Construction/Installment Purchase Contract

EXHIBIT 10.114


Construction/Installment Purchase and Management Services Contract by and among CSC, the State of Nevada, Department of Human Resources, Nevada Real Property Corporation and Clark & Sullivan construcors -- Rite of Passage, Inc. dated February 12, 1999.


TABLE OF CONTENTS
-----------------


PAGE RECITALS................................................................ 1 ARTICLE 1............................................................... 3


DEFINITIONS............................................................ 3


ARTICLE 2............................................................... 7


TERM OF CONTRACT....................................................... 7


Period of Management Agreement....................................... 7
Period of Purchase Agreement......................................... 8


ARTICLE 3............................................................... 9


CONSTRUCTION / INSTALLMENT PURCHASE.................................... 9


Facility Design and Construction..................................... 9
Land Acquisition..................................................... 9
Cost, Financing and Purchase Price................................... 10
Installment Purchase Agreement (Lease-Purchase Financing Agreement).. 12
Equipment, Fixtures and Furnishings.................................. 32
Facility Capacity.................................................... 32
Additional Consideration............................................. 32
Lease Agreement...................................................... 32


ARTICLE 4............................................................... 33


FACILITY AND EQUIPMENT................................................. 33
Possession of Facility............................................... 33
Possession of Moveable Equipment..................................... 33
Additional Property.................................................. 33
SCD Inventory........................................................ 33
Maintenance.......................................................... 33
Access by State...................................................... 34
Expansion............................................................ 34
Replacement Equipment................................................ 34


ARTICLE 5............................................................... 35


OPERATION OF FACILITY.................................................. 35
General Duties and Obligations....................................... 35
Custody of Residents................................................. 35
Operational Plan..................................................... 37
Security And Control................................................. 38
Sanitation/Hygiene................................................... 38
Hygiene Items........................................................ 39
Classification....................................................... 39
Programs and Services................................................ 39
Work Programs........................................................ 44
Emergency............................................................ 44
Access to Courts and Hearings........................................ 44
Grievance Procedure.................................................. 44
Discipline........................................................... 45
Laundry.............................................................. 45
Transportation....................................................... 45
Mail................................................................. 45


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Telephones........................................................... 45
Food Service......................................................... 45
Library.............................................................. 45
Volunteer Program.................................................... 46
Visitation........................................................... 46
Revenue Programs..................................................... 46
Records Inspection, Audit & Ownership................................ 46
ACA and NCCHC Accreditation.......................................... 47
Telecommunications................................................... 47
Data Processing Services............................................. 47
Admission, Orientation, Personal Property and Release................ 47


ARTICLE 6............................................................... 47


EMPLOYEES OF INDEPENDENT CONTRACTOR.................................... 47
Independent Contractor............................................... 47
Personnel............................................................ 48
Training............................................................. 48
Vacancies............................................................ 49
Subcontracts and Assignment.......................................... 50
Use of Force......................................................... 50
Limited Right to Employ.............................................. 50


ARTICLE 7............................................................... 50


CONTRACT MONITORS...................................................... 50
Contract Monitor..................................................... 50
Construction Monitor Role............................................ 51


ARTICLE 8............................................................... 52


COMPENSATION AND ADJUSTMENTS........................................... 52
Start-up Period...................................................... 52
Per Diem Rate........................................................ 52
Payment.............................................................. 52
Billing.............................................................. 52
Per Diem Inflation Adjustments....................................... 52
Compensation for Additional Services................................. 53
Failure to Agree on Compensation for Additional Services............. 53
Utilities............................................................ 53
Performance Bond..................................................... 53
Fiscal Management.................................................... 54


ARTICLE 9............................................................... 54


INDEMNIFICATION AND INSURANCE.......................................... 54
Indemnification...................................................... 54
Insurance............................................................ 54


BUILDER................................................................ 55
Workers' Compensation and Employer's Liability Insurance............. 55
Commercial General Liability Insurance............................... 56
Business Automobile Liability Insurance.............................. 56
Umbrella or Excess Liability Insurance............................... 56
Performance & Payment Bond........................................... 57
Builders Risk Insurance.............................................. 57
Boiler & Machinery Insurance......................................... 58


MANAGEMENT CONTRACTOR.................................................. 58
Workers' Compensation and Employer's Liability Insurance............. 58
Commercial General Liability Insurance............................... 59
Professional Liability Insurance..................................... 59


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Umbrella or Excess Liability Insurance............................... 60
Performance Bond..................................................... 60
Commercial Property & Business Interruption Insurance................ 60
Boiler & Machinery Insurance......................................... 61
General Requirements................................................. 61
Evidence of Insurance................................................ 62
Subcontractor Insurance.............................................. 63
Defense/immunity..................................................... 63
Notice of Claims..................................................... 64


ARTICLE 10.............................................................. 64


DEFAULT AND TERMINATION................................................ 64
Default or Termination............................................... 64
Notice............................................................. 64
State Termination Without Cause.................................... 64
State Non-appropriation Without Cause.............................. 64
State Immediate Termination for Cause.............................. 64
Cause Termination for an Event of Default.......................... 65
Time to Cure......................................................... 65
Force Majeure ....................................................... 66
Remedy for Default or Termination.................................... 66
Waiver............................................................... 66


ARTICLE 11.............................................................. 66


DISPUTES............................................................... 66
Dispute Resolution................................................... 66


ARTICLE 12.............................................................. 67


MISCELLANEOUS.......................................................... 67
Non-discrimination................................................... 67
Binding Nature....................................................... 67
Invalidity and Severability.......................................... 67
Prohibition Against Assignment....................................... 67
Counterparts......................................................... 67
Interpretation....................................................... 67
Terminology and Definitions.......................................... 68
Venue................................................................ 68
Release.............................................................. 68
Amendment............................................................ 68
Scope of Contract.................................................... 68
Jurisdiction......................................................... 68
Laws of Nevada....................................................... 68
Liquidated Administrative Adjustments................................ 68
Government Obligations............................................... 69
Notices.............................................................. 69


EXHIBITS AND ATTACHMENTS................................................ 72


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SECURE JUVENILE TREATMENT FACILITY
CONSTRUCTION / INSTALLMENT PURCHASE
AND MANAGEMENT SERVICES CONTRACT


THIS CONSTRUCTION / INSTALLMENT PURCHASE AND MANAGEMENT SERVICES CONTRACT, is made on February 2, 1999, effective upon approval by the State Board of Examiners and satisfaction of all conditions expressed herein, by and between the STATE OF NEVADA, DEPARTMENTS OF ADMINISTRATION AND HUMAN RESOURCES, HEREINAFTER REFERRED TO AS "DOA", 209 East Musser Street, Blasdel Building, Room 200, Carson City, Nevada 89701, political subdivisions of the State of Nevada, the NEVADA REAL PROPERTY CORPORATION ("CORPORATION"), a Nevada non-profit corporation, as designated by the office of the State Treasurer, Capitol Building Capitol Complex, Carson City Nevada, 89710, CLARK & SULLIVAN CONSTRUCTORS RITE OF PASSAGE, INC., ("Builder"), a Nevada licensed building contractor design/build team, 905 Industrial Way, Sparks, Nevada 89431, and CORRECTIONAL SERVICES CORPORATION ("CONTRACTOR") a Florida for-profit corporation, 1819 Main Street, Suite 1000, Sarasota, Florida 34236, and incorporates by reference, whether created before, concurrent or after execution and approval, in the subsequent descending order of constructive intent: All EXHIBITS 1 THROUGH 8; and (ATTACHMENT A) the Contractor's RFP Response for sale, design/build and operations of the real property and proposed improvements dated June 30, 1998, and any amendments and/or best and final offer; (ATTACHMENT B) the Builder's best and final offer to develop and construct the Facility on Contractor's site and pursuant to Builder's construction plans, as amended; (ATTACHMENT C) the RFP Amendment(s): No. 1, dated April 27, 1998; No. 2, dated June 18, 1998; No. 3, dated May 22, 1998; (ATTACHMENT D) the RFP No. 1018 dated April 20, 1998; and, (ATTACHMENT E) the executed Indenture of Trust. This entire contract and its component parts shall be construed consistent with the legislative intent of Senate Bill 495 (1997 session). This contract includes jointly or severally enforceable component parts that are hereinafter referred to as: the Design, and Construction Agreement ("CONSTRUCTION AGREEMENT"); and the Installment Purchase Agreement ("PURCHASE AGREEMENT" OR "IP AGREEMENT"); the Facility Lease Agreement ("LEASE AGREEMENT"); and the Management Services Agreement ("MANAGEMENT AGREEMENT"), which collectively shall be referred to as ("AGREEMENT" OR "CONTRACT").


RECITALS


WHEREAS, DOA, pursuant to Senate Bill 495, 1997 Statutes of Nevada p.2738, as adopted by the 1997 Nevada State Legislature, has the authority to issue a Request for Proposal and enter into a Contract with a private vendor for construction, and/or operation and installment purchase of a secure juvenile correctional facility;


WHEREAS, DOA, Purchasing Division issued a Request for Proposal No. 1018 for Site Acquisition, Design, Construction and/or Operation of a Secure Juvenile Treatment Facility ("RFP") on April 20, 1998; and


WHEREAS, Contractor submitted a response to the RFP and has been selected to provide operation services defined herein; and Builder has agreed to develop and construct ON Contractor's site, utilizing the proposed Builder's construction plans, as amended;


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NOW, in consideration of the mutual promises and covenants contained herein, DOA Corporation, Builder and Contractor hereby agree as follows:


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ARTICLE 1
DEFINITIONS


ACA - means the American Correctional Association. - ---


ACA Standards - means the applicable Accreditation Standards for juvenile - ------------- correctional institutions existing upon the effective date of this Contract and as the same may be modified, amended or supplemented in the future, as published by the ACA.


Accreditation - means formal review and approval by agencies which promulgate - ------------- standards and guidelines relating to the delivery of correctional services in juvenile institutions. Specifically included are the accreditation programs of the American Correctional Association and the National Commission on Correctional Health Care.


Additional Services - means those additional operation and management services - ------------------- required to be furnished by Contractor pursuant to post-Contract effective date changes in Standards as defined in this Agreement, which cause a demonstrable increase in the annualized cost of operating and managing the Facility.


Agreement or Contract - means this contract, together with all attachments and - --------------------- exhibits hereto, and all amendments and modifications hereto.


Architect - means the firm named in this Contract which employs or contracts the - --------- services of a legal resident registered architect of Nevada or an individual legal resident architect of Nevada. In the instance of a firm, the term "Architect" shall include the Project Architect.


Authorized Representative - means any person at the 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 or Chief Executive Officer. In the case of the State, the Director of the Department of Administration is hereby designated as its authorized representative at any time, the Director may designate any additional person(s) as its authorized representative(s) by delivering to Contractor a written designation signed by the Director. Such designation shall remain effective until revoked in writing by the Director.


Biennium - means a State legislative appropriation period of two (2) fiscal - -------- years.


Board - means the Board of Examiners. - -----


Case Worker - means a caseworker and is also known as case manager or social - ----------- worker. The minimum requirements for a caseworker include graduation from a two- year masters level program in social work or counseling and guidance.


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Case Work Supervisor - means the supervisor of case workers must be licensed by - -------------------- the State of Nevada to provide professional therapy; e.g. Licensed Clinical Social Worker, Clinical Psychologist.


Codes - means all federal, state and local codes applicable to the Facility. - -----


Construction Monitor - means the person designated by the State who will be the - -------------------- official liaison between the State and Contractor on all matters pertaining to the design and construction of the Facility.


Contract Monitor - means the person designated by the State who will be the - ---------------- official liaison between State and Contractor on all matters pertaining to auditing and reporting regarding Contractor's compliance with the terms of this Management Agreement.


Court Orders - mean 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 operations, management or maintenance of the Facility and relate to the care and custody of Residents.


Critical Post - means a Post that is of particular concern due to Facility - ------------- security or safety to the Residents or staff. Each such Post shall be set forth in the Operational Plan and the Staffing Pattern.


Deadly Force - means the use of force which may reasonably result in death or - ------------ serious injury. It shall be construed consistent with ACA Standards.


Debt Service - means the required payments towards the retirement of the public - ------------ debt created under a Trust Indenture (as defined in Section 3.4) to finance the construction, acquisition, lease and installment purchase of the Facility constructed, equipped and furnished pursuant to the Construction / Installment Purchase Agreement, which total amount may not exceed the debt authorized by SB 495.


Direct Care Worker - means any position which has security, custody and direct - ------------------ contact with juveniles as the primary job responsibility. These positions are line level positions. Positions such as counselor, recreation worker, teacher, and supervisor are not considered to satisfy the requirement for direct care worker positions in meeting minimum staffing ratios.


Disability Requirements - means all programs and services must meet all - ----------------------- applicable State and federal requirements for access to and delivery of services to the disabled, including but not limited to the Americans with Disabilities Act and the Individuals with Disabilities Education Act.


Emergency - means any event where the life, health or safety of any Resident or - --------- the general public is threatened by circumstances that exist at the Facility and which circumstances appear, in the sole discretion of the State, to be out of the Contractor's ability to control.


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Event of Default - means a breach, bad faith cancellation or the persistent or - ---------------- repeated failure or refusal by the party to substantially fulfill any of its obligations under this Contract (the IP Agreement not included), unless excused or justified by this Agreement, Unforeseen Circumstances as defined in this Agreement, or other party's default ("Event of Default" is defined separately in Section 3.4).


Facility - means the Secure Juvenile Treatment Facility to be designed and - -------- constructed in southern Nevada including, without limitation, physical improvements upon the land paid for by either the DOA, Builder, Contractor or the Corporation, including without limitation preliminary and final updated construction plans, studies or surveys related thereto, the land and any easements, appurtenances or other rights to the use of the land, and any furnishings, fixtures, equipment, systems, machines, computers, software, data, files, buildings, vehicles, apparatus or equipment used in connection therewith.


Facility Capacity - means the number of Residents by cell, by dorm and overall - ----------------- capacity who can be located at the Facility as defined or identified in the final construction plans accepted by DOA.


Fiscal Year - means any of the one (1) year periods, beginning on July 1 and - ----------- ending on June 30, used for budgeting purposes by the State of Nevada.


Force Majeure - means the failure of performance of any of the terms and - ------------- conditions (except the IP agreement) resulting from acts of God, acts of public enemies, declared disaster or emergency orders of any kind of the Government of Nevada or the United States of America, or any of their departments, agencies or officials, or any civil or military authority ("Force Majeure" is defined separately in Section 3.4).


Grievance Procedure - means the method by which Residents may address complaints - ------------------- about the conditions of their incarceration to administrative staff.


IEP - means an Individual Education Plan. - ---


IP Agreement - means the Installment Purchase Agreement as defined in Article 3, - ------------ Section 3.4, including the signature page and the relevant exhibits attached to this contract.


In-Patient Hospital Costs - means those costs incurred upon and during admission - ------------------------- to a hospital licensed by the State of Nevada or another state.


ITP - means an Individual Treatment Plan. - ---


Minimum Contractor Payment - means the product of the Per Diem Rate times the - -------------------------- number of Residents as defined in this Management Agreement who are assigned to the Facility for any Resident Day(s) during the billing month according to the daily count sheet for each day of the billing month.


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NCCHC Standards - means the applicable Accreditation standards for the juvenile - --------------- correctional institutions specifically, and generally for correctional facility health care services, that exist upon the effective date of this Contract and as the same may be modified, amended or supplemented in the future, as published by the National Commission on Correctional Health Care.


Non-Deadly Force - means the use of force which a reasonable person would not - ---------------- expect to result in either death or serious bodily injury.


Operations and Management Services - means those services to be performed by the - ---------------------------------- Management Agreement Contractor subsequent to the Services Commencement Date, which identify the expectations, obligations and requirements of this Contract to provide the day-to-day operation, maintenance and management of the Facility, including the Residents housed therein.


Per Diem Rate - means the original Management Agreement negotiated per diem and - ------------- any subsequent adjustments thereto and shall have the meaning more fully set forth in Article 8, "Compensation and Adjustments."


Post - means a work location to be staffed according to an approved Staffing - ---- Pattern.


Resident - means any juvenile assigned by the State to the Facility for - -------- incarceration or evaluation, pursuant to applicable laws, rules and regulations of the State of Nevada, or accepted under the State's policy and procedures for housing such juvenile. Resident shall include those accepted under contract between the State and another state, political subdivision or from the federal government.


Resident Day - means the basis for management services billing and is further - ------------ defined as each calendar day, or part thereof, during which a Resident is assigned to the Facility and which Resident is counted as present during ...