SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File No.: 0-23038
CORRECTIONAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 11-2872782
_______________________________ __________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1819 Main Street, Suite 1000, Sarasota, Florida 34236
(Address of principal executive offices)
Issuer's telephone number: (941) 953-9199
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [x] No []
The number of shares outstanding of the issuer's Common Stock, par
value $.0l per share, as of October 31, 1997, was 7,677,354.
<PAGE>
CORRECTIONAL SERVICES CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance
Sheets - December 31, 1996
and September 30, 1997....................................3
Condensed Consolidated Statements
of Income - for the Nine Months
Ended September 30, 1997 and September 30, 1996
and the Three Months Ended September 30, 1997.............4
Condensed Consolidated Statement
of Cash Flows - for the Nine Months
Ended September 30, 1997 and September 30, 1996
and the Three Months Ended September 30, 1997.............5
Notes to Financial Statements.............................6
Item 2. Management's Discussion and Analysis
or Plan of Operation...............................7
Part II. Other Information..............................11
Signature................................................14
<PAGE>
<TABLE>
CORRECTIONAL SERVICES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>
ASSETS September 30, December 31,
1997 1996
____________ ___________
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 8,736,525 $20,932,309
Accounts receivable 9,350,384 4,023,620
Receivable from sale of equipment and
leasehold improvements 1,380,000 1,476,000
Prepaid expenses and other current assets 1,256,268 2,001,973
____________ ___________
Total current assets 20,723,177 28,433,902
EQUIPMENT AND LEASEHOLD IMPROVEMENTS AT COST, NET 22,103,152 12,040,149
LONG-TERM RECEIVABLE FROM SALE OF EQUIPMENT AND
LEASEHOLD IMPROVEMENTS 1,224,082 2,031,882
OTHER ASSETS
Deferred development and start-up costs, net 8,399,699 5,817,959
Deferred income taxes 1,295,000 1,495,000
Other 837,978 485,157
___________ ___________
$54,583,088 $50,304,049
___________ ___________
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 7,209,598 $ 4,873,542
Current portion of mortgage payable 1,800 -
___________ ___________
Total current liabilities 7,211,398 4,873,542
LONG-TERM MORTGAGE PAYABLE 322,366 -
LONG-TERM PORTION OF ACCRUED CLOSURE COSTS 1,165,000 1,606,000
SUBORDINATED PROMISSORY NOTES 3,943,074 3,899,841
STOCKHOLDERS' EQUITY
Preferred Stock, $.01 par value, 1,000,000
shares authorized, none issued and outstanding - -
Common Stock, $.01 par value, 30,000,000
shares authorized, 7,673,504 and 7,660,779
shares issued and outstanding 76,735 76,608
Additional paid-in capital 42,135,980 42,022,593
Accumulated deficit (271,465) (2,174,535)
___________ ___________
Total stockholders' equity 41,941,250 39,924,666
___________ ___________
$54,583,088 $50,304,049
___________ ___________
___________ ___________
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CORRECTIONAL SERVICES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
Nine Months Ended
September 30,
_________________________
1997 1996
___________ ___________
<S> <C> <C>
Revenues $42,520,258 $23,184,210
___________ ___________
Expenses:
Operating 30,863,519 15,835,673
General and administrative 8,678,605 6,637,329
___________ ___________
39,542,124 22,473,002
___________ ___________
Operating income 2,978,134 711,208
Interest income (expense), net 144,936 (643,539)
___________ ___________
Income before income taxes 3,123,070 67,669
Income tax provision (benefit) 1,220,000 (26,000)
___________ ___________
Net earnings (loss) $1,903,070 93,669
___________ ___________
___________ ___________
Net Earnings (loss) per share $0.23 $0.02
___________ ___________
___________ ___________
Weighted average shares outstanding 8,292,274 5,760,440
___________ ___________
___________ ___________
The accompanying notes are an integral part of these statements.
<PAGE>
CORRECTIONAL SERVICES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
Three Months Ended
September 30,
_________________________
1997 1996
___________ ___________
<S> <C> <C>
Revenues $16,252,306 $ 8,139,992
Expenses:
Operating 11,738,669 5,593,930
General and administrative 3,083,924 2,235,347
___________ ___________
14,822,593 7,829,277
___________ ___________
Operating income 1,429,713 310,715
Interest income (expense), net ( 26,333) ($219,521)
___________ __________
Income before income taxes 1,403,380 91,194
Income tax provision (benefit) 549,000 ( $16,000)
___________ ___________
Net earnings (loss) $854,380 $107,194
___________ ___________
___________ ___________
Net Earnings (loss) per share $0.10 $0.02
___________ ___________
___________ ___________
Weighted average shares outstanding 8,298,441 6,173,133
___________ ___________
___________ ___________
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CORRECTIONAL SERVICES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
<CAPTION>
Nine Months Ended
September 30,
___________________________
1997 1996
____________ ____________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,903,070 $ 93,669
Adjustments to reconcile net earnings
to net cash provided by (used in) operating
activities:
Depreciation and amortization 1,874,676 999,381
Deferred income tax benefit 200,000 -
Changes in operating assets and liabilities:
Accounts receivable (5,326,764) (777,476)
Prepaid expenses and other current assets 745,705 454,627
Accounts payable and accrued liabilities 2,458,903 551,987
Reserve for Fort Worth and NYC facilities
carrying costs (563,842) -
Reserve for New Jersey facility carrying
costs - (300,000)
___________ ___________
Net cash provided by operating activities 1,291,748 1,022,188
___________ ___________
Cash flows from investing activities:
Capital expenditures (10,757,100) (5,007,491)
Development and start-up costs (3,501,669) (2,767,503)
Change in construction funds - 516,239
___________ ____________
Net cash (used in) investing activities (14,258,769) (7,258,755)
___________ ____________
Cash flows from financing activities:
Proceeds from long-term borrowing 325,000 21,966
Payment on long-term borrowings (834) (4,003,408)
Proceeds (payments) on short-term debt - (1,221,022)
Proceeds from sale of equipment and leasehold
improvements 903,800 -
Proceeds from exercise of stock options and
warrants 90,223 218,267
Proceeds from issuance of common stock - 26,582,112
Common stock issuance costs - (647,598)
Other assets (546,952) 34,704
___________ ___________
Net cash provided by financing activities: 771,237 20,985,021
___________ ___________
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (12,195,784) 14,748,454
Cash and cash equivalents at beginning of period 20,932,309 3,756,748
___________ ___________
Cash and cash equivalents at end of period $ 8,736,525 $18,505,202
___________ ___________
___________ ___________
Supplemental disclosures of cash flows information:
Cash paid during the period for:
Interest $ 315,871 $ 767,116
___________ ___________
___________ ___________
Income taxes $ 460,776 $ (137,958)
___________ ___________
___________ ___________
The accompanying notes are an integral part of these statements.
<PAGE>
CORRECTIONAL SERVICES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
<CAPTION>
Three Months Ended
September 30,
___________________________
1997 1996
_____________ ____________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 854,380 $ 107,194
Adjustments to reconcile net earnings
to net cash provided by (used in) operating
activities:
Depreciation and amortization 710,396 341,764
Deferred income tax benefit 100,000 -
Changes in operating assets and liabilities:
Accounts receivable (732,732) (366,555)
Prepaid expenses and other current assets 644,803 48,046
Accounts payable and accrued liabilities 1,468,920 656,043
Reserve for Fort Worth and NYC facilities
carrying costs (264,921) -
Reserve for New Jersey facility carrying
costs - -
___________ __________
Net cash provided by operating activities 2,780,846 786,492
___________ __________
Cash flows from investing activities:
Capital expenditures (5,740,545) (268,558)
Development and start-up costs (1,491,924) (1,512,828)
Change in construction funds - -
___________ __________
Net cash ( used in) investing activities (7,232,469) (1,781,386)
----------- ----------
Cash flows from financing activities:
Proceeds from long-term borrowing - -
Payment on long-term borrowings - (3,584,486)
Proceeds (payments) on short-term debt - (2,969,000)
Proceeds from sale of equipment and leasehold
improvements 460,000 -
Proceeds from exercise of stock options and
warrants - 6,019
Proceeds from issuance of common stock - 26,582,112
Common stock issuance costs - (647,598)
Other assets (401,249) 75,292
___________ ___________
Net cash provided by financing activities: 58,751 19,462,339
___________ ___________
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,392,872) 18,467,445
Cash and cash equivalents at beginning of period 13,129,397 37,757
___________ ___________
Cash and cash equivalents at end of period $ 8,736,525 $18,505,202
___________ ___________
___________ ___________
Supplemental disclosures of cash flows information:
Cash paid during the period for:
Interest $105,312 $285,072
___________ ___________
Income taxes $26,127 ($219,868)
___________ ___________
___________ ___________
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
CORRECTIONAL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
NOTE 1 - In the opinion of management of Correctional Services
Corporation and subsidiaries (the "Company"), the accompanying
unaudited condensed consolidated financial statements as of
September 30, 1997, and for the three and nine months ended
September 30, 1997, include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation.
The statements should be read in conjunction with the
consolidated financial statements and the related notes included
in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996 and do not include all the information and
footnote disclosures required by generally accepted accounting
principles for complete financial statements.
The results of operations for the three and nine months ended
September 30, 1997 are not necessarily indicative of the results
to be expected for the full year.
NOTE 2 - In February 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share," which is effective for financial
statements for both interim and annual periods ending after
December 15, 1997. Early adoption of the new standard is not
permitted. The new standard eliminates primary and fully diluted
earnings per share and requires presentation of basic and diluted
earnings per share together with disclosure of how the per share
amounts were computed. The pro forma effect of adopting the new
standard for the nine months ended September 30, 1997 and 1996
would be basic earnings per share of $0.24 and $0.02, and diluted
earnings per share of $0.23 and $0.02, respectively and for the
three months ended September 30, 1997 and 1996, basic earnings
per share of $0.10 and $0.02 and diluted earnings per share of
$0.10 and $0.02, respectively.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of
Operation
Results of Operations
Nine Months ended September 30, 1997 Compared to Nine Months
ended September 30, 1996.
Revenue increased 83.4% from $23,184,210 for the nine months
ended September 30, 1996 to $42,520,258 for the nine months ended
September 30, 1997. The net increase in revenues for the 1997
period as compared to the 1996 period resulted principally from
the full nine months operations of the Company's Phoenix Arizona
facility and the opening of the juvenile detention facilities and
related educational programs in Polk (December 1996) and Pahokee
(January 1997), Florida. In addition, revenues were generated in
the first nine months of 1997 by newly opened facilities in Bell
County, Milam County and Frio County, Texas and from per diem
increases in several ongoing contracts.
Operating expenses increased 94.9% from $15,835,673 for the nine
months ended September 30, 1996 to $30,863,519 for the nine
months ended September 30, 1997 primarily due to increases in
payroll which increased $10,731,325, or 105.6%. The opening of
the facilities noted above and the addition of management
personnel in the corporate office accounted for the increase in
operating expenses. As a percentage of revenues, operating
expenses increased from 68.3% for the nine months ended September
30, 1996 to 72.6% for the nine months ended September 30, 1997.
The percentage increase primarily reflects higher expenses as a
percentage of revenues during the phase-in period for the
Company's newly opened facilities including the Polk and Pahokee,
Florida facilities.
General and administrative expenses increased 30.8% from
$6,637,329 for the nine months ended September 30, 1996 to
$8,678,605 for the nine months ended September 30, 1997. The
increase in general and administrative expenses was primarily
attributable to a full nine months operations of the Company's
Phoenix Arizona facility and the opening of the detention
facilities previously noted in Polk and Pahokee, Florida, Milam,
Bell and Frio counties in Texas. As a percentage of revenues,
general and administrative expenses were 28.6% and 20.4% for the
nine months ended September 30, 1996 and 1997, respectively. The
percentage decline for the nine months ended September 30, 1997
can primarily be attributed to lower general and administrative
expenses, as a percentage of revenues, at the Company's corporate
offices as well as lower general and administrative expense
percentages experienced at the Company's newly opened Polk and
Pahokee, Florida facilities.
Operating income for the 1996 and 1997 first nine months of each
year was $711,208 and $2,978,134 respectively, an increase of
318.7%. Improved occupancy levels, the full nine months
operations of the Company's Phoenix Arizona facility and the
contribution from the Company's newly opened facilities primarily
accounts for the increase in operating income.
The Company had interest expense, net of interest income of
$643,539 for the nine months ended September 30, 1996, while for
the same 1997 period the Company had interest income, net of
interest expense of $144,936, an improvement of $788,475. The
improvement resulted primarily from utilizing a portion of the
net proceeds received from the September 1996 public offering of
Common Stock to repay bank indebtedness which reduced interest
expense, and from investing the balance of the net proceeds in
cash equivalents which increased interest income.
Income taxes increased from a credit of $26,000 for the nine
months ended September 30, 1996 to a provision of $1,220,000 for
the same 1997 period as a result of the above noted improvement
in operations.
As a result of the foregoing factors, the Company had a net
income of $93,669 or $0.02 per share for the nine months ended
September 30, 1996 compared to net income of $1,903,070 or $0.23
per share for the nine months ended September 30, 1997.
Three Months ended September 30, 1997 Compared to Three Months
ended September 30, 1996.
Revenue increased $8,112,314 from $8,139,992 for the three months
ended September 30, 1996 to $16,252,306 for the three months
ended September 30, 1997. The net increase in revenues for the
1997 period as compared to the 1996 period resulted principally
from the 1997 full quarter operations of the Company's juvenile
detention facilities and related educational programs in Polk and
Pahokee, Florida. In addition, revenues were generated in the
third quarter of 1997 from facilities which opened after
September 1996, including Milam, Bell and Frio Counties in Texas
and from per diem increases in several ongoing contracts.
Operating expenses increased 109.9% from $5,593,930 for the three
months ended September 30, 1996 to $11,738,669 for the three
months ended September 30, 1997 primarily due to increases in
payroll which increased $4,428,483, or 123.6%. As a percentage of
revenues, operating expenses increased from 68.7% for the three
months ended September 30, 1996 to 72.2% for the three months
ended September 30, 1997. The aforementioned percentage
increases primarily reflects higher expenses as a percentage of
revenues during the phase-in period for the Company's newly
opened facilities.
General and administrative expenses increased 38.0% from
$2,235,347 for the three months ended September 30, 1996 to
$3,083,924 for the three months ended September 30, 1997. The
increase in general and administrative expenses was primarily
attributable to the full quarter's operations of the detention
facilities previously noted in Polk and Pahokee, Florida and
Milam, Bell and Frio counties in Texas. As a percentage of
revenues, general and administrative expenses were 27.5% and
19.0% for the three months ended September 30, 1996 and 1997,
respectively. The percentage decline for the three months ended
September 30, 1997 primarily can be attributed to lower general
and administrative expenses, as a percentage of revenues, at the
Company's corporate offices as well as lower general and
administrative expense percentages experienced at the Company's
newly opened Polk and Pahokee, Florida facilities.
Operating income for the respective 1996 and 1997 third quarters
were $310,715 as compared to $1,429,713, an increase of 360.1%.
Improved occupancy levels, and the contribution from the
Company's newly opened facilities primarily account for the
increase in operating income.
The Company had interest expense, net of interest income of
$219,521 and $26,335 for the three months ended September 30,
1996 and 1997 respectively. Interest expense for the third
quarter of 1997 was offset by interest income of $113,899 which
was generated from investing the balance of the net proceeds from
the September 1996 public offering.
For the three months ended September 30, 1996 and 1997, income
taxes increased from a credit of $16,000 to a provision of
$549,000 respectively, due to the above noted improvement in
operations.
As a result of the foregoing factors, the Company had net income
of $107,194 or $0.02 per share for the three months ended
September 30, 1996 compared to net income of $854,380 or $0.10
per share for the three months ended September 30, 1997.
<PAGE>
Liquidity and Capital Resources
The Company has historically financed its operations through
private placements and public sales of its securities, cash
generated from operations and borrowings from banks.
The Company had working capital at September 30, 1997 of
$13,511,779, as compared to working capital of $23,560,360 at
December 31, 1996, which are both principally attributable to
funds received from the September 1996 public offering of the
Company's Common Stock. The Company's current ratio was 2.87 to
1 at September 30, 1997 as compared to 5.83 to 1 at December 31,
1996.
Net cash of $1,291,748 was provided by operating activities for
the nine months ended September 30, 1997 as compared to
$1,022,188 of cash provided by operations for the nine months
ended September 30, 1996. The increase was primarily attributed
to an increase in net earnings and non cash items offset by
increased accounts receivable relating to billing of new
contracts.
Net cash of $14,258,769 was used in investing activities during
the nine months ended September 30, 1997 as compared to
$7,258,755 being used in the first nine months of 1996. In the
1997 period such cash was used principally for construction of
the Company's Florence, Arizona facility and for fixed asset and
start-up costs associated with the Company's newly opened
facilities. In the comparable period for 1996 the construction
and start-up costs of the Phoenix, Arizona facility was the
principal investment activity of the Company.
Net cash of $771,237 was provided by financing activities for the
nine months ended September 30, 1997 as compared to financing
activities raising $20,985,021 during the first nine months of
1996. In the first nine months of 1997, the primary financing
activity was the collection of $903,800 on its long-term
receivable from the sale of equipment and leasehold improvements.
For the same nine month period in 1996, the Company received
proceeds from the issuance of common stock of $26,582,112 and
decreased its bank borrowings by $5,224,430.
The Company received $90,223 and $218,267 respectively from the
exercise of stock options and warrants during the nine months
ended September 30, 1997 and 1996.
<PAGE>
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
The nature of the Company's business results in numerous claims
or litigation against the Company for damages arising from the
conduct of its employees or others. Under the rules of the
Securities and Exchange Commission, the Company is obligated to
disclose lawsuits which involve a claim for damages in excess of
10% of its current assets notwithstanding the Company's belief as
to the merit of the lawsuit and the existence of adequate
insurance coverage.
In May 1993, a former employee of the Company filed suit in the
United States District Court, Southern District of New York,
claiming he was intentionally assaulted by employees of the
Company and claiming $5,000,000 in damages on each of six causes
of action. In January 1996, a lawsuit was filed with the Supreme
Court of New York, County of Kings, by a former employee alleging
sexual harassment and discrimination, physical assault, rape and
negligent screening of employees and claiming damages of
$4,000,000 plus attorney fees.
In March 1996, former inmates at one of the Company's facilities
filed suit in the Supreme Court of the State of New York, County
of Bronx on behalf of themselves and others similarly situated,
alleging personal injuries and property damage purportedly caused
by negligence and intentional acts of the Company and claiming
$500,000,000 for each compensatory and punitive damages, which
suit was transferred to the United States District Court,
Southern District of New York, in April 1996. In July 1996,
seven detainees at one of the Company's facilities (and certain
of their spouses) filed suit in the Superior Court of New Jersey,
County of Union, seeking $10,000,000 each in damages arising from
alleged mistreatment of the detainees, which suit was transferred
to the United States District Court, District of New Jersey, in
August 1996. In July 1997 former detainees of the Company's
Elizabeth, New Jersey Facility filed suit in the United States
District Court for the District of New Jersey. The suit claims
violations of civil rights, personal injury and property damage
allegedly caused by the negligent and intentional acts of the
Company. No monetary damages have been stated.
The Company believes the claims made in each of the foregoing
actions to be without merit and will vigorously defend such
actions. The Company further believes the outcome of these
actions and all other current legal proceedings to which it is a
party will not have a material adverse effect upon its results of
operations, financial condition or liquidity. However, there is
an inherent risk in any litigation and a decision adverse to the
Company could be rendered.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On August 20, 1997, the Nolan County Juvenile Board requested the
Company operate a 50 bed juvenile facility in Sweetwater, Texas
on an interim basis pending completion of a competitive bid
process. The Board had removed the former operator.
On August 21, 1997, CSC finalized an Operations and Management
Agreement with McKinley County, New Mexico, for a 200 bed adult
detention facility known as the McKinley County Adult Detention
Facility in Gallup, New Mexico.
On September 1, 1997, CSC and the Grenada County Board of
Supervisors entered into contracts for the lease, operation and
management of a 200 bed jail in Grenada, Mississippi. The jail
will house both convicted inmates and those awaiting trial.
On September 2, 1997, CSC closed on an Asset Purchase Agreement
with Dove Development Corporation for the purchase of certain
assets including contracts real and personal property connected
to the Frio County Detention Center in Pearsall, Texas. CSC is
currently operating that facility.
On September 30, 1997, CSC and the Travis County Community
Supervision and Corrections Department entered into a contract
which extended CSC's operation and management of a 76 bed
residential substance abuse treatment center for male and female
residents in Del Valle, Texas.
On October 15, 1997, CSC and the Martin Hall Juvenile Board
Facility Board representing nine (9) Washington State Counties
executed a Management Services Agreement for the operation and
management of a 65 bed residential treatment center for juvenile
offenders known as the Martin Hall Juvenile Detention Center in
Medical Lake, Washington.
<PAGE>
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This document contains forward looking statements involving risks
and uncertainties. Actual results could differ materially from
those projected due to factors which may include population
fluctuations, acquisition risks, market conditions, government
funding and availability of financing. These and other risk
factors are outlined in the reports filed by the Company with the
Securities and Exchange Commission.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
_______
27. Financial Data Schedule
10.21.2 Amendment to the Contract and the Company for the
Operation and Management of the Travis County Substance
Abuse Treatment facility.
10.50 Contract between the Company and Grenada County,
Mississippi for the operation and management of a 200
bed jail dated September 1, 1997.
10.50.1 Lease Agreement between the Company and Grenada
County dated September 1, 1997.
10.51 Asset Purchase Agreement between the Company and
Dove Development Corporation, Consolidate Financial
Resources/Crystal City, Inc., dated August 27, 1997.
10.51.1 First Amendment to Asset Purchase Agreement
between the Company and Dove Development Corporation,
Consolidate Financial Resources/Crystal City, Inc.,
dated August 27, 1997.
10.52 Contract between the Company and McKinley County,
New Mexico for the Operation and Management of the
McKinley County Adult Detention Facility in Gallup, New
Mexico, executed August 21, 1997.
10.53 Contract between the Company and the Martin Hall
Juvenile Facility Board dated October 15, 1997 for the
Operation and Management of the Martin Hall Juvenile
Detention Center in Medical Lake, Washington.
(b) Reports on Form 8-K
_________________
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CORRECTIONAL SERVICES CORPORATION
Registrant
By: \s\ Aaron Speisman
________________________________
Aaron Speisman, Secretary
By: \s\ Ira M. Cotler
_______________________________________
Ira M. Cotler, Executive Vice President
Dated: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000914670
<NAME> Correctional Services Corporation
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 8,736,525
<SECURITIES> 0
<RECEIVABLES> 9,350,384
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,723,177
<PP&E> 23,696,551
<DEPRECIATION> 1,593,399
<TOTAL-ASSETS> 54,583,088
<CURRENT-LIABILITIES> 7,211,398
<BONDS> 0
0
0
<COMMON> 76,735
<OTHER-SE> 41,864,515
<TOTAL-LIABILITY-AND-EQUITY> 54,583,088
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[CIK] 0000914670
[NAME] CORRECTIONAL SERVICES CORPORATION
COMMUNITY CORRECTIONAL FACILITY
CONTRACT FOR SERVICES
FOR
TRAVIS COUNTY COMMUNITY SUPERVISION AND
CORRECTIONS DEPARTMENT
This Operations Agreement (the Agreement), made and entered into by and
between the Travis County Supervision and Corrections Department,
(DEPARTMENT ), a governmental entity and
Correctional Services, Corporation
Contact Person: James F. Slattery
1819 Main Street
Sarasota, Florida 34236
Office #: (941)953-9199
Fax #: (941)953-9198
hereinafter called "VENDOR" on this first day of September 1997.
ARTICLE I. CONTRACT TERM AND SERVICE PROCEDURES
1.1 Appointment of VENDOR. In accordance with the terms and
conditions set forth herein, and in consideration of the Payments
hereinafter provided, VENDOR is hereby appointed to provide DEPARTMENT,
and VENDOR hereby agrees to furnish to DEPARTMENT, the Services provided
for herein.
1.2 Term. This Agreement provides the basis under which the
DEPARTMENT and the VENDOR may carry out their interrelated activities.
The purpose of this Agreement is to provide for the operation and security
of the Travis County DWI Substance Abuse Treatment Facility (SMART),
hereinafter referred to as Facility, by the VENDOR. The VENDOR will
provide residential and community correctional supervision services for up
to seventy-six (76) offenders, male and female, hereinafter referred to as
Residents.
1.3 DEPARTMENT Obligations.
a) DEPARTMENT to Provide Facility.
The DEPARTMENT will provide the Facility. The Facility is on a
single campus and in such a manner as to allow the utilization of
resources (e.g., kitchen, dining hall, transportation vehicles, etc.)
while allowing the operation of the program.
b) Compliance With Codes and Standards.
At the time of construction, the facility was constructed to meet
all state, local and generally recognized building and construction codes.
The facility currently meets all standards promulgated by the Community
Justice Assistance Division (CJAD) of the Texas Department of Criminal
Justice (TDCJ). The Department shall obtain all permits and licenses
required by any governmental entity having power to control or regulate
the operation of th Facility unless VENDOR is authorized by the DEPARTMENT
to obtain permits and licenses.
1.4 Fixtures and Equipment. The DEPARTMENT shall provide a complete
facility with all major essential components and systems functioning and in
good repair, such as heating, air conditioning, electrical, plumbing, door,
window and fire alarm systems, internal fixtures, exterior security lighting,
interior emergency lighting, interior security system, telephone system,
all connections to utilities, including water, sewer, electricity, refuse
collection, gas, telephone, etc., entry ways, parking areas, walkways,
Challenge Course grounds, fences, etc.
1.5 Repairs and Maintenance. The DEPARTMENT shall cause the Facility,
as defined above, including all materials and equipment owned and/or
supplied by the DEPARTMENT, to be of a size, quantity, and quality typical
of minimum security correctional institutions and of a sufficient
quality to withstand the wear and tear normally associated with a
community correctional facility.
a) The DEPARTMENT shall ensure that all necessary repairs to
the Facility's foundation, exterior and load bearing walls, roof, and
the heating, cooling, ventilating, plumbing, and electrical systems
are made when said repairs are properly reported by the VENDOR to the
DEPARTMENT as a result of routine preventative maintenance checks conducted
by the VENDOR and are not caused by negligent or willful act(s) or other
activities of residents, or VENDOR staff, or resulting from a failure to
properly supervise and/or manage VENDOR staff and/or provide positive
correctional custody, control, and supervision of the resident population
assigned to the Facility The VENDOR s Facility Administrator will
coordinate all Facility maintenance activity. The DEPARTMENT is not
responsible for the replacement, betterment, and/or improvements to the
Facility, as defined above, or the equipment provided by the DEPARTMENT.
b) The VENDOR shall perform or provide for the performance of all
preventative maintenance on all Facility property and equipment provided
for and/or associated directly with the correctional custody, control,
and supervision of the residents and the supervision and management of
VENDOR staff. Additionally, the VENDOR shall maintain all furnishings,
equipment and facility structures in good operating order.
c) The VENDOR shall perform or provide for the performance of all
maintenance and make all repairs to the Facility and its fixtures and
equipment except those repairs and non-operator maintenance to the
Facility s foundation, exterior and load bearing walls, roof, and
components of the Facility s heating, cooling, ventilating, plumbing,
and electrical systems that are not caused by, negligent or willful act(s)
or other activities of residents, or VENDOR staff, or resulting from a
failure to provide positive correctional custody, control, and supervision
of the resident population assigned to the Facility.
d) The VENDOR shall maintain, repair, and replace as necessary
all interior doors, locking devices, all windows, exterior lighting,
and all equipment required, used for, and/or intended to provide
security, surveillance, and the positive correctional control, custody,
and supervision of the resident population assigned to the Facility.
Additionally, the VENDOR shall maintain, repair, and replace as necessary
all facilities, fixtures, and equipment that are provided by and the property
of the DEPARTMENT, used exclusively by VENDOR staff.
e) The VENDOR shall maintain and repair both storage buildings at
their cost. The VENDOR shall be responsible for all grounds maintenance
including upkeep of all landscaped areas, Challenge Course area and future
landscaping/grounds projects at their cost.
f) The VENDOR shall refer to the DEPARTMENT the need for any
goods or services which the DEPARTMENT is responsible for providing.
If the VENDOR incurs costs for such goods or services directly, then
the VENDOR will pay those costs.
1.6 Destruction or Damage to Facility.
a) In the event of the destruction of or damage to the Facility or
any portion thereof to the extent that there is substantial reduction of
the intended operation of the Facility or any component program in the
Facility, the DEPARTMENT shall have the option upon thirty (30) days
written notice from the DEPARTMENT to the VENDOR to suspend VENDOR's
operations and compensation which are set forth in this agreement or to
negotiate a reduction in services provided by the VENDOR and compensation
to the VENDOR for such a period of time required to restore the Facility
to the capability of its intended operation.. In the event of such
destruction or substantial damage to the Facility, either party shall
have the option to terminate this Agreement upon thirty (30) days written
notice to the other party.
1.7 Utilities. The DEPARTMENT shall pay for the use of all
utilities necessary and/or required for the Facility such as electricity,
gas, water, DEPARTMENT telephone service, sewer, waste removal, etc.
1.8 Operation, Management and Supervision Services. VENDOR shall
operate the Facility under the terms and conditions as more fully set
forth below:
a) Compliance.
VENDOR shall use all reasonable efforts to cause its operation of
the Facility to conform with the laws of the State of Texas and with
applicable standards promulgated by the TDCJ-CJAD, and in all material
respects to applicable American Correctional Association (ACA) Standards
for Adult Community Residential Services to the extent VENDOR has the ability
to control such compliance and applicable building and safety codes,
regulations and sanitary and health codes governing like facilities. A
full-time employee of VENDOR will be designated to inspect the Facility
semi-annually for the compliance with applicable codes and regulations.
DEPARTMENT and VENDOR will develop a quarterly contract compliance checklist.
In addition, a quarterly inspection and quarterly compliance report
detailing preventative maintenance activities, staffing levels and staff
training hours and other contractual obligations will be completed. Such
inspections and actions taken, if any, to comply with inspections findings
will be kept on file at the facility and at VENDOR's headquarters, and a
copy shall be promptly sent, subsequent to each inspection, to the
DEPARTMENT Facility Director and DEPARTMENT Manager of Planning and
Community Resources. VENDOR will cooperate fully with the DEPARTMENT
to maintain ACA standards, prepare for ACA accreditation and to comply with
CJAD standards. VENDOR will submit to the DEPARTMENT an ACA accreditation
timeline by the end of the first quarter of FY 1998.
b) Resident Housing Services.
VENDOR shall operate all housing program and work release services.
Work Release verification procedures will be a VENDOR function.
c) Securing Points of Facility Access.
VENDOR shall operate and control all points of facility ingress and
egress.
d) Security and Resident Supervision.
VENDOR shall provide such security and supervision as is required by
CJAD standards and Texas Commission on Alcohol and Drug Abuse (TCADA)
standards, recognized substance abuse treatment standards and by sound
correctional practice to maintain the safety, security and order of the
facility and to protect the safety and well-being of the Residents, staff,
visitors and surrounding community. All residential supervisors shall be
in uniform while on duty.
(i) VENDOR shall ensure that male and female Residents have
separate sleeping quarters, including toilet and shower facilities.
(ii) VENDOR shall ensure an adequate number of female Residents
supervisors to properly supervise female populations. There shall be at
least one female resident supervisor per shift.
(iii) VENDOR shall ensure an adequate number of both female
and male resident supervisors to ensure that Residents shall not be
supervised or escorted by only members of the opposite sex.
(iv) Access to and means for communication by Residents with
their supervision officers, attorney, judge, or the TDCJ-CJAD shall not be
hindered by VENDOR Facility staff.
(v) A permanent log containing information regarding the
transportation of Residents from the Facility to all outside destinations
shall be maintained in written form by VENDOR including (A) name(s) of
resident(s) and driver(s), (B) other staff members accompanying,(C)
destination, (D) vehicle, (E) time of departure, (F) time of return, (G)
purpose of the trip, and (I) any other pertinent information.
(vi) VENDOR will immediately notify the DEPARTMENT's designee of
all incidents or unusual occurrences (including but not limited to use of
force or isolation as a means of controlling Residents) as defined by the
DEPARTMENT and will within 24 hours, furnish written notification to
include documentation of the facts of such incident or occurrence.
(vii) In the event of a disturbance caused by Residents, or
if any security threat or peril, including a resident strike, should occur
within the facility or on its premises, the VENDOR shall notify the
DEPARTMENT Facility Director or Designee immediately. The VENDOR will
develop and implement written policies and procedures and train staff to the
standards of said policies and procedures concerning the use of force.
Under no circumstances is the VENDOR to initiate or participate in the use
or application of deadly force.
Reportable incidents shall include, but not be limited to, the following
listed items:
(aa) Fire;
(bb) Damage to the Facility;
(cc) Injury of a resident/trainee requiring emergency room
treatment;
(dd) Injury of a resident/trainee by another resident/trainee;
(ee) Injury of a resident/trainee by a member of the
Facility Staff;
(ff) Injury of a resident/trainee by a visitor or volunteer;
(gg) Catastrophic failure of key environmental, plumbing,
sanitation, or other vital systems;
(hh) Walk-off, Absconding, or Escape of resident/trainee
from the Facility or work detail;
(ii) Any incident requiring the use of force by Facility
Staff;
(jj) Placement of a resident/trainee in restraints and/or
pre-hearing detention and/or seclusion;
(kk) Any incident deemed reportable by the on-duty
supervisor or any member of his chain of supervision;
(ll) Death of a resident/trainee;
(mm) Collision or other damage involving a DEPARTMENT-owned
motor vehicle and any injury(ies) associated therewith.
(viii) In the event of any such occurrence, VENDOR will, as requested,
cooperate with the DEPARTMENT and any appropriate law enforcement
authorities in restoring order to the Facility.
(ix) The VENDOR shall notify the DEPARTMENT of any act or omission
by a VENDOR employee or agent, which comes to VENDOR s attention, that
violates the law, is unethical, violates the terms of this Agreement, or
in any way adversely impacts or threatens program goals or integrity of
the well-being, program progress or standing, or community supervision and
corrections status of any resident or trainee.
e) Food Service.
VENDOR will provide all Residents assigned to the facility with three
(3) meals per day with at least one of those meals containing fresh
fruit. For work release Residents, sack lunches will be made available
and for off site CSR Residents, sack lunches will be provided by VENDOR.
The meal plan will be approved by a registered dietician and will be
prepared under sanitary conditions and in compliance with applicable state
and local regulations and ACA Standards. All food service employees shall
be in uniforms while on duty.
f) Clothing and Laundry Services.
VENDOR shall provide clothing for all facility Residents. Work
release Residents will only wear facility clothing while at the facility.
Non-work release Residents will wear VENDOR supplied clothing at all times.
VENDOR shall provide on-site laundry services in accordance with ACA
standards for Adult Community Residential Services.
g) Equipment, Material and Supplies.
In addition to other requirements specified in this Agreement for
VENDOR provided equipment, materials, and supplies, VENDOR shall
provide the equipment, materials, and supplies indicated in Exhibit B.
VENDOR shall provide an institutional grade washer and dryer for the
on-site laundry construction. The washer and dryer equipment, upon
installation, will become property of the DEPARTMENT. The VENDOR may
lease coin-operated washers and dryers and telephones for resident and
public use, as well as vending machines for food stuffs for VENDOR and
DEPARTMENT staff and Offenders participating in the Continuing Care
phase of the program. Any profits derived from the leased equipment
mentioned above, shall be designated for a facility equipment/supply
and/or resident recreational fund. Monthly/quarterly reports detailing
the amount of funds deposited/used into/from the Resident Recreational
fund will be forwarded to the DEPARTMENT Facility Director and Manager for
Planning and Community Resources. Any taxes associated with the
aforementioned leased equipment will be the sole responsibility of the
VENDOR. VENDOR will initiate written contracts with any sub-contractor
and will forward copies of all contracts to the DEPARTMENT Manager of
Planning and Community Resources.
h) Safety and Sanitation.
VENDOR shall operate the Facility in a safe and sanitary manner, in
compliance with all applicable health and safety requirements, subject to
the DEPARTMENT s responsibility to maintain the Facility as set forth above.
i) Rehabilitation and Counseling Services.
The VENDOR and the DEPARTMENT jointly shall be responsible for the
orientation of new Residents. The DEPARTMENT shall be responsible
for any and all treatment and counseling services, except to the extent
as expressly provided for below.
j) Facility Rules, Policies and Operational Guidelines.
(i) VENDOR shall establish written policies, procedures and
operation manuals in regard to the facility operation and resident
supervision for which it is responsible pursuant to the terms of this
Agreement and in compliance with state laws and CJAD and ACA standards.
Said written policies will be submitted to the DEPARTMENT for review
and approval prior to implementation. Said written policies, procedures
and operation manuals shall be the property of VENDOR, and shall continue
to be the property of VENDOR.
(ii) The VENDOR will submit proposed policies and procedures and
operations manuals to the DEPARTMENT. In consultation with the DEPARTMENT,
these policies, procedures and operations manuals will be reviewed annually,
by the end of the second quarter of each fiscal year. The VENDOR and the
DEPARTMENT will make a good faith effort to resolve any questions or
issues concerning proposed policies and procedures and when necessary,
will develop acceptable alternatives to any proposed policies and
procedures.
(iii) The VENDOR will provide all residents with a copy of a
DEPARTMENT approved Resident Handbook (English and Spanish version) at
new resident orientation.
k) Medical Care.
VENDOR shall provide on a consulting basis a licensed practicing
physician in the State of Texas to review, at least quarterly, the
medical and health care policies, procedures, and practices of VENDOR. A
report from the reviewing physician shall be provided to the DEPARTMENT's
Manager of Planning and Community Resources on a quarterly basis. VENDOR
shall provide a registered nurse to provide on-site coverage at least five
days per week (preferably Monday through Friday) as well as 24 hour on-call
availability. The nurse shall be in uniform while on duty. The nursing
staff shall meet the licensing and certification requirements of the state
of Texas. VENDOR will provide an initial routine physical exam by a
physician, physician's assistant or an advanced registered nurse
practitioner for all Residents within 72 hours of admission to include a
TB test. HIV test screening/ counseling will be offered bi-monthly. This
physical exam can occur either at the facility or off-site. VENDOR will
provide transportation for Residents to medical appointments or for the
purpose of obtaining medical treatment not available at the facility,
outside of the facility but only within Travis County, Texas, except, in
any case of medical emergency, upon which VENDOR will provide transportation
of Residents to the nearest point of medical care. Neither the VENDOR nor
the DEPARTMENT will assume responsibility for provision of or payment for
any resident's medical/dental expenses past the initial physical. Neither
the DEPARTMENT nor the VENDOR shall provide payment for prescription drugs,
medications, medical care, hospitalization or institutionalization. As
used herein, "medical care" means all types of health related services,
including but not limited to dental, psychological, psychiatric, optical,
chiropractic, laboratory, and diagnostic, as well as the services traditionally
rendered by medical doctors. VENDOR shall develop a written policy to
detail security procedures for dispensing and storing approved medication.
l) Personnel Recruitment and Training.
(i) VENDOR s recruitment selection and employment of all personnel
shall conform to the rules and regulations of the Equal Employment
Opportunity Commission and as prescribed in Article II, 2.2. The VENDOR
shall make every effort to employ personnel to approximate Residents'
ethnic distribution. VENDOR shall provide access to the DEPARTMENT for
records required by law to be maintained of such non-discriminatory action
upon request by the DEPARTMENT. A notice evidencing VENDOR's adoption and
commitment to this policy shall be posted in a conspicuous location at the
Facility.
(ii) VENDOR shall provide copies of the applications of all
prospective employees to a designated representative of the DEPARTMENT.
Information shall include name, driver's license number, date of birth and
social security number, of all prospective employees. The VENDOR shall
conduct a criminal record background investigation on all employees prior
to their employment. VENDOR will perform a routine reference check
independently on all employees prior to their employment. Results of
VENDOR's routine reference check shall be made available to the DEPARTMENT.
DEPARTMENT may reject a proposed employee based on information available.
Due to confidentiality of records, the DEPARTMENT may accept or reject a
proposed employee without discussion of cause. VENDOR employees must hold
confidential all information/data accessed in performance of job duties.
As an independent contractor, VENDOR assumes all responsibility for payment
of its employee wages, salaries and benefits, including medical insurance,
worker's compensation insurance, and other benefits.
(iii) The DEPARTMENT reserves the right to have the VENDOR re-assign
any existing employee, considered by the DEPARTMENT to be a security risk or
inappropriate for the facility.
(iv) VENDOR will appoint an on-site administrator to manage VENDOR's
day-to-day operation of the Facility. The administrator's position shall be
staffed by an experienced and trained professional in the administration of
correctional facilities. Such appointment shall be subject to DEPARTMENT
approval. The VENDOR will schedule staff coverage for both the residential
wing and aftercare wing of Facility. The residential wing will require 24
hour coverage, seven days per week. Minimum staffing requirements will
be as follows: First Shift, 3 staff; Second Shift, Monday through Friday,
2:00 p.m. to 10:00p.m., 4 staff; Third Shift, 3 staff. The aftercare wing
will require at least one staff member between the hours of 5:00 p.m. to
10:00 p.m., Monday through Friday, with hours on Saturday and Sunday to be
determined by programming needs. VENDOR will notify DEPARTMENT Facility
Director regarding staff schedule changes due to reduction in staff or
change in staffing pattern as a result of resignations, shift changes or
terminations.
(v) Training of VENDOR employees and adequate staffing requirements
of the facility shall be the responsibility of VENDOR. To the extent
necessary, VENDOR shall train VENDOR employees to assure their ability to
comply with applicable policies, ACA standards, procedures and operation
manuals as specified by VENDOR and approved by the DEPARTMENT and any
additional quarterly training agreed upon by the VENDOR and DEPARTMENT.
Training shall include, but not be limited to, substance abuse issues,
specific treatment modalities utilized at the facility, security,
resident supervision, emergency procedures, etc. VENDOR shall be
responsible for providing and scheduling CPR and first aid training to
all Facility staff (VENDOR and DEPARTMENT) on an annual basis. VENDOR
shall provide on-going training to ensure that all employees are
knowledgeable of and adhere to appropriate policies, procedures and
operations manuals. VENDOR shall ensure that all VENDOR staff meet all
TDCJ-CJAD training standards including, but not limited to, Re-integration
Model Training.
(vi) All of Service VENDOR's personnel records shall be the property
of VENDOR, and shall continue to be the property of VENDOR and shall be
provided to the DEPARTMENT upon request for review and/or reproduction.
(vii) Volunteers to the facility program shall be approved by the
DEPARTMENT. The VENDOR shall allow access to the Facility for the
DEPARTMENT-approved volunteers.
m) Community Service Restitution.
The DEPARTMENT shall be responsible for developing Community Service
Restitution (CSR) programs. VENDOR will be responsible for tracking and
implementing the CSR program and for security and supervision. This
includes all work details in the Facility, on the Facility grounds and in
the community. The VENDOR shall be responsible for providing appropriate
instruction to Residents so that work projects and CSR can be successfully
completed. VENDOR shall ensure that appropriate administrative staff
conduct monthly, unannounced inspections of CSR to ensure that appropriate
safety, security and supervision policies and procedures are maintained.
VENDOR shall, when necessary, provide drivers for Residents to CSR programs
anywhere within Travis County, Texas. VENDOR shall be responsible for
equipment maintenance necessary to complete work details and CSR.
VENDOR's CSR supervision ratio shall be no less than one (1) staff person
for every twelve (12) Residents and shall comply with Article I, 1.8, c., of
this Agreement. Each resident participating in the CSR program must have
demonstrated satisfactory performance in the facility program. DEPARTMENT
staff and VENDOR staff must agree that each (I) CSR assignment location
does not pose an undue risk or hazard to the health and/or safety of
Residents or supervising staff, (ii) CSR assignment locations allow for
adequate control and supervision of Residents at all times, and (iii) CSR
materials and equipment supplied to perform assigned tasks do not pose
undue risks to the health and/or safety of Residents or supervising staff.
n) Utilities.
The VENDOR shall make every effort to provide energy conservation at
the facility.
o) Transportation.
The DEPARTMENT will provide two (2) DEPARTMENT-owned vans which
VENDOR will operate for the purpose of transporting Residents to and from
CSR, to medical appointments, court appearances and for support of facility
operations. Drivers shall be in uniform while on duty. VENDOR will
schedule appointments, when necessary, and deliver the DEPARTMENT-owned
vans to the Travis County Garage, or other facility that DEPARTMENT may
designate, for all necessary vehicle maintenance and repairs at the cost
of the VENDOR. VENDOR will be responsible for all insurance and costs for
operating the two DEPARTMENT-owned vehicles (vans), excluding fuel, which
will be at DEPARTMENT cost. The VENDOR will be responsible for taking the
vans to be fueled. VENDOR will also maintain and monitor daily trip and
mileage logs for each DEPARTMENT van. These records are to be made
available to the DEPARTMENT upon request for review and/or photocopying.
The VENDOR will insure that all staff whose job descriptions include
transportation duties will have completed an approved defensive driving
course annually.
p) Urinalysis Testing/Breathalyzer Testing.
The VENDOR, in coordination with the DEPARTMENT, shall establish a
procedure for taking specimens from Residents. The VENDOR shall be
responsible and shall administer a breathalyzer test and/or urinalysis test
to all work release Residents or Residents returning from furlough upon
their return to the Facility. VENDOR and DEPARTMENT personnel will be
responsible for urinalysis testing for all Continuing Care clients. The
DEPARTMENT will determine the type of urinalysis supplies required and
shall purchase all supplies. The VENDOR will maintain all urinalysis
supplies and will test residents and continuing care participants as
directed by DEPARTMENT. The VENDOR shall be responsible for all costs
associated with the safe disposal of all used urinalysis supplies.
q) Bio-Hazard Disposal.
The DEPARTMENT provides acupuncture treatment to Residents as a
voluntary treatment modality. The VENDOR shall provide for timely disposal
of used acupuncture supplies utilizing bio-hazard containers for disposal.
Ultimate disposal must occur off-site and shall meet all applicable health
and safety disposal standards. The VENDOR shall be responsible for all costs
associated with bio-hazard disposal for used acupuncture and urinalysis
supplies.
r) Recreation.
The VENDOR shall supervise all resident recreation activities both
in the facility and on the grounds. The DEPARTMENT shall supply basic
recreational supplies. The VENDOR shall be responsible for replacement of
basic recreational supplies. The DEPARTMENT and VENDOR will determine a
minimum number of recreational hours to be provided to residents weekly
and/or monthly based on treatment schedule.
s) Interagency Relationships.
The VENDOR shall establish cooperative relationships with area law
enforcement and mental health agencies to facilitate procedures for arrest
of assaultive Residents and/or appropriate removal from the Facility of
psychotic Residents. VENDOR shall also establish cooperative relationships
with other appropriate agencies and businesses to meet the needs of Residents.
1.9 ADMISSION AND DISCHARGE OF RESIDENTS.
a) Admission.
VENDOR shall accept for admission to the facility, Residents
presented by the DEPARTMENT to the VENDOR. The DEPARTMENT will present
for admission to the facility only Residents who are placed in the facility
by court order.
b) To Deliver Resident Records.
The DEPARTMENT will deliver to the VENDOR each resident's data sheet,
court order and medical files (where applicable) upon the resident's
admission to the facility, or as soon thereafter as is reasonably
possible, but in no event later than seventy-two (72) hours following
the resident's admission to the Facility.
c) Inappropriate Referrals.
(i) VENDOR shall inform the DEPARTMENT when a resident who meets the
following criteria is inappropriate for admission:
(aa) Those Residents whose behavior presents a threat to other
Residents, facility staff, or the security of the Facility or
(bb) Residents who pose a threat or risk of transmitting an
airborne or bloodborne pathogen disease to other Residents or staff.
(ii) VENDOR shall furnish the DEPARTMENT with written notification
to include documentation of facts supporting its recommendation to return the
resident and the DEPARTMENT shall forward VENDOR's written notification to
the court for its consideration.
d) Non-Assignment.
In performing their obligations under this Agreement, the parties
agree that VENDOR's authority shall be limited by applicable law as
well as the express limitation that this Agreement does not authorize,
allow or imply an assignment of authority by the DEPARTMENT to VENDOR of
the following:
(i) Calculating resident release and release eligibility dates;
(ii) Calculating and assigning bed dates from waiting lists.
e) Discharge.
VENDOR shall discharge Residents from the facility only upon
expressed written direction from the DEPARTMENT.
1.10 VENDOR Records.
Any and all records developed, created and maintained by VENDOR,
pursuant to its operation and management of the Facility shall comply
with all applicable standards and statutes, including but not limited
to resident records, Facility rules, Facility policies, operational
guidelines, and personnel records, shall be the property of VENDOR, and
shall continue to be the property of VENDOR and shall be made available for
review and/or reproduction upon request of the DEPARTMENT and TDCJ-CJAD
per Article IV, 4.7.
a) Individual resident records which include, but are not limited
to, personal data, personal inventory receipts, disciplinary action reports,
incident reports, intake and release information, and progress information
generated by VENDOR personnel, and health/medical records,
waiver/confidentiality release forms and any other records VENDOR shall be
required by the DEPARTMENT to keep.
b) Monthly statistical reports of incidents, resident disciplinary
actions, resident program participation, intakes and releases, resident
grievances, meals, menus, medical attention, recreational activity (number
of hours), skills development and training participation, work release
participation, off-site CSR hours and sites, etc. VENDOR personnel will use
VENDOR computer equipment to maintain and compile data for the
aforementioned reports. All reports shall be compatible with DEPARTMENT
tracking and data collection software and procedures.
c) VENDOR shall make all record entries in a timely manner. All
resident information maintained by VENDOR shall be considered confidential
and subject to release or disclosure only (i) as required by law, (ii) in
compliance with the order of any court having jurisdiction, (iii) in defense
of any proceeding to which VENDOR or its employees or agents are a party
with permission of the DEPARTMENT, (iv) to the DEPARTMENT for its review
and/or reproduction, or (v) to physicians or other health care providers for
use in treatment.
d) VENDOR shall maintain records related to the operation of the
Facility. These Facility records shall all be available for review and/or
reproduction by DEPARTMENT and/or TDCJ-CJAD. Said records shall be the
property of VENDOR, and shall continue to be the property of VENDOR.
e) The VENDOR in coordination with the DEPARTMENT, develop
procedures to share all resident incident reports with the DEPARTMENT
Facility Director or Designee and Senior Community Supervision Officer or
other DEPARTMENT designee.
The VENDOR shall adhere to the following requirements regarding the
DEPARTMENT's program information and records of any resident:
f) VENDOR s staff shall have custody of or access to records on a
need to know basis only after receiving approval from DEPARTMENT treatment
staff person or DEPARTMENT supervisor.
g) VENDOR's staff shall understand and comply with all program
confidentiality requirements.
h) VENDOR shall notify the DEPARTMENT immediately upon receipt of
any request or requirement for program records or disclosure of program
information.
Upon request from the DEPARTMENT, VENDOR shall appear and provide information
or testimony at any administrative or legal proceeding.
1.11 Loss or Damage Caused by Resident or Aftercare Participant.
The DEPARTMENT shall not be responsible for loss or damage to VENDOR's
property, including loss or damage resulting from the action(s) of any
Residents or aftercare participants. VENDOR holds the DEPARTMENT harmless
for any damage to or loss of its property. However, in the event a
defendant willfully damages or causes a loss to VENDOR's property, the
DEPARTMENT to the extent practicable will endeavor to cooperate with
VENDOR's efforts to recover from the resident or aftercare participant
compensation for such damage or loss.
1.12 Charges, Fees and Cost to Residents.
VENDOR shall not impose any charges, fees or costs on Residents for goods
or services except those charges, fees, or costs which the VENDOR
specifically has been authorized in writing by the DEPARTMENT to impose.
Installation of coin-operated washers/dryers for resident use will be an
exception to this provision. In addition, the VENDOR may collect a
reimbursement fee from residents who lose any article of clothing or supply
regularly issued at intake by the VENDOR. The resident will be apprised of
this lost article reimbursement policy during intake procedures and
residents will sign an acknowledgment of this policy. The reimbursement
fee/policy will be established jointly between the VENDOR and the DEPARTMENT.
Funds which are authorized by the DEPARTMENT for the VENDOR to collect, shall
be used solely for those purposes approved by the DEPARTMENT.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Use of Payments. No part of the Payments made to VENDOR will be
expended for any consultant fees or honorariums to any employee of
DEPARTMENT or for unallowable costs. VENDOR shall expend Payments made
hereunder solely for providing direct services and for reasonable and
allowable expenses directly related to the provision of Services. VENDOR
may not collect defendant fees from any individual who receives Services
hereunder.
2.2 Non-Discrimination. In the performance hereof, VENDOR warrants that
it shall not discriminate against any employee, subvendor, or Defendant on
account of race, color, handicap, religion, sex, national origin, or age.
In addition, VENDOR shall not discriminate against employees, subvendors,
or Defendants who have or are perceived to have a handicap because of AIDS
or HIV infection, antibodies to HIV, or infection with any other probable
causative agent of AIDS.
ARTICLE III. GENERAL CONDITIONS
3.1 No SubVENDORs. No subVENDOR may be utilized by VENDOR unless
DEPARTMENT has furnished prior written approval thereof.
3.2 Payment to Employees or Agents of the CSCD VENDOR warrants that
no employee or agent of DEPARTMENT has been retained to solicit or secure
this Agreement and that VENDOR has not paid or agreed to pay any employee
of DEPARTMENT any fee, commission, percentage, brokerage fee, gift, or any
other consideration, contingent upon the making of this Agreement or as an
inducement for entering into this Agreement. The unauthorized offering or
receipt of such payments may result in the immediate termination of this
Agreement by DEPARTMENT.
3.3 Payments to VENDOR. VENDOR shall submit Monthly Invoices as required
herein and shall receive Payments from DEPARTMENT based thereon, subject
to the provisions of Section 6.7. Provided, however, that VENDOR shall
not, under any circumstances, bill DEPARTMENT for peer or group meetings
and such meetings shall not be counted toward the minimum contract
requirements set forth herein.
3.4 Availability of Funds. This agreement is subject to the
availability of state funds as appropriated by the State Legislature and
as made available by TDCJ-CJAD.
3.5 Misspent Funds. Any funds deemed inappropriate based on approved
budgets, the Financial Management Manual for TDCJ-CJAD Funding or the
Contract Management Manual for TDCJ-CJAD Funding by TDCJ-CJAD staff, CSCD
Staff or any CSCD or state designee will be subject to refund by the
VENDOR.
3.6 Visitation by State Employees. VENDOR shall at all times allow
employees/agents of the Governor, members of the Legislature and all other
members of the Executive and Judicial branches of the State of Texas, the
Contract Monitor, and any other persons designated by the DEPARTMENT and
the Texas Board of Criminal Justice to monitor the delivery of Services.
3.7 Non-Collusion. VENDOR warrants that no Person, other than a bona
fide employee, has been employed to solicit or secure this Agreement with
DEPARTMENT, and VENDOR has not paid or agreed to pay any Person, other
than a bona fide employee, any fee, commission, percentage, or brokerage
fee, gift, or any other consideration, contingent upon or resulting from
the execution hereof. For breach or violation of this provision,
DEPARTMENT shall have the right to terminate this Agreement without
liability, or in its discretion to deduct from Payments, or otherwise
recover, the full amount of such fee, commission, brokerage fee, gift, or
contingency fee.
3.8 Termination at Will. Either party may terminate this Agreement for
any reason whatsoever, without cause and at any time, by furnishing to the
other party thirty (30) days prior written notice. DEPARTMENT'S only
obligation for terminating this Agreement pursuant to this section shall
be the payment to VENDOR of Payments earned hereunder up to the date of
termination. VENDOR'S only obligation for terminating this Agreement
pursuant to this section shall be to provide Services until the date of
termination. Neither VENDOR nor DEPARTMENT shall thereafter be entitled to
any other bonus, damage, settlement or compensation for expected or lost
profits or otherwise.
ARTICLE IV. ADMINISTRATION AND FISCAL SYSTEM
4.1 Administrative Controls. VENDOR shall establish, document and
maintain adequate administrative and internal controls to ensure that only
allowable costs are billed hereunder in accordance with the Program Budget.
4.2 Conflict of Interest. VENDOR shall establish safeguards to prohibit
members of the governing board, contractual personnel, consultants,
volunteers, and employees from using their positions for a purpose that is
or gives the appearance of being motivated by a desire for private gain
for themselves or others, particularly those with whom they have family or
business relationships.
4.3 Remuneration. Staff of VENDOR shall not pay or receive any
commission, consideration, or benefit or any kind related to the referral
of a Defendant for treatment or engage in fee-splitting with other
professionals.
4.4 Disclosure. VENDOR is required to immediately or timely, as the
case may be, disclose to DEPARTMENT and TDCJ-CJAD the following:
a) If any Person who is an employee or director of VENDOR is required
to register as a lobbyist under Texas Government Code Chapter 304, at any
time during the term hereof, VENDOR shall provide to DEPARTMENT and TDCJ-
CJAD timely copies of all reports filed with the Texas Ethics Commission
as required by Chapter 305;
b) If any Person who is an employee, subvendor, or director of
VENDOR is or becomes an elected official (i.e., an elected or appointed
state official or member of the judiciary, or a United States congressman
or senator), during the term hereof;
c) The receipt by VENDOR of funds other than, or in addition
to, those paid by DEPARTMENT for Services hereunder, it being agreed that
in such event, DEPARTMENT shall be entitled to reimbursement of such
portion of such funds as it is attributed to the provision of Services
hereunder. As used in this subparagraph, the term funds means any
amounts received by VENDOR on behalf of any Defendant who is receiving
Services at Facility.
d) Report any actions or citations by Federal, State, or local
governmental agencies that may affect VENDOR S licensure status or its
ability to provide Services hereunder.
4.5 Withhold Payments. The DEPARTMENT may withhold Payments for any
ineligible claims including inadequate or untimely monthly invoices until
such time as the ineligible, inadequate or untimely claim is resubmitted
and/or corrected by VENDOR. DEPARTMENT reserves the right to suspend
Defendant placements, withhold Payments, or require the return of Payments
in the case of noncompliance with DEPARTMENT Policies, including, but not
limited to, recurring acts of noncompliance and expenditures for
unallowable costs.
4.6 Accounting Records. The VENDOR agrees to maintain a program
specific accounting or bookkeeping system in accordance with line item
categorization as outlined in the Program Budget negotiated between the
VENDOR and DEPARTMENT.
4.7 Audit of Records. VENDOR agrees to furnish to DEPARTMENT and/or
Texas Department of Criminal Justice - Community Justice Assistance
Division (TDCJ-CJAD) and/or their designees such information as may be
requested which relates to the services described in this AGREEMENT.
VENDOR shall permit DEPARTMENT and/or TDCJ-CJAD and or their designee to
audit/inspect records and reports, review services, and/or evaluate the
performance of services at any time. VENDOR shall provide reasonable
access to all the records, books, reports and other necessary data and
information requested by DEPARTMENT and/or TDCJ-CJAD for the purpose of
accomplishing reviews, inspections, and/or audits of program activities,
services and expenditures.
4.8 AIDS and HIV Infection VENDOR agrees that it shall adopt and
implement workplace guidelines concerning persons with AIDS and HIV
infection and shall also develop and implement guidelines regarding
confidentiality of AIDS and HIV-related medical information for employees
of said (VENDOR) and for clients, inmates, patients and residents served
by VENDOR in accordance with the provisions found in V.T.C.A., Health and
Safety Code, Section 85.113 and TCADA Licensure Standards.
4.9 Confidentiality. When applicable, records of identity,
diagnosis, prognosis, or treatment of any Defendant through this contract
shall be confidential and may be disclosed only in accordance with
applicable laws. No information may be released without the Defendant's
written consent as documented by a signed information release form that
complies with the requirements of 42 CFR, Part 2, or a proper court order
that conforms with the requirements of 42 CFR, Part 2. All records shall
be the property of VENDOR.
4.10 Governing Board Responsibility. The appropriate governing board
or entity of VENDOR shall bear full responsibility for the integrity of
the Program Budget, including accountability for all Payments, compliance
with DEPARTMENT policies, and applicable federal and state laws and
regulations, and the Texas Department of Criminal Justice-Community
Justice Assistance Division (TDCJ-CJAD). Ignorance of any contract
provisions or other requirements contained herein shall not constitute a
defense or basis for waiving or appealing such provisions or requirements.
ARTICLE V. INSURANCE AND INDEMNIFICATION
5.1 Insurance. VENDOR shall provide an adequate plan of insurance
that provides: (l) coverage to protect DEPARTMENT and the State against
all claims, including claims based on violations of civil rights arising
and from the Services performed by VENDOR; (2) coverage to protect the
State from actions by a third party against VENDOR or any subvendor of
VENDOR as a result hereof, and (3) coverage to protect the State from
actions by officers, employees, or agents of VENDOR or any subvendor(s).
VENDOR shall maintain the following insurance coverage in full force and
effect for the mutual protection and benefit of DEPARTMENT, the State and
VENDOR with the amounts and coverages as required by law, in accordance
with the following:
a) Claims that may arise out of or result from VENDOR'S
actions/operations hereunder, whether such actions/operations are by
VENDOR or by a subvendor of VENDOR , or by anyone directly or indirectly
employed by or acting on behalf of VENDOR or a subvendor where liability
may arise for:
(i) Claims under workers compensation disability benefit, and
other similar employee benefit actions;
(ii) Claims for damages because of bodily injury, occupational
sickness or disease, or death of any VENDOR employees;
(iii) Claims for damages because of bodily injury, sickness
or disease or death of any Person other than VENDOR'S employees;
(iv) Claims for damages insured by usual personal liability
coverage that are sustained by (a) any Person as a result of an act
directly or indirectly related to the employment of such Person by VENDOR,
or by (b) any other Person;
(v) Claims for damages because of injury to or destruction of
tangible property, including loss of use resulting therefrom;
(vi) Claims for damages based on violations of civil rights;
(vii) Claims for damages arising from fire and lightning and
other casualties.
b) The insurance required by this section shall be written for not
less than any limits of liability specified by DEPARTMENT or required by
law, whichever is greater, and shall include contractual liability
insurance as applicable to VENDOR'S obligations hereunder.
c) Certifications/policies of insurance shall be filed with
DEPARTMENT prior to execution hereof. These certificates/policies shall
contain a provision that coverage afforded under the policies shall not be
canceled until at least thirty (30) days prior written notice has been
given to DEPARTMENT.
d) Compliance with the foregoing insurance requirements shall
not relieve VENDOR from any liability under the indemnity
provisions.
5.2 Indemnification. VENDOR shall indemnify and save the DEPARTMENT,
the Board of Criminal Justice, the Texas Department of Criminal Justice,
the State of Texas, and its officers, agents and employees (hereinafter,
collectively referred to as the "State") harmless from and against any and
all claims arising from the conduct, management or performance hereof,
including, without limitation, any and all claims arising from any
condition herein or arising from any breach or default on the part of
VENDOR in the performance of any covenant or agreement on its part to be
performed, or arising from any act of negligence of VENDOR, or licensees
or arising from any accident, injury or damage whatsoever caused to any
person, firm or corporation and from and against all costs, reasonable
attorney's fees, expenses and liabilities incurred in or about any such
claim, action or proceeding brought against the State by reason of any
such claim. In any such action brought against the State, VENDOR, upon
notice from the State, shall defend against such action or proceeding by
counsel satisfactory to the State, unless such action or proceeding is
defended against by counsel for any carrier of liability insurance
provided for herein. The aforementioned indemnification shall not be
affected by a claim that negligence of DEPARTMENT, the State, or their
respective agents, VENDORS, employees or licensees contributed in part to
the loss or damage indemnified against.
ARTICLE VI. INDEPENDENT VENDOR
VENDOR is associated with DEPARTMENT only for the purposes and to the
extent set forth herein, and with respect to the performance of Services
hereunder, VENDOR is and shall be an independent VENDOR and shall have
the sole right to supervise, manage, operate, control, and direct the
performance of the details incident to its duties hereunder. Nothing
contained herein shall be deemed or construed to create a partnership or
joint venture, to create the relationships of an employer-employee or
principal-agent, or to otherwise create any liability for DEPARTMENT
whatsoever with respect to the indebtedness, liabilities, and obligations
of VENDOR or any other party. VENDOR shall be solely responsible for
(and DEPARTMENT shall have no obligation with respect to) payment of all
Federal Income, F.I.C.A., and other taxes owed or claimed to be owed by
VENDOR, arising out of VENDOR'S association with DEPARTMENT pursuant
hereto, and VENDOR shall indemnity and hold DEPARTMENT harmless from and
against any and all liability from all losses, damages, claims, costs,
penalties, liabilities, and expenses howsoever arising or incurred because
of, incident to, or otherwise with respect to any such taxes.
ARTICLE VII. MISCELLANEOUS PROVISIONS
7.1 Inconsistencies. Where there exists any inconsistency between this
Agreement and other provisions of collateral contractual agreements that
are made a part hereof by reference or otherwise, the provisions of this
Agreement shall control.
7.2 Severability. Each paragraph and provision hereof is severable from
the entire Agreement and if any provision is declared invalid, the
remaining provisions shall nevertheless remain in effect.
7.3 Prohibition Against Assignment. There shall be no assignment or
transfer of this Agreement without the prior written consent of both
parties.
7.4 Law of Texas. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and shall be enforced in
the primary County of the applicable judicial district.
7.5 Notices. All notices called for or contemplated hereunder shall be
in writing and shall be deemed to have been duly given when personally
delivered or forty-eight (48) hours after mailed to each party by certified
mail, return receipt requested, postage prepaid.
7.6 Entire. This Agreement incorporates all the agreements, covenants,
and understandings between the parties hereto concerning the subject
matter hereof, and all such covenants, agreements, and understandings have
been merged into this written Agreement. No other prior agreement or
understandings, verbal or otherwise, of the parties or their agents shall
be valid or enforceable unless attached hereto and/or embodies herein.
7.7 Amendment. No changes to this Agreement shall be made except upon
written agreement of both parties.
7.8 Confidentiality. Any confidential information provided to or
developed by VENDOR in the performance of this Agreement shall be kept
confidential, unless otherwise provided by law, and shall not be made
available to any individual or organization by VENDOR or DEPARTMENT
without prior approval of the other party.
7.9 Headings. The headings used herein are for convenience of reference
only and shall not constitute a part hereof or effect the construction or
interpretation hereof.
7.10 Waiver. The failure on the part of any party to exercise or to delay
in exercising, and no course of dealing with respect to any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law or in equity, except as
expressly set forth herein.
7.11 Counterparts. This Agreement may be executed in any number of and by
the different parties hereto on separate counterparts, each of which when
so executed shall be deemed to be an original, and such counterparts shall
together constitute but on and the same instrument.
7.12 Terminology and Definitions. All personal pronouns used herein,
whether used in the masculine, feminine, or neutral, shall include all
other genders; the singular shall include the plural and the plural shall
include the singular.
Entered into on the last date signed below.
\s\ Jim Rust 9/30/97
JIM RUST, Director Date
Travis County Community Supervision
and Corrections Department
\s\ James F. Slattery 9/25/97
JAMES F. SLATTERY Date
Correctional Services, Corporation
APPROVED:
\s\ Wilford Flowers 9/23/97
WILFORD FLOWERS, Presiding Judge Date
147th District Court
[CIK] 0000914670
[NAME] CORRECTIONAL SERVICES CORPORATION
OPERATION AND MANAGEMENT AGREEMENT
for the
GRENADA COUNTY JAIL
This OPERATION AND MANAGEMENT AGREEMENT for the GRENADA
COUNTY JAIL CENTER (the "Agreement") is made as of the 1st day of
September, 1997, by and between CORRECTIONAL SERVICES CORPORATION
(the "Contractor") and the GRENADA COUNTY BOARD OF SUPERVISORS
(the "Board"), a political subdivision of the State of
Mississippi, County of Grenada.
WITNESSETH
WHEREAS, the Board of the Contractor desire to enter into a
Contract under which the Contractor shall provide the management
and supervision of a jail in Grenada, Mississippi. The main 160
bed Jail is located at 60 Green St. and the Annex 20 bed facility
is located at 831 South Commerce Street and the Annex 20 bed
facility is located at 831 South Commerce, Grenada, Mississippi,
which Facilities are known as the GRENADA COUNTY JAIL ("the
Facilities").
WHEREAS, the Board of the Contractor shall provide, or cause
to be provided, the operation of the Facilities in accordance
with the laws of the State of Mississippi and the rules and
procedures promulgated by the American Correctional Association
(ACA) standards.
NOW, THEREFORE, in consideration of the mutual rights,
duties, benefits and obligations herein exchanged, the parties
hereto do covenant, agree and bind themselves as follows:
ARTICLE ONE
PURPOSES
1.01 The Contractor shall manage, supervise and operate the
Facilities for the Board and receive, supervise and care for each
inmate that is assigned to and detained in the Facilities (the
"Inmate") pursuant to laws of the State of Mississippi, both
convicted and awaiting trial. Contractor, acting directly or
through its officers, employees and designees, in its discretion,
may assign Inmates to the Facilities that are referred for
placement by court order and that originate from: (a) within the
City of Grenada (the "City"); (b) a jurisdiction that enters into
an interlocal contract with the Board and Contractor to reserve
space for the on-going placement of persons in the Facilities;
(c) a jurisdiction that contracts with the Contractor on a
limited basis to house one or more individuals in the Facilities;
or (d) a state or federal agency which enters into an interagency
or intergovernmental services agreement with the Contractor.
1.02 The Contractor shall manage and supervise the
Facilities to remain in compliance with all applicable local,
state and federal health, fire and safety codes and shall
document such compliance at the beginning of each fiscal year.
Such documentation shall consist of certificates from the local
health department, Fire Marshall and building inspector and
copies thereof shall be forwarded to the Sheriff, as required or
requested. The Facilities shall be managed, operated, maintained
and utilized in conformance and compliance with applicable law,
and the standards and regulations of the Commission.
1.03 Notwithstanding anything herein to the contrary, the
physical plant, programs, staffing, services and operation and
management of the Facilities shall be in accordance with the
Mississippi Code of 1972, Annotated, as amended.
ARTICLE TWO
TERM
2.01 This Agreement is effective on the date set forth in
the initial paragraph of this Agreement. The original term of
this Agreement shall be for a period of five (5) years with an
option to renew for additional period of two (2) years.
2.02 The Board and the Contractor may negotiate a new
agreement at the end of the original term. In such event, the
selection of the Contractor shall be at the sole discretion of
the Board and the Contractor shall provide operation, management
and supervision of the Facilities pursuant to the terms and
conditions of such negotiated successor operation and management
agreement.
2.03 Except as provided in 2.01, the Board may unilaterally
terminate this Agreement only for reason of the Contractor's
failure to operate or cause the operation of the Facilities in
compliance with the terms of this Agreement, State law, the
applicable rules and procedures of the Commission, or default
under this Agreement. However, prior to any such termination,
the Board shall give written notice by certified mail, return
receipt requested to the Contractor setting forth in detail all
matters of alleged non-compliance and giving Contractor thirty
(30) days within which to correct the matters of non-compliance
set forth in the notice; save and except, where a material (and
not a single incident) failure of the Contractor poses an
immediate threat to the health, safety or welfare of the
residents of the Facilities or the condition or security of the
Facilities, only seventy-two (72) hours notice and opportunity to
cure shall be required, subject to immediate action if the delay
of seventy-two (72) hours creates a further danger to the safety,
health or welfare of the Inmates.
2.04 Contractor may terminate this Agreement only for the
material breach of this Agreement by the Board, but only after
ninety (90) days prior written notice of the breach and
opportunity for the Board to cure the breach. The material
breach cannot be due to the contractor's failure to secure
agreements for the housing of non county inmates in the jail
facility.
ARTICLE THREE
FACILITIES REVENUES, COSTS & PAYMENTS
3.01 The duties and obligations of the Board to the
Contractor, pursuant to or arising from this Agreement, shall be
and are subject to the revenues received by the Board of revenues
from jurisdictions placing residents in the Facilities; and the
financial duties and obligations of the Board pursuant to this
Agreement shall be and are hereby limited only to the revenues
actually received by the Board for and with respect to the
Facilities.
3.02 Contractor shall be paid for county inmates within
thirty (30) days of submissions of an invoice to the Board.
Contractor will submit the invoice to the county by the 25th of
each month and payment by the Board will be made not later than
the 10th day of the following month.
3.03 The Contractor shall participate in an annual program
evaluation and annual fiscal audit of the Facilities, including
the maintenance and availability of accurate and up-to-date
program, client and financial records for inspection.
3.04 During the term of this Agreement:
(c) Correctional Services Corporation will house the City
of Grenada's prisoners for $30.00 per day plus medical
expenses, and keep at least 30 beds available to the
City of Grenada for misdemeanor prisoners and city
felony suspects prior to preliminary hearing for the
first year of operation and thereafter in accordance
with the city/county agreement.
(d) Correctional Services Corporation will bill the county
for $10.00 for a pro-rated day for county inmates. A
pro-rated day is defined as a stay of less than six (6)
hours in a twenty-four (24) hour period.
(e) Correctional Services Corporation will house county
prisoners for $25.00 per complete day, per prisoner,
with use of the Annex Facility and without a county
guaranteed bed usage per month.
(f) Correctional Services Corporation will house county
prisoners for $27.50 per complete day, per prisoner,
with a county guaranteed 600 beds/day per annum,
average [50 per month] and without use of the Annex
Facility.
(g) Correctional Services Corporation will house county
prisoners for $27.50 per complete day, per prisoner,
with a county guaranteed bed usage per month and
without use of the Annex Facility.
(h) Correctional Services Corporation will house county
prisoners in excess of 50 for $35.00 per complete day,
per prisoner, with or without use of the Annex
Facility.
(i) If the Board enters into an agreement with a
jurisdiction for a per diem rate for that
jurisdiction's Inmates that exceeds the rates set forth
above, then the Board shall pay the Contractor that
increased per diem for the Inmates from that
jurisdiction from Net Facilities Revenues.
3.05 The Board reserves the right to withhold or require the
return of funds upon substantial non-compliance with applicable
regulations, standards, policies or this Agreement if the
Contractor fails to remedy or cure the non-compliance within
thirty (30) days of written notice from the Board thereof, unless
the non-compliance poses an immediate threat to security or
safety of Inmates, in which case only seventy-two (72) hours
notice and opportunity to cure shall be required, subject to
immediate action if the delay of seventy-two (72) hours creates a
further danger to the safety, health or welfare of the Inmates.
3.06 Save and except for charges for additional services to
be provided by the Contractor to any Inmate pursuant to a
separate written agreement between the Contractor and the
jurisdiction placing Inmates in the Facilities, all revenues
received by any party for housing of prisoners or directly
relating thereto including the Contractor, with respect to the
Facilities shall be the property of the Contractor.
3.07 The Contractor's revenue due from the Board shall be
placed in a special segregated fund and paid to Contractor as
provided in 3.02
3.08 Save and except for charges for additional services to
be provided by the Contractor to any Inmate pursuant to a
separate written agreement between the Contractor and the
jurisdiction placing Inmates in the Facilities to which the Board
has provided written consent, all revenues received by any party,
including the Contractor, with respect to the Facilities shall be
the property of the Board as agent for the City.
3.09 Separate written agreements between the contractor and
other jurisdictions, as described in section 1.01, should be
executed by contractor with the jurisdiction. Revenue for these
agreements shall be billed and collected by the contractor and be
the property of the contractor. Board will to the extent
required by law, enter into interlocal agreements, if required,
in order to allow Contractor to hold inmates for 3rd parties, so
long as there is no cost to Board.
3.10 Contractor and Board shall pro-rate the cost of
utilities for space utilized by the Grenada County Sheriff
Office.
3.11 Board shall not be required to maintain a minimum
number of inmates.
3.12 Commencing with the first anniversary date of the
Agreement, Contractor shall be granted an increase in the per
diem rate to affect the effect, if any, of inflation as reflected
by the Southeastern C.P.I.
ARTICLE FOUR
DUTIES OF CONTRACTOR
4.01 The Contractor shall manage and operate and provide, or
cause the operation and provision under Contractor's supervision
and primary responsibility:
(a) the documentation of all agreements or contracts of the
Contractor with other jurisdictions, as referenced in
Sec. 1.01, to (i) assure the documentation reasonably
necessary for each such contract is complete and (ii)
that any such contract or agreement is not inconsistent
with the terms of this Agreement, prior to the
housing of any person at the Facilities pursuant to a
contract between the Contractor and another
jurisdiction. In this regard, the Contractor shall
also cooperate with the Sheriff and Board's legal
counsel;
(b) all services, supplies, amenities, benefits and
equipment necessary to (i) comply with the terms of
this Agreement and all contracts with other
jurisdictions for the housing of Inmates, (ii) meet or
exceed State and Federal law requirements, the rules
and procedures promulgated by the Commission and the
applicable standards of the ACA, and (iii) comply with
applicable court orders and the Operational Plan;
(c) intake facilities and Inmate account which may
encompass bookkeeping, record keeping and billing,
collections of delinquent accounts, system of controls,
identification systems and records, communication
interface with law enforcement agencies, and such
statistical records as may be required by law;
(d) attendants to control ingress and egress, maintain the
requisite level of internal security and to monitor the
activities of the Inmates within the Facilities;
(e) food and beverage services shall be provided in
accordance with all applicable standards, sanitation
and health codes and individualized and special needs.
All menus shall be planned and reviewed in advance by a
registered dietitian or physician. Meals shall meet
the dietary requirements of the United States
Department of Agriculture breakfast, lunch and dinner
dietary allowances unless some other standard is
specified by the Justice Department or ACA standards.
Menu or food service plans shall be prepared, and a
schedule shall be followed whenever possible. Menu
plans are kept for one year. The menus shall contain a
variety of foods and recognize special occasions and
holidays. The quality of the food and beverage
services provided will be periodically reviewed by the
Board or its designee, and the Contractor will
immediately (within 72 hours) correct any failure to
meet the foregoing standards noted by the Board or its
designee. Special diets shall be provided:
(i) to a Inmate upon the recommendation of a
physician or dentist;
(ii) to a Inmate whose religious beliefs require it.
Staff members shall supervise the Inmates during
meals. Staff monitoring Inmates while they are
eating need not eat, but if they do, the Staff
must eat the same food served to the Inmates
unless the staff member is on a special diet
ordered by his physician or dentist or a special
diet is required by his or her religious beliefs.
Two hot meals and one other meal which need not be
hot shall be provided at regular meal times during
each 24 hour period. No more than 14 hours may
elapse between the evening meal and breakfast,
unless a snack is provided. Notwithstanding
anything herein to the contrary, all food and
beverage service shall be provided by the
Contractor in accordance with the applicable
standards of the Commission;
(f) clothing shall be provided to Inmates at least in
accordance with ACA Standards and Sheriff's
recommendations. The use of uniforms is discouraged
but not absolutely prohibited. The Contractor shall
assure that a schedule is followed that provides for a
daily bath or shower for each Inmate, and shall
promote, encourage and provide instruction on proper
hygiene, and provide all necessary hygienic supplies;
(g) laundry service for all Inmates in accordance with ACA
and Commission Standards, clean linens to each Inmate
at least once weekly and clean bath and hand towels
twice per week, all without any deposit or fee being
charged;
(h) procurement and purchasing;
(i) recreational, vocational and counseling services;
bookkeeping and financial accounting;
(j) basic medical care (see Article Five of this
Agreement);
(k) training of personnel employed at the Facilities,
including such security, professional, law enforcement
and cultural sensitivity training and education as may
be required from time to time by Mississippi State Law,
applicable ACA standards, the Board, the terms of this
Agreement, third party contracts or agreements executed
by the Board, and the terms of all insurance policies
applying to the Facilities;
(l) all repair, upkeep, maintenance and cleaning without
any additional fee or profit to the Contractor;
(m) a risk management program, including periodic risk
management reviews and assessments;
(n) all personnel services, miscellaneous supplies and
benefits necessary to operation of the Facilities, or
the care and control of Inmates, including toiletries
and hygiene supplies;
(o) payment of all utility charges and fees, and, the
payment of all valid taxes and assessments [if any]
against the Facilities, and any lien charged upon the
Facilities or any part thereof as a result of actions
or inactions of the Contractor;
(p) engineering and maintenance;
(q) proper bedding, including mattresses, for each Inmate,
clothing storage space which accommodates both hanging
and folded clothing; and
(r) the provision of all such other services or tangible
things that are necessary to care for the Inmates
housed at the Facilities, including all services and
tangible things required by Commission standards or
directives.
(s) Compliance with House Bill # 1813 as enacted by
Mississippi Legislature, 1997 session.
4.02 Contractor shall prepare and furnish such reports and
audits as may be required by this Agreement to be submitted to
the Board or any other firm, person or entity with respect to the
operation of the Facilities or the Inmates therein and, in
addition, such other reports as may be required by State or
federal law, the State of Mississippi or any agency thereof, the
United States or any agency thereof, or any state or political
subdivision thereof contracting with the Board to place Inmates
in the Facilities. Contractor shall prepare all reports required
by the Board for the Facilities.
4.03 Contractor shall obtain, and thereafter maintain, all
the proper and required local, state and federal permits,
licenses and certification(s) (the "Certifications") necessary
for the Facilities to serve as a secure detention facility. The
Contractor shall maintain such Certifications as required. If,
after such Certifications have been obtained, the Contractor is
required by State law, other applicable law, Court Order, the
rules and procedures promulgated by the Commission or the
applicable ACA standards, to perform additional work or services,
or to modify the Facilities, the Board and the Contractor shall
consult and, if appropriate, subject to appropriations and/or
revenues therefor, agree upon a temporary increase in the
schedule of payments sufficient over a reasonable period of time
to reimburse the Contractor for the cost of such operational
modifications.
4.04 The interviewing, hiring, training, assignment,
certification, control, management, compensation, promotion and
termination of all members of the Facilities' administration and
staff shall be the responsibility and obligation of Contractor.
The Contractor shall furnish reports on such matters to the
Sheriff when so requested by the Sheriff. The Contractor will
use its, best efforts to hire and train local personnel, all
current jail employees will be offered employment by the
contractor, subject to a six month probation period. Staffing
shall conform with all applicable State Laws, Justice Department
requirements and ACA standards.
4.05 The Contractor shall use its best efforts to purchase
goods and services within the County where of equal quality and
competitively priced.
4.06 No later than ninety (90) calendar days after the end
of each calendar year in which the Contractor obtains an audit of
Contractor or the Facilities, during the term of this Agreement,
the Contractor shall deliver to the Board a copy of any such
audit of the Contractor and/or the Facilities. The Contractor
shall provide an audit during the third year of this Agreement
and such audit shall be prepared by an independent auditor in
compliance with GAAP and shall cover all aspects of Facilities
revenues, expenditures and operations. Audits may further be
undertaken by the Board at its expense.
4.07 The Contractor is associated with the Board for the
purposes of, and to the extent set forth in this Agreement, the
performance of operation and management services for the
Facilities, and Contractor is and shall be an independent
contractor and, subject to the terms of this Agreement, shall
have the sole right to supervise, manage, operate, control, and
direct the performance of the details incident to its duties
under this Agreement. Nothing contained in this Agreement shall
be deemed or construed to create a partnership or joint venture,
to create the relationships of an employer-employee or principal-
agent, or to otherwise create any liability for the Board
whatsoever with respect to the indebtedness, liabilities, and
obligations of the Contractor. The Contractor shall be solely
responsible for (and the Board shall have no obligation with
respect to) payment of all federal income, F.I.C.A., and other
taxes owed or claimed to be owed by the Contractor, arising out
of this Agreement, and the Contractor shall indemnify and hold
the Board harmless from and against, and shall defend the Board
against, any and all losses, damages, claims, costs, penalties,
liabilities, and expenses whatsoever arising or incurred because
of, incident to, or otherwise with respect to any such taxes.
4.08 In the event the Board contracts with another
jurisdiction for the housing of that jurisdiction's clients in
the Facilities, the Contractor shall provide billing services and
is authorized and directed to bill the Board for the fees
provided in Article Three, and each jurisdiction each calendar
month, one calendar month in arrears, for the aggregate amount
due pursuant to the agreement between the Board and such
jurisdiction, and/or between the Board and Contractor pursuant to
this Agreement. A copy of each billing to a contracting
jurisdiction shall be forwarded simultaneously to the Board. The
billings to other jurisdictions contracting with the Board shall
be in the name of the Board and shall be payable to the Board
through the Grenada City Auditor.
4.09 Contractor shall maintain the foundation, all outside
utilities and structural soundness of the building (excluding
windows and doors) in good repair, except for reasonable wear and
tear. Contractor shall be responsible for routine maintenance
and preventative maintenance of the Facilities' roof, but shall
not be responsible for installation or product defects arising
from the original construction of the roof, or the replacement of
the roof where necessary and not otherwise covered by insurance
covering the Facilities required to be purchased by the
Contractor hereunder.
4.10 The Contractor shall provide the services hereinafter
set forth in this section at its own expense and risk.
Contractor shall maintain all interior walls and ceilings of the
building and also all interior windows, window glass, doors,
electrical fixtures, and plumbing fixtures in good repair and
condition; painting all interior walls as required, furnishing
and regularly replacing furnace filters consistent with
heating/air conditioning systems manufacturer specifications.
The Contractor's duties shall include all usual janitorial and
maintenance service, including sweeping and waxing of floors,
vacuuming, trash collection and disposal. The cleaning of
windows, dusting and the replacement of light bulbs or
fluorescent tubes in the light fixtures will be the
responsibility of the Contractor. Contractor shall maintain all
grounds, including but not limited to, mowing, trimming, water of
plants and lawn as to maintain a good cosmetic look to the
grounds. In the event Contractor fails to comply with any of the
requirements of Article Four, the Board shall have the right, but
not the obligation, to cause repairs or corrections to be made
and any reasonable cost therefor shall be payable as provided in
Article Four. Contractor shall repair any damage caused by its
negligence or default hereunder, or the negligence of its
invitees, employees or customers, and deliver the leased premises
in good repair and condition, reasonable wear and tear excepted.
The Contractor will periodically have the Facilities fumigated
and/or sprayed for insects and rodents as needed.
4.11 The Contractor shall pay all lawfully levied taxes or
assessments against the Facilities, the real property on which it
is located, or the personal property used in conjunction
therewith. If the Contractor fails to pay such taxes or
assessments, the Board may, but is not required to, pay the taxes
or assessments and recover the same from the Contractor,
including all attorney's fees and costs incurred in the
collection of the same.
4.12 The Contractor shall provide all services and
accommodations required by applicable law, standards or
regulations for the operation of the Facilities whether or not
specifically set forth herein.
4.13 The County shall be responsible for all transportation
of inmates for Grenada County.
ARTICLE FIVE
MEDICAL CARE
5.01 Basic medical care for the first 72 hours will be made
available by Contractor at Contractor's sole cost, and without
charge or reimbursement pursuant to Article Three of this
Agreement, to all Grenada County Inmates housed at the
Facilities. For the purposes of this Agreement "basic medical
care" shall be limited to any condition which can be "self-
treated" by the Inmates or which may be treated by a lay
technician acting under guidelines provided by a medical doctor
including first aid for emergencies. This shall include the
dispensing of "over-the-counter" medications which have been
approved for inventory by the Facilities' medical consultant.
5.02 Consistent with its duties to provide basic medical
care, the Contractor shall establish a program which includes:
(a) the training of all supervisor staff in emergency first
aid procedures and cardiopulmonary resuscitation (CPR);
(b) adopting written medical backup plans which are
communicated to all employees and Inmates;
(c) maintaining sufficient first aid supplies and equipment
to adequately support the overall basic medical care
requirements of the Inmate population;
(d) maintaining, replacing and replenishing medical first
aid supplies and equipment in accordance with
prescribed standards recognized or approved by a
licensed health authority or organization that has the
expertise to evaluate, assess and determine the
potential need for or condition of the required first
aid supplies and equipment;
(e) written policies that set forth required procedural
guidelines to be followed in the administration and
management of all Inmate medication, including:
(i) policy guidelines governing the standards for
storage, security, monitoring, dispensing and
maintaining administrative control and
accountability of medication;
(ii) administrative control and accountability
procedures requiring a written record of the
name of the Inmate, date, time, name of
medication and signature of the authorized
and trained employee of the Contractor
dispensing the medication;
(iii) restrictions providing that medication
shall only be administered and recorded by an
employee authorized or trained to dispense
medication and to record the dispensation of
medication;
(iv) requirements that all medication must be
secured in a suitable locked container with
control records audited by the Contractor on
a monthly basis;
(v) requirements that in the event a Inmate is
released from the Facilities without his/her
medication, the medication shall be disposed
of in accordance with Board standards, which
disposition shall be witnessed and then
documented on the client's medical log sheet;
(f) all written policies and training required under
Mississippi law or any amendments or re-codifications
thereof,
(g) written policies and procedures for the prompt
notification of the Inmate's next of kin in the case of
serious illness, surgery, injury or death;
(h) requirements that a death in the Facilities shall be
immediately reported to the proper local authorities;
and
(i) all services and procedures required to provide medical
care to Inmates in accordance with applicable law.
5.03 The costs of hospitalization, prescription drugs,
surgical and dental care (and related non-local transportation
costs), ambulance/EMS transport (local or non-local), physical
examinations, and urinalysis, for Inmates shall be the obligation
of the jurisdiction from which the Inmate was assigned to the
Facilities. Such costs incurred by Contractor shall be invoiced
by Contractor directly to the obligated jurisdiction.
5.04 State certification and licensing requirements shall
apply to all health care personnel responsible for delivering
medical services to clients.
5.05 Except as directed by the Board or required by lawful
authority, the Contractor shall not knowingly accept or admit
into the Facilities any Inmate who represents a significant
health, medical or safety risk to the employees or the Inmates of
the Facilities.
5.06 The Contractor shall develop workplace guidelines which
address HIV policies, confidentiality and employee/client
education programs in compliance with State law. The guidelines
shall, at minimum, substantially incorporate the model workplace
guidelines developed by the Mississippi Department of Health or
those, if any, of the Board and the Commission. The Contractor
shall maintain written policies and guidelines which include:
(a) confidentiality guidelines regarding AIDS and HIV
medical information for employees and Inmates,
with policies consistent with guidelines published
by the Department of Health and with state and
federal laws and regulations; and
(b) educational programs regarding HIV/AIDS based on
the model education program created by the
Mississippi Department of Health, tailored to meet
the needs of all employees and Inmates, including
the use of Braille, or telecommunications devices
for the deaf, and the needs of persons with
physical or mental disabilities.
5.07 The Contractor shall provide the Board and/or the
Commission with copies of the above-stated policies and programs.
ARTICLE SIX
COMPLIANCE WITH STANDARDS
6.01 The Contractor shall prepare and adopt a Procedures
Manual for the operation of the Facilities so as to assure that
the Facilities is operated fully in accordance with State and
other applicable law and regulations, rules and procedures
promulgated by the Commission and applicable standards
promulgated by the ACA, in the Standards For Adult Local
Detention Facilities, 3rd Edition. The Contractor shall, from
time to time, make such modifications and corrections in the said
Procedures Manual as are necessary to keep the Facilities in
compliance with such laws, rules, regulations and standards. The
Contractor shall prepare all such manuals, guidelines and
policies required by Commission regulations, including those
required by the Mississippi Administrative Code and all
amendments and re-codifications thereof.
6.02 The Contractor shall require that all employees at the
Facilities are adequately trained and certified, as appropriate,
to perform at standards required by State and other applicable
law, the rules and procedures promulgated by the Commission and
the applicable standards promulgated by the ACA.
6.03 Contractor shall develop and submit to the Board for
its approval, a detailed plan illustrating how Contractor intends
to facilitate evaluation and monitoring of operations to ensure
compliance with this Agreement. The monitoring plan, as amended
from time to time, shall be adhered to throughout the term of
this Agreement and shall include requirements for:
(c) reporting procedures;
(d) frequency of reporting;
(e) subject-matter to be reported; and
(f) an administrative/management audit system providing
periodic assessment of Facilities operations designed
to reveal the degree of compliance with all the
policies and procedures.
6.04 The internal administrative/management audit conducted
by the Contractor shall exist apart from any external or
continuing audit conducted by the Board or any other agency.
ARTICLE SEVEN
DUTIES OF THE BOARD
7.01 Provided that the rated and design capacity of the
Facilities shall not be exceeded, the Board covenants and agrees
to transfer to the Facilities all Inmates that are referred by
the Courts and that: (a) reside within the City and that the
Board does not elect to place in a Facilities then-operated by
the Board and constructed prior to the date hereof, (b) are
referred for placement in the Facilities by a district,
department, board or City that has, by inter-local agreement,
contracted with the Board to participate and reserve space in the
Facilities; (c) the Board contracts with another jurisdiction to
place and house in the Facilities, or in any Facilities similar
or equal to the Facilities that is controlled by or is owned by
the Board; or (d) comes under the control and/or jurisdiction of
the Board by virtue of a contract with another jurisdiction.
7.02 This Agreement shall not apply to, and the Board shall
be solely responsible for, the housing, care and control of any
Inmates housed by the Board at another center or Facilities not
operated by the Contractor.
7.03 The Sheriff of Grenada County shall cooperate with
Contractor in all matters of law enforcement, security and
communications and shall employ its reasonable influence and
persuasion to obtain such cooperation from the law enforcement
agencies within the City.
7.04 The Sheriff may reasonably cooperate and assist the
Contractor in the future with on-going training, at Contractor's
expense, of Contractor employees, agents or sub-contractors.
Such training, if any, shall generally be accomplished by
permitting a reasonable participation by Contractor employees in
local training programs, in-house training or by presentations at
the Facilities. Any such training assistance by the Sheriff
shall be performed solely as a convenience to Contractor, and the
Sheriff shall not be liable for any duty of care or performance
with respect to such training assistance. Contractor shall
remain solely responsible for the training of its employees,
agents and sub-contractors.
7.05 The Sheriff shall assist and cooperate with the
Contractor in obtaining and providing information needed by
Contractor in the screening of candidates for employment.
7.06 It is agreed that the first priority for bed space in
the Facilities is to assure space is available for such persons
that are referred for placement from the County. However, the
Board and Contractor agree it shall be to their mutual benefit
and interest that the Facilities be utilized by a Inmate
population within the design limits of bed capacity. To this
end, and throughout the Term of this Agreement, the Board and
Contractor agree to cooperate and work to manage and limit long-
term vacancies by contracting with other jurisdictions for the
housing of residents from such other jurisdictions.
7.07 Notwithstanding the foregoing, the responsibility of
marketing the Facilities to other jurisdictions and agencies lies
with the Contractor.
7.08 In accordance with S19-3-40, MS Code of 1972
annotated, the Board of Supervisors of Grenada County shall have
the power to adopt any orders, resolutions or ordinances with
respect to county affairs, property and finances for which no
specific provisions has been made by general law and which are
not inconsistent with the Mississippi Constitution, the
Mississippi code of 1972, or any other statute or laws of the
State of Mississippi to implement this operation and management
agreement with Correctional Services Corporation (the
Contractor).
ARTICLE EIGHT
LIABILITY AND INDEMNITY
8.01 Contractor agrees to and hereby does defend, hold
harmless and indemnify the Board, Grenada County, and their
officers, directors, employees, agents, and representatives from
and against any and all claims, damages, demands, losses, costs,
assessments and expenses incurred or suffered by the Board,
Grenada County, or its officers, directors, employees, agents or
representatives that arise out of or result from any cause or
claim or any negligent or wrongful act, or failure to act
pursuant to the provisions of this Agreement by the Contractor or
its officers, employees, agents or representatives, or its
subcontractors or assigns. To the extent, if any, allowed by
Mississippi law, the Board similarly indemnities and holds
harmless the Contractor from claims and damages arising from the
negligent or wrongful acts of the Board's employees.
8.02 The Contractor agrees to and does hereby assume
responsibility for the care, maintenance and repair of the real
and personal property that is: (a) owned by the Contractor or the
Board; (b) is located at the Facilities and (c) is used by the
Contractor in the operation or maintenance of the Facilities.
8.03 Notwithstanding the foregoing or any other term,
provision or condition of this Agreement, as to third parties and
third party claims, nothing in this Agreement is intended to nor
shall be interpreted to: (a) give, grant or bestow any legal
right, defense or benefit upon any third party; or (b) deprive
the Board, Grenada County, or the Contractor of the benefits of
any legal defense, including sovereign and official immunity, or
the benefits of any law limiting damages.
ARTICLE NINE
INSURANCE
9.01 Contractor shall obtain and maintain in force during
the term of this Agreement beginning not later than the
Commencement Date, at its sole cost, risk and expense and without
charge to the Board, a policy or policies of liability insurance
by an insurer(s) acceptable to Board and in any aggregate amount
of no less than Five Million Dollars ($5,000,000) in coverage for
any single claim, specifically including insurance for civil
rights claims thereunder. The liability insurance shall be
issued by an insurance company with a rating of at least an A-
according to A.M. Best Standards. Save and except as hereafter
modified by the parties in writing, such insurance shall be in
addition to the coverage maintained or required to be maintained
by the Board and shall insure against all claims whatsoever
against Contractor, the Board, Grenada County, or their officers,
employees, agents and representatives, in connection with the
detention, care, security, housing and training of Inmates of the
Facilities, including but not limited to claims based on
violations or alleged violations of civil rights arising from
services performed by Contractor or its employees, agents,
subcontractors or assigns pursuant to this Agreement.
9.02 During the Term of this Agreement or any extended Term
hereof, the Contractor shall, at its sole cost and expense,
obtain, keep and maintain in full force and effect, an insurance
policy or policies providing worker's compensation insurance (or
its approved and authorized equivalent) in amounts not less than
the amounts required by State law.
9.03 Prior to the Commencement Date, the Contractor shall
assure the insurance required pursuant to this Section 9.03 is in
full effect. The Contractor may secure such insurance, or
additional insurance, through companies licensed to do business
in the State of Mississippi, and thereafter secure and maintain
insurance coverages in effect, as follows:
(c) a policy or polices of insurance insuring the
Facilities buildings and premises against all casualty
and hazard risks and other risks of direct physical
loss at replacement cost;
(d) a policy insuring against claims and liability for
personal injuries, death or property damages, that
arise or are in any manner occasioned by premise
defects or the acts of negligence of the Contractor or
others in the custody, operation or use of the
Facilities;
(e) all Contractor's vehicles (including those owned,
leased or hired), regardless of purpose, shall be
covered by automobile liability insurance in such
amounts as are agreed from time to time by the
Contractor and Board.
9.04 Save and except as specifically provided in Article
Nine, each and every policy of insurance required by Article Nine
shall name the Board and the City as additional insureds and, as
to property and casualty insurance, as loss payees, and shall
provide that such policy may not be canceled or modified except
upon at least thirty (30) calendar days notice in writing to both
the Contractor and the Board.
9.05 Contractor shall provide to the Board insurance
certificates as proof of the insurance policies obtained in
accordance with this Article.
9.06 The Contractor is not responsible to provide
worker's compensation insurance for Board employees on the
premises of the Facilities, nor is the Contractor responsible for
providing liability insurance coverage for the acts or conduct of
Board employees on the premises of the Facilities. This does not
release Contractor from its responsibility to assure that the
Board, City and their officers/employees are named as additional
insureds on the policies of insurance required to be procured and
maintained by the Contractor hereunder.
9.07 The contractor shall post a One Million ($1,000,000.)
performance bond to assure the contractor's faithful performance
of the specifications and conditions of the contract. The bond
is required throughout the term of the contract. The terms and
conditions must be approved by the Board of Supervisors and
approval is a condition precedent to contract taking effect.
ARTICLE TEN
ADDITIONAL PROVISIONS
10.01 Notwithstanding Contractor's obligation to perform, or
cause to be performed, all duties and services set forth in this
Agreement in consideration of the compensation to be paid
hereunder to Contractor, the Board and Contractor recognize and
agree that operation changes, and additional services desired by
entities contracting for the placement of Inmates may, at some
future time, require that Contractor provide services not
included in the terms of this Agreement. In such event, the
Board and the Contractor shall negotiate and execute written
terms, conditions and amendments hereto or supplemental
agreements prior to any such services being provided or
compensation earned.
10.02 To the extent, if any, specifically authorized by the
Board and another jurisdiction placing Inmates in the Facilities,
the Contractor may make a separate and independent agreement with
any such jurisdiction, agency or organization for special or
added education or training of any such resident so long as such
jurisdiction, agency or organization has the legal right,
capacity and authority to enter into a contract with Contractor
for the provision of such additional services to such Inmates.
The reimbursement of costs for these additional services shall be
payable directly to Contractor by the appropriate contracting
jurisdiction. The Contractor shall provide the Board with copies
of all such contracts or agreements, which shall be separate and
independent of, and impose no responsibility on the Board.
10.03 The Contractor may not assign, transfer or contract
with a third party for the provision of any portion of its duties
or responsibilities hereunder except with the express written
approval of the Board on terms and conditions accepted and
approved by the Board. However, the Contractor may contract with
third parties to provide to it goods or services to allow the
Contractor to perform under this Agreement without prior Board
consent.
10.04 In the event of the occurrence of any damage to or loss
of the Facilities that materially affects the continued operation
of the Facilities, the Contractor shall immediately notify the
Board of such loss or damage.
(c) If the damage or loss to the Facilities is equal to
fifty percent (50%) or less of the total value of the
Facilities and insurance proceeds or other funds are
available, the Contractor shall immediately proceed to
obtain the repair and reconstruction of the Facilities
in consultation with the Board only as to the plans and
quality of repair. The Board has no obligation to
appropriate any funds for this purpose, except
insurance proceeds received therefore.
(d) In the event the damage or loss to the Facilities
exceeds fifty percent (50%) of the value of the
Facilities and the repairs, rebuilding and
reconstruction can be completed within one hundred
eighty (180) calendar days after the date of such
damage, the Contractor shall commence such rebuilding
and reconstruction of the Facilities within sixty (60)
days from the date of the damage. In such event, the
Contractor shall fund the repairs and reconstruction
from insurance proceeds or monies appropriated to or
approved by the Board [if any, and none being required]
and reconstruct the Facilities upon plans and
specifications approved by the Board or, absent such
approval, based upon the original plans and
specifications for the Facilities.
(e) In the event the damage or loss to the Facilities
exceeds fifty percent (50%) of the value of the
Facilities and the rebuilding and reconstruction cannot
be completed within one hundred eighty (180) calendar
days after the date of such damage, the Board shall
promptly decide whether or not to rebuild and
reconstruct the Facilities. In such event:
(j) if the Board decides to rebuild the Facilities, the
rebuilding and reconstruction shall be funded from
insurance proceeds or monies appropriated or approved
by the Board [if any, and none being required] and the
Contractor shall commence such rebuilding and
reconstruction within sixty (60) days from the date of
the damage and based upon plans and specifications
approved by the Board or absent such approval, based on
the original plans and specifications for the
Facilities;
(ii) if the Board decides not to rebuild this
Facilities, then, in that event, this Agreement
shall terminate immediately upon such
determination; or
(iii) if the Board determines that rebuilding,
repairing, or restoring the Facilities is
practicable and desirable, and proceeds to cause
such rebuilding, repairing, or restoring, the
Contractor and the Board may nevertheless jointly
determine to terminate this Agreement and to
execute a new agreement for the supervision of the
reconstruction and the subsequent operation and
management of the new Facilities.
10.05 In the event title to or the temporary use of the
Facilities, or any part thereof, shall be taken in condemnation
or by the exercise of the power of eminent domain by any
governmental entity or by any person acting under governmental
authority, promptly after such condemnation or exercise of the
power of eminent domain, the Board and Contractor shall jointly
determine whether to restore or replace the Facilities. If the
decision is to restore or replace the Facilities, the Contractor
shall forthwith proceed with such restoration or replacement,
which restoration or replacement shall thereupon become part of
the Facilities. In such case, any proceeds received from any
award or awards in respect of the Facilities or any part thereof
made in such condemnation or eminent domain proceedings, after
payment of all expenses incurred in the collection thereof, shall
be for payment of, or reimbursement for, the costs of such
restoration or replacement. If the Contractor and the Board
determine not to restore or replace the Facilities, then this
Agreement shall terminate upon the date of the occupancy of the
Facilities by the condemnor.
10.06 In the event any State, County, or City taxes are
assessed on the facility, building or property owned by the
Contractor, the Contractor shall receive an increase in the per
diem to pay for these additional expenses.
ARTICLE ELEVEN
DEFAULT AND TERMINATION
11.01 Each of the following shall constitute an Event of
Default by the Contractor:
(a) a material failure to keep, observe, perform, meet, or
comply with any covenant, agreement, term, or provision
of this Agreement which is the duty of the Contractor
hereunder, which failure continues for a period of
thirty (30) days after the Contractor has been provided
written notice thereof,
(b) a material failure to meet or comply with any Court
order; the standards, rules and regulations of the
Commission or any federal or State requirement or law;
which failure continues for a period of thirty (30)
days after written notice thereof to the Contractor,
except with regard to material breaches that create a
safety or security hazard, which shall be an immediate
event of default, only seventy-two (72) hours notice
and opportunity to cure shall be required, subject to
immediate action if the delay of 72 hours creates a
further danger to the safety, health or welfare of the
Inmates
(c) the Contractor shall (i) admit in writing its inability
to pay its debts; (ii) make a general assignment for
the benefit of creditors; (iii) suffer a decree or
order appointing a receiver or trustee for it or
substantially all of its property to be entered and, if
entered without its consent, not to be stayed or
discharged within sixty (60) days; (iv) suffer
proceedings under any law relating to bankruptcy,
insolvency, or the reorganization or relief of debtors
to be instituted by or against it and, if contested by
it, not to be dismissed or stayed within sixty (60)
days; or (v) suffer any judgment, writ of attachment or
execution, or any similar process to be issued or
levied against a substantial part of its property which
is not released, stayed, bonded, or vacated within
sixty (60) days after issue or levy, and any of these
events has caused or threatens to adversely affect or
interrupt the continued operation of the Facilities in
full compliance with all conditions of this Agreement
and the Lease;
(d) the discovery by the Board that any material statement,
representation, or warranty herein or provided in
materials or made in support of the award of this
Agreement to the Contractor is false, misleading, or
erroneous in a material respect; or
(e) chronic failure of the Contractor to timely pay trade
creditors, utility suppliers, payroll and other
operational expenses which is not corrected or remedied
within thirty (30) days notice from the Board.
11.02 Upon the occurrence of an Event of Default of the type
specified in 11.01 (a) or 11.01(b) and if the Contractor
reasonably believes: (i) that such Event of Default cannot be
cured within the thirty (30) days allowed to cure such Event of
Default, and (ii) that such Event of Default can be cured,
through a diligent, on-going and conscientious effort on the part
of the Contractor, the Contractor may, within the thirty day cure
period, submit a plan for curing the Event of Default to the
Board (which plan shall show in detail the means the Contractor
proposes to cure the Event of Default). Upon receipt of any such
plan for curing an Event of Default, the Board shall promptly
review such plan and, at its discretion, allow or disallow the
Contractor to pursue such plan. If the Board allows the
Contractor to pursue the plan, the Board agrees that it will not
exercise its remedies hereunder with respect to such Event of
Default for so long as the Contractor diligently, conscientiously
and timely undertakes to cure the Event of Default in accordance
with the approved plan. If the Board does not allow an extension
of the cure period, the thirty day time period shall be tolled
during the period of time the plan is pending before the Board.
11.03 Upon the occurrence of an Event of Default by the
Contractor, the Board shall have the right to pursue any remedy
it may have at law or equity, including but not limited to: (a)
reducing its claim to a judgment; (b) taking action to cure the
Event of Default, in which case the Board may offset against any
payments owed to the Contractor all reasonable costs incurred by
the Board in connection with its efforts to cure such Event of
Default; (c) recovery of its reasonable attorneys fees and costs
from Contractor; and (d) termination of this Agreement and
removal of the Contractor as the operator of the Facilities and
the offsetting against any payments owed to the Contractor by the
Board of any reasonable amounts expended by the Board to cure the
Event of Default. In the event of the Contractor's removal as
operator due to an Event of Default, the Board shall have no
further obligation to the Contractor after such removal and the
Contractor agrees to comply with Section 11.04 and 11.05 hereof
and to cooperate with the Board during the transition of the
Facilities.
11.04 Notwithstanding anything to the contrary herein, in the
event any bankruptcy, reorganization, debt arrangement,
moratorium, proceeding under any bankruptcy or insolvency law, or
dissolution or liquidation proceeding, is instituted by or
against Contractor and, if instituted against Contractor, is
consented to or acquiesced in by Contractor or is not dismissed
within sixty (60) calendar days, this Agreement shall be
immediately terminated and canceled, and the Board shall promptly
assume responsibility for the operation, management and
supervision of the Facilities. In the event this Agreement is
canceled pursuant to the terms of this section, then in that
event, Contractor agrees that Board may take control and
ownership of all the property materials, supplies and records
within the Facilities. Further, the Board may, in its
discretion, employ or contract for personal services with any, or
all employees, agents or employees of Contractor at the
Facilities. In such event, Contractor shall have no claim, and
hereby expressly waives all claims, for compensation and payment
for such property, materials, supplies and records, and/or
regarding such employees.
ARTICLE TWELVE
NON-DISCRIMINATION
12.01 The Contractor shall not discriminate against any
employee, Inmate or subcontractor with regard to race, color,
handicap, religion, sex, national origin or age.
12.02 The prohibition of discrimination includes employees,
subcontractors and prospective clients or Inmates who have or are
perceived to have a handicap because of AIDS or HIV infection,
antibodies to HIV or infection with any causative agent of AIDS.
12.03 The Contractor agrees to post in conspicuous places,
available to employees and applicants for employment, notices
setting forth the provisions of this non-discrimination clause
and shall, in all solicitations or advertisements for employment
and purchase and service contracts placed by or on behalf of the
Contractor or Board, warrant that such Contractor is an equal
opportunity employer; provided that notices, advertisements and
solicitations placed in accordance with federal law, rule or
regulation shall be deemed sufficient for the purpose of meeting
the requirements of this section.
12.04 All services and facilities provided hereunder shall
comply with the Americans with Disabilities Act and all other
applicable laws.
12.05 The Contractor shall adopt and post a policy
prohibiting sexual harassment.
ARTICLE THIRTEEN
APPLICABLE LAW AND VENUE
13.01 This Agreement shall be construed under and in
accordance with the laws of the State of Mississippi, and all
obligations created hereunder are performable in Grenada,
Mississippi. Venue of any legal proceeding involving a dispute
under this Agreement or arising out of this Agreement shall lie
and be in Grenada County, Mississippi.
ARTICLE FOURTEEN
LEGAL CONSTRUCTION
14.01 In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable, and such is not a material provision,
such invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Agreement shall be construed
as if such invalid, illegal or unenforceable provision had never
been contained herein. If the invalid, illegal or unenforceable
provision is material to the clear intent of the parties hereto,
the Board and Contractor shall, within thirty (30) calendar days
of such determination, negotiate and execute a contract amendment
sufficient to correct such invalidity or, failing such amendment,
terminate this Agreement.
ARTICLE FIFTEEN
AMENDMENTS
15.01 This Agreement may be amended only in writing, with
such written instrument being approved and executed by both the
Contractor and the Board.
ARTICLE SIXTEEN
NOTICES
16.01 Notices required to be given hereunder by one party to
the other shall be in writing and shall be valid if actually
received by the party to whom such notice is given or if
deposited in the United States mail, postage prepaid and
addressed to the party below specified.
16.02 Notices to the Board shall be sent to:
_____________________________ Grenada, Mississippi 79356.
16.03 Notices to the Contractor shall be sent to:
Correctional Services Corporation, 1819 Main Street, Suite 1000,
Sarasota, Florida 34236.
ARTICLE SEVENTEEN
ENTIRE AGREEMENT
17.01 This Agreement constitutes the sole and only Operation
and Management Agreement of the Parties hereto and supersedes any
prior understandings or written or oral agreements between the parties
respecting the within subject matter.
EXECUTED this 12th day of September, 1997, and effective as of the
first day written above.
GRENADA COUNTY DETENTION CORRECTIONAL SERVICES
BOARD CORPORATION
By: \s\ Fred Carver By: \s\ James S. Slattery
Title: President Title: President
Date: 9/12/97 Date: 9/10/97
[CIK] 0000914670
[NAME] CORRECTIONAL SERVICES CORPORATION
LEASE AGREEMENT
This Lease ("Lease") is made this 1st day of September, 1997,
between Correctional Services Corporation ("Lessee"), and Grenada
County ("Lessor").
Premises
1. The Lessor leases to the Lessee the premises in the City of
Grenada, County of Grenada, and State of Mississippi, described as
follows: One 160 bed jail located at 60 Green Street, Grenada,
Mississippi and one 20 bed Annex located at 831 South Commerce,
Grenada, Mississippi, together with the exercise areas, fences and
other appurtenances thereto such as are required for the proper
operation of a jail. (Attach a footprint of the leased premises
to define them and to distinguish the sheriff's quarters.)
Term
2. The original term of this Agreement shall be for a period
of five (5) years with an option to renew for additional period of
two (2) years.
Rent
3. The Lessee agrees to pay the Lessor as rent for the premises
the sum of $10.00 yearly. Payments will be made to Grenada County,
Mississippi through the office of the Chancery Clerk of said
County.
Taxes
4. The Lessee shall pay and discharge all existing and future
taxes, assessments, duties, impositions, and burdens assessed,
charged, or imposed, upon the premises or any erections thereon,
or upon the owner or occupier in respect thereof, and shall
deliver to the Lessor promptly proper and sufficient receipts and
other evidence of the payment and discharge of the same.
Liens or Encumbrances
5. The Lessee shall not suffer the premises or any erection or
improvements thereon to become subject to any lien, charge, or
encumbrance whatsoever, and shall indemnify the Lessor against all
such liens, charges, and encumbrances; it being expressly agreed
that the Lessee shall have no authority, express or implied, to
create any lien, charge, or encumbrance upon the premises or the
improvements thereon.
Assignments
6. The Lessee shall not assign this lease, except with the
Lessor's written consent.
Insurance
7. The Lessee shall keep the buildings and improvements upon
the premises insured against loss or damage by fire or other
disasters, for their full insurable value in companies
satisfactory to the Lessor, and shall furnish the Lessor with a
complete list of all such insurance; shall pay all the premiums
necessary for those purposes immediately as they become due, and
deliver to the Lessor the receipts therefor; shall make all
insurance payable to the Lessor, and shall deliver to the Lessor
the policies of all insurance payable to the Lessor; provided,
that if the Lessee shall at any time fail to insure or keep
insured as aforesaid, the Lessor may do all things necessary to
effect or maintain such insurance, and any moneys expended by him
for that purpose shall be repaid by the Lessee within 30 days of
demand for payment.
Damage or Destruction
8. In case of damage or destruction by fire or otherwise, the
Lessee shall repair, restore, or rebuild the buildings and
improvements on the premises, in accordance with plans and
specifications to be approved by the Lessor, with all reasonable
dispatch, and in any event within twelve (12) months from the time
of such damage or destruction; provided, that in case of any such
damage or destruction the Lessor shall apply any insurance money
recovered by it to such repair, restoration or rebuilding under
plans and specifications approved by the Lessor; and provided
further that all insurance money recovered and paid to the Lessor
shall first be so applied; and provided also that in case the
Lessee shall not so repair, restore, or rebuild within twelve (12)
months, then such insurance money recovered by the Lessor shall be
retained it.
Repairs
9. The Lessee shall keep the demised buildings, and all other
buildings and erections which may at any time during the said term
be erected upon the premises, and the drains, fences, grounds and
appurtenances in good condition and repair.
Alterations
10. The Lessee shall not make any alteration of the buildings
or the premises without the consent in writing of the Lessor.
New Buildings
11. The Lessee shall not erect or permit to be erected on the
premises any new buildings or make or permit to be made any
addition to the building to be erected upon the premises, except
in accordance with plans and specifications previously approved by
the Lessor.
Lessor to Enter
12. The Lessee shall permit the Lessor and/or the Sheriff of
Grenada County and his agents at all reasonable times to enter
upon the premises to view the condition of the premises and
buildings.
Unlawful Use
13. The Lessee shall not make or suffer any use or occupancy
of the premises contrary to this lease, the operating agreement
between CSC and Grenada County, any law or ordinance now or
hereafter in force.
Indemnity
14. The Lessee shall indemnify the Lessor against all costs
and expenses, including counsel fees, lawfully and reasonably
incurred in the defense of any action or proceeding, or in
discharging the premises from any charge, lien, or encumbrance, or
in obtaining possession after default of the Lessee or the
termination of this lease, or enforcing the terms thereof.
Surrender
15. At the termination of this lease the Lessee shall
surrender the premises with all buildings erected thereon and
additions thereto and all fixtures affixed thereto in such repair
and condition as shall be in accordance with the covenants herein
contained.
Quiet Possession
16. The Lessor shall warrant and defend the Lessee in the
enjoyment and peaceful possession of the premises during the said
term.
17. The Lessor warrants that it has quiet title to the
premises, that it will promptly pay any and all bond or other
lawful payments required to assure continued possession and
operation of the premises for the purposes contemplated.
Representatives Bound
18. It is agreed that the covenants, stipulations, and
conditions herein contained shall inure to the benefit of and
shall be binding upon the heirs and assigns of the Lessor and the
heirs, executors, administrators, and assigns of the Lessee.
Venue and Choice of Law
19. This Lease will be governed by the laws of the State of
Mississippi. Any action regarding this Lease must be brought in a
court of competent jurisdiction for the County of Grenada,
Mississippi.
GRENADA COUNTY CORRECTIONAL SERVICES CORPORATION
("Lessee") ("Lessor")
By: \s\ Fred Carver By: \s\ James S. Slattery
Title: President Title: President
Date: 9/12/97 Date: 9/10/97
[CIK] 0000914670
[NAME] CORRECTIONAL SERVICES CORPORATION
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is entered into
effective as of the 27th day of August, 1997, by and among DOVE
DEVELOPMENT CORPORATION, a Texas corporation ("Seller"), CONSOLIDATED
FINANCIAL RESOURCES, INC., a Texas corporation ("CFR"), CONSOLIDATED
FINANCIAL RESOURCES/CRYSTAL CITY, INC., a Texas corporation ("CFRCCI"),
and CORRECTIONAL SERVICES CORPORATION, a Delaware corporation
("Purchaser").
WITNESSETH:
WHEREAS, Purchaser desires to acquire from Seller, and Seller
desires to sell to Purchaser, certain assets of Seller involved in the
operation and management of the Facilities (as hereinafter defined); all
on the terms and subject to the conditions contained in this Agreement;
WHEREAS, CFR and CFRCCI desire to evidence their consent and
approval, to the extent the same may be required, to (i) the transfer of
the Acquired Assets to Purchaser, and (ii) the designation of Purchaser,
and the operation and management by Purchaser, of the Facilities and the
related assets and properties.
NOW, THEREFORE, Purchaser and Seller in consideration of the
agreements and covenants contained herein and $1.00 in hand paid, the
receipt and sufficiency of which are acknowledged, and subject to the
satisfaction of the conditions set forth herein, hereby agree as follows:
ARTICLE 1.
Definitions
For purposes of this Agreement the following terms shall have
the following respective meanings:
1.1 Accounts (Prepaid): all of Dove's prepaid amounts
relating to the Acquired Assets or the business of Seller with respect to
the Facilities and attributable to periods prior to or after the Effective
Time, including, without limitation, those described or referred to on
Schedule 1.1.
1.2 Acquired Assets: all of the assets, interests and rights
being purchased by Purchaser hereunder, as more specifically described in
Section 2.1.
1.3 Assumed Liabilities: the meaning set forth in Section 2.6.
1.4 Closing: the meaning set forth in Section 2.2.
1.5 Closing Date: the date on which the Closing occurs, as
defined in Section 2.2.
1.6 Contract Rights: all of the rights and interests of Dove
in, to and under the following contracts and agreements:
(i) County Jail and Detention Facility Operation and Management
Agreement dated 9/1/92 between Frio County, a political subdivision of the
State of Texas ("County"), and Dove Development Corporation d/b/a Frio
Detention Management ("Dove" or "FDM"), as amended by Amendment dated as
of September 1, 1992, and further amended by that unsigned Amendment dated
September 27, 1996;
(ii) County Jail Operation and Management Agreement dated
9/1/92, between County of Frio and Dove, as amended by that certain
Amendment dated as of September 1, 1992, and further amended by that
County Jail Operation and Management Agreement Amendment dated as of
September 1, 1992, and further amended by that Amendment of the Amendment
to a County Jail Operation and Management Agreement dated as of September
1, 1992 (executed on 9/1/93), and further amended by that Second Amendment
of the County Jail Operation and Management Agreement dated December 22,
1994;
(iii) Frio County Temporary Detention Facility Operation and
Management Agreement dated _____________, 1994 (June 10, 1994 at bottom of
page), between Dove and County;
(iv) Agreement Concerning Temporary Detention Facility, between
County and Dove dated ___________________, 1994 (June 9, 1994 at bottom of
page);
(v) Temporary Housing Payment Agreement, dated June 2, 1994,
between County and The City of Crystal City, Texas; and
(vi) Agreement dated August 24, 1995, between Dove and Uvalde
County, Texas, regarding the housing of certain prisoners.
1.7 Contracts: all contracts, operating agreements, management
agreements, prisoner housing agreements, instruments, agreements,
mortgages, security agreements, purchase orders, sales contracts, leases,
licenses and franchises, whether written or oral, between Seller (or Seller
and one or more affiliates of Seller) and other persons or parties, or with
respect to which any of Seller's assets or properties are otherwise bound,
relating to the ongoing business, assets or operations of the Seller or to
the other Acquired Assets as listed on Schedule 1.7 attached hereto.
1.8 Effective Time: 11:59 p.m., Central Daylight Time, on the
Closing Date.
1.9 Employee Plans: all bonus, pension, stock option, stock
purchase, benefit, thrift, welfare, health, retirement, disability,
insurance, incentive, executive compensation, severance, deferred
compensation and all other plans, programs, agreements, contracts or
arrangements, including, without limitation, any collective bargaining
agreements, written or otherwise, benefiting employees of Seller
(including former employees) or their families or beneficiaries.
1.10 Environmental Regulations: the Clean Air Act, 42
U.S.C. 7401 et seq., the Clean Water Act, 42 U.S.C. 1251 et seq., the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Solid Waste
Disposal Act, as amended by the Resource, Conservation and Recovery Act
("RCRA"), 42 U.S.C. 6901 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et
seq., as amended by the Superfund Amendments and Reauthorization Act of
1986; Safe Drinking Water Act, 42 U.S.C.A. 300(f)-(j)(26); Hazardous
Liquids Pipeline Safety Rules, 16 TAC 7.80-7.87; Hazardous Liquids
Pipeline Safety Act of 1979, 49 U.S.C. 2001 et seq.; Natural Gas Pipeline
Safety Act of 1968, 49 U.S.C. 1671 et seq.; all other present or future
valid and applicable federal, state and local environmental laws and
ordinances, and all rules and regulations now or hereafter promulgated
with respect to any thereof.
1.11 Facilities (individually, a "Facility"): The
following three (3) correctional facilities: (i) one 167-bed facility
located at 410 S. Cedar St., Pearsall, Texas ("Main Unit"); (ii) one
96-bed facility located at South Cedar, Pearsall, Texas ("Williams Unit");
and (iii) one 30-bed facility located at 502 South Cedar, Pearsall, Texas
("Sanders Unit"), respectively.
1.12 Force Majeure: any (1) fire, explosion, breakdown of
plant, failure of machinery, strike, lock-out, labor dispute, casualty or
accident, shortage, lack or failure of all or part of transportation
facilities, sources of labor, raw materials, power or supplies; or (2) Act
of God, including epidemic, hurricane, cyclone, drought, flood; or (3)
war, revolution, civil commotion, act of enemies, blockage or embargo, any
law, order, proclamation, regulation, ordinance, demand or requirement of
any government or subdivision authority or representative of any such
government; or (4) any other acts whatsoever, whether similar or
dissimilar to those above enumerated, beyond the reasonable control of a
party hereto, which shall make it impossible for the party concerned to
carry out obligations of such party under this Agreement. Force Majeure
shall only be applicable under this Agreement in any situation where this
Agreement expressly so provides.
1.13 GAAP: generally accepted accounting principles.
1.14 Hazardous or Waste Substance: all hazardous or toxic
material, waste or substance, and any pollutant, as such terms are defined
in any Environmental Regulation; petroleum, and all petroleum-based
substances; natural gas, synthetic gas or any mixtures thereof; and all
materials or substances defined as any kind of waste under any
Environmental Regulation.
1.15 Liabilities: as to any person or entity, all debts,
adverse claims, liabilities and obligations, direct, indirect, absolute or
contingent of such person or entity, whether accrued, vested or otherwise,
whether in contract, tort or otherwise and whether or not actually
reflected, or required by GAAP to be reflected, in such person's or
entity's balance sheets, income statements or cash flow statements or
other books and records, including, without limitation, (i) obligations
arising under any law, rule or regulation of any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
or imposed by any court or any arbitrator of any kind, (ii) obligations
arising in connection with products sold by, or under contracts,
agreements (whether written or oral), leases, commitments or undertakings
of, such person or entity, (iii) all indebtedness or liability of such
person or entity for borrowed money, or for the purchase price of property
or services (including trade obligations), (iv) all obligations of such
person or entity as lessee under leases, capital, operating or otherwise,
(v) liabilities of such person or entity in respect of plans covered by
Title IV of the Employee Retirement Income Security Act of 1974, as
amended, or otherwise arising in respect of Employee Plans or employees or
former employees or their respective families or beneficiaries, (vi)
reimbursement obligations of such person or entity in respect of letters
of credit, (vii) all obligations of such person or entity arising under
acceptance facilities, (viii) all liabilities of other persons or entities
directly or indirectly guaranteed, endorsed (other than for collection or
deposit in the ordinary course of business) or discounted with recourse by
such person or entity or with respect to which the person or entity in
question is otherwise directly or indirectly liable, (ix) all obligations
secured by any lien on property of such person or entity, whether or not
the obligations have been assumed, and (x) all other items which have
been or in accordance with GAAP would be, included in determining total
liabilities on the liability side of a balance sheet.
1.16 Losses: the meaning set forth in Section 9.1(a).
1.17 Permits: all permits, licenses, filings,
authorizations, approvals or other indicia of authority issued by any
governmental agency, authority or other instrumentality of the United
States, or any state or political subdivision thereof necessary, or used,
or actually held by Seller and useful, as of the Closing, directly or
substantially (i) to conduct the business and operations of the Seller,
the Facilities or which otherwise relate to the Acquired Assets or to own,
construct, operate or maintain each fixture, process, the Facilities, any
item of equipment, vehicle, machinery, installation or other asset of the
Acquired Assets used as part of the Acquired Assets, or (ii) to store,
transport, dispose of, discharge, emit, market or sell any goods or any
substance (including, without limitation, materials classified as
"hazardous materials" or "hazardous substances" or "hazardous wastes")
used, handled, produced, disposed of, discharged, emitted, marketed or
sold in the business or operations of the Acquired Assets.
1.18 Permitted Encumbrances: those liens described or
referred to on Schedule 1.19.
1.19 Purchase Price: the meaning set forth in Section 2.3.
1.20 Real Property: all of those certain tracts or parcels
of land, as more particularly described on Schedule 1.20, together with
any improvements, buildings, structures, or fixtures which may be located
thereon.
1.21 Retained Assets: the Retained Contracts and the other
Assets of Seller listed or referred to on Schedule 1.21.
1.22 Retained Contracts: the Contracts designated on Schedule 1.22.
1.23 Retained Liabilities: the meaning set forth in Section 2.6.
ARTICLE 2.
Purchase and Sale
2.1 Purchase and Sale of Acquired Assets. Subject to the terms
and conditions set forth in this Agreement, at the Closing (but effective
as of the Effective Time), Seller shall sell, assign, transfer, grant,
convey and deliver to Purchaser, and Purchase shall purchase, acquire and
accept, all of the assets, properties, rights, and contracts (but not the
Liabilities thereunder, except as provided in Section 2.6) in the
following paragraphs (a) through (i) (the "Acquired Assets"), free and
clear of all liens, security interests, pledges, mortgages, deeds of
trust, servitudes, charges, and encumbrances (other than the Permitted
Encumbrances):
(a) All the machinery, equipment, inventories, furniture,
lighting fixtures, trucks, automobiles, cranes, tools, spare parts and
other tangible personal property or fixtures related to or used in
connection with the Facilities, including, without limitation, all the
personal property and fixtures listed or referenced in Schedule 2.1(a);
(b) To the extent assignable, all rights of Seller under
or pursuant to all warranties, representations and guarantees made by
suppliers, licensors, vendors and contractors in connection with Acquired
Assets to the extent that such warranties, representations and guarantees
(i) relate to claims that accrue or arise on or after the Effective Time,
(ii) create an obligation to repair or replace Acquired Assets (or refund
the purchase price therefor), (iii) constitute warranties of title for all
personal property, or (iv) relate to claims which have not been asserted
prior to the Effective Time and which affect the nature or value of any
Acquired Asset (whether or not such claims accrued or arose prior to the
Effective Time);
(c) All Contract Rights;
(d) To the extent assignable, all Permits, and any pending
applications therefor;
(e) all Accounts (Prepaid); and
(f) Subject to Section 13.4, rights to insurance proceeds,
if any, or claims against third parties resulting from damage, destruction
or loss to the Acquired Assets occurring between the date of this
Agreement and the Closing Date.
2.2 Closing. The Closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Hutcheson &
Grundy, L.L.P., on the date ninety (90) days after the date hereof or such
other place and date as the parties may agree (the "Closing Date")
following the satisfaction or waiver (in writing or by operation of this
Agreement) of the conditions precedent set forth in Sections 7 and 8.
2.3 Purchase Price.
(a) Subject to any adjustments provided hereunder, the
Purchase Price, payable at the Closing in the manner described in Section
2.3(b) below, shall be the sum of:
(i) TWO HUNDRED AND SEVENTEEN THOUSAND AND NO/100
DOLLARS ($217,000); plus
(ii) the assumption by Purchaser of the Assumed
Liabilities;
(iii) any adjustments provided under Section 2.4
below, and any other adjustments provided under this Agreement.
(b) The Purchase Price shall be payable as follows: at the
Closing, Purchaser shall pay (A) a portion of the Purchase Price directly
to the vendors described on Schedule 5.8 in an amount equal to the amount
owed such vendors (assuming that such amount is equal to or less than the
amount to be paid by Purchaser), and (B) the remainder of the cash portion
of the Purchase Price shall be paid to Seller in cash (or by wire transfer
to such of Seller's accounts as shall be designated by Seller or other
immediately available funds acceptable to Seller).
(c) The Purchase Price shall be allocated among the
Acquired Assets in accordance with Schedule 2.3(c), or in such other
proportion as Purchaser and Seller may agree in writing, it being hereby
agreed that (i) the amount so allocated by the parties to each of the
Acquired Assets shall be an amount substantially equal to the fair market
value of each such Acquired Asset as of the Effective Time, and, (ii) in
the aggregate, the Purchase Price, as allocated, equals the fair market
value of the Acquired Assets.
2.4 Adjustments to Purchase Price. The Purchase Price shall be
adjusted downward at the Closing by the following:
(a) any proceeds received by Seller attributable to the
Acquired Assets that are, in accordance with generally accepted accounting
principles, attributable to the period of time from and after the
Effective Time;
(b) an amount equal to all claimed, asserted or unpaid ad
valorem, property, or other taxes and assessments based on or measured by
ownership of the Acquired Assets or the receipt of proceeds therefrom; and
(c) any other adjustments provided in this Agreement.
2.5 Accounts. Any payments made by wire transfer of
immediately available funds to a party hereto shall be made to an account
or accounts which shall be designated by such party to the other party at
least two business days prior to payment.
2.6 Assumed and Retained Liabilities.
(a) On the terms and subject to the conditions set forth
in this Agreement and subject to Section 2.6(c), Purchaser agrees to
assume all obligations and liabilities attributable to the Contract Rights
and arising and accruing from and after the Effective Time, and Purchaser
agrees to assume at the Closing the obligations of Seller under the debt
described on Schedule 2.6(a) attached hereto. The above-described
liabilities and obligations are herein referred to as the "Assumed
Liabilities."
(b) Purchaser will not assume any Liabilities of Seller to
the extent they are not Assumed Liabilities, whether or not set forth on
the Schedules hereto or otherwise disclosed in or in connection with this
Agreement (collectively, the "Retained Liabilities", and individually, a
"Retained Liability").
(c) Without limiting the generality of Section 2.6(b) and
notwithstanding any other provision hereof, each of the following is a
Retained Liability of Seller which Purchaser does not assume:
(i) Any of Seller's obligations and liabilities under
this Agreement;
(ii) Any liabilities or obligations, to the extent
that the existence thereof is inconsistent with, or the amount thereof
exceeds the amount represented in, any of Seller's representations and
warranties in this Agreement or any Schedule or certificate delivered
pursuant hereto;
(iii) Any liability or obligation arising by
reason of any violation or claimed violation of any federal, state, local
or foreign law, rule, regulation, ordinance or any requirement of any
governmental authority (including, without limitation, any liability or
obligation under or relating to any Environmental Regulations) whether
arising before or after the Effective Time;
(iv) Any liability or obligation in respect of any
Employee Plan (whether currently existing or arising or accruing
hereafter, including without limitation, any liability or obligation
relating to the termination of any Employee Plans in connection with the
consummation of the transactions contemplated herein) or for income,
personal property, sales, use, ad valorem, franchise or other taxes or
assessments (including any interest, penalties or additions thereto) owed
to any taxing authority, including any taxes arising out of the
transactions contemplated hereby other than sales tax attributable to
transfer of motor vehicles which shall be borne by the parties pursuant to
Section 13.2(a) hereof;
(v) Any liability or obligation related to accounts
payable owed by Seller and attributable to periods prior to the Effective
Time (and Seller shall provide Purchaser with evidence at Closing of
provisions made therefor to the satisfaction of Purchaser);
(vi) Any liability or obligation against which Seller
is insured, at least to the extent of such insurance (but this shall in no
way be deemed a limitation or restriction on Seller's liability therefor);
(vii) Any liability or obligation of Seller
arising out of or related to past, present or future litigation involving
or relating to Seller or the Acquired Assets, whether the relevant cause
of action accrues before or after the Effective Time;
(viii) Any liability or obligation in respect of
any agreement or contract to which Seller is a party or to which Seller or
any of its assets or properties are otherwise bound, and which is not an
Assigned Contract, including, without limitation, Purchaser does not
assume any liability of Seller under any of the Retained Contracts;
(ix) Any liability or obligation relating to the
Acquired Assets and arising from (or attributable to) actions, events or
conditions occurring or existing as of or prior to the Effective Time;
(x) Any liability or obligation arising from or
relating to the termination or severance of any employees of Seller (which
are not employees of Purchaser) in connection with the consummation of the
transactions contemplated herein, including, without limitation, any
liability or obligation under the Worker Adjustment and Retraining
Notification Act, as amended ("WARN Act");
(xi) Any liability or obligation under the Contracts
or associated with the Contract Rights, or any of them, accruing or
attributable to periods prior to the Effective Time;
(xii) Any other liability or obligation of any
kind or nature of Seller which is not an Assumed Liability under Section
2.6(a).
2.7 Collection of Accounts (Prepaid). Schedule 1.1 sets forth
a true, complete and correct list of all Accounts (Prepaid).
ARTICLE 3.
Representations and Warranties of Seller
Seller represents and warrants to Purchaser and agrees as
follows:
3.1 Organization. Seller is a corporation duly organized,
existing and in good standing under the laws of the State of Texas, has
full corporate power to own the Acquired Assets and conduct the business
presently being conducted by it related thereto, and is duly qualified to
transact business as a foreign corporation, and is in good standing, in
each jurisdiction in which such qualification is required.
3.2 Authority. The execution, delivery and performance of this
Agreement and each agreement and instrument to be executed, delivered and
performed by Seller pursuant hereto have been duly authorized and approved
by all requisite corporate action. Neither the execution and delivery of
this Agreement and such other agreements and instruments nor the
consummation of the transactions contemplated hereby or thereby
(including, without limitation, the assignment to Purchaser of Dove's
interests in all Contract Rights and Seller's interest in all Permits) and
compliance with nor fulfillment of the terms and provisions hereof or
thereof will (a) conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, the
Articles of Incorporation or Bylaws of Seller or any judgment, order,
award, decree or other restriction of any kind to which Seller is a party
or by which it is bound or to which any of the Acquired Assets are
subject, (b) except as set forth in Schedule 3.2(b), require the approval,
consent, authorization or other order or action of, or any filing with,
any person or entity, including without limitation any court, governmental
authority or regulatory body and CFR and CFRCCI hereby grant their
consents to the foregoing, (c) result in the imposition of any mortgage,
security interest, lien, easement, pledge, servitude, encumbrance or claim
of any kind on any if the Acquired Assets, or (d) would not result, give
any party with rights under any Contract Rights or any mortgage, security
agreement, judgment, order, award or decree the right to terminate or
otherwise materially change the rights of Seller under such Contract
Rights, mortgage, security agreement, judgment, order, award or decree.
Seller has full corporate power and authority to do and perform all acts
and things required to be done by Seller under this Agreement. This
Agreement and any other agreements and instruments required to be
delivered hereunder by Seller, when duly, executed and delivered by
Seller, will constitute legal, valid and binding obligations of Seller and
will be enforceable against it in accordance with their respective terms.
3.3 Acquired Assets.
(a) Seller owns, leases or has the legal right to use all
of the Acquired Assets. All Acquired Assets leased or licensed by Seller
are designated as such on Schedule 3.3(a). All Acquired Assets not
otherwise listed on Schedule 3.3(a) are owned by Seller, and Seller has
good and indefeasible title thereto.
(b) Except as set forth in Schedule 3.3(b), Seller has,
and upon the Closing Purchaser shall receive, the Acquired Assets, free
and clear of all mortgages, security interests, liens, deeds of trust,
notices of violation of law, ordinance or regulation, servitudes,
easements, pledges, consents, preferential purchase rights, encumbrances
or other title defects of any kind, except the Permitted Encumbrances.
(c) Each of the Contract Rights, including, any leases and
licenses included in the Acquired Assets, is in full force and effect,
Seller has received no (i) notice of cancellation or termination under
any option or right reserved to any other party under any such Contract
Rights or (ii) notice of default which remains uncured or has not been
waived, and no event or condition has occurred or exists which, with
notice or lapse of time or both would constitute a default under any
Contract Rights.
(d) Except as set forth in Schedule 3.3(b), Seller has
good and marketable title to all of the Real Property, personal property,
fixtures and equipment comprising the Acquired Assets, free and clear of
all security interests, liens, mortgages, deeds of trust, notices of
violations of law, ordinance or regulation, pledges or encumbrances of any
kind, other than Permitted Encumbrances.
(e) The Real Property (and any other properties on which
any of the Acquired Assets are located or are used) and improvements
thereon are zoned properly (as such zoning is reflected in the zoning maps
or other applicable public records) for operation as the Facilities and
performance of the Contracts. No the building or improvement, nor any of
the appurtenances thereto or equipment therein, nor the operation or
maintenance thereof, violates any restrictive covenants or any provision
of any federal, state, or local law, ordinance or zoning regulation, or
encroaches on any property owned by others.
(f) Neither the Real Property, nor any other properties on
which any of the Acquired Assets are located or are used, nor any
building, structure or improvements thereon violate any building, fire,
environmental or other regulatory law, ordinances or regulations, and
Seller has received no notice of any violation or alleged violation of any
thereof.
(g) All buildings and structures situated on the Real
Property (or any other properties on which any of the Acquired Assets are
located or are used) are structurally sound and do not have any material
defects in their roofs, foundations, HVAC system sewage system, walk-in
coolers or sidewalls.
3.4 Compliance with Laws.
(a) Seller is, and the Acquired Assets are, in compliance
with all valid and applicable statutes, orders, rules, ordinances and
regulations as interpreted and enforced on or before the date of this
Agreement (including, without limitation, (A) all Environmental
Regulations and other statutes, orders, rules, ordinances, and regulations
pertaining to the environment or to health and safety applicable to it,
and the generation, handling or disposition of any Hazardous or Waste
Substance, or and (B) those otherwise relating to the ownership, use,
operation, or disposition of any of the Acquired Assets).
(b) Except as set forth on Schedule 3.4(b), Seller has all
Permits and authorizations necessary to permit lawful use and operation
(based on conditions existing and the manner of use and operation
occurring immediately prior to the date hereof) of the Facilities and the
Acquired Assets by Seller. Except as set forth on Schedule 3.4(b), all
required applications for renewal thereof have been timely filed. Except
as set forth on Schedule 3.4(b), no granting authority has notified Seller
of its intent to modify, cancel, deny renewal of or impose conditions to
the renewal of any Permit, or required modifications to any filed
application for renewal of any Permit.
(c) Except as disclosed in reasonable detail on Schedule
3.4(c) relating to the Real Property to be provided to Purchaser hereunder
("Reports"), the Seller has neither transported nor arranged for the
transportation (directly or indirectly) of any Hazardous or Waste
Substance to any location which is or was at the time: (i) not authorized
under Environmental Regulations to receive such hazardous or waste
substance, (ii) listed or proposed for listing under any Environmental
Regulations, or on any similar list, or (iii) the subject of federal,
state or local laws which may lead to claims against the Seller for clean-
up costs, remedial work, damages to natural resources or personal injury,
including, but not limited to, claims under such Environmental
Regulations, where any such claims have, or are reasonably likely to have,
any damage or loss.
(d) There are no environmental liens on any of the real
property owned or leased by the Seller, and no actions have been taken by
any Federal, state, or local government agency or are in process which
could subject any of such real property to such liens, and the Seller is
not required to place any notice or restriction relating to the presence
of any Hazardous or Waste Substances at any real property owned by it in
any deed or other instrument relating to such Real Property.
(e) The Seller has provided or made available to Purchaser
all environmental investigations, studies, audits, tests, inspections,
reviews or other analyses (collectively, the "Environmental Site
Analyses") conducted or prepared by or on behalf of Seller relating to any
real property or facility now or previously owned or leased by the Seller
and are accurate and complete in all respects (it being understood that
nothing in this Section 3.4 shall be construed as waiving Purchaser's
rights for the breach of any representation, warranty, or covenant of the
Seller made herein).
(f) Except as disclosed in reasonable detail on Schedule
3.4(f) or as disclosed in the Reports, there have been no communications
to or from or any agreements with any Federal, state, or local government
agency or any private entity, including, but not limited to, any prior or
subsequent owners of real property now owned or previously owned by Seller
or by current or former owners of any adjacent real property, alleging or
relating in any way to any liability arising from, or the violation of any
law relating to, the presence, placement, use, manufacture, handling,
discharge, burial, or release either on, under or adjacent to such Real
Property, for which the Seller could reasonably be expected to be liable,
or the transportation to or from such real property for which the Seller
could reasonably be expected to be liable, of any Hazardous or Waste
Substance. Except as disclosed on Schedule 3.41(f), neither the Real
Property nor any of the property on which any of the Acquired Assets are
located or are used contain any Hazardous or Waste Substance.
3.5 Litigation; Etc. Except as set forth in Schedule 3.5,
there is no action, lawsuit, audit, investigation, claim or proceeding
pending (or threatened or any basis therefore known to Seller) against or
affecting or relating to the Acquired Assets or the ability of the Seller
to consummate any of the transactions contemplated herein in any court, or
before any federal. state, provincial, municipal or other governmental
department, board, agency or instrumentality, or before any arbitrator.
Seller is not in default, and no event or condition has occurred or exists
that with notice or the lapse of time or both would constitute a default,
with respect to any order, writ, injunction or decree of any court or
before any federal, state, provincial, municipal or other governmental
department, board, agency or instrumentality, or before any arbitrator,
affecting or relating to any of the Acquired Assets. Except as disclosed
in Schedule 3.5, no order, writ, injunction or decree is currently in
effect with respect to Seller or the ownership or operation of the
Acquired Assets.
3.6 Employee Plans and Contracts.
(a) Seller is not a party to any collective bargaining or
other labor union contract applicable to persons employed by Seller in the
business or operations of the Facilities or the Acquired Assets. There
exist no current activities or proceedings to organize any unorganized
employees of Seller employed in the Acquired Assets.
(b) There are no Employee Plans.
(c) No Employee Plan is required to be funded by Seller, nor is any Employee
Plan subject to Section 412 of the Internal Revenue
Code of 1986, as amended (or the corresponding provisions of any successor
statute) ("Code"). Seller has no Employee Plans subject to or governed by
the Employee Retirement Security Act or 1974, as amended (or the
corresponding provisions of any successor statute) ("ERISA").
(d) No lien in favor of an Employee Plan exists nor has
there been any occurrence that, with the passage of time, could likely
result in a lien on the assets of the Seller.
(e) There are no excise taxes, unrelated business income
taxes, additions to tax or penalties due to any entity or agency as a
result of the maintenance or operation of any pension plan or other
Employee Plan.
(f) All material obligations of the Seller for salaries,
vacation and holiday pay, bonuses, stock-based awards, consulting fees,
and other forms of compensation, current or deferred, payable to current
or former employees, officers, directors, agents, consultants, or similar
representatives of the Seller, whether arising by operation of law, by
contract, by legally binding past custom or practice or otherwise, have
been paid.
3.7 Finders. Seller has not paid or become obligated to pay
any fee or commission to any broker, finder or intermediary for or on
account of the transactions provided for in this Agreement.
3.8 Insurance. Schedule 3.8 contains a list of the policies
and contracts of insurance held by Seller (or Seller's parent for
Seller's benefit) with respect to the Acquired Assets or the employees of
Seller employed at the Acquired Assets for the period prior to November
20, 1996. Schedule 3.8 also contains a brief description (including the
name of the insurer, the amount of the annual premium for the current
policy period, amount of remaining coverage and coverage period) of each
such policy. All such policies were in full force and effect for the
period prior to November 20, 1996, and all premiums in respect of such
policies have been paid in full.
3.9 Schedules and Other Information. The Schedules and all
other certificates delivered pursuant hereto do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading. Originals or true
and complete copies of all documents or other written materials underlying
items listed in the Schedules, including without limitation all deeds,
leases, mortgages, deeds of trust, security instruments, Permits,
litigation files, Assigned Records, Contract Rights, Contracts, employee
agreements and licenses, have heretofore been furnished to Purchaser or
made available to it for copying in the form in which each of such
documents is in effect, to the extent contained in Seller's files, and
will not be modified prior to the Closing Date without Purchaser's prior
written consent.
3.10 Taxes. Seller has filed or has caused to be filed all
federal, state, county, municipal, local, foreign, and other tax returns
required to be filed by it and has paid all Taxes (as hereinafter defined)
which have become due (whether or not shown on any return) pursuant to
such returns or pursuant to any assessments received by it. For purpose
hereof, the term "Taxes" means any and all taxes, estimated taxes,
assessments, levies, withholdings, duties, fees, interest, penalties,
deficiencies, additions, and government charges or impositions of any kind
whatsoever, whether federal, state, county, municipal, local or foreign.
Seller represents that there is no tax lien, pending or threatened,
against any of the Acquired Assets as of the Closing Date.
3.11 Contract Rights.
(a) Except as otherwise disclosed on Schedule 3.11, all of
the Contract Rights are in full force and effect, are valid and
enforceable in accordance with their terms, and no condition exists or
event has occurred which, with notice or lapse of time or both, would
constitute a default under any provision thereof. No claim or notice of
the occurrence or existence of any such event or condition has been
received by Seller. Except as specifically designated on Schedule 3.11,
Seller has the right to transfer all of its right, title and interest in
such Contract Rights without any consent or approval of any person, and
the transfer thereof to Purchaser as contemplated hereby (after securing
consent or approval as to any Contract Rights so designated on Schedule
3.11) will not in any way affect the validity or enforceability of any
Contract Rights.
(b) Schedule 1.7 contains a true and correct list of all
Contracts relating to or in any affecting the Facilities or the Acquired
Assets. All such purchase orders and purchase contracts and agreements
represent valid and binding orders enforceable against Seller and, to
Seller's knowledge, each other person or entity which is a party thereto
in accordance with their respective terms.
(c) Seller has delivered to Purchaser true and complete
copies of all Contracts, including those creating or evidencing the
Contract Rights. All of the Contract Rights are in full force and effect,
are enforceable by Seller, and, to the best of Seller's knowledge, will be
enforceable by Purchaser, in accordance with their respective terms.
Seller is not and, to Seller's knowledge, none of the other parties to the
Contract Rights is in breach of or default, in any material respect, under
any term, provision or condition of any of the Contract Rights (there
existing no event under any such Contract Rights which, with notice, the
lapse of time or otherwise, would entitle, to Seller's knowledge, Seller
or would entitle any other party thereto to terminate or accelerate the
same).
3.12 Financial Statements.
(a) Seller has heretofore delivered to Purchaser certain
information concerning Seller's operation of the Facilities (the
"Financial Statements"). The Financial Statements of Seller delivered to
Purchaser are true, correct, complete, and accurate in all respects and
fairly present the financial condition, results of operations of the
Facilities and Seller.
(b) Other than routine operating expenses (including labor
and supplies) which are less than $5,000 in the aggregate as of the
Closing Date, Seller will not have any Liabilities arising out of
transactions entered into at or prior to Closing arising out of the
ownership or operation of the Acquired Assets or the Facilities, including
Taxes with respect to or based upon transactions or events occurring on or
before the Closing, which are not Assumed Liabilities.
3.13 Disclosure. All material facts possessed by Seller
relating to the Acquired Assets have been disclosed and made available to
the Purchaser in connection with this Agreement. The representations,
warranties, statements, and certificates furnished to Purchaser by Seller
relating to the Seller, its operations, the Acquired Assets or the
transaction contemplated herein, contain no untrue statements of material
facts and Seller has not intentionally omitted any material fact.
3.14 Bankruptcy. No petition in bankruptcy has been filed
or for reorganization or for protection under any debtor relief law has
been filed against Seller, CFR, CFRCCI or Tom Shirey.
ARTICLE 4.
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
4.2 Authority. The execution, delivery and performance by
Purchaser of this Agreement and each agreement and instrument to be
executed, delivered and performed by Purchaser pursuant hereto have been
duly authorized and approved by all requisite corporate action. Except as
set forth in Schedule 4.2, neither the execution and delivery of this
Agreement and such other agreements and instruments nor the consummation
of the transactions contemplated hereby or thereby, nor compliance with or
fulfillment of the terms and provisions hereof or thereof, will (a)
conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, the Articles of Incorporation or Bylaws
of Purchaser or any judgment, order, award or decree to which either is a
party or by which it is bound, (b) require any approval, consent or
authorization of, or other order or action, or filing with, any person or
entity, including without limitation any court, governmental authority or
regulatory body, or (c) give any party with rights under any instrument,
agreement, mortgage, judgment, order, award or decree the right to
terminate the rights and obligations of Purchaser under such instrument,
agreement, mortgage, judgment, order, award or decree. Purchaser have
full power and authority to do and perform all acts and things required to
be done by it under this Agreement. This Agreement and each agreement and
instrument to be executed, delivered and performed by Purchaser pursuant
hereto constitute valid and binding obligations of Purchaser enforceable
against Purchaser in accordance with their respective terms.
4.3 Finders. Purchaser has not paid or become obligated to pay
any fee or commission to any broker, finder or intermediary for or on
account of the transactions provided for in this Agreement.
ARTICLE 5.
Actions Prior to the Closing Date
The following actions have been or will be taken prior to the
Closing Date:
5.1 Preserve Accuracy of Representations and Warranties.
Except to the extent inconsistent with prudent business operations
unrelated to the existence of this Agreement, and except for
events of casualty due to any cause other than intentional misconduct on the
part of the covenanting party, each of the parties hereto shall
refrain from taking or failing to take or permitting or suffering to be
taken any action within its control which would render any representation
and/or warranty contained in Articles 3 and 4 of this Agreement inaccurate
in any material respect as of the Closing Date. Seller will promptly
notify Purchaser, and Purchaser will promptly notify Seller, of all
lawsuits, claims, proceedings and investigations that may be threatened in
writing, brought, asserted or commenced against them or their respective
officers or directors (a) involving, or which might have a material
adverse effect on the ability of the covenanting party to perform, the
transactions called for by this Agreement or (b) which might have a
material adverse effect on the Acquired Assets.
5.2 Operation of Acquired Assets. From the date hereof through
the Closing Date, except with the prior written consent of Purchaser, and
subject to Force Majeure, Seller shall, in all material respects, use,
operate and maintain the Acquired Assets in the ordinary course, shall
cause the current level of insurance coverage on the Acquired Assets as
listed on Schedule 3.9 to be maintained, shall continue its maintenance
and turnaround practices, shall not modify, amend or terminate any of the
Contract Rights without Purchaser's prior written consent, and shall use
best efforts to (i) maintain intact the Acquired Assets in the condition
represented in Section 3.3(b), ordinary wear and tear excepted, and (ii)
keep available an adequate work force.
5.3 Payment of Liabilities. Seller shall be solely responsible
for, and shall INDEMNIFY, DEFEND AND HOLD HARMLESS Purchaser from any
liability for, all Liabilities, including, but not limited to, liabilities
for Taxes (including, without limitation, sales, special fuels, state and
local franchise fees and Federal, state or local income, business,
franchise, real estate transfer and excise taxes), fees, assessments,
charges, royalties and other payments owing on account of the operations,
acts or omissions of Seller relating to ownership and operation of the
Acquired Assets prior to the Closing or arising in connection with the
transactions contemplated hereby. Seller shall incur no new Liabilities
with respect to the Acquired Assets prior to the Closing Date.
5.4 No Solicitation or Shopping. Seller, its agents and
representatives and its employees, officers, directors, and shareholders
shall not directly or indirectly solicit, initiate or negotiate inquiries
or proposals from any person or entity other than Purchaser and its
officers, employees, representatives and agents concerning any direct or
indirect acquisition of the Acquired Assets or any portion thereof.
5.5 Cooperation. Seller, CFR and CFRCCI shall cooperate with
and assist Purchaser promptly to file or submit and diligently prosecute
any and all applications or notices with public authorities and all
requests for consents or approvals to private persons, the filing or
granting of which is necessary for the consummation of the transactions
contemplated hereby or to prevent termination or restriction of any right,
privilege, license, agreement of Seller or the Acquired Assets or any loss
or disadvantage to the Acquired Assets upon the consummation of the
transactions contemplated hereby. Without limitation of the generality of
the foregoing, (i) Seller, CFR and CFRCCI shall cooperate with Purchaser
in obtaining the transfer to Purchaser of all Permits and Contract Rights
and the estoppel certificates referred to in Section 7.4, (ii) Seller, CFR
and CFRCCI hereby consent to, approve and authorize Purchaser to operate,
manage and use the Facilities, whether such consent is required under any
lease covering such Facilities or otherwise, and (iii) Dove, CFR and
CFRCCI hereby consent to and approve any subsequent assignment, transfer,
sublease or other disposition to Purchaser (or Purchaser's successors and
assigns) of any or all of the lessee's rights and interests in, to and
under any of the lease agreements with Frio, County, Texas (or its
successors or assigns), including, without limitation, the following: (1)
Lease Purchase Agreement dated September 1, 1987, between Consolidated
Financial Resources, Inc., as lessor, and the County, as lessee; (2) Lease
Purchase Agreement dated June 1, 1988, between CFR, as lessor, and County,
as lessee; and (3) Municipal Lease Purchase Agreement dated April 19,
1994, between County, as lessee and CFR, as lessor.
5.6 Supplemental Disclosure. Seller shall prior to Closing
amend the representations and warranties made by it herein, in the
Schedules and in all other certificates delivered by it to Purchaser
pursuant hereto to ensure that such representations and warranties,
Schedules and other certificates remain true, correct and complete between
the date of this Agreement and the Closing. Purchaser shall, prior to
Closing, amend the representations and warranties made by it herein to
ensure that such representations and warranties remain true in all
material respects between the date of this Agreement and Closing. The
delivery by one party to the other of each such amended representation or
warranty, Schedule or other certificate shall constitute a new
representation and warranty by the delivering party as to the truth,
completeness and accuracy of each such amended representation or warranty,
Schedule or certificate.
5.7 Commercial Efforts. Provided the covenanting party shall
not be required to incur unreasonable expense in connection therewith,
each of the parties hereto shall use commercially reasonable efforts to
fulfill all of the conditions set forth in this Agreement over which it
has control or influence (including obtaining any authorizations,
consents, approvals or waivers necessary to the performance of such
party's obligations hereunder) and to consummate the transactions
contemplated hereby.
5.8 Pay Vendors. Seller shall pay and discharge (or make
adequate provision for the payment and discharge, in a manner satisfactory
to Purchaser) any and all liabilities or obligations owed to those vendors
listed on Schedule 5.8.
ARTICLE 6.
Information and Records Concerning the Business; Title Procedures
6.1 Access to Information and Records. Seller shall give
Purchaser, its employees, counsel, accountants and other representatives
full and complete access at Purchaser's sole risk and expense during
normal business hours and upon reasonable prior notice throughout the
period prior to the Closing Date to all Seller's properties, books,
software, electronic documents or records, other records and personnel
related to the Facilities, the Acquired Assets or the Real Property to be
sold or assigned to Purchaser, and shall permit such representatives of
Purchaser to discuss Seller's business, finances and affairs relating to
the Acquired Assets or the Real Property to be sold or assigned to
Purchaser or otherwise covered by the Lease with Seller's officers,
directors, employees, counsel and accountants. Seller hereby authorizes
all of its officers, directors, employees and counsel to discuss its
business, finances and affairs with representatives of Purchaser and
furnish to Purchaser all such information concerning the Acquired Assets
and the business related thereto as Purchaser may request. Representatives
of Purchaser shall be afforded access to third parties who have contracts
with Seller relating to the Acquired Assets or the Real Property to be
sold or assigned to Purchaser or otherwise covered by the Lease for the
purpose of accomplishing an orderly transfer of the Acquired Assets and
the Lease to Purchaser on the Closing Date or obtaining estoppel
certificates. After the Closing Date, Seller shall continue to provide
Purchaser access, to the extent permitted by law, to Seller's personnel
files and records relating to the employment of persons at or in
connection with the Facilities.
6.2 Delivery of Information by Seller. (a) Within two (2) days
after the execution of this Agreement by Seller, Seller, at Seller's sole
cost and expense, shall deliver or cause to be delivered to Purchaser the
following:
(1) commitment for Title Insurance (the "Title Commitment")
from Stewart Title Company ("Title Company") setting forth the status of
the title of the Real Property and showing all liens, claims,
encumbrances, easements, rights-of-way, encroachments, reservations,
restrictions, and all other matters of record affecting the Real Property;
(2) a true, complete, and legible copy of all documents
referred to in the Title Commitment; and
(3) a survey of the Real Property ("Survey") consisting of a
plat and field notes prepared by a licensed surveyor acceptable to
Purchaser, which Survey shall show or be updated to (i) reflect the actual
dimensions of, and area within, the Real Property, the location of any
easements, rights-of-way, setback lines, encroachments, or overlaps
thereon or thereover, (ii) identify by recording reference all easements,
set back lines, and other matters referred to in the Title Commitment,
(iii) include the surveyor's registered number and seal and the date of
the Survey, and (iv) reflect that there is access to and from the Real
Property from a publicly dedicated street or road. To the extent that
Purchaser wishes to update the Survey supplied hereunder, the cost thereof
shall be borne by Purchaser.
(4) copies of any Environmental Reports pertaining to the Real
Property in Seller's possession.
6.3 Title. Purchaser shall have until the Closing Date, to
object in writing to any liens and encumbrances reflected by the Title
Commitment, or any matters disclosed on the Survey. All liens and
encumbrances or matters to which Purchaser so objects are hereinafter
referred to as the "Non-Permitted Encumbrances"; if no such notice of
objection is given, then it shall be deemed that all matters reflected by
the Title Commitment are "Permitted Encumbrances." Seller shall have the
right, but not the obligation, to cure prior to Closing all or any Non-
Permitted Encumbrances. If Seller does not timely cause all of the Non-
Permitted Encumbrances to be removed or cured, Purchaser, as its sole
remedy, shall have the right to either (i) terminate this Agreement in
accordance with Section 12.1 hereof, or (ii) elect to purchase the Real
Property subject to the Non-Permitted Encumbrances. The Non-Permitted
Encumbrances, subject o which Purchaser elects to purchase the Real
Property, shall thereafter be Permitted Encumbrances.
ARTICLE 7.
Conditions Precedent to Obligations of Purchaser
The obligations of Purchaser under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of all of
the following conditions, any one or more of which may be waived by
Purchaser in writing:
7.1 Representations and Warranties Accurate.. All
representations and warranties of Seller contained in this Agreement, the
Schedules hereto or in any other certificate or document delivered by or
for the account of Seller in connection herewith shall have been true,
complete and accurate in all material respects when made and, after giving
effect to any amendments to such representations and warranties made
pursuant to Section 5.6 which (i) are acceptable to Purchaser and (ii) are
delivered to Purchaser no later than forty-eight (48) hours prior to the
time of Closing (hereinafter, the "Amendments"), shall be true, complete
and accurate in all material respects at and as of the Closing Date as if
made at and as of the Closing Date. Seller shall furnish Purchaser with a
certificate, dated the Closing Date, in such form as Purchaser may
reasonably request and signed on Seller's behalf by a duly authorized
fficer of Seller, as to the truth, completeness and accuracy of the
representations and warranties of Seller. For purposes of determining
whether a misrepresentation or breach of a warranty has occurred, Seller's
representations and warranties shall be its representations and warranties
as modified by the Amendments.
7.2 Performance by Seller. Purchaser shall have satisfied
itself that Seller shall have performed and complied in all respects with
all agreements and conditions required by this Agreement to the performed
and complied with by it prior to or on the Closing Date.
7.3 Authorization, Approvals and Consents. All governmental
and third party approvals and consents necessary in Purchaser's judgment
to be obtained by Purchaser to consummate the transactions contemplated
hereunder and own and operate the Acquired Assets shall have been obtained
by Purchaser prior to the Closing Date. Purchaser shall have received all
authorizations, consents, approvals, estoppel certificates and waivers or
other actions (collectively, "Consents") (i) required to be obtained by
Seller in connection with the execution, delivery and performance of this
Agreement (including, without limitation, Shawnut National Bank, N.A.
and/or Fleet Bank, N.A.), and (ii) necessary in Purchaser's judgment to
properly and effectively transfer to Purchaser the Contract Rights or to
other Acquired Assets.
7.4 Legal Prohibition. On the Closing Date, there shall exist
no injunction or judgment, law or regulation prohibiting the consummation
of the transactions contemplated by this Agreement.
7.5 Permits. Purchaser shall have received assurances
satisfactory to it that all Permits shall be transferable at Closing, or
shall be granted or issued to Purchaser at or immediately following
Closing, so that Purchaser shall be entitled to own and operate the
Acquired Assets, without material modification or adjustment or
requirement that Purchaser incur material expenditure, after Closing in
the same fashion as it was operated by Seller immediately prior to the
date hereof.
7.6 Changes in Law. No change in law (or interpretation
thereof) which in Purchaser's judgment could materially and adversely
affect the ownership and operation by Purchaser of the Acquired Assets or
any material part or item thereof shall have occurred between the date
hereof and the Closing Date.
7.7 Financing. If Purchaser deems the same necessary, in
its sole discretion, Purchaser shall have obtained third party financing
for purposes of acquiring the Acquired Assets, on such terms and
conditions as are satisfactory to Purchaser, in its sole discretion.
7.8 Title Policy. Purchaser shall have obtained a title policy
issued by the Title Company acceptable to Purchaser, insuring Purchaser's
ownership in fee title to the Real Property, in form and substance
acceptable to Purchaser; and Purchaser, in its sole discretion, shall be
satisfied with the coverage thereof and the exceptions and exclusions
therefrom.
7.9 Satisfaction With Acquired Assets. Purchaser, in its sole
and absolute discretion, shall be fully satisfied in all respects with all
of the Acquired Assets. Seller acknowledges that Purchaser has not
completed its review of the Acquired Assets as of the execution of this
Agreement and may not complete such review until the Closing.
7.10 Release of Liens and Subordination of Rights. Seller, CFR
and CFRCCI shall release and fully discharge any rights, liens, security
interests or encumbrance that Seller may have, as lessor under a lease or
in any other capacity, to any of the revenues, accounts receivable or
other amounts received by or on behalf of the Frio County from or in any
way relating or attributable to the operation, use or management of the
Facilities. In addition, to the extent that Seller has any right to
foreclose on or succeed to the interest of the Frio County under any lease
covering any of the Facilities (or personal property used in connection
therewith), Seller shall, prior to Closing, subordinate any such right or
interest that it may have to the rights of Purchaser under any of the
Contract Rights (or any operation or management subsequently entered into
covering the Facilities). Seller shall execute and deliver such releases,
subordination agreements, non-disturbance agreements and other instruments
as Purchaser may deem necessary or appropriate, in forms satisfactory to
Purchaser.
7.11 Guaranty. Seller shall deliver to Purchaser a
Guaranty, executed by Tom Shirey, in form and substance satisfactory to
Purchaser, in Purchaser's sole discretion, guaranteeing, among other
things, the representations, warranties, covenants and indemnifications of
or by Seller under this Agreement (and any agreement, document or
instrument executed or delivered in connection herewith).
7.12 At Closing. At the Closing, Purchaser shall be
furnished the documents required or contemplated under this Agreement, and
Seller shall (i) deliver to Purchaser good and marketable title to the
Acquired Assets, free and clear of all liens, security interests, pledges,
mortgages, deeds of trust, servitudes, charges, consents, preferential
purchase rights and encumbrances (other than Permitted Encumbrances) and
those specifically assumed by Purchaser in writing), and (ii) execute and
deliver, or cause the execution and delivery of, all instruments as are
necessary to effectively transfer such title to Purchaser, said
instruments to be in form reasonably acceptable to Purchaser, including,
without limitation, the instruments identified in clauses (a), (b), and
(d) below:
(a) Deeds, Bills of Sale, Assignments, Etc. Such bill(s)
of sale, deed(s) (covering the Real Property), endorsements, assignments
and other good and sufficient instruments of transfer, conveyance and
assignment, and with such consents or waivers to the assignment of such
Acquired Assets as may be necessary, as shall be fully effective to vest
in Purchaser title to the Acquired Assets.
(b) Assignment and Assumption Agreements. For leases and
Contract Rights, Assignment and Assumption Agreements under which all of
Seller's rights are transferred to Purchaser, together with the original
leases or Contract Rights, pursuant to this Agreement, as shall be fully
effective to vest in Purchaser all of Seller's rights therein and under
which Purchaser shall assume and agree to discharge Assumed Liabilities,
where appropriate (together with such estoppel certificates relating
thereto as Purchaser may request).
(c) Records. All Assigned Records.
(d) Release of Liens, Etc. Such documents in addition to
those described in (a) and (b) above as are required to effect release of
liens, security interests and financing statements on, and effect transfer
of title to, the Acquired Assets.
(e) Estoppel Certificates. Such estoppel certificates, in
forms satisfactory to Purchaser, executed by (i) the lessor and lessee
under any lease covering all or any portion of the Facilities, (ii) the
Frio County, Texas, and (iii) and any other person holding any debt
secured by the Facilities or the revenue therefrom or any portion thereof.
ARTICLE 8.
Conditions Precedence to Obligations of Seller
The obligations of Seller under this Agreement shall be subject
to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which may be waived by Seller in writing
(Seller being deemed to have waived any unsatisfied conditions by
consummating the sale contemplated in this Agreement):
8.1 Representations and Warranties Accurate. All
representations and warranties of Purchase contained in this Agreement or
in any certificate delivered by or for the account of Purchaser in
connection herewith shall have been true, complete and accurate in all
material respects when made and, after giving effect to any amendments
thereto made pursuant to Section 5.9 which are acceptable in form and
substance to Seller, shall be true, complete and accurate in all material
respects at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date. Purchaser shall
furnish Seller a certificate, dated the Closing Date and signed by a duly
authorized officer of Purchaser, as to the truth, accuracy and
completeness of the representations and warranties of Purchaser in such
form as Seller may reasonably request. For purposes of determining
whether a misrepresentation or breach of a warranty has occurred,
Purchaser's representations and warranties shall be its representations
and warranties as modified by such amendments thereto made pursuant to
Section 5.7 as shall be acceptable in form and substance to Seller.
8.2 Performance by Purchaser. Seller shall have satisfied
itself that Purchaser shall have performed and complied in all material
respects with all agreements and conditions required by this Agreement to
be performed and complied with by it prior to or on the Closing Date
(including without limitation the following enumerated agreements and
conditions):
(a) Purchaser shall have delivered to Seller the cash
payments required by Section 2.3 hereof;
(b) Purchaser shall have executed and delivered to Seller
the Assignment and Assumption Agreements required to be delivered by
Purchaser to Seller; and
8.3 Legal Prohibition. On the Closing Date, there shall exist
no injunction or judgment, law or regulation prohibiting the consummation
of the transactions contemplated by this Agreement.
8.4 Termination Date. The transactions contemplated hereby
shall have been consummated on or before ninety (90) days after the date
of execution hereof, as such date may be extended by Purchaser.
8.5 Lease Purchase Agreement. Seller and Purchaser shall each
execute and deliver a lease purchase agreement, in substantially the form
attached hereto as Exhibit "A."
ARTICLE 9.
Indemnification
9.1 Indemnified Representations, Warranties and Agreements of
Seller.
(a) Seller hereby agrees to indemnify, defend, and hold
Purchaser, and its shareholders, officers, directors, employees, agents
and representatives, harmless from and after the Closing against and in
respect of any losses, liabilities (including, but not limited to, any
court costs or attorney fees), and damages of any kind whatsoever incurred
by Purchaser that (i) arise in any manner from or relate to the Acquired
Assets, or the ownership, use, operation, or disposition of the Acquired
Assets (including, without limitation, all obligations and liabilities
under any Contract Rights accruing), prior to the Effective Time, (ii)
arise in any manner or relate to the Retained Assets, (iii) result or
arise from any misrepresentation, breach of warranty or breach or
nonfulfillment of any agreement or covenant on the part of Seller
contained in this Agreement or in any certificate delivered pursuant
hereto or in connection herewith, or (iv) result or arise from any
Retained Liabilities (including, without limitation, any liability or
obligation (1) under any Environmental Regulations regardless of whether
such Environmental Regulations existing now or promulgated in the future,
and regardless of whether any such Environmental Regulations were violated
(2) arising from or relating to the severance or termination of any of the
employees of Seller), and from all suits, actions, proceedings, demands,
assessments, judgments, costs, reasonable attorneys' fees and expenses
incident to any of the foregoing matters, including those out-of-pocket
costs, charges and expenses in respect of the participation of officers
and employees of Purchaser after the Closing Date in defense thereof (all
of the foregoing being referred to herein as the "Losses").
(b) In addition to the indemnity provided in Section
9.1(a) and without limiting the generality thereof, Seller hereby agrees
to indemnify and hold Purchaser harmless from and after the Closing
against and in respect of any losses, liabilities and damages incurred by
Purchaser arising out of or based upon failure of Seller and/or Purchaser
to comply with any applicable successor tax law.
(c) If a claim by a third party is made against Purchaser,
and if Purchaser intends to seek indemnity with respect thereto under
Section 9.1(a), Purchaser shall notify Seller of such claim, provided that
Purchaser's failure to give Seller prompt notice of a third party claim
shall not deny Purchaser its right to claim indemnification hereunder
except to the extent Seller is prejudiced thereby. Seller shall have 30
calendar days after receipt of the above-mentioned notice to elect to
undertake, conduct and control, through counsel of its own choosing and at
its expense, the settlement or defense therefor, and Purchaser shall
cooperate with it in connection therewith; provided, however, that: (i)
Purchaser shall be entitled to assume the defense of such claim to the
extent reasonably necessary while Seller determines whether to undertake
the settlement or defense thereof, and to be indemnified therefor, (ii)
Seller shall not thereby permit to exist any lien, encumbrance or other
adverse charge upon any asset of Purchaser or any material interference
with the business or operation of the Acquired Assets or any intended
disposition thereof, and (iii) Seller shall permit Purchaser to
participate in (but not control) such settlement or defense through
counsel chosen by Purchaser, provided that the fees and expenses of such
counsel shall be borne by Purchaser and shall not be included in Losses.
If Seller fails to respond within this thirty (30) day period, then
Purchaser shall have full discretionary control with regard to the
settlement and defense thereof, and Seller shall be bound thereby, and INDEMNIFY
AND HOLD HARMLESS Purchaser for any Losses relating thereto.
Purchaser may, at the sole cost and expense of Purchaser, participate with
Seller and its counsel in contesting the third party claim, including
without limitation the making of any related counterclaim against the
third party asserting the claim or any cross-complaint against any person
or entity.
9.2 Indemnified Representations, Warranties and Agreements of
Purchaser.
(a) Purchaser hereby agrees to indemnify, defend, and hold
harmless Seller from and after the Closing against and in respect of any
losses, liabilities or damages incurred by Seller that result or arise
from (i) acts or omissions of Purchaser with respect to the ownership or
operation of the Acquired Assets after the Effective Date, or (ii) any
misrepresentation, breach of warranty, or breach or nonfulfillment of any
agreement or covenant on the part of Purchaser under this Agreement
(including the Purchaser's covenant to assume and pay, perform or
discharge Assumed Liabilities).
(b) In making claims for indemnification pursuant to this
Section 9.2, Seller and Purchaser shall be obligated to follow the same
procedures as are applicable to Purchaser's claims for indemnification
pursuant to Section 9.1(c) and shall be subject to the same principles and
rules as therein set forth.
9.3 Default Interest Rate. If any party shall fail to pay when
due any amount accruing under this Article 9, such amount shall thereafter
bear interest at the Default Interest Rate (as hereinafter defined) until
satisfied. For purposes hereof, the term "Default Interest Rate" shall
mean a rate per annum equal to the lesser of (a) five percent (5%) plus a
varying rate per annum that is equal to the interest rate publicly quoted
by Texas Commerce Bank, N.A. from time to time as its prime commercial or
similar reference interest rate, with adjustments in that varying rate to
be made on the same date as any change in that rate, and (b) the maximum
non-usurious rate permitted by applicable law.
ARTICLE 10.
Employee Relations and Benefits
10.1 Employees. From time to time prior to the Closing
Date as shall be requested by Purchaser, Purchaser shall be permitted to
interview all of Seller's employees during business hours, pursuant to
schedules to be coordinated with Seller, and, to the extent permitted by
law, Seller shall give Purchaser all information (or copies thereof) in
Seller's possession reasonably requested by Purchaser in connection with
such employees. Purchaser may offer employment commencing as of the
Closing Date to any such employees on such terms as Purchaser shall deem
appropriate. Seller shall be responsible for any and all termination
and other benefits, costs or judgments, if any are owed or awarded to such
employees as a result of termination by or with Seller.
10.2 No Rights to Employment. Nothing herein expressed or
implied shall confer upon any employee or former employee of Seller or any
legal representatives thereof or any collective bargaining agent any
rights or remedies, including, without limitation, any right to
employment, or continued employment for any specified period, or the
payment of any benefit of any nature or kind whatsoever under or by reason
of this Agreement.
10.3 Warn Act. In the event that termination of any or all
of Seller's employees (which are not the employees of Purchaser) results
in any obligation or liability under the WARN Act, Seller shall pay and
discharge any and all liability and obligations imposed on Purchaser or
Seller under the WARN Act, including, without limitation, those incurred
in connection with the transactions contemplated in this Agreement, this
Article 10 or from Purchaser's not employing any person employed by
Seller.
ARTICLE 11.
Actions to be Taken
Subsequent to the Closing Date
11.1 Further Assurances. To the extent such authorization
is necessary, Seller authorizes Purchaser (i) to be the operator of each
of the Facilities and (ii) to apply for and obtain recordation of the
evidences of transfer to Purchaser of the Acquired Assets under this
Agreement. Seller shall (at its expense) promptly execute such documents
as Purchaser may reasonably request to obtain the full benefits of the
transfer of ownership of the Acquired Assets, which documents Purchaser
may duly record at its sole expense in each appropriate office, bureau and
tribunal in each jurisdiction as the registered owner or proprietor of
each of the rights hereby transferred.
11.2 Mutual Cooperation with Respect to Taxes and Other
Financial Matters and Other Financial Matters. Each of Purchaser and
Seller will provide the other with such assistance as may reasonably be
requested by either of them in connection with the preparation of any tax
return, any audit or other examination by any taxing or other governmental
authority, or any judicial or administrative proceedings relating to
liability or taxes or other governmental matters relating to the
transactions contemplated by this Agreement. Each party will provide the
other with the opportunity to make copies of any records or information
which may be relevant to such return, audit or examination, proceedings or
determination. Such assistance shall include making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder and shall include providing
copies of any relevant tax returns and supporting work schedules. The
party requesting assistance hereunder shall reimburse the other for
reasonable out-of-pocket expenses incurred in providing such assistance,
and after the expiration of four months from the Closing Date, for
services provided at a reciprocal per diem rate to be mutually agreed upon
for the specific employees of Purchaser, or Seller, involved in performing
such services.
11.3 Cooperation in Litigation. In the event that, after
the Closing Date, Seller or Purchaser shall reasonably require the
participation of officers and employees by each other to aid in the
defense or prosecution of litigation or claims, and so long as there
exists no unwaived conflict of interest between the parties, each of
Seller and Purchaser shall make such officers and employees reasonably
available to participate in such defense or prosecution provided that,
except as required pursuant to the provisions of Article 9, the party
requiring the participation of such officers or employees shall pay all
reasonable out-of-pocket costs, charges and expenses arising from such
participation.
11.4 Omitted Assets. Seller agrees to transfer (or cause
to be transferred) to Purchaser, promptly upon demand therefor, at no cost
to Purchaser, any asset or right (tangible or intangible and including
without limitation any Contract) owned by Seller at any time between the
date hereof and the Closing Date which does not appear on a Schedule
hereto, if such asset or right is an Acquired Asset and Purchaser has
demanded that such asset or right be transferred to it.
ARTICLE 12.
Termination
12.1 Termination Events. This Agreement may, by notice
given on or prior to the Closing Date, in the manner hereinafter provided,
be terminated and abandoned:
(a) By mutual consent of Seller and Purchaser;
(b) By either Purchaser or Seller if the Closing shall not
have occurred on or before the Termination Date; provided, however, that
no party hereto can so terminate this Agreement if the Closing has failed
to occur because such party failed to perform or observe its material
agreements and covenants hereunder;
(c) By either Purchaser or Seller if any court or
governmental agency shall have issued an order, judgment or decree or
taken any other action materially challenging, delaying, restraining,
enjoining, prohibiting or invalidating the consummation of any of the
transactions contemplated herein;
(d) By Purchaser, if without fault of Purchaser, all
conditions set forth in Article 7 shall not have been satisfied prior to
the Closing Date; or
(e) By Seller, if without fault of Seller, all conditions
set forth in Article 8 shall not have been satisfied prior to the Closing
Date.
12.2 Effect of Termination.
(a) In the event the Closing does not occur as a result of
any party hereto exercising its right to terminate pursuant to Section
12.1, then this Agreement shall be null and void, and except as expressly
provided herein, no party shall have any rights or obligations under this
Agreement, except that nothing herein shall relieve any party from
liability for any willful or negligent failure to perform or observe any
accrued obligation, covenant or agreement herein, including, but not
limited to, indemnity obligations. Subject to the provisions of Section
12.2(b), if the termination of this Agreement results from failure of any
party to perform any material obligation, covenant or agreement herein,
then the other party hereto shall be entitled to all remedies available at
law or in equity. Subject to the provisions of Section 12.2(b), if any
party to this Agreement resorts to legal proceedings to enforce this
Agreement or any rights in respect hereof, the prevailing party in such
proceedings shall be entitled to recover all costs incurred by such party
including reasonable attorneys' fees, in addition to any other relief to
which such party may be entitled.
ARTICLE 13.
Other Provisions
13.1 Survival of Representations, Warranties and
Agreements. The representations, warranties, covenants and agreements
contained herein shall survive the Closing.
13.2 Transfer, Sales and Property Taxes.
(a) Seller will pay or reimburse Purchaser for any
transfer, purchase, sales, use or similar tax under the laws of any
nation, state or any country, city, or political subdivision thereof
arising out of the transactions contemplated by this Agreement and any
filing or recording fees payable in connection with the instruments of
transfer provided for herein.
(b) All personal property, and ad valorem taxes, water
charges and sewer rents, if any, vault charges, if any, and all other
taxes, charges or assessment levied or imposed upon the Acquired Assets by
the State of Texas, any county where any of the property is located or any
other governmental subdivision or taxing authority of any one of the
foregoing or of any other locale, shall be apportioned or prorated on a
per diem basis between Purchaser and Seller as of the Effective Time (the
"Adjustment Time"). Toward this end, Seller hereby agrees to pay or cause
to be paid, on or prior to the Closing Date all other taxes and
assessments against the Acquired Assets for all calendar years prior to
the calendar year of Closing. If the Closing Date shall occur before the
tax rate for the year of Closing is fixed by the appropriate taxing
authority, the apportionment of any such taxes shall be upon the basis of
the tax rate for the preceding calendar year applied to the latest
assessed valuation and shall he readjusted promptly after such taxes are
known.
13.3 Complete Agreement. This Agreement, including the
Schedules and Exhibits attached hereto, shall constitute the entire
agreement between the parties hereto with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter, including, without
limitation, that certain Letter of Intent dated September 25, 1996, as
amended, between Dove and Purchaser (except insofar as the same relates to
the Confidentiality Obligations, as hereinafter defined).
13.4 Passage of Title and Risk of Loss. It is the intent
of the parties that title and risk of loss to the Acquired Assets shall
pass from Seller to Purchaser at the Effective Time, notwithstanding that
the Closing shall take place later on the Closing Date. If there is any
material damage, destruction or loss to any material portion of the
Acquired Assets between the date hereof and the Closing Date, caused by
Force Majeure ("Material Event"), or if any condemnation proceeding
against any material portion of the Acquired Assets has been commenced
prior to the Closing Date ("Condemnation"), Purchaser and Seller shall
have the following rights with respect to such Material Event or
Condemnation:
(a) Should a Material Event or Condemnation occur between
the date of this Agreement and the Effective Time, Seller shall notify
Purchaser in writing of such occurrence and Purchaser may elect to
complete the Closing and take possession of the Acquired Assets without
any reduction of the Purchase Price or of the other obligations of
Purchaser hereunder; provided, however, that Seller, if permitted by the
terms of any insurance policy, or applicable law, as the case may be,
shall assign to Purchaser, in respect to such Material Event or
Condemnation, Seller's claim against any third party, or its right to
recover under any insurance policies maintained by Seller or, where any
such assignment is not permitted by the terms of any such policy, or
applicable law, as the case may be, Seller shall arrange for payment to
Purchaser of all proceeds payable in respect of such Material Event or
Condemnation under such policy, and shall cooperate with Purchaser in
effecting such recovery and shall not settle or compromise any claim in
connection with a Material Event or Condemnation without Purchaser's
prior consent (not to be unreasonably withheld), and if Seller recovers
any payments for any third party in connection with a Material Event or
Condemnation, it shall hold such proceeds in trust for Purchaser's
benefit, and pay them over to Purchaser. Purchaser shall have the right
to delay the Closing for a period of up to ten (10) days after the date of
notice of occurrence of any Material Event or Condemnation for the purpose
of determining whether to elect to complete the Closing.
(b) If Purchaser shall not elect to close as contemplated
by Section 13.4(a) hereof, Seller and Purchaser may elect, in writing
executed by both parties, prior to the Closing Date, at Seller's expense,
to permit Seller to repair or to restore to the satisfaction of Purchaser,
the damaged or destroyed portions of the Acquired Assets suffering the
Material Event to its or their operating conditions substantially as it or
they were immediately prior to the occurrence of the Material Event. If
the parties so elect, the Closing may be postponed for a reasonable time
(not later than to permit Seller to complete such restoration to the
satisfaction of Purchaser, and insurance proceeds with respect to such
casualty (regardless of when paid) shall be excluded from the Acquired
Assets).
(c) If Purchaser elects not to close, this Agreement shall
terminate and be null and void and neither party shall have any liability
to the other hereunder in respect of such termination.
13.5 Waiver, Discharge, Etc. This Agreement and its
exhibits and schedules may not be released, discharged, abandoned, changed
or modified in any manner, except by an instrument in writing signed on
behalf of each of the parties hereto by their duly authorized
representatives. The failure of any party hereto to enforce at any time
any of the provisions of this Agreement shall in no way be construed to be
a waiver of any such provision, nor in any way to affect the validity of
this Agreement or any part thereof or the right of any party thereafter to
enforce each and every such provision. No waiver or any breach of this
agreement shall be held to be a waiver of any other or subsequent breach.
13.6 Severability. In the event that any provision of this
Agreement shall be determined to be invalid or unenforceable in any
respect and such determination does not have a material adverse effect on
the interests of Seller, or Purchaser, as the case may be, in the
transaction contemplated hereby, such determination shall not affect such
provision in any other respect or any other provision of this Agreement,
which shall remain in full force and effect.
13.7 Arbitration. Except as expressly provided elsewhere
in this Agreement, any controversy or claim arising out of or relating to
this Agreement or the relationship, rights, duties and obligations of the
parties hereto, or the breach hereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA") as such rules may be modified herein
or as otherwise agreed by the parties in such controversy. The forum for
arbitration shall be Houston, Texas and the governing law for such
arbitration shall be the laws of the State of Texas. Following thirty
(30) days' notice by any party of intention to invoke arbitration to
resolve any dispute arising under this Agreement and not resolved to the
parties' mutual satisfaction within such thirty (30) day period shall be
determined by a single arbitrator upon which the parties agree, or, if the
parties cannot agree on a single arbitrator within five (5) business days
following such thirty (30) day period, then by a board of three (3)
arbitrators, which arbitrator(s) shall be selected for each such
controversy so arising hereunder in the manner hereinafter provided. In
the event it is necessary to proceed with a board of three (3) arbitrators
in order to resolve any controversy arising hereunder, then either party
to the arbitration proceeding may apply to the AAA for the appointment of
arbitrators to be selected by the parties to the arbitration from a list
of ten (10) qualified potential arbitrators supplied by AAA, which shall
include a resume of qualifications, background and experience. Each
arbitrator must have had at least five (5) years experience in the area of
the issue proposed for arbitration, and shall not be an employee, officer,
director, representative, agent, consultant or in any way affiliated with
either party. For a period of fifteen (15) days after the AAA's list is
delivered to a party, such party shall have the right to strike three
names from the list of arbitrators and the AAA shall pick three
arbitrators from the names not stricken, who shall be the arbitrators
hereunder. Any party who is unable or unwilling to so strike a name
timely shall forfeit his right to participate in the selection process. If
a selected arbitrator is unable or unwilling to act, or if for any other
reason an appointment of the requisite number of arbitrators cannot be
made from the list submitted to the parties by the AAA, then the AAA may
be requested to submit another list of potential arbitrators and the same
procedures shall apply. If the arbitrators are not appointed from the
second list submitted by AAA, then any party, on behalf of all the
parties, may request such appointment by the United States District Judge
for the Federal District which includes Houston, Texas, who is then senior
in service (acting as an individual and not in his judicial capacity). In
the event of any subsequent withdrawal, by death, incapacity or
resignation, of an arbitrator, the AAA may be requested to supply a list
of three qualified arbitrators and each party shall have the right to
strike one name from the list and the arbitrator not stricken shall be the
replacement arbitrator; if, for any reason, more than one arbitrator's
name remains on the list, then the replacement arbitrator shall be chosen
by AAA. The arbitrator or arbitrators shall be guided, but not bound, by
the Federal Rules of Evidence and by the discovery rules of the Federal
Rules of Civil Procedure. Any discovery shall be limited to information
directly relevant to the controversy or claim in arbitration. Such board
shall determine the matters submitted to it pursuant to the provisions of
this Agreement and render a decision thereon no later than sixty (60) Days
after such board (or single arbitrator, as the case may be) has been
appointed. The action of the sole arbitrator, or of a majority of the
members of the board of arbitrators, as the case may be, shall govern
and their decisions in writing shall be final and binding on the parties
hereto, appealable only on the grounds of bias, abuse of discretion as a
result of gross negligence or willful or wanton disregard of the facts.
Each party shall pay costs of the arbitration as allocated by the
arbitrators in their decision.
13.8 Confidentiality. Pursuant to that certain letter of
intent dated September 25, 1996, as amended, between Dove and Purchaser,
the parties thereto agreed to certain confidentiality restrictions and
obligations relating to the transactions covered by this Agreement
("Confidentiality Obligations"). Dove, Purchaser, CFR and CFRCCI hereby
ratify and affirm the Confidentiality Obligations and agree that (i) the
Confidentiality Obligations are expressly incorporated herein by
reference, and (ii) the letter of intent, insofar as it relates to the
Confidentiality Obligations, shall not be merged or superseded by the
execution and delivery of this Agreement.
13.9 Notices. All notices or other communications required
or permitted hereunder shall be in writing and shall be validly given if
delivered personally, by telex, or sent by courier or by certified mail
addressed, if to Purchaser to:
Correctional Services Corporation
1819 Main Street, Suite 1000
Sarasota, Florida 34236
Attention: President
with a copy to:
John G. Cannon
Hutcheson & Grundy, L.L.P.
1200 Smith Street, Suite 3300
Houston, Texas 77002-4579
or to such other person or at such other place as Purchaser shall furnish
to Seller and Seller's Stockholder in writing, and
if to Seller to:
Dove Development Corporation
P.O. Box 191
Greenville, Texas 75403
Attention: President
or to such other person or at such other place as Seller shall furnish to
Purchaser and Seller's Stockholder in writing. Notice given by telex
shall be deemed delivered when received as evidenced by their answer back.
Notice given by certified mall as set out above shall be deemed delivered
five business days after the date the same is postmarked. Notice given by
courier shall be deemed delivered on the next business day after dispatch.
13.10 Expenses. Except as expressly provided herein, if the
transactions contemplated by this Agreement are consummated or fail to be
consummated for any reason which is Seller's fault or within Seller's
control, Seller shall be solely responsible for its own and Purchaser's
costs and expenses (including, without limitation, legal fees, appraisal
and auditor fees, and other costs) incurred in connection herewith.
13.11 Title and Headings. Titles and headings to Sections
herein are inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this
Agreement.
13.12 Governing Law. THE VALIDITY, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF
TEXAS, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
13.13 Successors and Assigns, Transferability. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and the successors or permitted assigns of the parties hereto,
provided that the rights and obligations of Seller and Purchaser may not
be assigned or delegated to an unaffiliated third party without the
consent of the other party. The transfer of a controlling interest in
Purchaser's stock to an unaffiliated third party shall be considered an
assignment of the rights and obligations of Purchaser for purposes of this
section.
13.14 Remedies. Seller acknowledges that money damages
would not be a sufficient remedy for beach of its obligations under this
Agreement that are performable prior to Closing and agrees that Purchaser
shall be entitled to specific performance and injunctive relief as a
remedy for any such breach. Such remedy shall not be an exclusive remedy
for breach of this Agreement but shall be in addition to all other
remedies available to Purchaser. Except as expressly set forth in
Articles 10 and 13 to the contrary, each right, remedy, power and
privilege of Purchaser herein provided for shall be cumulative and
concurrent and shall be in addition to every other right, remedy, power
and privilege provided for herein or by statute or at law or in equity or
otherwise, and the exercise or partial exercise of any such right, remedy,
power or privilege shall not preclude the simultaneous or later exercise
of any or all such other right, remedies, powers and privileges.
13.15 No Solicitation. Unless and until this Agreement is
terminated, the Seller will not, directly or indirectly, solicit, initiate
or encourage or give consideration to or accept any proposals or offers or
enter into any agreements which provide for or contemplate an acquisition
of Seller, the business of Seller, any of the Acquired Assets or any
shares of stock or other equity securities of Seller, or respond to or
participate in discussions regarding such proposals, offers or agreements,
or any other transaction which could interfere with the consummation of
the transactions contemplated by this Agreement.
13.16 Publicity. No public announcement or other disclosure
of the transactions contemplated hereby shall be made by Seller without
the prior written approval thereof by Purchaser.
13.17 Third-Party Beneficiaries. Except as otherwise
specifically provided in this Agreement, each of the provisions of this
Agreement is for the sole and exclusive benefit of Seller and Purchaser
and not for the benefit of any other person.
13.18 Execution in Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be considered one
and the same agreement, and shall become a binding agreement when one or
more counterparts have been signed by each of the parties and delivered to
the other party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
DOVE DEVELOPMENT CORPORATION
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CONSOLIDATED FINANCIAL RESOURCES, INC.
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CONSOLIDATED FINANCIAL RESOURCES, INC.
/CRYSTAL CITY, INC.
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CORRECTIONAL SERVICES CORPORATION
By: /s/ J.F. Slattery
Name: James F. Slattery
Title: President
[CIK] 0000914670
[NAME]
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement (this "Agreement") is
entered into effective as of August 27, 1997 by and between Dove
Development Corporation, a Texas corporation ("Dove"), Consolidated
Financial Resources, Inc., a Texas corporation ("CFR"), Consolidated
Financial Resources/Crystal City, Inc., a Texas corporation ("CFRCCI") and
Correctional Services Corporation, a Delaware corporation ("CSC").
W I T N E S S E T H
WHEREAS, Dove, CFR, CFRCCI and CSC entered into that certain Asset
Purchase Agreement dated August 27, 1997 (the "Agreement"); and
WHEREAS, such parties desire to amend the Agreement as set forth
herein.
NOW THEREFORE, for and in consideration of a good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
the parties hereto agree that the Agreement is amended as follows (with all
capitalized terms not defined herein having the meaning given such terms in
the Agreement):
1. Dove has lost the certificate of title to one of the
Acquired Assets; a 1989 Ford I-150 Utility Van, VIN #HB89220. Dove agrees
to obtain a replacement certificate of title and to deliver same to CSC as
soon as reasonably possible.
2. Dove has delivered to CSC a Survey of only a portion of the
Real Property. Dove agrees to deliver to CSC a Survey of the remainder of
the Real Property (the southeast quarter and northeast quarter of Block 67,
City of Pearsall) in accordance with the Agreement as soon as reasonably
possible.
3. The Purchase Price is reduced from $217,000.00 to
$167,000.00. The Schedule 2.3(c) attached hereto is hereby substituted in
its entirety for the Schedule 2.3(c) attached to the Agreement.
Except as specifically or by necessary implication amended
hereby, the Agreement shall continue in full force and effect according to
its original terms and conditions. This Amendment may be signed in
multiple counterparts, which together shall form an original document.
Facsimile transmissions of signatures to this Amendment shall be as
effective as original signatures.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment on the day and year first above written.
DOVE DEVELOPMENT CORPORATION
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CONSOLIDATED FINANCIAL RESOURCES, INC.
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CONSOLIDATED FINANCIAL RESOURCES, INC.
/CRYSTAL CITY, INC.
By: /s/ David Thomas Shirey, Jr.
Name: David Thomas Shirey, Jr.
Title: President
CORRECTIONAL SERVICES CORPORATION
By: /s/ James F. Slattery
Name: James F. Slattery
Title: President
[CIK] 0000914670
[NAME] CORRECTIONAL SERVICES CORPORATION
OPERATIONS AND MANAGEMENT AGREEMENT
for the
McKinley County, New Mexico Adult Detention Facility
This Operations and Management Agreement for the McKinley County, New
Mexico Adult Detention Facility (the "Agreement") is made as of the 3rd day
of October, 1996, by and between Correctional Services Corporation, 1819
Main Street, Suite 1000, Sarasota, Florida 34236, (the "Contractor") and
McKinley County New Mexico, 210 West Hill Avenue, Gallup, New Mexico 87301
(the "County"), a governmental entity of the State of New Mexico, upon the
terms, conditions and provisions herein set forth.
WITNESSETH
WHEREAS, the County has made provisions for the financing and construction
of an adult detention facility in McKinley County, New Mexico, which
Facility, exclusive of courtrooms, county, city and state offices, shall be
known as the McKinley County Adult Detention Facility (the "Facility");
and,
WHEREAS, the County desires to enter into a contract under which the
Contractor shall operate, maintain and manage the Facility in compliance
with all applicable Federal, State and Local laws and ordinances; and,
NOW THEREFORE, in consideration of the mutual rights, duties, benefits and
obligations herein exchanged, the parties hereto covenant, agree and bind
themselves as follows:
ARTICLE ONE
Purposes
1.01 The Contractor shall manage, supervise and operate the Facility for
the County and receive, supervise and care for each inmate that is assigned
to the Facility by the County pursuant to applicable law. The Contractor
shall accept inmates that are assigned by the County, from a jurisdiction
that enters into a Joint Powers Agreement with the County to reserve space
for the on-going placement of inmates in the Facility, or a jurisdiction
that contracts with the County on a limited basis to house one or more
individuals in the Facility.
1.02 The Contractor shall manage and supervise the Facility to remain in
compliance with all local, State and Federal health, fire and safety codes
and shall document such compliance at the beginning of each fiscal year.
Such documentation shall consist of certificates from the local health
department, Fire Marshall and building inspector and copies thereof shall
be forwarded to the County as required or requested. The Facility shall be
managed, operated maintained and utilized in conformance and compliance
with applicable law, the standards and regulations of the American
Corrections Association, or County standards, whichever is higher.
1.03 The Contractor shall work cooperatively with the County and agrees
that the County shall have the right to inspect the Facility prior to the
placement of any inmate and that there shall be no placements made until
both the Contractor and the Facility are in compliance with all contract
provisions, and all standards or regulations of the County.
1.04 Youthful offenders subject to the Juvenile Code shall not be accepted
into the Facility.
ARTICLE TWO
Term
2.01 This Agreement is effective on the date set forth in the initial
paragraph of this Agreement. The ordinal term of this Agreement shall be
three(3) years and such term shall commence on the date the first inmate
shall occupy the Facility and shall end on the third anniversary date
thereafter.
2.02 The County may, unilaterally and without penalty, terminate the
Contract upon ninety (90) days written notice to Contractor in the event of
non-appropriation of funds.
2.03 Except as set forth in Section 2.02 and 2.04 herein, the County may
unilaterally terminate this Agreement at any time only for reason of
Contractor's failure to operate or cause the operation of the Facility in
compliance with the terms of this Agreement, State law, the applicable
rules and procedure of the County and/or the applicable standards of the
ACA, or default under this Agreement. However, prior to any such
termination, the County shall give written notice by certified mail to the
Contractor of such deficiency. Deficiencies shall be corrected within 30-90
days as specifically stated in the notice. Within ten days, the Contractor
shall submit a plan of corrections to the County indicating action to be
taken and the time frame for full compliance. The County shall review the
plan of correction and shall either concur with the plan or identify
corrective actions to be taken and the time frame for completion. At the
end of the specified time frame, the County may again inspect for
deficiencies at the Facility to ensure compliance with the plan.
Deficiencies that remain uncorrected may cause a one percent penalty per
day for that day's billable man-days to be imposed against the monthly
invoice of the Contractor until deficiencies are corrected.
2.04 The County may, without penalty or cause, upon 30-days written notice
to the Contractor, unilaterally terminate this Agreement on or after the
second anniversary of the effective date set forth in the initial paragraph
of this Agreement. The County shall give written notice by certified mail
to the Contractor of such notice.
2.05 The Contractor may, upon 90-days written notice to the County,
unilaterally terminate this Agreement on or after the second anniversary of
the effective date set forth in the initial paragraph of this Agreement.
The Contractor shall give written notice by certified mail to the County of
such notice.
ARTICLE THREE
Facility Costs and Payments
3.01 The Contractor shall submit to the County or its designee, no later
than the third day of each month, a billing for inmates assigned from the
16th day to the last day of the previous month, and no later than the 18th
day of each month, a billing for inmates assigned from the first day to the
15th day of the current month.
3.02 The Contractor shall participate in an annual program evaluation and
annual audit of the Facility including the maintenance and availability of
accurate and up-to-date program, and inmate trust fund financial records
for inspection. The first evaluation and audit shall be conducted no later
than the eleventh (llth) month after the commencement of operations.
3.03 During the term of this Agreement, the County shall pay the Contractor
$35.00 per inmate per day for the operation and management services set
forth herein; which includes gross receipts tax. (The term "day" means a
twenty-four hour period, or part thereof, beginning at 12 o'clock
midnight-12:00 a.m.)
3.04 The County reserves the right to withhold or require return of funds
upon substantial noncompliance with applicable regulations, standards,
policies or this Agreement if the Contractor fails to remedy or cure the
noncompliance within 30 days of written notice from the County, as required
in Paragraph 2.03.
3.05 The County Auditor shall make payments to the Contractor on the eighth
and twenty-third days of each month; based on the billings and invoices
given to the County by the Contractor on the 3rd and 18th day of each
month.
3.06 Services that are desired by the County, or a jurisdiction in contract
with the County for detention services, that are not included in this
Agreement, shall be negotiated for between the County and the Contractor.
Additional charges for services not in the Agreement shall be as agreed
upon between the Contractor and the County and placed in an addendum to
this Agreement.
3.07 The Contractor may enter into Agreement with vendors for inmate
telephone service and commissary operations at their option; during the
term of the contract. All commission from inmate telephone service and
income from commissary operations may be utilized at the Contractor s
discretion. The cost to the inmates for commissary items shall be based on
actual cost of goods plus taxes and reasonable mark-ups for overhead and
personnel. Sales prices for goods shall be comparable to that available in
local retail store for the same or similar goods. Inmate telephone service
shall be in accordance with regulations of the Public Utilities Commission.
3.08 Within 10 working days after the execution of the Agreement,
Contractor shall post a performance bond in the amount of $500,000, and
shall provide the County with a copy of said bond. Immediately upon receipt
of the performance bond, the County shall release to Contractor the
$500,000 currently located in an Operating Account in Gallup, New Mexico.
ARTICLE FOUR
Duties of the Contractor
4.01 The Contractor shall manage and shall operate and provide, or cause
the operation and provision under Contractor's supervision and primary
responsibility:
A. The documentation of all agreements or contracts of the County with
other jurisdictions to assure the documentation reasonably necessary for
each such contract is complete and that any such contract or Agreement is
not inconsistent with the terms of this Agreement, prior to the housing of
any inmate in the Facility pursuant to a contract between the County and
another jurisdiction.
B. All services, supplies, amenities, benefits and equipment necessary to
comply with the terms of this Agreement and all contracts with other
jurisdictions for the housing of inmates meet or exceed State law
requirements, the rules and procedures promulgated by the County and the
applicable standards of the ACA. Should the Agreement between the county
and the contractor be terminated for any reason, at any time, those
supplies and the equipment purchased by the Contractor, and utilized in the
daily operation of the Facility, remain the property of the Contractor. The
supplies and equipment furnished by the developer or the County shall
remain the property of the County.
C. Intake facilities and inmate accounting which may encompass bookkeeping,
recordkeeping end billings, system of controls, identification systems and
records, communication interface with law enforcement agencies, and such
statistical records as may be required by law.
D. Attendants to control ingress and egress, maintain the requisite level
of internal security and to monitor the activities of the inmates within
the Facility.
E. Food and beverage services shall be provided in accordance with all
applicable standards, sanitation and health codes and individualized and
special needs. All menus shall be planned and reviewed in advance by a
registered dietitian or physician. Meals shall meet the dietary
requirements of the U.S. Department of Agriculture; unless some other
standard is required by the County. Menu and food service plans shall be
prepared, and a schedule shall be followed whenever possible. Menu plans
shall be kept for one year. The menus shall contain a variety of foods and
recognize special occasions and holidays. The quality of food and beverage
service provided will be periodically reviewed by the County or its
designee, and the Contractor shall correct any failure to meet the
foregoing standards noted by the County or its designee within 72 hours.
Special diets shall be provided to inmates on the recommendation of a
physician or dentist and for inmates whose religious beliefs require it to
be provided. Staff members shall supervise inmates during meals. Inmates
will be provided three meals each day, two of which shall be hot meals. No
more than 14 hours may lapse between the evening meal and breakfast, unless
a snack is provided.
F. Clothing shall be provided to inmates at least in accordance with County
standards and shall be adequate according to climate, sex, height and
weight of the inmate. Inmates shall be provided with the opportunity to
shower daily and hygiene supplies shall be provided to inmates.
G. Laundry service for inmates shall be provided in accordance with
standards. Inmates may exchange linens once each week, clean towels twice
each week, and clean clothing two times per week.
H. Procurement and purchasing.
I. Recreational services.
J. Bookkeeping and financial accounting.
K. Basic medical care.
L. Training of personnel employed at the Facility, including such security,
professional, law enforcement and cultural sensitivity training and
education as may be required by the County, ACA standards as identified in
Article Six and the terms of this Agreement. Classes shall be similar to
those set forth in Exhibit 2 attached hereto.
M. All repair, upkeep, maintenance and cleaning.
N. All personnel services, miscellaneous supplies and benefits necessary to
the operations of the Facility, or care and control of inmates; including
toiletries and hygiene supplies.
O. Payment of all utility charges and fees.
P. An inventory of the Facility furnishings at start up, and thereafter
keep, maintain and replace such furnishings, fixtures, and equipment
furnished by the County or the Developer with equivalent quality.
Q. Proper bedding, to each inmate and personal property storage
R. The provision of all such other services or tangible things that are
necessary to care for the inmates housed at the Facility; including all
services and tangible things required by the County, standards or
directives; to include access to a law library.
S. The Contractor shall provide transportation for inmates to and from
locations within Gallup, New Mexico, including taking Native Americans to
the Indian Health Services Hospital in Gallup, as required for Court
hearing, medical reasons or other pertinent reasons. It is the Contractor's
responsibility to provide armed security for inmates outside the Facility
except as noted in section 5.10 of this Agreement.
4.02 Contractor, with the County's assistance, where needed, shall obtain
and maintain all of the proper and required local, State and federal
permits, licenses and certifications necessary for the Facility to serve as
an Adult Detention Facility. The Contractor shall maintain such
certifications as required. If, after such certifications have been
obtained, the Contractor is required by the County, State law, other
applicable law, court order, rules and procedures, or ACA standards, to
perform additional work or services, or to modify the Facility, the County
and the Contractor shall consult and, if appropriate, agree upon a
temporary increase in the schedule of payments sufficient over a reasonable
period of time to reimburse the Contractor for the cost of such operational
modifications.
4.03 Notwithstanding anything contained herein to the contrary, the County
shall have no liability for any employees, agents, subcontractors or
assigns of the Contractor. The Contractor hereby agrees to indemnify and
hold the County and its officials, officers, or employees, harmless from
all costs, claims, expenses and liabilities whatsoever which may be
incurred by or arising from any and all acts done or omitted to be done by
Contractor or employees, agents, subcontractors and assigns of the
Contractor, in connection with services performed or to be performed under
this Agreement. The Contractor shall provide the County with copies of
incident reports and claims and the types of claims made against the
Contractor each quarter.
4.04 The interviewing, hiring, training, assignment, certification,
control, management compensation, promotion and termination of all members
of the Facility's administration and staff shall be the responsibility and
obligation of the Contractor. The Contractor shall furnish reports on such
matters to the County when so requested. The Contractor will use its best
efforts to hire and train local personnel. Staffing shall conform to the
following:
A. The qualifications, selection, training and staff development shall
comply with County standards, ACA standards as identified in Article Six
and the terms of this Agreement. Written job descriptions for all employee
positions at the Facility shall be prepared and provided to the County.
B. A sufficient number of trained, qualified employees shall be on duty,
awake and fully dressed at all times to meet all contractual requirements
and to monitor Facility control, security end inmate safety.
C. The County shall be notified within 72 hours of any change in the
position of Facility Administrator.
D. Adequate staff with provision for supervision of male and female inmates
shall be maintained in accordance with all legal requirements, including
County standards.
E. Hiring preference shall be given to current, qualified jail employees.
4.05 The Contractor shall use the best efforts to purchase goods and
services within the County.
4.06 The Contractor is associated with the County for the purposes and to
the extent set forth in this Agreement for the performance of operations
and management services for the Facility, and Contractor is and shall be an
independent contractor and, subject to the terms of this Agreement, shall
have the sole right to supervise, manage, operate, control, and direct the
performance of the details incident to its duties under this Agreement.
Nothing contained in this Agreement shall be deemed or construed to create
a partnership or joint venture, to create the relationships of an
employer-employee or principal agent, or to otherwise create any liability
for the County whatsoever with respect to the indebtedness, liabilities,
and obligations of the Contractor. The Contractor shall be solely
responsible for payment of all federal income, F.I.C.A., and other taxes
owed or claimed to be owed by the Contractor, arising out of this
Agreement, and the Contractor shall indemnify and hold the County harmless
from and against, and shall defend the County against any and all losses,
damages, claims, costs, penalties, liabilities, and expenses whatsoever
arising or incurred because of, incident to, or otherwise with respect to
any such taxes.
4.07 The Contractor shall maintain the exterior walls, roof, foundation,
and all outside utilities in good repair, except for reasonable wear and
tear. Such maintenance includes the duty to repair and/or replace
components of the building that may be damaged due to neglect; with quality
equivalent to the original component.
A. The Contractor shall not be liable to make repairs or replacement to any
exterior wall, roof, foundation, or outside utility that is the result of
design or construction flaws. The County shall pass through to the
Contractor any and all warranties from the Project Design/Builder.
B. The Contractor shall be responsible for damages caused by the
intentional acts of its employees, subcontractors, agents or the Inmates.
4.08 The Contractor shall provide the services hereinafter set forth at its
own expense and risk:
A. Maintain all interior walls and ceilings, window glass, doors,
electrical fixtures, and plumbing fixtures in good repair; painting all
interior wall, as required, and furnishing furnace filters.
B. Include all usual janitorial and maintenance service including sweeping
and mopping of floors, trash disposal, cleaning of window, dusting and
replacement of light bulbs.
C. Shall maintain grounds of the Facility, mowing, trimming, watering of
plants and lawn to maintain a good cosmetic appearance of the grounds.
D. Periodically have the Facility fumigated and/or sprayed for insects and
rodents.
ARTICLE FIVE
Medical Care
5.01 Basic medical care will be made available by Contractor, at
Contractor's sole cost, to all inmates housed at the Facility. For the
purposes of this Agreement, basic medical care shall be limited to any
condition which can be "self-treated" by the inmates or which may be
treated by a lay technician acting under guidelines provided by a medical
doctor, including first aid for emergencies. This shall include dispensing,
"over the counter" medications which have been approved for inventory by
the Facility's medical authority.
5.02 Consistent with its duties to provide basic medical care the
Contractor shall establish a program which includes:
A. The training of all supervisory staff in emergency first aid procedures
and cardiopulmonary resuscitation (CPR).
B. Adopting written medical backup plans which are communicated to all
employees and inmates.
C. Maintaining, sufficient first aid supplies and equipment to adequately
support the overall basic medical care requirements of the inmate
population.
D. Maintaining, replacing and replenishing medical first aid supplies and
equipment in accordance with prescribed standards recognized or approved by
a licensed health authority or organization that has expertise to evaluate,
assess and determine the potential need for or condition of the required
first aid supplies and equipment.
5.03 State certification shall apply to all health care personnel
responsible for dispensing medical services to inmates.
5.04 Except as required by lawful authority, the Contractor will not accept
or admit into the Facility any offender who represents a significant health
or medical risk. Arresting Officers must have a release from a physician
for any arrestee that has obvious medical problems such as cuts, broken
bones, etc. prior to bringing the offender to the Facility.
5.05 The Contractor shall develop workplace guidelines which addresses all
airborne and blood borne pathogens, communicable diseases including HIV.
Contractor shall develop policies of confidentiality and an employee/client
education program in compliance with State laws.
5.06 The Contractor shall provide the County with copies of all medical
related policies and procures at, on or before the commencement of this
Agreement.
5.07 Inmates shall receive a physical screening by qualified health care
personnel within seven days of admittance into the Facility. Facility
nursing staff shall perform the screenings and make referrals to the local
hospital as required.
5.08 Inmate medical files shall be confidential and accessed by authorized
health care personnel only.
5.09 All prescription drugs, prostheses, dental treatment, psychiatric
care, eye glasses and medical treatment that is not a part of the routine
treatment at the Facility shall be at the expense of the inmate or the
County.
5.10 Should an inmate be hospitalized for any reason, the Contractor shall
be responsible for maintaining security, including the Indian Health
Services Hospital in Gallup, of the inmate for the first seventy-two (72)
hours. Security of inmates hospitalized for more than 72 hours shall be the
responsibility of the County.
5.11 The Contractor shall provide psychological evaluation and counseling
for inmates as necessary at the Facility.
ARTICLE SIX
Compliance With Standards
6.01 The Contractor shall prepare and adopt, prior to admitting any inmate
to the Facility, a Procedures Manual for the operation of the Facility so
as to assure that the Facility is operated fully in accordance with State
and other applicable laws and regulations, rules and procedures promulgated
by the County and standards promulgated by the ACA. The Contractor shall,
from time to time, make such modifications and corrections in the said
Procedures manual as are necessary to keep the Facility in compliance with
such laws, regulations and standards. The County and the Contractor agree
that the Facility shall be operated according to those standards
established by the American Correctional Association in the STANDARDS FOR
ADULT LOCAL DETENTION FACILITIES third edition as they may be amended from
time to time.
6.02 Training of personnel employed at the Facility, including such
security, professional, law enforcement and cultural sensitivity training
and education as may be required by the County, ACA standards as identified
in Article Six and the terms of this Agreement.
6.03 The County and the Contractor shall agree upon a monitoring plan to
assure compliance with this agreement. The Contractor shall develop and
submit to the County a detailed plan, illustrating how Contractor intends
to facilitate evaluation and monitoring of operations, prior to receiving
any inmate.
ARTICLE SEVEN
Duties of the County
7.01 The County shall cooperate with the Contractor in all matters of law
enforcement, security and communications and shall use its best efforts to
obtain such cooperation from the law enforcement agencies within the County
and State.
7.02 The County shall assist and cooperate with the Contractor in obtaining
and providing information needed by the Contractor in the screening of
candidates for employment; NCIC checks and driving records. The Contractor
is responsible for background and employment history checks.
7.03 It is agreed that the first priority for bed space in the Facility is
to assure space is available for such persons that are detained by the
County Sheriff, and the New Mexico State Police, and the city of Gallup.
However, the County and Contractor agree it shall be to the* mutual benefit
that the Facility be utilized by an inmate population within the design
limits of bed capacity. To this end, and throughout the term of the
Agreement, the County and Contractor agree to cooperate and work to manage
and limit vacancies by contracting with other jurisdictions, the Navajo
Nation, the Pueblo of Zuni, and the City of Gallup for the housing of their
offenders.
ARTICLE EIGHT
Inmate Programs. Monitoring & Staffing
8.01 The Contractor shall provide housing, supervision and programs for all
inmates including adult remedial education, counseling, and other education
and training as required by law or the County.
8.02 Orientation-All inmates entering the Facility shall complete an
orientation that includes:
A. Intake booking, including but not limited to fingerprinting and mug shot
according to the appropriate State statutes.
B. Physical examination within seven days of confinement.
C. Orientation to Facility rules and regulations.
D. Classification assignment.
E. Education, counseling assessment.
F. HIV orientation and education.
G. Literacy screening.
H. Other programs required by law or the County.
8.03 Participation by inmates in programs shall be made available by the
Contractor at no cost to the inmate.
8.04 Appropriate safeguards shall be established to enable the Contractor
to closely monitor the whereabouts of each inmate, including a daily system
and periodic accounting for all inmates assigned to the Facility and
providing that such inmates shall only be allowed to leave the Facility to
conduct court approved business. Written policy and procedure shall follow
those guidelines from the ACA and guidelines based on generally accepted
security practices.
8.05 The Contractor shall provide a designated area for family visitation
which shall accommodate visitors and also provide shelter during inclement
weather. Family visits shall be allowed five days a week during hours
specified by the Contractor.
8.06 The Contractor shall adopt Disciplinary procedures including
procedures for the processing of violations and setting the types of
sanctions which may be imposed. Each inmate shall be given the Disciplinary
Rules included in the Orientation Handbook during intake.
8.07 The Contractor shall be responsible for maintaining accurate and
complete file records, reports as necessary for each inmate. Safeguards
will be established for the protection and confidentiality of inmate
records in accordance with the Inspection of Public Records Act (NMSA 1978
Sections 14-2-1 through 14-2-12), or as otherwise permitted by law. To the
extent permitted by law, records shall only be disclosed to authorized
persons on a need to know basis. Inmate records shall be maintained for a
period of three years after discharge from the Facility. Files shall
include:
A. Identification data, including but not limited to fingerprinting and mug
shot according to the appropriate State statutes.
B. Conditions of Confinement.
C. Intake forms and assessments.
D. Classification committee records.
E. Correspondence.
P. Disciplinary record.
G. Incident reports.
H. Release of information forms.
I. Medical records (in a separate file).
8.08 Inmate labor shall only be used to support the Facility or in
Community Service projects. No inmate shall perform personal services or
labor for any employee of the Facility.
8.09 Inmate trustee status shall only be given to those inmates that meet
all requirements of being appointed as a trustee:
A. Inmate must not have an aggravated with bodily harm or sexual offense,
and
B. Inmate must be a resident of McKinley County, New Mexico, or
C. Inmate, with a bond and administrative approval, must be a resident of a
county directly adjoining McKinley County, or
D. Any other inmate that has been approved by the Classification Committee,
and
E. Inmate must not have an escape offense on record.
ARTICLE NINE
Liability and Indemnity
9.01 The County and the Contractor agree to use their best efforts to
ensure that neither becomes responsible for any such actions taken with
regard to any inmate prior to the delivery of such inmate to the
Contractor's employees, officers, and agents at the Facility. To the extent
possible and allowed by law, the County and Contractor will insure that all
inmate agreements and contracts with other jurisdictions provide that the
contracting jurisdiction shall, to the extent allowed by law, defined,
indemnify and hold harmless the County and Contractor for any claims,
damages or losses arising, or alleged to have arisen from act or failures
to act, including but not limited to claims of false arrest, false
imprisonment, wrongful detention, violation of civil rights, and all other
claims of a similar nature, occurring prior to the delivery of any inmate
to the Facility, or occurring after the release of any inmate therefrom to
the contracting jurisdiction or assigning agency.
9.02 Contractor agrees to and hereby does defend, hold harmless and
indemnify the County and its officers, directors, employees, agents and
representatives from and against any and all claims, damages, demands,
losses, costs, assessments and expenses incurred or suffered by the County
that arise out of or result from any cause or claim or any negligent or
wrongful act or failure to act pursuant to the provisions of this Agreement
by the Contractor or its officers, employees, agents or representatives, or
its subcontractors or assigns, but not including liability, claims,
damages, losses, or expenses, including attorneys' fees, arising out of
bodily indite to persons or damage to property caused by, or resulting
from, in whole or in part, the negligent act, or omission of, the county or
the agents or employees of the county, or any legal entity for whose
negligence, action or omission any of these may be liable.
9.03 The Contractor agrees to and does hereby assume responsibility for the
maintenance and repair of the real and personal property that is (a) owned
by the County or the Contractor; (b) is located at the Facility and; (c) is
used by the Contractor in the Operation or maintenance of the Facility.
9.04 Notwithstanding the foregoing or an other term or provision or
condition of this Agreement, as to third parties and third party claims,
nothing in this Agreement is intended to nor shall be interpreted to: (a)
Waive or deprive the County or the Conductor of any legal defense; (b)
give, grant or bestow any legal right, defense or benefit upon any third
party; or; (c) deprive the County or the Contractor of the benefits of any
legal defense including sovereign and official immunity, or the benefits of
any law limiting damages.
ARTICLE TEN
Insurance
10.01 Contractor shall obtain and maintain in force during the term of this
Agreement beginning not later then the commencement date, at its sole cost,
risk and expense and without charge or reimbursement by the County, the
greater of, (i) the amounts shown on Exhibit 1 or (ii) the State
requirement under the Tort Claim Act. Save and except as hereafter modified
by the parties in writing, such insurance shall be in addition to the
coverage maintained or required to be maintained by the County and shall
insure against all claims whatsoever against Contractor or County, or their
officers, employees, agents and representatives in connection with the
detention, care, security, housing and training of Inmates of the Facility,
including but not limited to claims based on violations or alleged
violations of civil rights arising from services performed by Contractor or
its employees, agents, subcontractors or assigns pursuant to this
Agreement.
10.02 During the term of the Agreement or any extended Term hereof, the
Contractor shall at its sole cost and expense obtain, keep and maintain in
full force and effect, an insurance policy or policies providing worker's
compensation Insurance (or its approved and authorized equivalent) in
amounts not less than the amounts required by State law.
10.03 Prior to the commencement date the Contractor shall assure County
that the insurance required pursuant to this section 10.03 and Exhibit 1 is
in full effect. The Contractor shall secure such insurance, or additional
insurance, through companies licensed to do business in the State of New
Mexico.
10.04 Save and except as specifically provided in this Article Ten, each
and every insurance policy required by this Article Ten shall name the
County as an additional insured and shall provide that such policy may not
be canceled or modified except upon at least thirty calendar days notice in
writing to both the Contractor and the County.
10.05 Contractor shall provide to the County insurance certificates as
proof of the insurance policies obtained, and if, through no fault of the
Contractor, such insurance policies are canceled or endorsed in such a way
as to limit such insurance coverage, Contractor shall provide the County
written notice thereof immediately, and Contractor shall obtain, as soon as
possible and at its own cost, replacement insurance. Should the Contractor
not obtain sufficient insurance in a reasonable time, the County may obtain
a policy to fulfill the obligation of the Contractor and shall adjust
payments to the - Contractor to cover the premium cost of such insurance
purchased by the County.
10.06 The County shall be responsible for providing workers compensation
coverage and liability insurance for its officers, agents and employees,
and insurance for County property, with exception of that property provided
by the developer, used or stored at the Facility other than the facility
building and its contents, which is the contractor's responsibility to
insure pursuant to Section 10.03.
10.07 Should any required policy lapse from non-payment, the County may
provide the policy at the Contractor's expense.
ARIICLE ELEVEN
Monitoring by the County
11.01 The County shall regularly monitor the operation of the Facility,
and, to this end, the County's designated representative may conduct a
thorough on-site inspection of the liability at least once during each
month throughout the term of this Agreement. Such monitoring by County
shall not relieve the Contractor of any duties, standards of care or
responsibility. The County shall be given full access to conduct, and will
conduct, any other inspection required by law.
ARTICLE TWELVE
Additional Provisions
12.01 Notwithstanding Contractor's obligation to perform, or cause to be
performed, all duties and services set forth in this Agreement in
consideration of the compensation to be paid hereunder to Contractor, the
County and Contractor recognize and agree that operation changes, and
additional Services desired by jurisdictions contracting for placement of
inmates, may, at some future time, require that Contractor provide service
not included in the terms of this Agreement. In such event, the County and
the Contractor shall negotiate and execute written terms, conditions and
amendments hereto or supplementary agreements prior to any such services
being provided or compensation earned. Any amendment is subject to the
provisions of NMSA 1978, Sections 33-3 - 27.
12.02 In the event of the occurrence of any damage to or loss of the
Facility that materially affects the continued operation of the Facility
the Contractor shall immediately notify the County of such loss or damage.
If insurance proceeds are available, the Contractor shall immediately
proceed to obtain repair and reconstruction of the Facility in consultation
with the County only as to the plans and quality of repair. The County has
no obligation to appropriate funds for this purpose, except insurance
proceeds received therefor. If the County, in its sole discretion, decides
that the damage is too extensive to repair or reconstruct and decides not
to rebuild the Facility, this Agreement shall terminate immediately upon
such determination
12.03 The Contractor shall not sell, assign, transfer, convey or encumber,
in whole or in part, their Contract or any right, interest, duty or
obligation of performance herein or hereunder or suffer or permit any such
assignment, transfer or encumbrance to occur by operation of law.
12.04 All subcontractors for counseling, education and employee services at
the Facility are subject to the approval of an authorized representative of
the County, which approval will not be unreasonably withheld. The use of
subcontractors will not adversely impact the requirements set forth in
Sections 4.03 or 10.03 hereto.
ARTICLE THIRTEEN
Default and Termination
13.01 Each of the following shall constitute an Event of Default by the
Contractor:
A. A material failure to keep, observe, perform, meet or comply with any
covenant, Agreement, term or provision of this Agreement which is the duty
of the Contractor hereunder, which failure continues for a period of 90
days after the Contractor has been provided written notice thereof.
B. A material failure to meet or comply with any Court Order; the
standards, rules and regulations of the County or any federal or State
requirement or law; which failure continues for a period of 90 days after
written notice thereof of the Contractor.
C. The discovery by the County that any material statement, representation,
or warranty herein or made is support of the award of this Agreement to the
Contractor is false, misleading or erroneous in a material respect.
D. Failure of the Contractor to timely pay trade creditors, utility
suppliers payroll and other operational expenses; timely payments shall be
within ninety days of billing.
E. Failure of the Contractor to comply with the terms of the Operations and
Management Agreement.
13.02 Upon the occurrence of an Event of Default and if the Contractor
believes that it cannot be corrected within the 90 days allowed to cure
period, and if the Contractor, through a diligent, on-going, and
conscientious effort to correct the default believes that the cure will
take longer than 90 days, the Contractor may submit a plan for a cure to
the County. Upon receipt of the plan and review by the County, the County
may at its discretion approve or disapprove of the plan. If the County
approves of the plan, the County agrees that it will not exercise its
remedies hereunder so long as the Contractor takes diligent, on-going
conscientious action to cure the default. If the County disapproves of the
Contractor's plan, the County will either identify corrective actions
necessary to be taken or terminate the Agreement without penalty.
13.03 In the event of a bankruptcy, reorganization, debt arrangement,
moratorium, proceeding under any bankruptcy or insolvency law, or
dissolution or liquidation proceeding is instituted by or against the
Contractor, this Agreement shall be reviewed immediately by the County and
determination made as to continue the contractual agreement or modify the
agreement to ensure that the County is not liable for Contractor's debt.
13.04 The Contractor may terminate this Agreement at its sole discretion in
the event that sufficient funds are not provided or appropriated by the
County to pay the amounts due the Contractor for services provided under
Article 3 of this Agreement; if the failure of funding arises from matters
beyond the control of the Contractor and is without fault or negligence of
the Contractor.
ARTICLE FOURTEEN
Non-Discrimination
14.01 The Contractor shall not discriminate against any employee, inmate or
subcontractor with regard to race, color, handicap, religion, sex, national
origin or age.
14.02 The Contractor agrees to place in conspicuous places, available to
employees and applicants for employment, notices setting forth the
provisions of this non-discrimination clause and that all advertisements
for employment shall state that the Contractor is an Equal Opportunity
Employer.
14.03 The contractor shall make every effort to use under utilized
businesses minority and female owned businesses and suppliers in the
performance of this Agreement.
ARTICLE FIFTEEN
Applicable Law and Venue
15.01 This Agreement shall be construed under and in accordance with the
laws of the State of New Mexico, and all obligations created hereunder are
performable in McKinley County, New Mexico. Venue shall lie and be in
McKinley County, New Mexico.
ARTICLE SIXTEEN
Legal Construction
16.01 In case any one or more of the provisions contained in the Agreement
shall, for any reason, be held invalid, illegal or unenforceable, and such
is not a material provision, such validity, illegality or unenforceability
shall not effect any other provision hereof.
ARTICLE SEVENTEEN
Amendments
17.01 This Agreement may be amended only in writing, with such written
instrument approved and executed by both the County and the Contractor and,
for any substantial amendment, with the prior approval of the Attorney
General's Office, Local Government, Division of the Department of Finance
and Administration and the Risk Management Division of the General Services
Department.
ARTICLE EIGHTEEN
Compliance with Federal Tax Law
18.01 The Contractor acknowledges and agrees that the Facility has been
financed with tax exempt bonds issued by the County under the provisions of
the Internal Revenue Code of 1986, as amended. Therefore, this Agreement is
required to comply with Rev. Proc. 97-13 promulgated by the Internal
Revenue Service and other regulations/guidelines which may hereafter be
promulgated by the Internal Revenue Service for management contracts such
as this Agreement. Consequently, the Contractor and County agree that this
Agreement shall be construed in a manner necessary to satisfy the terms and
conditions of Rev.Proc.97-13 and other future regulations/ guidelines and,
if necessary to protect and preserve the tax exempt; status of bonds issued
by the County to finance the Facility, shall be modified to meet those
requirements.
18.02 The Contractor shall have no role or relationship with the County
that, in effect, substantially limits the County's ability to execute its
rights, including termination rights, under this Agreement, based on all
the facts and circumstances.
ARTICLE NINETEEN
Execution Authority
19.01 By his or her signature below, each signatory individually certifies
that he or she is the properly authorized agent or officer of the
applicable party hereto and has the necessary authority to execute this
Agreement on behalf of such party, and each party hereby certifies to the
other that any resolutions necessary to create such authority have been
duly passed and are now in full force and effect.
ARTICLE IWENTY
Entire Agreement
20.01 This Agreement constitutes the sole and only Operations and
Management Agreement of the Parties hereto and supersedes any prior
understanding or written or oral agreements between the parties respecting
the within subject matter.
20.02 This Agreement will not become valid or enforceable until the date of
the final signature set forth below.
ARTICLE TVVEN1Y-ONE
Miscellaneous
21.01 The Contractor shall make a Report to the County no less frequently
than annually covering any developments relating to the Facility or the
Agreement.
21.02 The County shall have the right upon advance written notice, to
examine the records of the Contractor related to the performance of its
contractual obligations including, without limitation, financial books and
records, maintenance records, employee records and inmate records generated
by the Contractor, its subcontractors or any other parties involved in the
performance of this Agreement.
BOARD OF COUNTY COMMISSIONERS ATTEST:
By: \s\ Chairperson \s\ McKinley County Clerk
Date: 7/24/97
CORRECTIONAL SERVICES CORPORATION
By: \s\ President
Date: 8/28/97
APPROVED PURSUANT TO NMSA 1978 33-3-27
LOCAL GOVERNMENT DIVISION RISK MANAGEMENT DIVISION
FOR THE DEPARTMENT OF FINANCE OF THE GENERAL SERVICES
& ADMINISTRATION DEPARTMENT
By: \s\ Executive Budget Analyst Sr. By: \s\ Director, Risk Mgmt. Div.
Date: 8/21/97 Date: 8/21/97
ATTORNEY GENERAL OF NEW MEXICO
By: \s\ Assistant Attorney General
Date: 8/21/97
[CIK] 0000914670
[NAME]
MANAGEMENT SERVICES AGREEMENT
BETWEEN
MARTIN HALL JUVENILE FACILITY BOARD
AND
CORRECTIONAL SERVICES CORPORATION,
a Florida corporation
This Management Services Agreement is made and entered into
this 15th day of October, 1997 between the Martin Hall Juvenile
Facilities Board, on behalf of the counties of Adams, Asotin,
Douglas, Ferry, Lincoln, Pend Oreille, Spokane, Stevens and
Whitman, State of Washington ("MHJFB") and Correctional Services
Corporation, a Florida corporation ("CSC").
RECITALS
WHEREAS: The MHJFB was created by Interlocal Agreement as
amended from time to time among the Counties of Adams, Asotin,
Douglas, Ferry, Lincoln, Pend Oreille, Spokane, Stevens and
Whitman, State of Washington ("Counties") and in accordance with
law to construct and administer a fully secure Juvenile Detention
Facility for custody and detention of juveniles of said Counties
and others.
WHEREAS: CSC is a corporation entity in the business of
providing correctional or jail service to governmental entities
and has been selected in accordance with Washington law to provide
services for the operation of a fully secure Juvenile Detention
Facility for the MHJFB.
ARTICLE 1 - DEFINITIONS
The following terms used in this Agreement shall, unless the
context indicates otherwise, have the meanings set forth below:
"ACA" means the American Correctional Association.
"ACA Standards" means the Standards for Juvenile Correction
Institution Standards (Third Edition, January 1990, as hereto
supplemented and as the same may be modified, amended, or
supplemented in the future) published by the ACA.
"Additional Services" means those additional operation and
management services required to be furnished by the Contractor
pursuant to changes in MHJFB, Counties or applicable State of
Washington policies from those in effect as of the date of this
Management Agreement, which changes are required by changes in ACA
Standards, laws, government regulations, or court orders generally
applicable to the counties and which changes cause an increase in
the cost of operating and managing the facility.
"Authorized Representative" means a person at any time designated
in writing to act for and on behalf of a party to this
Agreement, which designation has been furnished to the other party
hereto. In the case of Contractor, such designation shall be
signed by its President. In the case of the MHJFB, the chairman
of the MHJFB is hereby designated as its authorized
representative. At any time the Board may designate any person(s)
as its authorized representative(s) by delivering to the
Contractor a written designation signed by the Chairman of the
MHJFB. Such designation shall remain in effect until new written
instruments are filed with an actual notice given to the other
party that such designations have been revoked. Unless otherwise
designated, all parties who act for or on behalf of the parties
hereto, including agents, employees and independent contractors,
shall not be deemed authorized representatives unless duly
designated in accordance with this paragraph.
"Codes" means all federal, state, and local codes applicable
to the project.
"Contractor" means Correctional Services Corporation, a
Florida corporation, who may also be referred to as "CSC."
"Contractor Policy and Procedures" means the Policy and
Procedures Manual described in Section 4.2 below and all sections
contained in Contractor's Response to the MHJFB's Requests for
Proposals provided under Contractor's cover letter of June 19,
1997, together with Contractor's Responses to Clarification as to
RFP under Contractor's cover letter of July 9, 1997 and materials
contained in Contractor's Cost Proposal for Juvenile Facility
Operator dated June 19, 1997.
"Counties" means and includes all of the Counties and any
other entity who hereafter becomes a party to the Interlocal
Agreement.
"Court Orders" means any orders or judgments issued by a court
of competent jurisdiction, any stipulations, Agreements, or plans
entered into in connection with litigation that are applicable to
the operation, management, or maintenance of the facility and/or
relate to the care and custody of inmates, including, but not
limited to, orders or judgments issued by courts in Washington
State and Federal Courts.
"Deadly Force" means force which may result in death or
serious bodily injury.
"Event of Default" means any of the events or circumstances
described in Section 8.1 with respect to the Contractor, or
Section 8.4 with respect to the Counties.
"Facility" shall mean the 52-bed fully secure juvenile
detention facility located at Martin Hall on the State of
Washington Eastern State campus in Medical Lake, Washington.
"Fiscal Year" means any of the one-year periods beginning on
January 1 and ending on December 31, which periods are used for
budgeting purposes by the counties.
"Inmate" shall include any juvenile placed by the Counties or
other entities who contract with the MHJFB for space in the
Facility.
"Inmate Day" means one-half day for the first ten (10) hours
or less each inmate is held, booked, and/or admitted to the
Facility operated by the contractor; and one full day if any
inmate is held, booked and/or admitted to the Facility for more
than ten (10) hours. The date and hour of each inmates arrival in
the Facility will be noted by Contractor for purposes of
determining half or whole inmate days. The day an inmate is
released will be known as the inmates "release day".
"Lease" means that certain Lease Agreement as amended from
time to time, originally made and entered into on March 12, 1996,
by and between State of Washington, Department of Social and
Health Services, acting through the Department of General
Administration ("State"), and the Counties, acting pursuant to an Interlocal
Agreement (therein referred to as "Lessee").
"Management Agreement" or "Agreement" means this operation and
management services agreement, together with all attachments and
exhibits hereto, and all amendments and modifications, hereto.
"On-Site Liaison" shall have the meaning set forth in Article
XI.
"MHJFB" means the Martin Hall Juvenile Facility Board on
behalf of the Counties of Adams, Asotin, Douglas, Ferry, Lincoln,
Pend Oreille, Spokane, Stevens and Whitman, State of Washington,
and any other party to the Interlocal Agreement.
"Non-Deadly Force" means force which normally would cause
neither death nor serious bodily injury.
"Operation and Management Services" means furnishing to the
MHJFB, consulting, operation, management and maintenance services,
and all personnel and materials necessary to provide for the
operation, management, and maintenance of the Facility for the
care, custody and treatment of inmates in accordance with the
terms and conditions contained in this Agreement.
"Other Expenses" means:
(a) Utility Charges as defined below;
(b) Taxes, meaning all taxes and other governmental charges,
general and special, ordinary and extraordinary, of any
kind whatsoever, applicable or attributable to the
Facility and the property described in the Lease between
the MHJFB, as Lessee, and the State of Washington, as
Lessor;
(c) Assessments, meaning all assessments for public
improvements or benefits which shall be assessed, levied,
imposed upon, or become due and payable, or a lien on the
Facility and/or property described in the Lease, any
improvements constructed thereon, or any part thereof;
(d) Rents, which means any Rent due the State of Washington,
as Lessor, from the MHJFB, as Lessee, pursuant to the
Lease, including any additional Rent, if any, and all
other sums payable by Lessee thereunder.
"Payment" or "Payments" means amount(s) agreed to be paid by
the MHJFB through its designated fiscal agent to Contractor for
operation and management services pursuant to this agreement.
"Per Diem Rate" shall have the meaning set forth in Article
VII.
"Persons" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization, court or other tribunal or government
or any agency or political subdivision, thereof.
"Services Commencement Date" means the date on which
Contractor shall begin providing Operation and Management Services
at the Facility pursuant to this Agreement, which date shall be the first day
that inmates are placed with Contractor at the Facility.
"Start-up Period" means the period of time between the
execution of this Agreement and the Services Commencement Date.
"Term" means the duration of this Management Agreement as
specified in Article II, including any Extension thereof.
"Utility Charges" means all costs and charges of the provision
of electricity, phone, other telecommunications, natural gas,
water, sewer, snow removal, lawn and landscaping maintenance and
replacement, and garbage.
"Users" means any person or entity with whom the MHJFB
contracts to place Inmates in the Facility.
ARTICLE II - APPOINTMENT OF CONTRACTOR: TERM
2.1 Appointment of Contractor. Upon the terms and subject to
the conditions set forth in this Agreement and for the Term and in
consideration of the Payments hereinafter provided, MHJFB hereby
grants, delegates, and assigns to Contractor the right to provide
MHJFB, and Contractor hereby agrees to furnish to MHJFB, the
Operation and Management Services.
2.2 Initial Term. This Agreement is effective on the date
set forth in the initial paragraph of this Agreement. The initial
term of this Agreement shall be for the period commencing on the
Services Commencement Date.
2.3 Period of Contract. The initial period of the Contract
shall be for a two-year term. Before the conclusion of the 18th
month of the initial two-year term, the MHJFB shall have the option
to renew the Contract for an additional one-year period, said one-
year period to begin at the end of the initial two-year term.
Thereafter, before the conclusion of the initial two-year period or
the additional one-year renewal period, the MHJFB shall have the
option to extend the Contract term for additional one-year
periods, up to a total of three years. Said one-year period is to
begin at the conclusion of the term then in effect. In the event
the MHJFB extends the Contract Term for a total of three one-year
periods, the MHJFB shall have the absolute right to terminate the
Agreement on reasonable notice, without penalty or cause, at the
end of two (2) years.
ARTICLE III - CONTRACTORS REPRESENTATIONS AND WARRANTIES
3.1 Representations of Contractor. Contractor represents and
warrants to and for the benefit of MHJFB, with the intent that
MHJFB will rely thereon for purposes of entering into this
Agreement, as follows:
3.1.1 Organization and Qualification. Contractor has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Washington with power and authority to own its properties,
conduct its business and perform this Agreement as presently
conducted. Contractor is duly qualified to do business as a
foreign corporation in good standing in Washington.
3.1.2 Authorization. This Agreement has been duly
authorized, executed, and delivered by Contractor and,
assuming due execution and delivery by MHJFB constitutes a
legal, valid, and binding agreement enforceable against
Contractor in accordance with its terms.
3.1.3 No Violation of Agreement, Articles of
Incorporation of Bylaws. The consummation of the transactions
contemplate by this Agreement and its fulfillment of the terms
hereof will not conflict with, or result in a breach of any of
the terms and provision of, or constitute a default under any
indenture, mortgage, deed or trust, lease, loan agreement,
license, security agreement, contract, governmental license or
permit, or other agreement or instrument to which Contractor
is a party or by which its properties are bound, or any order,
rule, or regulation of any court or any regulatory body,
administrative agency, or their governmental body applicable
to Contractor or any of its properties, except any such
conflict, breach, or default which would not materially and
adversely affect Contractor's ability to perform its
obligations under this Agreement, and will not conflict with,
or result in a breach of any of the terms and provisions of,
or constitute a default under, the Articles of Incorporation
(or other corresponding charter document) or Bylaws of
Contractor.
3.1.4 No Defaults Under Agreements. Contractor is
not in default, nor is there any event in existence which,
with notice or the passage of time or both, would constitute
a default by Contractor, under any indenture, mortgage, deed
of trust, lease, loan agreement, license, security agreement,
contract, governmental license or permit or other agreement or
instrument to which it is a party or by which any of its
properties are bound and which default would materially and
adversely affect Contractor's ability to perform its
obligations under this Agreement.
3.1.5 Compliance with Laws. Contractor, its officers
and directors purporting to act on behalf of Contractor or
such officers and directors have been conducting business in
compliance with all applicable laws, rules, and regulations of
the jurisdictions in which Contractor is conducting business
including all safety laws and laws with respect to worker's
compensation, discrimination in hiring, promotion or pay of
employees or other laws affecting employees generally.
3.1.6 No Litigation. There is not pending or, to the
knowledge of Contractor, threatened, any action, suit, or
proceeding to which Contractor is a party, before or by any
court or governmental agency or body, or any such action, suit
or proceeding related to environmental or civil right matters,
which might result in any material adverse change in
Contractor's ability to perform its obligations under this
Agreement, and Contractor has insurance coverage of a
magnitude which is more than sufficient to defend any present
and future claims; and no labor disturbance by the employees
of Contractor exists or is imminent which might be expected to
materially and adversely affect Contractor's ability to
perform its obligations under this Agreement.
3.1.7 Financial Statements. Contractor has delivered
to MHJFB copies of the following statements contained in its
annual reports, with appended notes and summary of significant
accounting policies which are an integral part of such
statement: balance sheet as of December 31, 1996 and statements
of income, shareholders' equity, and changes in financial position
of Contractor for each of the years ended since 1991. Contractor
represents such financial statements fairly present the financial
position of Contractor at the dates shown and the results of the
operations for the periods covered, and have been prepared in
conformity with generally accepted accounting principles applied
on a consistent basis, except as discussed in the notes to the
financial statements.
3.1.8 No. Adverse Change. Since the date of Contractor's most
recent balance sheet provided to MHJFB, there has not been any
material adverse change in Contractor's business or condition, nor
has there been any change in the assets or liabilities or
financial condition of Contractor from that reflected in such
balance sheet which is material to Contractor's ability to perform
its obligations under this Agreement.
3.1.9 Disclosure. There is no material fact which
materially and aversely affects or in the future will (so far
as Contractor can now reasonably foresee) materially and
adversely affect Contractor's ability to perform its
obligations under this Agreement which has not been accurately
set forth in this Agreement or otherwise accurately disclosed
in writing to MHJFB by Contractor prior to the date hereof.
3.2 Opinion of Contractor's Counsel. Contractor shall
furnish to MHJFB an opinion of counsel in connection with this
Management Agreement. Such opinion shall address the Contractor's
compliance with applicable law, affirm its authority to enter into
this Agreement, indicate that the Contractor is not currently in
litigation or have notice of litigation that could cause the
Contractor not to perform the items of this Agreement, and affirm
that the financial statements provided by the Contractor were
prepared in accordance with sound accounting principles.
ARTICLE IV - OPERATION OF FACILITY
4.1 General Duties and Obligations; Standards. Contractor
shall provide the Operation and Management Services and shall
operate, maintain, and manage the Facility in compliance with all
applicable federal and state constitutional requirements and laws,
court orders, ACA standards (except where otherwise noted herein),
whether now in effect or hereafter effected or implemented, and in
accordance with specific areas of MHJFB, Counties and applicable
State and law policy and procedures which have been agreed to
herein and Contractor Policy and Procedures which have been
reviewed by MHJFB. When differences between court orders and ACA
standards exist, the higher standard shall be followed. The MHJFB
will govern the reasonable interpretation of the standards and
court orders.
4.2 Policy and Procedures. Contractor shall prepare a policy
and procedures manual which shall be submitted to MHJFB
immediately for their review and shall be approved by MHJFB in
advance of the services commencement date. MHJFB may terminate
this Agreement if, in its sole discretion, it finds the manual or
any part thereof unacceptable. The manual shall not deviate from
any constitutional or legal standard required of MHJFB, law or
specific areas of MHJFB policy and procedures which are agreed to
as part of this service Agreement. Contractor shall notify MHJFB
in writing of all changes in, or additions to its policy and
procedures manual for MHJFB review and approval prior to
implementation. MHJFB shall notify Contractor in writing of new
constitutional or legal standards that it may become aware of,
including court orders or laws directed at MHJFB, which affect
the Facility and its operation. Upon notification by MHJFB to
Contractor of any new standards, Contractor shall immediately
modify their policy and procedures manual so as to comply
therewith, provide the proposed changes to MHJFB and obtain MHJFB approval
of the same.
4.3 Specified Duties and Obligations. Contractor's duties
and obligation shall include, but are not limited to each of the
following:
4.3.1. Training. Contractor shall provide all staff
and personnel training outlined in Contractor's response to
RFP, including basic level correctional officer pre-service
training, CSC staff and employee training, and security and
control training. All costs associated with this training is
the responsibility of the Contractor. CSC warrants that its
staff and management training will meet or exceed all State
requirements.
4.3.2. Personnel. Contractor and MHJFB attach to this
as Exhibit "A" the staffing pattern for this Facility, which
will be in place regardless of the actual bed usage per day.
Contractor shall otherwise at all times provide staffing in
accordance with ACA and the staffing patterns set forth in
Contractor's response to RFP, or as is acceptable to MHJFB.
At a minimum, the Contractor shall provide written job
descriptions and qualifications, an affirmative action plan,
personnel records system, performance evaluation plan, and
background check of all employees prior to employment. When
necessary, MHJFB will assist Contractor in conducting the NCIC
and FBI checks. No reductions in staffing from those set
forth on Exhibit "A" shall occur without MHJFB's prior
approval.
4.3.3 Food Service. Contractor shall provide food
service for all inmates in accordance with Contractor's
response to RFP and Policy and Procedures. At a minimum, the
food service operation shall provide a meal schedule, special
diet, medical, religious requirements, a certified
nutritionist, three meals of which two are hot meals, at
regular times during each 24-hour period, with no more than 14
hours between the evening meal and breakfast.
4.3.4 Sanitation and Hygiene. Contractor shall
provide sanitation, hygiene and laundry service in accordance
with ACA, and Contractor Policy and Procedures. At a minimum,
the Contractor shall provide full inmate laundry services,
inmate clothing, bed and linen, a chair, adequate ventilation,
heating, cooling and lighting, closet/locker space, hygiene
supplies and supplies to control vermin, garbage disposal and
pest control.
4.3.5 Telecommunications. Contractor shall provide,
at its expenses, all telecommunication equipment, radio, NCIC,
fax machine, copy machine, and all other telephone or
telecommunication service for operation of the Facility not
provided by MHJFB at the Services Commencement Date. Such
telecommunication equipment shall be capable of interfacing
with MHJFB existing communication systems and with any future
MHJFB communication system.
4.3.6 Data Processing Services. Contractor shall
provide at its expense, facilities and compatible equipment
necessary to interface with MHJFB computer systems.
4.3.7 General and Family Visitation. Contractor
shall provide general and family visitation for all inmates in
accordance with ACA, Contractor Policy and Procedures, MHJFB
Policy and Procedures, making use of physical space to provide
furniture, equipment and supervision necessary to provide such
Visitation.
4.3.8 Essentials. At a minimum, Contractor shall
provide, at its expense, all Facility supplies, including
hygiene items, clothing, office supplies, building support
items, and inmate housing unit sheets, pillowcases, blankets,
necessary to meet all ACA and MHJFB Policy and Procedures
requirements.
4.3.9 Maintenance, Remodeling, Damages and Condemnation.
(a) Except for the portions of the Facility structure,
personal property and equipment shown on attached
Exhibit "B" for which the MHJFB will be
responsible, Contractor shall, at its own expense,
maintain the physical structure of the Facility and
all tangible personal property contained therein,
and equipment, in accordance with ACA and
Contractor Policy and Procedures, including all
ordinary routine maintenance, including a
preventative maintenance program, which will
maintain, preserve and keep the Facility and
equipment in good repair, working order and
condition, subject to normal wear and tear, and
will from time to time make or cause to be made all
necessary and proper repairs, replacements and
renewals, which shall thereupon become part of the
Facility. During the term of this Agreement,
except with respect to the portions of the
structure, personal property and equipment
described on attached Exhibit "B," MHJFB shall have
no responsibility, financial or otherwise, with
respect to maintenance of the Facility. In the
event Contractor fails to comply with maintenance
requirements, resulting in MHJFB incurring costs
therefore, any costs incurred by MHJFB in any given
month shall be subtracted from any amounts due from
MHJFB to Contractor under this Agreement for each
such month.
(b) Subject to the prior approval of MHJFB, which
approval shall not unreasonably be withheld, and
further subject to the approval of the State of
Washington, if required, Contractor shall have the
authority to remodel the Facility or make
substitutions, alterations, additions,
modifications and improvements to the Facility from
time to time, the cost of which remodeling,
substitutions, alterations, additions,
modifications and improvements shall be paid by
Contractor and the same shall become part of the
Facility.
(c) If the Facility is damaged or destroyed in whole or
in part the obligation to house inmates pursuant to
this Agreement shall not cease. In the event
damage or destruction renders the Facility
unusable, the duties of the parties hereunder shall
abate until such time as alternative facilities are
made available by MHJFB. The parties agree to
cooperate to locate alternative facilities.
(d) In the event any or all of the facilities is taken
by condemnation, the obligation to house inmates
shall not cease. In the event the Facility is
rendered unusable due to condemnation, the duties
of the parties hereunder shall abate until such
time as alternative facilities are made available
by MHJFB. The parties agree to cooperate to locate
alternative facilities.
(e) Contractor may from time to time after the Services
Commencement Date, at its own expense, install or
remove machinery, equipment, and the other personal
property in the Facility, which may be attached or
affixed to the Facility. Anything of MHJFB removed
shall be replaced with items of equal or better
capability and value and any such replacements
shall be the property of MHJFB. MHJFB and
Contractor shall conduct an initial inventory of
all equipment prior to or within a reasonable time
after the Services Commencement Date, and shall be
entitled to conduct an annual inventory of
equipment throughout the term of this Agreement.
Contractor shall cooperate with MHJFB in its
conducting of all inventories of equipment.
4.3.10 Safety and Emergency Procedures. Contractor
shall operate and maintain the Facility in compliance with all
applicable federal, state and local safety and fire codes and
in accordance with ACA, and Contractor Policy and Procedure.
At a minimum, the Contractor shall provide a fire prevention
plan, fire inspection and service, fire alarm and smoke
detection system, weekly fire and safety inspections,
evacuation plan, a procedure to report job-related injuries,
equipment to maintain essential lighting, power and
communications, and a Riot and Disturbance Control Plan.
4.3.11 Diagnostic Commitments. The responsibility
for reporting to the court the appropriate disposition for an
inmate pursuant to Court Order shall remain with MHJFB. The
testing and other diagnostic work will remain with the
Contractor.
4.3.12 Security and Control. The Contractor shall
provide security and control in accordance with ACA and the
Contractor Policy and Procedures with respect to inmates at
the Facility. At a minimum, the Contractor shall provide
sufficient staff training, post orders, security perimeter
control, log and shift reports, count procedures, security
inspections, key control, procedure for search and control of
contraband, tool control, escape plan and physical force
requirements.
4.3.13 Programs. Contractor shall provide, in
accordance with Contractor Policy and Procedures, the
following programs for the inmates at the Facility:
(a) Substance abuse assessment and education;
(b) Academic education;
(1) Teachers of effective juvenile correctional education
programs;
(2) Guiding principals;
(3) Operator approach;
(4) Program length/duration/intensity;
(5) Philosophy/approach;
(6) Curriculum and instruction;
(7) Special education programs
(8) Student Assessment/ Achievement;
(9) Facility;
(10) Instructional support;
(11) Staffing;
(12) School climate and communications;
(13) Continuous progress improvement;
(14) Record keeping/slash reporting;
(15) Administration;
(16) School/Board/Community Relations;
(17) Additional components;
(18) Assessment/Testing;
(19) Academic skilled development and/or mediation;
(20) Life skills;
(21) Critical thinking skills
(22) Literacy skills;
(23) Job skills assessment and education
(24) Operation by Objective
(c) Victim Empathy;
(d) Anger Management;
(e) Religious programs
(f) Volunteer Programs;
(g) Restitution Program;
(h) Juvenile industries.
4.3.14 Mail. The Contractor shall provide, in
accordance with ACA and Contractor Policy and Procedures, a
mail delivery system for inmates at the Facility.
4.3.15 Phone. The Contractor shall provide, in
accordance with ACA and Contractor Policy and Procedures, a
telephone access system for inmates at the Facility.
4.3.16 Work/Exercise Program. Contractor shall
provide in accordance with the ACA, and Contractor policy and
procedures, a physical training/work/exercise program or
programs for the inmates at the Facility. Said activities
will exclude team sports and such recreational activities
basketball, volleyball, Ping-Pong and pool.
4.3.17 Administration, Organization and Management.
The Contractor shall provide, in accordance with ACA and
Contractor Policy and Procedures, an administrative structure
to manage the Facility. At a minimum, the organization shall
include a single Facility administrator, the development of a
policy and procedure manual, a system to inspect, review and
maintain programs, a management system for operations,
personnel and inmate oversight, and an organizational chart
for the Facility.
4.3.18 Fiscal Management. The Contractor shall
provide, in accordance with ACA and Contractor Policy and
Procedures, a fiscal management system for the Facility. At
a minimum, the program shall include an annual budget, income
and expenditure report, financial reports, audit reports,
internal contracts, petty cash, inmate trust, check control,
bonding, employee expense reimbursement, purchasing and
requisitions and payroll.
4.3.19 Medical Services. The Contractor shall
provide, in accordance with ACA and Contractor Policy and
Procedures a system for a provision of medical and health care
services for employees and inmates placed in the Facility. At
a minimum, the program shall include intake/release protocols
for appropriate screening of inmates for physical and mental
health, adequate staffing of nurse(s) and doctor(s) and other
appropriate medical and health care personnel, routine sick
call, inmate out referral, health education, medication
storage, health care and medication record keeping, provision
of medical services and inmate record keeping. Contractor
will provide up to $5,000.00 per inmate patient for medical,
dental and emergency room services with a $25,000.00 cap for
the entire Facility population per year. Contractor will
develop cooperative working agreements with regional medical
facilities to provide emergency medical care as needed for the
inmates. Contractor will agree to immediately contact
originating County/User regarding emergency care and/or actual
or intended offsite care provided to any inmate for which said
County/User is originator.
Any inmate presented for admission to detention in need,
in the opinion of an appropriate medical professional, as
determined by the Facility Doctor, of immediate emergency
medical care due to injury, illness or intoxication or, in the
opinion of a County designated mental health professional, in
need of immediate commitment, may be detained pending
evaluation but shall not be admitted to the Facility, and if
not admitted shall be referred to the presenting County/User.
Subsequent admission to detention is contingent upon written
clearance by a medical, County designated mental health
professional or Judge/Court Commissioner.
4.3.20 Intake/Release. The Contractor shall provide,
in accordance with ACA and Contractor Policy and Procedures,
a policy and protocol for intake and release of all inmates
brought to the Facility for placement. Counties shall receive
a priority on all beds over Users. In the event Users have an
inmate in a bed and a County needs that bed, Contractor will
require a User (designated by the MHJFB, or if there is no
designation, by Contractor) to pick up the inmate and make
that bed available to the County. In the event the Facility
is full and an inmate is presented for intake from any member
County, Contractor shall require a User (designated by the
MHJFB or, if there is no designation, by Contractor) to pick
up the inmate and make a bed available to the County inmate.
Contractor agrees to accept inmates in excess of 52 in
number. Contractor agrees to accept inmates in excess of 52
up to 11 additional inmates. MHJFB will provide contact
persons from the Counties and other users who shall make
themselves available to CSC by telephone to advise CSC of
allowance of admission or rejection of any inmates in excess
of 63.
4.3.21 Juvenile Records. The Contractor shall create
and maintain a system of inmate record keeping complying with
all local, state and federal law and regulation and will
manage, store, transmit and preserve all such record systems.
Appropriate policy and procedures will be created for access
and preservation of confidentiality and privacy.
4.4. Custody of Inmates. Within ten days of the issuance of
Certificate of Occupancy of the Facility, Contractor shall
immediately accept inmates at the Facility.
4.5 Disciplinary Rules and Regulations. Contractor shall
impose discipline through rules, regulations and orders pursuant
to ACA, MHJFB and Contractor Policy and Procedures and local,
state and federal law.
4.6 Grievance Procedures. Contractor shall impose grievance
procedures pursuant to ACA and Contractor Policy and Procedures.
4.7 Use of Non-Deadly Force. The Contractor shall use non-
deadly force in accordance with federal and state law, and
Contractor Policy and Procedures as follows:
Firearms are to be used as a last resort to prevent
escape; to prevent the loss of life or serious
bodily harm. If a person is injured during an
incident involving the use of firearms, immediate
medical attention will be provided.
4.8 Kitchen Equipment. MHJFB agrees to install and pay for
the kitchen equipment items listed on the kitchen equipment
schedule Contractor included in its response to MHJFB's Request
for Proposals for Facility. MHJFB shall own the same. Contractor
shall repair and/or replace any item on said list when needed
during the term of this Agreement.
ARTICLE V - EMPLOYEES
5.1 Independent Contractor. Contractor is associated with
MHJFB only for the purposes and to the extent set forth in this
Agreement, and in respect of the performance of the Operation and
Management Services pursuant to this Agreement, Contractor is and
shall be an independent contractor and, subject to the terms of
this Agreement, shall have the sole right to supervise, manage,
operate, control, and direct the performance of the details
incident to its duties under this Agreement. Nothing contained in
this Agreement shall be deemed or construed to create a
partnership or joint venture, to create the relationships of an
employer-employee or principal-agent, or to otherwise create any
liability of MHJFB whatsoever with respect to the indebtedness,
liabilities, and obligations of Contractor to any other party.
Contractor shall be solely responsible for (and MHJFB shall have
no obligation with respect to) payment of all federal income,
FICA, and other taxes owed or claimed to be owed by Contractor,
arising out of Contractor's association with MHJFB pursuant to
this Agreement, and Contractor shall indemnify and hold MHJFB
harmless from and against, and shall defend MHJFB against, any and
all losses, damages, claims, costs, penalties, liabilities, and
expenses howsoever arising or incurred because of, incident to, or
otherwise with respect to any such taxes.
5.2 Subcontracts. Contractor may subcontract for the
performance of any of its responsibilities to provide services
pursuant to this Management Agreement. No contractual elationship
shall exist between MHJFB and any subcontractor and MHJFB shall
accept no responsibility whatsoever for the conduct, actions, or
omissions of any subcontractor selected by Contractor. Contractor
shall be responsible for the management of the subcontractor in
the performance of their work.
5.3 Employee Background/Licensing. A background
investigation shall be made by Contractor of each employee
(including consultants, subcontractors and independent
contractors and their employees and agents who work on a routine
basis at the Facility) prior to being hired by Contractor for
assignment to the Facility, the results of which investigation
shall be made available to MHJFB upon request. In addition to
background investigation reports, Contractor shall maintain on
file two completed fingerprint charts on each employee. When
necessary, the MHJFB will assist the Contractor in conducting the
NCIC and FBI check. All consultants, subcontractors and
independent contractors shall be appropriately licensed and shall
provide proof of such to Contractor.
5.4 Orientation and Training. All non-management Contractor
employees shall attend and pass a new employee orientation program
after being hired and prior to regular assignment in accordance
with ACA requirements.
ARTICLE VI - COMPENSATION AND ADJUSTMENTS
6.1 Payment. Subject to Sections 6.1.2 and 6.1.3, MHJFB
shall pay Contractor a "Contractor Per Diem Rate" per inmate for
each inmate day an inmate is incarcerated in the Facility operated
by Contractor.
6.1.1 Billing. Contractor shall bill MHJFB, no
later than the 5th of each month, for each calendar month, one
calendar month in arrears for the aggregate amount of the
Contractor Per Diem Rate for the preceding month, and MHJFB,
subject to Sections 6.1.2 and 6.1.3, shall pay such invoice
within 30 days after receipt of invoice. Contractor will
provide monthly statements based upon and describing therein
the average population of the month billed.
6.1.2 Monthly Detail. Each bill shall also contain
a detail of each bed day use broken out for each County and/or
User with the information described in Section 10.3 on a form
required by the MHJFB.
6.1.3 Per Diem Rate and Contractor's Per Diem Rate
During Initial Term. The payment for the initial term of this
Management Agreement shall be based on a per diem rate of (1)
$84.05 per inmate day where the average of all inmates per day
each month is twenty-seven (27) or less; (2) $79.77 per inmate
day where the average of all inmates per day each month is
above 27 and below 41; and (3) $64.08 per inmate day where the
average of all inmates per day each month is 41 or more. The
MHJFB shall have no responsibility to pay for any non-Counties
or Users inmate. To determine averaging, the inmates entering
the Facility on the last day of each month will be counted for
that entry day based on their actual length of stay.
The per diem rate for half days is one-half the daily rate.
The preceding year's per diem rates will increase or decrease on
the first day of each succeeding year of the term of this
Agreement in an amount equal to the percentage increase or
decrease, if any, during the preceding August to August period in
the "U.S. Bureau of Labor Statistics Consumer Price Index for
Urban Consumers (CPI-U), U.S. City Average,
all items (1982-84=100), not to exceed 3.5% per year. If the
index base is changed by the USBLS, this index base shall
change concurrently.
6.2 Compensation for Additional Services. MHJFB recognizes
that Contractor has entered into this Management Agreement and has
offered to furnish the operation and management services hereunder
based upon the MHJFB, Counties and applicable State of Washington
policies in effect as of the date of this Management Agreement. If
there are changes in such MHJFB policies, which changes are as a
result of changes in ACA standards or laws, government regulations
or court orders generally applicable to the MHJFB and Counties and
which necessitate a change in the scope of services furnished by
the Contractor so as to increase the cost of operating and
managing the facilities or performing other services contemplated
in this Management Agreement, then the Contractor shall be
provided extra compensation for the additional services required,
which compensation may be provided pursuant to an amendment to
this Agreement so long as they are within the scope of the request
for proposal. The Contractor shall request in writing, together
with such supporting documentation or information as MHJFB may
reasonably request, the additional compensation Contractor desires
to offset Contractor's increase in costs for furnishing the
additional services because of such change in such policies. MHJFB
shall review the request and decide if additional payment is
justified. If MHJFB agrees, then a contract amendment will be
made.
6.3 Failure to Agree on Compensation for Additional Services.
If the parties cannot agree on a compensation for additional
services within 60 days of the date Contractor's request is
received by MHJFB, Contractor and MHJFB may initiate resolution
through the dispute proceedings as provided herein.
ARTICLE VII - COMPENSATION AND ADJUSTMENT
7.1 Default by Contractor. Each of the following shall
constitute an Event of Default on the part of Contractor:
(a) a material failure to keep, observe, perform, meet or
comply with any covenant, agreement, term, or provision
of this Agreement to be kept, observed, met, performed,
or complied with by Contractor hereunder, which such
failure continues for a period of twenty (20) days after
Contractor has written notice thereof;
(b) a material failure to meet or comply with any Court
Order, ACA Standard, where applicable, or federal or
state requirement or law, which such failure continues
for a period of twenty (20) days after Contractor has
written notice thereof;
(c) a material failure of Contractor to comply with any MHJFB
Policy for which Contractor has not received a prior
written waiver from MHJFB which such failure continues
for a period of twenty (20) days after Contractor has
written notice thereof;
(d) any of the following acts of the Contractor: (1) admit in
writing its inability to pay its debts; (2) make a
general assignment for the benefit of creditors; (3)
suffer a decree or order appointing a receiver or trustee
for it to substantially all of its property to be entered
and, if entered without its consent, not to be stayed or
discharged within sixty (60) days; (4) suffer proceeding
under any law relating to bankruptcy, insolvency, or the
reorganization or relief of debtors to be instituted by
or against it and, if contested by it, not be dismissed
or stayed within sixty (60) days, or (5) suffer any
judgment, writ of attachment or execution, or any similar
process to be issued or levied against a substantial part
of its property which is not released, stayed, bonded, or
vacated within sixty (60) days after issue or levy; and
(e) the discovery by MHJFB that any statement, representation
or warranty in this Agreement is false, misleading or
erroneous in any material respect.
7.2 Further Opportunity to Cure. In the event of
Default, of the type specified in Section 7.1(a), (b), or (c)
occurs and Contractor reasonably believes (a) that such Event
of Default cannot be cured within the twenty (20) days allowed
to cure such Event of Default in Section 7.1(a), (b) or (c),
as the case may be, and (b) that such Event of Default can be
cured, through a diligent, on-going, and conscientious effort
on the part of Contractor, within a reasonable period not to
exceed six months, unless extended by MHJFB, then Contractor
may, within the twenty (20) day cure period, submit a plan for
curing the Event of Default to MHJFB (which plan shall show in
detail by what means Contractor proposes to cure the Event of
Default).
Upon receipt of any such plan for curing an Event of
Default, MHJFB shall promptly review the circumstances, may
allow, or not allow, Contractor to pursue such plan of cure.
MHJFB will not unreasonably hold approval of the plan. If
the plan is approved, MHJFB agrees that it will not exercise
its remedies hereunder with respect to such Event of Default
for so long as Contractor diligently, conscientiously, and
timely undertakes to cure the Event of Default in accordance
with the approved plan.
7.3 Remedy of MHJFB. Upon the occurrence of the Event
of Default by Contractor, MHJFB shall have the right to pursue
any remedy it may have at law or in equity, including but not
limited to, (a) reducing its claim to a judgment, (b) taking
action to cure the Event of Default, in which case, MHJFB may
offset against any payment owed to Contractor all reasonable
costs incurred by MHJFB in connection with its efforts to cure
such Event of Default, and (c) termination and removal of
Contractor as the Contractor of the Facility and the
offsetting against by Payments owed to Contractor by MHJFB of
any reasonable amounts expended by MHJFB to cure the Event of
Default. In the event of Contractor's removal as Contractor
pursuant to an Event of Default, MHJFB shall have no further
obligations to Contractor after such removal and Contractor
agrees to comply with Section 10.6 hereof with respect to the
transition to new management.
7.4 Default by MHJFB. Each of the following shall constitute
an Event of Default on the part of MHJFB.
(a) after receipt by the MHJFB of funds from Counties
and Users, failure by MHJFB to pay within thirty
(30) days after payment is due any Payment required
to be paid pursuant to this Agreement; provided,
however, that in the event MHJFB fails to timely
pay due to either (1) administrative delay in
payment processing or late submission by
Contractor, and payment is made within sixty (60)
days or (2) MHJFB asserts an offset to payment as
provided in this Agreement, said events shall not
constitute an Event of Default.
(b) Failure by MHJFB to observe and perform any material
covenant, condition, or agreement on its part to be
observed or performed, or its failure or refusal to
substantially fulfill any of material obligations
hereunder, unless caused by the default of
Contractor, and unless cured by MHJFB within thirty
(30) days after receiving written notice thereof.
7.5 Remedy of Contractor. Upon the occurrence of the Event
of Default by MHJFB, Contractor shall have the right to pursue any
remedy it may have at law or in equity, including by not limited
to: (a) reducing its claim to judgment, (b) taking action to cure
the Event of Default, and (c) termination of the Agreement. Upon
such termination, Contractor shall be entitled to receive from
MHJFB payment for all services furnished under this Agreement up
to and including the date of termination.
7.6 Termination for Unavailability of Funds. The payment of
money by MHJFB and Users under any provision hereof is contingent
upon the availability of funds to MHJFB by Counties and Users to
pay the sums due pursuant to this Agreement. The availability of
funds to the MHJFB and Users is contingent upon timely and proper
appropriation by the Counties and Users of funds sufficient to pay
sums due pursuant to this Agreement. MHJFB agrees to submit to
the appropriate persons in each County and to the appropriate
parties in each User, if required of MHJFB in any MHJFB User
Contract, written requests for appropriation of money in amounts
not less than amounts equal to the payments that will be required
per annum. Neither the MHJFB nor the Counties, or their elected
officials, officers, employees, agents, attorneys, or other
individuals acting on behalf of them, make any representations or
warranties as to whether any appropriation will, from time to
time, during the initial term or any extension thereof, be made by
the applicable County or User. In the event funds for this
Agreement become unavailable due to non-appropriation, MHJFB shall
have the right to terminate this Agreement without penalty.
7.7 Termination Without Cause. Either party may terminate
this Agreement without cause by giving written notice one hundred
and thirty five (135) days before the effective date of
termination. The parties may, by agreement, reduce the notice
period.
7.8 Termination due to Termination of State Lease. In the
event the State of Washington terminates the Lease, this Agreement
shall also terminate on the same date upon such termination.
Contractor shall be entitled to receive from MHJFB payment for all
services terminated under this Agreement up to and including the
date of termination.
7.9 Force Majeure. The failure of performance of any of the
terms and conditions of this Agreement resulting from acts of God,
war, civil insurrection or riot (excluding any riot in the
Facility) shall not be a breach or an Event of Default pursuant
hereto.
7.10 Turnover. In the event of termination of the Contract,
the Contractor shall surrender to MHJFB all inmate files, fiscal
records and any other records the MHJFB deems necessary to
continue operation of the Facility.
ARTICLE VIII - INDEMNIFICATION AND INSURANCE
8.1 Insurance. Contractor shall maintain insurance coverage
for the mutual protection of it and the MHJFB, the Counties, the
Landlord State of Washington, all their elected officials, agents
and public or private employees, and parties with whom MHJFB
contracts for incarceration of inmates (collectively, in this
Article VIII, the "Insureds") naming the Insureds as an additional
insured, to cover all claims that may arise out of or result from
Contractor's Operation and Management Services under this
Agreement, regardless of whether such services are provided by
Contractor or subcontractor, or by anyone directly or indirectly
employed by Contractor or a subcontractor, or by anyone else for
whose acts Contractor or a subcontractor may be liable. The
insurance shall provide the following coverages: a) comprehensive
general liability coverage, including, but not limited to
professional liability coverage for correctional officers and
employees, including Law Enforcement Liability Insurance to
include Jail Keepers Legal Liability; b) coverage against claims
based on violation of civil rights; c) coverage for damages
because of injury to or destruction of tangible property,
including loss of use of such property; d) coverage for damages
because of loss or damage to the Facility due to fire or other
casualties; and e) Workmen's Compensation Insurance. Coverages
shall extend during the applicable statutes-of-limitations periods
and during the pendency of any claims. Compliance with this
Section 8.1 shall not relieve Contractor from any liability under
the indemnity provisions of Section 8.5 of this Agreement, and the
terms of this Section 8.1 shall survive the termination of this
Agreement. Any deductibles must be agreed to in writing by MHJFB.
All policies of insurance shall be written as primary policies
not contributing with and not in excess of coverage that the
Insured's may carry. All policies shall contain an endorsement
containing express waiver of any right of subrogation by the
insurance company against the Insureds. All policies shall provide
that the insurance proceeds of any loss will be payable
notwithstanding any act or negligence of the Insureds which might
otherwise result in a forfeiture of said insurance. All policies
must provide that the additional Insureds shall not be required to
give notice of accidents or claims and that the additional
Insureds shall have no liability for premiums.
The policy or policies providing Physical Property Damage
Insurance shall provide that all proceeds shall be paid to MHJFB.
All proceeds received by MHJFB shall be held by an escrow agent to
be identified at the time of notice or loss or damage to MHJFB by
Contractor. The application of insurance proceeds from damage or
loss to property shall be determined as set forth below. The
parties hereto shall cooperate to obtain all insurance available
for such loss and with the work necessary to repair, replace,
restore and/ or rebuild the facility. In the case of failure or
refusal of any insurance company or third person or corporation
from whom money may be due to apply the same, it shall be the duty
of Contractor, and not MHJFB, to use all proper and legal means in
conjunction and cooperation with MHJFB to recover the same but at
the expense of Contractor. MHJFB agrees to invest any proceeds in
an interest bearing account in a federally insured Bank, Savings
and Loan or Credit Union while the same are not being applied to
the work.
In the event of any damage to or destruction of the Property
or Facility or any improvements thereon from any cause whatever,
Contractor shall promptly give written notice thereof to MHJFB.
MHJFB shall promptly, as insurance proceeds become available,
repair or restore the Property and Facility as nearly as possible
to its condition immediately prior to such damage or destruction
unless MHJFB and Contractor, subject to the rights of the
Landlord, State of Washington, mutually agree in writing that such
repair and restoration is not feasible, in which event this
Agreement shall thereupon terminate, or, if MHJFB and Contractor,
subject to the rights of the Landlord State of Washington,
mutually agree that the damage is immaterial and that there is no
need to repair or restore the Property and Facility, then such
repair or restoration will not be required and the Agreement shall
not terminate.
Funds held by MHJFB in excess of the cost of such
reconstruction shall be paid to Contractor.
8.2 Amounts. The insurance coverages required by Section 8.1
of this Agreement shall be for not less than the amounts shown on
the attached summary of coverages, or as required by law,
whichever is greater. All coverages shall provide for payment of
the following items: a) compensatory damages; b) plaintiff's
attorneys' fees, when awarded; and c)costs of defense. Cost of
defense shall be included within the policy limits.
8.3 Certificate of Insurance and Cancellation. All insurance
required by this Article VIII shall be procured and maintained
with financially sound insurance companies that have been approved
by the MHJFB. Such certificates of insurance shall contain a
provision that the Insureds shall receive written notice from the
insurance company(ies) at least sixty (60) days prior to the
material change, amendment or cancellation of any of the coverages
provided under the policies. In the event that any insurance
described herein or any portion thereof becomes commercially
unavailable, Contractor shall obtain such replacement insurance as
may be available and this Management Agreement shall be modified
accordingly. In the event that adequate insurance becomes
commercially unavailable, MHJFB or Contractor may terminate this
Agreement upon sixty (60) days' prior written notice, in which
case Contractor shall comply with Section 10.6 with respect to the
transition to new management. The Contractor shall submit to
MHJFB on June 30th of each year an annual audit by an Independent
Auditor regarding the fund balance on the insurance coverage
provided by the Contractor.
8.4 Subcontractors. Contractor shall require all
subcontractors to obtain, maintain, and keep in force insurance
coverage in accordance with accepted industry standards and this
Agreement during the time they are engaged hereunder.
8.5 Indemnification of MHJFB. Contractor shall indemnify and
save the MHJFB, the Counties, the Landlord State of Washington and
all their public employees, and parties with whom MHJFB contracts
for incarceration of Inmates ("the Indemnitees") harmless from and
against:
(a) any and all claims arising from the provision of the
Operation and Management Services, including, without
limitation, any and all claims arising from (I) any breach or
default on the part of Contractor in the performance of any
covenant or agreement to be performed pursuant to the terms of
this Agreement, (II) any act of negligence of Contractor, or
any of its agents, subcontractors, servants, employees, or
licenses and (III) any accident, injury or damage whatsoever
caused to any person; and
(b) all costs, reasonable attorneys' fees, expenses, and
liabilities incurred on account of any such claim, action, or
proceeding brought thereon. In case any action or proceeding
is brought against the Indemnitees, or any of them,
Contractor, upon notice from the Indemnitees, or any of them,
shall defend against such action or proceeding by counsel
satisfactory to the Indemnitees, or any of them, unless such
action or proceeding is defended against by counsel for any
carrier or liability insurance provided for herein.
Contractor's obligation to indemnify the MHJFB shall not be
affected by a claim that negligence of the MHJFB or its
respective agents, contractors, employees, or licensees
contributed in part to the loss or damage indemnified against.
Contractor's obligation to indemnity the MHJFB, however,
shall not be applicable to injury, death or damage to property
arising out of the sole negligence or sole willful misconduct
of the MHJFB. The terms of this Section 8.5 shall survive the
termination of this Agreement.
The MHJFB shall remain solely responsible for all
litigation, losses and costs that are unrelated to the
Facility and resulting from claims or litigation pending
against the MHJFB at the time this Management Agreement first
becomes effective or arising thereafter from occurrences prior
to the effective date of this Management Agreement.
Contractor agrees to cooperate with the MHJFB in the defense
of any such claims or litigation. Nothing contained in this
Section 8.6 shall in any way abrogate, modify, or mitigate any
obligation of Contractor under this Agreement to comply with
Court Orders or other requirements imposed on Contractor by
this Agreement.
8.7 Waiver of Defenses. Neither the Indemnitees nor
Contractor shall waive, release, or otherwise forfeit any possible
defense the Indemnitees or Contractor may have regarding claims
arising from or made in connection with the operation of the
Facility by Contractor without the consent of the other party to
this Agreement. The Indemnitees and Contractor shall preserve all
such available defenses and cooperate with each other to make such
defenses available for each other's benefit to the maximum extent
allowed by law. Nothing contained in this Agreement shall be
construed as a waiver of sovereign immunity by the State of
Washington.
ARTICLE IX - INMATE SENTENCES
9.1 Sentence Computation. The referring Counties or other
users shall compute all Inmates' sentences including, but not
limited to, computation of good time awards, discharge dates and
parole eligibility dates.
ARTICLE X - ADDITIONAL COVENANTS OF CONTRACTOR
10.1 Cooperation with MHJFB. In the operation and maintenance
of the Facility, Contractor shall cooperate with and assist MHJFB
in the fulfillment of its duties relating to federal, state and
MHJFB Policy and Procedure requirements.
10.2 Start-Up Period Requirements. During the Start-up
Period, Contractor will prepare and submit to MHJFB, at least 30
days before the Services Commencement date.
(a) A policy and operations manual which covers all
aspects of Facility operations including the procedures that
will be utilized to facilitate monitoring of the Facility and
for assumption of operations by MHJFB in the event of
Contractor's bankruptcy or inability to perform its duties
hereunder;
(b) A fully developed training package to be administered to all
Contractor staff;
(c) An emergency procedures/security manual for confidential use
by staff supervisors employed by Contractor; and
(d) Post orders for all Facility staff positions.
10.3 Maintenance of Records. The Contractor shall be required
to maintain documentation for all charges against the MHJFB under
the contract. The books, records, and documents of the
Contractor, insofar as they relate to work which is to be
performed or money which is to received under a proposed contract,
shall be maintained for the length of the contract and shall be
subject to audit, at any reasonable time and upon reasonable
notice by MHJFB, the State Auditor or their duly appointed
representatives. The records shall be maintained in accordance
with general accepted accounting principles and at no less than
those recommended in the Regulations related to independent
contracts published by the State Auditor. Record keeping will
include providing daily records of bed users, the entity of bed
use origin, and whether the admitted juvenile is admitted
predisposition or post-disposition.
10.4 Maintenance of Corporate Existence and Business.
Contractor shall at all times maintain its corporate existence and
authority to transact business and good standing in its
jurisdiction of incorporation and Washington. Contractor shall
maintain all licenses, permits, and franchises necessary for its
business where the failure to so maintain might have a material
adverse effect on Contractor's ability to perform its obligations
under this Agreement.
10.5 S.E.C. Report. Contractor shall, on a timely basis
provide MHJFB with copies of all reports required to be filed by
Contractor with the Securities and Exchange Commission. Prior to
execution of this Agreement, Contractor shall provide MHJFB with
their most recent Form 10Q and any such Form filed since the date
thereof.
10.6 Transition. Upon the termination of this Agreement as to
the Facility, Contractor agrees to work with MHJFB under MHJFB
management supervision for a period of one hundred and thirty five
(135) days to ensure an orderly and efficient transition from
Contractor management to MHJFB management (or management by a
third party) of the Facility. During this transition period,
Contractor shall transfer all Facility records to MHJFB.
10.7 Non-discrimination. Contractor shall at all times
provide the Operation and Management Services in compliance with
all laws with respect to discrimination in hiring, promotion or
pay of employees. No person will be subject to discrimination on
the grounds of handicap, race, color, religion, sex, age, or
national origin. Upon request, Contractor shall show proof of
such non-discrimination, and shall post in a conspicuous place,
available to employees and job applicants, notice of such
non-discrimination. Contractor shall provide MHJFB with copies of
its affirmative action plan and all employment discrimination
reports required to be filed by it with the Equal Employment
Opportunity Commission or any other government agency.
10.8 Utility Charges, Rent, Taxes, Liens, and Assessments.
Contractor shall: (1) pay all rent due by MHJFB, as Lessee, to
Lessor under the Lease, (2) pay or make provision for payment of,
as the same shall respectively become due, all lawful taxes and
assessments levied or assessed by the Federal, State or any
municipal government on the Facility or any machinery, equipment
or other property installed or located by Contractor therein or
thereon, (3) not create or suffer to be created any lien or charge
upon the Facility or any pert thereof; (4) pay or cause to be
discharged or make adequate provision to satisfy and discharge,
within sixty (60) days after the same shall come into force, any
lien or charge upon the Facility or any part thereof and all
lawful claims or demand for labor, materials, supplies or other
charges which, if unpaid, might be or become a lien upon the
Facility or any part thereof; and (5) pay all utility charges,
including "service charges," incurred or imposed with respect to
the Facility. A true and correct copy of the MHJFB/State Lease is
attached to this Agreement.
10.9 Benefits/Wages. CSC will provide to its employees at the
Facility the full range of employee benefit programs described on
attached Schedule "C," unless said programs are modified by
Contractor on a company wide basis.
10.10 Grants. The Contractor agrees to provide MHJFB
access at no cost to Contractor's grant writers from time to time
to seek grants beneficial to the Facility and MHJFB.
10.11 Noncompete. Contractor agrees with respect to any
Juvenile Detention Facility it may operate in Washington State,
(1) Contractor will not offer to any then Facility Users a rate at
a CSC facility in Washington State lower than said User/MHJFB
Contract rate, plus five percent (5%); and (2) not to contract
with any entity in Eastern Washington (defined as the Counties of
Okanogan, Douglas, Chelan, Klickitat, Yakima and Kittitas, and all
Counties east of the same) ; unless otherwise agreed to by both
the parties hereto.
10.12 Marketing. The Contractor will assist MHJFB in
obtaining contracts for use of unused beds in the Facility,
subject to MHJFB's final review and approval of all bed users,
which approval will not be unreasonably withheld.
10.13 Liability Limitation. In accordance with the
Interlocal Agreement between the Counties, the liability of each
member County to the Contractor under the terms of this Agreement
shall be limited to that portion of each dollar of liability as
follows:
Adams .07407
Asotin .09259
Douglas .18519
Ferry .01852
Lincoln .01852
Pend Oreille .07407
Spokane .18519
Stevens .25926
Whitman .09259
Said liability shall include, but not be limited to, all payments
described in paragraphs 6.1 and 6.2.
10.14 Construction Completion. At the Commencement of
this Agreement, Contractor will be allowed to participate in
MHJFB's final Facility Construction Completion walk through and
punchlist review to provide comments and suggestions regarding
Facility operation.
10.15 MHJFB Contracts with the State of Washington. In
addition to the Lease, MHJFB has agreed to independently contract
with the State of Washington for the provision of utilities
including electricity, telephone, natural gas, water, sewer, and
garbage. CSC will independently obtain and be solely responsible
for snow removal, landscaping and lawn watering, fertilizing and
mowing. True and correct copies of each State - MHJFB Contract
are attached to this Agreement. Contractor agrees to comply with
all terms and conditions of said Contract(s), including all
responsibilities for payment thereunder and agrees to defend and
hold harmless MHJFB from all liability and responsibility
therefore. In the event of Contractor's breach of this paragraph,
MHJFB shall have, in addition to all other rights and remedies,
the right to pay any sums due the State of Washington under any
such contract. Upon payment, Contractor shall immediately repay
said sum to MHJFB, together with interest at 12%. If said sum
remains unpaid for a period of thirty days, MHJFB can elect any
right or remedy or may, in its discretion, deduct said sum from
any sums due Contractor under this Agreement. A true and correct
copy of the Interagency Agreement is attached to this Agreement.
10.16 Intergovernmental Agreements. MHJFB agrees to seek
inmates for the Facility in good faith and enter into
Intergovernmental Agreements therefore when the same are in the
best interests of the MHJFB, in its sole discretion.
10.17 Program Funding. In the event funding is obtained
by grant or grants obtained by MHJFB, Contractor agrees to reduce
cost dollar for dollar if MHJFB provides funding for certain
programs (i.e., substance abuse programs via grants).
10.18 Contractor Self-Audits. Contractor agrees to provide
MHJFB a copy of their semi-annual self accounting and operations
audit.
10.19 Disputes. To the extent permitted by law and except
as otherwise specified herein, any controversy arising out of
performance of this Contractor which the parties are unable to
resolve by mutual agreement, are to be submitted to a third party
arbitrator to be agreed upon by the parties. In the event the
parties hereto cannot agree upon an arbitrator, either party may
apply to Spokane County Superior Court solely for the appointment
of an arbitrator, which application shall be in accordance with
RCW Chapter 7.04. Upon appointment of an arbitrator, the
arbitrator shall advise the parties of the rules of procedure to
be followed with respect to hearing dates, submission of
documentation and testimony, and presentation of each party's
position. The arbitrator shall hear the matter within sixty (60)
days of appointment. The arbitrator will render a decision in
writing and serve it on the parties within thirty (30) days after
the controversy is submitted. Each decision shall be final with
respect to any further internal appeals. Either party may, if
dissatisfied with the decision, pursue litigation in a court of
competent jurisdiction.
ARTICLE XI - MHJFB ON-SITE LIAISON/PERFORMANCE EVALUATION
11.1 MHJFB On-site Liaison. MHJFB may appoint a MHJFB On-Site
Liaison for the Facility who shall work for and be paid by MHJFB.
The MHJFB On-Site Liaison will be the official liaison between
MHJFB and Contractor on all matters pertaining to this Agreement
and the Operations and Management Services provided hereunder. All
official communications concerning the matters covered by this
Agreement shall be managed according to policies to be adopted by
both parties.
11.2 MHJFB Use of Facility Space. Contractor shall make work
space available at the Facility to the MHJFB On-Site Liaison, at
no cost to MHJFB.
11.3 Access to Facilities. MHJFB On-Site Liaison and other
MHJFB and Counties staff appointed and approved by MHJFB shall have
access at all times to all areas of the Facility. Board
Members and the Commissioners of the Counties shall be admitted
into the Facility at anytime, as well as any other individuals
designated by MHJFB.
11.4 Right to Audit. MHJFB and other appropriate agencies
shall, subject to limitations provided by law with respect to
right to privacy, have the right to examine all records of
Contractor related to the Facility, including without limitation,
all financial books and records, maintenance records, employee
records, and Inmate records generated by Contractor, its
subcontractors or by other related parties in connection with
performance of this Management Agreement.
11.5 Self-Monitoring. During the Start-Up Period, Contractor
shall develop and submit to MHJFB for its approval a detail plan
illustrating how Contractor intends to monitor operations of the
Facility to ensure compliance with this Agreement.
11.6 Monitoring By MHJFB. MHJFB in coordination with the
MHJFB On-Site Liaison may, in its discretion, devise its own check
list or lists for monitoring the quality of Contractor's
performance with this Management Agreement and the ACA Standards,
applicable MHJFB Policy and Procedures and Contractor Policy and
Procedures and Contractor shall cooperate fully with MHJFB and the
MHJFB On-Site Liaison to supply or allow MHJFB to obtain the
requisite information needed to complete such checklists and to
assess the quality of Contractor's performance. Such monitoring
by MHJFB shall not relieve Contractor of any of its obligations
under this Agreement.
ARTICLE XII - CERTAIN PROHIBITION
12.1 Certain Prohibitions. Notwithstanding any other Section
of this Agreement, nothing contained herein shall be interpreted]
to grant to Contractor the final authority to do the following:
(a) calculate inmate release and parole eligibility dates;
(b) award good conduct time to inmates;
(c) approve inmates for work, medical, or temporary furloughs;
(d) place inmates in less restrictive custody than ordered by
the Counties or other users; provided, however, that this Section
shall not prevent Contractor from making recommendations to MHJFB
with respect to any of the above, it being understood that no
action may be taken by Contractor with respect to the above
without the prior written decision of MHJFB.
ARTICLE XIII - MISCELLANEOUS PROVISION
13.1 Binding Nature. This Management Agreement shall not be
binding upon the parties until it is approved and executed by both
parties. This Management Agreement, after properly approved and
executed by the parties, shall inure to the benefit of MHJFB and
Contractor and shall be binding upon MHJFB and Contractor and
their respective successors and assigns, subject to the
limitations set forth in this Management Agreement. In the event
MHJFB and Contractor and shall be binding upon MHJFB Contractor
and their respective successors and assigns, subject to the
limitations set forth in this Management Agreement. In the event
MHJFB is reorganized then this Agreement will remain in its effect
with its successors.
13.2 Invalidity and Severability. In the event that any
provision shall be null and void, the validity of the remaining
provisions of this Management Agreement shall not in anyway be
affected thereby.
13.3 Terminology and Definitions. All personal pronouns
unused in this Management Agreement, whether used in the
masculine, feminine, or neuter gender, shall include all other
genders; the singular shall include the plural and the plural
shall include the singular.
13.4 Prohibition Against Assignment. It is hereby agreed by
the parties that there will be no assignment or transfer of this
Management Agreement or any interest in this Management Agreement
without the written agreement of both parties, same and except
that additional members may be added or members may be deleted
from the Counties pursuant to the terms of the Interlocal
Agreement without Contractors consent.
13.5 Jurisdiction and Venue. Any and all suits for any and
every breach of this Management Agreement shall be instituted and
maintained in a Court of competent jurisdiction in the County of
Spokane, State of Washington.
13.6 Laws of Washington. This Management Agreement shall be
governed by and construed in accordance with the laws of the State
of Washington.
13.7 Notices. All notices called for or contemplated hereunder
shall be in writing and shall be deemed to have been duly
given when personally delivered or 48 hours after mailed to the
Authorized Representative of each party by certified mail, return
receipt requested, postage prepaid, addressed as set forth below.
MHJFB: Martin Hall Juvenile Facility Board
c/o Commissioner Deral Boleneus
Office of County Commissioners, Lincoln County
P.O. Box 366
Davenport, WA 99122
CONTRACTOR: Correctional Services Corporation
1819 Main Street, Suite 1000
Sarasota, FL 34236
Each party may rely on the above addresses until receipt of
any change thereof in writing by the other party.
13.8 RFP and Proposal Incorporation. The Request for
Proposals and the Contractor's Proposal are incorporated in full
within this Agreement so far as they are not inconsistent with
this Agreement.
13.9 Entire Agreement. This Management Agreement incorporates
all the agreement, covenants, and understanding between the
parties hereto concerning the subject matter hereof, and all such
covenants, agreements and understandings have been merged into
this written Management Agreement. No other prior agreement or
understandings, verbal or otherwise, of the parties or their
agents shall be valid or enforceable unless embodied in this
Management Agreement.
13.10 Amendment. No changes to this Management Agreement
shall be made except upon written agreement of both parties.
13.11 Confidentiality. Any confidential information
provided to or developed by Contractor in the performance of this
Management Agreement shall be kept confidential and shall not be
made available to any individual or organization by Contractor or
MHJFB without prior written approval of the other party.
13.12 Headings. The headings used herein are for convenience
or reference only and shall not constitute a part hereof, or
effect the construction of interpretation of this Management
Agreement.
13.13 Waiver. No failure on the part of any party to
exercise, and no delay in exercising, and no course of dealing
with respect to any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or in the
exercise of any other right. The remedies provided in this
Management Agreement are cumulative and not exclusive of any
remedies provided by law or in equity, except as expressly set
forth herein.
The parties do hereby enter into this Agreement the date first
above mentioned.
MHJFB:
MARTIN HALL JUVENILE FACILITY
BOARD, on behalf of the Counties of
Adams, Asotin, Douglas, Ferry, Pend Oreille,
Lincoln, Spokane, Stevens, and Whitman
By: /s/ Deral Boleneus
Deral Boleneus
Chair, MHJFB
CONTRACTOR:
CORRECTIONAL SERVICES CORPORATION,
a Florida Corporation
By: /s/ J.F. Slattery
Its President
State of Washington )
)ss.
County of Spokane )
I certify that I know or have satisfactory evidence that Deral
Boleneus is the person who appeared before me, and said person
acknowledged that he was authorized to sign this instrument as
Chair of MHJFB, and acknowledged it to be the free and voluntary
act of such entity, for the uses and purposes mentioned in the
instrument.
DATED: October 15, 1997.
/s/ Melissa Krum
Print Name: Melissa Krum
Notary Public in and for the State
of Washington, residing at Spokane
My Commission Expires: 7/10/99
