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Exhibit 4.8
LC ACCOUNT AGREEMENT
THIS LC ACCOUNT AGREEMENT (the "Agreement") dated as of December 30,
1997, and made between WACKENHUT CORPORATION, a Florida corporation (the
"Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, as a Lender ("NationsBank") and as Agent (in such capacity herein
and together with any successors in such capacity, the "Agent") for the lenders
(the "Lenders") party to the Credit Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Pledgor, the Lenders, and the Agent have entered into that
certain Amended and Restated Revolving Credit and Reimbursement Agreement dated
as of the date hereof (as may hereafter be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and in
effect, hereinafter referred to as the "Credit Agreement");
WHEREAS, as a condition precedent to the Lenders' obligations to make
the Loans or to issue Letters of Credit, the Pledgor is required to execute and
deliver to the Agent a copy of this Agreement on or before the Closing Date;
NOW, THEREFORE, in consideration of the foregoing and the agreements,
provisions and covenants contained herein, the Pledgor and the Agent hereby
agree as follows:
Section 1. DEFINITIONS. Capitalized terms used in this Agreement shall
have the following meanings:
"COLLATERAL" means (a) all funds from time to time on deposit in the LC
Account; (b) all Investments and all certificates and instruments from time to
time representing or evidencing such Investments; (c) all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Agent for or on behalf of the Pledgor in
substitution for or in addition to any or all of the Collateral described in
clause (a) or (b) above; (d) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Collateral described in
clause (a), (b) or (c) above; and (e) to the extent not covered by clauses (a)
through (d) above, all proceeds of any or all of the foregoing Collateral.
"INVESTMENTS" means those investments, if any, made by the Agent
pursuant to Section 5 hereof.
"LC ACCOUNT" means the cash collateral account established and
maintained pursuant to SECTION 2 hereof.
"SECURED OBLIGATIONS" means (i) all obligations of the Pledgor now
existing or hereafter arising under or in respect of the Credit Agreement or the
Notes (including, without limitation,
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the Pledgor's obligation to pay principal and interest and all other charges,
fees, expenses, commissions, reimbursements, indemnities and other payments
related to or in respect of the obligations contained in the Credit Agreement or
the Notes) or any documents or agreement related to the Credit Agreement or the
Notes; and (ii) without duplication, all obligations of the Pledgor now or
hereafter existing under or in respect of this Agreement, including, without
limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, indemnities and other payments related to or in respect of the
obligations contained in this Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
Section 2. LC ACCOUNT; CASH COLLATERALIZATION OF LETTERS OF CREDIT.
(i) At any time, in the Agent's sole discretion, the Agent
shall establish and maintain at the offices of NationsBank, National
Association at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, in
the name of the Agent and under the sole dominion and control of the
Agent, a cash collateral account designated as Wackenhut Corporation
Cash LC Account (the "LC Account").
(ii) In accordance with ARTICLE VIII of the Credit Agreement,
in the event that an Event of Default has occurred and shall not have
been waived pursuant to SECTION 10.07 of the Credit Agreement and the
Pledgor is required to pay to Agent an amount equal to the maximum
amount remaining undrawn or unpaid under the Letters of Credit, the
Agent shall, upon receipt of any such amounts, exercise the remedies
set forth in SECTION 12 hereof and shall apply the proceeds as provided
in ARTICLE VIII of the Credit Agreement. Any such amounts received by
the Agent shall be deposited in the LC Account. Upon a drawing under
the Letters of Credit in respect of which any amounts described above
have been deposited in the LC Account, the Agent shall apply such
amounts to reimburse NationsBank for the amount of such drawing. In the
event the Letters of Credit are canceled or expire or in the event of
any reduction in the maximum amount available at any time for drawing
under such Letters of Credit (the "Maximum Available Amount"), the
Agent shall apply the amount then in the LC Account designated to
reimburse NationsBank for any drawings under the Letters of Credit less
the Maximum Available Amount immediately after such cancellation,
expiration or reduction, if any, FIRST, to the cash collateralization
of the Letters of Credit if the Pledgor has failed to pay all or a
portion of the maximum amounts described above, SECOND, to the payment
in full of the outstanding Secured Obligations and THIRD, the balance,
if any, to the Pledgor.
(iii) Interest received in respect of Investments of any
amounts deposited in the LC Account pursuant to clause (ii) of this
SECTION 2 shall be delivered by the Agent to the Pledgor on the last
Business Day of each calendar month or, if earlier, upon cancellation
or expiration of or drawing of the Maximum Available Amount for drawing
under the Letters of Credit, as the case may be, in respect of which
such amounts were so
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deposited; PROVIDED, HOWEVER, that the Agent shall not deliver to the
Pledgor any such interest received in respect of Investments of any
amounts deposited in the LC Account pursuant to this SECTION 2 if an
Event of Default has occurred and shall not have been waived pursuant
to SECTION 10.07 of the Credit Agreement or unless all outstanding
Secured Obligations have been indefeasibly paid in full in cash.
Section 3. PLEDGE; SECURITY FOR SECURED OBLIGATIONS. The Pledgor hereby
pledges (or will cause to be pledged) to the Agent (for itself and on behalf of
the Lenders) a first priority lien and security interest in, the Collateral, as
collateral security for the prompt payment in full when due, whether at stated
maturity, by acceleration or otherwise (including, without limitation, the
payment of interest and other amounts which would accrue and become due but for
the filing of a petition in bankruptcy or the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code), of all Secured Obligations.
Section 4. DELIVERY OF COLLATERAL. All certificates or instruments, if
any, representing or evidencing the Collateral shall be delivered to and held by
the Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Agent. In the event any Collateral is not evidenced by a certificate, a
notation, reflecting title in the name of the Agent or the security interest of
the Agent, shall be made in the records of the issuer of such Collateral or in
such other appropriate records as the Agent may require, all in form and
substance reasonably satisfactory to the Agent. The Agent shall have the right,
at any time and without notice to the Pledgor, to transfer to or to register in
the name of the Agent or any of its nominees any or all of the Collateral. In
addition, the Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. INVESTING OF AMOUNTS IN THE LC ACCOUNT; AMOUNTS HELD BY THE
AGENT. Cash held by the Agent in the LC Account shall not be invested or
reinvested except as provided in this SECTION 5.
(i) Except as otherwise provided in SECTION 12 hereof, any
funds on deposit in the LC Account shall be invested by the Agent so
long as no Default or Event of Default shall have occurred and shall
not have been waived pursuant to SECTION 10.07 of the Credit Agreement,
in cash equivalents.
(ii) The Agent is hereby authorized to sell, and shall sell,
all or any designated part of the Collateral (A) so long as no Default
or Event of Default shall have occurred and shall not have been waived
pursuant to SECTION 10.07 of the Credit Agreement, upon the receipt of
appropriate written instructions from an Authorized Representative or
(B) in any event if such sale is necessary to permit the Agent to
perform its duties hereunder or under the Credit Agreement. The Agent
shall have no responsibility for any loss in the value of the
Collateral resulting from a fluctuation in interest rates or otherwise.
Any interest on securities constituting part of the Collateral and the
net proceeds of the sale or
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payment of any such securities shall be held in the LC Account by the
Agent.
Section 6. REPRESENTATIONS AND WARRANTIES. In addition to its
representations and warranties made pursuant to ARTICLE VI of the Credit
Agreement, the Pledgor represents and warrants to the Agent (for itself and as
agent on behalf of the Lenders), that the following statements are true, correct
and complete:
(i) The Pledgor will be the legal and beneficial owner of the
Collateral free and clear of any Lien except for the lien and security
interest created by this Agreement and the Credit Agreement;
(ii) The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Secured
Obligations.
Section 7. FURTHER ASSURANCES. The Pledgor agrees that at any time and
from time to time, at the Pledgor's expense, the Pledgor will promptly execute
and deliver (or cause to be executed and delivered) to the Agent any further
instruments and documents, and take any further actions, that may be necessary
or that the Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral.
Section 8. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will
not (a) sell or otherwise dispose of any of the Collateral, or (b) create or
permit to exist any Lien upon or with respect to any of the Collateral, except
for the lien and security interest created by this Agreement.
Section 9. THE AGENT APPOINTED ATTORNEY-IN FACT. The Pledgor hereby
appoints the Agent as its attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Agent's reasonable discretion to take any action and to execute any
instrument which the Agent may reasonably deem necessary or advisable to
accomplish the purposes of the Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to the Pledgor or
either of them representing any payment, dividend, or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same. In performing its functions and duties under this Agreement, the Agent
shall act solely for itself and as the agent of the Lenders and the Agent has
not assumed nor shall be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Pledgor.
Section 10. THE AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, after notice to the Pledgor, the Agent may itself
perform, or cause performance of, such agreement, and the expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under SECTION
13 hereof.
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Section 11. STANDARD OF CARE; NO RESPONSIBILITY FOR CERTAIN MATTERS. In
dealing with the Collateral in its possession, the Agent shall exercise the same
care which it would exercise in dealing with its own property of a similar
nature, but it shall not be responsible for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Agent has or is deemed to
have knowledge of such matters, (b) taking any steps to preserve rights against
any parties with respect to any Collateral (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the
Collateral), (c) the collection of any proceeds, (d) any loss resulting from
Investments made pursuant to Section 5 hereof, or (e) determining (x) the
correctness of any statement or calculation made by the Pledgor in any written
or telex (tested or otherwise) instructions, or (y) whether any deposit in the
LC Account is proper.
Section 12. REMEDIES UPON DEFAULT; APPLICATION OF PROCEEDS. If any
Event of Default shall have occurred and shall not have been waived pursuant to
SECTION 10.07 of the Credit Agreement:
(i) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein otherwise
available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code (the "Code") as in effect in
the State of North Carolina at that time, and the Agent may, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
exchange or broker's board or at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and at such
price or prices, and upon such other terms as the Agent may reasonably
deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days' notice
to Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of the
Collateral regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(ii) Subject to the provisions of SECTION 2(II) hereof, any
cash held by the Agent as Collateral and all cash proceeds received by
the Agent in respect of any sale of, collection from, or other
realization upon all or part of the Collateral shall be applied (after
payment of any amounts payable to the Agent pursuant to SECTION 13
hereof) by the Agent to pay the Secured Obligations pursuant to ARTICLE
VIII of the Credit Agreement. Any surplus of such cash or cash proceeds
held by the Agent and remaining after payment in full of all Secured
Obligations shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
Section 13. EXPENSES. In addition to any payments of expenses of Agent
pursuant to the Credit Agreement or the other Loan Documents, the Pledgor agrees
to pay promptly to the Agent
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all the costs and expenses, including reasonable attorneys fees and expenses,
which the Agent may reasonably incur in connection with (a) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (b) the exercise or enforcement of any of the rights of the
Agent hereunder, or (c) the failure by the Pledgor to perform or observe any of
the provisions hereof.
Section 14. NO DELAYS; WAIVER, ETC. No delay or failure on the part of
the Agent in exercising, and no course of dealing with respect to, any power or
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent of any power or right hereunder preclude other or
further exercise thereof or the exercise of any other power or right. The
remedies herein provided are to the fullest extent permitted by law cumulative
and are not exclusive of any remedies provided by law.
Section 15. AMENDMENTS, ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, or consent to any departure by the
Pledgor therefrom, shall in any event be effective without the written
concurrence of the Agent.
Section 16. NOTICES. Except as otherwise specifically provided herein,
all notices which are to be sent to the Pledgor or Agent shall be given in
accordance with the Credit Agreement.
Section 17. CONTINUING SECURITY INTEREST; TERMINATION. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until all Secured Obligations (other than
Secured Obligations in the nature of continuing indemnities or expense
reimbursement obligations not yet due and payable) shall have been indefeasibly
paid in full in cash, the commitments or other obligations of the Agent or any
Lender to make any Loan under the Credit Agreement shall have expired and the
Letters of Credit shall have expired, (b) be binding upon Pledgor, its
successors and assigns, and (c) inure to the benefit of the Agent, the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c) and subject to the provisions of the
Credit Agreement, any Lender may assign or otherwise transfer any Note held by
it to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. Upon the indefeasible payment in full in cash of the
Secured Obligations (other than Secured Obligations in the nature of continuing
indemnities or expense reimbursement obligations not yet due and payable) and
the cancellation or expiration of the Letters of Credit and termination or
expiration of all commitments and other obligations of the Agent and any Lender
to make any Loan, Pledgor shall be entitled, subject to the provisions of
SECTION 12 hereof, to the return, upon its request and at its expense, of such
of the Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof.
Section 18. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
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INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
FLORIDA. UNLESS OTHERWISE DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS
DEFINED IN ARTICLE 9 OF THE CODE ARE USED HEREIN AS THEREIN DEFINED.
Section 19. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT SITTING IN THE COUNTY OF BROWARD, STATE OF FLORIDA, UNITED STATES
OF AMERICA AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY AND JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT
SUBJECT TO RIGHT OF APPEAL. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT
OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE PLEDGOR IN THE COURTS OF ANY
OTHER JURISDICTION.
Section 20. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party and all covenants, promises, and agreements
by or on behalf of the Pledgor or by and on behalf of the Agent shall bind and
inure to the benefit of the successors and assigns of the Pledgor, the Agent and
the Lenders.
Section 21. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by the different parties on separate
counterparts and each such counterpart shall for all purposes be deemed an
original, but all such counterparts shall together constitute but one and the
same Agreement. The Pledgor and the Agent hereby acknowledge receipt of a true,
correct, and complete counterpart of this Agreement.
Section 22. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 23. HEADINGS. This section headings in this Agreement are
inserted for convenience of reference and shall not be considered a part of this
Agreement or used in its interpretation.
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IN WITNESS WHEREOF, The Pledgor and the Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
WITNESS: WACKENHUT CORPORATION
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By:
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Name: Xxxxx X. Mayotte
Title: Treasurer
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WITNESS: NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
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By:
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
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