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EXHIBIT 10.1
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this "Agreement"), dated July 25, 2001, is made
and entered into on the terms and conditions hereinafter set forth, by and among
AMERICA SERVICE GROUP INC., a Delaware corporation (the "Borrower"), the
subsidiaries of the Borrower who are parties to the Credit Agreement, as
hereinafter defined (the "Guarantors"), the several lenders who are now or
hereafter become parties to the Credit Agreement (the "Lenders"), and BANK OF
AMERICA, N.A., a national banking association ("Bank of America"), individually
and as administrative agent for the Lenders and the Issuing Bank (in such
capacity, the "Administrative Agent"), and as Issuing Bank.
RECITALS:
1. Pursuant to an Amended and Restated Credit Agreement dated as of
August 1, 2000, among the Borrower, the Guarantors, the Administrative Agent,
the Lenders and the Issuing Bank (as the same heretofore may have been and/or
hereafter may be amended, restated, supplemented, extended, renewed, replaced or
otherwise modified from time to time, the "Credit Agreement"), the Lenders have
agreed to make Loans and purchase participations in Letters of Credit issued for
the account of the Borrower, and the Issuing Bank has agreed to issue such
Letters of Credit, all as more specifically described in the Credit Agreement.
Capitalized terms used but not otherwise defined in this Agreement have the same
meanings as in the Credit Agreement.
2. The parties hereto believe that the Borrower and the Guarantors were
not in compliance with the requirements of Section 10.1.1 of the Credit
Agreement (Net Worth), Section 10.1.2 of the Credit Agreement (Fixed Charge
Coverage Ratio) and Section 10.1.3 of the Credit Agreement (Leverage Ratio) as
of the Fiscal Quarter ended June 30, 2001 (collectively, the "June 30 Defaults")
and anticipate that the Borrower and the Guarantors also may not be in
compliance with such requirements as of the Fiscal Quarter ending September 30,
2001 (collectively, the "September 30 Defaults"; the June 30 Defaults and the
September 30 Defaults are sometimes herein referred to collectively as the
"Specified Defaults").
3. The Borrower and the Guarantors have requested that the Lenders, the
Issuing Bank and the Administrative Agent waive the Specified Defaults, which
the Lenders, the Issuing Bank and the Administrative Agent are willing and have
agreed to do, subject to and upon all of the terms, conditions and provisions of
this Agreement.
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AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Waiver of Specified Defaults. Subject to and upon all of the terms,
conditions and provisions of this Agreement, the Lenders, the Issuing Bank and
the Administrative Agent hereby (a) waive the obligation of the Borrower and the
Guarantors to comply with the requirements of Section 10.1.1 of the Credit
Agreement (Net Worth), Section 10.1.2 of the Credit Agreement (Fixed Charge
Coverage Ratio) and Section 10.1.3 of the Credit Agreement (Leverage Ratio) as
of the Fiscal Quarters ending June 30, 2001 and September 30, 2001,
respectively, and (b) agree that they will not exercise remedies under the Loan
Documents in respect of the Specified Defaults.
2. EBITDA Requirements. It shall constitute an Event of Default if:
(a) EBITDA for the Fiscal Quarter ended June 30, 2001 (taking into
account any charges to Consolidated Net Income resulting from the
write-down of goodwill associated with the Asset Acquisition involving
Correctional Physician Services, Inc., a Pennsylvania corporation) is
in an amount that has a greater negative magnitude than ($26,500,000)
(i.e., negative twenty-six million five hundred thousand dollars), or
(b) EBITDA for each of the calendar months listed below is less than
the amount specified for such month:
July, 2001 $ 900,000
August, 2001 1,000,000
September, 2001 1,100,000
3. Delivery of Monthly Income Statements. While this Agreement is in
effect, a monthly income statement similar in format to the financial statements
and reports described in Section 8.1.3 of the Credit Agreement shall be
furnished by the Borrower and the Guarantors within twenty-one (21) days after
the end of each month.
4. Margins. Prior to the first Pricing Tier Determination Date
subsequent to the close of the Fiscal Quarter ending September 30, 2001, the
Applicable Base Rate Margin, the Applicable LIBOR Margin, the Applicable Letter
of Credit Fee Percentage and the Applicable Commitment Fee Percentage,
respectively, shall be as follows, notwithstanding the provisions of Section
2.13 of the Credit Agreement to the contrary:
Applicable Base Rate Margin 2.00%
Applicable LIBOR Margin 3.50%
Applicable Letter of Credit Fee Percentage 3.50%
Applicable Commitment Fee Percentage 0.50%
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5. Consultant's Examination and Report. At the expense of the Borrower
and the Guarantors, the Administrative Agent shall engage Pricewaterhouse
Coopers LLP or another firm of independent certified public accountants approved
by the Borrower, such approval not to be withheld unreasonably (the
"Consultant"), to examine and report on the Borrower's and the Guarantors'
financial projections, service contracts supporting the financial projections,
healthcare claim and expense reporting systems and IBNR ("incurred but not
reported") reserves, and such other matters regarding the business and affairs
of the Borrower and the Guarantors as the Administrative Agent reasonably may
specify.
6. Effectiveness. This Agreement shall be effective only upon execution
and delivery by the Borrower, the Guarantors, the Administrative Agent, the
Issuing Bank and Requisite Lenders.
7. Expiration. This Agreement and the waivers provided in Section 1
hereof shall expire and be of no further force nor effect on and as of the date
of the earliest to occur of the following:
(a) the occurrence of any Event of Default other than the Specified
Defaults,
(b) any date after August 15, 2001 on which the Administrative Agent
notifies the Borrower that the Consultant's report described in Section
5 hereof disclosed one or more matters regarding the Borrower or the
Guarantors that for any reason were unsatisfactory to the
Administrative Agent or Requisite Banks in any material respect, and
(c) September 20, 2001, if by that date the Borrower, the
Guarantors, the Issuing Bank and Requisite Lenders for any reason have
failed to agree upon, execute and deliver an amendment to the Credit
Agreement that is intended to address areas of noncompliance with the
Credit Agreement that exist or would exist but for this Agreement and
such amendment, including revisions to Article 10 of the Credit
Agreement taking into account the information contained in the
Consultant's report described in Section 5 hereof.
The parties hereto expressly acknowledge and agree that no party hereto is
hereby or otherwise obligated in any way to agree to any amendments to or
modifications of the Credit Agreement or any of the other Loan Documents, and
that the determination whether to agree to any such amendment or modification
shall be made by each party hereto in its sole and absolute discretion.
8. Representations and Warranties of the Borrower and the Guarantors.
As an inducement to the Administrative Agent, the Issuing Bank and the Lenders
to enter into this Agreement, the Borrower and the Guarantors hereby represent
and warrant to the Administrative Agent, the Issuing Bank and the Lenders that,
on and as of the date hereof:
(a) the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct, except for
(1) representations and
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warranties that expressly relate to an earlier date, which remain true
and correct as of said earlier date, and (2) representations and
warranties that have become untrue or incorrect solely because of
changes permitted by the terms of the Credit Agreement and the other
Loan Documents, and
(b) no Default or Event of Default other than the Specified Defaults
has occurred and is continuing.
9. Effect of Agreement; Continuing Effectiveness of Credit Agreement
and Loan Documents.
(a) The agreements of the Administrative Agent, the Issuing Bank and
the Lenders contained herein are limited strictly as herein set forth,
and shall not extend nor be deemed to extend to any other Default that
may now exist or hereafter arise under the Credit Agreement or any of
the other Loan Documents, whether similar to or dissimilar from the
Specified Defaults, and nothing contained herein shall impair, restrict
or limit any right or remedy of the Administrative Agent, the Issuing
Bank or the Lenders with respect to any such other Default. Neither
this Agreement nor any other indulgences that may have been granted to
the Borrower or any of the Guarantors by the Administrative Agent, the
Issuing Bank or any Lender shall constitute a course of dealing or
otherwise obligate the Administrative Agent, the Issuing Bank or any
Lender to modify, expand or extend the agreements contained herein or
to grant any other consent to, waiver of or indulgence with respect to
any other noncompliance with any provision of the Loan Documents.
(b) This Agreement shall constitute a Loan Document for all purposes
of the Credit Agreement and the other Loan Documents. Any noncompliance
by the Borrower or any Guarantor with any of the covenants, terms,
conditions or provisions of this Agreement shall constitute an Event of
Default. Except to the extent compliance with the provisions thereof
has been waived hereby, the Credit Agreement, the other Loan Documents
and all terms, conditions and provisions thereof shall continue in full
force and effect in all respects.
10. Counterparts. This Agreement may be executed in multiple
counterparts or copies, each of which shall be deemed an original hereof for all
purposes. One or more counterparts or copies of this Agreement may be executed
by one or more of the parties hereto, and some different counterparts or copies
executed by one or more of the other parties. Each counterpart or copy hereof
executed by any party hereto shall be binding upon the party executing same even
though other parties may execute one or more different counterparts or copies,
and all counterparts or copies hereof so executed shall constitute but one and
the same agreement. Each party hereto, by execution of one or more counterparts
or copies hereof, expressly authorizes and directs any other party hereto to
detach the signature pages and any corresponding acknowledgment, attestation,
witness or similar pages relating thereto from any such counterpart or copy
hereof executed by the authorizing party and affix same to one or more other
identical counterparts or copies hereof so that upon execution of multiple
counterparts or copies hereof by all parties hereto, there shall be one or more
counterparts or copies hereof to
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which is (are) attached signature pages containing signatures of all parties
hereto and any corresponding acknowledgment, attestation, witness or similar
pages relating thereto.
11. Miscellaneous.
(a) This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Tennessee, without reference to the
conflicts or choice of law principles thereof.
(b) The headings in this Agreement and the usage herein of defined
terms are for convenience of reference only, and shall not be construed as
amplifying, limiting or otherwise affecting the substantive provisions hereof.
(c) Any reference herein to any instrument, document or agreement,
by whatever terminology used, shall be deemed to include any and all amendments,
modifications, supplements, extensions, renewals, substitutions and/or
replacements thereof as the context may require.
(d) When used herein, (1) the singular shall include the plural, and
vice versa, and the use of the masculine, feminine or neuter gender shall
include all other genders, as appropriate, (2) "include", "includes" and
"including" shall be deemed to be followed by "without limitation" regardless of
whether such words or words of like import in fact follow same, and (3) unless
the context clearly indicates otherwise, the disjunctive "or" shall include the
conjunctive "and".
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
BORROWER:
AMERICA SERVICE GROUP INC.
a Delaware corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
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GUARANTORS:
PRISON HEALTH SERVICES, INC.
a Delaware corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
PRISON HEALTH SERVICES OF INDIANA, L.L.C.
an Indiana limited liability company
BY: PRISON HEALTH SERVICES, INC.
a Delaware corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice
President and Chief Financial Officer
Being the duly authorized General Manager
thereof.
EMSA GOVERNMENT SERVICES, INC.
a Florida corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
EMSA CORRECTIONAL CARE, INC.
a Florida corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
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EMSA MILITARY SERVICES, INC.
a Florida corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
EMSA LIMITED PARTNERSHIP
a Florida limited partnership
BY: EMSA CORRECTIONAL CARE, INC.
a Florida corporation
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice
President and Chief Financial
Officer
Being the duly authorized General Partner
thereof.
CORRECTIONAL HEALTH SERVICES, INC.
a New Jersey corporation
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Senior Vice President
SECURE PHARMACY PLUS, INC.
By: /s/ X. Xxxxxx Choppin
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X. Xxxxxx Choppin, Senior Vice President
and Chief Financial Officer
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ADMINISTRATIVE AGENT, LENDER AND ISSUING
BANK:
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxxxx X. Xxxx
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Title: Senior Vice President
LENDERS:
AMSOUTH BANK,
as a Lender and as a Co-Agent
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Vice President
XXXXXX TRUST AND SAVINGS BANK
as a Lender and as a Co-Agent
By: /s/ Xxxxxx Xxxxxxx-Xxxxxxxx
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Title: Vice President
COMERICA BANK
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Vice President
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