Amended and Restated Credit Agreement
On April 30, 2018, GEO entered into Amendment No. 1 to Third Amended and Restated Credit Agreement (the Credit Agreement) by and among
the refinancing lenders party thereto, the other lenders party thereto, GEO and GEO Corrections Holdings, Inc. and BNP Paribas, as administrative agent. The amendment, among other things, provides for the refinancing of all of GEOs existing
senior secured term loans with refinancing term loans in the aggregate principal amount of $792.0 million and makes certain other modifications to GEOs senior secured credit agreement. The interest rate applicable to the refinancing term
loans is equal to LIBOR plus 2.00% (with a LIBOR floor of 0.75%). The amendment was considered to be a modification and loan costs of approximately $1.0 million were incurred and capitalized in connection with the transaction.
The Credit Agreement evidences a credit facility (the Credit Facility) consisting of the $792.0 million term loan discussed above (the
Term Loan) bearing interest at LIBOR plus 2.00% (with a LIBOR floor of 0.75%), and a $900.0 million Revolver initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD275 million available solely for
the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars under the Australian Dollar Letter of Credit Facility (the Australian LC Facility). As of March 31, 2019,
there were no letters of credit issued under the Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Term Loan component is scheduled to mature on
March 23, 2024. The revolving credit commitment component is scheduled to mature on May 19, 2021. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and
satisfying the relevant borrowing conditions.
The Credit Agreement contains certain customary representations and warranties, and certain customary
covenants that restrict GEOs ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions
and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 6.25 to 1.00, allow the
senior secured leverage ratio to exceed 3.50 to 1.00, or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes,
except as permitted, (x) alter the business GEO conducts, and (xi) materially impair GEOs lenders security interests in the collateral for its loans.
Events of default under the Credit Agreement include, but are not limited to, (i) GEOs failure to pay principal or interest when due,
(ii) GEOs material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material
indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims asserted against GEO, and (viii) a change in control.
All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the
related guarantees are secured by a perfected first-priority pledge of substantially all of GEOs present and future tangible and intangible domestic assets and all present and future tangible and intangible domestic assets of each guarantor,
including but not limited to a first-priority pledge of all of the outstanding capital stock owned by GEO and each guarantor in their domestic subsidiaries.
GEO Australasia Holdings Pty Ltd, GEO Australasia Finance Holdings Pty Ltd as trustee for the GEO Australasia Finance Holding Trust, and together with GEO
Australasia Holdings, collectively (the Australian Borrowers) are wholly owned foreign subsidiaries of GEO. GEO has designated each of the Australian Borrowers as restricted subsidiaries under the Credit Agreement. However, the
Australian Borrowers are not obligated to pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any of their assets to
secure any obligations under the Credit Agreement.
On August 18, 2016, the Company executed a Letter of Offer by and among GEO and HSBC Bank
Australia Limited (the Letter of Offer) providing for a bank guarantee line and bank guarantee/standby
sub-facility
in an aggregate amount of approximately AUD100 million, or
$71.0 million, based on exchange rates in effect as of March 31, 2019 (collectively, the Bank Guarantee Facility). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations
of its wholly owned subsidiary relating to its correctional facility in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the
satisfaction of the conditions precedent specified in the Letter of Offer. Letters of credit issued under the bank
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