all material respects and presents accurately the results of the
operations of the Property for the periods indicated. Since the date of the last
financial statement included in Seller's Financial Information, there has been
no material adverse change in the financial condition or in the operations of
the Property.
3.14 BANKRUPTCY. No Act of Bankruptcy has occurred with respect to Seller.
3.15 HAZARDOUS SUBSTANCES. To Seller's Knowledge, neither Seller nor any
previous owner, tenant, occupant or user of the Property, nor any other person,
has engaged in or permitted any operations or activities upon, or any use or
occupancy of the Property or any portion thereof, for the purpose of or in any
way involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials on,
under, in or about the Property in violation of any Applicable Laws. To Seller's
knowledge, no Hazardous Materials have migrated from or to the Property upon,
about, or beneath other properties in violation of any Environmental
Requirements. To Seller's Knowledge, neither the Property nor its existing or
prior uses fail or failed to materially comply with Environmental Requirements.
Seller has no Knowledge of any permits, licenses or other authorizations which
are required under any Environmental Requirements with regard to the current
uses of the Property which have not been obtained and complied with. To Seller's
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Knowledge, neither Seller nor any prior owner, occupant or user of the Property
has received any written notice concerning any alleged violation of
Environmental Requirements in connection with the Property or any liability for
Environmental Damages in connection with the Property for which Seller (or
Purchaser after Closing) may be liable. To Seller's Knowledge, no Hazardous
Materials are constructed, deposited, stored or otherwise located on, under, in
or about the Property in violation of any Environmental Requirements. To
Seller's Knowledge, there exists no writ, injunction, decree, order or judgment
outstanding, nor any lawsuit, claim, proceeding, citation, summons or
investigation, pending or threatened, relating to any alleged violation of
Environmental Requirements on the Property, or from the suspected presence of
Hazardous Materials thereon, or relating to any Environmental Damages. To
Seller's Knowledge, no underground or above ground chemical treatment or storage
tanks, or gas or oil wells are located on the Property.
3.16 UTILITIES. To Seller's Knowledge, all Utilities required for the
operation of the Property either enter the Property through adjoining streets,
or they pass through adjoining land, do so in accordance with valid public
easements or irrevocable private easements, and all of said Utilities are
installed and operating and all installation and connection charges therefor
have been paid in full.
3.17 LEASED PROPERTY. To Seller's Knowledge, all leases of the Leased
Property are in good standing and free from default.
3.18 SUFFICIENCY OF CERTAIN ITEMS. The Property contains not less
than:
(a) a sufficient amount of kitchen equipment, refrigeration
equipment, paper goods, utensils, serviceware and other such personal property
to properly and efficiently operate the dining facilities located upon or within
the Improvements at maximum capacity;
(b) a sufficient amount of furniture, furnishings, mattresses,
pillows, blankets, towels, bed sheets and the like, to operate the Prison at its
current maximum capacity and properly house its inmates;
(c) one (1) average month's supply of paper goods, soaps, cleaning
supplies and other such supplies and materials;
(d) a sufficient amount of furniture, furnishings and customary
office supplies and equipment to properly and efficiently operate the Prison
administrative offices located upon or within the Improvements;
(e) a sufficient amount of laundry equipment (including, without
limitation, washers, dryers, pressing machines, sewing machines and related
equipment) and supplies to properly and efficiently operate the Prison laundry
facilities located upon or within the Improvements, at maximum capacity;
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(f) a sufficient amount of equipment and supplies necessary to fully
and properly operate all of the Prison's security systems;
(g) a sufficient amount of medical equipment, supplies and
furnishings necessary to properly and efficiently operate the Prison infirmary
located upon or within the Improvements, at maximum capacity;
(h) a sufficient number of vehicles and related equipment and
supplies necessary for the customary transfer of inmates as may customarily
arise in connection with the operation of the Prison at maximum capacity;
(i) a sufficient amount of furniture, furnishings and customary
teaching supplies and equipment to properly and efficiently operate the
educational facilities located upon or within the Improvements, at maximum
capacity;
(j) a sufficient amount of furniture, furnishings, equipment and
supplies to properly and efficiently operate the recreational facilities located
upon or within the Improvements, at maximum capacity;
(k) a sufficient amount of furniture, furnishings, equipment and
supplies to properly and efficiently operate the industry and workshop
facilities located upon or within the Improvements, at maximum capacity; and
(l) such other furniture, furnishings, equipment and supplies as may
be necessary to operate the Prison in a proper and efficient manner.
3.19 AMERICANS WITH DISABILITIES ACT AND REHABILITATION ACT. To Seller's
Knowledge, the Property is in compliance with the Americans With Disabilities
Act and Section 504 of the Rehabilitation Act of 1973, to the extent such acts
are applicable to facilities such as the one on the Property.
3.20 STRUCTURAL CONDITION. To Seller's Knowledge, there is no latent
material defect in the Improvements or structural elements thereof, mechanical
systems (including, without limitation, all heating, ventilating, air
conditioning, plumbing, electrical, utility and sprinkler systems) therein, the
utility system servicing the Property and the roofs.
3.21 ZONING. To Seller's Knowledge, the present zoning of the Property
permits the current use thereof without special variances. Seller has no
Knowledge of any fact, proceeding or threatened action or proceeding which could
result in a modification or termination of the present zoning of the Property.
3.22 NO OTHER PROPERTY INTERESTS. There are no property interests,
buildings, structures or other improvements or personal property that are owned
by Seller which are necessary for the operation of the Prison that are not being
conveyed pursuant to this Agreement.
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3.23 PRIVATE PRISON CONTRACT. The Private Prison Contract is in full force
and effect. To Seller's Knowledge, Seller has performed all of its obligations
under the Private Prison Contract and no fact or circumstance has occurred
which, by itself or with the passage of time or the giving of notice or both,
would constitute a default under the Private Prison Contract. To Seller's
Knowledge, the State has performed all of its obligations under the Private
Prison Contract in all material respects, and is not in default thereunder in
any material respect. Seller has received no notice of any intention by the
State to cancel the Private Prison Contract, nor has Seller acted to cancel
same. The State has not indicated to Seller any interest in exercising the
State's option to purchase the Real Property as set forth in Section 9.16 of the
Private Prison Contract and such option to purchase shall not preclude, prevent,
undo or otherwise affect the transaction contemplated in this Agreement.
3.24 LITIGATION. There are no actions, suits or proceedings pending or, to
Seller's Knowledge, threatened against or affecting the Property or any portion
thereof, or relating to or arising out of the ownership or operation of the
Property, or by any Governmental Authority.
Each of the representations and warranties contained in this Article III and its
various subparagraphs are intended for the benefit of Purchaser and may be
waived in whole or in part, by Purchaser, but only by an instrument in writing
signed by Purchaser. All of Seller's representations and warranties, and all
rights and remedies arising in connection with the untruth or inaccuracy of any
such representations and warranties shall survive the Closing of the transaction
contemplated hereby for a period of one (1) year from the Closing Date.
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
To induce Seller to enter into this Agreement and to sell the Property,
Purchaser hereby makes the following representations and warranties, upon each
of which Purchaser acknowledges and agrees that Seller is entitled to rely and
has relied:
4.1 ORGANIZATION AND POWER. Purchaser is duly organized, validly existing
and in good standing under the laws of the State of Colorado, and has all
corporate and/or partnership powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and to enter into and perform its obligations under this Agreement and
any document or instrument required to be executed and delivered on behalf of
Purchaser hereunder.
4.2 NON-CONTRAVENTION. The execution and delivery of this Agreement and
the performance by Purchaser of its obligations hereunder do not and will not
contravene, or constitute a default under, any provisions of applicable law or
regulation, or any agreement, judgment, injunction, order, decree or other
instrument binding upon Purchaser or result in the creation of any lien or other
encumbrance on any asset of Purchaser.
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4.3 LITIGATION. There is no action, suit or proceeding, pending or known
to be threatened, against or affecting Purchaser in any court or before any
arbitrator or before any Governmental Authority which (a) in any manner raises
any question affecting the validity or enforceability of this Agreement or any
other agreement or instrument to which Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of Purchaser, and/or (c) could materially and
adversely affect the ability of Purchaser to perform its obligations hereunder,
or under any document to be delivered pursuant hereto.
4.4 BANKRUPTCY. No Act of Bankruptcy has occurred with respect to
Purchaser.
ARTICLE V
CONDITIONS PRECEDENT; RIGHT TO TERMINATE
5.1 AS TO PURCHASER'S OBLIGATIONS. Purchaser's obligations hereunder are
subject to the satisfaction of the following conditions precedent:
(a) SELLER'S DELIVERIES. Seller shall have delivered to or for the
benefit of Purchaser, on or before the Closing Date, all of the documents and
other information required of Seller pursuant to SECTIONS 7.2 AND 7.4 hereof.
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS; OBLIGATIONS OF
SELLER; CERTIFICATE. All of Seller's representations and warranties made in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the date of Closing as if then made; there shall have been no
material adverse change in the business conducted at the Property or the
financial results thereof from the date of acceptance of this Agreement and no
matter, condition or event shall have occurred which could in Purchaser's
reasonable judgment, materially and adversely affect the operation, value or
marketability of the Property or any part thereof, or the ability to obtain
financing in connection with the Property; Seller shall have performed in all
material respects all of its covenants and other obligations under this
Agreement and Seller shall have executed and delivered to Purchaser at Closing a
certificate to the foregoing effect. Seller shall disclose all financial
information regarding the Property as it receives such information from the
Operator. In addition to the foregoing, in the event that all matters set forth
in Article III hereof are not true and correct in the absolute (i.e., regardless
of Seller's Knowledge of same) as of the Closing Date, Purchaser shall have the
right to terminate this Agreement upon written notice to Seller, whereupon the
Deposit shall be promptly returned to Purchaser.
(c) TITLE TO PROPERTY. Seller shall be the sole owner of good and
marketable fee simple title to the Real Property and good and marketable fee
simple title to the Tangible Personal Property, free and clear of all liens,
encumbrances, restrictions, conditions and
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agreements except for Permitted Title Exceptions. Seller shall not have taken
any action or permitted or suffered any action to be taken by others from the
date hereof and through and including the date of Closing that would adversely
affect the status of title to the Real Property and Tangible Personal Property.
(d) CONDITION OF IMPROVEMENTS. The Improvements and the Tangible
Personal Property (including but not limited to the mechanical systems,
electronic security and monitoring systems, plumbing, electrical, wiring,
appliances, fixtures, heating, air conditioning and ventilating equipment,
elevators, boilers, equipment, roofs, structural members and furnaces) shall be
in the same condition at Closing as they are as of the date hereof, reasonable
wear and tear excepted. Prior to Closing, Seller shall not have diminished the
quality or quantity of maintenance and upkeep services heretofore provided to
the Real Property and the Tangible Personal Property and Seller shall not have
diminished the Inventory. Seller shall not have removed or caused or permitted
to be removed any part or portion of the Real Property or the Tangible Personal
Property without Purchaser's prior written consent unless the same is replaced,
prior to Closing, with a similar item of at least equal suitability, quality and
value, free and clear of any lien or security interest.
(e) UTILITIES. All of the Utilities shall be installed in and
operating at the Property, and service shall be available for the removal of
garbage and other waste from the Property.
(f) PRIVATE PRISON CONTRACT. The Private Prison Contract is in full
force and effect, with no existing breach thereunder on the part of Seller or
the State, and Purchaser has received assurances of the foregoing from the State
that are reasonably satisfactory to Purchaser.
(g) OPERATING AGREEMENTS. The Operating Agreements are in full force
and effect, with no existing breach thereunder on the part of Seller or any
other party thereto.
(h) TITLE INSURANCE. Good and marketable fee simple title to the
Real Property shall be insurable as such by the Title Company, at its lowest
rates allowed by law, subject only to the Permitted Exceptions as determined in
accordance with SECTION 2.4 hereof and including, without limitation, all
applicable deletions of standard exceptions and endorsements permitted under
applicable state law which are customarily required by institutional investors
purchasing property comparable to the Property.
Each of the conditions contained in this Section are intended for the benefit of
Purchaser and may be waived in whole or in part, by Purchaser, but only by an
instrument in writing signed by Purchaser.
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5.2 AS TO SELLER'S OBLIGATIONS. Seller's obligations hereunder are subject
to the satisfaction of the following conditions precedent:
(a) PURCHASER'S DELIVERIES. Purchaser shall have delivered to or for
the benefit of Seller, on or before the Closing Date, all of the documents and
payments required of Purchaser pursuant to SECTIONS 7.3 AND 7.4 hereof.
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS; OBLIGATIONS OF
PURCHASER. All of Purchaser's representations and warranties made in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the date of Closing as if then made and Purchaser shall have
performed in all material respects all of its covenants and other obligations
under this Agreement.
Each of the conditions contained in this Section are intended for the benefit of
Seller and may be waived in whole or in part, by Seller, but only by an
instrument in writing signed by Seller.
5.3 SELLER'S RIGHT TO TERMINATE. On or before November 20, 1997, Purchaser
shall deliver to Seller a binding commitment (whether in the form of a loan or
equity contribution) consistent with industry standards which will provide
Purchaser with the funds necessary to pay the Purchase Price at Closing. Any
other provisions of this Agreement to the contrary notwithstanding, if Seller,
in its reasonable discretion, determines that Purchaser has failed to provide a
commercially reasonable commitment from a reasonably acceptable issuer by
November 20, 1997, Seller thereafter (for so long as an acceptable commitment
remains undelivered by Purchaser) shall have the right to terminate this
Agreement upon written notice to Purchaser, whereupon the Deposit shall be
promptly returned to Purchaser.
5.4 PURCHASER'S RIGHT TO TERMINATE. Any other provisions of this Agreement
to the contrary notwithstanding, in the event Purchaser is unable to obtain a
binding commitment for debt or equity financing, as contemplated in SECTION 5.3
above, due solely to the existence of the State's option to purchase set forth
in Section 9.16 of the Private Prison Contract, Purchaser shall have the right
to terminate this Agreement upon written notice to Seller, whereupon the Deposit
shall be promptly returned to Purchaser.
ARTICLE VI
COVENANTS OF SELLER
To induce Purchaser to enter into this Agreement and to purchase the
Property, and to pay the Purchase Price therefor, Seller covenants and agrees to
the following:
6.1 OPERATING AGREEMENTS. Seller shall not enter into any new Operating
Agreements, leases in which it is lessee or other agreements with respect to the
Property, nor shall Seller enter into any agreements modifying the Operating
Agreements, unless (a) any such agreement or modification will not bind
Purchaser or the Property after the date of Closing or (b)
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Seller has obtained Purchaser's prior written consent to such agreement or
modification. Seller agrees to cancel and terminate effective as of the Closing
Date, any Operating Agreement which Purchaser requests in writing within thirty
(30) days after the effective date of this Agreement.
6.2 WARRANTIES AND GUARANTIES. Seller shall not before or after Closing
release or modify any Warranties and Guaranties, if any, except with the prior
written consent of Purchaser.
6.3 INSURANCE. Seller shall pay all premiums on, and shall not cancel or
voluntarily allow to expire, any of Seller's Insurance Policies unless such
policy is replaced, without any lapse of coverage, by another policy or policies
providing coverage at least as extensive as the policy or policies being
replaced.
6.4 OPERATION OF PROPERTY PRIOR TO CLOSING. Seller covenants and agrees
with Purchaser that, between the date of this Agreement and the date of Closing:
(a) Subject to the restrictions contained herein, Seller shall
operate the Property in the same manner in which Seller operated the Property
prior to the execution of this Agreement, so as to keep the Property in good
condition, reasonable wear and tear excepted.
(b) Seller shall maintain its books of account and records in the
usual, regular and ordinary manner, in accordance with sound accounting
principles applied on a basis consistent with the basis used in keeping its
books in prior years.
(c) Seller shall maintain in full force and effect all Insurance
Policies.
(d) Seller shall maintain in full force and effect the Private
Prison Contract and all Operating Agreements.
(e) Seller shall use and operate the Property in compliance with
Applicable Laws and the requirements of any agreements affecting the Property.
(f) Except as otherwise permitted hereby, Seller shall not take any
action or fail to take action the result of which would have a material adverse
effect on the Property or Purchaser's ability to continue the operation thereof
after the date of Closing in substantially the same manner as presently
conducted, or which would cause any of the representations and warranties
contained in ARTICLE III hereof to be untrue as of Closing.
(g) Seller shall not fail to maintain the Improvements and the
Tangible Personal Property (including, but not limited to, the mechanical
systems, plumbing, electrical, wiring, appliances, fixtures, heating, air
conditioning and ventilating equipment, elevators, boilers, equipment, roofs,
structural members and furnaces) in the same condition as they are as of the
date hereof, reasonable wear and tear excepted.
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(h) Seller shall not diminish the quality or quantity of maintenance
and upkeep services heretofore provided to the Real Property and the Tangible
Personal Property and Seller shall not permit the Inventory to be diminished
other than as a result of the ordinary and necessary operation of the Prison by
Seller.
(i) Seller shall not remove or cause or permit to be removed any
part or portion of the Real Property or the Tangible Personal Property without
the express written consent of Purchaser unless the same is replaced, prior to
Closing, with similar items of at least equal suitability, quality and value,
free and clear of any liens or security interests.
(j) Neither Seller nor Seller's managing agent shall (1) make any
agreements which shall be binding upon Purchaser with respect to the Property or
that otherwise cannot be terminated without penalty upon thirty (30) days
notice, or (2) change, modify, extend, renew or terminate any agreement in
effect as of the date hereof which would be binding upon Purchaser with respect
to the Property without the express written consent of Purchaser.
(k) Seller shall promptly advise Purchaser of any litigation,
arbitration or administrative hearing concerning or affecting the Property of
which Seller obtains Knowledge.
(l) Seller shall, subject to limitations provided by law with
respect to privacy rights of inmates, give to Purchaser, its attorneys,
accountants and other representatives, during normal business hours and as often
as may be reasonably requested, full access to all books, records and files
relating to the Property so long as the same does not unreasonably interfere
with Seller's business operations.
6.5 NO MARKETING. Seller, for so long as this Agreement remains in effect,
shall not market the Property for sale or enter into discussions or negotiations
with potential purchasers of the Property.
The foregoing covenants of Seller are for the benefit of Purchaser or its
assignee of its rights under this Agreement.
ARTICLE VII
CLOSING
7.1 CLOSING. The Closing shall occur on a business day designated by
Purchaser, with at least ten (10) days notice to Seller, which date shall be no
later than January 6, 1998. As more particularly described below, at the Closing
the parties hereto will meet to (i) execute all of the documents required to be
delivered in connection with the transactions contemplated hereby (the "CLOSING
DOCUMENTS"), (ii) deliver the same to Escrow Agent, and (iii) take all other
action required to be taken in respect of the transactions contemplated hereby.
The Closing will occur at the offices of Andrews Davis Legg Bixler Milsten &
Price in Oklahoma City, Oklahoma, or at such other place as Purchaser shall
designate by written notice to Seller given at least five days
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prior to the Closing. At the Closing, Purchaser shall deliver the Purchase Price
to Escrow Agent and, provided there has been no change in the status of title as
reflected in the Title Commitment and Survey (following Seller's correction of
Purchaser's Objections as provided under Section 2.4 hereof), Escrow Agent shall
record the Deed, release and date, where appropriate, the Closing Documents in
accordance with the joint instructions of Seller and Purchaser and shall send,
by wire transfer, all sums owing to Seller hereunder to Seller. As provided
herein, the parties hereto will agree upon adjustments and perorations to
certain items which cannot be exactly determined at the Closing and will make
the appropriate adjustments with respect thereto. Possession of the Property
shall be delivered to Purchaser at Closing, subject only to Permitted Title
Exceptions.
7.2 SELLER'S DELIVERIES. At the Closing, Seller shall deliver to Escrow
Agent all of the following instruments, each of which shall have been duly
executed and, where applicable, acknowledged and/or sworn on behalf of Seller
and shall be dated as of the Closing Date:
(a) The certificate required by SECTION 5.1(B) hereof.
(b) The Deed.
(c) The Bill of Sale - Inventory.
(d) The Bill of Sale - Personal Property.
(e) The Assignment and Assumption Agreement.
(f) The Private Prison Contract Assignment.
(g) The Operator Estoppel Certificate.
(h) Certificates of Title for all vehicles owned by Seller and used
in connection with the Property, duly endorsed in favor of Purchaser.
(i) Such agreements, affidavits or other documents as may be
required by the Title Company to issue the Owner's Title Policy subject only to
the Permitted Title Exceptions and to eliminate such standard exceptions and to
issue such endorsements thereto which may be eliminated and issued under
applicable state law and which are customarily required by institutional
investors purchasing property comparable to the Property.
(j) The FIRPTA Certificate.
(k) All original Warranties and Guaranties in Seller's possession or
reasonably available to Seller.
(l) Certified copies of Seller's Organizational Documents.
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(m) Resolutions reasonably accepted to Purchaser, together with all
other necessary approvals and consents of Seller and such documentary and other
evidence as may be reasonably required by Purchaser or Escrow Agent, authorizing
and evidencing the authorization of (i) the execution on behalf of Seller of
this Agreement and the authority of the person or persons who are executing the
various documents to be executed and delivered by Seller prior to, at or
otherwise in connection with the Closing, and (ii) the performance by Seller of
its obligations hereunder and under such documents.
(n) A valid, final and unconditional certificate of occupancy for
the Real Property and Improvements, issued by the appropriate Governmental
Authority.
(o) For all Operating Agreements other than those being terminated
in accordance with the provisions of Section 6.1 hereof, the originals of such
agreements, duly assigned to Purchaser and with such assignment acknowledged and
approved by the other parties to such Operating Agreements to the extent
required by such Operating Agreements.
(p) For all Seller's Insurance Policies that are to be assigned to
Purchaser, if any (which election shall be made by Purchaser, if at all, in
writing, no later than thirty (30) days prior to the Closing Date), the
originals of such Insurance Policies, together with an assignment or assignments
thereof to Purchaser acknowledged and approved by all requisite parties.
(q) To the extent in Seller's possession or reasonably available to
Seller, originals of the following items: (1) complete sets of all
architectural, mechanical, structural and/or electrical plans and specifications
used in connection with the construction of or alterations or repairs to the
Property; and (2) as-built plans and specifications for the Property.
(r) A list of Seller's outstanding accounts receivable as of
midnight on the date prior to the Closing, specifying the name of each account
and the amount due Seller.
(s) A list of all vendors and suppliers servicing the Prison.
(t) All books, records, operating reports, appraisal reports, files
and other materials in Seller's possession or control which are necessary in
Purchaser's discretion to maintain continuity of operation of the Property.
(u) Written notice executed by Seller notifying all interested
parties that the Property has been conveyed to Purchaser and directing that all
payments, invoices, inquiries and the like be forwarded to Purchaser at the
address to be provided by Purchaser.
(v) A current UCC Report showing no financing statements by Seller
as Debtor covering the Property unless the Secured Parties named therein have
submitted termination statements therefor to be delivered in return for payment
at Closing.
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(w) To the extent available, executed originals of all
Authorizations, if any, transferred or assigned to Purchaser at Closing as
required hereunder.
(x) To the extent not previously delivered to Purchaser, all
Warranties and Guaranties in effect as of the date of this Agreement.
(y) To the extent in Seller's possession or reasonably available to
Seller and not previously delivered to Purchaser, copies of all Authorizations
including, without limitation, all certificates of occupancy, permits,
authorizations, approvals and licenses issued by Governmental Authorities having
jurisdiction over the Property and copies of all certificates issued by the
local board of fire underwriters (or other body exercising similar functions)
relating to the Property.
(z) To the extent not previously delivered to Purchaser, all
structural, mechanical or other engineering reports or studies related to the
Property, if any, in Seller's possession or reasonably available to Seller.
(aa) A written opinion from Seller's counsel stating that the
transaction contemplated herein shall be unaffected by the State's option to
purchase the Real Property, set forth in Section 9.16 of the Private Prison
Contract, and that such option to purchase cannot be used legally to nullify
this Agreement or preclude, prevent, undo or otherwise affect the transaction
contemplated herein.
(bb) Any other document or instrument reasonably requested by
Purchaser or required hereby.
7.3 PURCHASER'S DELIVERIES.
(a) At the Closing, Purchaser shall deliver to Escrow Agent the
Purchase Price described in SECTION 2.2 hereof.
(b) At the Closing, Purchaser shall deliver to Escrow Agent, the
following instruments, each of which shall have been duly executed and, where
applicable, acknowledged and/or sworn on behalf of Purchaser and shall be dated
as of the Closing Date: (i) the Assignment and Assumption Agreement, and (ii)
the Private Prison Contract Assignment.
(c) At the Closing, Purchaser shall deliver to Seller any other
document or instrument reasonably requested by Seller or required hereby.
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7.4 MUTUAL DELIVERIES. At the Closing, Purchaser and Seller shall mutually
execute and deliver each to the other:
(a) A final closing statement reflecting the Purchase Price and the
adjustments and perorations required hereunder and the allocation of income and
expenses required hereby.
(b) Such other and further documents, papers and instruments as may
be reasonably required by the parties hereto or their respective counsel.
7.5 CLOSING COSTS. Except as is explicitly provided in this Agreement,
each party hereto shall pay its own legal fees and expenses. All filing fees for
the Deed, if any, and all transfer, recording, sales or other similar taxes and
surtaxes due with respect to the transfer of title to the Real Property, if any,
shall be paid by Seller. Seller shall pay for the costs associated with the
releases of any deeds of trust, mortgages and other financing encumbering the
Property and for any costs associated with any corrective instruments. Purchaser
shall pay all other closing costs (except any costs incurred by Seller for its
own account) in carrying out the transactions contemplated hereunder, including
without limitation sales taxes, if any, due upon the sale of the Personal
Property.
7.6 REVENUE AND EXPENSE ALLOCATIONS. All revenues and expenses with
respect to the Property, and applicable to the period of time before and after
Closing, determined in accordance with sound accounting principles consistently
applied, shall be allocated between Seller and Purchaser as provided herein.
Seller shall be entitled to all revenue and shall be responsible for all
expenses for the period of time up to but not including the date of Closing, and
Purchaser shall be entitled to all revenue and shall be responsible for all
expenses for the period of time from, after and including the date of Closing.
Such adjustments shall be shown on the closing statements (with such supporting
documentation as the parties hereto may require being attached as exhibits to
the closing statements) and shall increase or decrease (as the case may be) the
cash amount payable by Purchaser pursuant to SECTION 2.2 hereof. Without
limiting the generality of the foregoing, the following items of revenue and
expense shall be allocated at Closing:
(a) Revenue and expenses under the Private Prison Contract.
(b) Personal property and real property taxes.
(c) Revenue and expenses under the Operating Agreements to be
assigned to and assumed by Purchaser. Seller shall receive a credit for, or a
refund of, any deposits made for utility service.
(d) Utility charges (including, but not limited to, charges for
water, sewer and electricity).
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(e) Insurance premiums for all insurance policies being assigned to
Purchaser, if any. Seller shall receive a credit for, or a refund of, any
unearned premiums paid on such Insurance Policies.
(f) License and permit fees, where transferable.
(g) All other revenues and expenses of the Property.
(h) Such other items as are usually and customarily prorated between
purchasers and sellers of properties in the area where the Property is located.
If accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills and/or personal
property taxes), the parties shall allocate such revenue or expenses at Closing
on the best available information, subject to adjustment upon receipt of the
final bill or other evidence of the applicable revenue or expense. The
obligation to make the adjustment shall survive the closing of the transaction
contemplated by this Agreement. Any revenue received or expense incurred by
Seller or Purchaser with respect to the Property after the date of Closing shall
be promptly allocated in the manner described herein and the parties shall
promptly pay or reimburse any amount due. The proration provisions of this
Agreement shall survive the closing of the transaction contemplated hereby for a
period of six (6) months.
7.7 ACQUISITION AND PAYMENT FOR INVENTORY. Seller agrees to sell to
Purchaser or its lessee, operator or other designee (as Purchaser shall specify)
and Purchaser agrees to purchase or cause its lessee, operator or other designee
to purchase from Seller inventories of food and beverage in unopened cases and
unused reserve stock (as opposed to in-use operating supplies) of linens,
towels, paper goods, soaps, cleaning supplies, office supplies, medical
supplies, automotive supplies, educational supplies, recreational supplies,
workshop supplies, serviceware, utensils and miscellaneous inmate supplies and
the like. Purchaser shall pay for same at fair market value or cost, whichever
is lower, on the Closing Date. Purchaser shall not be required to pay for in-use
operating supplies although title to same shall pass from Seller to Purchaser or
its lessee, operator or other designee (as Purchaser shall specify) at Closing
without additional compensation or payment. Such in-use operating supplies shall
include at a minimum the following operating supplies (i) linens: three (3)
sheets, pillowcases, bath towels and wash cloths per bed; (ii) serviceware,
utensils and similar supplies sufficient for operation of the Prison dining
facilities, and (iii) one (1) average month's supply of paper goods, soaps, and
cleaning supplies, (iv) a sufficient amount of furniture, furnishings,
mattresses, pillows, blankets and the like to house the Prison's inmates at
maximum occupancy, (v) a sufficient amount of furniture, furnishings and
supplies (including, without limitation, one (1) average month's supply of
disposable supplies) to properly and efficiently operate the Prison's infirmary,
laundry, administrative offices, security systems, educational facilities,
recreational facilities and workshop facilities, and (vi) a sufficient amount of
supplies to operate the vehicles used in connection with the operation of the
Prison. The parties hereto shall jointly take inventories of
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all such personal property as near as practical to the Closing Date, and all
adjustments and payments due thereon shall be made at Closing
ARTICLE VIII
GENERAL PROVISIONS
8.1 CONDEMNATION. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, of all or any portion of the Real
Property ,or any proposed sale in lieu thereof, Seller shall give written notice
thereof to Purchaser promptly after Seller learns or receives notice thereof. If
all or any part of the Real Property is, or is to be, so condemned or sold,
Purchaser shall have the right to terminate this Agreement pursuant to SECTION
9.3 hereof. If Purchaser elects not to terminate this Agreement, all proceeds,
awards and other payments arising out of such condemnation or sale (actual or
threatened) shall be paid or assigned, as applicable, to Purchaser at Closing.
Seller shall not settle or compromise any such proceeding without Purchaser's
written consent. If Purchaser elects to terminate this Agreement by giving
Seller written notice thereof prior to the Closing, the Deposit shall be
promptly returned to Purchaser and all rights and obligations of Seller and
Purchaser hereunder (except those set forth herein which expressly survive a
termination of this Agreement) shall terminate immediately.
8.2 RISK OF LOSS. The risk of any loss or damage to the Property prior to
the delivery of the Deed at Closing shall remain upon Seller. If any such loss
or damage occurs prior to delivery of the Deed at Closing, Purchaser shall have
the right to terminate this Agreement pursuant to SECTION 9.3 hereof. If
Purchaser elects not to terminate this Agreement, all insurance proceeds and
rights to proceeds arising out of such loss or damage shall be paid or assigned,
as applicable, to Purchaser at Closing and Purchaser shall receive as a credit
against the Purchase Price the amount of any deductibles under the policies of
insurance covering such loss or damage. If Purchaser elects to terminate this
Agreement by giving Seller written notice thereof prior to the Closing, the
Deposit shall be promptly returned to Purchaser and all rights and obligations
of Seller and Purchaser hereunder (except those set forth herein which expressly
survive a termination of this Agreement) shall terminate immediately.
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8.3 BROKER. The parties acknowledge that Broker has been the procuring
cause of this Agreement. Seller and Purchaser each shall pay Broker a .5%
commission, when, as and if the transaction contemplated hereby actually closes,
in accordance with a separate agreement or agreements between the Broker and the
parties hereto. Purchaser warrants and represents to Seller that Purchaser has
not dealt with any other real estate broker in connection with this transaction,
nor has Purchaser been introduced to the Property or to Seller by any other real
estate broker, and Purchaser shall indemnify Seller and hold Seller harmless
from and against any claims, suits, demands or liabilities of any kind or nature
whatsoever arising on account of the claim of any other person, firm or
corporation to a real estate brokerage commission or a finder's fee as a result
of having dealt with Purchaser, or as a result of having introduced Purchaser to
Seller or to the Property. In like manner, Seller warrants and represents to
Purchaser that Seller has not dealt with any other real estate broker in
connection with this transaction, nor has Seller been introduced to Purchaser by
any other real estate broker, and Seller shall indemnify Purchaser and save and
hold Purchaser harmless from and against any claims, suits, demands or
liabilities of any kind or nature whatsoever arising on account of the claim of
any person, firm or corporation to a real estate brokerage commission or a
finder's fee as a result of having dealt with Seller in connection with this
transaction. This provision shall survive any termination of this Agreement and
a closing of the transaction contemplated hereby.
8.4 BULK SALE. It shall be the obligation of Seller to comply with any
bulk sale requirements, statutes, laws, ordinances and regulations promulgated
with respect thereto, if any, in the State in which the Property is located, or
in or by any governmental entity having jurisdiction with respect thereto, and
to provide proof of such compliance or proof that no such compliance is
required, to Purchaser, at or prior to Closing. In any event, Seller shall
indemnify Purchaser and save and hold Purchaser harmless from and against any
claims, suits, demands, liabilities or obligations of any kind or nature
whatsoever, including all costs of defending same, and reasonable attorneys'
fees paid or incurred in connection therewith, arising out of or relating to any
claim made by any third party or any liability asserted by any third party that
any applicable bulk sales law or like statute has not been complied with. The
provisions of this Section shall survive the Closing of the transaction
contemplated hereby.
8.5 CONFIDENTIALITY. Except as hereinafter provided, from and after the
execution of this Agreement, Purchaser and Seller (to the extent allowed by law
as a public entity) shall keep the terms, conditions and provisions of this
Agreement confidential and neither shall make any public announcements hereof
unless the other first approves of same in writing, nor shall either disclose
the terms, conditions and provisions hereof, except to persons who "need to
know", such as their respective officers, directors, employees, attorneys,
accountants, engineers, surveyors, consultants, financiers, partners, investors,
potential lessees and bankers and such other third parties whose assistance is
required in connection with the consummation of this transaction. After Closing,
Purchaser shall be free to disclose previously confidential information in its
sole, unfettered discretion.
8.6 SELLER'S ACCOUNTS RECEIVABLE. It is expressly agreed by and between
Purchaser and Seller that Seller is not hereby
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agreeing to sell to Purchaser, and Purchaser is not hereby agreeing to purchase
from Seller, any of Seller's accounts receivable. All of Seller's accounts
receivable shall be and remain the property of Seller, subsequent to the Closing
of the transaction contemplated hereby. At the Closing, Seller shall prepare a
list of its outstanding accounts receivable as of midnight on the date prior to
the Closing, specifying the name of each account and the amount due to Seller.
Purchaser shall hold any funds received by Purchaser explicitly designated as
payment of such accounts receivable, in trust, if Purchaser actually collects
any such amounts, and shall pay the monies collected in respect thereof to
Seller at the end of each calendar month, accompanied by a statement showing the
amount collected on each such account. Other than the foregoing, Purchaser shall
have no obligation with respect to any such account, and Purchaser shall not be
required to take any legal proceeding or action to effect collection on behalf
of Seller. It is generally the intention of Purchaser and Seller that although
all of Seller's accounts receivable shall be and remain the property of Seller,
still, if any such accounts are paid to Purchaser, then Purchaser shall collect
same and remit to Seller in the manner above provided. Nothing herein contained
shall be construed as requiring Purchaser to remit to Seller any funds collected
by Purchaser on account of Purchaser's accounts receivable generated from Prison
operations, even if the person or entity paying same is also indebted to Seller.
Seller agrees that it shall not bring any legal action to enforce collection of
payment of any accounts receivable against any current tenant of the Property or
other third party in a contractual or business relationship with the Property as
of the Closing Date.
ARTICLE IX
LIABILITY OF PURCHASER AND SELLER;
INDEMNIFICATION BY SELLER AND PURCHASER; DEFAULT
9.1 LIABILITY OF PURCHASER. Except for obligations expressly assumed or
agreed to be assumed by Purchaser hereunder, Purchaser is not assuming any
obligations of Seller or any liability for claims arising out of any act,
omission or occurrence with respect to the Property which occurs, accrues or
arises prior to the Closing Date, and Seller hereby indemnifies and holds
Purchaser harmless from and against any and all claims, costs, penalties,
damages, losses, liabilities and expenses (including reasonable attorneys' fees)
that may at any time be incurred by Purchaser as a result of (1) obligations of
Seller not expressly assumed or agreed to be assumed by Purchaser hereunder, or
(2) acts, omissions or occurrences with respect to the Property which occur,
accrue or arise prior to the Closing Date. The provisions of this Section shall
survive the Closing of the transaction contemplated hereby.
9.2 INDEMNIFICATION BY SELLER. Seller hereby indemnifies and holds
Purchaser harmless from and against any and all claims, costs, penalties,
damages, losses, liabilities and expenses (including reasonable attorneys' fees)
that may at any time be incurred by Purchaser, whether before or after Closing,
as a result of any inaccuracy or breach by Seller of any of its representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by Seller pursuant hereto except for any breach or inaccuracy of any
representation or warranty as to which Seller has given Purchaser written notice
prior to Closing of the untruth or inaccuracy or of which Purchaser otherwise
had actual knowledge prior to the Closing and nevertheless elected to consummate
the Closing; provided, however, the foregoing knowledge
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limitation on Seller's indemnity shall not limit Purchaser's remedy described in
SECTION 9.5(A)(II) hereof. The provisions of this Section shall survive the
Closing of the transaction contemplated hereby.
9.3 Except for continuing obligations expressly assumed by Seller
hereunder, Seller shall not be liable for claims arising out of any act,
omission or occurrence with respect to the Property which occurs, accrues or
arises after the Closing Date, and Purchaser hereby indemnifies and holds Seller
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by Seller as a result of (1) obligations expressly assumed or
agreed to be assumed by Purchaser hereunder, or (2) acts, omissions or
occurrences with respect to the Property which occur, accrue or arise after the
Closing Date. The provisions of this Section shall survive the Closing of the
transaction contemplated hereby.
9.4 Purchaser hereby indemnifies and holds Seller harmless from and
against any and all claims, costs, penalties, damages, losses, liabilities and
expenses (including reasonable attorneys' fees) that may at any time be incurred
by Seller, whether before or after Closing, as a result of any inaccuracy or
breach by Purchaser of any of its representations, warranties, covenants or
obligations set forth herein or in any other document delivered by Purchaser
pursuant hereto except for any breach or inaccuracy of any representation or
warranty as to which Purchaser has given Seller written notice prior to Closing
of the untruth or inaccuracy or of which Seller otherwise had actual knowledge
prior to the Closing and nevertheless elected to consummate the Closing. The
provisions of this Section shall survive the Closing of the transaction
contemplated hereby.
9.5 DEFAULT BY SELLER/FAILURE OF CONDITIONS PRECEDENT. If any condition
set forth herein for the benefit of Purchaser cannot or will not be satisfied
prior to Closing, or upon the occurrence of any other event that would entitle
Purchaser to terminate this Agreement and its obligations hereunder, and if
Seller fails to cure any such matter or satisfy that condition within ten (10)
business days after notice thereof from Purchaser (or such other time period as
may be explicitly provided for herein), Purchaser, at its option, may elect (a)
to terminate this Agreement, in which event (i) the Deposit shall be promptly
returned to Purchaser, (ii) if the condition which has not been satisfied is a
breach of a representation, warranty or covenant, then Seller shall be obligated
upon demand to reimburse Purchaser for Purchaser's actual out-of-pocket
inspection, financing and other costs related to Purchaser's entering into this
Agreement, inspecting the Property and preparing for a Closing of the
transaction contemplated hereby, including, without limitation, Purchaser's
attorneys' fees incurred in connection with the preparation, negotiation and
execution of this Agreement and in connection with Purchaser's due diligence
review and preparation for a Closing, and (iii) all other rights and obligations
of Seller and Purchaser hereunder (except those set forth herein which expressly
survive a termination of this Agreement) shall terminate immediately; or (b)
elect to proceed to Closing. If Purchaser elects to proceed to Closing and there
is either a misrepresentation or breach of a warranty by Seller (other than a
breach of a representation or warranty of which Purchaser had actual knowledge
prior to the Closing and nevertheless elected to consummate the Closing) or the
32
<PAGE>
breach of a covenant by Seller or a failure by Seller to perform its obligations
hereunder, Purchaser shall retain all remedies accruing as a result thereof,
including, but not limited to the remedy of specific performance of Seller's
covenants and obligations and the remedy of the recovery of all reasonable
damages resulting from Seller's breach of warranty or covenant.
9.6 DEFAULT BY PURCHASER/FAILURE OF CONDITIONS PRECEDENT. If any condition
set forth herein for the benefit of Seller (other than a default by Purchaser)
cannot or will not be satisfied prior to Closing, and if Purchaser fails to
satisfy that condition within ten (10) business days after notice thereof from
Seller (or such other time period as may be explicitly provided for herein),
Seller may, at its option, elect either (a) to terminate this Agreement in which
event the Deposit shall be promptly returned to Purchaser and the parties hereto
shall be released from all further obligations hereunder except those which
expressly survive a termination of this Agreement, or (b) to waive its right to
terminate, and instead, to proceed to Closing. If, prior to Closing, Purchaser
defaults in performing any of its obligations under this Agreement (including
its obligation to purchase the Property), and Purchaser fails to cure any such
default within ten (10) business days after notice thereof from Seller, then
Seller's sole remedy for such default shall be to terminate this Agreement and
retain payments received under the Demand Note. Seller and Purchaser agree that,
in the event of such a default, the damages that Seller would sustain as a
result thereof would be difficult if not impossible to ascertain. Therefore,
Seller and Purchaser agree that, Seller shall retain payments received under the
Demand Note as full and complete liquidated damages and as Seller's sole remedy.
9.7 COSTS AND ATTORNEYS' FEES. In the event of any litigation or dispute
between the parties arising out of or in any way connected with this Agreement,
resulting in any litigation, then the prevailing party in such litigation shall
be entitled to recover its costs of prosecuting and/or defending same,
including, without limitation, reasonable attorneys' fees at trial and all
appellate levels. The provisions of this Section shall survive the Closing of
the transaction contemplated hereby.
9.8 LIMITATION OF LIABILITY. Notwithstanding anything herein to the
contrary, except in the case of fraud by either party, the liability of each
party hereto resulting from the breach or default by either party shall be
limited to actual damages incurred by the injured party and except in the case
of fraud by either party, the parties hereto hereby waive their rights to
recover from the other party consequential, punitive, exemplary, and speculative
damages. The provisions of this SECTION 9.6 shall survive the Closing of the
transaction contemplated hereby.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 COMPLETENESS; MODIFICATION. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto, including without
limitation that certain letter agreement dated as of October 6, 1997 by and
33
<PAGE>
between Purchaser and Seller. This Agreement may be modified only by a written
instrument duly executed by the parties hereto.
10.2 ASSIGNMENTS. Purchaser may assign its rights hereunder without the
consent of Seller.
10.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
10.4 DAYS. If any action is required to be performed, or if any notice,
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on the
first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
10.5 GOVERNING LAW. This Agreement and all documents referred to herein
shall be governed by and construed and interpreted in accordance with the laws
of the State of Oklahoma.
10.6 COUNTERPARTS. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
10.7 SEVERABILITY. If any term, covenant or condition of this Agreement,
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
10.8 COSTS. Regardless of whether Closing occurs hereunder, and except as
otherwise expressly provided herein, each party hereto shall be responsible for
its own costs in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees of attorneys, engineers
and accountants.
10.9 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, transmitted by
facsimile transmission, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such copies
as designated below. Any notice, request, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) when actually delivered to the intended recipient.
34
<PAGE>
If to Seller: HINTON ECONOMIC DEVELOPMENT AUTHORITY
101 West Main Street
P.O. Box 1038
Hinton, Oklahoma 73047
Attention: Mr. Michael Chaloner, Secretary
Telephone: (405) 542-3101
Facsimile: (405) 542-3107
With a copy to: ANDREWS DAVIS LEGG BIXLER MILSTEN & PRICE, INC.
500 West Main Street, Suite 500
Oklahoma City, Oklahoma 73102
Attention: Leroy J. Patton, Esq.
Telephone: (405) 272-9241
Facsimile: (405) 235-8786
If to Purchaser: FORESITE CAPITAL FACILITIES CORPORATION
3773 Cherry Creek North Drive - Suite 240
Denver, Colorado 81615
Attention: Mr. Norman E. Wirkler, President
Telephone: (303) 377-2900
Facsimile: (303) 377-0621
With a copy to: PEABODY & BROWN
1255 23rd Street, N.W.
Washington, D.C. 20037
Attention: Bruce S. Lane, Esq.
Telephone: (202) 973-7700
Facsimile: (202) 973-7750
If to Escrow Agent/Title Company: Caddo County Abstract Company, Inc.
as agent for First American Title Insurance
Company
109 Southwest Second Street
P.O. Box 307
Anadarko, Oklahoma 73105
Telephone: (405) 247-3369
Facsimile: (405) 247-7510
or to such other address as the intended recipient may have specified in a
notice to the other party. Any party hereto may change its address or designate
different or other persons or entities to receive copies by notifying the other
party and Escrow Agent in a manner described in this Section.
35
<PAGE>
10.10 ESCROW AGENT. Escrow Agent referred to in the definition thereof
contained in SECTION 1.1 hereof has agreed to act as such for the convenience of
the parties without fee or other charges for such services as Escrow Agent.
Escrow Agent shall not be liable: (a) to any of the parties for any act or
omission to act except for its own willful misconduct; (b) for any legal effect,
insufficiency, or undesirability of any instrument deposited with or delivered
by Escrow Agent or exchanged by the parties hereunder, whether or not Escrow
Agent prepared such instrument; (c) for any loss or impairment of funds that
have been deposited in escrow while those funds are in the course of collection,
or while those funds are on deposit in a financial institution, if such loss or
impairment results from the failure, insolvency or suspension of a financial
institution; (d) for the expiration of any time limit or other consequence of
delay, unless a properly executed written instruction, accepted by Escrow Agent,
has instructed Escrow Agent to comply with said time limit; (e) for the default,
error, action or omission of either party to the escrow. Escrow Agent, in its
capacity as escrow agent, shall be entitled to rely on any document or paper
received by it, believed by such Escrow Agent, in good faith, to be bona fide
and genuine. In the event of any dispute as to the disposition of the Deposit or
any other monies held in escrow, or of any documents held in escrow, Escrow
Agent may, if such Escrow Agent so elects, interplead the matter by filing an
interpleader action in a court of general jurisdiction in the county or circuit
where the Real Property is located (to the jurisdiction of which both parties do
hereby consent), and deliver the Deposit to the Registry of such court, or
deposit any such documents with respect to which there is a dispute in the
Registry of such court, whereupon such Escrow Agent shall be relieved and
released from any further liability as Escrow Agent hereunder. Escrow Agent
shall not be liable for Escrow Agent's compliance with any legal process,
subpoena, writ, order, judgment and decree of any court, whether issued with or
without jurisdiction, and whether or not subsequently vacated, modified, set
aside or reversed.
10.11 INCORPORATION BY REFERENCE. All of the exhibits attached hereto are
by this reference incorporated herein and made a part hereof.
10.12 SURVIVAL. All of the representations, warranties, covenants and
agreements of Seller and Purchaser made in, or pursuant to, this Agreement shall
survive Closing and shall not merge into the Deed or any other document or
instrument executed and delivered in connection herewith.
10.13 FURTHER ASSURANCES. Seller and Purchaser each covenant and agree to
sign, execute and deliver, or cause to be signed, executed and delivered, and to
do or make, or cause to be done or made, upon the written request of the other
party, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably required by either
party hereto for the purpose of or in connection with consummating the
transactions described herein.
10.14 NO PARTNERSHIP. This Agreement does not and shall not be construed
to create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of Seller and Purchaser specifically
established hereby.
36
<PAGE>
10.15 TIME OF ESSENCE. Time is of the essence with respect to every
provision hereof.
10.16 SIGNATORY EXCULPATION. The signatories for Purchaser and Seller are
executing this Agreement in their capacities as representatives of Purchaser and
Seller, respectively, and not individually and, therefore, shall have no
personal or individual liability of any kind in connection with this Agreement
and the transactions contemplated by it.
10.17 RULES OF CONSTRUCTION. The following rules shall apply to the
construction and interpretation of this Agreement:
(a) Singular words shall connote the plural number as well as the
singular and vice versa, and the masculine shall include the feminine and the
neuter. All headings, tables of content and section references are solely for
convenience and shall not constitute a part of this Agreement.
(b) Each party hereto and its counsel have reviewed and revised (or
requested revisions of) this Agreement and have participated in the preparation
of this Agreement, and therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Agreement or any
exhibits hereto.
(c) As used herein, the term or phrases "Effective Date," "date of
this Agreement" or "date hereof" shall mean the first date this Agreement is
fully executed by Seller and Purchaser.
[SIGNATURE PAGE FOLLOWS]
37
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
executed in their names by their respective duly authorized representatives.
SELLER:
HINTON ECONOMIC DEVELOPMENT AUTHORITY,
a public trust and agency of the State of
Oklahoma
By:/s/KENNETH DOUGHTY
Name: Kenneth Doughty
Title: Vice Chairman
Date of Execution: November 17, 1997
PURCHASER:
FORESITE CAPITAL FACILITIES CORPORATION,
a Colorado corporation
By:/s/NORMAN WIRKLER
Name: Norman Wirkler
Title: President
Date of Execution: November 13, 1997
38
EXHIBIT 2.2
AMENDMENT TO AGREEMENT
___OF PURCHASE AND SALE__
The undersigned hereby agree that that certain Agreement of Purchase and
Sale ("Purchase Agreement") dated as of November 17, 1997 between Foresite
Capital Facilities Corporation ("Foresite") and Hinton Economic Development
Authority ("HEDA") is hereby amended as follows:
1. Section 2.3 of the Purchase Agreement is hereby amended to provide that
within five (5) business days from the date hereof, the Demand Note (as defined
in the Purchase Agreement) shall be replaced with a new promissory note in such
increased amount as shall be necessary to cover HEDA's direct, actual,
out-of-pocket costs, not to exceed Two Hundred Fifty Thousand and 00/100 Dollars
($250,000), should the "Closing" not take place under the Purchase Agreement and
HEDA thereupon is entitled to draw on the Demand Note in accordance with the
terms of the Purchase Agreement.
2. The outside date for the Closing under the Purchase Agreement shall be
extended to the later of (i) January 30, 1998, or (ii) the date all necessary
consents and approvals are secured and in place and HEDA has delivered all items
required under the terms of the Purchase Agreement.
As modified herein, the provisions of the Purchase Agreement remains in
full force and effect.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed in their names by their respective duly authorized representatives.
FORESITE CAPITAL FACILITIES CORNELL CORRECTIONS, INC.
CORPORATION
By: /s/ NORMAN WIRKLER By: /s/ STEVEN W. LOGAN
Name: Norman Wirkler Name: Steven W. Logan
Title:President Title:Senior Vice President, CFO
HINTON ECONOMIC DEVELOPMENT
AUTHORITY
CORPORATION
By: /s/ ELDON MCCUMBER
Name: Eldon McCumber
Title:Chairman
EXHIBIT 2.3
AMENDMENT NO. 2 TO AGREEMENT OF PURCHASE AND SALE
This Amendment No. 2 to Agreement of Purchase and Sale (this "AMENDMENT")
dated as of January 6, 1998, is entered into by and among Hinton Economic
Development Authority, a public trust and agency of the State of Oklahoma
created pursuant to a Trust Indenture dated as of June 29, 1987, in Title 60
Oklahoma Statute 1981, Sections 176 to 180.4, as amended and supplemented
("SELLER"), and Cornell Corrections, Inc., a Delaware corporation ("PURCHASER").
WHEREAS, Seller and Foresite Capital Facilities Corporation ("FORESITE")
entered into an Agreement of Purchase and Sale dated as of November 17, 1997, as
amended by the Amendment dated December 10, 1997 (the "AGREEMENT"), which
Agreement was subsequently assigned by Foresite to Purchaser.
WHEREAS, Seller and Purchaser desire to further amend the Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The definition of "Purchase Price" set forth in SECTION 1.1 of the
Agreement is hereby amended and restated to read as follows:
" 'PURCHASE PRICE' shall mean Forty-Three Million and No/100 Dollars
($43,000,000.00) LESS the amount of accrued vacation, sick and holiday pay
as of Closing assumed by Purchaser pursuant to SECTION 2.5 below, payable
in the manner described in SECTION 2.2 hereof."
2. The Agreement is hereby amended by inserting a new SECTION 2.5 which
shall read as follows:
"2.5 ACCRUED VACATION, SICK AND HOLIDAY PAY. As further consideration for
the transactions contemplated herein, Purchaser hereby assumes and agrees
to pay Seller's accrued vacation, sick and holiday pay as of Closing
relating to Operator's employees (the "ACCRUED VACATION") determined in
accordance with generally accepted accounting principles consistently
applied ("GAAP"), and such amount shall be deducted from the Purchase
Price to be paid by Purchaser. As of the Closing Date, Seller estimates
the amount of the Accrued Vacation to be $ -0- and this amount shall be
adjusted and finalized in accordance with SECTION 7.6 below."
3. The Agreement is hereby amended by inserting second and third
paragraphs at the end of SECTION 3.15 which shall read as follows:
<PAGE>
"Seller represents and warrants that (a) sewage or wastewater treatment
does not occur at the Property, (b) no direct or indirect discharge or
release of waste or wastewater presently occurs in connection with
operations at the Property which requires any permit or other
authorization from any governmental authority, except for permission to
connect to a publicly owned sewer system, (c) the Property has authorized
connections to a publicly owned sewer system suitable for the conveyance
and treatment offsite of all sewage generated at the Property, and (d) all
sewage sludge resulting from sewage treatment at the Property has been or
is currently being removed from the Property, or beneficially reused at
the Property, in accordance with all Environmental Requirements.
Seller agrees that to the extent that the costs and expenses for the
proper removal, disposal or reuse of the sewage sludge referenced in (d)
of the preceding paragraph exceeds $250, Seller shall be responsible for
and shall pay (or if Purchaser has paid or incurred such costs, Seller
shall immediately reimburse Purchaser for all such amounts) all such
excess costs and expenses."
4. The Agreement is hereby amended by inserting a new paragraph at the end
of SECTION 7.6 which shall read as follows:
"Notwithstanding the foregoing and for purposes of convenience, Seller
will close its accounting records as of December 31, 1997, and Purchaser
will account for Seller's operations for the period from January 1, 1998
through the close of business on January 5, 1998 (the "INTERIM PERIOD").
The calculation of Seller's revenues and expenses during the Interim
Period shall be determined by multiplying Purchaser's net income for the
month of January 1998 determined in accordance with GAAP by the fraction
of 5/31. The adjustments and prorations required by this Agreement shall
be made in accordance with the following procedure. Seller shall prepare,
within 90 days following the Closing Date, a balance sheet (the "CLOSING
DATE BALANCE SHEET") of Seller dated as of the Closing Date, including a
listing of Accrued Vacation. Purchaser shall prepare, within 90 days
following the Closing Date, an income statement (the "INTERIM PERIOD
INCOME STATEMENT") of Purchaser for the month of January 1998. The Closing
Date Balance Sheet and Interim Period Income Statement shall be prepared
in accordance with GAAP. If, within fifteen days following the receipt of
the Closing Date Balance Sheet by Purchaser and the Interim Period Income
Statement by Seller, Purchaser or Seller, as the case may be, has not
objected in writing thereto, then the Closing Date Balance Sheet and the
Interim Period Income Statement shall be used in computing any required
adjustment. If Purchaser or Seller, as the case may be, shall object in
writing to the Closing Date Balance Sheet or the Interim Period Income
Statement, then Seller and Purchaser
<PAGE>
shall negotiate in good faith and attempt to resolve their disagreement.
Should such negotiations not result in agreement within 20 days, then the
matter will be submitted to a mutually agreed national accounting firm as
is jointly selected by Purchaser and Seller (the firm accepting the
engagement being referred to as the "ACCOUNTING ARBITER") whose decision
with respect thereto shall be final and binding on the parties in all
respects. Fees and expenses incurred in preparing the Closing Date Balance
Sheet shall be borne by Seller and the fees and expenses incurred in
preparing the Interim Period Income Statement shall be borne by Purchaser.
Fees and expenses incurred by Purchaser and Seller in reviewing the
financial statements shall be borne by the party incurring same. The fees
of any Accounting Arbiter shall be borne equally by Purchaser and Seller.
On the tenth business day following the final determination of any
required adjustment pursuant to this Section, the party owing the required
adjustment amount shall pay to the other party the full amount in
immediately available funds."
5. The Agreement is hereby amended by inserting anew paragraph at the end
of Section 9.1 which shall read as follows:
"Seller agrees to indemnify, defend, and hold Purchaser harmless from any
and all claims, demands, actions, fines, penalties, costs, and/or expenses
(including without limitation reasonable costs of investigation, redemption, or
monitoring) related to or arising from the use, reuse, release, storage,
disposal, handling, or distribution of sewage sludge which occurred or commenced
prior to the Closing Date". The provisions of this Section shall survive the
closing of the transaction contemplated hereby.
6. The notice information with respect to the Purchaser is hereby amended
to read as follows:
"If to Purchaser: Cornell Corrections, Inc.
4801 Woodway, Suite 100E
Houston, Texas 77056
Attn: Mr. Steven Logan, Senior Vice President
and Chief Financial Officer
Telephone: 713/623-0790
Facsimile: 713/623-2853
With a copy to: Liddell, Sapp, Zively, Hill & LaBoon, LLP
3200 Texas Commerce Tower
600 Travis
Houston, Texas 77002
Attn: Mr. Michael T. Peters
Telephone: 713/226-1331
<PAGE>
Facsimile: 713/223-3717"
7. Except as provided herein, the terms of the Agreement shall remain in
full force and effect.
8. This Amendment may be executed in several counterparts, and all such
counterparts, when so executed and delivered, shall constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the 6TH day of January, 1998.
SELLER:
HINTON ECONOMIC DEVELOPMENT
AUTHORITY, a public trust and agency of the
State of Oklahoma
By: /s/ ELDON MCCUMBER
Eldon McCumber, Chairman
PURCHASER:
CORNELL CORRECTIONS, INC., a Delaware
corporation
By: /s/ STEVEN W. LOGAN
Steven W. Logan, Chief Financial Officer
EXHIBIT 2.4
ASSIGNMENT OF AGREEMENT OF PURCHASE AND SALE
THIS ASSIGNMENT OF AGREEMENT OF PURCHASE AND SALE, hereinafter referred to
as this "ASSIGNMENT," dated as of January 5 , 1998, is made and entered into by
and between FORESITE CAPITAL FACILITIES CORPORATION, a Delaware corporation
("ASSIGNOR") and CORNELL CORRECTIONS OF OKLAHOMA, INC., a Delaware corporation
("ASSIGNEE").
RECITALS:
Hinton Economic Development Authority and Assignor entered into an
Agreement of Purchase and Sale (as amended, the "CONTRACT") dated effective as
of November 17, 1997, as amended by an Amendment to Agreement of Purchase and
Sale, a copy of which is attached.
Assignor now desires to assign the Contract to Assignee.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee do hereby
agree as follows:
SECTION 1. ASSIGNMENT OF CONTRACT. Assignor hereby assigns all of its
rights, duties and obligations under the Contract to Assignee, and Assignee
assumes all of Assignor's duties and obligations under the Contract.
SECTION 2. DEFINITIONS AND REFERENCES. Terms used herein, which are not
otherwise defined or modified herein but which are defined in the Contract shall
have the meanings therein ascribed to them. The term "CONTRACT" or "AGREEMENT"
as used in the Contract or any other instrument, document or writing furnished
in connection therewith shall mean the Contract as hereby assigned.
SECTION 3. MISCELLANEOUS. This Assignment (a) shall be binding upon and
inure to the benefit of Assignor and Assignee, and their respective heirs, legal
representatives, successors, assigns, receivers and trustees; (b) may be
modified or amended only by a writing signed by each party hereto; (c) shall be
governed by and construed in accordance with the laws of the State of Oklahoma
and the United States of America; (d) may be executed by facsimile signatures
and in several counterparts, and by the parties hereto on separate counterparts,
and each counterpart, when so executed and delivered, shall constitute an
original agreement, and all such separate counterparts shall constitute but one
and the same agreement; and (e) embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, consents and understandings relating to such subject matter.
The headings herein shall be accorded no significance in interpreting this
Assignment.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to
be executed effective as of the date first written above.
FORESITE CAPITAL FACILITIES CORPORATION
By: /s/ NORMAN WIRKLER
Name: NORMAN WIRKLER
President
CORNELL CORRECTIONS OF OKLAHOMA, INC.
By: /s/ STEVEN W. LOGAN
Name: STEVEN W. LOGAN
Sr. Vice President
