<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended June 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from to
COMMISSION FILE NUMBER 1-14260
WACKENHUT CORRECTIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0043078
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4200 Wackenhut Drive #100, Palm Beach Gardens, Florida 33410-4243
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(561) 622-5656
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve (12) months (or for such shorter period that the registrant
was required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
At August 1, 1997, 21,984,142 shares of the registrant's Common Stock were
issued and outstanding.
Page 1 of 16
<PAGE> 2
WACKENHUT CORRECTIONS CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following consolidated financial statements of Wackenhut Corrections
Corporation, a Florida corporation (the "Corporation") have been prepared in
accordance with the instructions to Form 10-Q and therefore, omit or condense
certain footnotes and other information normally included in financial
statements prepared in accordance with generally accepted accounting principles.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the financial
information for the interim periods reported have been made. Results of
operations for the twenty-six weeks ended June 29, 1997 are not necessarily
indicative of the results for the entire fiscal year ending December 28, 1997.
Page 2 of 16
<PAGE> 3
WACKENHUT CORRECTIONS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEKS ENDED
JUNE 29, 1997 AND JUNE 30, 1996
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-------------------------------------------------
JUNE 29, 1997 JUNE 30, 1996
----------------------- ----------------------
<S> <C> <C>
Revenues $ 51,509 $ 33,416
Operating expenses (including amounts related
to Parent of $1,496 and $949) 43,166 28,660
Depreciation and amortization 1,510 770
----------------------- ----------------------
Contribution from operations 6,833 3,986
G&A expense (including amounts related to
Parent of $387 and $357) 3,044 2,073
----------------------- ----------------------
Operating income 3,789 1,913
Interest income (including amounts
related to Parent of ($42) and $0) 286 656
----------------------- ----------------------
Income before income taxes and equity
income of affiliate 4,075 2,569
Provision for income taxes 1,603 895
----------------------- ----------------------
Income before equity income of affiliate 2,472 1,674
Equity income of affiliate, net of income tax
provision of $157 and $88 251 140
----------------------- ----------------------
Net income $ 2,723 $ 1,814
======================= ======================
Earnings per share $ 0.12 $ 0.08
======================= ======================
Weighted average shares outstanding 22,634 22,676
======================= ======================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
Page 3 of 16
<PAGE> 4
WACKENHUT CORRECTIONS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWENTY-SIX WEEKS ENDED
JUNE 29, 1997 AND JUNE 30, 1996
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
---------------------------------------------
JUNE 29, 1997 JUNE 30, 1996
----------------------- ----------------------
<S> <C> <C>
Revenues $ 92,736 $ 62,850
Operating expenses (including amounts related
to Parent of $2,727 and $1,604) 77,566 53,216
Depreciation and amortization 2,658 1,606
----------------------- ----------------------
Contribution from operations 12,512 8,028
G&A expense (including amounts related to
Parent of $775 and $716) 5,451 4,396
----------------------- ----------------------
Operating income 7,061 3,632
Interest income (including amounts related to Parent of
($108) and $109) 818 1,297
----------------------- -----------------------
Income before income taxes and equity
income of affiliate 7,879 4,929
Provision for income taxes 3,072 1,829
----------------------- ----------------------
Income before equity income of affiliate 4,807 3,100
Equity income of affiliate, net of income tax
provision of $311 and $114 497 182
----------------------- ----------------------
Net income $ 5,304 $ 3,282
======================= ======================
Earnings per share $ 0.23 $ 0.15
======================= ======================
Weighted average shares outstanding 22,613 21,767
======================= ======================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
Page 4 of 16
<PAGE> 5
WACKENHUT CORRECTIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 29, 1997 AND DECEMBER 29, 1996
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 29, 1997 DECEMBER 29, 1996
----------------------- ------------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 25,612 $ 44,368
Accounts receivable (net) 32,945 24,879
Other 7,142 6,066
----------------------- ------------------------
Total current assets 65,699 75,313
Property and equipment, net 28,999 18,975
Investments in and advances to affiliates 4,812 1,810
Deferred charges, net 10,814 7,522
Unamortized cost in excess of net assets
of acquired companies, net 1,955 2,224
Other 5,025 967
----------------------- ------------------------
$ 117,304 $ 106,811
======================= ========================
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities:
Accounts payable $ 4,622 $ 4,020
Accrued payroll and related taxes 5,629 4,558
Accrued expenses 3,967 3,717
Current portion of long-term debt 12 12
Deferred income tax liability, net 1,162 876
----------------------- ------------------------
Total current liabilities 15,392 13,183
----------------------- ------------------------
Deferred income taxes, net 8,497 5,434
----------------------- ------------------------
Long-term debt 361 225
----------------------- ------------------------
Shareholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized --- ---
Common stock, $.01 par value,
30,000,000 shares authorized,
21,969,272 and 21,937,992 shares
issued and outstanding 220 219
Additional paid-in capital 73,397 72,986
Retained earnings 19,652 14,348
Cumulative translation adjustment (215) 416
----------------------- ------------------------
Total shareholders' equity 93,054 87,969
======================= ========================
$ 117,304 $ 106,811
======================= ========================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.
Page 5 of 16
<PAGE> 6
WACKENHUT CORRECTIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
JUNE 29, 1997 AND JUNE 30, 1996
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
---------------------------------------------------
JUNE 29, 1997 JUNE 30, 1996
------------------------ -----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,304 $ 3,282
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization expense 2,658 1,606
Equity income of affiliates (809) (296)
Changes in assets and liabilities -- (Increase) decrease in assets:
Accounts receivable (8,245) (3,175)
Deferred income tax asset - current --- 51
Other current assets (1,112) (890)
Other assets 399 99
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 1,052 (294)
Accrued payroll and related taxes 1,153 763
Deferred income tax liability - current 286 63
Deferred income taxes - non-current 3,063 1,343
------------------------ -----------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $ 3,749 $ 2,552
------------------------ -----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in affiliates (2,193) ---
Capital expenditures (11,764) (1,107)
Deferred charge expenditures (8,789) (1,648)
------------------------ -----------------------
NET CASH USED IN INVESTING ACTIVITIES $ (22,746) $ (2,755)
------------------------ -----------------------
</TABLE>
(Continued)
The accompanying notes to consolidated financial statements are an integral part
of these statements.
Page 6 of 16
<PAGE> 7
WACKENHUT CORRECTIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
JUNE 29, 1997 AND JUNE 30, 1996
(IN THOUSANDS)
(UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
-----------------------------------------------
JUNE 29, 1997 JUNE 30, 1996
--------------------- ----------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock $ --- $ 51,606
Proceeds from exercise of stock options 350 320
Retirement of debt (6) (779)
Proceeds from debt 147 ---
Advances from Parent 22,777 45,124
Repayments to Parent (22,777) (45,124)
--------------------- ----------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 491 $ 51,147
--------------------- ----------------------
Effect of exchange rate changes on cash (250) 162
Net (decrease) increase in cash (18,756) 51,106
Cash, beginning of period 44,368 909
--------------------- ----------------------
CASH, END OF PERIOD $ 25,612 $ 52,015
===================== ======================
SUPPLEMENTAL DISCLOSURES:
Impact on equity from tax benefit related to the
exercise of options issued under the company's non-
qualified stock option plan $ --- $ 636
===================== ======================
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
Page 7 of 16
<PAGE> 8
WACKENHUT CORRECTIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed for the quarterly financial reporting are the
same as those disclosed in Note 2 of the Notes To Consolidated Financial
Statements included in the Corporation's Form 10-K filed with the Securities and
Exchange Commission on March 28, 1997 for the fiscal years ended December 29,
1996, December 31, 1995 and January 1, 1995. Certain prior year amounts have
been reclassified to conform with current year financial statement presentation.
2. EARNINGS PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
requires the disclosure of basic and diluted earnings per share for periods
ending after December 15, 1997. The computation under SFAS No. 128 differs from
the primary and fully diluted earnings per share computed under APB Opinion No.
15 primarily in the manner in which potential common stock is treated. Basic
earnings per share is computed by dividing net income by the weighted-average
number of common shares outstanding. In the computation of diluted earnings per
share, the weighted-average number of common shares outstanding is adjusted for
the effect of all potential common stock.
The basic and diluted earnings per share computed according to SFAS No. 128 are
as follows:
PRO-FORMA
THIRTEEN WEEKS ENDED
--------------------
JUNE 29, 1997 JUNE 30, 1996
------------- -------------
Basic earnings per share $ 0.12 $ 0.08
Diluted earnings per share 0.12 0.08
PRO-FORMA
TWENTY-SIX WEEKS ENDED
----------------------
JUNE 29, 1997 JUNE 30, 1996
------------- -------------
Basic earnings per share $ 0.24 $ 0.16
Diluted earnings per share 0.23 0.15
Page 8 of 16
<PAGE> 9
WACKENHUT CORRECTIONS CORPORATION
3. DOMESTIC AND INTERNATIONAL OPERATIONS
A summary of domestic and international operations is presented below:
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
JUNE 29, 1997 JUNE 30, 1996
----------------------- -----------------------
(in thousands)
<S> <C> <C>
REVENUES
Domestic operations $ 74,781 $ 48,218
International operations 17,955 14,632
----------------------- -----------------------
Total revenues $ 92,736 $ 62,850
======================= =======================
OPERATING INCOME
Domestic operations $ 5,014 $ 2,203
International operations 2,047 1,429
----------------------- -----------------------
Total operating income $ 7,061 $ 3,632
======================= =======================
JUNE 29, 1997 DECEMBER 29, 1996
----------------------- -----------------------
(in thousands)
IDENTIFIABLE ASSETS
Domestic operations $ 99,850 $ 96,872
International operations 17,454 9,938
----------------------- -----------------------
Total identifiable assets $ 117,304 $ 106,811
======================= =======================
</TABLE>
4. FINANCING INSTRUMENTS
In June 1997, the Company entered into a $30 million multi-currency revolving
credit facility with a syndicate of banks, the proceeds of which may be used for
working capital, acquisitions and general corporate purposes. The credit
facility also includes a letter of credit of up to $10 million for the issuance
of standby letters of credit. As of August 1, 1997, no amounts were outstanding
under this facility.
In June 1997, the Company also entered into an $80 million operating lease
facility that has been established to acquire and develop new correctional
institutions used in its business. As a condition of this facility, the Company
unconditionally agreed to guarantee certain obligations of First Security Bank,
National Association, a party to the aforementioned operating lease facility.
As of August 1, 1997, approximately $16 million of properties were under
development.
5. SUBSEQUENT EVENT
On July 18, 1997, Atlantic Shores Healthcare, Inc. a wholly-owned subsidiary of
Wackenhut Corrections Corporation, completed the purchase of an 86-bed
psychiatric hospital in Fort Lauderdale, Florida for $6 million. The hospital
has been renamed Atlantic Shores Hospital.
Page 9 of 16
<PAGE> 10
WACKENHUT CORRECTIONS CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
In June 1997, the Company entered into a $30 million multi-currency revolving
credit facility with a syndicate of banks, the proceeds of which may be used for
working capital, acquisitions and general corporate purposes. The credit
facility also includes a letter of credit of up to $10 million for the issuance
of standby letters of credit. As of August 1, 1997, no amounts were outstanding
under this facility.
In June 1997, the Company also entered into an $80 million operating lease
facility that has been established to acquire and develop new correctional
institutions used in its business. As a condition of this facility, the Company
unconditionally agreed to guarantee certain obligations of First Security Bank,
National Association, a party to the aforementioned operating lease facility. As
of August 1, 1997, approximately $16 million of properties were under
development.
In June 1997, the Company also purchased the Queens Private Correctional
Facility, a 66,000 square foot building currently being used by the Company as a
200-bed federal detention facility, for $6.6 million. The Company also invested
another $5.5 million to renovate the building.
Reference is made to Item 7, Part II of the Corporation's Annual Report on Form
10-K for the fiscal year ended December 29, 1996, filed with the Securities and
Exchange Commission on March 28, 1997, for further discussion and analysis of
information pertaining to the Corporation's results of operations, liquidity and
capital resources.
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Corporation's consolidated financial statements and the notes thereto.
COMPARISON OF THIRTEEN WEEKS ENDED JUNE 29, 1997 AND THIRTEEN WEEKS ENDED JUNE
30, 1996:
Revenues increased by 54.1% to $51.5 million in the thirteen weeks ended June
29, 1997 ("Second Quarter 1997") from $33.4 million in the thirteen weeks ended
June 30, 1996 ("Second Quarter 1996"). The increase in revenues in Second
Quarter 1997 compared to Second Quarter 1996 is primarily attributable to
increased compensated resident days resulting from the opening of two facilities
in the first half of 1996 (Willacy County Unit, Willacy County, Texas in January
1996, and Marshall County Correctional Facility, Marshall County, Mississippi in
June 1996), the opening of five facilities in the First Quarter of 1997 (South
Bay Correctional Facility, South Bay, Florida in February 1997, Travis County
Community Justice Center, Travis County, Texas in March 1997, Bayamon Regional
Detention Center, Bayamon, Puerto Rico in March 1997, Queens Private
Correctional Facility, Queens, New York in March 1997 and Fulham Correctional
Center, Victoria, Australia in March 1997) and improved occupancy at the Central
Texas Parole Violator Facility in San Antonio, Texas.
Page 10 of 16
<PAGE> 11
WACKENHUT CORRECTIONS CORPORATION
The number of compensated resident days in domestic facilities increased to
1,141,607 in Second Quarter 1997 from 752,474 in Second Quarter 1996. In
addition, compensated resident days in the Company's Australian facilities
increased to 142,840 from 111,748 for the comparable periods. As a result of the
increase in compensated resident days, average facility occupancy in domestic
facilities increased to 96.4% of capacity in Second Quarter 1997 compared to
95.2% in the same period in Second Quarter 1996.
Operating expenses increased by 50.6% to $43.2 million in Second Quarter 1996
compared to $28.7 million in Second Quarter 1996. The increase primarily
reflected the seven facilities that opened in 1996 and 1997, as described above.
Depreciation and amortization increased by 96.1% to $1.5 million in Second
Quarter 1997 from $770,000 in Second Quarter 1996. This increase is due to
deferred charge amortization attributable to the new facilities and depreciation
associated with the purchase of two facilities.
Contribution from operations increased 71.4% to $6.8 million in Second Quarter
1997 from $4.0 million in Second Quarter 1996 due primarily to the opening of
the South Bay Correctional Facility in February 1997, the openings of the Queens
Private Correctional Facility, Travis County Community Justice Center and Fulham
Correctional Center in March 1997, improved occupancy at the Central Texas
Parole Violator Facility, and a full six months of operating results at the
Marshall County Correctional Facility which opened in June 1996.
General and administrative expenses increased 46.8% to $3.0 million in Second
Quarter 1997 from $2.1 million in Second Quarter 1996. This increase is
primarily attributable to increased business development activities in response
to additional interest in the Company's services.
Operating income increased by 98.1% to $3.8 million in Second Quarter 1997 from
$1.9 million in Second Quarter 1996. As described above, the opening of four
facilities and improved occupancy at the Central Texas Parole Violator Facility
were the principal factors contributing to the increase in operating income
during Second Quarter 1997.
Income before taxes and equity income of affiliate increased by 58.6% to $4.1
million in Second Quarter 1997 from $2.6 million in Second Quarter 1996 due to
the factors described above, offset by lower interest income since the Company
has deployed cash to strategic opportunities.
Provision for income taxes increased to $1.6 million in Second Quarter 1997 from
$895,000 in Second Quarter 1996 due to higher taxable income, and a higher
effective tax rate.
Equity income of affiliates increased by 79.39% to $251,000 in Second Quarter
1997 from $140,000 in Second Quarter 1996. This increase is due to two
expansions at the H.M. Prison Doncaster (Doncaster, England) in June 1996 and
March 1997, and income earned from two court escort contracts that commenced
operations in May 1996.
Net income increased by 50.1% to $2.7 million in Second Quarter 1997 from
$1.8 million in Second Quarter 1996 as a result of the factors described above.
Page 11 of 16
<PAGE> 12
WACKENHUT CORRECTIONS CORPORATION
COMPARISON OF TWENTY-SIX WEEKS ENDED JUNE 27, 1997 AND TWENTY-SIX WEEKS ENDED
JUNE 30, 1996:
Revenues increased by 47.6% to $92.7 million in the twenty-six weeks ended June
29, 1997 ("First Half 1997") from $62.9 million in the twenty-six weeks ended
June 30, 1996 ("First Half 1996"). The increase in revenues in First Half 1997
compared to First Half 1996 is primarily attributable to increased compensated
resident days resulting from the opening of two facilities in the first half of
1996 (Willacy County Unit, Willacy County, Texas in January 1996, and Marshall
County Correctional Facility, Marshall County, Mississippi in June 1996), the
assumption of operational responsibility for an existing facility (Delaware
County Prison, Delaware County, Pennsylvania in April 1996), the opening of five
facilities in the First Quarter of 1997 (South Bay Correctional Facility, South
Bay, Florida in February 1997, Travis County Community Justice Center, Travis
County, Texas in March 1997, Bayamon Regional Detention Center, Bayamon, Puerto
Rico in March 1997, Queens Private Correctional Facility, Queens, New York in
March 1997 and Fulham Correctional Center, Victoria,Australia in March 1997) and
improved occupancy at the Central Texas Parole Violator Facility in San Antonio,
Texas.
The number of compensated resident days in domestic facilities increased to
2,105,395 in First Half 1997 from 1,389,295 in First Half 1996. In addition,
compensated resident days in Australian facilities increased to 250,038 from
223,496 for the comparable periods. As a result of the increase in compensated
resident days, average facility occupancy in domestic facilities increased to
96.9% of capacity in First Half of 1997 compared to 95.7% in First Half of 1996.
Operating expenses increased by 45.8% to $77.6 million in First Half 1997
compared to $53.2 million in First Half 1996. This increase primarily reflected
the eight facilities that opened in 1996 and 1997, as described above.
Depreciation and amortization increased by 65.5% to $2.7 million in the First
Half 1997 from $1.6 million in the First Half 1996. This increase is due to
deferred charge amortization attributable to the new facilities and depreciation
associated with the purchase of two facilities.
Contributions from operations increased by 55.9% to $12.5 million in First Half
1997 from $8.0 million in First Half 1996 due primarily to the opening of the
South Bay Correctional Facility in February 1997, the openings of the Queens
Private Correctional Facility, Travis County Community Justice Center and Fulham
Correctional Center in March 1997, improved occupancy at the Central Texas
Parole Violator Facility, and a full six months of operating results at the
Marshall County Correctional Facility which opened in June 1996.
General and administrative expenses increased by 24% to $5.5 million in First
Half 1997 from $4.4 million in First Half 1996. This increase is primarily
attributable to increased business development activities in response to
additional interest in the Company's services.
Operating income increased by 94.4% to $7.1 million in First Half 1997 from $3.6
million in First Half 1996. As described above, the opening of four facilities
and improved occupancy at the Central Texas Parole Violator Facility were the
principal factors contributing to the increase in operating income during Second
Quarter 1997.
Page 12 of 16
<PAGE> 13
WACKENHUT CORRECTIONS CORPORATION
Income before taxes and equity loss increased by 59.9% to $7.9 million in First
Half 1997 from $4.9 million in First Half 1996 due to the factors described
above, offset by lower interest income since the Company has deployed cash to
strategic opportunities.
Provision for income taxes increased to $3.1 million in First Half 1997 from
$1.8 million in First Half 1996 due to higher taxable income, and an increase in
the Company's effective tax rate.
Equity income of affiliates increased 173% to $497,000 for First Half 1997 from
$182,000 in First Half 1996. The current year increase results from two
expansions at the H.M. Prison Doncaster (Doncaster, England) in June 1996 and
March 1997, and income earned from two court escort contracts that commenced
operations in May 1996.
Net income increased by 61.6% to $5.3 million in First Half 1997 from $3.3
million in First Half 1996 as a result of the factors described above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Not Applicable.
Page 13 of 16
<PAGE> 14
WACKENHUT CORRECTIONS CORPORATION
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the Corporation's business results in claims or litigation against
the Corporation for damages arising from the conduct of its employees or others.
Except for routine litigation incidental to the business of the Corporation,
there are no pending material legal proceedings to which the Corporation or any
of its subsidiaries is a party or to which any of their property is subject. The
Corporation believes that the outcome of the proceedings to which it is
currently a party will not have a material adverse effect upon its operations or
financial condition.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of the Corporation was held on April 24, 1997
in Palm Beach Gardens, Florida. All directors nominated for election were
elected by a majority of the votes cast and the tabulation of the votes cast
were as follows:
VOTES FOR VOTES WITHHELD
Norman A. Carlson 20,881,163 46,191
Benjamin R. Civiletti 20,847,433 79,921
Manuel J. Justiz 20,877,433 49,921
Floretta McKenzie 20,876,613 50,741
John Ruffle 20,880,233 47,121
Anthony P. Travisono 20,879,813 47,541
George R. Wackenhut 20,879,063 48,291
Richard R. Wackenhut 20,881,883 45,471
George C. Zoley 20,881,933 45,421
The second matter voted upon at the Annual Meeting was the ratification of the
action of the Board of Directors appointing the firm of Arthur Andersen LLP to
be the independent certified public accountants of the Corporation for the
fiscal year 1997. The tabulation of the votes on this matter was as follows:
For: 20,874,560 Against: 17,970 Abstain: 34,824
ITEM 5. OTHER INFORMATION
Not applicable.
Page 14 of 16
<PAGE> 15
WACKENHUT CORRECTIONS CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - The following exhibits are filed as part of this quarterly
report.
Exhibit
No. Description
4.1 Credit Agreement, dated as of June 19, 1997, by and
among Wackenhut Corrections Corporation, as Borrower,
NationsBank National Association, as Agent and as Lender,
ScotiaBanc Inc. and Barnett Bank, N.A., as Co-Agents and as
Lenders, and the Lenders Party thereto from time to time.
4.2 Participation Agreement, dated as of June 19, 1997, among
Wackenhut Corrections Corporation, as Construction Agent and
as Lessee, First Security Bank, National Association, as
Owner Trustee under the Wackenhut Corrections Trust 1997-1,
the Various Banks and Other Lending Institutions which are
Parties thereto from time to time, as Holders, the Various
Banks and Other Lending Institutions which are parties
thereto from time to time, as the Lenders, and NationsBank,
National Association, as Administrative Agent for the
Lenders.
4.3 Credit Agreement, dated as of June 19, 1997, among First
Security Bank, National Association, as Owner Trustee for
Wackenhut Corrections Trust 1997, as Borrower, the Several
Lenders from time to time parties thereto, and NationsBank,
National Association, as Administrative Agent.
4.4 Second Amended and Restated Trust Agreement (Wackenhut
Corrections Trust 1997-1), dated as of June 19, 1997, among
NationsBank, National Association, and the other financial
institutions parties thereto, as Holders, and First Security
Bank, National Association, as Owner Trustee.
4.5 Security Agreement, dated as of June 19, 1997, between First
Security Bank, National Association, as Owner Trustee under
the Wackenhut Corrections Trust 1997-1, and NationsBank,
National Association, as Agent for the Lenders and Holders.
4.6 Lease Agreement dated as of June 19, 1997, between First
Security Bank, National Association, as Owner Trustee under
the Wackenhut Corrections Trust 1997-1, as Lessor, and
Wackenhut Corrections Corporation, as Lessee.
4.7 Agency Agreement, date as of June 19, 1997, between
Wackenhut Corrections Corporation, as Construction Agent,
and First Security Bank National Association, as Owner
Trustee under the Wackenhut Corrections Trust 1997-1, as
Lessor.
4.8 Guaranty Agreement (Series A Obligations), dated as of June
19, 1997, by and among Wackenhut Corrections Corporation, as
guarantor to NationsBank, National Association, as
Administrative Agent.
27 Financial Data Schedule (for S.E.C. use only).
(b) Reports on Form 8-K - The Corporation did not file a Form 8-K during the
first half of 1997.
Page 15 of 16
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
August 11, 1997 /s/ John G. O'Rourke
--------------------------------
John G. O'Rourke
Senior Vice President - Finance, Chief Financial
Officer and Treasurer
(Duly Authorized Officer and Principal Financial
Officer)
Page 16 of 16
<PAGE> 1
EXHIBIT 4.1
================================================================================
CREDIT AGREEMENT
by and among
WACKENHUT CORRECTIONS CORPORATION
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender,
SCOTIABANC INC.
BARNETT BANK, N.A.,
as Co-Agents and as Lenders,
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 19, 1997
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TABLE OF CONTENTS
<TABLE>
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Page
ARTICLE I
Definitions and Terms
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1.1. Definitions..............................................................................................2
1.2. Rules of Interpretation.................................................................................24
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.........................................................................................26
2.2. Payment of Interest.....................................................................................30
2.3. Payment of Principal....................................................................................30
2.4. Non-Conforming Payments.................................................................................30
2.5. Notes...................................................................................................31
2.6. Pro Rata Payments.......................................................................................31
2.7. Reductions..............................................................................................31
2.8. Conversions and Elections of Subsequent Interest Periods................................................32
2.9. Increase and Decrease in Amounts........................................................................32
2.10. Facility Fees...........................................................................................33
2.11. Deficiency Advances.....................................................................................33
2.12. Use of Proceeds.........................................................................................33
2.13. Extension of Stated Termination Date....................................................................33
2.14. Swing Line..............................................................................................34
ARTICLE III
Letters of Credit
3.1. Letters of Credit.......................................................................................36
3.2. Reimbursement...........................................................................................36
3.3. Letter of Credit Facility Fees..........................................................................40
3.4. Administrative Fees.....................................................................................40
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return.......................................................................41
4.2. Limitation on Types of Loans............................................................................42
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<TABLE>
<S> <C> <C>
4.3. Illegality..............................................................................................42
4.4. Treatment of Affected Loans.............................................................................43
4.5. Compensation............................................................................................43
4.6. Taxes...................................................................................................44
4.7. Replacement Banks.......................................................................................45
4.8. Lending Office..........................................................................................46
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance..........................................................................47
5.2. Conditions of Revolving Loans and Letter of Credit......................................................49
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority..............................................................................51
6.2. Loan Documents..........................................................................................51
6.3. Solvency................................................................................................52
6.4. Subsidiaries and Stockholders...........................................................................52
6.5. Ownership Interests.....................................................................................52
6.6. Financial Condition.....................................................................................52
6.7. Title to Properties.....................................................................................53
6.8. Taxes...................................................................................................53
6.9. Other Agreements........................................................................................53
6.10. Litigation..............................................................................................53
6.11. Margin Stock............................................................................................54
6.12. Investment Company......................................................................................54
6.13. Patents, Etc............................................................................................54
6.14. No Untrue Statement.....................................................................................54
6.15. No Consents, Etc........................................................................................54
6.16. Employee Benefit Plans..................................................................................55
6.17. No Default..............................................................................................56
6.18. Hazardous Materials.....................................................................................56
6.19. Employment Matters......................................................................................56
6.20. RICO....................................................................................................56
ARTICLE VII
Affirmative Covenants
7.1. Financial Reports, Etc..................................................................................58
7.2. Maintain Properties.....................................................................................59
</TABLE>
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<TABLE>
<S> <C> <C>
7.3. Existence, Qualification, Etc...........................................................................59
7.4. Regulations and Taxes...................................................................................59
7.5. Insurance...............................................................................................60
7.6. True Books..............................................................................................60
7.7. Right of Inspection.....................................................................................60
7.8. Observe all Laws........................................................................................60
7.9. Governmental Licenses...................................................................................60
7.10. Covenants Extending to Other Persons....................................................................60
7.11. Officer's Knowledge of Default..........................................................................60
7.12. Suits or Other Proceedings..............................................................................61
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint....................................61
7.14. Environmental Compliance................................................................................61
7.15. Indemnification.........................................................................................61
7.16. Further Assurances......................................................................................62
7.17. Employee Benefit Plans..................................................................................62
7.18. Continued Operations....................................................................................62
7.19. Additional Support Documents............................................................................63
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants.....................................................................................64
8.2. Acquisitions............................................................................................65
8.3. Capital Expenditures....................................................................................65
8.4. Liens...................................................................................................65
8.5. Indebtedness............................................................................................66
8.6. Transfer of Assets......................................................................................67
8.7. Investments.............................................................................................67
8.8. Merger or Consolidation.................................................................................67
8.9. Restricted Payments.....................................................................................68
8.10. Transactions with Affiliates............................................................................68
8.11. Compliance with ERISA...................................................................................68
8.12. Fiscal Year.............................................................................................69
8.13. Dissolution, etc........................................................................................69
8.14. Limitations on Sales and Leasebacks.....................................................................69
8.15. Change in Control.......................................................................................69
8.16. [Reserved]
8.17. Negative Pledge Clauses................................................................................69
8.18. Prepayments, Etc. of Indebtedness.......................................................................70
</TABLE>
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<TABLE>
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default.......................................................................................71
9.2. Agent to Act............................................................................................74
9.3. Cumulative Rights.......................................................................................74
9.4. No Waiver...............................................................................................74
9.5. Allocation of Proceeds..................................................................................74
9.6. Limitation..............................................................................................75
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities.....................................................................76
10.2. Reliance by Agent.......................................................................................76
10.3. Defaults................................................................................................77
10.4. Rights as Lender........................................................................................77
10.5. Indemnification.........................................................................................77
10.6. Non-Reliance on Agent and Other Lenders.................................................................78
10.7. Resignation of Agent....................................................................................78
10.8. Sharing of Payments, etc................................................................................78
10.9. Fees....................................................................................................79
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations..........................................................................80
11.2. Notices.................................................................................................82
11.3. Right of Set-off; Adjustments...........................................................................83
11.4. Survival................................................................................................84
11.5. Expenses................................................................................................84
11.6. Amendments and Waivers..................................................................................84
11.7. Counterparts............................................................................................85
11.8. Termination.............................................................................................85
11.9. Indemnification.........................................................................................85
11.10. Severability............................................................................................86
11.11. Entire Agreement........................................................................................86
11.12. Agreement Controls......................................................................................86
11.13. Usury Savings Clause....................................................................................86
11.14. Governing Law; Waiver of Jury Trial.....................................................................87
11.15. Judgment Currency.......................................................................................88
11.16. Economic and Monetary Union in the European Community...................................................88
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<TABLE>
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11.17. Confidentiality.........................................................................................89
EXHIBIT A Applicable Revolving Credit Commitment Percentages...................................................A-1
EXHIBIT B Form of Assignment and Acceptance....................................................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative...................................C-1
EXHIBIT D-1 Form of Borrowing Notice..........................................................................D-1-1
EXHIBIT D-2 Form of Borrowing Notice--Swing Line Loans........................................................D-2-1
EXHIBIT E Form of Interest Rate Selection Notice................................................................E-1
EXHIBIT F-1 Form of Revolving Note............................................................................F-1-1
EXHIBIT F-2 Form of Swing Line Note...........................................................................F-2-1
EXHIBIT G Form of Opinion of Borrower's Counsel.................................................................G-1
EXHIBIT H Compliance Certificate................................................................................H-1
EXHIBIT I Form of Facility Guaranty.............................................................................I-1
EXHIBIT J Form of LC Account Agreement..........................................................................J-1
Schedule 6.4 Subsidiaries and Investments in Other Persons......................................................S-1
Schedule 6.6 Indebtedness.......................................................................................S-2
Schedule 6.7 Liens..............................................................................................S-3
Schedule 6.10 Litigation........................................................................................S-4
Schedule 7.5 Insurance.........................................................................................S-5
</TABLE>
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June __, 1997 (the "Agreement"), is
made by and among WACKENHUT CORRECTIONS CORPORATION, a Florida corporation
having its principal place of business in Palm Beach Gardens, Florida (the
"Borrower"), NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States, in its capacity as a
Lender ("NationsBank"), and each other financial institution executing and
delivering a signature page hereto and each other financial institution which
may hereafter execute and deliver an instrument of assignment with respect to
this Agreement pursuant to Section 11.1 (hereinafter such financial institutions
may be referred to individually as a "Lender" or collectively as the "Lenders"),
and NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States, in its capacity as agent for
the Lenders (in such capacity, and together with any successor agent appointed
in accordance with the terms of Section 10.7, the "Agent");
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a multi-currency revolving credit facility of up to $30,000,000,
the proceeds of which are to be used for working capital, acquisitions, and
general corporate purposes and which shall include a letter of credit facility
of up to $10,000,000 for the issuance of standby letters of credit; and
WHEREAS, the Lenders are willing to make such revolving credit and letter
of credit facilities available to the Borrower upon the terms and conditions set
forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
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ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person which constitute all
or substantially all of the assets of such Person or of a line or lines
of business conducted by such Person.
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Advance Date Exchange Rate" means, with respect to a
specified Advance or Loan in an Alternative Currency, the Spot Rate of
Exchange as of the date two Business Days preceding the date such
Advance is originally made, provided that, if such Advance or Loan is
Continued for a subsequent Interest Period or Converted pursuant to
Section 2.8, the Advance Date Exchange Rate with respect to such Loan
shall be the Spot Rate of Exchange two Business Days preceding the
effective date of the latest Continuation or Conversion of such Advance
or Loan, and the Dollar Value of such Advance or Loan shall be adjusted
as set forth in Section 2.1(b).
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with the Borrower; or (ii) which beneficially owns
or holds 5% or more of any class of the outstanding voting stock (or in
the case of a Person which is not a corporation, 5% or more of the
equity interest) of the Borrower; or 5% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Borrower. The term "control" means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise.
"Alternative Currency" means Pounds Sterling, Australian
Dollars, Canadian Dollars, Euro Currency and with the prior written
consent of all Lenders and the Agent, any other lawful currency other
than Dollars which is freely transferable and convertible into Dollars
in the United States currency market; provided, however, that an
Alternative Currency shall only be available to the Borrower if each
Lender shall have determined (which determination shall be conclusive)
that it has access to such Alternative Currency on terms reasonably
acceptable to such Lender and that the Alternative Currency is freely
transferable and convertible into Dollars.
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"Alternative Currency Equivalent Amount" means with respect to
a specified Alternative Currency and a specified Dollar amount, the
amount of such Alternative Currency into which such Dollar amount would
be Converted, based on the applicable Advance Date Exchange Rate.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 11.1.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means for each Eurodollar Rate Loan, or
Swing Line Loan, that percent per annum set forth below, which shall be
based upon the Consolidated Debt Service Coverage Ratio for the
Four-Quarter Period most recently ended as specified below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Tier Consolidated Debt Service Applicable Margin
Coverage Ratio
- --------------------------------------------------------------------------------
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I Equal to or greater than 4.00 to 1.00 0.375%
- --------------------------------------------------------------------------------
II Equal to or greater than 3.25 to 1.00 0.450%
and less than 4.00 to 1.00
- --------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.625%
and less than 3.25 to 1.00
- --------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 0.875%
and less than 2.75 to 1.00
- --------------------------------------------------------------------------------
</TABLE>
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 7.1(a)(ii) and Section
7.1(b)(ii), subject to review and approval of such computations by the
Agent, and shall be effective commencing on the date following the date
such certificate is received (or, if earlier, the date such certificate
was required to be delivered) until the date following the date on
which a
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new certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within five (5) days after the time period
required by Section 7.1, then the Applicable Margin shall be Tier IV
from the date such certificate was required to be delivered until the
appropriate certificate is so delivered. From the Closing Date to the
date following the date on which the compliance certificate required by
Section 7.1(b)(ii) is delivered for the third (3rd) quarter of fiscal
year 1997, the Applicable Margin shall be Tier II.
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Debt Service Coverage
Ratio for the Four-Quarter Period most recently ended as specified
below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Tier Consolidated Debt Service Applicable Unused Fee
Coverage Ratio
- --------------------------------------------------------------------------------
<S> <C> <C>
I Equal to or greater than 4.00 to 1.00 0.125%
- --------------------------------------------------------------------------------
II Equal to or greater than 3.25 to 1.00 0.150%
and less than 4.00 to 1.00
- --------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.200%
and less than 3.25 to 1.00
- --------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 0.250%
and less than 2.75 to 1.00
- --------------------------------------------------------------------------------
</TABLE>
The Applicable Unused Fee shall be established on each Determination
Date. Any change in the Applicable Unused Fee following each
Determination Date shall be determined based upon the computations set
forth in the certificate furnished to the Agent pursuant to Section
7.1(a)(ii) and Section 7.1(b)(ii), subject to review and approval of
such computations by the Agent and shall be effective commencing on the
date following the date such certificate is received (or, if earlier,
the date such certificate was required to be delivered) until the date
following the date on which a new certificate is delivered or is
required to be delivered, whichever shall first occur; provided
however, if the Borrower shall fail to deliver any such certificate
within five (5) days after the time period required by Section 7.1,
then the Applicable Unused Fee shall be Tier IV from the date such
certificate was required to be delivered until the appropriate
certificate is so delivered. From the Closing Date to the date
following the date on which the compliance certificate required by
Section 7.1(b)(ii) is delivered for the third (3rd) quarter of fiscal
year 1997, the Applicable Margin shall be Tier II.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
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"Assessment Rate" means, for any day, the annual assessment
rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) which
is payable by the Agent (in its individual capacity) to the Federal
Deposit Insurance Corporation (or any successor) for deposit insurance
for Dollar time deposits with the Agent (in its individual capacity) at
its Principal Office as determined by the Agent. The CD Rate shall be
adjusted automatically on and as of the effective date of any change in
the Assessment Rate.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) executed and delivered to the Agent by the parties thereto in
connection with an assignment of a Lender's interest under this
Agreement pursuant to Section 11.1.
"Australian Dollars" means the official currency of Australia.
"Authorized Representative" means any of the Chief Executive
Officer, President, any Senior Vice President or Controller of the
Borrower or, with respect to financial matters, the chief financial
officer or Controller of the Borrower, or any other Person expressly
designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Dollar denominated Loan for which the
rate of interest is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made either
to (i) satisfy Reimbursement Obligations arising from a drawing under a
Letter of Credit or (ii) pay NationsBank in respect of Swing Line
Outstandings.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
[_____________________] or any successor account with the Agent, which
may be maintained at one or more offices of the Agent or an agent of
the Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or a Swing Line Loan, in the forms of Exhibits D-1 and D-2,
respectively.
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"Business Day" means, (i) with respect to any Floating Rate
Loan, any day which is not a Saturday, Sunday or a day on which banks
in the States of New York and North Carolina are authorized or
obligated by law, executive order or governmental decree to be closed,
and (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of
business contemplated by this Agreement in London, England, New York,
New York and Charlotte, North Carolina.
"Canadian Dollar" means the official currency of Canada.
"Capital Expenditures" means, with respect to the Borrower and
its Subsidiaries, for any period the sum of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Borrower or any Subsidiary during such period for items that would
be classified as "property, plant or equipment" or comparable items on
the consolidated balance sheet of the Borrower and its Subsidiaries,
including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been
capitalized, excluding, however, the amount of any Capital Expenditures
paid for with proceeds of casualty insurance as evidenced in writing
and submitted to the Agent together with any compliance certificate
delivered pursuant to Section 7.1(a) or (b), and (ii) with respect to
any Capital Lease entered into by the Borrower or its Subsidiaries
during such period, the present value of the lease payments due under
such Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such Capital Lease
(or in the absence of a stated interest rate, that rate used in the
preparation of the financial statements described in Section 7.1(a)),
all the foregoing in accordance with GAAP applied on a Consistent
Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"CD Rate" means the interest rate per annum calculated
according to the following formula:
CD = Floating CD Rate + Assessment + Applicable
-----------------------
Rate 1 - Reserve Requirement Rate Margin
"CD Rate Loans" means Loans that bear interest at rates based
upon the CD Rate.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes
the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act ), directly or indirectly, of Voting Stock of the
Borrower (or securities convertible into or exchangeable for
such Voting Stock)
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<PAGE> 13
representing 20% or more of the combined voting power of all
Voting Stock of the Borrower (on a fully diluted basis) or (B)
otherwise has the ability, directly or indirectly, to elect a
majority of the board of directors of the Borrower; provided,
however, that this subsection shall apply only to any "person"
or "group" (each as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act) who does not qualify hereunder as of the
Closing Date.
(ii) during any period of up to 24 consecutive
months, commencing on the Closing Date, individuals who at the
beginning of such 24-month period were directors of the
Borrower shall cease for any reason (other than the death,
disability or retirement of an officer of the Borrower that is
serving as a director at such time so long as another officer
of the Borrower replaces such Person as a director) to
constitute a majority of the board of directors of the
Borrower; or
(iii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition
of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of the
Borrower.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
Section 6.6(a).
"Consolidated Debt Service" means, with respect to the
Borrower and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the sum of, without duplication, (i)
Consolidated Interest Expense and (ii) Consolidated Lease Payments for
such period, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Consolidated Debt Service Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter-Period ending
on the date of computation thereof, the ratio of (i) Consolidated
EBITDA plus Consolidated Lease Payments for such period to (ii)
Consolidated Debt Service for such period.
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without
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<PAGE> 14
duplication, (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) taxes on income, (iv) amortization, and (v)
depreciation, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter Period ending
on the date of computation thereof, the ratio of (i) Consolidated
EBITDA plus Consolidated Lease Payments for such period to (ii)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Interest Expense, (ii) required principal payments of Consolidated
Indebtedness, (iii) Consolidated Lease Payments for such period and
(iv) all Restricted Payments, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Indebtedness" means all Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries plus all TROL
Indebtedness, all determined on a consolidated basis.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including fees payable in respect of any Swap Agreement and Letters of
Credit) payable in connection with the incurrence of Indebtedness to
the extent included in gross interest expense and (iii) the portion of
any payments made in connection with Capital Leases allocable to
interest expense, in each of the foregoing cases determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; provided that Consolidated Interest Expense shall not include
payments with respect to the TROL Leases.
"Consolidated Lease Payments" means the gross amount of all
lease or rental payments, whether or not characterized as rent,
including rental payments under TROL Leases of the Borrower and its
Subsidiaries, excluding payments in respect of Capital Leases
constituting Indebtedness, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Indebtedness
(determined as at such date) to (ii) Consolidated EBITDA plus all
payments with respect to TROL Indebtedness which are in the nature of
interest (for the Four-Quarter Period ending on (or most recently ended
prior to) such date).
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income, and (ii) dividends and
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<PAGE> 15
distributions, including management fees, made in the ordinary course
of their businesses by a Special Purpose Subsidiary or other Persons in
which investment is permitted pursuant to this Agreement, less all
operating and non-operating expenses of the Borrower and its
Subsidiaries including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (for all purposes other than compliance with
Section 8.1(a) hereof) as income: (i) net gains or losses on the sale,
conversion or other disposition of capital assets, (ii) net gains or
losses on the acquisition, retirement, sale or other disposition of
capital stock and other securities of the Borrower or its Subsidiaries,
(iii) net gains or losses on the collection of proceeds of life
insurance policies, (iv) any write-up of any asset, and (v) any other
net gain or loss or credit or debit of an extraordinary nature as
determined in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, Consolidated Shareholders' Equity
minus (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings) all reserves
(other than contingency reserves not allocated to any particular
purpose), including without limitation reserves for depreciation,
depletion, amortization, obsolescence, deferred income taxes, insurance
and inventory valuation all as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of issued
and outstanding share capital, plus (ii) the amount of additional
paid-in capital and retained earnings (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all as determined in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Total Assets" means, as of the date on which the
amount thereof is to be determined, the net book value of all assets of
the Borrower and its Subsidiaries as determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Consolidated Total Capitalization" means, as of any date on
which the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Shareholders' Equity.
"Contingent Obligation" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement
to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss)
the Indebtedness of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other
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<PAGE> 16
Person. The amount of any Person's obligation under any Contingent
Obligation shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness guaranteed thereby).
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.8 or Article IV of one Type of Loan
into another Type of Loan.
"Cost of an Acquisition" means, with respect to any
Acquisition, as at the date of entering into any agreement therefor,
the sum of the following (without duplication): (i) the value of the
capital stock, warrants or options to acquire capital stock of Borrower
or any Subsidiary to be transferred in connection therewith, (ii) the
amount of any cash and fair market value of other property (excluding
property described in clause (i) and the unpaid principal amount of any
debt instrument) given as consideration, (iii) the amount (determined
by using the face amount or the amount payable at maturity, whichever
is greater) of any Indebtedness incurred, assumed or acquired by the
Borrower or any Subsidiary in connection with such Acquisition, (iv)
all additional purchase price amounts in the form of earnouts and other
contingent obligations that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with
GAAP, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on financial statements
of the Borrower and its Subsidiaries in accordance with GAAP, (vi) the
aggregate fair market value of all other consideration given by the
Borrower or any Subsidiary in connection with such Acquisition, and
(vii) out of pocket transaction costs for the services and expenses of
attorneys, accountants and other consultants incurred in effecting such
transaction, and other similar transaction costs so incurred.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Floating Rate
Loans, at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, and (iii) in any case, the maximum rate permitted
by applicable law, if lower.
"Direct Foreign Subsidiary" means any Subsidiary of the
Borrower that is not a Domestic Subsidiary a majority of whose
outstanding Voting Stock is owned by the Borrower or a Domestic
Subsidiary.
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<PAGE> 17
"Dollar Equivalent Amount" means, with respect to a specified
Alternative Currency amount, the amount of Dollars into which the
Alternative Currency amount would be converted, based on the applicable
Advance Date Exchange Rate.
"Dollar Value" of an Advance or a Loan in an Alternative
Currency means the Dollar Equivalent Amount of the principal amount of
such Advance or Loan based on the Advance Date Exchange Rate with
respect to such Advance or Loan, as recorded in the Agent's records
pursuant to Section 2.1.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized under the laws of the United States of America or a state or
territory thereof.
"Eligible Assignee" means (i) a Lender; (ii) an affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.1; the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower, it being agreed that Borrower may withhold its approval if as
a result of such assignment the Borrower incurs increased cost under
Section 4.6; provided, however, that neither the Borrower nor an
affiliate of the Borrower shall qualify as an Eligible Assignee.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 270 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and Moody's;
(c) interest bearing demand or time deposits issued
by any Lender or certificates of deposit maturing within one
year from the date of issuance thereof and issued by a bank or
trust company organized under the laws of the United States or
of any state thereof having capital surplus and undivided
profits aggregating at least $400,000,000 and being rated
"A-3" or better by S&P or "A" or better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
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<PAGE> 18
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate preferred
stock issued by a Person having a rating of its long term
unsecured debt of "A" or better by S&P or "A- 3" or better by
Moody's; and
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by Moody's.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law."
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code.
"Euro Currency" means the official currency, if any, of the
European Union.
"Eurodollar Rate Loan" means Loans that bear interest at rates
based upon the Eurodollar Rate.
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<PAGE> 19
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
<TABLE>
<S> <C> <C> <C>
Eurodollar = Interbank Offered Rate + Applicable
------------------------
Rate 1 - Reserve Requirement Margin
</TABLE>
"Event of Default" means any of the occurrences set forth as
such in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Facility Guaranty" means each Guaranty and Suretyship
Agreement between one or more Guarantors and the Agent for the benefit
of the Lenders, delivered as of the Closing Date and otherwise pursuant
to Section 7.19, as the same may be amended, modified or supplemented.
"Facility Termination Date" means the date on which the
Revolving Credit Termination Date shall have occurred, no Letters of
Credit shall remain outstanding and the Borrower shall have fully,
finally and irrevocably paid and satisfied all Obligations.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on the Monday after the Sunday
closest to the calendar year end of each calendar year and ending on
the Sunday closest to the calendar year end of each calendar year.
"Floating CD Rate" means, for any CD Rate Loan, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Agent to be the average of the bid rates quoted to
the Agent at approximately 10:00 a.m. (or as soon thereafter as
practicable) by two (2) or more certificate of deposit dealers of
recognized national standing selected by the Agent for the purchase at
face value of certificates of deposit of the Agent having a term of
ninety (90) days and in an amount comparable to the principal amount of
the CD Loan to be made by the Agent.
"Floating Rate Loan" means Base Rate Loans or CD Rate Loans or
both.
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<PAGE> 20
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"Funding Bank" means any banking institution approved by the
Agent located within a country which country's currency has been
approved by the Lenders as an Alternative Currency.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guarantors" means, at any date, the Subsidiaries who are
required to be parties to a Facility Guaranty at such date.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Contingent Obligations, including letters of credit, that portion of
obligations with respect to Capital Leases and other items which in
accordance with GAAP is required
14
<PAGE> 21
to be classified as a liability on a balance sheet; but excluding all
accounts payable and accruals in the ordinary course of business so
long as payment therefor is due within one year; provided that in no
event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits or reserves.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, including without limitation all Capital Leases and the
deferred purchase price of any property or asset, evidenced by a
promissory note, bond, debenture or similar written obligation for the
payment of money (including conditional sales or similar title
retention agreements), other than trade payables and short-term
accounts payable incurred in the ordinary course of business.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan
for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Rate Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted and ending, at the Borrower's option, on the date one, two,
three or six months and nine months, if available, thereafter as
notified to the Agent by the Authorized Representative three (3)
Business Days prior to the beginning of such Interest Period; provided,
that,
(i) if the Authorized Representative fails to
notify the Agent of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Loan for which such Interest Period was to be determined
shall be deemed to be a Base Rate Loan as of the first day
thereof;
(ii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day, such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day);
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<PAGE> 22
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past the
Stated Termination Date; and
(v) there shall not be more than seven (7)
Interest Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"Issuing Bank" means initially NationsBank and thereafter any
Lender which is successor to NationsBank as issuer of Letters of Credit
under Article III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Agent, as amended,
modified or supplemented from time to time.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank for the account of the Borrower in favor of a Person
advancing credit or securing an obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
16
<PAGE> 23
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means any borrowing pursuant to an Advance
under the Revolving Credit Facility.
"Loan Documents" means this Agreement, the Notes, the Pledge
Agreements, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, and all other
instruments and documents heretofore or hereafter executed or delivered
to or in favor of any Lender or the Agent in connection with the Loans
made and transactions contemplated under this Agreement, as the same
may be amended, supplemented or replaced from time to time.
"Loan Parties" means the Borrower and the Guarantors.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower and any of its Subsidiaries, taken as a
whole, (ii) the ability of the Loan Parties to pay or perform their
respective obligations, liabilities and indebtedness under the Loan
Documents as such payment or performance becomes due in accordance with
the terms thereof, or (iii) the rights, powers and remedies of the
Agent or any Lender under any Loan Document or the validity, legality
or enforceability thereof.
"Material Subsidiary" means Domestic Subsidiaries and Direct
Foreign Subsidiaries of Borrower existing on the Closing Date and in
the case of any Domestic Subsidiary or Direct Foreign Subsidiary
acquired or created after the Closing Date any direct or indirect
Domestic Subsidiary or Direct Foreign Subsidiary of the Borrower which
(i) has total assets equal to or greater than 5% of Consolidated Total
Assets (calculated as of the most recent fiscal period with respect to
which the Agent shall have received financial statements required to be
delivered pursuant to Sections 8.01(a) or (b) (or if prior to delivery
of any financial statements pursuant to such Sections, then calculated
with respect to the Fiscal Year end financial statements referred in
Section 7.01(f) (the "Required Financial Information")) or (ii) has
revenues equal to or greater than 5% of total revenues of the Borrower
and its Subsidiaries (calculated for the most recent period for which
the Agent has received the Required Financial Information); provided,
however, that notwithstanding the foregoing, the term "Material
Subsidiaries" shall mean Domestic Subsidiaries and Direct Foreign
Subsidiaries of the Borrower that together with the Borrower have
assets equal to not less than 80% of Consolidated Total Assets
(calculated as described above) and revenues of not less than 80% of
total revenues of the Borrower and its Subsidiaries (calculated as
described above); provided further that if more than one combination of
Domestic Subsidiaries and Direct Foreign Subsidiaries satisfies such
threshold, then those Domestic Subsidiaries and
17
<PAGE> 24
Direct Foreign Subsidiaries determined by the Borrower to be "Material
Subsidiaries" shall be specified by the Borrower.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and Moody's.
"NationsBank" means NationsBank, National Association.
"NCMI" means NationsBanc Capital Markets, Inc. and its
successors.
"Non-Recourse Indebtedness" means Indebtedness of a Special
Purpose Subsidiary the source of payment of which as it relates to such
Special Purpose Subsidiary is limited to the assets of such Special
Purpose Subsidiary or any other Special Purpose Subsidiary.
"Notes" means, collectively, the promissory notes of the
Borrower evidencing (i) Revolving Loans executed and delivered to the
Lenders substantially in the form of Exhibit F- 1, and (ii) Swing Line
Loans executed and delivered to the NationsBank substantially in the
form of Exhibit F-2.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
all liabilities of Borrower to any Lender which arise under a Swap
Agreement, and (iii) the payment and performance of all other
obligations, liabilities and Indebtedness of the Borrower to the
Lenders, the Agent or NCMI hereunder, under any one or more of the
other Loan Documents or with respect to the Loans.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings, Swing Line Outstandings, and Revolving Credit
Outstandings on such date.
"Participation" means, (i) with respect to any Lender (other
than the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof and (ii) with
respect to any Lender (other than NationsBank) and a Swing Line Loan,
the extension of credit represented by the
18
<PAGE> 25
participation of such Lender hereunder in the liability of NationsBank
in respect of a Swing Line Loan made by NationsBank in accordance with
the terms hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Person" means an individual, partnership, corporation, trust,
limited liability company, unincorporated organization, association,
joint venture or a government or agency or political subdivision
thereof.
"Pledge Agreement" means a Pledge Agreement, Share Charge,
Debenture or similar instrument whereby the Borrower or Domestic
Subsidiary creates a security interest in favor of the Agent in 65% of
the outstanding capital stock of a Material Subsidiary that is a Direct
Foreign Subsidiary.
"Pledged Stock" means the ownership interest in a Direct
Foreign Subsidiary which is pledged to the Agent pursuant to a Pledge
Agreement.
"Pounds Sterling" means the official currency of the United
Kingdom.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and Moody's and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due, and (iii) in a principal
amount and bear such rate or rates of interest as shall be sufficient
to pay in full all principal of, interest, and premium, if any, on such
obligations as the same becomes due as verified by a nationally
recognized firm of certified public accountants.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at, Independence Center, 15th Floor, NC1 001-15-04,
Charlotte, North Carolina 28255, Attention: Agency Services.
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<PAGE> 26
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 3.2) for amounts theretofore
paid by the Issuing Bank pursuant to a drawing under such Letter of
Credit.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 51% of
the aggregate Credit Exposures of all Lenders on such date; provided,
however, that to the extent NationsBank has more than 51% of the
aggregate Credit Exposures, Required Lenders means Lenders on such date
having Credit Exposures of 80% of the aggregate Credit Exposures of all
Lenders. For purposes of the preceding sentence, the amount of the
"Credit Exposure" of each Lender shall be equal to the aggregate
principal amount of the Loans owing to such Lender plus the aggregate
unutilized amounts of such Lender's Revolving Credit Commitment
(without regard to any Swing Line Outstandings) plus the amount of such
Lender's Applicable Commitment Percentage of Letter of Credit
Outstandings; provided that, (i) if any Lender shall have failed to pay
to the Issuing Bank its Applicable Commitment Percentage of any drawing
under any Letter of Credit resulting in an outstanding Reimbursement
Obligation, such Lender's Credit Exposure attributable to Letters of
Credit and Reimbursement Obligations shall be deemed to be held by the
Issuing Bank for purposes of this definition and (ii) if any Lender
shall have failed to pay to NationsBank its Applicable Commitment
Percentage of any Swing Line Loan, such Lender's Credit Exposure
attributable to all Swing Line Outstandings shall be deemed to be held
by NationsBank for purposes of this definition.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves)
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are required to be maintained under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against (a) in
the case of Eurodollar Rate Loans, "Eurocurrency liabilities" (as such
term is used in Regulation D) or (b) in the case of CD Rate Loans,
non-personal Dollar time deposits in an amount of $100,000 or more.
Without limiting the effect of the foregoing, the Reserve Requirement
shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate or CD Rate
(as the case may be) is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate
Loans or CD Rate Loans. The Eurodollar Rate and the CD Rate shall be
adjusted automatically on and as of the effective date of any change in
the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower) now or hereafter outstanding; (c)
any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of Borrower or any of its Subsidiaries now or hereafter
outstanding; and (d) any issuance and sale of capital stock of any
Subsidiary of the Borrower (or any option, warrant or right to acquire
such stock) other than to the Borrower.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
made pursuant to Section 2.1 then outstanding.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings, Swing Line Outstandings and
Letter of Credit Outstandings and cancellation of all Letters of
Credit.
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"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Special Purpose Subsidiary" means a Subsidiary of the
Borrower or another Subsidiary no portion of whose obligations or
liabilities are payable, directly or indirectly by the Borrower or any
other Subsidiary.
"Spot Rate of Exchange" means (i) in determining the Dollar
Equivalent Amount of a specified Alternative Currency amount as of any
date, the spot exchange rate determined by the Agent in accordance with
its usual procedures for the purchase by the Agent of Dollars with such
Alternative Currency at approximately 10:00 A.M. on the business Day
that is two (2) Business Days prior to such date, and (ii) in
determining the Alternative Currency Equivalent Amount of a specified
Dollar amount on any date, the spot exchange rate determined by the
Agent in accordance with its usual procedures for the purchase by the
Agent of such Alternative Currency with Dollars at approximately 10:00
A.M. on the Business Day that is two (2) Business Days prior to such
date.
"Stated Termination Date" means [____________], 2000 or such
later date as the parties may agree pursuant to Section 2.13.
"Subsidiary" means any corporation or other entity, other than
a Special Purpose Subsidiary, in which more than 50% of its outstanding
voting stock or more than 50% of all equity interests is owned directly
or indirectly by the Borrower and/or by one or more of the Borrower's
Subsidiaries.
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"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to Borrower and such
Person and approved by the Agent, which agreements create Rate Hedging
Obligations; provided, however, that no such approval of the Agent
shall be required to the extent such agreements are entered into
between the Borrower and any Lender.
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Borrower pursuant to Section 2.14.
"Swing Line Loans" means loans made by NationsBank to the
Borrower pursuant to Section 2.14.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to
exceed $10,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $30,000,000, as reduced from time to time in accordance with
Section 2.7.
"TROL Indebtedness" means the aggregate amount of liabilities
(including obligations to purchase or repurchase or other Contingent
Obligations) arising under TROL Leases.
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"TROL Leases" means all tax retention operating lease
agreements between the Borrower or any Subsidiary, as Lessee, and First
Security Bank, N.A., as Lessor, as amended, supplemented or modified
from time to time.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan, CD
Rate Loan, or Eurodollar Rate Loan).
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code
of another jurisdiction is controlling, in which case such terms shall
have the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(f) used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary,
refer to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
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(g) References to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other
Person by reference to the title of such officer shall be deemed to
refer to each other officer of such Person, however titled, exercising
the same or substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case may be, as amended, modified or
supplemented from time to time only as and to the extent permitted
therein and in the Loan Documents.
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ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances in Dollars or an
Alternative Currency (as specified in the respective Borrowing Notice) to the
Borrower under the Revolving Credit Facility from time to time from the Closing
Date until the Revolving Credit Termination Date on a pro rata basis as to the
total borrowing requested by the Borrower on any day determined by such Lender's
Applicable Commitment Percentage up to but not exceeding a Dollar Value equal to
the Revolving Credit Commitment of such Lender, provided, however, that the
Lenders will not be required and shall have no obligation to make any such
Advance (i) so long as a Default or an Event of Default has occurred and is
continuing or (ii) if the Agent has accelerated the maturity of any of the Notes
as a result of an Event of Default; provided further, however, that immediately
after giving effect to each such Advance, the Dollar Value of the principal
amount of Revolving Credit Outstandings plus Letter of Credit Outstandings plus
Swing Line Outstandings shall not exceed the Total Revolving Credit Commitment.
Within such limits, the Borrower may borrow, repay and reborrow under the
Revolving Credit Facility on a Business Day from the Closing Date until, but (as
to borrowings and reborrowings) not including, the Revolving Credit Termination
Date; provided, however, that (y) no Eurodollar Rate Loan shall be made which
has an Interest Period that extends beyond the Stated Termination Date and (z)
each Eurodollar Rate Loan may, subject to the provisions of Section 2.7, be
repaid only on the last day of the Interest Period with respect thereto unless
such payment is accompanied by the additional payment, if any, required by
Section 4.5. The Borrower agrees that if at any time the Outstandings shall
exceed the Total Revolving Credit Commitment, the Borrower shall immediately
reduce the outstanding principal amount of the Loans such that, as a result of
such reduction, the Outstandings shall not exceed the Total Revolving Credit
Commitment.
(b) Amounts. (i) Each request for an Advance of an Alternative
Currency under a Borrowing Notice shall constitute the Borrower's request for a
Loan of the Dollar Value of the amount of the Alternative Currency specified in
such Borrowing Notice and for such Loan to be made available by the Lenders to
the Borrower in the Alternative Currency Equivalent Amount of such Dollar Value
(determined based on the Advance Date Exchange Rate applicable to such Advance).
The principal amount outstanding on any Loan shall be recorded in the Agent's
records in Dollars (in the case of an Advance of an Alternative Currency as if
the Loan had initially been made in Dollars), based on the amount of any
Eurodollar Rate Loan Advance and on the Dollar Value of the initial Advance of
an Alternative Currency, as reduced from time to time by the Dollar Equivalent
Amount (based on the Advance Date Exchange Rate applicable to such Advance) of
any principal payments with respect to such Advance. Advances in an Alternative
Currency shall be limited to Eurodollar Rate Loans. In the event a Eurodollar
Rate Loan of an Alternative Currency is Continued, such election to Continue the
Eurodollar Rate Loan shall be treated as an Advance and the Agent shall notify
the Borrower and the Lenders of the Advance Date Exchange Rate, Interest Period
and the Eurodollar Rate for such Continued Eurodollar Rate Loan. The Lenders
shall each be deemed to have made an Advance to the Borrower of its Applicable
Commitment Percentage of
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such Loan of an Alternative Currency and the Agent shall apply the Advance Date
Exchange Rate for such new Interest Period to such Continued Alternative
Currency Equivalent Amount to determine the new Dollar Value of such Eurodollar
Rate Loan and shall adjust its books and the Revolving Credit Outstandings. In
the event that such adjustment with respect to a Continued Loan would cause the
total Dollar Value of Outstandings to exceed the Total Revolving Credit
Commitment, the Borrower shall, immediately on the effective date of such
Continuation, repay (a "Rate Adjustment Payment") the portion of such Continued
Loan (applying the new Advance Date Exchange Rate) necessary to ensure that the
total Dollar Value of all Outstandings does not exceed the Total Revolving
Credit Commitment, provided, however, that the Borrower shall not be required to
pay any additional compensation pursuant to Section 4.5 with respect to a
prepayment of a Loan required by this sentence if such prepayment is made
immediately on the effective date of the Continuation giving rise to such
prepayment and no notice of such prepayment shall be required. For the purposes
of determining the maximum amount of Outstandings hereunder, it is intended by
the parties that all Loans shall be the functional equivalent of Loans made and
repaid (based on the applicable Advance Date Exchange Rate for each Advance) in
Dollars. It is recognized that one or more Lenders may elect to record Loans or
Advances in Alternative Currencies. The Agent shall maintain records sufficient
to identify at any time, (A) the Advance Date Exchange Rate with respect to each
Advance, and (B) the portion of the Revolving Credit Outstanding attributable to
each Advance.
(ii) Except as otherwise permitted by the Lenders from time to
time, the aggregate unpaid principal amount (including with respect to Loans of
Alternative Currencies the total Dollar Value) of the Revolving Credit
Outstandings plus Letter of Credit Outstandings plus Swing Line Outstandings
shall not exceed at any time the Total Revolving Credit Commitment, and, in the
event there shall be outstanding any such excess, the Borrower shall immediately
make such payments and prepayments as shall be necessary to comply with this
restriction. Each Loan hereunder, other than Base Rate Refunding Loans, and each
Conversion under Section 2.8, shall be (A) in the case of Loans made in Dollars,
in an amount of at least $2,000,000, and, if greater than $2,000,000, an
integral multiple of $100,000, and (B) in the case of Loans made in an
Alternative Currency, in an amount of at least $2,000,000 (or the equivalent
thereof in any Alternative Currency), and, if greater than $2,000,000, an
integral multiple of $100,000 (or the equivalent thereof if in any Alternative
Currency).
(c) Advances and Rate Selection. (i) An Authorized Representative
shall give the Agent (A) at least three (3) Business Days' irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of a borrowing hereunder) prior to 11:00
A.M. and (B) irrevocable written notice by telefacsimile transmission of a
Borrowing Notice or Interest Rate Selection Notice (as applicable) with
appropriate insertions, effective upon receipt, of each Revolving Loan (other
than Base Rate Refunding Loans to the extent the same are effected without
notice pursuant to Section 2.1(c)(iv)) that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the Conversion of borrowing
hereunder) prior to 11:00 A.M. on the day of such proposed Base Rate Loan. Each
such notice shall specify the amount of the borrowing, whether Dollar or
Alternative Currency, the type of Loan (Base Rate or Eurodollar Rate), the date
of borrowing and,
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if a Eurodollar Rate Loan, the Interest Period to be used in the computation of
interest. Notice of receipt of such Borrowing Notice or Interest Rate Selection
Notice, as the case may be, together with the amount of each Lender's portion of
an Advance requested thereunder, shall be provided by the Agent to each Lender
by telefacsimile transmission with reasonable promptness, but (provided the
Agent shall have received such notice by 11:00 A.M.) not later than 1:00 P.M. on
the same day as the Agent's receipt of such notice. At approximately 10:00 A.M.
two (2) Business Days preceding the date specified for an Advance of an
Alternative Currency, the Agent shall determine the Advance Date Exchange Rate
and the applicable Eurodollar Rate. Not later than 10:45 A.M. two (2) Business
Days preceding the date specified for each Advance of an Alternative Currency,
the Agent shall provide the Borrower and each Lender notice by telefacsimile
transmission of the Advance Date Exchange Rate applicable to such Advance, and
the applicable Alternative Currency Equivalent Amount of the Loan or Loans
required to be made by each Lender on such date, and the Dollar Value of such
Loan or Loans and the applicable Eurodollar Rate.
(ii) (A) In the case of Advances in Dollars, not later than 2:00 P.M.
on the date specified for each borrowing under this Section 2.1, each
Lender shall, pursuant to the terms and subject to the conditions of
this Agreement, make the amount of the Advance or Advances to be made
by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Revolving Loan or Revolving Loans to be
made on such day. Such wire transfer shall be directed to the Agent at
the Principal Office and shall be in the form of Dollars constituting
immediately available funds. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the Borrower by delivery of the proceeds thereof to the
Borrower's Account or otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and reasonably
acceptable to the Agent.
(B) In the case of Advances of an Alternative Currency, not
later than 10:00 A.M. on the date specified for each Advance, each
Lender shall, pursuant to the terms and subject to the conditions of
this Agreement, make the amount of the Loan or Loans to be made by it
on such day available to the Borrower at the Funding Bank, to the
account of the Agent with the Funding Bank. The amount so received by
the Funding Bank shall, subject to the terms and conditions of the Loan
Documents and upon instruction from the Agent to the Funding Bank on
the same day or immediately preceding day but no later than 10:00 A.M.,
be made available to the Borrower by delivery of the Alternative
Currency Equivalent Amount to the Borrower's account with the Funding
Bank.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Loans in
accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than seven (7) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Section 2.1(c) or
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2.8, the Borrower shall be deemed to have elected to Convert such Loans to (or
continue such Loan as) a Base Rate Loan until the Borrower notifies the Agent in
accordance with Section 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Stated Termination Date, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Loan as herein provided shall then be satisfied, the Reimbursement
Obligation arising from such drawing shall be paid to the Issuing Bank by the
Agent without the requirement of notice to or from the Borrower from immediately
available funds which shall be advanced as a Base Rate Refunding Loan by each
Lender under the Revolving Credit Facility in an amount equal to such Lender's
Applicable Commitment Percentage of such Reimbursement Obligation, and (B) if
the conditions to making a Revolving Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the related Reimbursement
Obligation based on their respective Applicable Commitment Percentages of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the Issuing Bank to the Agent
and the Agent shall provide notice to each Lender by telephone or telefacsimile
transmission. If notice to the Lenders of a drawing under any Letter of Credit
is given by the Agent at or before 12:00 noon on any Business Day, each Lender
shall, pursuant to the conditions specified in this Section 2.1(c)(iv), either
make a Base Rate Refunding Loan or fund the purchase of its Participation in the
amount of such Lender's Applicable Commitment Percentage of such drawing or
payment and shall pay such amount to the Agent for the account of the Issuing
Bank at the Principal Office in Dollars and in immediately available funds
before 2:30 P.M. on the same Business Day. If notice to the Lenders of a drawing
under a Letter of Credit is given by the Agent after 12:00 noon on any Business
Day, each Lender shall, pursuant to the conditions specified in this Section
2.1(c)(iv), either make a Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable Commitment Percentage of
such drawing or payment and shall pay such amount to the Agent for the account
of the Issuing Bank at the Principal Office in Dollars and in immediately
available funds before 12:00 noon on the next following Business Day. Any such
Base Rate Refunding Loan shall be advanced as, and shall continue as, a Base
Rate Loan unless and until the Borrower Converts such Base Rate Loan in
accordance with the terms of Section 2.8.
(d) Availability of Alternative Currency. If any Lender shall
notify the Borrower and the Agent of its election not to fund in any Alternative
Currency in accordance with the terms of this Agreement on or prior to two (2)
Business Days preceding the first day of an Interest Period for which a
Borrowing Notice or an Interest Rate Selection Notice, as the case may be, has
been delivered to the Agent requesting an Advance in an Alternative Currency or
a Continuation or Conversion of an Advance in an Alternative Currency, then such
Lender shall be obligated to fund the requested Advance, Continuation or
Conversion, as the case may be, in the Dollar Equivalent Amount of the amount of
the Alternative Currency specified in such Borrowing Notice or Interest Rate
Selection Notice and at the Eurodollar Rate specified by the Agent for such
request.
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2.2. Payment of Interest. (a) The Borrower shall pay interest to
the Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Revolving Loan made by such Lender for the period commencing on
the date of such Revolving Loan until such Revolving Loan shall be due (i) in
the case of Loans made in Dollars, at the then applicable Base Rate for Base
Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as
designated by the Authorized Representative pursuant to Section 2.1, such
payments to be made in Dollars, and (ii) in the case of Loans made in
Alternative Currencies, at the applicable Eurodollar Rate, such payments to be
made in the appropriate Alternative Currency; provided, however, that if any
amount shall not be paid when due (at maturity, by acceleration or otherwise),
all amounts outstanding hereunder shall bear interest thereafter at the Default
Rate.
(b) Interest on each Revolving Loan shall be computed on the basis
of a year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
June 30, 1997 for each Base Rate Loan, (ii) on the last day of the applicable
Interest Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3) months after
the first day of such Interest Period, and (iii) upon payment in full of the
principal amount of such Revolving Loan.
2.3. Payment of Principal. The principal amount of the Revolving
Credit Outstandings shall be due and payable to the Agent for the benefit of
each Lender in full on the Revolving Credit Termination Date, or earlier as
specifically provided herein. Such principal amount shall be recorded in Dollars
as set forth in Section 2.1. The repayment of such principal amount shall be
made in the appropriate Alternative Currency as follows: the portion of the
Revolving Credit Outstandings attributable to each specified Advance (or the
Continuation or Conversion thereof) (as determined from the Agent's records)
shall be repaid in the same Alternative Currency as such Advance. The principal
amount of any Base Rate Loan may be prepaid in Dollars in whole or in part at
any time. The principal amount of any Eurodollar Rate Loan may be prepaid only
at the end of the applicable Interest Period unless the Borrower shall pay to
the Agent for the account of the Lenders the additional amount, if any, required
under Section 4.5. All prepayments of Revolving Loans made by the Borrower shall
be in the amount of $1,000,000 (or the equivalent thereof in any Alternative
Currency) or such greater amount which is an integral multiple of $100,000 (or
the equivalent thereof in any Alternative Currency), or the amount equal to all
Revolving Credit Outstandings, or such other amount as necessary to comply with
Section 2.1(b) or Section 2.8.
2.4. Non-Conforming Payments. (a) Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lenders with respect to the Revolving Loans,
shall be made to the Agent at the Principal Office, for the account of each
Lender, in Dollars in the case Loans made in Dollars and in the same Alternative
Currency in the case of Loans made in Alternative Currencies, in immediately
available funds before 12:30 P.M. on the date such payment is due. The Borrower
shall give the Agent one (1) Business Days prior written notice of any payment
of principal, such notice to be given prior to 10:00 A.M. and to specify (i) the
date the payment will be made and (ii) the Loan to which payment relates. The
Agent may, at the election of the Borrower, but shall not be obligated to, debit
the amount of any
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such payment which is not made by such time to any ordinary deposit account, if
any, of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both (i) in Dollars in the case of Loans
made in Dollars and in the required Alternative Currency in the case of Loans
made in Alternative Currencies in immediately available funds and (ii) prior to
12:30 P.M. on the date payment is due to be a non-conforming payment. Any such
payment shall not be deemed to be received by the Agent until the later of (i)
the time such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default at
the determination of the Agent. The Agent shall give prompt telephonic or
telefacsimile notice to the Borrower if a non-conforming payment constitutes a
Default or an Event of Default. Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until the later of (x)
the date such funds become available funds or (y) the next Business Day at the
Default Rate from the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; provided that interest
shall continue to accrue during the period of any such extension and provided
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
2.5. Notes. Revolving Loans made by each Lender shall be evidenced
by Notes in substantially the form set forth as Exhibit F-1 payable to the order
of such Lender in the respective amount of its Applicable Commitment Percentage
of the Revolving Credit Commitment, which Note shall be dated the Closing Date
or a later date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by the Borrower. Swing Line Loans made by
NationsBank shall be evidenced by a Note in substantially the form as set forth
as Exhibit F-2 payable to the order of NationsBank.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a)
each payment on account of the principal of and interest on the Revolving Loans
and the fees described in Section 2.10 shall be made to the Agent for the
account of the Lenders pro rata based on their Applicable Commitment
Percentages, (b) all payments to be made by the Borrower for the account of each
of the Lenders on account of principal, interest and fees, shall be made without
diminution, setoff, recoupment or counterclaim, and (c) the Agent will promptly
distribute to the Lenders in immediately available funds payments received in
fully collected, immediately available funds from the Borrower.
2.7. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, telefacsimile notice, or telephonic notice (confirmed
in writing), of such
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reduction. Each such reduction shall be in the aggregate amount of $5,000,000 or
such greater amount which is in an integral multiple of $1,000,000, or the
entire remaining Total Revolving Credit Commitment, and shall permanently reduce
the Total Revolving Credit Commitment. Each reduction of the Total Revolving
Credit Commitment shall be accompanied by payment of the Revolving Loans to the
extent that the principal amount of Revolving Credit Outstandings plus Letter of
Credit Outstandings plus Swing Line Outstandings exceeds the Total Revolving
Credit Commitment after giving effect to such reduction, together with accrued
and unpaid interest on the amounts prepaid. No such reduction shall result in
the payment of any Eurodollar Rate Loan other than on the last day of the
Interest Period of such Eurodollar Rate Loan unless such prepayment is
accompanied by amounts due, if any, under Section 4.5.
2.8. Conversions and Elections of Subsequent Interest Periods.
Provided that no Default or Event of Default shall have occurred and be
continuing and subject to the limitations set forth below and in Article IV, the
Borrower may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on any
Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 11:00 A.M. three (3)
Business Days' prior to the date of such election or Conversion:
(i) elect a subsequent Interest Period for all
or a portion of Eurodollar Rate Loans to begin on the last day
of the then current Interest Period for such Eurodollar Rate
Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate
Loans on any Business Day;
(iii) elect that any Eurodollar Rate Loan be
converted from an Alternative Currency into another
Alternative Currency on the last day of the Interest Period
for any Eurodollar Rate Loan.
Each election and Conversion pursuant to this Section 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as Advances
shall be reduced by the aggregate amount of Outstanding Letters of Credit and
Outstanding Swing Line Loans.
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2.10. Facility Fees.
Unused Fee. For the period beginning on the Closing Date and ending on
the Revolving Credit Termination Date, the Borrower agrees to pay to the Agent,
for the pro rata benefit of the Lenders based on their Applicable Commitment
Percentages, an unused fee equal to the Applicable Unused Fee multiplied by the
average daily amount by which the Total Revolving Credit Commitment exceeds the
sum of (i) Revolving Credit Outstandings without giving effect to Swing Line
Outstandings (except in the case of NationsBank) plus (ii) Letter of Credit
Outstandings. Such fees shall be due in arrears on the last Business Day of each
March, June, September and December commencing June 30,1997 to the Revolving
Credit Termination Date (but excluding such day for the purpose of computing
such fee). Notwithstanding the foregoing, so long as any Lender fails to make
available any portion of its Revolving Credit Commitment when requested, such
Lender shall not be entitled to receive payment of its pro rata share of such
fee until such Lender shall make available such portion. Such fee shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.
2.11. Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan or fund its purchase of any Participation hereunder nor shall the
Revolving Credit Commitment of any Lender hereunder be increased as a result of
such default of any other Lender. Without limiting the generality of the
foregoing, in the event any Lender shall fail to advance funds to the Borrower
as herein provided, the Agent may in its discretion, but shall not be obligated
to, advance under the Note in its favor as a Lender all or any portion of such
amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Note;
provided that, upon payment to the Agent from such other Lender of the entire
outstanding amount of each such deficiency advance, together with accrued and
unpaid interest thereon, from the most recent date or dates interest was paid to
the Agent by the Borrower on each Revolving Loan comprising the deficiency
advance at the interest rate per annum for overnight borrowing by the Agent from
the Federal Reserve Bank, then such payment shall be credited against the
applicable Note of the Agent in full payment of such deficiency advance and the
Borrower shall be deemed to have borrowed the amount of such deficiency advance
from such other Lender as of the most recent date or dates, as the case may be,
upon which any payments of interest were made by the Borrower thereon.
2.12. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for general
working capital needs and other corporate purposes, including the making of
Acquisitions and Capital Expenditures permitted hereunder.
2.13. Extension of Stated Termination Date. At the request of the
Borrower the Lenders may, in their sole discretion, elect to extend the Stated
Termination Date then in effect for additional periods of one year upon each of
the first and second anniversary of the Closing Date. The Borrower shall notify
the Lenders of its request for such an extension by delivering to the Agent and
the Lenders notice of such request signed by an Authorized Representative not
more than ninety (90)
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days nor less than sixty (60) days prior to either the first or second
anniversary of the Closing Date, as the case may be. If the Lenders shall elect
to so extend, the Agent shall notify the Borrower in writing within sixty (60)
days of its receipt of such request for extension of the decision of the Lenders
as to whether to extend the Stated Termination Date. Failure by any Lender to
respond to a request for an extension shall constitute a refusal of such Lender
to give its consent to such extension. Failure by the Agent to give such notice
shall constitute refusal by the Lenders to extend the Stated Termination Date.
2.14. Swing Line. (a) Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Credit Facility
in an efficient manner and to minimize the transfer of funds between the Agent
and the Lenders, NationsBank shall make available Swing Line Loans to the
Borrower prior to the Revolving Credit Termination Date. NationsBank shall not
make any Swing Line Loan pursuant hereto (i) if to the actual knowledge of
NationsBank the Borrower is not in compliance with all the conditions to the
making of Revolving Loans set forth in this Agreement, (ii) if after giving
effect to such Swing Line Loan, the Swing Line Outstandings exceed $5,000,000,
or (iii) if after giving effect to such Swing Line Loan, the sum of the Swing
Line Outstandings, the Revolving Credit Outstandings and Letter of Credit
Outstandings exceeds the Total Revolving Credit Commitment. Swing Line Loans
shall be limited to CD Rate Loans. The Company may borrow, repay and reborrow
under this Section 2.14. Unless notified to the contrary by NationsBank,
borrowings under the Swing Line shall be made in the minimum amount of $200,000
or in the amount necessary to effect a Base Rate Refunding Loan, upon written
request by telefacsimile transmission, effective upon receipt, by an Authorized
Representative of the Borrower made to NationsBank not later than 12:30 P.M. on
the Business Day of the requested borrowing. Each such Borrowing Notice shall
specify the amount of the borrowing and the date of borrowing, and shall be in
the form of Exhibit D-2, with appropriate insertions. If the Borrower instructs
NationsBank to debit any demand deposit account of the Borrower in the amount of
any payment with respect to a Swing Line Loan, or NationsBank otherwise receives
repayment, after 1:00 P.M. on a Business Day, such payment shall be deemed
received on the next Business Day.
(b) Swing Line Loans shall bear interest at the CD Rate, the interest
payable on Swing Line Loans is solely for the account of NationsBank, and all
accrued and unpaid interest on Swing Line Loans shall be payable on the dates
and in the time provided in Sections 2.2(b) and 2.4 with respect to interest on
Base Rate Loans. The Swing Line Outstandings shall be evidenced by the Note
delivered to NationsBank pursuant to Section 2.5.
(c) Upon the making of a Swing Line Loan, each Lender shall be deemed
to have purchased from NationsBank a Participation therein in an amount equal to
that Lender's Applicable Commitment Percentage of such Swing Line Loan. Upon
demand made by NationsBank, each Lender shall, according to its Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to NationsBank
its purchase price therefor in an amount equal to its Participation therein. Any
Advance made by a Lender pursuant to demand of NationsBank of the purchase price
of its Participation shall be deemed (i) provided that the conditions to making
Revolving Loans shall be satisfied, a Base Rate Refunding Loan under Section 2.1
until the Borrower Converts such Base Rate Loan in accordance with the terms of
Section 2.8, and (ii) in all other cases, the funding by each Lender of the
purchase price of its Participation in such Swing Line Loan. The obligation of
each
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Lender to so provide its purchase price to NationsBank shall be absolute and
unconditional and shall not be affected by the occurrence of an Event of Default
or any other occurrence or event.
The Borrower, at its option and subject to the terms hereof, may
request an Advance pursuant to Section 2.1 in an amount sufficient to repay
Swing Line Outstandings on any date and the Agent shall provide from the
proceeds of such Advance to NationsBank the amount necessary to repay such Swing
Line Outstandings (which NationsBank shall then apply to such repayment) and
credit any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to Section 2.1(c)(ii). The proceeds of such
Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances. The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings and
accrued interest thereon shall be due and payable in full.
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ARTICLE III
Letters of Credit
3.1. Letters of Credit. (a) The Issuing Bank agrees, subject to the
terms and conditions of this Agreement, upon request of the Borrower to issue
from time to time for the account of the Borrower Letters of Credit upon
delivery to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment and (ii) no Letter of Credit shall be issued if,
after giving effect thereto, Letter of Credit Outstandings plus the Revolving
Credit Outstandings plus Swing Line Outstandings shall exceed the Total
Revolving Credit Commitment. No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter of
Credit to require renewal) or payment date occurring later than the earlier to
occur of one year after the date of its issuance or the fifth Business Day prior
to the Stated Termination Date.
(b) Subject to the approval by the Lenders of the making available of
an Alternative Currency not otherwise provided for herein, upon completion of a
proper Application and Agreement for Letter of Credit, NationsBank may issue
upon request and for the account of Borrower Letters of Credit payable in such
Alternative Currency. For purposes of determining Outstanding Letters of Credit,
any Letter of Credit issued in an Alternative Currency shall be recorded in the
Agent's account in Dollars based on the Alternative Currency Equivalent Amount
on the date of issuance of such Letter of Credit; provided, however, that the
Agent shall determine the Dollar Equivalent Amount of any Letter of Credit
issued in an Alternative Currency on the date of any Advance or Conversion for
the purpose of determining the amount of Outstandings. Any draw on a Letter of
Credit issued in an Alternative Currency shall be repaid in the same Alternative
Currency Equivalent Amount (determined based on the Spot Rate of Exchange on the
date of drawing under the Letter of Credit). To the extent that the Agent shall
determine at any time that the sum of (i) the Dollar Value of outstanding Loans
and Outstanding Letters of Credit, in each case determined on the date of each
Advance or issuance of a Letter of Credit, made or issued in Alternative
Currencies and (ii) outstanding Loans and Outstanding Letters of Credit made or
issued in Dollars exceeds the Total Revolving Credit Commitment, the Borrower
shall immediately repay Loans so that after giving effect to such payment the
outstanding Loans plus Outstanding Letters of Credit do not exceed the Total
Revolving Credit Commitment.
3.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the Issuing
Bank immediately on demand at the Principal Office all amounts required to pay
all drafts drawn or purporting to be drawn under the Letters of Credit and all
reasonable expenses incurred by the Issuing Bank in connection with the Letters
of Credit, and in any event and without demand to place in possession of the
Issuing Bank (which shall include Advances under the Revolving Credit Facility
if permitted by Section 2.1 and Swing Line Loans if permitted by Section 2.14)
sufficient funds to pay all debts and liabilities arising under any Letter of
Credit. The Issuing Bank agrees to give the Borrower prompt notice of any
request for a draw under a Letter of Credit. The Issuing Bank may, at the
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request of the Borrower, charge any account the Borrower may have with it for
any and all amounts the Issuing Bank pays under a Letter of Credit, plus charges
and reasonable expenses as from time to time agreed to by the Issuing Bank and
the Borrower; provided that to the extent permitted by Section 2.1(c)(iv) and
Section 2.14, amounts shall be paid pursuant to Advances under the Revolving
Credit Facility or, if the Borrower shall elect, by Swing Line Loans. The
Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Base Rate plus two percent
(2.0%), or the maximum rate permitted by applicable law, if lower, such rate to
be calculated on the basis of a year of 360 days for actual days elapsed.
(b) In accordance with the provisions of Section 2.1(c), the Issuing
Bank shall notify the Agent of any drawing under any Letter of Credit promptly
following the receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of the
Issuing Bank in respect of each Letter of Credit in an amount equal to such
Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay the Issuing Bank under Section 3.2(a),
each Lender (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, and shall be unconditionally obligated
to pay to the Issuing Bank as hereinafter described, its Applicable Commitment
Percentage of the liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in
its capacity as a Lender) shall, subject to the terms and
conditions of Article II, pay to the Agent for the account of
the Issuing Bank at the Principal Office in Dollars and in
immediately available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in Section
2.1(c)(iv).
(ii) Simultaneously with the making of each
payment by a Lender to the Issuing Bank pursuant to Section
2.1(c)(iv)(B), such Lender shall, automatically and without
any further action on the part of the Issuing Bank or such
Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest
accrued prior to the date the Lender made its payment) in the
related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately
due and payable whether by Advances made in accordance with
Section 2.1(c)(iv), Swing Line Loans made in accordance with
Section 2.14, or otherwise.
(iii) Each Lender's obligation to make payment to
the Agent for the account of the Issuing Bank pursuant to
Section 2.1(c)(iv) and this Section 3.2(c), and the right of
the Issuing Bank to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance
whatsoever and shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the
account of the Issuing Bank in full upon such request as
required by Section 2.1(c)(iv) or this
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Section 3.2(c), such Lender shall, on demand, pay to the Agent
for the account of the Issuing Bank interest on the unpaid
amount for each day during the period commencing on the date
of notice given to such Lender pursuant to Section 2.1(c)
until such Lender pays such amount to the Agent for the
account of the Issuing Bank in full at the interest rate per
annum for overnight borrowing by the Agent from the Federal
Reserve Bank.
(iv) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth in
clause (ii) above, then at any time payment (in fully
collected, immediately available funds) of such Reimbursement
Obligation, in whole or in part, is received by the Issuing
Bank from the Borrower, the Issuing Bank shall promptly pay to
each Lender an amount equal to its Applicable Commitment
Percentage of such payment from the Borrower.
(d) Promptly following the end of each calendar quarter, the Issuing
Bank shall deliver to the Agent a notice describing the aggregate undrawn amount
of all Letters of Credit at the end of such quarter. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver to the Agent, and the
Agent shall deliver to such Lender, any other information reasonably requested
by such Lender with respect to each outstanding Letter of Credit.
(e) The issuance by the Issuing Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Article V, be subject to the
conditions that such Letter of Credit be in such form and contain such terms as
shall be reasonably satisfactory to the Issuing Bank consistent with the then
current practices and procedures of the Issuing Bank with respect to similar
letters of credit, and the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letters of Credit as the Issuing
Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of Section 11.9,
the Borrower hereby agrees to indemnify and hold harmless the Issuing Bank, each
other Lender and the Agent from and against any and all claims and damages,
losses, liabilities, reasonable costs and expenses which the Issuing Bank, such
other Lender or the Agent may incur (or which may be claimed against the Issuing
Bank, such other Lender or the Agent) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure to pay under
any Letter of Credit; provided that the Borrower shall not be required to
indemnify the Issuing Bank, any other Lender or the Agent for any
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claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, (i) caused by the willful misconduct or gross negligence of the
party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this Section 3.2(g) shall
survive repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
(h) Without limiting the Borrower's rights as set forth in Section
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and such
obligations of the Borrower shall be performed strictly in accordance with the
terms of this Agreement and such Letters of Credit and the related Applications
and Agreement for any Letter of Credit, under all circumstances whatsoever,
including the following circumstances:
(i) any lack of validity or enforceability of
the Letter of Credit, the obligation supported by the Letter
of Credit or any other agreement or instrument relating
thereto (collectively, the "Related LC Documents");
(ii) any amendment or waiver of or any consent to
or departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the
terms of this Agreement) or other rights which the Borrower
may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the
Agent, the Lenders or any other Person, whether in connection
with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute
between the Borrower and any beneficiary or any transferee of
a Letter of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), the Agent,
the Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by the Agent, with or without notice to or approval
by the Borrower in respect of any of Borrower's Obligations
under this Agreement; or
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(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
Nothing contained in this clause (h) shall relieve the Issuing Bank of liability
for its gross negligence or willful misconduct.
3.3. Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, (i) for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin, and
(ii) for the Issuing Bank, 0.125% based on the aggregate amount available to be
drawn on each outstanding Letter of Credit. Such fees shall be due with respect
to each Letter of Credit quarterly in arrears on the last day of each March,
June, September and December, the first such payment to be made on the date of
issuance of a Letter of Credit. The fees described in this Section 3.3 shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.
3.4. Administrative Fees. The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
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ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return. (a) If, after the date hereof,
the adoption of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office and franchise taxes);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Eurodollar
Rate and the CD Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Agreement or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Rate Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Rate Loans, then the
Borrower shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by the Borrower under this Section 4.1(a), the Borrower
may, by notice to such Lender (with a copy to the Agent), suspend the obligation
of such Lender to make or Continue Loans of the Type with respect to which such
compensation is requested, or to Convert Loans of any other Type into Loans of
such Type, until the event or condition giving rise to such request ceases to be
in effect (in which case the provisions of Section 4.4 shall be applicable);
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
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(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to the Borrower and the Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
4.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
4.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrower thereof and such Lender's obligation
to make or Continue Eurodollar Rate Loans and to Convert other Types of
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Loans into Eurodollar Rate Loans shall be suspended until such time as such
Lender may again make, maintain, and fund Eurodollar Rate Loans (in which case
the provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any Lender to
make a particular Type of Eurodollar Rate Loan or to Continue, or to Convert
Loans of any other Type into, Loans of a particular Type shall be suspended
pursuant to Section 4.1 or 4.3 hereof (Loans of such Type being herein called
"Affected Loans" and such Type being herein called the "Affected Type"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for Affected Loans (or,
in the case of a Conversion required by Section 4.3 hereof, on such earlier date
as such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 4.1 or 4.3 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
4.5. Compensation. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9.1) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article V to be satisfied) to borrow (other than by reason of the
failure of a Lender or Lenders to make funds available without cause),
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Convert, Continue, or prepay a Eurodollar Rate Loan on the date for
such borrowing, Conversion, Continuation, or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
Any Lender claiming compensation under this Section 4.5 shall furnish
the Borrower and the Agent a statement setting forth in reasonable detail the
amounts to be paid to it hereunder and the determination thereof shall be
conclusive absent manifest error.
4.6. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under this Agreement or any other Loan Document
to any Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 11.2, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 4.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
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Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 4.6(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 4.6(a) or
4.6(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes at
such Lender's expense.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 4.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent evidence of such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 4.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Notes.
4.7. Replacement Banks. The Borrower may, in its sole discretion, on
ten (10) Business Days' prior written notice to the Agent and a Lender, cause a
Lender who has either (a) incurred increased costs or is unable to make
Eurodollar Rate Loans, (b) failed to fund any requested Advance, (c) made any
claim for taxes under Section 4.6, or (d) assigned a portion or all of its
Revolving Credit Commitment and not assigned a pro rata portion of the TROL
Indebtedness held by it, to (and such Lender shall) assign, pursuant to Section
11.1, all of its rights and obligations under this Agreement to an Eligible
Assignee designated by the Borrower which is willing to become a Lender for a
purchase price equal to the outstanding principal amount of the Loans payable to
such Lender plus any accrued but unpaid interest on such Loans, any accrued but
unpaid fees with respect to such Lender's Revolving Credit Commitment and any
other amount payable to such Lender under this Agreement; provided, however,
that any
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expenses or other amounts which would be owing to such Lender pursuant to any
indemnification provision hereof (including, if applicable, Section 4.5) shall
be payable by the Borrower as if the Borrower had prepaid the Loans of such
Lender rather than such Lender having assigned its interest hereunder. The
Borrower or the assignee shall pay the applicable processing fee under Section
11.1.
4.8. Lending Office. Without affecting its rights under this Article IV
or any other provision of this Agreement, each Lender agrees that if there is
any increase in cost to or reduction in an amount receivable by such Lender with
respect to which the Borrower would be obligated to compensate such Lender
pursuant to this Article IV, such Lender shall use reasonable efforts to elect
an alternative lending office (to the extent such Lender has available to it
such an office) which would not result in any such increase in any cost to or
reduction in any amount receivable by such Lender; provided, however, that no
Lender shall be obligated to select an alternative lending office if such Lender
determines, in its sole discretion, that (i) as a result of such selection such
Lender would be in violation of any applicable law, regulation, treaty, or
guideline, or would incur additional costs or expenses or (ii) such selection
would be inadvisable for regulatory reasons or would impose an unreasonable
burden or additional costs on such Lender.
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ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, and of the Issuing
Bank to issue any Letter of Credit, and of NationsBank to make any Swing Line
Loan, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in
form and substance satisfactory to the Agent and Lenders, the
following:
(i) executed originals of each of this
Agreement, the Notes, the initial Facility Guaranties, the LC
Account Agreement and the other Loan Documents, together with
all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions
with respect to the Loan Documents and the transactions
contemplated thereby of special counsel to the Loan Parties
dated the Closing Date, addressed to the Agent and the Lenders
and satisfactory to Smith Helms Mulliss & Moore, L.L.P.,
special counsel to the Agent, substantially in the form of
Exhibit G;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each of the Loan Parties certified by
its secretary or assistant secretary as of the Closing Date,
approving and adopting the Loan Documents to be executed by
such Person, and authorizing the execution and delivery
thereof;
(iv) specimen signatures of officers of each of
the Loan Parties executing the Loan Documents on behalf of
such Person, certified by the secretary or assistant secretary
of such Person;
(v) the charter documents of each of the Loan
Parties certified as of a recent date by the Secretary of
State of its state of organization;
(vi) the bylaws of each of the Loan Parties
certified as of the Closing Date as true and correct by its
secretary or assistant secretary;
(vii) certificates issued as of a recent date by
the Secretaries of State of the respective jurisdictions of
formation of each of the Loan Parties as to the due existence
and good standing of such Person;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
each of the Loan Parties as of a recent date by the
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Secretary of State or comparable official of each jurisdiction
in which the failure to be qualified to do business or
authorized so to conduct business could have a Material
Adverse Effect;
(ix) notice of appointment of the initial
Authorized Representative(s);
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in Sections 8 .1(a) through
8.1(d) and Section 8.3 as of the most recent fiscal quarter
ended, substantially in the form of Exhibit H;
(xi) evidence of all insurance required by the
Loan Documents;
(xii) an initial Borrowing Notice, if any;
(xiii) evidence that all fees payable by the
Borrower on the Closing Date to the Agent, NCMI and the
Lenders have been paid in full;
(xiv) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby; and
(b) In the good faith judgment of the Agent and the
Lenders:
(i) there shall not have occurred or become
known to the Agent or the Lenders any event, condition,
situation or status since the date of the information
contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Borrower and its
Subsidiaries delivered to the Agent prior to the Closing Date
that has had or could reasonably be expected to result in a
Material Adverse Effect;
(ii) no litigation, action, suit, investigation
or other arbitral, administrative or judicial proceeding shall
be pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(iii) the Loan Parties shall have received all
approvals, consents and waivers, and shall have made or given
all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of
(A) any applicable law, rule, regulation, order or decree of
any Governmental Authority or arbitral authority or (B) any
agreement, document or instrument to which any of the Loan
Parties is a party or by which any of them or their properties
is bound.
5.2. Conditions of Revolving Loans and Letter of Credit. The
obligations of the Lenders to make any Revolving Loans, and the Issuing Bank to
issue Letters of Credit and
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NationsBank to make Swing Line Loans, hereunder on or subsequent to the Closing
Date are subject to the satisfaction of the following conditions:
(a) the Agent or, in the case of Swing Line Loans,
NationsBank shall have received a Borrowing Notice if required by
Article II;
(b) the representations and warranties of the Loan
Parties set forth in Article VI and in each of the other Loan Documents
shall be true and correct in all material respects on and as of the
date of such Advance, Swing Line Loan or Letter of Credit issuance or
renewal, with the same effect as though such representations and
warranties had been made on and as of such date, except to the extent
that such representations and warranties expressly relate to an earlier
date and except that the financial statements referred to in Section
6.6(a) shall be deemed to be those financial statements most recently
delivered to the Agent and the Lenders pursuant to Section 7.1 from the
date financial statements are delivered to the Agent and the Lenders in
accordance with such Section;
(c) in the case of the issuance of a Letter of Credit,
the Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each
Advance, Swing Line Loan or the issuance of a Letter of Credit, no
Default or Event of Default specified in Article IX shall have occurred
and be continuing; and
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate principal
balance of all outstanding Revolving Loans for each Lender
shall not exceed such Lender's Revolving Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Participations
in Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment;
(iii) a Swing Line Loan, the Swing Line
Outstandings shall not exceed $5,000,000; and
(iv) a Revolving Loan, Swing Line Loan or a
Letter of Credit or renewal thereof, the sum of Letter of
Credit Outstandings plus Revolving Credit
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Outstandings plus Swing Line Outstandings shall not exceed the
Total Revolving Credit Commitment.
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ARTICLE VI
Representations and Warranties
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
6.1. Organization and Authority.
(a) The Borrower and each Subsidiary is a corporation or
partnership duly organized and validly existing under the laws of the
jurisdiction of its formation;
(b) The Borrower and each Subsidiary (x) has the requisite
power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan
Documents, and (y) is qualified to do business in every jurisdiction in
which failure so to qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Guarantor has the power and authority to execute,
deliver and perform the Facility Guaranty and each of the other Loan
Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to
which any Loan Party is a party will be the legal, valid and binding
obligation or agreement of such Loan Party, enforceable against such
Loan Party in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity (whether considered
in a proceeding at law or in equity);
6.2. Loan Documents. The execution, delivery and performance by
each Loan Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder or partner approval) of such
Loan Party required for the lawful execution, delivery and performance
thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on such Loan Party or its properties, or (iii) the charter
documents, partnership agreement or bylaws of such Loan Party;
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(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which such Loan Party is a party, or by which the
properties or assets of such Loan Party are bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of such Loan Party or
any Subsidiary;
6.3. Solvency. Each Loan Party is Solvent after giving effect to the
transactions contemplated by the Loan Documents;
6.4. Subsidiaries and Stockholders. The Borrower has no Subsidiaries
other than those Persons listed as Subsidiaries in Schedule 6.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 7.19; Schedule 6.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
6.4, free and clear of any Lien;
6.5. Ownership Interests. Borrower owns no interest in any Person other
than the Persons listed in Schedule 6.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 8.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 7.19;
6.6. Financial Condition.
(a) The Borrower has heretofore furnished to each Lender an
audited consolidated balance sheet of the Borrower and its Subsidiaries
as at December 29, 1996 and the notes thereto and the related
consolidated statements of income, stockholders' equity and cash flows
for the Fiscal Year then ended as examined and certified by Arthur
Andersen LLP, and unaudited consolidated interim financial statements
of the Borrower and its Subsidiaries consisting of a consolidated
balance sheet and related consolidated statements of income and cash
flows, in each case without notes, for and as of the end of the three
month period ending March 30, 1997. Except as set forth therein, such
financial statements (including the notes thereto) present fairly the
financial condition of the Borrower and its Subsidiaries as of the end
of such Fiscal Year and three month period and results of their
operations and the changes in its stockholders' equity for the Fiscal
Year and interim period then ended, all in conformity with GAAP applied
on a
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Consistent Basis, subject however, in the case of unaudited interim
statements to year end audit adjustments;
(b) since March 30, 1997 there has been no material adverse
change in the condition, financial or otherwise, of the Borrower or any
of its Subsidiaries or in the businesses, properties, performance,
prospects or operations of the Borrower or its Subsidiaries, nor have
such businesses or properties been materially adversely affected as a
result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God; and
(c) except as set forth in the financial statements referred
to in Section 6.6(a) or in Schedule 6.6 or permitted by Section 8.5,
neither Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material Indebtedness, Contingent
Obligation or other commitment or liability which remains outstanding
or unsatisfied;
6.7. Title to Properties. The Borrower and each of its Subsidiaries has
title to all its real and personal properties, subject to no transfer
restrictions or Liens of any kind, except for the transfer restrictions and
Liens described in Schedule 6.7 and Liens permitted by Section 8.4;
6.8. Taxes. The Borrower and each of its Subsidiaries has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which reserves
reflected in the financial statements described in Section 6.6(a) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due;
6.9. Other Agreements. No Loan Party nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect;
6.10. Litigation. Except as set forth in Schedule 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any
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properties or rights of the Borrower or any Subsidiary, which could reasonably
be expected to have a Material Adverse Effect;
6.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof;
6.12. Investment Company. No Loan Party is an "investment company," or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. ss. 80a-1, et seq.). The application of the proceeds
of the Loans and repayment thereof by the Borrower and the performance by the
Loan Parties of the transactions contemplated by the Loan Documents will not
violate any provision of said Act, or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder, in each case as in effect on
the date hereof;
6.13. Patents, Etc. The Borrower and each Subsidiary owns or has the
right to use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated by the Loan Documents, in all
cases without known conflict with any patent, license, franchise, trademark,
trade secret, trade name, copyright, other proprietary right of any other
Person, which conflict is reasonably likely to have a Material Adverse Effect;
6.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any Subsidiary in accordance with or pursuant to any Loan
Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading;
6.15. No Consents, Etc. Neither the respective businesses or properties
of the Loan Parties or any Subsidiary, nor any relationship among the Loan
Parties or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
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Governmental Authority or any other Person on the part of any Loan Party or any
Subsidiary as a condition to the execution, delivery and performance of, or
consummation of the transactions contemplated by the Loan Documents, which, if
not obtained or effected, would be reasonably likely to have a Material Adverse
Effect, or if so, such consent, approval, authorization, filing, registration or
qualification has been duly obtained or effected, as the case may be;
6.16. Employee Benefit Plans.
(a) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all Foreign
Benefit Laws with respect to all Employee Benefit Plans except for any
required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code. No material liability has
been incurred by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other material liability to the PBGC which remains outstanding other
than the payment of premiums and there are no premium payments which
are due and unpaid, (iii) failed to make a required contribution or
payment to a Multiemployer Plan, or (iv) failed to make a required
installment or other required payment under Section 412 of the Code,
Section 302 of ERISA or the terms of such Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
(e) To the best of the Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by the Borrower
or any ERISA Affiliate, has
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been administered in accordance with its terms in all material respects
and is in compliance in all material respects with all applicable
requirements of ERISA and other applicable laws, regulations and rules;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan;
6.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
6.18. Hazardous Materials. The Borrower and each Subsidiary is in
compliance with all applicable Environmental Laws in all material respects.
Neither the Borrower nor any Subsidiary has been notified of any action, suit,
proceeding or investigation which, and neither the Borrower nor any Subsidiary
is aware of any facts which, (i) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Subsidiary
with any Environmental Laws, (ii) which seeks, or could reasonably be expected
to form the basis of a meritorious proceeding, to suspend, revoke or terminate
any license, permit or approval necessary for the generation, handling, storage,
treatment or disposal of any Hazardous Material, or (iii) seeks to cause, or
could reasonably be expected to form the basis of a meritorious proceeding to
cause, any property of the Borrower or any Subsidiary to be subject to any
restrictions on ownership, use, occupancy or transferability under any
Environmental Law;
6.19. Employment Matters. (a) Except as set forth in Schedule 6.19,
none of the employees of the Borrower or any Subsidiary is subject to any
collective bargaining agreement and there are no strikes, work stoppages,
election or decertification petitions or proceedings, unfair labor charges,
equal opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Subsidiary or between the Borrower or any
Subsidiary and any of its employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all material respects with all applicable laws, rules and
regulations pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety and taxation
and there is neither pending or, to the knowledge of the Borrower, threatened
any litigation, administrative proceeding nor, to the knowledge of the Borrower,
any investigation, in respect of such matters which, if decided adversely, could
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect; and
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6.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
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ARTICLE VII
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
7.1. Financial Reports, Etc. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Agent and each Lender (i) consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Year,
and the notes thereto, and the related consolidated statements of income,
stockholders' equity and cash flows, and the respective notes thereto, for such
Fiscal Year, setting forth comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing opinions of Arthur Andersen LLP, or other such independent
certified public accountants selected by the Borrower and approved by the Agent,
which are unqualified as to the scope of the audit performed and as to the
"going concern" status of the Borrower and its Subsidiaries and without any
exception not acceptable to the Lenders, and (ii) a certificate of an Authorized
Representative demonstrating compliance with Sections 8.1(a) through 8.1(d) and
8.3, which certificate shall be in the form of Exhibit H;
(b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income and cash flows for such fiscal quarter
and for the period from the beginning of the then current Fiscal Year through
the end of such reporting period, and accompanied by a certificate of an
Authorized Representative to the effect that such financial statements present
fairly the financial position of the Borrower and its Subsidiaries as of the end
of such fiscal period and the results of their operations and the changes in
their financial position for such fiscal period, in conformity with the
standards set forth in Section 6.6(a) with respect to interim financial
statements, and (ii) a certificate of an Authorized Representative containing
computations for such quarter comparable to that required pursuant to Section
7.1(a)(ii);
(c) together with each delivery of the financial statements required by
Section 7.1(a)(i), deliver to the Agent and each Lender a letter from the
Borrower's accountants specified in Section 7.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial statements delivered
under Section 7.1(a)(i), they obtained no knowledge of any Default or Event of
Default by the Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement remains uncured); or if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature and period
of existence thereof;
(d) promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Agent and each Lender a copy of (i) all regular or
special reports or effective registration statements which Borrower or any
Subsidiary shall file with the Securities and
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<PAGE> 65
Exchange Commission (or any successor thereto) or any securities exchange, (ii)
any proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii) any
management letter or other report submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
of the Borrower or any Subsidiary; and
(e) not later than the last Business Day of each Fiscal Year, deliver
to the Agent and each Lender a consolidated operating budget for the Borrower
and its Subsidiaries for the next Fiscal Year, prepared in accordance with GAAP
applied on a Consistent Basis;
(f) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement;
7.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, ordinary wear and tear excepted,
make all needed repairs, replace ments and renewals to such properties, and
maintain free from Liens all trademarks, trade names, patents, copyrights, trade
secrets, know-how, and other intellectual property and proprietary information
(or adequate licenses thereto), in each case as are reasonably necessary to
conduct its business as currently conducted or as contemplated hereby, all in
accordance with customary and prudent business practices, except where such
failure could not be reasonably expected to have a Material Adverse Effect;
7.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 8.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and, except to the extent conveyed in connection with a
transaction permitted under Section 8.6 hereof, maintain its license or
qualification to do business as a foreign corporation and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary;
7.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any
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<PAGE> 66
Lien resulting therefrom attaches to any of its property and becomes enforceable
against its creditors;
7.5. Insurance. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards, (b) maintain general public liability insurance at
all times with responsible insurance carriers against liability on account of
damage to persons and property and (c) maintain insurance under all applicable
workers' compensation laws (or in the alternative, maintain required reserves if
self-insured for workers' compensation purposes) and against loss by reason of
business interruption such policies of insurance to have such limits,
deductibles, exclusions, co-insurance and other provisions providing no less
coverages than that specified in Schedule 7.5. Each of the policies of insurance
described in this Section 7.5 shall provide that the insurer shall give the
Agent not less than thirty (30) days' prior written notice before any such
policy shall be terminated, lapse or be altered in any manner;
7.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
7.7. Right of Inspection. Permit any Person designated by the Agent, at
the Agent's expense, to visit and inspect any of the properties, corporate books
and financial reports of the Borrower or any Subsidiary and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable intervals
and with reasonable prior notice and permit any Lender to discuss the Borrower's
affairs, finances and accounts with its principal officers all at reasonable
times, at reasonable intervals and with reasonable prior notice;
7.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
7.9. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
7.10. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 7.2 through 7.9, and 7.18
inclusive;
7.11. Officer's Knowledge of Default. Upon any officer of the Borrower
obtaining knowledge of any Default or Event of Default hereunder or under any
other obligation of the Borrower or any Subsidiary to any Lender, or any event,
development or occurrence which could reasonably be expected to have a Material
Adverse Effect, cause such officer or an Authorized
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Representative to promptly notify the Agent of the nature thereof, the period of
existence thereof, and what action the Borrower or such Subsidiary proposes to
take with respect thereto;
7.12. Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary or any attachment, levy, execution or
other process being instituted against any assets of the Borrower or any
Subsidiary making a claim or claims which is likely to result in damages in an
aggregate amount greater than $[1,000,000] not otherwise covered by insurance,
promptly deliver to the Agent written notice thereof stating the nature and
status of such litigation, dispute, proceeding, levy, execution or other
process;
7.13. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Agent true, accurate and complete copies of
any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or property owned or leased or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any Subsidiary
for the costs of cleaning up, removing, remediating or responding to a release
of Hazardous Materials;
7.14. Environmental Compliance. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, either (i) remove or remedy,
or cause the applicable Subsidiary to remove or remedy, such violation or
release or satisfy such liability or (ii) contest in good faith such violation
so long as no remedial action shall be required to be taken during the period of
such contest;
7.15. Indemnification. Without limiting the generality of Section 11.9,
the Borrower hereby agrees to indemnify and hold the Agent, the Lenders and
NCMI, and their respective officers, directors, employees and agents, harmless
from and against any and all claims, losses, penalties, liabilities, damages and
expenses (including assessment and cleanup costs and reasonable attorneys' fees
and disbursements) arising directly or indirectly from, out of or by reason of
(a) the violation of any Environmental Law by the Borrower or any Subsidiary or
with respect to any property owned, operated or leased by the Borrower or any
Subsidiary or (b) the handling, storage, treatment, emission or disposal of any
Hazardous Materials by or on behalf of the Borrower or any Subsidiary or on or
with respect to property owned or leased or operated by the Borrower or any
Subsidiary. The provisions of this Section 7.15 shall survive the Facility
Termination Date and expiration or termination of this Agreement;
7.16. Further Assurances. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such
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further instruments, documents, certificates, financing and continuation
statements, and do and cause to be done such further acts that may be reasonably
necessary or advisable in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement and the other Loan
Documents;
7.17. Employee Benefit Plans.
(a) With reasonable promptness, and in any event within thirty (30)
days thereof, give notice to the Agent of (a) the establishment of any new
Pension Plan (which notice shall include a copy of such plan), (b) the
commencement of contributions to any Employee Benefit Plan to which the Borrower
or any of its ERISA Affiliates was not previously contributing, (c) any material
increase in the benefits of any existing Employee Benefit Plan, (d) each funding
waiver request filed with respect to any Employee Benefit Plan and all
communications received or sent by the Borrower or any ERISA Affiliate with
respect to such request and (e) the failure of the Borrower or any ERISA
Affiliate to make a required installment or payment under Section 302 of ERISA
or Section 412 of the Code by the due date;
(b) Promptly and in any event within fifteen (15) days of becoming
aware of the occurrence or forthcoming occurrence of any (a) Termination Event
or (b) nonexempt "prohibited transaction," as such term is defined in Section
406 of ERISA or Section 4975 of the Code, in connection with any Pension Plan or
any trust created thereunder, deliver to the Agent a notice specifying the
nature thereof, what action the Borrower or any ERISA Affiliate has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto; and
(c) With reasonable promptness but in any event within fifteen (15)
days for purposes of clauses (a), (b) and (c), deliver to the Agent copies of
(a) any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section 401(a) of
the Code, (b) all notices received by the Borrower or any ERISA Affiliate of the
PBGC's intent to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan, (c) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by the Borrower or any ERISA Affiliate
with the Internal Revenue Service with respect to each Pension Plan and (d) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA. The Borrower will notify the Agent in writing
within five (5) Business Days of the Borrower or any ERISA Affiliate obtaining
knowledge or reason to know that the Borrower or any ERISA Affiliate has filed
or intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA;
7.18. Continued Operations. Continue at all times to conduct its
business and engage principally in the same or complementary line or lines of
business substantially as heretofore conducted;
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7.19. Additional Support Documents. The Borrower will cause (i) every
Material Subsidiary, whether on the Closing Date or thereafter, to execute and
deliver, as promptly as practicable but in any event within 30 days after the
creation or Acquisition of any such Subsidiary, or such Subsidiary becoming a
Material Subsidiary, (a) in the case of a Material Subsidiary that is a Domestic
Subsidiary a Guaranty of such Subsidiary and (b) in the case of a Material
Subsidiary that is a Direct Foreign Subsidiary 65% of the issued and outstanding
capital stock of such Subsidiary together with stock powers (to the extent
certificates exist) executed in blank and a Pledge Agreement covering such stock
duly executed by the owner of such stock, (ii) to be delivered to the Agent an
opinion of counsel to the Material Subsidiary dated as of the date of delivery
of the Facility Guaranty or Pledged Stock addressed to the Agent and the
Lenders, in form and substance reasonably acceptable to the Agent (which opinion
may include assumptions and qualifications of similar effect to those contained
in the opinions of counsel delivered pursuant to Section 5.1(a) and such others
that are appropriate at the time such opinion is to be given, to the effect)
that:
(A) such Material Subsidiary is duly organized,
validly existing and in good standing in the jurisdiction of
its formation, has the requisite power and authority to own
its properties and conduct its business as then owned and then
conducted and proposed to be conducted, and is duly qualified
to transact business and is in good standing as a foreign
corporation or partnership in each other jurisdiction in which
the character of the properties owned or leased, or the
business carried on by it, requires such qualification and the
failure to be so qualified would reasonably be likely to
result in a Material Adverse Effect;
(B) the execution, delivery and performance of the
Facility Guaranty or Pledge Agreement, as the case may be,
described in this Section 7.19 to which such Material
Subsidiary, Borrower or Domestic Subsidiary is a signatory
have been duly authorized by all requisite corporate or
partnership action (including any required shareholder or
partner approval), such agreement has been duly executed and
delivered and constitutes the valid and binding agreement of
such Material Subsidiary, Borrower or Domestic Subsidiary,
enforceable against such Material Subsidiary, Borrower or
Domestic Subsidiary in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in
a proceeding at law or in equity); and
(iii) current copies of the charter documents, including partnership agreements
and certificate of limited partnership, if applicable, and bylaws of such
Material Subsidiary, minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors, partners, or appropriate
committees thereof (and, if required by such charter documents, bylaws or by
applicable law, of the shareholders) of such Material Subsidiary authorizing the
actions and the execution and delivery of documents described in this Section
7.19.
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ARTICLE VIII
Negative Covenants
Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will not, nor will it permit any Subsidiary to:
8.1. Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth to
be less than (i) $75,000,000 at the Closing Date and (ii) as at the
last day of each succeeding fiscal quarter of the Borrower and until
(but excluding) the last day of the next following fiscal quarter of
the Borrower, the sum of (A) the amount of Consolidated Net Worth
required to be maintained pursuant to this Section 8.1(a) as at the end
of the immediately preceding fiscal quarter, plus (B) 50% of
Consolidated Net Income (with no reduction for net losses during any
period) for the fiscal quarter of the Borrower ending on such day
(including within "Consolidated Net Income" certain items otherwise
excluded, as provided for in the definition of "Consolidated Net
Income").
(b) Consolidated Leverage Ratio. Permit at any time
during the respective periods set forth below the Consolidated Leverage
Ratio to be more than that set forth opposite each such period:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Four Quarter Period Ending Consolidated Leverage Ratio Covenant
- -------------------------------------------------------------------------------
<S> <C>
6/30/97 3.75:1.00
- -------------------------------------------------------------------------------
9/30/97 3.75:1.00
- -------------------------------------------------------------------------------
12/31/97 3.75:1.00
- -------------------------------------------------------------------------------
3/31/98 3.75:1.00
- -------------------------------------------------------------------------------
6/30/98 3.75:1.00
- -------------------------------------------------------------------------------
9/30/98 3.75:1.00
- -------------------------------------------------------------------------------
12/31/98 and thereafter 3.50:1.00
- -------------------------------------------------------------------------------
</TABLE>
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio as of the end of any
Four-Quarter Period to be less than 2.00 to 1.00.
(d) Consolidated Total Capitalization. Permit at any
time Consolidated Indebtedness to be greater than fifty-five percent
(55%) of Consolidated Total Capitalization.
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8.2. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, unless (i) the Person to be (or whose assets
are to be) acquired does not oppose such Acquisition and the line or lines of
business of the Person to be acquired are substantially the same as one or more
line or lines of business conducted by the Borrower and its Subsidiaries, (ii)
no Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition,
(iii) the Cost of an Acquisition does not exceed 25% of Consolidated Net Worth,
(iv) the Borrower shall have furnished to the Agent (A) pro forma historical
financial statements as of the end of the most recently completed Fiscal Year of
the Borrower and most recent interim fiscal quarter, if applicable, giving
effect to such Acquisition and (B) a certificate in the form of Exhibit H
prepared on a historical pro forma basis giving effect to such Acquisition,
which certificate shall demonstrate that no Default or Event of Default would
exist immediately after giving effect thereto, (v) the Person acquired shall be
a wholly-owned Subsidiary, or be merged into the Borrower or a wholly-owned
Subsidiary, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be the Borrower or a wholly-owned
Subsidiary), and (vi) if the Cost of Acquisition shall exceed 25% of
Consolidated Net Worth, the Required Lenders shall consent to such Acquisition
in their discretion;
8.3. Capital Expenditures. Make Capital Expenditures, which exceed in
the aggregate in any Fiscal Year of the Borrower described below (on a limited
cumulative basis, with the effect that amounts not expended in the Fiscal Year
set forth below may be carried forward to the next Fiscal Year), the amount set
forth opposite each such period:
<TABLE>
<CAPTION>
Capital Expenditures
--------------------
Fiscal Year Ending: Not to Exceed:
------------------- --------------
<S> <C>
December 31, 1997 $85,000,000
December 31, 1998 $75,000,000
Each Fiscal Year
ending on or after
December 31, 1999 $60,000,000;
</TABLE>
8.4. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than
(a) Liens existing as of the date hereof and as set forth in
Schedule 6.7;
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith
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by appropriate proceedings diligently conducted and with respect to
which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP.
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP.
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower or
any Subsidiary and which do not materially detract from the value of
the property to which they attach or materially impair the use thereof
to the Borrower or any Subsidiary; and
(f) Liens on assets of a Special Purpose Subsidiary securing
Non-Recourse Indebtedness;
8.5. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of the Borrower, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth
in Schedule 6.6; provided, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified or
supplemented after the Closing Date to change any terms of
subordination, repayment or rights of conversion, put, exchange or
other rights from such terms and rights as in effect on the Closing
Date;
(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) additional unsecured Indebtedness for Money Borrowed not
otherwise covered by clauses (a) through (c) above, provided that the
aggregate outstanding
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principal amount of all such other Indebtedness permitted under this
clause (d) shall in no event exceed $15,000,000 at any time;
(e) TROL Indebtedness; and
(f) Non-Recourse Indebtedness;
8.6. Transfer of Assets. Sell, lease, transfer or otherwise
dispose of any assets of Borrower or any Subsidiary other than (a)
dispositions of assets in the ordinary course of business, (b) dispositions of
property that is substantially worn, damaged, obsolete or, in the judgment of
the Borrower, no longer best used or useful in its business or that of any
Subsidiary, (c) transfers of assets necessary to give effect to merger or
consolidation transactions permitted by Section 8.8, (d) the disposition of
Eligible Securities in the ordinary course of management of the investment
portfolio of the Borrower and its Subsidiaries and (e) the transfer of assets
to any Person during any Fiscal Year which assets have a net book value not
exceeding ten percent (10%) of Consolidated Total Assets so long as Borrower or
its Subsidiary shall be paid not less than the net book value of such asset in
cash;
8.7. Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:
(a) of any Person acquired in an Acquisition permitted
hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof and as set
forth in Schedule 6.4;
(d) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(e) investments in Domestic Subsidiaries which are Guarantors
or Direct Foreign Subsidiaries who have complied with Section 7.19; and
(f) other investments, loans or advances (including, without
limitation, loans or advances in or to Special Purpose Subsidiaries)
not exceeding in the aggregate at any time 20% of Consolidated Total
Assets;
8.8. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales permitted under
Section 6.6); provided, however, (i) any Subsidiary of the Borrower may merge
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<PAGE> 74
or transfer all or substantially all of its assets into or consolidate with the
Borrower or any wholly-owned Subsidiary of the Borrower, and (ii) any other
Person may merge into or consolidate with the Borrower or any wholly-owned
Subsidiary and any Subsidiary may merge into or consolidate with any other
Person in order to consummate an Acquisition permitted by Section 8.2, provided
further, that any resulting or surviving entity shall execute and deliver such
agreements and other documents, including a Facility Guaranty, and take such
other action as the Agent may require to evidence or confirm its express
assumption of the obligations and liabilities of its predecessor entities under
the Loan Documents;
8.9. Restricted Payments. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing;
8.10. Transactions with Affiliates. Other than transactions permitted
under Sections 8.7 and 8.8, and transactions with Subsidiaries enter into any
transaction after the Closing Date, including, without limitation, the purchase,
sale, lease or exchange of property, real or personal, or the rendering of any
service, with any Affiliate of the Borrower, except (a) that such Persons may
render services to the Borrower or its Subsidiaries for compensation at the same
rates generally paid by Persons engaged in the same or similar businesses for
the same or similar services, (b) that the Borrower or any Subsidiary may render
services to such Persons for compensation at the same rates generally charged by
the Borrower or such Subsidiary and (c) in either case in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries and upon fair and reasonable terms no less favorable to the
Borrower (or any Subsidiary) than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate;
8.11. Compliance with ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
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(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan; or
(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof;
8.12. Fiscal Year. Change its Fiscal Year other than to a calendar
year;
8.13. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 8.8;
8.14. Limitations on Sales and Leasebacks. Except to the extent
permitted under Section 8.6(e), enter into any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of real or personal
property, whether now owned or hereafter acquired in a related transaction or
series of related transactions, which has been or is to be sold or transferred
by the Borrower or any Subsidiary to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or any Subsidiary;
8.15. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control;
8.16. [RESERVED]
8.17. Negative Pledge Clauses. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, provided that the Borrower and any Subsidiary
may enter into such an agreement in connection with property acquired with the
proceeds of purchase money Indebtedness permitted hereunder;
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<PAGE> 76
8.18. Prepayments, Etc. of Indebtedness. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness; or
(b) amend, modify or change in any manner any term or condition of any
Indebtedness described in Section 8.5(a) or any lease so that the terms and
conditions thereof are less favorable to the Agent and the Lenders than the
terms of such Indebtedness or leases as of the Closing Date;
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether
pursuant to any provision of Article II or Article III, at maturity, by
acceleration or otherwise and; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan, Reimbursement Obligation or
other Obligation or of any fees or other amounts payable to any of the
Lenders or the Agent on the date on which the same shall be due and
payable and such default shall continue for three (3) or more days; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Section 7.7, 7.11, 7.12, 7.19 or Article
VIII (other than Section 8.4 and 8.11;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for thirty (30) or more days after the earlier of receipt of
notice of such default by the Authorized Representative from the Agent
or an Authorized Representative of the Borrower becomes aware of such
default, or if a default shall be made in the performance or observance
of, or shall occur under, any covenant, agreement or provision
contained in any of the other Loan Documents (beyond any applicable
grace period, if any, contained therein) or in any instrument or
document evidencing or creating any obligation, guaranty, or Lien in
favor of the Agent or any of the Lenders or delivered to the Agent or
any of the Lenders in connection with or pursuant to this Agreement or
any of the Obligations, or if any Loan Document ceases to be in full
force and effect (other than by reason of any action by the Agent or
any Lender), or if without the written consent of the Lenders, this
Agreement or any other Loan Document shall be disaffirmed or shall ter
minate, be terminable or be terminated or become void or unenforceable
for any reason whatsoever (other than in accordance with its terms in
the absence of default or by reason of any action by the Lenders or the
Agent); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness or Rate Hedging Obligation (other than the
Loans and other Obligations) of the Borrower or any Subsidiary in an
amount not less than $2,500,000 in the aggregate outstanding, or (ii) a
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<PAGE> 78
default, which is not waived, in the performance, observance or
fulfillment of any term or covenant contained in any agreement or
instrument under or pursuant to which any such Indebtedness or Rate
Hedging Obligation referred to in clause (i) may have been issued,
created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Borrower or any Subsidiary, and
any such default or event of default specified in clauses (i), (ii) or
(iii) shall continue for more than the period of grace, if any, therein
specified, or such default or event of default shall permit the holder
of any such Indebtedness (or any agent or trustee acting on behalf of
one or more holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower pursuant to or in connection with any Loan
Document, or otherwise, shall be false or misleading in any material
respect when given; or
(g) if the Borrower or any Subsidiary shall be unable to pay
its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the benefit
of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Subsidiary or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approve a petition filed against the Borrower or
any Subsidiary seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state,
which petition is not dismissed within sixty (60) days; or if, under
the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of the
Borrower or any Subsidiary or of the whole or any substantial part of
its properties, which control is not relinquished within sixty (60)
days; or if there is commenced against the Borrower or any Subsidiary
any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Borrower or any Subsidiary takes any action to
indicate its consent to or approval of any such proceeding or petition;
or
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(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer is
found not to be liable for) is in excess of $1,000,000 is rendered
against the Borrower or any Subsidiary, or (ii) there is any
attachment, injunction or execution against any of the Borrower's or
Subsidiaries' properties for any amount in excess of $1,000,000 in the
aggregate; and such judgment, attachment, injunction or execution
remains unpaid, unstayed, undischarged, unbonded or undismissed for a
period of thirty (30) days; or
(j) if the Borrower or any Material Subsidiary shall, other
than in the ordinary course of business (as determined by past
practices), suspend all or any part of its operations material to the
conduct of the business of the Borrower or such Material Subsidiary for
a period of more than sixty (60) days; or
(k) if at any time less than 80% of Consolidated Total Assets
are attributable to the operations and assets of the Borrower,
Guarantors and Direct Foreign Subsidiaries who have complied with the
requirements of Section 7.19; or
(l) if there shall occur and not be waived an Event of Default
as defined in any of the other Loan Documents;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders and the Issuing
Bank to make further Revolving Loans and Swing Line Loans or
to issue additional Letters of Credit terminated, whereupon
the obligation of each Lender to make further Revolving Loans,
of NationsBank to make further Swing Line Loans, and of the
Issuing Bank to issue additional Letters of Credit, hereunder
shall terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Obligations to be
immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to the Agent and the Lenders, shall forthwith become
immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Revolving Loans, of NationsBank to make Swing Line Loans, and
of the Issuing Bank to issue Letters of Credit hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of
any action by the Agent or the Required Lenders or notice to
the Agent or the Lenders;
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(B) The Borrower shall, upon demand of the Agent or
the Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the LC
Account Agreement; and
(C) the Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law.
9.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived or cured, the Agent may, and at the direction of
the Required Lenders shall, proceed to protect and enforce their rights or
remedies either by suit in equity or by action at law, or both, whether for the
specific performance of any covenant, agreement or other provision contained
herein or in any other Loan Document, or to enforce the payment of the
Obligations or any other legal or equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred upon
the Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right or
remedy shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
9.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has occurred
and not been waived, and the maturity of the Notes has been accelerated pursuant
to Article IX hereof, all payments received by the Agent hereunder, in respect
of any principal of or interest on the Obligations or any other amounts payable
by the Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.10, 3.3,
3.4 and 11.5;
(b) amounts due to the Agent pursuant to Section 10.9;
(c) payments of interest on Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
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(d) payments of principal of Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 9.1(l)(B);
(f) amounts due to the Lenders pursuant to Sections 3.2(g),
7.15 and 11.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders on a pro rata basis according to the amounts owed; and
(i) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
9.6. Limitation. The Agent and the Lenders shall have no right to
accelerate any of the Loans upon, or to institute any action or proceeding
before any court to realize upon collateral as a result of, the occurrence of
any Default which shall not also constitute an Event of Default; provided
however, nothing contained in this sentence shall in any respect impair or
adversely affect the right, power and authority of the Agent and the Lenders (i)
to take any action expressly required or permitted to be taken under the Loan
Documents upon the occurrence of any Default; and (ii) to take any action
provided under the Loan Documents or otherwise available by statute, at law or
in equity upon the occurrence of any Default.
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ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 10.5 and
the first sentence of Section 10.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents): (a) shall
not have any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Loan Party or any other Person to perform any of its obligations thereunder;
(c) shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Subsidiaries or
affiliates; (d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and (e) shall not be responsible
for any action taken or omitted to be taken by it under or in connection with
any Loan Document, except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Each Lender hereby irrevocably designates
and appoints NationsBank as the Agent for the Lenders under this Agreement, and
each of the Lenders hereby irrevocably authorizes NationsBank as the Agent for
such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers as are
expressly delegated to the Agent by the terms of this Agreement and such other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any of the
Lenders, and no implied covenants, functions, respon sibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
10.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Loan Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an
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Assignment and Acceptance executed in accordance with Section 11.1 hereof. As to
any matters not expressly provided for by this Agreement, the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Loan Document or applicable law or
unless it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking any such action.
10.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of its Subsidiaries
or affiliates as if it were not acting as Agent, and NationsBank (and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from any Loan Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 11.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Loan Document; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs
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or expenses payable by the Borrower under Section 11.5, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Borrower.
The agreements contained in this Section shall survive payment in full of the
Loans and all other amounts payable under this Agreement.
10.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Loan Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of its Subsidiaries or affiliates that may come into the possession
of the Agent or any of its affiliates.
10.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent meeting the
requirements set forth herein. The Borrower shall have the right to approve such
Agent so long as no Default or Event of Default exist. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the United States of America having combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor, such successor shall thereupon succeed to and become vested with
all the rights, powers, discretion, privileges, and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
10.8. Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article IV) which results in its receiving more than its pro rata share of
the aggregate payments with respect to all of the Obligations (other than any
payment expressly provided hereunder to be distributed on other than a pro rata
basis and payments pursuant to Article IV), then (a) such Lender shall be deemed
to have simultaneously purchased from the other Lenders a share in their
Obligations so that the amount of the Obligations held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to time
as shall be equitable to insure that the Lenders share such payments ratably;
provided, however, that for purposes of this Section 10.8 the term "pro rata"
shall be determined with respect to the Revolving Credit Commitment of each
Lender and to the Total Revolving Credit Commitments after subtraction in each
case of amounts, if any, by which any
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such Lender has not funded its share of the outstanding Loans and Obligations.
If all or any portion of any such excess payment is thereafter recovered from
the Lender which received the same, the purchase provided in this Section 10.8
shall be rescinded to the extent of such recovery, without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that each
Lender so purchasing a portion of the other Lenders' Obligations may exercise
all rights of payment (including, without limitation, all rights of set-off,
banker's lien or counterclaim) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
10.9. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
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ARTICLE XI
Miscellaneous
11.1. Assignments and Participations. (a) Each Lender may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Loans, its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and obligations under
this Agreement and the Note; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit B hereto, together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in Section 11.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent
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shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit B hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations at its expense to one or more
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Revolving Credit Commitment and its Loans);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to its
Loans and its Note and to approve any amendment, modification, or waiver of any
provision of this Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Note, extending any scheduled principal payment date or date
fixed for the payment of interest on such Loans or Note, or extending its
Revolving Credit Commitment) and (iv) the sale of any such participation which
requires the Borrower to file a registration statement with federal or state
regulatory authorities shall not be permitted.
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants) so
long as such Lender shall require in writing (which writing names the Borrower
as a third party beneficiary thereof) any such assignee or participant or
perspective assignee or participant to maintain the confidentiality of any
information delivered to it which is not publicly available.
(g) The Borrower may not assign, nor shall it cause, suffer or permit
any Guarantor to assign any rights, powers, duties or obligations under this
Agreement of the other Loan Documents without the prior written consent of all
the Lenders.
(h) Notwithstanding the fact that a Lender holding TROL Indebtedness
may assign all or a portion of its interest therein without the assignment of a
pro rata portion of its Revolving Credit Commitment, the Agent shall encourage
Lenders assigning a portion of its rights and obligations under this Agreement
who hold TROL Indebtedness to assign a like pro rata portion of its TROL
Indebtedness to the same Eligible Assignee. Should any Lender fail to make a pro
rata assignment of TROL Indebtedness held by it, the Agent shall, at the request
of the Borrower, assist the Borrower in locating an Eligible Assignee pursuant
to Section 4.7 to replace such assigning Lender.
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11.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram or telefacsimile, respectively (where the receipt of such
message is verified by return), or (iii) on the fifth Business Day after the day
on which mailed, if sent prepaid by certified or registered mail, return receipt
requested, in each case delivered, transmitted or mailed, as the case may be, to
the address or telefacsimile number, as appropriate, set forth below or such
other address or number as such party shall specify by notice hereunder:
(a) if to the Borrower:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410
Attention: Mr. David Watson, Controller and Chief
Accounting Officer
Telephone: (800) 666-5640 ext. 6646
Telefacsimile: (561) 691-6473
With a copy to:
Ackerman Senterfitt & Edison, P.A.
One Southeast Third Avenue, 28th Floor
Miami, Florida 33131-1704
Attention: Bruce S. Marks, Esq.
Telephone: (305) 374-5600
Telefacsimile:(305) 374-5095
(b) if to the Agent:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-2374
Telefacsimile:(704) 386-9923
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with a copy to:
NationsBank, National Association
100 S.E. 2nd Street, 14th Floor
Miami, Florida 33131
Attention: Maria Conroy
Telephone: (305) 533-2420
Telefacsimile: (305) 533-2437
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any Guarantor, at the address set forth on the
signature page of the Facility Guaranty or other Loan
Document executed by such Guarantor, as the case may
be.
11.3. Right of Set-off; Adjustments. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although the payment of
such obligations may not have been accelerated. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.3 may, to
the
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fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
11.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder unless
otherwise provided herein. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
11.5. Expenses. The Borrower agrees to pay on demand all reasonable
costs and expenses of the Agent in connection with the syndication, preparation,
execution, delivery, modification, and amendment of this Agreement, the other
Loan Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
with respect thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. The Borrower further agrees to pay on
demand all reasonable costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses and the
cost of internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Loan Documents and the
other documents to be delivered hereunder.
11.6. Amendments and Waivers. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if Article X or the rights or duties of the Agent are affected thereby, by
the Agent); provided that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Revolving Credit Commitments of the Lenders,
(ii) reduce the principal of or rate of interest on any Loan or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for the payment
of any scheduled installment of principal of or interest on any Loan or any fees
or other amounts payable hereunder or for termination of any Revolving Credit
Commitment, (iv) change the percentage of the Revolving Credit Commitments or of
the unpaid principal amount of the Notes, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action under this Section
or any other provision of this Agreement or (v) release any Guarantor; and
provided, further, that no such amendment or waiver which affects the rights,
privileges, or obligations of NationsBank as provider of the Swing Loans or
issuer of Letters of Credit, shall be effective unless signed in writing by
NationsBank.
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders. No notice to or demand on the
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Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances, except as otherwise expressly
provided herein. No delay or omission on any Lender's or the Agent's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any Default or Event of Default.
11.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully- executed counterpart.
11.8. Termination. The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and each
Lender with respect thereto. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until payment
in full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and the Borrower shall be
liable to, and shall indemnify and hold the Agent or such Lender harmless for,
the amount of such payment surrendered until the Agent or such Lender shall have
been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Agent or the Lenders in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to the Agent or
the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
11.9. Indemnification. (a) The Borrower agrees to indemnify and hold
harmless the Agent and each Lender and each of their affiliates and their
respective officers, directors and employees (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use of
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the proceeds of the Loans, except to the extent such claim, damage, loss,
liability, cost, or expense is finally judicially determined to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.9(a) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.
(b) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.9 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
11.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
11.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto.
11.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
11.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts
for, charges, or receives any consideration which constitutes interest in
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excess of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender's option be applied
to the outstanding amount of the Loans made hereunder or be refunded to the
Borrower. As used in this paragraph, the term "Highest Lawful Rate" means the
maximum lawful interest rate, if any, that at any time or from time to time may
be contracted for, charged, or received under the laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
11.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN
SUCH STATE.
(B) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
BROWARD, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 11.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED
FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE
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APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
11.15. Judgment Currency. The Borrower, the Agent and each Lender
hereby agree that if, in the event that a judgment is given in relation to any
sum due to the Agent or any Lender hereunder, such judgment is given in a
currency (the "Judgment Currency") other than that in which such sum was
originally denominated (the "Original Currency"), the Borrower agrees to
indemnify the agent or such Lender, as the case may be, to the extent that the
amount of the Original Currency which could have been purchased by the Agent in
accordance with normal banking procedures on the Business Day following receipt
of such sum is less than the sum which could have been so purchased by the agent
had such purchase been made on the day on which such judgment was given or, if
such day is not a Business Day, on the Business Day immediately preceding the
giving of such judgment, and if the amount so purchased exceeds the amount which
could have been so purchased had such purchase been made on the day on which
such judgment was given or, if such day is not a Business Day, on the Business
Day immediately preceding such judgment, the Agent or the applicable Lenders
agrees to remit such excess to the Borrower. The agreements in this Section
shall survive payment of all other Obligations.
11.16. Economic and Monetary Union in the European Community.
(a) The parties confirm that, except as provided in subsection (b)
below of this Section 11.16, the occurrence or non-occurence of an event
associated with economic and monetary union in the European Community will not
have the effect of altering any term of, or discharging or excusing performance
under, this Agreement, any other Loan Document, any Loan or any transaction
contemplated by any of the foregoing, nor give a party the right unilaterally to
alter or terminate this Agreement, any other Loan Document, any Loan or any
transaction contemplated by any of the foregoing or give rise to an Event of
Default or otherwise be the basis for the effective designation of the Revolving
Credit Termination Date.
88
<PAGE> 95
"An event associated with economic and monetary union in the European
Community" includes, without limitation, each (and any combination) of the
following:
(i) the introduction of, changeover to or operation of a
single or unified European currency (whether known as the euro or
otherwise);
(ii) the fixing of conversion rates between a member
state's currency and the new currency or between the currencies of
member states;
(iii) the substitution of that new currency for the Euro
Currency as the unit of account of the European Community;
(iv) the introduction of that new currency as lawful
currency in a member state;
(v) the withdrawal from legal tender of any currency
that, before the introduction of the new currency, was lawful currency
in one of the member states; or
(vi) the disappearance or replacement of a relevant price
source for the Euro Currency or the national currency of any member
state, or the failure of the agreed sponsor (or a successor sponsor) to
publish or display a relevant rate, index, price, page or screen.
(b) Any agreement between the parties that amends or overrides the
provisions of this Section in respect of any Loan or any other transaction
contemplated by this Agreement or any of the Loan Documents will be effective if
it is in writing and expressly refers to this Section or to European monetary
union or to an event associated with economic and monetary union in the European
Community and would otherwise be effective in accordance with Section 11.6.
(c) The Borrower agrees that, notwithstanding anything to the
contrary contained in any agreement relating to "an event associated with
economic and monetary union in the European Community", upon the occurrence of
any such event, the Lenders shall have the right to convert any or all Loans in
an Alternative Currency of a member of the European Union into Loans denominated
in Dollars determined as of a date, as may be selected by the Agent in its sole
discretion
11.17. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any advisor of any Lending
party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request
89
<PAGE> 96
or demand of any regulatory agency or authority, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party prohibited by this
Agreement, (g) in connection with any litigation to which such Lending Party or
any of its affiliates may be a party, (h) to the extent necessary in connection
with the exercise of any remedy under this Agreement or any other Loan Document,
and (i) subject to provisions substantially similar to those contained in this
Section, to any actual or proposed participant or assignee.
[Signatures on following pages]
90
<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WACKENHUT CORRECTIONS CORPORATION
WITNESS:
By:
- ------------------------------ ------------------------------
Name:
-----------------------------
Title:
- ------------------------------ -----------------------------
Signature Page 1 of 8
<PAGE> 98
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Signature Page 2 of 8
<PAGE> 99
NATIONSBANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Domestic Lending Office:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention:
------------------------------
Telephone: (704) 386-
Telefacsimile: (704) 386-
Wire Transfer Instructions:
NationsBank, National Association
ABA#
----------
Account No:
-----------------------------
Reference:
-----------------------------
Attention:
------------------------------
Eurodollar Lending Office:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention:
------------------------------
Telephone: (704) 386-
Telefacsimile: (704) 386-
Wire Transfer Instructions:
NationsBank, National Association
ABA#
----------
Account No.
-----------------------------
Reference:
-----------------------------
Attention:
------------------------------
Signature Page 3 of 8
<PAGE> 100
SCOTIABANC INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Lending Office:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Wire Transfer Instructions:
The Bank of Nova Scotia
New York, New York
ABA #026002532
Account #0735639
Attention: D. Legista
Reference: Wackehut Corrections Corporation
Signature Page 4 of 8
<PAGE> 101
BARNETT BANK, N.A.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
Lending Office:
625 N. Flagler Drive
10th Floor
West Palm Beach, Florida 33401
Wire Transfer Instructions:
Barnett Technologies
Jacksonville, Florida 32256
ABA #063000047
Account #0800053949
Attention: Commercial Loan Operations
Reference: Wackenhut Corrections Corporation
Signature Page 5 of 8
<PAGE> 102
BANQUE PARIBAS
By:
-----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
Lending Office:
787 Seventh Avenue
New York, New York 10019
Wire Transfer Instructions:
Bankers Trust
New York, New York
ABA #021-001-033
Name of Account: Banque Paribas NY
Account #04-202-195
Attention: Loan Servicing
Reference: Wackenhut Corrections Corporation
Signature Page 6 of 8
<PAGE> 103
THE SAKURA BANK, LIMITED, ATLANTA
AGENCY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
Lending Office:
245 Peachtree Center Avenue, N.E.
Suite 2703
Atlanta, Georgia 30303
Wire Transfer Instructions:
Morgan Guaranty Trust Co. of New York
New York, New York
ABA #021 000 238
Account Name: The Sakura Bank, Ltd., New York
Account #631-22-624
In favor of: MTKB, Atlanta
A/C 8000100-1
Signature Page 7 of 8
<PAGE> 104
SUMMIT BANK
By:
-----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
Lending Office:
250 Moore Street, 2nd Floor
Hackensack, New Jersey 07602
Wire Transfer Instructions:
Summit Bank
Ridgefield Park, New Jersey
ABA #021202162
Account #47902
Attention: CLO2
Signature Page 8 of 8
<PAGE> 105
EXHIBIT A
Applicable Revolving Credit Commitment Percentages
<TABLE>
<CAPTION>
Lender Revolving Applicable
- ------ Credit Commitment
Commitment Percentage
---------- ----------
<S> <C> <C>
NationsBank, National
Association $ %
ScotiaBanc Inc.
Barnett Bank, N.A.
Banque Paribas
The Sakura Bank, Limited,
Atlanta Agency
Summit Bank
----------- ---------
$30,000,000 100%
</TABLE>
A-1
<PAGE> 106
EXHIBIT B
Form of Assignment and Acceptance
DATED ,
-------------- --
Reference is made to the Credit Agreement dated as of June __, 1997
(the "Agreement") among WACKENHUT CORRECTIONS CORPORATION, a Florida corporation
(the "Borrower"), the Lenders (as defined in the Agreement), and NationsBank,
National Association , as Agent for the Lenders ("Agent"). Unless otherwise
defined herein, terms defined in the Agreement are used herein with the same
meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. After
giving effect to such sale and assignment, the Assignee's Revolving Credit
Commitment and the amount of the Loans owing to the Assignee will be as set
forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note held by the Assignor and requests that the Agent
exchange such Note for new Notes payable to the order of the Assignee in an
amount equal to the Revolving Credit Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Revolving Credit Commitment
retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such
B-1
<PAGE> 107
powers and discretion under the Credit Agreement as are delegated to the Agent
by the terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service or other forms required under Section 4.6.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Florida.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
B-2
<PAGE> 108
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
<TABLE>
<S> <C>
Percentage interest assigned: %
--------
Assignee's Revolving Credit Commitment: $
Aggregate outstanding principal amount --------
of Loans assigned: $
--------
Principal amount of Note payable to Assignee: $
--------
Principal amount of Note payable to Assignor: $
--------
Effective Date (if other than date
of acceptance by Agent): , 19
------- --
</TABLE>
[NAME OF ASSIGNOR], as Assignor
By:
--------------------------------
Title:
Dated: , 19 _
--------------------
[NAME OF ASSIGNEE], as Assignee
By:
--------------------------------
Title:
Domestic Lending Office:
Eurodollar Lending Office:
B-3
<PAGE> 109
Accepted [and Approved] *
this ___ day of __________, 19__
NATIONSBANK NATIONAL ASSOCIATION
By:
Title:
[Approved this_____day
of___________, 19__
WACKENHUT CORRECTIONS CORPORATION
By:_________________________]*
Title:
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
B-4
<PAGE> 110
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Representative
Reference is hereby made to the Credit Agreement dated as of June __,
1997 (the "Agreement") among WACKENHUT CORRECTIONS CORPORATION, a Florida
corporation (the "Borrower"), the Lenders (as defined in the Agreement), and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not defined herein shall have the respective meanings
therefor set forth in the Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such individual's name
is a true and correct statement of such individual's office (to which such
individual has been duly elected or appointed), a genuine specimen signature of
such individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
Name and Address Office Specimen Signature
- ------------------------ --------------------- ----------------------------
- ------------------------
- ------------------------
- ------------------------ --------------------- ----------------------------
- ------------------------
- ------------------------
Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.
This the day of , 19 .
--- ------------------ --
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
C-1
<PAGE> 111
EXHIBIT D-1
Form of Borrowing Notice
To: NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of June __,
1997 the "Agreement") among WACKENHUT CORRECTIONS CORPORATION (the "Borrower"),
the Lenders (as defined in the Agreement), and NationsBank, National
Association, as Agent for the Lenders ("Agent"). Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent that Loans of the type and amount set forth below be made on the
date indicated:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- --------- --------- ---------------
<S> <C> <C> <C>
Base Rate Loan
------ --------- ------------
Eurodollar Rate Loan
------ --------- ------------
Alternative Currency(4)
------ --------- ------------
</TABLE>
- -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months or nine
months, if available.
(2) Must be $2,000,000 or if greater an integral multiple of $100,000,
unless a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
(4) Specify Pounds Sterling, Australian Dollars, or Canadian Dollars.
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions] .
D-1-1
<PAGE> 112
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article VI of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct in all material respects as of
the date hereof except that the reference to the financial statements in Section
6.6(a) of the Agreement are to those financial statements most recently
delivered to you pursuant to Section 7.1 of the Agreement (it being understood
that any financial statements delivered pursuant to Section 7.1(b) have not been
certified by independent public accountants) and attached hereto are any changes
to the Schedules referred to in connection with such representations and
warranties.
3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full .
WACKENHUT CORRECTIONS CORPORATION
BY:
---------------------------------------
Authorized Representative
DATE:
------------------------------------
D-1-2
<PAGE> 113
EXHIBIT D-2
Form of Borrowing Notice--Swing Line Loans
To: NationsBank, National Association,
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of June __,
1997(the "Agreement") among WACKENHUT CORRECTIONS CORPORATION (the "Borrower"),
the Lenders (as defined in the Agreement), and NationsBank, National
Association, as Agent for the Lenders ("Agent"). Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower through its Authorized Representative hereby gives notice
to NationsBank that a Swing Line Loan of the amount set forth below be made on
the date indicated:
<TABLE>
<CAPTION>
Interest
Amount(1) Period Date of Loan
--------- ------ ------------
<S> <C> <C> <C>
CD Rate Loan ,
--------- ---------- ---------- ----
</TABLE>
- -------------------
(1) Must be a minimum of $200,000, unless a Base Rate Refunding Loan.
The Borrower hereby requests that the proceeds of Swing Line Loans
described in this Borrowing Notice be made available to the Borrower as follows:
[insert transmittal instructions] .
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article VI of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct in all material respects as of
the date hereof except that the reference to the financial statements in Section
6.6(a) of the Agreement are to those financial statements most recently
delivered to you pursuant to Section 7.1 of the Agreement (it being understood
that any financial statements delivered pursuant to Section 7.1(b) have not been
certified by independent public
D-2-1
<PAGE> 114
accountants) and attached hereto are any changes to the Schedules referred to in
connection with such representations and warranties.
3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full .
WACKENHUT CORRECTIONS CORPORATION
BY:
----------------------------------
Authorized Representative
DATE:
---------------------------------
D-2-2
<PAGE> 115
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Credit Agreement dated as of June __,
1997(the "Agreement") among WACKENHUT CORRECTIONS CORPORATION (the "Borrower"),
the Lenders (as defined in the Agreement), and NationsBank, National
Association, as Agent for the Lenders ("Agent"). Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent of the following selection of a type of Loan and Interest Period:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- --------- --------- ---------------
<S> <C> <C> <C>
Base Rate Loan
------ --------- ------------
Eurodollar Rate Loan
------ --------- ------------
Alternative Currency(4)
------ --------- ------------
</TABLE>
- -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months or nine
months, if available.
(2) Must be $2,000,000 or if greater an integral multiple of $100,000,
unless a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
(4) Specify Pounds Sterling, Australian Dollars, or Canadian Dollars.
WACKENHUT CORRECTIONS CORPORATION
BY:
--------------------------------------
Authorized Representative
DATE:
-------------------------------------
E-1
<PAGE> 116
EXHIBIT F-1
Form of Revolving Note
Promissory Note
(Revolving Loan)
$30,000,000 Charlotte, North Carolina
________ __, 1997
FOR VALUE RECEIVED, WACKENHUT CORRECTIONS CORPORATION, a Florida
corporation having its principal place of business located in Palm Beach
Gardens, Florida (the "Borrower"), hereby promises to pay to the order of
________________________________ (the "Lender"), in its individual capacity, at
the office of NATIONSBANK, NATIONAL ASSOCIATION, as agent for the Lenders (the
"Agent"), located at One Independence Center, 101 North Tryon Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may designate in writing) at the times set forth in the Credit
Agreement dated as of June __, 1997 among the Borrower, the financial
institutions party thereto (collectively, the "Lenders") and the Agent (the
"Agreement" -- all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
THIRTY MILLION DOLLARS ($30,000,000) or, if less than such principal amount, the
aggregate unpaid principal amount of all Revolving Loans made by the Lender to
the Borrower pursuant to the Agreement on the Revolving Credit Termination Date
or such earlier date as may be required pursuant to the terms of the Agreement,
and to pay interest from the date hereof on the unpaid principal amount hereof,
in like money, at said office, on the dates and at the rates provided in Article
II of the Agreement. All or any portion of the principal amount of Loans may be
prepaid or required to be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 (a) of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
F-1-1
<PAGE> 117
This Revolving Note is one of the Revolving Notes in the principal
amount of $40,000,000 referred to in the Agreement and is issued pursuant to and
entitled to the benefits and security of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon which
the Revolving Loans evidenced hereby were or are made and are to be repaid. This
Revolving Note is subject to certain restrictions on transfer or assignment as
provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Revolving Note
any collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
WACKENHUT CORRECTIONS CORPORATION
WITNESS:
By:
- -------------------------------- ------------------------------
Name:
- -------------------------------- ----------------------------
Title:
---------------------------
F-1-2
<PAGE> 118
EXHIBIT F-2
Form of Swing Line Note
Promissory Note
(Swing Line Loan)
$5,000,000 Charlotte, North Carolina
__________ __, 1997
FOR VALUE RECEIVED, WACKENHUT CORRECTIONS CORPORATION, a Florida
corporation having its principal place of business located in Palm Beach
Gardens, Florida (the "Borrower"), hereby promises to pay to the order of
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH) (the "Lender"), in its individual
capacity, at the office of NATIONSBANK, NATIONAL ASSOCIATION, located at One
Independence Center, 101 North Tryon Street, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Credit Agreement dated as of June __,
1997 among the Borrower, the financial institutions party thereto (collectively,
the "Lenders") and the Agent (the "Agreement" -- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of FIVE MILLION DOLLARS ($5,000,000) or,
if less than such principal amount, the aggregate unpaid principal amount of all
Swing Line Loans made by the Lender to the Borrower pursuant to the Agreement on
the Revolving Credit Termination Date or such earlier date as may be required
pursuant to the terms of the Agreement, and to pay interest from the date hereof
on the unpaid principal amount hereof, in like money, at said office, on the
dates and at the rates provided in Article II of the Agreement. All or any
portion of the principal amount of Loans may be prepaid or required to be
prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 (a) of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
F-2-1
<PAGE> 119
This Revolving Note is one of the Revolving Notes in the principal
amount of $5,000,000 referred to in the Agreement and is issued pursuant to and
entitled to the benefits and security of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon which
the Revolving Loans evidenced hereby were or are made and are to be repaid. This
Revolving Note is subject to certain restrictions on transfer or assignment as
provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Revolving Note
any collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
WACKENHUT CORRECTIONS CORPORATION
WITNESS:
By:
- -------------------------------- ------------------------------
Name:
- -------------------------------- -----------------------------
Title:
---------------------------
F-2-2
<PAGE> 120
EXHIBIT G
Form of Opinion of Borrower's Counsel
June __, 1997
NationsBank, National Association,
as Agent and
Each of the Lenders Party to the
Credit Agreement Referenced Below
NationsBank Corporate Center
Charlotte, North Carolina 28255-0065
RE: $30,000,000 REVOLVING CREDIT AND LETTER OF CREDIT FACILITIES AMONG
NATIONSBANK, NATIONAL ASSOCIATION, AS AGENT, THE LENDERS PARTY THERETO
AND WACKENHUT CORRECTIONS CORPORATION
Ladies and Gentlemen:
We have acted as counsel to WACKENHUT CORRECTIONS CORPORATION, a
Florida corporation (the "Borrower"), and the Guarantors in connection with the
Revolving Loan in the amount of $30,000,000 (the "Revolving Loan"), including
the $10,000,000 Letter of Credit Facility constituting part of the Revolving
Credit Facility (the "LC Facility"), each being made available to the Borrower
by you on this date pursuant to the Credit Agreement of even date herewith among
you, the Lenders and the Borrower (the "Credit Agreement"), and the other
transactions contemplated under the Credit Agreement.
This opinion is being delivered in accordance with the conditions set
forth in Section 5.1 of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the Credit
Agreement.
As such counsel, we have reviewed the following documents:
1. the Credit Agreement;
2. the Revolving Notes;
3. the Facility Guaranty;
G-1
<PAGE> 121
4. the LC Account Agreement.
The documents described in items 1 through 4 immediately above are
referred to herein as the "Loan Documents".
For purposes of the opinions expressed below, we have assumed that all
natural persons executing the Loan Documents have legal capacity to do so; that
all signatures (other than those of representatives of the Borrower and the
Guarantors on the Loan Documents) on all documents submitted to us are genuine;
that all documents submitted to us as originals (other than the Loan Documents)
are authentic; and that all documents submitted to us as certified copies or
photocopies conform to the originals of such documents, which themselves are
authentic.
In addition, for purposes of giving this opinion, we have examined such
corporate records of the Borrower and the Guarantors, certificates of public
officials, certificates of appropriate officials of the Borrower and the
Guarantors, and such other documents, and have made such inquiries as we have
deemed appropriate.
Based upon and subject to the foregoing, it is our opinion that:
1. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and is duly
qualified to transact business as a foreign corporation and is in good standing
in ___________________ and in all other jurisdictions in which the nature of its
business requires such qualification. The Borrower has full corporate power and
authority to own its assets and conduct the businesses in which it is now
engaged and as are expressly contemplated by the Loan Documents, and has full
corporate power and authority to enter into each of the Loan Documents to which
it is a party and to perform its obligations thereunder.
2. Each of the Loan Documents to which the Borrower is a party has been
duly authorized by the Board of Directors of the Borrower (and by any required
shareholder action), has been duly executed and delivered by the Borrower, and
constitutes the legal, valid and binding obligation, agreement, instrument or
conveyance, as the case may be, of the Borrower, enforceable against the
Borrower in accordance with its respective terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization and
other similar laws relating to or affecting creditors' rights generally and by
the application of general equitable principles (whether considered in
proceedings at law or in equity).
3. Each Guarantor is a corporation [or partnership, as the case may be]
duly organized, validly existing and in good standing under the laws of its
respective state of its formation and is duly qualified to transact business as
a foreign entity and is in good standing in all jurisdictions in which the
nature of its business requires such qualification[ and in which the failure to
be so qualified would reasonably be likely to result in a Material Adverse
Effect]. Each Guarantor has full corporate power and authority to own its assets
and conduct the businesses in which it is now engaged and as expressly
contemplated in the Loan Documents, and has full corporate power and authority
to enter into each of the Loan Documents to which it is a party and to perform
its obligations thereunder.
G-2
<PAGE> 122
4. Each of the Loan Documents to which each Guarantor is a party has
been duly authorized by the Board of Directors of such Guarantor (and by any
required shareholder action), has been duly executed and delivered by such
Guarantor, and constitutes the legal, valid and binding obligation, agreement or
instrument, as the case may be, of such Guarantor, enforceable against such
Guarantor in accordance with its respective terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization and
other similar laws relating to or affecting creditors' rights generally and by
the application of general equitable principles (whether considered in
proceedings at law or in equity).
5. Neither the execution or delivery of, nor performance by the
Borrower or any Guarantor of its obligations under, the Loan Documents (a) does
or will conflict with, violate or con stitute a breach of (i) the charter[,
partnership agreement] or bylaws of the Borrower or any Guarantor, (ii) any
laws, rules or regulations applicable to the Borrower or any other Guarantor, or
(iii) any contract, agreement, indenture, lease, instrument, other document,
judgment, writ, determination, order, decree or arbitral award to which the
Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary
or any Guarantor or any of their properties is bound, (b) requires the prior
consent of, notice to, license from or filing with any Governmental Authority
which has not been duly obtained or made on or prior to the date hereof, or (c)
does or will result in the creation or imposition of any lien, pledge, charge or
encumbrance of any nature upon or with respect to any of the properties of the
Borrower or any Subsidiary or any Guarantor, except for the Liens in your favor
expressly created pursuant to the Loan Documents.
6. There is no pending or, to the best of our knowledge, threatened,
action, suit, investigation or proceeding (including, without limitation, any
action, suit, investigation, or proceeding under any environmental or labor
law), nor is there any basis therefor, before or by any court, or governmental
department, commission, board, bureau, instrumentality, agency or arbitral
authority, (i) which calls into question the validity or enforceability of any
of the Loan Documents, or the titles to their respective offices or authority of
any officers of the Borrower or any Guarantor or (ii) an adverse result in which
would reasonably be likely to have a Material Adverse Effect.
7. Neither the Borrower nor any Subsidiary nor any Guarantor is subject
to any charter, bylaw or other corporate [or partnership] restrictions nor, to
the best of our knowledge, is the Borrower or any Subsidiary or any Guarantor
party to or bound by any contract or agreement which (i) materially and
adversely affects its business, properties or condition (financial or
otherwise), or (ii) restricts, limits, or prohibits performance of any of their
respective obligations pursuant to the terms of the Loan Documents.
8. To the best of our knowledge after due inquiry, neither the Borrower
nor any Subsidiary nor any Guarantor (i) is in default (which default has not
been waived) under any agreement, document or instrument to which it is a party
or by which it or any of its assets is bound or (ii) is in violation of any law,
rule, regulation, judgment, writ, determination, order, decree or arbitral award
to which the Borrower or any Subsidiary or any Guarantor is a party or by which
the Borrower or any Subsidiary or any Guarantor or any of their respective
properties is bound, which default or violation, as the case may be, would
constitute a Default or Event of Default under the Credit Agreement or otherwise
could reasonably be likely to have a Material Adverse Effect.
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<PAGE> 123
9. None of the transactions contemplated by the Credit Agreement,
including, without limitation, the use of the proceeds of the Loans provided for
in the Loan Documents, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, any regulations issued pursuant
thereto, or regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
Our opinions contained herein are rendered solely in connection with
the transactions contemplated under the Loan Documents and may not be relied
upon in any manner by any Person other than the addressees hereof, any successor
or assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of any Lender
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or a Person considering whether to become a Reliance Party), except as
may be required of any Reliance Party by applicable law or regulation or in
accordance with any auditing or oversight function or request of regulatory
agencies to which a Reliance Party is subject.
Very truly yours,
G-4
<PAGE> 124
EXHIBIT H
Compliance Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Credit Agreement dated as of June __,
1997 (the "Agreement") among Wackenhut Corrections Corporation, a Florida
corporation (the "Borrower"), the Lenders (as defined in the Agreement) and
NationsBank, National Association (South), as Agent for the Lenders ("Agent").
Capitalized terms used but not otherwise defined herein shall have the
respective meanings therefor set forth in the Agreement. The undersigned, a duly
authorized and acting Authorized Representative, hereby certifies to you as of
__________ (the "Determination Date") as follows:
1. Calculations:
<TABLE>
<S> <C> <C>
A. Calculation of Consolidated Debt Service
Coverage Ratio
1. Consolidated EBITDA* $
--------------
2. Consolidated Lease Payments $
--------------
3. Sum of A.1 + A.2 $
--------------
4. Consolidated Interest Expense $
--------------
5. Consolidated Lease Payments $
--------------
6. Sum of A.4 + A.5 $
--------------
7. Ratio of A.3 to A.6 . to 1.00
-- --
B. Compliance with Section 8.1(a):
Consolidated Net Worth
1. Required Consolidated Net Worth
at the last day of
the most recent fiscal quarter $
--------------
2. Consolidated Net Income x 0.5 $
--------------
</TABLE>
H-1
<PAGE> 125
<TABLE>
<S> <C> <C>
3. Sum of B.1 + B.2 $
--------------
4. Actual Consolidated Net Worth $
--------------
REQUIRED: B.4 MUST NOT BE LESS THAN B.3
C. Compliance with Section 8.1(b):
Consolidated Leverage Ratio
1. Consolidated Indebtedness $
--------------
2. Consolidated EBITDA* $
--------------
3. Interest on TROL Indebtedness $
--------------
4. Sum of C.2 + C.3 $
-------------
5. Ratio of C.1 to C.4 . to 1.00
-- --
REQUIRED: C.5 MUST NOT BE GREATER
THAN 3.75:1.00 THROUGH 9/30/98 AND
3.50:1.00 THEREAFTER
D. Compliance with Section 8.1(c):
Consolidated Fixed Charge Coverage Ratio
1. Consolidated EBITDA* $
--------------
2. Consolidated Lease Payments $
--------------
3. Sum of D.1 + D.2 $
--------------
4. Consolidated Interest Expense $
--------------
5. Required principal payments of
Consolidated Indebtedness $
--------------
6. Consolidated Lease Payments $
--------------
7. Restricted Payments $
--------------
8. Sum of D.4 + D.5 + D.6 + D.7 $
--------------
9. Ratio of D.3 to D.8 $
--------------
REQUIRED: D.9 MUST NOT BE LESS THAN 2.00
TO 1.00
</TABLE>
H-2
<PAGE> 126
<TABLE>
<S> <C> <C>
E. Compliance with Section 8.1(d):
Consolidated Total Capitalization
1. Consolidated Indebtedness $
--------------
2. Consolidated Total Capitalization $
--------------
3. E.1 / E.3 x 100 %
--------------
REQUIRED: E.3 MUST NOT EXCEED 55%
F. Compliance with Section 8.3:
Capital Expenditures
1. Capital Expenditures $
--------------
REQUIRED: E.1 MUST NOT EXCEED
$85,000,000 IN FISCAL YEAR 1997,
$75,000,000 IN FISCAL YEAR 1998,
AND $60,000,000 EACH
FISCAL YEAR THEREAFTER.
</TABLE>
2. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrower has not defaulted in the
keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article IX of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrower proposes to take the following action with
respect to such Default or Event of Default:
-----------------
-------------------------------------------------------------
------------------- .
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 7.1 of the
Agreement.
* See attached Schedule 1 for EBITDA calculation.
H-3
<PAGE> 127
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:
--------------------------------------
Authorized Representative
Name:
------------------------------------
Title:
-----------------------------------
H-4
<PAGE> 128
Schedule 1 to Compliance Certificate
[Insert Applicable Determination Date __, ____]
Consolidated EBITDA Calculation:
<TABLE>
<S> <C> <C>
A. Consolidated Net Income $
----------
B. Consolidated Interest Expense $
----------
C. Taxes on income $
----------
D. Amortization $
----------
E. Depreciation $
----------
F. Consolidated EBITDA $
(A + B + C + D + E) ----------
</TABLE>
H-5
<PAGE> 129
EXHIBIT I
Form of Facility Guaranty
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty Agreement" or
this "Guaranty"), dated as of ________ __, 1997, is made by each of the
undersigned (each a "Guarantor" and collectively the "Guarantors") to
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as a Lender
("NationsBank"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, in its capacity as agent for the Lenders (in such capacity, and
together with any successors in such capacity, the "Agent") party to the Credit
Agreement (as defined below).
WITNESSETH:
WHEREAS, the Agent and the Lenders have agreed to provide Wackenhut
Corrections Corporation, a Florida corporation (the "Borrower"), revolving
credit and letter of credit facilities pursuant to the terms of that certain
Credit Agreement dated as of the date hereof among the Borrower and the Agent
(as from time to time amended, supplemented or restated, the "Credit
Agreement"); and
WHEREAS, each Guarantor is a Subsidiary of the Borrower and will
materially benefit from the Loans to be made and the Letters of Credit to be
issued under the Credit Agreement, and each Guarantor is willing to enter into
this Guaranty Agreement to provide an inducement for the Lenders to make Loans
and issue Letters of Credit thereunder;
NOW, THEREFORE, in order to induce the Agent and the Lenders to enter
into the Credit Agreement and the other Loan Documents and in consideration of
the premises and the mutual covenants contained herein, the parties hereto agree
as follows:
1. DEFINITIONS. All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
2. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the Agent
and the Lenders the payment in full of the Borrower's Liabilities (as defined
below). For all purposes of this Guaranty Agreement, "Borrower's Liabilities"
means: (a) the Borrower's prompt payment in full, when due or declared due and
at all such times, of all Obligations and all other amounts pursuant to the
terms of the Credit Agreement, the Notes, and all other Loan Documents executed
in connection with the Credit Agreement heretofore, now or at any time or times
hereafter owing, arising, due or payable from the Borrower to any one or more of
the Lenders, including without limitation principal, interest, premium or fee
(including, but not limited to, loan fees and attorneys' fees and expenses).
Each Guarantor agrees that it is jointly and severally, directly and primarily
liable for the Borrower's Liabilities.
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<PAGE> 130
3. LIMIT OF LIABILITY. The obligations of the Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548 of
the United States Bankruptcy Code or any comparable provisions of any applicable
state law.
4. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities when and as the same shall become due,
whether according to the terms of the Credit Agreement, by acceleration, or
otherwise, or upon the occurrence of any other Event of Default under the Credit
Agreement that has not been cured or waived, then each Guarantor, upon demand
thereof by the Agent or its successors or assigns, will, as of the date of the
Agent's demand, fully pay to the Agent, for the benefit of itself and the
Lenders, subject to any restriction set forth in Section 3 hereof, an amount
equal to all Guarantor's Obligations then due and owing.
5. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be joint and several, absolute and unconditional irrespective of the
validity, legality or enforceability of the Credit Agreement, the Notes or any
other Loan Document or any other guaranty of the Borrower's Liabilities, and
shall not be affected by any action taken under the Credit Agreement, the Notes
or any other Loan Document, any other guaranty of the Borrower's Liabilities, or
any other agreement between the Agent or the Lenders and the Borrower or any
other person, in the exercise of any right or power therein conferred, or by any
failure or omission to enforce any right conferred thereby, or by any waiver of
any covenant or condition therein provided, or by any acceleration of the
maturity of any of the Borrower's Liabilities, or by the release or other
disposal of any Collateral or other security for any of the Borrower's
Liabilities, or by the dissolution of the Borrower or the combination or
consolidation of the Borrower into or with another entity or any transfer or
disposition of any assets of the Borrower or by any extension or renewal of the
Credit Agreement, any of the Notes or any other Loan Document, in whole or in
part, or by any modification, alteration, amendment or addition of or to the
Credit Agreement, any of the Notes or any other Loan Document, any other
guaranty of the Borrower's Liabilities, or any other agreement between the Agent
or the Lenders and the Borrower or any other Person, or by any other
circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the risks of
any Guarantor, or might otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent of the parties hereto that
this Guaranty Agreement and the Guarantors' Obligations hereunder shall be
absolute and unconditional under any and all circumstances and shall not be
discharged except by payment as herein provided.
6. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
guarantees that the Guarantors' Obligations will be paid in (i) the same
Alternative Currency in the case of Loans made and Letters of Credit drawn in
Alternative Currencies, and (ii) in Dollars in all other cases and in
immediately available funds, regardless of any law, regulation or decree now or
hereafter in effect that might in any manner affect the Borrower's Liabilities,
or the rights of the Agent or any Lender with respect thereto as against the
Borrower, or cause or permit to be invoked any alteration in the time, amount or
manner of payment by the Borrower of any or all of the Borrower's Liabilities.
I-2
<PAGE> 131
7. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall file a
petition to take advantage of any insolvency statute; (b) any Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) any Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of any Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against any
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of any Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
thirty (30) consecutive days; (e) there is commenced against any Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition remains
unstayed or undismissed for a period of thirty (30) consecutive days; (f) there
shall occur an Event of Default under the Credit Agreement; (g) any default
shall occur in the payment of amounts due hereunder; or (h) any other default in
compliance with the terms hereof shall occur which remains uncured or unwaived
for a period of thirty (30) days after the earlier of notice of such default
from the Agent or an officer of a Guarantor becomes aware of such default (each
of the foregoing an "Event of Default" hereunder), then notwithstanding any
Collateral or other security that the Agent or any Lender may process from
Borrower or any Guarantor or any other guarantor of the Borrower's Liabilities,
or any other party, at the Agent's election and without notice thereof or demand
therefor, so long as such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
8. SUITS. Each Guarantor from time to time shall pay to the Agent for
the benefit of itself and the Lenders, on demand, at the Agent's place of
business set forth in the Credit Agreement, the Guarantors' Obligations as they
become or are declared due, and in the event such payment is not made forthwith,
the Agent or any Lender or any of them may proceed to suit against any one or
more or all of the Guarantors. At the Agent's election, one or more and
successive or concurrent suits may be brought hereon by the Agent against any
one or more or all of the Guarantors, whether or not suit has been commenced
against the Borrower, any other guarantor of the Borrower's Liabilities, or any
other Person and whether or not the Agent or Lender has taken or failed to take
any other action to collect all or any portion of the Borrower's Liabilities.
9. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent or Lender as a defense, counterclaim, set-off or cross claim,
any defense (legal or equitable) or other claim which such Guarantor may now or
at any time hereafter have against the Borrower, the Agent or the Lenders,
without waiving any additional defenses, set-offs, counterclaims or other claims
otherwise available to such Guarantor. If at any time hereafter the Agent or any
Lender employs counsel for advice or other representation to enforce the
Guarantors' Obligations that arise out of an Event of Default, then, in any of
the foregoing events, all of the reasonable attorneys' fees arising
I-3
<PAGE> 132
from such services and all expenses, costs and charges in any way or respect
arising in connection therewith or relating thereto shall be jointly and
severally paid by the Guarantors to the Agent, for the benefit of itself and the
Lenders, on demand.
10. WAIVER; SUBROGATION; SUBORDINATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Lenders' heretofore, now or from time to time hereafter loaning monies or giving
or extending credit to or for the benefit of the Borrower, whether pursuant to
the Credit Agreement or the Notes or any amendments, modifications, or
supplements thereto, or replacements or extensions thereof; (iii) the Agent or
the Lenders or the Borrower heretofore, now or at any time hereafter, obtaining,
amending, substituting for, releasing, waiving or modifying the Credit
Agreement, the Notes or any other Loan Documents; (iv) presentment, demand,
notices of default, non-payment, partial payment and protest; (v) the Agent or
the Lenders heretofore, now or at any time hereafter granting to the Borrower
(or any other party liable to the Lenders on account of the Borrower's
Liabilities) any indulgence or extensions of time of payment of the Borrower's
Liabilities; and (vi) the Agent or the Lenders heretofore, now or at any time
hereafter accepting from the Borrower or any other person, any partial payment
or payments on account of the Borrower's Liabilities or any collateral securing
the payment thereof or the Agent settling, subordinating, compromising,
discharging or releasing the same. Each Guarantor agrees that the Agent and each
Lender may heretofore, now or at any time hereafter do any or all of the
foregoing in such manner, upon such terms and at such times as Agent or such
Lender, in its sole and absolute discretion, deems advisable, without in any way
or respect impairing, affecting, reducing or releasing such Guarantor from the
Guarantors' Obligations, and each Guarantor hereby consents to each and all of
the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantors' Obligations under this Guaranty Agreement may be
enforced by the Agent on behalf of itself and the Lenders upon demand by the
Agent to such Guarantor without the Agent being required, each Guarantor
expressly waiving any right it may have to require the Agent, to (i) prosecute
collection or seek to enforce or resort to any remedies against the Borrower or
any other Guarantor or any other guarantor of the Borrower's Liabilities, IT
BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT
DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE AGENT, AND THE
PROVISIONS HEREOF ENFORCED BY THE AGENT, EFFECTIVE AS OF THE FIRST DATE ANY
EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT, or (ii)
seek to enforce or resort to any remedies with respect to any, Liens or
encumbrances granted to the Agent by the Borrower or any other Person on account
of the Borrower's Liabilities or any guaranty thereof. Neither the Agent nor any
Lender shall have any obligation to protect, secure or insure any of the
foregoing security interests, Liens or encumbrances on the properties or
interests in properties subject thereto. The Guarantors' Obligations shall in no
way be impaired, affected, reduced, or released by reason of the Agent's or any
Lender's failure or delay to do or take any of the acts, actions or things
described in this Guaranty Agreement including, without limiting the generality
of the foregoing, those acts, actions and things described in this Section 10.
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<PAGE> 133
(c) Each Guarantor further agrees with respect to this Guaranty
Agreement that it shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities
in each case until after all the Borrower's Liabilities have been paid in full.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimburse ment by the Guarantor against the estate of Borrower
within the meaning of Section 101 of the Bankruptcy Code, and to prevent the
Guarantor from constituting a creditor of Borrower in respect of such
reimbursement within the meaning of Section 547(b) of the Bankruptcy Code in the
event of a subsequent case involving the Borrower.
(d) Until the Guarantors' Obligations are paid in full and the Lenders
are under no further obligation to lend or extend funds or credit which would
constitute Guarantors' Obligations, each Guarantor hereby unconditionally
subordinates all present and future debts, liabilities or obligations of the
Borrower to the Guarantor to the Guarantors' Obligations, and all amounts due
under such debts, liabilities, or obligations shall, upon the occurrence and
during the continuance of an Event of Default, be collected and paid over
forthwith to the Lenders on account of the Guarantors' Obligations and, pending
such payment, shall be held by each Guarantor as agent and bailee of the Lenders
separate and apart from all other funds, property and accounts of the Guarantor.
Each Guarantor, at the reasonable request of the Lenders, shall execute such
further documents in favor of the Lenders to further evidence and support the
purpose of this Section 10(d).
11. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date of the initial Advance under the Credit Agreement and
shall continue in full force and effect until the Borrower's Obligations are
fully paid and the Credit Agreement has terminated. The Agent shall give each
Guarantor written notice of such termination at each Guarantor's address set
forth below such Guarantor's execution hereof on the signature pages of this
Guaranty or such other address for the Guarantor as such Guarantor shall give
notice to the Agent in the manner provided for the giving of notices under the
Credit Agreement (the "Guarantor's Address"). This Guaranty Agreement shall be
binding upon and inure to the benefit of each Guarantor, the Agent and the
Lenders and their respective successors and assigns. Notwithstanding the
foregoing, no Guarantor may, without the prior written consent of the Agent,
assign any rights, powers, duties or obligations hereunder. Any claim or claims
that the Agent and the Lenders may at any time hereafter have against any
Guarantor under this Guaranty Agreement may be asserted by the Agent or any
Lender by written notice directed to any one or more or all of the Guarantors at
the applicable Guarantor's Address.
12. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to the Agent for the benefit of itself and the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its certificate
of incorporation or charter or governance documents or any agreement to which
such Guarantor is a party, or any applicable laws.
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13. EXPENSES. Each Guarantor agrees to be jointly and severally liable
for the payment of all reasonable fees and expenses, including attorney's fees,
incurred by the Agent in connection with the enforcement of this Guaranty
Agreement.
14. REINSTATEMENT. Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Agent under the Credit Agreement or this Guaranty
Agreement is rescinded or must be restored for any reason.
15. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument.
16. RELIANCE. Each Guarantor represents and warrants to the Agent, for
the benefit of the Agent and the Lenders, that: (a) such Guarantor has adequate
means to obtain from Borrower, on a continuing basis, information concerning
Borrower and Borrower's financial condition and affairs and has full and
complete access to Borrower's books and records; (b) such Guarantor is not
relying on the Agent or any Lender, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of Borrower and Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Agent or any Lender, its or their employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial condition
and affairs or other matters material to such Guarantor's decision to provide
this Guaranty or for any counseling, guidance, or special consideration or any
promise therefor with respect to such decision. Each Guarantor agrees that
neither the Agent nor any Lender has any duty or responsibility whatsoever, now
or in the future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs, other than as expressly
provided herein, and that, if such Guarantor receives any such information from
the Agent or any Lender, its or their employees, agents or other
representatives, such Guarantor will independently verify the information and
will not rely on the Agent or any Lender, its or their employees, agents or
other representatives, with respect to such information.
17. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such telefacsimile number for
such party and the receipt of such message is verified by the sender's
telefacsimile machine, (iii) on the fifth Business Day after the day on which
mailed, if sent prepaid by certified or registered mail, return receipt
requested, in each case delivered, transmitted or mailed, as the case may be, to
the Guarantor's Address or telefacsimile number, as appropriate.
18. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party
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on the date when all of the Obligations have been fully paid and the Credit
Agreement has terminated.
19. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
BROWARD, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE GUARANTOR'S ADDRESS (AS HEREIN
DEFINED) OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN THE
COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, THE
JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER, BY
REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
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ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT OR DELIVERED OR THAT
MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH
PARTY HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
GUARANTORS:
WITNESS:
By:
- ------------------------- -------------------------------
Name:
------------------------------
Title:
- ------------------------- -----------------------------
Address for Notices:
-----------------------------------
-----------------------------------
-----------------------------------
Telefacsimile:
--------------------
WITNESS:
By:
- ------------------------- -------------------------------
Name:
------------------------------
Title:
- ------------------------- -----------------------------
Address for Notices:
-----------------------------------
-----------------------------------
-----------------------------------
Telefacsimile:
--------------------
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WITNESS: NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:
- ------------------------- -------------------------------
Name:
------------------------------
Title:
- ------------------------- -----------------------------
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EXHIBIT J
Form of LC Account Agreement
LC ACCOUNT AGREEMENT
THIS LC ACCOUNT AGREEMENT (the "Agreement") dated as of June __, 1997,
and made between WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the
"Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, as a Lender ("NationsBank") and as Agent (in such capacity herein
and together with any successors in such capacity, the "Agent") for the lenders
(the "Lenders") party to the Credit Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, the Pledgor, the Lenders, and the Agent have entered into that
certain Credit Agreement dated as of the date hereof (as may hereafter be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and in effect, hereinafter referred to as the
"Credit Agreement");
WHEREAS, as a condition precedent to the Lenders' obligations to make
the Loans or to issue Letters of Credit, the Pledgor is required to execute and
deliver to the Agent a copy of this Agreement on or before the Closing Date;
NOW, THEREFORE, in consideration of the foregoing and the agreements,
provisions and covenants contained herein, the Pledgor and the Agent hereby
agree as follows:
Section 1. Definitions. Capitalized terms used in this Agreement shall
have the following meanings:
"Collateral" means (a) all funds from time to time on deposit in the LC
Account; (b) all Investments and all certificates and instruments from time to
time representing or evidencing such Investments; (c) all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Agent for or on behalf of the Pledgor in
substitution for or in addition to any or all of the Collateral described in
clause (a) or (b) above; (d) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Collateral described in
clause (a), (b) or (c) above; and (e) to the extent not covered by clauses (a)
through (d) above, all proceeds of any or all of the foregoing Collateral.
"Investments" means those investments, if any, made by the Agent
pursuant to Section 5 hereof.
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"LC Account" means the cash collateral account established and
maintained pursuant to Section 2 hereof.
"Secured Obligations" means (i) all obligations of the Pledgor now
existing or hereafter arising under or in respect of the Credit Agreement or the
Notes (including, without limitation, the Pledgor's obligation to pay principal
and interest and all other charges, fees, expenses, commissions, reimbursements,
indemnities and other payments related to or in respect of the obligations
contained in the Credit Agreement or the Notes) or any documents or agreement
related to the Credit Agreement or the Notes; and (ii) without duplication, all
obligations of the Pledgor now or hereafter existing under or in respect of this
Agreement, including, without limitation, with respect to all charges, fees,
expenses, commissions, reimbursements, indemnities and other payments related to
or in respect of the obligations contained in this Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
Section 2. LC Account; Cash Collateralization of Letters of Credit.
(i) From and after the occurrence of an Event of Default, the
Agent shall establish and maintain at the offices of NationsBank, N.A.
at 101 North Tryon Street, Charlotte, North Carolina, in the name of
the Agent and under the sole dominion and control of the Agent, a cash
collateral account designated as Wackenhut Corrections Cash LC Account
(the "LC Account").
(ii) In accordance with Article IX of the Credit Agreement, in
the event that an Event of Default has occurred and shall not have been
waived pursuant to Section 11.6 of the Credit Agreement and the Pledgor
is required to pay to Agent an amount equal to the maximum amount
remaining undrawn or unpaid under the Letters of Credit, the Agent
shall, upon receipt of any such amounts, exercise the remedies set
forth in Section 12 hereof and shall apply the proceeds as provided in
Article IX of the Credit Agreement. Any such amounts received by the
Agent shall be deposited in the LC Account. Upon a drawing under the
Letters of Credit in respect of which any amounts described above have
been deposited in the LC Account, the Agent shall apply such amounts to
reimburse NationsBank for the amount of such drawing. In the event the
Letters of Credit are canceled or expire or in the event of any
reduction in the maximum amount available at any time for drawing under
such Letters of Credit (the "Maximum Available Amount"), the Agent
shall apply the amount then in the LC Account designated to reimburse
NationsBank for any drawings under the Letters of Credit less the
Maximum Available Amount immediately after such cancellation,
expiration or reduction, if any, first, to the cash collateralization
of the Letters of Credit if the Pledgor has failed to pay all or a
portion of the maximum amounts described above, second, to the payment
in full of the outstanding Secured Obligations and third, the balance,
if any, to the Pledgor.
(iii) Interest received in respect of Investments of any
amounts deposited in the LC Account pursuant to clause (ii) of this
Section 2 shall be delivered by Agent to the
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Pledgor on the last Business Day of each calendar month or, if earlier,
upon cancellation or expiration of or drawing of the Maximum Available
Amount for drawing under the Letters of Credit, as the case may be, in
respect of which such amounts were so deposited; provided, however,
that the Agent shall not deliver to the Pledgor any such interest
received in respect of Investments of any amounts deposited in the LC
Account pursuant to this Section 2 if an Event of Default has occurred
and shall not have been waived pursuant to Section 11.6 of the Credit
Agreement or unless all outstanding Secured Obligations have been
indefeasibly paid in full in cash.
Section 3. Pledge; Security for Secured Obligations. The Pledgor hereby
pledges to the Agent (for itself and on behalf of the Lenders) a first priority
lien and security interest in, the Collateral, as collateral security for the
prompt payment in full when due, whether at stated maturity, by acceleration or
otherwise (including, without limitation, the payment of interest and other
amounts which would accrue and become due but for the filing of a petition in
bankruptcy or the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code), of all Secured Obligations.
Section 4. Delivery of Collateral. All certificates or instruments, if
any, representing or evidencing the Collateral shall be delivered to and held by
the Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Agent. In the event any Collateral is not evidenced by a certificate, a
notation, reflecting title in the name of the Agent or the security interest of
the Agent, shall be made in the records of the issuer of such Collateral or in
such other appropriate records as the Agent may require, all in form and
substance reasonably satisfactory to the Agent. The Agent shall have the right,
at any time and without notice to the Pledgor, to transfer to or to register in
the name of the Agent or any of its nominees any or all of the Collateral. In
addition, the Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. Investing of Amounts in the LC Account; Amounts held by the
Agent. Cash held by the Agent in the LC Account shall not be invested or
reinvested except as provided in this Section 5.
(i) Except as otherwise provided in Section 12 hereof, any
funds on deposit in the LC Account shall be invested by the Agent so
long as no Default or Event of Default shall have occurred and shall
not have been waived pursuant to Section 11.6 of the Credit Agreement,
in cash equivalents.
(ii) The Agent is hereby authorized to sell, and shall sell,
all or any designated part of the Collateral (A) so long as no Default
or Event of Default shall have occurred and shall not have been waived
pursuant to Section 11.6 of the Credit Agreement, upon the receipt of
appropriate written instructions from an Authorized Representative or
(B) in any event if such sale is necessary to permit the Agent to
perform its duties hereunder or under the Credit Agreement. The Agent
shall have no responsibility for any loss in the value of the
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Collateral resulting from a fluctuation in interest rates or otherwise.
Any interest on securities constituting part of the Collateral and the
net proceeds of the sale or payment of any such securities shall be
held in the LC Account by the Agent.
Section 6. Representations and Warranties. In addition to its
representations and warranties made pursuant to Article VI of the Credit
Agreement, the Pledgor represents and warrants to the Agent (for itself and as
agent on behalf of the Lenders), that the following statements are true, correct
and complete:
(i) The Pledgor will be the legal and beneficial owner of the
Collateral free and clear of any Lien except for the lien and security
interest created by this Agreement and the Credit Agreement;
(ii) The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Secured
Obligations.
Section 7. Further Assurances. The Pledgor agrees that at any time and
from time to time, at the Pledgor's expense, the Pledgor will promptly execute
and deliver to the Agent any further instruments and documents, and take any
further actions, that may be necessary or that the Agent may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.
Section 8. Transfers and Other Liens. The Pledgor agrees that it will
not (a) sell or otherwise dispose of any of the Collateral, or (b) create or
permit to exist any Lien upon or with respect to any of the Collateral, except
for the lien and security interest created by this Agreement.
Section 9. The Agent Appointed Attorney-in Fact. The Pledgor hereby
appoints the Agent as its attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Agent's reasonable discretion to take any action and to execute any
instrument which the Agent may reasonably deem necessary or advisable to
accomplish the purposes of the Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to the Pledgor or
either of them representing any payment, dividend, or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same. In performing its functions and duties under this Agreement, the Agent
shall act solely for itself and as the agent of the Lenders and the Agent has
not assumed nor shall be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Pledgor.
Section 10. The Agent May Perform. If the Pledgor fails to perform any
agreement contained herein, after notice to the Pledgor, the Agent may itself
perform, or cause performance of, such agreement, and the expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under Section
13 hereof.
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Section 11. Standard of Care; No Responsibility For Certain Matters. In
dealing with the Collateral in its possession, the Agent shall exercise the same
care which it would exercise in dealing with its own property of a similar
nature, but it shall not be responsible for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Agent has or is deemed to
have knowledge of such matters, (b) taking any steps to preserve rights against
any parties with respect to any Collateral (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the
Collateral), (c) the collection of any proceeds, (d) any loss resulting from
Investments made pursuant to Section 5 hereof, or (e) determining (x) the
correctness of any statement or calculation made by the Pledgor in any written
or telex (tested or otherwise) instructions, or (y) whether any deposit in the
LC Account is proper.
Section 12. Remedies upon Default; Application of Proceeds. If any
Event of Default shall have occurred and shall not have been waived pursuant to
Section 11.6 of the Credit Agreement:
(i) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein otherwise
available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code (the "Code") as in effect in
the State of North Carolina at that time, and the Agent may, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
exchange or broker's board or at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and at such
price or prices, and upon such other terms as the Agent may reasonably
deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days' notice
to Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of the
Collateral regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(ii) Subject to the provisions of Section 2(ii) hereof, any
cash held by the Agent as Collateral and all cash proceeds received by
the Agent in respect of any sale of, collection from, or other
realization upon all or part of the Collateral shall be applied (after
payment of any amounts payable to the Agent pursuant to Section 13
hereof) by the Agent to pay the Secured Obligations pursuant to Article
IX of the Credit Agreement. Any surplus of such cash or cash proceeds
held by the Agent and remaining after payment in full of all Secured
Obligations shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
Section 13. Expenses. In addition to any payments of expenses of Agent
pursuant to the Credit Agreement or the other Loan Documents, the Pledgor agrees
to pay promptly to the Agent all the costs and expenses, including reasonable
attorneys fees and expenses, which the Agent may reasonably incur in connection
with (a) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (b) the exercise or enforcement
of any of the rights
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of the Agent hereunder, or (c) the failure by the Pledgor to perform or observe
any of the provisions hereof.
Section 14. No Delays; Waiver, etc. No delay or failure on the part of
the Agent in exercising, and no course of dealing with respect to, any power or
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent of any power or right hereunder preclude other or
further exercise thereof or the exercise of any other power or right. The
remedies herein provided are to the fullest extent permitted by law cumulative
and are not exclusive of any remedies provided by law.
Section 15. Amendments, Etc. No amendment, modification, termination or
waiver of any provision of this Agreement, or consent to any departure by the
Pledgor therefrom, shall in any event be effective without the written
concurrence of the Agent.
Section 16. Notices. Except as otherwise specifically provided herein,
all notices which are to be sent to the Pledgor or Agent shall be given in
accordance with the Credit Agreement.
Section 17. Continuing Security Interest; Termination. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until all Secured Obligations (other than
Secured Obligations in the nature of continuing indemnities or expense
reimbursement obligations not yet due and payable) shall have been indefeasibly
paid in full in cash, the commitments or other obligations of the Agent or any
Lender to make any Loan under the Credit Agreement shall have expired and the
Letters of Credit shall have expired, (b) be binding upon Pledgor, its
successors and assigns, and (c) inure to the benefit of the Agent, the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c) and subject to the provisions of the
Credit Agreement, any Lender may assign or otherwise transfer any Note held by
it to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. Upon the indefeasible payment in full in cash of the
Secured Obligations (other than Secured Obligations in the nature of continuing
indemnities or expense reimbursement obligations not yet due and payable) and
the cancellation or expiration of the Letters of Credit and termination or
expiration of all commitments and other obligations of the Agent and any Lender
to make any Loan, Pledgor shall be entitled, subject to the provisions of
Section 12 hereof, to the return, upon its request and at its expense, of such
of the Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof.
Section 18. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
FLORIDA. UNLESS OTHERWISE DEFINED HEREIN OR IN THE
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CREDIT AGREEMENT, TERMS DEFINED IN ARTICLE 9 OF THE CODE ARE USED HEREIN AS
THEREIN DEFINED.
Section 19. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF FLORIDA AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY AND
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT TO RIGHT OF
APPEAL. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO
BRING PROCEEDINGS AGAINST THE PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.
Section 20. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party and all covenants, promises, and agreements
by or on behalf of the Pledgor or by and on behalf of the Agent shall bind and
inure to the benefit of the successors and assigns of the Pledgor, the Agent and
the Lenders.
Section 21. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties on separate
counterparts and each such counterpart shall for all purposes be deemed an
original, but all such counterparts shall together constitute but one and the
same Agreement. The Pledgor and the Agent hereby acknowledge receipt of a true,
correct, and complete counterpart of this Agreement.
Section 22. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 23. Headings. This section headings in this Agreement are
inserted for convenience of reference and shall not be considered a part of this
Agreement or used in its interpretation.
J-7
<PAGE> 146
IN WITNESS WHEREOF, The Pledgor and the Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
WITNESS: WACKENHUT CORRECTIONS CORPORATION
By:
- ----------------------------- ---------------------------------
Name:
Title:
- -----------------------------
WITNESS: NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:
- ----------------------------- ---------------------------------
Name:
Title:
- -----------------------------
J-8
<PAGE> 147
Schedule 6.4
Subsidiaries and Investments in Other Persons
S-1
<PAGE> 148
Schedule 6.6
Indebtedness
S-2
<PAGE> 149
Schedule 6.7
Liens
S-3
<PAGE> 150
Schedule 6.10
Litigation
S-4
<PAGE> 151
Schedule 7.5
Insurance
S-5
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Dated as of June 19, 1997
among
WACKENHUT CORRECTIONS CORPORATION,
as Construction Agent,
WACKENHUT CORRECTIONS CORPORATION,
as Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as Owner Trustee
under the Wackenhut Corrections Trust 1997-1
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME,
as the Holders
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH
ARE PARTIES HERETO FROM TIME TO TIME,
as the Lenders
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent for the
Lenders
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
TABLE OF CONTENTS
SECTION 1. THE LOANS........................................................1
SECTION 2. HOLDER FUNDINGS..................................................2
SECTION 3. SUMMARY OF TRANSACTIONS..........................................2
3.1. Operative Agreements.............................................2
3.2. Property Purchase................................................2
3.3. Construction of Improvements; Lease or
Disposition of Properties........................................2
SECTION 4. THE CLOSINGS.....................................................3
4.1. Initial Closing Date.............................................3
4.2. Initial Closing Date; Property Closing Dates;
Construction Fundings............................................3
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION
DATE; LESSEE DELIVERY OF NOTICES.................................3
5.1. General..........................................................3
5.2. Procedures for Funding...........................................4
5.3. Conditions to the Holders' and the Lenders'
Obligations to advance funds on the Initial
Closing Date or funds for the Acquisition of
Property.........................................................5
5.4. Conditions to the Holders' and the Lenders'
Obligations to Make Construction Fundings for
the Commencement of Construction of any
Improvements.....................................................9
5.5. Conditions to the Holders' and the Lenders'
Obligations to Make Construction Fundings for
the Ongoing Construction on any Property Prior
to the Construction Period Termination Date.....................11
5.6. Reporting and Delivery Requirements on
Completion Date and on Construction Period
Termination Date................................................12
5.7. Construction Agent Delivery of Allocation
Notice; Notice Regarding the Holder
Construction Property Cost and Construction
Budget Modifications............................................13
5.8. Inspection of Documents; Hold Harmless; Removal
of Properties...................................................14
SECTION 6. CONDITIONS OF THE INITIAL CLOSING...............................14
6.1. Conditions to the Lessor's and the Holders'
Obligations.....................................................14
6.2. Conditions to the Lessee's Obligations..........................16
6.3. Conditions to the Agent's Obligations...........................18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL
CLOSING DATE....................................................18
7.1. Representations and Warranties of the Initial
Holders.........................................................18
7.2. Representations and Warranties of the Owner
Trustee.........................................................20
7.3. Representations and Warranties of the
Construction Agent and the Lessee...............................23
7.4. Representations and Warranties of the Agent.....................29
SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING
DATES...........................................................30
8.1. Representations and Warranties on Property
Closing Dates...................................................30
8.2. Representations and Warranties Upon Initial
Construction Fundings...........................................32
8.3. Representations and Warranties Upon the Date of
Each Construction Funding that is not an
Initial Construction Funding....................................34
8.4. Certain Construction Fundings During Defaults...................35
SECTION 9. PAYMENT OF CERTAIN EXPENSES.....................................35
9.1. Transaction Expenses............................................35
9.2. Certain Fees and Expenses.......................................37
9.3. Unused Fee and Holder Unused Fee. ..............................37
SECTION 10. OTHER COVENANTS AND AGREEMENTS..................................37
10.1. Cooperation with the Construction Agent or the
Lessee..........................................................37
10.2. Covenants of the Owner Trustee and the
Holders.........................................................38
10.3. Lessee Covenants, Consent and Acknowledgment;
Construction Agent Covenants....................................41
10.4. Sharing of Certain Payments.....................................42
10.5. Grant of Easements, Voting at Meetings, etc.....................42
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT............................43
11.1. Construction Agent's and Lessee's Credit
Agreement Rights................................................43
11.2. Construction Agent's and Lessee's Trust
Agreement Rights................................................44
SECTION 12. TRANSFER OF INTEREST............................................44
12.1. Restrictions on Transfer........................................44
12.2. Effect of Transfer..............................................45
SECTION 13. INDEMNIFICATION.................................................45
13.1. General Indemnity...............................................45
13.2. General Tax Indemnity...........................................48
13.3. Environmental Indemnity.........................................53
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 14. MISCELLANEOUS...................................................54
14.1. Survival of Agreements..........................................54
14.2. No Broker, etc..................................................54
14.3. Notices.........................................................54
14.4. Counterparts....................................................56
14.5. Amendments and Termination......................................56
14.6. Headings, etc...................................................56
14.7. Parties in Interest.............................................56
14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL............................57
14.9. Submission to Jurisdiction; Waivers.............................57
14.10. Severability....................................................57
14.11. Liability Limited...............................................58
14.12. Rights of Lessee................................................59
14.13. Further Assurances..............................................59
14.14. Calculations under Operative Agreements.........................60
14.15. Confidentiality.................................................60
14.16. Calculation of Rent, Interest, Holder Yield and
Fees............................................................61
Schedule 1 Initial Holders ........................................Schedule-1
EXHIBIT A REQUISITION FORM...............................................A-1
Schedule 1 Legal Description of Land.................................A-3
Schedule 2 Description of Improvements...............................A-4
Schedule 3 Description of Equipment..................................A-5
Schedule 4 Work......................................................A-6
EXHIBIT B WACKENHUT CORRECTIONS CORPORATION OFFICER'S
CERTIFICATE....................................................B-1
Schedule 1 [itemized expenditures]...................................B-3
EXHIBIT C FORM OF OPINION OF COUNSEL TO
WACKENHUT CORRECTIONS CORPORATION..............................C-1
EXHIBIT D WACKENHUT CORRECTIONS CORPORATION OFFICER'S
CERTIFICATE....................................................D-1
EXHIBIT E WACKENHUT CORRECTIONS CORPORATION SECRETARY'S
CERTIFICATE....................................................E-1
EXHIBIT F FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE..........................................F-1
EXHIBIT G FIRST SECURITY BANK, NATIONAL ASSOCIATION
CERTIFICATE OF ASSISTANT SECRETARY.............................G-1
EXHIBIT H FORM OF OPINION OF COUNSEL TO FIRST SECURITY
BANK, NATIONAL ASSOCIATION ....................................H-1
Appendix A Rules of Usage and Definitions........................Appendix A-1
</TABLE>
iii
<PAGE> 5
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of June 19, 1997 (as amended,
modified, restated or supplemented from time to time, this "Agreement"), is by
and among WACKENHUT CORRECTIONS CORPORATION, a Florida corporation ("Wackenhut"
or the "Construction Agent"); WACKENHUT CORRECTIONS CORPORATION, as Lessee (the
"Lessee"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (in its individual capacity, the "Trust Company"),
except as expressly stated herein, but solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1 (the "Owner Trustee" or the "Lessor");
NATIONSBANK, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity,
the "Agent") for the Lenders; NATIONSBANK, NATIONAL ASSOCIATION, a national
banking association and the various other banks and lending institutions which
are parties hereto from time to time as Holders; NATIONSBANK, NATIONAL
ASSOCIATION and the various other banks and lending institutions which are
parties hereto from time to time as Lenders. Capitalized terms used but not
otherwise defined in this Agreement shall have the meanings set forth in
Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
The Lenders have agreed to make Loans to the Lessor from time to time
in an aggregate principal amount of up to the aggregate amount of the
Commitments of the Lenders in order for the Lessor to acquire the Properties and
certain Improvements and to develop and construct certain Improvements in
accordance with the Agency Agreement and the terms and provisions hereof, and in
consideration of the receipt of the proceeds of such Loans, the Lessor will
issue the Notes (together with any note or notes issued in exchange or
substitution therefor in accordance with the Credit Agreement, the "Notes"). The
Loans shall be made and the Notes shall be issued pursuant to the Credit
Agreement. Pursuant to Section 5 of this Agreement and Section 2 of the Credit
Agreement, the Loans will be made to the Lessor from time to time upon the
appropriate submission by the Construction Agent of a Requisition and borrowing
request therefor, in accordance with this Agreement and the other Operative
Agreements. The Loans and the obligations of the Lessor under the Credit
Agreement shall be secured by the Collateral. The Lessee and the Construction
Agent agree that each Property shall be improved for business purposes and shall
not merely be held as unimproved Land for speculative purposes.
<PAGE> 6
SECTION 2. HOLDER FUNDINGS.
Subject to the terms and conditions of this Agreement and in reliance
on the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto on each date Fundings are made in accordance with
Section 5 hereof, each Holder shall make a Holder Funding on a pro rata basis to
the Owner Trustee with respect to the Wackenhut Corrections Trust 1997-1 based
on its Holder Commitment in an amount in immediately available funds such that
the aggregate of all Holder Fundings shall be three percent (3%) of the amount
of the Funding being funded on such date; provided, no Holder shall be obligated
for any Holder Funding in excess of its pro rata share of the Available Holder
Commitment. The aggregate amount of Holder Fundings shall be up to the aggregate
amount of the Holder Commitments. No prepayment or any other payment with
respect to any Funding shall be permitted such that the Holder Funding with
respect to such Funding is less than 3% of the outstanding amount of such
Funding, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, not joint,
and not joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. Operative Agreements. On the date hereof (the "Initial Closing
Date"), each of the respective parties hereto and thereto shall execute and
deliver this Agreement, the Lease, the Agency Agreement, the Credit Agreement,
the Notes, the Certificates, the Trust Agreement, the Security Agreement and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.
3.2. Property Purchase. On each Property Closing Date and subject to
the terms and conditions of this Agreement (a) the Holders will each make a
Holder Funding in accordance with Sections 2 and 5 of this Agreement and the
terms and provisions of the Trust Agreement, (b) the Lenders will make Loans in
accordance with Sections 1 and 5 of this Agreement and the terms and provisions
of the Credit Agreement, and (c) the Lessor will purchase, or lease pursuant to
a Ground Lease, the applicable Property identified by the Construction Agent,
and grant the Agent a Lien on such Property by execution of the required
Security Documents.
3.3. Construction of Improvements; Lease or Disposition of Properties.
Construction Fundings will be made with respect to particular Improvements to be
constructed and with respect to ongoing Work regarding the Equipment and ongoing
construction of particular Improvements, in each case, pursuant to the terms and
conditions of this Agreement and the Agency Agreement. The
2
<PAGE> 7
Construction Agent will act as a construction agent on behalf of the Lessor
respecting such Work and the construction of such Improvements and the
expenditures of the Construction Fundings related thereto. The Construction
Agent shall promptly notify the Lessor upon Completion of the Improvements and
at such time Lessee shall execute and deliver to Lessor a Lease Supplement
relating to the particular Property and thereupon the Term shall commence with
respect to such Property.
SECTION 4. THE CLOSINGS.
4.1. Initial Closing Date. All documents and instruments required to be
delivered on the Initial Closing Date shall be delivered at the offices of Smith
Helms Mulliss & Moore, L.L.P., Charlotte, North Carolina, or at such other
location as may be determined by the Lessor, the Agent and the Lessee.
4.2. Initial Closing Date; Property Closing Dates; Construction
Fundings. The Construction Agent shall deliver to the Lessor and the Agent a
requisition (a "Requisition"), in the form attached hereto as Exhibit A or in
such other form as is reasonably satisfactory to the Lessor, the Construction
Agent and the Agent, in connection with (a) the Initial Closing Date relating to
the Transaction Expenses and other fees, expenses and disbursements payable by
the Lessor pursuant to Section 9.1(a) with invoices (in form and substance
reasonably acceptable to the Agent and the Lessor) for such Transaction Expenses
and other fees, expenses and disbursements attached to such Requisition, (b)
each Property Closing Date relating to each Acquisition Funding pursuant to
Section 5.3 and (c) each date of a Construction Funding pursuant to Sections 5.4
or 5.5.
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION DATE; LESSEE
DELIVERY OF NOTICES.
5.1. General. To the extent funds have been made available to the
Lessor as Loans by the Lenders and Holder Fundings by the Holders, the Lessor
will use such funds from time to time in accordance with the terms and
conditions of this Agreement and the other Operative Agreements (i) to pay
interest regarding the Loans relating to a Property and to pay the Holder Yield
regarding the Holder Fundings relating to a Property, in each case to the extent
accrued under the Credit Agreement or Trust Agreement (as the case may be)
during the period prior to the Term Commencement Date with respect to such
Property, (ii) at the direction of the Construction Agent to acquire Properties
in accordance with the terms of this Agreement, the Agency Agreement, the Lease
and the other Operative Agreements, (iii) to make advances to the Construction
Agent to permit the testing, engineering, installation, development,
construction, modification, design and renovation, as applicable, of
Improvements in accordance with the terms of the Agency Agreement, the Lease and
the other Operative Agreements, and (iv)
3
<PAGE> 8
to pay Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Sections 9.1(a) and (b).
5.2. Procedures for Funding.
(a) The Construction Agent shall designate the date for
Fundings hereunder in accordance with the terms and provisions hereof;
provided, however, it is understood and agreed that no more than four
(4) Fundings (of which only one (1) may be a Eurodollar Funding) may be
requested during any calendar month. Not less than (i) one (1) Business
Day prior to the date of any requested Base Rate Funding and (ii) three
(3) Business Days prior to the date of any requested Eurodollar
Funding, the Construction Agent shall deliver to the Lessor and the
Agent, (A) with respect to the Initial Closing Date and each Property
Closing Date, a Requisition as described in Section 4.2 hereof
(including without limitation a legal description of the Land, a
schedule of the Improvements, if any, and a schedule of the Equipment,
if any, to be acquired on such date, and a schedule of the Work, if
any, to be performed, each of the foregoing in a form reasonably
acceptable to the Lessor and the Agent) and (B) with respect to each
Construction Funding, a Requisition identifying (among other things)
the Property to which such Work relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Fundings and that
the Lenders make Loans to the Lessor for the payment of the Property
Acquisition Costs (in the case of an Acquisition Funding) or other
Property Costs, including the cost of Improvements (in the case of a
Construction Funding) that have previously been incurred and were not
subject to a prior Requisition, in each case as specified in the
Requisition.
(c) Subject to the terms and conditions of the Credit
Agreement and the Trust Agreement and subject to the satisfaction of
the conditions precedent set forth in Sections 5.3, 5.4 or 5.5, as
applicable, on each Property Closing Date or the date on which the
Construction Funding is to be made, as applicable, (i) the Lenders
shall make Loans to the Lessor in an aggregate amount equal to 97% of
the Requested Funds specified in any Requisition (such loans to be
apportioned 88% to Series A Loans and 9% to Series B Loans), up to
aggregate principal amount equal to the Available Commitments, (ii)
each Holder shall make a pro rata Holder Funding based on its Holder
Commitment in an amount such that the aggregate of all Holder Fundings
at such time shall be 3% of the balance of the Requested Funds
4
<PAGE> 9
specified in such Requisition, provided no such Holder Funding shall
exceed such Holder's pro rata share of the Available Holder
Commitments; and (iii) the total amount of such Loans and Holder
Fundings made on such date shall (w) be used by the Lessor to pay the
Property Acquisition Costs within three (3) Business Days of the
receipt by the Lessor of such Funding (in the case of a Property
Closing Date), (x) be used by the Lessor on the date of such Funding to
pay interest regarding the Loans relating to a Property and to pay the
Holder Yield regarding the Holder Fundings relating to a Property, in
each case to the extent accrued under the Credit Agreement or Trust
Agreement (as the case may be) during the period prior to the Term
Commencement Date with respect to such Property, (y) be used by the
Lessor to pay Transaction Expenses, fees, expenses and other
disbursements to the extent permitted under Sections 5.3, 5.4 or 5.5,
or (z) be disbursed by the Lessor, on the date of such Funding, to the
Construction Agent or the Lessee to pay Property Costs, as applicable.
Any such amounts held by the Lessor (or the Agent on behalf of the
Lessor) shall be subject to the lien of the Security Agreement.
5.3. Conditions to the Holders' and the Lenders' Obligations to advance
funds on the Initial Closing Date or funds for the Acquisition of Property.
(a) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on the Initial Closing
Date for the purpose of providing funds to the Lessor necessary to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Section 9.1 of this Agreement, are subject to the
prior or contemporaneous satisfaction or waiver of the following
conditions precedent:
(i) the correctness in all material respects on
the Initial Closing Date of the representations and warranties
of the Owner Trustee, the Construction Agent, the Lessee and
the Holders (other than such Holder) contained herein and in
each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on or
prior to the Initial Closing Date;
(iii) the satisfaction of all conditions to any
such Holder Funding or Loan set forth in any Operative
Agreement;
5
<PAGE> 10
(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed; and
(v) no Default or Event of Default under any of
the Operative Agreements shall have occurred after giving
effect to the Funding requested by such Requisition.
(b) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on a Property Closing
Date for the purpose of providing funds to the Lessor necessary to pay
the Transaction Expenses, fees, expenses and other disbursements
payable by Lessor under Section 9.1 (b) of this Agreement and to
acquire a Property, are subject to the prior or contemporaneous
satisfaction or waiver of the following conditions precedent:
(i) the correctness in all material respects on
such Property Closing Date of the representations and
warranties of the Owner Trustee, the Construction Agent, the
Lessee and the Holders (other than such Holder) contained
herein and in each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on or
prior to each such Property Closing Date;
(iii) the satisfaction of all conditions to any
such Holder Funding or Loan set forth in any Operative
Agreement;
(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed;
(v) title to each Property being acquired on
such Property Closing Date shall conform to the
representations and warranties set forth in Section 8.1(c)
hereof;
(vi) the Construction Agent shall have delivered
to the Lessor a copy of the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (if
any) with respect to the Land, and a copy of the Bill of Sale
with respect to the Equipment, in each case for such of the
foregoing as are being
6
<PAGE> 11
acquired on such Property Closing Date; and such Land and
existing Improvements shall be located in an Approved State;
(vii) there shall not have occurred and be
continuing any Default or Event of Default under any of the
Operative Agreements and no Default or Event of Default under
any of the Operative Agreements shall have occurred after
giving effect to the Funding requested by such Requisition;
(viii) the Construction Agent shall have delivered
to the Agent and the Owner Trustee, title insurance
commitments to issue policies in favor of the Owner Trustee
and the Agent with respect to each Property being acquired on
such Property Closing Date, such policies being in form and
substance reasonably acceptable to the Owner Trustee and the
Agent, with such title exceptions thereto as are reasonably
acceptable to the Owner Trustee and the Agent; and the
Construction Agent shall deliver to the Owner Trustee and the
Agent, as soon as possible after such Property Closing Date,
the final title insurance policies for each such Property,
taking no specific exception for any Lien filed on account of
materials furnished or labor performed in connection with the
Property, and otherwise showing no additional exceptions to
coverage;
(ix) the Construction Agent shall have delivered
to the Agent and the Owner Trustee a "Phase I" environmental
site assessment with respect to each such Property, prepared
by an independent recognized professional reasonably
acceptable to the Agent and the Owner Trustee and in a form
and substance that is reasonably acceptable to the Agent and
the Owner Trustee;
(x) the Construction Agent shall have delivered
to the Agent and the Owner Trustee a survey of each such
Property, prepared by an independent recognized professional
meeting the then current minimum standard detail requirements
for American Land Title Association/American Congress of
Surveying and Mapping (ALTA/ACSM) Land Title Surveys certified
to the Agent and otherwise reasonably acceptable to the Agent;
(xi) the Construction Agent shall have caused to
be delivered to the Agent and the Owner Trustee a legal
opinion (in form and substance reasonably satisfactory to the
Agent and the Owner Trustee) from counsel located in the state
where each such Property is located or, if the Agent and the
Owner Trustee have previously received an opinion from counsel
in such
7
<PAGE> 12
state, the Agent and the Owner Trustee (in their discretion)
may accept an update or a reaffirmation of the previous
opinion, in each case addressed to each Lender;
(xii) the Owner Trustee and the Agent shall be
satisfied, in their sole discretion, that the acquisition or
ground leasing of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not
adversely affect in any material respect the rights of the
Owner Trustee, the Holders, the Agent or the Lenders under or
with respect to the Operative Agreements in effect as of such
Property Closing Date (it being understood and acknowledged
that the Agent and the Owner Trustee may require that the
Construction Agent deliver an acceptable legal opinion in
connection with this condition);
(xiii) the Construction Agent shall have determined
(as set forth in the related Requisition) that such Property
is appropriate for its business operations; and the Agent
shall have consented to the Lessor's acquisition of such
Property, which consent (subject to clause (xii) above) shall
not be unreasonably withheld or delayed;
(xiv) the Construction Agent shall have delivered
to the Agent and the Owner Trustee, respecting each such
Property, invoices for the various Transaction Expenses and
other fees, expenses and disbursements referenced in Section
9.1 (a) or (b) of this Agreement;
(xv) the Lessor shall have delivered to the Agent
a Mortgage Instrument and Lender Financing Statements with
respect to each such Property in a form reasonably acceptable
to the Agent and Lessee;
(xvi) the Construction Agent shall have delivered
to the Lessor (A) with respect to each such Completed
Property, a Lease Supplement and a memorandum regarding the
Lease and such Lease Supplement, and (B) with respect to each
such Property (other than a Completed Property), a memorandum
regarding the Lease (such memoranda referenced in the
foregoing (A) and (B) to be substantially in the forms
attached to the Lease as Exhibit C-1 or Exhibit C-2 as
appropriate, and in each case, in form suitable for
recording);
(xvii) the Construction Agent shall have delivered
to the Lessor with respect to each such Property Lessor
Financing Statements executed by the Lessee and the Lessor;
8
<PAGE> 13
(xviii) if any such Property is subject to a Ground
Lease, the Construction Agent shall have caused a lease
memorandum (in form and substance satisfactory to the Agent)
to be delivered to the Agent for such Ground Lease;
(xix) counsel for the ground lessor of each such
Property subject to a Ground Lease shall have issued to the
Lessor, the Agent and the Holders, an opinion satisfactory to
the Agent;
(xx) all necessary (or in the reasonable opinion
of the Owner Trustee, the Agent, or their respective counsel,
advisable) Governmental Actions, in each case required by any
law or regulation enacted, imposed or adopted on or prior to
each such date or by any change in facts or circumstances on
or prior to each such date, shall have been obtained or made
and be in full force and effect;
(xxi) the Construction Agent shall cause (i)
Uniform Commercial Code lien searches, tax lien searches and
judgment lien searches regarding each of the Lessee and the
Lessor to be conducted (and copies thereof to be delivered to
the Agent and the Owner Trustee) in the state and county (or
other jurisdiction) in which such Property is located, by a
nationally recognized search company acceptable to the Owner
Trustee and the Agent and (ii) the liens referenced in such
lien searches which are objectionable to the Owner Trustee or
the Agent to be either removed or otherwise handled in a
manner reasonably satisfactory to the Owner Trustee and the
Agent; and
(xxii) the Agent shall have received an Appraisal
for such Property showing that such Property has a value at
least equal to eighty-five percent (85%) of the expected total
Property Cost of such Property and all Improvements
constructed or expected to be constructed thereon (based on a
Construction Budget satisfying the requirements of Section
5.4(e)).
5.4. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Commencement of Construction of any Improvements.
The obligations of each Holder to make Holder Fundings, and of each Lender to
make Loans, to the Lessor for the purpose of providing funds to the Lessor
necessary to pay the Transaction Expenses, fees, expenses and other
disbursements payable by Lessor under Section 9.1(b) of this Agreement, to make
an advance for the commencement of construction of any Improvements on a
Property, or to pay interest regarding the Loans relating to a Property and to
pay
9
<PAGE> 14
the Holder Yield regarding the Holder Fundings relating to a Property, in each
case regarding such interest and Holder Yield to the extent accrued and payable
under the Credit Agreement or Trust Agreement (as the case may be), in each case
during the period prior to the Term Commencement Date with respect to such
Property, are subject to the satisfaction or waiver of the following conditions
precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreement;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition
appropriately completed, together with copies of all Bills of Sale with
respect to any Equipment acquired as a part of any Improvements;
(e) with respect to each Initial Construction Funding, the
Agent and the Owner Trustee shall have received a copy of the
Construction Budget for the completion of the Improvements to which
such Funding relates, which Construction Budget shall indicate a total
Property Cost for such Improvements and the Land on which such
Improvements are to be constructed of not less than $5,000,000;
(f) with respect to each Initial Construction Funding, (i) the
title insurance commitments to issue policies (and any policies)
delivered in connection with the requirements of Section 5.3(b)(viii)
shall provide for (or shall be endorsed to provide for) insurance in an
amount at least equal to the maximum total Property Cost indicated by
the Construction Budget referred to in subparagraph (e) above taking no
specific exception for any Lien filed on account of materials furnished
or labor performed in connection with the Property, and otherwise
showing no additional exceptions to coverage, and (ii) all necessary
recording fees, documentary stamp taxes or similar amounts will be paid
in connection with the related Mortgage Instrument in an amount
sufficient to cover such maximum total Property Cost;
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(g) there shall not have occurred and be continuing any Event
of Default or (except as permitted under Section 8.4) any Default under
any of the Operative Agreements, and no Default or Event of Default
under any of the Operative Agreements will have occurred after giving
effect to the Funding requested by such Requisition;
(h) with respect to each Initial Construction Funding, based
upon Construction Budgets which satisfy the requirements of
subparagraph (e) above, the Available Commitment and the Available
Holder Commitment (after deducting the Unfunded Amount) will be
sufficient to complete the Improvements; and
(i) the Construction Agent shall have determined (as set forth
in the related Requisition) that such Improvements are appropriate to
its business; and the Agent shall have consented to such Improvements,
which consent shall not be unreasonably withheld or delayed.
5.5. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Ongoing Construction on any Property Prior to the
Construction Period Termination Date. The obligations of each Holder to make
Holder Fundings, and of each Lender to make Loans, to the Lessor (i) in
connection with all subsequent requests for Fundings to pay the Transaction
Expenses, fees, expense and other disbursements payable by Lessor under Section
9.1(b) of this Agreement, (ii) to pay interest regarding the Loans relating to a
Property and to pay the Holder Yield regarding the Holder Fundings relating to a
Property, in each case regarding such interest and Holder Yield to the extent
accrued and payable under the Credit Agreement or Trust Agreement (as the case
may be), during the period prior to the Term Commencement Date with respect to
such Property, and (iii) to pay for the construction of Improvements with
respect to any Property, in each case prior to the Construction Period
Termination Date are subject to the satisfaction or waiver of the following
conditions precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee hereto of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
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(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreements;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition,
appropriately completed;
(e) there shall not have occurred and be continuing any Event
of Default or (except as permitted under Section 8.4) any Default under
any of the Operative Agreements, and no Default or Event of Default
under any of the Operative Agreements will have occurred after giving
effect to the Construction Funding requested by such Requisition;
(f) (with respect to each Construction Funding) based upon
Construction Budgets which satisfy the requirements of Section 5.4(e)
of this Agreement, the Available Commitments and the Available Holder
Commitment (after deducting the Unfunded Amount) will be sufficient to
complete the Improvements; and
(g) with respect to each Construction Funding, the title
insurance commitments to issue policies (or any policies) delivered in
connection with the requirements of Section 5.3(b)(iii)) shall provide
for (or shall be endorsed to provide for) insurance in an amount at
least equal to the maximum total Property Cost indicated by the
Construction Budget referred to in Section 5.4(e) (and taking into
account any additional Property Cost represented by such Construction
Funding), taking no specific exception for any Lien filed on account of
materials furnished or labor performed in connection with the Property
(other than Permitted Liens which the title company insures as being
junior to the Liens of the Lessor, the Administrative Agent, the
Lenders and the Holders), and otherwise showing no additional
exceptions to coverage.
5.6. Reporting and Delivery Requirements on Completion Date and on
Construction Period Termination Date. On the Completion Date for each Property,
the Construction Agent shall deliver to the Agent, and the Owner Trustee an
Officer's Certificate in the form attached hereto as Exhibit B specifying (a)
the Completion Date for the construction of Improvements at the Property, (b)
the aggregate Property Cost for the Property and (c) if any of the Property
consists of Tangible Personal Property, a separate statement of the Property
Cost attributable to such Tangible Personal Property. Such Officer's Certificate
shall also include, in form and in detail reasonably acceptable to the Agent and
the Holders, a summary of the Property Cost figures and a certification to the
effect that all Improvements have been made in accordance with all applicable
material Legal Requirements, in a good and workmanlike manner and otherwise in
substantial
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compliance with the standards and practices of the Construction Agent with
respect to properties and improvements owned by the Construction Agent, and that
no consent or approval of any Person is required for such Improvements except
for consents and approvals which have already been obtained. Furthermore, (i) on
the Completion Date for each Property, the Construction Agent shall deliver or
cause to be delivered originals of the following to the Agent (and copies
thereof to the Owner Trustee) each of which shall be in a form reasonably
acceptable to the Agent: (1) insurance certificates with respect to the Property
as required under the Lease Agreement; (2) a Lease Supplement with respect to
the Property, (3) a memorandum of the Lease and such Lease Supplement (in form
suitable for recording), and (4) if requested by the Agent or the Owner Trustee,
amendments or modifications to the Lessor Financing Statements executed by the
Lessee and the Lessor; and (ii) within ninety (90) days after the Completion
Date for each Property, the Construction Agent shall deliver or cause to be
delivered originals of the following to the Agent (and copies thereof to the
Owner Trustee) each of which shall be in a form reasonably acceptable to the
Agent: (1) an as-built survey for the applicable Property, (2) an endorsement of
the title insurance policy regarding such Property, amending the effective date
of such policy to the date of such endorsement and taking no exception for any
Lien on account of materials furnished or labor performed in connection with the
Property (except for Liens which have been fully bonded by bonds acceptable to
the Agent), and otherwise showing no additional exceptions to coverage, and (3)
the final Plans and Specifications for such Property. In addition, on the
Completion Date for such Property the Construction Agent covenants and agrees
that the recording fees, documentary stamp taxes or similar amounts paid or
required to be paid in connection with the related Mortgage Instrument shall be
in an amount required by applicable law.
5.7. Construction Agent Delivery of Allocation Notice; Notice Regarding
the Holder Construction Property Cost and Construction Budget Modifications. The
Construction Agent covenants and agrees to deliver (i) to the Agent at least
five (5) Business Days before any Scheduled Interest Payment Date during the
Commitment Period the Allocation Notice referred to in the first sentence of
Section 2.3(b) of the Credit Agreement, and (ii) to the Agent and the Owner
Trustee each month any modification to any Construction Budget regarding any
Property; provided, no Construction Budget may be amended unless (a) the title
insurance policies referenced in Section 5.3(b)(viii) are also modified or
endorsed, if necessary, to provide for insurance in an amount that satisfies the
requirements of Section 5.4(f)(i) of this Agreement and, if necessary, any
additional recording fees, documentary stamp taxes or similar amounts paid in
connection with the related Mortgage Instrument in an amount sufficient to
comply with the requirements of Section 5.4(f)(ii), and (b) after giving effect
to any such amendment the
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Construction Budget remains in compliance with the requirements of Section
5.4(e) of this Agreement.
5.8. Inspection of Documents; Hold Harmless; Removal of Properties. Any
document or item (including without limitation any environmental report)
delivered to the Agent shall be available for inspection at any time during
ordinary business hours upon reasonable notice by any Lender or Holder. The
Agent shall not incur any liability to any Lender, any Holder, the Owner Trustee
or any other Person (and each Lender, each Holder, the Owner Trustee, the Lessee
and the Construction Agent hereby holds the Agent harmless from any such
liability) as a result of any such document or item, any information contained
therein, the failure to receive any such document, or the Agent's approval of
any Property. In the event the Majority Lenders determine that any environmental
site assessment reveals an Environmental Violation and they or the Agent so
notify the Lessee, then the Lessee shall remedy or purchase such Property in
accordance with Sections 15.2, 16.1 and 16.2 of the Lease, provided that if the
Property is a Construction Period Property, the Construction Agent shall be
responsible for such remedy or purchase as if the Property were subject to the
Lease.
SECTION 6. CONDITIONS OF THE INITIAL CLOSING.
6.1. Conditions to the Lessor's and the Holders' Obligations. The
obligations of the Lessor and the Holders to consummate the transactions
contemplated by this Agreement, including the obligation to execute and deliver
the applicable Operative Agreements to which each is a party on the Initial
Closing Date, are subject to (i) the accuracy and correctness on the Initial
Closing Date of the representations and warranties of the other parties hereto
contained herein, (ii) the accuracy and correctness on the Initial Closing Date
of the representations and warranties of the other parties hereto contained in
any other Operative Agreement or certificate delivered pursuant hereto or
thereto, (iii) the performance by the other parties hereto of their respective
agreements contained herein and in the other Operative Agreements and to be
performed by them on or prior to the Initial Closing Date and (iv) the
satisfaction, or waiver by the Lessor and the Holders, of all of the following
conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessor, and shall be
in full force and effect, and no Default or Event of Default shall
exist thereunder (both before and after giving effect to the
transactions contemplated by the Operative Agreements), and the Lessor
shall have received a fully executed copy of each of the Operative
Agreements (other than the Notes of which it shall have received
specimens). The Operative Agreements
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(or memoranda thereof), any supplements thereto and any financing
statements and fixture filings in connection therewith required under
the Uniform Commercial Code shall have been filed or shall be promptly
filed, if necessary, in such manner as to enable the Lessee's counsel
to render its opinion referred to in Section 6.1(g) hereof;
(b) All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provision for such payment
shall have been made to the reasonable satisfaction of the Lessor and
the Agent;
(c) No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Agreement, any
other Operative Agreement or any transaction contemplated hereby or
thereby or (ii) which is reasonably likely to have a Material Adverse
Effect;
(d) In the reasonable opinion of the Lessor and the Holders
and their counsel, the transactions contemplated by the Operative
Agreements do not and will not violate any material Legal Requirements
and do not and will not subject the Lessor or the Holders to any
materially adverse regulatory prohibitions or constraints;
(e) The Lessor and the Agent shall each have received an
Officer's Certificate of the Lessee, dated as of the Initial Closing
Date, in the form attached hereto as Exhibit D or in such other form as
is reasonably acceptable to such parties stating that (i) each and
every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct in all
material respects on and as of the Initial Closing Date; (ii) no
Default or Event of Default has occurred and is continuing under any
Operative Agreement; (iii) each Operative Agreement to which Lessee is
a party is in full force and effect with respect to it; and (iv) the
Lessee has performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Agreement required to
be performed or complied with by it on or prior to the Initial Closing
Date;
(f) The Lessor and the Agent shall each have received (i) a
certificate of the Secretary or an Assistant Secretary of Lessee in the
form attached hereto as Exhibit E or in such other form as is
reasonably acceptable to such parties attaching and certifying as to
(A) the resolutions of its Board of Directors duly authorizing the
execution, delivery
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and performance by Lessee of each of the Operative Agreements to which
it is or will be a party, (B) its certificate of incorporation and
by-laws, in each case certified as of a recent date by the Secretary of
State of the State of its incorporation, and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Agreements to which it is a party and (ii) a good
standing certificate from the appropriate officer of each state in
which it is required to be qualified to do business as to its good
standing in such state;
(g) Counsel for the Lessee and the Guarantor reasonably
acceptable to the other parties hereto shall have issued to the Lessor,
the Agent, the Lenders and the Holders an opinion in the form attached
hereto as Exhibit C or in such other form as is reasonably acceptable
to such parties; and
(h) As of the Initial Closing Date, there shall not have
occurred any material adverse change in the consolidated assets,
liabilities, operations, business or financial condition of the Lessee
from that set forth in the audited financial statements of the Lessee
dated December 29, 1996.
6.2. Conditions to the Lessee's Obligations. The obligation of the
Lessee to consummate the transactions contemplated by this Agreement, including
the obligation to execute and deliver the Operative Agreements to which it is a
party on the Initial Closing Date, is subject to (i) the accuracy and
correctness on the Initial Closing Date of the representations and warranties of
the other parties hereto contained herein, (ii) the accuracy and correctness on
the Initial Closing Date of the representations and warranties of the other
parties hereto contained in any other Operative Agreement or certificate
delivered pursuant hereto or thereto, (iii) the performance by the other parties
hereto of their respective agreements contained herein and in the other
Operative Agreements, in each case to be performed by them on or prior to the
Initial Closing Date, and (iv) the satisfaction or waiver by the Lessee of all
of the following conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessee, and shall be
in full force and effect, and no Default, other than Defaults of the
Lessee, shall exist thereunder, and the Lessee shall have received a
fully executed copy of each of the Operative Agreements (other than
Notes of which it shall have received a specimen);
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(b) In the reasonable opinion of the Lessee and its counsel,
the transactions contemplated by the Operative Agreements do not
violate any material Legal Requirements and will not subject Lessee to
any materially adverse regulatory prohibitions or constraints;
(c) No action or proceeding shall have been instituted nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Agreement, any
other Operative Agreement or any transaction contemplated hereby or
thereby or (ii) which is reasonably likely to have a Material Adverse
Effect;
(d) The Lessee and the Agent shall each have received an
Officer's Certificate of the Lessor dated as of such Closing Date in
the form attached hereto as Exhibit F or in such other form as is
reasonably acceptable to Lessee and the Agent, stating that (i) each
and every representation and warranty of the Lessor contained in the
Operative Agreements to which it is a party is true and correct on and
as of the Initial Closing Date; (ii) each Operative Agreement to which
the Lessor is a party is in full force and effect with respect to it,
and (iii) the Lessor has duly performed and complied with all
covenants, agreements and conditions contained herein or in any
Operative Agreement required to be performed or complied with by it on
or prior to the Initial Closing Date;
(e) The Lessee and the Agent shall each have received (i) a
certificate of the Secretary, an Assistant Secretary, Trust Officer or
Vice President of the Trust Company in the form attached hereto as
Exhibit G or in such other form as is reasonably acceptable to Lessee
and the Agent, attaching and certifying as to (A) the signing
resolutions, (B) its articles of incorporation or other equivalent
charter documents, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company, (C) its by-laws and (D)
the incumbency and signature of persons authorized to execute and
deliver on its behalf the Operative Agreements to which it is a party
and (ii) a good standing certificate from the state of incorporation of
the Trust Company; and
(f) Counsel for the Lessor acceptable to the other parties
hereto shall have issued to the Lessee, the Holders, the Lenders and
the Agent an opinion in the form attached hereto as Exhibit H or in
such other form as is reasonably acceptable to such parties.
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6.3. Conditions to the Agent's Obligations. The obligation of the Agent
to consummate the transactions contemplated by this Agreement on the Initial
Closing Date, including the obligation to execute and deliver each of the
Operative Agreements to which it is a party on the Initial Closing Date, is
subject to (i) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained herein,
(ii) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained in any
other Operative Agreement or certificate delivered pursuant hereto or thereto,
(iii) the performance by the other parties hereto of their respective agreements
contained herein and in the other Operative Agreements, in each case to be
performed by them on or prior to the Initial Closing Date, and (iv) the
satisfaction, or waiver by the Agent, of all of the following conditions on or
prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Agent, and shall be in
full force and effect, and no Default or Event of Default shall exist
thereunder (both before and after giving effect to the transactions
contemplated by the Operative Agreements), and the Agent shall have
received a fully executed copy of each of the Operative Agreements
(including the Notes). The Operative Agreements (or memoranda thereof),
any supplements thereto and any financing statements and fixture
filings in connection therewith required under the Uniform Commercial
Code shall have been filed or shall be promptly filed, if necessary, in
such manner as to enable the Lessor's counsel to render its opinion
referred to in Section 6.2(f) hereof;
(b) The satisfaction of each of the conditions set forth in
Sections 6.1(b), (c), (e), (f) and (h) and Sections 6.2(d), (e) and (f)
hereof; and
(c) In the reasonable opinion of the Agent and its counsel,
the transactions contemplated by the Operative Agreements do not and
will not violate any material Legal Requirements and do not and will
not subject the Agent to any materially adverse regulatory prohibitions
or constraints.
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL CLOSING DATE.
7.1. Representations and Warranties of the Initial Holders. Effective
as of the Initial Closing Date, each Holder on such date represents and warrants
to each of the other parties hereto that:
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(a) It is a national banking association, or a corporation
that is a commercial finance company, in each case duly organized,
validly existing and in good standing under the laws of the United
States or the country or state of its organization and has the power
and authority to carry on its business as now conducted and to enter
into and perform its obligations under each Operative Agreement to
which it is or will be a party and each other agreement, instrument and
document to be executed and delivered by it on or before each Closing
Date in connection with or as contemplated by each such Operative
Agreement to which it is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party have been duly authorized
by all necessary action on its part and neither the execution and
delivery thereof, nor the consummation of the transactions contemplated
thereby, nor compliance by it with any of the terms and provisions
thereof (i) requires or will require any approval of the stockholders
of, or approval or consent of any trustee or holder of any indebtedness
or obligations of, such Holder which have not been obtained and in full
force and effect, (ii) violates or will violate any Legal Requirement
applicable to or binding on it (except no representation or warranty is
made as to any Legal Requirement to which it may be subject solely as a
result of the activities of the Lessee) as of the date hereof, (iii)
violates or will violate or result in any breach of or constitute any
default under, or result in the creation of any Lien upon any Property
or any of the Improvements (other than Liens created by the Operative
Agreements) under its certificate of incorporation or other equivalent
charter documents, or any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, bank loan or credit agreement or
other agreement or instrument to which it is a party or by which it or
its properties is bound or affected or (iv) requires or will require
any Governmental Action by any Governmental Authority (other than
arising solely by reason of the business, condition or activities of
the Lessee or any Affiliate thereof or the construction or use of the
Properties or the Improvements);
(c) This Agreement and each other Operative Agreement to which
it is or will be a party have been, or will be, duly executed and
delivered by it and constitute, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against
it in accordance with the terms thereof, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
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<PAGE> 24
(d) There is no action or proceeding pending or, to its
knowledge, threatened against it before any Governmental Authority that
questions the validity or enforceability of any Operative Agreement to
which it is or will become a party or that, if adversely determined,
would materially and adversely affect its ability to perform its
obligations under the Operative Agreements to which it is a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) It is not a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended. It is not an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act or an "investment adviser"
within the meaning of the Investment Advisers Act of 1940, as amended;
and
(h) It is acquiring its interest in the Trust Estate for its
own account for investment and not with a view to any distribution (as
such term is used in Section 2(11) of the Securities Act) thereof, and
if in the future it should decide to dispose of its interest in the
Trust Estate, it understands that it may do so only in compliance with
the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder and any applicable state securities
laws. Neither it nor anyone authorized to act on its behalf has taken
or will take any action which would subject, as a direct result of such
action alone, the issuance or sale of any interest in any Property, the
Trust Estate or the Lease to the registration requirements of Section 5
of the Securities Act. No representation or warranty contained in this
Section 7.1(i) shall include or cover any action or inaction of the
Lessee or any Affiliate thereof whether or not purportedly on behalf of
the Holders, the Owner Trustee or any of their Affiliates.
7.2. Representations and Warranties of the Owner Trustee. Effective as
of the Initial Closing Date, Trust Company in its individual capacity and as the
Owner Trustee, as indicated, represents and warrants to each of the other
parties hereto as follows, provided, that the representations in paragraphs (h),
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(i), (j) and (k) below are made solely in its capacity as the Owner Trustee:
(a) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) requires or will require any approval
of its stockholders, or any approval or consent of any trustee or
holders of any of its indebtedness or obligations, (ii) violates or
will violate any current law, governmental rule or regulation relating
to its banking or trust powers, (iii) violates or will violate or
result in any breach of or constitute any default under, or result in
the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which violation,
breach, default or Lien under clause (B) would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or (iv) requires or will require any Governmental Action by any
Governmental Authority regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will
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be a party have been, or will be, duly executed and delivered by Trust
Company or the Owner Trustee, as the case may be, and the Trust
Agreement and each such other Operative Agreement to which Trust
Company or the Owner Trustee, as the case may be, is a party
constitutes, or upon execution and delivery will constitute, a legal,
valid and binding obligation enforceable against Trust Company or the
Owner Trustee, as the case may be, in accordance with the terms
thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or would question the validity or enforceability of any of the
Operative Agreements to which it is or will become a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease or the Agency Agreement except in
accordance with the Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Lenders, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act, or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(h) The Owner Trustee's chief place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept
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are located at 79 South Main Street, Salt Lake City, Utah 84111;
(i) The Owner Trustee is not engaged principally in, and does
not have as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Fundings will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of
Regulations G, T, U, or X of the Federal Reserve Board; and
(j) The Owner Trustee is not a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or a "public
utility" within the meaning of the Federal Power Act, as amended. The
Owner Trustee is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company
Act or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.
7.3. Representations and Warranties of the Construction Agent and the
Lessee. Effective as of the Initial Closing Date, the Construction Agent and the
Lessee represent and warrant to each of the other parties hereto that:
(a) Each of the Construction Agent and the Lessee is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Florida; each of their Subsidiaries is duly
organized and validly existing under the laws of the jurisdiction of
its organization; and each of the Construction Agent and the Lessee and
each of their Subsidiaries is duly qualified to do business in each
other jurisdiction where the nature of its business makes such
qualification necessary, except where such failure to so qualify would
not have a Material Adverse Effect. Each of the Construction Agent and
the Lessee has the power and authority to carry on its business as now
conducted and to enter into and perform its obligations under each
Operative Agreement to which it is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which it is or will be a party;
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(b) The execution, delivery and performance by each of the
Construction Agent and the Lessee of this Agreement and the other
Operative Agreements to which each is or will be a party have been duly
authorized by all necessary corporate action on the part of each of the
Construction Agent and the Lessee (including any necessary shareholder
action), have received all necessary governmental approval, and do not
and will not (i) violate any Legal Requirement, decree, judgment or
award which is applicable to or binding on the Construction Agent or
the Lessee or any of their Subsidiaries, (ii) violate or conflict with,
or result in a breach of, any provision of the Certificate of
Incorporation, By-Laws or other organizational documents of either the
Construction Agent or the Lessee or any of their Subsidiaries, or any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan, credit agreement or other agreement, instrument or
document to which either the Construction Agent or the Lessee or any of
their Subsidiaries is a party or which is binding on either the
Construction Agent or the Lessee or any of their Subsidiaries or any of
their respective properties, or (iii) result in, or require, the
creation or imposition of any Lien (other than pursuant to the terms of
the Operative Agreements) on any asset of either of the Construction
Agent or the Lessee or any of their Subsidiaries;
(c) Each of this Agreement and each other Operative Agreement
to which the Construction Agent or the Lessee is or will be a party has
been, or will be, duly executed and delivered by it and constitutes, or
upon execution and delivery will constitute, the legal, valid or
binding obligation of the Construction Agent or the Lessee, as the case
may be, enforceable against it in accordance with the terms thereof,
subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity). The Construction Agent and the Lessee have each executed
the various Operative Agreements required to be executed as of the
Initial Closing Date;
(d) There are no actions, suits or proceedings (including,
without limitation, any derivative action) pending or, to the knowledge
of either the Construction Agent or the Lessee, threatened with respect
to the Construction Agent or Lessee or any of their Subsidiaries which,
if adversely decided, are reasonably likely to result, either
individually or collectively, in a Material Adverse Effect. None of the
Construction Agent, the Lessee nor any of their Subsidiaries has any
material contingent liabilities not provided for or disclosed in the
financial statements referred to in Section 7.3(f), which are required
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in accordance with GAAP to be reported in such financial statements;
(e) No Governmental Action by any Governmental Authority or
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person is required to authorize or is
required in connection with (i) the execution, delivery or performance
of any Operative Agreement or (ii) the legality, validity, binding
effect or enforceability of any Operative Agreement, in each case,
except those which have been obtained and are in full force and effect;
(f) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 29, 1996,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at March 30,
1997, copies of which have been furnished to the Agent and the Owner
Trustee, were prepared in accordance with GAAP (subject to normal
year-end adjustments) and fairly present the financial condition of the
Construction Agent and the Lessee and their Subsidiaries on a
consolidated basis as of such date and their consolidated results of
operations for the fiscal year then ended and such 13-week period,
respectively;
(g) Since the date of the audited financial statements
described in Section 7.3(f), there has been no event or occurrence
which has had or is reasonably likely to have a Material Adverse
Effect;
(h) Neither the Construction Agent nor the Lessee knows of any
proposed material tax assessments against it. No extension of time for
assessment or payment of any material federal, state or local tax by
either the Construction Agent or the Lessee is in effect;
(i) ERISA.
(A) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee or the trusts
created thereunder has engaged in a prohibited transaction
which could subject any such employee benefit plan or trust to
a material tax or penalty on prohibited transactions imposed
under Code Section 4975 or ERISA;
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(B) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee which are
employee pension benefit plans and which are subject to Title
IV of ERISA or the trusts created thereunder has been
terminated nor has any such employee benefit plan of the
Construction Agent or Lessee incurred any liability to the
PBGC, other than for required insurance premiums which have
been paid; neither the Construction Agent nor the Lessee has
withdrawn from or caused a partial withdrawal to occur with
respect to any Multi-employer Plan; the Construction Agent and
the Lessee have made or provided for all contributions to all
such employee pension benefit plans which they maintain and
which are required as of the end of the most recent fiscal
year under each such plan; neither the Construction Agent nor
the Lessee has incurred any accumulated funding deficiency
with respect to any such plan, whether or not waived; nor has
there been any reportable event, or other event or condition,
which presents a material risk of termination of any such
employee benefit plan by the PBGC;
(C) The present value of all vested accrued benefits
under the employee pension benefit plans which are subject to
Title IV of ERISA, maintained by the Construction Agent or the
Lessee, did not, as of the most recent valuation date for each
such plan, exceed the then current value of the assets of such
employee benefit plans allocable to such benefits;
(D) The consummation of the transactions contemplated
by the Operative Agreements will not involve any prohibited
transaction under ERISA;
(E) To the best of the Construction Agent's and the
Lessee's knowledge, each employee pension benefit plan subject
to Title IV of ERISA, maintained by the Construction Agent or
the Lessee, has been administered in accordance with its terms
and is in compliance in all material respects with all
applicable requirements of ERISA and other applicable laws,
regulations and rules;
(F) There has been no withdrawal liability incurred
with respect to any Multi-employer Plan to which the
Construction Agent or the Lessee is or was a contributor;
(G) As used in this Agreement, the terms "employee
benefit plan," "employee pension benefit plan," "accumulated
funding deficiency," "reportable event," and "accrued
benefits" shall have the
26
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respective meanings assigned to them in ERISA, and the term
"prohibited transaction" shall have the meaning assigned to it
in Code Section 4975 and ERISA;
(H) Neither the Construction Agent nor the Lessee has
any liability, contingent or otherwise, under any plan or
program or the equivalent for unfunded post-retirement
benefits, including pension, medical and death benefits, which
liability would have a Material Adverse Effect;
(j) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in the Property, subject only to the
Permitted Exceptions, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Lease;
(k) Neither the Construction Agent nor the Lessee has filed a
voluntary petition in bankruptcy or been adjudicated bankrupt or
insolvent, or filed any petition or answer seeking any reorganization,
liquidation, receivership, dissolution or similar relief under any
bankruptcy, receivership, insolvency, or other law relating to relief
for debtors, or sought or consented to or acquiesced in the appointment
of any trustee, receiver, conservator or liquidator of all or any part
of its properties or its interest in any Property. No court of
competent jurisdiction has entered an order, judgment, or decree
approving a petition filed against the Construction Agent or the Lessee
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any federal or state
bankruptcy, receivership, insolvency or other law relating to relief
for debtors, and no other liquidator has been appointed for the
Construction Agent or the Lessee or all or any part of its properties
or its interest in any Property, and no such action is pending. Neither
the Construction Agent nor the Lessee has given notice to any
Governmental Authority or any Person of insolvency or pending
insolvency, or suspension or pending suspension of operations;
(l) Each of the Construction Agent, the Lessee and their
Subsidiaries owns marketable title to, or a subsisting leasehold
interest in, all of its Properties free and clear of all Liens, except
Permitted Liens;
(m) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is (a) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act or an "investment adviser" within the meaning of
the Investment Advisers Act
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of 1940, as amended, or (b) a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or a
"public utility", within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended;
(n) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is engaged principally in, or has as one of its
important activities, the business of extending credit for the purpose
of purchasing or carrying any margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no part of the proceeds
of the Loans or the Holder Fundings will be used for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or maintaining or extending credit to others for such
purpose, or for any purpose that violates, or is inconsistent with
Regulations G, T, U, or X of the Federal Reserve Board;
(o) Each of the Construction Agent, the Lessee and their
Subsidiaries has filed all material tax returns and reports required by
Law to have been filed by it and has paid all Taxes and governmental
charges thereby shown to be owing, except any such Taxes or charges
which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall in accordance with
GAAP have been set aside on its books;
(p) To the best of the knowledge of each of the Construction
Agent and the Lessee, after inquiry it has deemed appropriate, each of
the Construction Agent, the Lessee and their Subsidiaries is in
material compliance with all Environmental Laws and Occupational Safety
and Health Laws where failure to comply could have a Material Adverse
Effect. None of the Construction Agent, the Lessee nor any of their
Subsidiaries has received notice of any claims that any of them is not
in compliance in all material respects with any Environmental Law where
failure to comply could have a Material Adverse Effect;
(q) Each of the Construction Agent, the Lessee and their
Subsidiaries is in compliance with all statutes, judicial and
administrative orders, permits and governmental rules and regulations
which are material to its business or the non-compliance with which
could result in Material Adverse Result; and
(r) All information heretofore or contemporaneously herewith
furnished by either the Construction Agent or the Lessee or any of
their Subsidiaries to the Agent, the Owner Trustee, any Lender or any
Holder for purposes of or in
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connection with this Agreement and the transactions contemplated hereby
is, and all information hereafter prepared and furnished by the
Construction Agent, the Lessee or any of their Subsidiaries to the
Agent, the Owner Trustee, any Lender or any Holder pursuant hereto or
in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified,
and such information, taken as a whole, does not and will not omit to
state any material fact necessary to make such information, taken as a
whole, not misleading.
7.4. Representations and Warranties of the Agent. Effective as of the
Initial Closing Date, the Agent represents and warrants to each of the other
parties hereto that:
(a) It is a national banking association duly organized and
validly existing under the laws of the United States of America and has
the full power and authority to enter into and perform its obligations
under this Agreement and each other Operative Agreement to which it is
or will be a party;
(b) The execution, delivery and performance by the Agent of
this Agreement and each other Operative Agreement to which it is or
will be a party are not, and will not be, inconsistent with the
articles of incorporation or by-laws or other charter documents of the
Agent, do not and will not contravene any applicable Law of the State
of Florida or of the United States of America governing its activities
and will not contravene any provision of, or constitute a default under
any indenture, mortgage, contract or other instrument to which it is a
party or by which it or its properties are bound, or require any
consent or approval of any Governmental Authority under any applicable
law, rule or regulation of the State of Florida or any federal law,
rule or regulation of the United States of America governing its
activities; and
(c) Each of this Agreement and each other Operative Agreement
to which it is a party has been, or when executed and delivered will
be, duly authorized by all necessary corporate action on the part of
the Agent and has been, or on such Closing Date will be, duly executed
and delivered by the Agent and, assuming the due authorization,
execution and delivery hereof and thereof by the other parties hereto
and thereto, will constitute a legal, valid and binding obligation
enforceable against the Agent in accordance with the terms thereof.
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SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES.
8.1. Representations and Warranties on Property Closing Dates. The
Construction Agent and the Lessee hereby represent and warrant as of each
Property Closing Date as follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements are true and
correct in all material respects on and as of such Property Closing
Date as if made on and as of such date. The Construction Agent and the
Lessee are in all material respects in compliance with their respective
obligations under the Operative Agreements and there exists no Default
or Event of Default under any of the Operative Agreements. No Default
or Event of Default will occur under any of the Operative Agreements as
a result of, or after giving effect to, the Funding requested by the
Requisition on such Property Closing Date;
(b) The Properties to be acquired are being acquired at a
price that is not in excess of the price that would be obtained on an
arm's-length basis between unrelated parties, and such Properties
consist of (i) unimproved Land, or (ii) Land and existing Improvements
thereon which Improvements are either suitable for occupancy at the
time of acquisition or will be renovated or modified in accordance with
the terms of this Agreement, or (iii) Equipment. Each of the Properties
is located at the site set forth on the applicable Requisition, which
is in one of the Approved States;
(c) Upon the acquisition of each Property on such Property
Closing Date, and at all times thereafter, the Lessor will have
marketable title to such Property, subject only to Permitted
Exceptions;
(d) The execution and delivery of each Operative Agreement
delivered by the Construction Agent or the Lessee on such Property
Closing Date and the performance of the obligations of the Construction
Agent and the Lessee under each Operative Agreement have been duly
authorized by all requisite corporate action of the Construction Agent
or the Lessee, as applicable;
(e) Each Operative Agreement delivered on such Property
Closing Date by the Construction Agent or the Lessee has been duly
executed and delivered by the Construction Agent or the Lessee;
(f) Each Operative Agreement delivered by the Construction
Agent or the Lessee on such Property Closing Date is a legal, valid and
binding obligation of the Construction Agent or the Lessee, as
applicable, enforceable
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against the Construction Agent or the Lessee, as applicable, in
accordance with its respective terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
(g) Upon filing of each of the UCC Financing Statements (with
respect to the Property being acquired) in the filing offices
designated by the Construction Agent or the Lessee, such UCC Financing
Statements will have been filed with the appropriate Governmental
Authorities in order to perfect a security interest in the Property
described therein (to the extent perfection can be obtained by filing
under the UCC);
(h) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment to the Agent of the filed Lessor Financing
Statements, will perfect a valid first priority security interest in
all Equipment and other collateral described therein in which a
security interest or mortgage can be perfected by filing under the UCC,
subject only to Permitted Exceptions, and upon filing, the Lessor
Financing Statements will protect Lessor's interest under the Lease to
the extent the Lease is a security agreement and mortgage;
(i) No portion of any Property being acquired by the Lessor on
such Property Closing Date is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, or if any such Property is located in an area
identified as a special flood hazard area by any such agency, then
flood insurance has been obtained for such Property in accordance with
Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(j) The Construction Agent has obtained insurance coverage for
each Property being acquired by the Lessor on such Property Closing
Date which meets the requirements of Article XIV of the Lease and all
of such coverage is in full force and effect;
(k) Each Property being acquired by the Lessor on such
Property Closing Date complies with all Legal Requirements (including,
without limitation, all zoning and land use laws and Environmental
Laws), except to the extent that failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect; and
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(l) All utility services and facilities necessary for the
construction of the Improvements existing on, or to be constructed
after, such Property Closing Date (including, without limitation, gas,
electrical, water and sewage services and facilities) are available at
the boundaries of the real property upon which such Improvements exist
or will be constructed on each such Property prior to the Completion
Date for such Property.
8.2. Representations and Warranties Upon Initial Construction Fundings.
The Construction Agent and the Lessee hereby represent and warrant as of each
date on which an Initial Construction Funding is made as follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements are true and
correct in all material respects on and as of the date of such Initial
Construction Funding as if made on and as of such date. The
Construction Agent and the Lessee are in all material respects in
compliance with their respective obligations under the Operative
Agreements and there does not exist any Event of Default or (except as
permitted under Section 8.4 hereof) any Default under any of the
Operative Agreements. No Default or Event of Default will occur under
any of the Operative Agreements as a result of, or after giving effect
to, the Funding requested by the Requisition on such date;
(b) The Lessor has marketable title to each Property, subject
only to Permitted Exceptions;
(c) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment of the filed Lessor Financing Statements,
will perfect a valid first priority security interest in all the
Properties and other collateral described therein in which a security
interest can be perfected by filing under the UCC, subject only to
Permitted Liens;
(d) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property with respect to which a Funding is being made have been
obtained and are in full force and effect, except to the extent that
the failure to so obtain would not, individually or in the aggregate,
have a Material Adverse Effect;
(e) The Construction Agent has obtained insurance coverage
covering the Property which is the subject of such
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Funding which coverage meets the requirements of Section 2.6 of the
Agency Agreement before commencing construction, repairs or
modifications, as the case may be, and such coverage is in full force
and effect;
(f) The Improvements which are the subject of the Funding, as
improved in accordance with the Plans and Specifications, will comply
as of the applicable Completion Date with all applicable Legal
Requirements and Insurance Requirements (including, without limitation,
all zoning and land use laws and Environmental Laws), except to the
extent the failure to comply therewith would not, individually or in
the aggregate, have a Material Adverse Effect. The Plans and
Specifications have been or will be prepared in accordance with all
applicable Legal Requirements (including, without limitation, all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect, and
upon completion of such Improvements in accordance with the Plans and
Specifications, such Improvements will not encroach in any manner onto
any adjoining land (except as permitted by express written easements)
and such Improvements and the use thereof by the Lessee and its agents,
assignees, employees, invitees, lessees, licensees and tenants will
comply as of the applicable Completion Date in all respects with all
applicable Legal Requirements (including, without limitation, all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect. Upon
completion of such Improvements in accordance with the Plans and
Specifications, (i) there will be no material defects to such
Improvements including, without limitation, the plumbing, heating, air
conditioning and electrical systems thereof and (ii) all water, sewer,
electric, gas, telephone and drainage facilities and all other
utilities required to adequately service such Improvements for their
intended use will be available pursuant to adequate permits (including
any that may be required under applicable Environmental Laws), except
to the extent that failure to obtain any such permit would not,
individually or in the aggregate, have a Material Adverse Effect. There
is no action, suit or proceeding (including any proceeding in
condemnation or eminent domain or under any Environmental Law) pending
or, to the best knowledge of the Lessee or the Construction Agent,
threatened which adversely affects the title to, or the use, operation
or value of, such Properties. No fire or other casualty with respect to
such Properties has occurred which (y) has had a Material Adverse
Effect or (2) is not fully covered by insurance. All utilities serving
the related Properties, or proposed to serve the related
33
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Properties in accordance with the Plans and Specifications, are located
in (or will be located in) and vehicular access to such Improvements is
provided by (or will be provided by), either public rights-of-way
abutting the related Property or Appurtenant Rights. All licenses,
approvals, authorizations, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way,
including proof of dedication, required for (i) the use, treatment,
storage, transport, disposal or disposition of any Hazardous Substance
on, at, under or from the real property underlying such Improvements
during the construction of such Improvements and the use and operation
of such Improvements following such construction, (ii) the construction
of such Improvements in accordance with the Plans and Specifications
and the Agency Agreement and (iii) the use and operation of such
Improvements following such construction with the applicable Equipment
which such Improvements support for the purposes for which they were
intended have either been obtained from the appropriate Governmental
Authorities or from private parties, as the case may be, or will be
obtained from the appropriate Governmental Authorities or from private
parties, as the case may be, prior to commencing any such construction
or use and operation, as applicable; and
(g) All conditions precedent contained in this Agreement and
in the other Operative Agreements relating to the Initial Construction
Funding have been substantially satisfied.
8.3. Representations and Warranties Upon the Date of Each Construction
Funding that is not an Initial Construction Funding. The Construction Agent and
the Lessee hereby represent and warrant as of each date on which a Construction
Funding is made, when such advance is not an Initial Construction Funding, as
follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements (including
the representations and warranties set forth in Section 8.2) are true
and correct in all material respects on and as of the date of such
Construction Funding as if made on and as of such date. The
Construction Agent and the Lessee are in all material respects in
compliance with their respective obligations under the Operative
Agreements and there does not exist any Event of Default or (except as
expressly permitted under Section 8.4 hereof) any Default under any of
the Operative Agreements. No Default or Event of Default will occur
under any of the Operative Agreements as a result of, or after giving
effect to, the Funding requested by the Requisition on such date;
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(b) Construction of the Improvements to date has been
performed in a good and workmanlike manner, substantially in accordance
with the Plans and Specifications and in compliance with all Insurance
Requirements and Legal Requirements, except to the extent noncompliance
with any Legal Requirements would not, individually or in the
aggregate, have a Material Adverse Effect;
(c) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property have been obtained and are in full force and effect;
(d) When completed, the Improvements shall be wholly within
any building restriction lines (unless consented to by applicable
Government Authorities), however established; and
(e) The Funding is secured by the Lien of the Security
Agreement, and there have been no Liens against the applicable
Improvements other than Permitted Liens.
8.4. Certain Construction Fundings During Defaults. Notwithstanding any
other provision of the Operative Agreements, unless an Event of Default has
occurred and is continuing, the existence of a Default shall not prevent a
Construction Funding with respect to an existing Property if (a) such Default
does not relate to such Property and (b) the amount of such Funding, together
with the amounts of any other Fundings (whether or not relating to such
Property) made under the Operative Agreements during the period such Default has
been continuing, do not exceed in the aggregate ten percent (10%) of the
aggregate Commitments and Holder Commitments. The foregoing notwithstanding, no
Acquisition Funding shall be made when any Default or Event of Default has
occurred and is continuing.
SECTION 9. PAYMENT OF CERTAIN EXPENSES.
9.1. Transaction Expenses.
(a) Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all reasonable fees, expenses and disbursements of
the various outside legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative
Agreements and incurred in connection with the Initial Closing Date,
including all Transaction Expenses (arising in connection with the
Initial Closing Date), and all other reasonable fees, expenses and
disbursements in connection with the Initial Closing Date, and
including, without limitation, all fees, taxes and
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expenses for the recording, registration and filing of documents;
provided, however, that the Lessor shall pay such amounts described in
this Section 9.1(a) only if (i) such amounts are properly described in
a Requisition delivered on or before the Initial Closing Date, and (ii)
funds are made available by the Lenders and the Holders in connection
with such Requisition in an amount sufficient to allow such payment. On
the Initial Closing Date, after delivery and receipt of the Requisition
referenced in Section 4.2(a) hereof and satisfaction of the other
conditions precedent for such date, the Holders shall make Holder
Fundings and the Lenders shall make Loans to the Lessor to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced
in this Section 9.1(a). The Lessee agrees to pay all amounts referred
to in this Section 9.1(a) to the extent not paid by Lessor.
(b) Lessor agrees on each Property Closing Date, on the date
of any Construction Funding and on the Completion Date to pay, or cause
to be paid, all reasonable fees, expenses and disbursements of the
various outside legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative
Agreements and billed in connection with such Property Closing Date,
the date of such Funding, or such Completion Date, including all
Transaction Expenses (arising with respect to the Initial Closing Date,
such Property Closing Date, the date of such Funding or such Completion
Date), all fees, expenses and disbursements incurred with respect to
the various items referenced in Sections 5.3, 5.4, 5.5 or 5.6
(including without limitation the cost of any Appraisals or
environmental site assessments, any developer's fees, any premiums for
title insurance policies and charges for any updates to such policies)
and all other reasonable fees, expenses and disbursements in connection
with such Property Closing Date, the date of such Funding or such
Completion Date including, without limitation, all expenses relating to
and all fees (including brokers' fees), taxes (including any and all
stamp, transfer or similar taxes) and expenses for the recording,
registration and filing of documents; provided, however, the Lessor
shall pay such amounts described in this Section 9.1(b) only if (i)
such amounts are properly described in a Requisition delivered on the
applicable date and (ii) funds are made available by the Lenders and
the Holders in connection with such Requisition in an amount sufficient
to allow such payment. On each Property Closing Date, on the date of
any Construction Funding or any Completion Date, after delivery of the
applicable Requisition in satisfaction of the other conditions
precedent for such date, the Holders shall make a Holder Funding and
the Lenders shall make Loans to the Lessor to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in this
Section 9.1(b).
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The Lessee agrees to pay all amounts referred to in this Section 9.1(b)
to the extent not paid by the Lessor.
9.2. Certain Fees and Expenses. Lessee agrees to pay or cause to be
paid (i) the initial and annual Owner Trustee's fee and all reasonable expenses
of the Owner Trustee and any necessary co-trustees (including reasonable outside
counsel fees and expenses) or any successor owner trustee, for acting as owner
trustee under the Trust Agreement, (ii) all reasonable costs and expenses
(including reasonable counsel fees and expenses) incurred by the Construction
Agent, the Lessee, the Agent, the Lenders, the Holders or the Lessor in entering
into any future amendments or supplements requested by the Lessee with respect
to any of the Operative Agreements, whether or not such amendments or
supplements are ultimately entered into, or giving or withholding of waivers of
consents hereto or thereto which have been requested by the Lessee, or any
purchase of any Property by the Lessee pursuant to Article XX of the Lease, and
(iii) all reasonable costs and expenses (including reasonable counsel fees and
expenses) incurred by the Lessor, the Construction Agent, the Lessee, the
Holders, the Lenders or the Agent in connection with the enforcement of any
Operative Agreement or any exercise of remedies under any Operative Agreement.
9.3. Unused Fee and Holder Unused Fee. From the date hereof through the
Expiration Date and thereafter so long as any Rent or other amounts remain
outstanding under the Operative Agreements, the Lessee agrees to pay (a) to the
Agent, for the pro rata benefit of the Lenders of each Category of Loans based
on the Commitment Percentage of each such Lender during the period for which
payment is made, the Unused Fee; and (b) to the Lessor, for the pro rata benefit
of the Holders based on the Holder Commitment of each such Holder during the
period for which payment is made, the Holder Unused Fee. Such payments of fees
provided for in this Section 9.3 shall be due in arrears on each Unused Fee
Payment Date. Notwithstanding the foregoing, so long as any Lender or Holder
fails (in violation of the Operative Agreements) to make available any portion
of its Commitment or Holder Commitment when requested, such Person shall not be
entitled to receive payment of its pro rata share of its Unused Fee or Holder
Unused Fee (as the case may be) until such Person shall make available such
portion. Each such fee shall be calculated on the basis of a year of 360 days
for the actual number of days elapsed. If all or a portion of any Unused Fee or
Holder Unused Fee shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the Base
Rate plus 2%, from the date of such non-payment until such amount is paid in
full (as well after as before judgment).
SECTION 10. OTHER COVENANTS AND AGREEMENTS.
10.1. Cooperation with the Construction Agent or the Lessee. The
Holders, the Owner Trustee (at the direction of the Holders) and the Agent
shall, to the extent reasonably requested
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by the Construction Agent or Lessee (but without assuming additional liabilities
on account thereof), at the Construction Agent's or the Lessee's expense,
cooperate with the Construction Agent or the Lessee in connection with its
covenants contained herein including, without limitation, at any time and from
time to time, upon the request of the Construction Agent or the Lessee, promptly
and duly executing and delivering any and all such further instruments,
documents and financing statements (and continuation statements related thereto)
as the Construction Agent or the Lessee may reasonably request in order to
perform such covenants.
10.2. Covenants of the Owner Trustee and the Holders. Each of the Owner
Trustee and the Holders hereby agree that so long as this Agreement is in
effect:
(a) None of the Holders and the Owner Trustee (both in its
trust capacity and in its individual capacity) will create or permit to
exist at any time, and each of the Holders and the Owner Trustee will,
at its own cost and expense, promptly take such action (and notify
Lessee of such action) as may be necessary duly to discharge, or to
cause to be discharged, all Lessor Liens attributable to it on the
Properties; provided, however, that the Holders and the Owner Trustee
shall not be required to discharge any such Lessor Lien while the same
is being contested in good faith by appropriate proceedings diligently
prosecuted so long as (a) such proceedings shall not involve any
material danger of impairment of the Liens of the Security Documents or
of the sale, forfeiture or loss of, any Property or title thereto or
any interest therein or the payment of Rent, and (b) such proceedings
shall not materially interfere with the disposition of any Property or
title thereto or interest therein or the payment of Rent;
(b) Without prejudice to any right of the Owner Trustee under
the Trust Agreement to resign (subject to requirement set forth in the
Trust Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as Owner Trustee (after consent to such removal by the Agent as
provided in the Trust Agreement), each of the Holders and the Owner
Trustee hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of the Lessee or the Agent without the prior written consent of such
party and (iii) to comply with all of the terms of the Trust Agreement,
the nonperformance of which would adversely affect any such party;
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(c) The Owner Trustee or any successor may resign or be
removed by the Holders as Owner Trustee, a successor Owner Trustee may
be appointed and a corporation may become the Owner Trustee under the
Trust Agreement, only in accordance with the provisions of Article IX
of the Trust Agreement and, with respect to such appointment, with the
consent of the Lessee, which consent shall not be unreasonably
withheld, conditioned or delayed;
(d) The Owner Trustee, in its capacity as Owner Trustee under
the Trust Agreement, and not in its individual capacity, shall not
contract for, create, incur or assume any indebtedness (other than the
indebtedness under the Bridge Debt), or enter into any business or
other activity, other than pursuant to or under the Operative
Agreements, except that the Owner Trustee may own the Ancillary
Properties;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the Owner
Trustee under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to
the Owner Trustee or for all or any substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee
and the Agent if the Owner Trustee's chief place of business or chief
executive office, or the office where the records concerning the
accounts or contract rights relating to a Property are kept, shall
cease to be located at 79 South Main Street, Salt Lake City, Utah
84111, or if it shall change its name;
(h) Provided that no Lease Event of Default has occurred and
is continuing, neither the Owner Trustee nor any Holder shall, without
the prior written consent of the Lessee, consent to or permit any
amendment, supplement or other modification of the terms and provisions
of the Credit Agreement or the Notes or (to the extent such amendment,
supplement or modification would have an adverse effect on the rights
or obligations of the Lessee under the Lease) any other Operative
Agreement;
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(i) Neither the Owner Trustee nor any Holder shall consent to
or permit any amendment, supplement or other modification of the terms
and provisions of any Operative Agreement, in each case without the
prior written consent of the Agent except as described in Section 10.5
of this Agreement;
(j) The Owner Trustee (i) shall take such actions and shall
refrain from taking such actions with respect to the Operative
Agreements or the Properties and shall grant such approvals and
otherwise act or refrain from acting with respect to the Operative
Agreements or the Properties in each case as directed in writing by the
Agent or, in connection with Section 10.5 hereof, the Lessee,
notwithstanding any contrary instruction or absence of instruction by
any Holder or Holders; and (ii) shall not take any action, grant any
approvals or otherwise act under or with respect to the Operative
Agreements or any matters relating to the Properties without first
obtaining the prior written consent of the Agent (and without regard to
any contrary instruction or absence of instruction by any Holder);
provided, however, that notwithstanding the foregoing provisions of
this subparagraph (j) the Owner Trustee, the Agent and the Holders each
acknowledge, covenant and agree that, with respect to all matters under
the Operative Agreements that require the consent or concurrence of all
of the Lenders pursuant to the terms of Section 9.1 of the Credit
Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor
the Agent shall act or refrain from acting with respect to any
Unanimous Vote Matter until such party has received the approval of
each Lender and each Holder with respect thereto;
(k) Except as otherwise contemplated by the Operative
Agreements, neither the Owner Trustee nor any Holder shall use the
proceeds of any Loan or Holder Funding for any purpose other than the
payment of Transaction Expenses and the fees, expenses and other
disbursements referenced in Sections 9.1(a) and (b) of this Agreement,
the purchase or lease of Properties, the acquisition of Equipment, the
construction of Improvements and the payment of interest regarding the
Loans and the payment of the Holder Yield regarding the Holder
Fundings, in each case accrued under the Credit Agreement or Trust
Agreement, as the case may be, during the period prior to the Term
Commencement Date with respect to a particular Property; and
(l) Upon request of the Lessee, the Lessor shall provide the
Lessee with a copy of its fiduciary tax returns solely for the purpose
of enabling the Lessee to perform its obligations hereunder.
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10.3. Lessee Covenants, Consent and Acknowledgment; Construction Agent
Covenants.
(a) Lessee acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various
personal property, fixtures and real property described therein in
favor of the Agent. Lessee hereby irrevocably consents to the creation,
perfection and maintenance of such Liens.
(b) Lessor hereby instructs Lessee, and Lessee hereby
acknowledges and agrees, that until such time as the Loans are paid in
full and the Liens evidenced by the Security Agreement and the Mortgage
Instruments have been released, (i) any and all Rent and any and all
other amounts of any kind or type under any of the Operative Agreements
due and owing or payable to the Lessor or the Owner Trustee shall
instead be paid directly to the Agent or as the Agent may direct from
time to time and (ii) Lessee shall cause all notices, certificates,
financial statements, communications and other information which is
delivered, or is required to be delivered, to the Lessor, the Owner
Trustee or any Holder also to be delivered at the same time to the
Agent.
(c) Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement without, in each case, obtaining the prior written
consent of the Agent and, to the extent required by the proviso at the
end of Section 10.2(j) hereof, each of the Holders.
(d) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Funding or Loan for any purpose other than the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Section 9.1(a) and (b) of this Agreement, the purchase or
lease of Properties, the acquisition of Equipment, the construction of
Improvements, the payment of interest regarding the Loans and the
payment of the Holder Yield regarding the Holder Fundings, in each case
accrued under the Credit Agreement or Trust Agreement, as the case may
be, during the period prior to the Term Commencement Date with respect
to a particular Property.
(e) The Construction Agent and the Lessee shall restrict the
amount of Equipment located in or on each Property, so that at all
times the Property Cost of the Equipment located in or on a given
Property shall be less than or equal to 10% of the total Property Cost
of such Property, provided, however, that this percentage limitation
shall not apply to any such Equipment consisting of Fixtures or other
goods incorporated into or customarily considered to be part of a
building or structure erected on real
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property (such as heating, ventilating, air-conditioning, electrical
and mechanical equipment or systems, escalators, elevators, wall and
floor coverings, plumbing, pumps, tanks, conduits, wiring, lighting,
security systems, sprinklers and other fire prevention and
extinguishing apparatus). This 10% limitation shall apply to removable
Equipment that (i) is not incorporated into a building or structure or
(ii) is customarily considered to be trade fixtures or operating
equipment for the corrections business of the Lessee.
(f) Neither the Lessee nor the Construction Agent shall create
or permit to exist at any time (and each of the Lessee and the
Construction Agent shall, at its own expense, take such action as may
be necessary to duly discharge, or cause to be discharged) any Lien
against any Property other than Permitted Liens.
(g) The Lessee shall pay (or cause to be paid) to the Agent
the administrative fee (described in the Fee Letter) when and as due
from time to time.
(h) The Lessee and the Construction Agent agree that at all
times, with respect to any Property, the appraised value of such
Property (as shown in the most recent Appraisal of such Property
received by the Agent pursuant to Section 5.3 or otherwise) shall be
not less than 85% of the aggregate Property Cost of such Property; and
any Appraisal obtained to comply with this provision shall be at the
Lessee's and Construction Agent's sole cost and expense.
10.4. Sharing of Certain Payments. The parties hereto acknowledge and
agree that all payments due and owing by the Lessee to the Lessor under the
Lease or any of the other Operative Agreements shall be made by the Lessee
directly to the Agent as more particularly provided in Section 10.3 hereof. The
Holders and the Agent, on behalf of the Lenders, acknowledge the terms of
Section 8 of the Credit Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree all such payments and amounts are to be allocated as provided in Section 8
of the Credit Agreement. In connection therewith the Holders hereby (a) appoint
the Agent to act as collateral agent for the Holders in connection with the Lien
granted by the Mortgage Instruments to secure the Holder Amount and (b)
acknowledge and agree and direct that the rights and remedies of the
beneficiaries of the Lien of the Mortgage Instruments shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Lenders without notice to or consent from the Holders.
10.5. Grant of Easements, Voting at Meetings, etc. The Agent and the
Holders hereby agree that, so long as no Event of Default shall have occurred
and be continuing, and until such time as the Agent gives instructions to the
contrary to the Owner Trustee, the Owner Trustee shall, from time to time at the
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request of the Lessee, in connection with the transactions contemplated by the
Agency Agreement, the Lease or the other Operative Agreements, (i) grant
easements and other rights in the nature of easements with respect to any
Property, (ii) release existing easements or other rights in the nature of
easements which are for the benefit of any Property, (iii) execute and deliver
to any Person any instrument appropriate to confirm or effect such grants or
releases, and (iv) execute and deliver to any Person such other documents or
materials in connection with the acquisition, development or operation of any
Property, including, without limitation, reciprocal easement agreements,
operating agreements, development agreements, plats, replats or subdivision
documents; provided, that each of the agreements and documents referred to in
this Section 10.5 shall be of the type normally executed by the Lessee in the
ordinary course of the Lessee's business and shall be on commercially reasonable
terms so as not to diminish the value of any Property in any material respect.
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.
11.1. Construction Agent's and Lessee's Credit Agreement Rights.
Notwithstanding anything to the contrary contained in the Credit Agreement, the
Agent, the Construction Agent, the Lessee and the Owner Trustee hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and obligation
(as more specifically provided in Section 5.7 hereof) to designate the
portion of the Loans on which interest is due and payable for purposes
of the definition of "Allocated Interest";
(b) the Construction Agent shall have the right to give the
notice referred to in Section 2.3 of the Credit Agreement, to designate
the account to which a borrowing under the Credit Agreement is to be
credited pursuant to Section 2.3 of the Credit Agreement and to provide
the Allocation Notice;
(c) the Lessee shall have the right to terminate or reduce the
Commitments pursuant to Section 2.5(a) of the Credit Agreement and to
make an Extension Request pursuant to Section 2.5(c) of the Credit
Agreement;
(d) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to Section 2.7 of the Credit
Agreement;
(e) the Lessee shall have the right to approve any successor
agent pursuant to Section 7.9 of the Credit Agreement;
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(f) the Lessee shall have the right to consent to any
assignment by a Lender to which the Lessor has the right to consent
pursuant to Section 9.8 of the Credit Agreement; and
(g) without limiting the foregoing clauses (a) through (f),
and in addition thereto, the Lessee shall have the right to exercise
any other right of the Owner Trustee under the Credit Agreement upon
not less than five (5) Business Days' prior written notice from the
Lessee to the Owner Trustee and the Agent.
11.2. Construction Agent's and Lessee's Trust Agreement Rights.
Notwithstanding anything to the contrary contained in the Trust Agreement, the
Construction Agent, the Lessee, the Owner Trustee and the Holders hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and the
obligation (as more specifically provided in Section 5.7 hereof) to
designate the portion of the Holder Fundings on which Holder Yield is
due and payable for purposes of the definition of Allocated Return in
this Agreement;
(b) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to Section 3.8 of the Trust
Agreement;
(c) no removal of the Owner Trustee or appointment of a
successor Owner Trustee pursuant to Section 9.1 of the Trust Agreement
shall be made without the prior written consent (not to be unreasonably
withheld or delayed) of the Lessee; and
(d) the Holders and the Owner Trustee shall not amend,
supplement or otherwise modify any provision of the Trust Agreement in
such a manner as to adversely affect the rights of the Lessee without
the prior written consent (not to be unreasonably withheld or delayed)
of the Lessee.
SECTION 12. TRANSFER OF INTEREST.
12.1. Restrictions on Transfer. The Holders may, directly or
indirectly, assign, convey or otherwise transfer any of their right, title or
interest in or to the Trust Estate or the Trust Agreement with the prior written
consent of the Agent, and (provided no Default or Event of Default has occurred
and is continuing) the Lessee, and (only if such proposed assignee is not a
Lender) the Majority Lenders (which consent in each case shall not be
unreasonably withheld or delayed), provided that such consents shall not be
required for an assignment to an affiliate of the assigning Lender. The Owner
Trustee may, subject to the Lien of the applicable Security Documents, but only
with the prior written consent of the Agent, the Holders
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(which consent may be withheld by the Agent or the Holders in their sole
discretion) and (provided no Default or Event of Default has occurred and is
continuing) the Lessee, directly or indirectly, assign, convey, appoint an agent
with respect to enforcement of, or otherwise transfer any of the Owner Trustee's
right, title or interest in or to any Property, the Lease, the Trust Agreement,
this Agreement (including, without limitation, any right to indemnification
thereunder), or any other document relating to a Property or any interest in a
Property as provided in the Trust Agreement and the Lease. The provisions of the
immediately preceding sentence shall not apply to the obligations of the Owner
Trustee to transfer Property to the Lessee or a third party purchaser pursuant
to Article XXII of the Lease upon payment for such Property in accordance with
each of the terms and conditions of the Lease.
12.2. Effect of Transfer. From and after any transfer effected in
accordance with this Section 12, the transferor shall be released, to the extent
of such transfer, from its liability hereunder and under the other documents to
which it is a party in respect of obligations to be performed on or after the
date of such transfer; provided, however, that any transferor Holder shall
remain liable under Article XI of the Trust Agreement to the extent that the
transferee Holder shall not have assumed the obligations of the transferor
Holder thereunder. Upon any transfer by the Owner Trustee or a Holder as above
provided, any such transferee shall assume the obligations of the Owner Trustee
and Lessor or the obligations of a Holder, as the case may be, and shall be
deemed an "Owner Trustee", "Lessor" or "Holder", as the case may be, for all
purposes of such documents and each reference herein to the transferor shall
thereafter be deemed a reference to such transferee for all purposes, except as
provided in the preceding sentence. Notwithstanding any transfer of all or a
portion of the transferor's interest as provided in this Section 12, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer including, without limitation, rights to indemnification under
any such document.
SECTION 13. INDEMNIFICATION.
13.1. General Indemnity. Whether or not any of the transactions
contemplated hereby shall be consummated, the Indemnity Provider hereby assumes
liability for and agrees to defend, indemnify and hold harmless each Indemnified
Person on an After Tax Basis from and against any Claims which may be imposed
on, incurred by or asserted against an Indemnified Person by any other Person
(but not to the extent such Claims arise from the gross negligence, willful
misconduct or willful breach of such Indemnified Person) in any way relating to
or arising, or alleged (by any Person asserting such a Claim against an
Indemnified Person) to arise, out of the execution, delivery, performance or
enforcement of this Agreement, the Lease, any other Operative Agreement or the
Bridge Loan Documents or on or with respect to any Ancillary Property or
Property or any part thereof,
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including, without limitation, Claims in any way relating to or arising or
alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, refurbishment, development,
delivery, acceptance, nondelivery, leasing, subleasing, possession, use,
operation, repair, modification, transportation, condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any other
disposition of an Ancillary Property, a Property, or any part thereof, including
the acquisition, holding or disposition of any interest in any Ancillary
Property, Property, lease or agreement comprising a portion of any thereof; (b)
any latent or other defect in any property whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (c) any Environmental Claim, any
violation of Environmental Laws, or any other loss of or damage to any property
or the environment relating to any Property, the Lease, the Agency Agreement or
the Indemnity Provider; (d) the Operative Agreements, or any transaction
contemplated thereby, or the Bridge Loan Documents or any transaction
contemplated thereby; (e) any breach by the Construction Agent or the Lessee of
any of its representations or warranties under the Operative Agreements to which
it is a party or failure by the Construction Agent or the Lessee to perform or
observe any covenant or agreement to be performed by it under any of the
Operative Agreements; (f) the transactions contemplated hereby or by any other
Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle
B of Title I of ERISA; (g) any personal injury, death or property damage,
including without limitation Claims based on strict or absolute liability in
tort; (h) any easement, right, agreement or document referred to in Section 10.5
of this Agreement; or (i) any Lien on any Ancillary Property or any Property
(other than Liens created by the Operative Agreements or Lessor Liens).
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including a
written notice of such proceeding) for any Claim, such Indemnified Person shall
promptly notify the Indemnity Provider in writing and shall not take action with
respect to such Claim without the consent of the Indemnity Provider for thirty
(30) days after the receipt of such notice by the Indemnity Provider; provided,
however, that, in the case of any such Claim, if action shall be required by law
or regulation to be taken prior to the end of such 30-day period, such
Indemnified Person shall endeavor, in such notice to the Indemnity Provider, to
inform the Indemnity Provider of such shorter period, and no action shall be
taken with respect to such Claim without the consent of the Indemnity Provider
before seven (7) days before the end of such shorter period; provided, further,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure materially precludes the Indemnity Provider
from contesting such Claim.
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If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including, without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim can be pursued by the
Indemnity Provider on behalf of or in the name of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control the response to such Claim and (B) in
the case of any Claim, the Indemnified Person may request the Indemnity Provider
to conduct and control the response to such Claim (with counsel to be selected
by the Indemnity Provider and consented to by such Indemnified Person, such
consent not to be unreasonably withheld, conditioned or delayed; provided,
however, that any Indemnified Person may retain separate counsel at the expense
of the Indemnity Provider in the event of a conflict)) by, in the sole
discretion of the Person conducting and controlling the response to such Claim,
(1) resisting payment thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party, except that the Indemnity Provider may not agree to any dismissal or
settlement of, or other agreement in connection with, any claim without the
prior written consent of such Indemnified Person, if such dismissal, settlement
or agreement would require any admission or acknowledgment of any culpability or
wrongdoing by such Indemnified Person or provide for any nonmonetary relief to
be performed by such Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with respect to the
response to such Claim and may settle such Claim if such Indemnified Person
shall waive its rights to any indemnity from the Indemnity Provider that
otherwise would be payable in respect of such Claim (and any future Claim, the
pursuit of which is precluded by reason of such resolution of such Claim) and
shall pay to the Indemnity Provider any amount previously paid or advanced by
the Indemnity Provider pursuant to this Section 13.1 by way of indemnification
or advance for the payment of any amount regarding such Claim other than
expenses of the action relating to such Claim.
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Notwithstanding the foregoing provisions of this Section 13.1, an
Indemnified Person shall not be required to take any action and no Indemnity
Provider shall be permitted to respond to any Claim in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements, (B) the
Indemnified Person shall have reasonably determined that the action to be taken
will not result in any material danger of sale, forfeiture or loss of any
Property, or any part thereof or interest therein, will not interfere with the
payment of Rent, and will not result in risk of criminal liability, (C) if such
Claim shall involve the payment of any amount prior to the resolution of such
Claim, the Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the amount that the Indemnified
Person is required to pay (with no additional net after-tax cost to such
Indemnified Person), (D) in the case of a Claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall
have provided to such Indemnified Person an opinion of independent counsel
selected by the Indemnified Person and reasonably satisfactory to the Indemnity
Provider stating that a reasonable basis exists to contest such Claim, (E) such
claim is covered by insurance and (F) no Event of Default shall have occurred
and be continuing. In addition, an Indemnified Person shall not be required to
contest any Claim in its name (or that of an Affiliate) if the subject matter
thereof shall be of a continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the contest
provisions of this Section 13.1, unless there shall have been a change in law
(or interpretation thereof) and the Indemnified Person shall have received, at
the Indemnity Provider's expense, an opinion of independent counsel selected by
the Indemnified Person and reasonably acceptable to the Indemnity Provider
stating that as a result of such change in law (or interpretation thereof), it
is more likely than not that the Indemnified Person will prevail in such
contest.
13.2. General Tax Indemnity.
(a) The Indemnity Provider shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend each Property
and each Ancillary Property and all Indemnified Persons, and hold them
harmless against, all Impositions on an After Tax Basis.
(b) (i) Subject to the terms of Section 13.2(f), the
Indemnity Provider shall pay or cause to be paid all
Impositions directly to the taxing authorities where feasible
and otherwise to the Indemnified Person, as appropriate, and
the Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable
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request, furnish to such Indemnified Person copies of official
receipts or other satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no
contest is conducted pursuant to Section 13.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including the
computation of the amount payable). In the case of Impositions
for which a contest is conducted pursuant to Section 13.2(f),
the Indemnity Provider shall pay such Impositions or reimburse
such Indemnified Person for such Impositions, to the extent
not previously paid or reimbursed pursuant to subsection (a),
prior to the latest time permitted by the relevant taxing
authority for timely payment after conclusion of all contests
under Section 13.2(f).
(iii) Impositions imposed with respect to a
Property for a billing period during which the Lease expires
or terminates with respect to such Property (unless the Lessee
has exercised the Purchase Option with respect to such
Property or the Lessee has otherwise purchased such Property)
shall be adjusted and prorated on a daily basis between the
Indemnity Provider and the Lessor, whether or not such
Imposition is imposed before or after such expiration or
termination and each party shall pay its pro rata share
thereof.
(iv) At the Indemnity Provider's request, the
amount of any indemnification payment by the Indemnity
Provider pursuant to subsection (a) shall be verified and
certified by an independent public accounting firm mutually
acceptable to the Indemnity Provider and the Indemnified
Person. The fees and expenses of such independent public
accounting firm shall be paid by the Indemnity Provider unless
such verification shall result in an adjustment in the
Indemnity Provider's favor of 15% or more of the payment as
computed by the Indemnified Person, in which case such fee
shall be paid by the Indemnified Person.
(v) The Indemnified Persons shall use good faith
efforts to take lawful deductions in their respective tax
returns so as to reduce the Impositions required to
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be reimbursed by the Indemnity Provider hereunder; provided,
however, that the failure of any Indemnified Person to take
any deduction shall not impair in any way such Person's right
to indemnification from the Indemnity Provider for any
Impositions.
(c) (i)The Indemnity Provider shall be responsible for
preparing and filing any real and personal property or ad valorem tax
returns with respect to each Property or Ancillary Property. In case
any other report or tax return shall be required to be made with
respect to any obligations of the Indemnity Provider under or arising
out of subsection (a) and of which the Indemnity Provider has knowledge
or should have knowledge, the Indemnity Provider, at its sole cost and
expense, shall notify the relevant Indemnified Person of such
requirement and (except if such Indemnified Person notifies the
Indemnity Provider that such Indemnified Person intends to file such
report or return) (A) to the extent required or permitted by and
consistent with Legal Requirements, make and file in Indemnity
Provider's name such return, statement or report; and (B) in the case
of any other such return, statement or report required to be made in
the name of such Indemnified Person, advise such Indemnified Person of
such fact and prepare such return, statement or report for filing by
such Indemnified Person or, where such return, statement or report
shall be required to reflect items in addition to any obligations of
the Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to be
properly made with respect to any obligations of the Indemnity Provider
under or arising out of subsection (a). Such Indemnified Person shall,
upon the Indemnity Provider's request and at the Indemnity Provider's
expense, provide any data maintained by such Indemnified Person (and
not otherwise available to or within the control of the Indemnity
Provider) with respect to any Property which the Indemnity Provider may
reasonably require to prepare any required tax returns or reports.
(d) If as a result of the payment or reimbursement by the
Indemnity Provider of any Imposition or other reasonable expenses of
the Lessor or the payment of any Transaction Expenses incurred in
connection with the transactions contemplated by the Operative
Agreements, the Lessor, the Holders or partners of any Holder shall
suffer a net increase in any federal, state or local income tax
liability, the Indemnity Provider shall indemnify such Persons (without
duplication of any indemnification required by subsection (a)) on an
After Tax Basis for the amount of such increase. The calculation of any
such net increase shall take into account any current or future tax
savings (including tax deductions, net operating loss carry-forward or
tax credits) realized or reasonably expected to be realized by such
Person in respect thereof, as well as any
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interest, penalties and additions to tax payable by such Lessor, or
such Holder, or such Affiliate, in respect thereof.
(e) As between the Indemnity Provider on one hand, and the
Lessor or the Agent, any Lender or any Holder on the other hand, the
Indemnity Provider shall be responsible for, and the Indemnity Provider
shall indemnify and hold harmless the Lessor, the Agent, the Lenders
and each Holder (without duplication of any indemnification required by
subsection (a)) on an After Tax Basis against, any obligation for
United States or foreign withholding taxes imposed in respect of
payments on the Notes or Certificates or with respect to Rent payments
under the Lease (and, if the Lessor, the Agent, any Lender or any
Holder receives a demand for such payment from any taxing authority,
the Indemnity Provider shall discharge such demand on behalf of the
Lessor, the Agent, such Lender or such Holder); provided, however, that
the right of any Lender to make a claim for indemnification under this
Section 13.2(e) is subject to the compliance by such Lender with the
requirements of Section 2.13 of the Credit Agreement.
(f) (i) If a written Claim is made against any
Indemnified Person, or if any proceeding shall be commenced
against such Indemnified Person (including a written notice of
such proceeding), for any Impositions, such Indemnified Person
shall promptly notify the Indemnity Provider in writing and
shall not take action with respect to such Claim or proceeding
without the consent of the Indemnity Provider for thirty (30)
days after the receipt of such notice by the Indemnity
Provider; provided, however, that, in the case of any such
Claim or proceeding, if action shall be required by law or
regulation to be taken prior to the end of such 30- day
period, such Indemnified Person shall, in such notice to the
Indemnity Provider, inform the Indemnity Provider of such
shorter period, and no action shall be taken with respect to
such Claim or proceeding without the consent of the Indemnity
Provider before seven (7) days before the end of such shorter
period; provided, further, that the failure of such
Indemnified Person to give the notices referred to this
sentence shall not diminish the Indemnity Provider's
obligation hereunder except to the extent such failure
materially precludes the Indemnity Provider from contesting
such Claim.
(ii) If, within thirty (30) days of receipt of
such notice from the Indemnified Person (or such shorter
period as the Indemnified Person has notified the Indemnity
Provider is required by law or regulation for the Indemnified
Person to commence such contest), the Indemnity Provider shall
request in writing that such Indemnified Person contest such
Imposition, the
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Indemnified Person shall, at the expense of the Indemnity
Provider, in good faith conduct and control such contest
(including, without limitation, by pursuit of appeals)
relating to the validity, applicability or amount of such
Imposition (provided, however, that (A) if such contest can be
pursued independently from any other proceeding involving a
tax liability of such Indemnified Person, the Indemnified
Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control such contest and (B)
in the case of any contest, the Indemnified Person may request
the Indemnity Provider to conduct and control such contest
(with counsel to be selected by the Indemnity Provider and
consented to by such Indemnified Person, such consent not to
be unreasonably withheld, conditioned or delayed; provided,
however, that any Indemnified Person may retain separate
counsel at the expense of the Indemnity Provider in the event
of a conflict)) by, in the sole discretion of the Person
conducting and controlling such contest, (1) resisting payment
thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made,
using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4)
taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
(iii) The party controlling any contest shall
consult in good faith with the non-controlling party and shall
keep the non-controlling party reasonably informed as to the
conduct of such contest; provided, that all decisions
ultimately shall be made in the sole discretion of the
controlling party, except that the Indemnity Provider may not
agree to any dismissal or settlement of, or other agreement in
connection with, any claim without the prior written consent
of such Indemnified Person, if such dismissal, settlement or
agreement would require any admission or acknowledgment of any
culpability or wrongdoing by such Indemnified Person or
provide for any nonmonetary relief to be performed by such
Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with
respect to the contest of any Imposition and may settle such
contest if such Indemnified Person shall waive its rights to
any indemnity from the Indemnity Provider that otherwise would
be payable in respect of such Imposition (and any future Claim
by any taxing authority, the contest of which is precluded by
reason of such resolution of such contest) and shall pay to
the Indemnity Provider any amount previously paid or advanced
by the Indemnity Provider pursuant to this Section 13.2 by way
of indemnification or advance for
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the payment of any amount regarding such Imposition other than
expenses of such contest.
(iv) Notwithstanding the foregoing provisions of
this Section 13.2, an Indemnified Person shall not be required
to take any action and no Indemnity Provider shall be
permitted to contest any Imposition in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall
have agreed to pay and shall pay to such Indemnified Person on
demand and on an After Tax Basis all reasonable costs, losses
and expenses that such Indemnified Person actually incurs in
connection with contesting such Imposition, including, without
limitation, all reasonable legal, accounting and investigatory
fees and disbursements, (B) the Indemnified Person shall have
reasonably determined that the action to be taken will not
result in any material danger of sale, forfeiture or loss of
any Property, or any part thereof or interest therein, will
not interfere with the payment of Rent, and will not result in
risk of criminal liability, (C) if such contest shall involve
the payment of the Imposition prior to the contest, the
Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the Imposition
that the Indemnified Person is required to pay (with no
additional net after-tax cost to such Indemnified Person), (D)
in the case of a Claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the Indemnity
Provider shall have provided to such Indemnified Person an
opinion of independent tax counsel selected by the Indemnified
Person and reasonably satisfactory to the Indemnity Provider
stating that a reasonable basis exists to contest such Claim,
and (E) no Event of Default shall have occurred and be
continuing. In addition, an Indemnified Person shall not be
required to contest any claim in its name (or that of an
Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 13.2, unless there shall
have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity
Provider's expense, an opinion of independent tax counsel
selected by the Indemnified Person and reasonably acceptable
to the Indemnity Provider stating that as a result of such
change in law (or interpretation thereof), it is more likely
than not that the Indemnified Person will prevail in such
contest.
13.3. Environmental Indemnity. Without the limiting the generality of
the foregoing, whether or not the transactions contemplated hereby shall be
consummated, the Indemnity Provider
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hereby assumes liability for and agrees to defend, indemnify and hold harmless
each Indemnified Person on an after Tax Basis from and against any Claims which
may be imposed on, incurred by or asserted against an Indemnified Person by any
other Person (but not to the extent such Claims arise from the gross negligence,
willful misconduct or willful breach of such Indemnified Person) in any way
relating to or arising, or alleged (by any Person asserting such a Claim against
an Indemnified Person) to arise, out of any Environmental Claim, any violation
of Environmental Laws, or any other loss of or damage to any Property or
Ancillary Property or the environment, in each case relating to any Property,
Ancillary Property, the Lease, the Agency Agreement or the Indemnity Provider.
SECTION 14. MISCELLANEOUS.
14.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of any
Property to the Owner Trustee, the acquisition of any Equipment, the
construction of any Improvements, any disposition of any interest of the Owner
Trustee in any Property or any interest of the Holders in the Owner Trust, the
payment of the Notes and any disposition thereof, and shall be and continue in
effect notwithstanding any investigation made by any party and the fact that any
party may waive compliance with any of the other terms, provisions or conditions
of any of the Operative Agreements. Except as otherwise expressly set forth
herein or in other Operative Agreements, the indemnities of the parties provided
for in the Operative Agreements shall survive the expiration or termination of
any thereof.
14.2. No Broker, etc. Each of the parties hereto represents to the
others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed by any
other Person so to act. Any party who is in breach of this representation shall
indemnify and hold the other parties harmless from and against any liability
arising out of such breach of this representation.
14.3. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States certified or registered mail
(postage prepaid), by nationally recognized courier service, by hand or by
telecopy with confirming notice and any such notice shall become effective upon
receipt and shall be directed to the address of such Person as indicated:
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If to the Construction Agent, to it at the following address:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410-4243
Attention: Mr. David Watson, Controller and
Chief Accounting Officer
Telephone No.: (800) 666-5640 Ext. 6646
Telecopy No.: (561) 691-6473
If to the Lessee, to it at the following address:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410-4243
Attention: Mr. David Watson, Controller and
Chief Accounting Officer
Telephone No.: (800) 666-5640 Ext. 6646
Telecopy No.: (561) 691-6473
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
If to NationsBank, National Association, as a Holder or a Lender, to it at the
following address:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attn: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
with all notices of requests for Holder Fundings, or conversion, continuation or
prepayment of any Holder Funding, to be sent to:
NationsBank Agency Services
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Jamie McCotter
Telephone No.: (704) 388-2374
Telecopy No.: (704) 386-9923
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If to the Agent, to it at the following address:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attn: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
with all notices of borrowing, conversion, continuation or prepayment of any
Loan to be delivered to the address set forth in Section 9.2 of the Credit
Agreement.
If to any other Lender or Holder, to it at the address specified in the
signature pages to the Credit Agreement or Trust Agreement (as applicable), any
applicable amendment thereto, or any applicable Assignment and Assumption.
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
14.4. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
14.5. Amendments and Termination. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the party against which the enforcement of
the termination, amendment, supplement, waiver or modification shall be sought.
This Agreement may be terminated by an agreement signed in writing by the Owner
Trustee, the Holders, the Lessee and the Agent.
14.6. Headings, etc. The Table of Contents and headings of the various
Articles and Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or provisions
hereof.
14.7. Parties in Interest. Except as expressly provided herein, none of
the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto; provided, that the Lenders are intended to be
third-party beneficiaries of this Agreement.
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14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
14.9. Submission to Jurisdiction; Waivers. Each of the parties hereto
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida and the courts of
the United States of America, in each case sitting in Broward County,
Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the respective party at its address set forth in Section
14.3 hereof or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 14.9 any special, exemplary, punitive or
consequential damages.
14.10. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the
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remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render such provision unenforceable in any
other jurisdiction.
14.11. Liability Limited.
(a) The Agent, the Lessee and the Holders each acknowledge and
agree that the Owner Trustee is (except as otherwise expressly provided
herein or therein) entering into this Agreement and the other Operative
Agreements to which it is a party (other than the Trust Agreement and
other than as set forth in Section 7.2 of this Agreement), solely in
its capacity as trustee under the Trust Agreement and not in its
individual capacity and that Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner
Trustee, except for its own gross negligence or willful misconduct and
except as otherwise expressly provided herein or in the other Operative
Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, neither the Lessor nor any Holder (in its capacity as
a Holder) nor any officer, director, shareholder, or partner thereof,
nor any of the successors or assigns of the foregoing (all such Persons
being hereinafter referred to collectively as the "Exculpated
Persons"), shall be personally liable in any respect for any liability
or obligation hereunder or under any other Operative Agreement
including the payment of the principal of, or interest on, the Notes,
or for monetary damages for the breach of performance of any of the
covenants contained in the Credit Agreement, the Notes, this Agreement,
the Security Agreement or any of the other Operative Agreements. The
Agent (for itself and on behalf of the Lenders) agrees that, in the
event the Agent or any Lender pursues any remedies available to them
under the Credit Agreement, the Notes, this Agreement, the Security
Agreement, the Mortgage Instruments or under any other Operative
Agreement, neither the Lenders nor the Agent shall have any recourse
against any Exculpated Person, for any deficiency, loss or Claim for
monetary damages or otherwise resulting therefrom, and recourse shall
be had solely and exclusively against the Trust Estate and the Lessee
(with respect to the Lessee's obligations under the Lease, the
Participation Agreement and the Agency Agreement); but nothing
contained herein shall be taken to prevent recourse against or the
enforcement of remedies against the Trust Estate in respect of any and
all liabilities, obligations and undertakings contained herein, in the
Credit Agreement, in the Notes, in the Security Agreement, the Mortgage
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Instruments or in any other Operative Agreement. Notwithstanding the
provisions of this Section, nothing in this Agreement, the Credit
Agreement, the Notes, the Security Agreement, the Mortgage Instruments
or any other Operative Agreement shall: (i) constitute a waiver,
release or discharge of any indebtedness or obligation evidenced by the
Notes or arising under this Agreement, the Security Agreement, the
Mortgage Instruments or the Credit Agreement or secured by the Security
Agreement, the Mortgage Instruments or any other Operative Agreement,
but the same shall continue until paid or discharged; (ii) relieve the
Lessor or any Exculpated Person from liability and responsibility for
(but only to the extent of the damages arising by reason of): (a)
active waste knowingly committed by such Lessor or such Exculpated
Person with respect to the Properties or (b) any fraud, gross
negligence, willful misconduct or willful breach on the part of such
Lessor or such Exculpated Person; (iii) relieve such Lessor or such
Exculpated Person from liability and responsibility for (but only to
the extent of the moneys misappropriated, misapplied or not turned
over) (a) misappropriation or misapplication by such Lessor (i.e.,
application in a manner contrary to any Operative Agreement) of any
insurance proceeds or condemnation award paid or delivered to such
Lessor by any Person other than the Agent, (b) any deposits or any
escrows or amounts owed by the Lessee under the Agency Agreement held
by such Lessor or (c) any rents or other income received by such Lessor
from the Lessee that are not turned over to the Agent; or (iv) affect
or in any way limit the Agent's rights and remedies under any Operative
Agreement with respect to the Rents and its rights thereunder or its
right to obtain a judgment against the Lessor's interest in the
Properties.
14.12. Rights of Lessee. Notwithstanding any provision of the Operative
Agreements, if at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents, the Trust Agreement and the other
Operative Agreements and (ii) of the Lessee under the Operative Agreements have
in each case been satisfied or discharged in full, then the Lessee shall be
entitled to (a) terminate the Lease and (b) receive all amounts then held under
the Operative Agreements and all proceeds with respect to any of the Properties.
Upon the termination of the Lease pursuant to the foregoing clause (a), the
Lessor shall transfer to the Lessee all of its right, title and interest free
and clear of the Lien of the Lease and all Lessor Liens in and to any Properties
then subject to the Lease and any amounts or proceeds referred to in the
foregoing clause (b) shall be paid over to the Lessee.
14.13. Further Assurances. The parties hereto shall promptly cause to
be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts,
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conveyances, documents and assurances as the other parties may from time to time
reasonably request in order to carry out and effectuate the intent and purposes
of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Lessee, at its own
expense and without need of any prior request from any other party, shall take
such action as may be necessary (including any action specified in the preceding
sentence), or (if Owner Trustee shall so request) as so requested, in order to
maintain and protect all security interests provided for hereunder or under any
other Operative Agreement.
14.14. Calculations under Operative Agreements. The parties hereto
agree that all calculations and numerical determinations to be made under the
Operative Agreements by the Owner Trustee shall be made by the Agent and that
such calculations and determinations shall be conclusive and binding on the
parties hereto in the absence of manifest error.
14.15. Confidentiality. Each of the Owner Trustee, the Holders, the
Agent and the Lenders severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or its
Subsidiaries which is provided to it by the Lessee or its Subsidiaries, and
shall not intentionally disclose such information to any Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
(c) to any Affiliate of any such Person or to counsel,
auditors or accountants retained by any such Person or any such
Affiliate, provided they agree to keep such information confidential as
if such Person or Affiliate were party to this Agreement and to
financial institution regulators, including examiners of any Lender,
the Agent or the Owner Trustee, any Holder or any Affiliate in the
course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of the Agent, the
60
<PAGE> 65
Owner Trustee, the Lessor, any Lender or any Holder under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including, without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; provided, however,
that such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) the Agent, any Lender or any Holder may disclose such
information to the Agent, any Lender or any Holder; or
(g) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution (who will in turn be required by the Agent
to agree in writing to maintain confidentiality as if it were a Lender
originally party to the Credit Agreement) or (ii) assignment by any
Holder of interests in the Trust Agreement to another Person (who will
in turn be required by the transferring Holder to agree in writing to
maintain confidentiality as if it were a Holder originally party to
this Participation Agreement).
14.16. Calculation of Rent, Interest, Holder Yield and Fees. Except as
otherwise expressly set forth in the Operative Agreements, all calculation of
Rent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Facility Fees,
or Holder Facility Fees payable hereunder shall be computed based on the actual
number of days elapsed over a year of 360 days.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
61
<PAGE> 66
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
WACKENHUT CORRECTIONS CORPORATION,
as Construction Agent
By:
-----------------------------------------
Name: George C. Zoley
Title:Chief Executive Officer
WACKENHUT CORRECTIONS CORPORATION,
as Lessee
By:
-----------------------------------------
Name: George C. Zoley
Title:Chief Executive Officer
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly stated
herein, but solely as Owner Trustee under
the Wackenhut Corrections Trust 1997-1
By:
-----------------------------------------
Name: Val T. Orton
Title:Vice President
SIGNATURE PAGE 1
<PAGE> 67
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name: Maria Conroy
Title:Senior Vice President
NATIONSBANK, NATIONAL ASSOCIATION,
as a Holder
By:
-----------------------------------------
Name: Maria Conroy
Title:Senior Vice President
NATIONSBANK, NATIONAL ASSOCIATION,
as a Lender
By:
-----------------------------------------
Name: Maria Conroy
Title:Senior Vice President
SIGNATURE PAGE 2
<PAGE> 68
SCOTIABANC INC., as a Holder
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SCOTIABANC INC., as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 3
<PAGE> 69
BARNETT BANK, N.A., as a Holder
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BARNETT BANK, N.A., as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 4
<PAGE> 70
BANQUE PARIBAS, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 5
<PAGE> 71
THE SAKURA BANK, LIMITED
ATLANTA AGENCY, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 6
<PAGE> 72
SUMMIT BANK, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 7
<PAGE> 73
Schedule 1
Initial Holders
<TABLE>
<CAPTION>
Holder
Name Commitment
- ---- ----------
<S> <C>
NationsBank, National $ 645,545.22
Association
Barnett Bank, N.A. $ 545,454.48
ScotiaBanc, Inc. $ 1,200,000.00
</TABLE>
Schedule-1
<PAGE> 74
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2 and 5.2 of the Participation Agreement)
Wackenhut Corrections Corporation, a Florida corporation (the
"Company") hereby certifies as true and correct and delivers the following
Requisition to First Security Bank, National Association, not individually,
except as expressly stated in the Participation Agreement (hereinafter defined),
but solely as Owner Trustee under the Wackenhut Corrections Trust 1997-1
("Lessor"), the Holders (as defined in the Participation Agreement), and
NationsBank, National Association, as Administrative Agent for the Lenders
pursuant to the Credit Agreement (the "Agent"):
Reference is made herein to that certain Participation Agreement dated
as of June 19, 1997 (as such agreement may be amended, restated, supplemented or
otherwise modified from time to time, the "Participation Agreement") among the
Company, in its capacity as Construction Agent, the Company, as Lessee, the
Lessor, the Holders party thereto, the Lenders party thereto, and the Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings set forth therefor in the Participation Agreement.
Check one:
____ INITIAL CLOSING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
____ PROPERTY CLOSING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
____ CONSTRUCTION FUNDING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
1. Transaction Expenses and other fees, expenses and disbursements under
Section 9.1(a) or (b) of the Participation Agreement and any and all
other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like (with supporting invoices or closing
statement attached):
A-1
<PAGE> 75
<TABLE>
<CAPTION>
Party to Whom Amount is Owed
Amount Owed (in U.S. Dollars)
------------- -----------------
<S> <C>
------------- -----------------
------------- -----------------
------------- -----------------
------------- -----------------
------------- -----------------
</TABLE>
2. Legal Description of Land: See attached Schedule 1
[Note: Include legal description only with initial requisition form for
any particular piece of Land and any subsequent changes]
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Total Property Cost requested to date with respect to this
Property (excluding the amount requested herein): $________
7. Total additional amount requested herein: $_____________
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $__________ ($__________
constituting Series A Loans and $__________ constituting Series B Loans) and
that the Holder[s] make [a] Holder Fundings[s] to the Lessor in the amount of
$__________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitment and (ii) each of the provisions of the
Participation Agreement applicable to the Loans and Holder Fundings requested
hereunder have been complied with as of the date of this Requisition.
The Company hereby certifies that the Land, Improvements, Equipment and
Work described herein are necessary and appropriate for its business operations.
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
--------------------------------
Name: George C. Zoley
Title: Chief Executive Officer
A-2
<PAGE> 76
Schedule 1
Legal Description of Land
To be included only with initial requisition form and to show
any changes to legal description.
A-3
<PAGE> 77
Schedule 2
Description of Improvements
A-4
<PAGE> 78
Schedule 3
Description of Equipment
<TABLE>
<CAPTION>
================================================================================
General Description Make Model Serial Number
------------------- ---- ----- -------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
</TABLE>
A-5
<PAGE> 79
Schedule 4
Work
(a) Work Performed for which the Funding is requested:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(b) Property to which such Work relates:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
A-6
<PAGE> 80
EXHIBIT B
WACKENHUT CORRECTIONS CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.6 of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. The address for the subject Property is _______________________________
________________________________________________________.
2. The Completion Date for the construction of Improvements at the
Property occurred on __________________.
3. The aggregate Property Cost for the Property was $________________. [If
any of the Property consists of Tangible Personal Property, the portion
of the Property Cost attributable to such Tangible Personal Property
was $_____________.]
4. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted expenditure amounts referenced above in Section
3 of this Officer's Certificate.
5. All Improvements have been made in accordance with all applicable Legal
Requirements, in a good and workmanlike manner and otherwise in full
compliance with the standards and practices of the Company with respect
to Company-owned properties and improvements.
6. No consent or approval of any Person is required for any of the
Improvements except for consents and approvals which have already been
obtained.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of June 19, 1997 among the Company, as Lessee and as Construction
Agent, First Security Bank, National Association, as Owner Trustee under the
Wackenhut Corrections Trust 1997-1, the Holders party thereto, the Lenders party
thereto, and NationsBank, National Association, as the Administrative Agent for
the Lenders (as such agreement may be amended, modified, supplemented or
restated from time to time).
B-1
<PAGE> 81
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this ___ day of _______________, 199_.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-2
<PAGE> 82
Schedule 1
[itemized expenditures]
B-3
<PAGE> 83
EXHIBIT C
FORM OF OPINION
OF COUNSEL TO
WACKENHUT CORRECTIONS CORPORATION
AND WCC RE HOLDINGS, INC.
C-1
<PAGE> 84
EXHIBIT D
WACKENHUT CORRECTIONS CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 6.1(e) of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the
"Company"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Company contained in
the Operative Agreements to which it is a party is true and correct in
all material respects on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing under any
Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in full
force and effect with respect to it.
4. The Company has performed and complied with all covenants, agreements
and conditions contained in the Participation Agreement (hereinafter
defined) or in any Operative Agreement required to be performed or
complied with by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of June 19, 1997 among the Company, as Construction Agent and
as Lessee, First Security Bank, National Association, as the Owner Trustee, the
Holders party thereto, the Lenders party thereto, and NationsBank, National
Association, as the Administrative Agent.
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this 19th day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
D-1
<PAGE> 85
EXHIBIT E
WACKENHUT CORRECTIONS CORPORATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 6.1(f) of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the
"Company"), DOES HEREBY CERTIFY as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the Resolutions of the Board of Directors of the Company effective as
of ______________, 1997. Such resolutions have not been amended,
modified or rescinded since their date of adoption and remain in full
force and effect as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of
the Certificate of Incorporation of the Company on file in the Office
of the Secretary of State of Florida. Such Certificate of
Incorporation, as amended, remains in full force and effect as of the
date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of
the Bylaws of the Company. Such Bylaws, as amended, remain in full
force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite their
names, and the signatures opposite their names and title are their true
and correct signatures.
<TABLE>
<CAPTION>
Name Office Signature
---- ------ ---------
<S> <C> <C>
------------------ ----------------------- --------------------
------------------ ----------------------- --------------------
</TABLE>
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this 19th day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
E-1
<PAGE> 86
EXHIBIT F
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 6.2(d) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION not individually (except with
respect to paragraph (a) below, to the extent any such representations and
warranties are made in its individual capacity) but solely as owner trustee
under the Wackenhut Corrections Trust 1997-1 (the "Owner Trustee"), DOES HEREBY
CERTIFY as follows:
(a) Each and every representation and warranty of the Owner
Trustee contained in the Operative Agreements to which it is a
party is true and correct on and as of the date hereof.
(b) Each Operative Agreement to which the Owner Trustee is a party
is in full force and effect with respect to it.
(c) The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of June 19, 1997 among Wackenhut Corrections Corporation, as
Construction Agent and as Lessee, First Security Bank, National Association, as
Owner Trustee, the Holders party thereto, the Lenders party thereto, and
NationsBank, National Association, as the Administrative Agent.
IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's Certificate to
be duly executed and delivered as of this 19th day of June, 1997.
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not individually, except as expressly stated
herein, but solely as Owner Trustee under
the Wackenhut Corrections Trust 1997-1
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
F-1
<PAGE> 87
EXHIBIT G
FIRST SECURITY BANK, NATIONAL ASSOCIATION
CERTIFICATE OF ASSISTANT SECRETARY
(Pursuant to Section 6.2(e) of the Participation Agreement)
I, _____________________________, Senior Vice President and a duly
elected and qualified Assistant Secretary of the Board of Directors of First
Security Bank, National Association (the "Association"), hereby certify as
follows:
1. The Association is a National Banking Association duly
organized, validly existing and in good standing under the laws of the United
States. With respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as
amended, 12 U.S.C. 1, et seq., the Comptroller of the
Currency charters and exercises regulatory and
supervisory authority over all National Banking
Associations;
B. On December 9, 1881, the First National Bank of
Ogden, Utah was chartered as a National Banking
Association under the laws of the United States and
under Charter No. 2597;
C. On October 2, 1922, in connection with a
consolidation of The First National Bank of Ogden,
Ogden, Utah, and The Utah National Bank of Ogden,
Ogden, Utah, the title was changed to "The First &
Utah National Bank of Ogden"; on January 18, 1923,
The First & Utah National Bank of Ogden changed its
title to "First Utah National Bank of Ogden"; on
January 19, 1926, the title was changed to "First
National Bank of Ogden"; on February 24, 1934, the
title was changed to "First Security Bank of Utah,
National Association"; and
D. First Security Bank of Utah, National Association,
Ogden, Utah, continues to hold a valid certificate to
do business as a National Banking Association.
2. The Association's Articles of Association, as amended, are
in full force and effect, and a true, correct and complete copy is attached
hereto as Exhibit A and incorporated herein by reference. Said Articles were
last amended October 20, 1975, as required by law on notice at a duly called
special meeting of the shareholders of the Association.
3. The Association's By-Laws, as amended, are in full force
and effect; and a true, correct and complete copy is
G-1
<PAGE> 88
attached hereto as Exhibit B and incorporated herein by reference. Said By-Laws,
still in full force and effect, were adopted September 17, 1942, by resolution,
after proper notice of consideration and adoption of By-Laws was given to each
and every shareholder, at a regularly called meeting of the Board of Directors
with a quorum present.
4. Pursuant to the authority vested in it by an Act of
Congress approved December 23, 1913 and known as the Federal Reserve Act, as
amended, the Federal Reserve Board (now the Board of Governors of the Federal
Reserve System) has granted to the Association now known as "First Security Bank
of Utah, National Association" of Ogden, Utah, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any of the fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with National Banks are permitted to act under the laws of the State of Utah;
and under the provisions of applicable law, the authority so granted remains in
full force and effect.
5. Pursuant to authority vested by Act of Congress (12 U.S.C.
92a and 12 U.S.C. 481, as amended) the Comptroller of the Currency has issued
Regulation 9, as amended, dealing, in part, with the Fiduciary Powers of
National Banks, said regulation providing in sub-paragraph 9.7(a)(1-2):
(1) The board of directors is responsible for the proper
exercise of fiduciary powers by the Bank. All matters
pertinent thereto, including the determination of policies,
the investment and disposition of property held in fiduciary
capacity, and the direction and review of the actions of all
officers, employees, and committees utilized by the Bank in
the exercise of its fiduciary powers, are the responsibility
of the board. In discharging this responsibility, the board of
directors may assign, by action duly entered in the minutes,
the administration of such of the Bank's fiduciary powers as
it may consider proper to assign to such director(s),
officer(s), employee(s) or committee(s) as it may designate.
(2) No fiduciary account shall be accepted without the prior
approval of the board, or of the director(s), officer(s), or
committee(s) to whom the board may have designated the
performance of that responsibility . . . .
6. A Resolution relating to Exercise of Fiduciary Powers was
adopted by the Board of Directors at a meeting held July 26, 1994 at which time
there was a quorum present; said
G-2
<PAGE> 89
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Exhibit C and incorporated herein by reference.
7. A Resolution relating to the Designation of Officers and
Employees to Exercise Fiduciary Powers was adopted by the Trust Policy Committee
at a meeting held August 2, 1995 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Exhibit D and is incorporated herein by
reference.
8. Attached hereto as Exhibit E and incorporated herein by
reference, is a listing of facsimile signatures of persons authorized (herein
"Authorized Signatory or Signatories") on behalf of the Association and its
Trust Group to act in exercise of its fiduciary powers subject to the
resolutions in Paragraphs 6 and 7, above.
9. The principal office of the First Security, National
Association, Trust Group and of its departments, except for the St. George,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at 79 South Main
Street, Salt Lake City, Utah 84111 and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. George, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or
appointed, duly qualified officer or employee of the Association; (ii) holds the
office or job title set forth below his or her name on the date hereof; (iii)
and the facsimile signature appearing opposite the name of each such officer or
employee is a true replica of his or her signature.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this 19th day of June, 1997.
(SEAL)
-----------------------------------
Senior Vice President
Assistant Secretary
G-3
<PAGE> 90
EXHIBIT H
FORM OF
OPINION OF COUNSEL
TO FIRST SECURITY
BANK, NATIONAL ASSOCIATION
H-1
<PAGE> 91
Appendix A
Rules of Usage and Definitions
I. Rules of Usage
The following rules of usage shall apply to this Participation
Agreement and the Operative Agreements (and each appendix, schedule, exhibit and
annex to the foregoing) unless otherwise required by the context or unless
otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions
set forth herein or in any other document shall be equally applicable
to the singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits are references to articles, sections,
paragraphs, clauses, annexes, appendices, schedules or exhibits in or
to such document.
(c) The headings, subheadings and table of contents used in
any document are solely for convenience of reference and shall not
constitute a part of any such document nor shall they affect the
meaning, construction or effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended,
supplemented, restated or replaced from time to time in accordance with
the applicable provisions thereof.
(f) Except as otherwise expressly provided, references to any
law includes any amendment or modification to such law and any rules or
regulations issued thereunder or any law enacted in substitution or
replacement therefor.
(g) When used in any document, words such as "hereunder",
"hereto", "hereof" and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
Appendix A-1
<PAGE> 92
(h) References to "including" means including without limiting
the generality of any description preceding such term and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(i) Unless the context indicates otherwise, the disjunctive
"or" shall include the conjunctive "and."
(j) Each of the parties to the Operative Agreements and their
counsel have reviewed and revised, or requested revisions to, the
Operative Agreements, and the usual rule of construction that any
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Operative
Agreements and any amendments or exhibits thereto.
II. Definitions
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
"acquire" or "purchase" shall mean, with respect to any Property,
unless the context indicates, the acquisition or purchase of such Property by
the Owner Trustee from any Person.
"Acquisition Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) to the Lessor on a
specified date to pay Property Acquisition Costs and other expenses pursuant to
Section 5.3(b) of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with and as
part of an Acquisition Funding.
"Administrative Agent" or "Agent" shall mean, collectively, (a)
NationsBank, together with its Affiliates, as the administrative agent for the
Lenders under this Agreement and the other Operative Agreements and any
successor Administrative Agent who may be appointed pursuant to Section 7.9 of
the Credit Agreement, and (b) NationsBank, together with its affiliates, as
agent and collateral agent for itself, the Lenders and the Holders under the
Security Documents.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person. For the purposes of this definition, "control (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies
Appendix A-2
<PAGE> 93
of a Person, whether through the ownership of voting securities or by contract
or otherwise.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the rate
believed by such recipient to be the highest marginal rate then applicable to
the recipient (less any tax savings realized as a result of the payment of the
indemnified amount) with respect to the receipt by the recipient of such
amounts, such increased payment (as so reduced) is equal to the payment
otherwise required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated as of the
Initial Closing Date, between the Construction Agent and the Lessor, as such
agreement may be amended, modified, restated or supplemented from time to time
in accordance with the terms thereof.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Allocated Interest" with respect to any Construction Period Property
shall mean as of any Scheduled Interest Payment Date, the amount of interest due
and payable on such date with respect to a portion of the Loans (which portion
shall be designated by the Borrower by written notice (an "Allocation Notice")
to the Administrative Agent) having an aggregate principal amount equal to the
Loan Property Cost of such Property as of such date.
"Allocated Return" with respect to any Construction Period Property
shall mean, as of any Scheduled Interest Payment Date, the amount of Holder
Yield due and payable on such date with respect to a portion of the Holder
Fundings (which portion shall be designated by the Owner Trustee by written
notice to the Holders) having an aggregate stated amount equal to the Holder
Property Cost of such Property as of such date.
"Allocation Notice" shall have the meaning given to such term in the
definition of "Allocated Interest."
"Ancillary Property" shall mean the Louisiana Property or the Broward
Property.
"Applicable Margin" shall mean, for each Eurodollar Loan, that percent
per annum set forth below, which shall be based upon the Consolidated Fixed
Charge Coverage Ratio for the Four-Quarter Period most recently ended as
specified below:
Appendix A-3
<PAGE> 94
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Tier Consolidated Fixed Charge Coverage Ratio Applicable Margin
- --------------------------------------------------------------------------------
<S> <C> <C>
I Equal to or greater than 4.00 to 1.00 0.525%
- --------------------------------------------------------------------------------
<CAPTION>
Tier Consolidated Fixed Charge Coverage Ratio Applicable Margin
- --------------------------------------------------------------------------------
<S> <C> <C>
II Equal to or greater than 3.25 to 1.00 0.605%
and less than 4.00 to 1.00
- --------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.775%
and less than 3.25 to 1.00
- --------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 1.025%
and less than 2.75 to 1.00
- --------------------------------------------------------------------------------
</TABLE>
The Applicable Margin shall be established at the end of each Fiscal Quarter of
Wackenhut Corrections (each, a "Determination Date"). Any change in the
Applicable Margin following each Determination Date shall be determined based
upon the computations set forth in the certificate furnished to the Agent
pursuant to Section 7.1(a)(ii) and Section 7.1(b)(ii) of the Existing Wackenhut
Corrections Credit Agreement (as incorporated by reference into Section 28.1 of
the Lease), subject to review and approval of such computations by the Agent,
and shall be effective commencing on the date following the date such
certificate is received (or, if earlier, the date such certificate was required
to be delivered) until the date following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur; provided
however, if Wackenhut Corrections shall fail to deliver any such certificate
within five (5) days after the time period required by such Section 7.1, then
the Applicable Margin shall be Tier IV from the date such certificate was
required to be delivered until the appropriate certificate is so delivered. The
foregoing notwithstanding, from the Initial Closing Date to the date following
the date on which the compliance certificate required by such Section 7.1(b)(ii)
is delivered for the third (3rd) quarter of Fiscal Year 1997, the Applicable
Margin shall be Tier II.
"Applicable Unused Fee Rate" shall mean that percent per annum set
forth below, which shall be based upon the Consolidated Fixed Charge Coverage
Ratio for the Four-Quarter Period most recently ended as specified below:
Appendix A-4
<PAGE> 95
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Tier Consolidated Fixed Charge Coverage Ratio Applicable Unused Fee Rate
- --------------------------------------------------------------------------------
<S> <C> <C>
I Equal to or greater than 4.00 to 1.00 0.175%
- --------------------------------------------------------------------------------
II Equal to or greater than 3.25 to 1.00 0.200%
and less than 4.00 to 1.00
- --------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.250%
and less than 3.25 to 1.00
- --------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 0.300%
and less than 2.75 to 1.00
- --------------------------------------------------------------------------------
</TABLE>
The Applicable Unused Fee Rate shall be established at the end of each Fiscal
Quarter of Wackenhut Corrections (the "Determination Date"). Any change in the
Applicable Unused Fee Rate following each Determination Date shall be determined
based upon the computations set forth in the certificate furnished to the Agent
pursuant to Section 7.1(a)(ii) and Section 7.1(b)(ii) of the Existing Wackenhut
Corrections Credit Agreement (as incorporated by reference into Section 28.1 of
the Lease), subject to review and approval of such computations by the Agent,
and shall be effective commencing on the date following the date such
certificate is received (or, if earlier, the date such certificate was required
to be delivered) until the date following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur; provided
however, if Wackenhut Corrections shall fail to deliver any such certificate
within five (5) days after the time period required by such Section 7.1, then
the Applicable Unused Fee Rate shall be Tier IV from the date such certificate
was required to be delivered until the appropriate certificate is so delivered.
The foregoing notwithstanding, from the Initial Closing Date, the date following
the date on which the compliance certificate required by such Section 7.1(b)(ii)
is delivered for the third (3rd) quarter of Fiscal Year 1997, the Applicable
Unused Fee Rate shall be Tier II.
"Appraisal" shall mean, with respect to any Property an appraisal to be
delivered in connection with Section 5.3 of the Participation Agreement or in
accordance with the terms of Section 10.1(e) of the Lease, in each case prepared
by a reputable appraiser reasonably acceptable to the Agent, which in the
judgment of counsel to the Agent, complies with all of the provisions of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
the rules and regulations adopted pursuant thereto, and all other applicable
Legal Requirements.
Appendix A-5
<PAGE> 96
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved State" shall mean any state in the United States.
"Appurtenant Rights" shall mean (i) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying any Improvements, or the Improvements,
including, without limitation, the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (ii)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached as Exhibit C to the Credit Agreement.
"Assignment of Project Rights" shall mean the Assignment of Project
Rights and Contract Documents dated as of the Initial Closing Date, between the
Owner Trustee and the Agent, as such agreement may be amended, modified,
restated or supplemented from time to time in accordance with the terms thereof.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender.
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (i) the amount of the Holder Commitments over (ii) the
aggregate amount of the Holder Fundings made since the Initial Closing Date.
"Bankruptcy Code" shall mean Title 11 of the U.S. Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto;
"Base Rate" shall have the meaning given such term in the Existing
Wackenhut Corrections Credit Agreement.
"Base Rate Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Base Rate.
"Base Rate Holder Funding" shall mean a Holder Funding bearing a Holder
Yield based on the Base Rate.
"Base Rate Loans" shall mean Loans the rate of interest applicable to
which is based upon the Base Rate.
Appendix A-6
<PAGE> 97
"Basic Rent" shall mean, the sum of (i) the Loan Basic Rent and (ii)
the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent
is due.
"Basic Term" shall mean with respect to any Property, the period
beginning on the commencement of the Term and ending on June 19, 1999.
"Basic Term Expiration Date" shall have the meaning specified in
Section 2.2 of the Lease.
"Bill of Sale" shall mean a Bill of Sale regarding Equipment in form
and substance satisfactory to the Owner Trustee, the Holders and the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which the
Borrower requests the Lenders to make Loans hereunder.
"Bridge Debt" shall mean indebtedness in the outstanding principal
amount of not more than $11,700,930.37 on the Initial Closing Date, and (after
giving effect to a required payment on June 20, 1997) not more than
$4,959,243.37 from and after June 20, 1997, owed by the Owner Trustee to
NationsBank pursuant to the Bridge Loan Documents.
"Bridge Loan Documents" shall mean, collectively, (a) the Promissory
Note dated as of March 14, 1997 by the Owner Trustee in favor of NationsBank, in
the original principal amount of $10,000,000, (b) the Guaranty Agreement dated
as of March 14, 1997 by Wackenhut Corrections Corporation, (c) the
Indemnification Agreement dated as of March 14, 1997 by and among Owner Trustee
and NationsBank, National Association, and (d) the Trust Agreement, as each of
the foregoing agreements or instruments may be amended, modified, supplemented
or restated from time to time (including without limitation by the Consolidated
Amendment No. 1 to Note and Other Agreements dated as of the Initial Closing
Date, among the Owner Trustee, NationsBank and Wachenhut); and any other
agreements, instruments and documents heretofore or hereafter executed or
delivered in connection with any of the foregoing or the transactions
contemplated thereby.
"Bridge Loan Event of Default" shall mean an "Event of Default" as
defined in the Bridge Loan Documents.
"Broward Property" shall mean the property in Broward County, Florida,
currently owned by the Owner Trustee, which was acquired using proceeds of loans
under the Bridge Loan Documents.
Appendix A-7
<PAGE> 98
"Budgeted Total Loan Property Cost" shall mean, at any date of
determination, with respect to any Construction Period Property, an amount equal
to the aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property (including
amounts expected to be expended to pay Allocated Interest and Allocated Return
with respect to such Property).
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina are authorized or
required by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Casualty" shall mean any damage or destruction of all or any portion
of a Property as a result of a fire or other casualty.
"Category" with respect to any Commitment or Loan shall mean a
Commitment or Loan with respect to Series A Loans or Series B Loans, as the case
may be.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss.ss. 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder
evidencing the Holder Fundings made by such Holder and issued pursuant to the
Trust Agreement.
"Change of Control" shall mean (a) in the case of the Incorporated
Covenants, a "Change of Control" as defined in the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or amendments
thereto, or covenants of a New Facility, in each case approved in accordance
with Section 28.1(a) of the Lease); and (b) in the case of a Wackenhut
Corrections Credit Agreement Event of Default, a "Change of Control" as defined
in the Existing Wackenhut Corrections Credit Agreement (as amended, modified or
restated heretofore or hereafter) or any New Facility.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including,
without limitation, reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
Appendix A-8
<PAGE> 99
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto.
"Collateral" shall mean all assets of the Lessor or the Lessee, now
owned or hereafter acquired, upon which a lien is purported to be created by the
Security Documents.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make Series A Loans or Series B Loans, as the case may be, to the
Borrower hereunder in an aggregate principal amount at any one time outstanding
not to exceed the respective amounts for such Category set forth opposite such
Lender's name on Schedule 1.2 of the Credit Agreement, as such amounts may be
reduced or increased from time to time in accordance with the provisions of this
Agreement, the Credit Agreement or the Lease.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment with respect to a Category of Loans
then constitutes of the aggregate Commitments of all Lenders with respect to the
same Category (or, at any time after the Commitments of any such Category shall
have expired or terminated, the percentage which the aggregate principal amount
of such Lender's Loans of such Category then outstanding constitutes of the
aggregate principal amount of all of the Loans of such Category then
outstanding).
"Commitment Period" shall mean the period from the Initial Closing Date
to and including the Construction Period Termination Date, or such earlier date
as the Commitments shall terminate as provided in the Credit Agreement.
"Completed Property" shall mean a Property for which Completion has
occurred or will occur on the date of determination or on the respective
Property Closing Date.
"Completion" shall mean, with respect to a Property, such time as final
completion of the Improvements on such Property has been achieved in accordance
with the Plans and Specifications (excluding punch list items), the Agency
Agreement and the Lease, and in compliance with all material Legal Requirements
and Insurance Requirements and a certificate of occupancy has been issued with
respect to such Property by the appropriate Governmental Authority. If the
Lessor purchases a Property that includes existing Improvements that are to be
immediately occupied by the Lessee, the date of Completion for such Property
shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the earlier
of (i) the date on which Completion for such Property has occurred and (ii) the
Construction Period Termination Date. The foregoing notwithstanding, for the
purposes of Section 2.6(b), 3.2(a)(x), 3.3(b) or 5.1(b) of the Agency Agreement,
Appendix A-9
<PAGE> 100
"Completion Date" shall mean, with respect to a Property, the date on which
Completion for such Property has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of: (a) any actual
or threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including any action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, any Property
or alter the pedestrian or vehicular traffic flow to any Property so as to
result in a change in access to such Property, or (b) an eviction by paramount
title or any transfer made in lieu of any such proceeding or action.
"Consolidated Fixed Charge Coverage Rate" shall have the meaning
assigned thereto in the Existing Wackenhut Corrections Credit Agreement.
"Construction Agent" shall mean Wackenhut Corrections, as construction
agent under the Agency Agreement.
"Construction Budget" shall mean, with respect to any Property, the
cost of constructing and developing any Improvements on such Property as
determined by the Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) on a specified date to
pay Property Costs pursuant to Section 5.4 or 5.5 of the Participation
Agreement.
"Construction Loan" shall mean any Loan made in connection with and as
part of a Construction Funding .
"Construction Loan Property Cost" shall mean, with respect to each
Construction Period Property at any date of determina tion, an amount equal to
(a) the aggregate principal amount of Construction Loans and Interest Payment
Loans made on or prior to such date with respect to such Property minus (b) the
aggregate principal amount of prepayments or repayments, as the case may be, of
the Loans allocated to reduce the Construction Loan Property Cost of such
Property pursuant to Section 2.6(c) of the Credit Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement
Appendix A-10
<PAGE> 101
Date for such Property and ending on the Completion Date for such Property.
"Construction Period Property" shall mean, at any date of
determination, any Property as to which the Term has not commenced on or prior
to such date.
"Construction Period Termination Date" shall mean the earlier of (i)
the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
June 19, 1999.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" (including the correlative meanings of the terms "controlled
by" and "under common control with"), as used with respect to any Person, shall
mean the possession directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Controlled Affiliate" shall mean (a) any Subsidiary of Wackenhut
Corrections or (b) any corporation in which Wackenhut Corrections or any
Subsidiary of Wackenhut Corrections has the power to elect directors having more
than 50% voting control of such corporation.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated as of the
Initial Closing Date, among the Lessor, the Agent, and the Lenders, as specified
therein, as such agreement may be amended, modified, restated or supplemented
from time to time in accordance with the terms thereof.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Credit Agreement, the Notes, and the
Security Documents.
"Deed" shall mean a warranty deed regarding Land or Improvements in
form and substance satisfactory to the Owner Trustee, the Holders and the Agent.
Appendix A-11
<PAGE> 102
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Environmental Claim" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, any actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Material, Environmental
Law, or other order of a Governmental Authority or (d) from any actual or
alleged damage, injury, threat, or harm to health, safety, natural resources, or
the environment.
"Environmental Law" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Governmental
Authority relating to emissions, discharges, releases, threatened releases of
any Hazardous Substance into ambient air, surface water, ground water, publicly
owned treatment works, septic system, or land, or otherwise relating to the
handling, storage, treatment, generation, use, emission or disposal of any
Hazardous Substance or pollution or to the protection of health or the
environment, including without limitation CERCLA, the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq., and state or local statutes analogous
thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens to violate (if the threat requires
remediation under any Environmental Law and is not remediated during any grace
period allowed under such Environmental Law) or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of the Loans or the Holder Fundings by the
Construction Agent, the Lessee or the Lessor as specified or described in either
a Requisition or a Lease Supplement, whether or not now or subsequently attached
to, contained in or used or usable in any
Appendix A-12
<PAGE> 103
way in connection with any operation of any Improvements or other improvements
to real property, including without limitation, all equipment described in the
Appraisal, all heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading and
unloading equipment and systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, fittings and fixtures of every kind
and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement as Schedule I-A.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
the Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.
"Eurodollar Reserve Percentage" shall have the meaning specified in the
Existing Wackenhut Corrections Credit Agreement.
"Eurodollar Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Eurodollar Rate.
"Eurodollar Holder Funding" shall mean a Holder Funding bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Reserve Rate.
"Eurodollar Rate" or "Eurodollar Reserve Rate" shall mean for the
Interest Period for any Eurodollar Loan or Eurodollar Holder Funding comprising
part of the same borrowing or advance (including conversions, extensions and
renewals), a per annum rate calculated according to the following formula:
Interbank Offered Rate
----------------------------------
1-Eurodollar Reserve Percentage.
"Event of Default" shall mean a Lease Event of Default, a Guaranty
Event of Default, an Agency Agreement Event of Default or a Credit Agreement
Event of Default.
"Excepted Payments" shall mean:
Appendix A-13
<PAGE> 104
(a) all indemnity payments (including indemnity payments made pursuant
to Section 13 of the Participation Agreement), whether made by adjustment to
Basic Rent or otherwise, to which the Owner Trustee, any Holder or any of their
respective Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent, Termination Value, or Purchase
Option Price) payable under any Operative Agreement to reimburse the Owner
Trustee, any Holder or any of their respective Affiliates for performing or
complying with any of the obligations of the Lessee under and as permitted by
any Operative Agreement (including without limitation any reimbursement of the
reasonable expenses of the Owner Trustee, the Trust Company and the Holders
incurred in connection with any such payment);
(c) any amount payable to a Holder by any transferee of such interest
of a Holder as the purchase price of such Holder's interest in the Trust Estate
(or portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than such
proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the Owner
Trustee or any Holder other than such proceeds payable to the Agent or any
Lender;
(f) Transaction Expenses or other amounts or expenses paid or payable
to or for the benefit of the Owner Trustee or any Holder;
(g) all right, title and interest of any Holder or the Owner Trustee to
any Property or any portion thereof or any other property to the extent any of
the foregoing has been released from the Liens of the Security Documents and the
Lease pursuant to the terms thereof;
(h) upon termination of the Credit Agreement pursuant to the terms
thereof, all remaining property covered by the Lease or Security Documents;
(i) all payments in respect of the Holder Yield;
(j) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (i) above; and
(k) any rights of either the Owner Trustee or Trust Company to demand,
collect, sue for or otherwise receive and enforce payment of any of the
foregoing amounts, provided that such rights shall not include the right to
terminate the Lease.
Appendix A-14
<PAGE> 105
"Excepted Rights" shall mean the rights retained by the Owner Trustee
pursuant to Section 8.2(a) of the Credit Agreement.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Existing Credit Agent" shall mean the "Agent" as defined in the
Existing Wackenhut Corrections Credit Agreement.
"Existing Wackenhut Corrections Credit Agreement" shall have the
meaning specified in Section 28.1 of the Lease.
"Expected Maximum Property Cost" at any time shall mean the sum of (a)
the then outstanding aggregate Property Cost of all Properties (whether or not
subject to the Lease), plus (b) the maximum total additional Property Cost
expected to be advanced or incurred, on such date or at any time thereafter,
with respect to any Properties (including without limitation any expected
Acquisition Funding, Contribution Funding or other expected Property Costs, and
including without limitation any expected Property Cost referred to in a
Construction Budget).
"Expiration Date" shall mean the Basic Term Expiration Date or the last
day of any Extended Term, if applicable.
"Expiration Date Purchase Option" shall mean the Lessee's option to
purchase all (but not less than all) of the Properties on the Expiration Date.
"Extended Term" shall mean the extension of the Basic Term (or a
previous Extended Term) for a period of one year following the end of the Basic
Term (or such previous Extended Term) with respect to which Lessee has exercised
its Renewal Option pursuant to Section 21.1 of the Lease.
"Facility" shall mean a facility used for the treatment, storage or
disposal of Hazardous Substances.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero, that would be paid in
cash in an arms-length transaction between an informed and willing purchaser and
an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
Appendix A-15
<PAGE> 106
"Federal Funds Effective Rate" shall have the meaning given to such
term in the Existing Wackenhut Corrections Credit Agreement.
"Fee Letter" shall mean that certain letter agreement dated June 17,
1997, among Wackenhut Corrections and NationsBank.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of approximately twelve consecutive
calendar months ending on the Sunday nearest to December 31; references to a
Fiscal Year with a number corresponding to any calendar year (e.g., the "1996
Fiscal Year") refer to the Fiscal Year ending on the Sunday nearest to December
31 of such calendar year (which Sunday may occur in such calendar year or the
following calendar year.)
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including, but not
limited to, strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, governmental
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition.
"Four-Quarter Period" shall have the meaning given to such term in the
Existing Wackenhut Corrections Credit Agreement.
"Funding" shall mean a Construction Funding or an Acquisition Funding.
"GAAP" shall mean "Generally Accepted Accounting Principles" as defined
in the Existing Wackenhut Corrections Credit Agreement.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operation of any Property.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and
Appendix A-16
<PAGE> 107
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including without
limitation any court or governmental body, agency, department, commission,
board, bureau or instrumentality of a governmental body.
"Ground Lease" shall mean (a) a ground lease (in form and substance
satisfactory to the Agent and the Lessor) with respect to any Property owned by
the Lessee and leased to the Lessor where such lease has a ninety-nine year term
and payments set at $1.00 per year, or (b) a ground lease or ground sub-lease of
any Property by any Person to the Lessor, where such lease or sublease (as well
as any other lease or sub-lease with respect to such Property) is in form and
substance, and contains such terms and conditions, as are satisfactory in all
respects to the Agent and the Lessor.
"Guarantor" shall mean Wackenhut Corrections.
"Guaranty Agreement" or "Guaranty" shall mean, collectively, (a) the
Guaranty Agreement (Series A Obligations) dated as of the Initial Closing Date
between the Guarantor and the Agent, and (b) the Guaranty Agreement dated as of
the Initial Closing Date by Wackenhut Corrections to the Lessor, as each such
agreement may be amended, supplemented, restated or modified from time to time
in accordance with the terms thereof.
"Guaranty Event of Default" shall mean any default by the Guarantor of
any of its covenants, agreements or obligations contained under the Guaranty
Agreement.
"Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive material, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (iii) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"Hedging Obligations" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
Appendix A-17
<PAGE> 108
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Fundings made by each Holder to the Trust Estate pursuant to Section 2 of
the Participation Agreement or Section 3.1 of the Trust Agreement less any
payments of any Holder Fundings received by the Holders pursuant to Section 3.4
of the Trust Agreement.
"Holder Applicable Margin" shall mean a rate per annum equal to the
Applicable Margin plus one percent (1.00%).
"Holder Commitment" shall mean, as to any Holder, the obligation of
such Holder to make Holder Fundings to the Lessor in an aggregate principal
amount at any time outstanding not to exceed the respective amount set forth
opposite such Holder's name on Schedule 1, as such amounts may be increased or
reduced from time to time in accordance with the provisions of this Agreement,
the Trust Agreement or the Lease.
"Holder Commitments" shall mean the aggregate of all Holder
Commitments.
"Holder Construction Property Cost" shall mean, with respect to any
Construction Period Property at any date of determination, an amount equal to
(a) the outstanding Holder Fundings made on or prior to such date in connection
with and as part of any Construction Funding for such Property, plus (b) the
outstanding Holder Fundings made on or prior to such date to fund the payment of
Allocated Holder Return with respect to such Property, minus (c) the aggregate
principal amount of prepayments or repayments, as the case may be, of Holder
Fundings described in clause (a) or clause (b).
"Holder Funding" shall mean any Funding made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Overdue Rate" shall mean the rate specified in Section 3.13 of
the Trust Agreement.
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Fundings with respect thereto (including Holder
Fundings with respect to Allocated Return allocated to such Property).
"Holder Unused Fee" shall mean, at any time, the product of (a) the
Applicable Unused Fee Rate multiplied by (b) the average daily amount by which
(i) the aggregate Holder Commitments of the Holders (under the Operative
Agreements) exceeds (ii) the aggregate outstanding principal amount of Holder
Fundings.
"Holder Yield" shall mean with respect to Holder Fundings from time to
time either the Eurodollar Reserve Rate plus the Holder Applicable Margin, or
the Base Rate plus one percent
Appendix A-18
<PAGE> 109
(1.00%) per annum, as elected by the Owner Trustee from time to time with
respect to such Holder Fundings in accordance with the terms of the Trust
Agreement; provided, however, that (i) upon delivery of the notice described in
Section 3.7(c) of the Trust Agreement, the outstanding Holder Fundings of each
Holder shall bear a yield at the Base Rate plus one percent (1.00%) applicable
from time to time from and after the dates and during the periods specified in
Section 3.7(c) of the Trust Agreement, and (ii) upon the delivery by a Holder of
the notice described in Section 3.9(d) of the Trust Agreement or as otherwise
set forth in Section 3.8 of the Trust Agreement, the Holder Fundings of such
Holder shall bear a yield at the Base Rate plus one percent (1.00%) applicable
from time to time after the dates and during the periods specified in Section
3.9(d) or 3.8 (as the case may be) of the Trust Agreement.
"Holders" shall mean the several banks and other financial institutions
which are from time to time holders of Certificates in connection with the
Wackenhut Corrections Trust 1997-1.
"Impositions" shall mean, except to the extent described in the
following sentence, any and all liabilities, losses, expenses, costs, charges
and Liens of any kind whatsoever for fees, taxes, levies, imposts, duties,
charges, assessments or withholdings ("Taxes") including without limitation (i)
any real and personal property taxes, including personal property taxes on any
property covered by the Lease that is classified by Governmental Authorities as
personal property, frontage taxes and real estate or ad valorem taxes in the
nature of property taxes; (ii) any sales taxes, use taxes and other similar
taxes (including rent taxes and intangibles taxes); (iii) any excise taxes; (iv)
any real estate transfer taxes, conveyance taxes, mortgage taxes, stamp taxes
and documentary recording taxes and fees; (v) any taxes that are or are in the
nature of franchise, income, value added, privilege and doing business taxes,
license and registration fees; (vi) any assessments on any Property, including
all assessments for public Improvements or benefits, whether or not such
improvements are commenced or completed within the Term; and (vii) any tax,
Lien, assessment or charge asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, transfer of title, return or other disposition of any
Property or any part thereof or interest
Appendix A-19
<PAGE> 110
therein; (c) the Certificates or the Notes or other indebtedness with respect to
any Property or any part thereof or interest therein; (d) the rentals, receipts
or earnings arising from any Property or any part thereof or interest therein;
(e) the Operative Agreements, the performance thereof, or any payment made or
accrued pursuant thereto; (f) the income or other proceeds received with respect
to any Property or any part thereof or interest therein upon the sale or
disposition thereof; (g) any contract (including the Agency Agreement) relating
to the construction, acquisition or delivery of the Improvements or any part
thereof or interest therein; (h) the issuance of the Certificates or the Notes;
or (i) otherwise in connection with the transactions contemplated by the
Operative Agreements.
The term "Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or
are in the nature of, withholding, sales, use, rental, value added,
transfer or property taxes) that are imposed on an Indemnified Person
(other than Lessor) by the United States federal government or (in the
case of a Person organized under the laws of a foreign country) by a
Governmental Authority of such country, and that are in each case based
on or measured by the net income (including taxes based on capital
gains and minimum taxes or franchise taxes) of such Person; provided
that this clause (i) shall not apply to (and shall not exclude) any Tax
or imposition imposed with respect to a payment (including any Rent
payment) except for (A) the portion of such payment constituting
interest on a Loan or Holder Yield or (B) any such Tax or imposition to
the extent it arises because an Indemnified Person has previously
written off as uncollectible (and reduced the tax basis for) an
Obligation which it has subsequently collected, and provided, further
that this clause (i) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise required
to be so made;
(ii) Taxes and impositions (other than Taxes that are, or
are in the nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Indemnified Person (other than
Lessor) by any state or local jurisdiction or taxing authority within
any state or local jurisdiction and that are based upon or measured by
the net income or net receipts; provided that this clause (ii) shall
not apply to (and shall not exclude) (A) any Tax or imposition imposed
with respect to a payment (including any Rent payment) except for (I)
the portion of such payment constituting interest on a Loan or Holder
Yield or (II) any such Tax or imposition to the extent it arises
because an Indemnified Person has previously written off (and reduced
the tax basis for) an Obligation which it has subsequently collected,
or (B) any Tax or imposition imposed on an
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<PAGE> 111
Indemnified Person by any state or local jurisdiction if such Tax or
imposition would not arise as to such Person but for the location,
possession or use of any Property in such jurisdiction; and provided,
further, that this clause (ii) shall not be interpreted to prevent a
payment from being made on an After Tax Basis if such payment is
otherwise required to be so made;
(iii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs after the
termination of the Lease and redelivery or sale of the property in
accordance with the terms of the Lease (but not any Tax or imposition
that relates to such termination, redelivery or sale or to any period
prior to such termination, redelivery or sale); or
(iv) any Taxes which are imposed on an Indemnified Person
as a result of the gross negligence or willful misconduct of such
Indemnified Person itself (as opposed to any gross negligence or
willful misconduct imputed to such Indemnified Person), but not Taxes
imposed as a result of the ordinary negligence of such Person.
Any Tax or imposition excluded from the defined term "Imposition" by any one of
the foregoing clauses (i) through (iv) shall not be construed as constituting an
Imposition by any provision of any other of the aforementioned clauses.
"Improvements" shall mean, with respect to the construction, renovation
or Modification of a Property, all buildings, structures, Fixtures, and other
improvements of every kind existing at any time and from time to time on or
under the Land purchased, leased or otherwise acquired using the proceeds of the
Loans or the Holder Fundings, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time, including
without limitation (a) any Improvements existing as of the Property Closing Date
as such Improvements may be referenced on the applicable Requisition and (b) any
Improvements made subsequent to such Property Closing Date.
"Incorporated Covenants" shall have the meaning specified in Section
28.1 of the Lease.
"Indebtedness" shall have the meaning assigned thereto in the Existing
Wackenhut Corrections Credit Agreement.
"Indemnified Person" shall mean each of the Lessor, the Owner Trustee,
in its individual and its trust capacity, the Agent, NCMI, the Holders, the
Lenders and their respective
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<PAGE> 112
successors, assigns, directors, shareholders, partners, officers, employees,
agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the
Construction Agent from the date of the Participation Agreement to and including
the Term Commencement Date for such Property and the Lessee for the duration of
the Term for such Property.
"Initial Closing Date" shall mean the date of the Participation
Agreement.
"Initial Construction Funding" shall mean any initial Funding to pay
for: (i) Property Costs for construction of any Improvements; and (ii) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with Section 15.1(e) of the Lease.
"Insurance Requirements" shall mean (a) all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
(b) all requirements of the issuer of any such policy.
"Interbank Offered Rate" shall mean for the Interest Period for any
Eurodollar Loan or Eurodollar Holder Funding comprising part of the same
borrowing or advance (including conversions, extensions and renewals), a per
annum rate equal to the "Interbank Offered Rate" (as defined in the Existing
Wackenhut Corrections Credit Agreement) having an identical Interest Period.
"Interest Payment Loan" shall mean any Loan made to fund the payment of
Allocated Interest with respect to a Construction Period Property.
"Interest Period" shall mean (a) during the Commitment Period the
period beginning on the date of the first Eurodollar Loan (and related
Eurodollar Holder Funding) extended pursuant to the terms of the Operative
Agreements and ending one month later, and, thereafter, the period commencing on
the last day of the preceding Interest Period and ending one month later, and
(b) during the period from and the Commitment Period, (i) initially, the period
commencing on the conversion or continuation date, as the case may be, with
respect to such Eurodollar Loan or Eurodollar Holder Funding and ending, in the
case of any Eurodollar Loan or Eurodollar Holder Funding, one, two, three, six
or nine months thereafter, as selected by the Borrower (in the case of a
Eurodollar Loan) or the Owner Trustee (in the case of a Eurodollar Holder
Funding) in its notice of borrowing, Funding, continuation or conversion, as the
case may be, given with respect thereto; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable
Appendix A-22
<PAGE> 113
to such Eurodollar Loan or Eurodollar Holder Funding and ending one, two, three,
six or nine months thereafter, as selected by the Borrower by irrevocable notice
to Administrative Agent (in the case of a Eurodollar Loan) or by the Owner
Trustee by irrevocable notice to the Holders (in the case of a Eurodollar Holder
Funding) in each case not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided, however, that
all of the foregoing provisions relating to Interest Periods are subject to the
following: (A) if any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Maturity Date, (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month, (D) during the Commitment Period, then
shall not be (on any day) more than one (1) Interest Period in effect for all
Eurodollar Loans and Eurodollar Holder Fundings, and (E) from and after all the
Commitment Period, on any day the sum of the (1) Interest Periods in effect
under the Operative Agreements for all Eurodollar Loans and Eurodollar Holder
Funding plus (2) all "Interest Periods" (as defined in the Existing Wackenhut
Corrections Credit Agreement, as amended from time to time), shall not exceed
eight (8) in the aggregate.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
"IRS" shall mean the United States Internal Revenue Service, or any
successor or analogous organization.
"Land" shall mean (a) a parcel or parcels of real property that is
described on (i) the Requisition issued by the Construction Agent on the
Property Closing Date relating to such parcel or (ii) Schedule I-C to each
applicable Lease Supplement executed and delivered in accordance with the
requirements of Section 2.4 of the Lease and, to the extent set forth in any
such Requisition or Schedule, may include without limitation a leasehold
interest (pursuant to a Ground Lease) in such Land, and (b) all Appurtenant
Rights with respect to such Land.
"Law" shall mean any statute, law, ordinance, code, regulation, rule,
directive, order, writ, injunction or decree of any Governmental Authority.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated as of
the Initial Closing Date, between the Lessor and the Lessee, together with any
Lease Supplements thereto, as such
Appendix A-23
<PAGE> 114
Lease Agreement may from time to time be supplemented, amended, restated or
modified in accordance with the terms thereof.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto, as such Lease Supplement may be supplemented, amended, restated or
modified from time to time.
"Legal Requirements" shall mean all foreign, Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, the
Holders, the Agent, any Lender or any Improvements or the taxation, demolition,
construction, use or alteration of such Improvements, whether now or hereafter
enacted and in force, including without limitation any that require repairs,
modifications or alterations in or to any Property or in any way limit the use
and enjoyment thereof (including all building, zoning and fire codes and the
Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101 et seq., and any
other similar Federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including all Environmental Laws), and all permits, certificates of occupancy,
licenses, authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments which are
either of record or known to the Lessee affecting any Property or the
Appurtenant Rights.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to evidence or perfect the Agent's security
interest (for itself and on behalf of the Lenders) in any Equipment or in any
Improvements.
"Lenders" shall mean the several banks and other financial institutions
from time to time party to the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Fundings on any Scheduled Interest Payment Date
Appendix A-24
<PAGE> 115
pursuant to the Trust Agreement (but not including interest on (i) any such
scheduled Holder Yield due on the Holder Fundings prior to the Term Commencement
Date with respect to the Property to which such Holder Fundings relate or (ii)
overdue amounts under the Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to evidence or perfect the Lessor's interest
under the Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
Trust Company, in its individual capacity, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the Lessor
or Trust Company, in its individual capacity, which is not required by the
Operative Agreements or is in violation of any of the terms of the Operative
Agreements, (c) any claim against the Lessor or Trust Company, in its individual
capacity, with respect to Taxes or Transaction Expenses against which the Lessee
is not required to indemnify Lessor or Trust Company, in its individual
capacity, pursuant to Section 13 of the Participation Agreement or (d) any claim
against the Lessor or Trust Company, in its individual capacity, arising out of
any transfer by the Lessor of all or any portion of the interest of the Lessor
in the Properties, the Trust Estate or the Operative Agreements other than the
transfer of title to or possession of any Properties by the Lessor pursuant to
and in accordance with the Lease, the Credit Agreement, the Security Agreement
or the Participation Agreement or pursuant to the exercise of the remedies set
forth in Article XVII of the Lease.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean, with respect to the Properties on
an aggregate basis as of a specified date, an amount equal to the sum of the
Termination Values with respect to all of the Properties on such date, less the
Maximum Residual Guarantee Amount as of such date with respect to the
Properties.
"Loan Basic Rent" shall mean the interest due on the Loans on any
Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (i) any such Loan prior to the Term Commencement Date with
respect to the Property to which such Loan relates or (ii) any overdue amounts
under Section 2.8(c) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount of
Acquisition Loans, Construction
Appendix A-25
<PAGE> 116
Loans and Interest Payment Loans made on or prior to such date with respect to
such Property minus (b) the aggregate amount of prepayments or repayments as the
case may be of the Loans allocated to reduce the Loan Property Cost of such
Property pursuant to Section 2.6(c) of the Credit Agreement.
"Loans" shall mean, collectively, the Series A Loans and the Series B
Loans.
"Louisiana Property" shall mean the property in Jena, Louisiana,
currently owned by the Owner Trustee, which was acquired using proceeds of loans
under the Bridge Loan Documents.
"Majority Lenders" shall mean at any time, Lenders whose Commitment
Percentages represent at least 51% of the aggregate Commitments.
"Marketing Period" shall mean, if the Lessee has given an Election
Notice in accordance with Section 20.1 of the Lease, the period commencing on
the date such Sale Notice is given and ending on the applicable Expiration Date
or Payment Date.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise) assets, liabilities or
operations of Wackenhut Corrections or any of its Subsidiaries, (b) the ability
of the Lessee or any Subsidiary to perform its respective obligations under any
Operative Agreement to which it is a party, (c) the validity or enforceability
of any Operative Agreement or the rights and remedies of the Agent, the Lenders,
the Holders, or the Lessor thereunder, (d) the validity, priority or
enforceability of any Lien on any Property created by any of the Operative
Agreements, or (e) the value, utility or useful life of any Property or the use,
or ability of the applicable Lessee to use, any Property for the purpose for
which it was intended.
"Maturity Date" shall mean June 19, 2002, or such earlier date as the
Lease may terminate.
"Maximum Property Cost" shall mean the aggregate amount of the Property
Costs for all Properties subject to the Lease as of the applicable determination
date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to
eighty-eight percent (88%) of the aggregate Property Cost for all of the
Properties.
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee in favor of
Appendix A-26
<PAGE> 117
the Agent and evidencing a Lien on a Property, in form and substance reasonably
acceptable to the Agent.
"Multi-employer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or are required
to be made by Wackenhut Corrections or any of its Subsidiaries or ERISA
Affiliates.
"NationsBank" shall mean NationsBank, National Association, a national
banking association.
"NCMI" means NationsBanc Capital Markets, Inc.
"Net Proceeds" shall mean all amounts paid in connection with any
Casualty or Condemnation, and all interest earned thereon, less the expense of
claiming and collecting such amounts, including all costs and expenses in
connection therewith for which the Agent or Lessor is entitled to be reimbursed
pursuant to the Lease.
"Net Sale Proceeds Shortfall" shall mean the amount by which the
proceeds of a sale described in Section 22.1 of the Lease (net of all expenses
of sale) are less than the Limited Recourse Amount with respect to the
Properties if it has been determined that the Fair Market Sales Value of the
Properties at the expiration of the term of the Lease has been impaired by
greater than expected wear and tear during the Term of the Lease.
"New Facility" shall have the meaning specified in Section 28.1 of the
Lease.
"Non-Excluded Taxes" shall have the meaning given to such term in
Section 2.13 of the Credit Agreement.
"Notes" shall mean, collectively, the Series A Notes and the Series B
Notes.
"Occupational Safety and Health Law" shall mean the Occupational Safety
and Health Act of 1970 and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating or relating to, or
imposing liability or standards of conduct concerning, employee health or
safety, as now or at any time hereafter in effect.
"Officer's Certificate" shall mean a certificate signed by any
individual holding the office of vice president or higher, which certificate
shall certify as true and correct the subject matter being certified to in such
certificate.
"Operative Agreements" shall mean, collectively, the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease (and a memorandum thereof in a form
reasonably acceptable
Appendix A-27
<PAGE> 118
to the Agent), each Lease Supplement (and a memorandum thereof in a form
reasonably acceptable to the Agent), the Side Agreement, the Guaranty Agreement,
the Security Agreement, the Assignment of Project Rights, and each Mortgage
Instrument.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(c) of the Credit Agreement.
"Overdue Rate" shall mean (i) with respect to Loan Basic Rent, and any
other amount owed under or with respect to the Credit Agreement or the Security
Documents, the rate specified in Section 2.8(c) of the Credit Agreement, (ii)
with respect to Lessor Basic Rent, the Holder Yield and any other amount owed
under or with respect to the Trust Agreement, the Holder Overdue Rate and (iii)
with respect to any other amount, the Base Rate plus 2%.
"Owner Trustee" shall mean First Security Bank, National Association,
not individually, except as expressly stated in the various Operative
Agreements, but solely as Owner Trustee under the Wackenhut Corrections Trust
1997-1, and any successor or replacement Owner Trustee expressly permitted under
the Operative Agreements.
"Participant" shall have the meaning given to such term in Section 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
as of the date hereof among the Construction Agent, the Lessee, the Owner
Trustee, the Holders party thereto, the Lenders party thereto, and the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms thereof.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Fundings is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Permitted Exceptions" shall mean:
(i) Liens of the types described in clauses (i), (ii) and
(v) of the definition of Permitted Liens;
(ii) Liens for Taxes not yet due; and
(iii) all encumbrances, exceptions, restrictions,
easements, rights of way, servitudes, encroachments and irregularities
in title, other than Liens which, in the
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<PAGE> 119
reasonable assessment of the Agent, materially impair the use of any
Property for its intended purpose.
"Permitted Liens" shall mean:
(i) the respective rights and interests of the parties to
the Operative Agreements as provided in the Operative Agreements;
(ii) the rights of any sublessee or assignee under a
sublease or an assignment expressly permitted by the terms of the
Lease;
(iii) Liens for Taxes that either are not yet due or are
being contested in accordance with the provisions of Section 13.1 of
the Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
30 days past due or are being diligently contested in good faith by
appropriate proceedings, so long as such proceedings satisfy the
conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements satisfactory to the
Lessor and the Agent have been made), which bonding (or arrangements)
shall comply with applicable Legal Requirements, and shall have
effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being prosecuted
in good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease;
(vii) Liens in favor of municipalities to the extent agreed
to by the Lessor and the Agent; and
(viii) Permitted Exceptions.
Appendix A-29
<PAGE> 120
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, limited liability partnership, governmental authority
or any other entity.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Participation
Agreement.
"Primary Property Percentage" shall mean 9%.
"Prime Rate" shall have the meaning given to such term in the Existing
Wackenhut Corrections Credit Agreement.
"Property" shall mean, with respect to each real property site that is
acquired, constructed or renovated pursuant to the terms of the Operative
Agreements, the Land and each item of Equipment and the various Improvements, in
each case located on such Land. Each Property shall be suitable for, and used by
Lessee (or a permitted sublessee) only for, correctional facilities. There shall
not be more than 8 properties in the aggregate that are (or have at any time
been) Properties (including without limitation any properties that were
previously Properties subject to the Operative Agreements but have subsequently
been repurchased by the Lessee, transferred to any other Person, or retained by
the Lessor).
"Property Acquisition Cost" shall mean the cost to Lessor to purchase a
Property on a Property Closing Date.
"Property Closing Date" shall mean each date on which the Lessor
purchases a Property.
"Property Cost" shall mean with respect to a Property the aggregate
amount of the Loan Property Cost plus the Holder Property Cost for such Property
(as such amounts shall be increased equally among all Properties respecting the
Holder Fundings and the Loans extended from time to time to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced in
Sections 9.1(a) and (b) of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchase Option Price" shall have the meaning specified in Section
20.1 of the Lease.
Appendix A-30
<PAGE> 121
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Register" shall have the meaning given to such term in Section 9.9(a)
of the Credit Agreement.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leek, flow, discharge,
disposal or emission of a Hazardous Substance.
"Renewal Option" shall have the meaning specified in Section 21.1 of
the Lease.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chief Executive Officer, the
President, any Senior Vice President or Controller or with respect to financial
matters, the Chief Financial Officer or Controller, except that when used with
respect to the Trust Company or the Owner Trustee, "Responsible Officer" shall
also include the Cashier, any Assistant Cashier, any Trust Officer or Assistant
Trust Officer, the Controller and any Assistant Controller or any other officer
of the Trust Company or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity
with the particular subject.
"Sale Date" shall have the meaning given to such term in Section
22.1(a) of the Lease.
Appendix A-31
<PAGE> 122
"Sale Notice" shall mean a notice given to Lessor in connection with
the election by Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1
of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan (or Eurodollar Holder Funding), the last day of the Interest Period
applicable to such Eurodollar Loan (or Holder Funding), and if such Interest
Period is for more than three months, at intervals of three months after the
first day of such Interest Period and (b) as to any Base Rate Loan (or Base Rate
Holder Funding), the first day of each month, and the date of conversion of such
Loan to a Eurodollar Loan (or conversion of such Holder Funding to a Eurodollar
Holder Funding), and (c) as to any Loan (or Holder Funding), the Maturity Date.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement, dated as of the
Initial Closing Date between the Owner Trustee and NationsBank, National
Association, as agent, as such agreement may be amended, supplemented, restated
or otherwise modified from time to time in accordance with the terms thereof.
"Security Documents" shall mean the collective reference to the Lease,
the Lease Supplements, the Security Agreement, the Mortgage Instruments, and all
other security documents hereafter delivered to the Administrative Agent
granting a lien on any asset or assets of any Person to secure the obligations
and liabilities of the Borrower hereunder or under any of the other Credit
Documents or to secure any guarantee of any such obligations and liabilities.
"Series A Loans" shall mean the loans described as such in Section 2.1
of the Credit Agreement.
"Series A Notes" shall mean the promissory notes issued to the Lenders
pursuant to Section 2.2 of the Credit Agreement evidencing the Series A Loans.
"Series B Loans" shall mean the loans described as such in Section 2.1
of the Credit Agreement.
"Series B Notes" shall mean the promissory notes issued to the Lenders
pursuant to Section 2.2 of the Credit Agreement evidencing the Series B Loans.
"Side Agreement" shall mean the Side Agreement dated as of the Initial
Closing Date among the Lessee, the Construction
Appendix A-32
<PAGE> 123
Agent, the Owner Trustee, the Lenders party thereto, the Holders party thereto
and the Administrative Agent.
"Subsidiary" shall mean, as to any Person, any corporation in which
more than 50% of its outstanding voting stock is owned directly or indirectly by
such Person and/or by one or more of such Persons's Subsidiaries.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to Lessor, the
Holders, the Agent, the Lenders or any other Person under the Lease or under any
of the other Operative Agreements including, without limitation, payments of the
Purchase Option Price, the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Tangible Personal Property" shall mean that portion of the Equipment
which is not and will not become a Fixture or Improvement.
"Taxes" shall have the meaning specified in the definition of
Impositions.
"Term" shall mean the Basic Term and each Extended Term, if any.
"Term Commencement Date" shall have the meaning specified in Section
2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean (a) with respect to all Properties, an
amount equal to the sum of (i) the aggregate outstanding principal of the Notes,
plus (ii) the aggregate accrued interest on the Loans, plus (iii) the aggregate
Holder Property Cost, plus (iv) the aggregate accrued Holder Yield, plus any (v)
other Rent and other amounts due and owing under the Lease or any other
Operative Agreement, and (b) with respect to a particular Property, an amount
equal to the product of the Termination Value of all the Properties times a
fraction, the numerator of which is the Property Cost allocable to the
particular Property in question and the denominator of which is the aggregate
Property Cost for all the Properties.
"Total Condemnation" shall mean a Condemnation that involves a taking
of Lessor's entire title to a Property.
Appendix A-33
<PAGE> 124
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) any and all reasonable fees, charges or other amounts
payable to the Lenders, Agent, the Holders, the Owner Trustee or any
broker which arise under any of the Operative Agreements;
(c) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents;
(d) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement; and
(e) real estate taxes on a Property paid during the
Construction Period.
"Trust Agreement" shall mean the Second Amended and Restated Trust
Agreement dated as of the Initial Closing Date between the Holders and the Owner
Trustee, as such agreement may be amended, modified, restated or supplemented
from time to time in accordance with the terms thereof.
"Trust Company" shall mean First Security Bank, National Association in
its individual capacity, and any successor owner trustee under the Trust
Agreement, in each case in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Tuhnekcaw, Inc." shall mean Tuhnekcaw, Inc., a Delaware corporation.
Appendix A-34
<PAGE> 125
"Type" shall mean, as to any Loan, whether it is a Base Rate Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unfunded Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, at any time, the product of (a) the Applicable
Unused Fee Rate, multiplied by (b) the average daily amount by which (i) the
aggregate Commitments of the Lenders for all Categories of Loans (under the
Operative Agreements) exceeds (ii) the outstanding principal amount of all
Categories of Loans.
"Unused Fee Payment Date" shall mean last Business Day of each March,
June, September and December and the last day of the Commitment Period, or such
earlier date as the Commitments shall terminate as provided in the Credit
Agreement.
"U.S." shall mean the United States of America, its territories, its
possessions and all other areas subject to its jurisdiction.
"Voting Stock" shall mean, with respect to any Person, capital stock
issued by a corporation or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such
Person, even though the right to vote may have been suspended by the happening
of such a contingency.
"Wackenhut Control Group Member" shall mean any of the following: (a)
Wackenhut Corrections, (b) Wackenhut Corporation, (c) Tuhnekcaw, Inc., (d)
George R. Wackenhut, (e) Ruth J. Wackenhut, (f) Richard R. Wackenhut, (g) any
trust over which George R. Wackenhut or Ruth J. Wackenhut has dispositive or
voting power, or (h) any heir or successor of any of the foregoing.
"Wackenhut Corporation" shall mean Wackenhut Corporation, a Florida
corporation.
"Wackenhut Corrections" means Wackenhut Corrections Corporation, a
Florida corporation.
Appendix A-35
<PAGE> 126
"Wackenhut Corrections Credit Agreement Event of Default" shall mean an
"Event of Default" as defined in the Existing Wackenhut Corrections Credit
Agreement (as amended, modified or restated heretofore or hereafter) or any New
Facility.
"Wackenhut Corrections Trust 1997-1" shall mean the grantor trust
created pursuant to the terms and conditions of the Trust Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods or services with respect to any
Property.
Appendix A-36
<PAGE> 1
EXHIBIT 4.3
CREDIT AGREEMENT
Dated as of June 19, 1997
among
First Security Bank, National Association,
not individually, except as
expressly stated herein,
but solely as Owner Trustee
for Wackenhut Corrections Trust 1997-1
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
and
NationsBank, National Association
as Administrative Agent
<PAGE> 2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................1
1.1. Definitional Provisions..................................1
1.2. Defined Terms............................................1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................2
2.1. Commitments..............................................2
2.2. Notes....................................................2
2.3. Procedure for Borrowing; Amounts of Borrowings...........3
2.4. Unused Fees..............................................4
2.5. Termination, Reduction or Extension of
Commitments..............................................4
2.6. Prepayments and Payments.................................5
2.7. Conversion and Continuation Options......................6
2.8. Interest Rates and Payment Dates.........................7
2.9. Computation of Interest..................................8
2.10. Pro Rata Treatment and Payments..........................8
2.11. Increased Costs, Illegality, etc.........................9
2.12. Funding Indemnity.......................................11
2.13. Taxes...................................................11
2.14. Notice of Amounts Payable; Mandatory Assignment.........13
SECTION 3. REPRESENTATIONS AND WARRANTIES....................................14
3.1. Due Organization, etc...................................14
3.2. Authorization; No Conflict..............................15
3.3. Enforceability, etc.....................................15
3.4. Litigation..............................................15
3.5. Lessor Liens............................................16
3.6. Assignment..............................................16
3.7. Defaults................................................16
3.8. Documentation...........................................16
3.9. Use of Proceeds.........................................16
3.10. Securities Act..........................................16
3.11. Chief Place of Business.................................16
3.12. Federal Reserve Regulations.............................16
3.13. Investment Company Act..................................17
SECTION 4. CONDITIONS PRECEDENT..............................................17
4.1. Conditions to Effectiveness.............................17
4.2. Conditions to Each Loan.................................17
SECTION 5. COVENANTS.........................................................18
5.1. Other Activities........................................18
5.2. Ownership of Properties; Indebtedness...................18
5.3. Disposition of Assets...................................18
5.4. Compliance with Operative Agreements....................18
5.5. Further Assurances......................................18
5.6. Notices.................................................19
5.7. Discharge of Liens......................................19
5.8. Trust Agreement.........................................19
SECTION 6. EVENTS OF DEFAULT.................................................19
i
<PAGE> 3
PAGE
SECTION 7. THE ADMINISTRATIVE AGENT..........................................22
7.1. Appointment.............................................22
7.2. Delegation of Duties....................................23
7.3. Exculpatory Provisions..................................23
7.4. Reliance by Administrative Agent........................24
7.5. Notice of Default.......................................24
7.6. Non-Reliance on Administrative Agent and Other
Lenders.................................................24
7.7. Indemnification.........................................25
7.8. Administrative Agent in Its Individual Capacity.........26
7.9. Successor Administrative Agent..........................26
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL........................27
8.1. Collection of Payments and Other Amounts................27
8.2. Certain Remedial Matters................................29
8.3. Release of Properties, etc..............................29
8.4. Excepted Payments.......................................30
SECTION 9. MISCELLANEOUS.....................................................30
9.1. Amendments and Waivers..................................30
9.2. Notices.................................................31
9.3. No Waiver; Cumulative Remedies..........................32
9.4. Survival of Representations and Warranties..............32
9.5. Payment of Expenses and Taxes...........................32
9.6. Successors and Assigns; Participations and
Assignments.............................................33
9.7. Participations..........................................33
9.8. Assignments; Additional Commitment......................33
9.9. The Register; Disclosure................................36
9.10. Adjustments; Set-off....................................37
9.11. Counterparts............................................38
9.12. Severability............................................38
9.13. Integration.............................................38
9.14. GOVERNING LAW...........................................38
9.15. Submission To Jurisdiction; Waivers.....................38
9.16. Acknowledgments.........................................39
9.17. WAIVERS OF JURY TRIAL...................................39
9.18. Nonrecourse.............................................39
9.19. Usury Savings Clause....................................40
Schedule 1.2
Exhibit A SERIES A NOTE
Exhibit B SERIES B NOTE
Exhibit C ASSIGNMENT AND ACCEPTANCE
SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE
RELATING TO (A) THE
CREDIT AGREEMENT
ii
<PAGE> 4
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 19, 1997, is among FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not individually, except as expressly
stated herein, but solely as Owner Trustee for Wackenhut Corrections Trust
1997-1 (the "Owner Trustee" or the "Borrower"), the several banks and other
financial institutions from time to time parties to this Agreement (the
"Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, as Lender and as Administrative Agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. DEFINITIONAL PROVISIONS.
(a) Unless otherwise defined therein, all terms defined in
this Agreement shall have such defined meanings when used in the other
Credit Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) All accounting terms used herein shall have the respective
meanings given to them in accordance with GAAP, unless otherwise
provided herein. All computations and determinations for purposes of
determining compliance with the financial requirements of this
Agreement shall be made in accordance with GAAP, unless otherwise
provided herein.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms or such terms.
1.2. DEFINED TERMS. Each capitalized term used in this Agreement and
not otherwise defined herein shall have the meaning ascribed thereto in Appendix
A to the Participation Agreement (defined below).
(a) "AGREEMENT" shall mean this Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time in
accordance with the terms hereof.
(b) "PARTICIPATION AGREEMENT" means the Participation
Agreement dated as of the date hereof among Wackenhut Corrections
Corporation, as Construction Agent and as Lessee, the Owner Trustee,
the Holders party thereto from time to time, the Lenders party thereto
from time to time,
<PAGE> 5
and NationsBank, National Association, as Administrative Agent, as such
agreement may be amended, modified, restated or supplemented from time
to time in accordance with the
terms thereof.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1. COMMITMENTS.
(a) Subject to the terms and conditions hereof, each Lender
severally agrees to make Series A Loans and Series B Loans to the
Borrower from time to time during the Commitment Period for the purpose
of enabling the Borrower to purchase the Properties and to pay Property
Acquisition Costs, Property Costs and Transaction Expenses, in an
aggregate principal amount as to each Category of Loans at any one time
outstanding not to exceed such Lender's Commitment applicable to such
Category of Loans; provided that all borrowings under this SECTION
2.1(a), when aggregated with corresponding Holder Fundings, shall be
allocated between Series A Loans and Series B Loans as follows: Series
A Loans--88%; Series B Loans--9%; and Holder Fundings--3%.
(b) The Loans may be Base Rate Loans or Eurodollar Loans
having an Interest Period of one, two, three, six or nine months, as
specified in the definition of "Interest Period," subject only to the
limitations specified in such definition and to the provisions of
SECTIONS 2.7, 2.9(c) and 2.11. Any Loan other than a Eurodollar Loan
shall constitute a Base Rate Loan.
2.2. NOTES. The Loans made by each Lender shall be evidenced by
(i) in the case of Series A Loans, a promissory note of the Borrower,
substantially in the form of EXHIBIT A (the "Series A Note"), and (ii) in the
case of Series B Loans, a promissory note of the Borrower, substantially in the
form of EXHIBIT B (the "Series B Note"), in each case with appropriate
insertions as to payee, date and principal amount, payable to the order of such
Lender and in a principal amount equal to the applicable Commitment of such
Lender. Each Lender is hereby authorized to record the date, Type and amount of
each Loan made by such Lender, each continuation thereof, each conversion of all
or a portion thereof to another Type, and the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of any of its Notes, and any such recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded, PROVIDED that the
failure to make any such recordation or any error in such recordation shall not
affect the Borrower's obligations hereunder or under such Note. Each Note shall
(i) be dated the Initial Closing Date (ii) be stated to mature on the Maturity
Date, and (iii) provide for the payment of interest in accordance with
SECTION 2.8.
2
<PAGE> 6
2.3. PROCEDURE FOR BORROWING; AMOUNTS OF BORROWINGS.
(a) The Borrower may borrow under the Commitments during the
Commitment Period on any Business Day that a Funding may be requested
pursuant to the terms of SECTION 5.2 of the Participation Agreement,
PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which must be received by the Administrative Agent
(i) prior to 11:00 A.M., Charlotte, North Carolina time, three Business
Days prior to the requested Borrowing Date if all or any part of the
requested Loans are to be Eurodollar Loans, or (ii) prior to 11:00
A.M., Charlotte, North Carolina time one (1) Business Day prior to the
requested Borrowing Date with respect to any Loans that are to be Base
Rate Loans) specifying (A) the amount to be borrowed (which on any date
shall not be in excess of the then Available Commitments), (B) the
requested Borrowing Date, (C) whether the borrowing is to be of
Eurodollar Loans, Base Rate Loans or a combination thereof, and (D) if
the borrowing is to be a combination of Eurodollar Loans and Base Rate
Loans, the respective amounts of each Type of Loan; PROVIDED, HOWEVER,
that during the Commitment Period (1) there shall be only one (1)
Interest Period in effect at any specified time, which Interest Period
shall apply to all amounts then outstanding hereunder bearing interest
based on the Eurodollar Rate and which Interest Period shall be one
month in length (subject to the adjustments set forth in the definition
of "Interest Period"), (2) the first Interest Period shall commence on
the date that the first Eurodollar Loan hereunder is extended, (3) each
succeeding Interest Period shall begin on the last day of the preceding
Interest Period, and (4) any amounts borrowed or converted hereunder
which are to bear interest based on the Eurodollar Rate may only be
borrowed or converted on the first day of a permitted Interest Period.
Pursuant to the terms of the Participation Agreement, the Borrower
shall be deemed to have delivered such notice upon the delivery of a
notice by the Construction Agent or the Lessee containing such required
information. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Subject
to the terms and conditions hereof (including specifically without
limitation SECTION 4.2 hereof), each Lender will make the amount of its
pro rata share of each borrowing of each Category available to the
Administrative Agent for the account of the Borrower at the office of
the Administrative Agent specified in SECTION 9.2 prior to 2:00 P.M.,
Charlotte, North Carolina time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting an account designated, subject to
SECTION 11.1 of the Participation Agreement, by the Borrower on the
books of such office with the aggregate
3
<PAGE> 7
of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent. To
the extent the principal amount of any Loan is repaid by the Borrower
(in connection with the purchase by the Lessee or Construction Agent,
or transfer to a third party, of a Property pursuant to the Operative
Agreements, but NOT the purchase or transfer of all the Properties
pursuant to the Lease or the transfer of any Property pursuant to the
Lessor's or Agent's foreclosure or similar exercise of remedies
following an Event of Default), the amount repaid shall not reduce the
Commitments and may be reborrowed hereunder (PRO RATA from the
Lenders), subject to any conditions on borrowing (and the limit on the
aggregate number of Properties) set forth herein and in the other
Operative Agreements; and PROVIDED FURTHER that the available amount
shall not be increased hereunder if the Commitments have been
terminated pursuant to SECTION 6 of this Agreement. Except as set forth
in the preceding sentence, no amount of any Loan which is repaid or
prepaid may be reborrowed hereunder.
(b) The Borrower shall deliver an Allocation Notice to the
Administrative Agent at least five (5) Business Days before any
Scheduled Interest Payment Date. On each date which is three (3)
Business Days prior to any Scheduled Interest Payment Date that occurs
during the Commitment Period, the Borrower shall be deemed to have
requested a Eurodollar Loan pursuant to SECTION 2.3(a) in an amount
equal to the aggregate amount of Allocated Interest due and payable on
such date with respect to the Construction Period Properties. Upon
receipt of any Allocation Notice from the Borrower with respect to such
Allocated Interest, the Administrative Agent shall promptly notify each
Lender thereof. The Borrowing Date with respect to any such borrowing
shall be the relevant Scheduled Interest Payment Date (PROVIDED, that
the making of the Loans pursuant to such borrowing shall be subject to
satisfaction of the applicable conditions precedent set forth in
SECTION 4.2) and the proceeds of such borrowing shall be applied to pay
such Allocated Interest. On each such Borrowing Date, the Loan Property
Cost and Construction Loan Property Cost shall be increased by an
amount equal to the Allocated Interest paid on such date with respect
to such Property with the proceeds of such borrowing.
(c) The aggregate amount of any borrowing constituting a
Eurodollar Loan and any conversion thereof shall be in an amount of at
least $1,000,000.
2.4. UNUSED FEES. Promptly after receipt from the Lessee of payment of
any Unused Fees payable pursuant to the Participation Agreement, the
Administrative Agent shall distribute such payment to the Lenders pro rata
according to their respective Commitment Percentages.
4
<PAGE> 8
2.5. TERMINATION, REDUCTION OR EXTENSION OF COMMITMENTS.
(a) The Borrower shall have the right, upon not less than five
(5) Business Days' written notice to the Administrative Agent, to
terminate the Commitments or, from time to time (but not more than
twice), to reduce the amount of the Commitments, such reductions to be
effected pro rata among Categories of Loans and in conjunction with
simultaneous pro rata reductions of the Holder Commitments, PROVIDED,
that (i) after giving effect to such reduction, the aggregate
outstanding principal amount of the Loans of any Category shall not
exceed the aggregate Commitments of such Category and the aggregate
outstanding amount of Holder Fundings shall not exceed the aggregate
Holder Commitments, (ii) such notice shall be accompanied by a
certificate of the Construction Agent stating that the amount equal to
97% of aggregate Budgeted Total Loan Property Cost as of the date of
such reduction does not exceed the aggregate amount of Available
Commitments as of such date after giving effect to such reduction and
(iii) unless a Lease Default or Lease Event of Default has occurred and
is continuing, the Lessee or the Construction Agent shall have
consented to such reduction or termination. Any such reduction of
Commitments and Holder Commitments shall be in an aggregate amount
equal to the lesser of (A) $1,000,000 or any integral multiple thereof
or (B) the remaining Available Commitments of each Category and the
remaining Available Holder Commitments, and shall reduce permanently
the Commitments of each Category and the Holder Commitments then in
effect.
(b) On any date on which the Commitments of any Category shall
automatically be reduced to zero pursuant to SECTION 6, the Borrower
shall prepay all outstanding Loans, together with accrued unpaid
interest thereon and all other amounts owing hereunder or under any
other Credit Document.
2.6. PREPAYMENTS AND PAYMENTS.
(a) The Borrower may at any time and from time to time prepay
the Loans, in whole or in part, without premium or penalty, upon at
least two (2) Business Days' irrevocable notice to the Administrative
Agent, specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, Base Rate Loans or a combination
thereof, and, if a combination thereof, the amount allocable to each;
provided that all prepayments of Loans shall be applied pro rata
between Series A Loans (aggregated as a single amount) and Series B
Loans (aggregated as a single amount). Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein. Except as set forth
in the next-to-last sentence of SECTION 2.3(a), amounts
prepaid may not be reborrowed.
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(b) If on any date the Administrative Agent or the Lessor
shall receive any payment in respect of (i) any Casualty or
Condemnation pursuant to SECTION 15.1(a) or 15.1(g) of the Lease
(excluding any payments in respect thereof which are payable to Lessee
in accordance with the Lease), or (ii) the Termination Value of any
Property in connection with the delivery of a Termination Notice
pursuant to ARTICLE XVI of the Lease, or (iii) the Termination Value of
any Property in connection with the exercise of the option to purchase
any Property under SECTION 17.11, 17.12 OR 20.1 of the Lease, or (iv)
the Termination Value of any Property in connection with the exercise
of a Purchase Option under SECTION 20.2 of the Lease or the exercise of
the option of the Lessee to transfer the Properties to a third party
pursuant to SECTION 20.2 of the Lease, or (v) any payment required to
be made or elected to be made by the Construction Agent to the Lessor
pursuant to the terms of the Agency Agreement, then in each case, the
Borrower shall be required to prepay the principal balance of the Loans
on such date (such prepayment to be applied pro rata as between Series
A Loans (aggregated as a single amount) and Series B Loans (aggregated
as a single amount)) in an amount equal to ninety-seven percent (97%)
of such payment and shall apply the remaining three percent (3%) of
such payment pro rata to the principal amount of outstanding Holder
Fundings.
(c) Each prepayment of the Loans pursuant to SECTION 2.6(b)
shall be allocated to reduce the Loan Property Cost of the affected
Property. Each prepayment of the Loans pursuant to SECTION 2.6(a) shall
be allocated to reduce the respective Loan Property Costs of all
Properties pro rata according to the Loan Property Costs of such
Properties immediately before giving effect to such prepayment. Any
amounts applied to reduce the Loan Property Cost of any Construction
Period Property pursuant to this paragraph (c) shall also be applied to
reduce the Construction Loan Property Cost of such Property until such
Construction Loan Property Cost has been reduced to zero. Each
prepayment of the Loans pursuant to Section 2.6(a) or 2.6(b) shall be
accompanied by a simultaneous prepayment of accrued interest on such
Loan and the simultaneous payment of any amounts payable under SECTION
2.12 hereof in connection with the prepayment of such Loan.
(d) The outstanding principal amount of the Loans shall be due
and payable in full to the Agent for the benefit of each Lender on the
Maturity Date, or earlier as specified herein or in any other Operative
Agreement.
2.7. CONVERSION AND CONTINUATION OPTIONS.
(a) Subject to the restrictions set forth in SECTIONS
2.3, 2.9(c) and 2.11 the Borrower may elect from time to
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time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three (3) Business Days' prior
irrevocable notice of such election. Upon receipt or any such notice
the Administrative Agent shall promptly notify each Lender hereof. All
or any part of outstanding Eurodollar Loans or Base Rate Loans may be
converted as provided herein, PROVIDED that (i) no Base Rate Loan may
be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing, (ii) no Base Rate Loan may be converted
into a Eurodollar Loan which matures after the Maturity Date, (iii)
during the Commitment Period such conversion may only occur on the
first day of an Interest Period permitted pursuant to the terms of
SECTION 2.3 hereof and (iv) such notice of conversion shall contain an
election by the Borrower of an Interest Period for such Eurodollar Loan
to be created by such conversion and such Interest Period shall be in
accordance with the terms of the definition of the term "Interest
Period" as set forth in Appendix A to the Participation Agreement.
(b) Subject to the restrictions set forth in SECTIONS 2.3,
2.9(c) and 2.11 hereof, any Eurodollar Loan may be continued as such
upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving irrevocable notice to the Administrative
Agent in accordance with the applicable provisions of the term
"Interest Period" set forth in Appendix A to the Participation
Agreement, PROVIDED that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is continuing or (ii) if
such Eurodollar Loan would mature after the Maturity Date and PROVIDED,
FURTHER, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not
permitted pursuant to the preceding provision such Loan shall be
automatically converted to a Base Rate Loan on the last day of such
then expiring Interest Period.
2.8. INTEREST RATES AND PAYMENT DATES.
(a) Each Eurodollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Reserve Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable on any Loan or (iii) any other amount
payable hereunder shall not be paid when due (subject to applicable
grace periods) (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum
which is the lesser of (x) the interest rate applicable to such Loan
(or
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in the case of clause (iii) above, the Base Rate) plus 2% and (y) the
highest interest rate permitted by applicable law, in each case from
the date of such non-payment until such amount is paid in full (whether
after or before judgment).
(d) Interest shall be payable in arrears on each Scheduled
Interest Payment Date, PROVIDED that (i) interest accruing pursuant to
paragraph (c) of this SECTION 2.8 shall be payable from time to time on
demand and (ii) each prepayment of any Loan shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
2.9. COMPUTATION OF INTEREST.
(a) Interest shall be calculated on the basis established in
SECTION 14.16 of the Participation Agreement, with respect to length of
a "year" and number of days for which interest is accrued. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Base
Rate, Eurodollar Reserve Percentage, or otherwise, shall become
effective as of the day on which such change would become effective
under the Existing Wackenhut Corrections Credit Agreement. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error.
(c) If the Eurodollar Rate cannot be determined by
the Administrative Agent in the manner specified in the definition of
the term "Eurodollar Rate" referenced in Appendix A to the
Participation Agreement, the Administrative Agent shall give telecopy
or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. Until such time as the Eurodollar Rate can be
determined by the Administrative Agent in the manner specified in such
definition of such term, no further Eurodollar Loans shall be made or
continued as such at the end of the then current Interest Period and
all Loans shall continue as Base Rate Loans.
2.10. PRO RATA TREATMENT AND PAYMENTS.
(a) Except as provided in SECTION 2.14(b)(ii), each
borrowing by the Borrower from the Lenders hereunder and any reduction
of the Commitments of any Category of the Lenders
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shall be made pro rata according to the respective Commitment
Percentages of such Category of the Lenders. Each payment (including
each prepayment) by the Borrower on account of principal of and
interest on the Series A Loans or the Series B Loans, as the case may
be, shall be made pro rata according to the respective outstanding
principal amounts on the Loans of each such Category then held by each
Lender. All payments (including prepayments) to be made by the Borrower
hereunder and under the Notes, whether on account of principal,
interest or otherwise, shall be made without setoff, counterclaim or
other defense and shall be made prior to 12:00 Noon, Charlotte, North
Carolina time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Administrative Agent's office
specified in SECTION 9.2, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day;
PROVIDED, HOWEVER, if such payment includes an amount of interest
calculated with reference to the Eurodollar Rate and the result of such
extension would be to extend such payment into another calendar month,
then such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant
to the preceding two sentences, interest thereon shall be payable at
the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such amount is not made available
to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average
Federal Funds Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this SECTION 2.10(b) shall be
conclusive in the absence of manifest error. If such Lender's share of
such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate as set forth above on demand from the
Borrower.
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2.11. INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements that are expressly included in the calculation of the
Eurodollar Reserve Rate) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request
hereafter adopted, promulgated or made by any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Loans, then the Borrower shall from time
to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent but subject to the terms of SECTION 2.14), pay to
the Administrative Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the
Borrower and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law, but in
each case promulgated or made after the date hereof) affects or would
affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the
amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other commitments of
this type or upon the Loans, then, upon demand by such Lender (with a
copy of such demand to the Administrative Agent but subject to the
terms of SECTION 2.14), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time
as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender reasonably determines
such increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder or upon the Loans. A certificate
as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) Without affecting its rights under SECTION 2.11(a) or
2.11(b) or any other provision of this Agreement, each Lender agrees
that if there is any increase in any cost to or reduction in any amount
receivable by such Lender with respect to which the Borrower would be
obligated to compensate such Lender pursuant to SECTIONS 2.11(a) or
2.11(b), such Lender shall use reasonable efforts to select an
alternative lending office which would not result in any
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such increase in any cost to or reduction in any amount receivable by
such Lender; PROVIDED, HOWEVER, that no Lender shall be obligated to
select an alternative lending office if such Lender determines, in its
sole discretion, that (i) as a result of such selection such Lender
would be in violation of any applicable law, regulation, treaty, or
guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or would impose
an unreasonable burden or additional costs on such Lender.
(d) Notwithstanding any other provision of this Agreement, if
any Lender shall notify the Administrative Agent that the introduction
of or any change in any law or regulation, or in the interpretation of
any law or regulation, makes it unlawful, or any central bank or other
Governmental Authority asserts that it is unlawful, for any Lender to
perform its obligations hereunder to make or maintain Eurodollar Loans,
then (i) each Eurodollar Loan will automatically, at the end of the
Interest Period for such Eurodollar Loan, convert into a Base Rate Loan
and (iii) the obligation of the Lenders to make, convert or continue
Eurodollar Loans shall be suspended until the Administrative Agent
shall notify the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.
2.12. FUNDING INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or reasonable expense which such
Lender may sustain or incur as a consequence of (a) any failure of the Borrower
to make a borrowing of any Loan hereunder after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement (other
than by reason of the failure of a Lender or Lenders to make funds available
without cause), (b) any failure of the Borrower to make any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a voluntary or involuntary prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification shall be in an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued for the period from the date
of such prepayment or of such failure to borrow, convert or continue to the last
day of such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein over (ii) the amount of interest (as determined by such Lender) which
would have accrued to such Lender on such amount by reemploying such funds in
loans of the same type and amount during the period from the date of prepayment
or failure to borrow to the last day of the then applicable Interest Period (or,
in the case of a failure to
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borrow, the Interest Period that would have commenced on the date of such
failure). This covenant shall survive the termination of this Agreement and the
payment of all other amounts payable hereunder.
2.13. TAXES.
(a) All payments made by the Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income,
documentary stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net
income taxes) imposed on the Administrative Agent or any Lender as a
result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced,
this Agreement, any Note or any other Operative Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Administrative Agent or any Lender hereunder
or under the Notes, the amounts so payable to the Administrative Agent
or such Lender shall be increased to the extent necessary to yield to
the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement
and the Notes, PROVIDED, HOWEVER, that the Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the U.S. or a state thereof if such Lender
fails to comply with the requirements of paragraph (b) of this SECTION
2.13. Whenever any Non-Excluded Taxes are payable by the Borrower, then
as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the
Borrower shall indemnify the Administrative Agent and the Lenders for
any incremental taxes, interest, costs or penalties that may become
payable by the Administrative Agent or any Lender as a result of any
such failure. The agreements in this SECTION 2.13(a) shall
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survive the termination of this Agreement and the payment of the Notes
and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
U.S. or a state thereof shall:
(i) deliver to the Borrower and the Administrative
Agent (A) the duly completed copies of IRS Form 1001 or 4224,
or successor applicable form, as the case may be, and (B) an
IRS Form W-8 or W-9, or successor applicable form, as the case
may be;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification on
or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such
Lender so advises the Borrower and the Administrative Agent. Such
Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any U.S. federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from U.S. backup
withholding tax. Each Person that shall become a Participant pursuant
to SECTION 9.7 or a Lender pursuant to SECTION 9.8 shall, upon the
effectiveness of the related transfer, be required to provide all of
the forms and statements required pursuant to this SECTION 2.13(b),
PROVIDED that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which
the related participation shall have been purchased.
2.14. NOTICE OF AMOUNTS PAYABLE; MANDATORY ASSIGNMENT.
(a) NOTICE. In the event that any Lender becomes
aware that any amounts are or will be owed to it pursuant to SECTION
2.11, 2.12 or 2.13 or that it is unable to make Eurodollar Loans, then
it shall promptly notify the Borrower and the Administrative Agent
thereof and, as soon as
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possible thereafter, such Lender shall submit to the Borrower (with a
copy to the Administrative Agent) a certificate indicating the amount
owing to it and the calculation thereof. The amounts set forth in such
certificate shall be conclusive evidence of the obligations of the
Borrower hereunder absent manifest error.
(b) MANDATORY ASSIGNMENT. In the event that any Lender
delivers to the Borrower a certificate pursuant to SECTION 2.14(a) in
connection with amounts payable pursuant to SECTION 2.11 or SECTION
2.12, or such Lender is required to make Loans as Base Rate Loans in
accordance with SECTION 2.11(d) then, subject to SECTION 11.1 of the
Participation Agreement, the Borrower may, at its own expense and in
its sole discretion, (i) require such Lender to transfer or assign, in
whole or in part, without recourse (in accordance with SECTION 9.8),
all or part of its interests, rights (except for rights to be
indemnified for actions taken while a party hereunder) and obligations
under this Agreement to a replacement bank or institution if the
Borrower (subject to SECTION 11.1 of the Participation Agreement), with
the full cooperation of such Lender, can identify a Person who is
ready, willing and able to be such replacement bank or institution with
respect thereto and such replacement bank or institution (which may be
another Lender) shall assume such assigned obligations, or (ii) during
such time as no Default or Event of Default has occurred and is
continuing, terminate the Commitment of such Lender and prepay all
outstanding Loans of such Lender; PROVIDED, HOWEVER, that (x) the
Borrower or such replacement bank or institution, as the case may be,
shall have paid to such Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the
Loans made by it hereunder and all other amounts owed to it hereunder
(and, if such Lender is also a Holder, all Holder Fundings and Holder
Yield accrued and unpaid thereon), (y) any termination of Commitments
shall be subject to the terms of SECTION 2.5(a) and (z) such assignment
or termination of the Commitment of such Lender and prepayment of Loans
does not conflict with any law, rule or regulation or order of any
court or other Governmental Authority.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, each of the Trust Company and the Owner Trustee
hereby represents and warrants to the Administrative Agent and each Lender as
follows (PROVIDED that the representations in SECTIONS 3.8, 3.9, 3.10, 3.12 and
3.13 are made solely by the Owner Trustee in its capacity as such):
3.1. DUE ORGANIZATION, ETC. It is a national banking association duly
organized, validly existing and in good standing
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under the laws of the United States and has the power and authority to enter
into and perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the Holders) has
the trust power and authority to act as the Owner Trustee and to enter into and
perform the obligations under each of the other Operative Agreements to which
the Trust Company or the Owner Trustee, as the case may be, is or will be a
party and each other agreement, instrument and document to be executed and
delivered by it on or before the date this representation is made or deemed made
in connection with or as contemplated by each such Operative Agreement to which
the Trust Company or the Owner Trustee, as the case may be, is or will be a
party.
3.2. AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of each Operative Agreement to which it is or will be a party,
either in its individual capacity or (assuming due authorization, execution and
delivery of the Trust Agreement by the Holders) as the Owner Trustee, as the
case may be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (a) requires or will require any approval of its
stockholders or any approval or consent of any trustee or holders of any of its
indebtedness or obligations, (b) violates or will violate any current law,
governmental rule or regulation relating to its banking or trust powers, (c)
violates or will violate or result in any breach of or constitute any default
under, or result in the creation of any Lien upon any of its property under, (i)
its charter or by-laws, or (ii) any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, bank loan or credit agreement or other
agreement or instrument to which it is a party or by which it or its properties
may be bound or affected, which violation, breach, default or Lien under clause
(ii) would materially and adversely affect its ability, in its individual
capacity or as Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or (d) requires or will require any
Governmental Action by any Governmental Authority regulating its banking or
trust powers.
3.3. ENFORCEABILITY, ETC. The Trust Agreement and, assuming the Trust
Agreement is the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as the case
may be, is or will be a party have been, or will be, duly executed and delivered
by the Trust Company or the Owner Trustee, as the case may be, and the Trust
Agreement and each such other Operative Agreement to which the Trust Company or
the Owner Trustee, as the case may be, is a party constitutes, or upon execution
and delivery will constitute, a legal, valid and binding obligation enforceable
against the Trust Company or the Owner Trustee, as the case may be, in
accordance with the terms thereof.
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3.4. LITIGATION. There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental Authority
that concerns any Property being purchased or leased or Construction Funding
being funded on the date this representation is made or deemed made or that, if
adversely determined, would materially and adversely affect its ability, in its
individual capacity or as Owner Trustee, to perform its obligations under the
Operative Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or will become
a party.
3.5. LESSOR LIENS. Each Property is free and clear of all Lessor Liens
attributable to it in its individual capacity.
3.6. ASSIGNMENT. It has not assigned or transferred any of its right,
title or interest in or under the Lease, the Agency Agreement or its interest in
any Property, except in accordance with the Operative Agreements.
3.7. DEFAULTS. No Default or Event of Default hereunder or under any
other Operative Agreement attributable to it has occurred and is continuing.
3.8. DOCUMENTATION. The Owner Trustee, in its trust capacity, is a
party to no documents, instruments or agreements other than the Operative
Agreements (and any other documents delivered in connection with the Operative
Agreements).
3.9. USE OF PROCEEDS. The Owner Trustee shall use the proceeds of the
Loans solely in accordance with the terms of the Operative Agreements.
3.10. SECURITIES ACT. Neither the Owner Trustee nor any Person
authorized by the Owner Trustee to act on its behalf has offered or sold any
interest in the Trust Estate or the Notes, or in any similar security relating
to a Property, or in any security the offering of which for the purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than in the case of the
Notes, the Lenders, and neither the Owner Trustee nor any Person authorized by
the Owner Trustee to act on its behalf will take any action which would subject,
as a direct result of such action alone, the issuance or sale of any interest in
the Trust Estate or the Notes to the provisions of Section 5 of the Securities
Act of 1933, as amended, or require the qualification of any Operative
Agreement under the Trust Indenture Act of 1939, as amended.
3.11. CHIEF PLACE OF BUSINESS. The Owner Trustee's chief place of
business, chief executive office and office where the documents, accounts and
records relating to the transactions
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contemplated by this Agreement and each other Operative Agreement are kept are
each located at 79 South Main Street, Salt Lake City, Utah 84111.
3.12. FEDERAL RESERVE REGULATIONS. The Owner Trustee is not engaged
principally in, and does not have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Board), and no part of
the proceeds of the Loans will be used by it to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulations G, T, U or X of the Board.
3.13. INVESTMENT COMPANY ACT. The Owner Trustee is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4. CONDITIONS PRECEDENT
4.1. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
is subject to the satisfaction of all conditions precedent set forth in SECTION
6 of the Participation Agreement required by said Section to be satisfied on or
prior to the Initial Closing Date and to the receipt by each Lender of its
Notes, duly executed by the Borrower.
4.2. CONDITIONS TO EACH LOAN. The agreement of each Lender to make any
Loan requested to be made by it on any date is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in or pursuant to
the Operative Agreements shall be true and correct in all material
respects on and as of such date as if made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date.
(b) NO DEFAULT. Neither any Event of Default nor (except as
otherwise permitted under SECTION 8.4 of the Participation Agreement)
any Default shall have occurred and be continuing on such date or after
giving effect to the Loans requested to be made on such date.
(c) PARTICIPATION AGREEMENT CONDITIONS. With respect to each
Acquisition Funding and each Construction Funding, the applicable
conditions precedent to the Funding associated therewith specified in
SECTION 5 of the Participation Agreement shall have been satisfied.
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(d) HOLDER CONTRIBUTION. With respect to each Acquisition
Funding and each Construction Funding, the Administrative Agent shall
be satisfied that the Lessor shall receive from the Holders on the
relevant Borrowing Date an amount equal to the Holder Funding
associated with such Loan.
(e) ALLOCATION NOTICE. With respect to each Interest Payment
Loan, the Administrative Agent shall have received an Allocation Notice
no later than five (5) Business Days prior to the Borrowing Date in
respect thereof.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such Loan that the conditions
contained in this SECTION 4.2 have been satisfied.
SECTION 5. COVENANTS
So long as any Loan or Note remains outstanding and unpaid or any other
amount is owing to any Lender or the Administrative Agent hereunder or under any
other Credit Document and so long as the Commitments have not been terminated:
5.1. OTHER ACTIVITIES. The Borrower shall not conduct, transact or
otherwise engage in, or commit to transact, conduct or otherwise engage in, any
business or operations other than the entry into, and exercise of rights and
performance of obligations in respect of, the Operative Agreements and other
activities incidental or related to the foregoing.
5.2. OWNERSHIP OF PROPERTIES; INDEBTEDNESS. The Borrower shall not own,
lease, manage or otherwise operate any properties or assets other than the
Ancillary Properties or in connection with the activities described in SECTION
5.1, or incur, create, assume or suffer to exist any Indebtedness or other
consensual liabilities or financial obligations other than the Bridge Debt or as
may be incurred, created or assumed or as may exist in connection with the
activities described in SECTION 5.1 (including, without limitation, the Loans
and other obligations incurred by the Borrower hereunder).
5.3. DISPOSITION OF ASSETS. The Borrower shall not convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets, whether now owned or hereafter acquired, except to the extent expressly
contemplated by the Operative Agreements.
5.4. COMPLIANCE WITH OPERATIVE AGREEMENTS. The Borrower shall at all
times (a) observe and perform all of the covenants, conditions and obligations
required to be performed by it (whether in its capacity as Lessor, Owner Trustee
or otherwise) under each Operative Agreement to which it is a party and (b)
observe and perform, or cause to be observed and performed,
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all of the covenants, conditions and obligations of the Lessor under the Lease,
even in the event that the Lease is terminated at stated expiration following a
Lease Event of Default or otherwise.
5.5. FURTHER ASSURANCES. At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further action as the Administrative
Agent or the Majority Lenders may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the other
Operative Agreements and of the rights and powers herein or therein granted.
5.6. NOTICES. If on any date, a Responsible Officer of the Borrower
shall obtain actual knowledge of the occurrence of a Default or Event of
Default, the Borrower will give written notice thereof to the Administrative
Agent within five (5) Business Days after such date.
5.7. DISCHARGE OF LIENS. Neither the Borrower nor the Trust Company
will create or permit to exist at any time (and each of the Borrower and the
Trust Company will, at its own expense, promptly take such action as may be
necessary duly to discharge, or cause to be discharged), any Lessor Liens
attributable to it on the Properties, PROVIDED that the Borrower and the Trust
Company shall not be required to discharge any Lessor Lien while the same is
being contested in good faith by appropriate proceedings diligently prosecuted
so long as (a) such proceedings shall not involve any material danger of
impairment of any of the Liens contemplated by the Security Documents or of the
sale, forfeiture or loss of any Property or title thereto or any interest
therein or the payment of Rent, and (b) such proceedings shall not materially
interfere with the disposition of any Property or title thereto or interest
therein or the payment of Rent.
5.8. TRUST AGREEMENT. Without prejudice to any right of the Owner
Trustee under the Trust Agreement to resign, the Owner Trustee (a) agrees not to
terminate or revoke the trust created by the Trust Agreement except as permitted
by ARTICLE VIII of the Trust Agreement, (b) agrees not to amend, supplement,
terminate, revoke or otherwise modify any provision of the Trust Agreement in
any manner which could reasonably be expected to have an adverse effect on the
rights or interests of the Administrative Agent or the Lenders hereunder or
under the other Operative Agreements and (c) agrees to comply with all of the
terms of the Trust Agreement.
SECTION 6. EVENTS OF DEFAULT
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
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(a) The Borrower shall, except as provided in paragraph (c),
default, and such default shall continue for five (5) or more days, in
the payment when due of any principal or interest on any Loan; or
(b) Except as provided in paragraphs (a) and (c), the Borrower
shall default, and such default shall continue for ten (10) or more
days, in the payment of any amount owing under any of the Credit
Documents; or
(c) The Borrower shall default in the payment of any amount
due on the Maturity Date owing under any Credit Document; or
(d) The Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in any
Credit Document to which it is a party (other than those referred to in
paragraphs (a), (b) and (c) above), PROVIDED that in the case of any
such default under SECTION 5.4, 5.5 or 5.8(c), such default shall
continue for a period of at least thirty (30) days after notice to the
Borrower and the Lessee by the Administrative Agent or the Majority
Lenders; or
(e) Any representation, warranty or statement made or deemed
made by the Borrower herein or in any other Credit Document, or by the
Borrower, or the Lessee or the Construction Agent in the Participation
Agreement, the Lease or the Agency Agreement or in any statement or
certificate delivered or required to be delivered pursuant hereto or
thereto, shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
(f) (i) Any Lease Event of Default shall have occurred and be
continuing; or
(ii) The Owner Trustee shall default in the due performance
or observance by it of any term, covenant or agreement contained in the
Participation Agreement or in the Trust Agreement to or for the benefit
of the Administrative Agent or a Lender, PROVIDED that in the case of
this clause (ii), such default shall continue unremedied for a period
of at least thirty (30) days after notice to the Owner Trustee and the
Lessee by the Administrative Agent or the Majority Lenders; or
(iii) Any Wackenhut Corrections Credit Agreement Event of
Default shall have occurred and be continuing; or
(iv) Any Bridge Loan Event of Default shall have occurred
and be continuing; or
(g) The Borrower shall be unable to pay its debts generally as
they become due; file a petition to take
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advantage of any insolvency statute; make an assignment for the benefit
of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute; or
(h) Any court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Borrower seeking liquidation,
reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state, which petition is not dismissed within
sixty (60) days; or if, under the provisions of any other law for the
relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of the Borrower or of the whole or any
substantial part of its properties, which control is not relinquished
within sixty (60) days; or if there is commenced against the Borrower
any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Borrower takes any action to indicate its consent
to or approval of any such proceeding or petition; or
(h) Any Security Document shall cease to be in full force and
effect, or shall cease to give the Administrative Agent the Liens,
rights, powers and privileges purported to be created thereby
(including, without limitation, a first priority perfected security
interest in, and Lien on, all of the Properties), in favor of the
Administrative Agent on behalf of itself and the Lenders, superior to
and prior to the rights of all third Persons and subject to no other
Liens (except Permitted Liens); or
(i) The Lease, the Guaranty or any other Operative Agreement
shall cease to be enforceable against the Lessee, the Construction
Agent or the Guarantor; or
(j) One or more judgments or decrees shall be entered against
the Borrower involving a liability of $50,000 or more for any one such
judgment or decree, or $100,000 or more in the aggregate for all such
judgments and decrees, and any such judgments or decrees shall not have
been
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vacated, discharged or stayed or bonded pending appeal within thirty
(30) days from the entry thereof; or
(k) Any default by any party shall have occurred and be
continuing under any lease or sublease (other than the Lease or any
sublease by Lessee permitted under SECTION 25.2(b) of the Lease) of any
portion of any Property;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above with respect to the Borrower, the Commitments shall
automatically and immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and any other Credit Documents, shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Majority Lenders, the
Administrative Agent may, or upon the request of the Majority Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Commitments
to be terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Majority Lenders, the Administrative
Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and any other Credit Documents, to be due and payable forthwith, whereupon the
same shall immediately become due and payable (any of the foregoing occurrences
or actions referred to in clause (A) or (B) above, being referred to as an
"Acceleration"). Except as expressly provided above in this SECTION 6,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Administrative Agent
may, and upon the written instructions of the Majority Lenders shall, exercise
any or all of the rights and powers and pursue any or all of the remedies
available to it hereunder and under the other Credit Documents and the Lease and
shall have any and all rights and remedies available under the Uniform
Commercial Code or any other provision of law (all such remedies being
cumulative and in addition to any other remedies that may be available).
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Administrative Agent
may, and upon request of the Majority Lenders shall, proceed to protect and
enforce this Agreement, the Notes, the Lease, and the other Operative Agreements
by one or more suits or proceedings in equity, at law or in bankruptcy, whether
for the specific performance of any covenant or agreement contained therein or
in execution or aid of any power granted therein, or for foreclosure hereunder,
or for the appointment of a receiver for any Property, or for the recovery of
judgment for
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any indebtedness secured thereby, or for the enforcement of any other remedy
available under applicable laws.
The Borrower shall be liable for any and all accrued and unpaid amounts
due hereunder before, during or after the exercise of any of the foregoing
remedies, including without limitation all reasonable legal fees and other
reasonable costs and expenses incurred by the Administrative Agent or any Lender
by reason of the occurrence of any Event of Default or the exercise of remedies
with respect thereto.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Operative Agreements, and each Lender irrevocably
authorizes the Administrative Agent, in such capacity, to execute the Operative
Agreements as agent for and on behalf of such Lender, to take such action on
behalf of such Lender under the provisions of this Agreement and the other
Operative Agreements and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Operative Agreements, together with such other powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
each of the Lenders hereby specifically acknowledges the terms and provisions of
the Participation Agreement and directs the Administrative Agent to exercise
such powers, make such decisions and otherwise perform such duties as are
delegated to the Administrative Agent thereunder without being required to
obtain any specific consent with respect thereto from any Lender.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Operative Agreement
or otherwise exist against the Administrative Agent.
7.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement and the other Operative Agreements through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
7.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Operative
Agreement (except for its or such Person's own gross negligence
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or willful misconduct) or (b) responsible in any manner to any of the Lenders
for any recitals, statements, representations or warranties made by the Borrower
or the Lessee or any officer thereof contained in this Agreement or any other
Operative Agreement or in any certificate, report, statement or other document
provided in connection with, this Agreement or any other Operative Agreement or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Operative Agreement or for any
failure of the Borrower or the Lessee to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other
Operative Agreement, or to inspect the properties, books or records of the
Borrower or the Lessee.
7.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower or the
Lessee), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Operative Agreement unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Operative Agreements
in accordance with a request of the Majority Lenders, and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
7.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with
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respect to such Default or Event of Default as shall be reasonably directed by
the Majority Lenders; PROVIDED that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interest of the Lenders.
7.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or the Lessee, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the Lessee and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Operative Agreements, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the Lessee. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or the Lessee which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
7.7. INDEMNIFICATION. The Lenders agree to indemnify the Administrative
Agent, in its capacity as such (to the extent not reimbursed by the Borrower or
the Lessee and without limiting the obligation of the Borrower or the Lessee to
do so), ratably according to their respective Commitment Percentages in effect
on the date on which indemnification is sought under this SECTION 7.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Commitment Percentages immediately prior to such date), from and
against any
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and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against any of them
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Operative Agreements or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any of them under or in connection with any of the
foregoing; PROVIDED that the Administrative Agent shall not be indemnified
hereunder against any liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the gross negligence or willful misconduct of the Administrative Agent. The
agreements in this SECTION 7.7 shall survive the payment of the Notes and all
other amounts payable hereunder or under any other Credit Document.
7.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or the Lessee as
though the Administrative Agent were not the Administrative Agent hereunder and
under the other Operative Agreements. With respect to any Loans made or renewed
by it and any Note issued to it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Operative Agreements as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
7.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon thirty (30) days' notice to the Lenders, the
Borrower and, so long as no Lease Event of Default shall have occurred and be
continuing, the Lessee. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Majority Lenders shall appoint
from among the Lenders a successor Administrative Agent which successor
Administrative Agent shall be subject to the approval of the Borrower and, so
long as no Lease Event of Default shall have occurred and be continuing, the
Lessee, such approval not to be unreasonably withheld, conditioned or delayed.
If no successor Administrative Agent is appointed prior to the effective date of
the resignation of the resigning Administrative Agent, the Administrative Agent
may appoint a successor Administrative Agent from among the Lenders, after
consulting with the Lenders and subject to the approval of the Borrower and, so
long as no Lease Event of Default shall have occurred and be continuing, the
Lessee, such approval not to be unreasonably withheld, conditioned or delayed.
If no successor Administrative Agent has accepted appointment as Administrative
Agent by the date which is thirty days following a retiring Administrative
Agent's notice of resignation, the retiring agent's notice of
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resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Administrative Agent until such time, if any, as
the Majority Lenders appoint a successor Administrative Agent, as provided for
above. Upon the effective date of such resignation, the successor Administrative
Agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent, the term "Administrative Agent" shall mean such successor
Agent, and the retiring Administrative Agent's rights, powers and duties in such
capacity shall be terminated. After any retiring Administrative Agent resigns
hereunder, the provisions of this ARTICLE VII and SECTION 9.5 shall inure to the
benefit of such retiring Agent as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL
8.1. COLLECTION OF PAYMENTS AND OTHER AMOUNTS.
(a) The Lessee has agreed pursuant to the terms of the
Participation Agreement to pay directly to the Administrative Agent any
and all Rent and any other amounts of any kind or type owing by the
Lessee to the Lessor or the Owner Trustee under the Lease or any other
Operative Agreement. The Administrative Agent shall, promptly after
receipt, apply in accordance with the terms of this SECTION 8 any such
amounts received from the Lessee and all other payments, receipts and
other consideration received by the Administrative Agent pursuant to
the Security Agreement or otherwise received by the Administrative
Agent or any of the Lenders in connection with the Collateral, the
Security Documents or any of the other Operative Agreements.
(b) Payments and other amounts received by the Administrative
Agent from time to time in accordance with the terms of subparagraph
(a) shall be applied as follows:
(i) Any such payment identified as Basic Rent shall
be applied by the Administrative Agent FIRST, ratably to the
Lenders for application to the payment of interest on the
Loans which is due and payable on such date (other than,
except in the case of an Acceleration, Allocated Interest);
and SECOND, to the Borrower for application ratably to the
payment of accrued Holder Yield with respect to Holder
Property Cost (other than, except in the case of an
Acceleration, Allocated Return); and THIRD, if no Default or
Event of Default has occurred and is continuing, any excess
shall be paid to such Person or Persons as the Lessee may
designate; PROVIDED that if a Default or Event of Default is
in effect, such excess (if any) shall instead be held by the
Administrative Agent until the earlier of (I) the first date
thereafter on which no Default or Event of Default
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shall be continuing (in which case such payments shall then be
made to such other Person or Persons designated by the Lessee)
and (II) the Maturity Date (or, if earlier, the date of any
Acceleration) in which case such amounts shall be applied in
the manner contemplated by SECTION 8.1(b)(iv).
(ii) Any such payment or amount described in SECTION
2.6(b) shall be applied in accordance with the terms of
SECTION 2.6(b).
(iii) Any such payment identified as proceeds of the
sale of any Property, whether pursuant to ARTICLE XXII of the
Lease or pursuant to the exercise of remedies under the
Security Documents or otherwise, and any payment in respect of
excess wear and tear pursuant to SECTION 22.3 of the Lease,
shall be applied by the Administrative Agent FIRST, ratably to
the payment of the principal and interest of the Series B
Loans then outstanding, SECOND, to the payment to the Borrower
of an amount not to exceed the outstanding principal balance
of all Holder Fundings plus all outstanding Holder Yield with
respect to such outstanding Holder Fundings, THIRD, to the
extent such payment exceeds the maximum amount payable
pursuant to the foregoing provisions of this paragraph (iii),
ratably to the payment of the principal and interest of the
Series A Loans plus any and all other amounts owing to the
Administrative Agent and the Lenders hereunder or under any of
the other Operative Agreements and FOURTH, to the extent
moneys remain after application pursuant to clauses FIRST
through THIRD above, to the Borrower for application to any
and all other amounts owing to the Holders or the Borrower and
as the Borrower and the Holders shall determine.
(iv) Any such payment identified as a payment
pursuant to SECTION 22.1(b) of the Lease (or otherwise) of the
Maximum Residual Guarantee Amount (or any such lesser amount
as may be required by SECTION 22.1(b) of the Lease) in respect
of the Properties shall be applied by the Administrative Agent
FIRST, ratably to the payment of the principal and interest
balance of the Series A Loans then outstanding, SECOND, to the
payment of any other amounts owing to the Administrative Agent
or the Lenders hereunder or under any of the other Operative
Agreement, and THIRD, to the extent moneys remain after
application pursuant to clauses FIRST and SECOND above, to the
Borrower for application to Holder Fundings and Holder Yield
and any other amounts owing to the Holders or the Borrower as
the Borrower and the Holders shall determine.
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(v) Any such payment identified as Supplemental Rent
shall be applied by the Administrative Agent to the payment of
any amounts then owing to the Administrative Agent, the
Lenders, the Holders and the other parties to the Operative
Agreements (or any of them) (other than any such amounts
payable pursuant to the preceding provisions of this SECTION
8.1(b)) as shall be determined by the Administrative Agent in
its reasonable discretion.
(vi) The Administrative Agent in its reasonable
judgment shall identify the nature of each payment or amount
received by the Administrative Agent and apply each such
amount in the manner specified above.
(c) Upon the termination of the Commitments and the payment in
full of the Loans and all other amounts owing by the Borrower hereunder
or under any other Credit Document, any such moneys remaining with the
Administrative Agent shall be paid to the Borrower or such other Person
or Persons as the Borrower may designate. In the event of an
Acceleration it is agreed that, prior to the application of amounts
received by the Administrative Agent in the order described in SECTION
8.1(b) above, any such amounts shall first be applied to the payment of
(i) any and all sums advanced by the Administrative Agent in order to
preserve the Collateral or preserve its security interest therein, (ii)
the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing or realizing on the Collateral,
or of any exercise by the Administrative Agent of its rights under the
Security Documents, together with reasonable attorneys' fees and court
costs and (iii) any other amounts owed to the Administrative Agent
under or in connection with the transactions contemplated by the
Operative Agreements (including without limitation any accrued and
unpaid administration fees).
8.2. CERTAIN REMEDIAL MATTERS. Notwithstanding any other provision of
this Agreement or any other Credit Document:
(a) the Borrower shall at all times retain all rights
to Excepted Payments payable to or for the account of the Owner Trustee
or any of the Holders and to demand, collect or commence an action at
law to obtain such payments and to enforce any judgment with respect
thereto (but not to terminate the Lease as a result thereof); and
(b) the Borrower shall at all times retain the right, but not
to the exclusion of the Administrative Agent, (A) to receive from the
Lessee all notices, certificates and other documents and all
information that the Lessee is permitted or required to give or furnish
to the Borrower or the Lessor pursuant to the Lease, the Participation
Agreement or any
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other Operative Agreement, (B) to retain all rights with respect to
insurance that ARTICLE XIV of the Lease specifically confers upon the
"Lessor", (C) to provide such insurance as the Lessee shall have failed
to maintain or as the Borrower may desire, and (D) to enforce
compliance by the Lessee with the provisions of ARTICLES VIII, IX, X,
XI, XIV AND XVII of the Lease.
8.3. RELEASE OF PROPERTIES, ETC. If the Lessee shall at any time
purchase any Property pursuant to the terms of the Lease, or the Construction
Agent shall purchase any Property pursuant to the Agency Agreement, or if any
Property shall be sold in accordance with ARTICLE XXII of the Lease, then, upon
satisfaction by the Borrower of its obligation to prepay the Loans and to pay
accrued interest on the Loans so prepaid pursuant to SECTION 2.6, the
Administrative Agent is hereby authorized to release such Property from the
Liens created by the Security Documents. In addition, upon the termination of
the Commitments and the payment in full of the Loans and all other amounts owing
by the Borrower, the Lessee and the Construction Agent hereunder or under any
other Operative Agreement the Administrative Agent is hereby authorized to
release all of the Properties from the Liens created by the Security Documents;
provided that such payment shall be sufficient to pay in full the Loans and all
other amounts owing by the Borrower, the Lessee or the Construction Agent
hereunder or under the other Operative Agreements. Upon request of the Borrower
or the Lessee following any such release, the Administrative Agent shall, at the
sole cost and expense of the Borrower or the Lessee, execute and deliver to the
Borrower or the Lessee such documents as the Borrower or the Lessee shall
reasonably request to evidence such release.
8.4. EXCEPTED PAYMENTS. Notwithstanding any other provision of this
Agreement or the Security Documents, any Excepted Payment received at any time
by the Administrative Agent shall be distributed promptly to the Person entitled
to receive such Excepted Payment.
SECTION 9. MISCELLANEOUS
9.1. AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this SECTION 9.1. The
Majority Lenders may, or, with the written consent of the Majority Lenders, the
Administrative Agent may, from time to time, (a) enter into written agreements
with the Borrower, amending, modifying or supplementing the Credit Documents for
the purpose of adding any provisions to the Credit Documents or changing in any
manner the rights of the Administrative Agent, the Lenders or the Borrower
thereunder or (b) waive, on such terms and conditions as the Majority Lenders
may specify in such instrument, any of the requirements of the Credit Documents
or any Default or Event of
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Default and its consequences. In addition, the Administrative Agent may from
time to time consent in writing to amendments, supplements, modifications or
waivers with respect to any Operative Agreement (other than the Credit Documents
but including the Guaranty Agreement), subject to receipt of the prior written
consent of the Majority Lenders; PROVIDED, HOWEVER, that so long as the
Administrative Agent has no actual knowledge of the existence of an Event of
Default the Administrative Agent may grant waivers or consents with respect to
the terms and requirements of the Participation Agreement without the prior
consent of the Lenders (as such authority of the Administrative Agent is more
specifically described in SECTION 7.1 hereof). Notwithstanding the foregoing, no
such amendment, supplement, modification or waiver shall (i) reduce the amount
or extend the scheduled date of maturity of any Note, or reduce the stated rate
of any interest payable hereunder (other than as a result of waiving the
applicability of any post default increase in interest rates) or any Unused Fees
payable under the Participation Agreement, or extend the scheduled date of any
payment of such interest or Unused Fees, or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender directly affected thereby, or (ii) amend, modify or waive any
provision of this SECTION 9.1 or reduce the percentage specified in the
definition of Majority Lenders, or consent to the assignment or transfer by the
Borrower of or release the Borrower from any of its rights and obligations under
the Credit Documents, or release a material portion of the Collateral (except in
accordance with SECTION 8.3), or release the Lessee from its obligations under
the Lease, or release the Guarantor from its obligations under the Guaranty, or
otherwise alter any payment obligations of the Lessee to the Lessor or the
Lessor to the Administrative Agent or the Lenders under the Operative
Agreements, in each case without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of SECTION 7 without the written
consent of the then Administrative Agent. Any such waiver, amendment, supplement
or modification shall be binding upon the Borrower, the Lessee, the Lenders and
the Administrative Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the Lessee, the Lenders and the Administrative Agent shall
be restored to their former position and rights under the Credit Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extent to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2. NOTICES. All notices, requests and demands to or upon the
respective parties hereto shall be in writing and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when received, addressed as follows in the case
of the Borrower and the Administrative Agent, and as set forth in SCHEDULE 1.2
in the case of the other parties hereto, or to such
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other address as may be hereafter notified by any party hereto or any future
holder of the Notes:
The Borrower:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
NationsBank, as Administrative Agent:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attention: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
with all notices of borrowing, conversion, continuation or
prepayment to be sent to:
NationsBank, N.A.
Agency Services
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Jamie McCotter
Telephone No.: (704) 388-2374
Telecopy No.: (704) 386-9923
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to SECTION 2.3, 2.5, 2.6 or 2.7 shall not be effective
until received.
9.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall, except
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as otherwise specifically limited therein, survive the execution and delivery of
this Agreement and the Notes and the making of the Loans hereunder.
9.5. PAYMENT OF EXPENSES AND TAXES. The Borrower agrees to: (a) pay all
reasonable out-of-pocket costs and expenses of (i) the Administrative Agent,
whether or not the transactions herein contemplated are consummated, in
connection with the negotiation, preparation, execution and delivery of the
Operative Agreements and the documents and instruments referred to therein and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent) and
(ii) the Administrative Agent and each of the Lenders in connection with the
enforcement of the Operative Agreements and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and for each of the
Lenders) and (b) pay and hold each of the Lenders harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes.
9.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
9.7. PARTICIPATIONS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, the Notes held by such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Operative Agreements; PROVIDED that any such sale
of a participating interest shall be in a principal amount of at least
$5,000,000. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the Notes, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the Notes. In no event shall any Participant have any right to approve any
amendment or waiver of any provision of this Agreement or any other Operative
Agreement, or any consent to any departure by the Borrower or any other Person
therefrom, except to the extent that such amendment,
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waiver or consent would (a) reduce the principal of, or interest on, any Loan or
Note, or postpone the date of the final maturity of any Loan or Note, or reduce
the amount of any Unused Fee, in each case to the extent subject to such
participation or (b) release all or substantially all of the Collateral.
9.8. ASSIGNMENTS; ADDITIONAL COMMITMENT.
(a) Any Lender may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any affiliate of any
Lender or, with the consent (subject to SECTION 11.1 of the
Participation Agreement) of the Borrower and the Administrative Agent
(which in each case shall not be unreasonably withheld, conditioned or
delayed), to an additional bank, financial institution or other entity
that (i) is either organized under the laws of the United States or any
state thereof or is a foreign bank that operates a branch office in the
United States and (ii) in either case, is not the Lessee or any
affiliate of the Lessee, (each such permitted assignee being referred
to as a "Purchasing Lender"), all or any part of its rights and
obligations under this Agreement and the other Operative Agreements
pursuant to an Assignment and Acceptance, substantially in the form of
EXHIBIT C, executed by such Purchasing Lender, such assigning Lender
(and, in the case of a Purchasing Lender that is not a Lender or an
affiliate thereof, subject to SECTION 11.1 of the Participation
Agreement, by the Borrower and the Administrative Agent) and delivered
to the Administrative Agent for its acceptance and recording in the
Register; PROVIDED that no such assignment to a Purchasing Lender
(other than any Lender or any affiliate thereof) of the Commitments
hereunder shall be in an aggregate principal amount less than
$5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement and the Notes), and PROVIDED
FURTHER that the assigning Lender shall simultaneously assign to the
same Purchasing Lender the same percentage of the assigning Lender's
rights and obligations under each of the Operative Agreements (with
respect to each of the Series A Loans and the Series B Loans), and
PROVIDED FURTHER that the Borrower (or, subject to SECTION 11.1 of the
Participation Agreement, the Lessee) may withhold its approval of such
an assignment if as a result of such assignment the Borrower incurs
increased cost under SECTION 2.13. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and
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Acceptance covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding anything to
the contrary in this Agreement, the consent of the Borrower shall not
be required, and, unless requested by the relevant Purchasing Lender or
assigning Lender, new Notes shall not be required to be executed and
delivered by the Borrower, for any assignment which occurs at any time
when any of the events described in SECTION 6(g) shall have occurred
and be continuing.
(b) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not a Lender or an affiliate thereof, by the
Borrower and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $2,500
(which shall not be payable by the Borrower, except in connection with
an assignment requested in accordance with SECTION 2.14(b)), the
Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) promptly after the effective date determined
pursuant thereto, record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Lenders and the Borrower on or prior to such effective date, the
Borrower, at its own expense, shall execute and deliver to the
Administrative Agent new Notes (in exchange for the Notes of the
assigning Lender), each in an amount equal to the Commitment assumed or
Loans purchased by the relevant Purchasing Lender pursuant to such
Assignment and Acceptance, and, if the assigning Lender has retained a
Commitment or any Loan hereunder, new Notes to the order of the
assigning Lender, each in an amount equal to the Commitment or Loans
retained by it hereunder. Such new Notes shall be dated the Effective
Date and shall otherwise be in the form of the Notes replaced thereby.
(c) Each Purchasing Lender (other than any Lender organized
and existing under the laws of the U.S. or any state thereof, or any
political subdivision of the U.S. or of any such state), by executing
and delivering an Assignment and Acceptance,
(i) agrees to execute and deliver to the
Administrative Agent, as promptly as practicable, four signed
copies (two for the Administrative Agent and two for delivery
by the Administrative Agent to the Borrower) of IRS Form 1001,
Form 4224 or Form W-8 (or any successor form or comparable
form) claiming complete exemption from withholding and
deduction for or on account of U.S. Federal taxes on or in
respect of payments of principal and interest under or in
respect of this Agreement (it being understood that if
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the applicable form is not so delivered, payments under or in
respect of this Agreement may be subject to withholding and
deduction);
(ii) represents and warrants to the Borrower and the
Administrative Agent that the form so delivered is true and
accurate and that, as of the effective date of the applicable
Assignment and Acceptance, each of such Purchasing Lender's
Lending Offices is entitled to receive payments of principal
and interest under or in respect of this Agreement without
withholding or deduction for or on account of any taxes
imposed by the U.S. Federal government;
(iii) agrees to deliver annually hereafter to each of
the Borrower and the Administrative Agent not later than
December 31 of the year preceding the year to which it will
apply, two further properly completed signed copies of IRS
Form 1001, Form 4224 or Form W-8 (or any successor form or
comparable form), as appropriate, unless an event has occurred
which renders the relevant form inapplicable (it being
understood that if the applicable form is not so delivered,
payments under or in respect of this Agreement may be subject
to withholding and deduction);
(iv) agrees to promptly notify the Borrower and the
Administrative Agent in writing if it ceases to be entitled to
receive payments of principal and interest under or in respect
of this Agreement without withholding or deduction for or on
account of any taxes imposed by the U.S. or any political
subdivision in or of the U.S. (it being understood that
payments under or in respect of this Agreement may be subject
to withholding and deduction in such event);
(v) acknowledges that in the event it ceases to be
exempt from withholding or deduction of such taxes, the
Administrative Agent may withhold or deduct the applicable
amount from any payments to which such assignee Lender would
otherwise be entitled, without any liability to such assignee
Lender therefor; and
(vi) agrees to indemnify the Borrower and the
Administrative Agent from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs or expenses that result from such assignee
Lender's breach of any such representation, warranty or
agreement.
(d) Any Lender party to this Agreement may, from time
to time and without the consent of the Borrower or any other
Person, pledge or assign for security purposes any portion
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of its Loans or any other interests in this Agreement and the other
Credit Documents to any Federal Reserve Bank.
9.9. THE REGISTER; DISCLOSURE. The Administrative Agent shall maintain
at its address referred to in SECTION 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders, the Commitments of the Lenders, and
the principal amount of the Loans by Series owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable notice.
9.10. ADJUSTMENTS; SET-OFF.
(a) If any Lender (a "BENEFITTED LENDER") shall at any time
receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in SECTION 6(g), or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loans, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders as to
each Category of Loans; PROVIDED, HOWEVER, that if all or any portion
of such excess payment or benefit is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this SECTION 9.10 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
(b) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each of the
Administrative Agent and each Lender is hereby authorized at any time
or from time to time, without presentment, demand, protest or other
notice
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of any kind to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at
any time held or owing by the Administrative Agent or such Lender
(including, without limitation, by branches and agencies of the
Administrative Agent or such Lender wherever located) to or for the
credit or the account of the Borrower against and on account of the
obligations and liabilities of the Borrower to the Administrative Agent
or such Lender under this Agreement or under any of the other Operative
Agreements, including, without limitation, all interests in obligations
of the Borrower purchased by any such Lender pursuant to SECTION
9.10(a), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Operative Agreement,
irrespective or whether or not the Administrative Agent or such Lender
shall have made any demand and although said obligations, liabilities
or claims, or any of them, shall be contingent or unmatured.
9.11. COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
9.12. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.13. INTEGRATION. This Agreement and the other Operative Documents
represent the agreement of the Borrower, the Administrative Agent, and the
Lenders with respect to the subject mater hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Operative Documents.
9.14. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
FLORIDA WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAW.
9.15. SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
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(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of Florida and the courts of the United States of
America, in each case sitting in Broward County, Florida, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the Borrower at its address set forth in SECTION 9.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this SECTION 9.15 any special, exemplary, punitive or
consequential damages.
9.16. ACKNOWLEDGMENTS. Borrower hereby acknowledges that:
(a) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Credit Documents,
and the relationship between the Administrative Agent and the Lenders,
on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(b) no joint venture is created hereby or by the
other Credit Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among the
Borrower and the Lenders.
9.17. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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9.18. NONRECOURSE. Anything to the contrary contained in this Agreement
or in any other Operative Agreement notwithstanding, neither the Borrower nor
any Holder nor any officer, director or shareholder thereof, nor any of the
Borrower's successors or assigns (all such Persons being hereinafter referred to
collectively as the "Exculpated Persons"), shall be liable in its individual
capacity in any respect for any liability or obligation hereunder or under any
other Operative Agreement including the payment of the principal of, or interest
on, the Notes, or for monetary damages for the breach of performance of any of
the covenants contained in this Agreement, the Notes or any of the other
Operative Agreements. The Administrative Agent and the Lenders agree that, in
the event any of them pursues any remedies available to them under this
Agreement, the Notes or any other Operative Agreement, neither the
Administrative Agent nor the Lenders shall have any recourse against the
Borrower, in its individual capacity, nor any other Exculpated Person, for any
deficiency, loss or claim for monetary damages or otherwise resulting therefrom
and recourse shall be had solely and exclusively against the Trust Estate and
the Lessee; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Trust Estate in respect of
any and all liabilities, obligations and undertakings contained in this
Agreement, the Notes or any other Operative Agreement. Notwithstanding the
provisions of this Section, nothing in this Agreement, the Participation
Agreement, the Notes, the Security Agreement, the Mortgage Instruments or any
other Operative Agreement shall: (a) constitute a waiver, release or discharge
of any indebtedness or obligation evidenced by the Notes or arising under this
Agreement, the Security Agreement, the Mortgage Instruments or the Participation
Agreement or secured by the Security Agreement, the Mortgage Instruments or any
other Operative Agreement, but the same shall continue until paid or discharged;
(b) relieve the Lessor or any Exculpated Person from liability and
responsibility for (but only to the extent of the damages arising by reason of):
(i) active waste knowingly committed by the Lessor or any Exculpated Person with
respect to the Properties or (ii) any fraud, gross negligence, willful
misconduct or willful breach on the part of the Lessor or any such Exculpated
Person; (c) relieve the Lessor or any Exculpated Person from liability and
responsibility for (but only to the extent of the moneys misappropriated,
misapplied or not turned over) (i) misappropriation or misapplication by the
Lessor (i.e., application in a manner contrary to any Operative Agreement) of
any insurance proceeds or condemnation award paid or delivered to the Lessor by
any Person other than the Agent, (ii) any deposits or any escrows or amounts
owed by the Lessee under the Agency Agreement held by the Lessor or (iii) any
rents or other income received by the Lessor from the Lessee that are not turned
over to the Agent; or (d) affect or in any way limit the Agent's rights and
remedies under any Operative Agreement with respect to the Rents and its rights
and powers thereunder or to obtain a judgment against the Lessor's interest in
the Properties.
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9.19. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged under any of the Notes, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the Highest Lawful Rate (as such term is defined
below). If the rate of interest (determined without regard to the preceding
sentence) under this Agreement or any other Operative Agreement at any time
exceeds the Highest Lawful Rate (as defined below), the outstanding amount of
the Loans made hereunder shall bear interest at the Highest Lawful Rate until
the total amount of interest due hereunder equals the amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement and the other Operative Agreements had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder and under the other Operative Agreements (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder and thereunder if the stated rates of interest set
forth in this Agreement and in such Operative Agreements had at all times been
in effect, then to the extent permitted by law, the Borrower shall pay to the
Agent an amount equal to the difference between the amount of interest paid and
the amount of interest which would have been paid if the Highest Lawful Rate had
at all times been in effect. Notwithstanding the foregoing, it is the intention
of the Lenders and the Borrower to conform strictly to any applicable usury
laws. Accordingly, if any Lender contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest Lawful Rate,
then any such excess shall be cancelled automatically and, if previously paid,
shall at such Lender's option be applied to the outstanding amount of the Loans
made hereunder or be refunded to the Borrower. As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
41
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually
except as expressly stated herein,
but solely as Owner Trustee for
Wackenhut Corrections Trust 1997-1
By:
-------------------------------
Name: Val T. Orton
Title: Vice President
SIGNATURE PAGE 1
<PAGE> 46
LENDERS:
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent, and as a
Lender
By:
--------------------------------
Name: Maria Conroy
Title: Senior Vice President
SIGNATURE PAGE 2
<PAGE> 47
SCOTIABANC INC., as a Lender
By:
-------------------------
Name:
Title:
Address for Notices:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Telephone No.: (404) 877-1535
Telecopy No.: (404) 888-8998
Wire Transfer Instructions:
The Bank of Nova Scotia
1 Liberty Plaza
New York, New York 10006
ABA No.: 026002532
Account No.: 0735639
Attention: D. Legista
Re: Wackenhut
SIGNATURE PAGE 3
<PAGE> 48
BARNETT BANK, N.A., as a Lender
By:
----------------------------
Name:
Title:
Address for Notices:
9000 Southside Boulevard
Building 600
Jacksonville, Florida 32256
Telephone No.: (904) 464-6502
Telecopy No.: (904) 464-5549
Wire Transfer Instructions:
Barnett Technologies
9000 Southside Boulevard
Building 600
Jacksonville, Florida 32256
ABA No.: 063000047
Account No.: 0800053949
Attention: Commercial Loan
Operations
SIGNATURE PAGE 4
<PAGE> 49
BANQUE PARIBAS, as a Lender
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
Address for Notices:
787 Seventh Avenue
New York, New York 10019
Telephone No.: (212) 841-2509
Telecopy No.: (212) 841-2217
Wire Transfer Instructions:
Bankers Trust NY
ABA No.: 021-001-033
Account Name: Banque Paribas NY
Account No.: 04-202-195
Attention: Loan Servicing
Re: Wackenhut Corrections
Corporation
SIGNATURE PAGE 5
<PAGE> 50
THE SAKURA BANK, LIMITED
ATLANTA AGENCY, as a Lender
By:
------------------------
Name:
Title:
Address for Notices:
245 Peachtree Center Avenue, NE
Suite 2703
Atlanta, Georgia 30303
Telephone No.: (404) 521-3111
Telecopy No.: (404) 521-1131
Wire Transfer Instructions:
Morgan Guaranty Trust Co. of
New York
New York, New York
ABA No.: 021 000 238
Account Name: The Sakura Bank,
Ltd., New York
Account No.: 631-22-624
In Favor of: MTKB, Atlanta
A/C 8000100-1
SIGNATURE PAGE 6
<PAGE> 51
SUMMIT BANK, as a Lender
By:
---------------------
Name:
Title:
Address for Notices:
250 Moore Street, 2nd Floor
Hackensack, New Jersey 07602
Telephone No.: (201) 646-5441
Telecopy No.: (201) 488-6185
Wire Transfer Instructions:
Summit Bank
55 Challenger Boulevard
Ridgefield Park, NJ 07660
ABA No.: 021202162
Account No.: 47902
Attention: CL02
SIGNATURE PAGE 7
<PAGE> 52
SCHEDULE 1.2
<TABLE>
<CAPTION>
SERIES A SERIES B
NAME OF LENDER COMMITMENT COMMITMENT
- -------------- ---------- ----------
<S> <C> <C>
NationsBank, National
Association $ 15,928,624.51 $ 1,629,063.85
ScotiaBanc, Inc. $ 12,300,371.78 $ 1,257,992.53
Barnett Bank, N.A. $ 16,000,000.00 $ 1,636,363.70
Banque Paribas $ 6,542,750.93 $ 669,144.98
The Sakura Bank, Limited,
Atlanta Agency $ 9,814,126.39 $ 1,003,717.47
Summit Bank $ 9,814,126.39 $ 1,003,717.47
</TABLE>
<PAGE> 53
EXHIBIT A
SERIES A NOTE
$ ____________________
-----------------------------------
__________, 199_
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Owner Trustee for the
Wackenhut Corrections Trust 1997-1 (the "BORROWER"), hereby unconditionally
promises to pay to the order of _________________ __________________ (the
"LENDER") at the office of NationsBank, National Association, as Administrative
Agent, located at Independence Center, 15th Floor, Charlotte, North Carolina
28255 in lawful money of the United States of America and in immediately
available funds, on the Maturity Date, the principal amount of (a)
________________ DOLLARS ($___________, or, if less, (b) the aggregate unpaid
principal amount of all Series A Loans made by the Lender to the Borrower
pursuant to SECTION 2.1 of the Credit Agreement (as defined below). The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in SECTION 2.8 of such Credit Agreement. The Borrower further
agrees to pay all other amounts owing to the Lender pursuant to the Credit
Agreement or any other Credit Document (as defined in the Credit Agreement).
The holder of this Series A Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Series A Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof and each conversion of all or a portion thereof to another Type. Each
such endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Series A Note (a) is one of the Series A Notes referred to in the
Credit Agreement dated as of June 19, 1997 (as amended, supplemented, restated
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto, and NationsBank, National Association, as Administrative
Agent, (b) is subject to the provisions of the Credit Agreement (including,
without limitation, SECTION 9.18 thereof) and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
Capitalized terms not otherwise defined herein shall have the respective
meanings assigned in the Credit Agreement. Reference is hereby made to the
Credit Documents for a description of the properties and assets in which a
security interest has been granted, the nature
<PAGE> 54
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Series A Note in respect thereof.
Upon the occurrence of any Event of Default, all amounts then remaining
unpaid on this Series A Note shall become, or may be declared to be, immediately
due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not
individually, but solely as
Owner Trustee for the
Wackenhut Corrections Trust 1997-1
By:
-------------------------------
Name:
Title:
<PAGE> 55
EXHIBIT B
SERIES B NOTE
$ ____________________
-----------------------------------
__________, 199_
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Owner Trustee for the
Wackenhut Corrections Trust 1997-1 (the "BORROWER"), hereby unconditionally
promises to pay to the order of ____________________________________ (the
"LENDER") at the office of NationsBank, National Association, as Administrative
Agent, located at Independence Center, 15th Floor, Charlotte, North Carolina
28255, in lawful money of the United States of America and in immediately
available funds, on the Maturity Date, the principal amount of (a)
_________________________ DOLLARS ($___________), or, if less, (b) the aggregate
unpaid principal amount of all Series B Loans made by the Lender to the Borrower
pursuant to SECTION 2.1 of the Credit Agreement (as defined below). The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in SECTION 2.8 of such Credit Agreement. The Borrower further
agrees to pay all other amounts owing to the Lender pursuant to the Credit
Agreement or any other Credit Document (as defined in the Credit Agreement).
The holder of this Series B Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Series B Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof and each conversion of all or a portion thereof to another Type. Each
such endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Series B Note (a) is one of the Series B Notes referred to in the
Credit Agreement dated as of June 19, 1997 (as amended, supplemented, restated
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto, and NationsBank, National Association, as Administrative
Agent, (b) is subject to the provisions of the Credit Agreement (including,
without limitation, SECTION 9.18 thereof) and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
Capitalized terms not otherwise defined herein shall have the respective
meanings assigned in the Credit Agreement. Reference is hereby made to the
Credit Documents for a description of the properties and assets in which a
security interest has been granted, the nature
<PAGE> 56
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Series B Note in respect thereof.
Upon the occurrence of any Event of Default, all amounts then remaining
unpaid on this Series B Note shall become, or may be declared to be, immediately
due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not
individually, but solely as
Owner Trustee for the
Wackenhut Corrections Trust 1997-1
By:
-------------------------------
Name:
Title:
<PAGE> 57
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to (a) the Credit Agreement, dated as of June 19,
1997 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), restated among First Security Bank, National Association,
not in its individual capacity, but solely as Owner Trustee (the "OWNER TRUSTEE"
or the "BORROWER"), the Lenders named therein, and NationsBank, National
Association, as Administrative Agent [(b) the Amended and Restated Trust
Agreement dated as of June 19, 1997 (as amended, supplemented, restated or
otherwise modified from time to time, the "Trust Agreement"), among the Holders
party thereto and the Owner Trustee] and (c) the Credit Agreement, dated as of
June 19, 1997 (as amended, supplemented or otherwise modified from time to time,
the "WACKENHUT CORRECTIONS CREDIT AGREEMENT") among Wackenhut Corrections
Corporation, as borrower ("Wackenhut Corrections"), NationsBank, National
Association, as Administrative Agent and the Lenders party thereto. Unless
otherwise defined herein, terms defined in the Credit Agreement [(or if not
defined therein, then the Trust Agreement)] and used herein shall have the
meanings given to them in the Credit Agreement [(or the Trust Agreement, as the
case may be)].
__________________ (the "ASSIGNOR") and __________________
(the "ASSIGNEE") agree as follows:
20. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), an interest (the "ASSIGNED INTEREST") in
and to (A) the Assignor's rights and obligations under the Credit Agreement with
respect to the credit facilities contained in the Credit Agreement as are set
forth on Schedule 1 hereto (collectively, the "ASSIGNED FACILITY"), in the
respective principal amount for the Assigned Facility as set forth on Schedule
1; [(B) the Assignor's rights and obligations as a Holder under the Trust
Agreement, in the respective Holder Advance and Holder Commitment Amounts set
forth on Schedule 1] and (C) the Assignor's rights and obligations under the
Wackenhut Corrections Credit Agreement with respect to certain credit facilities
contained in the Wackenhut Corrections Credit Agreement as are set forth on
Schedule 1 hereto (collectively, the "ASSIGNED WACKENHUT CORRECTIONS FACILITY").
21. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, [the Trust
Agreement,] any other Operative Agreement, the Wackenhut Corrections Credit
Agreement, or any other Loan Documents (as defined in the Wackenhut Corrections
Credit Agreement, and hereinafter referred to as the "WACKENHUT CORRECTIONS LOAN
DOCUMENTS") or the execution, legality,
<PAGE> 58
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, [the Trust Agreement,] any other Operative Agreement, the Wackenhut
Corrections Credit Agreement, or any other Wackenhut Corrections Loan Documents,
or any other instrument or document furnished pursuant thereto, other than that
it has not created any adverse claim upon the interest being assigned by it
hereunder and that such interest is free and clear of any such adverse claim;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or Wackenhut Corrections, or
any other obligor or the performance or observance by the Borrower or Wackenhut
Corrections, or any other obligor of any of their respective obligations under
the Credit Agreement, [the Trust Agreement], any other Operative Agreement, the
Wackenhut Corrections Credit Agreement, any other Wackenhut Corrections Loan
Document, or any other instrument or document furnished pursuant hereto or
thereto; (c) attaches the Series A Note and the Series B Note held by it
evidencing the Assigned Facility, [and the Certificate held by it,] and requests
that the Administrative Agent exchange each such Note [and such Certificate] for
a new Note of like Series payable to the Assignee, [and a new Certificate in the
name of Assignee] and (if the Assignor has retained any interest in the Assigned
Facility [and interest as a Holder]) a new Note of such Series payable to the
Assignor in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date); and (d) attaches the Revolving Credit Note (as
defined in the Wackenhut Corrections Credit Agreement, and hereinafter referred
to as the "WACKENHUT CORRECTIONS REVOLVING CREDIT NOTE") held by it entering the
Assigned Wackenhut Corrections Facility, and requests that the Administrative
Agent exchanges such Wackenhut Corrections Revolving Credit Note for a new
Wackenhut Corrections Revolving Credit Note payable to the Assignee, and (if the
Assignor has retained any interest in the Assigned Wackenhut Corrections
Facility) a new Wackenhut Corrections Revolving Credit Note payable to the
Assignor in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
22. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance and that it is an
"Eligible Assignee" (as such term is defined in the Wackenhut Corrections Credit
Agreement); (b) confirms that it has received copies of the Operative
Agreements, the Wackenhut Corrections Loan Documents, and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Administrative Agent
or any other Lender [or Holder] and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, [the Trust
Agreement,] other Operative Agreements, the
<PAGE> 59
Wackenhut Corrections Credit Agreement, other Wackenhut Corrections Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Administrative Agent as defined in each
of the Operative Agreements and the Wackenhut Corrections Loan Documents) to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Operative Agreements, the
Wackenhut Corrections Credit Agreement, the other Wackenhut Corrections Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the respective Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Participation Agreement, the
Wackenhut Corrections Credit Agreement, [and] the Credit Agreement [and the
Trust Agreement] and will perform in accordance with their terms all the
obligations which by the terms of the Participation Agreement, the Wackenhut
Corrections Credit Agreement, [and] the Credit Agreement [and the Trust
Agreement] are required to be performed by it as a Lender [or a Holder]
including, if it is organized under the laws of a jurisdiction outside the U.S.,
its obligations pursuant to SECTION 2.13(b) of the Participation Agreement,
SECTION 9.8 of the Credit Agreement and SECTION _____ of the Wackenhut
Corrections Credit Agreement.
23. The effective date of this Assignment and Acceptance shall be
__________, 19__ (the "EFFECTIVE DATE"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by it in the manner provided pursuant to SECTION 9.9 of
the Credit Agreement and SECTION _____ of the Wackenhut Corrections Credit
Agreement, effective as of the Effective Date.
24. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees, [Holder
Fundings, Holder Yield] and other amounts) to the Assignee whether such amounts
have accrued prior to the Effective Date or accrue subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
25. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement, the Wackenhut Corrections Credit Agreement [and
the Trust Agreement] and to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender [or a Holder] thereunder
and under the other Operative Agreements and other Wackenhut Corrections Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement, the
Wackenhut Corrections Credit Agreement,[the Trust Agreement] and
<PAGE> 60
the other Operative Agreements and other Wackenhut Corrections Loan Documents.
26. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
ASSIGNOR:
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
Title:
ASSIGNEE:
[NAME OF ASSIGNEE]
By:
----------------------------------
Name:
Title:
Consent to:
WACKENHUT CORRECTIONS CORPORATION
By:
------------------------------
Name:
Title:
NATIONSBANK, NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
<PAGE> 61
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO (A) THE
CREDIT AGREEMENT,
DATED AS OF JUNE 19, 1997,
AMONG
FIRST SECURITY BANK, NATIONAL ASSOCIATION
NOT INDIVIDUALLY,
BUT SOLELY AS OWNER TRUSTEE,
THE LENDERS NAMED THEREIN,
NATIONSBANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
FOR THE LENDERS,
AND
(B) THE CREDIT AGREEMENT DATED
AS OF JUNE 19, 1997,
AMONG
WACKENHUT CORRECTIONS CORPORATION, AS BORROWER,
NATIONSBANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT,
AND THE LENDERS PARTY THERETO.
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
I. TROL FACILITY
LOAN COMMITMENT
AMOUNTS ASSIGNED
OUTSTANDING LOAN (INCLUDING LOAN COMMITMENT
PRINCIPAL AMOUNTS OUTSTANDING LOAN PERCENTAGE
ASSIGNED PRINCIPAL AMOUNTS) ASSIGNED
----------------- ----------------- ---------------
Series A Series A
$__________ $__________
Series B Series B
$__________ $__________
<PAGE> 62
Holder Commitment
Amounts Assigned
(Including
Outstanding Holder Outstanding Holder Commitment
Funding Amounts Holder Funding Percentage
Assigned Amounts) Assigned
-------- -------- --------
$ $ %
------------ ------------- -----
II. REVOLVING CREDIT
FACILITY
----------------
<TABLE>
<CAPTION>
Revolving
Credit
Commitment
Assigned
(including
Outstanding
Revolving Applicable
Outstanding Revolving Credit Loans Commitment
Credit Loans Participations and Percentage
Assigned Assigned Participations) Assigned
-------- -------- --------------- --------
<S> <C> <C> <C> <C>
$ $ $ %
------------ ------------- ------------- -----
</TABLE>
[Name of Assignor] [Name of Assignee]
By:_______________________________ By:______________________________
Name: Name:
Title: Title:
Address for Notices to Assignee:
_________________________________
_________________________________
_________________________________
Telephone No.: __________________
Telecopy No.: ___________________
<PAGE> 63
Wire Transfer Instructions for
Assignee:
ABA #:_____________________________
Account #:_________________________
Reference:_________________________
Attention:_________________________
<PAGE> 64
Document Name : NB WACKENHUT TROL CREDIT AGREEMENT
DOC NO: 119594.12
NANCY
Attorney: Manley Roberts
Time and Date: June 1, 1997 (10:58am)
<PAGE> 1
EXHIBIT 4.4
AMENDED AND RESTATED TRUST AGREEMENT
dated as of June 19, 1997
among
NATIONSBANK, N.A. (SOUTH),
and the other financial institutions parties thereto,
as Holders,
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Owner Trustee
WACKENHUT CORRECTIONS TRUST 1997-1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS; AMENDED AND RESTATED AGREEMENT.............................1
SECTION 1.1 Definitions.....................................1
SECTION 1.2 Interpretation..................................2
ARTICLE II AUTHORITY TO EXECUTE AND PERFORM VARIOUS
DOCUMENTS; DECLARATION OF TRUST BY TRUST COMPANY........................2
SECTION 2.1 Authority To Execute and Perform Various
Documents.......................................2
SECTION 2.2 Declaration of Trust by Trust Company...........2
ARTICLE III CONTRIBUTIONS AND PAYMENTS..............................................3
SECTION 3.1 Procedure for Holder Fundings; Certificates.....3
SECTION 3.2 Certificate Yield...............................4
SECTION 3.3 Scheduled Return of Holder Fundings.............5
SECTION 3.4 Early Return of Holder Fundings.................5
SECTION 3.5 Payments from Trust Estate Only.................5
SECTION 3.6 Method of Payment...............................5
SECTION 3.7 Computation of Yield............................6
SECTION 3.8 Conversion and Continuation Options.............6
SECTION 3.9 Increased Costs, Illegality, etc................7
SECTION 3.10 Contribution Indemnity..........................8
SECTION 3.11 Notice of Amounts Payable.......................9
SECTION 3.12 [INTENTIONALLY DELETED].........................9
ARTICLE IV COLLECTIONS AND DISTRIBUTIONS..........................................10
SECTION 4.1 Collections and Remittances by the Owner
Trustee........................................10
SECTION 4.2 Priority of Distributions......................10
SECTION 4.3 Excepted Payments..............................10
SECTION 4.4 Distributions after Default....................10
ARTICLE V DUTIES OF THE OWNER TRUSTEE............................................11
SECTION 5.1 Notice of Certain Events.......................11
SECTION 5.2 Action Upon Instructions.......................11
SECTION 5.3 Indemnification................................11
SECTION 5.4 No Duties Except as Specified In Trust
Agreement or Instructions......................12
SECTION 5.5 No Action Except Under Specified
Documents or Instructions......................12
SECTION 5.6 Absence of Duties..............................13
ARTICLE VI THE OWNER TRUSTEE......................................................13
SECTION 6.1 Acceptance of Trust and Duties.................13
SECTION 6.2 Furnishing of Documents........................14
SECTION 6.3 No Representations or Warranties as to
the Properties or Operative Agreements.........14
SECTION 6.4 No Segregation of Moneys; No Interest..........15
SECTION 6.5 Reliance; Advice of Counsel....................15
SECTION 6.6 Liability With Respect to Documents............15
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
SECTION 6.7 Not Acting In Individual Capacity..............15
SECTION 6.8 Books and Records; Tax Returns.................16
ARTICLE VII INDEMNIFICATION OF THE OWNER TRUSTEE..................................16
SECTION 7.1 Indemnification Generally......................16
SECTION 7.2 Compensation and Expenses......................17
ARTICLE VIII TERMINATION OF TRUST AGREEMENT........................................17
SECTION 8.1 Termination of Trust Agreement.................17
SECTION 8.2 Termination at Option of the Holders...........17
SECTION 8.3 Termination at Option of the Owner
Trustee........................................18
SECTION 8.4 Actions by the Owner Trustee Upon
Termination....................................18
ARTICLE IX SUCCESSOR OWNER TRUSTEES, CO-OWNER TRUSTEES
AND SEPARATE OWNER TRUSTEES...........................................18
SECTION 9.1 Resignation of the Owner Trustee;
Appointment of Successor.......................18
SECTION 9.2 Co-Trustees and Separate Trustees..............20
SECTION 9.3 Notice.........................................23
ARTICLE X SUPPLEMENTS AND AMENDMENTS............................................23
SECTION 10.1 Supplements and Amendments.....................23
SECTION 10.2 Limitation on Amendments.......................24
ARTICLE XI MISCELLANEOUS.........................................................24
SECTION 11.1 No Legal Title to Trust Estate in the
Holders........................................24
SECTION 11.2 Sale of Properties by the Owner Trustee
is Binding.....................................24
SECTION 11.3 Limitations on Rights of Others................24
SECTION 11.4 Notices........................................25
SECTION 11.5 Severability...................................25
SECTION 11.6 Limitation on the Holders' Liability...........25
SECTION 11.7 Separate Counterparts..........................25
SECTION 11.8 Successors and Assigns.........................25
SECTION 11.9 Headings.......................................26
SECTION 11.10 Governing Law..................................26
SECTION 11.11 Performance by the Holders.....................26
SECTION 11.12 Conflict with Operative Agreements.............26
SECTION 11.13 No Implied Waiver..............................26
EXHIBIT A FORM OF HOLDER CERTIFICATE.............................................A-1
</TABLE>
ii
<PAGE> 4
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of June __, 1997,
is among the Holders from time to time parties hereto (each a "Holder"), and
FIRST SECURITY BANK, NATIONAL ASSOCIATION, in its individual capacity ("Trust
Company"), and in its capacity as trustee hereunder, together with its
successors and assigns (the "Owner Trustee").
WHEREAS, in order to provide a portion of the funds for the acquisition
or leasing of the Properties and for carrying out the other transactions
contemplated by the Operative Agreements, each Holder will make its respective
Holder Fundings pursuant to this Trust Agreement and the Participation Agreement
(as defined below); and
WHEREAS, the Holders desire to provide for the Trust to exist for the
purpose of purchasing the Properties and leasing such Properties to the Lessee,
and carrying out certain transactions contemplated by the Operative Agreements;
and
WHEREAS, Trust Company is willing to act as trustee hereunder and to
accept the trust created hereby (the "Trust").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
[INSERT ADDITIONAL LANGUAGE RE INDIVIDUAL
TRUSTEE IN LOUISIANA]
ARTICLE I
DEFINITIONS; AMENDED AND
RESTATED AGREEMENT
SECTION 1.1 DEFINITIONS. For purposes of this Trust Agreement
(including the "WHEREAS" clauses set forth above), capitalized terms used in
this Trust Agreement and not otherwise defined herein shall have the meanings
assigned to them in Appendix A to that certain Participation Agreement, dated as
of the date hereof (the "Participation Agreement"), among Wackenhut Corrections
Corporation , as Construction Agent and as Lessee, the Owner Trustee, the
Holders party thereto from time to time, the Lenders party thereto from time to
time, and NationsBank, N.A. (South), as Administrative Agent for the Lenders, as
such agreement may be amended, modified, restated or supplemented from time to
time in accordance with the terms thereof. Unless otherwise indicated,
references in this Trust Agreement to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Trust
Agreement.
<PAGE> 5
SECTION 1.2 INTERPRETATION. The rules of usage set forth in Appendix A
to the Participation Agreement shall apply to this Trust Agreement.
ARTICLE II
AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS;
DECLARATION OF TRUST BY TRUST COMPANY
SECTION 2.1 AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS. Each
Holder hereby authorizes and directs the Owner Trustee (i) to execute and
deliver, as trustee for and on behalf of each such Holder, each Operative
Agreement to which the Owner Trustee is a party and any other agreements,
instruments, certificates or documents related to the transactions contemplated
hereby or thereby to which the Owner Trustee is a party, (ii) to take whatever
action shall be required to be taken by the Owner Trustee by the terms of, and
exercise its rights and perform its duties under, each of the documents,
agreements, instruments and certificates referred to in clause (i) above as set
forth in such documents, agreements and certificates, and (iii) subject to the
terms of this Trust Agreement, to take such other action in connection with the
foregoing as the Holders may from time to time direct.
SECTION 2.2 DECLARATION OF TRUST BY TRUST COMPANY.
(a) Trust Company hereby declares that it will hold all
estate, right, title and interest of the Owner Trustee in and to the
Properties, each Holder Funding, the Operative Agreements and any other
property contributed by any Holder, including, without limitation, all
amounts of Rent, insurance proceeds and condemnation awards, indemnity
or other payments of any kind (collectively, the "Trust Estate") as
Owner Trustee upon the trusts set forth herein and for the use and
benefit of each Holder, subject, however, to the provisions of the
Credit Agreement and the Security Documents. The name of the Trust
shall be Wackenhut Corrections Trust 1997-1.
(b) The purpose of the Trust is to hold title to the Trust
Estate for the benefit of the Holders and to engage in activities
ancillary and incidental thereto as the Holders shall determine to be
desirable. Except in connection with the foregoing, the Owner Trustee
shall not (i) engage in any business activity, (ii) have any property,
rights or interest, whether real or personal, tangible or intangible,
(iii) incur any legal liability or obligation, whether fixed or
contingent, matured or unmatured, other than in the normal course of
the administration of the Trust or (iv) subject any of its property or
assets for any mortgage, Lien, security interest or other claim or
encumbrance, other
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<PAGE> 6
than in favor of the Lenders or the Holders pursuant to the provisions
of the Operative Agreements and this Trust Agreement. THIS TRUST IS NOT
A BUSINESS TRUST. THE SOLE PURPOSE OF THE TRUST IS TO ACQUIRE AND HOLD
TITLE TO THE TRUST ESTATE, SUBJECT TO THE RIGHTS OF THE LENDERS, FOR
THE BENEFIT OF THE HOLDERS. THE OWNER TRUSTEE MAY NOT TRANSACT BUSINESS
OF ANY KIND WITH RESPECT TO THE PROPERTY COMPRISING THE TRUST ESTATE
NOR SHALL THIS AGREEMENT BE DEEMED TO BE, OR CREATE OR EVIDENCE THE
EXISTENCE OF A CORPORATION DE FACTO OR DE JURE, OR A MASSACHUSETTS
TRUST, OR ANY OTHER TYPE OF BUSINESS TRUST, ASSOCIATION OR JOINT
VENTURE AMONG THE OWNER TRUSTEE, THE HOLDERS, THE ADMINISTRATIVE AGENT
AND THE LENDERS.
ARTICLE III
CONTRIBUTIONS AND PAYMENTS
SECTION 3.1 PROCEDURE FOR HOLDER FUNDINGS; CERTIFICATES.
(a) Upon receipt from the Lessee by the Owner Trustee and the
Administrative Agent of the Requisition specified in Section 5.2 of the
Participation Agreement, and subject to the terms and conditions of the
Participation Agreement, the Owner Trustee shall request from each
Holder an advance and each Holder shall make an advance under the
Holder Commitment of such Holder on each date Fundings are made
pursuant to Section 5 of the Participation Agreement. The Owner Trustee
may request an advance under the Holder Commitments during the
Commitment Period on any date that an Advance may be requested pursuant
to the terms of Section 5.2(a) of the Participation Agreement, provided
that the Owner Trustee shall give each Holder irrevocable notice (which
notice must be received by each Holder (i) prior to 12:00 Noon,
Charlotte, North Carolina time, three Business Days prior to the
requested date of advance if all or any part of the requested advance
is to be a Eurodollar Holder Funding or (ii) prior to 12:00 Noon
Charlotte, North Carolina time one Business Day prior to the requested
date of advance with respect to any advance that is to be a Base Rate
Holder Funding), specifying (A) the amount to be advanced, (B) the
requested date of advance, (C) whether the advance is to be a
Eurodollar Holder Funding or a Base Rate Holder Funding or a
combination thereof, and (D) if the advance is to be a combination of
Eurodollar Holder Fundings and Base Rate Holder Fundings, the
respective amounts of each type of advance; provided, however, that (1)
there shall be not more than ___ (__) Interest Periods in effect at any
specified date, which Interest Periods shall apply to all Eurodollar
Holder Fundings then outstanding, and (2) any amounts advanced or
converted hereunder which are to bear Holder Yield based on the
Eurodollar Rate may only be
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<PAGE> 7
advanced or converted on the first day of one of the ___ (__) permitted
Interest Periods. Pursuant to the terms of Section 11.2 of the
Participation Agreement, the Owner Trustee shall be deemed to have
delivered such notice upon the delivery of a notice by the Lessee
containing such required information.
(b) Upon receipt of the Requisition and the notice delivered
pursuant to Section 3.1(a), each Holder shall make the amount of its
Holder Funding available to the Owner Trustee at the office of the
Owner Trustee referred to in Section 11.4 prior to 12:00 Noon,
Charlotte, North Carolina time on the date requested by the Lessee in
funds immediately available to the Owner Trustee.
(c) The Holder Funding shall at all times be Eurodollar Holder
Fundings having an Interest Period of one, two, three or six months, as
specified in the definition of "Interest Period," subject only to the
limitations specified in such definition and to the provisions of
Sections 3.1(a), 3.7(c), 3.8 and 3.9. Any Holder Funding other than a
Eurodollar Holder Funding shall constitute a Base Rate Holder Funding.
(d) On each date which is three Business Days prior to any
Scheduled Interest Payment Date, the Owner Trustee shall be deemed to
have requested a Eurodollar Holder Funding pursuant to Section 3.1(a)
in an amount equal to the aggregate amount of Allocated Return due and
payable on such date with respect to the Construction Period
Properties. The date such Holder Funding shall be made with respect to
any such request shall be the relevant Scheduled Interest Payment Date
and the proceeds of such Holder Funding shall be applied to pay such
Allocated Return. On each such date, the Holder Property Cost and
Holder Construction Property Cost of each Construction Period Property
shall be increased by an amount equal to the Allocated Return paid on
such date with the proceeds of such Holder Funding.
(e) The Holder Fundings made by each Holder to the Trust
Estate shall be evidenced by a Certificate of the Owner Trustee,
substantially in the form of Exhibit A hereto, issued in the name of
the Holder and in an amount equal to the Holder Commitment of such
Holder. Each Certificate shall (i) be dated as of the Initial Closing
Date and (ii) bear a yield on the unpaid Holder Amount thereof from
time to time outstanding at the Holder Yield.
SECTION 3.2 CERTIFICATE YIELD. The Owner Trustee shall pay to each
Holder, from the Trust Estate, its pro rata portion of Holder Yield on Holder
Fundings made hereunder. Payment of Holder Yield on each Holder Funding shall be
made in arrears on each Payment Date. If the date on which such payment of
Holder
4
<PAGE> 8
Yield shall be due shall not be a Business Day, such payment shall be made on
the next succeeding Business Day.
SECTION 3.3 SCHEDULED RETURN OF HOLDER FUNDINGS. Except in the case
of early return of advances as set forth in Section 3.4 below or upon
default, no return of the principal amount of the Holder Fundings shall be
due prior to the Maturity Date. On the Maturity Date, subject to the terms of
the Credit Agreement, the Owner Trustee shall pay to each Holder its aggregate
unpaid Holder Amount together with all accrued but unpaid Holder Yield and all
other amounts due the Holders from the Owner Trustee hereunder or under the
Operative Agreements.
SECTION 3.4 EARLY RETURN OF HOLDER FUNDINGS. As contemplated by and
pursuant to the terms of the Lease, the Lessee shall be required or may elect
under certain circumstances as described in the Lease to pay the Termination
Value with respect to one or more Properties or purchase one or more
Properties and upon such purchase or payment the amounts paid by the Lessee in
connection therewith shall be distributed in accordance with the terms of
Section 8 of the Credit Agreement. Any such amounts received by the Owner
Trustee shall be paid over by the Owner Trustee to each Holder in an amount
equal to such Holder's pro rata portion of the Holder Amount relating to the
applicable Property or Properties. Notwithstanding the provisions set forth
in this Section 3.4, any prepayment of the Certificates shall be in accordance
with the provisions of Sections 2.6 and 8.1(b)(i) of the Credit Agreement so
that so long as any amount of the Loans is outstanding the aggregate amount of
the outstanding Holder Fundings as evidenced by the Certificates shall be equal
to or greater than three percent (3%) of the Property Cost. No amount of any
Holder Funding which is repaid to the Holders may be readvanced hereunder.
SECTION 3.5 PAYMENTS FROM TRUST ESTATE ONLY. All payments to be made
by the Owner Trustee under this Trust Agreement (including, without limitation,
any payments pursuant to Section 3.10) shall be made only from the income and
proceeds from the Trust Estate and only to the extent that the Owner Trustee
shall have received income or proceeds from the Trust Estate to make such
payments in accordance with the terms hereof, except as specifically provided
in Section 6.1. Each Holder agrees that it will look solely to the income and
proceeds from the Trust Estate to the extent available for payment as herein
provided and that, except as specifically provided herein, Trust Company shall
not be liable to any Holder for any amounts payable under this Trust Agreement
and shall not be subject to any liability under this Trust Agreement.
SECTION 3.6 METHOD OF PAYMENT. All amounts payable to a Holder
pursuant to this Trust Agreement shall be paid or caused to be paid by the Owner
Trustee to, or for the account of, such
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<PAGE> 9
Holder, or its nominee, by transferring such amount in immediately available
funds to a bank institution or banking institutions with bank wire transfer
facilities for the account of such Holder or as otherwise instructed in writing
from time to time by such Holder.
SECTION 3.7 COMPUTATION OF YIELD.
(a) Holder Yield shall be calculated on the basis established
in Section 14.16 of the Participation Agreement, with respect to length
of a "year" and number of days for which interest is accrued. Any
change in the Holder Yield resulting from a change in the Base Rate,
Eurodollar Reserve Percentage, or otherwise, shall become effective as
of the opening of business on the day on which such change would become
effective under the Existing Wackenhut Corrections Credit Agreement.
(b) Pursuant to Section 14.14 of the Participation Agreement,
the calculation of Holder Yield under this Section 3.7 shall be made by
the Administrative Agent. Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Owner
Trustee and the Holders in the absence of manifest error.
(c) If the Eurodollar Rate cannot be determined by the
Administrative Agent in the manner specified in the definition of the
term "Eurodollar Rate", the Owner Trustee shall give telecopy or
telephonic notice thereof to the Holders as soon as practicable after
receipt of same from the Administrative Agent. Until such time as the
Eurodollar Rate can be determined by the Administrative Agent in the
manner specified in the definition of such term, no further Eurodollar
Holder Fundings shall be made or continue as such at the end of the
then current Interest Period and all Holder Fundings shall continue as
Base Rate Holder Fundings.
SECTION 3.8 CONVERSION AND CONTINUATION OPTIONS.
(a) Subject to the restrictions set forth in Sections 3.1,
3.7(c) and 3.9, the Owner Trustee may elect from time to time to
convert Base Rate Holder Fundings to Eurodollar Holder Fundings by
giving each Holder at least three Business Days' prior irrevocable
notice of such election. All or any part of outstanding Holder Fundings
may be converted as provided herein, provided that (i) no Base Rate
Holder Funding may be converted into a Eurodollar Holder Funding when
any Event of Default has occurred and is continuing, (ii) no Base Rate
Holder Funding may be converted into a Eurodollar Holder Funding which
matures after the Maturity Date, and (iii) such notice of conversion
shall contain an election by the Owner Trustee of an Interest Period
for such Eurodollar Holder Funding to be
6
<PAGE> 10
created by such conversion and such Interest Period shall satisfy the conditions
of the definition of the term "Interest Period" as set forth in Appendix A to
the Participation Agreement.
(b) Subject to the restrictions set forth in Sections 3.1,
3.7(c) and 3.9 hereof, any Eurodollar Holder Funding may be continued
as such upon the expiration of the then current Interest Period with
respect thereto by the Owner Trustee giving irrevocable notice to each
Holder in accordance with the applicable provisions of the definition
of the term "Interest Period" as set forth in Appendix A to the
Participation Agreement; provided that no Eurodollar Holder Funding may
be continued as such (i) when any Event of Default has occurred and is
continuing or (ii) if such Eurodollar Holder Funding would mature after
the Maturity Date and provided, further, that if the Owner Trustee
shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the
preceding provision, such Holder Funding shall be automatically
converted to a Base Rate Holder Funding on the last day of such then
expiring Interest Period.
SECTION 3.9 INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements that are expressly included in the calculation of the
Eurodollar Reserve Rate) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request
hereafter adopted, promulgated or made, by any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Holder of agreeing to make or
making, funding or maintaining Holder Fundings, then the Owner Trustee
shall from time to time, upon demand by such Holder, pay to such Holder
additional amounts sufficient to compensate such Holder for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Owner Trustee by such Holder, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Holder determines that compliance with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law, but in
each case promulgated or made after the date hereof) affects or would
affect the amount of capital required or expected to be maintained by
such Holder or any corporation controlling such Holder and that the
amount of such capital is increased by or based upon the existence of
such Holder's commitment to make Holder Fundings hereunder and other
commitments of this
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<PAGE> 11
type, then, upon demand by such Holder, the Owner Trustee shall
immediately pay to such Holder, from time to time as specified by such
Holder, additional amounts sufficient to compensate such Holder or such
corporation in the light of such circumstances, to the extent that such
Holder reasonably determines such increase in capital to be allocable
to the existence of such Holder's commitment to make Holder Fundings
hereunder. A certificate as to such amounts submitted to the Owner
Trustee by such Holder shall be conclusive and binding for all
purposes, absent manifest error.
(c) Without affecting its rights under Section 3.9(a) or
3.9(b) or any other provision of this Trust Agreement, each Holder
agrees that if there is any increase in any cost to or reduction in any
amount receivable by such Holder with respect to which the Owner
Trustee would be obligated to compensate such Holder pursuant to
Section 3.9(a) or 3.9(b) or 2.10(b), such Holder shall use reasonable
efforts to select an alternative office from which to fund Holder
Fundings which would not result in any such increase in any cost to or
reduction in any amount receivable by such Holder; provided, however,
that no Holder shall be obligated to select such an alternate office if
such Holder determines that (i) as a result of such selection such
Holder would be in violation of any applicable law, regulation, treaty,
or guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or would impose
an unreasonable burden or additional costs on such Holder.
(d) Notwithstanding any other provision of this Trust
Agreement, if any Holder shall notify the Owner Trustee that the
introduction of or any change in any law or regulation, or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other Governmental Authority asserts that it is
unlawful, for any Holder to perform its obligations hereunder to make
or maintain Eurodollar Holder Fundings then (i) each Eurodollar Holder
Funding will automatically, at the end of the Interest Period for such
Eurodollar Holder Funding, convert into a Base Rate Holder Funding and
(ii) the obligation of the Holders to make, convert or continue
Eurodollar Holder Fundings shall be suspended until such Holder shall
notify the Owner Trustee that such Holder has determined that the
circumstances causing such suspension no longer exist.
SECTION 3.10 CONTRIBUTION INDEMNITY. Subject to the provisions of
Section 3.11, the Owner Trustee agrees to indemnify each Holder and to hold each
Holder harmless from any loss or reasonable expense which such Holder may
sustain or incur as a consequence of (a) failure of the Owner Trustee to accept
any Holder Funding hereunder after the Owner Trustee has given a
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<PAGE> 12
notice requesting the same in accordance with the provisions of this Trust
Agreement, (b) failure of the Owner Trustee to make any prepayment of a Holder
Funding after the Owner Trustee has given a notice thereof in accordance with
the provisions of this Trust Agreement, or (c) the making of a voluntary or
involuntary prepayment of a Eurodollar Holder Funding on a day which is not the
last day of an Interest Period with respect thereto. Such indemnification shall
be in an amount equal to the excess, if any, of (i) the amount of Holder Yield
which would have accrued on the amount so prepaid, or not accepted, converted or
continued for the period from the date of such prepayment or of such failure to
accept, convert or continue to the last day of such Interest Period (or, in the
case of a failure to accept, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable
Holder Yield rate for such Holder Fundings provided for herein over (ii) the
amount of yield (as determined by such Holder) which would have accrued to such
Holder on such amount by placing such amount on deposit for a comparable period
with leading banks in the relevant interest rate market. This covenant shall
survive the termination of this Trust Agreement and the payment of all other
amounts payable hereunder.
SECTION 3.11 NOTICE OF AMOUNTS PAYABLE. In the event that any
Holder becomes aware that any amounts are or will be owed to it pursuant to
Section 3.9 or 3.10 or that it is unable to make Holder Fundings which bear a
yield based on the Eurodollar Rate, then it shall promptly notify the Owner
Trustee thereof and, as soon as possible thereafter, such Holder shall submit to
the Owner Trustee a certificate indicating the amount owing to it and the
calculation thereof. The amounts set forth in such certificate shall be prima
facie evidence of the obligations of the Owner Trustee hereunder.
SECTION 3.12 [INTENTIONALLY DELETED]
SECTION 3.13 HOLDER OVERDUE RATE. If all or a portion of (i) the
principal amount of any Holder Funding, (ii) any Holder Yield payable on any
Holder Funding, or (iii) any other amount payable hereunder shall not be paid
when due (subject to applicable grace periods) (whether at the stated maturity,
by acceleration or otherwise), such amount shall bear interest at a rate per
occurrence which is the lesser of (x) the Holder Yield applicable to such Holder
Funding plus 2% (or in the case of clause (iii) above, the Base Rate plus 3%)
and (y) the highest interest rate permitted by applicable law, in each case from
the date of such non-payment until such amount is paid in full (whether after or
before judgment).
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ARTICLE IV
COLLECTIONS AND DISTRIBUTIONS
SECTION 4.1 COLLECTIONS AND REMITTANCES BY THE OWNER TRUSTEE. The
Owner Trustee agrees that, subject to the provisions of this Trust Agreement, it
will during the term of this Trust administer the Trust Estate and, at the
direction of the Holders (or, so long as the Credit Agreement shall continue,
subject to the provisions of the Credit Agreement and the Security Documents),
take steps to collect all Rent and other sums payable to the Owner Trustee by
the Lessee under the Lease. The Owner Trustee agrees to distribute all proceeds
received from the Trust Estate in accordance with Article III and Sections 4.2
and 4.3. The Owner Trustee shall make such distribution promptly upon receipt of
such proceeds (provided such proceeds are available for distribution) by the
Owner Trustee, it being understood and agreed that the Owner Trustee shall not
be obligated to make such distribution until the funds for such distribution
have been received by the Owner Trustee in cash or its equivalent reasonably
acceptable to the Owner Trustee.
SECTION 4.2 PRIORITY OF DISTRIBUTIONS. Subject to the terms and
requirements of the Operative Agreements, all payments and amounts received by
Trust Company as Owner Trustee or on its behalf shall be distributed to the
Administrative Agent for allocation by the Administrative Agent in accordance
with the terms of Section 8 of the Credit Agreement or, if such payments or
amounts are received by the Owner Trustee from the Administrative Agent, then
they shall be distributed forthwith upon receipt in the following order of
priority: first, in accordance with the Holder Yield protection provisions set
forth in Article III; and, second, the balance, if any, of such payment or
amount remaining thereafter shall be distributed to the Holders pro rata.
SECTION 4.3 EXCEPTED PAYMENTS. Anything in this Article IV, or
elsewhere in this Trust Agreement to the contrary notwithstanding, any Excepted
Payment received at any time by the Owner Trustee shall be distributed promptly
to the Person entitled to receive such Excepted Payment.
SECTION 4.4 DISTRIBUTIONS AFTER DEFAULT. Subject to the terms of
Section 5.1 hereof, the proceeds received by the Owner Trustee from the exercise
of any remedy under the Lease shall be distributed pursuant to Section 4.2
above. This Trust shall cease and terminate in accordance with the terms set
forth in Section 8.1 and upon the final disposition by the Owner Trustee of all
of the Trust Estate pursuant to this Section 4.4.
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<PAGE> 14
ARTICLE V
DUTIES OF THE OWNER TRUSTEE
SECTION 5.1 NOTICE OF CERTAIN EVENTS. In the event the Owner
Trustee shall have knowledge of any Lease Default, Lease Event of Default,
Credit Agreement Default, Credit Agreement Event of Default, Agency Agreement
Default or Agency Agreement Event of Default, the Owner Trustee shall give
written notice thereof within five (5) Business Days to each Holder, the Lessee
and the Administrative Agent unless such Default or Event of Default no longer
exists before the giving of such notice. Subject to the provisions of Section
5.3, the Owner Trustee shall take or refrain from taking such action as
Administrative Agent shall direct so long as the Credit Agreement is in effect
(and as more specifically provided in Section 10.2(j) of the Participation
Agreement) and thereafter as the Holders shall jointly direct, in each case by
written instructions to the Owner Trustee. If the Owner Trustee shall have given
the Administrative Agent and the Holders notice of any event and shall not have
received written instructions as above provided within 30 days after mailing
notice of such event to the Administrative Agent and the Holders, the Owner
Trustee may, but shall be under no duty to, and shall have no liability for its
failure or refusal to, take or refrain from taking any action with respect
thereto, not inconsistent with the provisions of the Operative Agreements, as
the Owner Trustee shall deem advisable and in the best interests of the Lenders
and the Holders. For all purposes of this Trust Agreement, in the absence of
actual knowledge of a Responsible Officer in the Corporate Trust Department of
Trust Company, the Owner Trustee shall be deemed not to have knowledge of any
Default or Event of Default unless a Responsible Officer of the Corporate Trust
Department of Trust Company receives notice thereof given by or on behalf of a
Holder, the Lessee or the Administrative Agent.
SECTION 5.2 ACTION UPON INSTRUCTIONS. Subject to the provisions
of Sections 5.1 and 5.3, upon the written instructions of the Administrative
Agent or the Holders (as applicable) or, as permitted expressly by the Operative
Agreements, the Lessee, as the case may be, the Owner Trustee will take or
refrain from taking such action or actions as may be specified in such
instructions.
SECTION 5.3 INDEMNIFICATION. The Owner Trustee shall not be
required to take or refrain from taking any action under this Trust Agreement or
any other Operative Agreement (other than the actions specified in the first
sentence of Section 5.1 and in the last sentence of Section 5.4) unless Trust
Company shall have been indemnified by the Lessee or, if Trust Company
reasonably believes such indemnity to be inadequate, by either the Lenders or
the Holders in manner and form reasonably satisfactory to
11
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Trust Company, against any liability, fee, cost or expense (including reasonable
attorneys' fees and expenses) that may be incurred or charged in connection
therewith, other than such as may result from the willful misconduct or gross
negligence of the Owner Trustee; and, if the Administrative Agent or the Holders
shall have directed the Owner Trustee to take or refrain from taking any action
under any Operative Agreement, the Lenders or the Holders, as applicable, agree
to furnish such indemnity by a written undertaking of indemnification and, in
addition, to pay the reasonable compensation of Trust Company for the services
performed or to be performed by the Owner Trustee pursuant to such direction.
The Owner Trustee shall not be required to take any action under any Operative
Agreement if Trust Company shall reasonably determine, or shall have been
advised by counsel, that such action (a) is likely to result in personal
liability for which Trust Company has not been and will not be adequately
indemnified, (b) is contrary to the terms hereof or of any Operative Agreement
to which the Owner Trustee is a party, or (c) is otherwise contrary to law. The
Owner Trustee shall be under no liability with respect to any action taken or
omitted to be taken by the Owner Trustee in accordance with instructions of the
Administrative Agent or the Holders pursuant to Section 5.2 hereof.
SECTION 5.4 NO DUTIES EXCEPT AS SPECIFIED IN TRUST AGREEMENT OR
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
control, use, make any payment in respect of, register, record, insure, inspect,
sell, dispose of or otherwise deal with the Properties or any other part of the
Trust Estate, or to otherwise take or refrain from taking any action under or in
connection with any Operative Agreement to which the Owner Trustee is a party,
except as expressly provided by the terms of this Trust Agreement or in written
instructions from the Administrative Agent or the Holders, as applicable,
received pursuant to Section 5.1, 5.2 or 8.4; and no implied duties or
obligations shall be read into this Trust Agreement against the Owner Trustee.
The Owner Trustee shall have no duty or obligation to supervise or monitor the
performance of the Construction Agent pursuant to the Agency Agreement, which
Construction Agent for all purposes shall be an independent contractor. Trust
Company nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any Lessor Liens on any part of
the Trust Estate.
SECTION 5.5 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee agrees that it will not manage, control, use,
sell, dispose of or otherwise deal with the Properties or any other part of the
Trust Estate except (i) as required by the terms of the Operative Agreements,
(ii) in accordance with the powers granted to, or the authority conferred upon,
it pursuant to this Trust Agreement or (iii) in accordance
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with the express terms hereof or with written instructions from the
Administrative Agent or the Holders, as applicable, pursuant to Section 5.1, 5.2
or 8.4.
SECTION 5.6 ABSENCE OF DUTIES.
(a) Except in accordance with written instructions furnished
pursuant to Section 5.1, 5.2 or 8.4, and without limitation of the
generality of Section 5.4, the Owner Trustee shall not have any duty to
(i) file, record or deposit any Operative Agreement or any other
document, or to maintain any such filing, recording or deposit or to
refile, rerecord or redeposit any such document; (ii) obtain insurance
on the Properties or effect or maintain any such insurance, other than
to receive and forward to each Holder any notices, policies,
certificates or binders furnished to the Owner Trustee pursuant to the
Lease; (iii) maintain the Properties; (iv) pay or discharge any Tax or
any Lien owing with respect to or assessed or levied against any part
of the Trust Estate, except as provided in the last sentence of Section
5.4, other than to forward notice of such Tax or Lien received by the
Owner Trustee to each Holder and the Administrative Agent; (v) confirm,
verify, investigate or inquire into the failure to receive any reports
or financial statements of the Lessee; (vi) inspect the Properties at
any time or ascertain or inquire as to the performance or observance of
any of the covenants of the Lessee or any other Person under any
Operative Agreement with respect to the Properties; or (vii) manage,
control, use, sell, dispose of or otherwise deal with the Properties or
any part thereof or any other part of the Trust Estate, except as
provided in Section 5.5.
(b) The Owner Trustee, in the exercise or administration of
the trusts and powers hereunder, including its obligations under
Section 5.2 hereof, may, at the expense of the Lessee, employ agents,
attorneys, accountants, and auditors and enter into agreements with any
of them, and Trust Company shall not be liable, either in its
individual capacity or in its capacity as Owner Trustee, for the
default or misconduct of any such agents, attorneys, accountants or
auditors if such agents, attorneys, accountants or auditors shall have
been selected by it in good faith.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 ACCEPTANCE OF TRUST AND DUTIES. Trust Company
accepts the trust hereby created and agrees to perform
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the same, but only upon the terms of this Trust Agreement. Trust Company agrees
to receive, manage and disburse all moneys constituting part of the Trust Estate
actually received by it as Owner Trustee in accordance with the terms of this
Trust Agreement. Trust Company shall not be answerable or accountable under any
circumstances, except for (i) its own willful misconduct or gross negligence,
(ii) the inaccuracy of any of its representations or warranties contained in
Section 6.3 of this Trust Agreement or Section 7.2 of the Participation
Agreement, (iii) its failure to perform obligations expressly undertaken by it
in the last sentence of Section 5.4 of this Trust Agreement or in Section
10.2(a) of the Participation Agreement, (iv) Taxes based on or measured by any
fees, commissions or compensation received by it for acting as Owner Trustee in
connection with any of the transactions contemplated by the Operative
Agreements, or (v) its failure to use ordinary care to receive, manage and
disburse moneys actually received by it in accordance with the terms hereof.
SECTION 6.2 FURNISHING OF DOCUMENTS. The Owner Trustee will
furnish to each Holder and to the Administrative Agent, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
opinions, certificates, financial statements and any other instruments or
writings furnished to the Owner Trustee hereunder or under the Operative
Agreements, unless by the express terms of any Operative Agreement a copy of the
same is required to be furnished by some other Person directly to the Holders or
the Administrative Agent, or the Owner Trustee shall have determined that the
same has already been furnished to the Holders and the Administrative Agent.
SECTION 6.3 NO REPRESENTATIONS OR WARRANTIES AS TO THE
PROPERTIES OR OPERATIVE AGREEMENTS. TRUST COMPANY MAKES (i) NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE, USE, CONDITION,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART THEREOF) AND TRUST
COMPANY SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR
THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL
REQUIREMENT except that Trust Company hereby represents, warrants and covenants
to each Holder that it will comply with the last sentence of Section 5.4, and
(ii) no representation or warranty as to the validity or enforceability of any
Operative Agreement or as to the correctness of any statement made by a Person
other than Trust Company or the Owner Trustee contained in any thereof, except
that Trust Company represents, warrants and covenants to each Holder that this
Trust Agreement has been and each of the other Operative Agreements which
contemplates execution thereof by the Owner Trustee has been or will be executed
and delivered by its
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officers who are, or will be, duly authorized to execute and deliver documents
on its behalf.
SECTION 6.4 NO SEGREGATION OF MONEYS; NO INTEREST. Except as
otherwise provided herein or in any of the other Operative Agreements, moneys
received by the Owner Trustee hereunder need not be segregated in any manner
except to the extent required by law, and may be deposited under such general
conditions as may be prescribed by law, and neither Trust Company nor the Owner
Trustee shall be liable for any interest thereon, except as may be agreed to in
writing by Trust Company or the Owner Trustee.
SECTION 6.5 RELIANCE; ADVICE OF COUNSEL. Trust Company shall not
incur any liability to any Person in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it in
good faith to be signed by the proper party or parties. Trust Company may accept
and rely upon, a certified copy of a resolution of the board of directors or
other governing body of any corporate party as conclusive evidence that each
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the manner of ascertainment of which is not
specifically prescribed herein, Trust Company may for all purposes hereof rely
on an Officers' Certificate of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to Trust Company for any
action taken or omitted to be taken by it in good faith in reliance thereon. In
the administration of the trusts hereunder, the Owner Trustee may execute any of
the trusts or powers hereof and perform its powers and duties hereunder directly
or through agents or attorneys and may consult with counsel, accountants and
other skilled Persons to be selected and employed by it, and Trust Company shall
not be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or other
skilled Persons and not contrary to this Trust Agreement.
SECTION 6.6 LIABILITY WITH RESPECT TO DOCUMENTS. The Owner
Trustee, either in its trust or individual capacities, shall not incur any
liability to any Person for or in respect of (a) the recitals herein, (b) the
validity or sufficiency of this Trust Agreement, (c) the due execution hereof by
any Holder, (d) the form, character, genuineness, sufficiency, value or validity
of the Properties, or (e) the validity or sufficiency of any of the Operative
Agreements; and the Owner Trustee, either in its trust or individual capacities,
shall in no event assume or incur any liability, duty or obligation to any
Person or to any Holder, other than as expressly provided for herein or in any
of the other Operative Agreements.
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SECTION 6.7 NOT ACTING IN INDIVIDUAL CAPACITY. All Persons
having any claim against Trust Company by reason of the transactions
contemplated by the Operative Agreements shall look only to the Trust Estate (or
a part thereof, as the case may be) for payment or satisfaction thereof, except
as specifically provided in this Article VI and except to the extent that Trust
Company shall otherwise expressly agree in any Operative Agreement to which it
is a party.
SECTION 6.8 BOOKS AND RECORDS; TAX RETURNS.
(a) The Owner Trustee shall be responsible for the keeping of
all appropriate books and records relating to the receipt and
disbursement of all moneys that it may receive hereunder, or under any
other Operative Agreement. The Owner Trustee shall, at the expense of
the Owner Trustee, file an application with the Internal Revenue
Service for a taxpayer identification number with respect to the trust
created hereby. The Owner Trustee shall, at the expense of the Owner
Trustee, prepare or cause to be prepared and the Owner Trustee shall
sign or file the federal fiduciary tax return with respect to Taxes due
and payable by the trust created hereby in connection with the
transactions contemplated hereby and by any other Operative Agreement.
Each Holder shall furnish the Owner Trustee with all such information
as may be reasonably required from such Holder in connection with the
preparation of such tax returns. The Owner Trustee shall keep copies of
all returns delivered to or filed by it.
(b) The Owner Trustee, either in its trust or individual
capacities, shall be under no obligation to appear in, prosecute or
defend any action, which in its opinion may require it to incur any
out-of-pocket expense or any liability unless it shall be furnished
with such reasonable security and indemnity against such expense or
liability as it may require. The Owner Trustee may, but shall be under
no duty to, undertake such action as it may deem necessary at any and
all times, without any further action by the Administrative Agent or
any Holder to protect the Properties and the rights and interests of
the Holders pursuant to the terms of this Trust Agreement; provided,
however, that Trust Company may obtain reimbursement for the
out-of-pocket expenses and costs of such actions, undertakings or
proceedings from the Lessee.
ARTICLE VII
INDEMNIFICATION OF THE OWNER TRUSTEE
SECTION 7.1 INDEMNIFICATION GENERALLY. The Owner Trustee and
Trust Company are indemnified for matters related to the
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transactions described herein by the Lessee pursuant to Section 13 of the
Participation Agreement. Except as may be specifically provided from time to
time hereafter in writing by the Holders, neither the Owner Trustee nor Trust
Company shall have any right of indemnification from any Holder with respect to
the transactions described herein or in any of the other Operative Agreements.
SECTION 7.2 COMPENSATION AND EXPENSES. The Lessee has agreed to
pay the fees and reasonable expenses of the Owner Trustee and Trust Company as
provided in Section 9.3 of the Participation Agreement.
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
SECTION 8.1 TERMINATION OF TRUST AGREEMENT. This Trust
Agreement and the trusts created hereby shall terminate, and the Trust Estate
shall, subject to the provisions of the Participation Agreement, the other
Operative Agreements and Article IV hereof, be distributed pro rata to the
Holders, and this Trust Agreement shall be of no further force or effect, upon
the earliest to occur of (i) the joint written request of the Holders following
the sale or other final disposition by the Owner Trustee of all property
constituting part of the Trust Estate and the final distribution by the Owner
Trustee of all moneys or other property or proceeds constituting part of the
Trust Estate in accordance with the terms of Article IV; or (ii) the sale or
other final disposition by the Owner Trustee of all property constituting the
Trust Estate and the final disposition by the Owner Trustee of all moneys or
other property or proceeds constituting part of the Trust Estate in accordance
with the terms hereof; provided, however, that the Trust Estate shall not be
subject to sale or other final disposition by the Owner Trustee prior to the
payment in full and discharge of the Loans and all other indebtedness secured
by the Credit Documents, the release of the Credit Documents and the liens and
security interest granted thereby and the payment in full of the Holder Amount
and Holder Yield thereon and all other amounts owing to the Holders under any
of the Operative Agreements; and (iii) 110 years after the date hereof.
SECTION 8.2 TERMINATION AT OPTION OF THE HOLDERS.
Notwithstanding Section 8.1, this Trust Agreement and the trusts created hereby
shall terminate and the Trust Estate shall be distributed pro rata to the
Holders, and this Trust Agreement shall be of no further force and effect, upon
the joint election of the Holders by notice to the Owner Trustee, if such notice
shall be accompanied by the written agreement of each Holder assuming all the
obligations of the Owner Trustee under or contemplated by the Operative
Agreements and all other
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obligations of the Owner Trustee incurred by it as trustee hereunder; provided,
however, that each Holder agrees for the express benefit of the Administrative
Agent and the Lenders, that without the consent of the Administrative Agent, no
such election shall be effective until the Liens and security interests of the
Security Documents on the Collateral shall have been released and until full
payment of the principal of, and interest on the Loans and all other sums due to
the, Lenders shall have been made. Such written agreement shall be reasonably
satisfactory in form and substance to the Owner Trustee and shall release the
Owner Trustee from all further obligations of the Owner Trustee hereunder and
under the agreements and other instruments mentioned in the preceding sentence.
SECTION 8.3 TERMINATION AT OPTION OF THE OWNER TRUSTEE.
Notwithstanding any other section hereof, at any time that the Lease shall no
longer be in full force and effect, and the Administrative Agent shall have
confirmed in writing to the Owner Trustee that the Lenders have received payment
in full of the principal of and interest on the Loans and that all other sums
due to the Administrative Agent and the Lenders under the Operative Documents
shall have been paid, and the Holders shall have received payment in full of all
Holder Yield and other amounts due to the Holders under the Operative Documents,
then the Holders hereby authorize the Owner Trustee to: (a) terminate this Trust
Agreement and the trusts created hereby and (b) distribute and convey the Trust
Estate pro rata to the Holders by executing the necessary transfer documents as
contemplated by Section 8.4 hereof. The exercise of such option by the Owner
Trustee shall cause this Trust Agreement to be of no further force and effect
and shall release the Owner Trustee from all further obligations of the Owner
Trustee hereunder and under the agreements and other instruments mentioned in
the preceding sentence.
SECTION 8.4 ACTIONS BY THE OWNER TRUSTEE UPON TERMINATION. Upon
termination of this Trust Agreement and the trusts created hereby pursuant to
Section 8.1, Section 8.2 or Section 8.3, the Owner Trustee shall upon notice of
such event take such action as may be necessary or as may be requested by the
Holders to transfer the Trust Estate pro rata to the Holders, including, without
limitation, the execution of instruments of transfer or assignment with respect
to any of the Operative Agreements to which the Owner Trustee is a party.
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ARTICLE IX
SUCCESSOR OWNER TRUSTEES, CO-OWNER TRUSTEES
AND SEPARATE OWNER TRUSTEES
SECTION 9.1 RESIGNATION OF THE OWNER TRUSTEE; APPOINTMENT
OF SUCCESSOR.
(a) The Owner Trustee may resign at any time without cause by
giving at least 30 days' prior written notice to each Holder, the
Administrative Agent and the Lessee; provided, however that such
resignation shall not be effective until the acceptance of appointment
by a successor Owner Trustee under Section 9.1(b). The Owner Trustee
may be removed with or without cause at any time by the Holders upon
consent to such removal by the Administrative Agent and with 60 days'
prior written notice to the Owner Trustee, a copy of which notice shall
be concurrently delivered by the Holders to the Administrative Agent
and the Lessee. Any such removal shall be effective upon the acceptance
of appointment by a successor Owner Trustee under Section 9.1(b). In
case of the resignation or removal of the Owner Trustee, the Holders
may appoint a successor Owner Trustee by an instrument signed by each
Holder; provided, however, that such successor Owner Trustee must be
approved by the Administrative Agent. If a successor Owner Trustee
shall not have been appointed within 30 days after the giving of
written notice of such resignation or the delivery of the written
instrument with respect to such removal, the Owner Trustee or any
Holder may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor
shall have been appointed and shall have accepted its appointment as
above provided. Any successor Owner Trustee so appointed by such court
shall immediately and without further act be superseded by any
successor Owner Trustee appointed as above provided within one year
from the date of the appointment by such court.
(b) Any successor Owner Trustee, however appointed, shall
execute and deliver to the predecessor Owner Trustee an instrument
accepting such appointment, and thereupon such successor Owner Trustee,
without further act shall become vested with all the estates,
properties, rights, powers, duties and trusts of the predecessor Owner
Trustee in the trusts hereunder with like effect as if originally named
an Owner Trustee herein; but, the foregoing notwithstanding, upon the
written request of such successor Owner Trustee, such predecessor Owner
Trustee shall execute and deliver an instrument transferring to such
successor Owner Trustee, upon the trusts herein expressed, all the
estates, properties, rights, powers, duties and trusts of such
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predecessor Owner Trustee, and such predecessor Owner Trustee shall
duly assign, transfer, deliver and pay over to such successor Owner
Trustee all moneys or other property then held by such predecessor
Owner Trustee upon the trusts herein expressed.
(c) Any successor Owner Trustee, however appointed, shall be a
bank or trust company incorporated and doing business within the United
States of America and having a combined capital and surplus of at least
$50,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of Owner Trustee hereunder upon
reasonable or customary terms.
(d) Any corporation into which the Owner Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Owner Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Owner Trustee may
be transferred, shall, subject to the terms of Section 9.1(c), be the
Owner Trustee under this Trust Agreement without further act.
SECTION 9.2 CO-TRUSTEES AND SEPARATE TRUSTEES. Whenever
(a) the Owner Trustee or the Holders (i) shall deem it necessary or prudent in
order to conform to any law of any jurisdiction in which all or any part of the
Trust Estate shall be situated or to which it may be subject, or to make any
claim or bring any suit with respect to the Trust Estate or any Operative
Agreement, or (ii) shall be advised by counsel satisfactory to the Trustee or
the Holders, as the case may be, that it is so necessary or prudent, or (b) the
Owner Trustee shall have been directed to do so by the Holders and the
Administrative Agent, then the Owner Trustee and the Holders shall execute and
deliver an agreement supplemental hereto and all other instruments and
agreements, and shall take all other action, necessary or proper to constitute
one or more Persons who need not meet the requirements of Section ------- 9.1(c)
(and the Owner Trustee may appoint one or more of its ------ officers) either as
co-trustee or co-trustees (the "Co-Owner Trustee"), jointly with the Owner
Trustee, of all or any part of the Trust Estate, or as separate trustee or
separate trustees of all or any part of the Trust Estate, and to vest in such
Persons, in such capacity, such title to the Trust Estate or any part thereof
and such rights or duties as may be necessary or desirable, all for such period
and under such terms and conditions as are satisfactory to the Owner Trustee and
the Holders. In accordance with the foregoing:
(a) Trust Company shall appoint a Co-Owner Trustee hereunder
in part so that if, under any present or future law of any State where
the Properties are located or of any jurisdiction in which it may be
necessary to perform any act in carrying out the trusts herein created,
Trust Company or
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any of its successors may be incompetent or unqualified or
incapacitated or unwilling to perform certain acts as such Owner
Trustee, then upon the written request of Trust Company of any of its
successors received by any Co-Owner Trustee, all of such acts required
to be performed in such jurisdiction in the execution of the trust
hereby created, shall and will be performed by such Co-Owner Trustee,
or any of his successors, in trust acting alone, as if he or such
successor had been specifically authorized to do so or had been the
sole Owner Trustee hereunder. Any Co-Owner Trustee shall continue to
perform such acts until otherwise directed in writing by Trust Company
or any of its successors. Any request in writing by Trust Company or
any of its successors to a Co-Owner Trustee shall be sufficient warrant
for him to take such action as may be so requested.
(b) Except to the extent it may be deemed necessary for any
Co-Owner Trustee or any of his successors solely or jointly to execute
the trusts herein created, Trust Company or any of its successors shall
alone possess and exercise the powers, and shall be solely charged with
the performance of the duties herein declared to be possessed,
exercised or performed by the Owner Trustee; and no Co-Owner Trustee
shall be liable therefor. Any Co-Owner Trustee or any of his successors
may delegate to Trust Company or its successor hereunder the exercise
of any power or discretion conferred by any provision of this Trust
Agreement.
(c) Any act of the Owner Trustee herein required or authorized
shall and will be jointly or separately performed by Trust Company or
its successors hereunder and by any Co- Owner Trustee or any of his
successors appointed hereunder, if such joint performance or separate
performance shall be necessary to the legality of such act and when so
acting all references herein to "First Security Bank, National
Association" shall be deemed to be references to such Co- Owner Trustee
in its individual capacity and all references to "Owner Trustee" shall
be deemed to be references to such Co-Owner Trustee, and such Co-Owner
Trustee shall be entitled to all the protection, indemnification,
immunity and compensation herein provided to Trust Company acting
singly in reference to such acts (subject to the limitations to such a
protection, indemnification, immunity and compensation set forth
herein).
(d) Trust Company or its successor in trust shall have and is
hereby given the power at any time by an instrument in writing duly
executed by a Vice President, and under its corporate seal, to remove
any Co-Owner Trustee or his successor, from his position as Co-Owner
Trustee hereunder. In the case of death, resignation, removal,
incapacity or inability to act hereunder of the Co-Owner Trustee, or
his successor as Co-Owner Trustee, (i) any adult citizen of the
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United States of America may be appointed Co-Owner Trustee hereunder by
a person who shall at the time be a Vice President of the corporation
then acting as Owner Trustee hereunder, by an instrument in writing
duly executed, and (ii) subject to its right to revoke such appointment
or to appoint another person, Trust Company shall appoint a successor
Co-Owner Trustee, such appointment to be immediately effective. In the
event a vacancy occurs in the office of the Co-Owner Trustee, either by
reason of resignation, removal, incapacity or inability to act and no
successor is appointed pursuant to the foregoing provisions within 30
days after such vacancy occurs, the Holders and the Administrative
Agent may jointly appoint a successor to the Co-Owner Trustee in the
same manner as is provided for the appointment of a successor to the
Co-Owner Trustee hereunder.
(e) At any time or times, for the purposes of meeting the
legal requirements of any jurisdiction in which any part of the Trust
Estate hereunder may at the time be located, or to avoid any violation
of law or imposition of taxes not otherwise imposed on the Owner
Trustee, or if the Owner Trustee shall deem it desirable for its own
protection, Trust Company shall have power to appoint one or more
persons (who may be officers of Trust Company) either to act as an
additional co-trustee, jointly with Trust Company, of all or any part
of the Trust Estate hereunder, or of any property constituting part
thereof, or to act as separate trustee of any part of the Trust Estate,
in either case with such powers as may be provided in the instrument of
appointment and are consistent with the terms hereof, and to vest in
such person or persons (in such capacity as co-trustee or separate
trustee), any property, title, right or power deemed necessary or
desirable, subject to the remaining provisions of this Section 9.2.
(f) Notwithstanding any provision of this Trust Agreement to
the contrary, any Co-Owner Trustee or co-trustee shall act upon and be
subject to the following terms and conditions:
All rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred or
imposed solely upon and solely exercised and performed by
Trust Company except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed Trust Company or the Owner Trustee shall be
incompetent or unqualified to perform such act or acts or to
avoid any violation of law or imposition of taxes not
otherwise imposed on the Owner Trustee, or if the Owner
Trustee shall deem it desirable for its own protection, in
which event such rights, powers, duties and obligations
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shall be exercised and performed by such co-trustee or Co-Owner
Trustee.
(g) No power granted by this Trust Agreement to, or which this
Trust Agreement provides may be exercised by, the Owner Trustee in
respect of the custody, control and management of moneys may be
exercised by any Co-Owner Trustee or any subsequently appointed
co-trustee except jointly with, or with the consent in writing of,
Trust Company for disbursement or application in accordance with the
terms hereof.
(h) All moneys which may be received or collected by any
Co-Owner Trustee or such subsequently appointed co-trustees shall be
paid over to Trust Company to be distributed in accordance with this
Trust Agreement and the other Operative Agreements.
(i) Any Co-Owner Trustee, or any subsequently appointed
co-trustee to the extent permitted by law, does hereby constitute Trust
Company or its successors hereunder his or her agent or attorney in
fact, with full power and authority to do any and all acts and things
and exercise any and all discretion authorized or permitted by the
Co-Owner Trustee or such subsequently appointed co-trustee, in its
behalf or in its name.
(j) No trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder.
SECTION 9.3 NOTICE. At all times that a successor Owner Trustee
is appointed pursuant to Section 9.1, an Owner Trustee resigns pursuant to
Section 9.1 or the Co-Owner Trustee, a co-trustee or separate trustee, is
appointed pursuant to Section 9.2, the Holders shall give joint notice of such
fact within 15 days of its occurrence to (x) the Lessee, if the Lease is then in
effect and (y) the Administrative Agent, if the Credit Agreement is in effect.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
SECTION 10.1 SUPPLEMENTS AND AMENDMENTS. Subject to Section 10.2
of this Trust Agreement, and Section 10.2 of the Participation Agreement, at the
written request of any Holder, this Trust Agreement shall be amended by a
written instrument signed by Trust Company and each Holder, but if in the
opinion of Trust Company or any non-requesting Holder, any instrument required
to be so executed adversely affects any right, duty or liability of, or immunity
or indemnity in favor of, such non-
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requesting Holder or the Owner Trustee under this Trust Agreement or any of the
other Operative Agreements to which the Owner Trustee is a party, or would cause
or result in any conflict with or breach of any terms, conditions or provisions
of, or default under, the charter documents or by-laws of such non-requesting
Holder or any document contemplated hereby to which it or the Owner Trustee is a
party, then Trust Company or such other Holder, as the case may be, may in its
sole discretion decline to execute such instrument, unless it shall have been
provided an indemnity satisfactory to it by the Holder so requesting the
amendment.
SECTION 10.2 LIMITATION ON AMENDMENTS. Notwithstanding Section
10.1, Trust Company shall not, without the consent of the Administrative Agent,
execute any amendment (i) that might result in the trusts created hereunder
being terminated prior to the satisfaction and discharge of the Lien and
security interest of the Security Documents on the Collateral or prior to the
payment in full of the principal of and interest on the Loans, and any other
amounts due to the Administrative Agent or any Lender under any Credit Document,
and (ii) other than in accordance with the terms of the Credit Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 NO LEGAL TITLE TO TRUST ESTATE IN THE HOLDERS. The
Holders shall not have legal title to any part of the Trust Estate; provided,
however, that each Holder has a pro rata beneficial interest in the Trust
Estate. No transfer, by operation of law or otherwise, of any right, title or
interest of a Holder in and to the Trust Estate or hereunder shall operate to
terminate this Trust Agreement or the Trust or the trusts hereunder or entitle
any successor or transferee to an accounting or to the transfer to it of legal
title to any part of the Trust Estate.
SECTION 11.2 SALE OF PROPERTIES BY THE OWNER TRUSTEE IS BINDING.
Any sale, transfer, or other conveyance of the Properties or any part thereof by
the Owner Trustee made pursuant to the terms of this Trust Agreement or any
other Operative Agreement shall bind the Holders and shall be effective to sell,
transfer and convey all right, title and interest of the Owner Trustee and the
Holders in and to the Properties or any part thereof. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application of
any sale or other proceeds with respect thereto by the Owner Trustee.
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SECTION 11.3 LIMITATIONS ON RIGHTS OF OTHERS. Nothing in this
Trust Agreement whether express or implied, shall be construed to give to any
Person, other than Trust Company, the Owner Trustee and each Holder, any legal
or equitable right, remedy or claim under or in respect of this Trust Agreement,
any covenants, conditions or provisions contained herein or in the Trust Estate;
but this Trust Agreement shall be held for the sole and exclusive benefit of the
Owner Trustee and the Holders. The Administrative Agent shall have the right to
enforce the provisions of Sections 5.1, 5.2, 5.3, 5.4, 5.5, 6.2, 6.8, 8.1,
8.2, 8.3, 9.1, 9.2, 9.3, 10.1 and 10.2 hereof.
SECTION 11.4 NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices hereunder shall be given as provided
in the Participation Agreement.
SECTION 11.5 SEVERABILITY. Any provision of this Trust Agreement
that may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.6 LIMITATION ON THE HOLDERS' LIABILITY. No Holder
shall have any liability for the performance of this Trust Agreement except as
expressly set forth herein.
SECTION 11.7 SEPARATE COUNTERPARTS. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.8 SUCCESSORS AND ASSIGNS.
(a) All covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, Trust Company, the Owner
Trustee and its successors and assigns and each Holder and its
successors and assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by a Holder
shall bind the successors and assigns of such Holder.
(b) Subject to the terms of Section 12.1 of the Participation
Agreement, any Holder may transfer or assign all or any portion of its
right, title and interest in the Trust Estate, this Trust Agreement and
the Certificate of such Holder pursuant to an assignment agreement in a
form acceptable to the Owner Trustee, which assignment agreement shall
provide, without limitation, that the assignee
25
<PAGE> 29
undertakes and assumes all obligations and covenants of a Holder under
this Trust Agreement and the other Operative Documents. The Holder
proposing the transfer or assignment shall notify the Owner Trustee in
writing of the effective date of the transfer or assignment, which
effective date shall be at least three (3) Business Days after the date
of such notification. The Owner Trustee, at its own expense, shall
maintain a register showing the Holders and their respective interests
in the Trust Estate and, upon the occurrence of a permitted assignment
pursuant to this Section 11.8(b), shall issue a Certificate to the
assignee and, if the assigning Holder is maintaining an interest
hereunder, a new Certificate to such assigning Holder representing its
revised interest in the Trust Estate.
SECTION 11.9 HEADINGS. The headings of the various articles and
sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.10 GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF FLORIDA, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICT OF LAWS.
SECTION 11.11 PERFORMANCE BY THE HOLDERS. Any obligation of the
Owner Trustee hereunder or under any Operative Document or other document
contemplated herein may be performed by the Holders (or by one of them with the
written consent of the other) and any such performance shall not be construed as
a revocation of the trusts created hereby.
SECTION 11.12 CONFLICT WITH OPERATIVE AGREEMENTS. If this Trust
Agreement (or any instructions given by a Holder pursuant hereto) shall require
that any action be taken with respect to any matter and any other Operative
Agreement (or any instructions duly given in accordance with the terms thereof)
shall require that a different action be taken with respect to such matter, and
such actions shall be mutually exclusive, the provisions of such other Operative
Agreement shall control in respect thereof.
SECTION 11.13 NO IMPLIED WAIVER. No term or provision of this
Trust Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing entered into as provided in Section 10.1; and
any such waiver of any term hereof shall be effective only in the specific
instance and for the specific purpose given.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
26
<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the date set forth above.
OWNER TRUSTEE:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
By: /s/ Val T. Orton
------------------------
Name: Val T. Orton
Title: Vice President
(Wackenhut Corrections Trust 1997-1)
HOLDERS:
NATIONSBANK, N.A. (SOUTH)
as a Holder
By: /s/ Maria Conroy
------------------------
Name: Maria Conroy
Title: Senior Vice President
[ADD APPROPRIATE LANGUAGE RE
INDIVIDUAL TRUSTEE]
Signature Page 1 of 3
<PAGE> 31
BARNETT BANK, N.A., as a Holder
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Address for Notices:
9000 Southside Boulevard
Building 600
Jacksonville, Florida 32256
Attention: Andrea Potts
Telephone No.: (904) 464-6502
Telecopy No.: (904) 464-5549
Signature Page 2 of 3
<PAGE> 32
SCOTIABANC INC., as a Holder
By:
------------------------------
Name:
-----------------------------
Title:
----------------------------
Address for Notices:
600 Peachtree Streen, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Dorothy Legista
Telephone No.: (404) 877-1535
Telecopy No.: (404) 888-8998
Signature Page 3 of 3
<PAGE> 33
EXHIBIT A
FORM OF HOLDER CERTIFICATE
FIRST SECURITY BANK, NATIONAL ASSOCIATION
TRUSTEE UNDER
AMENDED AND RESTATED TRUST AGREEMENT DATED AS OF JUNE --, 1997
HOLDER CERTIFICATE
WACKENHUT CORRECTIONS TRUST 1997-1
$ , 199
------------------------- --------------- -
Holder:
-------------------
First Security Bank, National Association, as trustee (in such capacity
the "Trustee") under that certain Amended and Restated Trust Agreement (the
"Trust Agreement") dated as of June __, 1997, between NationsBank, N.A. (South)
and the other Holders party thereto, and the Trustee, hereby certifies as
follows: (i) this Holder Certificate is the Holder Certificate referred to in
the Section 3.1(d) of the Trust Agreement, which Holder Certificate has been
issued to the Holder named herein by the Trustee pursuant to the Trust Agreement
and (ii) subject to the prior payment of, and the assignment, pledge or mortgage
of the Trust Estate to secure the Notes as set forth in the applicable Operative
Agreements, the holder of this Holder Certificate has an undivided beneficial
interest in properties of the Trustee constituting part of the Trust Estate and
is entitled to receive as provided in the Trust Agreement, a portion of the Rent
received or to be received by the Trustee for the Properties, as well as a
portion of certain other payments which may be received by the Trustee pursuant
to the terms of the Operative Agreements as more particularly set forth therein.
(Capitalized terms not otherwise defined herein shall have the respective
meanings assigned to them in the Trust Agreement.)
All amounts payable hereunder and under the Trust Agreement shall be
paid only from the income and proceeds from the Trust Estate and only to the
extent that the Trustee shall have received sufficient income or proceeds from
the Trust Estate to make such payments in accordance with the terms of the Trust
Agreement, except as specifically provided in Section 6.1 of the Trust
Agreement; and the holder hereof, by its acceptance of this Holder Certificate,
agrees that it will look solely to the income and proceeds from the Trust Estate
to the extent available for distribution to the holder hereof as provided in the
Trust Agreement and the other Operative Agreements and that, except as
specifically provided in the Trust Agreement and the other Operative Agreements,
the Trustee is not personally liable to the
A-1
<PAGE> 34
holder hereof for any amount payable under this Holder Certificate or the Trust
Agreement.
The amounts payable to the holder hereof pursuant to the Trust
Agreement shall be paid or caused to be paid by the Owner Trustee to, or for the
account of, such Holder, or its nominee, by transferring such amount in
immediately available funds to one or more banking institutions with bank wire
transfer facilities for the account of such Holder or as otherwise instructed in
writing from time to time by such Holder.
This Holder Certificate shall mature, and all amounts payable to the
holder hereof pursuant to the Trust Agreement shall be due on, the Maturity
Date.
The Holder Fundings outstanding from time to time under this Holder
Certificate shall bear a yield on the unpaid amount hereof at the Holder Yield
as provided in the Trust Agreement. The Holder Yield on this Holder Certificate
shall be computed as provided in the Trust Agreement and shall be payable at the
rates, at the times and from the dates specified in the Trust Agreement.
From and after the execution of the Participation Agreement, the rights
of the holder of this Holder Certificate under the Trust Agreement as well as
the beneficial interest of the holder of this Holder Certificate in and to the
properties of the Trustee constituting part of the Trust Estate, are subject and
subordinate to the rights of the holders of the Notes to the extent provided in
the applicable Operative Agreements. The Trust Estate has been or will be
assigned, pledged and mortgaged to the Administrative Agent, on behalf of the
Lenders, as security for the Notes. Reference is hereby made to the Trust
Agreement, the Participation Agreement, the Credit Agreement, the Security
Agreement and the Notes for statements of the rights of the holder of this
Holder Certificate and of the rights of the holders of, and the nature and
extent of the security for, the Notes, as well as for a statement of the terms
and conditions of the trusts created by the Trust Agreement; and the holder
hereof, by its acceptance of this Holder Certificate, agrees to all such terms
and conditions.
The holder hereof, by its acceptance of this Holder Certificate, agrees
not to transfer this Holder Certificate except in accordance with the terms of
the Trust Agreement and the other Operative Agreements.
THIS HOLDER CERTIFICATE SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF
FLORIDA. WHENEVER POSSIBLE EACH PROVISION OF THIS HOLDER CERTIFICATE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
A-2
<PAGE> 35
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS HOLDER CERTIFICATE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
HOLDER CERTIFICATE.
IN WITNESS WHEREOF, the undersigned authorized officer of the Trustee
has executed this Holder Certificate as of the date first set forth above.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Trustee
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
A-3
<PAGE> 1
EXHIBIT 4.5
- -------------------------------------------------------------------------------
SECURITY AGREEMENT
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely
as Owner Trustee under the
Wackenhut Corrections Trust 1997-1
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders and the Holders
Dated as of June 19, 1997
- -------------------------------------------------------------------------------
<PAGE> 2
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of June 19, 1997 (as amended,
supplemented or otherwise modified from time to time, this "Security
Agreement"), is made between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as Owner Trustee under the Wackenhut Corrections Trust
1997-1 (the "Borrower"), and NATIONSBANK, NATIONAL ASSOCIATION, a national
banking association ("NationsBank"), as agent for itself, the Administrative
Agent, the Lenders and the Holders (in such capacity, the "Agent").
Preliminary Statement
Pursuant to the Credit Agreement dated as of even date herewith (as
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), by and among the Borrower, NationsBank, as Administrative
Agent for the Lenders (in such capacity, the "Administrative Agent") and the
financial institutions from time to time parties thereto (the "Lenders"), the
Lenders have severally agreed to make Loans to the Borrower in an aggregate
amount not to exceed the aggregate Commitments (as defined in the Participation
Agreement) upon the terms and subject to the conditions set forth therein, to be
evidenced by the Notes issued by the Borrower under the Credit Agreement.
Pursuant to the Trust Agreement dated as of even date herewith (as
amended, supplemented, restated or otherwise modified from time to time, the
"Trust Agreement"), by and among First Security Bank, National Association,
individually and as Owner Trustee, and the financial institutions from time to
time parties thereto (the "Holders"), the Holders have severally agreed to make
Holder Fundings in an aggregate amount not to exceed the aggregate Holder
Commitments (as defined in the Participation Agreement).
The Borrower is, or shall be upon the date of the initial Advance with
respect thereto, the legal and beneficial owner of each Property.
It is a condition, among others, to the obligation of the Lenders to
make their respective Loans to the Borrower under the Credit Agreement, and the
obligation of the Holders to make Holder Fundings under the Trust Agreement,
that the Borrower shall have executed and delivered this Security Agreement to
the Agent, for the benefit of the Lenders and the Holders.
<PAGE> 3
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make their respective Loans under the Credit Agreement, and to induce
the Holders to make their respective Holder Fundings under the Trust Agreement,
the Borrower hereby agrees with the Agent, for the benefit of the Lenders and
the Holders, as follows:
1. Definitions. (a) As used herein, the following terms
shall have the following respective meanings:
"Accounts" shall mean all "accounts", as such term is defined
in the Uniform Commercial Code, now owned or hereafter acquired by the
Borrower, including without limitation (a) all accounts receivable,
other receivables, book debts and other forms of obligations now owned
or hereafter received or acquired by or belonging or owing to the
Borrower, whether arising out of goods sold or leased or services
rendered by it or from any other transaction (including without
limitation any such obligations which may be characterized as an
account under the Uniform Commercial Code), (b) all of the Borrower's
rights in, to and under all purchase orders or receipts now owned or
hereafter acquired by it for goods or services, (c) all of the
Borrower's rights to any goods represented by any of the foregoing
(including without limitation unpaid sellers' rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (d) all monies due or to become due to
the Borrower under all purchase orders and contracts for the sale or
lease of goods or the performance of services or both by the Borrower
(whether or not yet earned by performance on the part of Borrower) now
or hereafter in existence, including without limitation the right to
receive the proceeds of said purchase orders and contracts, and (e) all
collateral security and guarantees of any kind, now or hereafter in
existence, given by any Person with respect to any of the foregoing.
"Chattel Paper" shall mean any and all "chattel paper", as
such term is defined in the Uniform Commercial Code, now owned or
hereafter acquired by the Borrower, wherever located.
"Contracts" shall mean any and all "contracts", as such term
is defined in the Uniform Commercial Code, now owned or hereafter
acquired by the Borrower, including without limitation all contracts,
undertakings, or agreements in or under which Borrower may now or
hereafter have any right, title or interest, including without
limitation any
2
<PAGE> 4
agreements relating to the terms of payment or the terms of
performance of any Account.
"Documents" shall mean any and all "documents", as such term
is defined in the Uniform Commercial Code, now owned or hereafter
acquired by the Borrower, wherever located.
"Instruments" shall mean any and all "instruments", as such
term is defined in the Uniform Commercial Code, now owned or hereafter
acquired by the Borrower, wherever located, including without
limitation all certificated securities, all certificates of deposit,
and all notes and other evidences of Indebtedness.
"Obligations" shall mean any and all obligations of the
Borrower, now existing or hereafter arising under the Credit Agreement,
the Notes or any other Operative Agreement.
(b) Capitalized terms used but not otherwise defined in this
Security Agreement shall have the respective meanings specified in the
Credit Agreement or Appendix A to the Participation Agreement (as
defined in the Credit Agreement).
2. Grant of Security Interest. To secure payment of all the
amounts advanced under the Credit Agreement, the Notes, the Trust Agreement and
the Certificates, and all other amounts now or hereafter owing to the Agent, the
Lenders, the Administrative Agent or the Holders thereunder or under any other
Operative Agreement, THE BORROWER HEREBY CONVEYS, GRANTS, ASSIGNS, TRANSFERS,
HYPOTHECATES, MORTGAGES AND SETS OVER TO THE AGENT (FOR ITSELF AND ON BEHALF OF
THE LENDERS AND THE HOLDERS), A FIRST PRIORITY SECURITY INTEREST IN AND LIEN ON
THE TRUST ESTATE AND THE FOLLOWING (AS A PART THEREOF OR IN ADDITION THERETO):
(A) all right, title and interest of the Borrower in
and to the Operative Agreements now existing or hereafter
acquired by the Borrower (including without limitation all
rights to payment and indemnity rights of the Borrower under
the Participation Agreement) (all of the foregoing in this
paragraph (A) being referred to as the "Rights in Operative
Agreements");
(B) all right, title and interest of the Borrower in
and to all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and
articles of personal property of every kind and nature
whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each
case, attachments,
3
<PAGE> 5
components, parts and accessories) currently owned or
subsequently acquired by the Borrower and now or subsequently
attached to, or contained in, comprising a portion of or used
or usable in any way in connection with the Property,
including but without limiting the generality of the
foregoing, all equipment referred to in the Appraisals and the
Equipment Schedules pursuant to the Lease or the Participation
Agreement, all computer hardware, and all heating, electrical,
and mechanical equipment, lighting, switchboards, plumbing,
ventilation, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems,
cleaning systems (including without limitation window cleaning
apparatus), telephones, communication systems (including
without limitation satellite dishes and antennae),
televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, conveyers, pipes, pumps,
tanks, conduits, appliances, fittings and fixtures of every
kind and description (all of the foregoing in this paragraph
(B) being referred to as the "Borrower's Equipment");
(C) all right, title and interest of the Borrower in
and to all of the fixtures, furnishings and fittings of every
kind and nature whatsoever, and all appurtenances and
additions thereto and substitutions or replacements thereof
(together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by
the Borrower and now or subsequently attached to, or contained
in or used or usable in any way in connection with any of the
Property (all of the foregoing in this paragraph (C) being
referred to as the "Fixtures"; all Land, Fixtures and
Borrower's Equipment being collectively referred to herein as
the "Property");
(D) all estate, right, title, claim or demand
whatsoever of the Borrower, in possession or
expectancy, in and to the Property or any part thereof;
(E) all right, title and interest of the Borrower in
and to all substitutes, modifications and replacements of, and
all additions, accessions and improvements to, the Fixtures
and Borrower's Equipment, subsequently acquired by the
Borrower or constructed, assembled or placed by the Borrower
on the Land, immediately upon such acquisition, release,
4
<PAGE> 6
construction, assembling or placement, and in each such
case, without any further conveyance, assignment or
other act by the Borrower;
(F) all right, title and interest of the Borrower in,
to and under all patents, trade names, trade marks, logos,
copyrights, applications for patents, trademarks and
copyrights, licenses, software, good will and books and
records relating to or used in connection with the operation
of the Property or any part thereof; all general intangibles
now existing or hereafter arising; all rights to the payment
of money or property; and all rights in and to any causes of
action or choses in action now or hereafter existing in favor
of the Borrower and all rights to any recoveries therefrom;
(G) all right, title and interest of the Borrower in
and to all unearned premiums under insurance policies now or
subsequently obtained by the Lessee relating to the Property
and the Borrower's interest in and to all proceeds of any such
insurance policies, including without limitation the right to
collect and receive such proceeds; and all awards and other
compensation, including without limitation the interest
payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Property
for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Property or any easement or other
right therein;
(H) all right, title and interest of the Borrower in
and to (i) all consents, licenses, certificates and other
governmental approvals relating to construction, completion,
use or operation of the Property or any part thereof and (ii)
all Plans and Specifications relating to the Property;
(I) the Lease, and all Rent and all other rents,
payments, purchase prices, receipts, revenues, issues and
profits payable under the Lease or pursuant to any other lease
(or guaranty thereof) with respect to the Property;
(J) all Instruments and Documents;
(K) all Contracts;
(L) all Chattel Paper (including without
limitation all rights under the Lease);
5
<PAGE> 7
(M) all money, cash or cash equivalent and bank
accounts;
(N) all Accounts;
(O) all proceeds of any operating agreements and
other agreements with any governmental authority
relating to the Property; and
(P) all proceeds, both cash and noncash, of any
of the foregoing.
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by the Borrower and described in the foregoing
clauses (A) through (P) are collectively referred to as the "Trust Property").
TO HAVE AND TO HOLD the Trust Property and the rights and privileges
hereby granted unto the Agent, its successors and assigns for the uses and
purposes set forth, until all of the obligations of the Borrower under the
Operative Agreements are paid in full; provided, that EXCLUDED from the Trust
Property at all times and in all respects shall be all Excepted Payments.
3. Payment of Obligations. The Borrower shall pay all
Obligations in accordance with the terms of the Credit Agreement,
the Notes and the other Operative Agreements and perform each
term to be performed by it under the Credit Agreement, the Notes
and the other Operative Agreements.
4. Other Covenants. At any time and from time to time, upon the
written request of the Agent, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purposes of obtaining or preserving the full benefits of this Security
Agreement and the rights and powers granted by this Security Agreement. In
addition, the Borrower will execute and deliver the Mortgage Instruments with
respect to each Property.
5. Default; Remedies. (a) If a Credit Agreement Event of
Default has occurred and is continuing:
(i) the Agent, in addition to all other remedies
available at law or in equity, shall have the right forthwith
to enter upon the Land (or any other place where the Property
is located at such time) without charge, and take possession
of all or any portion of the Trust Property, and to re-let or
sell the Trust Property and receive the rents, issues and
profits
6
<PAGE> 8
thereof, to make repairs and to apply said rentals and
profits, after payment of all necessary or proper charges and
expenses, on account of the amounts hereby secured; and
(ii) the Agent, shall, as a matter of right, be
entitled to the appointment of a receiver for the Trust
Property, and the Borrower hereby consents to such appointment
and waives notice of any application therefor.
(b) If an Event of Default has occurred and is continuing, the
Agent may proceed by an action at law, suit in equity or other
appropriate proceeding, to protect and enforce its rights, whether for
the foreclosure of the Lien of this Security Agreement, or for the
specific performance of any agreement contained herein or for an
injunction against the violation of any of the terms hereof. The
proceeds of any sale of any of the Trust Property shall be applied
pursuant to Section 8 of the Credit Agreement. In addition, the Agent
may proceed under Section 11 hereof.
(c) The Borrower hereby waives the benefit of all appraisal,
valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale of the
Trust Property or any portion thereof or interest therein.
6. Remedies Not Exclusive. The Agent shall be entitled to enforce
payment of the indebtedness and performance of the Obligations and to exercise
all rights and powers under this Security Agreement or under any of the other
Operative Agreements or other agreement or any laws now or hereafter in force,
notwithstanding that some or all of the Obligations may now or hereafter be
otherwise secured, whether by deed of trust, mortgage, security agreement,
pledge, Lien, assignment or otherwise. Neither the acceptance of this Security
Agreement nor its enforcement, shall prejudice or in any manner affect the
Agent's right to realize upon or enforce any other security now or hereafter
held by the Administrative Agent, it being agreed that the Agent shall be
entitled to enforce this Security Agreement and any other security now or
hereafter held by the Agent in such order and manner as the Agent may determine
in its absolute discretion. No remedy herein conferred upon or reserved to the
Agent is intended to be exclusive of any other remedy herein or by law provided
or permitted, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. Every power or remedy given by any of the Operative Agreements to
the Agent or the Administrative Agent or to which
7
<PAGE> 9
it may otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by the Agent or the
Administrative Agent. In no event shall the Agent, in the exercise of the
remedies provided in this Security Agreement (including without limitation in
connection with the assignment of Rents to the Agent, or the appointment of a
receiver and the entry of such receiver onto all or any part of the Land), be
deemed a "mortgagee in possession" or a "pledgee in possession", and the Agent
shall not in any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
7. Performance by the Agent of the Borrower's Obligations. If the
Borrower fails to perform or comply with any of its agreements contained herein
the Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement. The
expenses of the Agent incurred in connection with actions undertaken as provided
in this Section 7, together with interest thereon at a rate per annum equal to
the Overdue Rate, from the date of payment by the Agent to the date reimbursed
by the Borrower, shall be payable by the Borrower to the Agent on demand and
constitutes part of the Obligations secured hereby.
8. Duty of the Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of any Trust Property in its
possession, under Section 9-207 of the Uniform Commercial Code or otherwise,
shall be to deal with it in the same manner as the Agent deals with similar
property for its own account. Neither the Agent, any Lender, any Holder nor any
of their respective directors, officers, employees, shareholders, partners or
agents shall be liable for failure to demand, collect or realize upon any of the
Trust Property or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Trust Property upon the request of the Borrower
or any other Person or to take any other action whatsoever with regard to the
Trust Property or any part thereof.
9. Powers Coupled with an Interest. All powers, authorizations
and agencies contained in this Security Agreement are coupled with an interest
and are irrevocable until this Security Agreement is terminated and the Lien
created hereby is released.
10. Execution of Financing Statements. Pursuant to Section
9-402 of the Uniform Commercial Code, the Borrower authorizes the Agent at the
sole expense of the Borrower to file financing statements with respect to the
Security Agreement without the signature of the Borrower in such form and in
such filing offices as the Agent reasonably determines appropriate to perfect
the
8
<PAGE> 10
security interests of the Agent under this Security Agreement. A carbon,
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.
11. Security Agreement Under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Security Agreement shall
constitute a security agreement within the meaning of the Uniform Commercial
Code of the States in which the Trust Property is located. If an Event of
Default shall occur, then in addition to having any other right or remedy
available at law or in equity, the Agent may proceed under the applicable
Uniform Commercial Code and exercise such rights and remedies as may be provided
to a secured party by such Uniform Commercial Code with respect to all or any
portion of the Trust Property which is personal property (including without
limitation taking possession of and selling such property). If the Agent shall
elect to proceed under the Uniform Commercial Code, then fifteen days' notice of
sale of the personal property shall be deemed reasonable notice and the
reasonable expenses of retaking, holding, preparing for sale, selling and the
like incurred by the Agent shall include, but not be limited to, attorneys' fees
and legal expenses. At the Agent's request, the Borrower shall assemble the
personal property and make it available to the Agent at a place designated by
the Agent which is reasonably convenient to both parties.
(b) The Borrower, upon request by the Agent from time to time,
shall execute, acknowledge and deliver to the Agent one or more separate
security agreements, in form satisfactory to the Agent, covering all or any part
of the Trust Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as the Agent
may request in order to perfect, preserve, maintain, continue or extend the
security interest under, and the priority of the Liens granted by, this Security
Agreement and such security instrument. The Borrower further agrees to pay to
the Agent (with funds provided by the Lessee for such purpose) on demand all
costs and expenses incurred by the Agent in connection with the preparation,
execution, recording, filing and re-filing of any such document and all
reasonable costs and expenses of any record searches for financing statements
the Agent shall reasonably require. The filing of any financing or continuation
statements in the records relating to personal property or chattels shall not be
construed as in any way impairing the right of the Agent to proceed against any
personal property encumbered by this Security Agreement as real property, as set
forth above.
9
<PAGE> 11
12. Authority of Agent. The Borrower acknowledges that the rights
and responsibilities of the Agent under this Security Agreement with respect to
any action taken by the Agent or the exercise or non-exercise by the Agent of
any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Security Agreement shall be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time, but the Agent shall be conclusively
presumed to be acting as agent for the Lenders and the Holders with full and
valid authority so to act or refrain from acting, and the Borrower shall be
under no obligation, or entitlement, to make any inquiry respecting such
authority.
13. Notices. All notices, requests and demands to or upon the
Agent or the Borrower to be effective shall be in writing (or by telecopy or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (i) when delivered by hand or (ii) if given by mail,
when deposited in the mails by certified mail, return receipt requested, or (ii)
if by telecopy or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:
If to the Agent:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attention: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
If to the Borrower:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Mr. Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
The Agent and the Borrower may change their addresses and transmission numbers
for notices by notice in the manner provided in this Section 13.
14. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
10
<PAGE> 12
15. Amendment in Writing; No Waivers; Cumulative Remedies.
(a) None of the terms or provisions of this Security Agreement
may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Borrower and the Agent in
accordance with the terms of the Credit Agreement.
(b) No failure to exercise, nor any delay in exercising, on
the part of the Agent, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Agent would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
16. Section Headings. The section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
17. Successors and Assigns. This Security Agreement shall be
binding upon the successors of the Borrower, and the Borrower shall not assign
any of its rights or obligations hereunder or with respect to any of the Trust
Property without the prior written consent of the Agent. This Security Agreement
shall inure to the benefit of the Agent, the Lenders, the Holders and their
respective successors and assigns.
18. Borrower's Waiver of Rights. Except as otherwise set forth
herein, to the fullest extent permitted by law, the Borrower waives the benefit
of all laws now existing or that may subsequently be enacted providing for (i)
any appraisal before sale of any portion of the Trust Property, (ii) any
extension of the time for the enforcement of the collection of the indebtedness
or the creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Trust Property from attachment,
levy or sale under execution or exemption from civil process. Except as
otherwise set forth herein, to the fullest extent the Borrower may do so, the
Borrower agrees that the Borrower will not at any time insist upon, plead, claim
or take the benefit or advantage of any law now or hereafter in force providing
for any appraisement, valuation, stay, exemption, extension or redemption, or
requiring foreclosure of this Security Agreement before exercising any other
remedy granted hereunder and the
11
<PAGE> 13
Borrower, for the Borrower and its successors and assigns, and for any and all
Persons ever claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the Obligations and marshaling in the event of
foreclosure of the Liens hereby created.
19. GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF FLORIDA.
20. Obligations Are Without Recourse. Anything to the contrary
contained in this Security Agreement, the Credit Agreement, the Notes or in any
other Operative Agreement notwithstanding, neither the Borrower nor the Holders
nor any officer, director, partner or shareholder of any thereof, nor any of the
Borrower's successors or assigns (all such Persons being hereinafter referred to
collectively as the "Exculpated Persons"), shall be personally liable in any
respect for any liability or obligation arising hereunder or in any other
Operative Agreement, including without limitation the payment of the principal
of, or interest on, the Notes, or for monetary damages for the breach of
performance of any of the covenants contained in the Credit Agreement, the
Notes, this Security Agreement or any of the other Operative Agreements. The
Agent, on behalf of itself and the Lenders, agrees that, in the event any of
them pursues any remedies available to them under the Credit Agreement, the
Notes, this Security Agreement, or under any other Operative Agreement, neither
the Agent nor the Lenders shall have any recourse against the Borrower, nor any
Exculpated Person, for any deficiency, loss or claim for monetary damages or
otherwise resulting therefrom, and recourse shall be had solely and exclusively
against the Trust Estate or the Lessee; but nothing contained herein shall be
taken to prevent recourse against or the enforcement of remedies against the
Trust Estate in respect of any and all liabilities, obligations and undertakings
contained in this Security Agreement, the Credit Agreement, the Notes or in any
other Operative Agreement. Notwithstanding the provisions of this paragraph,
nothing in this Security Agreement, the Credit Agreement, the Notes or any other
Operative Agreement shall: (i) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Notes or arising under this Security
Agreement or the Credit Agreement or secured by this Security Agreement, but the
same shall continue until paid or discharged; (ii) relieve the Borrower from
liability and responsibility for (but only to the extent of the damages arising
by reason of): (a) active waste knowingly committed by the Borrower with respect
to any of the Properties or (b) any fraud on the part of the Borrower or any
12
<PAGE> 14
such Exculpated Person; (iii) relieve the Borrower from liability and
responsibility for (but only to the extent of the moneys misappropriated,
misapplied or not turned over): (a) misappropriation or misapplication by the
Borrower (i.e., application in a manner contrary to any of the Operative
Agreements) of any insurance proceeds or condemnation awards paid or delivered
to the Borrower by any Person other than the Administrative Agent; (b) any
deposits or any escrows or amounts owed by the Construction Agent under the
Agency Agreement held by the Borrower; or (c) any rents or other income received
by the Borrower from the Lessee that is not turned over to the Administrative
Agent in accordance with the Operative Agreements; or (iv) affect or in any way
limit the Agent's rights and remedies hereunder with respect to the Rents and
rights and powers of the Administrative Agent assigned under the Operative
Agreements or to obtain a judgment against the Borrower (provided, that no
deficiency judgment or other money judgment shall be enforced against the
Borrower or any Exculpated Person except to the extent of the Borrower's
interest in the Trust Estate or to the extent the Borrower may be liable as
otherwise contemplated in clauses (ii) and (iii) of this Section 20).
21. Partial Release; Full Release. The Agent may release for such
consideration as it may require any portion of the Trust Property without (as to
the remainder of the Trust Property) in any way impairing or affecting the Lien,
security interest and priority herein provided for the Agent compared to any
other Lien holder or secured party. Further, upon receipt by the Borrower of the
Purchase Option Price or the Termination Value and payment to the Lenders or the
Holders (as the case may be) of all principal and interest due on the Loans, all
Holder Fundings and Holder Yield, and all other Obligations with respect to any
Property or all Properties encumbered by this Security Agreement, the Agent
shall execute and deliver to the Borrower such documents and instruments as may
be required to release the Lien and security interest created by this Security
Agreement with respect to such Property or all Properties, as the case may be.
22. Miscellaneous. (a) This Security Agreement is one of the
documents which create Liens and security interests that secure payment and
performance of the Obligations. The Agent, at its election, may commence or
consolidate in a single action all proceedings to realize upon all such Liens
and security interests. The Borrower hereby waives (i) any objections to the
commencement or continuation of an action to foreclose the Lien of this Security
Agreement or exercise of any other remedies hereunder based on any action being
prosecuted or any judgment entered with respect to the Obligations or any Liens
or security interests that secure payment and performance of the Obligations and
(ii) any objections to the commencement of, continuation of,
13
<PAGE> 15
or entry of a judgment in any such other action based on any action or judgment
connected to this Security Agreement. In case of a foreclosure sale, the Trust
Property may be sold, at the Agent's election, in one parcel or in more than one
parcel and the Agent is specifically empowered (without being required to do so,
and in its sole and absolute discretion) to cause successive sales of portions
of the Trust Property to be held.
(b) Except as provided in the Operative Agreements, the Agent,
with the express written consent of the Borrower, may at any time or from time
to time renew or extend this Security Agreement, or alter or modify the same in
any way. In addition, except as provided in the Operative Agreements, the Agent
may waive any of the terms, covenants or conditions hereof in whole or in part,
or release any portion of the Trust Property or any other security, or grant
such extensions and indulgences in relation to the Obligations secured hereby as
the Agent may determine, in each case without the consent of the Borrower or any
other Person and without any obligation to give notice of any kind thereto and
without in any manner affecting the priority of the Lien hereof on any part of
the Trust Property.
[The remainder of this page has been intentionally left blank.]
14
<PAGE> 16
IN WITNESS WHEREOF, the undersigned has caused the Security Agreement
to be duly executed and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1
By:
-------------------------------
Name: Val T. Orton
Title: Vice President
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders and the
Holders
By:-------------------------------
Name: Maria Conroy
Title: Senior Vice President
SIGNATURE PAGE 1 OF 1
<PAGE> 1
EXHIBIT 4.6
LEASE AGREEMENT
Dated as of June 19, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as Owner Trustee
under the Wackenhut Corrections Trust 1997-1
as Lessor
and
WACKENHUT CORRECTIONS CORPORATION, as Lessee
- --------------------------------------------------------------------------------
This Lease Agreement is subject to a security interest in favor of NationsBank,
National Association, as Administrative Agent (the "Agent") under a Security
Agreement dated as of June 19, 1997, among First Security Bank, National
Association, not individually except as expressly stated therein, but solely as
Owner Trustee under the Wackenhut Corrections Trust 1997-1, the Lenders and the
Agent, as amended, modified, supplemented, restated or replaced from time to
time. This Lease Agreement has been executed in several counterparts. To the
extent, if any, that this Lease Agreement constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease Agreement may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefor executed by the Agent on the
signature page hereof.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I.........................................................................................................1
1.1 Definitions.................................................................................1
ARTICLE II........................................................................................................2
2.1 Property....................................................................................2
2.2 Lease Term..................................................................................2
2.3 Title.......................................................................................2
2.4 Lease Supplements...........................................................................2
2.5 Controlled Affiliates as Lessee.............................................................2
ARTICLE III.......................................................................................................3
3.1 Rent........................................................................................3
3.2 Payment of Basic Rent.......................................................................3
3.3 Supplemental Rent...........................................................................3
3.4 Performance on a Non-Business Day...........................................................4
3.5 Rent Payment Provisions.....................................................................4
ARTICLE IV........................................................................................................4
4.1 Utility Charges; Taxes......................................................................4
ARTICLE V.........................................................................................................5
5.1 Quiet Enjoyment.............................................................................5
ARTICLE VI........................................................................................................5
6.1 Net Lease...................................................................................5
6.2 No Termination or Abatement.................................................................6
ARTICLE VII.......................................................................................................6
7.1 Ownership of the Properties.................................................................6
ARTICLE VIII......................................................................................................7
8.1 Condition of the Properties.................................................................7
8.2 Possession and Use of the Properties........................................................8
ARTICLE IX........................................................................................................9
9.1 Compliance with Legal Requirements and Insurance
Requirements................................................................................9
ARTICLE X.........................................................................................................9
10.1 Maintenance and Repair; Return..............................................................9
10.2 Environmental Inspection...................................................................11
ARTICLE XI.......................................................................................................11
11.1 Modifications..............................................................................11
ARTICLE XII......................................................................................................12
12.1 Warranty of Title..........................................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE XIII.....................................................................................................13
13.1 Permitted Contests Other Than in Respect of
Indemnities................................................................................13
ARTICLE XIV......................................................................................................13
14.1 Public Liability and Workers' Compensation
Insurance..................................................................................13
14.2 Hazard and Other Insurance.................................................................14
14.3 Coverage...................................................................................15
ARTICLE XV.......................................................................................................16
15.1 Casualty and Condemnation..................................................................16
15.2 Environmental Matters......................................................................17
15.3 Notice of Environmental Matters............................................................18
ARTICLE XVI......................................................................................................18
16.1 Termination Upon Certain Events............................................................18
16.2 Procedures.................................................................................19
ARTICLE XVII.....................................................................................................19
17.1 Lease Events of Default....................................................................19
17.2 Surrender of Possession....................................................................22
17.3 Reletting..................................................................................22
17.4 Damages....................................................................................22
17.5 Final Liquidated Damages...................................................................23
17.6 Waiver of Certain Rights...................................................................24
17.7 Assignment of Rights Under Contracts.......................................................24
17.8 Environmental Costs........................................................................24
17.9 Remedies Cumulative........................................................................25
17.10 Notice of Default or Event of Default......................................................25
17.11 Option to Purchase or Sell All Properties Upon
Certain Changes of Control.................................................................25
ARTICLE XVIII....................................................................................................25
18.1 Lessor's Right to Cure Lessee's Lease Defaults.............................................25
ARTICLE XIX......................................................................................................26
19.1 Provisions Relating to Lessee's Exercise of its
Purchase Option............................................................................26
19.2 No Termination With Respect to Less than All of a
Property...................................................................................26
ARTICLE XX.......................................................................................................26
20.1 Individual Purchase Option.................................................................26
20.2 Purchase or Sale Option....................................................................27
20.3 Accounting Changes.........................................................................28
ARTICLE XXI......................................................................................................29
21.1 Renewal....................................................................................29
ARTICLE XXII.....................................................................................................29
22.1 Sale Procedure.............................................................................29
22.2 Application of Proceeds of Sale............................................................32
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <S> <C> <C>
22.3 Indemnity for Excessive Wear...............................................................32
22.4 Appraisal Procedure........................................................................32
22.5 Certain Obligations Continue...............................................................33
ARTICLE XXIII....................................................................................................33
23.1 Holding Over...............................................................................33
ARTICLE XXIV.....................................................................................................34
24.1 Risk of Loss...............................................................................34
ARTICLE XXV......................................................................................................34
25.1 Assignment.................................................................................34
25.2 Subleases..................................................................................34
ARTICLE XXVI.....................................................................................................35
26.1 No Waiver..................................................................................35
ARTICLE XXVII....................................................................................................35
27.1 Acceptance of Surrender....................................................................35
27.2 No Merger of Title.........................................................................36
ARTICLE XXVIII...................................................................................................36
28.1 Incorporation of Covenants.................................................................36
ARTICLE XXIX.....................................................................................................37
29.1 Notices....................................................................................37
ARTICLE XXX......................................................................................................38
30.1 Miscellaneous..............................................................................38
30.2 Amendments and Modifications...............................................................38
30.3 Successors and Assigns.....................................................................38
30.4 Headings and Table of Contents.............................................................38
30.5 Counterparts...............................................................................38
30.6 GOVERNING LAW..............................................................................38
30.7 Calculation of Rent........................................................................38
30.8 Memoranda of Lease and Lease Supplements...................................................39
30.9 Allocations between the Lenders and the Holders............................................39
30.10 Limitations on Recourse....................................................................39
30.11 WAIVERS OF JURY TRIAL......................................................................39
30.12 Original Leases............................................................................39
30.13 Mortgage Grant and Remedies................................................................40
30.14 Exercise of Lessor Rights..................................................................40
EXHIBITS
EXHIBIT A Lease Supplement No. __ .................................................................. 43
EXHIBIT B Other Names And Locations of Lessee....................................................... 53
EXHIBIT C-1 Form of Memorandum of Lease............................................................... 54
EXHIBIT C-2 Form of Memorandum of Lease and Lease Supplement.......................................... 55
</TABLE>
iii
<PAGE> 5
LEASE AGREEMENT
THIS LEASE AGREEMENT (as amended, supplemented or modified from time to
time, this "Lease"), dated as of June 19, 1997, is between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, having its principal
office at 79 South Main Street, Salt Lake City, Utah 84111, not individually,
but solely as Owner Trustee under the Wackenhut Corrections Trust 1997-1, as
lessor (the "Lessor"), and WACKENHUT CORRECTIONS CORPORATION, a Florida
corporation, having its principal place of business at 4200 Wackenhut Drive,
#100, Palm Beach Gardens, Florida 33410-4243 as lessee (the "Lessee") provided
that in the case of a Property with an alternate Lessee, as described in Section
2.5 below, such alternate Lessee shall also be deemed a "Lessee" with respect to
such Property).
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and Agency Agreement, Lessor will (i) purchase or ground lease various
parcels of real property, some of which may have existing Improvements thereon,
from one or more third parties designated by the Construction Agent and (ii)
fund the development, refurbishment, installation and construction by the
Construction Agent of Improvements on such real property; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the earlier to occur of the Completion of such Property or if such Property
is a Construction Period Property as of the date of any Agency Agreement Event
of Default, the date of such Agency Agreement Event of Default; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions. Capitalized terms used but not otherwise defined in
this Lease have the respective meanings specified in Appendix A to the
Participation Agreement of even date herewith (as such may be amended, modified,
supplemented, restated and/or replaced from time to time, the "Participation
Agreement") among Wackenhut Corrections Corporation, as Construction Agent, the
Lessee, First Security Bank, National Association, not individually, except as
expressly stated therein, as Owner Trustee under the Wackenhut Corrections Trust
1997-1, the Holders party thereto, the Lenders party thereto, and the Agent.
<PAGE> 6
ARTICLE II
2.1 Property. Subject to the terms and conditions hereinafter set forth
and contained in the respective Lease Supplement relating to each Property,
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each
Property.
2.2 Lease Term. The term of this Lease with respect to each Property
(the "Basic Term") shall begin upon the earlier to occur of (i) the Completion
Date for such Property or (ii) if such Property is a Construction Period
Property as of the date of any Agency Agreement Event of Default, the date of
such Agency Agreement Event of Default (in each case the "Basic Term
Commencement Date") and shall end on June 19, 1999 (the "Basic Term Expiration
Date"), unless the Term is extended in accordance with Article XXI of this
Lease, or earlier terminated in accordance with the provisions of this Lease.
2.3 Title. Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including, without
limitation, the Permitted Exceptions) and all applicable Legal Requirements.
Lessee shall in no event have any recourse against Lessor for any defect in
Lessor's title to any Property other than for Lessor Liens.
2.4 Lease Supplements. On or prior to each Basic Term Commencement
Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for
the Property to be leased effective as of such Basic Term Commencement Date in
substantially the form of Exhibit A hereto. Lessee hereby irrevocably appoints
Lessor as Lessee's attorney-in-fact, with power of substitution, in the name of
Lessor or the name of Lessee or otherwise, to execute any Lease Supplement which
Lessee fails or refuses to sign in accordance with the terms of this Section 2.4
(including specifically without limitation any Lease Supplement required in
connection with any Construction Period Property upon the occurrence of an
Agency Agreement Event of Default).
2.5 Controlled Affiliates as Lessee. Subject to the consent of the
Administrative Agent and the delivery of such agreements and documents as the
Administrative Agent may require (including without limitation the Guaranty,
documents perfecting the liens of the Owner Trustee, Agent, Lenders and Holders
under the Operative Agreements and written opinions of counsel for the Lessee
and Wackenhut Corrections or any applicable Controlled Affiliate), any
Controlled Affiliate of Wackenhut Corrections may become party to this Lease as
a Lessee (each as "alternative Lessee") of a Property, and shall be liable
(jointly and severally with Wackenhut Corrections) for all obligations as
Lessee. The foregoing notwithstanding, (a) Wackenhut Corrections shall remain
fully liable for all obligations as Lessee and Construction Agent with
2
<PAGE> 7
respect to each Property, and (b) Wackenhut Corrections shall have the right to
give any notice, consent or waiver, to exercise any option permitted under any
Operative Agreement, and to agree to any amendment or modification with respect
to Operative Agreement or any Property, as and on behalf of the Lessee with
respect to each Property (and each alternate Lessee hereby grants to Wackenhut
Corrections an irrevocable power of attorney to take any such actions), and any
other party to the Operative Agreements shall be fully protected in relying on
any such actions taken by Wackenhut Corrections or (with respect to the
applicable Property) by any alternate Lessee.
ARTICLE III
3.1 Rent.
(a) Lessee shall pay Basic Rent on each Payment Date, and on
any date on which this Lease shall terminate with respect to any or all
Properties during the Term; provided, however, with respect to each
individual Property Lessee shall have no obligation to pay Basic Rent
with respect to such Property until the Basic Term has commenced with
respect to such Property.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid in immediately available funds on the
due date therefor (or within the applicable grace period) to such
account or accounts as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of the Lessor, the Construction
Agent, Lessee, or any other Person, or for any other reason whatsoever,
shall not delay or otherwise affect Lessee's obligation to pay Rent for
such Property in accordance with the terms of this Lease.
3.2 Payment of Basic Rent. Basic Rent shall be paid absolutely net to
Lessor or its designee, so that this Lease shall yield to Lessor the full amount
of Basic Rent, without setoff, deduction or reduction.
3.3 Supplemental Rent. Lessee shall pay to Lessor or its designee or to
the Person entitled thereto any and all Supplemental Rent promptly as the same
shall become due and payable, and if Lessee fails to pay any Supplemental Rent,
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. Without limiting
the generality of the definition of "Supplemental Rent," Lessee shall pay to
Lessor as Supplemental Rent, among other things, on demand, to the extent
permitted by applicable Legal Requirements, (a) any and all unpaid fees,
charges, payments and
3
<PAGE> 8
other obligations (except the obligations of Lessor to pay the principal amount
of the Loans and the Holder Amount) due and owing by Lessor under the Credit
Agreement, the Trust Agreement or any other Operative Agreement (including
specifically without limitation any amounts owing to the Lenders under Section
2.11 or Section 2.12 of the Credit Agreement and any amounts owing to the
Holders under Section 3.9 or Section 3.10 of the Trust Agreement) and (b)
interest at the applicable Overdue Rate on any installment of Basic Rent not
paid when due (subject to the applicable grace period) for the period for which
the same shall be overdue and on any payment of Supplemental Rent not paid when
due or demanded by the appropriate Person for the period from the due date or
the date of any such demand, as the case may be, until the same shall be paid.
The expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any Supplemental
Rent as and when due, Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added, pursuant to any
Operative Agreement or otherwise, in each case for nonpayment or late payment of
such Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4 Performance on a Non-Business Day. If any Basic Rent is required
hereunder on a day that is not a Business Day, then such Basic Rent shall be due
on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent
is required hereunder on a day that is not a Business Day, then such
Supplemental Rent shall be due on the next succeeding Business Day.
3.5 Rent Payment Provisions. Lessee shall make payment of all Basic
Rent and Supplemental Rent when due regardless of whether any of the Operative
Agreements pursuant to which same is calculated and is owing shall have been
rejected, avoided or disavowed in any bankruptcy or insolvency proceeding
involving any of the parties to any of the Operative Agreements. Such provisions
of such Operative Agreements and their related definitions are incorporated
herein by reference and shall survive any termination, amendment or rejection of
any such Operative Agreements.
ARTICLE IV
4.1 Utility Charges; Taxes. Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on a Property and related
real property during the Term. Lessee shall be entitled to receive any credit or
refund with respect to any utility charge paid by Lessee, provided that Lessee
must collect any such credit or refund from Lessor or the respective utility
company (as the case may be) and shall not be entitled to offset any such amount
owed to Lessee against Rent payable by the Lessee hereunder. Unless a Lease
Default or Lease
4
<PAGE> 9
Event of Default shall have occurred and be continuing, the amount of any credit
or refund received by Lessor on account of any utility charges paid by Lessee,
net of the costs and expenses incurred by Lessor in obtaining such credit or
refund, shall be promptly paid over to Lessee. In addition, Lessee shall pay or
cause to be paid all taxes or taxes assessments against a Property. All charges
for utilities and all taxes or tax assessments imposed with respect to a
Property for a billing period (or in the cases of tax assessments, a tax period)
during which this Lease expires or terminates shall be adjusted and prorated on
a daily basis between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment. Subject to the rights of Lessor contained in
Sections 17.2 and 17.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Lease Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Basic Term
Commencement Date.
ARTICLE VI
6.1 Net Lease. This Lease shall constitute a net lease. Any present or
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (a) any damage to or destruction of any Property or any part thereof;
(b) any taking of any Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of any Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f) any
default by Lessor hereunder; (g) any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding relating to or
affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of any Property; (k) breach of
any warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or
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dissimilar to the foregoing and whether or not Lessee shall have notice or
knowledge of any of the foregoing. The foregoing clause (j) shall not prevent
the termination of the Lease in accordance with the terms hereof if the Lessee
purchases all of the Properties pursuant to Section 20.2, or the termination of
the Lease with respect to an individual Property if the Lessee purchases such
Property pursuant to Section 20.1. The parties intend that the obligations of
Lessee hereunder shall be covenants, agreements and obligations that are
separate and independent from any obligations of Lessor hereunder and shall
continue unaffected unless such covenants, agreements and obligations shall have
been modified or terminated in accordance with an express provision of this
Lease. Lessor and Lessee acknowledge and agree that the provisions of this
Section 6.1 have been specifically reviewed and subject to negotiation.
6.2 No Termination or Abatement. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, any other Person or any Governmental Authority, or
any action with respect to this Lease or any Operative Agreement which may be
taken by any trustee, receiver or liquidator of Lessor, any other Person or any
Governmental Authority or by any court with respect to Lessor, any other Person
or any Governmental Authority. Lessee hereby waives all right (a) to terminate
or surrender this Lease (except as permitted under the terms of the Operative
Agreements) or (b) to avail itself of any abatement, suspension, deferment,
reduction, setoff, counterclaim or defense with respect to any Rent. Lessee
shall remain obligated under this Lease in accordance with its terms and Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 Ownership of the Properties.
(a) Lessor and Lessee intend that for federal and all state
and local income tax purposes and other tax purposes, for bankruptcy
purposes, creditor's rights purposes, environmental law purposes, for
purposes of exercising remedies against the Lessee, the Construction
Agent or the Properties, and for the purposes of any other laws
governing any right or obligation of any party under any Operative
Agreement (A) this Lease will be treated as a loan and financing
arrangement and not a true lease, (B) Lessee will be treated as the
owner of the Properties and will be entitled to all tax benefits
ordinarily available to owners of property
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similar to the Properties for such tax purposes, and (C) all payments
of Basic Rent shall be deemed to be interest payments. Consistent with
the foregoing, Lessee intends to claim depreciation and cost recovery
deductions associated with the Property, and Lessor agrees not to take
any inconsistent position on its income tax returns. Neither Lessor,
the Agent, any Lender, any Holder nor NCMI makes any representation or
warranty with respect to the foregoing matters described in this
Section 7.1 and will assume no liability for the Lessee's accounting
treatment of this transaction.
(b) Lessor and Lessee further intend and agree that, for the
purpose of securing Lessee's obligations hereunder, (i) this Lease
shall be deemed to be a security agreement and financing statement
within the meaning of Article 9 of the Uniform Commercial Code
respecting each of the Properties to the extent such is personal
property and an irrevocable grant and conveyance of a lien and mortgage
on each of the Properties to the extent such is real property; (ii) the
acquisition of title (or to the extent applicable, a leasehold
interest) in each Property referenced in Article II shall be deemed to
be (A) a grant by Lessee to Lessor of a lien on and security interest
in all of Lessee's right, title and interest in and to each Property
and all proceeds (including without limitation insurance proceeds) of
any of the Property, whether in the form of cash, investments,
securities or other property, (B) an assignment by Lessee to Lessor of
all rents, profits and income produced by any of the Property and (C)
an assignment by Lessee to Lessor of all proceeds of any operating
agreements or other agreements between Lessee and any Governmental
Authority relating to any Property; and (iii) notifications to Persons
holding such property, and acknowledgments, receipts or confirmations
from financial intermediaries, bankers or agents (as applicable) of
Lessee shall be deemed to have been given for the purpose of perfecting
such security interest under applicable law. Lessor and Lessee shall
promptly take such actions as may be necessary or advisable in either
party's opinion (including without limitation the filing of Uniform
Commercial Code Financing Statements or Uniform Commercial Code Fixture
Filings) to ensure that the lien and security interest in each Property
will be deemed to be a perfected lien and security interest of first
priority under applicable law and will be maintained as such throughout
the Term.
ARTICLE VIII
8.1 Condition of the Properties. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING
STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY
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STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, (D)
ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH
MAY EXIST ON THE DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE
AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY
(OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART
THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL
BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. THE LESSEE
HAS OR WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE
IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS THE LESSOR, THE AGENT,
EACH LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS
INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE
PRECEDING SENTENCE, AS BETWEEN THE LESSOR, THE AGENT, THE LENDERS AND THE
HOLDERS, ON THE ONE HAND, AND THE LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY
LESSEE.
8.2 Possession and Use of the Properties.
(a) At all times during the Term with respect to each
Property, such Property shall be used by Lessee in the ordinary course
of its business. Lessee shall pay, or cause to be paid, all charges and
costs required in connection with the use of the Properties as
contemplated by this Lease. Lessee shall not commit or permit any waste
of the Properties or any part thereof.
(b) Lessee represents and warrants that the address stated in
Section 29.1 of this Lease is the chief place of business and chief
executive office of Lessee (as such terms are used in Section 9-103 of
the Uniform Commercial Code of any applicable jurisdiction), and Lessee
will provide Lessor with prior written notice of any change of location
of its chief place of business or chief executive office. Regarding
each Property, Lessee represents and warrants that each Lease
Supplement correctly identifies the initial location of the related
Equipment and Improvements and contains an accurate legal description
for the related parcel of Land. Lessee has no other places of business
where the Equipment or Improvements will be located other than those
identified on the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property (except the Land identified in the Lease
Supplement in which such Equipment is
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also described) in a manner that could give rise to the assertion of
any Lien (other than a Permitted Lien) on such item of Equipment by
reason of such attachment or the assertion of a claim that such item of
Equipment has become a fixture and is subject to a Lien in favor of a
third party that is prior to the Liens thereon created by the Operative
Agreements.
(d) Each Lease Supplement delivered under the terms of this
Lease shall contain, in regard to the relevant Property, an Equipment
Schedule that has a complete description of each item of Equipment, an
Improvement Schedule that has a complete description of each
Improvement and a legal description of the Land, to be leased hereunder
as of such date. Simultaneously with the execution and delivery of each
Lease Supplement, such Equipment, Improvements and Land shall be deemed
to have been accepted by Lessee for all purposes of this Lease and to
be subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under, and (to the
extent no Event of Default has occurred and is continuing and provided
that such exercise will not impair the value of such Property) shall be
permitted to exercise all rights and remedies under, all operation and
easement agreements and related or similar agreements applicable to
such Property.
ARTICLE IX
9.1 Compliance with Legal Requirements and Insurance Requirements.
Subject to the terms of Article XIII relating to permitted contests, Lessee, at
its sole cost and expense, shall (i) comply with all material Legal Requirements
(including without limitation all Environmental Laws), and all Insurance
Requirements relating to the Properties, including the use, development,
construction, operation, maintenance, repair, refurbishment and restoration
thereof, whether or not compliance therewith shall require structural or
extraordinary changes in the Improvements or interfere with the use and
enjoyment of the Properties, and (ii) procure, maintain and comply with all
material licenses, permits, orders, approvals, consents and other authorizations
required for the construction, use, maintenance and operation of the Properties
and for the use, development, construction, operation, maintenance, repair and
restoration of the Improvements.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and make all necessary
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repairs thereto, of every kind and nature whatsoever, whether interior
or exterior, ordinary or extraordinary, structural or nonstructural, or
foreseen or unforeseen, in each case as required by all Legal
Requirements, Insurance Requirements, and manufacturer's specifications
and standards and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property and in compliance with standard industry
practice, subject, however, to the provisions of Article XV with
respect to Condemnation and Casualty.
(b) Lessee shall not use or locate any component of any
Property outside of any Approved State. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the
Land described in the applicable Lease Supplement without Lessor's
prior written consent, which consent shall not be unreasonably withheld
or delayed.
(c) If any material component of any Property becomes worn
out, lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, Lessee, at its own expense, will within a
reasonable time replace such component with a replacement component
which is free and clear of all Liens (other than Permitted Liens) and
has a value, utility and useful life at least equal to the component
replaced. All components which are added to any Property shall
immediately become the property of, and title thereto shall vest in,
Lessor, and shall be deemed incorporated in such Property and subject
to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not materially disrupt the business of Lessee.
(e) If, at any time, because of a condemnation, casualty or
other event or condition, Lessor has reason to believe that the
appraised value of any Property has materially decreased, then the
Lessor or the Agent (at Lessee's sole expense) may cause an additional
Appraisal (addressed to the Lessor and the Agent) to be prepared. In
addition, Lessor or the Agent (at Lessee's sole expense) may cause to
be prepared (at Lessee's sole expense) any additional Appraisals (or
reappraisals) as Lessor or the Agent may deem appropriate (i) if an
Event of Default has occurred and is continuing, (ii) if any one of
Lessor, the Agent, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such an Appraisal (or
reappraisal), or (iii) at any time upon the request of the Agent or the
Lessor, such a request pursuant to this clause (iii) not to be made
more frequently than once every three (3) years for the same Property.
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(f) Lessor shall under no circumstances be required to build
any improvements on any Property, make any repairs, replacements,
alterations or renewals of any nature or description to any Property,
make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild
all or any part of any Property (unless such repairs are needed to cure
damage to a Property caused by the gross negligence or willful
misconduct of the Lessor), or (ii) make repairs at the expense of
Lessor pursuant to any Legal Requirement, Insurance Requirement,
contract, agreement, covenants, condition or restriction at any time in
effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property, surrender
such Property to Lessor, or the third party purchaser, as the case may
be, subject to Lessee's obligations under this Lease (including without
limitation Sections 9.1, 10.1(a)-(f), 10.2, 11.1, 12.1, 22.1 and 23.1).
10.2 Environmental Inspection. If (a) Lessee has not given
notice of the exercise of its Purchase Option on the Expiration Date pursuant
to Section 20.1, or (b) Lessee has given notice, pursuant to Section 20.1 of
its election to remarket the Properties on the Expiration Date or a Payment
Date pursuant to Section 22.1 then, in either case, not more than 120 days nor
less than 60 days prior to such Expiration Date or Payment Date, Lessee shall,
at its sole cost and expense, provide to Lessor and the Agent a report by a
reputable environmental consultant selected by Lessee, which report shall be in
form and substance reasonably satisfactory to Lessor and the Agent and shall
include without limitation a "Phase I" environmental report (or update of a
prior "Phase I" report that was previously delivered to the Lessor and the
Agent) on each of the Properties. If the report delivered pursuant to the
preceding sentence recommends that a "Phase II" report or other supplemental
report be obtained, the Lessee shall, at its own cost and expense, not less
than 30 days prior to such Expiration Date or Payment Date, provide to Lessor
and the Agent such "Phase II" or other report, in form and substance reasonably
satisfactory to Lessor and the Agent.
ARTICLE XI
11.1 Modifications.
(a) Lessee at its sole cost and expense, at any time and
from time to time without the consent of Lessor may make alterations,
renovations, improvements and additions to any Property or any part
thereof and substitutions and
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replacements therefor (collectively, "Modifications"); provided, that:
(i) except for any Modification required to be made pursuant to a Legal
Requirement, no Modification shall materially impair the value, utility
or useful life of any Property from that which existed immediately
prior to such Modification; (ii) the Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) Lessee shall
comply with all material Legal Requirements (including all
Environmental Laws) and Insurance Requirements applicable to the
Modification, including without limitation the obtaining of all permits
and certificates of occupancy, and the structural integrity of any
Property shall not be adversely affected; (iv) to the extent required
by Section 14.2(a), Lessee shall maintain builders' risk insurance at
all times when a Modification is in progress; (v) subject to the terms
of Article XIII relating to permitted contests, Lessee shall pay all
costs and expenses and discharge any Liens (other than Permitted Liens)
arising with respect to the Modification; (vi) such Modification shall
comply with the requirements of this Lease (including without
limitation Sections 8.2 and 10.1); and (vii) no Improvements shall be
demolished unless Lessee shall finance the proposed Modification
outside of this lease facility. All Modifications shall become property
of the Lessor and shall be subject to this Lease, and title to any
component of any Property comprising any such Modifications shall
immediately vest in Lessor.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor and the Agent to be consistent with
and in compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 Warranty of Title.
(a) Lessee agrees that, except as otherwise provided herein
and subject to the terms of Article XIII relating to permitted
contests, Lessee shall not directly or indirectly create or allow to
remain, and shall promptly discharge at its sole cost and expense, (i)
any Lien, defect, attachment, levy, title retention agreement or claim
upon any Property or any Modifications or (ii) any Lien, attachment,
levy or claim with respect to the Rent or with respect to any amounts
held by the Agent pursuant to the Credit Agreement, in each case other
than Permitted Liens and Lessor Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted Lien or Lessor Lien has occurred with respect to a
Property, and Lessee represents and warrants to, and covenants with,
Lessor that the Liens in favor of the Lessor created by the Operative
Agreements are first priority perfected Liens subject only to Permitted
Liens.
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(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities. Except to
the extent otherwise provided for in Section 13 of the Participation Agreement,
Lessee, on its own or on Lessor's behalf but at Lessee's sole cost and expense,
may contest, by appropriate administrative or judicial proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any Legal Requirement, or utility charges payable pursuant to
Section 4.1 or any Lien, attachment, levy, encumbrance or encroachment, and
Lessor agrees not to pay, settle or otherwise compromise any such item, provided
that (a) the commencement and continuation of such proceedings shall suspend the
collection of any such contested amount from, and suspend the enforcement
thereof against, the applicable Properties, Lessor, each Holder, the Agent and
each Lender; (b) there shall not be imposed a Lien (other than Permitted Liens)
on any Property and no part of any Property nor any Rent shall be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance. During the
Term of each Property, Lessee shall procure and carry, at Lessee's sole cost and
expense, commercial general liability insurance for claims for injuries or death
sustained by persons or damage to property while on the Properties or the
premises where
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the Equipment is located and such other public liability coverages as are then
customarily carried by similarly situated companies conducting business similar
to that conducted by Lessee. Such insurance shall be on terms and in amounts
(and with deductibles and limitations on coverage) that are no less favorable
than insurance maintained by Lessee with respect to similar properties and
equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies shall be
endorsed to name Lessor (for itself and on behalf of the Holders) and the Agent
(for itself and on behalf of the Lenders) as additional insureds. The policies
shall also specifically provide that such policies shall be considered primary
insurance which shall apply to any loss or claim before any contribution by any
insurance which Lessor, any Holder, the Agent or any Lender may have in force.
Lessee shall, in the operation of the Properties, comply with the applicable
workers' compensation laws and protect Lessor, each Holder, the Agent and each
Lender against any liability under such laws.
14.2 Hazard and Other Insurance.
(a) During the Term for each Property, Lessee shall keep, or
cause to be kept, such Property insured against loss or damage by fire
and other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in amounts not less
than the Termination Value from time to time of such Property and on
terms that (a) are no less favorable than insurance covering other
similar properties owned by Lessee and (b) are then carried by
similarly situated companies conducting business similar to that
conducted by Lessee. Lessee shall not be required to maintain separate
builder's insurance solely by reason of the Modifications to a Property
if the cost of such Modifications will not exceed $100,000 in the
aggregate. The policies shall be endorsed to name Lessor (for itself
and on behalf of the Holders) and the Agent (for itself and on behalf
of the Lenders), to the extent of their respective interests, as
additional loss payees; provided, that so long as no Lease Event of
Default has occurred and is continuing, any loss payable under the
insurance policies required by this Section will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood- prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto, then Lessee shall comply with the
National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973. In addition, Lessee will fully comply with the
requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from time to
time, and with any other Legal Requirement concerning
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flood insurance to the extent that it may apply to any such
Property.
14.3 Coverage.
(a) As of the date of this Lease and annually thereafter,
Lessee shall furnish Lessor and the Agent with certificates prepared by
the insurers or insurance broker of Lessee showing the insurance
required under Sections 14.1 and 14.2 to be in effect, naming (except
with respect to workers' compensation insurance) Lessor (for itself and
on behalf of the Holders) and the Agent (for itself and on behalf of
the Lenders) as additional insureds and loss payees and evidencing the
other requirements of this Article XIV. All such insurance shall be at
the cost and expense of Lessee and provided by nationally recognized,
financially sound insurance companies. Such certificates shall include
a provision for thirty (30) days' advance written notice by the insurer
to Lessor and the Agent in the event of cancellation or material
alteration of such insurance. If a Lease Event of Default has occurred
and is continuing and Lessor so requests, Lessee shall deliver to
Lessor copies of all insurance policies required by Sections 14.1 and
14.2.
(b) Lessee agrees that any insurance policy required by
Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate
provision that such policy will not be invalidated should Lessee waive,
at any time, any or all rights of recovery against any party for losses
covered by such policy or due to any breach of warranty, action or
inaction by Lessee or any Person acting on behalf of Lessee. Lessee
hereby waives any and all such rights against the Lessor, the Holders,
the Agent and the Lenders to the extent of payments made to any such
Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof, and shall
otherwise maintain the coverage required by such Sections without any
lapse in coverage.
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ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of this Article XV and Article
XVI (in the event Lessee delivers, or is obligated to deliver, a
Termination Notice), and prior to the occurrence and continuation of a
Lease Default or Lease Event of Default, Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any award, compensation or
insurance proceeds under Sections 14.2(a) or (b) hereof to which Lessee
or Lessor may become entitled by reason of their respective interests
in a Property (i) if all or a portion of such Property is damaged or
destroyed in whole or in part by a Casualty or (ii) if the use, access,
occupancy, easement rights or title to such Property or any part
thereof is the subject of a Condemnation; provided, however, if a Lease
Default or Lease Event of Default shall have occurred and be continuing
such award, compensation or insurance proceeds shall be paid directly
to Lessor or, if received by Lessee, shall be held in trust for Lessor,
and shall be paid over by Lessee to Lessor and held in accordance with
the terms of this paragraph (a). All amounts held by Lessor hereunder
on account of any award, compensation or insurance proceeds either paid
directly to Lessor or turned over to Lessor shall be held as security
for the performance of Lessee's obligations hereunder.
(b) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a possible
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed ten percent (10%) of
the Property Cost of such Property, Lessee shall give notice thereof to
the Lessor and to the Agent promptly after the receipt of such notice.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor and the Agent a Termination Notice
to such effect.
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(e) If, pursuant to this Section 15.1, this Lease shall
continue in full force and effect following a Casualty or Condemnation
with respect to the affected Property, Lessee shall, at its sole cost
and expense and using, if available, the proceeds of any award,
compensation or insurance with respect to such Casualty or Condemnation
(including, without limitation, any such award, compensation or
insurance which has been received by the Agent and which should be
turned over to Lessee pursuant to the terms of the Operative
Agreements, and if not available or sufficient, using its own funds),
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built plans and
specifications or manufacturer's specifications for the applicable
Improvements or Equipment (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all
applicable Legal Requirements), so as to restore the applicable
Property to substantially the same condition, operation, function and
value as existed immediately prior to such Casualty or Condemnation. In
such event, title to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation with respect
to which this Lease remains in full force and effect under this Section
15.1 affect Lessee's obligations to pay Rent pursuant to Section 3.1.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, (i) the applicable Property
cannot reasonably be restored, repaired or replaced on or before the
180th day prior to the Expiration Date (if such Casualty or
Condemnation occurs during the Term) to substantially the same
condition as existed immediately prior to such Casualty or
Condemnation, or (ii) on or before such day such Property is not in
fact so restored, repaired or replaced, then Lessee shall be required
to purchase such Property on the next Payment Date and pay Lessor the
Termination Value for such Property, plus any and all Rent then due and
owing, plus all other amounts then due and owing (including without
limitation amounts described in clause FIRST of Section 22.2).
15.2 Environmental Matters. Promptly upon Lessee's actual knowledge of
the presence of Hazardous Substances in any portion of any Property (or in any
other property that is not subject to this Lease if Lessee has reason to believe
that such Hazardous Substances may be caused by an emission from or on, or a
condition on, any Property) in concentrations and conditions that constitute an
Environmental Violation and as to which, in the reasonable
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opinion of Lessee, the cost to undertake any legally required response, clean
up, remedial or other action might result in a cost to Lessee or loss in the
value of such Property of more than $100,000, Lessee shall notify Lessor in
writing of such condition. In the event of any Environmental Violation
(regardless of whether notice thereof must be given to Lessor pursuant to the
preceding sentence), Lessee shall, not later than sixty (60) days after Lessee
has actual knowledge of such Environmental Violation, either deliver to Lessor a
Termination Notice with respect to the applicable Property or Properties
pursuant to Section 16.1, if applicable, or, at Lessee's sole cost and expense,
promptly and diligently undertake and complete any response, clean up, remedial
or other action necessary to remove, cleanup or remediate the Environmental
Violation in accordance with all Environmental Laws. If Lessee does not deliver
a Termination Notice with respect to such Property pursuant to Section 16.1,
Lessee shall, upon completion of remedial action by Lessee, cause to be prepared
by a reputable environmental consultant acceptable to Lessor a report describing
the Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in full compliance with applicable
Environmental Law.
15.3 Notice of Environmental Matters. Promptly, but in any event within
thirty (30) days from the date Lessee has actual knowledge thereof, Lessee shall
provide to Lessor written notice of any pending or threatened Environmental
Claim involving any Environmental Law or any Release on or in connection with
any Property. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
Environmental Claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 Termination Upon Certain Events. If any of the following occur:
(i) if the requirements of Section 15.1(c) are satisfied, or (ii) if the
requirements of Section 15.1(d) are satisfied and Lessee has determined pursuant
to such section that following the applicable Casualty or Condemnation this
Lease shall terminate with respect to the affected Property, or (iii) Lessee has
determined pursuant to the second sentence of Section 15.2 that, due to the
occurrence of an Environmental Violation, this Lease shall terminate with
respect to the affected Property, then Lessee shall be obligated to deliver,
within sixty (60) days of its receipt of notice of the applicable Condemnation
or the occurrence of the applicable Casualty or Environmental Violation, a
written notice to
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the Lessor in the form described in Section 16.2(a) (a "Termination Notice") of
the termination of this Lease with respect to the applicable Property.
16.2 Procedures.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property, any and all Rent then due and owing and all
other amounts then due and owing from Lessee under any of the Operative
Agreements (including without limitation amounts described in clause
FIRST of Section 22.2) and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, any and all Rent then
due and owing and all other amounts then due and owing from Lessee
under any of the Operative Agreements (including without limitation
amounts described in clause FIRST of Section 22.2), and Lessor shall
convey such Property, or the remaining portion thereof, if any, to
Lessee (or Lessee's designee), all in accordance with Section 19.1.
ARTICLE XVII
17.1 Lease Events of Default. If any one or more of the
following events (each a "Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after the
same has become due and payable or (ii) any Termination Value, on the
date any such payment is due, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of
Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17(a)(ii)) due and
payable within three (3) days after receipt of notice that such payment
is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease;
(d) Lessee or Guarantor shall fail to observe or perform any
term, covenant or provision (including without limitation the
Incorporated Covenants) of Lessee or Guarantor under this Lease or any
other Operative Agreement to which Lessee or Guarantor is a party other
than those set forth in Sections
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17.1(a), (b) (c) or (g) hereof, and such failure shall remain uncured
for a period of thirty (30) days after the earlier of receipt of
written notice from Lessor thereof or a Responsible Officer of Lessee
becomes aware of such failure;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) (i) Any default, which is not waived, in the payment of
any principal, interest, premium or other amount with respect to any
Indebtedness or Rate Hedging Obligation (as defined in the Existing
Wackenhut Corrections Credit Agreement) (other than obligations under
the Operative Agreements) of Lessee in an amount not less than
$2,500,000 in the aggregate outstanding, or (ii) any default, which is
not waived, in the performance, observance or fulfillment of any term
or covenant contained in any agreement or instrument under or pursuant
to which any such Indebtedness or Rate Hedging Obligation referred to
in clause (i) may have been issued, created, assumed, guaranteed or
secured by Lessee, or (iii) any other event of default as specified in
any agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by Lessee, and any such default or event
of default specified in clauses (i), (ii) or (iii) shall continue for
more than the period of grace, if any, therein specified, or such
default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; or
(g) The breach of any financial covenant incorporated by
reference in Article XXVIII hereof or Section 12 of the
Guaranty;
(h) The Lessee shall be unable to pay its debts generally as
they become due; file a petition to take advantage of any insolvency
statute; make an assignment for the benefit of its creditors; commence
a proceeding for the appointment of a receiver, trustee, liquidator or
conservator of itself or of the whole or any substantial part of its
property; file a petition or answer seeking liquidation, reorganization
or arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute;
(i) A court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Lessee or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Lessee seeking liquidation,
reorganization or
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arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of debtors,
a court of competent jurisdiction shall assume custody or control of
the Lessee or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there
is commenced against the Lessee any proceeding or petition seeking
liquidation, reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Lessee
takes any action to indicate its consent to or approval of any such
proceeding or petition;
(j) The entering of any order in any proceedings against
Lessee decreeing the dissolution, divestiture or split-up of Lessee,
and such order remains in effect for more than sixty (60) days;
(k) Any representation, warranty or statement of fact
contained in any Operative Agreement in any writing, report,
certificate, or statement at any time furnished to Lessor, the Agent,
any Holder or any Lender by or on behalf of Lessee pursuant to or in
connection with this Lease or any other Operative Agreement or
otherwise shall be false or misleading in any material respect when
given;
(l) One or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer) is found
not to be liable for) is in excess of $500,000 is rendered against
Lessee, or (ii) there is any attachment, injunction or execution
against any of the Lessee's properties for any amount in excess of
$500,000 in the aggregate; and such judgment, attachment, injunction or
execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of thirty (30) days; or
(m) Any material Environmental Violation shall have occurred
and be continuing;
(n) Any Wackenhut Corrections Credit Agreement Event of
Default shall have occurred and be continuing; or
(o) Any Operative Agreement shall cease to be in full
force and effect;
then, in any such event, (i) all Construction Period Properties shall
automatically become Properties subject to the terms of this Lease as more
specifically provided in Section 2.2 and thereafter all references hereunder to
"Property" or "Properties" and all
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obligations of the Lessee with respect to the Properties (including specifically
without limitation the obligations of the Lessee contained in this Article XVII)
shall be deemed to include such Construction Period Properties, and (ii) Lessor
may, in addition to the other rights and remedies provided for in this Article
XVII and in Section 18.1, terminate this Lease by giving Lessee fifteen (15)
days notice of such termination, and this Lease shall terminate, and all rights
of Lessee under this Lease shall cease. Lessee shall, to the fullest extent
permitted by law, pay as Supplemental Rent all costs and expenses incurred by or
on behalf of Lessor, including without limitation reasonable fees and expenses
of counsel, as a result of any Lease Event of Default hereunder.
17.2 Surrender of Possession. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to Section 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Properties. Lessor may enter upon
and repossess the Properties by such means as are available at law or in equity,
and may remove Lessee and all other Persons and any and all personal property
and Lessee's equipment and personalty and severable Modifications from the
Properties. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, Lessee shall return the Properties promptly to Lessor,
in the manner and condition required by, and otherwise in accordance with the
provisions of, Section 22.1(c) hereof.
17.3 Reletting. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 Damages. Neither (a) the termination of this Lease as to all or
any of the Properties pursuant to Section 17.1; (b) the repossession of all or
any of the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including the
date of
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such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
Section 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1,
provided that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in Section 17.5. The amount of
Lessee's liabilities and obligations under this Lease shall not be reduced or
offset by any proceeds Lessor may receive from any reletting of any Property,
except that the net proceeds, if any, which are actually received by Lessor from
reletting of any Property shall be offset against the final liquidated damages
amount specified in Section 17.5. In calculating the amount of such net proceeds
from reletting, there shall be deducted all of Lessor's, any Holder's, the
Agent's and any Lender's reasonable expenses in connection therewith, including
repossession costs, brokerage or sales commissions, fees and expenses of counsel
and any necessary repair or alteration costs and expenses incurred in
preparation for such reletting. To the extent Lessor receives any damages
pursuant to this Section 17.4, such amounts shall be regarded as amounts paid on
account of Rent. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.4 shall be absolute and unconditional under
any and all circumstances and shall be paid or performed, as the case may be,
without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.5 Final Liquidated Damages. If a Lease Event of Default shall have
occurred and be continuing, whether or not this Lease shall have been terminated
pursuant to Section 17.1 and whether or not Lessor shall have collected any
current liquidated damages pursuant to Section 17.4, Lessor shall have the right
to recover, by demand to Lessee and at Lessor's election, and Lessee shall pay
to Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 13 of the Participation Agreement, and in lieu of all
current liquidated damages beyond the date of such demand (it being agreed that
it would be impossible accurately to determine actual damages) the sum of (a)
the Termination Value for all Properties remaining under this Lease, plus (b)
all other amounts owing in respect of Rent, Supplemental Rent and other amounts
then due and payable under this Lease or any other Operative Agreement. It is
intended and agreed that the foregoing amount is and will be liquidated damages
and not a penalty. Upon payment of the amount specified pursuant to the first
sentence of this Section 17.5, Lessee shall be entitled to receive from Lessor,
either at Lessee's request or upon Lessor's
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election, in either case at Lessee's cost, an assignment of Lessor's entire
right, title and interest in and to the Properties, the Improvements, Fixtures,
Modifications and Equipment, in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of this Lease
(including the release of any memoranda of Lease or the Lease Supplement
recorded in connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS IS" and in their then present physical condition. If any
statute or rule of law shall limit the amount of such final liquidated damages
to less than the amount agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law; provided, however, Lessee
shall not be entitled to receive an assignment of Lessor's interest in the
Properties, the Improvements, Fixtures, Modifications or Equipment or documents
unless Lessee shall have paid in full the Termination Value and all other
amounts due and owing hereunder and under the other Operative Agreements. Lessee
specifically acknowledges and agrees that its obligations under this Section
17.5 shall be absolute and unconditional under any and all circumstances and
shall be paid or performed, as the case may be, without notice or demand (except
as otherwise specifically provided herein) and without any abatement, reduction,
diminution, setoff, defense, counterclaim or recoupment whatsoever.
17.6 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or possession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might otherwise
limit or modify any of Lessor's rights or remedies under this Article XVII.
17.7 Assignment of Rights Under Contracts. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessee shall upon Lessor's demand
immediately assign, transfer and set over to Lessor all of Lessee's right, title
and interest in and to each agreement executed by Lessee in connection with the
purchase, construction, development, use or operation of the Properties
(including, without limitation, all right, title and interest of Lessee with
respect to all warranty, performance, service and indemnity provisions), as and
to the extent that the same relate to the purchase, construction, use and
operation of the Properties.
17.8 Environmental Costs. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to Section 17.1, Lessee shall pay directly to any third
party (or at Lessor's election, reimburse Lessor) for the cost of any
environmental testing or remediation work undertaken respecting any Property as
such testing or work is
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deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such payment.
17.9 Remedies Cumulative. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise, including, without limitation, any
mortgage foreclosure remedies.
17.10 Notice of Default or Event of Default. Lessee shall promptly
notify the Lessor and the Agent if any Responsible Officer of Lessee has
received notice, or has actual knowledge, of any Default or Event of Default.
17.11 Option to Purchase or Sell All Properties Upon Certain Changes of
Control. If (a) a Change of Control has occurred and is continuing, (b) such
Change of Control has not been consented to by, and is not otherwise within the
control of, any Wackenhut Control Group Member, and (c) no Lease Event of
Default (other than such Change of Control) has occurred and is continuing on
the date of the applicable Election Notice or Sale Date, then notwithstanding
anything to the contrary in this Article XVII, Lessee may within ten (10) days
of such Change of Control give the Lessor and the Agent the Election Notice
pursuant to Section 20.1, and may (on a Payment Date occurring not more than 180
and not less than 120 days after such Election Notice) purchase or remarket all
of the Properties in accordance with, and subject to the conditions set forth
in, Section 20.1 and Article XXII. Provided no Lease Event of Default (other
than such Change of Control) has occurred and is continuing, then during the
10-day period described in this paragraph for delivery of Lessee's Election
Notice, Lessor shall not remarket the Properties without Lessee's consent.
17.12 Lessee's Purchase Option During Default. If a Lease Event of
Default that is not within the control of Lessee has occurred and is continuing,
and such Lease Event of Default could not reasonably be cured by Lessee within
any applicable grace period, and Lessee exercises its option to purchase a
Property (the "affected Property") in accordance with Section 20.1 (without
regard to the limitations contained in the first sentence of Section 20.1
regarding the absence of Lease Events of Default) within fifteen (15) days of
the occurrence of such Lease Event of Default, the purchase of the affected
Property within such 15-day period shall be deemed to have cured such Lease
Event of Default to the extent such Lease Event of Default is no longer
continuing with respect to any other Property remaining subject to this Lease
after such purchase of the affected Property.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults. Lessor,
without waiving or releasing any obligation or Lease Event of
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Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
the failure by Lessee to maintain the insurance required by Article XIV, and
may, to the fullest extent permitted by law, and notwithstanding any right of
quiet enjoyment in favor of Lessee, enter upon any Property, or real property
owned or leased by Lessee and take all such action thereon as may be necessary
or appropriate therefor. No such entry shall be deemed an eviction of any
lessee. All reasonable out-of-pocket costs and expenses so incurred (including
without limitation reasonable fees and expenses of counsel), together with
interest thereon at the Overdue Rate from the date on which such sums or
expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
Subject to Section 19.2, in connection with any termination of this Lease with
respect to any Property pursuant to the terms of Section 16.2, or in connection
with Lessee's exercise of its Purchase Option or its option to purchase a
Property pursuant to Section 20.1, upon the date on which this Lease is to
terminate with respect to a Property or all of the Properties, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b), 20.1 or 20.2, as
applicable, Lessor shall execute and deliver to Lessee (or to Lessee's designee)
at Lessee's cost and expense an assignment of Lessor's entire interest in the
applicable Property, in each case in recordable form and otherwise in conformity
with local custom and free and clear of the Lien of this Lease and any Lessor
Liens attributable to Lessor but without any other warranties (of title or
otherwise) from the Lessor. The applicable Property shall be conveyed to Lessee
"AS IS" "WHERE IS" and in then present physical condition. In addition, Lessor
shall, upon Lessee's request and at Lessee's expense, execute and deliver any
documents (including any appropriate releases of or amendments to financing
statements or recorded memoranda of this Lease) necessary to release the Lien of
this Lease on the applicable Property.
19.2 No Termination With Respect to Less than All of a Property. Lessee
shall not be entitled to exercise its Purchase Option separately with respect to
Property consisting of Land, Equipment and Improvements but shall be required to
exercise its Purchase Option with respect to an entire Property.
ARTICLE XX
20.1 Individual Purchase Option. Subject to the restrictions set forth
in this paragraph and provided no Default or Event of Default shall have
occurred and be continuing and provided that the Election Notice referred to in
Section 20.2 has not been delivered, Lessee shall have the option, exercisable
by giving the Agent and Lessor no more than one hundred twenty (120) days and no
less than sixty (60) days irrevocable written notice of Lessee's election to
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exercise such option, to purchase any Property (whether or not the Basic Term
shall have commenced for such Property) on a Scheduled Interest Payment Date as
identified in such written notice, at a price equal to the Termination Value for
such Property and all Rent then due and owing and all other amounts then due and
owing (by the Lessee or the Construction Agent) under this Lease or under any
other Operative Agreement (including without limitation amounts, if any,
described in clause FIRST of Section 22.2) (which the parties do not intend to
be a "bargain" purchase price); and, upon receipt of such amount, Lessor shall
transfer to Lessee all of Lessor's right, title and interest in and to such
Property in accordance with Section 19.1 as of the Scheduled Interest Payment
Date on which such purchase occurs. The foregoing notwithstanding, Lessee may
not purchase any Property or Properties pursuant to this Section 20.1 if the
Property Cost of the Property or Properties then under consideration for
purchase (collectively, the "Intended Acquisition Properties") plus the
aggregate Property Cost of all Properties then or previously purchased by Lessee
or the Construction Agent (including without limitation purchases pursuant to,
as a result of or otherwise relating to any exercise of the purchase option
pursuant to this Section 20.1, any Default, any Event of Default, any Casualty,
any Condemnation or any Environmental Violation) on a cumulative basis exceeds
20% of the aggregate of the Maximum Expected Property Costs (as of the date of
determination) of all properties that have at any time been Properties
(including without limitation any Intended Acquisition Properties and any other
Properties then or previously purchased by the Lessee or retained by the
Lessor), unless the Agent (at Lessee's sole expense) obtains Appraisals of the
remaining Properties (excluding any Intended Acquisition Properties) showing an
aggregate appraised value equal to or greater than 85% of the aggregate Maximum
Expected Property Costs of such remaining Properties. For the purposes of this
paragraph, "Maximum Expected Property Cost" with respect to any Property, as of
the date of determination, shall mean (A) with respect to any Property then
subject to the Lease, the Property Cost of such Property, or (B) with respect to
any Construction Period Property, the greater of the Property cost or expected
maximum Property Cost (based on the applicable Construction Budgets) for such
Property, or (C) with respect to any property that was previously, but is not
then, a Property, the highest Property Cost of such property when it was a
Property.
20.2 Purchase or Sale Option. Not less than 120 days and no more than
180 days prior to the Expiration Date or any Payment Date occurring after the
Construction Period Termination Date, Lessee may give Lessor and Agent
irrevocable written notice (the "Election Notice") that Lessee is electing to
exercise either (a) the option to purchase all, but not less than all, of the
Properties on such Expiration Date or Payment Date (the "Purchase Option") or
(b) the option to remarket all of the Properties and cause a sale of all of the
Properties pursuant to the terms of Section 22.1 (the "Sale Option"), such sale
to occur on such Expiration Date or Payment
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Date. If Lessee does not give an Election Notice indicating the Sale Option at
least 120 days and not more than 180 days prior to the Expiration Date, then
Lessee shall be deemed to have elected the Purchase Option for the Expiration
Date. Lessor shall have no obligation to sell any Property unless all of the
Properties are sold on the respective Expiration Date or Payment Date. If Lessee
shall (i) elect (or be deemed to elect) to exercise the Purchase Option, or (ii)
elect to remarket all of the Properties pursuant to Section 22.1 and fail to
deliver the environmental report required by Section 10.2 at the time specified
in such Section, or (iii) elect to remarket all of the Properties pursuant to
Section 22.1 and fail to cause all of the Properties to be sold in accordance
with the terms of Section 22.1 on the respective Expiration Date or Payment Date
on which such a sale of all of the Properties is required in connection with
such election, then in each case, Lessee shall pay to Lessor on such Expiration
Date or Payment Date an amount (the "Purchase Option Price") equal to the
Termination Value for all the Properties (which the parties do not intend to be
a "bargain" purchase) plus all Rent and other amounts then due and payable under
this Lease or under any other Operative Agreement (including without limitation
the amounts described in clause FIRST of Section 22.2), and, upon receipt of
such amount, Lessor shall transfer to Lessee all of Lessor's right, title and
interest in and to the Properties in accordance with Section 19.1. Lessee may
not elect the Sale Option, and Lessor shall have no obligation to sell any
Property pursuant to Section 22.1, if a Lease Event of Default has occurred and
is continuing on the date of the Election Notice or the Sale Date. Upon any
purchase or sale of all the Properties pursuant to this Section 20.2 or Section
22.1, the Expiration Date shall be deemed to have occurred on the date of such
purchase or sale.
20.3 Accounting Changes. Although neither Lessor, the Agent, NCMI, nor
any Lender or Holder makes any representation or warranty with respect to the
Lessee's accounting treatment of this transaction, Lessee represents that a
material incentive for Lessee to enter into this Lease is the advice of the
Lessee's independent auditors that this Lease may be treated as an operating
lease for financial accounting purposes under the applicable rules and
interpretations of the Financial Accounting Standards Board and/or the
Securities Exchange Commission (the "Lease Accounting Rules") in effect as of
the date of this Lease. In the event that Lessee's independent auditors shall
determine that any subsequent change in the Lease Accounting Rules will preclude
the Lessee (or raise a substantial question as to whether the Lessee is
precluded) from continuing to account for this Lease as an operating lease with
substantially the same financial accounting benefits as before the change in
Lease Accounting Rules, then the Lessee shall so notify the Lessor and the Agent
in writing of such determination by its auditors; and Lessee may elect (by
delivery of irrevocable written notice of such election to the Lessor and the
Agent) to purchase all of the Properties or to cause all of the Properties to be
transferred to a third party transferee designated by Lessee
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(such purchase or transfer to be consummated on a date (the "Accounting
Change Transfer Date") specified by Lessee in such notice and in any event
within sixty (60) days after the date of such notice). On the Accounting Change
Transfer Date (whether the Properties are to be purchased by Lessee or
transferred to a third party), Lessee shall pay to Lessor an amount equal to
the Termination Value for all the Properties (which the parties do not intend
to be a "bargain" purchase) plus all Rent and other amounts then due and
payable under this Lease or under any other Operative Agreement (including
without limitation the amounts described in clause FIRST of Section 22.2), and,
upon receipt of such amount, Lessor shall transfer to Lessee (or to the third
party designated by Lessee) all of Lessor's right, title and interest in and to
the Properties in accordance with Section 19.1 and the Expiration Date shall be
deemed to have occurred on the date of such transfer (without giving Lessee the
right to remarket Properties pursuant to Section 22.1).
ARTICLE XXI
21.1 Renewal.
(a) Provided that no Lease Event of Default shall have
occurred and be continuing at the Basic Term Expiration Date or at the
expiration of any Extended Term, Lessee may renew this Lease (the
"Renewal Option") for an Extended Term of one year upon not more than
one hundred eighty (180) days and not less than one hundred twenty
(120) days prior written notice to Lessor, with respect to all, but not
less than all Properties (excluding Properties previously repurchased
by Lessee pursuant to Section 20.1), provided further that the Term
shall not be extended pursuant to this Section 21.1(a) beyond June 19,
2002. If Lessee will not have given an Election Notice pursuant to
Section 20.2 at least one hundred twenty (120) days and not more than
one hundred eighty (180) days prior to the final day of the Basic Term
or the first or second Extended Term, then Lessee shall be deemed to
have elected the Renewal Option for the Basic Term Expiration Date.
(b) Each renewal of this Lease for an Extended Term pursuant
to Section 21.1(a) shall be on the same terms and conditions as those
set forth in this Lease for the original Basic Term (which the parties
do not intend to be "bargain" renewals).
ARTICLE XXII
22.1 Sale Procedure.
(a) During the Marketing Period, Lessee, on behalf of
the Lessor, shall obtain bids for the cash purchase of all of
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the Properties in connection with a sale to one or more purchasers
(other than Lessee or any Affiliate of Lessee) to be consummated on
the applicable Expiration Date or Payment Date for the highest
price available, shall notify Lessor promptly of the name and address
of each prospective purchaser and the cash price which each
prospective purchaser shall have offered to pay for any Property and
shall provide Lessor with such additional information about the bids
and the bid solicitation procedure as Lessor may reasonably request
from time to time. Lessor may reject any and all bids and may assume
sole responsibility for obtaining bids by giving Lessee written notice
to that effect; provided, however, that notwithstanding the foregoing,
Lessor may not reject the highest bids for the Properties submitted by
the Lessee if (i) such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all of the
Properties, plus all reasonable costs and expenses referred to in
clause FIRST of Section 22.2 and represent bona fide offers from one
or more third party purchasers, and (ii) prior to Lessor's acceptance
of any such bid, Lessee has delivered to the Agent cash collateral in
an amount not less than the anticipated Deficiency Balance (as defined
in Section 22.1(b) below) as determined by the Agent. If the price
which a prospective purchaser or purchasers shall have offered to pay
for the Properties is less than the sum of the Limited Recourse Amount
plus all reasonable costs and expenses referred to in clause FIRST of
Section 22.2, Lessor may elect to retain the Properties by giving
Lessee prior written notice of Lessor's election to retain the
Properties, and upon receipt of such notice, Lessee shall surrender
the Properties to Lessor pursuant to Section 10.1. Unless Lessor shall
have elected to retain the Properties pursuant to the preceding
sentence, Lessee shall arrange for Lessor to sell the Properties free
and clear of the Lien of this Lease and any Lessor Liens attributable
to it, without recourse or warranty (of title or otherwise), for cash
on the last day of the Marketing Period (such date being hereafter
referred to as the "Sale Date") to the purchaser or purchasers
identified by Lessee or Lessor, as the case may be; provided, however,
solely as to Lessor or the Trust Company, in its individual capacity,
any Lessor Lien shall not constitute a Lessor Lien so long as Lessor
or the Trust Company, in its individual capacity, is diligently
contesting such Lessor Lien by appropriate proceedings in good faith;
and provided further that (except as expressly permitted by Section
17.11) Lessor shall have no obligation to sell any Property if a Lease
Event of Default has occurred and is continuing on the Date of the
Election Notice or the Sale Date. Lessee shall surrender the Property
so sold or subject to such documents to each purchaser in the
condition specified in Section 10.1. Lessee shall not take or fail to
take any action which would have the effect of unreasonably
discouraging bona fide third party bids for any Property. Lessor shall
have no obligation to sell any
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Property on the Sale Date unless all of the Properties are sold (and
Lessor has received full payment therefor in cash in the amount
required pursuant to this Section 22.1) on the Sale Date. If all of
the Properties are not either (i) sold on the Sale Date in accordance
with the terms of this Section 22.1, or (ii) retained by the Lessor
pursuant to an affirmative election made by the Lessor pursuant to the
third sentence of this Section 22.1(a), then the Lessee shall be
obligated to pay the Lessor on the Sale Date an amount equal to the
Termination Value for all of the Properties (plus all Rent and other
amounts then due and payable under this Lease and any other Operative
Agreements) in accordance with the terms of Section 20.2.
(b) If the Properties are sold on the Sale Date to one or more
third party purchasers in accordance with the terms of Section 22.1(a)
and the aggregate purchase price paid for the Properties minus the sum
of all costs and expenses referred to in clause FIRST of Section 22.2
is less than the sum of the aggregate Termination Values for all of the
Properties plus all Rent and other amounts then due and payable under
this Lease and under any other Operative Agreements (hereinafter such
difference shall be referred to as the "Deficiency Balance"), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date the lesser of (i) the Deficiency Balance, or (ii) the Maximum
Residual Guarantee Amount for all of the Properties. If the Properties
are retained by the Lessor pursuant to an affirmative election made by
the Lessor pursuant to the third sentence of Section 22.1(a), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date an amount equal to the Maximum Residual Guarantee Amount for all
of the Properties.
(c) In the event that the Properties are either sold to one or
more third party purchasers on the Sale Date or retained by the Lessor
in connection with an affirmative election made by the Lessor pursuant
to the third sentence of Section 22.1(a), then in either case on the
Sale Date the Lessee shall provide Lessor or such third party
purchasers with (i) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use and operate
such Property for its intended purposes, (ii) such easements, licenses,
rights-of-way and other rights and privileges in the nature of an
easement as are reasonably necessary or desirable in connection with
the use, repair, access to or maintenance of such Property for its
intended purpose or otherwise as the Lessor shall reasonably request,
and (iii) a services agreement covering such services as Lessor or such
third party purchaser may request in order to use and operate a
Property for its intended purposes at such rates (not in excess of
arm's-length fair market rates) as shall be acceptable to Lessee and
Lessor or such third party purchaser. All
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assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to the Lessor or such third party purchaser, as
applicable, and shall be fully assignable (including both primary
assignments and assignments given in the nature of security) without
payment of any fee, cost or other charge.
22.2 Application of Proceeds of Sale. The Lessor shall apply
the proceeds of sale of any Property in the following order of
priority:
(i) FIRST, to pay or to reimburse Lessor for the
payment of all reasonable costs and expenses incurred by
Lessor in connection with the sale;
(ii) SECOND, so long as the Participation
Agreement, the Credit Agreement or the Trust Agreement is in
effect and any Loan, Holder Advance or any other amount is
owing to the Lenders, the Holders or any other Person under
any Operative Agreement, to the Agent to be applied pursuant
to inter-creditor provisions between the Lenders and the
Holders contained in the Operative Agreements; and
(iii) THIRD, to the Lessee.
22.3 Indemnity for Excessive Wear. If the proceeds of the sale
described in Section 22.1 with respect to the Properties, less all expenses
incurred by Lessor in connection with such sale, shall be less than the Limited
Recourse Amount with respect to the Properties, and at the time of such sale it
shall have been reasonably determined (pursuant to the Appraisal Procedure) that
the Fair Market Sales Value of the Properties, shall have been impaired by
greater than expected wear and tear during the term of the Lease, Lessee shall
pay to Lessor within ten (10) days after receipt of Lessor's written statement
(i) the amount of such excess wear and tear determined by the Appraisal
Procedure or (ii) the amount of the Net Sale Proceeds Shortfall, whichever
amount is less.
22.4 Appraisal Procedure. For determining the Fair Market Sales Value
of any Property or any other amount which may, pursuant to any provision of any
Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee
shall use the following procedure (the "Appraisal Procedure"). Lessor and Lessee
shall endeavor to reach a mutual agreement as to such amount for a period of ten
(10) days from commencement of the Appraisal Procedure under the applicable
section of the Lease, and if they cannot agree within ten (10) days, then two
qualified appraisers, one chosen by Lessee and one chosen by Lessor, shall
mutually agree thereupon, but if either party shall fail to choose an appraiser
within twenty (20) days after notice from the other party of the selection of
its appraiser, then the appraisal by such appointed appraiser shall be
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binding on Lessee and Lessor. If the two appraisers cannot agree within twenty
(20) days after both shall have been appointed, then a third appraiser shall be
selected by the two appraisers or, failing agreement as to such third appraiser
within (30) days after both shall have been appointed, by the American
Arbitration Association. The decisions of the three appraisers shall be given
within twenty (20) days of the appointment of the third appraiser and the
decision of the appraiser most different from the average of the other two shall
be discarded and such average shall be binding on Lessor and Lessee; provided
that if the highest appraisal and the lowest appraisal are equidistant from the
third appraisal, the third appraisal shall be binding on Lessor and Lessee. The
fees and expenses of the appraiser appointed by Lessee shall be paid by Lessee;
the fees and expenses of the appraiser appointed by Lessor shall be paid by
Lessor (such fees and expenses not being indemnified pursuant to Section 13 of
the Participation Agreement); and the fees and expenses of the third appraiser
shall be divided equally between Lessee and Lessor.
22.5 Certain Obligations Continue. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to the Properties (including the
installment of Basic Rent due on the applicable Expiration Date or Payment Date)
shall continue undiminished until payment in full to Lessor of the sale
proceeds, if any, the Maximum Residual Guarantee Amount, the amount due under
Section 22.3, if any, and all other amounts due to Lessor with respect to all
Properties. Lessor shall have the right, but shall be under no duty, to solicit
bids, to inquire into the efforts of Lessee to obtain bids or otherwise to take
action in connection with any such sale, other than as expressly provided in
this Article XXII.
ARTICLE XXIII
23.1 Holding Over. If Lessee shall for any reason remain in possession
of a Property after the expiration or earlier termination of this Lease as to
such Property (unless such Property is conveyed to Lessee), such possession
shall be as a tenancy at sufferance during which time Lessee shall continue to
pay Supplemental Rent that would be payable by Lessee hereunder were the Lease
then in full force and effect with respect to the Property and Lessee shall
continue to pay Basic Rent at 110% of the Basic Rent that would otherwise be due
and payable at such time. Such Basic Rent shall be payable from time to time
upon demand by Lessor and such additional 10% amount shall be applied by the
Lessor to the payment of the Loans pursuant to the Credit Agreement and the
Holder Advances pursuant to the Trust Agreement pro rata between the Loans and
the Holder Advances. During any period of tenancy at sufferance, Lessee shall,
subject to the first sentence of this paragraph, be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have
no rights hereunder other than the right, to the extent given by law to tenants
at sufferance, to continue their occupancy and use of
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such Property. Nothing contained in this Article XXIII shall constitute the
consent, express or implied, of Lessor to the holding over of Lessee after the
expiration or earlier termination of this Lease as to any Property (unless such
Property is conveyed to Lessee) and nothing contained herein shall be read or
construed as preventing Lessor from maintaining a suit for possession of such
Property or exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss. During the Term, unless Lessee shall not be in
actual possession of the Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under Article XVII, the risk of loss
or decrease in the enjoyment and beneficial use of such Property as a result of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise is assumed by Lessee, and Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XXV
25.1 Assignment.
(a) Subject to Section 2.5 above, Lessee may not assign this
Lease or any of its rights or obligations hereunder in whole or in part
to any Person without the prior written consent of the Agent and the
Lessor, with such consent to be given or withheld in the sole
discretion of each such party.
(b) No such assignment or other relinquishment of possession to
any Property shall in any way discharge or diminish any of the
obligations of Lessee to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease.
25.2 Subleases.
(a) Promptly but in any event within five (5) days following
the execution and delivery of any sublease permitted by this Article
XXV, Lessee shall notify Lessor and the Agent of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Properties described in such Lease Supplement from
Lessor, and any existing tenant respecting such Property shall
automatically be deemed to be a subtenant of Lessee and not a tenant of
Lessor.
(b) Lessee may, without the consent of Lessor, sublet not more
than twenty percent (20%) of the square footage of the Improvements on
any specific Property to sublessees who use the sublet portion of the
Improvements only for educational purposes, job training, food and
commissary
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services or maintenance purposes; provided that in any event, Lessee
shall remain fully liable for all obligations (including without
limitation all Rent and other obligations with respect to such
subleased Properties and any other Properties) under this Lease, each
Lease Supplement and the other Operative Agreements. Any such sublease
of any Property shall be on commercially reasonable terms and at market
rates, and such Property shall continue to be used for the purposes set
forth in this paragraph and in the definition of "Property." Except as
set forth in this Section 25.2(b), Lessee may not sublet any Property
or portion thereof without first obtaining the prior written consent of
the Lessor and the Agent, which consent may be given or withheld in the
sole discretion of each such party.
(c) No such sublease or other relinquishment of possession to any
Property shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease as to the Property, or portion
thereof, so sublet.
(d) Any sublease of any Property or portion thereof shall be
subject, and expressly subordinate to the rights of the Lessor, the
Agent, the Lenders and the Holders under this Lease, the Security
Agreement, each Mortgage Instrument and all other Operative Agreements.
Each insurance policy carried by Lessee pursuant to Article XIV hereof
shall be endorsed to name each sublessee under any such sublease as an
additional insured. Prior to the effectiveness of any such sublease,
Lessee shall deliver a copy thereof to the Lessor and the Agent.
ARTICLE XXVI
26.1 No Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
ARTICLE XXVII
27.1 Acceptance of Surrender. No surrender to Lessor of this Lease or
of all or any portion of any Property or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by Lessor and the Agent, and no act by Lessor or the Agent or any
representative or agent of Lessor or the Agent, other than a written acceptance,
shall constitute an acceptance of any such surrender.
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27.2 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) any right, title or interest in any Property, (c) any
Notes, or (d) a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 Incorporation of Covenants.
(a) Reference is made to that certain Credit Agreement dated
as of June 19, 1997 (the "Existing Wackenhut Corrections Credit
Agreement") among Wackenhut Corrections, the lenders party thereto, and
NationsBank, National Association, as Agent. Further reference is made
to the covenants contained in Article VII and Article VIII of the
Existing Wackenhut Corrections Credit Agreement (hereinafter referred
to as the "Incorporated Covenants"). The Lessee agrees with the Lessor
that, effective as of the date hereof (whether or not the Basic Term
has commenced with respect to any Property), the Incorporated Covenants
(and all other relevant provisions of the Existing Wackenhut
Corrections Credit Agreement related thereto) are hereby incorporated
by reference into this Lease and into the Guaranty Agreement to the
same extent and with the same effect as if set forth fully herein and
therein and shall inure to the benefit of the Lessor, without giving
effect to any waiver, amendment, modification or replacement of the
Existing Wackenhut Corrections Credit Agreement or any term or
provision of the Incorporated Covenants occurring subsequent to the
date of this Lease, except to the extent otherwise specifically
provided in the following provisions of this paragraph. In the event a
waiver is granted under the Existing Wackenhut Corrections Credit
Agreement or an amendment or modification is executed with respect to
the Existing Wackenhut Corrections Credit Agreement, and such waiver,
amendment or modification affects the Incorporated Covenants, then such
waiver, amendment or modification shall be effective with respect to
the Incorporated Covenants as incorporated by reference into this Lease
only if consented to in writing by the Majority Lenders and the Agent.
In the event of any replacement of the Existing Wackenhut Corrections
Credit Agreement with a similar credit facility (the "New Facility")
the covenants contained in the New Facility which correspond to the
covenants contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement shall become the Incorporated Covenants
hereunder only if consented to in writing by the Majority Lenders and
the Agent, and, if such consent is not granted, then the covenants
contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or
amendments approved in accordance with this paragraph) shall
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continue to be the Incorporated Covenants hereunder. If the Existing
Wackenhut Corrections Credit Agreement (or any such New Facility, as
the case may be) is terminated and not replaced, then the covenants
contained in Articles VII and VIII of the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or
amendments thereto, or covenants of the New Facility, in each case
approved in accordance with this paragraph) shall continue to be the
Incorporated Covenants hereunder.
(b) Financial Information, Reports, Notices, Etc. Without
limiting the generality of the foregoing, from and after the date
hereof (whether or not the Basic Term has commenced with respect to any
Property), to the extent that the Incorporated Covenants require
Wackenhut Corrections or any of its Subsidiaries to deliver any
financial statement, certificate, notice, report, or other document or
information to the Existing Credit Agent (or any other agent under the
applicable credit facility), the Lessee shall, and shall cause
Wackenhut Corrections to, simultaneously deliver a copy of such
financial statement, certificate, notice, report, document or
information to the Agent, each Lender and (upon Lessor's request) the
Lessor.
ARTICLE XXIX
29.1 Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and delivered personally or
by a nationally recognized overnight courier service or mailed (by registered or
certified mail, return receipt requested, postage prepaid) or telecopied with a
confirming notice, addressed to the respective parties, as follows:
If to Lessee:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410-4243
Attention: Mr. David Watson, Controller
and Chief Accounting Officer
Telephone No.: (800) 666-5640 Ext. 6646
Telecopy No.: (561) 691-6473
If to Lessor:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
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with a copy to the Agent:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attention: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
or such additional parties or other address as such party may hereafter
designate, and shall be effective upon receipt or refusal thereof.
ARTICLE XXX
30.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
30.2 Amendments and Modifications. Neither this Lease, any Lease
Supplement nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by
Lessor and Lessee.
30.3 Successors and Assigns. All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
30.4 Headings and Table of Contents. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
30.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
30.7 Calculation of Rent. All calculation of Rent payable hereunder
shall be computed based on the actual number of days elapsed over a year of 360
days.
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30.8 Memoranda of Lease and Lease Supplements. This Lease shall not be
recorded; provided Lessor and Lessee shall promptly record (a) a memorandum of
this Lease (in substantially the form of Exhibit C-1 attached hereto) regarding
each Property (that is not then a Completed Property) promptly after the
acquisition thereof in the local filing office with respect thereto and (b) a
memorandum of this Lease and the applicable Lease Supplement (in substantially
the form of Exhibit C-2 attached hereto) regarding each Property that is (at the
time of acquisition) or subsequently becomes a Completed Property, promptly
after the date of acquisition or Completion thereof (as the case may be) in the
local filing office with respect thereto, in all cases at Lessee's cost and
expense, and as required under applicable law to sufficiently evidence this
Lease or any such Lease Supplement in the applicable real estate filing records.
30.9 Allocations between the Lenders and the Holders. Notwithstanding
any other term or provision of this Lease to the contrary, the allocations of
the proceeds of the Properties and any and all other Rent and other amounts
received hereunder shall be subject to the inter-creditor provisions between the
Lenders and the Holders contained in the Operative Agreements (or as otherwise
agreed among the Lenders and the Holders from time to time).
30.10 Limitations on Recourse. Notwithstanding anything contained in
this Lease to the contrary, Lessee agrees to look solely to Lessor's estate and
interest in the Properties for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the foregoing shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lessee under or
with respect to this Lease, the relationship of Lessor and Lessee hereunder or
Lessee's use of the Properties or any other liability of Lessor to Lessee,
except to the extent expressly provided in Section 14.11(b) of the Participation
Agreement. Nothing in this Section shall be interpreted so as to limit the terms
of Sections 6.1 or 6.2.
30.11 WAIVERS OF JURY TRIAL. THE LESSOR AND THE LESSEE IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS LEASE OR ANY COUNTERCLAIM THEREIN.
30.12 Original Leases. The single executed original of this Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt of the Agent therefor on or following
the signature page thereof shall be the original executed counterpart of this
Lease (the "Original Executed Counterpart"). To the extent that this Lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code as in effect in any applicable
39
<PAGE> 44
jurisdiction, no security interest in this Lease may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
30.13 Mortgage Grant and Remedies. Without limiting any other remedies
set forth in this Lease, in the event that a court of competent jurisdiction
rules that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the Lessor and the
Lessee agree that the Lessee hereby grants, bargains, sells, conveys, mortgages,
and grants a security interest in each Property to Lessor WITH POWER OF SALE to
secure the payment of all sums due and owing by Lessee or the Construction Agent
hereunder or under any other Operative Agreement, and that, upon the occurrence
of any Event of Default, the Lessor shall have the power and authority, to the
extent provided by law or the Operative Agreements, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of any Property, to appoint or
obtain the appointment of a receiver for all or any part of the Property, and to
exercise any other right or remedy that may be available under applicable law to
the holder of a mortgage, deed of trust, security deed or other secured
financing.
30.14 Exercise of Lessor Rights. The Lessee hereby acknowledges and
agrees that the rights and powers of the Lessor under this Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
(a) In the event that a court of competent jurisdiction rules
that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the
Lessor and the Lessee agree that the Lessor's collateral assignment of
this Lease to the Agent shall be deemed to be a collateral assignment
of such mortgage, deed of trust, security deed or other secured
financing, and the Agent as such collateral assignee shall be entitled
to exercise any and all rights and remedies of the Lessor set forth
herein during the existence of any Event of Default, including without
limitation the Lessor's rights to obtain a receiver, to obtain
possession of the Properties and the rents and revenues thereof, to
foreclose this Lease, to sell the Lessee's interest in the Properties,
and to exercise any other rights or remedies that may then be available
to the Lessor under applicable law on account of such Event of Default.
40
<PAGE> 45
(b) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under this Lease.
(c) During the existence of an Event of Default, the Agent as
holder of the Mortgage Instruments and as collateral assignee of this
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
this Lease (regardless of whether this Lease shall be deemed a
mortgage, deed of trust, security deed or other secured financing) even
if Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
41
<PAGE> 46
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
WITNESS: WACKENHUT CORRECTIONS
CORPORATION, as Lessee
By: By:
------------------------------ -----------------------------------
Name: Name: George C. Zoley
---------------------------- Title: Chief Executive Officer
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not individually, but
solely as Owner
Trustee under the
Wackenhut Corrections
WITNESS: Trust 1997-1, as Lessor
By: By:
------------------------------ ----------------------------------
Name: Name: Val T. Orton
---------------------------- Title: Vice President
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as of the date hereof
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:
-------------------------------
Name: Maria Conroy
Title: Senior Vice President
SIGNATURE PAGE 1 OF 1
<PAGE> 47
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of
[__________] between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as Owner Trustee under the Wackenhut Corrections Trust
1997-1, as lessor (the "Lessor"), and WACKENHUT CORRECTIONS CORPORATION, as
lessee (the "Lessee").
WHEREAS, the Lessor is the owner or will be the owner of the Property
described on Schedule I hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of June 19, 1997, among the WACKENHUT CORRECTIONS CORPORATION, as
Construction Agent, Lessee, the Lessor, not individually, except as expressly
stated therein, but solely as Owner Trustee under the Wackenhut Corrections
Trust 1997-1, the Holders party thereto, the Lenders party thereto, and
NationsBank, National Association, as Agent for the Lenders (as such agreement
may be amended, modified, supplemented or restated from time to time).
SECTION 2. THE PROPERTIES. Attached hereto as Schedule I is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule I-A, an Improvement Schedule attached hereto as Schedule I-B and a
legal description of the Land for such Project attached hereto as Schedule I-C.
Effective upon the execution and delivery of this Lease Supplement by the Lessor
and the Lessee, the Leased Property shall be subject to the terms and provisions
of the Lease.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default has occurred and is continuing and provided that such
exercise will not impair the value of such Property) shall be permitted to
exercise all rights and remedies under, all operation and easement agreements
and related or similar agreements applicable to such Property.
SECTION 4. RATIFICATION. Except as specifically modified
hereby, the terms and provisions of the Lease and the Operative
43
<PAGE> 48
Agreements are hereby ratified and confirmed and remain in full
force and effect.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF ________________ WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS.
SECTION 7. MORTGAGE GRANT AND REMEDIES. Without limiting any other
remedies set forth in the Lease, in the event that a court of competent
jurisdiction rules that the Lease constitutes a mortgage, deed of trust,
security deed or other secured financing as is the intent of the parties, then
the Lessor and the Lessee agree that the Lessee hereby grants, bargains, sells,
conveys, mortgages, and grants a security interest in each Property to Lessor
WITH POWER OF SALE to secure the payment of all sums due and owing by Lessee or
the Construction Agent hereunder or under any other Operative Agreement, and
that, upon the occurrence of any Event of Default, the Lessor shall have the
power and authority, to the extent provided by law or the Operative Agreements,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of any Property, to appoint or obtain the appointment of a receiver for all
or any part of the Property, and to exercise any other right or remedy that may
be available under applicable law to the holder of a mortgage, deed of trust,
security deed or other secured financing.
SECTION 8. EXERCISE OF LESSOR RIGHTS. The Lessee hereby acknowledges
and agrees that the rights and powers of the Lessor under the Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
44
<PAGE> 49
(i) In the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust, security
deed or other secured financing as is the intent of the parties, then
the Lessor and the Lessee agree that the Lessor's collateral
assignment of the Lease to the Agent shall be deemed to be a
collateral assignment of such mortgage, deed of trust, security deed
or other secured financing, and the Agent as such collateral assignee
shall be entitled to exercise any and all rights and remedies of the
Lessor set forth herein during the existence of any Event of Default,
including without limitation the Lessor's rights to obtain a receiver,
to obtain possession of the Properties and the rents and revenues
thereof, to foreclose the Lease, to sell the Lessee's interest in the
Properties, and to exercise any other rights or remedies that may then
be available to the Lessor under applicable law on account of
such Event of Default.
(ii) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under the Lease.
(iii) During the existence of an Event of Default, the Agent
as holder of the Mortgage Instruments and as collateral assignee of the
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
the Lease (regardless of whether the Lease shall be deemed a mortgage,
deed of trust, security deed or other secured financing) even if
Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
SECTION 9. COUNTERPART EXECUTION. This Lease Supplement may
be executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one and
the same instrument.
45
<PAGE> 50
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
[IF NECESSARY, MODIFY TO PUT IN RECORDABLE FORM.]
46
<PAGE> 51
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1,
as Lessor
By:
---------------------------------------
Name:Val T.Orton
Title: Vice President
LESSEE:
WACKENHUT CORRECTIONS CORPORATION,
as Lessee
By:
---------------------------------------
Name:George C. Zoley
Title: Chief Executive Officer
47
<PAGE> 52
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
NATIONSBANK, NATIONAL ASSOCIATION, as
Agent
By:
---------------------------------------
Name: Maria Conroy
Title: Senior Vice President
48
<PAGE> 53
STATE OF NORTH CAROLINA )
) ss:
COUNTY OF GASTON )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County Mecklenburg of this 19th day of June,
1997, by VAL T. ORTON, as VICE PRESIDENT of FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, but solely as
Owner Trustee under the Wackenhut Corrections Trust 1997-1, on behalf of the
Owner Trustee.
----------------------------------------
[Notarial Seal] Notary Public
My commission expires:
------------------
STATE OF NORTH CAROLINA )
) ss:
COUNTY OF GASTON )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of Mecklenburg this 19th day of June,
1997, by GEORGE C. ZOLEY, as CHIEF EXECUTIVE OFFICER of WACKENHUT CORRECTIONS
CORPORATION, a Florida corporation, on behalf of the corporation.
[Notarial Seal] ----------------------------------------
Notary Public
My commission expires:
-----------------
STATE OF NORTH CAROLINA )
) ss:
COUNTY OF GASTON )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of Mecklenburg this 19th day of June,
1997 by MARIA CONROY, as SENIOR VICE PRESIDENT of NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent.
[Notarial Seal]
-------------------------------------
Notary Public
My commission expires:
-----------------
49
<PAGE> 54
SCHEDULE I
TO LEASE SUPPLEMENT NO. ___
50
<PAGE> 55
SCHEDULE I-A
TO LEASE SUPPLEMENT NO. ___
(Equipment)
51
<PAGE> 56
SCHEDULE I-B
TO LEASE SUPPLEMENT NO. ___
(Improvements)
52
<PAGE> 57
SCHEDULE I-C
TO LEASE SUPPLEMENT NO. ___
(Land)
53
<PAGE> 58
EXHIBIT B TO THE LEASE
[OTHER NAMES AND LOCATIONS OF LESSEE]
54
<PAGE> 59
EXHIBIT C-1 TO THE LEASE
FORM OF MEMORANDUM OF LEASE
55
<PAGE> 60
EXHIBIT C-2 TO THE LEASE
FORM OF MEMORANDUM OF LEASE AND LEASE SUPPLEMENT
56
<PAGE> 61
ACKNOWLEDGMENT OF EXECUTION ON BEHALF OF
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS
OWNER TRUSTEE FOR THE WACKENHUT CORRECTIONS TRUST 1997-1
STATE OF NORTH CAROLINA
COUNTY OF GASTON
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Val T. Orton,
known to be the Vice President of First Security Bank, National Association, as
Owner Trustee for the Wackenhut Corrections Trust 1997-1 (the "Lessor"), who,
being by me duly sworn, says he works at 79 South Main Street, Salt Lake City,
Utah 84111, and that by authority duly given by, and as the act of, the Lessor,
the foregoing and annexed Lease Agreement dated June 19, 1997, was executed by
him in the State and County aforesaid as said __________ on behalf of the
Lessor.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My commission expires:
----------------------
57
<PAGE> 62
ACKNOWLEDGMENT OF EXECUTION ON BEHALF OF
WACKENHUT CORRECTIONS CORPORATION
STATE OF NORTH CAROLINA
COUNTY OF GASTON
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared George C. Zoley
known to be the Chief Executive Officer of Wackenhut Corrections Corporation
(the "Lessee"), who being by me duly sworn, says he works at 4200 Wackenhut
Drive, Suite #100, Palm Beach Gardens, Florida 33410-4243, and that by authority
duly given by, and as the act of, the Lessee, the foregoing and annexed Lease
Agreement dated June 19, 1997, was executed by him as said __________ on behalf
of the Lessee, in the aforesaid State and County.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My commission expires:
----------------------
58
<PAGE> 63
AFFIDAVIT OF VAL T. ORTON
The undersigned, being first duly sworn, deposes and says that:
1. He is a Vice President of First Security Bank, National
Association, and works at 79 South Main Street, Salt Lake City,
Utah, 84111.
2. Reference is made to the Lease Agreement (the "Lease") dated as of
June 19, 1997, of First Security Bank, National Association, as Owner Trustee
for the Wackenhut Corrections Trust 1997-1 (the "Lessor") and Wackenhut
Corrections Corporation (the "Lessee").
3. The Lease was executed by the undersigned on behalf of the Lessor
and delivered by the Lessor to NationsBank, National Association as collateral
assignee of the Lease, both execution and delivery occurring in Charlotte, North
Carolina as of June 19, 1997.
This the 19th day of June, 1997.
--------------------------------------
Name: Val T. Orton
Title:Vice President
Acknowledgment of Execution
STATE OF
----------------
COUNTY OF
---------------
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared Val T. Orton who
before me affixed his signature to the above Affidavit.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My Commission Expires:
------------------
59
<PAGE> 64
AFFIDAVIT OF GEORGE C. ZOLEY
The undersigned, being first duly sworn, deposes and says that:
1. He is a Chief Executive Officer of Wackenhut Corrections
Corporation, and works at 4200 Wackenhut Drive, Suite #100, Palm Beach Gardens,
Florida 33410-4243.
2. Reference is made to the Lease Agreement (the "Lease") dated as of
June 19, 1997, of First Security Bank, National Association, as Owner Trustee
for the Wackenhut Corrections Trust 1997-1 (the "Lessor") and Wackenhut
Corrections Corporation (the "Lessee").
3. The Lease was executed by the undersigned on behalf of the Lessee
and delivered by the Lessee to the Lessor, both execution and delivery occurring
in Charlotte, North Carolina as of June 19, 1997.
This the 19th day of June, 1997.
--------------------------------------
Name: George C. Zoley
Title:Chief Executive Officer
Acknowledgment of Execution
STATE OF NORTH CAROLINA
COUNTY OF GASTON
Before me, the undersigned, a Notary Public in and for said County and
State on this 19th day of June, 1997 A.D., personally appeared George C. Zoley
who before me affixed his signature to the above Affidavit.
Witness my hand and official seal this 19th day of June, 1997.
-----------------------------------
Notary Public
(SEAL)
My Commission Expires:
------------------
60
<PAGE> 1
EXHIBIT 4.7
AGENCY AGREEMENT
between
WACKENHUT CORRECTIONS CORPORATION
as Construction Agent
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Owner Trustee under the Wackenhut Corrections Trust 1997-1
as Lessor
Dated as of June 19, 1997
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
PRELIMINARY STATEMENT...............................................................1
ARTICLE I DEFINITIONS.............................................................1
1.1 Defined Terms...........................................................1
ARTICLE II APPOINTMENT OF CONSTRUCTION AGENT.......................................2
2.1 Appointment.............................................................2
2.2 Acceptance and Undertaking..............................................2
2.3 Term....................................................................2
2.4 Scope of Authority......................................................2
2.5 Delegation of Duties....................................................4
2.6 Covenants of the Construction Agent.....................................4
ARTICLE III THE IMPROVEMENTS........................................................5
3.1 Construction............................................................5
3.2 Amendments; Modifications...............................................5
3.3 Failure to Complete Construction Period Properties
and Purchase Obligation.................................................6
ARTICLE IV PAYMENT OF FUNDS........................................................6
4.1 Right to Receive Construction Cost......................................6
ARTICLE V EVENTS OF DEFAULT.......................................................7
5.1 Events of Default.......................................................7
5.2 Damages.................................................................8
5.3 Remedies; Remedies Cumulative...........................................8
ARTICLE VI LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS...........................10
6.1 Exercise of the Lessor's Rights........................................10
6.2 Lessor's Right to Cure Construction Agent's Defaults ..................10
ARTICLE VII MISCELLANEOUS..........................................................11
7.1 Notices................................................................11
7.2 Successors and Assigns.................................................11
7.3 GOVERNING LAW..........................................................12
7.4 Submission To Jurisdiction; Waivers....................................12
7.5 Amendments and Waivers.................................................12
7.6 Counterparts...........................................................13
7.7 Severability...........................................................13
7.8 Headings and Table of Contents.........................................13
7.9 WAIVER OF JURY TRIAL...................................................13
</TABLE>
i
<PAGE> 3
AGENCY AGREEMENT
THIS AGENCY AGREEMENT, dated as of June 19, 1997 (the "Agreement"),
between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association ("FSB"), not individually, but solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1 (the "Lessor") and WACKENHUT CORRECTIONS
CORPORATION, a Florida corporation (the "Construction Agent").
PRELIMINARY STATEMENT
A. The Lessor and the Construction Agent are parties to that certain
Lease Agreement, dated as of even date herewith (as amended, supplemented or
otherwise modified, the "Lease"), pursuant to which the Construction Agent, as
lessee (the "Lessee") has agreed to lease certain Land, Improvements and
Equipment from the Lessor (collectively, the "Properties").
B. In connection with the execution and delivery of the Participation
Agreement, the Lease and the other Operative Agreements, and subject to the
terms and conditions hereof, (i) the Lessor desires to appoint the Construction
Agent as its sole and exclusive agent in connection with the identification and
acquisition of the Properties (provided title to the Properties shall be held in
the name of the Lessor) and construction of such Improvements in accordance with
the Plans and Specifications and (ii) the Construction Agent desires, for the
benefit of the Lessor, to identify and acquire the Properties and to cause the
construction of such Improvements in accordance with the Plans and
Specifications and to undertake such other liabilities and obligations as are
herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledge, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms.
Capitalized terms used but not otherwise defined in this
Agreement shall have the meanings set forth in Appendix A to the Participation
Agreement, dated as of June 19, 1997, among the Construction Agent, the Lessee,
FSB, not individually, but solely as Owner Trustee under the Wackenhut
Corrections Trust 1997-1 and
<PAGE> 4
NationsBank, National Association, as Agent for the Lenders, as such agreement
may be amended, modified, supplemented or restated from time to time.
ARTICLE II
APPOINTMENT OF CONSTRUCTION AGENT
2.1 Appointment. Subject to the terms and conditions hereof, the
Lessor hereby irrevocably designates and appoints the Construction Agent as its
exclusive agent, and the Construction Agent accepts such appointment, in
connection with the identification and acquisition from time to time of the
Properties (provided title to the Properties shall be held in the name of the
Lessor) and construction of the Improvements in accordance with the Plans and
Specifications on the Land, and pursuant to the terms of this Agreement, the
Participation Agreement and the other Operative Agreements. Notwithstanding any
provisions hereof or in any other Operative Agreement to the contrary, the
Construction Agent acknowledges and agrees that the Lessor shall advance no more
than the sum of the aggregate Commitment of the Lenders plus the aggregate
amount of the Holder Commitments in regard to the Properties (including without
limitation for any and all Advances in the aggregate from the Lenders under the
Credit Agreement and from the Holders under the Trust Agreement).
2.2 Acceptance and Undertaking. The Construction Agent hereby
unconditionally accepts the agency appointment and undertakes, for the benefit
of the Lessor, to identify and acquire certain Properties (provided title to the
Properties shall be held in the name of the Lessor) and to cause the
construction of the Improvements in accordance with the Plans and Specifications
and the Operative Agreements.
2.3 Term. This Agreement shall commence on the date hereof and shall
terminate on the later of the Construction Period Termination Date or the date
on which all Properties have been made subject to the Lease by execution of
appropriate Lease Supplements by the Lessee.
2.4 Scope of Authority.
(a) The Lessor hereby expressly authorizes the Construction
Agent, or any agent or contractor of the Construction Agent, and the
Construction Agent unconditionally agrees, for the benefit of the
Lessor, to take all action necessary or desirable for the performance
and satisfaction of any and all of Lessor's obligations under any
construction agreement and to fulfill all of the
2
<PAGE> 5
obligations of the Construction Agent including, without limitation:
(i) the identification and assistance with the
acquisition of Properties in accordance with the terms and
conditions of the Participation Agreement and the negotiation
and entering into of all contracts necessary to purchase the
Properties;
(ii) all design and supervisory functions relating
to the construction of the Improvements and installation and
testing of the related Equipment and performing all
engineering work related to the construction, installation and
testing of the Improvements;
(iii) (A) negotiating and entering into all
contracts or arrangements to procure the equipment necessary
to construct the Improvements and (B) negotiating all
contracts or arrangements to procure the Equipment on such
terms and conditions as are customary and reasonable in light
of local standards and practices and the businesses in which
the Lessee is engaged;
(iv) assisting in obtaining all necessary permits,
licenses, consents, approvals and other authorizations,
including without limitation those required under applicable
Environmental Laws, from all Governmental Authorities in
connection with the development and construction of the
Improvements on the Land in accordance with the Plans and
Specifications;
(v) maintaining all books and records with
respect to the construction, operation and management
of the Properties; and
(vi) performing any other acts necessary in
connection with the identification and acquisition of the
Properties and construction and development of the
Improvements in accordance with the Plans and Specifications.
(b) Neither the Construction Agent nor any of its
Affiliates or agents shall enter into any contract in the name of
Lessor without Lessor's consent, which consent shall not be
unreasonably withheld, conditioned or delayed.
(c) Subject to the terms and conditions of this
Agreement, the Construction Agent shall have sole management and
control over the construction means, methods, sequences
3
<PAGE> 6
and procedures with respect to the construction of the Improvements.
2.5 Delegation of Duties. The Construction Agent may execute any of
its duties under this Agreement by or through agents, contractors, employees or
attorneys-in-fact; provided, however, that no such delegation shall limit or
reduce in any way the Construction Agent's duties and obligations under this
Agreement.
2.6 Covenants of the Construction Agent. The Construction
Agent hereby covenants and agrees that it will:
(a) following the Construction Commencement Date for each
Property, cause construction of the applicable Improvements to be
prosecuted diligently and substantially in accordance with the Plans
and Specifications for such Property and all material Legal
Requirements and Insurance Requirements;
(b) cause the Completion Date for such Improvements to occur
on or before the Construction Period Termination Date, in each case
free and clear (by removal or bonding) of Liens (other than Permitted
Liens) or claims for materials supplied or labor or services performed
in connection with the construction of the Improvements;
(c) cause all outstanding punch list items with respect to such
Improvements to be completed;
(d) during construction, cause all title to all Equipment on
each Property to vest in the Owner Trustee and file all necessary
documents under Article 9 of the Uniform Commercial Code to perfect
such title (to the extent perfection can be obtained by filing under
the UCC);
(e) no less than five (5) Business Days prior to the scheduled
date for the initial Construction Advance to be made in connection with
any Improvements, the Construction Agent shall deliver to the Lessor
true, complete and correct copies of the Construction Budget for such
Improvements. Thereafter, the Construction Agent, on a monthly basis,
shall deliver to the Lessor true, correct and complete copies of any
material modifications of the Construction Budget; and
(f) procure (or cause to be procured), on behalf of Lessor
(but at Construction Agent's expense) insurance for the Properties
during the period commencing on each Property Closing Date and
continuing to and throughout the Construction Period in such amounts
and with such coverages
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as are required to be maintained during the Term under the provisions
of Article XIV of the Lease.
ARTICLE III
THE IMPROVEMENTS
3.1 Construction. The Construction Agent shall cause the Improvements
to be constructed, equipped, maintained and used in full compliance with all
Legal Requirements and Insurance Requirements.
3.2 Amendments; Modifications.
(a) The Construction Agent may at any time revise, amend or
modify (i) the Plans and Specifications without the consent of the
Lessor; provided that any such amendment to the Plans and
Specifications does not (x) result in the Completion Date of the
Improvements occurring on or after the Construction Period Termination
Date or (y) result in the total Property Cost of the Improvements and
the Land included in a Property being less than the minimum amount
specified in Section 5.4(e) of the Participation Agreement or (z)
result in the cost of any Improvements subject to such amendment
exceeding the sum of the then Available Commitments and the then
Available Holder Commitments (reduced by the amount, if any, necessary
to pay for the cost of construction and development of Improvements on
other Properties which are currently under construction but have not
yet been completed (such amount the "Unfunded Amount")), and (ii) the
Construction Budget and enter into any related amendments,
modifications or supplements without the consent of the Lessor;
provided that such revisions, amendments or modifications to the Plans
and Specifications or related amendments, modifications or supplements
to the Construction Budget do not (A) result in the total Property Cost
of the Improvements and the Land included in a Property being less than
the minimum amount specified in Section 5.4(e) of the Participation
Agreement or (B) result in unfunded Project Costs being greater than
the sum of the then Available Commitments and the then Available Holder
Commitments (reduced by the Unfunded Amount).
(b) The Construction Agent agrees that it will not implement
any revision, amendment or modification to the Plans and Specifications
or Construction Budget for any Property if the aggregate effect of such
revision, amendment or modification, when taken together with any
previous or contemporaneous revision, amendment or modification to the
Plans and Specifications or Construction Budget (as the case
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<PAGE> 8
may be) for any Property, would cause a material reduction in value of
any Property when completed, unless the Agent has previously obtained
(at Construction Agent's sole cost) an Appraisal of such Property
taking account of such proposed revision, amendment or modification and
showing an appraised value for such Property equal to or greater than
85% of the expected maximum Property Cost of such Property (based on
appropriately revised Construction Budgets).
3.3 Failure to Complete Construction Period Properties and Purchase
Obligation. If at any time prior to the Completion Date with respect to any
Construction Period Property there occurs and is continuing for five (5) days or
more, a Casualty, an Environmental Violation, the commencement of a Condemnation
or a Force Majeure Event, the Construction Agent shall either (a) pay to Lessor,
on a date designated by Construction Agent (which date shall be not more than
thirty (30) days after the occurrence of the applicable event), an aggregate
amount equal to the liquidated damages amount referenced in Section 5.3(b) of
this Agreement regarding such Construction Period Property and on such date
Lessor shall transfer and convey to the Construction Agent all right, title and
interest of Lessor in and to such Construction Period Property or (b) notify
Lessor in writing it intends to proceed with construction of the Improvements
with respect to such Construction Period Property in which case the Construction
Agent shall promptly and diligently complete the construction of such
Improvements in accordance with the Plans and Specifications and with the terms
hereof and cause the Completion Date with respect to such Construction Period
Property to occur on or prior to the Construction Period Termination Date.
ARTICLE IV
PAYMENT OF FUNDS
4.1 Right to Receive Construction Cost.
(a) In connection with the acquisition of any Property and
during the course of the construction of the Improvements on any
Property, the Construction Agent may request that the Lessor advance
funds for the payment of Property Acquisition Costs or any other
Property Cost (such other Property Cost being referred to collectively
as "Project Costs"), and the Lessor will comply with such request to
the extent provided for under the Participation Agreement. The
Construction Agent and the Lessor acknowledge and agree that the
Construction Agent's right to request such funds and the Lessor's
obligation to advance such funds for the payment of Property
Acquisition Costs or Project Costs is subject in all respects to the
terms and
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<PAGE> 9
conditions of the Participation Agreement and each of the other
Operative Agreements. Without limiting the generality of the foregoing,
it is specifically understood and agreed that in no event shall the
aggregate amounts advanced by the Lenders or the Holders to the Lessor
for Property Acquisition Costs or Project Costs and any other amounts
due and owing hereunder or under any of the other Operative Agreements
exceed the sum of the aggregate Commitment of the Lenders plus the
aggregate amount of the Holder Commitments, including without
limitation such amounts owing for (a) the acquisition and development
of the Properties, (b) additional amounts which accrue or become due
and owing under the Credit Agreement or Trust Agreement as obligations
of the Lessor prior to any Completion Date (for interest payments on
the Loans or payments of the Holder Yield for the Holder Advances) or
(c) any other purpose.
(b) The proceeds of any funds made available to the Lessor to
pay Property Acquisition Costs or Project Costs shall be made available
to the Construction Agent in accordance with the Requisition relating
thereto and the terms of the Participation Agreement. The Construction
Agent will use such proceeds only to pay the Property Acquisition Costs
or Project Costs set forth in the Requisition relating to such funds.
ARTICLE V
EVENTS OF DEFAULT
5.1 Events of Default. If any one or more of the following
events (each an "Event of Default") shall occur:
(a) the Construction Agent shall fail to apply any funds paid
by the Lessor to the Construction Agent for the acquisition of the
Properties and the construction of the Improvements to the payment of
Property Acquisition Costs or Project Costs;
(b) the Completion Date with respect to any Property shall
fail to occur for any reason on or prior to the Construction Period
Termination Date;
(c) any Lease Event of Default shall have occurred and not be
cured within any cure period expressly permitted under the terms of the
Lease;
(d) the Construction Agent shall fail to maintain insurance
as required by Section 2.6(f) of this Agreement; or
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<PAGE> 10
(e) the Construction Agent or the Lessee shall materially
breach any of its representations or warranties under any Operative
Agreement or shall fail to observe or perform any material term,
covenant or condition of this Agreement or any other Operative
Agreement other than as set forth in paragraphs (a), (b), (c) or (d) of
this Section 5.1 and such failure or breach shall remain uncured for a
period of thirty (30) days after receipt of written notice from Lessor
thereof; provided, that if such failure or breach is not capable of
being cured, the grace period referred to in this subclause (e) shall
not apply;
then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Agreement, terminate this Agreement by giving the
Construction Agent written notice of such termination and upon the expiration of
the time fixed in such notice and the payment of all amounts owing by the
Construction Agent hereunder (including without limitation any amounts specified
under Section 5.3 hereof), this Agreement shall terminate. The Construction
Agent shall pay all reasonable costs and expenses incurred by or on behalf of
the Lessor, including reasonable fees and expenses of counsel, as a result of
any Event of Default hereunder.
5.2 Damages. The termination of this Agreement pursuant to Section
5.1 shall in no event relieve the Construction Agent of its liability and
obligations hereunder, all of which shall survive any such termination.
5.3 Remedies; Remedies Cumulative.
(a) If an Event of Default shall have occurred and be
continuing, the Lessor shall have all rights available at law, equity
or otherwise.
(b) Without limiting the generality of paragraph (a) above,
upon the occurrence of an Event of Default, beyond any applicable
notice, grace or cure period (if any) included within the definition of
such Event of Default, Lessor shall have the option (and shall be
deemed automatically, and without any further action, to have exercised
such option upon the occurrence of any Lease Event of Default arising
under Sections 17.1(h), (i), (j) or (k) of the Lease) to transfer and
convey to the Construction Agent upon a date designated by Lessor all
right, title and interest of Lessor in and to any Property (including
without limitation any Land or any Improvements then under
construction) for which the Term of the Lease has not yet commenced (a
"Construction Period Property"). On any transfer and conveyance date
specified by Lessor pursuant to this Section 5.3(b), (a) Lessor shall
transfer and convey
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all of its right, title and interest in and to any and all such
Construction Period Properties free and clear of the Lien of the Lease
and all Lessor Liens, (b) the Construction Agent hereby covenants and
agrees that it will accept such transfer and conveyance of right, title
and interest in and to such Construction Period Properties and (c) the
Construction Agent hereby promises to pay to the Lessor, as liquidated
damages (it being agreed that it would be impossible accurately to
determine actual damages) but exclusive of the indemnities payable
under Section 13 of the Participation Agreement, an aggregate amount
equal to the sum of the following: (i) the Holder Property Cost plus
the Loan Property Cost for such Construction Period Properties, (ii)
the accrued and unpaid Allocated Return with respect to the Holder
Property Cost referred to in subparagraph (i) plus the accrued and
unpaid interest owing to the Lenders with respect to the Loan Property
Cost referred to subparagraph (i), and (iii) all other amounts then due
and payable under this Agreement and under any other Operative
Agreement with respect to such Construction Period Properties
(including without limitation all costs and expenses incurred by Lessor
in connection with such transfer and conveyance). The Construction
Agent specifically acknowledges and agrees that its obligations under
this Section 5.3(b), including without limitation its obligations to
accept the transfer and conveyance of any Construction Period Property
and its payment obligations described in subparagraph (c) of this
Section 5.3(b), shall be absolute and unconditional under any and all
circumstances and shall be performed or paid, as the case may be,
without further notice or demand and without any abatement, reduction,
diminution, setoff, defense, counterclaim or recoupment whatsoever.
Notwithstanding the foregoing provisions of this Section 5.3(b), Lessor
shall have the right in its sole discretion to rescind any exercise of
its option under this Section 5.3(b) upon the giving of its written
confirmation of such rescission to the Construction Agent.
(c) The Construction Agent shall have the right to cure an
Event of Default hereunder with respect to any given Property by
purchasing or causing the Lessee to purchase such Property from the
Lessor (to the extent such Event of Default is no longer continuing
with respect to any other Property remaining subject to this Agreement
after such purchase) for an amount equal to the liquidated damages
amount for such Property set forth in Section 5.3(b) of this Agreement.
(d) No failure to exercise and no delay in exercising, on the
part of the Lessor, any right, remedy, power or privilege under this
Agreement or under the other Operative
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Agreements shall operate as a waiver thereof; nor shall any single or
partial exercise of any right remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided in this Agreement are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
ARTICLE VI
LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS
6.1 Exercise of the Lessor's Rights. Subject to the Excepted
Rights and the Excepted Payments, the Construction Agent and the Lessor hereby
acknowledge and agree that, subject to and in accordance with the terms of the
Security Agreement made by the Lessor in favor of the Agent, the rights and
powers of the Lessor under this Agreement have been assigned to the Agent.
6.2 Lessor's Right to Cure Construction Agent's Defaults. The
Lessor, without waiving or releasing any obligation or Event of Default, may
(but shall be under no obligation to) remedy any Event of Default for the
account of and at the sole cost and expense of the Construction Agent. All
reasonable out-of-pocket costs and expenses so incurred (including reasonable
fees and expenses of counsel), together with interest thereon at the Overdue
Rate from the date on which such sums or expenses are paid by the Lessor, shall
be paid by the Construction Agent to the Lessor on demand.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, requests and demands to or upon the
parties hereto to be effective shall be in writing (including by facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of
notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows, or to such address as may be hereafter notified in writing
by the parties hereto:
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If to the Lessor:
First Security Bank, National
Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy: (801) 246-5053
with a copy to the Agent:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attention: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
If to the Construction Agent:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410-4243
Attention: Mr. David Watson, Controller
and Chief Accounting Officer
Telephone No.: (800) 666-5640 Ext. 6646
Telecopy No.: (561) 691-6473
7.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Lessor, and Construction Agent and the
respective successors and the assigns of the Lessor. The Construction Agent may
not assign this Agreement or any of its rights or obligations hereunder in whole
or in part to any Person without the prior written consent of the Lessor.
7.3 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
7.4 Submission To Jurisdiction; Waivers. Each party hereto
hereby irrevocably and unconditionally:
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(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative Agreements to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of Florida and the courts of the United States of America in each case
sitting in Broward County, Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same.
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail) postage prepaid, to the
respective party at its address set forth in Section 7.1 hereof or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section 7.4 any special, exemplary, punitive or consequential
damages.
7.5 Amendments and Waivers. The Lessor and the Construction Agent
may, from time to time, enter into written amendments, supplements or
modifications hereto.
7.6 Counterparts. This Agreement may be executed in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
7.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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7.8 Headings and Table of Contents. The headings and table of
contents contained in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
7.9 WAIVER OF JURY TRIAL. THE LESSOR AND THE CONSTRUCTION
AGENT IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
WACKENHUT CORRECTIONS CORPORATION,
as the Construction Agent
By:
---------------------------------
Name: John G. O'Rourke
Title: Senior Vice President/
Treasurer/Chief Financial
Officer
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Owner Trustee under the Wackenhut
Corrections Trust 1997-1, as the
Lessor
By:
---------------------------------
Name: Val T. Orton
Title: Vice President
SIGNATURE PAGE 1 OF 1
<PAGE> 1
EXHIBIT 4.8
GUARANTY AGREEMENT
(SERIES A OBLIGATIONS)
THIS GUARANTY AGREEMENT (SERIES A OBLIGATIONS) (the "Guaranty
Agreement" or the "Guaranty"), dated as of June 19, 1997 is made by WACKENHUT
CORRECTIONS CORPORATION, a Florida corporation (the "Guarantor") to NATIONSBANK,
NATIONAL ASSOCIATION, as Administrative Agent (the "Agent") for the ratable
benefit of the Series A Lenders (as defined in the Participation Agreement
referred to below).
W I T N E S S E T H:
WHEREAS, the Agent and First Security Bank, N.A. (the "Borrower") have
entered into the Credit Agreement dated as of June 19, 1997 (as from time to
time amended, modified, restated or supplemented, the "Credit Agreement"); and
Wackenhut Corrections Corporation, as Construction Agent (the "Construction
Agent"), Wackenhut Corrections Corporation, as Lessee (the "Lessee"), the
Borrower, the Holders party thereto from time to time, the Lenders party thereto
from time to time, and the Agent have entered into the Participation Agreement
dated as of June 19, 1997 (as from time to time amended, modified, restated or
supplemented, the "Participation Agreement"); and
WHEREAS, pursuant to the Credit Agreement, the Participation Agreement
and certain other Operative Agreements (as defined in the Participation
Agreement), the Series A Lenders will extend a credit facility to the Borrower
in the aggregate principal amount of up to the aggregate Commitments for Series
A Loans under the Credit Agreement; and
WHEREAS, the proceeds of the Series A Loans will be used by the
Borrower to acquire and improve certain Properties which will be leased by the
Borrower to the Lessee as set forth in the Operative Agreements; and
WHEREAS, it is condition to the obligations of the Series A Loans under
the Credit Agreement that the Guarantor execute and deliver this Guaranty
Agreement; and
WHEREAS, Guarantor intends to acquire, directly or indirectly, all of
the stock of Lessee and will materially benefit from (a) the Series A Lenders'
extension of the credit facility and making of Series A Loans to the Borrower,
and (b) the Borrower's acquisition and improvement of the Properties and its
lease of the Properties to the Lessee; and the Guarantor is willing to enter
into this Guaranty to provide an inducement for the Series A Lenders to extend
the credit facility and make Series A Loans to the Borrower;
<PAGE> 2
NOW, THEREFORE, as required under the Operative Agreements and in order
to induce the Series A Lenders to extend the credit facility and to make Series
A Loans, the Guarantor agrees as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement or (if
not defined in the Credit Agreement) in the Participation Agreement.
2. GUARANTY. The Guarantor hereby, unconditionally, absolutely,
continually and irrevocably guarantees to the Agent and the Series A Lenders the
payment in full of the Borrower's Liabilities (as defined below). For all
purposes of this Guaranty Agreement, "Borrower's Liabilities" means: the
Borrower's prompt payment in full, when due or declared due and at all such
times, of all Series A Loans and all other amounts pursuant to the terms of the
Credit Agreement, the Series A Notes and all other Operative Agreements
heretofore, now or at any time or times hereafter owing, arising, due or payable
from the Borrower to the Series A Lenders (or to the Agent on behalf of the
Series A Lenders), including without limitation all principal and interest on
any Series A Loans, and any fees or expenses (including, but not limited to,
attorneys' fees and expenses). The Guarantor's obligations to the Agent and the
Series A Lenders under this Guaranty Agreement are hereinafter collectively
referred to as the "Guarantor's Obliga tions".
The Guarantor agrees that it is directly and primarily liable for the
Borrower's Liabilities.
3. PAYMENT. If the Borrower shall default in payment of any Borrower's
Liabilities, when and as the same shall become due (and such default is not
cured within the applicable grace period, if any), whether according to the
terms of the Credit Agreement, any Series A Note or any other Operative
Agreement, by acceleration, or otherwise, or upon the occurrence of any other
Event of Default that has not been cured or waived, then the Guarantor, upon
demand thereof by the Agent, or its successors or assigns, will AS OF THE DATE
OF THE AGENT'S DEMAND fully pay to the Agent (for the benefit of the Series A
Lenders), an amount equal to all of the Guarantor's Obligations then due and
owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantor's Obligations under this Guaranty Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, any Series A Note or any other Operative
Agreement, or any other guaranty of the Borrower's Liabilities, and shall not be
affected by any action taken under the Credit Agreement, any Series A Note or
any other Operative Agreement, any other guaranty of the
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Borrower's Liabilities, or any other agreement between the Borrower and the
Agent, any Series A Lender or any other Person, in the exercise of any right or
power therein conferred, or by any failure or omission to enforce any right
conferred thereby, or by any waiver of any covenant or condition therein
provided, or by any acceleration of the maturity of any of the Borrower's
Liabilities, or by the release or other disposal of any security for any of the
Borrower's Liabilities, or by the dissolution of the Lessee or the combination
or consolidation of the Lessee or the Borrower into or with another entity or
any transfer or disposition of any assets of the Lessee or the Borrower, or by
any extension or renewal of the Credit Agreement, any Series A Note or any other
Operative Agreement, in whole or in part, or by any modification, alteration,
amendment or addition of or to the Credit Agreement, any Series A Note or any
other Operative Agreement, any other guaranty of the Borrower's Liabilities, or
any other agreement between the Borrower and the Agent, any Series A Lender or
any other Person, or by any defense to or avoidance or rejection (by a
bankruptcy trustee or otherwise) of the Credit Agreement, any Series A Note or
any other Operative Agreement in any bankruptcy or similar proceeding, or by any
other circumstance whatsoever (with or without notice to or knowledge of the
Guarantor) which may or might in any manner or to any extent vary the risks of
the Guarantor, or might otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent of the parties hereto that
this Guaranty Agreement and the Guarantor's Obligations hereunder shall be
absolute and unconditional under any and all circumstances and shall not be
discharged except by payment as herein provided. Without limiting the generality
of the foregoing, the Guarantor acknowledges and agrees that (a) the Guarantor's
Obligations are absolute and separate from the Borrower's obligations under the
Credit Agreement, any Series A Note or any other Operative Agreement, (b) the
Guarantor's Obligations hereunder shall not be reduced, limited or otherwise
affected if the Credit Agreement, any Series A Note or any other Operative
Agreement is avoided, rejected or limited as an executory contract in a
bankruptcy or similar proceeding, and (c) for the purpose of defining the
Guarantor's Obligations, hereunder, the amount of the Borrower's Liabilities
shall include without limitation all principal and interest on any Series A Loan
and any other amount which is due or may become due under the Credit Agreement,
any Series A Note or any other Operative Agreement, including without limitation
any principal, interest or other amount that would have been payable at any time
but for the avoidance, rejection or limitation of any Operative Agreement in a
bankruptcy or similar proceeding.
5. CURRENCY AND FUNDS OF PAYMENT. The Guarantor hereby guarantees that
the Guarantor's Obligations will be paid in lawful currency of the United States
of America and in immediately available funds, regardless of any law, regulation
or decree now or hereafter in effect that might in any manner affect the
Borrower's Liabilities, or the rights of the Agent (or any Series A Lender) with
respect thereto as against the Borrower, or cause or permit to
3
<PAGE> 4
be invoked any alteration in the time, amount or manner of payment by the Lessee
of any or all of the Borrower's Liabilities.
6. EVENTS OF DEFAULT. In the event that (a) the Guarantor shall file a
petition to take advantage of any insolvency statute; (b) the Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) the Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of the Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against the
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
sixty (60) consecutive days; (e) there is commenced against the Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition remains
unstayed or undismissed for a period of sixty (60) consecutive days; (f) there
shall occur Event of Default (as defined in the Participation Agreement); (g)
any default shall occur in the payment of amounts due hereunder; or (h) any
other default shall occur hereunder which remains uncured or unwaived for a
period of thirty (30) days after receipt of written notice thereof from the
Agent or the Lessor thereof (each of the foregoing an "Event of Default"
hereunder); then notwithstanding any collateral that the Agent or any Lender may
possess from the Borrower or the Guarantor or any other guarantor of the
Borrower's Liabilities, or any other party, at the Agent's election and without
notice thereof or demand therefor, so long as such Event of Default shall be
continuing, the Guarantor's Obliga tions shall immediately become due and
payable.
7. SUITS. The Guarantor from time to time shall pay to the Agent (on
behalf of the Series A Lenders), on demand, at the Agent's place of business set
forth in the Credit Agreement, the Guarantor's Obligations as they become or are
declared due, and in the event such payment is not made forthwith, the Agent may
proceed to suit against the Guarantor. At the Agent's election, one or more and
successive or concurrent suits may be brought hereon by the Agent against the
Guarantor, whether or not suit has been commenced against the Borrower, any
other guarantor of the
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Borrower's Liabilities, or any other Person and whether or not the Agent has
taken or failed to take any other action to collect all or any portion of the
Borrower's Liabilities.
8. SET-OFF AND WAIVER. The Guarantor waives any right to assert against
the Agent or any Series A Lender as a defense, counterclaim, set-off or cross
claim, any defense (legal or equitable) or other claim which the Guarantor may
now or at any time hereafter have against the Lessee, the Borrower, the Agent,
any Lender, or any Holder, without waiving any additional defenses, set-offs,
counterclaims or other claims otherwise available to the Guarantor. If at any
time hereafter the Agent or any Series A Lender employs counsel for advice or
other representation to enforce the Guarantor's Obligations that arise out of an
Event of Default, then, in any of the foregoing events, all of the attorneys'
fees arising from such services and all expenses, costs and charges in any way
or respect arising in connection therewith or relating thereto shall be
obligations of the Guarantor and shall be paid by the Guarantor to the Agent (or
such Series A Lender), on demand.
9. WAIVER; SUBROGATION.
(a) The Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's (or any Lender's) acceptance of this Guaranty
Agreement; (ii) any Series A Lender's heretofore, now or from time to time
hereafter, making any advances to the Borrower whether pursuant to the Credit
Agreement or any Series A Note, or any amendments, modifications, restatements
or supplements thereto, or replacements or extensions thereof; (iii) the
Borrower, the Agent or any Lender heretofore, now or at any time hereafter,
obtaining, amending, substituting for, releasing, waiving or modifying the
Credit Agreement, any Series A Note or any other Operative Agreements; (iv)
presentment, demand, notices of default, non-payment, partial payment and
protest; (v) the Agent (or any Lender) heretofore, now or at any time hereafter,
granting to the Borrower (or any other party liable to the Lessor on account of
the Borrower's Liabilities) any indulgence or extensions of time of payment of
the Borrower's Liabilities; and (vi) the Borrower heretofore, now or at any time
hereafter, accepting from the Agent (or any Lender) or any other person, any
partial payment or payments on account of the Borrower's Liabilities or any
collateral securing the payment thereof or the Agent (or any Lender) settling,
subordinating, compromising, discharging or releasing the same. The Guarantor
agrees that the Agent (or any Lender) may heretofore, now or at any time
hereafter do any or all of the foregoing in such manner, upon such terms and at
such times as the Agent (or any Lender), in its sole and absolute discretion,
deems advisable, without in any way or respect impairing, affecting, reducing or
releasing the Guarantor from the Guarantor's Obligations, and the Guarantor
hereby consents to each and all of the foregoing events or occurrences.
5
<PAGE> 6
(b) The Guarantor hereby agrees that payment or performance by the
Guarantor of the Guarantor's Obligations under this Guaranty Agreement may be
enforced by the Agent upon demand by the Agent to the Guarantor without the
Agent being required, the Guarantor expressly waiving any right it may have to
require the Agent, to (i) prosecute collection or seek to enforce or resort to
any remedies against the Lessee, the Borrower or the Guarantor or any other
guarantor of the Lessee's Liabilities, IT BEING EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO BY THE GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE
AGENT, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING, or (ii) seek to enforce or resort to any remedies with respect to
any security interests, Liens or encumbrances granted to the Agent by the
Borrower or any other Person on account of the Lessee's Liabilities or any
guaranty thereof. The Agent shall not have any obligation to protect, secure or
insure any of the foregoing security interests, Liens or encumbrances on the
properties or interests in properties subject thereto. The Guarantor's
Obligations shall in no way be impaired, affected, reduced, or released by
reason of the Agent's failure or delay to do or take any of the acts, actions or
things described in this Guaranty Agreement including, without limiting the
generality of the foregoing, those acts, actions and things described in this
Section 10.
(c) The Guarantor further agrees with respect to this Guaranty
Agreement that, until the Borrower's Liabilities have been paid in full and the
Lenders and the Holders have no further obligation to make any Loan or Holder
Advance, the Guarantor shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by the Guarantor against the estate of Borrower
within the meaning of Section 101 of the Bankruptcy Code, and to prevent the
Guarantor from constituting a creditor of Borrower in respect of such
reimbursement within the meaning of Section 547(b) of the Bankruptcy Code in the
event of a subsequent case involving the Lessee.
(d) Any claim or claims that the Agent may at any time hereafter have
against the Guarantor under this Guaranty Agreement may be asserted by the Agent
by written notice directed to the Guarantor.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date of the Initial Closing Date and shall continue in full
force and effect until the Borrower's Liabilities are fully paid and the Credit
Agreement, each Series A Note and the Participation Agreement have terminated in
accordance with their respective terms. The Agent shall give the Guarantor
written notice of such termination at the Guarantor's address set forth in
Section 17 below. This Guaranty Agreement shall be
6
<PAGE> 7
binding upon the Guarantor and its successors and assigns and shall inure to the
benefit of the Agent, each Series A Lender, and their respective successors and
assigns. Notwithstanding the foregoing, the Guarantor may not, without the prior
written consent of the Agent, assign any rights, powers, duties or obligations
hereunder.
11. REPRESENTATIONS AND WARRANTIES. The Guarantor warrants and
represents to the Agent and each Series A Lender that the Guarantor is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against the
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that the Guarantor's execution, delivery and performance of this
Guaranty Agreement do not violate or constitute a breach of its certificate of
incorporation or other documents of corporate governance or any agreement to
which the Guarantor is a party, or any applicable laws, in each case, which
violation or breach could reasonably be expected to have a material adverse
effect on the business, operations or condition (financial or otherwise) of the
Guarantor.
12. INCORPORATION OF COVENANTS. Reference is made to Article XXVIII of
the Lease, and the "Incorporated Covenants" (as defined therein). The Guarantor
agrees with the Lessor that, effective as of the date hereof (whether or not the
Basic Term has commenced with respect to any Property), the Incorporated
Covenants (and all other relevant provisions of the Existing Wackenhut
Corrections Credit Agreement related thereto) are hereby incorporated by
reference into this Guaranty Agreement to the same extent and with the same
effect as if set forth fully herein and shall inure to the benefit of the
Lessor, without giving effect to any waiver, amendment, modification or
replacement of the Existing Wackenhut Corrections Credit Agreement or any term
or provision of the Incorporated Covenants occurring subsequent to the date of
this Guaranty, except to the extent any such waiver or modification (or any
covenants contained in any New Facility) are approved as Incorporated Covenants
pursuant to Section 28.1(a) of the Lease. Without limiting the generality of the
foregoing, from and after the date hereof (whether or not the Basic Term has
commenced with respect to any Property), to the extent that the Incorporated
Covenants require Wackenhut Corrections or any of its Subsidiaries to deliver
any financial statement, certificate, notice, report, or other document or
information to the Existing Credit Agent (or any other agent under the
applicable credit facility), the Guarantor shall simultaneously deliver a copy
of such financial statement, certificate, notice, report, document or
information to the Agent, each Lender and (upon Lessor's request) the Lessor.
13. EXPENSES. The Guarantor agrees to be liable for the payment of all
fees and expenses, including attorney's fees,
7
<PAGE> 8
incurred by the Agent or any Series A Lender in connection with the enforcement
of this Guaranty Agreement.
14. REINSTATEMENT. The Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Lessor under the Credit Agreement, any Series A Note any
other Operative Agreement or this Guaranty Agreement is rescinded or must be
restored for any reason.
15. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument.
16. RELIANCE. The Guarantor represents and warrants to the Agent and
each Series A Lender that: (a) the Guarantor has adequate means to obtain from
Borrower, on a continuing basis, information concerning Lessee or Borrower and
Lessee's or Borrower's financial condition and affairs and has full and complete
access to Lessee's or Borrower's books and records; (b) the Guarantor is not
relying on the Agent, any Lender, or any of their respective employees, agents
or other representatives, to provide such information, now or in the future; (c)
the Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) the Guarantor has relied solely on its own independent
investigation, appraisal and analysis of Lessee and Borrower and Lessee's and
Borrower's financial condition and affairs in deciding to provide this Guaranty
and is fully aware of the same; and (e) the Guarantor has not depended or relied
on the Agent, any Lender, or any of their respective employees, agents or
representatives, for any information whatsoever concerning Lessee or Borrower or
Lessee's or Borrower's financial condition and affairs or other matters material
to the Guarantor's decision to provide this Guaranty or for any counselling,
guidance, or special consideration or any promise therefor with respect to such
decision. The Guarantor agrees that neither the Agent nor any Lender has any
duty or responsibility whatsoever, now or in the future, to provide to the
Guarantor any information concerning Lessee or the Borrower or Lessee's or the
Borrower's financial condition and affairs, other than as expressly provided
herein, and that, if the Guarantor receives any such information from the Agent,
any Lender, or any of their respective employees, agents or other
representatives, the Guarantor will independently verify the information and
will not rely on the Agent, any Lender, or any of their respective employees,
agents or other representatives, with respect to such information.
17. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantor hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when
8
<PAGE> 9
all of the Borrower's Liabilities have been fully paid and the Credit Agreement,
each Series A Note and the Participation Agreement have terminated in accordance
with their respective terms.
18. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telephone, telecopy or telex number as may from
time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Guarantor:
Wackenhut Corrections Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, Florida 33410
Attention: Mr. David Watson, Controller
and Chief Accounting Officer
Telephone No.: (800) 666-5640 Ext. 6646
Telecopy No.: (561) 691-6473
(b) if to the Administrative Agent:
NationsBank, National Association
100 Southeast 2nd Street
FL7-950-14-02
Miami, Florida 33131
Attention: Maria Conroy
Telephone No.: (305) 533-2428
Telecopy No.: (305) 533-2437
19. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN BROWARD COUNTY,
FLORIDA AND, BY THE EXECUTION
9
<PAGE> 10
AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY OBJECTION THAT IT
MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE
JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED
IN SECTION 17 HEREOF OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR
UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN THE COURTS OF ANY PLACE WHERE
ANY OTHER PARTY OR ANY OF SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND
OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT,
ACTION OR PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS
WHICH NOW OR HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR
OTHERWISE, MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
20. ADDITIONAL WAIVERS.
(a) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER
CONTAINED HEREIN AND WITHOUT IMPAIRING THE PARTIES' CHOICE OF FLORIDA
LAW TO GOVERN THIS GUARANTY (AS SET FORTH ABOVE), THE
10
<PAGE> 11
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO
ASSERT, ARGUE OR RAISE, IN ANY ACTION BROUGHT BY ANY PERSON AGAINST THE
GUARANTOR UNDER THIS GUARANTY, THAT THE AGENT, THE LESSOR OR ANY OTHER
PERSON STRUCTURED THE TRANSACTION CONTEMPLATED BY THE OPERATIVE
AGREEMENTS IN SUCH A MANNER PRIMARILY TO CIRCUMVENT THE CALIFORNIA
ONE-FORM-OF-ACTION AND ANTI-DEFICIENCY LAWS, INCLUDING CALIFORNIA CODE
OF CIVIL PROCEDURE Sections 580a, 580b, 580d AND 726.
(b) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER
CONTAINED HEREIN AND WITHOUT IMPAIRING THE PARTIES' CHOICE OF FLORIDA
LAW TO GOVERN THIS GUARANTY (AS SET FORTH ABOVE), THE GUARANTOR HEREBY
WAIVES (SUBJECT TO SECTION 9(c) ABOVE) ALL OF THE GUARANTOR'S RIGHTS OF
SUBROGATION AND REIMBURSEMENT AND ANY OTHER RIGHTS AND DEFENSES
AVAILABLE TO THE GUARANTOR BY REASON OF CALIFORNIA CIVIL CODE SECTIONS
2787 TO 2855, INCLUSIVE, INCLUDING (i) ANY GUARANTY BY REASON OF AN
ELECTION OF REMEDIES BY THE LESSOR, THE AGENT OR ANY OTHER PERSON, AND
(ii) ANY RIGHTS OF DEFENSES THE GUARANTOR MAY HAVE BY REASON OF
PROTECTION AFFORDED TO THE BORROWER, THE LESSEE OR ANY OTHER PERSON
WITH RESPECT TO THE OBLIGATIONS GUARANTEED HEREBY PURSUANT TO THE
ANTIDEFICIENCY OR OTHER LAWS OF THE STATE OF CALIFORNIA LIMITING OR
DISCHARGING THE LESSEE'S OR THE BORROWER'S INDEBTEDNESS, INCLUDING
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 580a, 580b, 580d OR 726. THE
GUARANTOR'S WAIVER OF DEFENSES UNDER CLAUSE (i) ABOVE IS MADE EVEN
THROUGH AN ELECTION OF REMEDIES BY THE LESSOR, THE AGENT OR ANY OTHER
PERSON SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A
GUARANTEED OBLIGATION, DESTROYS THE GUARANTOR'S RIGHTS OF SUBROGATION
AND REIMBURSEMENT AGAINST THE LESSEE, THE BORROWER OR ANY OTHER PERSON
BY THE OPERATION OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 580d OR
OTHERWISE.
[SIGNATURE PAGE FOLLOWS.]
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
GUARANTOR:
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name: John G. O'Rourke
Title: Senior Vice-President/
Treasurer/Chief Financial Officer
ADMINISTRATIVE AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name: Maria Conroy
Title: Senior Vice President
SIGNATURE PAGE 1 OF 1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT JUNE 29, 1997 AND THE CONSOLIDATED STATEMENT OF
INCOME FOR THE FISCAL PERIOD ENDING JUNE 29, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> JUN-29-1997
<CASH> 25,612
<SECURITIES> 0
<RECEIVABLES> 32,945
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65,699
<PP&E> 32,784
<DEPRECIATION> 3,785
<TOTAL-ASSETS> 117,304
<CURRENT-LIABILITIES> 15,392
<BONDS> 373
0
0
<COMMON> 220
<OTHER-SE> 92,834
<TOTAL-LIABILITY-AND-EQUITY> 117,304
<SALES> 0
<TOTAL-REVENUES> 92,736
<CGS> 0
<TOTAL-COSTS> 80,224
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,879
<INCOME-TAX> 3,072
<INCOME-CONTINUING> 5,304
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,304
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
