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EXHIBIT 4.2
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PARTICIPATION AGREEMENT
Dated as of June 19, 1997
among
WACKENHUT CORRECTIONS CORPORATION,
as Construction Agent,
WACKENHUT CORRECTIONS CORPORATION,
as Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as Owner Trustee
under the Wackenhut Corrections Trust 1997-1
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME,
as the Holders
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH
ARE PARTIES HERETO FROM TIME TO TIME,
as the Lenders
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent for the
Lenders
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TABLE OF CONTENTS
SECTION 1. THE LOANS........................................................1
SECTION 2. HOLDER FUNDINGS..................................................2
SECTION 3. SUMMARY OF TRANSACTIONS..........................................2
3.1. Operative Agreements.............................................2
3.2. Property Purchase................................................2
3.3. Construction of Improvements; Lease or
Disposition of Properties........................................2
SECTION 4. THE CLOSINGS.....................................................3
4.1. Initial Closing Date.............................................3
4.2. Initial Closing Date; Property Closing Dates;
Construction Fundings............................................3
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION
DATE; LESSEE DELIVERY OF NOTICES.................................3
5.1. General..........................................................3
5.2. Procedures for Funding...........................................4
5.3. Conditions to the Holders' and the Lenders'
Obligations to advance funds on the Initial
Closing Date or funds for the Acquisition of
Property.........................................................5
5.4. Conditions to the Holders' and the Lenders'
Obligations to Make Construction Fundings for
the Commencement of Construction of any
Improvements.....................................................9
5.5. Conditions to the Holders' and the Lenders'
Obligations to Make Construction Fundings for
the Ongoing Construction on any Property Prior
to the Construction Period Termination Date.....................11
5.6. Reporting and Delivery Requirements on
Completion Date and on Construction Period
Termination Date................................................12
5.7. Construction Agent Delivery of Allocation
Notice; Notice Regarding the Holder
Construction Property Cost and Construction
Budget Modifications............................................13
5.8. Inspection of Documents; Hold Harmless; Removal
of Properties...................................................14
SECTION 6. CONDITIONS OF THE INITIAL CLOSING...............................14
6.1. Conditions to the Lessor's and the Holders'
Obligations.....................................................14
6.2. Conditions to the Lessee's Obligations..........................16
6.3. Conditions to the Agent's Obligations...........................18
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SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL
CLOSING DATE....................................................18
7.1. Representations and Warranties of the Initial
Holders.........................................................18
7.2. Representations and Warranties of the Owner
Trustee.........................................................20
7.3. Representations and Warranties of the
Construction Agent and the Lessee...............................23
7.4. Representations and Warranties of the Agent.....................29
SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING
DATES...........................................................30
8.1. Representations and Warranties on Property
Closing Dates...................................................30
8.2. Representations and Warranties Upon Initial
Construction Fundings...........................................32
8.3. Representations and Warranties Upon the Date of
Each Construction Funding that is not an
Initial Construction Funding....................................34
8.4. Certain Construction Fundings During Defaults...................35
SECTION 9. PAYMENT OF CERTAIN EXPENSES.....................................35
9.1. Transaction Expenses............................................35
9.2. Certain Fees and Expenses.......................................37
9.3. Unused Fee and Holder Unused Fee. ..............................37
SECTION 10. OTHER COVENANTS AND AGREEMENTS..................................37
10.1. Cooperation with the Construction Agent or the
Lessee..........................................................37
10.2. Covenants of the Owner Trustee and the
Holders.........................................................38
10.3. Lessee Covenants, Consent and Acknowledgment;
Construction Agent Covenants....................................41
10.4. Sharing of Certain Payments.....................................42
10.5. Grant of Easements, Voting at Meetings, etc.....................42
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT............................43
11.1. Construction Agent's and Lessee's Credit
Agreement Rights................................................43
11.2. Construction Agent's and Lessee's Trust
Agreement Rights................................................44
SECTION 12. TRANSFER OF INTEREST............................................44
12.1. Restrictions on Transfer........................................44
12.2. Effect of Transfer..............................................45
SECTION 13. INDEMNIFICATION.................................................45
13.1. General Indemnity...............................................45
13.2. General Tax Indemnity...........................................48
13.3. Environmental Indemnity.........................................53
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SECTION 14. MISCELLANEOUS...................................................54
14.1. Survival of Agreements..........................................54
14.2. No Broker, etc..................................................54
14.3. Notices.........................................................54
14.4. Counterparts....................................................56
14.5. Amendments and Termination......................................56
14.6. Headings, etc...................................................56
14.7. Parties in Interest.............................................56
14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL............................57
14.9. Submission to Jurisdiction; Waivers.............................57
14.10. Severability....................................................57
14.11. Liability Limited...............................................58
14.12. Rights of Lessee................................................59
14.13. Further Assurances..............................................59
14.14. Calculations under Operative Agreements.........................60
14.15. Confidentiality.................................................60
14.16. Calculation of Rent, Interest, Holder Yield and
Fees............................................................61
Schedule 1 Initial Holders ........................................Schedule-1
EXHIBIT A REQUISITION FORM...............................................A-1
Schedule 1 Legal Description of Land.................................A-3
Schedule 2 Description of Improvements...............................A-4
Schedule 3 Description of Equipment..................................A-5
Schedule 4 Work......................................................A-6
EXHIBIT B WACKENHUT CORRECTIONS CORPORATION OFFICER'S
CERTIFICATE....................................................B-1
Schedule 1 [itemized expenditures]...................................B-3
EXHIBIT C FORM OF OPINION OF COUNSEL TO
WACKENHUT CORRECTIONS CORPORATION..............................C-1
EXHIBIT D WACKENHUT CORRECTIONS CORPORATION OFFICER'S
CERTIFICATE....................................................D-1
EXHIBIT E WACKENHUT CORRECTIONS CORPORATION SECRETARY'S
CERTIFICATE....................................................E-1
EXHIBIT F FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE..........................................F-1
EXHIBIT G FIRST SECURITY BANK, NATIONAL ASSOCIATION
CERTIFICATE OF ASSISTANT SECRETARY.............................G-1
EXHIBIT H FORM OF OPINION OF COUNSEL TO FIRST SECURITY
BANK, NATIONAL ASSOCIATION ....................................H-1
Appendix A Rules of Usage and Definitions........................Appendix A-1
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of June 19, 1997 (as amended,
modified, restated or supplemented from time to time, this "Agreement"), is by
and among WACKENHUT CORRECTIONS CORPORATION, a Florida corporation ("Wackenhut"
or the "Construction Agent"); WACKENHUT CORRECTIONS CORPORATION, as Lessee (the
"Lessee"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (in its individual capacity, the "Trust Company"),
except as expressly stated herein, but solely as Owner Trustee under the
Wackenhut Corrections Trust 1997-1 (the "Owner Trustee" or the "Lessor");
NATIONSBANK, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity,
the "Agent") for the Lenders; NATIONSBANK, NATIONAL ASSOCIATION, a national
banking association and the various other banks and lending institutions which
are parties hereto from time to time as Holders; NATIONSBANK, NATIONAL
ASSOCIATION and the various other banks and lending institutions which are
parties hereto from time to time as Lenders. Capitalized terms used but not
otherwise defined in this Agreement shall have the meanings set forth in
Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
The Lenders have agreed to make Loans to the Lessor from time to time
in an aggregate principal amount of up to the aggregate amount of the
Commitments of the Lenders in order for the Lessor to acquire the Properties and
certain Improvements and to develop and construct certain Improvements in
accordance with the Agency Agreement and the terms and provisions hereof, and in
consideration of the receipt of the proceeds of such Loans, the Lessor will
issue the Notes (together with any note or notes issued in exchange or
substitution therefor in accordance with the Credit Agreement, the "Notes"). The
Loans shall be made and the Notes shall be issued pursuant to the Credit
Agreement. Pursuant to Section 5 of this Agreement and Section 2 of the Credit
Agreement, the Loans will be made to the Lessor from time to time upon the
appropriate submission by the Construction Agent of a Requisition and borrowing
request therefor, in accordance with this Agreement and the other Operative
Agreements. The Loans and the obligations of the Lessor under the Credit
Agreement shall be secured by the Collateral. The Lessee and the Construction
Agent agree that each Property shall be improved for business purposes and shall
not merely be held as unimproved Land for speculative purposes.
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SECTION 2. HOLDER FUNDINGS.
Subject to the terms and conditions of this Agreement and in reliance
on the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto on each date Fundings are made in accordance with
Section 5 hereof, each Holder shall make a Holder Funding on a pro rata basis to
the Owner Trustee with respect to the Wackenhut Corrections Trust 1997-1 based
on its Holder Commitment in an amount in immediately available funds such that
the aggregate of all Holder Fundings shall be three percent (3%) of the amount
of the Funding being funded on such date; provided, no Holder shall be obligated
for any Holder Funding in excess of its pro rata share of the Available Holder
Commitment. The aggregate amount of Holder Fundings shall be up to the aggregate
amount of the Holder Commitments. No prepayment or any other payment with
respect to any Funding shall be permitted such that the Holder Funding with
respect to such Funding is less than 3% of the outstanding amount of such
Funding, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, not joint,
and not joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. Operative Agreements. On the date hereof (the "Initial Closing
Date"), each of the respective parties hereto and thereto shall execute and
deliver this Agreement, the Lease, the Agency Agreement, the Credit Agreement,
the Notes, the Certificates, the Trust Agreement, the Security Agreement and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.
3.2. Property Purchase. On each Property Closing Date and subject to
the terms and conditions of this Agreement (a) the Holders will each make a
Holder Funding in accordance with Sections 2 and 5 of this Agreement and the
terms and provisions of the Trust Agreement, (b) the Lenders will make Loans in
accordance with Sections 1 and 5 of this Agreement and the terms and provisions
of the Credit Agreement, and (c) the Lessor will purchase, or lease pursuant to
a Ground Lease, the applicable Property identified by the Construction Agent,
and grant the Agent a Lien on such Property by execution of the required
Security Documents.
3.3. Construction of Improvements; Lease or Disposition of Properties.
Construction Fundings will be made with respect to particular Improvements to be
constructed and with respect to ongoing Work regarding the Equipment and ongoing
construction of particular Improvements, in each case, pursuant to the terms and
conditions of this Agreement and the Agency Agreement. The
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Construction Agent will act as a construction agent on behalf of the Lessor
respecting such Work and the construction of such Improvements and the
expenditures of the Construction Fundings related thereto. The Construction
Agent shall promptly notify the Lessor upon Completion of the Improvements and
at such time Lessee shall execute and deliver to Lessor a Lease Supplement
relating to the particular Property and thereupon the Term shall commence with
respect to such Property.
SECTION 4. THE CLOSINGS.
4.1. Initial Closing Date. All documents and instruments required to be
delivered on the Initial Closing Date shall be delivered at the offices of ▇▇▇▇▇
▇▇▇▇▇ Mulliss & ▇▇▇▇▇, L.L.P., Charlotte, North Carolina, or at such other
location as may be determined by the Lessor, the Agent and the Lessee.
4.2. Initial Closing Date; Property Closing Dates; Construction
Fundings. The Construction Agent shall deliver to the Lessor and the Agent a
requisition (a "Requisition"), in the form attached hereto as Exhibit A or in
such other form as is reasonably satisfactory to the Lessor, the Construction
Agent and the Agent, in connection with (a) the Initial Closing Date relating to
the Transaction Expenses and other fees, expenses and disbursements payable by
the Lessor pursuant to Section 9.1(a) with invoices (in form and substance
reasonably acceptable to the Agent and the Lessor) for such Transaction Expenses
and other fees, expenses and disbursements attached to such Requisition, (b)
each Property Closing Date relating to each Acquisition Funding pursuant to
Section 5.3 and (c) each date of a Construction Funding pursuant to Sections 5.4
or 5.5.
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION DATE; LESSEE
DELIVERY OF NOTICES.
5.1. General. To the extent funds have been made available to the
Lessor as Loans by the Lenders and Holder Fundings by the Holders, the Lessor
will use such funds from time to time in accordance with the terms and
conditions of this Agreement and the other Operative Agreements (i) to pay
interest regarding the Loans relating to a Property and to pay the Holder Yield
regarding the Holder Fundings relating to a Property, in each case to the extent
accrued under the Credit Agreement or Trust Agreement (as the case may be)
during the period prior to the Term Commencement Date with respect to such
Property, (ii) at the direction of the Construction Agent to acquire Properties
in accordance with the terms of this Agreement, the Agency Agreement, the Lease
and the other Operative Agreements, (iii) to make advances to the Construction
Agent to permit the testing, engineering, installation, development,
construction, modification, design and renovation, as applicable, of
Improvements in accordance with the terms of the Agency Agreement, the Lease and
the other Operative Agreements, and (iv)
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to pay Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Sections 9.1(a) and (b).
5.2. Procedures for Funding.
(a) The Construction Agent shall designate the date for
Fundings hereunder in accordance with the terms and provisions hereof;
provided, however, it is understood and agreed that no more than four
(4) Fundings (of which only one (1) may be a Eurodollar Funding) may be
requested during any calendar month. Not less than (i) one (1) Business
Day prior to the date of any requested Base Rate Funding and (ii) three
(3) Business Days prior to the date of any requested Eurodollar
Funding, the Construction Agent shall deliver to the Lessor and the
Agent, (A) with respect to the Initial Closing Date and each Property
Closing Date, a Requisition as described in Section 4.2 hereof
(including without limitation a legal description of the Land, a
schedule of the Improvements, if any, and a schedule of the Equipment,
if any, to be acquired on such date, and a schedule of the Work, if
any, to be performed, each of the foregoing in a form reasonably
acceptable to the Lessor and the Agent) and (B) with respect to each
Construction Funding, a Requisition identifying (among other things)
the Property to which such Work relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Fundings and that
the Lenders make Loans to the Lessor for the payment of the Property
Acquisition Costs (in the case of an Acquisition Funding) or other
Property Costs, including the cost of Improvements (in the case of a
Construction Funding) that have previously been incurred and were not
subject to a prior Requisition, in each case as specified in the
Requisition.
(c) Subject to the terms and conditions of the Credit
Agreement and the Trust Agreement and subject to the satisfaction of
the conditions precedent set forth in Sections 5.3, 5.4 or 5.5, as
applicable, on each Property Closing Date or the date on which the
Construction Funding is to be made, as applicable, (i) the Lenders
shall make Loans to the Lessor in an aggregate amount equal to 97% of
the Requested Funds specified in any Requisition (such loans to be
apportioned 88% to Series A Loans and 9% to Series B Loans), up to
aggregate principal amount equal to the Available Commitments, (ii)
each Holder shall make a pro rata Holder Funding based on its Holder
Commitment in an amount such that the aggregate of all Holder Fundings
at such time shall be 3% of the balance of the Requested Funds
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specified in such Requisition, provided no such Holder Funding shall
exceed such Holder's pro rata share of the Available Holder
Commitments; and (iii) the total amount of such Loans and Holder
Fundings made on such date shall (w) be used by the Lessor to pay the
Property Acquisition Costs within three (3) Business Days of the
receipt by the Lessor of such Funding (in the case of a Property
Closing Date), (x) be used by the Lessor on the date of such Funding to
pay interest regarding the Loans relating to a Property and to pay the
Holder Yield regarding the Holder Fundings relating to a Property, in
each case to the extent accrued under the Credit Agreement or Trust
Agreement (as the case may be) during the period prior to the Term
Commencement Date with respect to such Property, (y) be used by the
Lessor to pay Transaction Expenses, fees, expenses and other
disbursements to the extent permitted under Sections 5.3, 5.4 or 5.5,
or (z) be disbursed by the Lessor, on the date of such Funding, to the
Construction Agent or the Lessee to pay Property Costs, as applicable.
Any such amounts held by the Lessor (or the Agent on behalf of the
Lessor) shall be subject to the lien of the Security Agreement.
5.3. Conditions to the Holders' and the Lenders' Obligations to advance
funds on the Initial Closing Date or funds for the Acquisition of Property.
(a) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on the Initial Closing
Date for the purpose of providing funds to the Lessor necessary to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Section 9.1 of this Agreement, are subject to the
prior or contemporaneous satisfaction or waiver of the following
conditions precedent:
(i) the correctness in all material respects on
the Initial Closing Date of the representations and warranties
of the Owner Trustee, the Construction Agent, the Lessee and
the Holders (other than such Holder) contained herein and in
each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on or
prior to the Initial Closing Date;
(iii) the satisfaction of all conditions to any
such Holder Funding or Loan set forth in any Operative
Agreement;
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(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed; and
(v) no Default or Event of Default under any of
the Operative Agreements shall have occurred after giving
effect to the Funding requested by such Requisition.
(b) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on a Property Closing
Date for the purpose of providing funds to the Lessor necessary to pay
the Transaction Expenses, fees, expenses and other disbursements
payable by Lessor under Section 9.1 (b) of this Agreement and to
acquire a Property, are subject to the prior or contemporaneous
satisfaction or waiver of the following conditions precedent:
(i) the correctness in all material respects on
such Property Closing Date of the representations and
warranties of the Owner Trustee, the Construction Agent, the
Lessee and the Holders (other than such Holder) contained
herein and in each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on or
prior to each such Property Closing Date;
(iii) the satisfaction of all conditions to any
such Holder Funding or Loan set forth in any Operative
Agreement;
(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed;
(v) title to each Property being acquired on
such Property Closing Date shall conform to the
representations and warranties set forth in Section 8.1(c)
hereof;
(vi) the Construction Agent shall have delivered
to the Lessor a copy of the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (if
any) with respect to the Land, and a copy of the ▇▇▇▇ of Sale
with respect to the Equipment, in each case for such of the
foregoing as are being
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acquired on such Property Closing Date; and such Land and
existing Improvements shall be located in an Approved State;
(vii) there shall not have occurred and be
continuing any Default or Event of Default under any of the
Operative Agreements and no Default or Event of Default under
any of the Operative Agreements shall have occurred after
giving effect to the Funding requested by such Requisition;
(viii) the Construction Agent shall have delivered
to the Agent and the Owner Trustee, title insurance
commitments to issue policies in favor of the Owner Trustee
and the Agent with respect to each Property being acquired on
such Property Closing Date, such policies being in form and
substance reasonably acceptable to the Owner Trustee and the
Agent, with such title exceptions thereto as are reasonably
acceptable to the Owner Trustee and the Agent; and the
Construction Agent shall deliver to the Owner Trustee and the
Agent, as soon as possible after such Property Closing Date,
the final title insurance policies for each such Property,
taking no specific exception for any Lien filed on account of
materials furnished or labor performed in connection with the
Property, and otherwise showing no additional exceptions to
coverage;
(ix) the Construction Agent shall have delivered
to the Agent and the Owner Trustee a "Phase I" environmental
site assessment with respect to each such Property, prepared
by an independent recognized professional reasonably
acceptable to the Agent and the Owner Trustee and in a form
and substance that is reasonably acceptable to the Agent and
the Owner Trustee;
(x) the Construction Agent shall have delivered
to the Agent and the Owner Trustee a survey of each such
Property, prepared by an independent recognized professional
meeting the then current minimum standard detail requirements
for American Land Title Association/American Congress of
Surveying and Mapping (ALTA/ACSM) Land Title Surveys certified
to the Agent and otherwise reasonably acceptable to the Agent;
(xi) the Construction Agent shall have caused to
be delivered to the Agent and the Owner Trustee a legal
opinion (in form and substance reasonably satisfactory to the
Agent and the Owner Trustee) from counsel located in the state
where each such Property is located or, if the Agent and the
Owner Trustee have previously received an opinion from counsel
in such
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state, the Agent and the Owner Trustee (in their discretion)
may accept an update or a reaffirmation of the previous
opinion, in each case addressed to each Lender;
(xii) the Owner Trustee and the Agent shall be
satisfied, in their sole discretion, that the acquisition or
ground leasing of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not
adversely affect in any material respect the rights of the
Owner Trustee, the Holders, the Agent or the Lenders under or
with respect to the Operative Agreements in effect as of such
Property Closing Date (it being understood and acknowledged
that the Agent and the Owner Trustee may require that the
Construction Agent deliver an acceptable legal opinion in
connection with this condition);
(xiii) the Construction Agent shall have determined
(as set forth in the related Requisition) that such Property
is appropriate for its business operations; and the Agent
shall have consented to the Lessor's acquisition of such
Property, which consent (subject to clause (xii) above) shall
not be unreasonably withheld or delayed;
(xiv) the Construction Agent shall have delivered
to the Agent and the Owner Trustee, respecting each such
Property, invoices for the various Transaction Expenses and
other fees, expenses and disbursements referenced in Section
9.1 (a) or (b) of this Agreement;
(xv) the Lessor shall have delivered to the Agent
a Mortgage Instrument and Lender Financing Statements with
respect to each such Property in a form reasonably acceptable
to the Agent and Lessee;
(xvi) the Construction Agent shall have delivered
to the Lessor (A) with respect to each such Completed
Property, a Lease Supplement and a memorandum regarding the
Lease and such Lease Supplement, and (B) with respect to each
such Property (other than a Completed Property), a memorandum
regarding the Lease (such memoranda referenced in the
foregoing (A) and (B) to be substantially in the forms
attached to the Lease as Exhibit C-1 or Exhibit C-2 as
appropriate, and in each case, in form suitable for
recording);
(xvii) the Construction Agent shall have delivered
to the Lessor with respect to each such Property Lessor
Financing Statements executed by the Lessee and the Lessor;
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(xviii) if any such Property is subject to a Ground
Lease, the Construction Agent shall have caused a lease
memorandum (in form and substance satisfactory to the Agent)
to be delivered to the Agent for such Ground Lease;
(xix) counsel for the ground lessor of each such
Property subject to a Ground Lease shall have issued to the
Lessor, the Agent and the Holders, an opinion satisfactory to
the Agent;
(xx) all necessary (or in the reasonable opinion
of the Owner Trustee, the Agent, or their respective counsel,
advisable) Governmental Actions, in each case required by any
law or regulation enacted, imposed or adopted on or prior to
each such date or by any change in facts or circumstances on
or prior to each such date, shall have been obtained or made
and be in full force and effect;
(xxi) the Construction Agent shall cause (i)
Uniform Commercial Code lien searches, tax lien searches and
judgment lien searches regarding each of the Lessee and the
Lessor to be conducted (and copies thereof to be delivered to
the Agent and the Owner Trustee) in the state and county (or
other jurisdiction) in which such Property is located, by a
nationally recognized search company acceptable to the Owner
Trustee and the Agent and (ii) the liens referenced in such
lien searches which are objectionable to the Owner Trustee or
the Agent to be either removed or otherwise handled in a
manner reasonably satisfactory to the Owner Trustee and the
Agent; and
(xxii) the Agent shall have received an Appraisal
for such Property showing that such Property has a value at
least equal to eighty-five percent (85%) of the expected total
Property Cost of such Property and all Improvements
constructed or expected to be constructed thereon (based on a
Construction Budget satisfying the requirements of Section
5.4(e)).
5.4. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Commencement of Construction of any Improvements.
The obligations of each Holder to make Holder Fundings, and of each Lender to
make Loans, to the Lessor for the purpose of providing funds to the Lessor
necessary to pay the Transaction Expenses, fees, expenses and other
disbursements payable by Lessor under Section 9.1(b) of this Agreement, to make
an advance for the commencement of construction of any Improvements on a
Property, or to pay interest regarding the Loans relating to a Property and to
pay
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the Holder Yield regarding the Holder Fundings relating to a Property, in each
case regarding such interest and Holder Yield to the extent accrued and payable
under the Credit Agreement or Trust Agreement (as the case may be), in each case
during the period prior to the Term Commencement Date with respect to such
Property, are subject to the satisfaction or waiver of the following conditions
precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreement;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition
appropriately completed, together with copies of all Bills of Sale with
respect to any Equipment acquired as a part of any Improvements;
(e) with respect to each Initial Construction Funding, the
Agent and the Owner Trustee shall have received a copy of the
Construction Budget for the completion of the Improvements to which
such Funding relates, which Construction Budget shall indicate a total
Property Cost for such Improvements and the Land on which such
Improvements are to be constructed of not less than $5,000,000;
(f) with respect to each Initial Construction Funding, (i) the
title insurance commitments to issue policies (and any policies)
delivered in connection with the requirements of Section 5.3(b)(viii)
shall provide for (or shall be endorsed to provide for) insurance in an
amount at least equal to the maximum total Property Cost indicated by
the Construction Budget referred to in subparagraph (e) above taking no
specific exception for any Lien filed on account of materials furnished
or labor performed in connection with the Property, and otherwise
showing no additional exceptions to coverage, and (ii) all necessary
recording fees, documentary stamp taxes or similar amounts will be paid
in connection with the related Mortgage Instrument in an amount
sufficient to cover such maximum total Property Cost;
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(g) there shall not have occurred and be continuing any Event
of Default or (except as permitted under Section 8.4) any Default under
any of the Operative Agreements, and no Default or Event of Default
under any of the Operative Agreements will have occurred after giving
effect to the Funding requested by such Requisition;
(h) with respect to each Initial Construction Funding, based
upon Construction Budgets which satisfy the requirements of
subparagraph (e) above, the Available Commitment and the Available
Holder Commitment (after deducting the Unfunded Amount) will be
sufficient to complete the Improvements; and
(i) the Construction Agent shall have determined (as set forth
in the related Requisition) that such Improvements are appropriate to
its business; and the Agent shall have consented to such Improvements,
which consent shall not be unreasonably withheld or delayed.
5.5. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Ongoing Construction on any Property Prior to the
Construction Period Termination Date. The obligations of each Holder to make
Holder Fundings, and of each Lender to make Loans, to the Lessor (i) in
connection with all subsequent requests for Fundings to pay the Transaction
Expenses, fees, expense and other disbursements payable by Lessor under Section
9.1(b) of this Agreement, (ii) to pay interest regarding the Loans relating to a
Property and to pay the Holder Yield regarding the Holder Fundings relating to a
Property, in each case regarding such interest and Holder Yield to the extent
accrued and payable under the Credit Agreement or Trust Agreement (as the case
may be), during the period prior to the Term Commencement Date with respect to
such Property, and (iii) to pay for the construction of Improvements with
respect to any Property, in each case prior to the Construction Period
Termination Date are subject to the satisfaction or waiver of the following
conditions precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee hereto of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
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(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreements;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition,
appropriately completed;
(e) there shall not have occurred and be continuing any Event
of Default or (except as permitted under Section 8.4) any Default under
any of the Operative Agreements, and no Default or Event of Default
under any of the Operative Agreements will have occurred after giving
effect to the Construction Funding requested by such Requisition;
(f) (with respect to each Construction Funding) based upon
Construction Budgets which satisfy the requirements of Section 5.4(e)
of this Agreement, the Available Commitments and the Available Holder
Commitment (after deducting the Unfunded Amount) will be sufficient to
complete the Improvements; and
(g) with respect to each Construction Funding, the title
insurance commitments to issue policies (or any policies) delivered in
connection with the requirements of Section 5.3(b)(iii)) shall provide
for (or shall be endorsed to provide for) insurance in an amount at
least equal to the maximum total Property Cost indicated by the
Construction Budget referred to in Section 5.4(e) (and taking into
account any additional Property Cost represented by such Construction
Funding), taking no specific exception for any Lien filed on account of
materials furnished or labor performed in connection with the Property
(other than Permitted Liens which the title company insures as being
junior to the Liens of the Lessor, the Administrative Agent, the
Lenders and the Holders), and otherwise showing no additional
exceptions to coverage.
5.6. Reporting and Delivery Requirements on Completion Date and on
Construction Period Termination Date. On the Completion Date for each Property,
the Construction Agent shall deliver to the Agent, and the Owner Trustee an
Officer's Certificate in the form attached hereto as Exhibit B specifying (a)
the Completion Date for the construction of Improvements at the Property, (b)
the aggregate Property Cost for the Property and (c) if any of the Property
consists of Tangible Personal Property, a separate statement of the Property
Cost attributable to such Tangible Personal Property. Such Officer's Certificate
shall also include, in form and in detail reasonably acceptable to the Agent and
the Holders, a summary of the Property Cost figures and a certification to the
effect that all Improvements have been made in accordance with all applicable
material Legal Requirements, in a good and workmanlike manner and otherwise in
substantial
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compliance with the standards and practices of the Construction Agent with
respect to properties and improvements owned by the Construction Agent, and that
no consent or approval of any Person is required for such Improvements except
for consents and approvals which have already been obtained. Furthermore, (i) on
the Completion Date for each Property, the Construction Agent shall deliver or
cause to be delivered originals of the following to the Agent (and copies
thereof to the Owner Trustee) each of which shall be in a form reasonably
acceptable to the Agent: (1) insurance certificates with respect to the Property
as required under the Lease Agreement; (2) a Lease Supplement with respect to
the Property, (3) a memorandum of the Lease and such Lease Supplement (in form
suitable for recording), and (4) if requested by the Agent or the Owner Trustee,
amendments or modifications to the Lessor Financing Statements executed by the
Lessee and the Lessor; and (ii) within ninety (90) days after the Completion
Date for each Property, the Construction Agent shall deliver or cause to be
delivered originals of the following to the Agent (and copies thereof to the
Owner Trustee) each of which shall be in a form reasonably acceptable to the
Agent: (1) an as-built survey for the applicable Property, (2) an endorsement of
the title insurance policy regarding such Property, amending the effective date
of such policy to the date of such endorsement and taking no exception for any
Lien on account of materials furnished or labor performed in connection with the
Property (except for Liens which have been fully bonded by bonds acceptable to
the Agent), and otherwise showing no additional exceptions to coverage, and (3)
the final Plans and Specifications for such Property. In addition, on the
Completion Date for such Property the Construction Agent covenants and agrees
that the recording fees, documentary stamp taxes or similar amounts paid or
required to be paid in connection with the related Mortgage Instrument shall be
in an amount required by applicable law.
5.7. Construction Agent Delivery of Allocation Notice; Notice Regarding
the Holder Construction Property Cost and Construction Budget Modifications. The
Construction Agent covenants and agrees to deliver (i) to the Agent at least
five (5) Business Days before any Scheduled Interest Payment Date during the
Commitment Period the Allocation Notice referred to in the first sentence of
Section 2.3(b) of the Credit Agreement, and (ii) to the Agent and the Owner
Trustee each month any modification to any Construction Budget regarding any
Property; provided, no Construction Budget may be amended unless (a) the title
insurance policies referenced in Section 5.3(b)(viii) are also modified or
endorsed, if necessary, to provide for insurance in an amount that satisfies the
requirements of Section 5.4(f)(i) of this Agreement and, if necessary, any
additional recording fees, documentary stamp taxes or similar amounts paid in
connection with the related Mortgage Instrument in an amount sufficient to
comply with the requirements of Section 5.4(f)(ii), and (b) after giving effect
to any such amendment the
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Construction Budget remains in compliance with the requirements of Section
5.4(e) of this Agreement.
5.8. Inspection of Documents; Hold Harmless; Removal of Properties. Any
document or item (including without limitation any environmental report)
delivered to the Agent shall be available for inspection at any time during
ordinary business hours upon reasonable notice by any Lender or Holder. The
Agent shall not incur any liability to any Lender, any Holder, the Owner Trustee
or any other Person (and each Lender, each Holder, the Owner Trustee, the Lessee
and the Construction Agent hereby holds the Agent harmless from any such
liability) as a result of any such document or item, any information contained
therein, the failure to receive any such document, or the Agent's approval of
any Property. In the event the Majority Lenders determine that any environmental
site assessment reveals an Environmental Violation and they or the Agent so
notify the Lessee, then the Lessee shall remedy or purchase such Property in
accordance with Sections 15.2, 16.1 and 16.2 of the Lease, provided that if the
Property is a Construction Period Property, the Construction Agent shall be
responsible for such remedy or purchase as if the Property were subject to the
Lease.
SECTION 6. CONDITIONS OF THE INITIAL CLOSING.
6.1. Conditions to the Lessor's and the Holders' Obligations. The
obligations of the Lessor and the Holders to consummate the transactions
contemplated by this Agreement, including the obligation to execute and deliver
the applicable Operative Agreements to which each is a party on the Initial
Closing Date, are subject to (i) the accuracy and correctness on the Initial
Closing Date of the representations and warranties of the other parties hereto
contained herein, (ii) the accuracy and correctness on the Initial Closing Date
of the representations and warranties of the other parties hereto contained in
any other Operative Agreement or certificate delivered pursuant hereto or
thereto, (iii) the performance by the other parties hereto of their respective
agreements contained herein and in the other Operative Agreements and to be
performed by them on or prior to the Initial Closing Date and (iv) the
satisfaction, or waiver by the Lessor and the Holders, of all of the following
conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessor, and shall be
in full force and effect, and no Default or Event of Default shall
exist thereunder (both before and after giving effect to the
transactions contemplated by the Operative Agreements), and the Lessor
shall have received a fully executed copy of each of the Operative
Agreements (other than the Notes of which it shall have received
specimens). The Operative Agreements
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(or memoranda thereof), any supplements thereto and any financing
statements and fixture filings in connection therewith required under
the Uniform Commercial Code shall have been filed or shall be promptly
filed, if necessary, in such manner as to enable the Lessee's counsel
to render its opinion referred to in Section 6.1(g) hereof;
(b) All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provision for such payment
shall have been made to the reasonable satisfaction of the Lessor and
the Agent;
(c) No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Agreement, any
other Operative Agreement or any transaction contemplated hereby or
thereby or (ii) which is reasonably likely to have a Material Adverse
Effect;
(d) In the reasonable opinion of the Lessor and the Holders
and their counsel, the transactions contemplated by the Operative
Agreements do not and will not violate any material Legal Requirements
and do not and will not subject the Lessor or the Holders to any
materially adverse regulatory prohibitions or constraints;
(e) The Lessor and the Agent shall each have received an
Officer's Certificate of the Lessee, dated as of the Initial Closing
Date, in the form attached hereto as Exhibit D or in such other form as
is reasonably acceptable to such parties stating that (i) each and
every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct in all
material respects on and as of the Initial Closing Date; (ii) no
Default or Event of Default has occurred and is continuing under any
Operative Agreement; (iii) each Operative Agreement to which Lessee is
a party is in full force and effect with respect to it; and (iv) the
Lessee has performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Agreement required to
be performed or complied with by it on or prior to the Initial Closing
Date;
(f) The Lessor and the Agent shall each have received (i) a
certificate of the Secretary or an Assistant Secretary of Lessee in the
form attached hereto as Exhibit E or in such other form as is
reasonably acceptable to such parties attaching and certifying as to
(A) the resolutions of its Board of Directors duly authorizing the
execution, delivery
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and performance by Lessee of each of the Operative Agreements to which
it is or will be a party, (B) its certificate of incorporation and
by-laws, in each case certified as of a recent date by the Secretary of
State of the State of its incorporation, and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Agreements to which it is a party and (ii) a good
standing certificate from the appropriate officer of each state in
which it is required to be qualified to do business as to its good
standing in such state;
(g) Counsel for the Lessee and the Guarantor reasonably
acceptable to the other parties hereto shall have issued to the Lessor,
the Agent, the Lenders and the Holders an opinion in the form attached
hereto as Exhibit C or in such other form as is reasonably acceptable
to such parties; and
(h) As of the Initial Closing Date, there shall not have
occurred any material adverse change in the consolidated assets,
liabilities, operations, business or financial condition of the Lessee
from that set forth in the audited financial statements of the Lessee
dated December 29, 1996.
6.2. Conditions to the Lessee's Obligations. The obligation of the
Lessee to consummate the transactions contemplated by this Agreement, including
the obligation to execute and deliver the Operative Agreements to which it is a
party on the Initial Closing Date, is subject to (i) the accuracy and
correctness on the Initial Closing Date of the representations and warranties of
the other parties hereto contained herein, (ii) the accuracy and correctness on
the Initial Closing Date of the representations and warranties of the other
parties hereto contained in any other Operative Agreement or certificate
delivered pursuant hereto or thereto, (iii) the performance by the other parties
hereto of their respective agreements contained herein and in the other
Operative Agreements, in each case to be performed by them on or prior to the
Initial Closing Date, and (iv) the satisfaction or waiver by the Lessee of all
of the following conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessee, and shall be
in full force and effect, and no Default, other than Defaults of the
Lessee, shall exist thereunder, and the Lessee shall have received a
fully executed copy of each of the Operative Agreements (other than
Notes of which it shall have received a specimen);
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(b) In the reasonable opinion of the Lessee and its counsel,
the transactions contemplated by the Operative Agreements do not
violate any material Legal Requirements and will not subject Lessee to
any materially adverse regulatory prohibitions or constraints;
(c) No action or proceeding shall have been instituted nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Agreement, any
other Operative Agreement or any transaction contemplated hereby or
thereby or (ii) which is reasonably likely to have a Material Adverse
Effect;
(d) The Lessee and the Agent shall each have received an
Officer's Certificate of the Lessor dated as of such Closing Date in
the form attached hereto as Exhibit F or in such other form as is
reasonably acceptable to Lessee and the Agent, stating that (i) each
and every representation and warranty of the Lessor contained in the
Operative Agreements to which it is a party is true and correct on and
as of the Initial Closing Date; (ii) each Operative Agreement to which
the Lessor is a party is in full force and effect with respect to it,
and (iii) the Lessor has duly performed and complied with all
covenants, agreements and conditions contained herein or in any
Operative Agreement required to be performed or complied with by it on
or prior to the Initial Closing Date;
(e) The Lessee and the Agent shall each have received (i) a
certificate of the Secretary, an Assistant Secretary, Trust Officer or
Vice President of the Trust Company in the form attached hereto as
Exhibit G or in such other form as is reasonably acceptable to Lessee
and the Agent, attaching and certifying as to (A) the signing
resolutions, (B) its articles of incorporation or other equivalent
charter documents, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company, (C) its by-laws and (D)
the incumbency and signature of persons authorized to execute and
deliver on its behalf the Operative Agreements to which it is a party
and (ii) a good standing certificate from the state of incorporation of
the Trust Company; and
(f) Counsel for the Lessor acceptable to the other parties
hereto shall have issued to the Lessee, the Holders, the Lenders and
the Agent an opinion in the form attached hereto as Exhibit H or in
such other form as is reasonably acceptable to such parties.
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6.3. Conditions to the Agent's Obligations. The obligation of the Agent
to consummate the transactions contemplated by this Agreement on the Initial
Closing Date, including the obligation to execute and deliver each of the
Operative Agreements to which it is a party on the Initial Closing Date, is
subject to (i) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained herein,
(ii) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained in any
other Operative Agreement or certificate delivered pursuant hereto or thereto,
(iii) the performance by the other parties hereto of their respective agreements
contained herein and in the other Operative Agreements, in each case to be
performed by them on or prior to the Initial Closing Date, and (iv) the
satisfaction, or waiver by the Agent, of all of the following conditions on or
prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into on the
Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Agent, and shall be in
full force and effect, and no Default or Event of Default shall exist
thereunder (both before and after giving effect to the transactions
contemplated by the Operative Agreements), and the Agent shall have
received a fully executed copy of each of the Operative Agreements
(including the Notes). The Operative Agreements (or memoranda thereof),
any supplements thereto and any financing statements and fixture
filings in connection therewith required under the Uniform Commercial
Code shall have been filed or shall be promptly filed, if necessary, in
such manner as to enable the Lessor's counsel to render its opinion
referred to in Section 6.2(f) hereof;
(b) The satisfaction of each of the conditions set forth in
Sections 6.1(b), (c), (e), (f) and (h) and Sections 6.2(d), (e) and (f)
hereof; and
(c) In the reasonable opinion of the Agent and its counsel,
the transactions contemplated by the Operative Agreements do not and
will not violate any material Legal Requirements and do not and will
not subject the Agent to any materially adverse regulatory prohibitions
or constraints.
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL CLOSING DATE.
7.1. Representations and Warranties of the Initial Holders. Effective
as of the Initial Closing Date, each Holder on such date represents and warrants
to each of the other parties hereto that:
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(a) It is a national banking association, or a corporation
that is a commercial finance company, in each case duly organized,
validly existing and in good standing under the laws of the United
States or the country or state of its organization and has the power
and authority to carry on its business as now conducted and to enter
into and perform its obligations under each Operative Agreement to
which it is or will be a party and each other agreement, instrument and
document to be executed and delivered by it on or before each Closing
Date in connection with or as contemplated by each such Operative
Agreement to which it is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party have been duly authorized
by all necessary action on its part and neither the execution and
delivery thereof, nor the consummation of the transactions contemplated
thereby, nor compliance by it with any of the terms and provisions
thereof (i) requires or will require any approval of the stockholders
of, or approval or consent of any trustee or holder of any indebtedness
or obligations of, such Holder which have not been obtained and in full
force and effect, (ii) violates or will violate any Legal Requirement
applicable to or binding on it (except no representation or warranty is
made as to any Legal Requirement to which it may be subject solely as a
result of the activities of the Lessee) as of the date hereof, (iii)
violates or will violate or result in any breach of or constitute any
default under, or result in the creation of any Lien upon any Property
or any of the Improvements (other than Liens created by the Operative
Agreements) under its certificate of incorporation or other equivalent
charter documents, or any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, bank loan or credit agreement or
other agreement or instrument to which it is a party or by which it or
its properties is bound or affected or (iv) requires or will require
any Governmental Action by any Governmental Authority (other than
arising solely by reason of the business, condition or activities of
the Lessee or any Affiliate thereof or the construction or use of the
Properties or the Improvements);
(c) This Agreement and each other Operative Agreement to which
it is or will be a party have been, or will be, duly executed and
delivered by it and constitute, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against
it in accordance with the terms thereof, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
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(d) There is no action or proceeding pending or, to its
knowledge, threatened against it before any Governmental Authority that
questions the validity or enforceability of any Operative Agreement to
which it is or will become a party or that, if adversely determined,
would materially and adversely affect its ability to perform its
obligations under the Operative Agreements to which it is a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) It is not a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended. It is not an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act or an "investment adviser"
within the meaning of the Investment Advisers Act of 1940, as amended;
and
(h) It is acquiring its interest in the Trust Estate for its
own account for investment and not with a view to any distribution (as
such term is used in Section 2(11) of the Securities Act) thereof, and
if in the future it should decide to dispose of its interest in the
Trust Estate, it understands that it may do so only in compliance with
the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder and any applicable state securities
laws. Neither it nor anyone authorized to act on its behalf has taken
or will take any action which would subject, as a direct result of such
action alone, the issuance or sale of any interest in any Property, the
Trust Estate or the Lease to the registration requirements of Section 5
of the Securities Act. No representation or warranty contained in this
Section 7.1(i) shall include or cover any action or inaction of the
Lessee or any Affiliate thereof whether or not purportedly on behalf of
the Holders, the Owner Trustee or any of their Affiliates.
7.2. Representations and Warranties of the Owner Trustee. Effective as
of the Initial Closing Date, Trust Company in its individual capacity and as the
Owner Trustee, as indicated, represents and warrants to each of the other
parties hereto as follows, provided, that the representations in paragraphs (h),
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(i), (j) and (k) below are made solely in its capacity as the Owner Trustee:
(a) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) requires or will require any approval
of its stockholders, or any approval or consent of any trustee or
holders of any of its indebtedness or obligations, (ii) violates or
will violate any current law, governmental rule or regulation relating
to its banking or trust powers, (iii) violates or will violate or
result in any breach of or constitute any default under, or result in
the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which violation,
breach, default or Lien under clause (B) would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or (iv) requires or will require any Governmental Action by any
Governmental Authority regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will
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be a party have been, or will be, duly executed and delivered by Trust
Company or the Owner Trustee, as the case may be, and the Trust
Agreement and each such other Operative Agreement to which Trust
Company or the Owner Trustee, as the case may be, is a party
constitutes, or upon execution and delivery will constitute, a legal,
valid and binding obligation enforceable against Trust Company or the
Owner Trustee, as the case may be, in accordance with the terms
thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or would question the validity or enforceability of any of the
Operative Agreements to which it is or will become a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease or the Agency Agreement except in
accordance with the Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Lenders, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act, or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(h) The Owner Trustee's chief place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept
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are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇;
(i) The Owner Trustee is not engaged principally in, and does
not have as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Fundings will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of
Regulations G, T, U, or X of the Federal Reserve Board; and
(j) The Owner Trustee is not a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or a "public
utility" within the meaning of the Federal Power Act, as amended. The
Owner Trustee is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company
Act or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.
7.3. Representations and Warranties of the Construction Agent and the
Lessee. Effective as of the Initial Closing Date, the Construction Agent and the
Lessee represent and warrant to each of the other parties hereto that:
(a) Each of the Construction Agent and the Lessee is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Florida; each of their Subsidiaries is duly
organized and validly existing under the laws of the jurisdiction of
its organization; and each of the Construction Agent and the Lessee and
each of their Subsidiaries is duly qualified to do business in each
other jurisdiction where the nature of its business makes such
qualification necessary, except where such failure to so qualify would
not have a Material Adverse Effect. Each of the Construction Agent and
the Lessee has the power and authority to carry on its business as now
conducted and to enter into and perform its obligations under each
Operative Agreement to which it is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which it is or will be a party;
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(b) The execution, delivery and performance by each of the
Construction Agent and the Lessee of this Agreement and the other
Operative Agreements to which each is or will be a party have been duly
authorized by all necessary corporate action on the part of each of the
Construction Agent and the Lessee (including any necessary shareholder
action), have received all necessary governmental approval, and do not
and will not (i) violate any Legal Requirement, decree, judgment or
award which is applicable to or binding on the Construction Agent or
the Lessee or any of their Subsidiaries, (ii) violate or conflict with,
or result in a breach of, any provision of the Certificate of
Incorporation, By-Laws or other organizational documents of either the
Construction Agent or the Lessee or any of their Subsidiaries, or any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan, credit agreement or other agreement, instrument or
document to which either the Construction Agent or the Lessee or any of
their Subsidiaries is a party or which is binding on either the
Construction Agent or the Lessee or any of their Subsidiaries or any of
their respective properties, or (iii) result in, or require, the
creation or imposition of any Lien (other than pursuant to the terms of
the Operative Agreements) on any asset of either of the Construction
Agent or the Lessee or any of their Subsidiaries;
(c) Each of this Agreement and each other Operative Agreement
to which the Construction Agent or the Lessee is or will be a party has
been, or will be, duly executed and delivered by it and constitutes, or
upon execution and delivery will constitute, the legal, valid or
binding obligation of the Construction Agent or the Lessee, as the case
may be, enforceable against it in accordance with the terms thereof,
subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity). The Construction Agent and the Lessee have each executed
the various Operative Agreements required to be executed as of the
Initial Closing Date;
(d) There are no actions, suits or proceedings (including,
without limitation, any derivative action) pending or, to the knowledge
of either the Construction Agent or the Lessee, threatened with respect
to the Construction Agent or Lessee or any of their Subsidiaries which,
if adversely decided, are reasonably likely to result, either
individually or collectively, in a Material Adverse Effect. None of the
Construction Agent, the Lessee nor any of their Subsidiaries has any
material contingent liabilities not provided for or disclosed in the
financial statements referred to in Section 7.3(f), which are required
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in accordance with GAAP to be reported in such financial statements;
(e) No Governmental Action by any Governmental Authority or
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person is required to authorize or is
required in connection with (i) the execution, delivery or performance
of any Operative Agreement or (ii) the legality, validity, binding
effect or enforceability of any Operative Agreement, in each case,
except those which have been obtained and are in full force and effect;
(f) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 29, 1996,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at March 30,
1997, copies of which have been furnished to the Agent and the Owner
Trustee, were prepared in accordance with GAAP (subject to normal
year-end adjustments) and fairly present the financial condition of the
Construction Agent and the Lessee and their Subsidiaries on a
consolidated basis as of such date and their consolidated results of
operations for the fiscal year then ended and such 13-week period,
respectively;
(g) Since the date of the audited financial statements
described in Section 7.3(f), there has been no event or occurrence
which has had or is reasonably likely to have a Material Adverse
Effect;
(h) Neither the Construction Agent nor the Lessee knows of any
proposed material tax assessments against it. No extension of time for
assessment or payment of any material federal, state or local tax by
either the Construction Agent or the Lessee is in effect;
(i) ERISA.
(A) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee or the trusts
created thereunder has engaged in a prohibited transaction
which could subject any such employee benefit plan or trust to
a material tax or penalty on prohibited transactions imposed
under Code Section 4975 or ERISA;
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(B) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee which are
employee pension benefit plans and which are subject to Title
IV of ERISA or the trusts created thereunder has been
terminated nor has any such employee benefit plan of the
Construction Agent or Lessee incurred any liability to the
PBGC, other than for required insurance premiums which have
been paid; neither the Construction Agent nor the Lessee has
withdrawn from or caused a partial withdrawal to occur with
respect to any Multi-employer Plan; the Construction Agent and
the Lessee have made or provided for all contributions to all
such employee pension benefit plans which they maintain and
which are required as of the end of the most recent fiscal
year under each such plan; neither the Construction Agent nor
the Lessee has incurred any accumulated funding deficiency
with respect to any such plan, whether or not waived; nor has
there been any reportable event, or other event or condition,
which presents a material risk of termination of any such
employee benefit plan by the PBGC;
(C) The present value of all vested accrued benefits
under the employee pension benefit plans which are subject to
Title IV of ERISA, maintained by the Construction Agent or the
Lessee, did not, as of the most recent valuation date for each
such plan, exceed the then current value of the assets of such
employee benefit plans allocable to such benefits;
(D) The consummation of the transactions contemplated
by the Operative Agreements will not involve any prohibited
transaction under ERISA;
(E) To the best of the Construction Agent's and the
Lessee's knowledge, each employee pension benefit plan subject
to Title IV of ERISA, maintained by the Construction Agent or
the Lessee, has been administered in accordance with its terms
and is in compliance in all material respects with all
applicable requirements of ERISA and other applicable laws,
regulations and rules;
(F) There has been no withdrawal liability incurred
with respect to any Multi-employer Plan to which the
Construction Agent or the Lessee is or was a contributor;
(G) As used in this Agreement, the terms "employee
benefit plan," "employee pension benefit plan," "accumulated
funding deficiency," "reportable event," and "accrued
benefits" shall have the
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respective meanings assigned to them in ERISA, and the term
"prohibited transaction" shall have the meaning assigned to it
in Code Section 4975 and ERISA;
(H) Neither the Construction Agent nor the Lessee has
any liability, contingent or otherwise, under any plan or
program or the equivalent for unfunded post-retirement
benefits, including pension, medical and death benefits, which
liability would have a Material Adverse Effect;
(j) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in the Property, subject only to the
Permitted Exceptions, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Lease;
(k) Neither the Construction Agent nor the Lessee has filed a
voluntary petition in bankruptcy or been adjudicated bankrupt or
insolvent, or filed any petition or answer seeking any reorganization,
liquidation, receivership, dissolution or similar relief under any
bankruptcy, receivership, insolvency, or other law relating to relief
for debtors, or sought or consented to or acquiesced in the appointment
of any trustee, receiver, conservator or liquidator of all or any part
of its properties or its interest in any Property. No court of
competent jurisdiction has entered an order, judgment, or decree
approving a petition filed against the Construction Agent or the Lessee
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any federal or state
bankruptcy, receivership, insolvency or other law relating to relief
for debtors, and no other liquidator has been appointed for the
Construction Agent or the Lessee or all or any part of its properties
or its interest in any Property, and no such action is pending. Neither
the Construction Agent nor the Lessee has given notice to any
Governmental Authority or any Person of insolvency or pending
insolvency, or suspension or pending suspension of operations;
(l) Each of the Construction Agent, the Lessee and their
Subsidiaries owns marketable title to, or a subsisting leasehold
interest in, all of its Properties free and clear of all Liens, except
Permitted Liens;
(m) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is (a) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act or an "investment adviser" within the meaning of
the Investment Advisers Act
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of 1940, as amended, or (b) a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or a
"public utility", within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended;
(n) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is engaged principally in, or has as one of its
important activities, the business of extending credit for the purpose
of purchasing or carrying any margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no part of the proceeds
of the Loans or the Holder Fundings will be used for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or maintaining or extending credit to others for such
purpose, or for any purpose that violates, or is inconsistent with
Regulations G, T, U, or X of the Federal Reserve Board;
(o) Each of the Construction Agent, the Lessee and their
Subsidiaries has filed all material tax returns and reports required by
Law to have been filed by it and has paid all Taxes and governmental
charges thereby shown to be owing, except any such Taxes or charges
which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall in accordance with
GAAP have been set aside on its books;
(p) To the best of the knowledge of each of the Construction
Agent and the Lessee, after inquiry it has deemed appropriate, each of
the Construction Agent, the Lessee and their Subsidiaries is in
material compliance with all Environmental Laws and Occupational Safety
and Health Laws where failure to comply could have a Material Adverse
Effect. None of the Construction Agent, the Lessee nor any of their
Subsidiaries has received notice of any claims that any of them is not
in compliance in all material respects with any Environmental Law where
failure to comply could have a Material Adverse Effect;
(q) Each of the Construction Agent, the Lessee and their
Subsidiaries is in compliance with all statutes, judicial and
administrative orders, permits and governmental rules and regulations
which are material to its business or the non-compliance with which
could result in Material Adverse Result; and
(r) All information heretofore or contemporaneously herewith
furnished by either the Construction Agent or the Lessee or any of
their Subsidiaries to the Agent, the Owner Trustee, any Lender or any
Holder for purposes of or in
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connection with this Agreement and the transactions contemplated hereby
is, and all information hereafter prepared and furnished by the
Construction Agent, the Lessee or any of their Subsidiaries to the
Agent, the Owner Trustee, any Lender or any Holder pursuant hereto or
in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified,
and such information, taken as a whole, does not and will not omit to
state any material fact necessary to make such information, taken as a
whole, not misleading.
7.4. Representations and Warranties of the Agent. Effective as of the
Initial Closing Date, the Agent represents and warrants to each of the other
parties hereto that:
(a) It is a national banking association duly organized and
validly existing under the laws of the United States of America and has
the full power and authority to enter into and perform its obligations
under this Agreement and each other Operative Agreement to which it is
or will be a party;
(b) The execution, delivery and performance by the Agent of
this Agreement and each other Operative Agreement to which it is or
will be a party are not, and will not be, inconsistent with the
articles of incorporation or by-laws or other charter documents of the
Agent, do not and will not contravene any applicable Law of the State
of Florida or of the United States of America governing its activities
and will not contravene any provision of, or constitute a default under
any indenture, mortgage, contract or other instrument to which it is a
party or by which it or its properties are bound, or require any
consent or approval of any Governmental Authority under any applicable
law, rule or regulation of the State of Florida or any federal law,
rule or regulation of the United States of America governing its
activities; and
(c) Each of this Agreement and each other Operative Agreement
to which it is a party has been, or when executed and delivered will
be, duly authorized by all necessary corporate action on the part of
the Agent and has been, or on such Closing Date will be, duly executed
and delivered by the Agent and, assuming the due authorization,
execution and delivery hereof and thereof by the other parties hereto
and thereto, will constitute a legal, valid and binding obligation
enforceable against the Agent in accordance with the terms thereof.
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SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES.
8.1. Representations and Warranties on Property Closing Dates. The
Construction Agent and the Lessee hereby represent and warrant as of each
Property Closing Date as follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements are true and
correct in all material respects on and as of such Property Closing
Date as if made on and as of such date. The Construction Agent and the
Lessee are in all material respects in compliance with their respective
obligations under the Operative Agreements and there exists no Default
or Event of Default under any of the Operative Agreements. No Default
or Event of Default will occur under any of the Operative Agreements as
a result of, or after giving effect to, the Funding requested by the
Requisition on such Property Closing Date;
(b) The Properties to be acquired are being acquired at a
price that is not in excess of the price that would be obtained on an
arm's-length basis between unrelated parties, and such Properties
consist of (i) unimproved Land, or (ii) Land and existing Improvements
thereon which Improvements are either suitable for occupancy at the
time of acquisition or will be renovated or modified in accordance with
the terms of this Agreement, or (iii) Equipment. Each of the Properties
is located at the site set forth on the applicable Requisition, which
is in one of the Approved States;
(c) Upon the acquisition of each Property on such Property
Closing Date, and at all times thereafter, the Lessor will have
marketable title to such Property, subject only to Permitted
Exceptions;
(d) The execution and delivery of each Operative Agreement
delivered by the Construction Agent or the Lessee on such Property
Closing Date and the performance of the obligations of the Construction
Agent and the Lessee under each Operative Agreement have been duly
authorized by all requisite corporate action of the Construction Agent
or the Lessee, as applicable;
(e) Each Operative Agreement delivered on such Property
Closing Date by the Construction Agent or the Lessee has been duly
executed and delivered by the Construction Agent or the Lessee;
(f) Each Operative Agreement delivered by the Construction
Agent or the Lessee on such Property Closing Date is a legal, valid and
binding obligation of the Construction Agent or the Lessee, as
applicable, enforceable
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against the Construction Agent or the Lessee, as applicable, in
accordance with its respective terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
(g) Upon filing of each of the UCC Financing Statements (with
respect to the Property being acquired) in the filing offices
designated by the Construction Agent or the Lessee, such UCC Financing
Statements will have been filed with the appropriate Governmental
Authorities in order to perfect a security interest in the Property
described therein (to the extent perfection can be obtained by filing
under the UCC);
(h) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment to the Agent of the filed Lessor Financing
Statements, will perfect a valid first priority security interest in
all Equipment and other collateral described therein in which a
security interest or mortgage can be perfected by filing under the UCC,
subject only to Permitted Exceptions, and upon filing, the Lessor
Financing Statements will protect Lessor's interest under the Lease to
the extent the Lease is a security agreement and mortgage;
(i) No portion of any Property being acquired by the Lessor on
such Property Closing Date is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, or if any such Property is located in an area
identified as a special flood hazard area by any such agency, then
flood insurance has been obtained for such Property in accordance with
Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(j) The Construction Agent has obtained insurance coverage for
each Property being acquired by the Lessor on such Property Closing
Date which meets the requirements of Article XIV of the Lease and all
of such coverage is in full force and effect;
(k) Each Property being acquired by the Lessor on such
Property Closing Date complies with all Legal Requirements (including,
without limitation, all zoning and land use laws and Environmental
Laws), except to the extent that failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect; and
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(l) All utility services and facilities necessary for the
construction of the Improvements existing on, or to be constructed
after, such Property Closing Date (including, without limitation, gas,
electrical, water and sewage services and facilities) are available at
the boundaries of the real property upon which such Improvements exist
or will be constructed on each such Property prior to the Completion
Date for such Property.
8.2. Representations and Warranties Upon Initial Construction Fundings.
The Construction Agent and the Lessee hereby represent and warrant as of each
date on which an Initial Construction Funding is made as follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements are true and
correct in all material respects on and as of the date of such Initial
Construction Funding as if made on and as of such date. The
Construction Agent and the Lessee are in all material respects in
compliance with their respective obligations under the Operative
Agreements and there does not exist any Event of Default or (except as
permitted under Section 8.4 hereof) any Default under any of the
Operative Agreements. No Default or Event of Default will occur under
any of the Operative Agreements as a result of, or after giving effect
to, the Funding requested by the Requisition on such date;
(b) The Lessor has marketable title to each Property, subject
only to Permitted Exceptions;
(c) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment of the filed Lessor Financing Statements,
will perfect a valid first priority security interest in all the
Properties and other collateral described therein in which a security
interest can be perfected by filing under the UCC, subject only to
Permitted Liens;
(d) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property with respect to which a Funding is being made have been
obtained and are in full force and effect, except to the extent that
the failure to so obtain would not, individually or in the aggregate,
have a Material Adverse Effect;
(e) The Construction Agent has obtained insurance coverage
covering the Property which is the subject of such
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Funding which coverage meets the requirements of Section 2.6 of the
Agency Agreement before commencing construction, repairs or
modifications, as the case may be, and such coverage is in full force
and effect;
(f) The Improvements which are the subject of the Funding, as
improved in accordance with the Plans and Specifications, will comply
as of the applicable Completion Date with all applicable Legal
Requirements and Insurance Requirements (including, without limitation,
all zoning and land use laws and Environmental Laws), except to the
extent the failure to comply therewith would not, individually or in
the aggregate, have a Material Adverse Effect. The Plans and
Specifications have been or will be prepared in accordance with all
applicable Legal Requirements (including, without limitation, all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect, and
upon completion of such Improvements in accordance with the Plans and
Specifications, such Improvements will not encroach in any manner onto
any adjoining land (except as permitted by express written easements)
and such Improvements and the use thereof by the Lessee and its agents,
assignees, employees, invitees, lessees, licensees and tenants will
comply as of the applicable Completion Date in all respects with all
applicable Legal Requirements (including, without limitation, all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect. Upon
completion of such Improvements in accordance with the Plans and
Specifications, (i) there will be no material defects to such
Improvements including, without limitation, the plumbing, heating, air
conditioning and electrical systems thereof and (ii) all water, sewer,
electric, gas, telephone and drainage facilities and all other
utilities required to adequately service such Improvements for their
intended use will be available pursuant to adequate permits (including
any that may be required under applicable Environmental Laws), except
to the extent that failure to obtain any such permit would not,
individually or in the aggregate, have a Material Adverse Effect. There
is no action, suit or proceeding (including any proceeding in
condemnation or eminent domain or under any Environmental Law) pending
or, to the best knowledge of the Lessee or the Construction Agent,
threatened which adversely affects the title to, or the use, operation
or value of, such Properties. No fire or other casualty with respect to
such Properties has occurred which (y) has had a Material Adverse
Effect or (2) is not fully covered by insurance. All utilities serving
the related Properties, or proposed to serve the related
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Properties in accordance with the Plans and Specifications, are located
in (or will be located in) and vehicular access to such Improvements is
provided by (or will be provided by), either public rights-of-way
abutting the related Property or Appurtenant Rights. All licenses,
approvals, authorizations, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way,
including proof of dedication, required for (i) the use, treatment,
storage, transport, disposal or disposition of any Hazardous Substance
on, at, under or from the real property underlying such Improvements
during the construction of such Improvements and the use and operation
of such Improvements following such construction, (ii) the construction
of such Improvements in accordance with the Plans and Specifications
and the Agency Agreement and (iii) the use and operation of such
Improvements following such construction with the applicable Equipment
which such Improvements support for the purposes for which they were
intended have either been obtained from the appropriate Governmental
Authorities or from private parties, as the case may be, or will be
obtained from the appropriate Governmental Authorities or from private
parties, as the case may be, prior to commencing any such construction
or use and operation, as applicable; and
(g) All conditions precedent contained in this Agreement and
in the other Operative Agreements relating to the Initial Construction
Funding have been substantially satisfied.
8.3. Representations and Warranties Upon the Date of Each Construction
Funding that is not an Initial Construction Funding. The Construction Agent and
the Lessee hereby represent and warrant as of each date on which a Construction
Funding is made, when such advance is not an Initial Construction Funding, as
follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements (including
the representations and warranties set forth in Section 8.2) are true
and correct in all material respects on and as of the date of such
Construction Funding as if made on and as of such date. The
Construction Agent and the Lessee are in all material respects in
compliance with their respective obligations under the Operative
Agreements and there does not exist any Event of Default or (except as
expressly permitted under Section 8.4 hereof) any Default under any of
the Operative Agreements. No Default or Event of Default will occur
under any of the Operative Agreements as a result of, or after giving
effect to, the Funding requested by the Requisition on such date;
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(b) Construction of the Improvements to date has been
performed in a good and workmanlike manner, substantially in accordance
with the Plans and Specifications and in compliance with all Insurance
Requirements and Legal Requirements, except to the extent noncompliance
with any Legal Requirements would not, individually or in the
aggregate, have a Material Adverse Effect;
(c) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property have been obtained and are in full force and effect;
(d) When completed, the Improvements shall be wholly within
any building restriction lines (unless consented to by applicable
Government Authorities), however established; and
(e) The Funding is secured by the Lien of the Security
Agreement, and there have been no Liens against the applicable
Improvements other than Permitted Liens.
8.4. Certain Construction Fundings During Defaults. Notwithstanding any
other provision of the Operative Agreements, unless an Event of Default has
occurred and is continuing, the existence of a Default shall not prevent a
Construction Funding with respect to an existing Property if (a) such Default
does not relate to such Property and (b) the amount of such Funding, together
with the amounts of any other Fundings (whether or not relating to such
Property) made under the Operative Agreements during the period such Default has
been continuing, do not exceed in the aggregate ten percent (10%) of the
aggregate Commitments and Holder Commitments. The foregoing notwithstanding, no
Acquisition Funding shall be made when any Default or Event of Default has
occurred and is continuing.
SECTION 9. PAYMENT OF CERTAIN EXPENSES.
9.1. Transaction Expenses.
(a) Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all reasonable fees, expenses and disbursements of
the various outside legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative
Agreements and incurred in connection with the Initial Closing Date,
including all Transaction Expenses (arising in connection with the
Initial Closing Date), and all other reasonable fees, expenses and
disbursements in connection with the Initial Closing Date, and
including, without limitation, all fees, taxes and
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expenses for the recording, registration and filing of documents;
provided, however, that the Lessor shall pay such amounts described in
this Section 9.1(a) only if (i) such amounts are properly described in
a Requisition delivered on or before the Initial Closing Date, and (ii)
funds are made available by the Lenders and the Holders in connection
with such Requisition in an amount sufficient to allow such payment. On
the Initial Closing Date, after delivery and receipt of the Requisition
referenced in Section 4.2(a) hereof and satisfaction of the other
conditions precedent for such date, the Holders shall make Holder
Fundings and the Lenders shall make Loans to the Lessor to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced
in this Section 9.1(a). The Lessee agrees to pay all amounts referred
to in this Section 9.1(a) to the extent not paid by Lessor.
(b) Lessor agrees on each Property Closing Date, on the date
of any Construction Funding and on the Completion Date to pay, or cause
to be paid, all reasonable fees, expenses and disbursements of the
various outside legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative
Agreements and billed in connection with such Property Closing Date,
the date of such Funding, or such Completion Date, including all
Transaction Expenses (arising with respect to the Initial Closing Date,
such Property Closing Date, the date of such Funding or such Completion
Date), all fees, expenses and disbursements incurred with respect to
the various items referenced in Sections 5.3, 5.4, 5.5 or 5.6
(including without limitation the cost of any Appraisals or
environmental site assessments, any developer's fees, any premiums for
title insurance policies and charges for any updates to such policies)
and all other reasonable fees, expenses and disbursements in connection
with such Property Closing Date, the date of such Funding or such
Completion Date including, without limitation, all expenses relating to
and all fees (including brokers' fees), taxes (including any and all
stamp, transfer or similar taxes) and expenses for the recording,
registration and filing of documents; provided, however, the Lessor
shall pay such amounts described in this Section 9.1(b) only if (i)
such amounts are properly described in a Requisition delivered on the
applicable date and (ii) funds are made available by the Lenders and
the Holders in connection with such Requisition in an amount sufficient
to allow such payment. On each Property Closing Date, on the date of
any Construction Funding or any Completion Date, after delivery of the
applicable Requisition in satisfaction of the other conditions
precedent for such date, the Holders shall make a Holder Funding and
the Lenders shall make Loans to the Lessor to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in this
Section 9.1(b).
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The Lessee agrees to pay all amounts referred to in this Section 9.1(b)
to the extent not paid by the Lessor.
9.2. Certain Fees and Expenses. Lessee agrees to pay or cause to be
paid (i) the initial and annual Owner Trustee's fee and all reasonable expenses
of the Owner Trustee and any necessary co-trustees (including reasonable outside
counsel fees and expenses) or any successor owner trustee, for acting as owner
trustee under the Trust Agreement, (ii) all reasonable costs and expenses
(including reasonable counsel fees and expenses) incurred by the Construction
Agent, the Lessee, the Agent, the Lenders, the Holders or the Lessor in entering
into any future amendments or supplements requested by the Lessee with respect
to any of the Operative Agreements, whether or not such amendments or
supplements are ultimately entered into, or giving or withholding of waivers of
consents hereto or thereto which have been requested by the Lessee, or any
purchase of any Property by the Lessee pursuant to Article XX of the Lease, and
(iii) all reasonable costs and expenses (including reasonable counsel fees and
expenses) incurred by the Lessor, the Construction Agent, the Lessee, the
Holders, the Lenders or the Agent in connection with the enforcement of any
Operative Agreement or any exercise of remedies under any Operative Agreement.
9.3. Unused Fee and Holder Unused Fee. From the date hereof through the
Expiration Date and thereafter so long as any Rent or other amounts remain
outstanding under the Operative Agreements, the Lessee agrees to pay (a) to the
Agent, for the pro rata benefit of the Lenders of each Category of Loans based
on the Commitment Percentage of each such Lender during the period for which
payment is made, the Unused Fee; and (b) to the Lessor, for the pro rata benefit
of the Holders based on the Holder Commitment of each such Holder during the
period for which payment is made, the Holder Unused Fee. Such payments of fees
provided for in this Section 9.3 shall be due in arrears on each Unused Fee
Payment Date. Notwithstanding the foregoing, so long as any Lender or Holder
fails (in violation of the Operative Agreements) to make available any portion
of its Commitment or Holder Commitment when requested, such Person shall not be
entitled to receive payment of its pro rata share of its Unused Fee or Holder
Unused Fee (as the case may be) until such Person shall make available such
portion. Each such fee shall be calculated on the basis of a year of 360 days
for the actual number of days elapsed. If all or a portion of any Unused Fee or
Holder Unused Fee shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the Base
Rate plus 2%, from the date of such non-payment until such amount is paid in
full (as well after as before judgment).
SECTION 10. OTHER COVENANTS AND AGREEMENTS.
10.1. Cooperation with the Construction Agent or the Lessee. The
Holders, the Owner Trustee (at the direction of the Holders) and the Agent
shall, to the extent reasonably requested
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by the Construction Agent or Lessee (but without assuming additional liabilities
on account thereof), at the Construction Agent's or the Lessee's expense,
cooperate with the Construction Agent or the Lessee in connection with its
covenants contained herein including, without limitation, at any time and from
time to time, upon the request of the Construction Agent or the Lessee, promptly
and duly executing and delivering any and all such further instruments,
documents and financing statements (and continuation statements related thereto)
as the Construction Agent or the Lessee may reasonably request in order to
perform such covenants.
10.2. Covenants of the Owner Trustee and the Holders. Each of the Owner
Trustee and the Holders hereby agree that so long as this Agreement is in
effect:
(a) None of the Holders and the Owner Trustee (both in its
trust capacity and in its individual capacity) will create or permit to
exist at any time, and each of the Holders and the Owner Trustee will,
at its own cost and expense, promptly take such action (and notify
Lessee of such action) as may be necessary duly to discharge, or to
cause to be discharged, all Lessor Liens attributable to it on the
Properties; provided, however, that the Holders and the Owner Trustee
shall not be required to discharge any such Lessor Lien while the same
is being contested in good faith by appropriate proceedings diligently
prosecuted so long as (a) such proceedings shall not involve any
material danger of impairment of the Liens of the Security Documents or
of the sale, forfeiture or loss of, any Property or title thereto or
any interest therein or the payment of Rent, and (b) such proceedings
shall not materially interfere with the disposition of any Property or
title thereto or interest therein or the payment of Rent;
(b) Without prejudice to any right of the Owner Trustee under
the Trust Agreement to resign (subject to requirement set forth in the
Trust Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as Owner Trustee (after consent to such removal by the Agent as
provided in the Trust Agreement), each of the Holders and the Owner
Trustee hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of the Lessee or the Agent without the prior written consent of such
party and (iii) to comply with all of the terms of the Trust Agreement,
the nonperformance of which would adversely affect any such party;
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(c) The Owner Trustee or any successor may resign or be
removed by the Holders as Owner Trustee, a successor Owner Trustee may
be appointed and a corporation may become the Owner Trustee under the
Trust Agreement, only in accordance with the provisions of Article IX
of the Trust Agreement and, with respect to such appointment, with the
consent of the Lessee, which consent shall not be unreasonably
withheld, conditioned or delayed;
(d) The Owner Trustee, in its capacity as Owner Trustee under
the Trust Agreement, and not in its individual capacity, shall not
contract for, create, incur or assume any indebtedness (other than the
indebtedness under the Bridge Debt), or enter into any business or
other activity, other than pursuant to or under the Operative
Agreements, except that the Owner Trustee may own the Ancillary
Properties;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the Owner
Trustee under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to
the Owner Trustee or for all or any substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee
and the Agent if the Owner Trustee's chief place of business or chief
executive office, or the office where the records concerning the
accounts or contract rights relating to a Property are kept, shall
cease to be located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, or if it shall change its name;
(h) Provided that no Lease Event of Default has occurred and
is continuing, neither the Owner Trustee nor any Holder shall, without
the prior written consent of the Lessee, consent to or permit any
amendment, supplement or other modification of the terms and provisions
of the Credit Agreement or the Notes or (to the extent such amendment,
supplement or modification would have an adverse effect on the rights
or obligations of the Lessee under the Lease) any other Operative
Agreement;
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(i) Neither the Owner Trustee nor any Holder shall consent to
or permit any amendment, supplement or other modification of the terms
and provisions of any Operative Agreement, in each case without the
prior written consent of the Agent except as described in Section 10.5
of this Agreement;
(j) The Owner Trustee (i) shall take such actions and shall
refrain from taking such actions with respect to the Operative
Agreements or the Properties and shall grant such approvals and
otherwise act or refrain from acting with respect to the Operative
Agreements or the Properties in each case as directed in writing by the
Agent or, in connection with Section 10.5 hereof, the Lessee,
notwithstanding any contrary instruction or absence of instruction by
any Holder or Holders; and (ii) shall not take any action, grant any
approvals or otherwise act under or with respect to the Operative
Agreements or any matters relating to the Properties without first
obtaining the prior written consent of the Agent (and without regard to
any contrary instruction or absence of instruction by any Holder);
provided, however, that notwithstanding the foregoing provisions of
this subparagraph (j) the Owner Trustee, the Agent and the Holders each
acknowledge, covenant and agree that, with respect to all matters under
the Operative Agreements that require the consent or concurrence of all
of the Lenders pursuant to the terms of Section 9.1 of the Credit
Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor
the Agent shall act or refrain from acting with respect to any
Unanimous Vote Matter until such party has received the approval of
each Lender and each Holder with respect thereto;
(k) Except as otherwise contemplated by the Operative
Agreements, neither the Owner Trustee nor any Holder shall use the
proceeds of any Loan or Holder Funding for any purpose other than the
payment of Transaction Expenses and the fees, expenses and other
disbursements referenced in Sections 9.1(a) and (b) of this Agreement,
the purchase or lease of Properties, the acquisition of Equipment, the
construction of Improvements and the payment of interest regarding the
Loans and the payment of the Holder Yield regarding the Holder
Fundings, in each case accrued under the Credit Agreement or Trust
Agreement, as the case may be, during the period prior to the Term
Commencement Date with respect to a particular Property; and
(l) Upon request of the Lessee, the Lessor shall provide the
Lessee with a copy of its fiduciary tax returns solely for the purpose
of enabling the Lessee to perform its obligations hereunder.
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10.3. Lessee Covenants, Consent and Acknowledgment; Construction Agent
Covenants.
(a) Lessee acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various
personal property, fixtures and real property described therein in
favor of the Agent. Lessee hereby irrevocably consents to the creation,
perfection and maintenance of such Liens.
(b) Lessor hereby instructs Lessee, and Lessee hereby
acknowledges and agrees, that until such time as the Loans are paid in
full and the Liens evidenced by the Security Agreement and the Mortgage
Instruments have been released, (i) any and all Rent and any and all
other amounts of any kind or type under any of the Operative Agreements
due and owing or payable to the Lessor or the Owner Trustee shall
instead be paid directly to the Agent or as the Agent may direct from
time to time and (ii) Lessee shall cause all notices, certificates,
financial statements, communications and other information which is
delivered, or is required to be delivered, to the Lessor, the Owner
Trustee or any Holder also to be delivered at the same time to the
Agent.
(c) Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement without, in each case, obtaining the prior written
consent of the Agent and, to the extent required by the proviso at the
end of Section 10.2(j) hereof, each of the Holders.
(d) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Funding or Loan for any purpose other than the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Section 9.1(a) and (b) of this Agreement, the purchase or
lease of Properties, the acquisition of Equipment, the construction of
Improvements, the payment of interest regarding the Loans and the
payment of the Holder Yield regarding the Holder Fundings, in each case
accrued under the Credit Agreement or Trust Agreement, as the case may
be, during the period prior to the Term Commencement Date with respect
to a particular Property.
(e) The Construction Agent and the Lessee shall restrict the
amount of Equipment located in or on each Property, so that at all
times the Property Cost of the Equipment located in or on a given
Property shall be less than or equal to 10% of the total Property Cost
of such Property, provided, however, that this percentage limitation
shall not apply to any such Equipment consisting of Fixtures or other
goods incorporated into or customarily considered to be part of a
building or structure erected on real
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property (such as heating, ventilating, air-conditioning, electrical
and mechanical equipment or systems, escalators, elevators, wall and
floor coverings, plumbing, pumps, tanks, conduits, wiring, lighting,
security systems, sprinklers and other fire prevention and
extinguishing apparatus). This 10% limitation shall apply to removable
Equipment that (i) is not incorporated into a building or structure or
(ii) is customarily considered to be trade fixtures or operating
equipment for the corrections business of the Lessee.
(f) Neither the Lessee nor the Construction Agent shall create
or permit to exist at any time (and each of the Lessee and the
Construction Agent shall, at its own expense, take such action as may
be necessary to duly discharge, or cause to be discharged) any Lien
against any Property other than Permitted Liens.
(g) The Lessee shall pay (or cause to be paid) to the Agent
the administrative fee (described in the Fee Letter) when and as due
from time to time.
(h) The Lessee and the Construction Agent agree that at all
times, with respect to any Property, the appraised value of such
Property (as shown in the most recent Appraisal of such Property
received by the Agent pursuant to Section 5.3 or otherwise) shall be
not less than 85% of the aggregate Property Cost of such Property; and
any Appraisal obtained to comply with this provision shall be at the
Lessee's and Construction Agent's sole cost and expense.
10.4. Sharing of Certain Payments. The parties hereto acknowledge and
agree that all payments due and owing by the Lessee to the Lessor under the
Lease or any of the other Operative Agreements shall be made by the Lessee
directly to the Agent as more particularly provided in Section 10.3 hereof. The
Holders and the Agent, on behalf of the Lenders, acknowledge the terms of
Section 8 of the Credit Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree all such payments and amounts are to be allocated as provided in Section 8
of the Credit Agreement. In connection therewith the Holders hereby (a) appoint
the Agent to act as collateral agent for the Holders in connection with the Lien
granted by the Mortgage Instruments to secure the Holder Amount and (b)
acknowledge and agree and direct that the rights and remedies of the
beneficiaries of the Lien of the Mortgage Instruments shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Lenders without notice to or consent from the Holders.
10.5. Grant of Easements, Voting at Meetings, etc. The Agent and the
Holders hereby agree that, so long as no Event of Default shall have occurred
and be continuing, and until such time as the Agent gives instructions to the
contrary to the Owner Trustee, the Owner Trustee shall, from time to time at the
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request of the Lessee, in connection with the transactions contemplated by the
Agency Agreement, the Lease or the other Operative Agreements, (i) grant
easements and other rights in the nature of easements with respect to any
Property, (ii) release existing easements or other rights in the nature of
easements which are for the benefit of any Property, (iii) execute and deliver
to any Person any instrument appropriate to confirm or effect such grants or
releases, and (iv) execute and deliver to any Person such other documents or
materials in connection with the acquisition, development or operation of any
Property, including, without limitation, reciprocal easement agreements,
operating agreements, development agreements, plats, replats or subdivision
documents; provided, that each of the agreements and documents referred to in
this Section 10.5 shall be of the type normally executed by the Lessee in the
ordinary course of the Lessee's business and shall be on commercially reasonable
terms so as not to diminish the value of any Property in any material respect.
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.
11.1. Construction Agent's and Lessee's Credit Agreement Rights.
Notwithstanding anything to the contrary contained in the Credit Agreement, the
Agent, the Construction Agent, the Lessee and the Owner Trustee hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and obligation
(as more specifically provided in Section 5.7 hereof) to designate the
portion of the Loans on which interest is due and payable for purposes
of the definition of "Allocated Interest";
(b) the Construction Agent shall have the right to give the
notice referred to in Section 2.3 of the Credit Agreement, to designate
the account to which a borrowing under the Credit Agreement is to be
credited pursuant to Section 2.3 of the Credit Agreement and to provide
the Allocation Notice;
(c) the Lessee shall have the right to terminate or reduce the
Commitments pursuant to Section 2.5(a) of the Credit Agreement and to
make an Extension Request pursuant to Section 2.5(c) of the Credit
Agreement;
(d) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to Section 2.7 of the Credit
Agreement;
(e) the Lessee shall have the right to approve any successor
agent pursuant to Section 7.9 of the Credit Agreement;
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(f) the Lessee shall have the right to consent to any
assignment by a Lender to which the Lessor has the right to consent
pursuant to Section 9.8 of the Credit Agreement; and
(g) without limiting the foregoing clauses (a) through (f),
and in addition thereto, the Lessee shall have the right to exercise
any other right of the Owner Trustee under the Credit Agreement upon
not less than five (5) Business Days' prior written notice from the
Lessee to the Owner Trustee and the Agent.
11.2. Construction Agent's and Lessee's Trust Agreement Rights.
Notwithstanding anything to the contrary contained in the Trust Agreement, the
Construction Agent, the Lessee, the Owner Trustee and the Holders hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and the
obligation (as more specifically provided in Section 5.7 hereof) to
designate the portion of the Holder Fundings on which Holder Yield is
due and payable for purposes of the definition of Allocated Return in
this Agreement;
(b) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to Section 3.8 of the Trust
Agreement;
(c) no removal of the Owner Trustee or appointment of a
successor Owner Trustee pursuant to Section 9.1 of the Trust Agreement
shall be made without the prior written consent (not to be unreasonably
withheld or delayed) of the Lessee; and
(d) the Holders and the Owner Trustee shall not amend,
supplement or otherwise modify any provision of the Trust Agreement in
such a manner as to adversely affect the rights of the Lessee without
the prior written consent (not to be unreasonably withheld or delayed)
of the Lessee.
SECTION 12. TRANSFER OF INTEREST.
12.1. Restrictions on Transfer. The Holders may, directly or
indirectly, assign, convey or otherwise transfer any of their right, title or
interest in or to the Trust Estate or the Trust Agreement with the prior written
consent of the Agent, and (provided no Default or Event of Default has occurred
and is continuing) the Lessee, and (only if such proposed assignee is not a
Lender) the Majority Lenders (which consent in each case shall not be
unreasonably withheld or delayed), provided that such consents shall not be
required for an assignment to an affiliate of the assigning Lender. The Owner
Trustee may, subject to the Lien of the applicable Security Documents, but only
with the prior written consent of the Agent, the Holders
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(which consent may be withheld by the Agent or the Holders in their sole
discretion) and (provided no Default or Event of Default has occurred and is
continuing) the Lessee, directly or indirectly, assign, convey, appoint an agent
with respect to enforcement of, or otherwise transfer any of the Owner Trustee's
right, title or interest in or to any Property, the Lease, the Trust Agreement,
this Agreement (including, without limitation, any right to indemnification
thereunder), or any other document relating to a Property or any interest in a
Property as provided in the Trust Agreement and the Lease. The provisions of the
immediately preceding sentence shall not apply to the obligations of the Owner
Trustee to transfer Property to the Lessee or a third party purchaser pursuant
to Article XXII of the Lease upon payment for such Property in accordance with
each of the terms and conditions of the Lease.
12.2. Effect of Transfer. From and after any transfer effected in
accordance with this Section 12, the transferor shall be released, to the extent
of such transfer, from its liability hereunder and under the other documents to
which it is a party in respect of obligations to be performed on or after the
date of such transfer; provided, however, that any transferor Holder shall
remain liable under Article XI of the Trust Agreement to the extent that the
transferee Holder shall not have assumed the obligations of the transferor
Holder thereunder. Upon any transfer by the Owner Trustee or a Holder as above
provided, any such transferee shall assume the obligations of the Owner Trustee
and Lessor or the obligations of a Holder, as the case may be, and shall be
deemed an "Owner Trustee", "Lessor" or "Holder", as the case may be, for all
purposes of such documents and each reference herein to the transferor shall
thereafter be deemed a reference to such transferee for all purposes, except as
provided in the preceding sentence. Notwithstanding any transfer of all or a
portion of the transferor's interest as provided in this Section 12, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer including, without limitation, rights to indemnification under
any such document.
SECTION 13. INDEMNIFICATION.
13.1. General Indemnity. Whether or not any of the transactions
contemplated hereby shall be consummated, the Indemnity Provider hereby assumes
liability for and agrees to defend, indemnify and hold harmless each Indemnified
Person on an After Tax Basis from and against any Claims which may be imposed
on, incurred by or asserted against an Indemnified Person by any other Person
(but not to the extent such Claims arise from the gross negligence, willful
misconduct or willful breach of such Indemnified Person) in any way relating to
or arising, or alleged (by any Person asserting such a Claim against an
Indemnified Person) to arise, out of the execution, delivery, performance or
enforcement of this Agreement, the Lease, any other Operative Agreement or the
Bridge Loan Documents or on or with respect to any Ancillary Property or
Property or any part thereof,
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including, without limitation, Claims in any way relating to or arising or
alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, refurbishment, development,
delivery, acceptance, nondelivery, leasing, subleasing, possession, use,
operation, repair, modification, transportation, condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any other
disposition of an Ancillary Property, a Property, or any part thereof, including
the acquisition, holding or disposition of any interest in any Ancillary
Property, Property, lease or agreement comprising a portion of any thereof; (b)
any latent or other defect in any property whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (c) any Environmental Claim, any
violation of Environmental Laws, or any other loss of or damage to any property
or the environment relating to any Property, the Lease, the Agency Agreement or
the Indemnity Provider; (d) the Operative Agreements, or any transaction
contemplated thereby, or the Bridge Loan Documents or any transaction
contemplated thereby; (e) any breach by the Construction Agent or the Lessee of
any of its representations or warranties under the Operative Agreements to which
it is a party or failure by the Construction Agent or the Lessee to perform or
observe any covenant or agreement to be performed by it under any of the
Operative Agreements; (f) the transactions contemplated hereby or by any other
Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle
B of Title I of ERISA; (g) any personal injury, death or property damage,
including without limitation Claims based on strict or absolute liability in
tort; (h) any easement, right, agreement or document referred to in Section 10.5
of this Agreement; or (i) any Lien on any Ancillary Property or any Property
(other than Liens created by the Operative Agreements or Lessor Liens).
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including a
written notice of such proceeding) for any Claim, such Indemnified Person shall
promptly notify the Indemnity Provider in writing and shall not take action with
respect to such Claim without the consent of the Indemnity Provider for thirty
(30) days after the receipt of such notice by the Indemnity Provider; provided,
however, that, in the case of any such Claim, if action shall be required by law
or regulation to be taken prior to the end of such 30-day period, such
Indemnified Person shall endeavor, in such notice to the Indemnity Provider, to
inform the Indemnity Provider of such shorter period, and no action shall be
taken with respect to such Claim without the consent of the Indemnity Provider
before seven (7) days before the end of such shorter period; provided, further,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure materially precludes the Indemnity Provider
from contesting such Claim.
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If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including, without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim can be pursued by the
Indemnity Provider on behalf of or in the name of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control the response to such Claim and (B) in
the case of any Claim, the Indemnified Person may request the Indemnity Provider
to conduct and control the response to such Claim (with counsel to be selected
by the Indemnity Provider and consented to by such Indemnified Person, such
consent not to be unreasonably withheld, conditioned or delayed; provided,
however, that any Indemnified Person may retain separate counsel at the expense
of the Indemnity Provider in the event of a conflict)) by, in the sole
discretion of the Person conducting and controlling the response to such Claim,
(1) resisting payment thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party, except that the Indemnity Provider may not agree to any dismissal or
settlement of, or other agreement in connection with, any claim without the
prior written consent of such Indemnified Person, if such dismissal, settlement
or agreement would require any admission or acknowledgment of any culpability or
wrongdoing by such Indemnified Person or provide for any nonmonetary relief to
be performed by such Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with respect to the
response to such Claim and may settle such Claim if such Indemnified Person
shall waive its rights to any indemnity from the Indemnity Provider that
otherwise would be payable in respect of such Claim (and any future Claim, the
pursuit of which is precluded by reason of such resolution of such Claim) and
shall pay to the Indemnity Provider any amount previously paid or advanced by
the Indemnity Provider pursuant to this Section 13.1 by way of indemnification
or advance for the payment of any amount regarding such Claim other than
expenses of the action relating to such Claim.
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Notwithstanding the foregoing provisions of this Section 13.1, an
Indemnified Person shall not be required to take any action and no Indemnity
Provider shall be permitted to respond to any Claim in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements, (B) the
Indemnified Person shall have reasonably determined that the action to be taken
will not result in any material danger of sale, forfeiture or loss of any
Property, or any part thereof or interest therein, will not interfere with the
payment of Rent, and will not result in risk of criminal liability, (C) if such
Claim shall involve the payment of any amount prior to the resolution of such
Claim, the Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the amount that the Indemnified
Person is required to pay (with no additional net after-tax cost to such
Indemnified Person), (D) in the case of a Claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall
have provided to such Indemnified Person an opinion of independent counsel
selected by the Indemnified Person and reasonably satisfactory to the Indemnity
Provider stating that a reasonable basis exists to contest such Claim, (E) such
claim is covered by insurance and (F) no Event of Default shall have occurred
and be continuing. In addition, an Indemnified Person shall not be required to
contest any Claim in its name (or that of an Affiliate) if the subject matter
thereof shall be of a continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the contest
provisions of this Section 13.1, unless there shall have been a change in law
(or interpretation thereof) and the Indemnified Person shall have received, at
the Indemnity Provider's expense, an opinion of independent counsel selected by
the Indemnified Person and reasonably acceptable to the Indemnity Provider
stating that as a result of such change in law (or interpretation thereof), it
is more likely than not that the Indemnified Person will prevail in such
contest.
13.2. General Tax Indemnity.
(a) The Indemnity Provider shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend each Property
and each Ancillary Property and all Indemnified Persons, and hold them
harmless against, all Impositions on an After Tax Basis.
(b) (i) Subject to the terms of Section 13.2(f), the
Indemnity Provider shall pay or cause to be paid all
Impositions directly to the taxing authorities where feasible
and otherwise to the Indemnified Person, as appropriate, and
the Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable
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request, furnish to such Indemnified Person copies of official
receipts or other satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no
contest is conducted pursuant to Section 13.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including the
computation of the amount payable). In the case of Impositions
for which a contest is conducted pursuant to Section 13.2(f),
the Indemnity Provider shall pay such Impositions or reimburse
such Indemnified Person for such Impositions, to the extent
not previously paid or reimbursed pursuant to subsection (a),
prior to the latest time permitted by the relevant taxing
authority for timely payment after conclusion of all contests
under Section 13.2(f).
(iii) Impositions imposed with respect to a
Property for a billing period during which the Lease expires
or terminates with respect to such Property (unless the Lessee
has exercised the Purchase Option with respect to such
Property or the Lessee has otherwise purchased such Property)
shall be adjusted and prorated on a daily basis between the
Indemnity Provider and the Lessor, whether or not such
Imposition is imposed before or after such expiration or
termination and each party shall pay its pro rata share
thereof.
(iv) At the Indemnity Provider's request, the
amount of any indemnification payment by the Indemnity
Provider pursuant to subsection (a) shall be verified and
certified by an independent public accounting firm mutually
acceptable to the Indemnity Provider and the Indemnified
Person. The fees and expenses of such independent public
accounting firm shall be paid by the Indemnity Provider unless
such verification shall result in an adjustment in the
Indemnity Provider's favor of 15% or more of the payment as
computed by the Indemnified Person, in which case such fee
shall be paid by the Indemnified Person.
(v) The Indemnified Persons shall use good faith
efforts to take lawful deductions in their respective tax
returns so as to reduce the Impositions required to
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be reimbursed by the Indemnity Provider hereunder; provided,
however, that the failure of any Indemnified Person to take
any deduction shall not impair in any way such Person's right
to indemnification from the Indemnity Provider for any
Impositions.
(c) (i)The Indemnity Provider shall be responsible for
preparing and filing any real and personal property or ad valorem tax
returns with respect to each Property or Ancillary Property. In case
any other report or tax return shall be required to be made with
respect to any obligations of the Indemnity Provider under or arising
out of subsection (a) and of which the Indemnity Provider has knowledge
or should have knowledge, the Indemnity Provider, at its sole cost and
expense, shall notify the relevant Indemnified Person of such
requirement and (except if such Indemnified Person notifies the
Indemnity Provider that such Indemnified Person intends to file such
report or return) (A) to the extent required or permitted by and
consistent with Legal Requirements, make and file in Indemnity
Provider's name such return, statement or report; and (B) in the case
of any other such return, statement or report required to be made in
the name of such Indemnified Person, advise such Indemnified Person of
such fact and prepare such return, statement or report for filing by
such Indemnified Person or, where such return, statement or report
shall be required to reflect items in addition to any obligations of
the Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to be
properly made with respect to any obligations of the Indemnity Provider
under or arising out of subsection (a). Such Indemnified Person shall,
upon the Indemnity Provider's request and at the Indemnity Provider's
expense, provide any data maintained by such Indemnified Person (and
not otherwise available to or within the control of the Indemnity
Provider) with respect to any Property which the Indemnity Provider may
reasonably require to prepare any required tax returns or reports.
(d) If as a result of the payment or reimbursement by the
Indemnity Provider of any Imposition or other reasonable expenses of
the Lessor or the payment of any Transaction Expenses incurred in
connection with the transactions contemplated by the Operative
Agreements, the Lessor, the Holders or partners of any Holder shall
suffer a net increase in any federal, state or local income tax
liability, the Indemnity Provider shall indemnify such Persons (without
duplication of any indemnification required by subsection (a)) on an
After Tax Basis for the amount of such increase. The calculation of any
such net increase shall take into account any current or future tax
savings (including tax deductions, net operating loss carry-forward or
tax credits) realized or reasonably expected to be realized by such
Person in respect thereof, as well as any
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interest, penalties and additions to tax payable by such Lessor, or
such Holder, or such Affiliate, in respect thereof.
(e) As between the Indemnity Provider on one hand, and the
Lessor or the Agent, any Lender or any Holder on the other hand, the
Indemnity Provider shall be responsible for, and the Indemnity Provider
shall indemnify and hold harmless the Lessor, the Agent, the Lenders
and each Holder (without duplication of any indemnification required by
subsection (a)) on an After Tax Basis against, any obligation for
United States or foreign withholding taxes imposed in respect of
payments on the Notes or Certificates or with respect to Rent payments
under the Lease (and, if the Lessor, the Agent, any Lender or any
Holder receives a demand for such payment from any taxing authority,
the Indemnity Provider shall discharge such demand on behalf of the
Lessor, the Agent, such Lender or such Holder); provided, however, that
the right of any Lender to make a claim for indemnification under this
Section 13.2(e) is subject to the compliance by such Lender with the
requirements of Section 2.13 of the Credit Agreement.
(f) (i) If a written Claim is made against any
Indemnified Person, or if any proceeding shall be commenced
against such Indemnified Person (including a written notice of
such proceeding), for any Impositions, such Indemnified Person
shall promptly notify the Indemnity Provider in writing and
shall not take action with respect to such Claim or proceeding
without the consent of the Indemnity Provider for thirty (30)
days after the receipt of such notice by the Indemnity
Provider; provided, however, that, in the case of any such
Claim or proceeding, if action shall be required by law or
regulation to be taken prior to the end of such 30- day
period, such Indemnified Person shall, in such notice to the
Indemnity Provider, inform the Indemnity Provider of such
shorter period, and no action shall be taken with respect to
such Claim or proceeding without the consent of the Indemnity
Provider before seven (7) days before the end of such shorter
period; provided, further, that the failure of such
Indemnified Person to give the notices referred to this
sentence shall not diminish the Indemnity Provider's
obligation hereunder except to the extent such failure
materially precludes the Indemnity Provider from contesting
such Claim.
(ii) If, within thirty (30) days of receipt of
such notice from the Indemnified Person (or such shorter
period as the Indemnified Person has notified the Indemnity
Provider is required by law or regulation for the Indemnified
Person to commence such contest), the Indemnity Provider shall
request in writing that such Indemnified Person contest such
Imposition, the
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Indemnified Person shall, at the expense of the Indemnity
Provider, in good faith conduct and control such contest
(including, without limitation, by pursuit of appeals)
relating to the validity, applicability or amount of such
Imposition (provided, however, that (A) if such contest can be
pursued independently from any other proceeding involving a
tax liability of such Indemnified Person, the Indemnified
Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control such contest and (B)
in the case of any contest, the Indemnified Person may request
the Indemnity Provider to conduct and control such contest
(with counsel to be selected by the Indemnity Provider and
consented to by such Indemnified Person, such consent not to
be unreasonably withheld, conditioned or delayed; provided,
however, that any Indemnified Person may retain separate
counsel at the expense of the Indemnity Provider in the event
of a conflict)) by, in the sole discretion of the Person
conducting and controlling such contest, (1) resisting payment
thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made,
using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4)
taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
(iii) The party controlling any contest shall
consult in good faith with the non-controlling party and shall
keep the non-controlling party reasonably informed as to the
conduct of such contest; provided, that all decisions
ultimately shall be made in the sole discretion of the
controlling party, except that the Indemnity Provider may not
agree to any dismissal or settlement of, or other agreement in
connection with, any claim without the prior written consent
of such Indemnified Person, if such dismissal, settlement or
agreement would require any admission or acknowledgment of any
culpability or wrongdoing by such Indemnified Person or
provide for any nonmonetary relief to be performed by such
Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with
respect to the contest of any Imposition and may settle such
contest if such Indemnified Person shall waive its rights to
any indemnity from the Indemnity Provider that otherwise would
be payable in respect of such Imposition (and any future Claim
by any taxing authority, the contest of which is precluded by
reason of such resolution of such contest) and shall pay to
the Indemnity Provider any amount previously paid or advanced
by the Indemnity Provider pursuant to this Section 13.2 by way
of indemnification or advance for
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the payment of any amount regarding such Imposition other than
expenses of such contest.
(iv) Notwithstanding the foregoing provisions of
this Section 13.2, an Indemnified Person shall not be required
to take any action and no Indemnity Provider shall be
permitted to contest any Imposition in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall
have agreed to pay and shall pay to such Indemnified Person on
demand and on an After Tax Basis all reasonable costs, losses
and expenses that such Indemnified Person actually incurs in
connection with contesting such Imposition, including, without
limitation, all reasonable legal, accounting and investigatory
fees and disbursements, (B) the Indemnified Person shall have
reasonably determined that the action to be taken will not
result in any material danger of sale, forfeiture or loss of
any Property, or any part thereof or interest therein, will
not interfere with the payment of Rent, and will not result in
risk of criminal liability, (C) if such contest shall involve
the payment of the Imposition prior to the contest, the
Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the Imposition
that the Indemnified Person is required to pay (with no
additional net after-tax cost to such Indemnified Person), (D)
in the case of a Claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the Indemnity
Provider shall have provided to such Indemnified Person an
opinion of independent tax counsel selected by the Indemnified
Person and reasonably satisfactory to the Indemnity Provider
stating that a reasonable basis exists to contest such Claim,
and (E) no Event of Default shall have occurred and be
continuing. In addition, an Indemnified Person shall not be
required to contest any claim in its name (or that of an
Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 13.2, unless there shall
have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity
Provider's expense, an opinion of independent tax counsel
selected by the Indemnified Person and reasonably acceptable
to the Indemnity Provider stating that as a result of such
change in law (or interpretation thereof), it is more likely
than not that the Indemnified Person will prevail in such
contest.
13.3. Environmental Indemnity. Without the limiting the generality of
the foregoing, whether or not the transactions contemplated hereby shall be
consummated, the Indemnity Provider
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hereby assumes liability for and agrees to defend, indemnify and hold harmless
each Indemnified Person on an after Tax Basis from and against any Claims which
may be imposed on, incurred by or asserted against an Indemnified Person by any
other Person (but not to the extent such Claims arise from the gross negligence,
willful misconduct or willful breach of such Indemnified Person) in any way
relating to or arising, or alleged (by any Person asserting such a Claim against
an Indemnified Person) to arise, out of any Environmental Claim, any violation
of Environmental Laws, or any other loss of or damage to any Property or
Ancillary Property or the environment, in each case relating to any Property,
Ancillary Property, the Lease, the Agency Agreement or the Indemnity Provider.
SECTION 14. MISCELLANEOUS.
14.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of any
Property to the Owner Trustee, the acquisition of any Equipment, the
construction of any Improvements, any disposition of any interest of the Owner
Trustee in any Property or any interest of the Holders in the Owner Trust, the
payment of the Notes and any disposition thereof, and shall be and continue in
effect notwithstanding any investigation made by any party and the fact that any
party may waive compliance with any of the other terms, provisions or conditions
of any of the Operative Agreements. Except as otherwise expressly set forth
herein or in other Operative Agreements, the indemnities of the parties provided
for in the Operative Agreements shall survive the expiration or termination of
any thereof.
14.2. No Broker, etc. Each of the parties hereto represents to the
others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed by any
other Person so to act. Any party who is in breach of this representation shall
indemnify and hold the other parties harmless from and against any liability
arising out of such breach of this representation.
14.3. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States certified or registered mail
(postage prepaid), by nationally recognized courier service, by hand or by
telecopy with confirming notice and any such notice shall become effective upon
receipt and shall be directed to the address of such Person as indicated:
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If to the Construction Agent, to it at the following address:
Wackenhut Corrections Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇, Controller and
Chief Accounting Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Ext. 6646
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lessee, to it at the following address:
Wackenhut Corrections Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇, Controller and
Chief Accounting Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Ext. 6646
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to NationsBank, National Association, as a Holder or a Lender, to it at the
following address:
NationsBank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with all notices of requests for Holder Fundings, or conversion, continuation or
prepayment of any Holder Funding, to be sent to:
NationsBank Agency Services
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Agent, to it at the following address:
NationsBank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with all notices of borrowing, conversion, continuation or prepayment of any
Loan to be delivered to the address set forth in Section 9.2 of the Credit
Agreement.
If to any other Lender or Holder, to it at the address specified in the
signature pages to the Credit Agreement or Trust Agreement (as applicable), any
applicable amendment thereto, or any applicable Assignment and Assumption.
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
14.4. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
14.5. Amendments and Termination. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the party against which the enforcement of
the termination, amendment, supplement, waiver or modification shall be sought.
This Agreement may be terminated by an agreement signed in writing by the Owner
Trustee, the Holders, the Lessee and the Agent.
14.6. Headings, etc. The Table of Contents and headings of the various
Articles and Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or provisions
hereof.
14.7. Parties in Interest. Except as expressly provided herein, none of
the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto; provided, that the Lenders are intended to be
third-party beneficiaries of this Agreement.
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14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
14.9. Submission to Jurisdiction; Waivers. Each of the parties hereto
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida and the courts of
the United States of America, in each case sitting in Broward County,
Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the respective party at its address set forth in Section
14.3 hereof or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 14.9 any special, exemplary, punitive or
consequential damages.
14.10. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the
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remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render such provision unenforceable in any
other jurisdiction.
14.11. Liability Limited.
(a) The Agent, the Lessee and the Holders each acknowledge and
agree that the Owner Trustee is (except as otherwise expressly provided
herein or therein) entering into this Agreement and the other Operative
Agreements to which it is a party (other than the Trust Agreement and
other than as set forth in Section 7.2 of this Agreement), solely in
its capacity as trustee under the Trust Agreement and not in its
individual capacity and that Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner
Trustee, except for its own gross negligence or willful misconduct and
except as otherwise expressly provided herein or in the other Operative
Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, neither the Lessor nor any Holder (in its capacity as
a Holder) nor any officer, director, shareholder, or partner thereof,
nor any of the successors or assigns of the foregoing (all such Persons
being hereinafter referred to collectively as the "Exculpated
Persons"), shall be personally liable in any respect for any liability
or obligation hereunder or under any other Operative Agreement
including the payment of the principal of, or interest on, the Notes,
or for monetary damages for the breach of performance of any of the
covenants contained in the Credit Agreement, the Notes, this Agreement,
the Security Agreement or any of the other Operative Agreements. The
Agent (for itself and on behalf of the Lenders) agrees that, in the
event the Agent or any Lender pursues any remedies available to them
under the Credit Agreement, the Notes, this Agreement, the Security
Agreement, the Mortgage Instruments or under any other Operative
Agreement, neither the Lenders nor the Agent shall have any recourse
against any Exculpated Person, for any deficiency, loss or Claim for
monetary damages or otherwise resulting therefrom, and recourse shall
be had solely and exclusively against the Trust Estate and the Lessee
(with respect to the Lessee's obligations under the Lease, the
Participation Agreement and the Agency Agreement); but nothing
contained herein shall be taken to prevent recourse against or the
enforcement of remedies against the Trust Estate in respect of any and
all liabilities, obligations and undertakings contained herein, in the
Credit Agreement, in the Notes, in the Security Agreement, the Mortgage
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Instruments or in any other Operative Agreement. Notwithstanding the
provisions of this Section, nothing in this Agreement, the Credit
Agreement, the Notes, the Security Agreement, the Mortgage Instruments
or any other Operative Agreement shall: (i) constitute a waiver,
release or discharge of any indebtedness or obligation evidenced by the
Notes or arising under this Agreement, the Security Agreement, the
Mortgage Instruments or the Credit Agreement or secured by the Security
Agreement, the Mortgage Instruments or any other Operative Agreement,
but the same shall continue until paid or discharged; (ii) relieve the
Lessor or any Exculpated Person from liability and responsibility for
(but only to the extent of the damages arising by reason of): (a)
active waste knowingly committed by such Lessor or such Exculpated
Person with respect to the Properties or (b) any fraud, gross
negligence, willful misconduct or willful breach on the part of such
Lessor or such Exculpated Person; (iii) relieve such Lessor or such
Exculpated Person from liability and responsibility for (but only to
the extent of the moneys misappropriated, misapplied or not turned
over) (a) misappropriation or misapplication by such Lessor (i.e.,
application in a manner contrary to any Operative Agreement) of any
insurance proceeds or condemnation award paid or delivered to such
Lessor by any Person other than the Agent, (b) any deposits or any
escrows or amounts owed by the Lessee under the Agency Agreement held
by such Lessor or (c) any rents or other income received by such Lessor
from the Lessee that are not turned over to the Agent; or (iv) affect
or in any way limit the Agent's rights and remedies under any Operative
Agreement with respect to the Rents and its rights thereunder or its
right to obtain a judgment against the Lessor's interest in the
Properties.
14.12. Rights of Lessee. Notwithstanding any provision of the Operative
Agreements, if at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents, the Trust Agreement and the other
Operative Agreements and (ii) of the Lessee under the Operative Agreements have
in each case been satisfied or discharged in full, then the Lessee shall be
entitled to (a) terminate the Lease and (b) receive all amounts then held under
the Operative Agreements and all proceeds with respect to any of the Properties.
Upon the termination of the Lease pursuant to the foregoing clause (a), the
Lessor shall transfer to the Lessee all of its right, title and interest free
and clear of the Lien of the Lease and all Lessor Liens in and to any Properties
then subject to the Lease and any amounts or proceeds referred to in the
foregoing clause (b) shall be paid over to the Lessee.
14.13. Further Assurances. The parties hereto shall promptly cause to
be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts,
59
64
conveyances, documents and assurances as the other parties may from time to time
reasonably request in order to carry out and effectuate the intent and purposes
of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Lessee, at its own
expense and without need of any prior request from any other party, shall take
such action as may be necessary (including any action specified in the preceding
sentence), or (if Owner Trustee shall so request) as so requested, in order to
maintain and protect all security interests provided for hereunder or under any
other Operative Agreement.
14.14. Calculations under Operative Agreements. The parties hereto
agree that all calculations and numerical determinations to be made under the
Operative Agreements by the Owner Trustee shall be made by the Agent and that
such calculations and determinations shall be conclusive and binding on the
parties hereto in the absence of manifest error.
14.15. Confidentiality. Each of the Owner Trustee, the Holders, the
Agent and the Lenders severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or its
Subsidiaries which is provided to it by the Lessee or its Subsidiaries, and
shall not intentionally disclose such information to any Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
(c) to any Affiliate of any such Person or to counsel,
auditors or accountants retained by any such Person or any such
Affiliate, provided they agree to keep such information confidential as
if such Person or Affiliate were party to this Agreement and to
financial institution regulators, including examiners of any Lender,
the Agent or the Owner Trustee, any Holder or any Affiliate in the
course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of the Agent, the
60
65
Owner Trustee, the Lessor, any Lender or any Holder under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including, without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; provided, however,
that such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) the Agent, any Lender or any Holder may disclose such
information to the Agent, any Lender or any Holder; or
(g) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution (who will in turn be required by the Agent
to agree in writing to maintain confidentiality as if it were a Lender
originally party to the Credit Agreement) or (ii) assignment by any
Holder of interests in the Trust Agreement to another Person (who will
in turn be required by the transferring Holder to agree in writing to
maintain confidentiality as if it were a Holder originally party to
this Participation Agreement).
14.16. Calculation of Rent, Interest, Holder Yield and Fees. Except as
otherwise expressly set forth in the Operative Agreements, all calculation of
Rent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Facility Fees,
or Holder Facility Fees payable hereunder shall be computed based on the actual
number of days elapsed over a year of 360 days.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
61
66
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
WACKENHUT CORRECTIONS CORPORATION,
as Construction Agent
By:
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:Chief Executive Officer
WACKENHUT CORRECTIONS CORPORATION,
as Lessee
By:
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:Chief Executive Officer
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly stated
herein, but solely as Owner Trustee under
the Wackenhut Corrections Trust 1997-1
By:
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title:Vice President
SIGNATURE PAGE 1
67
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title:Senior Vice President
NATIONSBANK, NATIONAL ASSOCIATION,
as a Holder
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title:Senior Vice President
NATIONSBANK, NATIONAL ASSOCIATION,
as a Lender
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title:Senior Vice President
SIGNATURE PAGE 2
68
SCOTIABANC INC., as a Holder
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SCOTIABANC INC., as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 3
69
▇▇▇▇▇▇▇ BANK, N.A., as a Holder
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇▇ BANK, N.A., as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 4
70
BANQUE PARIBAS, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 5
71
THE SAKURA BANK, LIMITED
ATLANTA AGENCY, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 6
72
SUMMIT BANK, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE 7
73
Schedule 1
Initial Holders
Holder
Name Commitment
---- ----------
NationsBank, National $ 645,545.22
Association
▇▇▇▇▇▇▇ Bank, N.A. $ 545,454.48
ScotiaBanc, Inc. $ 1,200,000.00
Schedule-1
74
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2 and 5.2 of the Participation Agreement)
Wackenhut Corrections Corporation, a Florida corporation (the
"Company") hereby certifies as true and correct and delivers the following
Requisition to First Security Bank, National Association, not individually,
except as expressly stated in the Participation Agreement (hereinafter defined),
but solely as Owner Trustee under the Wackenhut Corrections Trust 1997-1
("Lessor"), the Holders (as defined in the Participation Agreement), and
NationsBank, National Association, as Administrative Agent for the Lenders
pursuant to the Credit Agreement (the "Agent"):
Reference is made herein to that certain Participation Agreement dated
as of June 19, 1997 (as such agreement may be amended, restated, supplemented or
otherwise modified from time to time, the "Participation Agreement") among the
Company, in its capacity as Construction Agent, the Company, as Lessee, the
Lessor, the Holders party thereto, the Lenders party thereto, and the Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings set forth therefor in the Participation Agreement.
Check one:
____ INITIAL CLOSING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
____ PROPERTY CLOSING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
____ CONSTRUCTION FUNDING DATE: _______________
(one Business Day prior notice required for Base Rate
Funding)
(three Business Days prior notice required for
Eurodollar Funding)
1. Transaction Expenses and other fees, expenses and disbursements under
Section 9.1(a) or (b) of the Participation Agreement and any and all
other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like (with supporting invoices or closing
statement attached):
A-1
75
Party to Whom Amount is Owed
Amount Owed (in U.S. Dollars)
------------- -----------------
------------- -----------------
------------- -----------------
------------- -----------------
------------- -----------------
------------- -----------------
2. Legal Description of Land: See attached Schedule 1
[Note: Include legal description only with initial requisition form for
any particular piece of Land and any subsequent changes]
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Total Property Cost requested to date with respect to this
Property (excluding the amount requested herein): $________
7. Total additional amount requested herein: $_____________
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $__________ ($__________
constituting Series A Loans and $__________ constituting Series B Loans) and
that the Holder[s] make [a] Holder Fundings[s] to the Lessor in the amount of
$__________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitment and (ii) each of the provisions of the
Participation Agreement applicable to the Loans and Holder Fundings requested
hereunder have been complied with as of the date of this Requisition.
The Company hereby certifies that the Land, Improvements, Equipment and
Work described herein are necessary and appropriate for its business operations.
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
A-2
76
Schedule 1
Legal Description of Land
To be included only with initial requisition form and to show
any changes to legal description.
A-3
77
Schedule 2
Description of Improvements
A-4
78
Schedule 3
Description of Equipment
================================================================================
General Description Make Model Serial Number
------------------- ---- ----- -------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
A-5
79
Schedule 4
Work
(a) Work Performed for which the Funding is requested:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(b) Property to which such Work relates:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
WACKENHUT CORRECTIONS CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.6 of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. The address for the subject Property is _______________________________
________________________________________________________.
2. The Completion Date for the construction of Improvements at the
Property occurred on __________________.
3. The aggregate Property Cost for the Property was $________________. [If
any of the Property consists of Tangible Personal Property, the portion
of the Property Cost attributable to such Tangible Personal Property
was $_____________.]
4. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted expenditure amounts referenced above in Section
3 of this Officer's Certificate.
5. All Improvements have been made in accordance with all applicable Legal
Requirements, in a good and workmanlike manner and otherwise in full
compliance with the standards and practices of the Company with respect
to Company-owned properties and improvements.
6. No consent or approval of any Person is required for any of the
Improvements except for consents and approvals which have already been
obtained.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of June 19, 1997 among the Company, as Lessee and as Construction
Agent, First Security Bank, National Association, as Owner Trustee under the
Wackenhut Corrections Trust 1997-1, the Holders party thereto, the Lenders party
thereto, and NationsBank, National Association, as the Administrative Agent for
the Lenders (as such agreement may be amended, modified, supplemented or
restated from time to time).
B-1
81
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this ___ day of _______________, 199_.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-2
82
Schedule 1
[itemized expenditures]
B-3
83
EXHIBIT C
FORM OF OPINION
OF COUNSEL TO
WACKENHUT CORRECTIONS CORPORATION
AND WCC RE HOLDINGS, INC.
C-1
84
EXHIBIT D
WACKENHUT CORRECTIONS CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 6.1(e) of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the
"Company"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Company contained in
the Operative Agreements to which it is a party is true and correct in
all material respects on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing under any
Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in full
force and effect with respect to it.
4. The Company has performed and complied with all covenants, agreements
and conditions contained in the Participation Agreement (hereinafter
defined) or in any Operative Agreement required to be performed or
complied with by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of June 19, 1997 among the Company, as Construction Agent and
as Lessee, First Security Bank, National Association, as the Owner Trustee, the
Holders party thereto, the Lenders party thereto, and NationsBank, National
Association, as the Administrative Agent.
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this 19th day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
D-1
85
EXHIBIT E
WACKENHUT CORRECTIONS CORPORATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 6.1(f) of the Participation Agreement)
WACKENHUT CORRECTIONS CORPORATION, a Florida corporation (the
"Company"), DOES HEREBY CERTIFY as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the Resolutions of the Board of Directors of the Company effective as
of ______________, 1997. Such resolutions have not been amended,
modified or rescinded since their date of adoption and remain in full
force and effect as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of
the Certificate of Incorporation of the Company on file in the Office
of the Secretary of State of Florida. Such Certificate of
Incorporation, as amended, remains in full force and effect as of the
date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of
the Bylaws of the Company. Such Bylaws, as amended, remain in full
force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite their
names, and the signatures opposite their names and title are their true
and correct signatures.
Name Office Signature
---- ------ ---------
------------------ ----------------------- --------------------
------------------ ----------------------- --------------------
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this 19th day of June, 1997.
WACKENHUT CORRECTIONS CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 6.2(d) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION not individually (except with
respect to paragraph (a) below, to the extent any such representations and
warranties are made in its individual capacity) but solely as owner trustee
under the Wackenhut Corrections Trust 1997-1 (the "Owner Trustee"), DOES HEREBY
CERTIFY as follows:
(a) Each and every representation and warranty of the Owner
Trustee contained in the Operative Agreements to which it is a
party is true and correct on and as of the date hereof.
(b) Each Operative Agreement to which the Owner Trustee is a party
is in full force and effect with respect to it.
(c) The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of June 19, 1997 among Wackenhut Corrections Corporation, as
Construction Agent and as Lessee, First Security Bank, National Association, as
Owner Trustee, the Holders party thereto, the Lenders party thereto, and
NationsBank, National Association, as the Administrative Agent.
IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's Certificate to
be duly executed and delivered as of this 19th day of June, 1997.
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not individually, except as expressly stated
herein, but solely as Owner Trustee under
the Wackenhut Corrections Trust 1997-1
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
F-1
87
EXHIBIT G
FIRST SECURITY BANK, NATIONAL ASSOCIATION
CERTIFICATE OF ASSISTANT SECRETARY
(Pursuant to Section 6.2(e) of the Participation Agreement)
I, _____________________________, Senior Vice President and a duly
elected and qualified Assistant Secretary of the Board of Directors of First
Security Bank, National Association (the "Association"), hereby certify as
follows:
1. The Association is a National Banking Association duly
organized, validly existing and in good standing under the laws of the United
States. With respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as
amended, 12 U.S.C. 1, et seq., the Comptroller of the
Currency charters and exercises regulatory and
supervisory authority over all National Banking
Associations;
B. On December 9, 1881, the First National Bank of
Ogden, Utah was chartered as a National Banking
Association under the laws of the United States and
under Charter No. 2597;
C. On October 2, 1922, in connection with a
consolidation of The First National Bank of Ogden,
Ogden, Utah, and The Utah National Bank of Ogden,
Ogden, Utah, the title was changed to "The First &
Utah National Bank of Ogden"; on January 18, 1923,
The First & Utah National Bank of Ogden changed its
title to "First Utah National Bank of Ogden"; on
January 19, 1926, the title was changed to "First
National Bank of Ogden"; on February 24, 1934, the
title was changed to "First Security Bank of Utah,
National Association"; and
D. First Security Bank of Utah, National Association,
Ogden, Utah, continues to hold a valid certificate to
do business as a National Banking Association.
2. The Association's Articles of Association, as amended, are
in full force and effect, and a true, correct and complete copy is attached
hereto as Exhibit A and incorporated herein by reference. Said Articles were
last amended October 20, 1975, as required by law on notice at a duly called
special meeting of the shareholders of the Association.
3. The Association's By-Laws, as amended, are in full force
and effect; and a true, correct and complete copy is
G-1
88
attached hereto as Exhibit B and incorporated herein by reference. Said By-Laws,
still in full force and effect, were adopted September 17, 1942, by resolution,
after proper notice of consideration and adoption of By-Laws was given to each
and every shareholder, at a regularly called meeting of the Board of Directors
with a quorum present.
4. Pursuant to the authority vested in it by an Act of
Congress approved December 23, 1913 and known as the Federal Reserve Act, as
amended, the Federal Reserve Board (now the Board of Governors of the Federal
Reserve System) has granted to the Association now known as "First Security Bank
of Utah, National Association" of Ogden, Utah, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any of the fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with National Banks are permitted to act under the laws of the State of Utah;
and under the provisions of applicable law, the authority so granted remains in
full force and effect.
5. Pursuant to authority vested by Act of Congress (12 ▇.▇.▇.
▇▇▇ ▇▇▇ ▇▇ ▇.▇.▇. ▇▇▇, as amended) the Comptroller of the Currency has issued
Regulation 9, as amended, dealing, in part, with the Fiduciary Powers of
National Banks, said regulation providing in sub-paragraph 9.7(a)(1-2):
(1) The board of directors is responsible for the proper
exercise of fiduciary powers by the Bank. All matters
pertinent thereto, including the determination of policies,
the investment and disposition of property held in fiduciary
capacity, and the direction and review of the actions of all
officers, employees, and committees utilized by the Bank in
the exercise of its fiduciary powers, are the responsibility
of the board. In discharging this responsibility, the board of
directors may assign, by action duly entered in the minutes,
the administration of such of the Bank's fiduciary powers as
it may consider proper to assign to such director(s),
officer(s), employee(s) or committee(s) as it may designate.
(2) No fiduciary account shall be accepted without the prior
approval of the board, or of the director(s), officer(s), or
committee(s) to whom the board may have designated the
performance of that responsibility . . . .
6. A Resolution relating to Exercise of Fiduciary Powers was
adopted by the Board of Directors at a meeting held July 26, 1994 at which time
there was a quorum present; said
G-2
89
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Exhibit C and incorporated herein by reference.
7. A Resolution relating to the Designation of Officers and
Employees to Exercise Fiduciary Powers was adopted by the Trust Policy Committee
at a meeting held August 2, 1995 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Exhibit D and is incorporated herein by
reference.
8. Attached hereto as Exhibit E and incorporated herein by
reference, is a listing of facsimile signatures of persons authorized (herein
"Authorized Signatory or Signatories") on behalf of the Association and its
Trust Group to act in exercise of its fiduciary powers subject to the
resolutions in Paragraphs 6 and 7, above.
9. The principal office of the First Security, National
Association, Trust Group and of its departments, except for the St. ▇▇▇▇▇▇,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. ▇▇▇▇▇▇, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or
appointed, duly qualified officer or employee of the Association; (ii) holds the
office or job title set forth below his or her name on the date hereof; (iii)
and the facsimile signature appearing opposite the name of each such officer or
employee is a true replica of his or her signature.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this 19th day of June, 1997.
(SEAL)
-----------------------------------
Senior Vice President
Assistant Secretary
G-3
90
EXHIBIT H
FORM OF
OPINION OF COUNSEL
TO FIRST SECURITY
BANK, NATIONAL ASSOCIATION
H-1
91
Appendix A
Rules of Usage and Definitions
I. Rules of Usage
The following rules of usage shall apply to this Participation
Agreement and the Operative Agreements (and each appendix, schedule, exhibit and
annex to the foregoing) unless otherwise required by the context or unless
otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions
set forth herein or in any other document shall be equally applicable
to the singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits are references to articles, sections,
paragraphs, clauses, annexes, appendices, schedules or exhibits in or
to such document.
(c) The headings, subheadings and table of contents used in
any document are solely for convenience of reference and shall not
constitute a part of any such document nor shall they affect the
meaning, construction or effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended,
supplemented, restated or replaced from time to time in accordance with
the applicable provisions thereof.
(f) Except as otherwise expressly provided, references to any
law includes any amendment or modification to such law and any rules or
regulations issued thereunder or any law enacted in substitution or
replacement therefor.
(g) When used in any document, words such as "hereunder",
"hereto", "hereof" and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
Appendix A-1
92
(h) References to "including" means including without limiting
the generality of any description preceding such term and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(i) Unless the context indicates otherwise, the disjunctive
"or" shall include the conjunctive "and."
(j) Each of the parties to the Operative Agreements and their
counsel have reviewed and revised, or requested revisions to, the
Operative Agreements, and the usual rule of construction that any
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Operative
Agreements and any amendments or exhibits thereto.
II. Definitions
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
"acquire" or "purchase" shall mean, with respect to any Property,
unless the context indicates, the acquisition or purchase of such Property by
the Owner Trustee from any Person.
"Acquisition Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) to the Lessor on a
specified date to pay Property Acquisition Costs and other expenses pursuant to
Section 5.3(b) of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with and as
part of an Acquisition Funding.
"Administrative Agent" or "Agent" shall mean, collectively, (a)
NationsBank, together with its Affiliates, as the administrative agent for the
Lenders under this Agreement and the other Operative Agreements and any
successor Administrative Agent who may be appointed pursuant to Section 7.9 of
the Credit Agreement, and (b) NationsBank, together with its affiliates, as
agent and collateral agent for itself, the Lenders and the Holders under the
Security Documents.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person. For the purposes of this definition, "control (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies
Appendix A-2
93
of a Person, whether through the ownership of voting securities or by contract
or otherwise.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the rate
believed by such recipient to be the highest marginal rate then applicable to
the recipient (less any tax savings realized as a result of the payment of the
indemnified amount) with respect to the receipt by the recipient of such
amounts, such increased payment (as so reduced) is equal to the payment
otherwise required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated as of the
Initial Closing Date, between the Construction Agent and the Lessor, as such
agreement may be amended, modified, restated or supplemented from time to time
in accordance with the terms thereof.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Allocated Interest" with respect to any Construction Period Property
shall mean as of any Scheduled Interest Payment Date, the amount of interest due
and payable on such date with respect to a portion of the Loans (which portion
shall be designated by the Borrower by written notice (an "Allocation Notice")
to the Administrative Agent) having an aggregate principal amount equal to the
Loan Property Cost of such Property as of such date.
"Allocated Return" with respect to any Construction Period Property
shall mean, as of any Scheduled Interest Payment Date, the amount of Holder
Yield due and payable on such date with respect to a portion of the Holder
Fundings (which portion shall be designated by the Owner Trustee by written
notice to the Holders) having an aggregate stated amount equal to the Holder
Property Cost of such Property as of such date.
"Allocation Notice" shall have the meaning given to such term in the
definition of "Allocated Interest."
"Ancillary Property" shall mean the Louisiana Property or the Broward
Property.
"Applicable Margin" shall mean, for each Eurodollar Loan, that percent
per annum set forth below, which shall be based upon the Consolidated Fixed
Charge Coverage Ratio for the Four-Quarter Period most recently ended as
specified below:
Appendix A-3
94
--------------------------------------------------------------------------------
Tier Consolidated Fixed Charge Coverage Ratio Applicable Margin
--------------------------------------------------------------------------------
I Equal to or greater than 4.00 to 1.00 0.525%
--------------------------------------------------------------------------------
Tier Consolidated Fixed Charge Coverage Ratio Applicable Margin
--------------------------------------------------------------------------------
II Equal to or greater than 3.25 to 1.00 0.605%
and less than 4.00 to 1.00
--------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.775%
and less than 3.25 to 1.00
--------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 1.025%
and less than 2.75 to 1.00
--------------------------------------------------------------------------------
The Applicable Margin shall be established at the end of each Fiscal Quarter of
Wackenhut Corrections (each, a "Determination Date"). Any change in the
Applicable Margin following each Determination Date shall be determined based
upon the computations set forth in the certificate furnished to the Agent
pursuant to Section 7.1(a)(ii) and Section 7.1(b)(ii) of the Existing Wackenhut
Corrections Credit Agreement (as incorporated by reference into Section 28.1 of
the Lease), subject to review and approval of such computations by the Agent,
and shall be effective commencing on the date following the date such
certificate is received (or, if earlier, the date such certificate was required
to be delivered) until the date following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur; provided
however, if Wackenhut Corrections shall fail to deliver any such certificate
within five (5) days after the time period required by such Section 7.1, then
the Applicable Margin shall be Tier IV from the date such certificate was
required to be delivered until the appropriate certificate is so delivered. The
foregoing notwithstanding, from the Initial Closing Date to the date following
the date on which the compliance certificate required by such Section 7.1(b)(ii)
is delivered for the third (3rd) quarter of Fiscal Year 1997, the Applicable
Margin shall be Tier II.
"Applicable Unused Fee Rate" shall mean that percent per annum set
forth below, which shall be based upon the Consolidated Fixed Charge Coverage
Ratio for the Four-Quarter Period most recently ended as specified below:
Appendix A-4
95
--------------------------------------------------------------------------------
Tier Consolidated Fixed Charge Coverage Ratio Applicable Unused Fee Rate
--------------------------------------------------------------------------------
I Equal to or greater than 4.00 to 1.00 0.175%
--------------------------------------------------------------------------------
II Equal to or greater than 3.25 to 1.00 0.200%
and less than 4.00 to 1.00
--------------------------------------------------------------------------------
III Equal to or greater than 2.75 to 1.00 0.250%
and less than 3.25 to 1.00
--------------------------------------------------------------------------------
IV Equal to or greater than 2.00 to 1.00 0.300%
and less than 2.75 to 1.00
--------------------------------------------------------------------------------
The Applicable Unused Fee Rate shall be established at the end of each Fiscal
Quarter of Wackenhut Corrections (the "Determination Date"). Any change in the
Applicable Unused Fee Rate following each Determination Date shall be determined
based upon the computations set forth in the certificate furnished to the Agent
pursuant to Section 7.1(a)(ii) and Section 7.1(b)(ii) of the Existing Wackenhut
Corrections Credit Agreement (as incorporated by reference into Section 28.1 of
the Lease), subject to review and approval of such computations by the Agent,
and shall be effective commencing on the date following the date such
certificate is received (or, if earlier, the date such certificate was required
to be delivered) until the date following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur; provided
however, if Wackenhut Corrections shall fail to deliver any such certificate
within five (5) days after the time period required by such Section 7.1, then
the Applicable Unused Fee Rate shall be Tier IV from the date such certificate
was required to be delivered until the appropriate certificate is so delivered.
The foregoing notwithstanding, from the Initial Closing Date, the date following
the date on which the compliance certificate required by such Section 7.1(b)(ii)
is delivered for the third (3rd) quarter of Fiscal Year 1997, the Applicable
Unused Fee Rate shall be Tier II.
"Appraisal" shall mean, with respect to any Property an appraisal to be
delivered in connection with Section 5.3 of the Participation Agreement or in
accordance with the terms of Section 10.1(e) of the Lease, in each case prepared
by a reputable appraiser reasonably acceptable to the Agent, which in the
judgment of counsel to the Agent, complies with all of the provisions of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
the rules and regulations adopted pursuant thereto, and all other applicable
Legal Requirements.
Appendix A-5
96
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved State" shall mean any state in the United States.
"Appurtenant Rights" shall mean (i) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying any Improvements, or the Improvements,
including, without limitation, the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (ii)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached as Exhibit C to the Credit Agreement.
"Assignment of Project Rights" shall mean the Assignment of Project
Rights and Contract Documents dated as of the Initial Closing Date, between the
Owner Trustee and the Agent, as such agreement may be amended, modified,
restated or supplemented from time to time in accordance with the terms thereof.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender.
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (i) the amount of the Holder Commitments over (ii) the
aggregate amount of the Holder Fundings made since the Initial Closing Date.
"Bankruptcy Code" shall mean Title 11 of the U.S. Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto;
"Base Rate" shall have the meaning given such term in the Existing
Wackenhut Corrections Credit Agreement.
"Base Rate Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Base Rate.
"Base Rate Holder Funding" shall mean a Holder Funding bearing a Holder
Yield based on the Base Rate.
"Base Rate Loans" shall mean Loans the rate of interest applicable to
which is based upon the Base Rate.
Appendix A-6
97
"Basic Rent" shall mean, the sum of (i) the Loan Basic Rent and (ii)
the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent
is due.
"Basic Term" shall mean with respect to any Property, the period
beginning on the commencement of the Term and ending on June 19, 1999.
"Basic Term Expiration Date" shall have the meaning specified in
Section 2.2 of the Lease.
"▇▇▇▇ of Sale" shall mean a ▇▇▇▇ of Sale regarding Equipment in form
and substance satisfactory to the Owner Trustee, the Holders and the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which the
Borrower requests the Lenders to make Loans hereunder.
"Bridge Debt" shall mean indebtedness in the outstanding principal
amount of not more than $11,700,930.37 on the Initial Closing Date, and (after
giving effect to a required payment on June 20, 1997) not more than
$4,959,243.37 from and after June 20, 1997, owed by the Owner Trustee to
NationsBank pursuant to the Bridge Loan Documents.
"Bridge Loan Documents" shall mean, collectively, (a) the Promissory
Note dated as of March 14, 1997 by the Owner Trustee in favor of NationsBank, in
the original principal amount of $10,000,000, (b) the Guaranty Agreement dated
as of March 14, 1997 by Wackenhut Corrections Corporation, (c) the
Indemnification Agreement dated as of March 14, 1997 by and among Owner Trustee
and NationsBank, National Association, and (d) the Trust Agreement, as each of
the foregoing agreements or instruments may be amended, modified, supplemented
or restated from time to time (including without limitation by the Consolidated
Amendment No. 1 to Note and Other Agreements dated as of the Initial Closing
Date, among the Owner Trustee, NationsBank and Wachenhut); and any other
agreements, instruments and documents heretofore or hereafter executed or
delivered in connection with any of the foregoing or the transactions
contemplated thereby.
"Bridge Loan Event of Default" shall mean an "Event of Default" as
defined in the Bridge Loan Documents.
"Broward Property" shall mean the property in Broward County, Florida,
currently owned by the Owner Trustee, which was acquired using proceeds of loans
under the Bridge Loan Documents.
Appendix A-7
98
"Budgeted Total Loan Property Cost" shall mean, at any date of
determination, with respect to any Construction Period Property, an amount equal
to the aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property (including
amounts expected to be expended to pay Allocated Interest and Allocated Return
with respect to such Property).
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina are authorized or
required by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Casualty" shall mean any damage or destruction of all or any portion
of a Property as a result of a fire or other casualty.
"Category" with respect to any Commitment or Loan shall mean a
Commitment or Loan with respect to Series A Loans or Series B Loans, as the case
may be.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ▇▇.▇▇. 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder
evidencing the Holder Fundings made by such Holder and issued pursuant to the
Trust Agreement.
"Change of Control" shall mean (a) in the case of the Incorporated
Covenants, a "Change of Control" as defined in the Existing Wackenhut
Corrections Credit Agreement (together with any modifications or amendments
thereto, or covenants of a New Facility, in each case approved in accordance
with Section 28.1(a) of the Lease); and (b) in the case of a Wackenhut
Corrections Credit Agreement Event of Default, a "Change of Control" as defined
in the Existing Wackenhut Corrections Credit Agreement (as amended, modified or
restated heretofore or hereafter) or any New Facility.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including,
without limitation, reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
Appendix A-8
99
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto.
"Collateral" shall mean all assets of the Lessor or the Lessee, now
owned or hereafter acquired, upon which a lien is purported to be created by the
Security Documents.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make Series A Loans or Series B Loans, as the case may be, to the
Borrower hereunder in an aggregate principal amount at any one time outstanding
not to exceed the respective amounts for such Category set forth opposite such
Lender's name on Schedule 1.2 of the Credit Agreement, as such amounts may be
reduced or increased from time to time in accordance with the provisions of this
Agreement, the Credit Agreement or the Lease.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment with respect to a Category of Loans
then constitutes of the aggregate Commitments of all Lenders with respect to the
same Category (or, at any time after the Commitments of any such Category shall
have expired or terminated, the percentage which the aggregate principal amount
of such Lender's Loans of such Category then outstanding constitutes of the
aggregate principal amount of all of the Loans of such Category then
outstanding).
"Commitment Period" shall mean the period from the Initial Closing Date
to and including the Construction Period Termination Date, or such earlier date
as the Commitments shall terminate as provided in the Credit Agreement.
"Completed Property" shall mean a Property for which Completion has
occurred or will occur on the date of determination or on the respective
Property Closing Date.
"Completion" shall mean, with respect to a Property, such time as final
completion of the Improvements on such Property has been achieved in accordance
with the Plans and Specifications (excluding punch list items), the Agency
Agreement and the Lease, and in compliance with all material Legal Requirements
and Insurance Requirements and a certificate of occupancy has been issued with
respect to such Property by the appropriate Governmental Authority. If the
Lessor purchases a Property that includes existing Improvements that are to be
immediately occupied by the Lessee, the date of Completion for such Property
shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the earlier
of (i) the date on which Completion for such Property has occurred and (ii) the
Construction Period Termination Date. The foregoing notwithstanding, for the
purposes of Section 2.6(b), 3.2(a)(x), 3.3(b) or 5.1(b) of the Agency Agreement,
Appendix A-9
100
"Completion Date" shall mean, with respect to a Property, the date on which
Completion for such Property has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of: (a) any actual
or threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including any action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, any Property
or alter the pedestrian or vehicular traffic flow to any Property so as to
result in a change in access to such Property, or (b) an eviction by paramount
title or any transfer made in lieu of any such proceeding or action.
"Consolidated Fixed Charge Coverage Rate" shall have the meaning
assigned thereto in the Existing Wackenhut Corrections Credit Agreement.
"Construction Agent" shall mean Wackenhut Corrections, as construction
agent under the Agency Agreement.
"Construction Budget" shall mean, with respect to any Property, the
cost of constructing and developing any Improvements on such Property as
determined by the Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) on a specified date to
pay Property Costs pursuant to Section 5.4 or 5.5 of the Participation
Agreement.
"Construction Loan" shall mean any Loan made in connection with and as
part of a Construction Funding .
"Construction Loan Property Cost" shall mean, with respect to each
Construction Period Property at any date of determina tion, an amount equal to
(a) the aggregate principal amount of Construction Loans and Interest Payment
Loans made on or prior to such date with respect to such Property minus (b) the
aggregate principal amount of prepayments or repayments, as the case may be, of
the Loans allocated to reduce the Construction Loan Property Cost of such
Property pursuant to Section 2.6(c) of the Credit Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement
Appendix A-10
101
Date for such Property and ending on the Completion Date for such Property.
"Construction Period Property" shall mean, at any date of
determination, any Property as to which the Term has not commenced on or prior
to such date.
"Construction Period Termination Date" shall mean the earlier of (i)
the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
June 19, 1999.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" (including the correlative meanings of the terms "controlled
by" and "under common control with"), as used with respect to any Person, shall
mean the possession directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Controlled Affiliate" shall mean (a) any Subsidiary of Wackenhut
Corrections or (b) any corporation in which Wackenhut Corrections or any
Subsidiary of Wackenhut Corrections has the power to elect directors having more
than 50% voting control of such corporation.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated as of the
Initial Closing Date, among the Lessor, the Agent, and the Lenders, as specified
therein, as such agreement may be amended, modified, restated or supplemented
from time to time in accordance with the terms thereof.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Credit Agreement, the Notes, and the
Security Documents.
"Deed" shall mean a warranty deed regarding Land or Improvements in
form and substance satisfactory to the Owner Trustee, the Holders and the Agent.
Appendix A-11
102
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Environmental Claim" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, any actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Material, Environmental
Law, or other order of a Governmental Authority or (d) from any actual or
alleged damage, injury, threat, or harm to health, safety, natural resources, or
the environment.
"Environmental Law" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Governmental
Authority relating to emissions, discharges, releases, threatened releases of
any Hazardous Substance into ambient air, surface water, ground water, publicly
owned treatment works, septic system, or land, or otherwise relating to the
handling, storage, treatment, generation, use, emission or disposal of any
Hazardous Substance or pollution or to the protection of health or the
environment, including without limitation CERCLA, the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq., and state or local statutes analogous
thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens to violate (if the threat requires
remediation under any Environmental Law and is not remediated during any grace
period allowed under such Environmental Law) or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of the Loans or the Holder Fundings by the
Construction Agent, the Lessee or the Lessor as specified or described in either
a Requisition or a Lease Supplement, whether or not now or subsequently attached
to, contained in or used or usable in any
Appendix A-12
103
way in connection with any operation of any Improvements or other improvements
to real property, including without limitation, all equipment described in the
Appraisal, all heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading and
unloading equipment and systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, fittings and fixtures of every kind
and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement as Schedule I-A.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
the Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.
"Eurodollar Reserve Percentage" shall have the meaning specified in the
Existing Wackenhut Corrections Credit Agreement.
"Eurodollar Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Eurodollar Rate.
"Eurodollar Holder Funding" shall mean a Holder Funding bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Reserve Rate.
"Eurodollar Rate" or "Eurodollar Reserve Rate" shall mean for the
Interest Period for any Eurodollar Loan or Eurodollar Holder Funding comprising
part of the same borrowing or advance (including conversions, extensions and
renewals), a per annum rate calculated according to the following formula:
Interbank Offered Rate
----------------------------------
1-Eurodollar Reserve Percentage.
"Event of Default" shall mean a Lease Event of Default, a Guaranty
Event of Default, an Agency Agreement Event of Default or a Credit Agreement
Event of Default.
"Excepted Payments" shall mean:
Appendix A-13
104
(a) all indemnity payments (including indemnity payments made pursuant
to Section 13 of the Participation Agreement), whether made by adjustment to
Basic Rent or otherwise, to which the Owner Trustee, any Holder or any of their
respective Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent, Termination Value, or Purchase
Option Price) payable under any Operative Agreement to reimburse the Owner
Trustee, any Holder or any of their respective Affiliates for performing or
complying with any of the obligations of the Lessee under and as permitted by
any Operative Agreement (including without limitation any reimbursement of the
reasonable expenses of the Owner Trustee, the Trust Company and the Holders
incurred in connection with any such payment);
(c) any amount payable to a Holder by any transferee of such interest
of a Holder as the purchase price of such Holder's interest in the Trust Estate
(or portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than such
proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the Owner
Trustee or any Holder other than such proceeds payable to the Agent or any
Lender;
(f) Transaction Expenses or other amounts or expenses paid or payable
to or for the benefit of the Owner Trustee or any Holder;
(g) all right, title and interest of any Holder or the Owner Trustee to
any Property or any portion thereof or any other property to the extent any of
the foregoing has been released from the Liens of the Security Documents and the
Lease pursuant to the terms thereof;
(h) upon termination of the Credit Agreement pursuant to the terms
thereof, all remaining property covered by the Lease or Security Documents;
(i) all payments in respect of the Holder Yield;
(j) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (i) above; and
(k) any rights of either the Owner Trustee or Trust Company to demand,
collect, ▇▇▇ for or otherwise receive and enforce payment of any of the
foregoing amounts, provided that such rights shall not include the right to
terminate the Lease.
Appendix A-14
105
"Excepted Rights" shall mean the rights retained by the Owner Trustee
pursuant to Section 8.2(a) of the Credit Agreement.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Existing Credit Agent" shall mean the "Agent" as defined in the
Existing Wackenhut Corrections Credit Agreement.
"Existing Wackenhut Corrections Credit Agreement" shall have the
meaning specified in Section 28.1 of the Lease.
"Expected Maximum Property Cost" at any time shall mean the sum of (a)
the then outstanding aggregate Property Cost of all Properties (whether or not
subject to the Lease), plus (b) the maximum total additional Property Cost
expected to be advanced or incurred, on such date or at any time thereafter,
with respect to any Properties (including without limitation any expected
Acquisition Funding, Contribution Funding or other expected Property Costs, and
including without limitation any expected Property Cost referred to in a
Construction Budget).
"Expiration Date" shall mean the Basic Term Expiration Date or the last
day of any Extended Term, if applicable.
"Expiration Date Purchase Option" shall mean the Lessee's option to
purchase all (but not less than all) of the Properties on the Expiration Date.
"Extended Term" shall mean the extension of the Basic Term (or a
previous Extended Term) for a period of one year following the end of the Basic
Term (or such previous Extended Term) with respect to which Lessee has exercised
its Renewal Option pursuant to Section 21.1 of the Lease.
"Facility" shall mean a facility used for the treatment, storage or
disposal of Hazardous Substances.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero, that would be paid in
cash in an arms-length transaction between an informed and willing purchaser and
an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
Appendix A-15
106
"Federal Funds Effective Rate" shall have the meaning given to such
term in the Existing Wackenhut Corrections Credit Agreement.
"Fee Letter" shall mean that certain letter agreement dated June 17,
1997, among Wackenhut Corrections and NationsBank.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of approximately twelve consecutive
calendar months ending on the Sunday nearest to December 31; references to a
Fiscal Year with a number corresponding to any calendar year (e.g., the "1996
Fiscal Year") refer to the Fiscal Year ending on the Sunday nearest to December
31 of such calendar year (which Sunday may occur in such calendar year or the
following calendar year.)
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including, but not
limited to, strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, governmental
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition.
"Four-Quarter Period" shall have the meaning given to such term in the
Existing Wackenhut Corrections Credit Agreement.
"Funding" shall mean a Construction Funding or an Acquisition Funding.
"GAAP" shall mean "Generally Accepted Accounting Principles" as defined
in the Existing Wackenhut Corrections Credit Agreement.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operation of any Property.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and
Appendix A-16
107
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including without
limitation any court or governmental body, agency, department, commission,
board, bureau or instrumentality of a governmental body.
"Ground Lease" shall mean (a) a ground lease (in form and substance
satisfactory to the Agent and the Lessor) with respect to any Property owned by
the Lessee and leased to the Lessor where such lease has a ninety-nine year term
and payments set at $1.00 per year, or (b) a ground lease or ground sub-lease of
any Property by any Person to the Lessor, where such lease or sublease (as well
as any other lease or sub-lease with respect to such Property) is in form and
substance, and contains such terms and conditions, as are satisfactory in all
respects to the Agent and the Lessor.
"Guarantor" shall mean Wackenhut Corrections.
"Guaranty Agreement" or "Guaranty" shall mean, collectively, (a) the
Guaranty Agreement (Series A Obligations) dated as of the Initial Closing Date
between the Guarantor and the Agent, and (b) the Guaranty Agreement dated as of
the Initial Closing Date by Wackenhut Corrections to the Lessor, as each such
agreement may be amended, supplemented, restated or modified from time to time
in accordance with the terms thereof.
"Guaranty Event of Default" shall mean any default by the Guarantor of
any of its covenants, agreements or obligations contained under the Guaranty
Agreement.
"Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive material, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (iii) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"Hedging Obligations" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
Appendix A-17
108
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Fundings made by each Holder to the Trust Estate pursuant to Section 2 of
the Participation Agreement or Section 3.1 of the Trust Agreement less any
payments of any Holder Fundings received by the Holders pursuant to Section 3.4
of the Trust Agreement.
"Holder Applicable Margin" shall mean a rate per annum equal to the
Applicable Margin plus one percent (1.00%).
"Holder Commitment" shall mean, as to any Holder, the obligation of
such Holder to make Holder Fundings to the Lessor in an aggregate principal
amount at any time outstanding not to exceed the respective amount set forth
opposite such Holder's name on Schedule 1, as such amounts may be increased or
reduced from time to time in accordance with the provisions of this Agreement,
the Trust Agreement or the Lease.
"Holder Commitments" shall mean the aggregate of all Holder
Commitments.
"Holder Construction Property Cost" shall mean, with respect to any
Construction Period Property at any date of determination, an amount equal to
(a) the outstanding Holder Fundings made on or prior to such date in connection
with and as part of any Construction Funding for such Property, plus (b) the
outstanding Holder Fundings made on or prior to such date to fund the payment of
Allocated Holder Return with respect to such Property, minus (c) the aggregate
principal amount of prepayments or repayments, as the case may be, of Holder
Fundings described in clause (a) or clause (b).
"Holder Funding" shall mean any Funding made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Overdue Rate" shall mean the rate specified in Section 3.13 of
the Trust Agreement.
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Fundings with respect thereto (including Holder
Fundings with respect to Allocated Return allocated to such Property).
"Holder Unused Fee" shall mean, at any time, the product of (a) the
Applicable Unused Fee Rate multiplied by (b) the average daily amount by which
(i) the aggregate Holder Commitments of the Holders (under the Operative
Agreements) exceeds (ii) the aggregate outstanding principal amount of Holder
Fundings.
"Holder Yield" shall mean with respect to Holder Fundings from time to
time either the Eurodollar Reserve Rate plus the Holder Applicable Margin, or
the Base Rate plus one percent
Appendix A-18
109
(1.00%) per annum, as elected by the Owner Trustee from time to time with
respect to such Holder Fundings in accordance with the terms of the Trust
Agreement; provided, however, that (i) upon delivery of the notice described in
Section 3.7(c) of the Trust Agreement, the outstanding Holder Fundings of each
Holder shall bear a yield at the Base Rate plus one percent (1.00%) applicable
from time to time from and after the dates and during the periods specified in
Section 3.7(c) of the Trust Agreement, and (ii) upon the delivery by a Holder of
the notice described in Section 3.9(d) of the Trust Agreement or as otherwise
set forth in Section 3.8 of the Trust Agreement, the Holder Fundings of such
Holder shall bear a yield at the Base Rate plus one percent (1.00%) applicable
from time to time after the dates and during the periods specified in Section
3.9(d) or 3.8 (as the case may be) of the Trust Agreement.
"Holders" shall mean the several banks and other financial institutions
which are from time to time holders of Certificates in connection with the
Wackenhut Corrections Trust 1997-1.
"Impositions" shall mean, except to the extent described in the
following sentence, any and all liabilities, losses, expenses, costs, charges
and Liens of any kind whatsoever for fees, taxes, levies, imposts, duties,
charges, assessments or withholdings ("Taxes") including without limitation (i)
any real and personal property taxes, including personal property taxes on any
property covered by the Lease that is classified by Governmental Authorities as
personal property, frontage taxes and real estate or ad valorem taxes in the
nature of property taxes; (ii) any sales taxes, use taxes and other similar
taxes (including rent taxes and intangibles taxes); (iii) any excise taxes; (iv)
any real estate transfer taxes, conveyance taxes, mortgage taxes, stamp taxes
and documentary recording taxes and fees; (v) any taxes that are or are in the
nature of franchise, income, value added, privilege and doing business taxes,
license and registration fees; (vi) any assessments on any Property, including
all assessments for public Improvements or benefits, whether or not such
improvements are commenced or completed within the Term; and (vii) any tax,
Lien, assessment or charge asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, transfer of title, return or other disposition of any
Property or any part thereof or interest
Appendix A-19
110
therein; (c) the Certificates or the Notes or other indebtedness with respect to
any Property or any part thereof or interest therein; (d) the rentals, receipts
or earnings arising from any Property or any part thereof or interest therein;
(e) the Operative Agreements, the performance thereof, or any payment made or
accrued pursuant thereto; (f) the income or other proceeds received with respect
to any Property or any part thereof or interest therein upon the sale or
disposition thereof; (g) any contract (including the Agency Agreement) relating
to the construction, acquisition or delivery of the Improvements or any part
thereof or interest therein; (h) the issuance of the Certificates or the Notes;
or (i) otherwise in connection with the transactions contemplated by the
Operative Agreements.
The term "Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or
are in the nature of, withholding, sales, use, rental, value added,
transfer or property taxes) that are imposed on an Indemnified Person
(other than Lessor) by the United States federal government or (in the
case of a Person organized under the laws of a foreign country) by a
Governmental Authority of such country, and that are in each case based
on or measured by the net income (including taxes based on capital
gains and minimum taxes or franchise taxes) of such Person; provided
that this clause (i) shall not apply to (and shall not exclude) any Tax
or imposition imposed with respect to a payment (including any Rent
payment) except for (A) the portion of such payment constituting
interest on a Loan or Holder Yield or (B) any such Tax or imposition to
the extent it arises because an Indemnified Person has previously
written off as uncollectible (and reduced the tax basis for) an
Obligation which it has subsequently collected, and provided, further
that this clause (i) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise required
to be so made;
(ii) Taxes and impositions (other than Taxes that are, or
are in the nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Indemnified Person (other than
Lessor) by any state or local jurisdiction or taxing authority within
any state or local jurisdiction and that are based upon or measured by
the net income or net receipts; provided that this clause (ii) shall
not apply to (and shall not exclude) (A) any Tax or imposition imposed
with respect to a payment (including any Rent payment) except for (I)
the portion of such payment constituting interest on a Loan or Holder
Yield or (II) any such Tax or imposition to the extent it arises
because an Indemnified Person has previously written off (and reduced
the tax basis for) an Obligation which it has subsequently collected,
or (B) any Tax or imposition imposed on an
Appendix A-20
111
Indemnified Person by any state or local jurisdiction if such Tax or
imposition would not arise as to such Person but for the location,
possession or use of any Property in such jurisdiction; and provided,
further, that this clause (ii) shall not be interpreted to prevent a
payment from being made on an After Tax Basis if such payment is
otherwise required to be so made;
(iii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs after the
termination of the Lease and redelivery or sale of the property in
accordance with the terms of the Lease (but not any Tax or imposition
that relates to such termination, redelivery or sale or to any period
prior to such termination, redelivery or sale); or
(iv) any Taxes which are imposed on an Indemnified Person
as a result of the gross negligence or willful misconduct of such
Indemnified Person itself (as opposed to any gross negligence or
willful misconduct imputed to such Indemnified Person), but not Taxes
imposed as a result of the ordinary negligence of such Person.
Any Tax or imposition excluded from the defined term "Imposition" by any one of
the foregoing clauses (i) through (iv) shall not be construed as constituting an
Imposition by any provision of any other of the aforementioned clauses.
"Improvements" shall mean, with respect to the construction, renovation
or Modification of a Property, all buildings, structures, Fixtures, and other
improvements of every kind existing at any time and from time to time on or
under the Land purchased, leased or otherwise acquired using the proceeds of the
Loans or the Holder Fundings, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time, including
without limitation (a) any Improvements existing as of the Property Closing Date
as such Improvements may be referenced on the applicable Requisition and (b) any
Improvements made subsequent to such Property Closing Date.
"Incorporated Covenants" shall have the meaning specified in Section
28.1 of the Lease.
"Indebtedness" shall have the meaning assigned thereto in the Existing
Wackenhut Corrections Credit Agreement.
"Indemnified Person" shall mean each of the Lessor, the Owner Trustee,
in its individual and its trust capacity, the Agent, NCMI, the Holders, the
Lenders and their respective
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112
successors, assigns, directors, shareholders, partners, officers, employees,
agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the
Construction Agent from the date of the Participation Agreement to and including
the Term Commencement Date for such Property and the Lessee for the duration of
the Term for such Property.
"Initial Closing Date" shall mean the date of the Participation
Agreement.
"Initial Construction Funding" shall mean any initial Funding to pay
for: (i) Property Costs for construction of any Improvements; and (ii) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with Section 15.1(e) of the Lease.
"Insurance Requirements" shall mean (a) all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
(b) all requirements of the issuer of any such policy.
"Interbank Offered Rate" shall mean for the Interest Period for any
Eurodollar Loan or Eurodollar Holder Funding comprising part of the same
borrowing or advance (including conversions, extensions and renewals), a per
annum rate equal to the "Interbank Offered Rate" (as defined in the Existing
Wackenhut Corrections Credit Agreement) having an identical Interest Period.
"Interest Payment Loan" shall mean any Loan made to fund the payment of
Allocated Interest with respect to a Construction Period Property.
"Interest Period" shall mean (a) during the Commitment Period the
period beginning on the date of the first Eurodollar Loan (and related
Eurodollar Holder Funding) extended pursuant to the terms of the Operative
Agreements and ending one month later, and, thereafter, the period commencing on
the last day of the preceding Interest Period and ending one month later, and
(b) during the period from and the Commitment Period, (i) initially, the period
commencing on the conversion or continuation date, as the case may be, with
respect to such Eurodollar Loan or Eurodollar Holder Funding and ending, in the
case of any Eurodollar Loan or Eurodollar Holder Funding, one, two, three, six
or nine months thereafter, as selected by the Borrower (in the case of a
Eurodollar Loan) or the Owner Trustee (in the case of a Eurodollar Holder
Funding) in its notice of borrowing, Funding, continuation or conversion, as the
case may be, given with respect thereto; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable
Appendix A-22
113
to such Eurodollar Loan or Eurodollar Holder Funding and ending one, two, three,
six or nine months thereafter, as selected by the Borrower by irrevocable notice
to Administrative Agent (in the case of a Eurodollar Loan) or by the Owner
Trustee by irrevocable notice to the Holders (in the case of a Eurodollar Holder
Funding) in each case not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided, however, that
all of the foregoing provisions relating to Interest Periods are subject to the
following: (A) if any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Maturity Date, (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month, (D) during the Commitment Period, then
shall not be (on any day) more than one (1) Interest Period in effect for all
Eurodollar Loans and Eurodollar Holder Fundings, and (E) from and after all the
Commitment Period, on any day the sum of the (1) Interest Periods in effect
under the Operative Agreements for all Eurodollar Loans and Eurodollar Holder
Funding plus (2) all "Interest Periods" (as defined in the Existing Wackenhut
Corrections Credit Agreement, as amended from time to time), shall not exceed
eight (8) in the aggregate.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
"IRS" shall mean the United States Internal Revenue Service, or any
successor or analogous organization.
"Land" shall mean (a) a parcel or parcels of real property that is
described on (i) the Requisition issued by the Construction Agent on the
Property Closing Date relating to such parcel or (ii) Schedule I-C to each
applicable Lease Supplement executed and delivered in accordance with the
requirements of Section 2.4 of the Lease and, to the extent set forth in any
such Requisition or Schedule, may include without limitation a leasehold
interest (pursuant to a Ground Lease) in such Land, and (b) all Appurtenant
Rights with respect to such Land.
"Law" shall mean any statute, law, ordinance, code, regulation, rule,
directive, order, writ, injunction or decree of any Governmental Authority.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated as of
the Initial Closing Date, between the Lessor and the Lessee, together with any
Lease Supplements thereto, as such
Appendix A-23
114
Lease Agreement may from time to time be supplemented, amended, restated or
modified in accordance with the terms thereof.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto, as such Lease Supplement may be supplemented, amended, restated or
modified from time to time.
"Legal Requirements" shall mean all foreign, Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, the
Holders, the Agent, any Lender or any Improvements or the taxation, demolition,
construction, use or alteration of such Improvements, whether now or hereafter
enacted and in force, including without limitation any that require repairs,
modifications or alterations in or to any Property or in any way limit the use
and enjoyment thereof (including all building, zoning and fire codes and the
Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101 et seq., and any
other similar Federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including all Environmental Laws), and all permits, certificates of occupancy,
licenses, authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments which are
either of record or known to the Lessee affecting any Property or the
Appurtenant Rights.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to evidence or perfect the Agent's security
interest (for itself and on behalf of the Lenders) in any Equipment or in any
Improvements.
"Lenders" shall mean the several banks and other financial institutions
from time to time party to the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Fundings on any Scheduled Interest Payment Date
Appendix A-24
115
pursuant to the Trust Agreement (but not including interest on (i) any such
scheduled Holder Yield due on the Holder Fundings prior to the Term Commencement
Date with respect to the Property to which such Holder Fundings relate or (ii)
overdue amounts under the Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to evidence or perfect the Lessor's interest
under the Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
Trust Company, in its individual capacity, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the Lessor
or Trust Company, in its individual capacity, which is not required by the
Operative Agreements or is in violation of any of the terms of the Operative
Agreements, (c) any claim against the Lessor or Trust Company, in its individual
capacity, with respect to Taxes or Transaction Expenses against which the Lessee
is not required to indemnify Lessor or Trust Company, in its individual
capacity, pursuant to Section 13 of the Participation Agreement or (d) any claim
against the Lessor or Trust Company, in its individual capacity, arising out of
any transfer by the Lessor of all or any portion of the interest of the Lessor
in the Properties, the Trust Estate or the Operative Agreements other than the
transfer of title to or possession of any Properties by the Lessor pursuant to
and in accordance with the Lease, the Credit Agreement, the Security Agreement
or the Participation Agreement or pursuant to the exercise of the remedies set
forth in Article XVII of the Lease.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean, with respect to the Properties on
an aggregate basis as of a specified date, an amount equal to the sum of the
Termination Values with respect to all of the Properties on such date, less the
Maximum Residual Guarantee Amount as of such date with respect to the
Properties.
"Loan Basic Rent" shall mean the interest due on the Loans on any
Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (i) any such Loan prior to the Term Commencement Date with
respect to the Property to which such Loan relates or (ii) any overdue amounts
under Section 2.8(c) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount of
Acquisition Loans, Construction
Appendix A-25
116
Loans and Interest Payment Loans made on or prior to such date with respect to
such Property minus (b) the aggregate amount of prepayments or repayments as the
case may be of the Loans allocated to reduce the Loan Property Cost of such
Property pursuant to Section 2.6(c) of the Credit Agreement.
"Loans" shall mean, collectively, the Series A Loans and the Series B
Loans.
"Louisiana Property" shall mean the property in Jena, Louisiana,
currently owned by the Owner Trustee, which was acquired using proceeds of loans
under the Bridge Loan Documents.
"Majority Lenders" shall mean at any time, Lenders whose Commitment
Percentages represent at least 51% of the aggregate Commitments.
"Marketing Period" shall mean, if the Lessee has given an Election
Notice in accordance with Section 20.1 of the Lease, the period commencing on
the date such Sale Notice is given and ending on the applicable Expiration Date
or Payment Date.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise) assets, liabilities or
operations of Wackenhut Corrections or any of its Subsidiaries, (b) the ability
of the Lessee or any Subsidiary to perform its respective obligations under any
Operative Agreement to which it is a party, (c) the validity or enforceability
of any Operative Agreement or the rights and remedies of the Agent, the Lenders,
the Holders, or the Lessor thereunder, (d) the validity, priority or
enforceability of any Lien on any Property created by any of the Operative
Agreements, or (e) the value, utility or useful life of any Property or the use,
or ability of the applicable Lessee to use, any Property for the purpose for
which it was intended.
"Maturity Date" shall mean June 19, 2002, or such earlier date as the
Lease may terminate.
"Maximum Property Cost" shall mean the aggregate amount of the Property
Costs for all Properties subject to the Lease as of the applicable determination
date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to
eighty-eight percent (88%) of the aggregate Property Cost for all of the
Properties.
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee in favor of
Appendix A-26
117
the Agent and evidencing a Lien on a Property, in form and substance reasonably
acceptable to the Agent.
"Multi-employer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or are required
to be made by Wackenhut Corrections or any of its Subsidiaries or ERISA
Affiliates.
"NationsBank" shall mean NationsBank, National Association, a national
banking association.
"NCMI" means NationsBanc Capital Markets, Inc.
"Net Proceeds" shall mean all amounts paid in connection with any
Casualty or Condemnation, and all interest earned thereon, less the expense of
claiming and collecting such amounts, including all costs and expenses in
connection therewith for which the Agent or Lessor is entitled to be reimbursed
pursuant to the Lease.
"Net Sale Proceeds Shortfall" shall mean the amount by which the
proceeds of a sale described in Section 22.1 of the Lease (net of all expenses
of sale) are less than the Limited Recourse Amount with respect to the
Properties if it has been determined that the Fair Market Sales Value of the
Properties at the expiration of the term of the Lease has been impaired by
greater than expected wear and tear during the Term of the Lease.
"New Facility" shall have the meaning specified in Section 28.1 of the
Lease.
"Non-Excluded Taxes" shall have the meaning given to such term in
Section 2.13 of the Credit Agreement.
"Notes" shall mean, collectively, the Series A Notes and the Series B
Notes.
"Occupational Safety and Health Law" shall mean the Occupational Safety
and Health Act of 1970 and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating or relating to, or
imposing liability or standards of conduct concerning, employee health or
safety, as now or at any time hereafter in effect.
"Officer's Certificate" shall mean a certificate signed by any
individual holding the office of vice president or higher, which certificate
shall certify as true and correct the subject matter being certified to in such
certificate.
"Operative Agreements" shall mean, collectively, the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease (and a memorandum thereof in a form
reasonably acceptable
Appendix A-27
118
to the Agent), each Lease Supplement (and a memorandum thereof in a form
reasonably acceptable to the Agent), the Side Agreement, the Guaranty Agreement,
the Security Agreement, the Assignment of Project Rights, and each Mortgage
Instrument.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(c) of the Credit Agreement.
"Overdue Rate" shall mean (i) with respect to Loan Basic Rent, and any
other amount owed under or with respect to the Credit Agreement or the Security
Documents, the rate specified in Section 2.8(c) of the Credit Agreement, (ii)
with respect to Lessor Basic Rent, the Holder Yield and any other amount owed
under or with respect to the Trust Agreement, the Holder Overdue Rate and (iii)
with respect to any other amount, the Base Rate plus 2%.
"Owner Trustee" shall mean First Security Bank, National Association,
not individually, except as expressly stated in the various Operative
Agreements, but solely as Owner Trustee under the Wackenhut Corrections Trust
1997-1, and any successor or replacement Owner Trustee expressly permitted under
the Operative Agreements.
"Participant" shall have the meaning given to such term in Section 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
as of the date hereof among the Construction Agent, the Lessee, the Owner
Trustee, the Holders party thereto, the Lenders party thereto, and the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms thereof.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Fundings is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Permitted Exceptions" shall mean:
(i) Liens of the types described in clauses (i), (ii) and
(v) of the definition of Permitted Liens;
(ii) Liens for Taxes not yet due; and
(iii) all encumbrances, exceptions, restrictions,
easements, rights of way, servitudes, encroachments and irregularities
in title, other than Liens which, in the
Appendix A-28
119
reasonable assessment of the Agent, materially impair the use of any
Property for its intended purpose.
"Permitted Liens" shall mean:
(i) the respective rights and interests of the parties to
the Operative Agreements as provided in the Operative Agreements;
(ii) the rights of any sublessee or assignee under a
sublease or an assignment expressly permitted by the terms of the
Lease;
(iii) Liens for Taxes that either are not yet due or are
being contested in accordance with the provisions of Section 13.1 of
the Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
30 days past due or are being diligently contested in good faith by
appropriate proceedings, so long as such proceedings satisfy the
conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements satisfactory to the
Lessor and the Agent have been made), which bonding (or arrangements)
shall comply with applicable Legal Requirements, and shall have
effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being prosecuted
in good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease;
(vii) Liens in favor of municipalities to the extent agreed
to by the Lessor and the Agent; and
(viii) Permitted Exceptions.
Appendix A-29
120
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, limited liability partnership, governmental authority
or any other entity.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Participation
Agreement.
"Primary Property Percentage" shall mean 9%.
"Prime Rate" shall have the meaning given to such term in the Existing
Wackenhut Corrections Credit Agreement.
"Property" shall mean, with respect to each real property site that is
acquired, constructed or renovated pursuant to the terms of the Operative
Agreements, the Land and each item of Equipment and the various Improvements, in
each case located on such Land. Each Property shall be suitable for, and used by
Lessee (or a permitted sublessee) only for, correctional facilities. There shall
not be more than 8 properties in the aggregate that are (or have at any time
been) Properties (including without limitation any properties that were
previously Properties subject to the Operative Agreements but have subsequently
been repurchased by the Lessee, transferred to any other Person, or retained by
the Lessor).
"Property Acquisition Cost" shall mean the cost to Lessor to purchase a
Property on a Property Closing Date.
"Property Closing Date" shall mean each date on which the Lessor
purchases a Property.
"Property Cost" shall mean with respect to a Property the aggregate
amount of the Loan Property Cost plus the Holder Property Cost for such Property
(as such amounts shall be increased equally among all Properties respecting the
Holder Fundings and the Loans extended from time to time to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced in
Sections 9.1(a) and (b) of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchase Option Price" shall have the meaning specified in Section
20.1 of the Lease.
Appendix A-30
121
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Register" shall have the meaning given to such term in Section 9.9(a)
of the Credit Agreement.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leek, flow, discharge,
disposal or emission of a Hazardous Substance.
"Renewal Option" shall have the meaning specified in Section 21.1 of
the Lease.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chief Executive Officer, the
President, any Senior Vice President or Controller or with respect to financial
matters, the Chief Financial Officer or Controller, except that when used with
respect to the Trust Company or the Owner Trustee, "Responsible Officer" shall
also include the Cashier, any Assistant Cashier, any Trust Officer or Assistant
Trust Officer, the Controller and any Assistant Controller or any other officer
of the Trust Company or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity
with the particular subject.
"Sale Date" shall have the meaning given to such term in Section
22.1(a) of the Lease.
Appendix A-31
122
"Sale Notice" shall mean a notice given to Lessor in connection with
the election by Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1
of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan (or Eurodollar Holder Funding), the last day of the Interest Period
applicable to such Eurodollar Loan (or Holder Funding), and if such Interest
Period is for more than three months, at intervals of three months after the
first day of such Interest Period and (b) as to any Base Rate Loan (or Base Rate
Holder Funding), the first day of each month, and the date of conversion of such
Loan to a Eurodollar Loan (or conversion of such Holder Funding to a Eurodollar
Holder Funding), and (c) as to any Loan (or Holder Funding), the Maturity Date.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement, dated as of the
Initial Closing Date between the Owner Trustee and NationsBank, National
Association, as agent, as such agreement may be amended, supplemented, restated
or otherwise modified from time to time in accordance with the terms thereof.
"Security Documents" shall mean the collective reference to the Lease,
the Lease Supplements, the Security Agreement, the Mortgage Instruments, and all
other security documents hereafter delivered to the Administrative Agent
granting a lien on any asset or assets of any Person to secure the obligations
and liabilities of the Borrower hereunder or under any of the other Credit
Documents or to secure any guarantee of any such obligations and liabilities.
"Series A Loans" shall mean the loans described as such in Section 2.1
of the Credit Agreement.
"Series A Notes" shall mean the promissory notes issued to the Lenders
pursuant to Section 2.2 of the Credit Agreement evidencing the Series A Loans.
"Series B Loans" shall mean the loans described as such in Section 2.1
of the Credit Agreement.
"Series B Notes" shall mean the promissory notes issued to the Lenders
pursuant to Section 2.2 of the Credit Agreement evidencing the Series B Loans.
"Side Agreement" shall mean the Side Agreement dated as of the Initial
Closing Date among the Lessee, the Construction
Appendix ▇-▇▇
▇▇▇
▇▇▇▇▇, the Owner Trustee, the Lenders party thereto, the Holders party thereto
and the Administrative Agent.
"Subsidiary" shall mean, as to any Person, any corporation in which
more than 50% of its outstanding voting stock is owned directly or indirectly by
such Person and/or by one or more of such Persons's Subsidiaries.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to Lessor, the
Holders, the Agent, the Lenders or any other Person under the Lease or under any
of the other Operative Agreements including, without limitation, payments of the
Purchase Option Price, the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Tangible Personal Property" shall mean that portion of the Equipment
which is not and will not become a Fixture or Improvement.
"Taxes" shall have the meaning specified in the definition of
Impositions.
"Term" shall mean the Basic Term and each Extended Term, if any.
"Term Commencement Date" shall have the meaning specified in Section
2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean (a) with respect to all Properties, an
amount equal to the sum of (i) the aggregate outstanding principal of the Notes,
plus (ii) the aggregate accrued interest on the Loans, plus (iii) the aggregate
Holder Property Cost, plus (iv) the aggregate accrued Holder Yield, plus any (v)
other Rent and other amounts due and owing under the Lease or any other
Operative Agreement, and (b) with respect to a particular Property, an amount
equal to the product of the Termination Value of all the Properties times a
fraction, the numerator of which is the Property Cost allocable to the
particular Property in question and the denominator of which is the aggregate
Property Cost for all the Properties.
"Total Condemnation" shall mean a Condemnation that involves a taking
of Lessor's entire title to a Property.
Appendix A-33
124
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) any and all reasonable fees, charges or other amounts
payable to the Lenders, Agent, the Holders, the Owner Trustee or any
broker which arise under any of the Operative Agreements;
(c) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents;
(d) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement; and
(e) real estate taxes on a Property paid during the
Construction Period.
"Trust Agreement" shall mean the Second Amended and Restated Trust
Agreement dated as of the Initial Closing Date between the Holders and the Owner
Trustee, as such agreement may be amended, modified, restated or supplemented
from time to time in accordance with the terms thereof.
"Trust Company" shall mean First Security Bank, National Association in
its individual capacity, and any successor owner trustee under the Trust
Agreement, in each case in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Tuhnekcaw, Inc." shall mean Tuhnekcaw, Inc., a Delaware corporation.
Appendix A-34
125
"Type" shall mean, as to any Loan, whether it is a Base Rate Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unfunded Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, at any time, the product of (a) the Applicable
Unused Fee Rate, multiplied by (b) the average daily amount by which (i) the
aggregate Commitments of the Lenders for all Categories of Loans (under the
Operative Agreements) exceeds (ii) the outstanding principal amount of all
Categories of Loans.
"Unused Fee Payment Date" shall mean last Business Day of each March,
June, September and December and the last day of the Commitment Period, or such
earlier date as the Commitments shall terminate as provided in the Credit
Agreement.
"U.S." shall mean the United States of America, its territories, its
possessions and all other areas subject to its jurisdiction.
"Voting Stock" shall mean, with respect to any Person, capital stock
issued by a corporation or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such
Person, even though the right to vote may have been suspended by the happening
of such a contingency.
"Wackenhut Control Group Member" shall mean any of the following: (a)
Wackenhut Corrections, (b) Wackenhut Corporation, (c) Tuhnekcaw, Inc., (d)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (e) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (f) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (g) any
trust over which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ has dispositive or
voting power, or (h) any heir or successor of any of the foregoing.
"Wackenhut Corporation" shall mean Wackenhut Corporation, a Florida
corporation.
"Wackenhut Corrections" means Wackenhut Corrections Corporation, a
Florida corporation.
Appendix A-35
126
"Wackenhut Corrections Credit Agreement Event of Default" shall mean an
"Event of Default" as defined in the Existing Wackenhut Corrections Credit
Agreement (as amended, modified or restated heretofore or hereafter) or any New
Facility.
"Wackenhut Corrections Trust 1997-1" shall mean the grantor trust
created pursuant to the terms and conditions of the Trust Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods or services with respect to any
Property.
Appendix A-36
