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GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty Agreement" or
this "Guaranty"), dated as of December 18, 1997, is made by each of the
undersigned (each a "Guarantor" and collectively the "Guarantors") to
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as a Lender
("NationsBank"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, in its capacity as agent for the Lenders (in such capacity, and
together with any successors in such capacity, the "Agent") party to the Amended
and Restated Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Agent and the Lenders have agreed to provide Wackenhut
Corrections Corporation, a Florida corporation (the "Borrower"), revolving
credit and letter of credit facilities pursuant to the terms of that certain
Amended and Restated Credit Agreement dated as of December 18, 1997 among the
Borrower and the Agent (as from time to time amended, supplemented or restated,
the "Credit Agreement"); and
WHEREAS, each Guarantor is a Subsidiary of the Borrower and will
materially benefit from the Loans to be made and the Letters of Credit to be
issued under the Credit Agreement, and each Guarantor is willing to enter into
this Guaranty Agreement to provide an inducement for the Lenders to make Loans
and issue Letters of Credit thereunder;
NOW, THEREFORE, in order to induce the Agent and the Lenders to enter
into the Credit Agreement and the other Loan Documents and in consideration of
the premises and the mutual covenants contained herein, the parties hereto agree
as follows:
1. DEFINITIONS. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the Agent
and the Lenders the payment in full of the Borrower's Liabilities (as defined
below). For all purposes of this Guaranty Agreement, "Borrower's Liabilities"
means: (a) the Borrower's prompt payment in full, when due or declared due and
at all such times, of all Obligations and all other amounts pursuant to the
terms of the Credit Agreement, the Notes, and all other Loan Documents executed
in connection with the Credit Agreement heretofore, now or at any time or times
hereafter owing, arising, due or payable from the Borrower to any one or more of
the Lenders, including without limitation principal, interest, premium or fee
(including, but not limited to, loan fees and attorneys' fees and expenses).
Each Guarantor agrees that it is jointly and severally, directly and primarily
liable for the Borrower's Liabilities. The Guarantors' obligations to the Agent
and the Lenders under this Guaranty Agreement are hereinafter collectively
referred to as the "Guarantors' Obligations".
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3. LIMIT OF LIABILITY. The obligations of the Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of any applicable
state law.
4. PAYMENT. If the Borrower shall default in payment or performance of
any Borrower's Liabilities when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any other Event of Default under the Credit Agreement
that has not been cured or waived, then each Guarantor, upon demand thereof by
the Agent or its successors or assigns, will, as of the date of the Agent's
demand, fully pay to the Agent, for the benefit of itself and the Lenders,
subject to any restriction set forth in Section 3 hereof, an amount equal to all
Guarantor's Obligations then due and owing.
5. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantors' Obligations under this Guaranty Agreement shall be
joint and several, absolute and unconditional irrespective of the validity,
legality or enforceability of the Credit Agreement, the Notes or any other Loan
Document or any other guaranty of the Borrower's Liabilities, and shall not be
affected by any action taken under the Credit Agreement, the Notes or any other
Loan Document, any other guaranty of the Borrower's Liabilities, or any other
agreement between the Agent or the Lenders and the Borrower or any other person,
in the exercise of any right or power therein conferred, or by any failure or
omission to enforce any right conferred thereby, or by any waiver of any
covenant or condition therein provided, or by any acceleration of the maturity
of any of the Borrower's Liabilities, or by the release or other disposal of any
Collateral or other security for any of the Borrower's Liabilities, or by the
dissolution of the Borrower or the combination or consolidation of the Borrower
into or with another entity or any transfer or disposition of any assets of the
Borrower or by any extension or renewal of the Credit Agreement, any of the
Notes or any other Loan Document, in whole or in part, or by any modification,
alteration, amendment or addition of or to the Credit Agreement, any of the
Notes or any other Loan Document, any other guaranty of the Borrower's
Liabilities, or any other agreement between the Agent or the Lenders and the
Borrower or any other Person, or by any other circumstance whatsoever (with or
without notice to or knowledge of any Guarantor) which may or might in any
manner or to any extent vary the risks of any Guarantor, or might otherwise
constitute a legal or equitable discharge of a surety or guarantor; it being the
purpose and intent of the parties hereto that this Guaranty Agreement and the
Guarantors' Obligations hereunder shall be absolute and unconditional under any
and all circumstances and shall not be discharged except by payment as herein
provided.
6. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby guarantees that
the Guarantors' Obligations will be paid in (i) the same Alternative Currency in
the case of Loans made and Letters of Credit drawn in Alternative Currencies,
and (ii) in Dollars in all other cases and in immediately available funds,
regardless of any law, regulation or decree now or hereafter in effect that
might in any manner affect the Borrower's Liabilities, or the rights of the
Agent or any Lender with respect thereto as against the Borrower, or cause or
permit to be invoked any alteration in the time, amount or manner of payment by
the Borrower of any or all of the Borrower's Liabilities.
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7. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall file a
petition to take advantage of any insolvency statute; (b) any Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) any Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of any Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against any
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of any Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
thirty (30) consecutive days; (e) there is commenced against any Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition remains
unstayed or undismissed for a period of thirty (30) consecutive days; (f) there
shall occur an Event of Default under the Credit Agreement; (g) any default
shall occur in the payment of amounts due hereunder; or (h) any other default in
compliance with the terms hereof shall occur which remains uncured or unwaived
for a period of thirty (30) days after the earlier of notice of such default
from the Agent or an officer of a Guarantor becomes aware of such default (each
of the foregoing an "Event of Default" hereunder), then notwithstanding any
Collateral or other security that the Agent or any Lender may process from
Borrower or any Guarantor or any other guarantor of the Borrower's Liabilities,
or any other party, at the Agent's election and without notice thereof or demand
therefor, so long as such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
8. SUITS. Each Guarantor from time to time shall pay to the Agent for
the benefit of itself and the Lenders, on demand, at the Agent's place of
business set forth in the Credit Agreement, the Guarantors' Obligations as they
become or are declared due, and in the event such payment is not made forthwith,
the Agent or any Lender or any of them may proceed to suit against any one or
more or all of the Guarantors. At the Agent's election, one or more and
successive or concurrent suits may be brought hereon by the Agent against any
one or more or all of the Guarantors, whether or not suit has been commenced
against the Borrower, any other guarantor of the Borrower's Liabilities, or any
other Person and whether or not the Agent or Lender has taken or failed to take
any other action to collect all or any portion of the Borrower's Liabilities.
9. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent or Lender as a defense, counterclaim, set-off or cross claim,
any defense (legal or equitable) or other claim which such Guarantor may now or
at any time hereafter have against the Borrower, the Agent or the Lenders,
without waiving any additional defenses, set-offs, counterclaims or other claims
otherwise available to such Guarantor. If at any time hereafter the Agent or any
Lender employs counsel for advice or other representation to enforce the
Guarantors' Obligations that arise out of an Event of Default, then, in any of
the foregoing events, all of the reasonable attorneys' fees arising
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from such services and all expenses, costs and charges in any way or respect
arising in connection therewith or relating thereto shall be jointly and
severally paid by the Guarantors to the Agent, for the benefit of itself and the
Lenders, on demand.
10. WAIVER; SUBROGATION; SUBORDINATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Lenders' heretofore, now or from time to time hereafter loaning monies or giving
or extending credit to or for the benefit of the Borrower, whether pursuant to
the Credit Agreement or the Notes or any amendments, modifications, or
supplements thereto, or replacements or extensions thereof; (iii) the Agent or
the Lenders or the Borrower heretofore, now or at any time hereafter, obtaining,
amending, substituting for, releasing, waiving or modifying the Credit
Agreement, the Notes or any other Loan Documents; (iv) presentment, demand,
notices of default, non-payment, partial payment and protest; (v) the Agent or
the Lenders heretofore, now or at any time hereafter granting to the Borrower
(or any other party liable to the Lenders on account of the Borrower's
Liabilities) any indulgence or extensions of time of payment of the Borrower's
Liabilities; and (vi) the Agent or the Lenders heretofore, now or at any time
hereafter accepting from the Borrower or any other person, any partial payment
or payments on account of the Borrower's Liabilities or any collateral securing
the payment thereof or the Agent settling, subordinating, compromising,
discharging or releasing the same. Each Guarantor agrees that the Agent and each
Lender may heretofore, now or at any time hereafter do any or all of the
foregoing in such manner, upon such terms and at such times as Agent or such
Lender, in its sole and absolute discretion, deems advisable, without in any way
or respect impairing, affecting, reducing or releasing such Guarantor from the
Guarantors' Obligations, and each Guarantor hereby consents to each and all of
the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantors' Obligations under this Guaranty Agreement may be
enforced by the Agent on behalf of itself and the Lenders upon demand by the
Agent to such Guarantor without the Agent being required, each Guarantor
expressly waiving any right it may have to require the Agent, to (i) prosecute
collection or seek to enforce or resort to any remedies against the Borrower or
any other Guarantor or any other guarantor of the Borrower's Liabilities, IT
BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT
DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE AGENT, AND THE
PROVISIONS HEREOF ENFORCED BY THE AGENT, EFFECTIVE AS OF THE FIRST DATE ANY
EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT, or (ii)
seek to enforce or resort to any remedies with respect to any, Liens or
encumbrances granted to the Agent by the Borrower or any other Person on account
of the Borrower's Liabilities or any guaranty thereof. Neither the Agent nor any
Lender shall have any obligation to protect, secure or insure any of the
foregoing security interests, Liens or encumbrances on the properties or
interests in properties subject thereto. The Guarantors' Obligations shall in no
way be impaired, affected, reduced, or released by reason of the Agent's or any
Lender's failure or delay to do or take any of the acts, actions or things
described in this Guaranty Agreement including, without limiting the generality
of the foregoing, those acts, actions and things described in this Section 10.
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(c) Each Guarantor further agrees with respect to this Guaranty
Agreement that it shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities
in each case until after all the Borrower's Liabilities have been paid in full.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by the Guarantor against the estate of Borrower
within the meaning of Section 101 of the Bankruptcy Code, and to prevent the
Guarantor from constituting a creditor of Borrower in respect of such
reimbursement within the meaning of Section 547(b) of the Bankruptcy Code in the
event of a subsequent case involving the Borrower.
(d) Until the Guarantors' Obligations are paid in full and the Lenders
are under no further obligation to lend or extend funds or credit which would
constitute Guarantors' Obligations, each Guarantor hereby unconditionally
subordinates all present and future debts, liabilities or obligations of the
Borrower to the Guarantor to the Guarantors' Obligations, and all amounts due
under such debts, liabilities, or obligations shall, upon the occurrence and
during the continuance of an Event of Default, be collected and paid over
forthwith to the Lenders on account of the Guarantors' Obligations and, pending
such payment, shall be held by each Guarantor as agent and bailee of the Lenders
separate and apart from all other funds, property and accounts of the Guarantor.
Each Guarantor, at the reasonable request of the Lenders, shall execute such
further documents in favor of the Lenders to further evidence and support the
purpose of this Section 10(d).
11. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date of the initial Advance under the Credit Agreement and
shall continue in full force and effect until the Borrower's Obligations are
fully paid and the Credit Agreement has terminated. The Agent shall give each
Guarantor written notice of such termination at each Guarantor's address set
forth below such Guarantor's execution hereof on the signature pages of this
Guaranty or such other address for the Guarantor as such Guarantor shall give
notice to the Agent in the manner provided for the giving of notices under the
Credit Agreement (the "Guarantor's Address"). This Guaranty Agreement shall be
binding upon and inure to the benefit of each Guarantor, the Agent and the
Lenders and their respective successors and assigns. Notwithstanding the
foregoing, no Guarantor may, without the prior written consent of the Agent,
assign any rights, powers, duties or obligations hereunder. Any claim or claims
that the Agent and the Lenders may at any time hereafter have against any
Guarantor under this Guaranty Agreement may be asserted by the Agent or any
Lender by written notice directed to any one or more or all of the Guarantors at
the applicable Guarantor's Address.
12. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to the Agent for the benefit of itself and the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its certificate
of incorporation or charter or governance documents or any agreement to which
such Guarantor is a party, or any applicable laws.
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13. EXPENSES. Each Guarantor agrees to be jointly and severally liable
for the payment of all reasonable fees and expenses, including attorney's fees,
incurred by the Agent in connection with the enforcement of this Guaranty
Agreement.
14. REINSTATEMENT. Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Agent under the Credit Agreement or this Guaranty
Agreement is rescinded or must be restored for any reason.
15. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument.
16. RELIANCE. Each Guarantor represents and warrants to the Agent, for
the benefit of the Agent and the Lenders, that: (a) such Guarantor has adequate
means to obtain from Borrower, on a continuing basis, information concerning
Borrower and Borrower's financial condition and affairs and has full and
complete access to Borrower's books and records; (b) such Guarantor is not
relying on the Agent or any Lender, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of Borrower and Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Agent or any Lender, its or their employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial condition
and affairs or other matters material to such Guarantor's decision to provide
this Guaranty or for any counseling, guidance, or special consideration or any
promise therefor with respect to such decision. Each Guarantor agrees that
neither the Agent nor any Lender has any duty or responsibility whatsoever, now
or in the future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs, other than as expressly
provided herein, and that, if such Guarantor receives any such information from
the Agent or any Lender, its or their employees, agents or other
representatives, such Guarantor will independently verify the information and
will not rely on the Agent or any Lender, its or their employees, agents or
other representatives, with respect to such information.
17. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such telefacsimile number for
such party and the receipt of such message is verified by the sender's
telefacsimile machine, (iii) on the fifth Business Day after the day on which
mailed, if sent prepaid by certified or registered mail, return receipt
requested, in each case delivered, transmitted or mailed, as the case may be, to
the Guarantor's Address or telefacsimile number, as appropriate.
18. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party
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on the date when all of the Obligations have been fully paid and the Credit
Agreement has terminated.
19. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN
ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF BROWARD, STATE OF
FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF
THIS AGREEMENT, EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR
HEREAFTER TO THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE GUARANTOR'S ADDRESS (AS HEREIN
DEFINED) OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN THE
COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, THE
JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER, BY
REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
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ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY
IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
GUARANTOR:
WCC RE HOLDINGS, INC.
WITNESS:
_________________________ By:_____________________________________
Name: Xxxx X. X'Xxxxxx
_________________________ Title: Senior Vice President
Address for Notices:
0000 Xxxxxxxxx Xxxxx, #000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Telefacsimile: (000) 000-0000
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WITNESS: NATIONSBANK, NATIONAL ASSOCIATION, as Agent
_________________________ By:______________________________________
Name: Xxxxx Xxxxxx
_________________________ Title: Senior Vice President
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