#1PUBLIC FINANCE AUTHORITY $849,100,000* Senior Secured Private Activity Revenue Bonds ALABAMA DEPARTMENT OF CORRECTIONS FACILITIES PROJECT $633,500,000* Series 2021A Sponsor: CoreCivic Inc. Government Real Estate Solutions of Alabama Holdings LLC (Borrower) Government Real Estate Solutions of Central Alabama LLC (Elmore County Lessor) Government Real Estate Solutions of South Alabama LLC (Escambia County Lessor) Investor Presentation *- Preliminary, subject to change March 31st, 2021#2Disclaimer If you have been invited to participate in this electronic roadshow, you should already have been provided with a copy of the Preliminary Official Statement dated March 31, 2021 relating to the Public Finance Authority's (the "Issuer" or "PFA") Senior Secured Taxable Private Activity Revenue Bonds (Alabama Department of Corrections Facilities Project) Series 2021A (the "Bonds") issued on behalf of Government Real Estate Solutions of Alabama Holdings LLC (the "Borrower" or "Holdco"). This electronic roadshow must be read in conjunction with the Preliminary Official Statement, including all information incorporated therein by reference. Investment decisions relating to the Bonds should only be based upon the final Official Statement when available. Neither the provision of access to the electronic roadshow nor the posting of the Preliminary Official Statement constitutes an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds described in the roadshow and the Preliminary Official Statement in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The Bonds described in the roadshow and the Preliminary Official Statement will not be offered or sold, whether directly or indirectly, other than to legal entities who may receive such offer or sale under applicable law. Offers to purchase the Bonds may only be made through a registered broker-dealer. By electronically accessing the roadshow or the Preliminary Official Statement, you acknowledge that you understand and agree to the provisions of this page and also agree that the Preliminary Official Statement consists of the document available on this website in its entirety. Certain statements contained in this electronic roadshow do not reflect historical facts but represent forecasts and "forward-looking statements." These statements are based upon a number of assumptions and estimates that are subject to significant uncertainties, many of which are beyond the control of the. Company In this respect, the words "estimates," "projects," "anticipates," "expects," "intends,” “believes" and similar expressions are intended to identify forward-looking statements. All estimates, projections, expectations, intentions, forecasts, assumptions, expressions of opinions, estimates and other forward-looking statements are expressly qualified in their entirety by this cautionary statement: actual results may differ materially from those expressed or implied by forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those implied by such forward-looking statements. Factors that may cause actual results to differ materially are described in the CERTAIN INVESTMENT CONSIDERATIONS section of the Preliminary Official Statement. All investors are strongly recommended to consult the CERTAIN INVESTMENT CONSIDERATIONS section of the Preliminary Official Statement before making any investment decisions. This electronic roadshow is provided "as is" and neither the Issuer, the Borrower nor the Initial Purchasers makes any representations or warranties as to the accuracy, adequacy, completeness or appropriateness for any particular purpose of any information in the roadshow and expressly disclaims liability for any errors and omissions therein and for any damages whatsoever whether arising out of or in connection with your use of, reliance upon, or acting or forbearing to act upon, any information in the roadshow. This paragraph shall apply to the extent permitted by law. THE PRINTING, COPYING, DOWNLOADING, OR DISTRIBUTION OF ANY ROADSHOW MATERIAL IS NOT PERMITTED.#3Offering Summary Issuer: Borrower: Project: Par Amount: Offering: Interest: Amortization / Final Maturity: Public Finance Authority ("PFA") Government Real Estate Solutions of Alabama Holdings LLC ("HoldCo") Alabama Department of Corrections ("ADOC") Facilities Project Approximately $633.5 million* Rule 144A, Qualified Institutional Buyers (U.S.); Regulation S (International) Fixed-rate, taxable, payable semi-annually commencing on October 1, 2021 The bonds begin amortizing in 2025 and have a final maturity in 2054 Rating: Expected to be rated by (_ Outlook) Security: Reserves: Other: * Preliminary, subject to change The Series 2021A Bonds and Series 2021B Bonds (together the "Bonds") will be payable from loan repayments by the Borrower to PFA. The Bonds will be payable from and secured by the Trust Estate established under the Indenture. In addition, the Bonds will be payable from and secured by a lien on and security interest in the Bondholder Collateral of the Borrower held by KeyBank National Association, as collateral agent. Project Revenues will consist of Lease Payments received from ADOC pursuant to the Lease Agreements; the obligation of ADOC to make such Lease Payments is subject to appropriation by the State of Alabama Legislature. Debt Service Reserve Account & Life Cycle Work Reserve Account Concurrent with the Series 2021A issue, PFA may issue approximately $215.6 million* of Series 2021B to be privately placed pursuant to Section 4(a)(2) 1#4CoreCivic Team Damon T. Hininger* President & Chief Executive Officer Roles and sample projects: • Damon T. Hininger was named President and Chief Executive Officer in August 2009 after serving in various capacities throughout the company, both at CoreCivic facilities and the company's headquarters Lucibeth Mayberry* Executive Vice President, Real Estate Roles and sample projects: ⚫ Lucibeth Mayberry was named Executive Vice President, Real Estate, in May 2015 after having served as Senior Vice President, Real Estate ⚫ Ms. Mayberry joined CoreCivic in May 2003 as Senior Director, State Customer Relations David Garfinkle* Executive Vice President and Chief Financial Officer Roles and sample projects: ⚫ David Garfinkle was named Executive Vice President and Chief Financial Officer as of May 2014 • Mr. Garfinkle joined CoreCivic in February 2001 Alex Sherling Managing Director Roles and sample projects: • Alex Sherling was named Managing Director of Treasury in December 2016 ⚫ Mr. Sherling joined CoreCivic in November of 2013 as Senior Director of Pricing & Valuation * Presenting team members 2#5Table of Contents I. Project Background & Overview II. Key Project Parties III. Appropriation Overview IV. Facility Lease Overview and Key Credit Considerations V. Finance Plan Overview VI. Appendix 4 7 12 14 24 725 17 3#6Overview of the Alabama Correctional Facilities Overview & History • ADOC currently has 15 major correctional facilities, many of which have capacity and staffing challenges and are under federal remedial order to address prison conditions, particularly relating to healthcare Over the last two years, ADOC has conducted a procurement for three new correctional facilities to replace the majority of the State's existing prison capacity, which is in poor condition and unsafe for both staff and residents. The department will subsequently lease and operate the new facilities. This Project includes the land acquisition, development, design, construction, finance and maintenance of two of the three new ADOC correctional facilities Each new facility will be designed to accommodate facility support functions and operational components being provided by ADOC such as: security and control, inmate housing, healthcare services, program services, administration, staff services, receiving and release, reception and visiting, food services, laundry, and warehouse Map of Current Facilities Alabama Department of Corrections Facilities Map Lauderdale Limestone CF Limestone Jackson Madhon Colbert Lawrence North Alabama WR/CWC Morgan Franklin Marshall De Kalb Hamilton WR/ CWC- Marion Winston Cullman Hamilton A&I Cherokee William E. Donaldson CF Etowah St. Clair CF Blount Walker Childersburg WR/CWC Fayette St. Clair hous Laman Jefferson Cleburne Alex City WR/CWC Birmingham (WF) WR/CWC Talladega Pickens Tuscalooss Frank Lee WR/CWC Shelby Randolph Bibb CF Staton/Elmore ABAR Tutwiler WF/Annex Greene Coosa Chamber 7 Chilton Corrections Academy Sumar Camden WR/CWC- Choctaw Washington Holman CF Fountain CF The New Facilities will facilitate ADOC's Strategic Plan to reduce recidivism and provide long-term safety for both inmates and staff Loxley WR/CWC Mobile WR/CWC- Mobile Elmore Autaug Dala Marango Lowndes Wilcox Clarke Monroe Conecuh Baldwin Escambia acon Russell Red Eagle CWC Central Office Kilby CF Montgomery WF Bullock CF Barbour Pike Buder Easterling CF Ventress CF Crenshaw Henry Coffee Dale Elba WR/CWC Covington Houston Geneva Alabama Department of Corrections 15 Major Correctional Facilities 11 Work Release (WR)/ Community Work Centers (CWC) Alabama Corrections Academy Central Office 4#7Project Objectives • • • . • Overview ADOC is the agency responsible for the care, custody, and control of convicted felons in the State of Alabama. ADOC's mission is to provide public safety through the safe and secure confinement, rehabilitation, and successful re-entry of offenders ADOC's overall goal for these correctional Facilities is to provide safe, secure, and constitutional incarceration in newly constructed facilities ADOC is seeking facilities with a 50-year design life, so as to maximize ADOC's occupancy of the new facilities over a long-term lease with minimal interruption Current Status and Impact of New Facilities The State's prisons are subject to two class action lawsuits and two US Department of Justice finding letters, as described in the offering materials The State of Alabama has taken action and developed a comprehensive plan to address the deficient conditions at its prisons A foundational element to the State's plan is to build three new correctional facilities to upgrade living conditions, provide a safer environment for both inmates and employees, provide access to on-site health care and mental health care, while enhancing support program infrastructure for the inmates The new facilities will enhance other elements of the plan, such as recruiting, training and retention of correctional officers and improved programing that facilitates reintegration into the community Facility Procurement Objectives ☑ ☑ Procuring high-quality Facilities that will conform to ADOC's program and Design Criteria, employ proven lifecycle and sustainability strategies, and fully support the intended use and operation of the Facilities (including indicated staffing and energy efficiency criteria) Establishing a collaborative relationship between ADOC and the Developer Team so that the Developer is able to deliver a well- designed, well-built Facility for occupancy within ADOC's budget and timeframe Minimizing adverse impacts to ADOC operations through close coordination with ADOC and its stakeholders Encouraging Developer maintenance and promotion of safe, injury-free worksites and workplaces ✓ Encouraging Developer maximization of local participation in the Project(s) and assembly of a Developer Team that reflects the racial, gender, geographic, urban/rural, and economic diversity of the State Ensuring quality ongoing maintenance of the Facilities in accordance with ADOC's performance standards, including sufficient maintenance staffing and energy efficiency and sustainability requirements 5#8Project Overview • In September 2020, CoreCivic was selected as the preferred developer for two of the three New Facilities, which includes the Elmore County and Escambia County Correctional Facilities, as described below Overview of New Facilities* Elmore County Correctional Facility Escambia County Correctional Facility Expected Costs and Timeline Payment Construction Timeline Estimated Construction Costs (subject to change) • The Facility will provide minimum-medium custody for ADOC's inmate population • This facility will be larger than the Escambia County Correctional Facility and contain ADOC's special services (e.g. medical, mental health, aged care, and inmate reception) The Facility will provide minimum-medium custody for ADOC's inmate population Lease payments from ADOC, subject to annual appropriations from the Alabama Legislature • Approximately 42 months Elmore County Correctional Facility: approximately $508.3 million Escambia County Correctional Facility: approximately $266.5 million Combined, the two New Facilities will provide approximately 7,000 beds for ADOC *There is a third facility that was awarded to another Developer. 6#9Key Project Parties CoreCivic DEPARTMENTO CORRECTIONS CADDELL DLR Group RN SYSTEMS DESIGN Government Real Estate Solutions of Alabama Holdings LLC (Borrower) Government Real Estate Solutions of Central Alabama, LLC (Lessor) Government Real Estate Solutions of South Alabama, LLC (Lessor) CoreCivic of Tennessee, LLC (Facility Maintenance Provider) State of Alabama, Alabama Department of Corrections (Lessee/Operator) Caddell Construction (Contractor) DLR Group (Engineer and Architect) R&N Systems Design (Systems Design) • • • • • CoreCivic is the Project Sponsor The Borrower, Government Real Estate Solutions of Alabama Holdings LLC will be 100% owned by CoreCivic The Lessors, Government Real Estate Solutions of Central Alabama, LLC and Government Real Estate Solutions of South Alabama, LLC, both of which will be 100% owned by the Borrower, will be the landlords and Lessors under its respective Lease Agreement and responsible for construction and maintenance of the Facilities Each Lessor has entered into a Lease Agreement with ADOC for its respective facility CoreCivic of Tennessee will provide maintenance and life cycle services pursuant to a Facilities Management Agreement ADOC is a department of the State of Alabama and is currently responsible for 15 correctional facilities throughout the State ADOC will be responsible for the day-to-day operations of the facilities, including managing inmates, employees, and personnel Caddell was hired by the Borrower as the design-build contractor to design and build the facilities Caddell is an Alabama based construction contractor with operations world-wide within many sectors including government, commercial, industrial, power, and manufacturing projects DLR Group has been hired by Caddell as a subcontractor to provide architecture and engineering services DLR Group has focused on the planning and design of correctional facilities for over 40 years; having completed 100+ corrections projects in the past 10 years and 30+ correctional reconstruction projects R&N has been hired by Caddell as a subcontractor to provide systems design services R&N is a Tennessee-based systems design company Previously completed several projects in the State of Alabama 7#10CoreCivic Overview Overview and Key Financials • CoreCivic Established in 1983, CoreCivic is a diversified government solutions provider. We believe we are the largest private owner of correctional real estate utilized by U.S. government agencies, managing nearly 18mm sq. ft. of real estate assets CoreCivic provides a broad range of solutions and offers three core business operations: 1 3 CoreCivic Safety: A national leader in corrections and detention management Owns 42 facilities (63,628 beds) and 5 managed-only (6,375 beds) CoreCivic Properties: Offers a wide range of mission-critical government real estate solutions Currently leasing: 4 correctional facilities, 6 residential re-entry centers, and 5 properties to the federal or state government agencies (2.7mm sq. ft. of real estate) CoreCivic Community: - Completes a spectrum of correctional services by providing needed residential reentry facilities and non-residential services primarily to states and localities Operates 26 residential re-entry centers (5,049 beds) Source: CoreCivic public disclosures 8#11CoreCivic is Experienced Delivering Turnkey Correctional Facilities for Lease to State Governments • California City Correctional Center In 2013, CoreCivic entered into a lease agreement with the California Department of Corrections and Rehabilitation (CDCR) for the renovation and maintenance of the 2,560 bed California Correctional Facility The initial renovations included additional office space, hardening the segregation unit, addition of gun towers, and a full facility upgrade; all of these projects were delivered on time and within budget As a result of the successful renovation, CDCR expanded CoreCivic's responsibilities and requested that it install new camera systems and build a new standalone medical unit in 2015 • North Fork Correctional Facility In 2016, CoreCivic entered into a lease agreement with the Oklahoma Department of Corrections (ODC) for the 2,400 bed CoreCivic- owned North Fork Correctional Facility Under this lease, CoreCivic performed over a half- million dollars in upgrades to prepare the facility for use by the State of Oklahoma Similar to the Facility Lease with ADOC, CoreCivic is responsible for repairs and maintenance to the facility, allowing critical budget certainty for the State • Lansing Correctional Center In 2018, CoreCivic entered into a lease agreement with the Kansas Department of Corrections (KDOC) for the construction, renovation and maintenance of the 2,432 bed Lansing Correctional Facility ➤ The project includes two rebuilt housing facilities in the Central Unit that includes medical services, food services, a spiritual area, staff break rooms, facility maintenance and an exterior service yard Also includes improvements to utility systems, parking, security system, and optimized unit layout In January 2020, CoreCivic completed the construction of the Lansing Correctional Facility on time and ahead of budget STATE OF CALIFORNIA CALIFORNIA CITY CORRECTIONAL FACILITY WARDEN JOHN GARZA 22844 VIRGINIA BLVD CALIFORNIA CITY, CA 93505 LANSING CORRECTIONAL FACILITY In December 2019, CoreCivic entered into a new lease agreement with the Kentucky Department of Corrections for the Company's 656-bed Southeast Correctional Complex, the company's fourth lease agreement for our correctional assets Source: CoreCivic public disclosures 9#12Alabama Department of Corrections ADOC Overview • ADOC operates the State of Alabama's correctional facilities and is headquartered in Montgomery, Alabama • ADOC currently operates 15 major correctional facility sites ADOC Strategic Goals Total DEPARTMENT OF CORRECTIONS Total Inmate Population Population 20,953 Capacity 18,205 . . . . = Staffing to be fully staffed with high-quality professionals working in the security, medical and other non-security fields; recruit, retain and grow ADOC's workforce through better compensation and improved workplace conditions Infrastructure - to upgrade ADOC infrastructure to improve the working conditions for staff and living conditions for the offenders by pursuing short and medium-term repairs and the construction of new facilities Programming - to improve the delivery of research and evidence-based rehabilitative programs Culture - to improve the professional operating environment within ADOC facilities Relationship to the State of Alabama . • • ADOC is a department of the State of Alabama and not a separate legal entity, indicating that obligations of ADOC are obligations of the State of Alabama. All of ADOC's revenues are provided by the State through yearly appropriations This will include budgeting for all of ADOC's obligations under the new Lease Agreements ADOC's budget appropriations are expected to include funds for all correctional facilities operated by ADOC (will include the three new correctional facilities when operational) Although ADOC is not independently rated, its relationship to the State of Alabama makes it a highly-rated counterparty for the Project Overview of correctional facilities under ADOC management¹ Facility Bed Count Current Capacity Limestone Correctional Facility 2,456 114.4% Bibb Correctional Facility 1,823 181.3% Bullock Correctional Facility 1,573 158.7% Kilby Correctional Facility 1,447 216.4% Donaldson Correctional Facility 1,438 143.4% Staton Correctional Facility Ventress Correctional Facility Fountain Correctional Facility Elmore Correctional Facility Easterling Correctional Facility 1,399 264.0% 1,334 151.8% 1,268 140.3% 1,180 180.7% 1,110 159.7% St. Clair Correctional Facility Tutwiler Prison for Women Holman Correctional Facility 1,075 108.0% 964 102.4% 840 25.3%² Hamilton Aged and Infirm Center 298 170.7% Source: Alabama Department of Corrections Monthly Statistical Report; January 2021.pdf (state.al.us) Alabama Department of Corrections Annual Report, Fiscal Year 2019: 2019 Annual Report.pdf (state.al.us) (1)- In addition, ADOC also manages Montgomery Women's Facility (2)- Due to deteriorating facility condition and severe overcrowding, Holman Correctional Facility is running at limited capacity 10#13Caddell Construction Co. (DE), LLC Overview Company Overview • • • • • Founded in 1983, Caddell has a broad portfolio of Government, Commercial, and Industrial/Power / Manufacturing projects Caddell is headquartered in Montgomery, Alabama with over 3000 employees, and has worked on over $11 billion of projects worldwide Caddell has worked with CoreCivic on two completed projects and is currently working with CoreCivic on 8 projects in the preconstruction phase Caddell has been working with correctional facilities since 1991, and their portfolio includes over $1.8 billion in contracts and over 12.3 million square feet of facilities Caddell's justice portfolio has more than 15 large multi-building correctional facility design build projects similar to the Alabama Correctional Facility project Caddell has completed two projects with DLR and one with R&N, in addition to 8 projects with both subcontractors currently in preconstruction Map of Offices Office location CADDELL Bentonville, Arkansas Woodstock, Georgia Montgomery, Alabama Caddell operates 4 offices and has over 100 employees throughout the United States Select projects Caddell has completed Project Santa Clara County Hall of Justice Aliceville Federal Correction Institution Escambia County Correctional Facility Jackson County Adult Detention Center U.S. Penitentiary Location San Jose, CA Aliceville, AL Pensacola, FL Pascagoula, MS Yazoo City, MS McCreary County, KY Power Systems Testing and Development Wilsonville, AL McCreary County Penitentiary Туре Square Feet Construction 325,000 Design/Build 650,000 Design/Build 300,000 General Contractor 127,000 Design/Build 780,000 Design/Build 533,000 Construction Confidential 11#14Appropriation Process . • • • . • Overview of State of Alabama Appropriations Process The State's annual Appropriation Acts include legally adopted budgets for two budgetary fund groups, the General Fund Budget and the Education Trust Fund ADOC receives appropriations as program or block appropriations, which are not designated to specific line items or projects < < Thus, ADOC's Commissioner generally has large discretion to determine where funds will be expended Constitutional and statutory limits require the State to maintain a balanced budget The State's appropriations process does not face unusual administrative / political risks likely to disrupt appropriations; it further benefits from dedicated payment sources, recent build-up of budgetary reserves and $3.3 billion of internal liquidity support from the Alabama Trust Fund ("ATF") For FY 2020, the overall State General Fund expenditure budget was increased to $2.3 billion from $2.2 billion received in FY 2019 For FY 2020, ADOC received a budgetary increase of approximately $53 million to $540 million in General Fund appropriations, more than 10% over FY 2019 budgeted General Fund Appropriations ADOC receives annual appropriations from the State to fund its activities; rental payments, including those contemplated under the Lease Agreements, are subject to appropriation from the State Legislature; ADOC is subject to market standard 'best efforts' commitment to seek appropriations from the State Legislature Pursuant to the Lease Agreement, ADOC covenants to cause the State Legislature to appropriate amounts sufficient to make lease payments Detail Schedule of Budget and Actual Expenditures ADOC Appropriations, Non-GAAP, Budget Basis (Fiscal Year Ended September 30, 2019) General Fund Earmarked Funds Total Administration Service and Logistical Support Budget 24,976 Actual 24,971 Variance Budget Actual Variance Budget 5 24,976 Correctional Industries 25,928 14,836 11,092 25,928 Actual Variance 24,971 14,836 5 11,092 Institutional Service Corrections 461,860 443,318 18,542 54,896 31,792 23,104 516,756 475,110 41,646 Total 486,836 468,289 18,547 80,824 46,628 34,196 567,660 514,917 52,743 Source: State of Alabama, Comprehensive Annual Financial Report, Fiscal Year Ended September 30, 2019 12#15Non-Appropriation Risk Mitigants Essential Asset • Together the Facilities in aggregate will hold approximately 40-50% of the State's rated bed capacity; and ADOC is under pressure, as a result of litigation, to move inmates to more modern facilities with better services Cross Non- Appropriation Vacating of Premises Non- Substitution • • • • Both facilities must remain funded concurrently, as a Non-Appropriation Event for either facility will be considered a Non-Appropriation Event of both Leases and constitute a Pre-Payment Event for both Upon a Non-Appropriation Event occurring on June 30th and not being cured by October 1st, the start of ADOC's fiscal year, ADOC will have 180 days to vacate the Premises If ADOC cures by the following March 30th, the vacation process halts and ADOC can stay in the Facility, although there is a limit on how many times the State can cure a Non-Appropriation Event (any cure must appropriate funds for missed year's payments and next year's payments) ADOC may not develop or otherwise occupy a different facility which would serve the same purpose of, or materially reduce their utilization of the facilities being built as part of this project ADOC may only begin exploring alternatives in the last 5 years of the Lease and occupancy of a new facility may not begin sooner than 6 months prior to the expiration of the Occupancy Period Block Appropriations • . The Legislature historically has appropriated funds as a block grant to ADOC giving ADOC discretion on how to spend the funds Based upon historic practices the Lease Payments should not be a line item for the Governor to strike Prioritization of Payments • ADOC has discretion over how to spend the appropriations provided by the Legislature and has covenanted in the Lease to prioritize Lease Payments above all other obligations to the extent permitted by law 13#16Project Structure 144A Investors Bond Indenture Public Finance Authority Intercompany Loan Loan Agreement Government Real Estate Solutions of Alabama Holdings LLC (Borrower) State of Alabama ALABAMA 4(a)(2) Investors Intercompany Loan Facilities Management Agreement Government Real Estate Solutions of Central Alabama, LLC1 1 Facility Lease GREATS TSEAL PARTMENT Lease Payment Facility Lease Lease Payment Government Real Estate Solutions of South Alabama, LLC1 Facilities Management Agreement Operates facility CORRECTIONS Operates facility CoreCivic of Elmore County Tennessee, LLC Maintains Facility CoreCivic Designs & Escambia County Builds facilities Correctional Facility Construction Contract Payments CADDELL Correctional Facility Construction Contract Payments Maintains Facility CoreCivic of Tennessee, LLC CoreCivic Indicates ownership / control over Indicates a contract Indicates a service is being provided Indicates a cash flow DLR Group RN Architect, Engineer, and Systems Subcontractors 3 SYSTEMS DESIGN Facility Management Agreement Maintenance Contract between CoreCivic and Lessor to provide routine maintenance and life cycle maintenance services 1 Facility Lease 2 Construction Contract Agreement between ADOC and the Lessors outlining scope of obligations . Construction Contract between the ProjectCos and Caddell for all construction obligations under Facility Lease (1)- 100% owned through a pass-through HoldCo subsidiary 4 • Subcontractors Subcontracting agreements between Caddell and R&N Systems Design & DLR Group • R&N Systems Design & DLR Group obligations: provide architecture, engineering, and systems design services Caddell: pay R&N Systems Design & DLR Group for their services 14#17Facility Lease Overview Overview of Facility Lease Lessors: Lessee: Term: Equity Contribution: Targeted DSCR: Permitted Use: Payment Frequency: Lease Payments: Rent Deductions and Abatements: Termination and Pre-Payment: Events of Default (Lessee): Events of Default (Lessor)*: End of Lease Work Requirements: Relief Events: Elmore County Facility: Government Real Estate Solutions of Central Alabama LLC, a wholly-owned subsidiary of the Borrower Escambia County Facility: Government Real Estate Solutions of South Alabama LLC, a wholly-owned subsidiary of the Borrower Alabama Department of Corrections Construction + 30 years Approximately $77 million, or at least 8% of total Project Costs Minimum 1.20x Solely as a correctional facility operated by the Lessee Monthly Lease Payments Lease Payments begin upon Substantial Completion: • Lease Payment equals (a) Maximum Annual Lease Payment minus (b) Lease Payment deductions and abatements for performance failures ⚫ If Lessor fails to perform or is otherwise noncompliant pursuant to the term of the Lease, the Lessee will have the right to abate a portion of the payment, which will be capped so as to protect payment for debt service • • Standard debt prepayment provisions to apply (Lessor Default, Lessee Default) plus Borrower has the right to terminate if the State Legislature fails to appropriate funds (Note - No termination for convenience) Upon prepayment event Lessor will be entitled to a Pre-Payment Amount which will, in all cases including Lessor Default, be sufficient to repay 100% of all Lessor Outstanding Debt obligations, including make-whole, subject to appropriation by the Alabama Legislature Failure to make payments to the Lessor when due, unless the failure to make payment is a result of the failure of the state legislature to appropriate the necessary funds or the fault of a third party (such Non-Appropriation Event being a separate Pre-Payment Event) Breach of a representation or warranty in any material respect or any materially inaccurate representation or warranty • Failure to commence construction work within thirty (30) days after the issuance of the notice to proceed • • Failure to achieve Substantial Completion by the Long Stop Date Violation of restrictions on transfer of the Lease, including restrictions on change in control Any other material breach of the Lease • The Leases for each facility will be cross-defaulted for Lessee payment defaults ⚫ Failure to appropriate Lease Payments for one lease will trigger an event of non- appropriation for both Leases Insolvency/bankruptcy of the Lessor ⚫ Discontinuation of the construction work for a continuous or extended period of time to be agreed with Lessor and set forth in the Lease • Failure to comply with any material governmental approval in any material respect The accumulation of a certain number of noncompliance events To the extent the parties agree to extend the Lease beyond the initial term, the parties will at that time negotiate the extent of work required to be completed by end of the term If the parties are not able to negotiate the End of Lease Work, an extension of the Lease will not be approved by either party and Lessor will not be considered in default of its obligations Standard relief events include Force Majeure, strikes, injunction, unknown conditions, certain hazardous materials, uncooperative utility owner, change in law, discriminatory action, compliance with public order, condemnation/taking, vandalism, Lessee change, lessee-caused delay, Lessee breach and protest actions. Relief will be in the form of time and in some cases, compensation as determined by the specific Relief Event - Full list of Lessor Events of Default detailed in Exhibit 16 Table 1 of the Project Agreement - See the Preliminary Official Statement, including Appendix D, for more detailed Lease Information 15#18Key Credit Considerations Credit Highlights Strength of 1 Counterparty and Lease Essentiality of 2 Facilities • • • • • 3 Cash flow Certainty • Strength of Sponsor & Project Parties 5 High Quality Asset Advancement of • 6 ESG Objectives • • • 7 Construction Risk • Source: State of Alabama, Executive Budget 2020 ADOC's obligations are expected to be fully funded through annual appropriations, budgeted for and provided by the State of Alabama The Project's Maximum Annual Lease Payment represents a modest portion of the State of Alabama's $2.3 billion approved appropriations from the State General Fund For FY 2020, ADOC received a budgetary increase of approximately $53 million to $540 million in General Fund appropriations, more than 10% over FY 2019 budgeted General Fund Appropriations Lease terms provide significant protections for lenders including protection from payment performance deductions and repayment of 100% of all Lessor Outstanding Debt obligations, including make-whole, in all situations including Lessor Default The State's three new facilities will replace up to 11 existing ADOC facilities while ADOC is expected to refurbish two to four other facilities CoreCivic's facilities will comprise 40-50% of the State's rated capacity after the new facilities are constructed and existing facilities are refurbished Lease payments are made by ADOC based on availability of project and lessor performance Deductions for lessor performance failures will be capped in order to protect debt service CoreCivic believes itself to be the largest private prison owner in the U.S., owning or managing approximately 73 correctional, detention, and re-entry facilities CoreCivic has enlisted industry leading partners Caddell, DLR Group, and R&N Systems Design, all of whom have extensive experience building correctional facilities The newly constructed correctional facilities will employ state of the art technology resulting in a safe, highly efficient, and cost-effective correctional facility The Project will materially improve the quality of life for inmates with improved mental health, physical health, education, rehabilitation programs, and religious services as well as improved efficiency, resiliency, and sustainability of the prison facilities Straight forward construction on "clean" sites Caddell is a highly experienced contractor with prior experience constructing correctional facilities as well as working with CoreCivic ADOC's prepayment amount following a lease default will cover 100% of all lessor secured debt obligations (including make whole) in the event of a failure to achieve Substantial Completion by the Long Stop Date 16#19Terms and Conditions for Senior Secured Debt Senior Secured Debt Borrower: Lessors: Bond Issuer: Bond Type: Use of Proceeds: Ranking: Estimated Construction Costs*: Tenor*: Principal Payments*: Optional Redemption: Extraordinary Redemption: Security: Restricted Payment Conditions: Debt Service Reserve: Construction Security: Life Cycle Work Reserve Account: * Preliminary, subject to change Government Real Estate Solutions of Alabama Holdings LLC Government Real Estate Solutions of Central AL LLC Government Real Estate Solutions of South AL LLC Public Finance Authority Taxable Private Activity Revenue Bonds to be offered and sold in compliance with Rule 144A and/or privately placed taxable Bonds with institutional investors in compliance with Section 4(a)(2) of the Securities Act Proceeds will be used to fund Project Costs, capitalized interest, debt service reserve account, and retainage, among other things Senior secured payable from net revenues after payment for routine maintenance and major maintenance Elmore County Correctional Facility: approximately $508.3 million Escambia County Correctional Facility: approximately $266.5 million 33 years with 21-year average life Fully amortizing, with annual principal repayments with a minimum 1.20x Debt Service Coverage Ratio • Callable at any time at the make-whole price • Make-whole price is par plus the present value of the remaining principal and interest discounted at a rate of US Treasuries plus a spread to be determined at pricing • At make-whole price upon a Prepayment Event under the Lease Agreement, including a Prepayment Event caused by failure of the Project to achieve Substantial Completion The Series 2021A Bonds and Series 2021B Bonds (together the "Bonds") will be payable from loan repayments by the Borrower to PFA. The Bonds will be payable from and secured by the Trust Estate established under the Indenture. In addition, the Bonds will be payable from and secured by a lien on and security interest in the Bondholder Collateral of the Borrower held by KeyBank National Association, as collateral agent. Project Revenues will consist of Lease Payments received from ADOC pursuant to the Lease Agreements; the obligation of ADOC to make such Lease Payments is subject to appropriation by the State of Alabama Legislature. ⚫ No Default / Event of Default • All reserves are funded to required amounts • Occupancy Date shall have occurred ⚫ All capital contributions have been contributed pursuant to any Equity Funding Agreement ⚫ In the prior and future 12-month periods, Restricted Payments DSCR was 1.1x ⚫ Sufficient funds to remain available after distribution to pay the next principal and interest payment 6 months of principal and interest cash funded or backed by a letter of credit Usual and customary construction security package to include payment and performance bonds, liquidated damages, and retainage or other form of liquidity 3-year forward looking reserve account 17#20Cash Flow Waterfall During Maintenance Period Illustrative Summary Revenue Account 1 Routine Maintenance Account* 2 Lessor Expense Account 3 Ongoing Financing Fees Taxable Bonds Interest & Principal Payment Account Debt Service Reserve Account Replenishment Life Cycle Work Reserve Account** 5 6 7 Discretionary Capital Expenditures 8 Debt Service on Permitted Indebtedness 9 Restricted Payments Account & Distribution Account Considerations 1 Routine Maintenance Expenses and current Life Cycle Work not funded by the Life Cycle Work Reserve Account 2 Deposits to Lessor Expense Account, an amount equal to the aggregate amount of the Lessor Operating Expenses then due and payable or reasonably projected to be due 3 Repayment of fees, costs, expenses, or other amounts due under the Financing Documents as well as any on-going rating agency costs 4 1/12th of upcoming principal and 1/6th of upcoming interest on the Bonds 5 To repay any DSRA LC drawdowns or to cash fund DSRA 6 To fund the Life Cycle Work Reserve Account to the Life Cycle Work Required Amount 7 Payment of any discretionary and permissible capital expenditures 8 Payment of any scheduled interest and principal on any Permitted Indebtedness 9 Restricted payments (distributions) subject to traditional project finance conditions *In connection with any Monthly Funding Date, in the event that the amount of the related Monthly Lease Payment made by the Lessee under a Lease Agreement is less than the amount of the Monthly Lease Payment (without regard to any reduction or deduction provided for in the Lease Agreement) scheduled to be paid thereunder for the applicable Lease Month, the amount to be deposited in the Routine Maintenance Account on such Monthly Funding Date shall be reduced by the amount of such deficiency until the amounts required to be deposited into the Lessor Expense Account, the Taxable Bonds Interest Payment Account, Taxable Bond Principal Payment Account, the Debt Service Reserve Account and to pay ongoing financing costs for such Monthly Funding Date have been satisfied in full pursuant to the Waterfall. ** For purposes of calculating the Debt Service Coverage Ratio, required deposits into the Life Cycle Work Reserve Account, as well as amounts required to be deposited in the Routine Maintenance Account, the Lessor Expense Account and the payment of fees, expenses and other amounts required under the Financing Documents prior to the payment of debt service, are deducted from available Project Revenues when determining available Project Revenues for payment of debt service on the Bonds. Note: Simplification, refer to Collateral Agency and Security Agreement for full detail of cash flow waterfall 18#21* Preliminary, subject to change **Subject to change; anticipated to be at least 8% of total Project Costs Sources: 4(a)(2) Private Placement*: 144A Taxable Muni*: Equity**: Interest Income: Total: Preliminary Plan of Finance Sources and Uses During Construction Uses: Development Costs: 34,164 3.68% Elmore County Facility - D&C Costs: 496,845 53.57% Escambia County Facility - D&C Costs: 253,700 27.35% Routine Maintenance Costs: 4,023 0.43% $80 SPV & Insurance: 402 0.04% Interest during construction: 118,100 12.73% Millions $70 $60 $50 Financing Costs: 2,367 0.26% $40 Debt Service Reserve Account prefund: 15,925 1.72% $30 Life Cycle Work Reserve Account prefund: Equity LC Fees: 253 0.03% $20 1,665 0.18% $10 $0 Total: 927,444 100.00% Jan-2021 Apr-2021 215,600 23.25% $60 633,500 68.31% $50 $40 77,244 8.33% $30 1,100 0.12% $20 927,444 100.00% $10 $0 Jan-2021 Apr-2021 Jul-2021 Oct-2021 Sources During Construction Millions $80 $70 4(a)(2) Private Placement & 144A Taxable Muni Interest income ■ Equity Jan-2022 Apr-2022 Jul-2022 Oct-2022 Uses During Construction ■D&C Costs ■Routine Maintenance & SPV Costs ■DSRF, LCWRA ■Development costs Interest and Financing costs Taxes Jul-2021 Oct-2021 Jan-2022 Apr-2022 Jul-2022 Oct-2022 Jan-2023 Apr-2023 Jul-2023 Oct-2023 Jan-2024 Apr-2024 Jul-2024■ Oct-2024 19 Jan-2023 Apr-2023 Jul-2023 Oct-2023 Jan-2024 Apr-2024 Jul-2024 Oct-2024#22Millions Payment Mechanism & DSCR Payment Mechanism $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 2021 2023 DSCR & Cost Resiliency Cost Resiliency 200% 180% 160% 140% 120% 100% 80% 60% 40% --- Cost Resiliency1 ― DSCR 20% 0% Apr-2024 Oct-2026 Apr-2029 Oct-2031 Apr-2034 ■Fixed Lease Payment Indexed Lease Payment (1) Cost Resiliency refers to the maximum amount of operating period cost increases while still maintaining 1.0x debt service coverage Oct-2036 2.50x 2.00x 1.50x 1.00x 0.00x Apr-2039 Oct-2041 Apr-2044 Oct-2046 Apr-2049 Oct-2051 Apr-2054 0.50x DSCR 20 20#23Pro Forma Projections Operational Cash Flows 1-Jan-2024 31-Dec-2024 FY 2024 1-Jan-2025 31-Dec-2025 FY 2025 1-Jan-2026 1-Jan-2027 1-Jan-2028 31-Dec-2026 31-Dec-2028 FY 2026 FY 2028 31-Dec-2027 FY 2027 1-Jan-2029 1-Jan-2030 31-Dec-2029 1-Jan-2031 1-Jan-2032 31-Dec-2030 31-Dec-2031 31-Dec-2032 1-Jan-2033 1-Jan-2034 31-Dec-2033 31-Dec-2034 1-Jan-2044 31-Dec-2044 1-Jan-2054 31-Dec-2054 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2044 FY 2054 Maximum Annual Lease Payment - Indexed¹ 4,130 15,221 15,525 15,836 Maximum Annual Lease Payment - Fixed 16,519 60,682 60,682 60,682 16,153 60,682 16,476 16,805 17,141 17,484 17,834 18,190 22,174 22,450 60,682 60,682 60,682 60,682 60,682 60,682 60,682 50,568 Interest Income 4 22 29 30 30 30 29 31 33 35 39 56 7 Total Revenue 20,653 75,925 76,236 76,547 76,865 77,187 77,516 77,854 78,198 78,551 78,911 82,912 73,026 Elmore County Facility - Routine Maintenance cost² (885) (3,497) (3,500) (3,572) (3,703) (3,780) (3,830) (3,943) (4,020) (4,279) (4,603) (5,787) (3,946) Escambia County Facility - Routine Maintenance cost² (700) (2,803) (2,766) (2,843) (2,910) (3,050) (3,013) (3,133) (3,176) (3,326) (3,625) (4,563) (4,687) Elmore County Facility - Lifecycle costs² (23) (84) (76) (143) (663) (857) (343) (468) (616) (2,027) (3,020) (7,779) (1,532) Escambia County Facility - Lifecycle costs² (9) (39) (40) (61) (276) (669) (338) (155) (473) (1,005) (2,462) (5,109) (1,269) Reserve Movements SPV & Insurance Costs² Bank fees Total Expenses (14) (294) (767) (843) (11) 730 (891) (2,556) (3,474) (5,104) (8,093) (7,949) 2,376 (282) (1,144) (1,166) (1,190) (1,213) (1,238) (1,263) (1,288) (1,313) (1,340) (1,367) (1,664) (1,221) (167) (675) (689) (702) (716) (731) (745) (760) (775) (791) (807) (982) (396) (2,081) (8,535) (9,004) (9,355) (9,492) (9,595) (10,422) (12,304) (13,846) (17,871) (23,977) (33,833) (10,675) Annual Debt Service DSCR Periodic (Annual) Notes: (8,838) (40,540) (56,027) (55,994) (56,144) (56,327) (55,912) (54,625) (53,627) (50,566) (45,778) (40,899) (20,085) 2.101x 1.662x 1.200x 1.200x 1.200x 1.200x 1.200x 1.200x 1.200x 1.200x 1.200x 1.200x 3.104x 'The Indexed portion assumed to grow at annual CPI of 2.00% over the lease term. 2 Costs assumed to grow at annual CPI of 2.00% over the lease term. **Totals may differ due to rounding 21#24Preliminary Financial Timeline* Overview of Financial Timeline April 2021 Event M T W Th F Mail Series 2021A POS 29 30 1 2 12 5 2 Series 2021A Marketing; One-on-One Calls** 6 7 8 6 13 14 15 16 Series 2021A Pricing 19 20 21 22 23 26 222 27 28 29 30 Closing *- Preliminary, subject to change **The Management team will be available for one-on-one calls Market Holiday Date March 31st April 1st April 14th April 15th April 29th 22 22#25BARCLAYS Stephen Howard Director Infrastructure Project Finance Banking Coverage Phone: (212) 284-0553 [email protected] Francisco Brugueras Director Infrastructure Project Finance Banking Coverage Phone: (212) 526-1190 [email protected] Steven Milano Managing Director Municipals Syndicate Phone: (212) 528-1062 [email protected] Rommel Medina Director Municipals Syndicate Phone: (212) 528-1052 [email protected] Contacts KeyBanc Capital Markets Thomas Mulvihill Managing Director Infrastructure Finance Phone: (212) 284-0553 [email protected] Nathan Flynn Managing Director Public Finance Phone: (317) 464-8287 [email protected] Randy Burleyson Senior Trader Taxable Municipal Bond Desk Phone: (312) 360-2067 [email protected] Matt Lindemulder Product Manager Fixed Income Sales and Trading Phone: (312) 360-3874 [email protected] STIFEL Michael Dunn Managing Director Public Finance Phone: (334) 834-5100 [email protected] Jake Campos Managing Director Public Finance Phone: (213) 443-5017 [email protected] Robert Casillas Managing Director Public Finance Phone: (602) 794-4001 [email protected] Benjamin Stern Managing Director Municipal Syndicate Phone: (213) 443-5225 [email protected] 23 23#26Appendix#27CoreCivic Leading Development Team Damon T. Hininger President & Chief Executive Officer CoreCivic Roles and sample projects: 28 ⚫ Damon T. Hininger was named President and Chief Executive Officer in August 2009 after serving in various capacities throughout the company, both at CoreCivic facilities and the company's headquarters 18 David Garfinkle Executive Vice President and Chief Financial Officer Roles and sample projects: CoreCivic • David Garfinkle was named Executive Vice President and Chief Financial Officer as of May 2014 30 • Mr. Garfinkle joined CoreCivic in February 2001 Lucibeth Mayberry Executive Vice President, Real Estate Roles and sample projects: CoreCivic ⚫ Lucibeth Mayberry was named Executive Vice President, Real Estate, in May 2015 after having served as Senior Vice President, Real Estate ⚫ Ms. Mayberry joined CoreCivic in May 2003 as Senior Director, State Customer Relations Steven Goraczkowski Managing Director, Design and Construction Roles and sample projects: Army Residential Communities Initiative (Oahu, Hawaii) 32 • Hickam Community Housing (Hickam Air Force Base, Hawaii) CoreCivic Timothy S. Aebie Senior Director, Design Roles and sample projects: • Otay Mesa Detention Center (Otay Mesa, California) Daniel R. Strebel CoreCivic Senior Director, Construction CoreCivic Roles and sample projects: ⚫ Atwell LLC, Development Consultants (2007-2014) 19 30 Trousdale Turner Correctional Center (Hartsville, Tennessee) Jenkins Correctional Center (Millen, Georgia) Vastland Development, LLC (1997-2007) ⚫ United States Air Force - Officer/Engineer (1988-1997) Scott Whitson Donnie Hyatt CoreCivic CoreCivic Managing Director, Facility Management Senior Director, Facility Management Roles and sample projects: Roles and sample projects: 30 • Regional Facilities Administrator, Federal Bureau of Prisons (2005-2014) - 21 Various Locations (19,800 beds) ⚫ U.S. Federal Medical Center (2003-2005) - Springfield, Missouri (1,032 beds) ■ Corecivic (Senior Director, Facility Management, 2010 - present) 33 Texas Department of Criminal Justice • Federal Correctional Institution Pekin (2000-2003) - Pekin, Illinois (1,291 beds) Alex Sherling Managing Director Roles and sample projects: • Alex Sherling was named Managing Director of Treasury in December 2016 18 ⚫ Mr. Sherling joined CoreCivic in November of 2013 as Senior Director of Pricing & Valuation [xx] Indicates years of experience CoreCivic Cameron Hopewell Managing Director CoreCivic Roles and sample projects: • Cameron Hopewell joined CoreCivic in the role of Managing Director of Investor Relations in August 2014 13 ■ Prior to joining CoreCivic, he was a Manager of Investor Relations for Omnicare, Inc. 24 24#28CoreCivic is Committed to ESG Criteria Lowering Recidivism • • • • • CoreCivic is committed to combatting the U.S.'s recidivism crisis and lowering the rate of current prisoners who will re-enter prison after being released CoreCivic's goal driven approach is based off well established data on how to lower the probability that an inmate will commit a crime after release, achieved through education, job training, faith-based programming, and addiction treatment Inmates who complete substance abuse disorder treatment in prison are 50% less likely to return to prison Inmates who complete vocational training while in prison are 28% more likely to find a job after release CoreCivic is expanding participation in these programs as well as the number of facilities that offer these programs CoreCivic's Progress towards Social Goals Substance Use Treatment Programs Completion Rate 72% Go Further Journal Completions 7,000 83% 6,000 5,000 4,000 • • • Sustainability In addition to lowering recidivism rates across their facilities, CoreCivic also has set meaningful goals to lower their environmental impact CoreCivic's overall electricity usage, emissions, and water usage all decreased from 2018 to 2019, despite a growing real estate portfolio, continuing an ongoing trend towards greater sustainability across CoreCivic facilities CoreCivic's portfolio at the end of 2020 included 4 LEED Certified buildings, including the largest private LEED Certified correctional facility in the nation and continues to expand their portfolio of LEED Certified buildings In addition, CoreCivic continues to transition its other facilities to a more sustainable model by recycling building products, recycling and reusing water, and utilizing solar technology for energy requirements where possible Victim Impact Program Completion Industry Recognized Certificates Awarded during Incarceration 1,400 6,229 1,247 6,000 5,136 1,200 1,000 800 996 5,000 4,712 4,483 4,000 3,000 2,702 600 455 2,000 400 560 200 1,000 0 0 0 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 III... 90% 80% 70% 61% 60% 50% 40% 30% 20% 10% 0% 2017 3,000 2,000 1,000 Source: CoreCivic ESG Report 25#29Project Parties Sponsor Lessors Borrower Government Real Estate Solutions of Central Alabama, LLC CoreCivic Government Real Estate Solutions of South Alabama, LLC Government Real Estate Solutions of Alabama Holdings LLC Lenders' Technical Advisor Initial Purchasers (144A) / Private Placement Agents (4(a)(2)) KeyBanc bty BARCLAYS Capital Markets STIFEL Lessee State of Alabama, Alabama Department of Corrections Borrower's Counsel Borrower's Operator Contractor Engineer and Architect Systems Design State of Alabama, Alabama Department of Corrections CADDELL DLR Group RN SYSTEMS DESIGN Alabama Counsel Initial Purchasers' Counsel Issuer NIXON PEABODY.LP BUTLER SNOW Chapman and Cutler LLP PFA PUBLIC FINANCE AUTHORITY™ 26#30Payment Mechanism Total Maximum Annual Lease Payment CPI MALPY = (80% × MALP;) + 20% × MALPyx CPI₁ Variable Definition y MALP Maximum Annual Lease Payment CPly CPI₁ Numbered Lease Year during which a Maximum Annual Lease Payment is determined The first or initial numbered Lease Year during which a Maximum Annual Lease Payment is determined and owing in accordance with the Leases Maximum Annual Lease Payment The CPI as of the anniversary of the Occupancy Date in the Lease Year "y" The initial year CPI Total Maximum Monthly Lease Payment Variable y m MALP = Maximum Annual Lease Payment MALPmMALPyx 12 Definition Numbered Lease Year during which a Maximum Annual Lease Payment is determined Calendar Month during which a Monthly Lease Payment is determined and paid Maximum Annual Lease Payment • . • . . Payment Mechanism • . Beginning on the Occupancy Date and for the remainder of the Term, Lessee shall make Lease Payments to Lessor in accordance with the Lease for each full or partial month Monthly Lease Payments will be calculated according to the Payment Mechanism detailed to the left The Lease Payment will also be subject to deductions following Noncompliance Events, detailed in the next slide The Lessee shall make best efforts to cause the State Legislature to appropriate all amounts sufficient to enable Lessee to pay amounts owed by Lessee to Lessor under the Lease Lessee covenants that it shall perform all actions lawfully within its power to obtain and maintain funds from which to make all payments owed by Lessee to Lessor, and will prioritize payments to the Lessor over all other payments to the extant permissible by law To the fullest extent permitted by law, Lessee will not procure, construct, purchase, acquire, lease, or otherwise utilize any other correctional facility if doing so would result in the effective replacement of the Facility, or a material reduction in, or substantial modification of, Lessee's need to utilize the Facility In addition, ADOC will reimburse the Lessors for certain pass- through expenses such as property taxes 27#31Description Noncompliance Events & Payment Deductions Event Scheduled Maintenance Failure Life Cycle Maintenance Failure Administrative Service Failure Event Description If at the end of the Lease year, Lessor has not performed at least 95% of the Scheduled Maintenance Activity A Life Cycle Maintenance Failure shall occur when the Lessor has not completed a Lifecycle Project in the month it was scheduled to be completed or performed Failure to complete certain administrative tasks and cure the failure within the allotted time frame within the Lease Any Noncompliance Event A Noncompliance Event occurs if Lessee fails to respond to or rectify a Performance Failure, Vandalism, or Other Demand Maintenance Event. The deduction will be assessed upon expiration of the required response time, unless the Lessor has already responded, and until Lessor has responded to such event, upon the expiration of each successive response time periods thereafter Assessed Annually, weekly after first event Monthly, weekly after expiration of the 30-day cure period Daily Classification Emergency Critical Response Time 1 hour 4 hours Deduction $500 $250 Routine 12 hours $200 Performance Failure A Service Failure that constitutes a failure to satisfy a Performance Indicator Emergency Critical 4 hours $750 Deduction $20,000 weekly until 95% of the Scheduled Maintenance Activity is completed $1000 $250-$1000 depending on the Administrative Performance Failure Payment Deductions are limited to protect Debt Service Payments as outlined in Exhibit 8 Section 4.2 The Lessee is entitled to make monthly and annual Payment Deductions for certain Noncompliance Events and Performance Failures detailed in the table to the left. 6 hours $750 Routine 4 days $250 Emergency 4 hours $750 Vandalism Any damage to, or destruction of, the Facility that requires repair and is caused by the intentional, willful, or careless conduct, or negligent act or omission of a Lessee Party, Inmate, or other Lessee Invitee Critical 6 hours $750 2-4 days (Depending on Routine $250 cost estimate) Emergency 8 hours $1000 Other Demand Maintenance Event (Lessee Cost) Critical 12 hours $750 Routine 8 days $250 An Event other than a Performance Failure or Vandalism that requires Demand Maintenance Emergency 4 hours $750 Other Demand Maintenance Event Critical 6 hours $750 (Lessor Cost) Routine 4 days $250 28#32Relief Events The Lessor is entitled to performance and schedule relief during certain Relief Events. A Relief Event means the occurrence of one of the below events that results in a delay or interruption in the performance of any obligation under the Lease Documents, adverse economic impact on Lessor, is beyond the Lessor's control, and could not have been avoided by the reasonable exercise of caution or diligence by the Lessor Schedule Relief and Compensation Schedule Relief Only Compensation (Adjustment Amount) Special Adjustment Amount No Rules N/A No N/A Event Compensation (Adjustment Amount) Special Adjustment Amount Rules Event Force Majeure Event Yes National or Statewide Strike Yes Injunction Yes Missed Lease Payment Costs Only Missed Lease Payment Costs Only None Lessee-Related Release of Hazardous Yes None Material Unknown Condition Other Third-Party Release of Hazardous Materials Uncooperative Utility Owner Compliance with Public Order Third-Party Release of Hazardous Yes Direct Costs Only Protest Actions Materials Change in Law Yes Discriminatory Action Yes None None Condemnation or Taking Yes Alteration and Other Works Yes May qualify as a Pre-Payment Event if elected by Lessor or Lessee None Vandalism Yes In certain instances, Lessee may provide an adjustment for repairs Lessee Change Yes None Lessee-Caused Delay Yes None Lessee Breach Yes May qualify as a Pre-Payment Event if elected by Lessor or Lessee No N/A No 2 2 2 2 N/A 3 No N/A 29 29#33Defaults and Remedies Lessee Default Events Default Event Non-Payment Representations and Warranties Lessee Breach Description Failure to make payments to the Lessor when due, unless the failure to make payment is a result of the failure of the State Legislature to appropriate the necessary funds or the fault of a third party Breach of a representation or warranty in any material respect or any materially inaccurate representation or warranty Any other material breach of the Lease Cure Period 30 days 60 days 60 days • • • Lessor Remedies If Lessor, in its discretion, elects not to treat an applicable Lessee Default as a Pre-Payment Event, then Lessor may treat the Lessee Default as an Adjustment Event on the terms and conditions set forth in the Lease Lessor may deduct and offset any damages owing to Lessor from Lessee under the Lease Documents from and against any amounts Lessor may owe Lessee. If the amount of damages owing Lessor is not liquidated or known with certainty at the time a payment is due from Lessor, Lessor may deduct and offset up to 100% of the amount it reasonably estimates is due, which amount (or applicable lesser amount) shall be paid back to Lessee by Lessor if and as directed pursuant to the resolution of the Dispute Cross Default between Leases: Any Non-Appropriation Event under the Other Facility Lease that is not timely cured in accordance with applicable provisions of the Other Facility Lease, and subject to each Party's respective rights and remedies therein, shall be deemed a Non-Appropriation Event under this Lease, and constitutes a Pre-Payment Event under this Lease 30 30#34Defaults and Remedies Select Lessor Default Events Default Event Failure to Commence Construction Work Substantial Completion Non-Payment Insurance and Performance Security Assignment and Change in Equity Ownership Material Nonperformance or Breach Description Failure to commence construction work within thirty (30) days after the issuance of the notice to proceed Failure to achieve the Substantial Completion by the Long Stop Date Failure to make payments due and owing to Lessee Failure to obtain, provide, and maintain any insurance bonds, guarantees, letters of credit, or other performance security as required under the Lease Violation of restrictions on transfer of the Lease, including restrictions on change in control The accumulation of a certain number of Noncompliance Events Failure to deliver to Lessee a Remediation Plan within 45 days of Persistent Lessor Breach receiving notice or a failure to fully comply Insolvency & Involuntary Bankruptcy with the schedule; or specific elements of and actions required under the approved Remediation Plan Insolvency and involuntary bankruptcy of the Lessor Cure Period 5 Business Days if Lessor fails to deliver to Lessee a Remediation Plan 30 days for failure to comply with the Remediation Plan 5 Business Days if Lessor fails to deliver to Lessee a Remediation Plan 30 days for failure to comply with the Remediation Plan 10 Business Days 30 Days 15 Days 30 Days 5 Business Days if Lessor fails to deliver to Lessee a Remediation Plan 30 days for failure to comply with the Remediation Plan 60 Days • • • Lessee Remedies Subject to the Lenders' Direct Agreement, in the event on any Lessor Default that is or becomes a Pre-Payment Event, Lessee may declare a Pre-Payment Event and proceed accordingly Upon the occurrence of a Lessor Default, without waiving or releasing Lessor from any obligations, Lessee shall be entitled to demand and enforce any payment or performance bond, and demand, draw on, and collect any letter of credit or other payment or performance security available to Lessee under this Lease with respect to Lessor Default in question Lessee may direct Lessor to replace, at Lessor's expense, the Lead Services Provider in the event of a Persistent Lessor Breach or Lessor Default, in each case relating to the performance of the Services Subject to the Lenders' Direct Agreement, upon the occurrence of a Lessor Default after the Occupancy Date, or a Persistent Lessor Breach Lessee may, without waiving or releasing Lessor from any obligations, pay and perform all or any portion of Lessor's obligations and the Services that are the subject of such Lessor Default or Persistent Lessor Breach and of any other then-existing breaches or failures to perform 31#35• Termination and Pre-Payment Events Pre-Payment Events Each of the following constitute Pre-Payment Events (For a full list of Per-Payment Events see section 18.1 of the Lease Agreements) ➤ A Lessee Default or Persistent Lessee Default ➤ A Non-Appropriation Event ➤ The issuance of a final, non-appealable order by a court of competent jurisdiction to the effect that the Lease is void or unenforceable ➤ A complete or substantial taking of the premises, and if taken by the State, Lessor has provided Lessee with notice that Lessor has elected to treat such occurrence as a Pre-Payment Event > An Extended Relief Event and Lessor has provided Lessee notice that Lessor has elected to treat such occurrence as a Pre-Payment Event ➤ A Lessor Default and Lessee has provided Lessor with notice that Lessee has elected to treat such occurrence as a Pre- Payment Event, except in the situation where Substantial Completion is not achieved by the Long Stop Date. Under such a scenario, the Collateral Agent is directed to call a Pre- Payment Event • Effect of Pre-Payment Events Upon the occurrence of a Pre-Payment Event, and subject to Lenders' rights under the Lenders' Direct Agreement, the Parties have the following rights and obligations ➤ Lessee shall pay to the Lessor an amount to satisfy all outstanding debt, taking into account cash funds Lessor has on hand are at least sufficient and subject to appropriation by the Alabama Legislature ➤ In the event of a Pre-Payment Event prior to the Occupancy Date, the Parties shall enter into a Ground Lease pursuant to which the Lessee will assume all obligations to provide the Services going forward and Lessor shall be relieved of its service obligations > In the case of a Non-Appropriation Event either party may terminate the Lessee's leasehold interest in the premises ➤ In the event the Lessee fails to make payment, the Lessor may terminate the Lessee's interest in the premises ➤ Lessee may require Lessor to enter into a new agreement with a replacement Lead Services Provider for performance of the Maintenance Services 32 32#36Project Development Cost Payment Termination and Pre-Payment Events Pre-Payment Calculation Pre-Payment Event Lessee Non- Payment Default Lessee Persistent Default Non-Appropriation Event Base Formula The Project Development Cost Payment + The Services Breakage Payment Court Ruling Event The Project Development Cost Payment Taking Event + The Services Breakage Payment Extended Relief Event Pre-Payment Event Prior to Occupancy 100% Lessor Outstanding Debt + Contributed Equity + Adjustment Amounts - Account Balances - Available Insurance Amounts Prior to Occupancy 100% Lessor Outstanding Debt + Contributed Equity + Adjustment Amounts - Account Balances During Occupancy Period 100% Lessor Outstanding Debt + Contributed Equity + All Equity Distributions anticipated in the Base Case Financial Model Discounted at the Equity IRR + Net Lease Payments Due + Net Adjustment Amounts Due - Account Balances - Available Insurance Payments During Occupancy Period 100% Lessor Outstanding Debt + Contributed Equity - Prior Distributions + Net Lease Payments Due + Net Adjustment Amounts Due - Available Insurance Amounts - Account Balances - Any Proceeds from a Taking - Available Insurance Amounts - Any Proceeds from a Taking Lessor Outstanding Debt means (a) all amounts outstanding, including interest and default interest accrued, and payable by Lessor to the Lenders provided that such amount shall not exceed the amount reflected in the Base Case Financial Model at the time of payment of the Project Development Cost Payment and that default interest will not include any increased interest, fees, or penalty amounts payable by Lessor for any reason other than a failure by Lessor to pay any when due, plus (b) all other fees, costs and expenses for which Lessor is responsible, including any Lessor Outstanding Breakage Amounts which may include premiums, penalties and make-whole payments Lessor Default Base Formula Prior to Occupancy 100% of the Lessor Outstanding Debt - Account Balances - Available Insurance Amounts During Occupancy Period 100% of the Lessor Outstanding Debt amount + Net Lease Payments Due + Net Adjustment Amounts Due - Account Balances - Available Insurance Amounts 33#37Certification and End of Lease Procedures Appropriation Certification Process It shall be considered a Non-Appropriation Event if, by June 30 of any Fiscal Year the State Legislature fails to appropriate or otherwise provide lawfully available funds sufficient to permit Lessee to satisfy its obligations under the Lease to make the full amount of all Lease Payments reasonably anticipated to be payable in that fiscal year The Lessee covenants to promptly deliver to the Lessor a written certification, no later than June 30, that the State Legislature has appropriated sufficient funds to satisfy their obligations under the Lease < > Upon the occurrence of a Non-Appropriation Event, the Lessee shall promptly undertake best efforts to cause the State legislature to make sufficient appropriations ➤ If the Non-Appropriation Event has not been cured and an Appropriation Certification has not been accepted by the Lessee by October 1 of the Fiscal Year following the Non-Appropriation Event, it shall constitute a Pre-Payment Event and Lessee shall commence the process of vacating the Facility If the Lessee cures such Non-Appropriation Event by causing the State Legislature to appropriate sufficient funds and provides an Appropriation Certification for such Fiscal Year, as well as the succeeding Fiscal Year by March 30, the vacation process shall cease • Transition Plan No Later than 30 days after the Effective Date the Lessor and Lessee must meet and confer for the purpose of developing a transition plan ➤ The plan will detail the orderly transfer of Inmates, Lessee's vacation of the Facility and surrender of the Premises, demobilization of any improvement work, and transfer of maintenance services ➤ The time allowed for Lessee's complete vacation of the Facility shall begin 90 days prior to the end of the Term and end at the expiration of the Term in the event of a scheduled expiration of the term ➤ The time allowed for Lessee's complete vacation of the Facility under a triggered event will begin on the day of the occurrence of the event and end within 180 days of such event ➤ If despite its best efforts, the Lessee is not able to complete the transition process and vacate the Premises in accordance with the transition plan, the Lessee may continue to make month-to-month Lease Payments and continue to occupy the facility provided such period does not last longer than 90 days following the expiration of the Term or the termination of the Lessee's leasehold interest 34