REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
by and among
THE WACKENHUT CORPORATION,
the Company
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION,
BANK OF AMERICA ILLINOIS
as Lenders
and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION,
as Agent
January 5, 1995
TABLE OF CONTENTS
ARTICLE I
Definitions
1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . . 22
1.03 Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE II
Revolving Credit Facility
2.01 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.02 Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.03 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.04 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.05 Payment of Interest. . . . . . . . . . . . . . . . . . . . . . . . 26
2.06 Payment of Principal . . . . . . . . . . . . . . . . . . . . . . . 26
2.07 Company's Account. . . . . . . . . . . . . . . . . . . . . . . . . 27
2.08 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.09 Pro Rata Payments. . . . . . . . . . . . . . . . . . . . . . . . . 28
2.10 Reduction in Commitment. . . . . . . . . . . . . . . . . . . . . . 28
2.11 Conversions and Elections of Subsequent Interest
Periods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.13 Deficiency Advances. . . . . . . . . . . . . . . . . . . . . . . . 30
2.14 Adjustments by Agent . . . . . . . . . . . . . . . . . . . . . . . 31
2.15 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.16 Highly Leveraged Transaction . . . . . . . . . . . . . . . . . . . 31
2.17 Swing Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.18 Extension of Revolving Credit Termination Date . . . . . . . . . . 33
ARTICLE III
Letters of Credit
3.01 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . 34
3.02 Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.03 Letter of Credit Fee . . . . . . . . . . . . . . . . . . . . . . . 38
3.04 Administrative Fees. . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV
Yield Protection and Illegality
4.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.02 Suspension of Loans. . . . . . . . . . . . . . . . . . . . . . . . 40
4.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.04 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.01 Conditions of Initial Advance and Issuance of
Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . 43
5.02 Conditions of Loans. . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VI
Representations and Warranties
6.01 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.02 Corporate Organization and Authority . . . . . . . . . . . . . . . 46
6.03 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 46
6.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.05 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.06 Pending Litigation . . . . . . . . . . . . . . . . . . . . . . . . 47
6.07 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . 47
6.08 Patents and Trademarks . . . . . . . . . . . . . . . . . . . . . . 47
6.09 Issuance is Legal and Authorized . . . . . . . . . . . . . . . . . 48
6.10 No Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.11 Governmental Consent . . . . . . . . . . . . . . . . . . . . . . . 48
6.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.13 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.14 Employee Retirement Income Security Act of 1974. . . . . . . . . . 49
6.15 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 50
6.16 Compliance with Environmental Laws . . . . . . . . . . . . . . . . 50
ARTICLE VII
Company Covenants
7.01 Corporate Existence, Etc.. . . . . . . . . . . . . . . . . . . . . 51
7.02 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.03 Taxes, Claims for Labor and Materials, Compliance
with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.04 Maintenance, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 52
7.05 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . 52
7.06 Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . 53
7.07 Limitations on Total Debt. . . . . . . . . . . . . . . . . . . . . 53
7.08 Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . . . 53
7.09 Trading Asset Ratio. . . . . . . . . . . . . . . . . . . . . . . . 53
7.10 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . 54
7.11 Restricted Payments: Joint Venture Investments. . . . . . . . . . 55
7.12 Limitation on Sale and Leasebacks. . . . . . . . . . . . . . . . . 57
7.13 Mergers, Consolidations and Sales of Assets. . . . . . . . . . . . 57
7.14 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.15 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 59
7.16 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.17 Reports and Rights of Inspection . . . . . . . . . . . . . . . . . 60
7.18 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.19 Additional Guaranties. . . . . . . . . . . . . . . . . . . . . . . 63
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ARTICLE VIII
Events of Default and Remedies Therefor
8.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 65
8.02 Notice to Holders. . . . . . . . . . . . . . . . . . . . . . . . . 66
8.03 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.04 Agent to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.05 Cumulative Rights. . . . . . . . . . . . . . . . . . . . . . . . . 67
8.06 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.07 Allocation of Proceeds . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE IX
The Agent
9.01 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.02 Attorneys-in-fact. . . . . . . . . . . . . . . . . . . . . . . . . 69
9.03 Limitation on Liability. . . . . . . . . . . . . . . . . . . . . . 69
9.04 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.05 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . 70
9.06 No Representations . . . . . . . . . . . . . . . . . . . . . . . . 70
9.07 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.08 Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.09 Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.10 Sharing of Payments, etc . . . . . . . . . . . . . . . . . . . . . 72
9.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE X
Miscellaneous
10.01 Assignments and Participation . . . . . . . . . . . . . . . . . . 73
10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.03 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.04 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.05 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.06 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.07 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.09 Waivers by the Company. . . . . . . . . . . . . . . . . . . . . . 79
10.10 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.13 Agreement Controls. . . . . . . . . . . . . . . . . . . . . . . . 81
EXHIBIT A APPLICABLE COMMITMENT PERCENTAGES . . . . . . . . . . . . . 85
EXHIBIT B FORM OF ASSIGNMENT AND ACCEPTANCE . . . . . . . . . . . . . 86
EXHIBIT C NOTICE OF APPOINTMENT (OR REVOCATION)
OF AUTHORIZED OFFICER . . . . . . . . . . . . . . . . . . . 89
EXHIBIT D-1 BORROWING NOTICE (LOAN) . . . . . . . . . . . . . . . . . . 90
EXHIBIT D-2 FORM OF BORROWING NOTICE--SWING LINE LOANS. . . . . . . . . 92
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EXHIBIT E FORM OF NOTE. . . . . . . . . . . . . . . . . . . . . . . . 94
EXHIBIT F [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . 97
EXHIBIT G-1 OPINION OF VICE PRESIDENT AND LEGAL COUNSEL . . . . . . . . 98
EXHIBIT G-2 OPINION OF COUNSEL TO THE GUARANTORS. . . . . . . . . . . . 99
EXHIBIT H FORM OF GUARANTY AGREEMENT. . . . . . . . . . . . . . . . .100
SCHEDULE 1.01 EXISTING LCs . . . . . . . . . . . . . . . . . . . . . .111
SCHEDULE 6.01 SUBSIDIARIES OF THE COMPANY. . . . . . . . . . . . . . .112
SCHEDULE 6.04 DESCRIPTION OF INDEBTEDNESS AND LEASES . . . . . . . . .113
SCHEDULE 6.06 LITIGATION . . . . . . . . . . . . . . . . . . . . . . .115
SCHEDULE 7.10 EXISTING LIENS . . . . . . . . . . . . . . . . . . . . .116
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REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT, dated
January 5, 1995 (the "Agreement"), is made by and among:
THE WACKENHUT CORPORATION, a corporation organized and existing under the
laws of the State of Florida and having its principal place of business located
in Coral Cables, Florida (the "Company"); and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION ("NationsBank"), BANK OF
AMERICA ILLINOIS ("BofA") and each other lender which may hereafter execute and
deliver an instrument of assignment with respect to this Agreement pursuant to
Section 10.01 (hereinafter NationsBank and such other lenders may be referred
to individually as a "Lender" or collectively as the "Lenders"); and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of
America and having a principal place of business in Miami, Florida in its
capacity as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Company, NationsBank as Lender and the Agent entered into an
Amended and Restated Revolving Credit and Reimbursement Agreement dated July 1,
1993 (the "Prior Agreement") pursuant to which the Lender under the Prior
Agreement made available to the Company a revolving credit facility of up to
$60,000,000 and a letter of credit facility which is available under the
Revolving Credit Facility of up to $20,000,000; and
WHEREAS, the Company, the Lenders and the Agent desire to enter into this
Agreement and the other Loan Documents to provide a revolving credit facility of
up to $60,000,000 and a letter of credit facility as a part of the revolving
credit facility upon the terms and conditions hereinafter set forth, the
proceeds of which revolving credit facility are to be used to repay the
indebtedness arising under the Prior Agreement and for other purposes as herein
provided;
NOW, THEREFORE, the Company, the Lenders and the Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
"Advance" means a borrowing under the Revolving Credit Facility
consisting of the aggregate principal amount of a Floating Rate Loan or
Fixed Rate Loan, as the case may be;
"Affiliate" shall mean any Person (other than a Subsidiary) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of
the Company or (iii) 5% or more of the 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 Company or a Subsidiary. 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 the ownership of Voting Stock, by contract or
otherwise;
"Applicable Base Rate" means:
(i) for any Fixed CD Loan, in respect of the Interest Period
specified by an Authorized Officer in the Borrowing Notice for such
Fixed CD Loan, the per annum rate of interest (expressed as a
percentage and rounded upwards if necessary to the nearest 1/100 of
1%) (which shall be the same for each day of such Interest Period)
determined in good faith by the Agent in accordance with the usual
procedures for its customers generally (which determination shall be
conclusive absent manifest error) to be the average of the secondary
market bid rates at approximately 10:00 A.M. Miami, Florida time on
the first day of such Interest Period of at least two dealers of
recognized standing in negotiable certificates of deposit for the
purchase at face value of negotiable certificates of deposit of major
money center banks for delivery on such day in an amount approximately
equal to the principal amount of, and for a period comparable to the
Interest Period for, such Fixed CD Loan and maturing at the end of
such Interest Period, and
(ii) for any Floating CD Loan the per annum rate of interest
(expressed as a percentage and rounded upwards if necessary to the
nearest 1/100 of 1%) determined in
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good faith by the Agent in accordance with the usual procedures for
its customers generally to be the average of the secondary market bid
rates at approximately 10:00 A.M. Miami, Florida time on each day of
such Floating CD Loan of at least two dealers of recognized standing
in negotiable certificates of deposit for the purchase at face value
of negotiable certificates of deposit of major money center banks for
delivery on such day in an amount approximately equal to the principal
amount of such Floating CD Loan for a period of 90 days, and
(iii) for any LIBOR Loan, in respect of the Interest Period
specified by the Authorized Officer in the Borrowing Notice for such
LIBOR Loan, the rate (expressed as a percentage and rounded upward if
necessary to the nearest 1/100 of 1%) (which shall be the same for
each day of such Interest Period) determined by the Agent in good
faith in accordance with its usual procedures for its customers
generally to be the average of the rates per annum for deposits in
Dollars offered to major money center banks in the London interbank
market at approximately 11:00 A.M. London time two (2) LIBOR Business
Days prior to the commencement of the applicable Interest Period in an
amount approximately equal to the principal amount of, and for a
period comparable to the Interest Period for, such LIBOR Loan;
"Applicable Commitment Percentage" means, for each Lender, with
respect to the Obligations hereunder (each a type of "credit exposure"), a
fraction (expressed as a percentage), the numerator of which shall be the
then amount of such Lender's Revolving Loan Commitment and the denominator
of which shall be the Total Revolving Loan Commitment, which Applicable
Commitment Percentage for each Lender as of the Closing Date is as set
forth in EXHIBIT A attached hereto and incorporated herein by this
reference;
"Applicable Interest Addition" means with respect to a CD Loan and
LIBOR Loan that percent per annum set forth below which percent shall be
the Applicable Interest Addition effective beginning on the first day of
the fiscal quarter (i) next following the Four-Quarter Period as at the end
of which the Fixed Charge Coverage Ratio and (ii) next following the
quarter as at the end of which the ratio of (x) Consolidated Funded Debt to
(y) Total Capitalization is more or less, as the case may be, than that set
forth below opposite such Applicable Interest Addition (in the event that
the two ratios fall within different Applicable Interest Addition
categories, then the larger Applicable Interest Addition shall apply):
3
Applicable
Ratio Interest Addition
----- -----------------
Fixed Charge Funded Debt to CD LIBOR
Coverage Capitalization Loan Loan
------------ -------------- ---- ----
Greater than 2.25 Less than or equal .50 .50
to 1.00 to .40 to 1.00
Greater than 1.65 Less than or equal
to 1.00 to .52 to 1.00 .625% .625%
Greater than 1.60 Less than or equal
to 1.00 to .55 to 1.00 .75% .75%
Greater than 1.60 Greater than .55
to 1.00 to 1.00 .875% .875%
"Applicable Reserve Requirement" means, for any CD Loan or LIBOR Loan
with respect thereto, the maximum aggregate rate at which reserves
(including, without limitation, any marginal, supplemental or emergency
reserves) are required to be maintained with respect thereto under
Regulation D by the member banks of the Federal Reserve System against (i)
non-personal Dollar time deposits in an amount of $100,000 or more in the
case of any CD Loan or (ii) with respect to Dollar funding in the London
interbank market in the case of any LIBOR Loan. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect
any other reserves required to be maintained by such member banks by reason
of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Applicable Base Rate is to be
determined or (ii) any category of extensions of credit or other assets
which include CD Loans or LIBOR Loans;
"Asset Securitization Facility" means the asset backed commercial
paper funded receivables securitization facility among the Company as
Seller, BofA and NationsBank as co-Managing Agents, and BofA as
Administrative Agent, providing for the sale by the Company and certain of
its Subsidiaries of fractional undivided interests in trade receivables,
provided that at no time shall the aggregate face amount of outstanding
trade receivables of the Company and its Subsidiaries sold or otherwise
transferred (in whole or in part) through such program exceed $50,000,000;
"Assessment Rate" means the rate per annum (rounded upward to the
nearest 1/100 of 1%) determined in good faith by the Agent in accordance
with its usual procedures for its customers generally (which determination
shall be conclusive absent manifest error) to be the maximum effective
assessment rate per annum payable by a bank insured by the Federal Deposit
Insurance Corporation (or any successor) for such day for insurance on
Dollar time deposits, exclusive of any credit
4
allowed against such annual assessment on account of assessment payments
made or to be made by such bank and exclusive of any adjustments not
applicable to banks generally. The CD Rate shall be adjusted automatically
as of the effective date of each change in the Assessment Rate;
"Assignment and Acceptance" means an Assignment and Acceptance in the
form of EXHIBIT B (with blanks appropriately filled in) delivered to the
Agent in connection with an assignment of a Lender's interest under this
Agreement pursuant to Section 10.01;
"Atrium Debt" means the indebtedness of the Company in the outstanding
principal amount as of December 5, 1994 of approximately $16,242,500
incurred to finance, and secured by, the Company's headquarters building
located at 1500 San Remo Avenue, Coral Gables, Florida;
"Authorized Officer" means any of the Chairman, President, Senior Vice
Presidents or Vice Presidents of the Company or, with respect to financial
matters, the Treasurer or Chief Financial Officer of the Company or any
other person expressly designated by the Board of Directors (or the
appropriate committee thereof) of the Company as an Authorized Officer for
purposes of this Agreement, as set forth from time to time in a certificate
in the form attached hereto as EXHIBIT C;
"Base Loan" means all of the Loans for which the rate of interest is
determined by reference to the Base Rate;
"Base Rate" means the greater of (i) the Federal Funds Effective
Rate plus 1/2%, or (ii) the Prime Rate;
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body);
"Borrowing Notice" means the telephonic request of the Authorized
Officer to obtain an Advance or a Swing Line Loan Advance or to elect a
subsequent Interest Period for or convert a Loan or Loans of any type
hereunder, as the obtaining of such Advance, such election or conversion of
such Loan or Loans shall be otherwise permitted herein. Any Borrowing
Notice shall be binding on and irrevocable by the Company, and shall be
confirmed in writing within three (3) Business Days an Authorized Officer
in the form attached hereto as EXHIBIT D;
"Business Day" means any day which is not a Saturday, Sunday or legal
holiday and which is a day on which banks are open for business in the
State of Florida;
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"Capitalized Lease" means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP;
"Capitalized Rentals" of any Person and as of the date of any
determination thereof means the amount at which the aggregate Rentals due
and to become due under all Capitalized Leases under which such Person is
lessee would be reflected as a liability on a consolidated balance sheet of
such Person;
"CD Loan" means all of the Loans for which the rate of interest is
determined by reference to the CD Rate;
"CD Rate" means, for any CD Loan, the rate of interest per annum
determined pursuant to the following formula:
Applicable Base Rate Applicable
--------------------
CD Rate = + Assessment Rate +
1 - Applicable Interest
Reserve Requirement Addition
"Closing Date" means the date as of which this Agreement is executed
by the Company, the Lenders and the Agent and on which the conditions set
forth in Section 5.01 hereof have been satisfied;
"Company's Account" means a demand deposit account number 3601603454,
or any successor account with the Agent, which may be maintained at one or
more offices of the Agent, or an agent for the Agent;
"Consolidated Current Assets" and "Consolidated Current Liabilities"
means as of the date of any determination thereof such assets and
liabilities of the Company and its Subsidiaries on consolidated basis as
shall be determined in accordance with GAAP to constitute current assets
and current liabilities, respectively;
"Consolidated Funded Debt" means all Funded Debt of the Company and
its Subsidiaries, determined on a consolidated basis eliminating
intercompany items;
"Consolidated Net Income" for any period means the gross revenues of
the Company and its Subsidiaries for such period LESS all expenses and
other proper charges (including taxes on income and Interest Charges),
determined on a consolidated basis after eliminating earnings or losses
attributable to outstanding Minority Interests, but excluding in any event:
(a) any gains on the sale or other disposition of Investments or
fixed or capital assets, and any taxes on such excluded gains and any
tax deductions or credits on account of any such excluded losses;
6
(b) the proceeds of any life insurance policy except for
proceeds received during such period with respect to deferred
compensation plans to the extent that the Company or any Subsidiary
recognized any expenses during such period with respect to such plans;
(c) net earnings and losses of any Subsidiary accrued prior to
the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired
in any manner by the Company or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Subsidiary) with which the Company or a Subsidiary shall have
consolidated or which shall have merged into or with the Company or a
Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an ownership
interest unless such net earnings shall have actually been received by
the Company or such Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary which for
any reason is unavailable for payment of dividends to the Company or
any other Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Subsidiary; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
made from income arising during such period;
"Consolidated Net Assets" means as of the date of any
determination thereof, the amount of all Total Assets of the Company and
its Subsidiaries after deducting all Restricted Investments and all items
which in accordance with GAAP would be included on the liability side of a
consolidated balance
7
sheet, except deferred income taxes, deferred investment tax credits,
capital stock of any class, surplus and Funded Debt;
"Consolidated Net Worth" means at any time as of which the amount
thereof is to be determined, the sum of the following in respect of the
Company and its Subsidiaries (on a consolidated basis and excluding
intercompany items): (i) the amount of issued and outstanding share
capital, plus (ii) the amont of additional paid-in capital and retained
income (or, in the case of a deficit, minus the amount of such deficit),
MINUS (iii) the sum of the following (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings): (A) all reserves, except legal reserves and other contingency
reserves (i.e., reserves not allocated to specific purposes and not
deducted from assets), which are properly treated as appropriations of
surplus or retained earnings; (B) any treasury stock, capital stock
subscribed and unissued and other contra-equity accounts; and (C) the
cumulative amount of any net write-up of asset values after the date of
the audit immediately preceding the Closing Date, PLUS or MINUS, as the
case may be (iv) the cumulative effect of foreign exchange valuations;
"Consolidated Total Assets" means as of the date of any determination
thereof the total amount of all assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP;
"Current Debt" of any Person as of the date of any determination
thereof means (i) all Indebtedness of such Person for borrowed money other
than Funded Debt of such Person and (ii) Guaranties by such Person of
Current Debt of others;
"Default" means any event or condition, the occurrence of which would,
with the lapse of time or the giving of notice,or both, constitute an Event
of Default;
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of
America;
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections;
"ERISA Affiliate" means any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or
controlled group of trades
8
or businesses, as described in section 414(b) and 414(c), respectively,
of the Code of Section 4001 of ERISA;
"Event of Default" shall have the meaning set forth in Section 8.01;
"Existing LCs" means the letters of credit issued by NationsBank or
BofA prior to the Closing Date and remaining outstanding as of the Closing
Date, all as more particularly described on SCHEDULE 1.01 attached hereto;
"Federal Funds Effective Rate" for any day, as used herein, means the
rate per annum (rounded upward to the nearest 1/100 of 1%) announced by the
Federal Reserve Bank of New York (or any successor) on such day as being
the weighted average of the rates on overnight Federal funds transactions
arranged by Federal funds brokers on the previous trading day, as computed
and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced;
"Fixed CD Loan" means a CD Loan for which the Company elects an
Interest Period of 30, 60, 90 or 180 days pursuant to Section 2.03 hereof;
"Fixed Charges" for any period means on a consolidated basis the sum
of (i) 100% of all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Subsidiaries (other than
WCC), and (ii) all Interest Charges on all Indebtedness (including the
interest component of Rentals on Capitalized Leases and the discount factor
or other economic equivalent of interest under the Asset Securitization
Facility) of the Company and its Subsidiaries (other than WCC) payable
during said period by the Company and its Subsidiaries (other than WCC);
"Fixed Charges Coverage Ratio" means the ratio of Net Income Available
for Fixed Charges to Fixed Charges;
"Fixed Rate Loan" means a Loan which is either a Fixed CD Loan or a
LIBOR Loan;
"Floating CD Loan" means a CD Loan other than a Fixed CD Loan;
"Floating Rate Loan" means a Loan which is either a Base Loan or a
Floating CD Loan;
9
"Four-Quarter Period" means a period of four full consecutive quarter
annual periods, taken together as one accounting period;
"Funded Debt" of any Person shall mean (i) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with the
acquisition of assets, including all payments in respect thereof that are
required to be made within one year from the date of any determination of
Funded Debt, whether or not the obligation to make such payments shall
constitute a current liability of the obligor under GAAP, (ii) all
Capitalized Rentals of such Person, (iii) all Guaranties by such Person of
Funded Debt of others, (iv) with respect to Funded Debt of the Company, the
product of (x) the aggregate amounts available for drawing under all
outstanding Letters of Credit and (y).50; and (v) to the extent not
otherwise included in clauses (i) through (iv) above, outstanding amounts
received by the Company or any Subsidiary in exchange for the transfer of
interests in trade receivables under the Asset Securitization Facility in
excess of the amounts repaid to the purchasers in respect of such purchase
price from collections on such trade receivables;
"GAAP" means generally accepted accounting principles at the time;
"Gross Revenues" for any period means the gross revenues, determined
in accordance with GAAP, of the Company and its Subsidiaries for such
period, determined on a consolidated basis after eliminating revenues
attributable to outstanding Minority Interests;
"Guaranties" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect,
guaranteeing any Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment
of such Indebtedness or obligation, (y) to maintain working capital or
other balance sheet condition or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation, or
(iii) to lease property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness of obligation, or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor against loss
in respect thereof. For the
10
purposes of all computations made under this Agreement, a Guaranty in
respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for
borrowed money which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend;
"Guaranty Agreements" means, collectively, the Guaranty and Suretyship
Agreements executed and delivered by each wholly-owned Subsidiary of the
Company pursuant to the terms hereof substantially in the form of EXHIBIT
H, as the same may be amended, modified or restated from time to time;
"Guarantors" means, collectively, (i) as of the date hereof, each
wholly-owned domestic Subsidiary of the Company as listed on SCHEDULE 6.01
hereof, and (ii) thereafter, each Person who is required to execute and
deliver a Guaranty pursuant to Section 7.19 hereof;
"Indebtedness" of any Person means and include all obligations of such
Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all (i) obligations of such Person for borrowed money or which has
been incurred in connection with the acquisition of property or assets,
(ii) obligations secured by any Lien upon property or assets owned by such
Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (iv)
Capitalized Rentals under any Capitalized Lease, (v) Guaranties of
Indebtedness of others, (vi) the Reimbursement Obligations, and (vii)
outstanding amounts received by the Company or any Subsidiary in exchange
for the transfer of interests in trade receivables under the Asset
Securitization Facility in excess of the amounts repaid to the purchasers
in respect of such purchase price from collections on such trade
receivables;
"Interest Charges" for any period means all interest and all
amortization of debt discount and expense on any particular Indebtedness
for which such calculations are being made, and shall include without
limitation the discount factor or other economic equivalent of interest
arising under the Asset Securitization Facility. Computations of Interest
Charges on a pro forma basis for Indebtedness having a variable interest
rate shall be calculated at the rate in effect on the date of any
determination;
11
"Interest Period" for each Fixed Rate Loan means a period commencing
on the date such Fixed Rate Loan is made or converted and each subsequent
period commencing on the last day of the immediately preceding Interest
Period for such Fixed Rate Loan and ending, at the Company's option, (A)
for any Fixed CD Loan on the date 30, 60, 90 or 180 days thereafter as
notified to the Agent by an Authorized Officer two (2) Business Days prior
to the beginning of such Interest Period and (B) for any LIBOR Loan, on the
date one, two, three or six months thereafter as notified to the Agent by
the Authorized Officer three (3) LIBOR Business Days prior to the beginning
of such Interest Period; PROVIDED, that,
(i) if an Authorized Officer fails to notify the Agent of
the length of an Interest Period for any Fixed CD Loan two (2)
Business Days or for any LIBOR Loan three (3) LIBOR Business Days, as
the case may be, 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 Prime Loan as of the first day thereof for an Interest
Period ending on the following Business Day;
(ii) if an Interest Period for a Fixed Rate Loan would end
on a day which is not a Business Day or a LIBOR Business Day, as the
case may be, such Interest Period shall be extended to the next
Business Day or LIBOR Business Day (unless in the case of any LIBOR
Loan, 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 LIBOR Business Day); and
(iii) there shall not be more than six (6) Interest Periods
in effect on any day, provided that all Floating Rate Loans shall be
treated as having the same Interest Period;
"Investments" means all investments, in cash or by delivery of
Property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, indebtedness or other obligations or Security
or by loan, advance, capital contribution or otherwise; PROVIDED, HOWEVER,
that "Investments" shall not mean or include routine investments in
Property to be used or consumed in the ordinary course of business or
investments in accounts receivable or notes receivable arising in the
ordinary course of business;
"Joint Venture Investment" means any Investment in an amount not to
exceed $500,000 in any Person by the Company with any other Person or
Persons which Investment is made in order to permit the Company to make
bids with respect to government contracts for the providing of services by
the
12
Company of the type provided by the Company and its Subsidiaries on the
date of this Agreement;
"Lending Office" means, as to each Lender, the Lending Office of such
Lender designated on the signature pages hereof or in an Assignment and
Acceptance or such other office of such Lender (or of an affiliate of such
Lender) as such Lender may from time to time specify to the Authorized
Officer and the Agent as the office by which its Loans are to be made and
maintained;
"Letter of Credit" or "Letters of Credit" means a letter of credit
issued by a Letter of Credit Issuer for the account of the Company or the
Company and Titania in favor of a Person advancing credit, providing
insurance or securing obligations on behalf of the Company or the Company
and Titania, and shall include without limitation all Existing LCs;
"Letter of Credit Account Agreement" means that Letter of Credit
Account Agreement of even date herewith by and between the Company and the
Agent, as amended and modified from time to time, providing for deposit of
amounts of cash with the Agent;
"Letter of Credit Facility" means the facility described in Article
III hereof providing for the issuance by the Letter of Credit Issuers for
the account of the Company or the Company and Titania of Letters of Credit
in an aggregate stated amount at any time outstanding not exceeding the
Total Letter of Credit Commitment;
"Letter of Credit Issuer" means NationsBank or, with respect to
Existing LCs, NationsBank or BofA, as the case may be, as issuer of a
Letter of Credit;
"LIBOR Business Day" means a Business Day on which the relevant
international financial markets are open for the transaction of the
business contemplated by this Agreement in London, England and New York,
New York;
"LIBOR Loan" means all of the Loans for which the rate of interest is
determined by reference to the LIBOR Rate;
"LIBOR Rate" means, for the Interest Period for any LIBOR Loan, the
rate of interest per annum determined pursuant to the following formula:
Applicable Base Rate
--------------------
LIBOR Rate = 1 - Applicable + Applicable Interest
Reserve Requirement Addition
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the
13
owner of the Property, whether such interest is based on the common law,
statute or contract, and including but not limited to the security interest
lien arising from a mortgage, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes.
The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances (including, with respect to stock,
stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting Property. For the purposes of this
Agreement, the Company or a Subsidiary shall be deemed to be the owner of
any Property which it has acquired or holds subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person for
security purposes and such retention or vesting shall constitute a Lien;
"Loan" or "Loans" means any of the Fixed Rate Loans or Floating Rate
Loans, as the context may require;
"Loan Documents" means this Agreement, the Letter of Credit Account
Agreement, the Notes, the Guaranty Agreements, any applications for
issuance of Letters of Credit and all other instruments and documents
executed or delivered to and in favor of any Lender or the Agent in
connection with the Loans or the Letters of Credit as the same may be
amended, modified or supplemented from time to time;
"Material Subsidiary" means a Subsidiary which as of any date of
determination (i) has total assets equal to 5% or more of Consolidated
Total Assets or (ii) contributed 5% or more of Consolidated Net Income for
the preceding fiscal year of the Company;
"Minority Interests" means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law)
that are not owned by the Company and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating
value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital
and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing
method of valuing Minority Interests in preferred stock;
"Multiemployer Plan" shall have the same meaning as in ERISA;
14
"Net Income Available for Fixed Charges" for any period means the sum
of (i) Consolidated Net Income during such period (excluding, for the
purpose of determining Net Income Available for Fixed Charges, revenues,
expenses and other appropriate charges or adjustments attributable to WCC)
plus (to the extent deducted in determining Consolidated Net Income), (ii)
all provisions for any Federal, state or other income taxes made by the
Company and its Subsidiaries (other than WCC) during such period, (iii)
Fixed Charges of the Company and its Subsidiaries (other than WCC) during
such period and (iv) for each of the last fiscal quarter of the fiscal year
of the Borrower ending January 1, 1995 and the first three fiscal quarters
in the succeeding fiscal year, the amount of the reserve (not to exceed
$5,000,000), if any, established by the Company in connection with the
anticipated sale of its headquarters building located at 1500 San Remo
Avenue, Coral Gables, Florida;
"Net Tangible Assets" means as of the date of determination thereof,
the total amount of all Tangible Assets of the Company (excluding
Subsidiaries) after deducting all Restricted Investments of the Company and
all items which in accordance with GAAP would be included on the liability
side of a balance sheet, except deferred income taxes, deferred investment
tax credits, capital stock of any class, surplus and Funded Debt;
"Notes" means, collectively, the promissory notes of the Company
executed and delivered to the Lenders as provided in Section 2.08 hereof in
substantially the form attached hereto as Exhibit E, with appropriate
insertions as to amounts, dates and names of Lenders;
"Obligations" means the obligations, liabilities and Indebtedness of
the Company with respect to (i) the principal and interest on the Loans as
evidenced by the Notes, (ii) the Reimbursement Obligations, and (iii) the
payment and performance of all other obligations, liabilities and
Indebtedness of the Company to the Lenders or the Agent hereunder, under
any one or more of the other Loan Documents or with respect to the Loans;
"Outstanding Letter of Credit Obligations" means the sum of (i) the
aggregate stated amount available for drawing under all Letters of Credit
and (ii) the aggregate amount of all Reimbursement Obligations;
"Participation" means, with respect to any Lender and either a Letter
of Credit or a Swing Line Loan, as the case may be, the extension of credit
represented by the participation of such Lender hereunder in the Letter of
Credit Issuer's liability in respect of a Letter of Credit issued by the
Letter of Credit Issuer in accordance with the terms
15
hereof, or in NationsBank's liability in respect of a Swing Line Loan made
in accordance with the terms hereof;
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA;
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof;
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability;
"Prior Notes" means the promissory notes issued to the Lenders under
the Prior Agreement;
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible;
"Prime Rate" means the rate of interest per annum announced publicly
by the Agent as its prime rate from time to time. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the Agent;
"Principal Office" means the principal office of the Agent at 150
Southeast Third Avenue, Miami, Florida 33102-5337, Attention: Corporate
Banking Department or such other office and address as the Agent may from
time to time designate;
"Reimbursement Obligation" means at any time, the obligation of the
Company with respect to any Letter of Credit to reimburse the Letter of
Credit Issuer and the Lenders to the extent of their respective
Participation (including by the receipt of proceeds of Revolving Loans
pursuant to Section 3.02) for amounts theretofore paid by the Letter of
Credit Issuer pursuant to a drawing under such Letter of Credit;
"Rentals" means and include as of the date of any determination
thereof, all fixed payments (including as such all payments which the
lessee is obligated to make to the lessor on termination of the lease or
surrender of the Property) payable by the Company or a Subsidiary, as
lessee or sublessee under a lease of real or personal property, but shall
be exclusive of any amounts required to be paid by the Company or a
Subsidiary (whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar charges.
Fixed rents under any
16
so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of
sales volume or gross revenues;
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time;
"Regulatory Change" means any change effective after the Closing Date
in United States federal or state laws or regulations (including Regulation
D and capital adequacy regulations) or foreign laws or regulations or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of banks, which includes any of the Lenders,
under any United States federal or state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration
thereof or compliance by any Lender with any request or directive regarding
capital adequacy, including with respect to "highly leveraged
transactions," whether or not having the force of law, whether or not
failure to comply therewith would be unlawful and whether or not published
or proposed prior to the date hereof;
"Reportable Event" shall have the same meaning as in ERISA;
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating at least 66-2/3% of the
aggregate Credit Exposures of all the Lenders on such date. 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 Loan Commitment (without regard to any outstanding Swing Line
Loans) plus the amount of such Lender's Applicable Commitment Percentage of
the aggregate undrawn stated amount of outstanding Letters of Credit and of
the Reimbursement Obligations; provided that if any Lender shall have
failed to pay to a Letter of Credit Issuer 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 with
respect to all Letters of Credit shall be deemed to be held by the
respective Letter of Credit Issuers of such Letters of Credit and, if the
Lender who fails to so pay is any Lender other than NationsBank, such
Lender's Credit Exposure attributable to Swing Line Loans shall be deemed
held by NationsBank for purposes of this definition;
"Restricted Investments" means all Investments in any Person, other
than:
17
(a) Investments by the Company and its Subsidiaries in and to
Subsidiaries, including any investment in a corporation which, after
giving effect to such investment, will become a Subsidiary;
(b) Investments in (i) Commercial paper maturing in 270 days or
less from the date of issuance and which, at the time of acquisition
by the Company or any Subsidiary, is accorded one of the two highest
ratings by Standard & Poor's Corporation or Moody's Investors Service,
Inc.; (ii) Variable Rate Demand Notes of issuers whose commercial
paper, at the time of acquisition, is accorded one of the two highest
ratings by Standard & Poor's Corporation or Moody's Investors Service,
Inc.; or (iii) Direct obligations of any State of the United States of
America or of any political subdivision thereof located in the United
States of America and which, at the time of acquisition, is accorded
one of the two highest ratings by Standard & Poor's Corporation or
Moody's Investors Service, Inc., maturing in twelve months or less
from the date of acquisition;
(c) Investments in direct obligations of the United States of
America, or investments in any Person, which Investments are
guaranteed by the full faith and credit of the United States of
America, in either case maturing in twelve months or less from the
date of acquisition thereof by the Company or any Subsidiary;
(d) Investments in certificates of deposit maturing within one
year from the date of issuance thereof, issued by a bank or trust
company organized under the laws of the United States or any state
thereof, having capital, surplus and undivided profits aggregating at
least $100,000,000 and whose long-term certificates of deposit are, at
the time of acquisition thereof by the Company or Subsidiary, rated A
by Standard & Poor's Corporation or A by Moody's Investors Services,
Inc.;
(e) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including
moving expenses related to a transfer) incidental to carrying on the
business of the Company or any Subsidiary; PROVIDED, HOWEVER that the
Company may make up to an aggregate at any one time outstanding of up
to $300,000 of such loans or advances which are not incidental to
carrying on the business of the Company or any Subsidiary; and
(f) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries;
and
18
(g) provided, however, that with respect to investments made by
or on behalf of Titania, the following shall not be Restricted
Investments:
(1) Certificates of deposit, time deposits and banker's
acceptances maturing within one year from the date of
acquisition, issued by a bank or trust company organized
under the laws of the United States or any state thereof, or
any foreign bank whose branch is organized under the laws of
the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least
$100,000,000 and whose long-term certificates of deposit
are, at the time of acquisition, rated at least A by
Standard & Poor's Corporation or Moody's Investors Service,
Inc.;
(2) Repurchase Agreements with any domestic bank with debt rated
'AA' or better by Standard & Poor's Corporation, or any
foreign bank rated at least 'AA' by Standard & Poor's
Corporation and 'Aa' by Moody's Investors Service, Inc.; or
repurchase agreements with such other Persons on such terms
as the Company and the Agent shall agree in writing;
provided the term of all such repurchase agreements is for
one year or less;
(3) Direct obligations of the United States of America, or
Investments in any Person, which Investments are guaranteed
by the full faith and credit of the United States of
America;
(4) Mortgage-backed securities issued by the United States
Government or an agency or instrumentality thereof, having
at the time of acquisition, a credit rating of at least AA
by a nationally recognized rating service;
(5) Bonds, notes and other direct obligations (other than those
referred to in clause (b), above) of any corporation
domiciled in the United States of America, of a State of the
United States of America, or of any sovereign or
supranational institution whose obligations are denominated
in United States dollars, at the time of acquisition rated
at least A by a nationally recognized rating service.
Obligations of sovereign or supranational institutions at
the time of acquisition, shall be rated at least AA by a
nationally recognized rating service;
19
(6) Preferred stock obligations of any corporation domiciled
in the United States of America, whose obligations at the
time of acquisition are rated at least A by a nationally
recognized rating service;
(7) Shares in mutual funds that invest solely in investments of
the types described in clause b(i), clause (b)(iii), clause
(3), clause (4), clause (5) and/or clause (6) above and have
assets in excess of One Hundred Million Dollars
($100,000,000);
(8) Any Investments (other than the Investments set forth in
clause (b) and clause (1) through clause (7) inclusive,
above), provided that the aggregate fair value for all such
investments shall not, at any time, exceed five percent (5%)
of the aggregate fair value of all Investments set forth in
clause (1) through clause (8) inclusive, above. For the
purposes of this subsection (8) only, fair value shall mean
the greater of book value or fair market value.
In valuing any investments for the purpose of applying the limitations
set forth in this Agreement, such investments, loans and advances shall be
taken at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered on account of capital or principal.
For purposes of this Agreement, at any time when a corporation becomes
a Subsidiary, all Investments of such corporation at such time shall be
deemed to have been made by such corporation, as a Subsidiary, at such
time.
"Revolving Credit Facility" means the facility described in Article II
hereof providing for Loans to the Company by the Lenders in the aggregate
principal amount of Total Revolving Loan Commitment less the aggregate
amount of outstanding Swing Line Loans and outstanding Letters of Credit
and Reimbursement Obligations;
"Revolving Credit Termination Date" means the earlier of (i) January
5, 1998 or such later date to which the Revolving Credit Termination Date
may be extended pursuant to Section 2.18, or (ii) such date as the Company
may voluntarily terminate the Revolving Credit Facility by payment in full
of all Obligations pursuant to Section 2.10(a) hereof;
"Revolving Loan" means Loans made by the Lenders to the Company
pursuant to Section 2.01 hereof;
20
"Revolving Loan Advance Account" means an account on the books of the
Agent in which
(i) each Advance by the Agent shall be debited thereto by
recording therein on the date of such Advance a debit entry in the
amount of such Advance; and
(ii) each payment made to the Agent for credit to the Revolving
Credit Advance Account shall be credited thereto by recording therein
on the date paid to the Agent a credit entry in the amount of such
payment;
"Revolving Loan Commitment" means with respect to each Lender, the
obligation of such Lender to make Loans to the Company up to an aggregate
principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Loan Commitment as
the same may be increased or decreased from time to time pursuant to this
Agreement;
"Revolving Loan Debit Balance" means an amount equal to the excess, if
any, of all debit entries over all credit entries required to be recorded
pursuant to Section 2.01 hereof in a Revolving Credit Advance Account of
the Agent up to and including the date of computation;
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended;
"Subordinated Funded Debt" means all unsecured Funded Debt of the
Company which shall contain or have applicable thereto subordination
provisions in form and substance acceptable to the Agent and the Required
Lenders;
The term "subsidiary" means, as to any particular parent corporation,
any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation.
The term "Subsidiary" shall mean a subsidiary of the Company and The Atrium
At Coral Gables, Ltd., a Florida limited partnership;
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Company pursuant to Section 2.17;
"Swing Line Loans" means Loans made by NationsBank to the Company
pursuant to Section 2.17;
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal Indebtedness of the Company on all Swing Line Loans
then outstanding;
21
"Titania" means Titania Insurance Company of America, a corporation
organized under the laws of Vermont and a wholly-owned Subsidiary of the
Company;
"Total Assets" means, as of the date of any determination thereof, the
total amount of all assets of the Company and its Subsidiaries (less
depreciation, depletion and other properly deductible valuation reserves);
"Total Capitalization" means the sum of (i) Consolidated Funded Debt
PLUS (ii) Consolidated Net Worth;
"Total Letter of Credit Commitment" means an amount not to exceed the
Total Revolving Loan Commitment;
"Total Revolving Loan Commitment" means $60,000,000, as reduced
pursuant to Section 2.10 hereof;
"Voting Stock" means Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect
a majority of the corporate directors (or Persons performing similar
functions);
"Wackenhut Family Group" means (i) George R. Wackenhut, Ruth J.
Wackenhut, Richard R. Wackenhut and other lineal descendants of George R.
Wackenhut, the founder of the Company; (ii) the spouses and lineal
descendants of the persons named in clause (i); and (iii) the estates or
legal representatives of the persons named in clause (i);
"WCC" means Wackenhut Corrections Corporation, a Florida corporation
and a Subsidiary of the Borrower as of the Closing Date;
"Wholly-owned" when used in connection with any Subsidiary means a
Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) and all Funded
Debt and Current Debt shall be owned by the Company and/or one or more of
its Wholly-owned Subsidiaries;
1.02 ACCOUNTING PRINCIPLES. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
1.03 DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be
22
applicable whether the action in question is taken directly or indirectly by
such Person.
23
ARTICLE II
REVOLVING CREDIT FACILITY
2.01 COMMITMENT. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Company (individually a
"Loan" and collectively the "Loans") 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 Company on any day determined by its Applicable
Commitment Percentage up to but not exceeding the Revolving Loan Commitment of
such Lender, PROVIDED, however, that the Lenders will not be required and shall
have no obligation to make any 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 the Notes; PROVIDED further, however, that immediately after giving
effect to each Advance, the sum of the principal amount of outstanding Loans and
Swing Line Loans plus Outstanding Letter of Credit Obligations shall not exceed
the Total Revolving Loan Commitment. Within such limits, the Company may
borrow, repay and reborrow hereunder, on a Business Day in the case of a Base
Loan or Fixed CD Loan, and on a LIBOR Business Day in the case of a LIBOR Loan,
from the Closing Date until, but (as to borrowings and reborrowings) not
including, the Revolving Credit Termination Date; PROVIDED, however, that (x) no
Fixed CD Loan shall be made less than thirty (30) days before the Revolving
Credit Termination Date and no LIBOR Loan shall be made less than one month
before the Revolving Credit Termination Date and (y) each Fixed Rate Loan may,
subject to the provisions of Section 2.06, be repaid only on the last day of the
Interest Period with respect thereto.
2.02 AMOUNTS. Except as otherwise permitted by the Lenders the aggregate
unpaid principal amount of the Revolving Loans and Swing Line Loans from time to
time outstanding, plus Outstanding Letter of Credit Obligations shall not exceed
at any time, an amount equal to the Total Revolving Loan Commitment. Each
Advance hereunder (i) for a Base Loan shall be in an amount of at least
$300,000, and (ii) for a Fixed Rate Loan shall be in an amount of $300,000, or
an integral multiple thereof.
2.03 INTEREST PERIODS. Each Revolving Loan shall be, at the option of
the Company specified in the Borrowing Notice furnished to the Agent pursuant to
subsection 2.04 hereof, either a Base Loan or a Fixed Rate Loan, which shall in
each case be made or maintained by each Lender at its applicable Lending Office.
Base Loans and Fixed Rate Loans may be outstanding at the same time, PROVIDED,
however, there shall not be outstanding at any one time Revolving Loans having
more than six (6) different Interest Periods; provided that all Base Loans shall
be treated as having the same Interest Period. No Revolving Loan may bear
interest at the Floating CD Rate.
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2.04 ADVANCES. (a) An Authorized Officer shall give the Agent (i) at
least two (2) Business Days' irrevocable telephonic notice of each Fixed CD Loan
(whether representing an additional borrowing hereunder or the conversion of
borrowings hereunder from Base Loans or other Fixed Rate Loans to Fixed CD
Loans) prior to 10:30 A.M. Miami, Florida time; (ii) at least three (3) LIBOR
Business Days' irrevocable telephonic notice of each LIBOR Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Base Loans or other Fixed Rate Loans to LIBOR Loans) prior to
12:30 P.M., Miami, Florida time; and (iii) irrevocable telephonic notice of each
Base Loan representing an additional borrowing hereunder prior to 12:30 P.M.
Miami, Florida time on the day of such proposed Base Loan. Each such Borrowing
Notice, which shall be effective upon receipt by the Agent, shall specify the
amount of the borrowing, the type (Base, Fixed CD or LIBOR) of Revolving Loan,
the date of borrowing and, if a Fixed Rate Loan the Interest Period to be used
in the computation of interest. The Authorized Officer shall provide the Agent
written confirmation of each such telephonic notice in the form attached hereto
as EXHIBIT D with appropriate insertions but failure to provide such
confirmation shall not affect the validity of such telephonic notice. Notice of
receipt of such Borrowing Notice shall be provided by the Agent to each Lender
by telephone with reasonable promptness, but not later than 1:30 P.M., Miami,
Florida time on the same day as Agent's receipt of such notice. The Agent shall
provide each Lender written confirmation of such telephonic confirmation but
failure to provide such notice shall not affect the validity of such telephonic
notice.
(b) Not later than 3:00 P.M., Miami, Florida time on the date specified
for each borrowing hereunder, each Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of the Revolving
Loan or Loans to be made by it on such day available to the Agent, by depositing
or transferring the proceeds thereof in immediately available funds at the
Principal Office. The amount so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Company by
depositing the proceeds thereof in immediately available funds, in the Company's
Account.
(c) Notwithstanding the foregoing, if the Agent receives telephonic or
written notice from a Letter of Credit Issuer that a drawing has been made under
any Letter of Credit prior to the Revolving Credit Termination Date, the drawing
shall be paid by the Agent without the requirement of notice from the Company
from immediately available funds which shall be advanced by the Lenders under
the Revolving Credit Facility. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof notice of such drawing shall be
provided promptly by the Letter of Credit Issuer to the Agent and the Agent
shall provide notice to each other Lender by telephone. If notice to the
Lenders of a drawing under any Letter of Credit is given by the Agent at or
before 12:00 noon Miami, Florida time on any Business Day, each
25
other Lender shall, pursuant to the conditions of this Agreement, make a Base
Loan in the amount of such Lender's Applicable Commitment Percentage of such
drawing and shall pay such amount to the Agent for the account of the Letter of
Credit Issuer at the Principal Office in Dollars and in immediately available
funds before 2:30 P.M. Miami, Florida time 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 Miami, Florida time on any Business Day, each Lender shall, pursuant
to the terms and subject to the conditions of this Agreement, make a Base Loan
in the amount of such Lender's Applicable Commitment Percentage of such drawing
and shall pay such amount to the Agent for the account of the Letter of Credit
Issuer at the Principal Office in Dollars and in immediately available funds
before 12:00 noon Miami, Florida time on the next following Business Day. Such
Base Loan shall be deemed made for a period ending on the following Business
Day, which shall be extended automatically to the next succeeding Business Day
unless and until the Company converts such Base Loan in accordance with the
terms of Section 2.11 hereof.
2.05 PAYMENT OF INTEREST. (a) The Company 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 at the then
applicable Base Rate for Base Loans, CD Rate for Fixed CD Loans or LIBOR Rate
for LIBOR Loans, as designated by the Authorized Officer pursuant to Section
2.04 hereof or as otherwise provided herein; PROVIDED, however, that if any
amount shall not be paid when due (at maturity, by acceleration or otherwise),
such amount shall bear interest thereafter until paid (i) in the case of a Fixed
Rate Loan, until the end of the Interest Period with respect to such Loan, at a
rate of two percent (2%) above the then Fixed Rate for such Loan, and (ii)
thereafter, and with respect to Base Loans, at a rate of interest per annum
which shall be two percent (2%) above the Base Rate or the maximum rate
permitted by applicable law, whichever is lower, from the date such amount was
due and payable until the date such amount is paid in full.
(b) Interest on each Revolving Loan shall be computed on the basis of a
year of 360 days and calculated for the actual number of days elapsed. Interest
on each Revolving Loan shall be paid (a) quarterly in arrears on the last
Business Day of each month on each Base Loan, (b) on the last day of the
applicable Interest Period for each Fixed Rate Loan and if such Interest Period
extends for more than three months or 90 days, respectively, at intervals of
three months or 90 days, as appropriate, after the first day of such Interest
Period, and (c) upon payment in full of the principal amount of such Loan.
2.06 PAYMENT OF PRINCIPAL. (a) The principal amount of each Revolving
Loan shall be due and payable in full on the Revolving Credit Termination Date.
The duration of the initial Interest
26
Period for each Revolving Loan shall be as specified in the Borrowing Notice.
The Company shall have the option to elect the duration of subsequent Interest
Periods and to convert Revolving Loans in accordance with Section 2.11 hereof.
If the Agent does not receive a notice of election of duration of an Interest
Period or to convert by the time prescribed by Section 2.11 hereof, the Company
shall be deemed to have elected to convert such Revolving Loan to (or continue
such Loan as) a Base Loan for a period extending to the next succeeding
Business Day until the Company notifies the Agent in accordance with Section
2.11.
(b) Each payment of principal (including any prepayment) and payment of
interest shall be made to the Agent at the Principal Office, for the account of
each Lender's applicable Lending Office, in Dollars and in immediately available
funds before 12:30 P.M. Miami, Florida time on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time to the Company's Account or any ordinary
deposit account of the Company with the Agent.
(c) The Agent shall deem any payment by or on behalf of the Company
hereunder that is not made both (a) in Dollars and in immediately available
funds and (b) prior to 12:30 P.M. Miami, Florida time (other than if such
payment is made by a debit by the Agent to the Company's Account) to be a non-
conforming payment. Any such payment shall not be deemed to be received by the
Agent until the time such funds become available funds. Any nonconforming
payment may constitute or become a Default or Event of Default. The Agent shall
give prompt telephonic notice to the Company and each of the Lenders (confirmed
in writing) if any payment is non-conforming. Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding Business Day) at a rate of interest per
annum which shall be two percent (2%) above the rate at which interest was
payable on such Revolving Loan on the day immediately preceding the due date or
the maximum rate permitted by applicable law, whichever is lower, from such due
date until the funds become available.
(d) 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; provided that interest shall
continue to accrue during the period of any such extension.
2.07 COMPANY'S ACCOUNT. The Agent shall render to the Company each month
a Loan ledger statement and a copy of the statement of the Company's Account.
The Company shall give the Agent written notice of its exceptions to any such
statement within 45 days after such statement has been rendered to the Company.
27
2.08 NOTES. Loans made by each Lender shall be evidenced by,and be
repayable with interest in accordance with the terms of, a promissory note
payable to the order of such Lender in the amount of its Applicable Commitment
Percentage of the Total Revolving Loan Commitment, which Note shall be dated the
Closing Date or such later date pursuant to an Assignment and Acceptance and
shall be duly completed, executed and delivered by the Company.
2.09 PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Revolving Loans, and
fees (other than (i) payments on Swing Line Loans, which shall be retained by
NationsBank, (ii) the Agent's fees payable under Section 9.11 hereof, which
shall be retained by the Agent, and (iii) Letter of Credit fronting and
administrative fees payable under Sections 3.03 and 3.04 hereof, which shall be
paid in respect of each Letter of Credit to the applicable Letter of Credit
Issuer) described in this Agreement 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 Company for the account of each of the Lenders on
account of principal, interest and fees, shall be made without set-off or
counterclaim, and (c) the Agent will promptly distribute payments received to
the Lenders.
2.10 REDUCTION IN COMMITMENT. (a) The Company shall have the right from
time to time (but not more frequently than once during each quarterly period),
upon not less than ten (10) Business Days written notice to the Agent to reduce
the Total Revolving Loan Commitment. The Agent shall give each Lender, within
one (1) Business Day, telephonic notice (confirmed in writing) of such
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, and shall
permanently reduce the Revolving Loan Commitment of the Lenders pro rata. No
such reduction shall result in the payment of any Fixed Rate Loan other than on
the last day of the Interest Period of such Loan. Each reduction of the Total
Revolving Loan Commitment shall be accompanied by payment of the Notes to the
extent that the sum of Swing Line Outstandings, Outstanding Letter of Credit
Obligations and the Revolving Loan Debit Balance exceeds the Total Revolving
Loan Commitment, after giving effect to such reduction, together with accrued
and unpaid interest on the amounts prepaid. The Company shall pay to the Agent
for the benefit of the Lenders at the date of such permanent reduction a
reduction fee equal to one-eighth of one percent (1/8%) per annum, times the
amount of such reduction, for the period from the date of reduction to the
Revolving Credit Termination Date.
(b) The amount of the Total Revolving Loan Commitment which shall be
available to the Company shall be increased and decreased, from time to time by
the stated amount of all Swing Line Outstandings and Outstanding Letter of
Credit Obligations; provided, that the sum of the Revolving Loan Debit Balance,
Swing
28
Line Outstandings and Outstanding Letter of Credit Obligations shall at no time
exceed the Total Revolving Loan Commitment.
2.11 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 Sections 4.01(b) and 4.02
hereof, the Company may with respect to Revolving Loans:
(a) on two (2) Business Days' notice to the Agent on or before 10:30 A.M.
Miami, Florida time:
(i) elect a subsequent Interest Period for all Fixed CD Loans having
the same Interest Period to begin on the last day of the Interest Period
for such Fixed CD Loans;
(ii) convert Base Loans to Fixed CD Loans on any date; and
(iii) convert all LIBOR Loans having the same Interest Period to Fixed
CD Loans on the last day of the Interest Period for such LIBOR Loans.
(b) on three (3) LIBOR Business Days' notice to the Agent on or before
1:00 P.M. Miami, Florida time:
(i) elect a subsequent Interest Period for all LIBOR Loans having
the same Interest Period to begin on the last day of the Interest Period
for such LIBOR Loans;
(ii) convert all Fixed CD Loans having the same Interest Period to
LIBOR Loans on the last day of the Interest Period for such Fixed CD Loans;
and
(iii) convert all Base Loans to LIBOR Loans on any date.
Notice of any such elections or conversions shall specify the effective
date of such election or conversion and the Interest Period to be applicable to
the Revolving Loan as continued or converted. Each election and conversion
pursuant to this Section 2.11 shall be subject to the limitations on Fixed CD
Loans and LIBOR Loans set forth in the definition of "Interest Period" herein
and in Sections 2.01, 2.02 and 2.03 hereof. All such continuations or
conversions of Revolving Loans shall be effected pro rata based on the
Applicable Commitment Percentages of the Lenders.
2.12 FEES. (a) For the period beginning on the Closing Date and ending
on the Revolving Credit Termination Date (or such earlier date on which the
Revolving Credit Facility has terminated), the Company agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a commitment fee for such period at a rate of .20%
(twenty basis points) per annum of the sum of the daily
29
amount by which the Total Revolving Loan Commitment exceeds the Revolving Loan
Debit Balance. Such payments of fees provided for in this Section 2.12 shall be
due in arrears on the last day of each December, March, June and September
beginning December 31, 1994 to and on the Revolving Credit Termination Date (or
such earlier date on which the Revolving Credit Facility has terminated).
Notwithstanding the foregoing, so long as any Lender fails to make available any
portion of its Revolving Loan 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. For purposes of this Section 2.12
only, the amount of the Revolving Credit Debit Balance shall include the stated
amount of all outstanding Letters of Credit. The Swing Line outstandings shall
be deemed outstanding Loans for purposes of determining such fee.
(b) For the period beginning on the Closing Date and ending on the
Revolving Credit Termination Date (or such earlier date on which the Revolving
Credit Facility has terminated), the Company agrees to pay to the Agent, for the
pro rata benefit of the Lenders, other than NationsBank as provider of Swing
Line Loans, a fee for such period equal to one eighth of one percent (1/8%) per
annum of the average Swing Line Outstandings. Such fees shall be payable
quarterly at the times set forth in Section 2.12 (a) above.
(c) The Company agrees to pay to the Agent for the benefit of the Lenders
on or before the Closing Date all required commitment fees. The fees provided
for in subsection (a) and (b) of this Section 2.12 shall be calculated on the
basis of a year of 360 days and computed for actual days elapsed.
2.13 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
Revolving Loan hereunder nor shall the Revolving Loan 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 Company 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 (the "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 such deficiency advance, together with interest
thereon, from the most recent date or dates interest was paid to the Agent by
the Company 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 Note of the Agent
in full payment of such deficiency advance and the Company shall be deemed to
have borrowed the amount of such
30
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 Company
thereon.
2.14 ADJUSTMENTS BY AGENT. Notwithstanding the construction of "pro rata"
to mean based on the Applicable Percentage Commitments and any provisions
contained herein for the advancement of funds or distribution of payments on a
pro rata basis, the Agent may, in its discretion, but shall not be obligated to,
adjust downward or upward (but not in excess of any applicable Revolving Loan
Commitment) the principal amount of any Revolving Loan to be made by any Lender
to the nearest amount which is evenly divisible by $100, and make appropriate
related adjustment in the distribution of payments of principal and interest on
the Revolving Loans.
2.15 USE OF PROCEEDS. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Company to repay in
full amounts outstanding under the Prior Notes, to provide working capital needs
of the Company and to fund general corporate needs including capital
expenditures and acquisitions.
2.16 HIGHLY LEVERAGED TRANSACTION. If at any time after the date hereof,
any Lender is required, pursuant to any law, regulation, interpretation, ruling,
decree, judgment, guideline, directive or recommendation (whether or nor having
the force of law but as to which the Lender would adhere in its reasonable
business judgment) by any regulatory body, central bank or any administrative or
governmental authority charged or claiming to be charged with regulation or
administration thereof, to classify the transactions contemplated hereunder as a
highly leveraged transaction or similar classification (an "HLT"), then in each
such event the Company and the Agent shall commence as soon as practicable, and
in any event within five (5) days after notice by the Agent to the Company,
negotiations in good faith on the extent to which fees or interest rates shall
be increased to reflect the then current market requirements for the transaction
contemplated herein that are classified as HLTs. In the event the Company and
the Agent are unable to agree as to the amount of such fees or interest rates,
then the Agent shall have the right to terminate, on thirty (30) days notice,
the Revolving Credit Facility. At the expiration of such thirty (30) day period
the Company shall pay in full all Obligations.
2.17 SWING LINE. 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 Company 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
Company is not in compliance with all the conditions to the
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making of Revolving Loans set forth in this Agreement, (ii) if after giving
effect to such Swing Line Loan, the Swing Line Outstandings exceed
$10,000,000, or (iii) if after giving effect to such Swing Line Loan, the sum of
the Swing Line Outstandings, Revolving Loan Debit Balance and Outstanding Letter
of Credit Obligations exceeds the Total Revolving Loan Commitment. Loans made
pursuant to this Section 2.17 shall be limited to Floating CD Loans. The
Company may borrow, repay and reborrow under this Section 2.17. Unless notified
to the contrary by NationsBank, borrowings under the Swing Line may be made in
amounts which are integral multiples of $50,000 upon telephonic request by an
Authorized Representative of the Company made to NationsBank not later than
12:30 a.m., Miami, Florida time, on the Business Day of the requested borrowing.
Each such Borrowing Notice, which shall be effective upon receipt by
NationsBank, shall specify the amount of the borrowing, and the date of
borrowing. An Authorized Representative shall provide NationsBank written
confirmation of each such telephonic notice on the same day by telefacsimile
transmission in the form attached hereto as EXHIBIT D-2, with appropriate
insertions but failure to provide such confirmation shall not affect the
validity of such telephonic notice. Unless notified to the contrary by
NationsBank, each repayment of a Swing Line Loan shall be in an amount which is
an integral multiple of $50,000. If the Company instructs NationsBank to debit
any demand deposit account of the Company in the amount of any payment with
respect to a Swing Line Loan, or NationsBank otherwise receives repayment, after
12:30 p.m., Miami, Florida time, on a Business Day, such payment shall be deemed
received on the next Business Day.
Swing Line Loans shall bear interest at the Floating CD Rate, and the
interest payable on Swing Line Loans is solely for the account of NationsBank.
The Swing Line Outstandings shall be evidenced by the Note delivered to
NationsBank pursuant to Section 2.08 hereof.
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 Lender's 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 a Base Loan until the Company
converts such Base Loan in accordance with the terms of Section 2.11 hereof.
The obligation of each 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.
32
The Company at its option may request a Revolving Loan pursuant to Section
2.01 in an amount sufficient to repay the Swing Line Loan on any date and the
Agent shall provide the proceeds of such Revolving Loan 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 Revolving Loan in
immediately available funds in the manner directed by the Company pursuant to
Section 2.04(b) hereof. 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 Revolving Loans in the amount of such Advances. The
Swing Line shall continue in effect until the earlier of (i) occurrence of a
Default, or (ii) the Revolving Credit Termination Date.
2.18 EXTENSION OF REVOLVING CREDIT TERMINATION DATE. At the request of the
Company the Lenders may, in their sole discretion, elect to extend the Revolving
Credit Termination Date then in effect for two successive periods of one year
each. The Borrower shall notify the Lenders of its request for each such
extension by delivering to the Agent and the Lenders notice of such request
signed by an Authorized Officer not more than sixty (60) days nor less than
thirty (30) days prior to the first (as to the first such extension period) or
second (as to the second such extension period and provided that the Lenders
shall theretofore have previously granted a one year extension) anniversary of
the Closing Date. If the Lenders shall elect to so extend, the Agent shall
notify the Borrower in writing within ninety (90) days of its receipt of such
request for extension of the decision of the Lenders of whether to extend the
Revolving Credit Termination Date. Failure by the Agent to give such notice
shall constitute refusal by the Lenders to extend the Revolving Credit
Termination Date.
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ARTICLE III
LETTERS OF CREDIT
3.01 LETTERS OF CREDIT. Each of NationsBank and BofA agrees, subject to
the terms and conditions of this Agreement, upon request of the Company to issue
from time to time for the account of the Company or Titania Letters of Credit;
provided, that (i) the undrawn face amount of all Letters of Credit outstanding
hereunder shall not exceed the Total Letter of Credit Commitment and (ii) to the
extent required by the Letter of Credit Issuer such request shall be accompanied
by an application for letter of credit in form and content acceptable to the
Letter of Credit Issuer. No Letter of Credit shall be issued by either Letter
of Credit Issuer with an expiry date occurring subsequent to the Revolving
Credit Termination Date. Neither Letter of Credit Issuer shall issue any Letter
of Credit if the aggregate amount which may be drawn under all outstanding
Letters of Credit when added to the face amount of any requested Letter of
Credit, Reimbursement Obligations, the Swing Line Outstandings and the Revolving
Loan Debit Balance exceeds the Total Revolving Loan Commitment, without regard
to any increase or decrease pursuant to Section 2.10(b).
3.02 REIMBURSEMENT.
(a) The Company hereby unconditionally agrees to pay to each Letter of
Credit Issuer on demand at its Lending Office (i) all amounts required to pay
all drafts drawn or purporting to be drawn under the Letters of Credit issued by
it and (ii) the face amount of each draft accepted by the Letter of Credit
Issuer on the maturity date of such draft, or in the event of a Default or Event
of Default, and any and all expenses of every kind incurred by the Letter of
Credit Issuer in connection with the Letters of Credit and in any event and
without demand to place in possession of the Letter of Credit Issuer (which
shall include Advances under the Revolving Credit Facility if permitted by
Section 2.04(c) hereof) sufficient funds to pay all debts and liabilities
arising under any Letter of Credit. The Company's obligations to pay each
Letter of Credit Issuer under this Section 3.02, and the Letter of Credit
Issuer's right to receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever. Each Letter of Credit
Issuer may charge any account, including the Company's Account, the Company may
have with it for any and all amounts such Letter of Credit Issuer pays under a
Letter of Credit, plus commissions, charges and expenses as from time to time
agreed to by the Letter of Credit Issuer and the Company; provided that to the
extent permitted by Section 2.04(c), amounts shall be paid pursuant to Advances
under the Revolving Credit Facility. The Company agrees that either Letter of
Credit Issuer may, in its sole discretion, accept or pay, as complying with the
terms of any Letter of Credit issued by it, any drafts or other documents
otherwise in order which may be signed or issued by an administrator, executor,
trustee in bankruptcy, debtor in
34
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. The
Company agrees to pay the Letter of Credit Issuer interest on any amounts not
paid when due hereunder at the Base Rate plus two percent (2%), or such lower
rate as may be required by law.
(b) In accordance with the provisions of Section 2.04(c) hereof, the
Letter of Credit Issuer shall notify the Agent (and shall also notify the
Company) of any drawing under any Letter of Credit issued for account of the
Company or the Company and Titania as promptly as practicable following the
receipt by the Letter of Credit Issuer of such drawing. In addition, each
Letter of Credit Issuer shall notify the Agent of (i) any proposed issuance of a
Letter of Credit, including the proposed stated amount thereof, (ii) any
reduction or increase in the stated amount of any previously issued Letter of
Credit, and (iii) any surrender, cancellation or expiration of any Letter of
Credit.
(c) Each Lender (other than the Letter of Credit Issuer) shall
automatically acquire on the date of issuance thereof, or with respect to
Existing LCs on the Closing Date, a Participation in the Letter of Credit
Issuer's liability 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 Company is obligated to pay the Letter of Credit Issuer under
Section 3.02(a), each Lender (other than the Letter of Credit Issuer) thereby
shall absolutely, unconditionally and irrevocably assume, and shall be
unconditionally obligated to pay to the Letter of Credit Issuer as hereinafter
described, its Applicable Commitment Percentage of the Letter of Credit Issuer's
liability under such Letter of Credit. Prior to the Revolving Credit
Termination Date, each Lender (including the Letter of Credit Issuer in its
capacity as a Lender) shall, subject to the terms and conditions of Article II,
make a Base Loan to the Company by paying to the Agent for the account of the
Letter of Credit Issuer 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, all as described and pursuant to Section
2.04(c). With respect to drawings under any of the Letters of Credit, each
Lender, upon receipt from the Agent of notice of a drawing in the manner
described in Section 2.04(c), shall promptly pay to the Agent for the account of
the Letter of Credit Issuer, prior to the applicable time set forth in Section
2.04(c), its Applicable Commitment Percentage of such drawing. Simultaneously
with the making of each such payment by a Lender to the Letter of Credit Issuer,
such Lender shall, automatically and without any further action on the part of
the Letter of Credit Issuer or such Lender, acquire a Participation in an amount
equal to such payment (excluding the portion thereof constituting interest) in
the related Reimbursement Obligation of the Company. The Reimbursement
Obligations of the Company shall be immediately due and payable
35
whether by Advances made in accordance with Section 2.04(c) or otherwise. Each
Lender's obligation to make payment to the Agent for the account of the Letter
of Credit Issuer pursuant to this Section 3.02(c), and the Letter of Credit
Issuer's right 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
Letter of Credit Issuer in full upon such request as required by this Section
3.02(c), such Lender shall, on demand, pay to the Agent for the account of the
Letter of Credit Issuer interest on the unpaid amount for each day during the
period commencing on the date of notice given to such Lender pursuant to Section
2.04(c) until such Lender pays such amount to the Agent for the account of the
Letter of Credit Issuer in full at the interest rate per annum for overnight
borrowing by the Letter of Credit Issuer from the Federal Reserve Bank.
(d) Promptly following the end of each calendar month, each Letter of
Credit Issuer shall deliver to the Agent, and the Agent shall deliver to each
Lender, a notice describing the aggregate undrawn amount of all Letters of
Credit outstanding at the end of such month. Upon the request of any Lender
from time to time, the Letter of Credit Issuer 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 Letter of Credit then outstanding.
(e) The issuance by the Letter of Credit Issuers of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 5.01 hereof,
be subject to the conditions that such Letter of Credit be in such form, contain
such terms and support such transactions or obligations as shall be reasonably
satisfactory to the Letter of Credit Issuer consistent with the Letter of Credit
Issuer's then current practices and procedures with respect to similar letters
of credit. All Letters of Credit (other than Existing LCs) 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. The Company shall have
executed and delivered such other instruments and agreements relating to such
Letter of Credit as the Letter of Credit Issuer shall have reasonably requested
consistent with such practices and procedures.
(f) Without duplication of Section 9.07 hereof, the Company hereby
indemnifies and holds harmless the Letter of Credit Issuers, each other Lender
and the Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which the Letter of Credit Issuer, such other
Lender or the Agent may incur (or which may be claimed against the Letter of
Credit Issuer, 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
36
to pay under any Letter of Credit; provided that the Company shall not be
required to indemnify the Letter of Credit Issuer, any other Lender or the Agent
for any 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, (ii) caused by the Letter of Credit Issuer's
failure to pay under any Letter of Credit after the presentation to it of a
request 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, or (iii) paid or payable by any Lender under Sections 2.14 or 9.10
hereof.
(g) Without limiting the Company's rights as set forth in Section 3.02(f)
above, the obligation of the Company to reimburse the Letter of Credit Issuers
immediately for drawings made under Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and such Letters of Credit, under all
circumstances whatsoever, including, without limitation, 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 Documents");
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related Documents;
(iii) the existence of any claim, setoff, defense or other rights
which the Company 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), Agent,
Lenders or any other person or entity, whether in connection with the
Loan Documents, the Related Documents or any unrelated transaction;
(iv) any breach of contract or other dispute between the Company
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), Agent, Lenders or any other person or entity;
(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) payment by the Letter of Credit Issuer under the Letter of
Credit against presentation of a sight
37
draft or certificate which does not comply with the terms of the
Letter of Credit;
(vii) any delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by Agent, with or
without notice to or approval by the Company in respect of any of the
Company's indebtedness under this Agreement; or
(viii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
3.03 LETTER OF CREDIT FEE. For the period beginning on the Closing Date
and ending on the Revolving Credit Termination Date, the Company agrees to pay
to the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee equal to the Applicable Interest Addition for
LIBOR Loans from time to time in effect times the stated amount of outstanding
Letters of Credit; PROVIDED, however, if the Company shall elect to secure any
Letter of Credit by depositing with the applicable Letter of Credit Issuer cash
or cash equivalents acceptable to the Agent over which the Agent shall have sole
control and a perfected security interest for the benefit of the Lenders, then
the fee with respect to such Letter of Credit shall be .40%. Such fees provided
in this Section 3.03 shall be paid quarterly in arrears. In the event that the
risk based capital required to be maintained by the Letter of Credit Issuer for
Letters of Credit securing performance by the Company or Titania shall be
reduced below that required for Letters of Credit providing credit support, the
Company, the Agent, the Letter of Credit Issuers and the Lenders may agree in
writing without further amendment to this Agreement to an adjustment in the
amount of the letter of credit fee payable with respect to such Letters of
Credit securing performance.
3.04 ADMINISTRATIVE FEES. The Company shall pay to each Letter of Credit
Issuer a fronting fee of .05% (5 basis points) per annum of the stated amount of
all Letters of Credit issued by such Letter of Credit Issuer, such fee to be
paid quarterly in arrears. The fronting fee shall be calculated on the basis of
a year of 360 days and computed for actual days elapsed. The Company shall also
pay to each Letter of Credit Issuer administrative and other fees, if any, in
connection with the Letters of Credit in such amounts and at such times as the
Letter of Credit Issuers and the Company shall agree from time to time.
38
ARTICLE IV
YIELD PROTECTION AND ILLEGALITY
4.01 ADDITIONAL COSTS. (a) The Company shall promptly pay to the Agent
for the account of a Lender from time to time, such amounts as such Lender may
determine to be necessary to compensate it for any costs incurred by such Lender
which it determines are attributable to its making or maintaining any Loan or
its obligation to make any Loans, or either Letter of Credit Issuer's issuance
or maintenance of or any other Lender's Participation in any Letter of Credit
issued hereunder or any reduction in any amount receivable by such Lender under
this Agreement, the Notes, or the Letters of Credit in respect of any of such
Loans or such obligation or the Letters of Credit, including reductions in the
rate of return on a Lender's capital (such increases in costs and reductions in
amounts receivable and returns being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or the Notes in respect
of any of such Loans or Letters of Credit (other than taxes imposed on the
income of such Lender by any jurisdiction in which the Principal Office or the
applicable Lending Office of such Lender is located); or (ii) imposes or
modifies any reserve, special deposit, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (other than any such reserve, deposit or requirement
reflected in the Base Rate, the CD Rate or the LIBOR Rate, in each case computed
in accordance with the respective definitions of such terms set forth in Section
1.01 hereof); or (iii) has or would have the effect of reducing the rate of
return on capital of any such Lender to a level below that which the Lender
could have achieved but for such Regulatory Change (taking into consideration
such Lender's policies with respect to capital adequacy); or (iv) imposes any
other condition affecting this Agreement, the Notes or the issuance or
maintenance of, or any Lender's Participation in, the Letters of Credit (or any
of such extensions of credit or liabilities). Each Lender will notify the
Authorized Officer of any event occurring after the Closing Date which would
entitle it to compensation pursuant to this Section 4.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation.
(b) Without limiting the effect of the foregoing provisions of this
Section 4.01, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Lender which includes deposits by reference to which the interest rate on CD
Loans or LIBOR Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of any Lender which includes CD Loans or
LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or
39
assets which it may hold, then, if the Lender so elects by notice to the other
Lenders, the obligation of such Lender to make, and to convert Base Loans of
any other type into, CD Loans or LIBOR Loans, as the case may be, hereunder
shall be suspended until the date such Regulatory Change ceases to be in effect
and the Company shall, on the last day(s) of the then current Interest Period(s)
for outstanding CD Loans or LIBOR Loans, as the case may be, convert such CD
Loans or LIBOR Loans into Base Loans or CD Loans or LIBOR Loans, if available
hereunder, in accordance with Section 2.11 hereof.
(c) Determinations by any Lender for purposes of this Section 4.01 of the
effect of any Regulatory Change on its costs of making or maintaining, or being
committed to make Loans or as to NationsBank or BofA as issuer of any Letter of
Credit, the issuance or maintenance of, or any other Lender's Participation in,
any Letter of Credit issued hereunder or on amounts receivable by it in respect
of Loans or Letters of Credit, and of the additional amounts required to
compensate the Lender in respect of any Additional Costs, shall be conclusive
absent manifest error, provided that such determinations are made on a
reasonable basis. The Lender requesting such compensation shall furnish to the
Authorized Officer an explanation of the Regulatory Change and calculations, in
reasonable detail, setting forth such Lender's determination of any such
Additional Costs.
4.02 SUSPENSION OF LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any CD Loan or LIBOR Loan for any Interest Period therefor, or, as to Swing Line
Loans only, any Floating CD Loan, the Agent or in the case of Swing Line Loans,
NationsBank, determines (which determination made on a reasonable basis shall be
conclusive absent manifest error) that:
(a) quotations of interest rates for the relevant deposits referred
to in the definition of "CD Rate" or "LIBOR Rate" in Section 1.01 hereof
are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for such CD
Loan or LIBOR Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the definition of
"Applicable Base Rate" in Section 1.01 hereof upon the basis of which the
CD Rate or LIBOR Rate for such Interest Period is to be determined do not
adequately reflect the cost to the Lenders of making or maintaining such CD
Loan or LIBOR Loan for such Interest Period;
then the Agent, or in the case of Swing Line Loans, NationsBank, shall give the
Company prompt notice thereof, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make CD Loans or LIBOR Loans, as the
case may be, or to convert Base Loans into CD Loans or LIBOR Loans, as the case
may
40
be, and the Company shall, on the last day(s) of the then current Interest
Period(s) for outstanding CD Loans or LIBOR Loans, as applicable, convert such
CD Loans or LIBOR Loans, into Base Loans or CD Loans or LIBOR Loans, if
available hereunder, in accordance with Section 2.11 hereof. The Agent, or in
the case of Swing Line Loans, NationsBank, shall give the Company notice
describing in reasonable detail any event or condition described in this Section
4.02 promptly following the Agent's or NationsBank's, as the case may be,
determination that the availability of CD Loans or LIBOR Loans, as the case may
be, is, or is to be, suspended as a result thereof.
4.03 ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender to honor its obligation to
make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify
the Company thereof (with a copy to the Agent) and such Lender's obligation to
make or continue LIBOR Loans, or convert Base Loans or CD Loans into LIBOR
Loans, shall be suspended until such time as such Lender may again make and
maintain LIBOR Loans, and such Lender's outstanding LIBOR Loans shall be
converted into Base Loans or CD Loans in accordance with Section 2.11 hereof.
4.04 COMPENSATION. The Company shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the reasonable determination of Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Fixed CD Loan or LIBOR
Loan on a date other than the last day of the Interest Period for such
Fixed CD Loan or LIBOR Loan, including without limitation any conversion
required pursuant to Section 4.03, the amount of such compensation to be
determined by each Lender; or
(b) any failure by the Company to borrow a Fixed CD Loan or LIBOR
Loan on the date for such borrowing specified in the relevant Borrowing
Notice under Section 2.04 hereof, such compensation to include, without
limitation, an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount so paid, prepaid
or converted or not borrowed for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan which would have commenced on the
date scheduled for such borrowing) at the applicable rate of interest for
such Fixed CD Loan or LIBOR Loan provided for herein over (ii) the
Applicable Base Rate (as reasonably determined by the Agent) for Dollar
deposits of amounts comparable to such principal amount and maturities
comparable to such period. A determination of a Lender as to the amounts
payable pursuant
41
to this Section 4.04 shall be conclusive, provided that such determinations
are made on a reasonable basis. The Lender requesting compensation under
this Section 4.04 shall furnish to the Company calculations in reasonable
detail setting forth such Lender's determination of the amount of such
compensation.
42
ARTICLE V
CONDITIONS TO MAKING LOANS AND ISSUING LETTERS OF CREDIT
5.01 CONDITIONS OF INITIAL ADVANCE AND ISSUANCE OF LETTERS OF CREDIT. The
obligation of the Lenders to make the initial Advance and of the Letter of
Credit Issuers to issue the Letters of Credit is subject to the conditions
precedent that the Agent shall have received, prior to the Initial Advance or
the issuance of Letters of Credit (other than Existing LCs) in form and
substance satisfactory to the Agent the following:
(a) executed originals of each of the Loan Documents, together with
all schedules and exhibits thereto in form and substance satisfactory to
the Agent and the Lenders;
(b) favorable written opinions of counsel to the Company dated the
Closing Date, addressed to the Agent and the Lenders and satisfactory to
Smith Helms Mulliss & Moore, special counsel to the Agent, substantially in
the form of EXHIBIT G-1 attached hereto;
(c) resolutions of the board of directors (or of the appropriate
committee thereof) of the Company certified by its secretary or assistant
secretary as of the Closing Date, appointing the initial Authorized
Officer(s) and approving and adopting the Loan Documents to be executed by
the Company, and authorizing the execution and delivery thereof; specimen
signatures of officers of the Company executing the Loan Documents,
certified by the Secretary or Assistant Secretary of the Company;
(d) the charter documents of the Company certified as of a recent
date by the Secretary of State of its state of incorporation;
(e) the by-laws of the Company certified as of the Closing Date as
true and correct by the respective secretary or assistant secretary of the
Company;
(f) certificates issued as of a recent date by the Secretary of State
of the state of the incorporation of the Company as to the corporate good
standing of the Company therein;
(g) appropriate certificates of qualification to do business and of
corporate good standing issued as of a recent date by the Secretary of
State of each jurisdiction in which the failure to be qualified to do
business could materially adversely affect the business, operations or
conditions, financial or otherwise, of Company;
43
(h) favorable written opinions of counsel to the Guarantors dated the
Closing Date, addressed to the Agent and the Lenders and satisfactory to
Smith Helms Mulliss & Moore, special counsel to the Agent, substantially in
the form of EXHIBIT G-2 attached hereto;
(i) resolutions of the board of directors (or of the appropriate
committee thereof) of each Guarantor certified by its secretary or
assistant secretary as of the Closing Date, approving and adopting the
Loan Documents to be executed by such Guarantor, and authorizing the
execution and delivery thereof; specimen signatures of officers of the
Guarantor executing the Loan Documents, certified by the Secretary or
Assistant Secretary of such Guarantor;
(j) the charter documents of each Guarantor certified as of a recent
date by the Secretary of State of its state of formation;
(k) the by-laws of each Guarantor certified as of the Closing Date as
true and correct by the respective secretary or assistant secretary of such
Guarantor;
(l) certificates issued as of a recent date by the Secretary of State
of the state of the incorporation of each Guarantor as to the corporate
good standing of the Guarantor therein;
(m) appropriate certificates of qualification to do business and of
corporate good standing issued as of a recent date by the Secretary of
State of each jurisdiction in which the failure to be qualified to do
business could materially adversely affect the business, operations or
conditions, financial or otherwise, of each Guarantor;
(n) closing statement;
(o) notice of appointment of the Authorized Officer(s);
(p) evidence of insurance complying with the requirements of Section
7.02 of this Agreement;
(q) all fees payable by the Company on the Closing Date to the Agent
and the Lenders;
(r) evidence satisfactory to the Agent that the Prior Notes and the
Atrium Debt shall have been paid in full; and
(s) 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.
44
5.02 CONDITIONS OF LOANS. The obligations of the Lenders to make any
Advance, and the Letter of Credit Issuers to issue Letters of Credit, hereunder
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 notice of such borrowing or request if required by Section
2.04 or 2.17 hereof;
(b) the representations and warranties of the Company set forth in
Article VI hereof and in each of the other Loan Documents shall be true and
correct on and as of the date of such Advance or Swing Line Loan or
issuance of such Letters of Credit, as the case may be, 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 6.03 shall be deemed to be
those financial statements most recently delivered to the Agent and the
Lenders pursuant to Section 7.20 hereof;
(c) in the case of the issuance of a Letter of Credit, the Company
shall have, upon request of the applicable Letter of Credit Issuer,
executed and delivered to the Letter of Credit Issuer an application and
agreement for Letter of Credit in form and content acceptable to such
Letter of Credit Issuer with such other instruments and documents as it
shall request;
(d) at the time of such Advance, Swing Line Loan or issuance of each
Letter of Credit, no Default or Event of Default specified in Article VIII
hereof, shall have occurred and be continuing;
(e) immediately after giving effect to a Loan or Letter of Credit (i)
the aggregate principal balance of all outstanding Loans and Participations
for each Lender shall not exceed such Lender's Applicable Commitment
Percentage of the Total Revolving Loan Commitment, and (ii) the aggregate
principal balance of the sum of all outstanding Loans, Swing Line
Outstandings and Outstanding Letter of Credit Obligations shall not exceed
the Total Revolving Loan Commitment; and
(f) immediately after giving effect to a Swing Line Loan the
aggregate Swing Line Outstandings shall not exceed $10,000,000.
45
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders with respect to itself
and to its Subsidiaries, to the extent indicated, that:
6.01 SUBSIDIARIES. SCHEDULE 6.01 attached hereto states the name of each
of the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its Subsidiaries.
Those Subsidiaries listed in Section 1 of said SCHEDULE 6.01 constitute
Subsidiaries. The Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and non-assessable.
6.02 CORPORATE ORGANIZATION AND AUTHORITY. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licensees and permits to own and operate its Properties and to carry on its
business as now conducted and as presently proposed to be conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the business
transacted by it or the nature of the property owned or leased by it makes
such licensing or qualification necessary.
6.03 FINANCIAL STATEMENTS. (a) The consolidated balance sheets of the
Company and its consolidated Subsidiaries as of the Sunday closest to December
31 in each of the years 1992 to 1993, both inclusive, and the statements of
income and retained earnings and changes in cash flows for the fiscal years
ended on said dates accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise without
qualification except as therein noted, by Arthur Andersen & Co., have been
prepared in accordance with GAAP consistently applied except as therein noted,
are correct and complete and present fairly the financial position of the
Company and its consolidated Subsidiaries as of such dates and the results of
their operations and changes in their cash flows for such periods. The
unaudited consolidated balance sheets of the Company and its consolidated
Subsidiaries as of October 2, 1994, and the unaudited statements of income and
retained earnings and changes in financial position for the nine-month period
ended on said date prepared by
46
the Company have been prepared in accordance with generally accepted accounting
principles consistently applied, are correct and complete and present fairly the
financial position of the Company and its consolidated Subsidiaries as of said
date and the results of their operations and changes in their cash flows for
such period.
(b) Since October 2, 1994, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries as
shown on the consolidated balance sheet as of such date except changes in the
ordinary course of business, none of which individually or in the aggregate has
been materially adverse.
6.04 INDEBTEDNESS. SCHEDULE 6.04 attached hereto correctly describes
all Current Debt, Funded Debt and Capitalized Leases of the Company and its
Subsidiaries outstanding on October 2, 1994.
6.05 FULL DISCLOSURE. The financial statements referred to in paragraph
6.03 hereof do not, nor does this Agreement or any other written statement
furnished by the Company to you in connection with the issuance of the Notes,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading.
There is no fact peculiar to the Company or its Subsidiaries which the Company
has not disclosed to you in writing which materially affects adversely nor, so
far as the Company can now foresee, will materially affect adversely the
Properties, business, prospects, profits or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole.
6.06 PENDING LITIGATION. Except as set forth in SCHEDULE 6.06, there are
no proceedings pending or, to the knowledge of the Company threatened, against
or affecting the Company or any Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which reasonably may
result in a judgment in excess of $1,000,000 which judgment is either (i) not
covered by insurance or insurance is contested, or (ii) not covered by reserves
set aside by the Company in an amount equal to such judgment.
6.07 TITLE TO PROPERTIES. The Company and each Subsidiary has good and
marketable title in fee simple (or its equivalent under applicable law) to all
material parcels of real property and has good title to all the other material
items of Property it purports to own, including that reflected in the most
recent balance sheet referred to in Section 6.03 hereof except as sold or
otherwise disposed of in the ordinary course of business and except for Liens
permitted by this Agreement.
6.08 PATENTS AND TRADEMARKS. The Company and each Subsidiary owns or
possesses all the patents, trademarks, trade names, service marks, copyright,
licenses and rights with respect
47
to the foregoing necessary for the present and planned future conduct of its
business, without any known conflict with the rights of others.
6.09 ISSUANCE IS LEGAL AND AUTHORIZED. The issuance of the Notes and
compliance by the Company and the Guarantors with all of the provisions of this
Agreement, the Notes, the Guaranty Agreements and the Letter of Credit Account
Agreement to which it is signatory--
(a) are within the corporate powers of the Company or Guarantor a
party thereto;
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under the Articles of Incorporation or By-laws of the
Company or any Guarantor or any indenture or other agreement or instrument
to which the Company or any Guarantor is a party or by which it may be
bound or result in the imposition of any Liens or encumbrances on any
Property of the Company or any Guarantor; and
(c) have been duly authorized by proper corporate action on the part
of the Company and each Guarantor (no action by the stockholders of the
Company or any Guarantor being required by law, by the Articles of
Incorporation or By-laws of the Company or any Guarantor or otherwise),
executed and delivered by the Company and each Guarantor signatory thereto,
and this Agreement, the Letter of Credit Account Agreement, the Notes and
the Guaranty Agreements constitute the legal, valid and binding
obligations, contracts and agreements of the Company and each Guarantor
signatory thereto enforceable in accordance with their respective terms.
6.10 NO DEFAULTS. No Default or Event of Default has occurred and is
continuing. Neither the Company nor any Subsidiary is in default in the payment
of principal or interest on any Funded Debt or Current Debt and is not in
default under any instrument or instruments or agreements under and subject to
which any Funded Debt or Current Debt has been issued and no event has occurred
and is continuing under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would constitute an
event of default thereunder.
6.11 GOVERNMENTAL CONSENT. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal, or local, is
necessary in connection with the execution and delivery by the Company or any
Guarantor of the Agreement, the Letter of Credit Account Agreement, the Notes or
any Guaranty Agreement, or compliance by the Company and the Guarantors with any
48
of the provisions of this Agreement, the Letter of Credit Account Agreement, the
Notes or the Guaranty Agreements.
6.12 TAXES. All tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or franchises,
which are shown to be due and payable in such returns have been paid. For all
taxable years ending on or before January 1, 1992, the Federal income tax
liability of the Company and its Subsidiaries has been satisfied and either the
period of limitations on assessment of additional Federal Income tax has expired
or the Company and its Subsidiaries have entered into an agreement with the
Internal Revenue Service closing conclusively the total tax liability for the
taxable year. The Company does not know of any proposed additional tax
assessment against it for which adequate provision has not been made on its
accounts, and no material controversy in respect of additional Federal or state
income taxes due since said date is pending or to the knowledge of the Company
threatened. The provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years, and for its current fiscal period.
6.13 USE OF PROCEEDS. The net proceeds of the Loans will be used to
repay in full the Prior Notes and for general corporate purposes. None of the
transactions contemplated in this Agreement (including, without limitation
thereof, the use of proceeds from the Loans), will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations G, T, U, and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns or
intends to carry or purchase any "margin stock" within the meaning of said
Regulation U. None of the proceeds from the Loans will be used to purchase, or
refinance any borrowing, the proceeds of which were used to purchase any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.
6.14 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. The consummation
of the transactions provided for in this Agreement and compliance by the Company
and the Guarantors with the provisions hereof, the Notes issued hereunder and
the Guaranty Agreements will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Internal Revenue Code. Each Plan
complies in all material respects with all applicable statutes and governmental
rules and regulations, and (a) no Reportable Event has occurred and is
continuing with respect to any Plan, (b) neither the Company nor any ERISA
Affiliate has withdrawn from any Plan or Multiemployer Plan or instituted steps
to do so, and (c) no steps have been instituted to terminate any Plan. No
condition exists or event or transaction has occurred in connection with any
Plan which could result in the incurrence by the Company or any ERISA Affiliate
of any material liability, fine or penalty. No Plan
49
maintained by the Company or any ERISA Affiliate, nor any trusts created
thereunder, have incurred any "accumulated funding deficiency" as defined in
Section 302 of ERISA nor does the present value of all benefits vested under all
Plans exceed, as of the last annual valuation date, the value of the assets of
the Plans allocable to such vested benefits by an amount greater than $1,000,000
in the aggregate. Neither the Company nor any ERISA Affiliate is a member of or
contributes to any multiple employer plan as defined in ERISA. Neither the
Company nor any ERISA Affiliate is a participant in or is obligated to make any
payment to a Multiemployer Plan. Neither the Company or any ERISA Affiliate has
any contingent liability with respect to any post- retirement "welfare benefit
plan" (as such term is defined in ERISA) except as has been disclosed to the
Purchasers.
6.15 COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary (a) is
in violation of any law, ordinance, franchise, governmental rule or regulation
to which it is subject; or (b) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the ownership of its
property or to the conduct of its business, which violation or failure to obtain
would materially adversely affect the business, prospects, profits, properties
or condition (financial or otherwise) of the Company and its Subsidiaries, taken
as a whole, or impair the ability of the Company or any Guarantor to perform its
obligations contained in this Agreement, the Letter of Credit Account Agreement,
the Notes or any Guaranty Agreement. Neither the Company nor any Subsidiary is
in default with respect to any order of any court or governmental authority or
arbitration board of tribunal.
6.16 COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither the Company nor any
Subsidiary is in violation of any applicable Federal, state, or local laws,
statutes, rules, regulations or ordinances relating to public health, safety or
the environment, including, without limitation, relating to releases,
discharges, emissions or disposals to air, water, land or ground water, to the
use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances which
violation could have a material adverse effect on the business, prospects,
profits, properties or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole. The Company does not know of any liability or
class of liability of the Company or any Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 ET SEQ.), or the Resource Conservation and Recovery Act of
1976, as amended (42 U.S.C. Section 6901 ET SEQ.).
50
ARTICLE VII
COMPANY COVENANTS
From and after the Closing Date and continuing until the Obligations have
been paid and satisfied in full and this Agreement has been terminated in
accordance with the terms hereof unless the Required Lenders shall otherwise
consent in writing:
7.01 CORPORATE EXISTENCE, ETC. The Company will preserve and keep in full
force and effect, and will cause each Subsidiary to preserve and keep in full
force and effect, its corporate existence and all licenses and permits necessary
to the proper conduct of its business, PROVIDED that the foregoing shall not
prevent any transaction permitted by section 7.15.
7.02 INSURANCE. The Company will maintain, and will cause each domestic
Subsidiary to maintain, insurance coverage by financially sound and reputable
insurers accorded a rating by A.M. Best Company, Inc. of A-XII or better at the
time of the issuance of any such policy and in such forms and amounts and
against such risks as are customary for corporations of established reputation
engaged in the same or a similar business and owning and operating similar
properties; PROVIDED, HOWEVER, that (i) if, during the term of any such
insurance policy, the rating accorded the insurer shall be less than A-XII, the
Company will, on the date of renewal of any such policy (or, if such change in
rating shall occur within 90 days prior to such renewal date, within 90 days of
the date of such change in rating), obtain such insurance policy from an insurer
accorded such rating and (ii) notwithstanding the requirements of this Section
7.02, the Company or any such Subsidiary may (a) maintain self-insurance
programs with respect to employee benefits such as medical and disability
coverage and casualty risks on its Property; PROVIDED that any such programs are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties and the Company or
the Subsidiary concerned shall maintain adequate and actuarially determined
reserves for losses in an amount and manner approved by nationally recognized
and reputable independent insurance consultants retained by the Company and (b)
maintain any insurance policy or program as in effect on the Closing Date with
Titania Insurance Co. of America, PROVIDED that such policies or programs are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties. The Company will
cause each Subsidiary which is not organized under the laws of the Unites States
or any state thereof to maintain in accordance with sound business practice,
insurance coverage with financially sound reputable insurers in such forms and
amounts and against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties. The Company will not permit Titania Insurance Co. of
America to enter
51
into insurance or reinsurance relationships with any Person other than the
Company or any Subsidiary, provided, that, notwithstanding the foregoing, the
Company may permit Titania to maintain such relationships at such levels and in
such amounts as are in effect on the Closing Date.
7.03 TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH LAWS. The
Company will promptly pay and discharge, and will cause each Subsidiary promptly
to pay and discharge, all lawful taxes, assessments and governmental charges or
levies imposed upon the Company or such Subsidiary, respectively, or upon or in
respect of all or any part of the Property or business of the Company or such
Subsidiary, respectively, all trade accounts payable in accordance with usual
and customary business terms, and all claims for work, labor or materials, which
if unpaid might become a Lien upon any Property of the Company or such
Subsidiary; PROVIDED the Company or such Subsidiary shall not be required to pay
any such tax, assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any Property of the Company or such Subsidiary or any material interference with
the use thereof by the Company or such Subsidiary, and (ii) the Company or such
Subsidiary shall set aside on its books, reserves deemed by it to be adequate
with respect thereto. The Company will promptly comply and will cause each
Subsidiary to comply with all laws, ordinances or governmental rules and
regulations to which it is subject including, without limitation, the
Occupational Safety and Health Act of 1970, the Employee Retirement Income
Security Act of 1974 and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely affect the
properties, business, prospects, profits or condition of the Company and its
Subsidiaries or would result in any Lien not permitted under Section 7.13.
7.04 MAINTENANCE, ETC. The Company will maintain, preserve and keep, and
will cause each Subsidiary to maintain, preserve and keep, its properties which
are used or useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order and from time to time will
make all necessary repairs, replacements, renewals and additions so that at all
times the efficiency thereof shall be maintained.
7.05 NATURE OF BUSINESS. Neither the Company nor any Subsidiary will
engage in any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by the Company and
its Subsidiaries would be substantially changed from the general nature of the
business engaged in by the Company and its Subsidiaries on the date of this
Agreement.
52
7.06 CONSOLIDATED NET WORTH. The Company will at all times keep and
maintain Consolidated Net Worth at an amount not less than the sum of (i)
$60,000,000 (or, if the Company shall establish a reserve in respect of the
anticipated sale of the Company's headquarters building located at 1500 San Remo
Avenue, Coral Gables, Florida, $60,000,000 minus the amount of such reserve, but
in no event shall resulting Consolidated Net Worth be less than $55,000,000)
plus, (ii) 50% of Consolidated Net Income (or if such Consolidated Net Income is
a deficit then no change) for the period from October 2, 1994 to and including
the date of determination, plus (iii) 75% of the net proceeds to the Company
from the sale of shares of the Company's capital stock.
7.07 LIMITATIONS ON TOTAL DEBT.
(a) The Company will at all times keep and maintain Consolidated
Funded Debt in an amount not to exceed 60% of Total Capitalization.
(b) The Company and its Subsidiaries (other than WCC) will not, at
any time, issue, incur, assume, be or become liable in respect of any
Indebtedness other than (i) Indebtedness arising under this Agreement, (ii)
the purchase of products, merchandise and services in the ordinary course
of business, (iii) Indebtedness outstanding on the Closing Date, (iv)
Indebtedness of a Guarantor to the Company or to another Guarantor, (v)
Indebtedness representing amounts received by the Company or any Subsidiary
in exchange for the transfer of interests in trade receivables under the
Asset Securitization Facility in excess of the amounts repaid to the
purchasers in respect of such purchase price from collections on such trade
receivables, which shall at no time exceed $50,000,000 in aggregate amount
outstanding, and (vi) Indebtedness in an aggregate amount for the Company
and all Subsidiaries (other than WCC) taken as a whole not greater than
$15,000,000.
(c) Any corporation which becomes a Subsidiary after the date hereof
shall for all purposes of this Section 7.07 be deemed to have created,
assumed or incurred at the time it becomes a Subsidiary all Indebtedness of
such corporation existing immediately after it becomes a Subsidiary.
7.08 FIXED CHARGE COVERAGE RATIO. The Company will at all times keep and
maintain the ratio of Net Income Available for Fixed Charges, determined as of
the last day of each fiscal quarter for the immediately preceding Four-Quarter
Period, to Fixed Charges for such Four-Quarter Period, at not less than
1.60:1.00.
7.09 TRADING ASSET RATIO. The Company will at all times keep and maintain
a ratio of (a) the sum of (1) unencumbered cash, net accounts receivable and net
inventory of the Company and its Subsidiaries (other than WCC) all as determined
in accordance with
53
GAAP, plus (2) provided that no Indebtedness is outstanding to finance or
refinance the Company's headquarters building located at 1500 San Remo Avenue,
Coral Gables, Florida, the net book value of such building, to (b) the sum of
(1) Consolidated Funded Debt, excluding the Funded Debt of WCC, (2) the stated
amount of outstanding unsecured Letters of Credit and (3) accounts payable of
the Company and its Subsidiaries (other than WCC) all determined as of the last
day of each fiscal quarter, of not less than 1.15 to 1.00.
7.10 LIMITATION ON LIENS. The Company will not, and will not permit any
Subsidiary to, create or incur, or suffer to be incurred or to exist, any Lien
on its or their Property, whether now owned or hereafter acquired, or upon any
income or profits therefrom, or transfer any property for the purpose of
subjecting the same to the payment of obligations in priority to the payment of
its or their general creditors, or acquire or agree to acquire, or permit any
Subsidiary to acquire, any property or assets upon conditional sales agreements
or other title retention, devices, except;
(a) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required by
Section 7.03;
(b) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review
shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or
appeal bonds or other liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money,
provided in each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on properties of
corporations engaged in similar activities and similarly situated and which
do not in any event materially impair their
54
use in the operation of the business of the Company and its Subsidiaries;
(e) Liens existing as of _______ __, 1994 and reflected in SCHEDULE
7.10 hereto, securing Funded Debt of the Company or any Subsidiary
outstanding on such date;
(f) [reserved];
(g) Liens securing Indebtedness of a Guarantor to the Company or to
another Guarantor;
(h) the interests in trade receivables of the purchasers thereof
created pursuant to the Asset Securitization Facility, to the extent the
same may constitute Liens; and
(i) Liens incurred after the Closing Date given to secure the payment
of the purchase price incurred in connection with the acquisition of
fixed assets useful and intended to be used in carrying on the business of
the Company or a Subsidiary, including Liens existing on such fixed assets
at the time of acquisition thereof or at the time of acquisition by the
Company or a Subsidiary of any business entity then owning such fixed
assets, whether or not such existing Liens were given to secure the payment
of the purchase price of the fixed assets to which they attach so long as
they were not incurred, extended or renewed in contemplation of such
acquisition, PROVIDED that (i) the Lien shall attach solely to the fixed
assets acquired or purchased, (ii) at the time of acquisition of such fixed
assets, the aggregate amount remaining unpaid on all Indebtedness secured
by Liens on such fixed assets whether or not assumed by the Company or a
Subsidiary shall not exceed an amount equal to 80% (or 100% in the case of
Capitalized Leases) of the lesser of the total purchase price or fair
market value at the time of acquisition of such fixed assets (as determined
in good faith by the Board of Directors of the Company), and (iii) all such
Indebtedness shall have been incurred within the applicable limitations
provided in Section 7.07.
7.11 RESTRICTED PAYMENTS: JOINT VENTURE INVESTMENTS.
(a) The Company will not except as hereinafter provided:
(i) Declare or pay any dividends, either in cash or
Property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of capital
stock of the Company);
(ii) Directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
capital
55
stock (other than (x) in exchange for or out of the net cash proceeds
to the Company from the substantially concurrent issue or sale of
other shares of capital stock of the Company or warrants, rights or
options to purchase or acquire any shares of its capital stock or (y)
purchases or acquisitions of shares of Voting Stock of the Company
which were issued pursuant to an employee stock plan, PROVIDED, that
the aggregated amount expended therefor does not exceed $250,000 in
any one fiscal year of the Company and PROVIDED FURTHER, that such
amounts expended shall not exceed that amount necessary in order to
maintain beneficial ownership or control, directly or indirectly, of
50.1% (by number of votes) of the Voting Stock of the Company by the
Wackenhut Family Group);
(iii) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(iv) Make any payment or distribution, either directly or
indirectly or through any Subsidiary, of principal of any Subordinated
Funded Debt prior to the date such payment shall be due; or
(v) Make any Restricted Investments other than any Joint Venture
Investments;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, Restricted
Investments and all such other distributions being herein collectively
called "RESTRICTED PAYMENTS"), if after giving effect thereto the aggregate
amount of Restricted Payments made during the period from and after
December 31, 1989 to and including the date of the making of the Restricted
Payment in question, would exceed the sum of (i) $5,000,000 plus (ii) 50%
of Consolidated Net Income for such period, computed on a cumulative basis
for said entire period (or if such Consolidated Net Income is a deficit
figure, then minus 100% of such deficit).
The Company will not declare any dividend which constitutes a
Restricted Payment payable more than 90 days after the date of declaration
thereof.
For the purposes of this Section 7.11(a) the amount of any Restricted
Payment declared, paid or distributed in Property shall be deemed to be the
greater of the book value or fair market value (as determined in good faith
by the Board of Directors of the Company) of such property at the time of
the making of the Restricted Payment in question.
(b) The Company will not make any Joint Venture Investment if after
giving effect thereto the aggregate value
56
of all Joint Venture Investments of the Company would exceed 10% of
Consolidated Net Worth of the Company as of the date of the making of such
Joint Venture Investment.
7.12 LIMITATION ON SALE AND LEASEBACKS.
The Company will not, and will not permit any Subsidiary to, enter into any
arrangement whereby the Company or any Subsidiary shall sell or transfer any
property currently owned by the Company or any Subsidiary to any Person other
than the Company or a Subsidiary and thereupon the Company or any Subsidiary
shall lease or intend to lease, as lessee, the same property, PROVIDED, that the
Company may sell and leaseback pursuant to a Capitalized Lease the Company's
headquarters building located at 1500 San Remo Avenue, Coral Gables, Florida and
the Immigration and Naturaliza- tion Service detention facility located in
Aurora, Colorado which was opened in February, 1987.
7.13 MERGERS, CONSOLIDATIONS AND SALES OF ASSETS.
(a) The Company will not, and will not permit any Subsidiary to, (i)
consolidate with or be a party to a merger with any other corporation or
(ii) sell, lease or otherwise dispose of all or any substantial part (as
defined in paragraph (d) of this Section 7.13) of the assets of the Company
and its Subsidiaries, PROVIDED, HOWEVER, that:
(1) any Subsidiary may merge or consolidate with or into the
Company or any Wholly-owned Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) The Company may consolidate or merge with any other
corporation if (i) either (x) the Company shall be the surviving or
continuing corporation or (y) the surviving corporation is organized
and existing under the laws of the United States of America or any
state thereof or the District of Columbia and such continuing or
surviving corporation expressly assumes in writing, in form and
substance satisfactory to the Required Lenders, all obligations of the
Company under this Agreement, (ii) at the time of such consolidation
or merger and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (iii) after giving
effect to such consolidation or merger the Company or such surviving
corporation, as the case may be, would be permitted to incur at least
$1.00 of additional Consolidated Indebtedness under the provisions of
Section 7.07(a);
57
(3) any Subsidiary may sell, lease or otherwise dispose of all
or any substantial part of its assets to the Company or any Wholly-
owned Subsidiary;
(4) the Company and its Subsidiaries may sell trade receivables
or fractional undivided interests therein pursuant to and in
accordance with the terms of the Asset Securitization Facility; and
(5) the Company may sell, lease or otherwise dispose of the
Company's headquarters building located at 1500 San Remo Avenue, Coral
Gables, Florida and the Immigration and Naturalization Service
detention facility located in Aurora, Colorado which was opened in
February, 1987.
(b) The Company will not permit any Subsidiary to issue or sell any
shares of stock of any class (including as "stock" for the purposes of this
Section 7.13, any warrants, rights or options to purchase or otherwise
acquire stock or other Securities exchangeable for or convertible into
stock) of such Subsidiary to any Person other than the Company or a Wholly-
owned Subsidiary, except for the purpose of qualifying directors, or except
in satisfaction of the validly pre-existing preemptive rights of minority
shareholders in connection with the simultaneous issuance of stock to the
Company and/or a Subsidiary whereby the Company and/or such Subsidiary
maintain their same proportionate interest in such Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Subsidiary (except (i) the minimal amount necessary
to qualify directors and (ii) shares of stock of WCC provided that, after
giving effect to any such sale of WCC stock, the Company shall own not less
than 69% of the stock of every class issued by WCC) or any Indebtedness of
any Subsidiary, and will not permit any Subsidiary to sell, transfer or
otherwise dispose of (except to the Company or a Wholly-owned Subsidiary)
any shares of stock or any Indebtedness of any other Subsidiary, unless:
(1) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of such
Subsidiary at the time owned by the Company and by every other
Subsidiary shall be sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Company shall have determined,
as evidenced by a resolution thereof, that the purposed sale, transfer
or disposition of said shares of stock and Indebtedness is in the best
interests of the Company;
58
(3) said shares of stock and Indebtedness are sold, transferred
or otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Subsidiary not being
simultaneously disposed of; and
(5) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the Company
and its Subsidiaries.
(d) As used in this Section 7.13, a sale, lease or other disposition
of assets shall be deemed to be a "substantial part" of the assets of the
Company and its Subsidiaries only if the book value of such assets, when
added to the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Subsidiaries (other than in the ordinary
course of business) during the period from and after the Closing Date to
and including the date of the sale, lease or disposition in question,
computed on a cumulative basis for said entire period, exceeds 10% of
Consolidated Net Assets, determined as of the end of the immediately
preceding fiscal quarter.
7.14 GUARANTIES. The Company will not, and will not permit any Subsidiary
to, become or be liable in respect of any Guaranty except the Guaranty
Agreements.
7.15 TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Subsidiary to, enter into or be a party to any transaction or
arrangement with any Affiliate (including, without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person other
than an Affiliate.
7.16 ERISA COMPLIANCE.
(a) The Company will not, and will not permit any Subsidiary to,
permit any Plans at any time maintained by the Company or any Subsidiary to
have any Unfunded Vested Pension Liabilities. As used herein "UNFUNDED
VESTED PENSION LIABILITY" shall mean an excess of the actuarial present
value of accumulated vested Plan benefits as at the end of the immediately
preceding Plan year of such Plans (or as of any more recent valuation date)
over the net assets allocated to such Plans which are available for
benefits, all as determined
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and disclosed in the most recent actuarial valuation report for such Plans.
(b) All assumptions and methods used to determine the actuarial
valuation of vested employee benefits under all Plans at any time
maintained by the Company or any Subsidiary and the present value of assets
of such Plans shall be reasonable in the good faith judgment of the Company
and shall comply with all requirements of law.
(c) The Company will not, and will not permit any Subsidiary to,
cause any Plan which it maintains or in which it participates at any time
to:
(1) engage in any "prohibited transaction" (as such term is
defined in ERISA);
(2) incur any "accumulated funding deficiency" (as such term is
defined in ERISA), whether or not waived; or
(3) terminate any such Plan in a manner which could result in
the imposition of a lien on any Property of the Company or any of its
Subsidiaries pursuant to ERISA.
(d) The Company will not, and will not permit any Subsidiary to,
withdraw from any Multiemployer Plan if such withdrawal shall subject the
Company or any Subsidiary to withdrawal liability (as described under Part
1 of Subtitle E of Title IV of ERISA).
7.17 REPORTS AND RIGHTS OF INSPECTION. The Company will keep, and will
cause each Subsidiary to keep, proper books of record and account in which full
and correct entries will be made of all dealings or transactions of or in
relation to the business and affairs of the Company or such Subsidiary, in
accordance with GAAP consistently applied (except for changes disclosed in the
financial statements furnished to the Lenders and the Agent pursuant to this
Section 7.17 and concurred in by the independent public accountants referred to
in Section 7.17(b) hereof), and will furnish to the Agent and each Lender (in
duplicate if so specified below or otherwise requested):
(a) QUARTERLY STATEMENTS. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, copies of:
(1) (i) consolidated balance sheets of the Company and its
Subsidiaries and (ii) consolidating balance sheet of WCC as of the
close of such quarterly fiscal period, setting forth in comparative
form as to the consolidated balance sheets the consolidated figures
for the fiscal year then most recently ended,
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(2) (i) consolidated statements of income of the Company and its
Subsidiaries and (ii) consolidating statement of income of WCC for
such quarterly fiscal period and for the portion of the fiscal year
ending with such period, in each case setting forth in comparative
form as to the consolidated statements of income the consolidated
figures for the corresponding periods of the preceding fiscal year,
and
(3) (i) consolidated statements of cash flows of the Company and
its Subsidiaries and (ii) consolidating statement of cash flows of WCC
for the portion of the fiscal year ending with such quarterly fiscal
period, setting forth in comparative form as to the consolidated
statements of cash flows the consolidated figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(b) ANNUAL STATEMENTS. As soon as available and in any event within
90 days after the close of each fiscal year of the Company, copies of:
(1) consolidated and consolidating balance sheets of the Company
and its Subsidiaries as of the close of such fiscal year, and
(2) consolidated and consolidating statements of income and
retained earnings and cash flows of the Company and its Subsidiaries
for such fiscal year,
in each case setting forth in comparative form the consolidated figures for
the preceding fiscal year, all in reasonable detail and, in the case of
such consolidated statements, accompanied by a report thereon of a firm of
independent public accountants of recognized national standing selected by
the Company to the effect that the consolidated financial statements have
been prepared in conformity with GAAP and present fairly, in all material
respects, the financial condition of the Company and its Subsidiaries and
that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards;
(c) AUDIT REPORTS. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Company or any Subsidiary and any management letter received from such
accountants;
(d) SEC AND OTHER REPORTS. Promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy statement
sent by the Company to stockholders
61
generally and of each regular or periodic report, and any registration
statement or prospectus filed by the Company or any Subsidiary with any
securities exchange or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any proceedings (other than
immaterial regulatory proceedings relating to obtaining or maintaining
licenses, permits or approvals by the Company or any Subsidiary) to which
the Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the company
or any of its Subsidiaries;
(e) ERISA REPORTS. promptly upon the occurrence thereof, written
notice of (i) a Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC or
any other person to terminate any Plan; (iii) the institution of any steps
by the Company or any ERISA Affiliate to withdraw from any Plan; (iv) a
"prohibited transaction; within the meaning of Section 406 of ERISA in
connection with any Plan; (v) any material increase in the contingent
liability of the Company or any restricted Subsidiary with respect to any
post-retirement welfare liability; or (vi) the taking of any action by, or
the threatening of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of the
foregoing;
(f) OFFICERS' CERTIFICATES. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information and
computations (in sufficient detail) required in order to establish whether
the Company was in compliance with the requirements of Section 7.06 through
Section 7.14, inclusive, and Section 7.20 at the end of the period covered
by the financial statements then being furnished, and (ii) whether there
existed as of the date of such financial statements and whether, to the
best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying the
nature and period of existence thereof and the action the Company is taking
and proposes to take with respect thereto, which certificate shall be in
the form attached hereto as EXHIBIT I;
(g) ACCOUNTANT'S CERTIFICATES. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion
with respect to such financial statements, stating that they have reviewed
this Agreement and stating further whether, in making their audit, such
accountants have become aware of any Default or Event of
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Default under any of the terms or provisions of this Agreement insofar as
any such terms or provisions pertain to or involve accounting matters or
determinations, and if any such condition or event then exists, specifying
the nature and period of existence thereof;
(h) REQUESTED INFORMATION. With reasonable promptness, such other
data and information including, without limitation, quarterly consolidating
financial statements of the Company and its Subsidiaries of the type
described in foregoing paragraph (a), as any of the Lender or Agent may
reasonably request;
(i) QUARTERLY SCHEDULES. Within the period provided in paragraph (a)
above, a schedule of (i) outstanding Letters of Credit issued for the
account of the Company and Titania, jointly, and (ii) investments held by
Titania.
Without limiting the foregoing, the Company will permit the Agent and the
Lenders (or such persons as the Agent and the Lenders may designate), to visit
and inspect, under the Company's guidance, any of the properties of the Company
or any Subsidiary, to examine all of their books of account, records, reports
and other papers, to make copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Company
authorizes said accountants to discuss with the Agent and the Lenders the
finances and affairs of the Company and its Subsidiaries) all at such reasonable
times and as often as may be reasonably requested. The Company shall not be
required to pay or reimburse the Agent or the Lenders for expenses which the
Agent or the Lenders may incur in connection with any such visitation or
inspection, PROVIDED, that if such visitation or inspection is made during any
period when a Default or an Event of Default shall have occurred and be
continuing, the Company agrees to reimburse the Agent and Lenders for all such
expenses promptly upon demand.
7.18 ACQUISITIONS. The Company will not, and will not permit any
Subsidiary, to enter into any agreement, contract or arrangement, providing for
the acquisition of any Person or the assets of any Person where the amount to be
paid exceeds $5,000,000 unless the Company shall have furnished to each Lender a
certificate of an authorized financial officer of the Company (i) certifying
that after giving effect to such acquisition there will be no Default or Event
of Default hereunder, and (ii) containing calculations based upon historical
financial information demonstrating that after giving effect to the proposed
acquisition the Company will not be in violation of any covenant contained in
Sections 7.06 through 7.09 hereof.
7.19 ADDITIONAL GUARANTIES. Not later than each date (a "Delivery Date")
upon which the officer's certificate described in
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Section 7.17(f) is required to be delivered by the Company, cause to be
delivered to the Agent for the benefit of the Lenders each of the following
documents in respect of each domestic wholly-owned Subsidiary of the Company
created or acquired after the Closing Date, as to whom such documents have not
been delivered on a prior Delivery Date (a "New Guarantor"):
(i) a Guaranty Agreement duly executed by such New Guarantor
substantially in the form attached hereto as EXHIBIT H;
(ii) an opinion of counsel to the New Guarantor (which opinion may be
rendered by in-house counsel to the Company unless the Agent requests as to
any particular New Guarantor that outside counsel be engaged to furnish the
opinion) dated as of the date of delivery of the Guaranty Agreement
provided in the foregoing clause (i) and addressed to the Agent and the
Lenders, in form and substance reasonably acceptable to the Agent, which
opinion shall include the opinions with respect to the New Guarantor and
its Guaranty Agreement as are provided on the Closing Date with respect to
Guarantors and Guaranty Agreements on such date pursuant to Section 5.01(h)
hereof, and may include assumptions and qualifications of similar effect to
those contained in the opinions of counsel to the Guarantors delivered
pursuant to Section 5.01(h) hereof); and
(iii) current copies of the charter documents, including partnership
agreements and certificate of limited partnership, if applicable, and
bylaws of such New Guarantor, 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 laws, of the shareholders or partners) of such New
Guarantor authorizing the actions and the execution and delivery of
documents described in clause (i) of this Section 7.19 and evidence
satisfactory to the Agent (confirmation of the receipt of which will be
provided by the Agent to the Lenders) that such New Guarantor is solvent as
of such date and after giving effect to the Guaranty.
7.20 ADVANCES TO WCC. The Company will not, and will not permit any
Subsidiary, to make or maintain loans or advances to WCC, enter into Guaranties
for the benefit of WCC, make capital contributions to WCC or purchase securities
from WCC, if, after giving effect to any such transaction, the aggregate amount
of such outstanding loans and advances, Guarantied obligations, capital
contributions and securities purchases shall exceed $1,500,000 in the aggregate.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.01 EVENTS OF DEFAULT. Any one or more of the following shall constitute
an "EVENT OF DEFAULT" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five days; or
(b) Default shall occur in the making of any payment of the principal
of any Note at the expressed or any accelerated maturity date; or
(c) Default shall be made in the payment when due(whether by lapse of
time, by declaration, by call for redemption or otherwise) of the principal
of or interest on any Funded Debt or Current Debt (other than the Funded
Debt evidenced by the Notes) aggregating $100,000 or more of the Company or
any Subsidiary and such default shall continue beyond the period of grace,
if any, allowed with respect thereto; or
(d) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Funded Debt or
Current Debt aggregating $100,000 or more of the Company or any Subsidiary
may be issued and such default or event shall continue for a period of time
sufficient to permit the acceleration of the maturity of any Funded Debt or
Current Debt aggregating $100,000 or more of the Company or any Subsidiary
outstanding thereunder; or
(e) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 7.06 through Section 7.16, or in
Section 7.18 through Section 7.20; or
(f) Default shall occur in the observance or performance of any other
provision of this Agreement which is not remedied within 30 days after
notice thereof to the Company by the holder of any Note; or
(g) Any representation or warranty made by the Company herein, or
made by the Company or any Guarantor in any other Loan Document or in any
statement or certificate furnished by the Company or any Guarantor in
connection with the consummation of the issuance and delivery of the Notes
or furnished by the Company or any Guarantor pursuant hereto or pursuant to
any other Loan Document, is untrue in any material respect as of the date
of the issuance or making thereof; or
(h) Final judgment or judgments for the payment of money aggregating
in excess of $100,000 is or are outstanding
65
against the Company or any Subsidiary or against any property or assets of
either and any one such judgments has remained unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 30 days from the date of
its entry; or
(i) A custodian, liquidator, trustee or receiver is appointed for the
Company or any Subsidiary or for the major part of the property of either
and is not discharged within 30 days after such appointment; or
(j) The Company or any Subsidiary becomes insolvent or bankrupt, is
generally not paying its debts as they become due or makes an assignment
for the benefit of creditors, or the Company or any Subsidiary causes or
suffers an order for relief to be entered with respect to it under
applicable Federal bankruptcy law or applies for or consents to the
appointment of a custodian, liquidator, trustee or receiver for the Company
or such Subsidiary or for the major part of the property of either; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors,are instituted by or against
the Company or any Subsidiary and, if instituted against the Company or any
Subsidiary, are consented to or are not dismissed within 60 days after the
institution of such proceedings; or
(l) The Wackenhut Family Group shall own or control,directly or
indirectly, less than 33.33% of the Voting Stock of the Company.
8.02 NOTICE TO HOLDERS. When an Event of Default described in the
foregoing Section 8.01 has occurred, or if the holder of any Note or of any
other evidence of Funded Debt or Current Debt of the Company gives any notice or
takes any other action with respect to a claimed default, the Company agrees to
give notice within three Business Days of such event to the Agent and all
Lenders; such notice to be in writing and sent by registered or certified mail
or by telegram.
8.03 ACCELERATION. Upon the happening of any Event of
Default, if such Event of Default or any other Event of Default shall then be
continuing,
(A) either or both of the following actions may betaken: (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 to
make further Loans or issue Letters of Credit terminated, whereupon the
obligation of each Lender to make further Loans or issue Letters of Credit
hereunder shall terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders,
66
at their option, declare by notice to the Company any or all of the
Obligations to be immediately due and payable, and the same, all interest
accrued thereon and all other obligations of the Company to 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 (j) or (k) above, then the obligation of the Lenders
to lend 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; and
(B) The Company shall, upon demand of Agent, deposit cash with the
Agent in an amount equal to the amount of any Letters of Credit remaining
undrawn, as collateral security for the repayment of any future drawings
under such Letters of Credit, and such amounts shall be held by Agent
pursuant to the terms of the Letter of Credit Account Agreement.
8.04 AGENT TO ACT. In case any one or more Events of Default shall occur
and be continuing, 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.
8.05 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.
8.06 NO WAIVER. No course of dealing between the Company 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 hereunder shall operate as a waiver of any
rights or remedies hereunder and no single or partial exercise of any rights or
remedies hereunder 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.
8.07 ALLOCATION OF PROCEEDS. If an Event of Default has occurred and is
continuing, and the maturity of the Notes has been accelerated pursuant to
Article VIII hereof, all payments received by the Agent hereunder in respect of
any principal of or interest
67
on the Obligations or any other amounts payable by the Company hereunder shall
be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.12, 3.02(f),
3.03, 3.04, 10.06 and 10.12 hereof;
(b) amounts due to the Agent pursuant to Section 9.11 hereof;
(c) payments of interest, to be applied in accordance with Section
2.09 hereof;
(d) payments of principal, to be applied in accordance with Section
2.09 hereof;
(e) payments of all other amounts due under this Agreement, if any,
to be applied in accordance with each Lender's pro rata share of all
principal due to the Lenders.
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ARTICLE IX
THE AGENT
9.01 APPOINTMENT. Each Lender (including NationsBank in its capacity as
maker of Swing Line Loans and as an issuer of the Letters of Credit and BofA as
an issuer of the Letters of Credit) hereby irrevocably designates and appoints
NationsBank as the Agent of 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, 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,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
9.02 ATTORNEYS-IN-FACT. The Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Agent shall not be responsible for the gross negligence or willful misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
9.03 LIMITATION ON LIABILITY. Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the Lenders
for any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement except for its or their own gross negligence or
willful misconduct. Neither the Agent nor any of its affiliates shall be
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Company, any of its Subsidiaries, or
any officer thereof contained in this Agreement or in any of the other Loan
Documents, or in any certificate, report, statement or other document referred
to or provided for in or received by the Agent under or in connection with this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any of the other Loan Documents, or for any
failure of the Company to perform its obligations thereunder. The Agent shall
not be under any obligation to any of the Lenders to ascertain or to inquire as
to the observance or performance of any of the terms, covenants or conditions of
this Agreement or any of the other Loan Documents on the part of the Company or
to inspect the properties, books or records of the Company or its Subsidiaries.
9.04 RELIANCE. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing,
69
resolution, notice, consent certificate, affidavit, letter, cablegram, telegram,
telecopy or telex message, statement, order or other document or conversation
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 Company), independent accountants
and other experts selected by the Agent. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless an Assignment shall
have been filed with and accepted by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first receive advice or concurrence of the Lenders or the Required
Lenders as provided in this Agreement 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 Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all present and future holders
of the Notes.
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender, the Authorized Officer or the
Company or any of the Subsidiaries 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 Agent receives such a notice, the Agent shall
promptly give notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably 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 Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.06 NO REPRESENTATIONS. Each Lender expressly acknowledges that neither
the Agent nor any of its affiliates has made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of the Company or any of its Subsidiaries, shall be deemed to constitute
any representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance upon the
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
financial condition, creditworthiness, affairs, status and nature of the Company
and its Subsidiaries and made its own decision to enter into this Agreement.
Each Lender also represents 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
70
the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and to make such investigation
as it deems necessary to inform itself as to the status and affairs, financial
or otherwise, of the Company and its Subsidiaries. Except for notices, reports
and other documents 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 the Company or any of its Subsidiaries which
may come into the possession of the Agent or any of its affiliates.
9.07 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Company or any of its
Subsidiaries and without limiting any obligations of the Company or any of its
Subsidiaries so to do), ratably according to the respective principal amount of
the Notes held by them (or, if no Notes are outstanding, ratably in accordance
with their respective Applicable Commitment Percentages as then in effect) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time (including without limitation at any
time following the payment of the Note) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other document contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Obligations and
the termination of this Agreement.
9.08 LENDER. The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company and
its Subsidiaries as though it were not the Agent hereunder. With respect to its
Loans made or renewed by it and any Note issued to it, the Agent shall have the
same rights and powers under this Agreement as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity.
9.09 RESIGNATION. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint a successor Agent for the
Lenders, which shall be a commercial bank organized under the laws of the United
States or any state thereof, having a combined surplus and capital of not less
than $500,000,000, whereupon such successor Agent shall succeed to the rights,
powers and duties of the former Agent and the obligations of the former
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Agent shall be terminated and cancelled, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement;
PROVIDED, if the Required Lenders cannot agree as to a successor Agent within
ninety (90) days after such resignation, the Agent shall appoint a successor
Agent and the parties hereto agree to execute whatever documents are necessary
to effect such action under this Agreement or any other document executed
pursuant to this Agreement; PROVIDED, however, in such event all provisions of
this Agreement and the Loan Documents, shall remain in full force and effect.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. In the event
NationsBank shall cease to act as Agent hereunder NationsBank, at its option,
shall not be obligated to make Swing Line Loans or issue Letters of Credit
hereunder.
9.10 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 any
payment 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 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 9.10 the term "pro rata"
shall be determined with respect to both the Revolving Loan Commitment of each
Lender and to the Total Revolving Loan Commitments after subtraction in each
case of amounts, if any, by which any such Lender has not funded its share of
the outstanding Loans and Reimbursement 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 9.10 shall be rescinded to the
extent of such recovery, without interest. The Company 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.
9.11 FEES. The Company agrees to pay to the Agent, for its individual
account, an annual Agent's fee in such amount as shall be agreed to from time to
time, such fee to be paid in quarterly installments in advance on the last day
of each December, March, June and September, the first such installment to be
paid on the first such date next following there being more than one Lender
party to this Agreement.
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ARTICLE X
MISCELLANEOUS
10.01 ASSIGNMENTS AND PARTICIPATION.
(a) At any time after the Closing Date each Lender may, with the prior
consent of the Agent and the Company (which consents shall not be unreasonably
withheld), assign to one or more banks or financial institutions all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of the Note payable to its order); PROVIDED, that
(i) each such assignment shall be of a constant, and not a varying, percentage
of all of the assigning Lender's rights and obligations (including Loans and
Participation) under this Agreement (ii) for each assignment involving the
issuance and transfer of a Note, the assigning Lender shall execute an
Assignment and Acceptance and the Company hereby consents to execute replacement
Notes to give effect to the assignment, (iii) the minimum Revolving Loan
Commitment which shall be assigned is $2,000,000 (together with which the
assigning Lender's applicable portion of Participation and the Letter of Credit
Commitment shall also be assigned) and (iv) such assignee shall have an office
located in the United States, provided, that an assignment by NationsBank shall
not include any portion of the Swing Line. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under such Note have
been assigned or negotiated to it pursuant to such Assignment and Acceptance
have the rights and obligations of a Lender hereunder and a holder of such Note
and (y) the assignor thereunder shall, to the extent that rights and obligations
hereunder or under such Note have been assigned or negotiated by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement. No assignee shall have the right to further
assign its rights and obligations pursuant to this Section 10.01. Any Lender
who makes an assignment shall pay to the Agent a one-time administrative fee of
$5,000.00.
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) the assignment made under
such Assignment and Acceptance is made under such Assignment and Acceptance
without recourse; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company or any Subsidiary or the performance or observance by the Company or any
Subsidiary of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to
73
Section 7.20(a) and (b) and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender 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 this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement, the Note and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender and a
holder of such Note.
(c) The Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to the Company.
(e) Each Lender may sell participations to one or more banks or other
entities as to all or a portion of its rights and obligations under this
Agreement; PROVIDED, 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) such Lender
shall remain the holder of any Note issued to it for the purpose of this
Agreement, (iv) such participation shall be in a minimum amount of $1,000,000
and shall include an allocable portion of such Lender's Participation, and (v)
the Company, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and with regard to any and all payments to be
made under this Agreement; PROVIDED, that the participation agreement between a
Lender and its participants may provide that such Lender will obtain the
approval of such participant prior to such Lender's agreeing to any amendment or
waiver of any provisions of this Agreement which would (A) extend the maturity
of the Note, (B) reduce the interest rate hereunder, (C) increase the Revolving
Loan Commitment of the Lender granting the participation, and (vi) the sale of
any such participation which require Company to file a registration statement
with the United States Securities and Exchange Commission or under the
securities regulations or laws of any state shall not be permitted.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, any Lender may assign all or any portion of its rights and
obligations under the Loan Documents and the Notes to any affiliate of such
Lender, and any Lender may pledge all or any portion of its
74
interest under the Loan Documents and the Notes to the Board as security for
obligations of such Lender to the Board, without the consent of the Company, the
Agent or any other Lender and without the payment of the administrative fee
referred to in Section 10.01(a).
10.02 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 Company:
The Wackenhut Corporation
1500 San Remo Avenue
Coral Gables, Florida 33146
Attention: James P. Rowan
with a copy to Chief Financial Officer or Treasurer
at the same address.
(b) if to an Authorized Officer:
at the address set forth for
receipt of notices in the
notice of appointment thereof.
(c) if to the Agent:
NationsBank of Florida, National
Association
150 S.E. Third Avenue
Miami, Florida 33131
Attention: Corporate Banking Department
(d) if to NationsBank in its capacity as issuer of the
Letters of Credit:
75
NationsBank of Florida, National
Association
c/o NationsBank of North Carolina, N.A.
NationsBank Corporate Center
100 N. Tryon Street
Charlotte, North Carolina 28255
Attention: International
Letter of Credit Department
NC 1007-09-02
(e) if to Bank of America in its capacity as issuer of the
Letters of Credit:
Bank of America Illinois
20 West Jackson, 17th Floor
Chicago, Illinois 60697
Attention: Phil Kelly
Re: Wackenhut Titania
(f) if to the Lenders:
At the addresses set forth on the signature pages hereof and on the
signature page of each Assignment and Acceptance.
10.03 NO WAIVER. No failure or delay on the part of the Agent or any
Lender in the exercise of any right, power or privilege hereunder shall operate
as a waiver of any such right, power or privilege nor shall any such failure or
delay preclude any other or further exercise thereof. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.
10.04 SETOFF. The Company agrees that the Agent and each Lender shall
have a lien for all the Obligations of the Company upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts
thereof, now or hereafter pledged, mortgaged, transferred or assigned to the
Agent or such Lender or otherwise in the possession or control of the Agent or
such Lender (other than for safekeeping) for any purpose for the account or
benefit of the Company and including any balance of any deposit account or of
any credit of the Company with the Agent or such Lender, whether now existing or
hereafter established, hereby authorizing the Agent and each Lender at any time
or times with or without prior notice to apply such balances or any part thereof
to such of the Obligations of the Company to the Lenders then past due and in
such amounts as they may elect, and whether or not the responsibility of other
Persons primarily, secondarily or otherwise liable may be deemed adequate. For
the purposes of this paragraph, all remittances and property shall be deemed to
be in the possession of the Agent or such Lender as soon as the same may be put
in transit to it by mail or carrier or by other bailee.
76
10.05 SURVIVAL. All covenants, agreements, representations and warranties
made herein shall survive the making by the Lenders of the Loans and the
expiration 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 the Obligations remain outstanding or any Lender has
any commitment hereunder. 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 Company which are contained in this Agreement and the Notes
shall inure to the benefit of the successors and permitted assigns of the
Lenders or any of them.
10.06 EXPENSES. The Company agrees (a) to pay or reimburse the Agent for
all its reasonable and customary out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, this Agreement or any of the other
Loan Documents, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable and customary fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and the
Lenders for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the Notes, the
Guaranty Agreements and the Letter of Credit Account Agreement, including
without limitation, the reasonable fees and disbursements of their counsel
(including allocated cost of in-house counsel), (c) to pay, indemnify and hold
the Agent and the Lenders harmless from any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any failure to
pay or delay in paying, documentary, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, and (d) to pay, indemnify, and hold the Agent and the Lenders
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement or in any respect
relating to the transactions contemplated hereby or thereby, (all the foregoing,
collectively, the "indemnified liabilities"); PROVIDED, HOWEVER, that the
Company shall have no obligation hereunder with respect to indemnified
liabilities arising from (i) the willful misconduct or gross negligence of the
party seeking indemnification, (ii) legal proceedings commenced against the
Agent or any Lender by any security holder or creditor thereof arising out of
and based upon rights afforded any such security holder or creditor solely in
its capacity as such, (iii) any taxes imposed upon the Agent or any Lender other
than the documentary, stamp, excise and similar taxes described in clause (c)
above or any tax resulting from any
77
Regulatory Change, which tax would be payable to Lenders by Company pursuant to
Article IV hereof, (iv) taxes imposed as a result of a transfer or assignment of
any Note, participation or assignment of a portion of its rights or (v) any
taxes imposed upon any transferee of any Note. The agreements in this
subsection shall survive repayment of the Notes and all other Obligations
hereunder.
10.07 AMENDMENTS. No amendment, modification or waiver of any provision
of this Agreement or any of the Loan Documents and no consent by the Lenders to
any departure therefrom by the Company shall be effective unless such amendment,
modification or waiver shall be in writing and signed by the Agent, but only
upon having received the written consent of the Required Lenders, and the same
shall then be effective only for the period and on the conditions and for the
specific instances and purposes specified in such writing; PROVIDED, however,
that, no such amendment, modification or waiver
(i) which changes, extends or waives any provision of Section 9.10 or
this Section 10.07, the due date of any scheduled installment of or the
rate of interest payable on any Loan, the definition of Required Lenders,
which increases or extends the Revolving Loan Commitment of any Lender or
which increases or extends the Total Letter of Credit Commitment or which
waives any condition to the making of any Loan (including without
limitation any Swing Line Loan), shall be effective unless in writing and
signed by each of the Lenders; PROVIDED, however, the Required Lenders may
in their sole discretion waive any Default or Event of Default (other than
any Event of Default under Section 8.01(a) or (b)); or
(ii) which affects the rights, privileges, immunities or indemnities
of the Agent, shall be effective unless in writing and signed by the Agent.
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 Company in any case shall
entitle the Company 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.
10.08 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.
78
10.09 WAIVERS BY THE COMPANY. In any litigation in any court with respect
to, in connection with, or arising out of this Agreement, the Guaranty
Agreements, the Loans, any of the Notes, any of the Letters of Credit, any of
the other Loan Documents, the Obligations, or any instrument or document
delivered pursuant to this Agreement, or the validity, protection,
interpretation, collection or enforcement thereof, or any other claim or dispute
howsoever arising between the Company and the Lenders or the Agent, (i) the
Company hereby waives the right to interpose any setoff, recoupment,
counterclaim or cross-claim in connection with any such litigation, irrespective
of the nature of such setoff, recoupment, counter-claim or cross-claim unless
such setoff, recoupment, counter-claim or cross-claim could not, by reason of
any applicable federal or state procedural laws, be interposed, pleaded or
alleged in any other action and (ii) the Company and each Lender and the Agent
hereby waive, to the extent permitted by applicable law, trial by jury in
connection with any such litigation.
10.10 TERMINATION. This Agreement shall continue in full force and effect
until terminated pursuant to the terms hereof; however, the Lenders shall have
the right to terminate this Agreement immediately, at any time, during the
continuance of an Event of Default under Article VIII hereof as provided
therein. The termination of this Agreement shall not affect any rights of the
Company, the Lenders or the Agent or any obligation of the Company, 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. Upon the
termination of this Agreement, all Obligations (including, without limitation,
the Loans and the Reimbursement Obligations) shall be due and payable without
notice or demand. The security interests, liens and rights granted to the Agent
for the benefit of the Lenders hereunder and under the other 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 or the Company 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 Company shall be liable to, and shall indemnify
and hold such Lender harmless for, the amount of such payment surrendered until
such Lender shall have been finally and irrevocably paid in full.
79
The provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Lenders in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Lenders' rights under this Agreement and shall be
deemed to have been conditioned upon such payment having become final and
irrevocable.
10.11 GOVERNING LAW. ALL DOCUMENTS EXECUTED PURSUANT TO THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING, WITHOUT LIMITATION, THIS AGREEMENT AND EACH OF
THE LOAN DOCUMENTS SHALL BE DEEMED TO BE CONTRACTS MADE UNDER, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND JUDICIAL
DECISIONS OF THE STATE OF FLORIDA. THE COMPANY HEREBY SUBMITS TO THE
JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF FLORIDA FOR THE
PURPOSES OF RESOLVING DISPUTES HEREUNDER OR FOR THE PURPOSES OF COLLECTION.
10.12 INDEMNIFICATION. In consideration of the execution and delivery of
this Agreement by the Agent and each Lender and the extension of the Revolving
Loan Commitments and Swing Line, the Company hereby indemnifies, exonerates and
holds the Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified Liabilities"),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan or supported by any
Letter of Credit;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties;
(c) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by the Company or any of its
Subsidiaries of any Hazardous Material; or
(d) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Company or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Company or
such Subsidiary,
80
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
10.13 AGREEMENT CONTROLS. In the event that any term of any of the Loan
Documents other than this Agreement conflicts with any term of this Agreement,
the terms and provisions of this Agreement shall control.
81
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.
WITNESS: THE WACKENHUT CORPORATION
_______________________
By /s/ Terry P. Mayotte
_______________________ ----------------------------
Name: Terry P. Mayotte
Title: Assistant Treasurer
82
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent for the Lenders
By /s/ John Miller
------------------------------
Name: John Miller
Title: Vice President
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION
By /s/ John Miller
------------------------------
Name: John Miller
Title: Vice President
Lending Office:
150 S.E. Third Avenue
Miami, Florida 33131
Wire Transfer Instructions:
NationsBank of Florida, National
Association
Tampa, Florida
ABA# 063100277
Reference: The Wackenhut Corporation
Attention:
Specialized Loan Support
Account # 109360-4025
83
BANK OF AMERICA ILLINOIS
By________________________________
Name:_____________________________
Title:____________________________
Lending Office:
231 S. LaSalle
Chicago, Illinois 60697
Wire Transfer Instructions:
Bank of America Illinois
Chicago, Illinois
ABA# 071000039
Reference: Wackenhut
Attention: Sharon Young, Loan Division
Account # 6570083
84
EXHIBIT A
APPLICABLE COMMITMENT PERCENTAGES
Lender Committed Percentage
- ------ --------------------
NationsBank of Florida, 50.00%
National Association
Bank of America Illinois 50.00%
------
100.00%
85
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED _________________, 19_____
Reference is made to the Revolving Credit and Reimbursement Agreement dated
as of January 5, 1995 (the "Agreement") among The Wackenhut Corporation, a
Florida corporation (the "Company"), the Lenders (as defined in the Agreement)
and NationsBank of Florida, 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") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a _______%
interest in and to all of the Assignor's rights and obligations under the
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Assignor's Loan owing to, and
Participation held by, the Assignor on the Effective Date, and the Note held by
the Assignor.
2. The Assignor (i) represents and warrants that, as of the date hereof,
the aggregate outstanding principal amount of the Loan owing to it (without
giving effect to assignments thereof which have not yet become effective) is
$________ and the aggregate principal amount of Letters of Credit in which it is
deemed to have a Participation under this Agreement is $_____________; (ii)
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; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Agreement or any of the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any of the Loan Documents or any other instrument or
document furnished pursuant thereto; (iv) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of Company
or the performance or observance by the Company of any of its obligations under
the Agreement or any of the Loan Documents or any other instrument or document
furnished pursuant thereto and (v) attaches the Note referred to in paragraph 1
above and requests that the Agent exchange such Note for new Note(s) as follows:
A Note, dated _____________, 19__ in the principal amount of
____________________
1 Specify percentage in no more than 4 decimal points.
86
$________________, payable to the order of the Assignor, and a Note, dated
____________________________ 19__, in the principal amount of $_________________
payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.17(a) and (b) 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 Agreement; (iii) appoints and authorizes the Agent to take such
actions on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Agreement are required to be performed by the Lender; and (v) specifies as its
address for notices the office set forth beneath its name on the signature pages
hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the execution
of this Assignment and Acceptance, it will be delivered to the Agent for
acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents 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 Agreement.
6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Agreement and Notes in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest, commitment fees and letter of credit fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement and the Notes for periods prior to
the Effective Date directly between themselves.
87
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of Florida.
[NAME OF ASSIGNOR]
By:____________________________________
Name:
Title:
Notice Address:________________________
________________________
________________________
After the Effective Date
Outstanding Revolving Loans:$______
[NAME OF ASSIGNEE]
By:____________________________________
Name:
Title:
Notice Address:________________________
________________________
________________________
After the Effective Date
Outstanding Revolving Loans:$_____
Accepted this ____ day of _______, 19___
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent
By:_________________________________________
Name:
Title:
Consented to this _____ day
of _______________, 199_.
THE WACKENHUT CORPORATION
By:_________________________
88
EXHIBIT C
NOTICE OF APPOINTMENT (OR REVOCATION) OF AUTHORIZED
OFFICER
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement, dated as of January 5, 1995 (the "Agreement") among NATIONSBANK OF
FLORIDA, NATIONAL ASSOCIATION, as Agent for certain Lenders signatory thereto,
such Lenders, and THE WACKENHUT CORPORATION (the "Company"). Capitalized terms
used but not defined herein shall have the respective meanings therefor set
forth in the Agreement.
The Company hereby nominates, constitutes and appoints each individual
named below as an Authorized Officer 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 corporate 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 Company to act as
Authorized Officer thereunder:
Name and Address Corporate Office Specimen Signature
___________________
__________________ ___________________
___________________
__________________ ___________________
___________________
__________________ ___________________
___________________
__________________ ___________________
___________________
__________________ ___________________
___________________
Company hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Officer.
This the ___ day of __________________, 19__.
WITNESS: THE WACKENHUT CORPORATION
_________________________ By_______________________________
_________________________ Title____________________________
EXHIBIT D-1
BORROWING NOTICE (LOAN)
(SECTION 2.04)
To: NationsBank of Florida,
National Association, as Agent
150 S.E. Third Avenue
Miami, Florida 33131
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement, dated as of January 5, 1995, (the "Agreement") among NATIONSBANK OF
FLORIDA, NATIONAL ASSOCIATION, as Agent for certain Lenders signatory thereto,
such Lenders and THE WACKENHUT CORPORATION. Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Company through its Authorized Officer hereby confirms its prior notice
of borrowing given to the Agent by telephone on ____________, 19__ to the effect
that Revolving Loans or conversions of Revolving Loans of the type and amount
set forth below be made on the date indicated by deposit of such amount to the
Company's Account:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ------------ --------- --------- ---------------
Base
Loan _____
Fixed CD
Loan _____
LIBOR Loan _____
_______________________
(1) For any Fixed CD Loan 30, 60, 90 or 180 days and for any LIBOR Loan, one,
two, three or six months.
(2) (i) If a Base Loan, in an amount equal to $300,000 or any integral multiple
thereof, (ii) if a Fixed CD Loan or LIBOR Loan, in a minimum amount of
$300,000 or, if greater, in additional amounts which are integral multiples
of $300,000 in excess thereof.
(3) At least two (2) Business Days after date of telephonic notice if a Fixed
CD Loan and three (3) LIBOR Business Days if a LIBOR Loan; may be same
Business Day in the case of Base Loans.
90
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 the Agreement
(other than those expressly stated to refer to a particular date) are true and
correct as of the date hereof except that the reference to the financial
statements in Section 6.03 thereof are to those financial statements most
recently delivered to you pursuant to Section 7.17 of the Agreement (it being
understood that any financial statements delivered pursuant to Section 7.17(a)
have not been certified by independent public accountants).
This the ___ day of ____________, 19__.
THE WACKENHUT CORPORATION
By: _______________________________
Authorized Officer
91
EXHIBIT D-2
FORM OF BORROWING NOTICE--SWING LINE LOANS
To: NationsBank of Florida, National Association
150 S.E. Third Avenue
Miami, Florida 33131
Telefacsimile: 305-___-____
Attention: Corporate Banking Department
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of January 5, 1995 (the "Agreement") among the Wackenhut
Corporation (the "Company"), the Lenders (as defined in the Agreement), and
NationsBank of Florida, 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 Company through its Authorized Representative hereby confirms its prior
notice of borrowing given to the Agent by telephone on _____________, 199_ to
the effect that Swing Line Loans in the amount set forth below be made on the
date indicated by deposit of such amount to the Company's Account:
Aggregate
Amount (1) Date of Loan
------ ------------
________________
(1) Must be an integral multiple of $50,000.
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 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 as if made on and as of
the date hereof except that the reference to the financial statements in Section
6.03 thereof are to those financial statements most recently delivered to you
pursuant to Section 7.17 of the Agreement (it being understood that any
financial statements delivered pursuant to Section 7.17(a) have not been
certified by independent public accountants).
92
3. After giving effect to Loans requested hereby, (i) the principal
amount of outstanding Loans plus Outstanding Letters of Credit will not exceed
the Total Revolving Loan Commitment and (ii) Swing Line Outstandings will not
exceed $10,000,000.
THE WACKENHUT CORPORATION
By:____________________________________
Authorized Officer
93
EXHIBIT E
FORM OF NOTE
_______________(1) [____________, ___________](2)
_______________, 199__
FOR VALUE RECEIVED, THE WACKENHUT CORPORATION, a Florida corporation having
its principal place of business located in Coral Gables, Florida (the
"Company"), hereby promises to pay to the order of
___________________________________(3) (the "Lender"), in its individual
capacity, at the office of NationsBank of Florida, National Association, as
agent for the Lender (the "Agent"), located at 150 Southeast Third Avenue,
Miami, Florida 33131 (or at such other place or places as the Agent may
designate) at the times set forth in the Revolving Credit and Reimbursement
Agreement dated as of January 5, 1995 among the Company, the financial
institutions parties thereto as lenders (collectively, the "Lenders") and the
Agent (as the same may be amended, modified or restated from time to time, the
"Agreement" -- all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
[______________________________________________](4) DOLLARS
($__________)(1) or, if less than such principal amount, the aggregate unpaid
principal amount of all Revolving Loans made by the Lender to the Company
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.
_______________________________
1 Insert Lender's pro rata share of Total Revolving Commitment in
arabic numerals.
2 Insert name of city of Lender's Principal Office.
3 Insert name of Lender in capital letters
4 Insert Lender's pro rata share of Total Revolving Loan
Commitment in words.
94
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 a rate two percent (2%) per annum in excess of the rate at which interest was
payable on such amount under the Agreement immediately preceding the date of
such acceleration or the maximum rate permitted under applicable law, if lower,
until such principal and interest have been paid in full. Further, in the event
of such acceleration, this Note, and all other indebtedness of the Company to
the Lender shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by the
Company.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Company agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees, and interest
thereon at the rates set forth above.
Interest hereunder shall be computed on the basis of a 360 day year for the
actual number of days in the interest period.
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 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.
95
IN WITNESS WHEREOF, the Company has caused this Note to be made, executed
and delivered by its duly authorized officer as of the date and year first above
written, all pursuant to authority duly granted.
WITNESS: THE WACKENHUT CORPORATION
_________________________ By________________________________
Title____________________________
_________________________
96
EXHIBIT F
[Reserved]
97
EXHIBIT G-1
OPINION OF VICE PRESIDENT AND LEGAL COUNSEL
(SECTION 5.01)
See attached.
98
[WACKENHUT LETTERHEAD]
January 5, 1995
NationsBank of Florida, N.A. and
NationsBank of Florida, N.A. as Agent
for the Lenders under the Credit Agreement
Bank of America Illinois
c/o NationsBank of Florida, N.A.
150 Southeast Third Avenue
Miami, Florida 33131
RE: $60,000,000 REVOLVING CREDIT FACILITY
MADE AVAILABLE BY NATIONSBANK OF FLORIDA, N.A. AND
BANK OF AMERICA, ILLINOIS
TO THE WACKENHUT CORPORATION, A FLORIDA CORPORATION
Ladies and Gentlemen:
I am Vice President, General Counsel and Assistant Secretary for The Wackenhut
Corporation, a Florida corporation and this letter is given in connection with
the negotiation, execution and delivery of that certain Revolving Credit and
Reimbursement Agreement, dated January 5, 1995 (the "Agreement") by and among
the Company, NationsBank of Florida, N.A. as Agent, and NationsBank of Florida,
N.A. and Bank of America, Illinois (the "Lenders").
In so acting, I have examined and relied upon originals (or copies thereof
certified to our satisfaction) of (i) the Letter of Credit and the Notes; and
(ii) such corporate and other documents, records and papers and certificates of
public officials and of officers of the Company as we deemed relevant and
necessary in order to give the opinions hereinafter set forth.
This letter is delivered to you pursuant to Section 5.01(b) of the Agreement in
connection with the conditions precedent to the Lenders making the initial
Advance and issuing the Letter of Credit. All capitalized terms used herein and
not otherwise defined have the meaning ascribed to them in the Agreement.
Based upon the foregoing and subject to the comments, assumptions, exceptions,
qualifications and limitations set forth herein, we are of the opinion that:
page 2
1. Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has the corporate
power and authority to own its properties and to carry on its business as
presently conducted by it in the state of its incorporation and other
jurisdictions where it does business.
2. Company has the corporate power to execute and deliver the Loan Documents
to which it is a party and to perform thereunder. The execution, delivery and
performance by Company of the Loan Documents has been duly authorized by all
requisite corporate action and the same will not violate any provision of the
Articles of Incorporation or the By-laws of Company, or, to the best of our
knowledge, (i) any applicable law of the State of Florida or of any local
jurisdiction within the State of Florida, (ii) any applicable law of the United
States, or (iii) any order of any court or governmental agency binding upon such
Company.
3. The following officers of Company are duly authorized and empowered to
execute and deliver the Loan Documents on behalf of Company:
Name Title
---- -----
Richard R. Wackenhut President
Richard C. DeCook Senior Vice President - Finance and Treasurer
Terry P. Mayotte Assistant Treasurer
Paul N. Brownell Assistant Treasurer
James P. Rowan Vice President & Assistant Secretary
Timothy J. Howard Vice President & Assistant Secretary
4. The execution, delivery and performance by Company of the Loan Documents
will not, (i) violate the terms of any instrument, document or agreement to
which Company is a party or by which it or any of its property is bound or (ii)
be in conflict with, result in a breach of or constitute (with giving of notice
and/or lapse of time, or both) a default under any such instrument, document or
agreement, or (iii) result in the creation or imposition of any lien upon any of
the property or assets of Company.
5. The loan Documents have been duly executed and delivered by Company, and,
assuming due authorization, execution and delivery of the Loan Documents by the
other parties thereto, constitute the valid and legally binding obligations of
Company, enforceable in accordance with their respective terms, except that
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting creditors' rights generally from
time to time in effect, and except as such enforceability may be limited by
applicable laws or judicial decisions which may affect the availability of the
remedy of specific performance or the application of equitable principles which
my limit the right of specific performance.
page 3
6. No consent, license, approval or authorization of any Federal, State of
Florida or local State of Florida governmental authority, bureau or agency is
required in connection with the execution, delivery, performance validity and
enforceability of the Loan Documents which has not been duly obtained on or
prior to the date hereof.
7. To the best of my knowledge, (i) there is no material action, suit or
proceeding at law or in equity by or before any court, governmental
instrumentality or agency now pending or threatened against or affecting the
Company or any property or rights of the Company, and (ii) there are no
judgments, liens, contingent liabilities, claims or counterclaims which might
materially adversely affect the Lender's rights under the Loan Documents.
8. To the best of my knowledge, after due inquiry, the Company is NOT in
default under any document, instrument or agreement to which it is a party or by
which it is bound which might materially adversely affect the Company's rights
under the Loan Documents.
9. To the best of my knowledge, after due inquiry, the Company has NOT
received any notice to the effect that it is not in full compliance with any of
the requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the regulations promulgated thereunder, and to the best
of our knowledge, after due inquiry, there exists no event of the type described
in Section 4043 of ERISA, excluding subsections 4043(b)(2) and 4043(b)(3)
thereof.
10. To the best of my knowledge, after due inquiry, the Company is NOT in
violation of any applicable statute, regulation or ordinance of any government
entity or of any agency thereof, which could materially adversely affect the
financial condition or operations of Company.
11. Payment of interest on the Document in the amounts provided for therein
will not result in a violation of the laws of Florida relating to interest or
usury.
This opinion letter has been issued solely for the benefit of the Lender, and
their counsel and no other party or entity shall be entitled to rely hereon
without my express written consent. Without my prior written consent, this
opinion letter may not be quoted in whole or in part or otherwise referred to in
any document or report and may not be furnished to any person or entity other
than successors or assigns of the lender which are institutional investors.
Respectfully submitted,
/s/ J.P. Rowan
-------------------------
J.P. Rowan
Vice President,
General Counsel,
and Assistant Secretary
EXHIBIT G-2
OPINION OF COUNSEL TO THE GUARANTORS
(SECTION 5.01)
See attached.
99
[WACKENHUT LETTERHEAD]
January 5, 1995
NationsBank of Florida, N.A. and
NationsBank of Florida, N.A. as Agent
for the Lenders under the Credit Agreement
Bank of America Illinois
c/o NationsBank of Florida, N.A.
150 Southeast Third Avenue
Miami, Florida 33131
RE: $60,000,000 REVOLVING CREDIT FACILITY
MADE AVAILABLE BY NATIONSBANK OF FLORIDA, N.A.
AND BANK OF AMERICA, ILLINOIS
TO THE WACKENHUT CORPORATION, A FLORIDA CORPORATION
Ladies and Gentlemen:
I am Vice President, General Counsel and Assistant Secretary for The Wackenhut
Corporation, a Florida corporation (the "Company") and Counsel to each of the
Guarantors and this letter is given in connection with the negotiation,
execution and delivery of that certain Revolving Credit and Reimbursement
Agreement, dated January 5, 1995 (the "Agreement") by and among the Company,
NationsBank of Florida, N.A. as Agent, and NationsBank of Florida, N.A. and Bank
of America, Illinois (the "Lenders").
In so acting, I have examined and relied upon originals (or copies thereof
certified to our satisfaction) of (i) the Letter of Credit and the Notes; and
(ii) such corporate and other documents, records and papers and certificates of
public officials and of officers of the Company as we deemed relevant and
necessary in order to give the opinions hereinafter set forth.
This letter is delivered to you pursuant to Section 5.01(b) of the Agreement in
connection with the conditions precedent to the Lenders making the initial
Advance and issuing the Letter of Credit. All capitalized terms used herein and
not otherwise defined have the meaning ascribed to them in the Agreement.
Based upon the foregoing and subject to the comments, assumptions, exceptions,
qualifications and limitations set forth herein, we are of the opinion that:
page 2
1. Each Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and has the
corporate power and authority to own its properties and to carry on its business
as presently conducted by it in the state of its incorporation and other
jurisdictions where it does business.
2. Each Guarantor has the corporate power to execute and deliver the Loan
Documents to which it is a party and to perform thereunder. The execution,
delivery and performance by each Guarantor of the Guaranty Agreement has been
duly authorized by all requisite corporate action and the same will not violate
any provision of the Articles of Incorporation or the By-laws of such Guarantor,
or, to the best of our knowledge, (i) any applicable law of the State of Florida
or of any local jurisdiction within the State of Florida, (ii) any applicable
law of the United States, or (iii) any order of any court or governmental agency
binding upon such Guarantor.
3. The following officer of each of the Guarantors is duly authorized and
empowered to execute and deliver the Guaranty Agreement on behalf of each
Guarantor:
Name Title
---- -----
Terry P. Mayotte Assistant Treasurer
4. The execution, delivery and performance by the Guarantors of the Guaranty
Agreement will not, (i) violate the terms of any instrument, document or
agreement to which Company is a party or by which it or any of its property is
bound or (ii) be in conflict with, result in a breach of or constitute (with
giving of notice and/or lapse of time, or both) a default under any such
instrument, document or agreement, or (iii) result in the creation or imposition
of any lien upon any of the property or assets of any Guarantor.
5. Each Guaranty Agreement has been duly executed and delivered by each
Guarantor signatory thereto, and, constitutes the valid and legally binding
obligations of each Guarantor, enforceable in accordance with its respective
terms, except that enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting creditors' rights
generally from time to time in effect, and except as such enforceability may be
limited by applicable laws or judicial decisions which may affect the
availability of the remedy of specific performance or the application of
equitable principles which my limit the right of specific performance.
page 3
6. No consent, license, approval or authorization of any Federal, State of
Florida or local State of Florida governmental authority, bureau or agency is
required in connection with the execution, delivery, performance validity and
enforceability of the Loan Documents which has not been duly obtained on or
prior to the date hereof.
7. To the best of my knowledge, (i) there is no material action, suit or
proceeding at law or in equity by or before any court, governmental
instrumentality or agency now pending or threatened against or affecting any
Guarantor or any property or rights of any Guarantor, and (ii) there are no
judgments, liens, contingent liabilities, claims or counterclaims which might
materially adversely affect the Lender's rights under the Guaranty Agreement.
8. To the best of my knowledge, after due inquiry, no Guarantor is in default
under any document, instrument or agreement to which it is a party or by which
it is bound.
9. To the best of my knowledge, after due inquiry, no Guarantor has received
any notice to the effect that it is not in full compliance with any of the
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the regulations promulgated thereunder, and to the best of our
knowledge, after due inquiry, there exists no event of the type described in
Section 4043 of ERISA, excluding subsections 4043(b)(2) and 4043(b)(3) thereof.
10. To the best of my knowledge, after due inquiry, no Guarantor is in
violation of any applicable statute, regulation or ordinance of any government
entity or of any agency thereof, which could materially adversely affect the
financial condition or operations of such Guarantor.
Very truly yours,
/s/ J. P. Rowan
----------------------------------
J.P. Rowan
Vice President, General Counsel, &
Assistant Secretary
EXHIBIT H
FORM OF GUARANTY AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT, dated as of January __, 1995 (the
"Guaranty"), is made by _____________________, ____________________ (the
"Guarantor"), to the parties named in Section 1 hereof. Except as otherwise
defined herein, terms used herein defined in the Revolving Credit and
Reimbursement Agreement referred to below shall be used herein as so defined.
W I T N E S S E T H:
--------------------
WHEREAS, The Wackenhut Corporation, a Florida corporation (the "Borrower"),
the banks party thereto (the "Lenders"), and NationsBank of Florida, National
Association, as Agent (in such capacity and together with any successor agent in
such capacity, the "Agent") have entered into a Revolving Credit and
Reimbursement Agreement dated as of January 5, 1995 (as at any time amended,
modified or restated, the "Credit Agreement"); and
WHEREAS, the Guarantor is a Subsidiary of the Borrower and has been or may
be provided with advances from the Borrower or other working capital made
available directly or indirectly by the Lenders under the Credit Agreement, and
has thereby materially benefitted or will materially benefit from the loans made
to the Borrower pursuant to the Credit Agreement; and
WHEREAS, pursuant to the terms of the Credit Agreement the Guarantor is
required to deliver this Guaranty;
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees as follows:
1. GUARANTY AND SURETY. The Guarantor does hereby absolutely and
unconditionally for the benefit of the Agent and the Lenders (collectively, the
"Beneficiaries"), guarantee and become surety for the full and timely payment
when due (whether by acceleration or otherwise) (including amounts which, but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code (or any successor statute), would become due) of:
A. All Obligations as defined in the Credit Agreement; and
B. all other indebtedness, obligations and liabilities of the
Borrower under written financing arrangements stated by the Guarantor and each
of the Beneficiaries to be guaranteed hereby;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, extended,
renewed, replaced, refinanced or restructured,
100
whether or not from time to time decreased or extinguished and later increased,
created or incurred (all indebtedness, obligations and liabilities of the
Borrower described in this Section 1 are collectively referred to as the
"Guarantied Obligations"); PROVIDED, HOWEVER, that the liability of the
Guarantor with respect to the Guarantied Obligations shall not exceed at any
time the Maximum Amount (as hereinafter defined). The "Maximum Amount" means
the greater of (X) the aggregate amount of all advances to or investments in the
Guarantor made directly or indirectly with the proceeds of Loans under the
Credit Agreement or (Y) 95% of (a) the fair salable value of the assets of such
Guarantor as of the date hereof minus (b) the total liabilities of the Guarantor
(including contingent liabilities, but excluding liabilities of the Guarantor
under this Guaranty and the other Loan Documents executed by the Guarantor) as
of the date hereof; PROVIDED FURTHER, HOWEVER, that if the calculation of the
Maximum Amount in the manner provided above as of the date payment is required
of the Guarantor pursuant to this Guaranty would result in a greater positive
number, then the Maximum Amount shall be deemed to be such greater positive
number.
2. GUARANTY OF PAYMENT. This is a guaranty of payment and not merely of
collection. In the event of any default by the original obligor in payment or
otherwise on any of the Guarantied Obligations, the Guarantor will pay all or
any portion of the Guarantied Obligations due or thereafter becoming due,
whether by acceleration or otherwise, without offset of any kind whatsoever,
without any Beneficiary first being required to make demand upon the original
obligor or pursue any of its rights against the original obligor, or against any
other Person, including other guarantors (whether or not party to this
Guaranty); and without being required to liquidate or to realize on any
collateral security. In any right of action accruing to any Beneficiary, such
Beneficiary may elect to proceed against (a) the Guarantor together with the
original obligor or obligors; (b) the Guarantor and the original obligor or
obligors individually; or (c) the Guarantor only without having first commenced
any action against the original obligor or obligors.
3. RIGHT TO DEAL WITH GUARANTIED OBLIGATIONS. Subject to the terms and
conditions of the Credit Agreement, any Beneficiary, without notice to
Guarantor, may deal with any Guarantied Obligations and any collateral security
therefor in such manner as it may deem advisable and may renew or extend the
Guarantied Obligations or any part thereof; accept partial payment, or settle,
release, compound, or compromise the same; demand additional collateral security
therefor, and substitute or release the same; and may compromise or settle with
or release and discharge from liability any other guarantor of any Guarantied
Obligation, or any other Person liable to such Beneficiary for all or any
portion of the obligations of any original obligor; all without impairing the
liability of the Guarantor hereunder.
101
4. OTHER WAIVERS. Guarantor hereby unconditionally waives with respect to
this Guaranty: (a) notice of acceptance of this Guaranty by any Beneficiary and
any notice of the incurring by the Borrower of any Guarantied Obligation; (b)
presentment for payment, protest, notice of protest and notice of dishonor to
any party including the Borrower or the Guarantor; (c) any disability of the
original obligor or obligors or defense available to the original obligor or
obligors, including absence or cessation of any original obligor's liability for
any reason whatsoever; (d) any defense or circumstances which might otherwise
constitute a legal or equitable discharge of a guarantor or surety; and (e) all
rights under any state or federal statute dealing with or affecting the rights
of creditors.
5. SUBORDINATION. Until the Guarantied Obligations are paid in full and
no Beneficiary is under any further obligation to lend or extend funds or credit
which would constitute Guarantied Obligations, Guarantor hereby unconditionally
subordinates all present and future debts, liabilities or obligations of the
original obligor to such Guarantor to the Guarantied 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 Beneficiaries on account of the Guarantied
Obligations and, pending such payment, shall be held by the Guarantor as agent
and bailee of the Beneficiaries separate and apart from all other funds,
property and accounts of the Guarantor. Guarantor, at the request of any
Beneficiary, shall execute such further documents in favor of such Beneficiary
to further evidence and support the purpose of this Section 5. Guarantor hereby
irrevocably waives and releases any right or rights of subrogation or
contribution existing at law, by contract or otherwise to recover all or any
portion of any payment made hereunder from the Borrower or any other guarantor.
6. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to the
Beneficiaries that: (a) no other agreement, representation or special condition
exists between the Guarantor and any Beneficiary regarding the liability of the
Guarantor under this Guaranty; nor does any understanding exist between the
Guarantor and any Beneficiary that the obligations of the Guarantor under this
Guaranty are or will be other than as set out herein; and (b) as of the date
hereof, the Guarantor has no defense whatsoever to any action or proceeding that
may be brought to enforce this Guaranty. Furthermore, the Guarantor affirms to
the Beneficiaries that each of the representations and warranties contained in
the Credit Agreement and made by the Borrower with respect to the Guarantor is
true and correct.
7. NO WAIVER BY BENEFICIARIES. No failure or delay on the part of any
Beneficiary in exercising any right, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof, or
the exercise of
102
any other right, power or privilege. Failure by any Beneficiary to insist upon
strict performance hereof shall not constitute a relinquishment of its right to
demand strict performance at another time. Receipt by any Beneficiary of any
payment by any person on any GuaraSubordination. Until the Guarantied
Obligations are paid in full and no Beneficiary is under any further obligation
to lend or extend funds or credit which would constitute Guarantied Obligation,
with knowledge of a default on any Guarantied Obligation or of a breach of this
Guaranty, or both, shall not be construed as a waiver of the default or breach.
8. CONTINUING GUARANTY; TERMINATION. THIS GUARANTY IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
GUARANTIED OBLIGATIONS SHALL HAVE BEEN INDEFEASIBLY PAID IN FULL (OTHER THAN
GUARANTIED OBLIGATIONS IN THE NATURE OF CONTINUING INDEMNITIES OR EXPENSE
REIMBURSEMENT OBLIGATIONS NOT YET DUE AND PAYABLE) AND NO BENEFICIARY SHALL BE
UNDER ANY FURTHER OBLIGATION TO LEND OR TO ADVANCE FUNDS TO THE ACCOUNT OF THE
BORROWER CONSTITUTING GUARANTIED OBLIGATIONS.
9. BENEFITS OF AGREEMENT. This Guaranty is freely assignable and
transferable by the Beneficiaries to any permitted assignee and transferee of
any Guarantied Obligation; however, the duties and obligations of the Guarantor
may not be delegated or transferred by the Guarantor without the written consent
of all Beneficiaries. The rights and privileges of the Beneficiaries shall
inure to the benefit of their respective successors and assigns, and the duties
and obligations of the Guarantors shall bind their respective successors and
assigns.
10. EXPENSES; INDEMNITY. The Guarantor will upon demand pay to each
Beneficiary the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
it may reasonably incur in connection with enforcement of this Guaranty or the
failure by the Guarantor to perform or observe any of the provisions hereof.
The Guarantor agrees to indemnify and hold harmless each Beneficiary from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, growing out
of or resulting from this Guaranty or the exercise by any Beneficiary of any
right or remedy granted to it hereunder or under the other Loan Documents, other
than such items arising out of the bad faith, gross negligence or willful
misconduct on the part of such Beneficiary or an officer, co-officer, director,
co-director, employee, co-employee, agent or co-agent thereof or breach of this
Agreement by such Beneficiary or an officer, co-officer, director, co-director,
employee, co-employee, agent or co-agent thereof. If and to the extent that the
obligations of the Guarantor under this Section 10 are unenforceable for any
reason, the Guarantor hereby agree to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law.
11. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Guaranty or consent to any departure by the Guarantor herefrom
shall in any event be effective unless the
103
same shall be in writing and signed by the Guarantor and the Agent (which
execution by Agent shall be evidence that Agent has received the consent thereto
of the Lenders required to effect such amendment or waiver), and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no such amendment,
waiver or consent shall (a) deprive any Beneficiary of the benefits generally of
this Guaranty without the written consent of such Beneficiary, or (b) alter the
provisions of this Section 11 without the written consent of all of the
Beneficiaries.
12. ADDRESSES FOR NOTICES. All notices and other communications provided
for hereunder shall be in writing (including telecopy communication) and shall
be sent by registered or certified mail, return receipt requested, or first
class express mail or overnight courier, or by telecopy, in all cases with
charges prepaid, and shall be effective when delivered against a receipt
therefor or when telecopy transmission is confirmed, as the case may be. All
notices shall be sent to the applicable party at the address stated on the
signature page hereof or in accordance with the last unrevoked written direction
from such party to the other parties hereto.
13. INTERPRETATION; PARTIAL INVALIDITY. Whenever possible each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such 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 Guaranty.
14. MISCELLANEOUS; REMEDIES CUMULATIVE. Unless the context of this
Guaranty otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or." The section headings used
herein are for convenience of reference only and shall not define, limit or
extend the provisions of this Guaranty. All remedies hereunder are cumulative
and are not exclusive of any other rights and remedies of the Beneficiaries
provided by law or under the Credit Agreement, the other Loan Documents, or
other applicable agreements or instruments. The making of the Loans to the
Borrower and the issuance of Letters of Credit pursuant to the Credit Agreement
shall be presumed conclusively to have been made, extended or issued,
respectively, in reliance upon the obligations of the Guarantor incurred
pursuant to this Guaranty.
14. GOVERNING LAW. This Guaranty shall in all respects be governed by the
internal substantive laws of the State of Florida without regard to its choice
of law principles. Guarantor hereby (i) submits to the jurisdiction and venue
of the state and federal courts of Florida for the purposes of resolving
disputes hereunder or under any of the other Loan Documents to which it is a
party or
104
for the purpose of collection and (ii) to the maximum extent permitted by
applicable law, waives trial by jury in connection with any such litigation.
15. REPAYMENT OR RECOVERY. If claim is ever made upon any Beneficiary for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guarantied Obligations and any of the Beneficiaries repays all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by such
Beneficiary with any such claimant (including the original obligor), then and in
such event the Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Revolving Note or other instrument
evidencing any Guarantied Obligation or any security therefor, and the Guarantor
shall be and remain liable to the aforesaid Beneficiary for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by any such Beneficiary.
17. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (as defined in the
Credit Agreement), Guarantor agrees that each Beneficiary shall have a lien for
all the liabilities of the Guarantor upon all deposits or deposit accounts, of
any kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to such Beneficiary or
otherwise in the possession or control of such Beneficiary (other than for
safekeeping) for any purpose for the account or benefit of the Guarantor and
including any balance of any deposit account or of any credit of the Guarantor
with such Beneficiary, whether now existing or hereafter established, hereby
authorizing each Beneficiary at any time or times with or without prior notice
to apply such balances or any part thereof to such of the liabilities of the
Guarantor to such Beneficiary then past due and in such amounts as they may
elect, and whether or not the collateral or the responsibility of other Persons
primarily, secondarily or otherwise liable may be deemed adequate. For the
purposes of this Section 17, all remittances and property shall be deemed to be
in the possession of such Beneficiary as soon as the same may be put in transit
to it by mail or carrier or by other bailee.
18. CREDIT AGREEMENT CONTROLS. In the event that any term of this
Guaranty or of any other Loan Document (other than the Credit Agreement)
conflicts with any term of the Credit Agreement, then the term of the Credit
Agreement shall control.
105
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officers hereunto duly authorized as of the date
first above written.
WITNESS: __________________________
_______________________ By:________________________________
Name:______________________________
_______________________ Title:_____________________________
Address: _________________________
_________________________
_________________________
_________________________
Telephone No. _____________________
Telefacsimile No. _________________
106
EXHIBIT I
COVENANT COMPLIANCE CERTIFICATE
NationsBank of Florida, National Association
as Agent
NationsBank Plaza
150 S.E. Third Avenue
Miami, Florida 33131
Attention: Corporate Banking Department
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of January 5, 1995 (the "Agreement") among The Wackenhut
Corporation (the "Company"), the Lenders (as defined in the Agreement) and
NationsBank of Florida, 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 undersigned, a
duly authorized and acting Authorized Officer, hereby certifies to you as of
__________ [insert Determination Date] as follows:
1. Calculations:
A. Compliance with Section 7.06: Net Worth
1. Paid in capital + retained income $________
2. Aggregate amount of reserves, treasury
stock, contra-equity accounts and asset
value write ups $________
3. A.1 - A.2 $________
4. A.3 adjusted for cumulative effect of
foreign exchange valuations $________
5. $60,000,000 - Atrium sale reserve, but
not less than $55,000,000 $_________
6. Consolidated Net Income since
October 2, 1994 X .25 $_________
7. Net proceeds of sale of Company
stock X .75 $_________
8. Required Consolidated Net Worth
A.5 + A.6 + A.7 $_________
Line A.4 must not be less than Line A.8
B. Compliance with Section 7.07: Indebtedness
1. Consolidated Funded Debt: $__________
2. Consolidated Total Capitalization
B.1 + A.4 $__________
3. B.1 divided by B.2 __________
107
4. Outstanding trade receivables subject
to Asset Securitization Facility $__________
5. Additional Indebtedness described in
Section 7.07(vi) $__________
Line B.3 must not exceed .60. Line B.4 must not exceed $50,000,000.
Line B.5 must not exceed $15,000,000.
C. Compliance with Section 7.08: Fixed Charge Ratio
1. Consolidated Net Income $_________
2. Income taxes deducted in arriving
at C.1 $_________
3. Fixed Charges $_________
4. C.1 + C.2 + C.3 $_________
5. Ratio of C.4 to C.3 ___to 1.00
Line C.5 must not be less than 1.75 to 1.00.
D. Compliance with Section 7.09: Trading Asset
Ratio
1. Unencumbered cash, accounts and
receivables $__________
2. Net book value of headquarters $__________
(if applicable)
3. D.1+ D.2 $__________
4. Consolidated Funded Debt $__________
5. Outstanding Letters of Credit $__________
6. Accounts payable $__________
7. D.4 + D.5 + D.6 $__________
8. Ratio of D.3 to D.7 ___ to 1.00
Line B.8 must not be less than 1.15 to 1.00.
E. Compliance with Section 7.11: Restricted Payments
1. Restricted Payments since
December 31, 1989 $_________
2. Consolidated Net Income since
December 31, 1989 X .50 $_________
3. E.2 + $5,000,000 $_________
4. E.3 - E.1 $_________
Line E.4 must be 0 or greater than 0.
F. Compliance with Section 7.20: Loans to WCC
1. Loans and advances to WCC $_________
in current Fiscal Year in
Line F.1 must not exceed $1,500,000.
108
2. No Default
A. To the best knowledge of the undersigned, since
__________ (the date of the last similar certification),
(a) the Company has not defaulted in the keeping, observance,
performance or fulfillment of any of the Loan Documents; and (b) no
Default or Event of Default specified in Article IX of the Agreement
has occurred.
B. If a Default or Event of Default has occurred since
__________ (the date of the last similar certification), the Company
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").
3. Additional Subsidiaries
Listed on the Schedule of Additional Persons attached hereto is a true and
correct description of all Subsidiaries in respect of which the Company is
required pursuant to Section 7.19 of the Agreement to deliver or cause to be
delivered a Guaranty Agreement and related documents not later than the date of
this Certificate, and all documents so required to be delivered in respect of
each such Persons are delivered to you simultaneously herewith.
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 7.17 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
_____________________________________________
Authorized Officer for The Wackenhut
Corporation
109
Schedule of Additional Persons to Compliance Certificate
___________________, 199__
[Insert Applicable Determination Date]
[Provide for each Subsidiary listed the same
information furnished on Schedule 6.01 of the
Agreement in respect of Subsidiaries]
110
SCHEDULE 1.01
EXISTING L/C's
BENEFICIARY ISSUER L/C NUMBER AMOUNT
----------- ------ ---------- ------
National Union Fire Bank of America 7197986 $29,816,997
Insurance Company of
Pittsburgh
National Union Fire NationsBank of 16383 $9,354,917
Insurance Company of Florida, N.A.
Pittsburgh
Credit Lyonnais Credit Lyonnais 940112/S895 (A$)3,500,000
Australia Limited 920611/S55 (A$)500,000
(Australian dollars) 930890/5506 (A$)1000,000
The Aetna Casualty and NationsBank of 16231 $1,090,084
Insurance Company Florida, N.A.
County of San Joaquin, NationsBank of 16393 $250,000
California Florida, N.A.
Thai Farmers Bank NationsBank of 40078 $39,200
Florida, N.A.
Wackenhut Education NationsBank of 40508 $47,000
Services (Gainesville) Florida, N.A.
Wackenhut Mozambique NationsBank of 40644 $3,551
Florida, N.A.
Texas Youth Commission NationsBank of 40750 $656,256
Florida, N.A.
Wackenhut Security NationsBank of 40925 $165,337
Hellas Greece Florida, N.A.
111
SCHEDULE 6.01
SUBSIDIARIES OF THE COMPANY
Percentage of
Voting Stock
Owned by
Jurisdiction of Company and each
Name of Subsidiary Incorporation other Subsidiary
------------------ --------------- ----------------
* Wackenhut Services, Incorporated Florida 100%
* Wackenhut International, Incorporated Florida 100%
American Guard and Alert, Incorporated Alaska 100%
* Wackenhut Corrections Corporation Florida 73.3%
Wackenhut Airline Services, Inc. Florida 100%
Wackenhut Education Services, Inc. Florida 100%
* Titania Insurance Company of Vermont 100%
America
Tuhneklan, Inc. Delaware 100%
Subsidiaries of Wackenhut International, Incorporated
-----------------------------------------------------
Wackenhut Liberia Incorporated Liberia 55%
Wackenhut Dominicana, S.A. Dominican Republic 90%
Wackenhut Del Ecuador, S.A. Ecuador 90%
Wackenhut El Salvador, S.A. El Salvador 70%
Wackenhut De Honduras, S.A. Honduras 80%
Wackenhut S.A. Costa Rica 66.7%
Peruana De Seguridad y Vigilancia, S.A. Peru 70%
Wackenhut Paraguay S.R.L. Paraguay 55%
Wackenhut Belize Ltd. Belize 100%
Wackenhut Central Europe GMBH Federal Republic 100%
of Germany
Wackenhut of Canada Limited Canada 100%
Wackenhut Du Quebec Quebec 100%
Protection Securite Detek Ltee. Quebec 100%
Wackenhut U K Limited United Kingdom 100%
Advanced Security Technology, Ltd. United Kingdom 100%
Wackenhut Investigations Limited United Kingdom 100%
Wackenhut Appointments Limited United Kingdom 100%
Wackenhut Puerto Rico Puerto Rico 100%
* Material Restricted Subsidiary
112
SCHEDULE 6.04
DESCRIPTION DEBT OF THE COMPANY AND ITS SUBSIDIARIES
1. FUNDED DEBT OF THE COMPANY AND ITS SUBSIDIARIES
DESCRIPTION AMOUNT
----------- ------
* Revolving credit agreement to provide working
capital and support a letter of credit facility,
expires in December, 1994 (various rates). $20,450,000
* First mortgage note on the Headquarters Building
matures on May 30, 1995. Quarterly payments of
$182,500 commenced March 30, 1992. Several rate
options for the borrowings at prime rate or lower. $16,060,000
2. CURRENT DEBT OF THE COMPANY AND ITS SUBSIDIARIES:
Revolving credit line for start-up and working
capital for a correctional facility in Australia.
Both lines expire in February, 1995 and are fully
secured by L/C's issued by the lender's parent
bank (various rates). ($A)1,500,000
3. CAPITALIZED LEASES OF THE COMPANY AND ITS SUBSIDIARIES:
None
* Funded debt which will be paid off from use of the new "Receivables
Purchase Agreement".
113
SCHEDULE 6.04
DESCRIPTION DEBT OF THE COMPANY AND ITS SUBSIDIARIES
(CONTINUED)
4. LETTERS OF CREDIT OUTSTANDING:
Beneficiary Issuer L/C Number Amount
----------- ------ ---------- ------
National Union Fire Bank of America 7197986 $29,816,997
Insurance Company of
Pittsburgh
National Union Fire NationsBank of 16383 $ 9,354,917
Insurance Company of Florida, N.A.
Pittsburgh
Credit Lyonnais Credit Lyonnais 940112/S895 (A$)3,500,000
Australia Limited 920611/S55 (A$)500.000
(Australia dollars) 9309901/5506 (A$)1,000,000
The Aetna Casualty and NationsBank of 16231 $1,090,084
Insurance Company Florida, N.A.
County of San Joaquin, NationsBank of 16393 $250,000
California Florida, N.A.
Thai Farmers Bank NationsBank of 40078 $39,200
Florida, N.A.
Wackenhut Education NationsBank of 40508 $47,000
Services (Gainesville) Florida, N.A.
Wackenhut Mozambique NationsBank of 40644 $3,551
Florida, N.A.
Texas Youth Commission NationsBank of 40750 $656,256
Florida, N.A.
Wackenhut Security NationsBank of 40925 $165,337
Hellas Greece Florida, N.A.
114
SCHEDULE 6.06
-------------
LITIGATION
----------
Except for ordinary routine AND NON-MATERIAL litigation incidental to the
Company's business, there are no pending material legal proceedings to which the
Company or any of its subsidiaries is a party or of which any of their property
is subject, except as follows:
The Company, in conjunction with its primary and excess insurance carriers,
contributed funds to create a pool to settle an underlying $4,500,000 judgement
against the Company for which all of the insurance carriers dispute
responsibility. It is the opinion of management, after consultation with
outside counsel, that it is more likely than not that the judgement would be the
responsibility of the insurance carriers. While there can be no absolute
assurance that the reserve provided by the Company is adequate, management
believes it has made its best estimate of the potential exposure to the Company
in this matter.
115
SCHEDULE 7.10
EXISTING LIENS
An existing lien is the first mortgage note on the Headquarters building owned
by The Atrium at Coral Gables, Ltd. due on May 30, 1995, which will be paid off
from the use of this new credit facility.
116
LETTER OF CREDIT ACCOUNT AGREEMENT
This LETTER OF CREDIT ACCOUNT AGREEMENT (the "Agreement") is dated as of
January , 1995, and made between THE WACKENHUT CORPORATION, a Florida
corporation ("Pledgor"), and NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION
("NationsBank"), as collateral agent for an representative of (in such capacity
herein and together with any successors in such capacity, the "Agent") the
financial institutions (the "Lenders") party to the Credit Agreement (as
hereinafter defined).
RECITALS
WHEREAS, the Lenders and NationsBank, as Agent for the Lenders, have
entered into a Revolving Credit and Reimbursement Agreement dated as of January
, 1995, with Pledgor (said Credit Agreement, as it may hereafter be amended and
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 and to issue Letters of Credit, Pledgor is required to execute and deliver
to NationsBank a copy of this Agreement on or before the Effective Time;
NOW, THEREFORE, in consideration of the foregoing and the agreements,
provisions and covenants contained herein, Pledgor and Agent hereby agree as
follows:
Section 1. 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 of evidencing such Investments; (c) all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by Agent for or on behalf of 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.
"EFFECTIVE TIME" means the Closing Date as defined in the Credit Agreement.
"INVESTMENTS" means those investments, if any, made by the Agent pursuant
to Section 5 hereof.
"LC ACCOUNT" means the cash collateral account established and maintained
pursuant to Section 2 hereof.
"SECURED OBLIGATIONS" means (i) all obligations of Pledgor now existing or
hereafter arising under or in respect of the Credit Agreement (including,
without limitation, Pledgor's obligations 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 any documents or agreement related to the Credit Agreement;
and (ii) without duplication, all obligations of 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) Agent shall establish and maintain at its offices at 150
Southeast Third Avenue, Miami, Florida 33131, in the name of the Agent and
under the sole dominion and control of the Agent, a cash collateral
account designated as NationsBank/Wackenhut Cash LC Account, Account No.
3601603489.
(ii) In accordance with Article VIII of the Credit Agreement, in the
event that an Event of Default has occurred and is continuing and Pledgor
is required to pay to Agent an amount equal to the maximum amount which may
at any time be drawn under the Letters of Credit, 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 VIII of the Credit
Agreement. Any such amounts received by Agent pursuant to Section 8.03 (B)
of the Credit Agreement shall be deposited in the Collateral Account. Upon
a drawing under the Letters of Credit in respect of which any amounts
described above have been deposited in the LC Account, Agent shall apply
such amounts to reimburse the appropriate Letter of Credit Issuer or the
Lenders, as the case may be, for the amount of such drawing. In the event
the Letters of Credit are cancelled 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"), Agent shall apply
the amount then in the Collateral Account designated to reimburse the
appropriate Letter of Credit Issuer or the Lenders, as the case may be,
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
Pledgor has failed to pay all or a portion of the maximum amounts
described above and, SECOND, to the payment in full of the outstanding
Secured Obligations.
2
(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 Pledgor on the last Business Day of each
calendar month or, if earlier, in the case of Investments (x) of any amounts
deposited in the LC Account pursuant to clause (ii), 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 and (y) of any amounts deposited in the LC Account
pursuant to clause (ii), upon payment of the tax liability in respect of
which such amounts were so deposited; PROVIDED, HOWEVER, that the Agent
shall not deliver to 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 is continuing or unless
all outstanding Secured Obligations have been indefeasibly paid in full
in cash.
Section 3. PLEDGE; SECURITY FOR SECURED OBLIGATIONS. Pledgor hereby pledges
to Agent, 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 foe
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 of instruments, if any,
representing or evidencing the Collateral shall be delivered to and held by the
Agent pursuant hereto and shall be a 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 Company, 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 THE 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
3
the Agent so long as no Default or Event of Default shall have
occurred and be continuing, in cash equivalents; provided that such
investment can be effected and maintained without the lapse or termination
of the Agent's perfected, first priority security interest therein.
(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 be continuing, upon the receipt of
appropriate written instructions from Pledgor 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 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, Pledgor represents and warrants to the Agent, as the agent for 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;
(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. Pledgor agrees that at any time and from
time to time, at its expense, it 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. 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. Pledgor hereby appoints
the Agent as its attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in the
Agent's reasonable
4
discretion to take any action and to execute any instrument which the Agent may
reasonable deem necessary or advisable to accomplish the purposes of the
Agreement, including, without limitations, to receive, endorse and collect all
instruments made payable to Pledgor 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 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 Pledgor.
Section 10. THE AGENT MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, after notice to 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 Pledgor under Section 13
hereof.
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 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 be continuing:
(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
Florida 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 for future delivery, and
at such price or prices, and upon such other terms as the Agent may deem
commercially reasonable. 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
5
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. 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 Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
Section 13. EXPENSES. In addition to any payments of expenses of
Collateral Agent pursuant to Section 10.06 of the Credit Agreement, Pledgor
agrees to pay promptly to the Agent all the costs and expenses which the Agent
may incur in connections 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 of the Agent hereunder, or (c) the
failure by Pledgor to perform or observe any of the provision hereof.
Section 14. NO DELAY'S 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 of 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
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 Pledgor or Collateral 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
6
yet due and payable) shall have been indefeasibly paid in full in cash, the
Commitments of the Lenders 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 generally of the foregoing clause (c) and subject to the provisions
of Section 10.01 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, Pledgor
shall be entitled 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 THE 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 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, 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 ANY
JUDGEMENT 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 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 Pledgor or by and on behalf of the Agent shall bind and inure
to the benefit of the successors and assigns of Pledgor, the Agent and the
Lenders.
7
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.
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. The 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.
8
IN WITNESS WHEREOF, 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: THE WACKENHUT CORPORATION
- ---------------------------- ---------------------------------------
By:
------------------------------------
Title:
---------------------------------
- ----------------------------
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent
---------------------------------------
By:
------------------------------------
Title:
Vice President
----------------
9
NationsBank of Florida, National Association
150 S.E. Third Avenue
Miami, Florida 33131
Attention: John Miller January ,1995
Re: Revolving Credit and Letter of Credit Facility for the Wackenhut
Corporation (the "Facilities") pursuant to Revolving Credit and Reimbursement
Agreement dated as of January , 1995 (the "Credit Agreement")
Ladies and Gentlemen:
In connection with your execution and delivery of the Credit Agreement and
the extension of the Facilities to us thereunder, we reaffirm our agreement to
pay, in addition to all fees described in the Credit Agreement (all capitalized
terms not defined herein shall have the respective meanings therefor provided in
the Credit Agreement), the following fees:
1. An upfront fee payable to the Agent for the ratable benefit of
the Lenders as of the Closing Date in an amount equal to .05% (5 basis
points) of the Total Revolving Loan Commitment, of $30,000, payable to you
in full on the Closing Date; and
2. An annual Agent fee, payable to the Agent for its own account, of
$10,000, such annual fee to be payable as provided in Section 9.11 of the
Credit Agreement.
WITNESS: THE WACKENHUT CORPORATION
- ---------------------------- By:
------------------------------------
Title:
- ---------------------------- ---------------------------------
IN WITNESS WHEREOF, the parties have caused this Purchase and Sale
Agreement to be executed by their respective officers thereunto duly authorized.
as of the date first above written.
THE WACKENHUT CORPORATION
as Initial Purchaser
By:
------------------------------------
Title: Assistant Treasurer
---------------------------------
1500 San Romo Avenue
Coral Gables, Florida 33146
Attention:
-----------------------------
Telephone:
-----------------------------
Facsimile:
-----------------------------
WACKENHUT AIRLINES SERVICES, INC.
as an Originator
By:
------------------------------------
Title: Assistant Treasurer
---------------------------------
1500 San Romo Avenue
Coral Gables, Florida 33146
Attention:
-----------------------------
Telephone:
-----------------------------
Facsimile:
-----------------------------
24