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Exhibit 4.21
Bank of America
September 10, 1999
The Wackenhut Corporation
4200 Wackenhut Drive, Suite 100
Palm Beach Gardens, Florida 33410
Attn: Frank Finizia
Assistant Secretary and Corporate Counsel
Re: 364-DAY REVOLVING CREDIT FACILITY
Ladies/Gentlemen:
BANK OF AMERICA, N.A. ("LENDER") is pleased to make available to THE WACKENHUT
CORPORATION, a Florida corporation ("BORROWER"), a revolving credit facility on
the terms and subject to the conditions set forth below. Terms not defined
herein have the meanings assigned to them in EXHIBIT A hereto.
1. THE FACILITY.
(a) THE COMMITMENT. Subject to the terms and conditions set forth
herein, Lender agrees to make available to Borrower from the
date hereof until the Maturity Date a revolving line of credit
providing for loans ("LOANS") in an aggregate principal amount
not exceeding at any time $30,000,000 (the "COMMITMENT").
Within the foregoing limit, Borrower may borrow, repay and
reborrow Loans until the Maturity Date.
(b) BORROWINGS, CONVERSIONS, CONTINUATIONS. Borrower may request
that Loans be (i) made as or converted to Base Rate Loans by
irrevocable notice to be received by Lender not later than
12:30 p.m. on the Business Day of the borrowing or conversion,
or (ii) made or continued as, or converted to, Offshore Rate
Loans by irrevocable notice to be received by Lender not later
than 12:30 p.m. three Business Days prior to the Business Day
of the borrowing, continuation or conversion. If Borrower
fails to give a notice of conversion or continuation prior to
the end of any Interest Period in respect of any Offshore Rate
Loan, Borrower shall be deemed to have requested that such
Loan be converted to a Base Rate Loan on the last day of the
applicable Interest Period.
Each Offshore Rate Loan shall be in a minimum principal amount
of $300,000 or an integral multiple thereof. Each Base Rate
Loan shall be in a
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minimum principal amount of $300,000. There shall not be more
than six (6) different Interest Periods in effect at any time.
(c) INTEREST. At the option of Borrower, Loans shall bear interest
at a rate per annum equal to (i) the Offshore Rate PLUS the
Applicable Margin; or (ii) the Base Rate. Interest on Base
Rate Loans when the Base Rate is determined by Lender's
"prime" rate shall be calculated on the basis of a year of 365
or 366 days and actual days elapsed. All other interest
hereunder shall be calculated on the basis of a year of 360
days and actual days elapsed.
Borrower promises to pay interest (i) for each Offshore Rate
Loan, on the last day of the applicable Interest Period, and,
if the Interest Period is longer than three months, on the
respective dates that fall every three months after the
beginning of the Interest Period; (ii) for Base Rate Loans, on
the last Business Day of each calendar quarter; and (iii) for
all Loans, on the Maturity Date. If the time for any payment
is extended by operation of law or otherwise, interest shall
continue to accrue for such extended period.
Upon the occurrence and during the continuance of an Event of
Default hereunder, Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment)
on the outstanding amount of all Loans hereunder at a rate per
annum equal to the then applicable rate plus 2.0%. Such
interest shall be payable on demand.
In no case shall interest hereunder exceed the amount that
Lender may charge or collect under applicable law.
(d) EVIDENCE OF LOANS. The Loans and all payments thereon shall be
evidenced by Lender's loan accounts and records; PROVIDED,
HOWEVER, that upon the request of Lender, the Loans may be
evidenced by a grid promissory note in the form of EXHIBIT B
hereto, instead of or in addition to such loan accounts and
records. Such loan accounts, records and promissory note shall
be conclusive absent manifest error of the amount of the Loans
and payments thereon. Any failure to record any Loan or
payment thereon or any error in doing so shall not limit or
otherwise affect the obligation of Borrower to pay any amount
owing with respect to the Loans.
(e) FEES. Borrower promises to pay the following fees in
accordance with the terms hereof:
(i) UPFRONT FEE. Borrower shall pay to Lender an upfront fee
(the "UPFRONT FEE") in accordance with the terms and
conditions of that certain letter agreement dated as of August
27, 1999 between Borrower and Lender. The Upfront Fee shall be
due and payable to Lender upon the execution and delivery of
this Agreement and shall be non-refundable once paid.
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(ii) COMMITMENT FEE. Borrower shall pay to Lender a commitment
fee (the "COMMITMENT FEE") in accordance with the terms of the
pricing grid appearing below on the actual daily unused
portion of the Commitment, payable in arrears on the last
Business Day of each calendar quarter and on the Maturity
Date, and calculated on the basis of a year of 360 days and
actual days elapsed.
FIXED CHARGES COVERAGE RATIO COMMITMENT FEE
---------------------------- --------------
Greater than 2.0x .20%
Less than or equal to 2.0x but .25%
greater than 1.75x
Less than or equal to 1.75x but .30%
greater than or equal to 1.5x
(f) REPAYMENT. Borrower promises to pay all Loans then outstanding
on the Maturity Date.
Borrower shall make all payments required hereunder not later
than 12:30 p.m. (other than if such payment is made by a debit
by the Lender to an account designated by Borrower) on the
date of payment in same day funds in United States Dollars at
the office of Lender located at Charlotte, North Carolina or
such other address as Lender may from time to time designate
in writing.
All payments by Borrower to Lender hereunder shall be made to
Lender in full without set-off or counterclaim and free and
clear of and exempt from, and without deduction or withholding
for or on account of, any present or future taxes, levies,
imposts, duties or charges of whatsoever nature imposed by any
government or any political subdivision or taxing authority
thereof. Borrower shall reimburse Lender for any taxes imposed
on or withheld from such payments (other than taxes imposed on
Lender's income, and franchise taxes imposed on Lender, by the
jurisdiction under the laws of which Lender is organized or
any political subdivision thereof).
(g) PREPAYMENTS. Borrower may, upon three Business Days' notice,
in the case of Offshore Rate Loans, and upon same-day notice
in the case of Base Rate Loans, prepay Loans on any Business
Day; PROVIDED that Borrower pays all Breakage Costs (if any)
associated with such prepayment on the date of such
prepayment. Prepayments of Offshore Rate Loans must be
accompanied by a payment of interest on the amount so prepaid.
Prepayments must be in a principal amount equal to (i) at
least $5,000,000 (or a greater amount which is an integral
multiple of $1,000,000) or (ii) to the extent Borrower chooses
to prepay the outstanding principal balance of all Loans, the
outstanding principal amount thereof.
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(h) COMMITMENT REDUCTIONS. Borrower may, upon five Business Days'
notice, reduce or cancel the undrawn portion of the
Commitment, PROVIDED, that the amount of such reduction is not
less than $5,000,000 or such greater amount which is in an
integral multiple of $1,000,000. Each such reduction shall
permanently reduce the Commitment.
2. (a) CONDITIONS PRECEDENT TO INITIAL LOAN. As a condition
precedent to the initial Loan hereunder, Lender must receive
the following from Borrower in form satisfactory to Lender:
(i) the enclosed duplicate of this Agreement duly
executed and delivered on behalf of Borrower;
(ii) a certified borrowing resolution or other evidence of
Borrower's authority to borrow;
(iii) a certificate of incumbency;
(iv) if requested by Lender, a promissory note as
contemplated in PARAGRAPH 1(d) above; and
(v) such other documents (including legal opinions) as
Lender may reasonably request.
(b) CONDITIONS TO EACH BORROWING, CONTINUATION AND CONVERSION. As
a condition precedent to each borrowing (including the initial
borrowing), conversion and continuation of any Loan:
(i) Borrower must furnish Lender with, as appropriate, a
notice of borrowing, conversion or continuation;
(ii) each representation and warranty set forth in
PARAGRAPH 3 below (or incorporated therein by
reference) shall be true and correct in all material
respects as if made on the date of such borrowing,
continuation or conversion; and
(iii) no Default or Event of Default shall have occurred
and be continuing on the date of such borrowing,
continuation or conversion.
Each notice of borrowing and notice of conversion or
continuation shall be deemed a representation and warranty by
Borrower that the conditions referred to in clauses (ii) and
(iii) above have been met.
3. REPRESENTATIONS AND WARRANTIES. Reference is made to the Existing
Credit Agreement and the representations and warranties of Lessee
contained in Sections 6.01 through 6.04, 6.06 through 6.08, 6.10, 6.12,
6.14, 6.16 and 6.17 of the Existing Credit Agreement
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(hereinafter referred to as the "INCORPORATED REPRESENTATIONS AND
WARRANTIES"). Borrower agrees with Lender that the Incorporated
Representations and Warranties (and all other relevant provisions of
the Existing Credit Agreement related thereto, including without
limitation all exhibits, schedules and the defined terms contained in
Section 1.02 thereof, which are used in the Incorporated
Representations and Warranties) are hereby incorporated by reference
into this Agreement to the same extent and with the same effect as if
set forth fully herein and shall inure to the benefit of Lender,
without giving effect to any waiver, amendment, modification or
replacement of the Existing Credit Agreement or any term or provision
of the Incorporated Representations and Warranties occurring subsequent
to the date of this Agreement, except to the extent otherwise
specifically provided in the final paragraph of Section 4 of this
Agreement. Borrower represents that the Incorporated Representations
and Warranties are true and accurate as of the date hereof.
Borrower further represents and warrants that:
(a) FULL DISCLOSURE. No written statement made by Borrower to
Lender in connection with this Agreement, or in connection
with any Loan, contains any untrue statement of a material
fact or omits a material fact necessary to make the statement
made not misleading.
(b) POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The execution,
delivery and performance of this Agreement and the other Loan
Documents by Borrower are within its powers and have been duly
authorized by all necessary action, and this Agreement is and
the other Loan Documents, when executed, will be, legal, valid
and binding obligations of Borrower, enforceable in accordance
with their respective terms. The execution, delivery and
performance of this Agreement and the other Loan Documents are
not in contravention of law or of the terms of Borrower's
organic documents and will not result in the breach of or
constitute a default under, or result in the creation of a
lien under any indenture, agreement or undertaking to which
Borrower is a party or by which it or its property may be
bound or affected.
(c) USE OF PROCEEDS. The proceeds of the Loans will be used solely
for working capital or general corporate purposes, and not in
contravention of Regulation U of the Board of Governors of the
Federal Reserve Bank or any other requirement of law.
(d) YEAR 2000 READINESS DISCLOSURE. Borrower has (i) initiated a
review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those
affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications used by Borrower or any of its
Subsidiaries (or their respective suppliers, vendors and
customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (ii) developed a plan and
timeline for addressing
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the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based
on the foregoing, Borrower believes that all computer
applications (including those of its and its Subsidiaries'
customers and vendors) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected
on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 compliant"), except to
the extent that a failure to do so could not reasonably be
expected to have a Material Adverse Effect on Borrower or on
the transaction documented under this Agreement.
4. COVENANTS. Reference is made to the Existing Credit Agreement and the
covenants contained in Sections 7.01 through 7.23 of the Existing
Credit Agreement (hereinafter referred to as the "INCORPORATED
COVENANTS"). So long as principal of and interest on any Loan or any
other amount payable hereunder or under any other Loan Document remains
unpaid or unsatisfied or the Commitment has not been terminated,
Borrower shall comply with the Incorporated Covenants, it being agreed
that such covenants and agreements shall survive any termination,
cancellation or discharge of the Existing Credit Agreement. Borrower
agrees with Lender that the Incorporated Covenants (and all other
relevant provisions of the Existing Credit Agreement related thereto,
including without limitation all exhibits, schedules and the defined
terms contained in Section 1.02 thereof, which are used in the
Incorporated Covenants) are hereby incorporated by reference into this
Agreement to the same extent and with the same effect as if set forth
fully herein and shall inure to the benefit of Lender, without giving
effect to any waiver, amendment, modification or replacement of the
Existing Credit Agreement or any term or provision of the Incorporated
Covenants occurring subsequent to the date of this Agreement, except to
the extent otherwise specifically provided in the following paragraph
of this Section 4.
In the event a waiver is granted under the Existing Credit Agreement or
an amendment or modification is executed with respect to the Existing
Credit Agreement, and such waiver, amendment and/or modification
affects the Incorporated Representations and Warranties or the
Incorporated Covenants, then such waiver, amendment or modification
shall be effective with respect to the Incorporated Representations and
Warranties and the Incorporated Covenants as incorporated by reference
into this Agreement only if consented to in writing by the Lender. In
the event of any replacement of the Existing Credit Agreement with a
similar credit facility (the "NEW FACILITY") the representations and
warranties and covenants contained in the New Facility which correspond
to the representations and warranties and covenants contained in (a)
Sections 6.01 through 6.04, 6.06 through 6.08, 6.10, 6.12, 6.14, 6.16
and 6.17 and (b) Sections 7.01 through 7.23, respectively, of the
Existing Credit Agreement shall become the Incorporated Representations
and Warranties and the Incorporated Covenants hereunder only if
consented to in writing by Lender and, if such consent is not granted
or if the Existing Credit Agreement is terminated and not replaced,
then the representations and warranties and covenants contained in (a)
Sections 6.01 through 6.04, 6.06 through 6.08, 6.10, 6.12, 6.14, 6.16
and 6.17 and (b) Sections 7.01 through 7.23, respectively, of the
Existing Credit Agreement (together with any modifications or
amendments approved in accordance with this paragraph) shall continue
to be the Incorporated Representations and Warranties and the
Incorporated Covenants hereunder.
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5. EVENTS OF DEFAULT. The following are "EVENTS OF DEFAULT:"
(a) Borrower fails to pay any principal of any Loan as and on the
date when due; or
(b) Borrower fails to pay any interest on any Loan, or any fees
due hereunder, or any portion thereof, within three days after
the date when due; or
(c) Any representation or warranty in any Loan Document (including
without limitation the Incorporated Representations and
Warranties) or in any certificate, agreement, instrument or
other document made or delivered by Borrower pursuant to or in
connection with any Loan Document proves to have been
incorrect when made or deemed made; or
(d) Borrower fails to comply with any covenant or agreement
incorporated herein by reference pursuant to PARAGRAPH 4
above, subject to any applicable grace period and/or notice
requirement set forth in Sections 8.01(e) and (f) of the
Existing Credit Agreement (it being understood and agreed that
any such notice requirement shall be met by Lender's giving
the applicable notice to Borrower); or
(e) Any "Event of Default" specified in Article VIII of the
Existing Credit Agreement occurs and is continuing, without
giving effect to any waiver thereof pursuant to the Existing
Credit Agreement.
Upon the occurrence of an Event of Default, Lender may declare the
Commitment to be terminated, whereupon the Commitment shall be
terminated, and/or declare all sums outstanding hereunder and under the
other Loan Documents to be immediately due and payable, together with
all interest thereon, without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, all of which are hereby
expressly waived; PROVIDED, HOWEVER, that upon the occurrence of any
event specified in Sections 8.01(j) or (k) of the Existing Credit
Agreement, the Commitment shall automatically terminate, and all sums
outstanding hereunder and under each other Loan Document shall become
immediately due and payable, together with all interest thereon,
without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor, or other notices or demands of any
kind or character, all of which are hereby expressly waived.
6. MISCELLANEOUS.
(a) All financial computations required under this Agreement shall
be made, and all financial information required under this
Agreement shall be prepared, in accordance with generally
accepted accounting principles consistently applied.
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(b) All references herein and in the other Loan Documents to any
time of day shall mean the local (standard or daylight, as in
effect) time of Charlotte, North Carolina.
(c) All Breakage Costs shall be for the account of Borrower.
(d) If on or prior to the first day of any Interest Period the
Lender determines (which determination shall be conclusive)
that (i) by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for
ascertaining the Offshore Rate for such Interest Period or
(ii) the Offshore Rate will not adequately and fairly reflect
the cost to the Lender of funding Offshore Rate Loans for such
Interest Period, then the Lender shall give the Borrower
prompt notice thereof specifying the relevant amounts or
periods, and so long as such condition remains in effect, the
Lender shall be under no obligation to make additional
Offshore Rate Loans, continue Offshore Rate Loans or to
convert Loans into Offshore Rate Loans and Borrower shall, on
the last day(s) of the then current Interest Period(s) for the
outstanding Offshore Rate Loans, either prepay such Loans or
convert such Loans to Base Rate Loans in accordance with the
terms of this Agreement.
(e) Borrower shall reimburse or compensate Lender, upon demand,
for all costs incurred, losses suffered or payments made by
Lender which are applied or reasonably allocated by Lender to
the transactions contemplated herein (all as determined by
Lender in its reasonable discretion) by reason of any and all
future reserve, deposit, capital adequacy or similar
requirements against (or against any class of or change in or
in the amount of) assets, liabilities or commitments of, or
extensions of credit by, Lender; and compliance by Lender with
any directive, or requirements from any regulatory authority,
whether or not having the force of law.
(f) No amendment or waiver of any provision of this Agreement
(including any provision of the Existing Credit Agreement
incorporated herein by reference pursuant to PARAGRAPH 3 or
PARAGRAPH 4 above and any waiver of PARAGRAPH 5(d) above) or
of any other Loan Document and no consent by Lender to any
departure therefrom by Borrower shall be effective unless such
amendment, waiver or consent shall be in writing and signed by
a duly authorized officer of Lender, and any such amendment,
waiver or consent shall then be effective only for the period
and on the conditions and for the specific instance specified
in such writing. No failure or delay by Lender in exercising
any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other rights, power or privilege.
(g) Except as otherwise expressly provided herein, notices and
other communications to each party provided for herein shall
be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by telecopy or electronic mail
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to the address provided from time to time by such party. Any
such notice or other communication sent by overnight courier
service, mail or telecopy shall be effective on the earlier of
actual receipt and (i) if sent by overnight courier service,
the scheduled delivery date, (ii) if sent by mail, the fourth
Business Day after deposit in the U.S. mail first class
postage prepaid, and (iii) if sent by telecopy, when
transmission in legible form is complete. All notices and
other communications sent by the other means listed in the
first sentence of this paragraph shall be effective upon
receipt. Notwithstanding anything to the contrary contained
herein, all notices (by whatever means) to Lender pursuant to
PARAGRAPH 1(b) hereof shall be effective only upon receipt.
(h) This Agreement shall inure to the benefit of the parties
hereto and their respective successors and assigns, except
that Borrower may not assign its rights and obligations
hereunder. Lender may at any time (i) assign all or any part
of its rights and obligations hereunder to any other Person
with the consent of Borrower, such consent not to be
unreasonably withheld, PROVIDED that no such consent shall be
required if the assignment is to an affiliate of Lender or if
a Default or Event of Default exists, and (ii) grant to any
other Person participating interests in all or part of its
rights and obligations hereunder without notice to Borrower.
Borrower agrees to execute any documents reasonably requested
by Lender in connection with any such assignment. All
information provided by or on behalf of Borrower to Lender or
its affiliates may be furnished by Lender to its affiliates
and to any actual or proposed assignee or participant.
(i) Borrower agrees to pay Lender, on demand, all reasonable
out-of-pocket expenses and legal fees (including the allocated
costs for in-house legal services) incurred by Lender in
connection with: (i) the preparation, negotiation and
execution of this Agreement or any other Loan Document and the
consummation of the transactions contemplated hereby and
thereby, (ii) any amendment, supplement or modification to
this Agreement or any other Loan Document and (iii) the
enforcement of this Agreement or any instruments or agreements
executed in connection herewith.
(j) If any provision of this Agreement or any other Loan Document
shall be held invalid or unenforceable in whole or in part,
such invalidity or unenforceability shall not affect the
remaining provisions hereof or thereof. This Agreement
supersedes all prior agreements and oral negotiations with
respect to the subject matter hereof.
(k) This Agreement may be executed in one or more counterparts,
and each counterpart, when so executed, shall be deemed an
original but all such counterparts shall constitute but one
and the same instrument.
(l) This Agreement and the other Loan Documents are governed by,
and shall be construed in accordance with, the laws of the
State of North Carolina and the applicable laws of the United
States of America. Borrower hereby submits to the
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nonexclusive jurisdiction of the United States District Court
and each state court in the City of Charlotte, North Carolina
for the purposes of all legal proceedings arising out of or
relating to any of the Loan Documents or the transactions
contemplated thereby. Borrower irrevocably consents to the
service of any and all process in any such action or
proceeding by the mailing of copies of such process to
Borrower at its address set forth beneath its signature
hereto. Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
(m) BORROWER AND LENDER EACH WAIVE THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(n) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Please indicate your acceptance of the Commitment on the foregoing terms and
conditions by returning an executed copy of this Agreement to the undersigned
not later than September 24, 1999.
BANK OF AMERICA, N.A.
By: /s/ Robert Mauriello
-------------------------------
Name: Robert Mauriello
Title: Vice President
ACCEPTED AND AGREED TO:
THE WACKENHUT CORPORATION
By: /s/ Kenneth J. Matulia
--------------------------------
Name: Kenneth J. Matulia
Title: Assistant Secretary
Date: 20 Sept., 1999
STATE OF Maryland
COUNTY OF Anne Arandel
I, Glenda K. White, a Notary Public for said County and State, do
hereby certify that Kenneth J. Matulia, the Assistant Secretary of The Wackenhut
Corporation, a Florida corporation, personally appeared before me this day, and
being by me duly sworn, acknowledged, on behalf of The Wackenhut Corporation as
its duly authorized representative, the due execution of the foregoing
instrument.
Witness my hand and official seal this 20th day of September, 1999.
(Official Seal)
/s/ Glenda K. White
--------------------------------------
Notary Public
My Commission Expires December 1, 1999
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EXHIBIT A
DEFINITIONS
Agreement: This letter agreement, as amended, restated,
extended, supplemented or otherwise modified in
writing from time to time.
Applicable Margin: The appropriate applicable percentage corresponding
to the Fixed Charges Coverage Ratio in effect as of
the four quarter period most recently ended as
specified below:
Fixed Charges Coverage Ratio Offshore Rate Loan
---------------------------- ------------------
Greater than 2.0x .675%
Less than or equal to 2.0x but .925%
greater than 1.75x
Less than or equal to 1.75x but 1.30%
greater than or equal to 1.5x
The Applicable Margin shall be established at the
end of each fiscal quarter of Borrower (each, a
"DETERMINATION DATE"). Any change in the Applicable
Margin following each Determination Date shall be
determined based upon the computations calculated
and set forth in the certificate delivered in
accordance with Section 7.17(f) of the Existing
Credit Agreement, and shall be effective commencing
on the date following the date such certificate is
received (or, if earlier, the date such certificate
was required to be delivered) until the date
following the date on which a new certificate is
delivered or required to be delivered, whichever
shall first occur; PROVIDED, if Borrower shall fail
to deliver such certificate within five (5) days
after the time period required by Section 7.17 of
the Existing Credit Agreement, then the Applicable
Margin shall correspond to the largest Applicable
Margin set forth in the grid above from the date
such certificate was required to be delivered until
the appropriate certificate is so delivered;
PROVIDED FURTHER, that the Applicable Margin will
increase by .25% on April 2, 2000 and each scheduled
fiscal quarter of Borrower ending thereafter until
the Loans are paid in full and the Commitment
terminated. Notwithstanding the foregoing, if at any
time the certificate furnished pursuant to Section
7.17(f) of the Existing Credit Agreement shall
disclose that Consolidated Funded Debt (excluding
Funded Debt of Wackenhut Corrections Corporation, a
Florida corporation and Subsidiary of Borrower, from
Consolidated Funded Debt) exceeds 40% of Total
Capitalization (but does not exceed 50% of Total
Capitalization), then there shall be added to the
Applicable Margin set forth above .25%.
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Base Rate: A fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 1/2 of 1% and (b)
the rate of interest publicly announced from time to
time by Lender as its "prime" rate. The Lender's
prime rate is the per annum rate of interest
established from time to time by Lender as its prime
rate, which rate may not be the lowest rate of
interest charged by Lender to its customers. Any
change in the prime rate announced by Lender shall
take effect at the opening of business on the day
specified in the public announcement of such change.
Base Rate Loan: A Loan bearing interest based on the Base Rate.
Breakage Costs: Any loss, cost or expense incurred by Lender
(including any loss of anticipated profits and any
loss or expense arising from the liquidation or
reemployment of funds obtained by Lender to maintain
the relevant Offshore Rate Loan or from fees payable
to terminate the deposits from which such funds were
obtained) as a result of (i) any continuation,
conversion, payment or prepayment of any Offshore
Rate Loan on a day other than the last day of the
Interest Period therefor (whether voluntary,
mandatory, automatic, by reason of acceleration, or
otherwise); or (ii) any failure by Borrower (for a
reason other than the failure of Lender to make a
Loan when all conditions to making such Loan have
been met by Borrower in accordance with the terms
hereof) to prepay, borrow, continue or convert any
Offshore Rate Loan on a date or in the amount
notified by Borrower. The certificate of Lender as
to its costs of funds, losses and expenses incurred
shall be conclusive absent manifest error.
Business Day: Any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to
close under the laws of, or are in fact closed in,
the State of North Carolina and, if such day relates
to any Offshore Rate Loan, means any such day on
which dealings in dollar deposits are conducted by
and between banks in the offshore dollar interbank
market.
Consolidated Funded Debt: As defined in the Existing Credit Agreement.
Default: Any event that, with the giving of any notice, the
passage of time, or both, would be an Event of
Default.
Event of Default: Has the meaning set forth in PARAGRAPH 5.
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14
Existing Credit The Amended and Restated Revolving Credit and
Agreement: Reimbursement Agreement dated December 30, 1997 by
and among Borrower, NationsBank, National
Association (now known as Bank of America, N.A.), as
administrative agent, Scotiabanc, as co-agent, and
the lenders party thereto from time to time (as
amended by that certain Amendment Agreement No. 1
dated as of March 12, 1998, Amendment Agreement No.
2 dated as of August 7, 1998, Amendment Agreement
No. 3 dated as of February 10, 1999, Amendment
Agreement No. 4 dated as of February 25, 1999,
Amendment Agreement No. 5 dated as of April 12, 1999
and Amendment Agreement No. 6 dated as of May 19,
1999)
Federal Funds Rate: For any day, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight
Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next
succeeding such day; PROVIDED that (a) if such day
is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on
the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day
shall be the average rate charged to Lender on such
day on such transactions as determined by Lender.
Fixed Charges As defined in the Existing Credit Agreement.
Coverage Ratio:
Funded Debt: As defined in the Existing Credit Agreement.
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15
Interest Period: For each Offshore Rate Loan, (a) initially, the
period commencing on the date the Offshore Rate
Loan is disbursed or converted from a Base Rate Loan
and (b) thereafter, the period commencing on the
last day of the preceding Interest Period, and, in
each case, ending on the earlier of (x) the Maturity
Date and (y) one, two, three or six months
thereafter, as requested by Borrower; PROVIDED that:
(i) any Interest Period that would otherwise end
on a day that is not a Business Day shall be
extended to the next succeeding Business Day
unless such Business Day falls in another
calendar month, in which case such Interest
Period shall end on the next preceding
Business Day; and
(ii) any Interest Period which begins on the last
Business Day of a calendar month (or on a
day for which there is no numerically
corresponding day in the calendar month at
the end of such Interest Period) shall end
on the last Business Day of the calendar
month at the end of such Interest Period.
Loan Documents: This Agreement, and any promissory note,
certificate, fee letter, and other instrument,
document or agreement delivered in connection with
this Agreement.
Material Adverse Any set of circumstances or events which (a) has or
Effect: could reasonably be expected to have any material
adverse effect whatsoever upon the validity or
enforceability of any Loan Document, (b) is or could
reasonably be expected to be material and adverse to
the condition (financial or otherwise), business
operations or prospects of Borrower or (c)
materially impairs or could reasonably be expected
to materially impair the ability of Borrower to
perform its obligations and liabilities under this
Agreement or any other Loan Document.
Maturity Date: September 8, 2000, or such earlier date on which the
Commitment may terminate in accordance with the
terms hereof.
Offshore Rate: For any Interest Period with respect to any Offshore
Rate Loan, a rate per annum determined pursuant to
the following formula:
Offshore Base Rate
Offshore Rate = -----------------------
1.00 - Eurodollar
Reserve Percentage
Where,
"OFFSHORE BASE RATE" means, for such
Interest Period:
A-4
16
(a) the rate per annum (carried out to
the fifth decimal place) equal to
the rate determined by Lender to be
the offered rate that appears on
the page of the Telerate Screen
that displays an average British
Bankers Association Interest
Settlement Rate (such page
currently being page number 3750)
for deposits in dollars (for
delivery on the first day of such
Interest Period) with a term
equivalent to such Interest Period,
determined as of approximately
11:00 a.m. (London time) two
Business Days prior to the first
day of such Interest Period, or
(b) in the event the rate referenced in
the preceding clause (a) does not
appear on such page or service or
such page or service shall cease to
be available, the rate per annum
(carried to the fifth decimal
place) equal to the rate determined
by Lender to be the offered rate on
such other page or other service
that displays an average British
Bankers Association Interest
Settlement Rate for deposits in
dollars (for delivery on the first
day of such Interest Period) with a
term equivalent to such Interest
Period, determined as of
approximately 11:00 a.m. (London
time) two Business Days prior to
the first day of such Interest
Period, or
(c) in the event the rates referenced
in the preceding clauses (a) and
(b) are not available, the rate per
annum determined by Lender as the
rate of interest at which dollar
deposits (for delivery on the first
day of such Interest Period) in
same day funds in the approximate
amount of the applicable Offshore
Rate Loan and with a term
equivalent to such Interest Period
would be offered by Lender's London
Branch to major banks in the
offshore dollar market at their
request at approximately 11:00 a.m.
(London time) two Business Days
prior to the first day of such
Interest Period.
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17
"EURODOLLAR RESERVE PERCENTAGE" means, for any day
during any Interest Period, the reserve percentage
(expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day applicable to
Lender under regulations issued from time to time by
the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement
(including any emergency, supplemental or other
marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"). The Offshore Rate for
each outstanding Offshore Rate Loan shall be
adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
Offshore Rate Loan: A Loan bearing interest based on the Offshore Rate.
Subsidiary: A corporation, partnership, joint venture, limited
liability company or other business entity of which
a majority of the shares of securities or other
interests having ordinary voting power for the
election of directors or other governing body (other
than securities or interests having such power only
by reason of the happening of a contingency) are at
the time beneficially owned, or the management of
which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or
both, by Borrower.
Total Capitalization: As defined in the Existing Credit Agreement.
A-6
18
EXHIBIT B
FORM OF PROMISSORY NOTE
$30,000,000 September 10, 1999
FOR VALUE RECEIVED, the undersigned, THE WACKENHUT CORPORATION, a
Florida corporation ("BORROWER"), hereby promises to pay to the order of BANK OF
AMERICA, N.A. ("LENDER") the principal sum of Thirty Million Dollars
($30,000,000) or, if less, the aggregate unpaid principal amount of all Loans
made by Lender to Borrower pursuant to the letter agreement, dated as of
September 10, 1999 (such letter agreement, as it may be amended, restated,
extended, supplemented or otherwise modified from time to time, being
hereinafter called the "AGREEMENT"), between Borrower and Lender, on the
Maturity Date. Borrower further promises to pay interest on the unpaid principal
amount of the Loans evidenced hereby from time to time at the rates, on the
dates, and otherwise as provided in the Agreement.
Lender is authorized to endorse the amount and the date on which each
Loan is made or converted, the Interest Period therefor (if applicable) and each
payment of principal with respect thereto on the schedules annexed hereto and
made a part hereof, or on continuations thereof which shall be attached hereto
and made a part hereof; PROVIDED that any failure to so endorse such information
on such schedule or continuation thereof or any error in doing so shall not
limit or otherwise affect any obligation of Borrower under the Agreement or this
promissory note.
This promissory note is the promissory note referred to in, and is
entitled to the benefits of, the Agreement, which Agreement, among other things,
contains provisions for acceleration of the maturity of the Loans evidenced
hereby upon the happening of certain stated events and also for prepayments on
account of principal of the Loans prior to the maturity thereof upon the terms
and conditions therein specified.
Unless otherwise defined herein, terms defined in the Agreement are
used herein with their defined meanings therein. This promissory note shall be
governed by, and construed in accordance with, the laws of the State of North
Carolina.
THE WACKENHUT CORPORATION
By: /s/ Kenneth J. Matulia
-------------------------------
Name: Kenneth J. Matulia
Title: Assistant Secretary
B-1
19
SCHEDULE A TO NOTE
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(1) (2) (3) (4) (5)
Amount of Base Rate
Amount of Base Rate Loan Repaid or Unpaid Principal
Loan Made or Converted Converted to Offshore Balance of Offshore Notation
Date from Offshore Rate Loan Rate Loan Rate Loans Made By
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B-2
20
SCHEDULE B TO NOTE
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(1) (2) (3) (4) (5) (6)
Amount of Amount of
Offshore Rate Offshore Rate Unpaid Principal
Loan Made or Loan Repaid or Balance of
Converted from Converted to Base Offshore Notation
Date Base Rate Loan Interest Period Rate Loan Rate Loans Made By
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B-3
21
OUT OF STATE CLOSING AFFIDAVIT
STATE OF MARYLAND
COUNTY OF BALTIMORE
BEFORE ME, the undersigned, a Notary Public in and for the State of
aforesaid, personally appeared Kenneth J. Matalia, the Asst. Secretary of THE
WACKENHUT CORPORATION (the "Borrower"), who, being by me first duly sworn,
stated:
1. On the date hereof, the Borrower executed a credit or loan agreement
and/or attached promissory note (the "Loan Documents") of even date herewith in
the maximum principal amount of $30,000,000 in favor of Bank of America, N.A.
(the "Bank"), whose applicable offices are located in Charlotte, Mecklenburg
County, North Carolina.
2. The Borrower has personally mailed or shipped the Loan Documents to
the Bank via overnight courier, for delivery to the Bank and its acceptance at
the Bank's offices located in Charlotte, Mecklenburg County, North Carolina.
DATED the 20th day of September, 1999.
Signature of Borrower's Officer:
/s/ Kenneth J. Matalia
----------------------------------------
Title: Assistant Secretary
Print Name: Kenneth J. Matalia
Sworn to and subscribed before me
this 20th day of September, 1999.
/s/ Glenda K. White
- -----------------------------------
Notary Public
Print Name: Glenda K. White
State and County Aforesaid
My Commission Expires: December 1, 1999
[NOTARY SEAL OR STAMP]
22
OUT OF STATE CLOSING AFFIDAVIT
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
BEFORE ME, the undersigned, a Notary Public in and for the State of
aforesaid, personally appeared Robert Mauriello, the Vice President of Bank of
America, N.A. (the "Bank"), who, being by me first duly sworn stated:
1. On or about the date hereof, The Wackenhut Corp. (the "Borrower")
executed a credit or loan agreement and/or attached promissory note (the "Loan
Documents") in the maximum principal amount of $30,000,000.00 in favor of the
Bank, whose applicable offices are located in Charlotte, Mecklenburg County,
North Carolina.
2. The Borrower has mailed or shipped the Loan Documents to the Bank
via overnight courier, for delivery to the Bank and its acceptance at the Bank's
offices located in Charlotte, Mecklenburg County, North Carolina.
3. I, as an authorized officer of the Bank, have received a package
containing the Loan Documents and have accepted and executed the Loan Documents
on behalf of the Bank, all of which has taken place in the Bank's offices
located in Charlotte, Mecklenburg County, North Carolina.
DATED the 21st day of September, 1999.
Signature of Bank's Officer:
/s/ Robert Mauriello
----------------------------------------
Title: Vice President
Print Name: Robert Mauriello
Sworn to and subscribed before me
this 21st day of September, 1999.
/s/ Glenda G. Wallace
- -----------------------------------
Notary Public
Print Name: Glenda G. Wallace
State and County Aforesaid
My Commission Expires: 9-28-02
[NOTARY SEAL OR STAMP]
B-5