New Mexico-Estancia-Torrance County Detention Facility Lease - CCA Prison Realty Trust and Corrections Corporation of America
LEASE AGREEMENT
(TORRANCE COUNTY)
THIS LEASE AGREEMENT ("Lease") dated as of the 1st day of October,
1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment
trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee
corporation ("Tenant").
RECITALS
WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently
conveyed to Landlord the property described in Exhibit A hereto, and Landlord
and Tenant desire that Landlord lease such property back to Tenant; and
WHEREAS, Landlord and Tenant have entered into a Master Agreement to
Lease dated July 18, 1997 (the "Master Agreement") which sets forth certain
agreements of the parties with respect to the lease of various properties
including the property that is the subject of this Lease;
NOW, THEREFORE, in consideration of the premises and of their
respective agreements and undertakings herein, Landlord and Tenant agree as
follows:
ARTICLE I
PREMISES AND TERM
1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases
from Landlord the Land located in Torrance County, New Mexico, described in
Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon
or thereto (each as defined in the Master Agreement, and, together with said
Land, the "Leased Property"); such Leased Property collectively known and
described at the date hereof as the Torrance County Detention Facility;
SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit
B hereto, if any, and to all easements, liens, encumbrances, restrictions,
agreements, and other title matters existing as of the date hereof and listed in
Exhibit C hereto (collectively the "Permitted Exceptions").
1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for
a fixed term of ten (10) years commencing on October 1, 1997 (the "Commencement
Date") and expiring on September 30, 2007 (the "Expiration Date"). The Term of
this Lease may be renewed on the mutual agreement of Landlord and Tenant as
follows: (i) provided that Tenant gives Landlord notice on or before the date
which is six (6) months prior to the Expiration Date, upon the mutual agreement
of Landlord and Tenant, the Lease shall be renewed for one (1) additional five
(5) year term (the "Extended Term") on the same terms and provisions (other than
with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii)
provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual
agreement of Landlord and Tenant, the Lease shall be renewed for one (1)
additional five (5) year term (the "Second Extended Term") on the same terms and
provisions (other than with respect to renewal) as the Fixed Term, as set forth
in the Lease; and (iii) provided that Tenant gives Landlord notice on or before
the date which is six (6) months prior to the expiration of the Second Extended
Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be
renewed for one (1)
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additional five (5) year term (the "Third Extended Term") on the same terms and
provisions (other than with respect to renewal) as the Fixed Term, as set forth
in the Lease. Tenant's right to so extend the Term of the Lease is conditioned
on Landlord's prior approval of the Extended Term, Second Extended Term, or
Third Extended Term, as the case may be. The term "Term" used in this Agreement
means the Fixed Term, Extended Term, Second Extended Term and Third Extended
Term, as appropriate. The term "Lease Year" means each twelve (12) month period
during the Term commencing on January 1 and ending on December 31, except the
first Lease Year of each Lease shall be the period from the Commencement Date
through the following December 31, and the last Lease Year shall end on the date
of termination of the Lease if a day other than December 31. Landlord may
terminate this Lease prior to the expiration of the Term hereof, at any time
following the date which is five (5) years from the date hereof, upon written
notice to Tenant not less than eighteen (18) months prior to the effective date
of such termination.
ARTICLE II
RENT
2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in
advance in consecutive monthly installments payable on the first day of each
month during the Term, the Extended Term, Second Extended Term and the Third
Extended Term, commencing on the Commencement Date, in accordance with the Base
Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the
Expiration Date shall be other than on the first day of a calendar month, the
initial (or final, as appropriate) monthly installment of Base Rent payable
pursuant to the Lease shall be prorated for the number of days until, in the
case of this initial monthly installment, the first day of the calendar month
following the Commencement Date and, in the case of the final monthly
installment, the Expiration Date.
2.2 Additional Rent. The Base Rent shall be subject to such increases
over the Term as determined pursuant to Section 2.02 of the Master Agreement.
2.3 Other Additional Rent. Tenant shall also pay all Other Additional
Rent with respect to the Leased Property, as set forth in the Master Agreement.
ARTICLE III
OTHER TERMS AND CONDITIONS
3.1 Master Agreement Incorporated Herein. All provisions of the Master
Agreement (except any provisions expressly therein not to be a part of an
individual lease of leased property) are hereby incorporated in and are a part
of this Lease of the Leased Property.
3.2 Recordation. At the request of Landlord or Tenant, a short form
memorandum of this Lease may be recorded in the real estate records of any
county which Landlord or Tenant deems appropriate in order to provide legal
notice of the existence hereof.
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IN WITNESS WHEREOF, the Landlord and the Tenant have executed this
Lease or caused the same to be executed by their respective duly authorized
officers as of the date first set forth above.
CCA PRISON REALTY TRUST
By: /s/ Michael W. Devlin
--------------------------------
Title: Chief Development Officer
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CORRECTIONS CORPORATION OF AMERICA
By: /s/ Doctor R. Crants
--------------------------------
Title: Chief Executive Officer
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EXHIBIT A
[legal description]
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EXHIBIT B
Mortgage Debt
Property: Torrance County Detention Facility
This property is subject to the following Mortgage Debt:
That certain deed of trust of First Union National Bank of
Tennessee, as Administrative Agent, dated October 1, 1997.
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EXHIBIT C
Permitted Exceptions
Property: Torrance County Detention Facility
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EXHIBIT D
Base Rent Schedule
Property: Torrance County Detention Facility
Tenant will pay to Landlord annual Base Rent of $4,235,000.00, payable
in equal monthly installments of $352,916.67.
Base Rent for the Extended Term, Second Extended Term and Third
Extended Term shall be equal to the fair market rental value of the Leased
Property as of the respective commencement dates thereof.