Exhibit 10.34

EXECUTION COPY
     
 
SERIES A-2 INCREMENTAL LOAN AGREEMENT*
dated as of
February 8, 2011
between
THE GEO GROUP, INC.,
As Borrower
The Lenders referred to herein
and
BNP Paribas,
as Administrative Agent
 
BNP PARIBAS SECURITIES CORP.,
as Lead Arranger
 
 

*   Certain portions of the Series A-2 Incremental Loan Agreement have been
omitted based upon a request for confidential treatment filed with the
Securities and Exchange Commission. The non-public information has been filed
with the Securities and Exchange Commission.

 

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SERIES A-2 INCREMENTAL LOAN AGREEMENT
          SERIES A-2 INCREMENTAL LOAN AGREEMENT dated as of February 8, 2011
between THE GEO GROUP, INC., (the “Borrower”), the GUARANTORS party hereto (the
“Guarantors”), the SERIES A-2 INCREMENTAL LENDERS party hereto and BNP PARIBAS.,
as Administrative Agent for the lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).
          The Borrower, the lenders party thereto and BNP Paribas as the
Administrative Agent, are parties to a Credit Agreement dated as of August 4,
2010 (as amended by Amendment No. 1, the “Credit Agreement”).
          Pursuant to Section 2.01(d) of the Credit Agreement, the Borrower may
request that one or more Persons (which may include the Lenders under the Credit
Agreement) offer to enter into commitments to make “Incremental Loans” under and
as defined in said Section 2.01(d), subject to the conditions specified in said
Section 2.01(d). The Borrower accordingly has requested that Incremental Loans
under said Section 2.01(d) be made available to it in an aggregate principal
amount equal to $150,000,000 in a single series of term loans to be designated
the “Series A-2 Incremental Loans”. The Series A-2 Incremental Lenders (as
defined below) are willing to make such loans on the terms and conditions set
forth below and in accordance with the applicable provisions of the Credit
Agreement, and accordingly, the parties hereto hereby agree as follows:
ARTICLE I
DEFINED TERMS
          Terms defined in the Credit Agreement are used herein as defined
therein, except to the extent the same term is defined herein, in which case
this Agreement shall control. The following terms have the meanings specified
below:
     “Acquisition” means the acquisition by the Borrower of the Target Company
through its wholly-owned subsidiary GEO Acquisition IV, Inc., pursuant to the
Merger Agreement.
     “Closing Date” means the date when the Acquisition and transactions
contemplated thereby are consummated.
     “Merger Agreement” means the Agreement and Plan of Merger dated as of
December 21, 2010 among the Borrower, GEO Acquisition IV, Inc. and Target
Company.

 

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     “Principal Payment Dates” means the Principal Payment Dates for Tranche A
Term Loans as in the effect on the date hereof.
     “Required Series A-2 Incremental Lenders” means, at any time, Series A-2
Incremental Lenders having Series A-2 Incremental Commitments representing at
least a majority of the sum of the total Series A-2 Incremental Commitments at
such time.
     “Series A-2 Incremental Commitment” means, with respect to each Series A-2
Incremental Lender, the commitment of such Lender to make Series A-2 Incremental
Loans hereunder. The amount of each Series A-2 Incremental Lender’s Series A-2
Incremental Commitment is on record with the Administrative Agent. The aggregate
original amount of the Series A-2 Incremental Commitments is $150,000,000.
     “Series A-2 Incremental Lender” means on the date hereof, the Persons
listed on the signature pages hereto under the caption “Series A-2 Incremental
Lender”.
     “Series A-2 Incremental Loan Effective Date” means the date on which the
conditions specified in Article IV are satisfied (or waived by the Required
Series A-2 Incremental Lenders in accordance with Section 9.02).
     “Series A-2 Incremental Loans” means the Loans made to the Borrower
pursuant to this Agreement which shall constitute a single Series of Incremental
Loans under Section 2.01(d) of the Credit Agreement.
     “Target Company” means BII Holding Corporation, a corporation organized
under the laws of the State of Delaware.
ARTICLE II
SERIES A-2 INCREMENTAL LOANS
          Section 2.01. Series A-2 Incremental Commitments. Subject to the terms
and conditions set forth herein and in the Credit Agreement, each Series A-2
Incremental Lender agrees to make Series A-2 Incremental Loans to the Borrower,
in an aggregate principal amount equal to such Series A-2 Incremental Lender’s
Series A-2 Incremental Commitment. Proceeds of Series A-2 Incremental Loans
shall be used in accordance with Section 5.08 of the Credit Agreement, to pay
expenses related to the Acquisition, and to repay certain Indebtedness of the
Target Company.
          Section 2.02. Termination of Series A-2 Incremental Commitments.
Unless previously terminated, the Series A-2 Incremental Commitments shall
terminate after the borrowing of the Series A-2 Incremental Loans on the
Series A-2 Incremental Loan Effective Date.

 

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          Section 2.03. Repayment of Series A-2 Incremental Loans. The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the Series A-2 Incremental Lenders the outstanding principal amount
of the Series A-2 Incremental Loans on each Principal Payment Date set forth
below in the aggregate principal amount set forth opposite such Principal
Payment Date:

          Principal Payment Date   Principal Amount
Each of the Principal Payment Dates falling after the Amendment No. 1 Effective
Date and on or before the second anniversary of the Amendment No. 1 Effective
Date
  $ 1,875,000  
 
       
Each of the Principal Payment Dates falling after the second anniversary of the
Amendment No. 1 Effective Date and on or before the third anniversary of the
Amendment No. 1 Effective Date
  $ 3,750,000  
 
       
Each of the Principal Payment Dates falling after the third anniversary of the
Amendment No. 1 Effective Date and on or before the fourth anniversary of the
Amendment No. 1 Effective Date
  $ 7,500,000  
 
       
Each of the Principal Payment Dates falling after the fourth anniversary of the
Amendment No. 1 Effective Date and on or before the fifth anniversary of the
Effective Date
  $ 45,000,000  

To the extent not previously paid, all Series A-2 Incremental Loans shall be due
and payable on the Term Loan Maturity Date with respect to Tranche A Term Loans.
          Section 2.04. Applicable Rate. The “Applicable Rate” means, in the
case of any Type of Series A-2 Incremental Loans, applicable rate per annum set
forth below, based upon the Total Leverage Ratio as of the most recent
determination date:

                                      ABR   Eurodollar             Applicable  
Applicable   Commitment Category   Total Leverage Ratio   Rate   Rate   Fee Rate
1  
>4.25 to 1.00
    2.00 %     3.00 %     0.500 % 2  
>3.75 to 1.00 and £4.25 to 1.00
    1.75 %     2.75 %     0.500 % 3  
>3.25 to 1.00 and £3.75 to 1.00
    1.50 %     2.50 %     0.500 %

 

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                                      ABR   Eurodollar             Applicable  
Applicable   Commitment Category   Total Leverage Ratio   Rate   Rate   Fee Rate
4  
>2.50 to 1.00 and £3.25 to 1.00
    1.25 %     2.25 %     0.500 % 5  
<2.50 to 1.00
    1.00 %     2.00 %     0.375 %

          For purposes of the foregoing, (i) the Total Leverage Ratio shall be
Category 2 as of the Series A-2 Incremental Loan Effective Date, and shall
thereafter be determined as of the end of each fiscal quarter of the Borrower
(starting with its fiscal quarter ending nearest to December 30, 2010) based
upon the Borrower’s consolidated financial statements delivered pursuant to
Section 5.01(a) or (b) of the Credit Agreement and (ii) each change in the
Applicable Rate resulting from a change in the Total Leverage Ratio shall be
effective on the date 10 Business Days after delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Total Leverage Ratio shall be deemed to be in Category
1 (A) at any time that an Event of Default has occurred and is continuing and
(B) if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b) of the Credit
Agreement, during the period from the expiration of the time for delivery
thereof until such consolidated financial statements are delivered.
          Notwithstanding anything to the contrary contained in this definition,
the determination of the Applicable Rate for any period shall be subject to the
provisions of Section 2.12(f) of the Credit Agreement.
          Section 2.05. Status of Agreement. Series A-2 Incremental Commitments
of each Series A-2 Incremental Lender constitute Incremental Loan Commitments
and each Series A-2 Incremental Lender constitutes an Incremental Loan Lender,
in each case under and for all purposes of the Credit Agreement. The Series A-2
Incremental Loans constitute a single “Series” of Incremental Loans under
Section 2.01(d) of the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; NO DEFAULTS
          Borrower represents and warrants to the Administrative Agent and the
Lenders as to itself and each of its Restricted Subsidiaries that, after giving
effect to the provisions hereof, (i) each of the representations and warranties
set forth in the Credit Agreement and the other Loan Documents is true and
correct on and as of the date hereof as if made on and as of the date hereof
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, such representation or warranty is true and correct
as of such specific date) and as if each reference therein to the Credit
Agreement or Loan Documents included reference to this Agreement and (ii) no
Default has occurred and is continuing. All references herein to “the date
hereof” mean references to the date of the Credit Agreement.

 

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ARTICLE IV
CONDITIONS
          The obligation of each Series A-2 Incremental Lender to make its
Series A-2 Incremental Commitment is subject to the conditions precedent that
each of the following conditions shall have been satisfied (or waived by the
Required Series A-2 Incremental Lenders) on or prior to February 10, 2011:
     (a) Acquisition. Evidence that the Acquisition and transactions
contemplated thereby shall be consummated in all material respects
simultaneously in accordance with the Merger Agreement and applicable law; and
all closing documentation related to the Merger Agreement shall be reasonably
satisfactory to the Administrative Agent. The Acquisition shall have been
approved by the Board of Directors of the Borrower and the Target Company and
shall otherwise be regarded as a “friendly” acquisition.
     (b) Additional Subsidiaries. Evidence that requirements of Section 5.09(a)
of the Credit Agreement with respect to additional Subsidiaries have been
satisfied.
     (c) Opinions, Corporate Documentation. The Administrative Agent shall have
received such legal opinions, corporate documentation, certificates and similar
documents as shall be customary for a transaction of this type.
     (d) Fees and Expenses. Evidence that all fees and expenses have been paid
in full on or prior to the Closing Date to the Administrative Agent, BNP Paribas
Securities Corp. and the Lenders as the Borrower has agreed to pay in connection
with the increase of Series A-2 Incremental Commitments.
     (e) Ratings. The Borrower’s senior secured debt shall be rated by Standard
& Poor’s Ratings Services, a Division of the McGraw-Hill Companies, Inc. and
Moody’s Investors Service, Inc.
     (f) No Default. No Default or Event of Default under the Credit Agreement
shall have occurred and be continuing at the time of the increase of Series A-2
Incremental Commitments after giving effect to the Acquisition.
     (g) Representations and Warranties. The representations and warranties of
the Borrower set forth in the Credit Agreement shall be true and correct as of
such time (or, to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date),
provided that neither the Borrower nor any Guarantor shall be required to make
any such representation or warranty that is inaccurate (and the accuracy of any
such representation or warranty shall not constitute a condition precedent if
both (a) the Borrower shall have notified the Administrative Agent at least
three Business Days prior to the consummation of the Acquisition of which such

 

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representation or warranty it cannot make, and describing the inaccuracy in
reasonable detail, and (b) such inaccuracy is not materially adverse with
respect to (i) the properties, business, operations, or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower or any Guarantors to perform its payment and other
material obligations under the Loan Documents or (iii) the validity or
enforceability of any Loan Document or the rights and remedies of the Lenders
thereunder).
     (h) Counterparts of Agreement. The Administrative Agent (or Special
Counsel) shall have received from each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
     (i) Notes. The Administrative Agent (or Special Counsel) shall have
received for each Series A-2 Incremental Lender that shall have requested a
promissory note, a duly completed and executed promissory note for such
Series A-2 Incremental Lender.
     (j) Additional Conditions. Each of the conditions precedent set forth in
Sections 2.01(d) and 4.02(a) and (c) (giving effect to paragraph (h) of
Article IV hereof) of the Credit Agreement to the increase of Series A-2
Incremental Commitments and the making of Series A-2 Incremental Loans on the
Series A-2 Incremental Loan Effective Date shall have been satisfied, and the
Administrative Agent (or Special Counsel) shall have received a certificate to
such effect, dated the Series A-2 Incremental Loan Effective Date and signed by
the President, Vice President or a Financial Officer of the Borrower.
ARTICLE V
MISCELLANEOUS
          SECTION 6.01. Expenses. The Credit Parties jointly and severally agree
to pay, or reimburse BNP Paribas Securities Corp. for paying, all reasonable
out-of-pocket expenses incurred by BNP Paribas Securities Corp. and its
Affiliates, including the reasonable fees, charges and disbursements of Special
Counsel, in connection with the syndication of the Series A-2 Incremental
Commitments provided for herein and the preparation of this Agreement.
          SECTION 6.02. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement shall become
effective when this Agreement shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of

 

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this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
          SECTION 6.03. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
          SECTION 6.04. Headings. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
          SECTION 6.05. USA Patriot Act. Each Series A-2 Incremental Lender
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)),
such Series A-2 Incremental Lender may be required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such
Series A-2 Incremental Lender to identify the Borrower in accordance with said
Act.
[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

            THE GEO GROUP, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
Sr. VP & CFO     

 

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GUARANTORS
          By its signature below, the undersigned hereby consents to the
foregoing Series A-2 Incremental Loan Agreement and confirms that the Series A-2
Incremental Loans shall constitute “Guaranteed Obligations” under and as defined
in the Guarantee Agreement and shall be entitled to the benefits of the
Guarantee and security provided under Guarantee Agreement.

            CORRECTIONAL SERVICES CORPORATION
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:   VP
& Treasurer        CORRECTIONAL PROPERTIES PRISON FINANCE LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance        CPT LIMITED PARTNER, LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance        CPT OPERATING PARTNERSHIP L.P.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance        GEO ACQUISITION II, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance        GEO ACQUISITION IV, INC.
                       

 

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                  By:   /s/ Brian R. Evans         Name:   Brian R. Evans       
Title:   VP-Finance        GEO CARE, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
Treasurer        GEO HOLDINGS I, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance        GEO RE HOLDINGS LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
SVP & Treasurer        GEO TRANSPORT, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:   VP
& Treasurer        JUST CARE, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:   VP
& Treasurer        PUBLIC PROPERTIES DEVELOPMENT AND LEASING LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, Finance     

 

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            CORNELL COMPANIES, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CCG I CORPORATION
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL ABRAXAS GROUP, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL COMPANIES ADMINISTRATION, LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL COMPANIES MANAGEMENT, LP
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO     

 

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            CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL CORRECTIONS MANAGEMENT, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL CORRECTIONS OF ALASKA, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL CORRECTIONS OF CALIFORNIA, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL CORRECTIONS OF RHODE ISLAND, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORNELL CORRECTIONS OF TEXAS, INC.
                       

 

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                  By:   /s/ Brian R. Evans         Name:   Brian R. Evans       
Title:   VP, CFO        CORNELL INTERVENTIONS, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        CORRECTIONAL SYSTEMS, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        WBP LEASING, INC.
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO        WBP LEASING, LLC
      By:   /s/ Brian R. Evans         Name:   Brian R. Evans        Title:  
VP, CFO     

 

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            ADMINISTRATIVE AGENT

BNP PARIBAS,
    as Administrative Agent
      By:   /s/ Brendan Heneghan         Name:   Brendan Heneghan       
Title:   Vice President              By:   /s/ John Treadwell, Jr.        
Name:   John Treadwell, Jr.        Title:   Vice President     

 

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SERIES A-2 INCREMENTAL LENDERS SIGNATORIES HERETO*
 

*   Confidential terms omitted and provided separately to the Securities and
Exchange Commission.