CoreCivic Lease Agreements and ESG Strategy
Facility 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
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