EXHIBIT 10.23
EXECUTION COPY
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CORNELL CORRECTIONS, INC.
and
SUBSIDIARY GUARANTORS
-----------------------------
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 31, 1997
------------------------------
ING (U.S.) CAPITAL CORPORATION,
as Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience of reference only.
PAGE
Section 1. Definitions and Accounting Matters.........................................1
1.01 Certain Defined Terms......................................................1
1.02 Accounting Terms and Determinations.......................................13
1.03 Classes and Types of Loans................................................14
Section 2. Commitments, Loans, Notes and Prepayments.................................14
2.01 Loans.....................................................................14
2.02 Borrowings of Loans.......................................................14
2.03 Changes of Commitments....................................................14
2.04 Commitment Fee............................................................14
2.05 Lending Offices...........................................................15
2.06 Several Obligations; Remedies Independent.................................15
2.07 Notes.....................................................................15
2.08 Optional Prepayments and Conversions or Continuations of Loans............15
2.09 Mandatory Prepayments.....................................................15
2.10 Letters of Credit.........................................................17
Section 3. Payments of Principal and Interest........................................20
3.01 Repayment of Loans........................................................20
3.02 Interest..................................................................20
Section 4. Payments; Pro Rata Treatment; Computations; Etc...........................20
4.01 Payments..................................................................20
4.02 Pro Rata Treatment........................................................21
4.03 Computations..............................................................21
4.04 Minimum Amounts...........................................................21
4.05 Certain Notices...........................................................21
4.06 Non-Receipt of Funds by the Agent.........................................22
4.07 Sharing of Payments, Etc..................................................23
Section 5. Yield Protection, Etc.....................................................23
5.01 Additional Costs..........................................................23
5.02 Limitation on Types of Loans..............................................25
5.03 Illegality................................................................26
5.04 Treatment of Eurodollar Loans.............................................26
5.05 Compensation..............................................................26
5.06 Substitution of Lenders...................................................27
5.07 Additional Costs in Respect of Letters of Credit..........................27
Section 6. Guarantee.................................................................28
6.01 The Guarantee.............................................................28
6.02 Obligations Unconditional.................................................28
6.03 Reinstatement.............................................................28
6.04 Subrogation...............................................................29
6.05 Remedies..................................................................29
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6.06 Instrument for the Payment of Money.......................................29
6.07 Continuing Guarantee......................................................29
6.08 Rights of Contribution....................................................29
6.09 General Limitation on Guarantee Obligations...............................30
Section 7. Conditions Precedent......................................................30
7.01 Effectiveness of Second Amendment and Restatement.........................30
7.02 Capital Expenditures; Eligible Acquisitions...............................31
7.03 Initial and Subsequent Extensions of Credit...............................34
Section 8. Representations and Warranties............................................34
8.01 Corporate Existence.......................................................34
8.02 Financial Condition.......................................................34
8.03 Litigation................................................................35
8.04 No Breach.................................................................35
8.05 Action....................................................................35
8.06 Approvals.................................................................35
8.07 Use of Credit.............................................................35
8.08 ERISA.....................................................................35
8.09 Taxes.....................................................................35
8.10 Investment Company Act....................................................36
8.11 Public Utility Holding Company Act........................................36
8.12 Material Agreements and Liens.............................................36
8.13 Environmental Matters.....................................................36
8.14 Capitalization............................................................38
8.15 Subsidiaries, Etc.........................................................38
8.16 Title to Assets...........................................................38
8.17 True and Complete Disclosure..............................................38
8.18 Real Property.............................................................39
Section 9. Covenants of the Company..................................................39
9.01 Financial Statements; Etc.................................................39
9.02 Litigation................................................................42
9.03 Existence, Etc............................................................42
9.04 Insurance.................................................................42
9.05 Prohibition of Fundamental Changes........................................44
9.06 Limitation on Liens.......................................................44
9.07 Indebtedness..............................................................45
9.08 Investments...............................................................45
9.09 Dividend Payments.........................................................46
9.10 EBITDA Ratio I............................................................46
9.11 EBITDA Ratio I I..........................................................46
9.12 Net Worth.................................................................47
9.13 Interest Coverage Ratio...................................................47
9.14 Fixed Charges Ratio.......................................................47
9.15 Capital Expenditures......................................................48
9.16 [INTENTIONALLY DELETED]...................................................48
9.17 Sale Lease-back Transactions..............................................48
9.18 Discount of Accounts......................................................48
9.19 Interest Rate Protection Agreements.......................................48
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9.20 Lines of Business.........................................................48
9.21 Transactions with Affiliates..............................................48
9.22 Use of Proceeds...........................................................48
9.23 Certain Obligations Respecting Subsidiaries...............................49
9.24 Modifications of Certain Documents........................................49
9.25 Post-closing Real Property................................................49
9.26 The Xxxxxxx Xxx Group, L.P................................................50
Section 10. Events of Default.........................................................50
Section 11. The Agent.................................................................53
11.01 Appointment, Powers and Immunities........................................53
11.02 Reliance by Agent.........................................................53
11.03 Defaults..................................................................53
11.04 Rights as a Lender........................................................54
11.05 Indemnification...........................................................54
11.06 Non-Reliance on Agent and Other Lenders...................................54
11.07 Failure to Act............................................................54
11.08 Resignation or Removal of Agent...........................................54
11.09 Consents under Other Basic Documents......................................55
Section 12. Miscellaneous.............................................................55
12.01 Waiver....................................................................55
12.02 Notices...................................................................55
12.03 Expenses, Etc.............................................................55
12.04 Amendments, Etc...........................................................56
12.05 Successors and Assigns....................................................56
12.06 Assignments and Participations............................................57
12.07 Survival..................................................................58
12.08 Captions..................................................................58
12.09 Counterparts..............................................................58
12.10 Governing Law; Submission to Jurisdiction.................................58
12.11 Waiver of Jury Trial......................................................58
12.12 Confidentiality...........................................................58
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Real Property
SCHEDULE V - Capital Stock, Equity Rights and Registration Rights
SCHEDULE VI - Existing Property, Indebtedness and Liabilities of The
Xxxxxxx Xxx Group, L.P.
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Opinion of Texas Counsel to the Obligors
EXHIBIT B-2 - Form of Opinion of New York Counsel to ING
EXHIBIT C - Form of Confidentiality Agreement
EXHIBIT D - Form of Assignment Agreement
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October
31, 1997 (this "AGREEMENT") among: CORNELL CORRECTIONS, INC., a corporation duly
organized and validly existing under the laws of the State of Delaware (the
"COMPANY"); each of the Subsidiaries of the Company identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto (individually, a
"SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY GUARANTORS"; and the
Subsidiary Guarantors collectively with the Company, the "OBLIGORS"); each of
the lenders that is a signatory hereto identified under the caption "LENDERS" on
the signature pages hereto or that, pursuant to Section 12.06(b) hereof, shall
become a "Lender" hereunder (individually, a "LENDER" and, collectively, the
"LENDERS"); and ING (U.S.) CAPITAL CORPORATION, a Delaware corporation, as agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "AGENT").
The Company, the Agent and certain of the Lenders are parties to
an Amended and Restated Credit Agreement, dated as of July 3, 1996 (the "AMENDED
AND RESTATED CREDIT AGREEMENT") as amended by Amendment No. 1 dated December 1,
1996 and Amendment No. 2 dated September 9, 1997 (collectively, such amendments
are referred to herein as the "AMENDMENTS"), and the Company, the Agent and the
Lenders wish to amend and restate the Amended and Restated Credit Agreement to
incorporate the terms of the Amendments into a single document and to amend the
Amended and Restated Credit Agreement in certain other respects. Accordingly,
the Company, the Agent and the Lenders agree that, subject to the terms and
conditions of this Agreement, the Amended and Restated Credit Agreement is
hereby amended and restated in its entirety to read as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):
"AFFILIATE" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "CONTROL" (including, with its correlative meanings,
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise). Notwithstanding the foregoing,
(a) no individual shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Company or any of its Subsidiaries, (b)
none of the Wholly Owned Subsidiaries of the Company shall be Affiliates and (c)
neither the Agent nor any of the Lenders shall be an Affiliate.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of
such Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Company as the office
by which its Loans of such Type are to be made and maintained.
"APPLICABLE MARGIN" shall mean 0.50% for Base Rate Loans and
2.50% for Eurodollar Loans; PROVIDED that if EBITDA Ratio II as at the last day
of any fiscal quarter of the Company shall fall within any of the ranges set
forth in Schedule A below then, subject to the delivery to the Agent of a
certificate of a senior financial officer of the Company demonstrating such
fact, the "Applicable Margin" shall be reduced to the applicable percentage set
forth in Schedule A below opposite such range (where "x" is EBITDA Ratio II) as
of the fifth Business Day following delivery of such certificate through the
fifth Business Day following the date of delivery of such a certificate with
respect to the next succeeding fiscal quarter (except that notwithstanding the
foregoing, the Applicable Margin shall not as a consequence of this PROVISO be
reduced at any time during which a Default shall have occurred and be
continuing):
Schedule A
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APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR LOANS
LOANS THAT ARE THAT ARE
EBITDA RATIO II BASE RATE LOANS EURODOLLAR LOANS
--------------- --------------- ----------------
x < or = 2.00 0.00% 1.75%
2.00 < x < or = 2.75 0.00% 2.00%
2.75 < x < or = 3.25 0.25% 2.25%
3.25 < x 0.50% 2.50%
"BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978,
as amended from time to time.
"BASE RATE" shall mean, for any day, a rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"BASE RATE LOANS" shall mean Loans that bear interest at rates
based upon the Base Rate.
"BASIC DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, the Security Documents and the Letter of Credit Documents.
"BUSINESS DAY" shall mean (a) any day on which commercial banks
are not authorized or required to close in New York City or Houston, Texas and
(b) if such day relates to a borrowing of, a payment or prepayment of principal
of or interest on, a Conversion of or into, or an Interest Period for, a
Eurodollar Loan or a notice by the Company with respect to any such borrowing,
payment, prepayment, Conversion or Interest Period, any day on which dealings in
Dollar deposits are carried out in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant, furniture, fixtures
and equipment (including renewals, improvements and replacements thereof, but
excluding repairs made in the ordinary course of business) during such period
computed in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CASUALTY EVENT" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"CLOSING DATE" shall mean the date hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
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"COLLATERAL ACCOUNT" shall have the meaning assigned to such term
in Section 4.1 of the Security Agreement.
"COMMITMENT" shall mean, for each Lender, the obligation of such
Lender to make Loans in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the name of
such Lender on the signature pages hereof under the caption "Commitment" (as the
same may be reduced from time to time pursuant to Section 2.03 hereof). The
original aggregate principal amount of the Commitments is $60,000,000.
"COMMITMENT PERCENTAGE" shall mean, with respect to any Lender,
the ratio of (a) the amount of the Commitment of such Lender to (b) the
aggregate amount of the Commitments of all of the Lenders."
"COMMITMENT REDUCTION DATES" shall mean the Quarterly Dates,
commencing with the last Business Day of September 2000 through and including
the last Business Day of December 2002.
"COMMITMENT TERMINATION DATE" shall mean the Business Day
immediately preceding March 31, 2003.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a
conversion pursuant to Section 2.08 hereof of one Type of Loan into another Type
of Loan, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"CORRECTIONAL AND DETENTION FACILITY CONTRACT" shall mean any
contract with a municipal, state or federal government, or agency,
instrumentality or political subdivision thereof, relating to the management by
the Company or its Subsidiaries of a correctional and/or detention facility or
to other related lines of business, as amended or modified from time to time.
"DEBT SERVICE" shall mean, for any period, the sum, for the
Company and its Subsidiaries, other than any Designated Subsidiaries (determined
on a consolidated basis without duplication in accordance with GAAP), of the
following: (a) all payments of principal of Indebtedness (including, without
limitation, the principal component of any payments in respect of Capital Lease
Obligations) scheduled to be made during such period PLUS (b) all Interest
Expense for such period.
"DEFAULT" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"DESIGNATED SUBSIDIARY" shall mean one or more newly-created
Subsidiaries of the Company, designated by the Company to the Agent in writing,
which are organized for the sole purpose of constructing and operating (a) a
512-bed addition to the Company's prison complex located in Big Spring, Texas
and (b) a 550-bed prison in Charlton County, Georgia.
"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries (other than any Designated Subsidiary) to any
other Person excluding any sale, assignment, transfer or other disposition of
any Property sold or disposed of in the ordinary course of business and on
commercially reasonable terms.
"DIVIDEND PAYMENT" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments,
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where the amount thereof is calculated with reference to the fair market or
equity value of the Company or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of the Company.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum of the following for
the Company and its Subsidiaries, other than any Designated Subsidiaries
(determined without duplication in accordance with GAAP):
(a) net income for such period, LESS extraordinary gains for such
period to the extent included in net income for such period, PLUS
(b) Interest Expense for such period, PLUS
(c) provisions for federal, state, local and foreign income taxes
(other than taxes on extraordinary gains), whether paid or deferred,
made during such period, to the extent deducted in determining net
income for such period, PLUS
(d) the aggregate amount of depreciation and amortization expense
for such period, to the extent deducted in determining net income for
such period, PLUS
(e) the aggregate amount of (i) accretion expense with respect to
options or rights to acquire the Company's common stock and (ii) any
write-off of expenses arising in connection with the Loans, in each case
to the extent deducted in determining net income for such period, PLUS
(f) the net income of any Person that is accounted for by the
equity method of accounting, but only to the extent of dividends paid to
the Company or any of its Subsidiaries, PLUS
(g) the aggregate amount of non-cash expense for such period
associated with the closure and post-closure reserves of a plant or
facility owned by the Company or any of its Subsidiaries, PLUS
(h) the aggregate amount of all other non-cash expenses for such
period, to the extent not specifically described above in this
definition;
PROVIDED, that with respect to:
(i) any Eligible Acquisition made during such period, "EBITDA"
shall include the actual EBITDA attributable to the business acquired in
such Eligible Acquisition for the 12 month period ending on the last day
of such period, including, if necessary, EBITDA prior to consummation of
such Eligible Acquisition (and may reflect Pro Forma Adjustments); and
(ii) any Eligible New Contract entered into by the Company or any
of its Subsidiaries (other than any Designated Subsidiary) during such
period, "EBITDA" shall include the following:
(x) if the Company or such Subsidiary has provided
services pursuant to such Eligible New Contract for less than
three calendar months, an amount equal to the estimated "EBITDA"
attributable to the operations resulting from such Eligible New
Contract (and may reflect Pro Forma Adjustments) for the 12-month
period beginning on the date on which the Company or such
Subsidiary began providing services pursuant to such Eligible New
Contract, or
(y) if the Company or such Subsidiary has provided
services pursuant to such Eligible New Contract for three
calendar months or more, an amount equal to actual EBITDA
attributable to the operations resulting from such Eligible New
Contract for each complete month that has elapsed
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since the date such Eligible New Contract was entered into (such
amount to be annualized so that it represents the equivalent of
12 months of EBITDA).
"EBITDA RATIO I" shall mean, at any date, the ratio of the
following:
(a) all Indebtedness of the Obligors on such date (other than
(x) Indebtedness of any Designated Subsidiary that is an Obligor, and
(y) additional Indebtedness incurred in connection with an Eligible
Acquisition (except for any Indebtedness hereunder) to the extent that
the Majority Lenders have consented to the incurrence of such
Indebtedness), to
(b) EBITDA for the period of 12 consecutive months ending on or
most recently ended prior to such date.
"EBITDA RATIO II" shall mean, at any date, the ratio of the
following:
(a) all Indebtedness of the Obligors on such date (other than
Indebtedness of any Designated Subsidiary that is an Obligor), to
(b) EBITDA for the period of 12 consecutive months ending on or
most recently ended prior to such date.
"ELIGIBLE ACQUISITION" shall mean any acquisition by any Obligor
(regardless of the structure of the transaction) of the capital stock of, or all
or substantially all of the assets of, any Person (or of a line of business or
business segment of any Person) that was, immediately prior to such acquisition,
engaged primarily in the business of operating correctional and/or detention
facilities, substance abuse rehabilitation facilities or related lines of
business.
"ELIGIBLE NEW CONTRACT" shall mean any acquired (or to be
acquired) Correctional and Detention Facility Contract, a newly executed
Correctional and Detention Facility Contract, an amendment to an existing
Correctional and Detention Facility Contract or an expansion under an existing
Correctional and Detention Facility Contract.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"CLAIM") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAWS" shall mean any and all applicable, currently
published and enforceable Federal, state, local and foreign laws, codes, rules
or regulations, and any orders, decrees, judgments or injunctions binding upon
Obligors, relating to the regulation or protection of human health, worker
safety and protection or the environment or to emissions, discharges, releases
or threatened releases of Hazardous Materials into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
"EQUITY ISSUANCE" shall mean (a) any issuance or sale by the
Company or any of its Subsidiaries after the Closing Date of (i) any capital
stock, (ii) any warrants or options exercisable in respect of capital stock
(other than
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any warrants or options issued to directors, officers or employees of the
Company or any of its Subsidiaries pursuant to the Incentive Compensation Plan
and any capital stock of the Company issued upon the exercise of such warrants
or options or (iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the Company or any of
its Subsidiaries or (b) the receipt by the Company or any of its Subsidiaries
after the Closing Date of any capital contribution (whether or not evidenced by
any equity security issued by the recipient of such contribution); PROVIDED that
Equity Issuance shall not include (A) any such issuance or sale by any
Subsidiary of the Company to the Company or any Wholly Owned Subsidiary of the
Company, or (B) any capital contribution by the Company or any Wholly Owned
Subsidiary of the Company to any Subsidiary of the Company.
"EQUITY RIGHTS" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.
"EURODOLLAR LOANS" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Rate" in this
Section 1.01.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%), reported, at 11:00 a.m. (London time) on
the date two Business Days prior to the first day of such Interest Period, on
Telerate Access Service Page 3750 (British Bankers Association Settlement Rate)
as the London Interbank Offered Rate for Dollar deposits having a term
comparable to such Interest Period and in an amount equal to or greater than
$1,000,000.
"EVENT OF DEFAULT" shall have the meaning assigned to such term
in Section 10 hereof.
"EXCESS CASH FLOW" shall mean, for any period, the excess of:
(a) the sum of the following (without duplication): (i) EBITDA
for such period (calculated without reference to the PROVISO at the end
of the definition thereof in Section 1.01 hereof), PLUS (ii) proceeds of
business interruption or similar insurance received during such period,
PLUS (iii) decreases in Working Capital of the Obligors for such period,
PLUS (iv) all tax refunds received by the Obligors in cash during such
period, OVER
(b) the sum of the following (without duplication): (i) Debt
Service for such period, PLUS (ii) Capital Expenditures made during such
period, PLUS (iii) increases in Working Capital of the Obligors for such
period, PLUS (iv) the aggregate amount of cash taxes actually paid by
the Obligors during such period.
For purposes of this definition of "Excess Cash Flow," "WORKING CAPITAL" shall
have the meaning given to that term by GAAP, PROVIDED that Working Capital shall
not include any Loans or any current maturities of any long-term debt.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal
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Reserve Bank of New York on the Business Day next succeeding such day, PROVIDED
that (a) if the day for which such rate is to be determined is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day and (b) if such rate is not so published for any Business Day, the
Federal Funds Rate for such Business Day shall be the average of quotations for
such day on transactions, received by the Agent (or any of its Affiliates) from
three federal funds brokers of recognized standing selected by it.
"FIXED CHARGES RATIO" shall mean, as at any date, the ratio of:
(a) the sum of (i) EBITDA for the period of 12-consecutive months
ending on or most recently ended prior to such date, MINUS (ii) Capital
Expenditures made by the Company and its Subsidiaries during such Period
to the extent not financed with the proceeds of Loans, MINUS (iii) taxes
paid in cash during such period, TO
(b) Debt Service for such period.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.
"GUARANTEE" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall
have a correlative meaning.
"HAZARDOUS MATERIAL" shall mean, collectively, (a) any petroleum
or petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and polychlorinated biphenyls
("PCB'S") and (b) any chemicals or other materials or substances that are
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", or any similar
denomination intended to classify substances by reason of toxicity,
carcinogenicity, ignitability, corrosivity or reactivity; but shall not include
naturally occurring materials existing in background conditions.
"IMPERMISSIBLE QUALIFICATION" shall mean any qualification,
exception or other statement in any opinion or certification of any independent
public accounts which either (a) is of a "going concern" or similar nature; or
(b) relates to the limited scope of examination of matters relevant to the
financial statements referred to in such opinion or certification.
"INCENTIVE COMPENSATION PLAN" shall mean a plan established by
the Company for the benefit of certain of its employees, or any other written
agreement to which the Company is a party, providing for the issuance to
employees of warrants or options in respect of the Company's capital stock,
PROVIDED that (a) the aggregate amount of capital stock that such warrants and
options would represent if exercised cannot exceed 20% of aggregate amount of
the Company's capital stock that would then be outstanding and (b) all other
terms and conditions of such plan or other written agreement shall be
satisfactory to the Majority Lenders.
"INDEBTEDNESS" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person
-7-
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; and (f) Indebtedness of others
Guaranteed by such Person.
"ING" shall mean ING (U.S.) Capital Corporation.
"INTEREST COVERAGE RATIO" shall mean, as of any date, the ratio
of (a) EBITDA for the period of 12 consecutive months ending on or most recently
ended prior to such date to (b) Interest Expense for such period.
"INTEREST EXPENSE" shall mean, for any period, the sum, for the
Company and its Subsidiaries, other than any Designated Subsidiaries (determined
on a consolidated basis without duplication in accordance with GAAP), of the
following: (a) all interest in respect of Indebtedness (including, without
limitation, the interest component of any payments in respect of Capital Lease
Obligations) accrued or capitalized during such period (whether or not actually
paid during such period), PLUS (b) the net amount payable (or MINUS the net
amount receivable) under Interest Rate Protection Agreements during such period
(whether or not actually paid or received during such period), MINUS (c) direct
reimbursements received by an Obligor during such period by a party to a
Correctional and Detention Facility Agreement, to the extent that such
reimbursements relate to interest expense of the Company or one of its
Subsidiaries (other than a Designated Subsidiary).
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is made or
Converted from a Base Rate Loan or the last day of the immediately preceding
Interest Period for such Loan and ending on the numerically corresponding day in
the first, second, third or sixth month thereafter, as the Company may select as
provided in Section 4.05 hereof (or such longer period as may be requested by
the Company and agreed to by all of the Lenders), except that each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest
Period for any Loan would otherwise end after the Commitment Termination Date,
such Interest Period shall not be available; (ii) no Interest Period may
commence before and end after any Commitment Reduction Date unless, after giving
effect thereto, the aggregate principal amount of Loans having Interest Periods
that end after such Commitment Reduction Date shall be equal to or less than the
aggregate principal amount of Loans scheduled be outstanding after giving effect
to the payments of principal required to be made on such Commitment Reduction
Date, and (iii) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next succeeding Business Day (or, if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day).
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding
-8-
90 days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business); (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Interest Rate Protection Agreement.
"LETTER OF CREDIT" shall have the meaning assigned to such term
in Section 2.10 hereof.
"LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any
Letter of Credit, collectively, any application therefor any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.
"LETTER OF CREDIT INTEREST" shall mean, for each Lender, such
Lender's participation interest (or, in the case of the Letter of Credit Issuer,
its retained interest) in the Letter of Credit Issuer's liability under Letters
of Credit and such Lender's rights and interests in Reimbursement Obligations
and fees, interest and other amounts payable in connection with Letters of
Credit and Reimbursement Obligations.
"LETTER OF CREDIT ISSUER" shall mean ING as the issuer of Letters
of Credit under Section 2.10 hereof, together with its successors in such
capacity.
"LETTER OF CREDIT LIABILITY" shall mean, without duplication, at
any time and in respect of any Letter of Credit, the sum of (a) the undrawn face
amount of such Letter of Credit, PLUS (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of the Company at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Letter of Credit Issuer) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation
interest in the related Letter of Credit under Section 2.10 hereof, and the
Letter of Credit Issuer shall be deemed to hold a Letter of Credit Liability in
an amount equal to its retained interest in the related Letter of Credit after
giving effect to the acquisition by the Lenders other than the Letter of Credit
Issuer of their participation interests under said Section 2.10.
"LIEN" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement and the other Basic Documents, a
Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"LOANS" shall mean the revolving credit loans provided for by
Section 2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"MAJORITY LENDERS" shall mean Lenders holding at least 51% of the
sum of (a) the aggregate unpaid principal amount of Loans PLUS (b) Lenders
having at least 51% of the aggregate amount of Commitments; PROVIDED THAT at all
times during which there are two or fewer Lenders, "Majority Lenders" shall mean
all Lenders.
"MARGIN STOCK" shall mean "margin stock" within the meaning of
Regulations G, U and X.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of any Obligor to perform its obligations under any of
the Basic Documents to which it is a party, (c) the validity or enforceability
of any of the Basic Documents, (d) the rights and remedies of the Lenders and
the Agent under any of the Basic Documents or (e) the timely payment of the
principal of or interest on the Loans, Reimbursement Obligations or other
amounts payable in connection therewith.
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"MONTHLY DATE" shall mean the last Business Day of each calendar
month.
"MORTGAGE" shall mean, in connection with any interest in real
property (whether a fee or a leasehold estate) acquired by any Obligor, an
Indenture or Instrument of Mortgage, Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing executed by such Obligor in favor of the
Agent and the Lenders (or, if applicable, in favor of a Trustee, for the benefit
of the Agent and the Lenders), in each case in form and substance satisfactory
to the Majority Lenders and covering such interest in real property, as said
instrument shall be modified and supplemented and in effect from time to time.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by the
Company or any ERISA Affiliate and that is covered by Title IV of ERISA.
"NET AVAILABLE PROCEEDS" shall mean:
(i) in the case of any Disposition, the amount of Net Cash
Payments received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate amount
of proceeds of insurance, condemnation awards and other compensation
received by the Company and its Subsidiaries in respect of such Casualty
Event net of (A) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith and (B) contractually required
repayments of Indebtedness to the extent secured by a Lien on such
Property and any income and transfer taxes payable by the Company or any
of its Subsidiaries in respect of such Casualty Event;
(iii) in the case of any incurrence of Indebtedness, the
aggregate amount of all cash received by the Company and its
Subsidiaries in respect of such incurrence net of fees and expenses
incurred by Company and its Subsidiaries in connection therewith; and
(iv) in the case of any Equity Issuance, the aggregate amount
of all cash received by the Company and its Subsidiaries in respect of
such Equity Issuance net of fees and expenses incurred by the Company
and its Subsidiaries in connection therewith.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition,
the aggregate amount of all cash payments, and the fair market value of any
non-cash consideration, received by the Company and its Subsidiaries directly or
indirectly in connection with such Disposition; PROVIDED that (a) Net Cash
Payments shall be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Company and its
Subsidiaries in connection with such Disposition and (ii) any federal, state,
local and foreign taxes estimated to be payable by the Company and its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority within three months of the date of such Disposition), (b)
Net Cash Payments shall be net of any repayments by the Company or any of its
Subsidiaries of Indebtedness to the extent that (i) such Indebtedness is secured
by a Lien on the Property that is the subject of such Disposition and (ii) the
transferee of (or holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the purchase of such Property and (c)
Net Cash Payments shall exclude the amount of any reasonable reserves
established by the Company or such Subsidiary, in accordance with GAAP, against
any liabilities retained by the Company or its Subsidiaries, which liabilities
are associated with the Property that is the subject of such Disposition (but
only during such period as such reserves are actually maintained), including
(without limitation) any indemnification obligations, pension and other
post-employment benefit liabilities, workers' compensation liabilities,
liabilities associated with retiree benefits, liabilities relating to
environmental matters and liabilities relating to any Guarantee of Indebtedness
secured by a Lien on such Property.
"NET WORTH" shall mean, as at any date for any Person, the sum
for such Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
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(a) the amount of capital stock; PLUS
(b) the amount of surplus and retained earnings (or, in the case
of a surplus or retained earnings deficit, MINUS the amount of such
deficit); PLUS
(c) any warrant accretion expense (as that term is used in GAAP)
or any original issue discount accretion expense (as such term is used
in GAAP) arising after the Closing Date, PLUS
(d) the value ascribed to any warrants issued to a Lender and the
cumulative effect of any change in the valuation of such warrants;
PROVIDED that any predecessor basis adjustment required under GAAP shall be
disregarded in calculating "Net Worth."
"NOTES" shall mean the promissory notes provided for by Section
2.07(a) hereof and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Corporation or Xxxxx'x Investors Services, Inc., respectively, maturing not more
than six months from the date of acquisition thereof; (d) commercial paper of
any Lender (or any Affiliate thereof located in the United States of America)
that is rated A-1 or better or P-1 by Standard and Poor's Corporation or Xxxxx'x
Investors Services, Inc., respectively, maturing not more than six months from
the date of acquisition thereof; (e) repurchase agreements entered into with any
Lender or with any bank or trust company satisfying the conditions of clause (b)
hereof that is secured by any obligation of the type described in clauses (a)
through (d) of this definition; and (f) money market funds acceptable to the
Majority Lenders.
"PERSON" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).
"PLAN" shall mean an employee benefit or other plan established
or maintained by the Company or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"POST-DEFAULT RATE" shall mean, in respect of any principal of
any Loan, any Reimbursement Obligation or any other amount under this Agreement,
any Note or any other Basic Document that is not paid when due (whether at
stated maturity, by acceleration, by optional or mandatory prepayment or
otherwise), a rate per annum during the period from and including the due date
to but excluding the date on which such amount is paid in full equal to 2% PLUS
the Base Rate as in effect from time to time PLUS the Applicable Margin for Base
Rate Loans (PROVIDED that, with respect to principal of a Eurodollar Loan, the
"Post-Default Rate" for such principal shall be, for the period from and
including such due date to but excluding the last day of such Interest Period,
2% PLUS the interest rate for such Loan as provided in Section 3.02 hereof and,
thereafter, the rate provided for above in this definition).
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"PRIME RATE" shall mean the arithmetic average of the rates of
interest publicly announced by The Chase Manhattan Bank, Citibank, N.A. and
Xxxxxx Guaranty Trust Company of New York (or their respective successors) as
their respective prime commercial lending rates (or, as to any such bank that
does not announce such a rate, such bank's "base" or other rate reasonably
determined by the Agent to be the equivalent rate announced by such bank),
EXCEPT THAT, if any such bank shall, for any period, cease to announce publicly
its prime commercial lending (or equivalent) rate, the Agent shall, during such
period, reasonably determine the "prime rate" based upon the commercial lending
(or equivalent) rates announced publicly by the other such banks.
"PRO FORMA ADJUSTMENTS" shall mean reasonable adjustments for (a)
non-recurring or extraordinary expenses, (b) operating efficiencies, (c) census
levels and (d) per diem rates.
"PROPERTY" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"QUARTERLY DATES" shall mean the last Business Day of March,
June, September and December in each year, the first of which shall be the first
such day after the date of this Agreement.
"REGULATIONS A, D, G, U AND X" shall mean, respectively,
Regulations A, D, G, U and X of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be modified and supplemented and in
effect from time to time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any
change after the date of this Agreement in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the adoption or
making after the date of this Agreement of any interpretation, directive or
request applying to a class of banks including such Lender of or under any
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"REIMBURSEMENT OBLIGATIONS" shall mean, at any time, the
obligations of the Company then outstanding, or that may thereafter arise in
respect of all Letters of Credit then outstanding, to reimburse amounts paid by
the Letter of Credit Issuer in respect of any drawings under a Letter of Credit.
"RELEASE" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"RELEVANT CONTRACT" shall have the meaning set forth in Section
7.02(a)(ii) hereof.
"RELEVANT TRANSACTION" shall have the meaning set forth in
Section 7.02(a) hereof.
"SECURITY AGREEMENT" shall mean the Security Agreement dated as
of March 14, 1995, as amended, between each Obligor and the Agent, as the same
shall be modified and supplemented and in effect from time to time.
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement, any Mortgage and all Uniform Commercial Code financing statements
required by this Agreement, the Security Agreement or any Mortgage to be filed
with respect to the security interests in personal Property and fixtures created
pursuant to the Security Agreement or any Mortgage.
"SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation,
-12-
partnership or other entity (irrespective of whether or not at the time
securities or other ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
"TYPE" shall have the meaning assigned to such term in Section
1.03 hereof.
"USE PERMIT" shall mean any permit issued by a municipal, state
or federal government, or agency, instrumentality or subdivision thereof, that
is required for the operation by the Company or its Subsidiaries of any
correctional or detention facility.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with generally accepted accounting principles applied on
a basis consistent with those used in the preparation of the latest financial
statements furnished to the Lenders hereunder (which, prior to the delivery of
the first financial statements under Section 9.01 hereof, shall mean the audited
financial statements as at December 31, 1996 referred to in Section 8.02
hereof). All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders pursuant to Section 9.01 hereof
(or, prior to the delivery of the first financial statements under Section 9.01
hereof, used in the preparation of the audited financial statements as at
December 31, 1996 referred to in Section 8.02 hereof) unless (i) the Company
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority Lenders shall so
object in writing within 30 days after delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 9.01 hereof,
shall mean the audited financial statements referred to in Section 8.02 hereof).
(b) The Company shall deliver to the Lenders at the same time as
the delivery of any annual or quarterly financial statement under Section 9.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 9 hereof, the Company will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30, September 30 and December 31 of each year, respectively.
1.03 CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to whether such Loan is a
Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type.
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Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.
2.01 LOANS.
(a) LOANS. Each Lender severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in Dollars during the
period from and including the Closing Date to but not including the Commitment
Termination Date in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount of the Commitment of such Lender as in effect
from time to time. Subject to the terms and conditions of this Agreement, during
such period the Company may borrow, repay and reborrow the amount of the
Commitments by means of Base Rate Loans and Eurodollar Loans and may Convert
Loans of one Type into Loans of the other Type (as provided in Section 2.08
hereof) or Continue Eurodollar Loans from one Interest Period to the next
Interest Period (as provided in Section 2.08 hereof), PROVIDED that in no event
shall the aggregate principal amount of all Loans, together with the aggregate
amount of all Letter of Credit Liabilities, exceed the aggregate amount of the
Commitments as in effect from time to time.
(b) LIMIT ON EURODOLLAR LOANS. No more than six separate Interest
Periods in respect of Eurodollar Loans from each Lender may be outstanding at
any one time.
2.02 BORROWINGS OF LOANS. The Company shall give the Agent notice
of each borrowing hereunder as provided in Section 4.05 hereof. Not later than
1:00 p.m. New York time on the date specified for each borrowing of Loans
hereunder, each Lender shall make available the amount of the Loan or Loans to
be made by it on such date to the Agent, at account number 9301035763 (ABA No.
000000000) maintained by the Agent with The Chase Manhattan Bank, in immediately
available funds, for account of the Company. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Company by depositing the same, in immediately available funds, in an
account of the Company maintained with a bank in New York City, Houston, Texas
or San Francisco, California, designated by the Company.
2.03 CHANGES OF COMMITMENTS.
(a) The aggregate amount of the Commitments shall automatically
be reduced (i) by $3,000,000 on each Commitment Reduction Date and (ii) to zero
on the Commitment Termination Date.
(b) The Company shall have the right at any time or from time to
time (i) so long as no Loans or Letter of Credit Liabilities are outstanding, to
terminate the Commitments and (ii) to reduce the aggregate unused amount of the
Commitments (for which purpose use of the Commitments shall be deemed to include
the aggregate amount of Letter of Credit Liabilities); PROVIDED that (x) the
Company shall give notice of each such termination or reduction as provided in
Section 4.05 hereof and (y) each partial reduction shall be in an aggregate
amount at least equal to (x) in the case of Base Rate Loans, $25,000 (or a
larger multiple of $25,000), and (y) in the case of Eurodollar Loans, $250,000
(or a larger multiple of $25,000).
(c) The Commitments once terminated or reduced may not be
reinstated.
2.04 COMMITMENT FEE. The Company shall, with respect to each
Commitment, pay to the Agent, for the account of each Lender, a commitment fee
on the daily average unused amount of such Lender's Commitment (for which
purpose the aggregate amount of any Letter of Credit Liabilities shall be deemed
to be a pro rata (based on the Commitments) use of each Lender's Commitment),
for the period from and including September 9, 1997 to (but not including) the
date such Commitment is reduced to zero, at a rate per annum equal to 0.375%.
Accrued commitment fees shall be payable on each Monthly Date and on the date
any Commitment is reduced to zero.
2.05 LENDING OFFICES. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
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2.06 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but neither any Lender nor the Agent shall be responsible for the failure
of any other Lender to make a Loan to be made by such other Lender, and no
Lender shall have any obligation to the Agent or any other Lender for the
failure by such Lender to make any Loan required to be made by such Lender. The
amounts payable by the Company at any time hereunder and under the Notes to each
Lender shall be a separate and independent debt and each Lender shall be
entitled to protect and enforce its rights arising out of this Agreement and the
Notes, and it shall not be necessary for any other Lender or the Agent to
consent to, or be joined as an additional party in, any proceedings for such
purposes.
2.07 NOTES.
(a) The Loans made by each Lender shall be evidenced by a single
promissory note of the Company substantially in the form of Exhibit A hereto,
dated the date hereof, payable to such Lender in a principal amount equal to the
amount of its Commitment as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan made by each Lender to the Company,
and each payment made on account of the principal thereof, shall be recorded by
such Lender on its books and, prior to any transfer of the Note evidencing the
Loans held by it, endorsed by such Lender on the schedule attached to such Note
or any continuation thereof; PROVIDED that the failure of such Lender to make
any such recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing hereunder or under such
Note in respect of the Loans to be evidenced by such Note.
(c) No Lender shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Lender's
relevant Commitment, Loans and Notes pursuant to Section 12.06(b) hereof.
2.08 OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF
LOANS. Subject to Section 4.04 hereof, the Company shall have the right to
prepay Loans, or to Convert Loans of one Type into Loans of another Type or to
Continue Eurodollar Loans, at any time or from time to time, PROVIDED that the
Company shall give the Agent notice of each such prepayment, Conversion or
Continuation as provided in Section 4.05 hereof (and, upon the date specified in
any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder). Notwithstanding the foregoing, and without limiting the
rights and remedies of the Lenders under Section 10 hereof, in the event that
any Event of Default shall have occurred and be continuing, the Agent may (and
at the request of the Majority Lenders shall) suspend the right of the Company
to Convert any Base Rate Loan into a Eurodollar Loan, or to Continue any Loan as
a Eurodollar Loan, in which event all Loans shall be Converted (on the last
day(s) of the respective Interest Periods therefor) or Continued, as the case
may be, as Base Rate Loans.
2.09 MANDATORY PREPAYMENTS.
(a) SALE OF ASSETS. Without limiting the obligation of the
Company to obtain the consent of the Majority Lenders pursuant to Section 9.05
hereof to any Disposition not otherwise permitted hereunder, in the event that
the Net Available Proceeds of any Disposition (herein, the "CURRENT
DISPOSITION"), and of all prior Dispositions as to which a prepayment has not
yet been made under this Section 2.09(a), shall exceed $250,000 then, no later
than five Business Days prior to the occurrence of the Current Disposition, the
Company will deliver to the Lenders a statement, certified by the chief
financial officer of the Company, in form and detail reasonably satisfactory to
the Agent, of the amount of the Net Available Proceeds of the Current
Disposition and of all such prior Dispositions and will prepay the Loans (and/or
provide cover for Letter of Credit Liabilities as specified in clause (f) below)
in an aggregate amount equal to 100% of the Net Available Proceeds of the
Current Disposition and such prior Dispositions.
(b) DEBT ISSUANCE. Without limiting the obligation of the Company
to obtain the consent of the Majority Lenders pursuant to Section 9.07 hereof to
the incurrence of any Indebtedness not otherwise permitted hereunder, upon the
receipt by the Company or any of its Subsidiaries of the proceeds of any
Indebtedness incurred after
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the Closing Date (other than Indebtedness described in clause (d), (e) or (f) of
Section 9.07 hereof), the Company shall prepay the Loans (and/or provide cover
for Letter of Credit Liabilities as specified in clause (f) below) in an
aggregate amount equal to 100% of the Net Available Proceeds thereof.
(c) EQUITY ISSUANCE. Upon any Equity Issuance (other than any
Equity Issuance by a Designated Subsidiary), the Company shall prepay the Loans
(and/or provide cover for Letter of Credit Liabilities as specified in clause
(f) below) in an aggregate amount equal to 50% of the Net Available Proceeds
thereof, PROVIDED that
(1) if the chief financial officer of the Company
certifies to the Agent that, without effecting an Equity
Issuance, the Company will not be able to pay principal of or
interest on the Loans when due, all Net Available Proceeds of
such Equity Issuance shall be applied directly by the Person
making the equity investment to the payment of such principal
and/or interest;
(2) if the Majority Lenders shall have expressly
approved an Investment or other acquisition by the Company or any
of its Subsidiaries (which approval may be withheld by the
Majority Lenders in their sole discretion) that was proposed by
the Company to the Lenders and the written materials furnished to
the Lenders describing such Investment or other acquisition
described in reasonable detail an Equity Issuance that would be
used to finance such Investment or acquisition, none of the Net
Available Proceeds of such Equity Issuance shall be required to
be applied to the prepayment of the Loans or the reduction of the
Commitments; and
(3) the Company shall not be required to prepay any Loan
if (x) the obligation to make such Loan was subject to Section
7.02 and (y) such Loan was used to finance Capital Expenditures
for the construction of fixed assets, plant, furniture, fixtures
and equipment and such construction has not substantially been
completed on the date of such Equity Issuance.
(d) CASUALTY EVENTS. Not later than 60 days following the receipt
by any Obligor (other than any Designated Subsidiary) of the proceeds of
insurance, condemnation award or other compensation in respect of any Casualty
Event affecting any Property of any such Obligor (or upon such earlier date as
the Obligor shall have determined not to repair or replace the Property affected
by such Casualty Event), or upon the receipt by any Obligor of the proceeds of
any key-man life insurance policy, the Company shall prepay the Loans (and/or
provide cover for Letter of Credit Liabilities as specified in clause (f) below)
in an aggregate amount, if any, equal to 100% of the Net Available Proceeds of
such Casualty Event not theretofore applied to the repair or replacement of such
Property or 100% of the proceeds of the key-man life insurance policy, as
applicable. Nothing in this clause (d) shall be deemed to limit any obligation
of any Obligor pursuant to any of the Security Documents to remit to a
collateral or similar account (including, without limitation, the Collateral
Account) maintained by the Agent pursuant to any of the Security Documents the
proceeds of insurance, condemnation award or other compensation received in
respect of any Casualty Event.
(e) EXCESS CASH FLOW. Not later than the date 90 days after the
end of each fiscal year, commencing with the fiscal year commencing on January
1, 1997, the Company shall prepay the Loans (and/or provide cover for Letter of
Credit Liabilities as specified in clause (f) below) in an aggregate amount
equal to 60% of Excess Cash Flow for such fiscal year (computed on the basis of
the financial statements provided to the Agent pursuant to Section 9.01(d)
hereof).
(f) COVER FOR LETTER OF CREDIT LIABILITIES. In the event that the
Company shall be required pursuant to this Section 2.09 to provide cover for
Letter of Credit Liabilities, the Company shall effect the same by paying to the
Agent immediately available funds in an amount equal to the required amount,
which funds shall be retained by the Agent in the Collateral Account (as
provided therein as collateral security in the first instance for Letter of
Credit Liabilities) until such time as the Letter of Credit shall have been
terminated and all of the Letter of Credit Liabilities paid in full.
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2.10 LETTERS OF CREDIT. Subject to the terms and conditions of
this Agreement, and subject to the prior consent of the Letter of Credit Issuer,
Commitments may be utilized, upon the request of the Company, in addition to the
Loans provided for by Section 2.01(a) hereof, by the issuance by the Letter of
Credit Issuer of letters of credit (collectively, "LETTERS OF CREDIT") for
account of the Company or any of its Subsidiaries (as specified by the Company),
PROVIDED that in no event shall the aggregate amount of all Letter of Credit
Liabilities exceed the lesser of (i) $15,000,000 and (ii) together with the
aggregate principal amount of the Loans, the aggregate amount of the Commitments
as in effect from time to time. The following additional provisions shall apply
to Letters of Credit:
(a) The Company shall give the Agent at least three Business
Days' irrevocable prior notice (effective upon receipt) specifying the
Business Day (which shall be no later than 30 days preceding the
Commitment Termination Date) each Letter of Credit is to be issued and
the account party or parties therefor and describing in reasonable
detail the proposed terms of such Letter of Credit (including the
beneficiary thereof) and the nature of the transactions or obligations
proposed to be supported thereby (including whether such Letter of
Credit is to be a commercial letter of credit or a standby letter of
credit). Upon receipt of any such notice, the Agent shall advise the
Letter of Credit Issuer of the contents thereof.
(b) On each day during the period commencing with the issuance by
the Letter of Credit Issuer of any Letter of Credit and until such
Letter of Credit shall have expired or been terminated, the Commitment
of each Lender shall be deemed to be utilized for all purposes of this
Agreement in an amount equal to such Lender's Commitment Percentage of
the then undrawn face amount of such Letter of Credit. Each Lender
(other than the Letter of Credit Issuer) agrees that, upon the issuance
of any Letter of Credit hereunder, it shall automatically acquire a
participation in the Letter of Credit Issuer's liability under such
Letter of Credit in an amount equal to such Lender's Commitment
Percentage of such liability, and each Lender (other than the Letter of
Credit Issuer) thereby shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and shall be
unconditionally obligated to the Letter of Credit Issuer to pay and
discharge when due, its Commitment Percentage of the Letter of Credit
Issuer's liability under such Letter of Credit.
(c) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment under such Letter of Credit, the Letter of Credit
Issuer shall promptly notify the Company (through the Agent) of the
amount to be paid by the Letter of Credit Issuer as a result of such
demand and the date on which payment is to be made by the Letter of
Credit Issuer to such beneficiary in respect of such demand.
Notwithstanding the identity of the account party of any Letter of
Credit, the Company hereby unconditionally agrees to pay and reimburse
the Agent for account of the Letter of Credit Issuer for the amount of
each demand for payment under such Letter of Credit at or prior to the
date on which payment is to be made by the Letter of Credit Issuer to
the beneficiary thereunder, without presentment, demand, protest or
other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in clause
(c) of this Section 2.10, the Company shall advise the Agent whether or
not the Company intends to borrow hereunder to finance its obligation to
reimburse the Letter of Credit Issuer for the amount of the related
demand for payment and, if it does, submit a notice of such borrowing as
provided in Section 4.05 hereof. In the event that the Company fails to
so advise the Agent, or if the Company fails to reimburse the Letter of
Credit Issuer for a payment under a Letter of Credit by the date of such
payment, the Agent shall give each Lender prompt notice of the amount of
the demand for payment, specifying such Lender's Commitment Percentage
of the amount of the related demand for payment.
(e) Each Lender (other than the Letter of Credit Issuer) shall
pay to the Agent for account of the Letter of Credit Issuer at the
Principal Office in Dollars and in immediately available funds, the
amount of such Lender's Commitment Percentage of any payment under a
Letter of Credit upon notice by the Letter of Credit Issuer (through the
Agent) to such Lender requesting such payment and specifying such
amount. Each such Lender's obligation to make such payment to the Agent
for account of the Letter of Credit Issuer under this clause (e), and
the Letter of Credit Issuer's right to receive the same, shall be
absolute and unconditional and
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shall not be affected by any circumstance whatsoever, including, without
limitation, the failure of any other Lender to make its payment under
this clause (e), the financial condition of the Company (or any other
account party), the existence of any Default or the termination of the
Commitments. Each such payment to the Letter of Credit Issuer shall be
made without any offset, abatement, withholding or reduction whatsoever.
If any Lender shall default in its obligation to make any such payment
to the Agent for account of the Letter of Credit Issuer, for so long as
such default shall continue the Agent may at the request of the Letter
of Credit Issuer withhold from any payments received by the Agent under
this Agreement or any Note for account of such Lender the amount so in
default and, to the extent so withheld, pay the same to the Letter of
Credit Issuer in satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Lender to the Letter of
Credit Issuer pursuant to clause (e) above in respect of any Letter of
Credit, such Lender shall, automatically and without any further action
on the part of the Agent, the Letter of Credit Issuer or such Lender,
acquire (i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Letter of Credit by the Company
hereunder and under the Letter of Credit Documents relating to such
Letter of Credit and (ii) a participation in a percentage equal to such
Lender's Commitment Percentage in any interest or other amounts payable
by the Company hereunder and under such Letter of Credit Documents in
respect of such Reimbursement Obligation (other than the commissions,
charges, costs and expenses payable to the Letter of Credit pursuant to
clause (g) of this Section 2.10). Upon receipt by the Letter of Credit
Issuer from or for account of the Company of any payment in respect of
any Reimbursement Obligation or any such interest or other amount
(including by way of setoff or application of proceeds of any collateral
security) the Letter of Credit Issuer shall promptly pay to the Agent
for account of each Lender entitled thereto, such Lender's Commitment
Percentage of such payment, each such payment by the Letter of Credit
Issuer to be made in the same money and funds in which received by the
Letter of Credit Issuer. In the event any payment received by the Letter
of Credit Issuer and so paid to the Lenders hereunder is rescinded or
must otherwise be returned by the Letter of Credit Issuer, each Lender
shall, upon the request of the Letter of Credit Issuer (through the
Agent), repay to the Letter of Credit Issuer (through the Agent) the
amount of such payment paid to such Lender, with interest at the rate
specified in clause (j) of this Section 2.10.
(g) The Company shall pay to the Agent for account of each Lender
(ratably in accordance with their respective Commitment Percentages) a
letter of credit fee in respect of each Letter of Credit in an amount
equal to the Applicable Margin for Loans that are Eurodollar Loans per
annum of the daily average undrawn face amount of such Letter of Credit
for the period from and including the date of issuance of such Letter of
Credit (i) in the case of a Letter of Credit that expires in accordance
with its terms, to and including such expiration date and (ii) in the
case of a Letter of Credit that is drawn in full or is otherwise
terminated other than on the stated expiration date of such Letter of
Credit, to but excluding the date such Letter of Credit is drawn in full
or is terminated (such fee to be non-refundable, to be paid in arrears
on each Quarterly Date and on the Commitment Termination Date and to be
calculated for any day after giving effect to any payments made under
such Letter of Credit on such day). In addition, the Company shall pay
to the Agent for account of the Letter of Credit Issuer a fronting fee
in respect of each Letter of Credit in an amount equal to 1/4 of 1% per
annum of the daily average undrawn face amount of such Letter of Credit
for the period from and including the date of issuance of such Letter of
Credit (i) in the case of a Letter of Credit that expires in accordance
with its terms, to and including such expiration date and (ii) in the
case of a Letter of Credit that is drawn in full or is otherwise
terminated other than on the stated expiration date of such Letter of
Credit, to but excluding the date such Letter of Credit is drawn in full
or is terminated (such fee to be non-refundable, to be paid in arrears
on each Quarterly Date and on the Commitment Termination Date and to be
calculated for any day after giving effect to any payments made under
such Letter of Credit on such day) plus all commissions, charges, costs
and expenses in the amounts customarily charged by the Letter of Credit
Issuer from time to time in like circumstances with respect to the
issuance of each Letter of Credit and drawings and other transactions
relating thereto.
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(h) Promptly following the end of each calendar month, the Letter
of Credit Issuer shall deliver (through the Agent) to each Lender and
the Company a notice describing the aggregate amount of all Letters of
Credit outstanding at the end of such month. Upon the request of any
Lender from time to time, the Letter of Credit Issuer shall deliver any
other information reasonably requested by such Lender with respect to
each Letter of Credit then outstanding.
(i) The issuance by the Letter of Credit Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 7 hereof, be subject to the conditions precedent that (i) such
Letter of Credit shall be in such form, contain such terms and support
such transactions as shall be satisfactory to the Letter of Credit
Issuer consistent with its then current practices and procedures with
respect to letters of credit of the same type and (ii) the Company shall
have executed and delivered such applications, agreements and other
instruments relating to such Letter of Credit as the Letter of Credit
Issuer shall have reasonably requested consistent with its then current
practices and procedures with respect to letters of credit of the same
type, PROVIDED that in the event of any conflict between any such
application, agreement or other instrument and the provisions of this
Agreement or any Security Document, the provisions of this Agreement and
the Security Documents shall control.
(j) To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to clause (e) or (f) of this Section 2.10
on the due date therefor, such Lender shall pay interest to the Letter
of Credit Issuer (through the Agent) on such amount from and including
such due date to but excluding the date such payment is made, PROVIDED
that if such Lender shall fail to make such payment to the Letter of
Credit Issuer within three Business Days of such due date, then,
retroactively to the due date, such Lender shall be obligated to pay
interest on such amount at the Post-Default Rate.
(k) The issuance by the Letter of Credit Issuer of any
modification or supplement to any Letter of Credit hereunder shall be
subject to the same conditions applicable under this Section 2.10 to the
issuance of new Letters of Credit, and no such modification or
supplement shall be issued hereunder unless either (i) the respective
Letter of Credit affected thereby would have complied with such
conditions had it originally been issued hereunder in such modified or
supplemented form or (ii) each Lender shall have consented thereto.
The Company hereby indemnifies and holds harmless each Lender and the Agent from
and against any and all claims and damages, losses, liabilities, costs or
expenses that such Lender or the Agent may incur (or that may be claimed against
such Lender or the Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or refusal to pay by
the Letter of Credit Issuer under any Letter of Credit; PROVIDED that the
Company shall not be required to indemnify any Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross negligence of the
Letter of Credit Issuer in determining whether a request presented under any
Letter of Credit complied with the terms of such Letter of Credit or (y) in the
case of the Letter of Credit Issuer, such Lender's failure to pay under any
Letter of Credit after the presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit. Nothing in this Section
2.10 is intended to limit the other obligations of the Company, any Lender or
the Agent under this Agreement.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF LOANS. The Company hereby promises to pay to
the Agent for the account of each Lender:
(a) on any Commitment Reduction Date, an amount equal to the
excess (if any) of (x) the entire outstanding principal of such Lender's
Loans outstanding plus such Lender's Letter of Credit Liabilities over
(y) the Commitment of such Lender as reduced pursuant to clause (i) of
Section 2.03(a) hereof on such Commitment Reduction Date, and
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(b) the entire outstanding principal of such Lender's Loans
outstanding, and each Loan shall mature, on the Commitment Termination
Date.
3.02 INTEREST. The Company hereby promises to pay to the Agent
for account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period from and including the date of such Loan to
but excluding the date such Loan shall be paid in full, at the following rates
per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) PLUS the Applicable Margin;
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan
for such Interest Period PLUS the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the Agent
for account of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender, on any Reimbursement Obligation held
by such Lender, and on any other amount payable by the Company hereunder or
under the Notes held by such Lender to or for account of such Lender, that shall
not be paid in full when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full. Accrued
interest on each Loan shall be payable (i) in the case of a Base Rate Loan,
monthly on the Monthly Dates, (ii) in the case of a Eurodollar Loan, on the last
day of each Interest Period therefor and, if such Interest Period is longer than
three months, at three-month intervals following the first day of such Interest
Period, and (iii) in the case of any Loan, upon the payment or prepayment
thereof or the Conversion of such Loan to a Loan of another Type (but only on
the principal amount so paid, prepaid or Converted), except that interest
payable at the Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided for herein or any
change therein, the Agent shall give notice thereof to the Lenders to which such
interest is payable and to the Company.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be made
by the Company under this Agreement and the Notes, and, except to the extent
otherwise provided therein, all payments to be made by the Obligors under any
other Basic Document, shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Agent at account number
9301035763 (ABA No. 000000000) maintained by the Agent with The Chase Manhattan
Bank, not later than 2:00 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company and the Agent).
(c) The Company shall, at the time of making each payment under
this Agreement or any Note for account of any Lender, specify to the Agent
(which shall so notify the intended recipient(s) thereof) the Loans,
Reimbursement Obligations or other amounts payable by the Company hereunder to
which such payment is to be applied (and in the event that the Company fails to
so specify, or if an Event of Default has occurred and is continuing, the Agent
may distribute such payment to the Lenders for application in such manner as it
or the Majority Lenders, subject to Section 4.02 hereof, may determine to be
appropriate).
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(d) Each payment received by the Agent under this Agreement or
any Note for account of any Lender shall be paid by the Agent promptly to such
Lender, in immediately available funds, for account of such Lender's Applicable
Lending Office for the Loan or other obligation in respect of which such payment
is made.
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be payable
for any principal so extended for the period of such extension.
4.02 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing of Loans from the Lenders under Section 2.01 hereof
shall be made from the Lenders, each payment of a commitment fee under Section
2.04 hereof in respect of Commitments shall be made for account of the Lenders,
and each termination or reduction of the amount of the Commitments under Section
2.03 hereof shall be applied to the respective Commitments of the Lenders, pro
rata according to the amounts of their respective Commitments; (b) the making,
Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 5.04 hereof) shall be made pro rata among
the Lenders according to the amounts of their respective Commitments (in the
case of making of Loans) or their respective Loans (in the case of Conversions
and Continuations of Loans) and the then current Interest Period for each Loan
of such Type shall be coterminous; (c) each payment or prepayment of principal
of Loans by the Company shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by
them; and (d) each payment of interest on Loans by the Company shall be made for
the account of the Lenders pro rata in accordance with the amounts of interest
on such Loans then due and payable to the Lenders.
4.03 COMPUTATIONS. Except as otherwise provided herein, interest
on Loans and Reimbursement Obligations and commitment fees shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable.
4.04 MINIMUM AMOUNTS. Except for mandatory prepayments made
pursuant to Section 2.09 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, each borrowing, Conversion and partial prepayment of
principal of Loans shall be in an aggregate amount at least equal to $25,000 (or
$250,000 in the case of Eurodollar Loans) or a larger multiple of $25,000
(borrowings, Conversions or prepayments of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period).
4.05 CERTAIN NOTICES. Notices by the Company to the Agent of
terminations or reductions of the Commitments, of borrowings, Conversions,
Continuations and optional prepayments of Loans, of Types of Loans and of the
duration of Interest Periods shall be irrevocable and shall be effective only if
received by the Agent not later than 11:00 a.m. New York time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
NUMBER OF
BUSINESS DAYS
NOTICE PRIOR NOTICE
------ ------------
Termination or reduction of Commitments 3
Borrowing or prepayment of, or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of, Conversions into,
Continuations as, or duration of Interest Period for,
Eurodollar Loans 3
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Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the amount
(subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a Conversion, the Type of
Loan to result from such Conversion) and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Agent shall promptly notify the Lenders
of the contents of each such notice. In the event that the Company fails to
select the Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided in this
Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate Loan.
4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Lender or the Company (the "PAYOR") prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Lender) the
proceeds of a Loan to be made by such Lender hereunder or (in the case of the
Company) a payment to the Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "REQUIRED PAYMENT"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date; and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE") such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid, PROVIDED that if neither the recipient(s) nor the Payor
shall return the Required Payment to the Agent within three Business Days of the
Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:
(i) if the Required Payment shall represent a payment to be
made by the Company to the Lenders, the Company and the recipient(s)
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the Post-Default Rate
(and, in case the recipient(s) shall return the Required Payment to the
Agent, without limiting the obligation of the Company under Section 3.02
hereof to pay interest to such recipient(s) at the Post-Default Rate in
respect of the Required Payment) and
(ii) if the Required Payment shall represent proceeds of a
Loan to be made by the Lenders to the Company, the Payor and the Company
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate of interest
provided for such Required Payment pursuant to Section 3.02 hereof (and,
in case the Company shall return the Required Payment to the Agent,
without limiting any claim the Company may have against the Payor in
respect of the Required Payment).
4.07 SHARING OF PAYMENTS, ETC.
(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option, to offset balances
held by it for account of the Company at any of its offices, in Dollars or in
any other currency, against any principal of or interest on any of such Lender's
Loans, Reimbursement Obligations or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such balances are
then due to the Company), in which case it shall promptly notify the Company and
the Agent thereof, PROVIDED that such Lender's failure to give such notice shall
not affect the validity thereof.
(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan or Letter of Credit Liability owing to it
or payment of any other amount under this Agreement or any other Basic
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Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from the Agent as
provided herein), and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans,
Letter of Credit Liabilities or such other amounts then due hereunder or
thereunder by such Obligor to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders participations
in (or, if and to the extent specified by such Lender, direct interests in) the
Loans, Letter of Credit Liabilities or such other amounts, respectively, owing
to such other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans, Letter of Credit Liabilities
or such other amounts, respectively, owing to each of the Lenders. To such end
all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.07 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
Section 5. YIELD PROTECTION, ETC.
5.01 ADDITIONAL COSTS.
(a) The Company shall pay directly to each Lender from time to
time such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs actually incurred by such Lender that such Lender
determines are attributable to its making or maintaining of any Eurodollar Loans
or its obligation to make any Eurodollar Loans hereunder, or any reduction in
any amount receivable by such Lender hereunder in respect of any of such Loans
or such obligation (such increases in costs and reductions in amounts receivable
being herein called "ADDITIONAL COSTS"), resulting from any Regulatory Change
that:
(i) shall subject any Lender (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in
respect of such Loans or its Notes or changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Notes in
respect of any of such Loans (excluding (A) franchise taxes imposed on
it or (B) changes in the rate of tax on the overall net income of such
Lender or of such Applicable Lending Office, in each case, by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than, in the case of any Lender for any
period as to which the Company is required to pay any amount under
paragraph (e) below, the reserves and "Eurocurrency liabilities" under
Regulation D referred to therein) relating to any extensions of credit
or other assets of, or any deposits with or other liabilities of, such
Lender (including, without limitation, any of such Loans or any deposits
referred to in the definition of "Eurodollar Rate" in Section 1.01
hereof), or any commitment of such Lender (including, without
limitation, the Commitments of such Lender hereunder); or
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(iii) imposes any other condition affecting this Agreement or
its Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Lender (with a copy to the Agent), suspend
the obligation of such Lender thereafter to make or Continue Eurodollar Loans,
or to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 5.04 hereof shall be applicable), PROVIDED that such suspension shall
not affect the right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the provisions of paragraph
(a) of this Section 5.01, in the event that, by reason of any Regulatory Change,
any Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender that includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold, then, if such Lender so
elects by notice to the Company (with a copy to the Agent), the obligation of
such Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.04 hereof shall be
applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
actually incurred by such Lender that it determines are attributable to the
maintenance by such Lender (or any Applicable Lending Office or such bank
holding company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) of any court or governmental or
monetary authority (i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basle Accord
(including, without limitation, the Final Risk-Based Capital Guidelines of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 208, Appendix
A; 00 X.X.X. Xxxx 000, Xxxxxxxx X) and the Final Risk-Based Capital Guidelines
of the Office of the Comptroller of the Currency (12 C.F.R. Part 3, Appendix
A)), of capital in respect of its Commitments or Loans (such compensation to
include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Lender (or any Applicable Lending Office or
such bank holding company) to a level below that which such Lender (or any
Applicable Lending Office or such bank holding company) could have achieved but
for such law, regulation, interpretation, directive or request). For purposes of
this Section 5.01(c) and Section 5.06 hereof, "BASLE ACCORD" shall mean the
proposals for risk-based capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect from time to time
or any replacement thereof.
(d) Each Lender shall notify the Company of any event occurring
after the date of this Agreement entitling such Lender to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in any
event within 45 days, after such Lender obtains actual knowledge thereof;
PROVIDED that (i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of any costs
resulting from such event, only be entitled to payment under this Section 5.01
for costs incurred from and after the date 45 days prior to the date that such
Lender does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Loans of such Lender affected by such event if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no obligation
to designate an Applicable Lending Office located in the United States of
America. Each Lender will furnish to the Company a certificate setting forth the
basis and amount of each request by such Lender
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for compensation under paragraph (a) or (c) of this Section 5.01. Determinations
and allocations by any Lender for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or
of the effect of capital maintained pursuant to paragraph (c) of this Section
5.01, on its costs or rate of return of maintaining Loans or its obligation to
make Loans, or on amounts receivable by it in respect of Loans, and of the
amounts required to compensate such Lender under this Section 5.01, shall be
conclusive, absent demonstrable error, PROVIDED that such determinations and
allocations are made and attributed on a reasonable basis.
(e) Without limiting the effect of the foregoing, the Company
shall pay to each Lender on the last day of each Interest Period so long as such
Lender is maintaining reserves against "Eurocurrency liabilities" under
Regulation D (or, unless the provisions of paragraph (b) above are applicable,
so long as such Lender is, by reason of any Regulatory Change, maintaining
reserves against any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or against any category of extensions of credit or
other assets of such Lender (which includes any Eurodollar Loans) an additional
amount (determined by such Lender and notified to the Company through the Agent)
equal to the product of the following for each Eurodollar Loan for each day
during such Interest Period:
(i) the principal amount of such Eurodollar Loan outstanding on
such day; and
(ii) the remainder of (x) the fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on such
Eurodollar Loan for such Interest Period as provided in this Agreement
(less the Applicable Margin) and the denominator of which is one MINUS
the effective rate (expressed as a decimal) at which such reserve
requirements are imposed on such Lender on such day MINUS (y) such
numerator; and
(iii) 1/360.
(f) Notwithstanding anything in this Section 5.01 to the
contrary, to the extent that any Lender does not charge all of its customers who
are similarly situated to the Company in respect of any Additional Costs or
other cost or compensation referred to this Section 5.01, such Lender shall not
charge the Company for such Additional Cost or other cost or compensation.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein; or
(b) if the Majority Lenders determine, which determination shall
be conclusive, and notify (or notifies, as the case may be) the Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate" in
Section 1.01 hereof upon the basis of which the rate of interest for Eurodollar
Loans for such Interest Period is to be determined do not adequately cover the
cost to such Lenders of making or maintaining Eurodollar Loans for such Interest
Period;
then the Agent shall give the Company and each Lender prompt notice thereof and,
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Base Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate
Loans in accordance with Section 2.08 hereof.
5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain
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Eurodollar Loans hereunder, then such Lender shall promptly notify the Company
thereof (with a copy to the Agent) and such Lender's obligation to make or
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of Section 5.04 hereof shall be applicable).
5.04 TREATMENT OF EURODOLLAR LOANS. If the obligation of any
Lender to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans
into, Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03
hereof, such Lender's Eurodollar Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by Section 5.01(b) or
5.03 hereof, on such earlier date as such Lender may specify to the Company with
a copy to the Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall remain as) Base Rate
Loans.
If such Lender gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
5.05 COMPENSATION. The Company shall pay to the Agent for account
of each Lender, upon the request of such Lender through the Agent, such amount
or amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost or expense actually incurred that such Lender
determines is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion
of a Eurodollar Loan made by such Lender for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section 10
hereof) on a date other than the last day of the Interest Period for
such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 7 hereof to be satisfied) to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice
of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed (other than the portion thereof consisting of the
Applicable Margin) for the period from the date of such payment, prepayment,
Conversion or failure to borrow to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan that would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest that otherwise would have accrued on such
principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts
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comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Lender).
5.06 SUBSTITUTION OF LENDERS. In the event that the Company
becomes obligated to pay additional amounts to any Lender pursuant to Section
5.01 hereof, then (unless such Lender has theretofore taken steps to remove or
cure, and has removed or cured, the conditions creating the cause for such
obligation to pay such additional amounts), then the Company may, so long as no
Default shall be continuing, within 60 days after the demand by such Lender for
such additional amounts, designate another bank which is acceptable to the Agent
and the Majority Lenders (such other bank being herein called a "REPLACEMENT
LENDER") to purchase all of the Loans of such Lender and all of such Lender's
rights and obligations hereunder (without recourse to or warranty by, or expense
to, such Lender) for a purchase price equal to the outstanding principal amount
of such Lender's Loans plus any accrued but unpaid interest thereon and any
accrued but unpaid fees in respect of such Lender's Commitments and any other
amounts then payable to such Lender hereunder, and to assume all of the
obligations of such Lender hereunder (except for such rights as survive the
repayment of the Loans) and, upon such purchase such Lender shall no longer be a
party hereto or have any rights hereunder (except for those that survive
repayment of the Loans) and shall be released from all of its obligations
hereunder, and the Replacement Lender shall succeed to the rights and
obligations of such Lender hereunder.
5.07 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. Without
limiting the obligations of the Company under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord there shall be imposed, modified or deemed applicable any tax,
reserve, special deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to any Lender or
Lenders of issuing (or purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit hereunder or reduce any amount receivable by any Lender hereunder in
respect of any Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Lender's or Lenders' reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then, upon demand by such Lender or Lenders (through the Agent), the
Company shall pay immediately to the Agent for account of such Lender or
Lenders, from time to time as specified by such Lender or Lenders (through the
Agent), such additional amounts as shall be sufficient to compensate such Lender
or Lender (through the Agent) for such increased costs or reductions in amount.
A statement as to such increased costs or reductions in amount incurred by any
such Lender or Lender, submitted by such Lender or Lenders to the Company shall
be conclusive in the absence of manifest error as to the amount thereof.
Section 6. GUARANTEE.
6.01 THE GUARANTEE. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Lender and the Agent and their respective successors
and assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lenders to, and the Notes held by each Lender of, the Company and all other
amounts from time to time owing to the Lenders or the Agent by the Company under
this Agreement and under the Notes and by any Obligor under any of the other
Basic Documents, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the "GUARANTEED
OBLIGATIONS"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Company shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
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6.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
Guarantors under Section 6.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor
of, the Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
6.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors
under this Section 6 shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly
and severally agree that they will indemnify the Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Agent or such Lender in connection with such rescission
or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
6.04 SUBROGATION. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lenders under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 6.01
hereof, whether by subrogation or otherwise, against the Company or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
6.05 REMEDIES. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Company under this Agreement and the Notes may be declared to
be forthwith due and payable as provided in Section 10 hereof (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Section 10) for purposes of Section 6.01 hereof
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notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Company and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
6.01.
6.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor hereby
acknowledges that the guarantee in this Section 6 constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the Agent, at
its sole option, in the event of a dispute by such Guarantor in the payment of
any moneys due hereunder, shall have the right to bring motion-action under New
York CPLR Section 3213.
6.07 CONTINUING GUARANTEE. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall become an
Excess Funding Guarantor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence), pay to such Excess Funding Guarantor an amount equal to such
Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the Properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to
any Excess Funding Guarantor under this Section 6.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 6 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.
For purposes of this Section 6.08, (i) "EXCESS FUNDING GUARANTOR"
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE" shall mean,
for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all Properties of
such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this Section 6.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Closing Date and the aggregate present fair saleable value
of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such
value and amount on the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.
6.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action
or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, any Lender, the Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
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Section 7. CONDITIONS PRECEDENT.
7.01 EFFECTIVENESS OF SECOND AMENDMENT AND RESTATEMENT. The
effectiveness of the amendment and restatement of the Amended and Restated
Credit Agreement is subject to the conditions precedent that the Agent shall
have received the following, each of which shall be satisfactory to the Agent in
form and substance:
(a) CORPORATE DOCUMENTS. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
authority for each Obligor (including, without limitation, board of
director resolutions and evidence of the incumbency of officers) with
respect to the execution, delivery and performance of such of the Basic
Documents to which such Obligor is intended to be a party and each other
document to be delivered by such Obligor from time to time in connection
herewith and the extensions of credit hereunder (and the Agent and each
Lender may conclusively rely on such certificate until it receives
notice in writing from such Obligor to the contrary).
(b) OFFICER'S CERTIFICATE. A certificate of a senior officer of
the Company, dated the date hereof, to the effect set forth in the first
sentence of Section 7.03 hereof.
(c) OPINIONS OF TEXAS COUNSEL TO THE OBLIGORS. An opinion, dated
the Closing Date, of Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.,
counsel to the Obligors, substantially in the form of Exhibit B-1 hereto
(and each Obligor hereby instructs such counsel to deliver such opinion
to the Lenders and the Agent).
(d) OPINIONS OF NEW YORK COUNSEL TO ING. An opinion, dated the
Closing Date, of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING,
substantially in the form of Exhibit B-2 hereto.
(e) NOTES. The Notes, duly completed and executed.
(f) INSURANCE. Certificates of insurance evidencing the existence
of all insurance required to be maintained by the Company pursuant to
Section 9.04 hereof and the designation of the Agent as the loss payee
or additional named insured, as the case may be, thereunder to the
extent required by said Section 9.04, such certificates to be in such
form and contain such information as is specified in said Section 9.04.
In addition, the Company shall have delivered a certificate of the chief
financial officer of the Company setting forth the insurance obtained by
it in accordance with the requirements of Section 9.04 and stating that
such insurance is in full force and effect and that all premiums then
due and payable thereon have been paid.
(g) REAL PROPERTY MORTGAGES. The following:
(i) Evidence satisfactory to the Agent that the existing
Deeds of Trust covering the real properties of the Obligors
located in the State of Texas have been modified to secure the
obligations of the Obligors hereunder, that appropriate title
insurance has been obtained with respect to such Deeds of Trust
as so modified and that all title insurance premiums in
connection with such modifications have been paid; and
(ii) One or more Mortgages covering the real properties
of the Obligors located in the States of Ohio and Pennsylvania,
together with (x) the items described in Section 9.25 hereof with
respect to such Mortgages and (y) opinions of Ohio and
Pennsylvania counsel to the Obligors with respect to the
creation, perfection and priority of the Liens created pursuant
to such Mortgages.
(h) ADVERSE LITIGATION OR PROCEEDING. Certificates of each
Obligor, signed on behalf of each Obligor by a senior officer thereof,
to the effect that (and the Agent shall be satisfied in its good faith
judgment that) no litigation or proceeding shall exist (or, to such
officer's knowledge be threatened) that could have a Material Adverse
Effect.
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(i) OTHER DOCUMENTS. Such other documents as the Agent or any
Lender or special New York counsel to ING may reasonably request.
The effectiveness of the amendment and restatement of the Amended and Restated
Credit Agreement is subject to the further condition precedent that the Company
shall have borrowed from and the Lenders shall have made Loans to the Company in
such amounts as shall be necessary so that after giving effect to such Loans the
Loans shall be held by the Lenders pro rata in accordance with the respective
amounts of their Commitments.
7.02 CAPITAL EXPENDITURES; ELIGIBLE ACQUISITIONS. The obligation
of any Lender to make any Loan the proceeds of which will be used to make (x) an
Eligible Acquisition or (y) Capital Expenditures in respect of an Eligible New
Contract (in each case, the "RELEVANT TRANSACTION" for such borrowing) is
subject to the further conditions precedent that the Agent shall have received
the following, each of which shall be satisfactory to the Agent (and to the
extent specified below, to the Majority Lenders) in form and substance:
(a) COMMON INFORMATION. With respect to any Relevant Transaction:
(i) CFO CERTIFICATE. A certificate of the chief
financial officer of the Company (in such detail as the Agent may
request) as to the good faith estimated amount of the
consideration to be paid in connection with such Relevant
Transaction.
(ii) RELEVANT CORRECTIONAL AND/OR DETENTION FACILITY
CONTRACTS. True and complete copies of the fully executed
Correctional and Detention Facility Contract or Contracts
(including all amendments thereto) to which such Relevant
Transaction relates (the "RELEVANT CONTRACT" for such Relevant
Transaction), together with a certificate of a senior officer of
the Company to the effect that (x) all conditions to the
effectiveness of the Relevant Contract for such borrowing shall
have been met or waived; PROVIDED THAT any condition in such
Relevant Contract that, if not met, could reasonably be expected
to have a Material Adverse Effect shall not be waived by any
Person without the consent of the Agent and the Majority Lenders
and (y) such Relevant Contract does not contain any provision
permitting the other party to such Relevant Contract to
terminate, cancel or otherwise modify such Relevant Contract upon
the occurrence of any change in control (or similar event) with
respect to any Obligor. Further, any condition in such Relevant
Contract requiring the satisfaction of any Person shall be deemed
for purposes of this Section 7.02(a) to require the satisfaction
of the Agent and the Majority Lenders if the failure to meet such
condition could reasonably be expected to have a Material Adverse
Effect.
(iii) USE PERMITS. A certificate of a senior officer of
the Company to the effect that (x) attached thereto are true and
complete copies of each Use Permit required in connection with
such Relevant Transaction for such borrowing and that each such
Use Permit is in full force and effect, or (y) no Use Permits are
so required.
(iv) CORPORATE AUTHORIZATIONS. Evidence to the
reasonable satisfaction of the Agent that such Relevant
Transaction for such borrowing shall have been duly approved by
the board of directors of each relevant Obligor and that the
Relevant Contract therefor shall have been duly executed and
delivered by the parties thereto and shall be in full force and
effect. In addition, the Agent shall have received copies of all
written information provided to the board of directors of any
Obligor in connection with such Relevant Transaction at the same
time such information was provided to such board of directors.
(v) FINANCIAL AND COMPLIANCE CERTIFICATE. A certificate
from the chief financial officer of the Company with respect to
such Relevant Transaction
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(A) providing the PRO FORMA consolidated statements of
income, cash flow and balance sheet of the Company,
(B) to the effect that immediately prior to such
Relevant Transaction, and after giving effect thereto,
(x) no Default shall have occurred and be continuing and
(y) each of the representations and warranties set forth
in Section 8 hereof, and by each Obligor in each of the
other Basic Documents to which it is a party, shall be
true and complete, and
(C) providing PRO FORMA financial projections (which may
reflect Pro Forma Adjustments) demonstrating or showing
(x) the sources and uses of funds in such Relevant
Transaction, (y) compliance with all financial covenants
set forth in Section 9 hereof after giving effect to
such Relevant Transaction and for the four consecutive
fiscal quarters after consummation of such Relevant
Transaction and (z) the Capital Expenditures to be
incurred by the Company and its Subsidiaries in
connection with such Relevant Transaction for the period
beginning from the date on which such Relevant
Transaction is consummated and ending on March 31, 2003.
(vi) GOVERNMENTAL CONSENT AND APPROVALS. A certificate
of a senior officer of the Company to the effect that (i) any
municipal, state or federal government (or agency,
instrumentality or political subdivision thereof) that is a party
to the Relevant Contract for such borrowing, and any such
governmental entity granting a Use Permit in connection with such
Relevant Contract, does not object to the financing of such
Relevant Transaction with such borrowing on the terms and
conditions set forth in this Agreement and the other Basic
Documents, including (without limitation) the granting of
security interests and pledges of stock by the Obligors under the
Security Agreement and the guarantees provided the Subsidiary
Guarantors in Section 6 hereof and (ii) all necessary licenses,
permits and governmental and third-party consents and approvals
relating to such Relevant Transaction have been obtained and
remain in full force and effect.
(vii) ANALYSES. To the extent completed by or on behalf
of any Obligor, any demographic, industry, competitive or other
analysis performed by any industry consultant, and the Agent and
the Lenders shall be named as beneficiaries of such report.
(viii) INSURANCE. Evidence to the satisfaction of the
Agent that, after giving effect to the transactions contemplated
by such borrowing, the insurance program of the Obligors, insofar
as it relates to such Relevant Transaction for such Loans,
adequately protects the interests of the Agent and the Lenders
and is comparable in all material respects with insurance carried
by responsible owners and operators of Properties similar to
those of the Obligors, including (without limitation) that the
Agent shall have been named as loss payee and additional insured
under any additional insurance policies (or with respect to any
additional insurance acquired under existing insurance policies)
acquired in connection with such Relevant Transaction.
(ix) ENVIRONMENTAL SURVEY AND QUESTIONNAIRE. If
requested by the Agent, an environmental audit and/or review of
any real property to be acquired or leased by any Obligor in
connection with such Relevant Transaction, with the results and
methodology thereof reasonably satisfactory to the Agent and
performed by an engineer acceptable the Agent and the Company. In
addition, if requested by the Majority Lenders (through the
Agent), the Company shall have completed (and delivered to each
Lender) an environmental risk questionnaire in a form provided to
the Company by the Agent (and containing such inquiries with
respect to environmental matters as shall have been requested by
any Lender, through the Agent, to be included in such
questionnaire), and the responses to such questionnaire (and the
underlying facts and circumstances shown thereby) shall be in
form and substance reasonably satisfactory to each Lender.
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(x) ADVERSE LITIGATION OR PROCEEDING. A certificate from
the secretary of the Company, to the effect that (and the Agent
shall be satisfied in its good faith judgment that) no litigation
or proceeding shall exist or, to such officer's knowledge be
threatened, with respect to consummation of such Relevant
Transaction or that could have a Material Adverse Effect.
(xi) TRANSACTION DOCUMENTS. A true and complete copy of
the fully executed transaction documents relating to such
Relevant Transaction (or unsigned drafts thereof that conform in
all material respects with the fully executed purchase
agreement).
(xii) SECURITY INTEREST. Evidence to the satisfaction of
the Agent that the Agent (on behalf of the Lenders) has a
perfected security interest in the assets (including stock)
related to such Relevant Transaction.
(xiii) OTHER DOCUMENTS. Such other documents as the
Agent or any Lender or special New York counsel to ING may
reasonably request, and such other information regarding the
financial condition, operations, business or prospects of the
Obligors insofar as its relates to such Loans and the Relevant
Transaction related thereto.
(b) ELIGIBLE ACQUISITION INFORMATION. With respect to any
Relevant Transaction that is an Eligible Acquisition:
(i) LENDER APPROVAL. If the consideration to be paid for
such Eligible Acquisition will exceed $15,000,000, the approval
of the Majority Lenders of such Eligible Acquisition, such
approval not to be unreasonably withheld.
(ii) POSITIVE EBITDA. Evidence to the satisfaction of
the Agent that the EBITDA of the business to be acquired in such
Eligible Acquisition (based on actual results with Pro Forma
Adjustments) for the period of 12 consecutive months most
recently preceding the proposed date of such Eligible Acquisition
is greater than $1.
(iii) Evidence to the satisfaction of the Agent that the
consideration to be paid for such Eligible Acquisition (including
any Indebtedness assumed) will not exceed the product of (x)
EBITDA with respect to the business to be acquired in such
Eligible Acquisition for the 12 month period ending on the
proposed date of consummation of such Eligible Acquisition and
(y) six.
(c) ELIGIBLE NEW CONTRACT INFORMATION. With respect to any
Relevant Transaction that is an Eligible New Contract:
(i) Evidence to the satisfaction of the Agent that the
aggregate Loans that would be used to finance Capital
Expenditures in connection with such Eligible New Contract would
not exceed the projected EBITDA for such Eligible New Contract
for the period beginning on the date on which such Eligible New
Contract is entered into and ending on the earlier of (x) the
last day of the original term of such Eligible New Contract
(including any stated renewal options) and (y) the fifth
anniversary of such Eligible New Contract.
(ii) If the principal amount of the Loans to finance
such Capital Expenditure would exceed $10,000,000, the Majority
Lenders shall have approved such Capital Expenditure, such
approval not to be unreasonably withheld.
7.03 INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT. The obligation
of any Lender to make any Loan or otherwise extend credit to the Company upon
the occasion of each borrowing or other extension of credit hereunder is subject
to the further conditions precedent that, both immediately prior to the making
of such Loan or other
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extension of credit and also after giving effect thereto and to the intended use
thereof: (a) no Default shall have occurred and be continuing; and (b) the
representations and warranties made by the Company in Section 8 hereof, and by
each Obligor in each of the other Basic Documents to which it is a party, shall
be true and complete on and as of the date of the making of such Loan or other
extension of credit with the same force and effect as if made on and as of such
date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date).
Section 8. REPRESENTATIONS AND WARRANTIES. Each Obligor,
represents and warrants to the Agent and the Lenders that:
8.01 CORPORATE EXISTENCE. Each Obligor: (a) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could reasonably be expected to (either individually or in
the aggregate) have a Material Adverse Effect.
8.02 FINANCIAL CONDITION. The Obligors have heretofore furnished
to each of the Lenders the consolidated and consolidating balance sheets of the
Company and its Subsidiaries as at December 31, 1996 and the related
consolidated and consolidating statements of income, retained earnings and cash
flow of the Company and its Subsidiaries for the fiscal year ended on said date,
with the opinion thereon (in the case of said consolidated balance sheet and
statements) of Xxxxxx Xxxxxxxx L.L.P., and the unaudited consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at July 31,
1997 and the related consolidated and consolidating statements of income and
retained earnings of the Company and its Subsidiaries for the seven-month period
ended on such date. All such financial statements are complete and correct and
fairly present the consolidated financial condition of the Obligors, and (in the
case of said consolidating financial statements) the respective unconsolidated
financial condition of the Obligors, as at said dates and the consolidated and
unconsolidated results of their operations for the fiscal year and seven-month
period ended on said dates (subject, in the case of such financial statements as
at July 31, 1997, to normal year-end audit adjustments), all in accordance with
generally accepted accounting principles and practices applied on a consistent
basis, except as otherwise indicated in the notes thereto. None of the Obligors
has on the date hereof any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, in each case, of a type required to be
reflected in a balance sheet prepared in accordance with GAAP, except as
referred to or reflected or provided for in said balance sheets as at said
dates. Since December 31, 1996, there has been no material adverse change in the
consolidated financial condition, operations, business or prospects taken as a
whole of the Obligors from that set forth in said financial statements as at
said date.
8.03 LITIGATION. There are no legal or arbitral proceedings, or
any proceedings by or before any governmental or regulatory authority or agency,
now pending or (to the knowledge of the Company) threatened against any Obligor
that, if adversely determined could be reasonably expected to (either
individually or in the aggregate) have a Material Adverse Effect.
8.04 NO BREACH. None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of any Obligor, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which any Obligor is a party or by which any of them or any of their Property is
bound or to which any of them is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any Lien upon any
Property of the Obligors pursuant to the terms of any such agreement or
instrument.
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8.05 ACTION. Each Obligor has all necessary power, authority and
legal right to execute, deliver and perform its obligations under each of the
Basic Documents to which it is a party; the execution, delivery and performance
by each Obligor of each of the Basic Documents to which it is a party have been
duly authorized by all necessary corporate action on its part (including,
without limitation, any required shareholder approvals); and this Agreement has
been duly and validly executed and delivered by each Obligor and constitutes,
and each of the Notes and the other Basic Documents to which it is a party when
executed and delivered by such Obligor (in the case of the Notes, for value)
will constitute, its legal, valid and binding obligation, enforceable against
each Obligor in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
8.06 APPROVALS. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the Liens created pursuant to the Security
Documents.
8.07 USE OF CREDIT. None of the Obligors is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
Margin Stock, and no part of the proceeds of any extension of credit hereunder
will be used to buy or carry any Margin Stock.
8.08 ERISA. Each Plan, and, to the knowledge of each Obligor,
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which any Obligor would be
under an obligation to furnish a report to the Lenders under Section 9.01(h)
hereof.
8.09 TAXES. The Obligors are members of an affiliated group of
corporations filing consolidated returns for Federal income tax purposes, of
which the Company is the "common parent" (within the meaning of Section 1504 of
the Code) of such group. Each Obligor has filed (either directly, or indirectly
through the Company) all Federal income tax returns and all other material tax
returns that are required to be filed by them and have paid (either directly, or
indirectly through Company) all taxes due pursuant to such returns or pursuant
to any assessment received by any Obligor, except for any taxes being contested
by an Obligor in good faith by proper proceedings as to which no Liens have been
created on any Property of any Obligor. The charges, accruals and reserves on
the books of the Obligors in respect of taxes and other governmental charges
are, in the opinion of the Obligors, adequate. The Company has not given or been
requested to give a waiver of the statute of limitations relating to the payment
of Federal, state, local and foreign taxes or other impositions.
8.10 INVESTMENT COMPANY ACT. None of the Obligors is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
8.11 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Obligors is
a "holding company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
8.12 MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule I hereto is a complete and correct list,
as of the date of this Agreement, of each credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any
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extension of credit) to, or guarantee by, any Obligor, and the aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement is correctly described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and correct list,
as of the date of this Agreement, of each Lien securing Indebtedness of any
Person and covering any Obligor, and the aggregate Indebtedness secured (or that
may be secured) by each such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule I.
8.13 ENVIRONMENTAL MATTERS. Each Obligor has obtained all
environmental, health and safety permits, licenses and other authorizations
required under all applicable Environmental Laws to carry on its business as now
being or as currently proposed to be conducted, except to the extent failure to
have any such permit, license or authorization would not (either individually or
in the aggregate) have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each of the Obligors is in
compliance with the terms and conditions thereof, and is also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law, except to the extent failure to comply therewith would not
(either individually or in the aggregate) have a Material Adverse Effect.
In addition, except as set forth in Schedule II hereto:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued to any Obligor or about which any
Obligor has otherwise become aware, no complaint has been filed against any
Obligor or about which any Obligor has otherwise become aware, no penalty has
been assessed against any Obligor or about which any Obligor has otherwise
become aware and no investigation or review is pending or, to the knowledge of
any Obligor, threatened by any governmental authority or other entity with
respect to any alleged failure by any Obligor to have any environmental, health
or safety permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of any Obligor
or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any Hazardous Materials
generated by any Obligor, which has either not been resolved to the satisfaction
of the issuing authority or which would not individually or in the aggregate
have a Material Adverse Effect.
(b) None of the Obligors owns, operates or leases a treatment,
storage or disposal facility requiring a permit under the Resource Conservation
and Recovery Act of 1976, as amended, or under any comparable state or local
statute; and
(i) no polychlorinated biphenyls (PCBs) are or have
been present at any site or facility now or previously owned,
operated or leased by any Obligor;
(ii) no asbestos or asbestos-containing materials that
are friable or bear a reasonable chance of becoming friable are
or have been present at any site or facility now or previously
owned, operated or leased by any Obligor;
(iii) there are no underground storage tanks for
Hazardous Materials, active or abandoned, at any site or facility
now or previously owned, operated or leased by any Obligor that
are not in material compliance with all applicable Environmental
Laws, and there are no surface impoundments for Hazardous
Materials, active or abandoned at any site or facility now or
previously owned, operated or leased by any Obligor;
(iv) no Hazardous Materials have been Released at, on
or under any site or facility now or previously owned, operated
or leased by any Obligor in a reportable quantity established by
any applicable Environmental Law; and
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(v) no Hazardous Materials have been otherwise
Released at, on or under any site or facility now or previously
owned, operated or leased by any Obligor that would (either
individually or in the aggregate) have a Material Adverse Effect.
(c) None of the Obligors has transported or arranged for the
transportation of any Hazardous Material to any location that is listed
on the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the NPL by the
Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
ss. 300.5 ("CERCLIS"), or on any similar state or local list or that is
the subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims against the Company
or any of its Subsidiaries, which individually or in the aggregate would
have a Material Adverse Effect.
(d) No Hazardous Material generated by the Company or any of its
Subsidiaries has been recycled, treated, stored, disposed of or Released
by any Obligor at any facility which is subject to an Environmental
Claim which would reasonably be expected individually or in the
aggregate to have a Material Adverse Effect.
(e) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of the Company or any of its
Subsidiaries and no site or facility now or previously owned, operated
or leased by any Obligor is listed or to the knowledge of any Obligor
(upon due investigation) proposed for listing on the NPL, CERCLIS or any
similar state list of sites requiring investigation or clean-up, in each
case, which has either not been resolved to the satisfaction of the
issuing authority or which would not individually or in the aggregate
have a Material Adverse Effect.
(f) No Liens have arisen under or pursuant to any Environmental
Laws on any site or facility owned, operated or leased by any Obligor,
and no government action has been taken or is in process that could
subject any such site or facility to such Liens and none of the Obligors
would be required to place any notice or restriction relating to the
presence of Hazardous Materials at any site or facility owned by it in
any deed to the real property on which such site or facility is located.
(g) All investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of any Obligor
relating to environmental matters at or affecting any site or facility
now or previously owned, operated or leased by the any Obligor and that
reveal facts, circumstances or conditions that could reasonably be
expected to result in a Material Adverse Effect have been made available
to the Lenders.
8.14 CAPITALIZATION. Schedule V hereto correctly sets forth the
number of shares of authorized capital stock of the Company, the class of such
shares, the number of each such class outstanding and the par value thereof. All
of such outstanding shares are duly and validly issued and outstanding, and (to
the Company's knowledge) each of which shares is fully paid and nonassessable.
Schedule V hereto correctly sets forth, as of the date hereof, the names of the
Persons owning 5% or more of any class of such capital stock, the class or
classes of such capital stock owned by each such Person and percentage of the
total number of shares of such class owned by each such Person. As of the date
hereof, (x) except for those set forth in Schedule V hereto, there are no
outstanding Equity Rights with respect to the Company and (y) except for those
set forth in Schedule V hereto, there are no outstanding obligations of any
Obligor to repurchase, redeem, or otherwise acquire any shares of capital stock
of any Obligor to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of any Obligor.
8.15 SUBSIDIARIES, ETC.
(a) Set forth in Part A of Schedule III hereto is a complete and
correct list, as of the date hereof, of all of the Subsidiaries of the
Company, together with, for each such Subsidiary, (i) the jurisdiction
of
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organization of such Subsidiary, (ii) each Person holding ownership
interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of
such Subsidiary represented by such ownership interests. Except as
disclosed in Part A of Schedule III hereto, (x) each of the Company and
its Subsidiaries owns, free and clear of Liens (other than Liens created
pursuant to the Security Documents), and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be
held by it in Part A of Schedule III hereto, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation
is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
(b) Set forth in Part B of Schedule III hereto is a complete and
correct list, as of the date of this Agreement, of all Investments
(other than Investments disclosed in Part A of said Schedule III hereto)
held by the Company or any of its Subsidiaries in any Person (other than
Investments which are Permitted Investments or deposits maintained with
banks in the ordinary course of business) and, for each such Investment,
(x) the identity of the Person or Persons holding such Investment and
(y) the nature of such Investment. Except as disclosed in Part B of
Schedule III hereto, each of the Company and its Subsidiaries owns, free
and clear of all Liens (other than Liens created pursuant to the
Security Documents), all such Investments.
8.16 TITLE TO ASSETS. Each Obligor owns and has on the date
hereof, and will own and have on the Closing Date, good and marketable title or
valid and subsisting leaseholds (subject only to Liens permitted by Section 9.06
hereof) to the Properties shown to be owned in the most recent financial
statements referred to in Section 8.02 hereof (other than Properties disposed of
in the ordinary course of business or otherwise permitted to be disposed of
pursuant to Section 9.05 hereof). Each Obligor (a) owns and has on the date
hereof (and will own and have on the Closing Date), good and marketable title
to, or has on the date hereof (and will have on the Closing Date) a valid and
subsisting leasehold estate in, and (b) enjoys on the date hereof (and will
enjoy on the Closing Date), peaceful and undisturbed possession of, all
Properties (subject only to Liens permitted by Section 9.06 hereof) that are
necessary for the operation and conduct of its businesses.
8.17 TRUE AND COMPLETE DISCLOSURE. The information (other than
projections), reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Obligors to the Agent or any Lender in connection
with the negotiation, preparation or delivery of this Agreement and the other
Basic Documents or included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. All projections furnished by or on behalf of the Obligors in writing
to the Agent or any Lender for purposes of or in connection with this Agreement
or the transactions contemplated hereby were prepared by the Company in good
faith based on assumptions determined to be reasonable by the Company under the
then existing facts and circumstances. All written information furnished after
the date hereof by any Obligor to the Agent and the Lenders in connection with
this Agreement and the other Basic Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections) based on reasonable assumptions, on the
date, and under the facts and circumstances, as of which such information is
stated or certified. There is no fact actually known to any Obligor that could
have a Material Adverse Effect that has not been disclosed herein, in the other
Basic Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lenders for use in
connection with the transactions contemplated hereby or thereby.
8.18 REAL PROPERTY. Set forth on Schedule IV hereto is a list, as
of the Closing Date, of all of the real property interests held by the Company
and its Subsidiaries, indicating in each case whether the respective Property is
owned or leased, the identity of the owner or lessor and the location of the
respective Property.
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Section 9. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the Lenders and the Agent that, so long as any Commitment, Loan or
Letter of Credit Liability is outstanding and until payment in full of all
amounts payable by the Company hereunder:
9.01 FINANCIAL STATEMENTS; ETC. The Company shall deliver to each
of the Lenders (in such form as shall be satisfactory to the Agent):
(a) no later than January 15 of each year, a budget (on a monthly
basis) for the Company and its Subsidiaries for such year (including
consolidating and consolidated statements of income, cash flow and
balance sheets prepared in accordance with GAAP); and promptly after any
material revision to such budget, such budget as so revised;
(b) as soon as available and in any event within 30 days after
the end of each month, consolidated and consolidating statements of
income and retained earnings of the Company and its Subsidiaries for
such month and for the period from the beginning of the respective
fiscal year to the end of such month, and the related consolidated
balance sheets of the Company and its Subsidiaries as at the end of such
month, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures provided in the budget required
under Section 9.01(a) hereof for such period, accompanied by a
certificate of a senior financial officer of the Company, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Subsidiaries, and said consolidating
financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of the
Company and of each of its Subsidiaries, in each case in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such month (subject to normal year-end audit
adjustments with the absence of footnotes);
(c) as soon as available and in any event within 45 days after
the end of each quarterly fiscal period of each fiscal year of the
Company, (i) a statement of occupancy rates at each of the facilities
owned or maintained by the Company and its Subsidiaries as at the end of
such period, and a statement of occupancy revenues and the direct costs
of occupancy for each Correctional and Detention Facility Contract for
such period and for the period from the beginning of the respective
fiscal year to the end of such fiscal quarter, in each case setting
forth in comparative form the corresponding figures for the
corresponding periods in the preceding fiscal year and in the budget
required under Section 9.01(a) hereof (ii) an analysis of the chief
financial officer of the financial condition of the Company and its
Subsidiaries, on a consolidated and consolidating basis, as of the end
of such period, including (without limitation) a reconciliation to the
budget required under Section 9.01(a) hereof;
(d) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company, consolidated and
consolidating statements of income and retained earnings, and a
consolidated statement of cash flow, of the Company and its Subsidiaries
for such fiscal year and the related consolidated and consolidating
balance sheets of the Company and its Subsidiaries as at the end of such
fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet of the Company, by an opinion thereon of
independent certified public accountants of recognized national standing
(which opinion shall not contain any Impermissible Qualification), which
opinion shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations
of the Company and its Subsidiaries as at the end of, and for, such
fiscal year in accordance with generally accepted accounting principles,
and by a management letter or similar letter submitted to the Company by
such accountants and (ii) in the case of said consolidating statements
and balance sheets, by a certificate of a senior financial officer of
the Company, which certificate shall state that said consolidating
financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of the
Company and of each of its Subsidiaries, in each case in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such fiscal year;
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(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any national securities
exchange;
(f) to the extent not previously furnished to the Lenders or the
Agent in such capacity, promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all financial
statements, reports and proxy statements so mailed;
(g) without duplication of any provision of subsection (d) above,
promptly after the receipt by the Company thereof, copies of each report
submitted to any Obligor by independent accountants in connection with
any annual, interim or special audit of the books of any Obligor made by
such accountants, or any management letters or similar documents
submitted to any Obligor by such accountants;
(h) as soon as possible, and in any event within ten days after
the Company knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial
officer of the Company setting forth details respecting such event or
condition and the action, if any, that the Company or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (PROVIDED that a
failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including, without limitation,
the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any
Plan;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by the
Company or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against the Company or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the trust
of which such Plan is a part if the Company or an ERISA Affiliate
fails to timely provide security to the Plan in accordance with
the provisions of said Sections;
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(i) without prejudice as to whether an Event of Default has
occurred, promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same
in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company has
taken or proposes to take with respect thereto;
(j) promptly after the termination or expiration of any
Correctional and Detention Facility Agreement, PRO FORMA financial
projections prepared by the Company demonstrating that after giving
effect to such termination or expiration (and any replacement
Correctional and Detention Facility Agreement therefor) the Company will
be in compliance with its obligations under Sections 9.10, 9.11, 9.12,
9.13, 9.14 and 9.15 hereof for the period commencing on the date of such
termination and ending on the Commitment Termination Date; and
(k) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company or
any of its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be
filed under ERISA) available to the Company, as any Lender or the Agent
may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a), (b) or (c) above, a certificate
of a senior financial officer of the Company to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto). In addition, at the
time the Company furnishes to each Lender the financial statements required
pursuant to paragraph (c) above, the Company shall furnish to each Lender a
certificate of a senior financial officer setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
Sections 9.10, 9.11, 9.12, 9.13, 9.14 and 9.15 hereof as of the date as of which
such financial statements have been provided. Further, upon the request of any
Lender, at the time the Company furnishes the financial statements required
pursuant to paragraph (b) above, the Company shall furnish to such Lender a
certificate of a senior financial officer setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
Sections 9.10, 9.11, 9.12, 9.13, 9.14 and 9.15 hereof as of date as of which
such financial statements have been provided.
9.02 LITIGATION. The Company will promptly give to each Lender
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings that, if adversely determined, would not
(either individually or in the aggregate) have a Material Adverse Effect.
9.03 EXISTENCE, ETC. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises;
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements could be reasonably expected to
(either individually or in the aggregate) have a Material Adverse
Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of
its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained;
(d) maintain all of its Properties necessary to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted;
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(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
(f) upon notice to the Company, permit representatives of any
Lender or the Agent, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its officers,
all to the extent reasonably requested by such Lender or the Agent (as
the case may be).
9.04 INSURANCE. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations of comparable size engaged in the same or
similar business and similarly situated, against loss, damage and liability of
the kinds and in the amounts customarily maintained by such corporations. The
Company will in any event maintain (with respect to itself and each of its
Subsidiaries):
(1) CASUALTY INSURANCE -- insurance against loss or damage
covering all of the tangible real and personal Property and improvements
of the Company and each of its Subsidiaries by reason of any Peril (as
defined below) in such amounts (subject to such deductibles as shall be
satisfactory to the Majority Lenders) as shall be reasonable and
customary and sufficient to avoid the insured named therein from
becoming a co-insurer of any loss under such policy but in any event in
an amount (i) in the case of fixed assets and equipment (including,
without limitation, vehicles), at least equal to 100% of the actual
replacement cost of such assets (including, without limitation,
foundation, footings and excavation costs), subject to deductibles as
aforesaid and (ii) in the case of inventory, not less than the fair
market value thereof, subject to deductibles as aforesaid, PROVIDED that
insurance in respect of Perils consisting of earthquakes or floods shall
not be required to be obtained except upon 30 days' prior notice from
the Agent.
(2) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY AND PROPERTY
DAMAGE -- insurance against liability for bodily injury and property
damage in respect of all vehicles (whether owned, hired or rented by the
Company or any of its Subsidiaries) at any time located at, or used in
connection with, its Properties or operations in such amounts as are
then customary for vehicles used in connection with similar Properties
and businesses, but in any event to the extent required by applicable
law.
(3) COMPREHENSIVE GENERAL LIABILITY INSURANCE -- insurance
against claims for bodily injury, death or Property damage occurring on,
in or about the Properties (and adjoining streets, sidewalks and
waterways) of the Company and its Subsidiaries, in such amounts as are
then customary for Property similar in use in the jurisdictions where
such Properties are located.
(4) WORKERS' COMPENSATION INSURANCE -- workers' compensation
insurance (including, without limitation, Employers' Liability
Insurance) to the extent required by applicable law.
(5) BUSINESS INTERRUPTION INSURANCE -- insurance against loss of
operating income (up to an aggregate amount equal to $20,000,000 and
subject to a deductible, or self-insured amount, not in excess of
$100,000) by reason of any Peril.
(6) PROFESSIONAL LIABILITY INSURANCE -- professional liability
insurance in an amount equal to at least $10,000,000.
Such insurance shall be written by financially responsible companies selected by
the Company and (except for automobile insurance) having an A.M. Best rating of
"A" or better and being in a financial size category of VII or larger (or, with
respect to professional liability insurance only, an equivalent rating by a
European equivalent of A.M. Best), or by other companies acceptable to the
Majority Lenders, and (other than workers' compensation) shall name the Agent as
loss payee (to the extent covering risk of loss or damage to tangible property)
and as an additional named insured as its interests may appear (to the extent
covering any other risk). Each policy referred to in this Section 9.04 shall
provide
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that it will not be canceled or reduced, or allowed to lapse without renewal,
except after not less than 30 days' notice to the Agent and shall also provide
that the interests of the Agent and the Lenders shall not be invalidated by any
act or negligence of the Company or any Person having an interest in any
Property covered by the Mortgage nor by occupancy or use of any such Property
for purposes more hazardous than permitted by such policy nor by any foreclosure
or other proceedings relating to such Property. The Company will advise the
Agent promptly of any significant policy cancellation (other than any such
cancellation in connection with the replacement thereof), reduction or
amendment.
On or before the Closing Date, the Company will deliver to the
Agent certificates of insurance satisfactory to the Agent evidencing the
existence of all insurance required to be maintained by the Company hereunder
setting forth the respective coverages, limits of liability, carrier, policy
number and period of coverage and showing that such insurance will remain in
effect through the December 31 falling at least six months after the date
hereof, subject only to the payment of premiums as they become due (and
attaching original copies of any policies with respect to casualty insurance).
Thereafter, the Company will maintain all insurance required to be maintained by
the Company hereunder through the December 31 of each subsequent calendar year
as long as any Loans or Commitments are outstanding under this Agreement,
subject only to the payment of premiums as they become due. In addition, the
Company will not modify any of the provisions of any policy with respect to
professional liability insurance without delivering the original copy of the
endorsement reflecting such modification to the Agent accompanied by a written
report of Xxxx Insurance Associates, or any other firm of independent insurance
brokers of nationally recognized standing, stating that, in their opinion, such
policy (as so modified) adequately protects the interests of the Lenders and the
Agent, is in compliance with the provisions of this Section 9.04, and is
comparable in all respects with insurance carried by responsible owners and
operators of businesses similar to those of the Company and its Subsidiaries.
The Company will not obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required by this Section 9.04 unless
the Agent is the named insured thereunder, with loss payable as provided herein.
The Company will immediately notify the Agent whenever any such separate
insurance is obtained and shall deliver to the Agent the certificates evidencing
the same.
Without limiting the obligations of the Company under the
foregoing provisions of this Section 9.04, in the event the Company shall fail
to maintain in full force and effect insurance as required by the foregoing
provisions of this Section 9.04, then the Agent may (upon notice to the
Company), but shall have no obligation so to do, procure insurance covering the
interests of the Lenders and the Agent in such amounts and against such risks as
the Agent (or the Majority Lenders) shall deem appropriate, and the Company
shall reimburse the Agent in respect of any premiums paid by the Agent in
respect thereof.
For purposes hereof, the term "PERIL" shall mean, collectively,
fire, lightning, flood, windstorm, hail, earthquake, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from aircraft, vehicles and
smoke and all other perils covered by the "all-risk" endorsement then in use in
the jurisdictions where the Properties of the Company and its Subsidiaries are
located.
9.05 PROHIBITION OF FUNDAMENTAL CHANGES. The Company will not,
nor will it permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution). The Company will not, nor
will it permit any of its Subsidiaries to, acquire any business or Property
from, or capital stock of, or be a party to any acquisition of, any Person
except for (w) purchases of inventory and other Property to be sold or used in
the ordinary course of business, (x) Investments permitted under Section 9.08
hereof, (y) Capital Expenditures permitted under Section 9.15 hereof and (z)
other acquisitions so long as the aggregate consideration paid by the Obligors
for all such acquisitions does not exceed $250,000. The Company will not, nor
will it permit any of its Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, any part
of its business or Property, whether now owned or hereafter acquired (including,
without limitation, receivables and leasehold interests, but excluding (i)
obsolete or worn-out Property, tools or equipment no longer used or useful in
its business, (ii) any inventory or other Property sold or disposed of in the
ordinary course of business and on ordinary business terms and (iii) other
dispositions so long as the aggregate fair market value of all Property so
disposed of does not exceed $250,000).
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9.06 LIMITATION ON LIENS. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except
(without duplication):
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Part B of
Schedule I hereto (excluding, however, following the making of the
initial Loans hereunder, Liens securing Indebtedness to be repaid with
the proceeds of such Loans, as indicated on said Schedule I);
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under Section 10(h) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Company or any of its Subsidiaries;
(h) Liens upon real and/or tangible personal Property acquired
after the date hereof (by purchase, construction or otherwise) by the
Company or any of its Subsidiaries, each of which Liens either (A)
existed on such Property before the time of its acquisition and was not
created in anticipation thereof or (B) was created solely for the
purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of
such Property; PROVIDED that (i) no such Lien shall extend to or cover
any Property of the Company or such Subsidiary other than the Property
so acquired and improvements thereon and (ii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 80% of the
fair market value (as determined in good faith by a senior financial
officer of the Company) of such Property at the time it was acquired (by
purchase, construction or otherwise); and
(i) Liens on the Property of a Designated Subsidiary securing
Indebtedness permitted pursuant to Section 9.07(e) hereof.
9.07 INDEBTEDNESS. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur or suffer to exist any Indebtedness except
(without duplication):
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed
in Part A of Schedule I hereto;
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(c) Indebtedness of Subsidiaries of the Company to the Company or
to other Subsidiaries of the Company;
(d) Indebtedness of the Company and its Subsidiaries secured by
Liens permitted under Section 9.06(h) hereof up to but not exceeding
$500,000 at any one time outstanding;
(e) Indebtedness of the Designated Subsidiaries in an aggregate
principal amount not to exceed $30,000,000 at any one time outstanding;
and
(f) additional Indebtedness of the Company and its Subsidiaries
(including, without limitation, Capital Lease Obligations) up to but not
exceeding $500,000 at any one time outstanding.
9.08 INVESTMENTS. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule III hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company and its Subsidiaries in capital
stock of Subsidiaries of the Company to the extent outstanding on the
date of the financial statements of the Company and its Subsidiaries
referred to in Section 8.02 hereof and advances by the Company and its
Subsidiaries to Subsidiaries of the Company (other than Designated
Subsidiaries) in the ordinary course of business or in connection with a
Relevant Transaction financed with Loans;
(e) Interest Rate Protection Agreements required to be maintained
under Section 9.18 hereof;
(f) additional Investments up to but not exceeding $200,000 in
the aggregate;
(g) existing and future Investments comprised of stocks, bonds
and notes of existing or former account debtors of the Obligors if such
Investment was received pursuant to the consummation of a bankruptcy
plan of reorganization or similar proceedings of such account debtor;
(h) loans or advances by the Company or any of its Subsidiaries
to employees in the ordinary course of business, PROVIDED THAT the
aggregate amount of such loans and advances outstanding at any time
shall not exceed $100,000; and
(i) Investments by the Company in Designated Subsidiaries made
with the proceeds of Loans in an aggregate amount not to exceed
$10,000,000.
9.09 DIVIDEND PAYMENTS. The Company will not, nor will it permit
any of its Subsidiaries to, declare or make any Dividend Payment at any time.
9.10 EBITDA RATIO I. The Company will not permit the EBITDA Ratio
I with respect to any period ending on a date that falls within any period set
forth below under the column entitled "Period" to exceed the applicable ratio
set forth under the caption "Ratio" opposite such period:
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PERIOD RATIO
September 9, 1997 through and
including September 30, 2000 4.00 to 1
October 1, 2000 through and
including March 31, 2001 3.75 to 1
April 1, 2001 through and
including September 30, 2001 3.50 to 1
October 1, 2001 through and
including March 31, 2002 3.25 to 1
April 1, 2002 through and
including September 30, 2002 3.00 to 1
October 1, 2002 through and
including March 31, 2003 2.50 to 1
9.11 EBITDA RATIO I I. The Company will not permit the EBITDA
Ratio II with respect to any period ending on a date that falls within any
period set forth below under the column entitled "Period" to exceed the
applicable ratio set forth under the caption "Ratio" opposite such period:
PERIOD RATIO
September 9, 1997 through and
including September 30, 2000 5.00 to 1
October 1, 2000 through and
including March 31, 2001 4.75 to 1
April 1, 2001 through and
including September 30, 2001 4.50 to 1
October 1, 2001 through and
including March 31, 2002 4.25 to 1
April 1, 2002 through and
including September 30, 2002 4.00 to 1
October 1, 2002 through and
including March 31, 2003 3.50 to 1
9.12 NET WORTH. The Company will not permit its Net Worth to be
less than $40,000,000.
9.13 INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio with respect to any period ending on a date that falls
within any period set forth below under the column entitled "Period" to be less
than the applicable ratio set forth under the caption "Ratio" opposite such
period:
PERIOD RATIO
September 9, 1997 through and
including September 30, 1999 2.25 to 1
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October 1, 1999 through and
including September 30, 2000 2.50 to 1
October 1, 2000 through and
including September 30, 2001 2.75 to 1
October 1, 2001 through and
including March 31, 2003 3.00 to 1
9.14 FIXED CHARGES RATIO. The Company will not permit the Fixed
Charge Ratio to be less than 1.25 to 1 at any time.
9.15 CAPITAL EXPENDITURES. The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures at any time,
except for the following:
(a) maintenance Capital Expenditures in an aggregate amount not
to exceed;
(i) for the year ending December 31, 1997, $2,750,000; and
(ii) for each year thereafter, an amount equal to 3% of the total
revenues of the Company and its Subsidiaries for such year; and
(b) Capital Expenditures made in connection with Eligible
Acquisitions and Eligible New Contracts as described pursuant to Section
7.02 (a) (v) (C) (z) hereof.
9.16 [INTENTIONALLY DELETED]
9.17 SALE LEASE-BACK TRANSACTIONS. The Company will not, and will
not permit any of its Subsidiaries to, enter into any arrangement with any
Person whereby the Company or such Subsidiary shall sell or otherwise transfer
any of its Property, whether now owned or hereafter acquired, and thereafter
rent or lease such Property or similar Property for substantially the same use
or uses as the Property sold or transferred.
9.18 DISCOUNT OF ACCOUNTS. The Company will not, and will not
permit any of its Subsidiaries to, sell (with or without recourse) or discount
any of their accounts receivable.
9.19 INTEREST RATE PROTECTION AGREEMENTS. The Company will, at
all times after the date that is 180 days after the Closing Date, maintain in
full force and effect one or more Interest Rate Protection Agreements with any
Lender (or an affiliate of any Lender), that effectively enables the Company (in
a manner satisfactory to the Majority Lenders), as at any date, to protect
itself against interest rates as to a notional principal amount at least equal
to 50% of the then outstanding principal amount of Loans.
9.20 LINES OF BUSINESS. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than the business of operating correctional and/or
detention facilities, substance abuse rehabilitation facilities and related
lines of business.
9.21 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted
by this Agreement, the Company will not, nor will it permit any of its
Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of an Affiliate);
PROVIDED that (x) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and
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(y) the Company and its Subsidiaries may enter into transactions (other than
extensions of credit by the Company or any of its Subsidiaries to an Affiliate
or the payment of management or similar fees by the Company or a Subsidiary to
an Affiliate) providing for the leasing of Property, the rendering or receipt of
services or the purchase or sale of inventory and other Property in the ordinary
course of business if the monetary or business consideration arising therefrom
would be substantially as advantageous to the Company and its Subsidiaries as
the monetary or business consideration that would obtain in a comparable
transaction with a Person not an Affiliate.
9.22 USE OF PROCEEDS. The Company will use the proceeds of the
Loans solely:
(i) for working capital purposes,
(ii) to make principal and interest payments on Loans,
(iii) to make Capital Expenditures, and
(iv) subject to Section 9.08(i), Investments in
Designated Subsidiaries;
PROVIDED that neither the Agent nor any Lender shall have any responsibility as
to the use of any of such proceeds. Notwithstanding the foregoing, no more than
$15,000,000 of the aggregate proceeds of the Loans outstanding at any one time
may be used for working capital purposes.
9.23 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.
(a) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that each of
its Subsidiaries is a Wholly Owned Subsidiary.
(b) In the event that any additional shares of capital stock
shall be issued by any Subsidiary of the Company, the respective Obligor agrees
forthwith to deliver to the Agent pursuant to the Security Agreement the
certificates evidencing such shares of stock, accompanied by undated stock
powers executed in blank and to take such other action as the Agent shall
request to perfect the security interest created therein pursuant to the
Security Agreement.
(c) The Company will take such action, and will cause each of its
Subsidiaries to take such action, from time to time as shall be necessary to
ensure that all Subsidiaries of the Company are Subsidiary Guarantors and,
thereby, "Obligors" hereunder. Without limiting the generality of the foregoing,
in the event that the Company or any of its Subsidiaries shall form or acquire
any new Subsidiary, the Company or the respective Subsidiary will cause (or in
the event such new Subsidiary is a Designated Subsidiary, shall use its best
effort to cause) such new Subsidiary to become a "Subsidiary Guarantor" (and,
thereby, an "Obligor") hereunder pursuant to a written instrument in form and
substance satisfactory to each Lender and the Agent, and to deliver such proof
of corporate action, incumbency of officers, opinions of counsel and other
documents as any Lender or the Agent shall have requested.
9.24 MODIFICATIONS OF CERTAIN DOCUMENTS. No Obligor will consent
to any material modification, supplement or waiver of any of the provisions of
any Correctional and Detention Facility Contract.
9.25 POST-CLOSING REAL PROPERTY. If any Obligor (other than any
Designated Subsidiary) acquires any interest in real property (whether in fee or
a leasehold estate) after the Closing Date, such Obligor shall notify the Agent
and, upon the request of the Agent and the Majority Lenders at any time
thereafter, shall (or if such interest in real property is a leasehold estate,
shall use its best efforts to):
(i) furnish to the Agent one or more Mortgages
covering such interest in real property (and, if such real
property is a leasehold estate, appropriate estoppel certificates
from the respective landlords thereof);
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(ii) obtain one or more mortgagee policies of title
insurance on forms of and issued by one or more title companies
satisfactory to each Lender (the "TITLE COMPANIES"), insuring the
validity and priority of the Liens created under such Mortgage(s)
for and in amounts satisfactory to each Lender, subject only to
such exceptions as are satisfactory to the Majority Lenders;
(iii) furnish to the Agent as-built surveys of recent
date of such real property, showing such matters as may be
required by any Lender, which surveys shall be in form and
content acceptable to the Majority Lenders, and certified to the
Agent and to each Lender and the Title Companies, and shall have
been prepared by a registered surveyor acceptable to the Majority
Lenders; and
(iv) furnish to the Agent certified copies of
unconditional certificates of occupancy (or, if it is not the
practice to issue certificates of occupancy in the jurisdiction
in which the facilities to be covered by such Mortgage(s) are
located, then such other evidence reasonably satisfactory to the
Majority Lenders) permitting the fully functioning operation and
occupancy of each such facility and of such other permits
necessary for the use and operation of each such facility issued
by the respective governmental authorities having jurisdiction
over each such facility. In addition, the Company shall have paid
to the Title Companies all expenses and premiums of the Title
Companies in connection with the issuance of such policies and in
addition shall have paid to the Title Companies an amount equal
to the recording and stamp taxes payable in connection with
recording such Mortgage in the appropriate county land office(s).
9.26 THE XXXXXXX XXX GROUP, L.P. The Xxxxxxx Xxx Group, L.P., a
Delaware limited partnership, shall not hold or acquire any Property and shall
not incur any Indebtedness or other liabilities in addition to those in
existence as of the date hereof, which are correctly set forth on Schedule VI
hereto.
Section 10. EVENTS OF DEFAULT. If one or more of the following
events (herein called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any
principal of any Loan or any Reimbursement Obligation when due (whether
at stated maturity or at mandatory or optional prepayment); or (ii)
default in the payment of any interest on any Loan, any fee or any other
amount payable by it hereunder or under any other Basic Document when
due and such default shall have continued unremedied for one Business
Day; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $100,000 or more, or in the payment when due of
any amount under any Interest Rate Protection Agreement; or any event
specified in any note, agreement, indenture or other document evidencing
or relating to any such Indebtedness or any event specified in any
Interest Rate Protection Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity or, in the case of an Interest Rate Protection
Agreement, to permit the payments owing under such Interest Rate
Protection Agreement to be liquidated; or
(c) Any representation, warranty or certification made or deemed
made herein or in any other Basic Document (or in any modification or
supplement hereto or thereto) by any Obligor, or any certificate
furnished to any Lender or the Agent pursuant to the provisions hereof
or thereof, shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
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(d) The Company shall default in the performance of any of its
obligations under any of Sections 9.01(j), 9.05, 9.06, 9.07, 9.08, 9.09,
9.10, 9.11, 9.12, 9.13, 9.14, 9.15, 9.17, 9.18, 9.19, 9.20 or 9.22
hereof; or any Obligor shall default in the performance of any of its
obligations under Section 4.2 or 5.2 of the Security Agreement; or
"Event of Default" under any Mortgage; or any Obligor shall default in
the performance of any of its other obligations in this Agreement or any
other Basic Document and such default shall continue unremedied for a
period of thirty or more days after notice thereof to the Company by the
Agent or any Lender (through the Agent); or
(e) The Company or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such debts
become due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of all
or a substantial part of its Property, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under
the Bankruptcy Code, (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or (vi) take
any corporate action for the purpose of effecting any of the foregoing;
or
(g) A proceeding or case shall be commenced, without the
application or consent of such of the Company or any of its Subsidiaries
as is affected thereby, in any court of competent jurisdiction, seeking
(i) the reorganization, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of the debts of the
Company or any of its Subsidiaries, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the Company or
any of its Subsidiaries or of all or any substantial part of its
Property, or (iii) similar relief in respect of the Company or any of
its Subsidiaries under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more
days; or an order for relief against the Company or any of its
Subsidiaries shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in an
amount in excess of $100,000 shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against the
Company or any of its Subsidiaries and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the date of
entry thereof and the Company or such Subsidiary (as the case may be)
shall not, within said period of 30 days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(i) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan and,
as a result of such event or condition, together with all other such
events or conditions, the Company or any ERISA Affiliate shall incur or
in the opinion of the Majority Lenders shall be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) that, in the determination of the Majority
Lenders, would (either individually or in the aggregate) have a Material
Adverse Effect; or
(j) A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries, or any predecessor in interest of
the Company or any of its Subsidiaries or Affiliates, of (or there shall
have been asserted against the Company or any of its Subsidiaries) an
Environmental Claim that, in the judgment of the Majority Lenders is
reasonably likely to be determined adversely to the Company or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a
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Material Adverse Effect (insofar as such amount is payable by the
Company or any of its Subsidiaries but after deducting any portion
thereof that is reasonably expected to be paid by other creditworthy
Persons jointly and severally liable therefor); or
(k) The Liens created by the Security Documents shall at any time
not constitute a valid and perfected Lien on the collateral stated to be
covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Agent, free and clear of all other Liens (other than Liens permitted
under Section 9.06 hereof or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the
Security Documents shall for whatever reason be terminated or cease to
be in full force and effect, or the enforceability thereof shall be
contested by any Obligor; or
(l) Any of the following:
(i) 15 Business Days shall have elapsed after any
material Correctional and Detention Facility Contract shall have
been terminated and shall not have been renewed on substantially
the same terms or terms more favorable to the Obligors (unless
during such 15 Business Day period the Company shall have
demonstrated to the satisfaction of the Agent and each Lender
that such termination will not have a Material Adverse Effect);
or
(ii) the payment terms of any material Correctional
and Detention Facility Contract shall be modified or any other
terms of any material Correctional and Detention Facility
Contract shall be modified in any respect which the Majority
Lenders determine could reasonably be expected to have a Material
Adverse Effect; or
(iii) any Obligor shall default in the performance of
any of its material obligations under any material Correctional
and Detention Facility Contract; or
(iv) any party to any Correctional and Detention
Facility Contract (other than an Obligor) shall default in the
performance of any of its material obligations thereunder; or
(v) an event or condition of the type described in
Section 10(f) or 10(g) shall occur or exist with respect to any
party to any material Correctional and Detention Facility
Contract (other than an Obligor); or
(vi) any relevant legislature or administrative body
shall fail to appropriate any material amount of funds in respect
of any material Correctional and Detention Facility Contract
(for purposes of this clause (l) and the following clause (m), a
Correctional and Detention Facility Contract shall be deemed to be
"material" if the failure of the Obligors to receive the amounts stated
to be due and owing thereunder could reasonably be expected to have a
Material Adverse Effect); or
(m) Any Use Permit relating to a material Correctional and
Detention Facility Agreement shall be revoked, withdrawn or otherwise
terminated; or any Use Permit relating to a material Correctional and
Detention Facility Agreement shall be modified, amended or supplemented
in a way which the Majority Lenders determine could have a Material
Adverse Effect;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 10 with respect to any Obligor, (A) the Agent
may and, upon request of the Majority Lenders shall, by notice to the Company,
terminate the Commitments and they shall thereupon terminate, and (B) the Agent
may and, upon request of the Majority Lenders shall by notice to the Company,
declare the principal amount then outstanding of, and the accrued interest on,
the Loans, the Reimbursement Obligations and all other amounts payable by the
Obligors hereunder and
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under the Notes to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor; and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 10 with respect to any Obligor, the
Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Obligors hereunder and under
the Notes shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by each Obligor.
In addition, upon the occurrence and during the continuance of any Event
of Default (if the Agent has declared the principal amount then outstanding of,
and accrued interest on, the Loans and all other amounts payable by the Company
hereunder and under the Notes to be due and payable), the Company agrees that it
shall, if requested by the Agent or the Majority Lenders through the Agent (and,
in the case of any Event of Default referred to in clause (f) or (g) of this
Section 10 with respect to any Obligor, forthwith, without any demand or the
taking of any other action by the Agent or the Lenders) provide cover for the
Letter of Credit Liabilities by paying to the Agent immediately available funds
in an amount equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Agent in the Collateral Account as
collateral security in the first instance for the Letter of Credit Liabilities
and be subject to withdrawal only as therein provided.
Section 11. THE AGENT.
11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Basic Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and of the other Basic Documents,
together with such other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 11.05 and the first sentence
of Section 11.06 hereof shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents): (a) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and in the other Basic Documents, and shall not by reason of this Agreement or
any other Basic Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Basic Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Basic Document or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Basic Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Agent may deem and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or transfer thereof
shall have been filed with the Agent, together with the consent of the Company
to such assignment or transfer (to the extent provided in Section 12.06(b)
hereof).
11.02 RELIANCE BY AGENT. The Agent shall be entitled to rely upon
any certification, notice or other communication (including, without limitation,
any thereof by telephone, telecopy, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Basic
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Majority Lenders or, if provided herein, in accordance with the
instructions given all of the Lenders, and such instructions of such Lenders and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders.
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11.03 DEFAULTS. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default unless the Agent has received notice
from a Lender or the Company specifying such Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall (subject to Section 11.07 hereof) take
such action with respect to such Default as shall be directed by the Majority
Lenders, PROVIDED that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of the Majority Lenders or all of the
Lenders.
11.04 RIGHTS AS A LENDER. With respect to its Commitments and the
Loans made by it, ING (and any successor acting as Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. ING (and any successor acting as
Agent) and its affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in and generally engage in
any kind of banking, trust or other business with the Obligors (and any of their
Subsidiaries or Affiliates) as if it were not acting as the Agent, and ING and
its affiliates may accept fees and other consideration from the Obligors for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
11.05 INDEMNIFICATION. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 12.03 hereof, but without limiting
the obligations of the Company under said Section 12.03, and including in any
event any payments under any indemnity that the Agent is required to issue to
any bank referred to in Section 4.02 of the Security Agreement to which
remittances in respect of Accounts, as defined therein, are to be made) ratably
in accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) arising
out of or by reason of any investigation in or in any way relating to or arising
out of this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 12.03 hereof, but
excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents, PROVIDED that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or under any other Basic Document. The Agent shall not be required to keep
itself informed as to the performance or observance by any Obligor of this
Agreement or any of the other Basic Documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Company or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the Security Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agent or any of its affiliates.
11.07 FAILURE TO ACT. Except for action expressly required of the
Agent hereunder and under the other Basic Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the Lenders
of their indemnification
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obligations under Section 11.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
11.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Company, and the Agent
may be removed at any time with or without cause by the Majority Lenders. Upon
any such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Majority Lenders and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, that shall be a financial institution
that has an office in New York, New York. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 11 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent. The Agent may at any time assign all of its
rights and obligations hereunder to any affiliate of the Agent by notice to the
Company and each Lender.
11.09 CONSENTS UNDER OTHER BASIC DOCUMENTS. Except as otherwise
provided in Section 12.04 hereof with respect to this Agreement, the Agent may,
with the prior consent of the Majority Lenders (but not otherwise), consent to
any modification, supplement or waiver under any of the Basic Documents,
PROVIDED that, without the prior consent of each Lender, the Agent shall not
(except as provided herein or in the Security Documents) release any collateral
or otherwise terminate any Lien under any Basic Document providing for
collateral security, or agree to additional obligations being secured by such
collateral security, except that no such consent shall be required, and the
Agent is hereby authorized, to release any Lien covering Property that is the
subject of a disposition of Property permitted hereunder or to which the
Majority Lenders have consented.
Section 12. MISCELLANEOUS.
12.01 WAIVER. No failure on the part of the Agent or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Each Obligor irrevocably waives, to the fullest extent permitted
by applicable law, any claim that any action or proceeding commenced by the
Agent or any Lender relating in any way to this Agreement should be dismissed or
stayed by reason, or pending the resolution, of any action or proceeding
commenced by any Obligor relating in any way to this Agreement whether or not
commenced earlier. To the fullest extent permitted by applicable law, the
Obligors shall take all measures necessary for any such action or proceeding
commenced by the Agent or any Lender to proceed to judgment prior to the entry
of judgment in any such action or proceeding commenced by any Obligor.
12.02 NOTICES. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telex or telecopy), delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof (below the name
of the Company, in the case of any Subsidiary Guarantor); or, as to any party,
at such other address as shall be designated by such party in a notice to each
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by telex
or telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
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12.03 EXPENSES, ETC. The Company agrees to pay or reimburse each
of the Lenders and the Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the reasonable fees and
expenses of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING) in connection
with (i) the negotiation, preparation, execution and delivery of this Agreement
and the other Basic Documents and the extension of credit hereunder and (ii) the
negotiation or preparation of any modification, supplement or waiver of any of
the terms of this Agreement or any of the other Basic Documents (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses of the Lenders
and the Agent (including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any enforcement or
collection proceedings resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this Section
12.03; and (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Basic Documents or any other
document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein.
The Company hereby agrees to indemnify the Agent and each Lender
and their respective directors, officers, employees, attorneys and agents from,
and hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including, without limitation, any
and all losses, liabilities, claims, damages or expenses incurred by the Agent
to any Lender, whether or not the Agent or any Lender is a party thereto)
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to the Repurchase Transaction and the transactions
contemplated thereby, the extensions of credit hereunder or any actual or
proposed use by the Company or any of its Subsidiaries of the proceeds of any of
the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). Without
limiting the generality of the foregoing, the Company will (x) indemnify the
Agent for any payments that the Agent is required to make under any indemnity
issued to any bank referred to in Section 4.02 of the Security Agreement to
which remittances in respect to Accounts, as defined therein, are to be made and
(y) indemnify the Agent and each Lender from, and hold the Agent and each Lender
harmless against, any losses, liabilities, claims, damages or expenses described
in the preceding sentence arising under any Environmental Law as a result of (i)
the past, present or future operations of the Company or any of its Subsidiaries
(or any predecessor in interest to the Company or any of its Subsidiaries), or
(ii) the past, present or future condition of any site or facility owned,
operated or leased at any time by the Company or any of its Subsidiaries (or any
such predecessor in interest), or (iii) any Release or threatened Release of any
Hazardous Materials at or from any such site or facility, including any such
Release or threatened Release that shall occur during any period when the Agent
or any Lender shall be in possession of any such site or facility following the
exercise by the Agent or any Lender of any of its rights and remedies hereunder
or under any of the Security Documents, PROVIDED THAT the Company shall not be
liable under this subclause (y) for any of the foregoing to the extent they
arise solely from the gross negligence or willful misconduct of the party to be
indemnified (or such party's employees or agents).
12.04 AMENDMENTS, ETC. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company, the Agent and the
Majority Lenders, or by the Company and the Agent acting with the consent of the
Majority Lenders, and any provision of this Agreement may be waived by the
Majority Lenders or by the Agent acting with the consent of the Majority
Lenders; PROVIDED that: (a) no modification, supplement or waiver shall, unless
by an instrument signed by all of the Lenders or by the Agent acting with the
consent of all of the Lenders: (i) increase, or extend the term of any of the
Commitments, or extend the time or waive any requirement for the reduction or
termination of any of the Commitments, (ii) extend the date fixed for the
payment of principal of or interest on any Loan, the Reimbursement Obligations
or any fee hereunder, (iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon or any fee is payable
hereunder, (v) alter the rights or obligations of the Company to prepay
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Loans, (vi) alter the terms of this Section 12.04, (vii) modify the definition
of the term "Majority Lenders" or modify in any other manner the number or
percentage of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof, or (viii) waive any of the
conditions precedent set forth in Section 7.01 or 7.02 hereof; (b) any
modification or supplement of Section 11 hereof shall require the consent of the
Agent; and (c) any modification or supplement of Section 6 hereof shall require
the consent of each Subsidiary Guarantor.
12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) No Obligor may assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders and
the Agent.
(b) Each Lender may, with the consent of the Agent and the Letter
of Credit Issuer, assign any of its Loans, its Notes, its Letter of Credit
Liabilities and its Commitments (and, in the case of its outstanding
Commitments, only with the consent of the Company which consent shall not be
unreasonably withheld); PROVIDED that (i) no such consent by the Company or the
Agent shall be required in the case of any assignment to another Lender; (ii)
any such partial assignment shall be in an amount at least equal to $5,000,000;
and (iii) each such assignment by a Lender of its Loans, Letter of Credit
Liabilities or Commitment shall be made in such manner so that the same portion
of its Loans, Letter of Credit Liabilities and Commitment is assigned to the
respective assignee. Upon execution and delivery by the assignor and the
assignee to the Company and the Agent of an Assignment Agreement substantially
in the form of Exhibit D hereto pursuant to which such assignee agrees to become
a "Lender" hereunder (if not already a Lender) having the Commitment(s), Letter
of Credit Liabilities and Loans specified in such Assignment Agreement, and upon
consent thereto by the Company and the Agent, to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise provided
in such assignment with the consent of the Company and the Agent), the
obligations, rights and benefits of a Lender hereunder holding the
Commitment(s), Letter of Credit Liabilities and Loans (or portion thereof)
assigned to it (in addition to the Commitment(s), Letter of Credit Liabilities
and Loans, if any, theretofore held by such assignee) and the assigning Lender
shall, to the extent of such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned. Upon each such assignment, the assigning Lender
shall pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loans or Letter of Credit
Interest held by it, or in its Commitments, in which event each purchaser of a
participation (a "PARTICIPANT") shall be entitled to the rights and benefits of
the provisions of Section 9.01(k) hereof with respect to its participation in
such Loans, Letter of Credit Interest and Commitments as if (and the Company
shall be directly obligated to such Participant under such provisions as if)
such Participant were a "Lender" for purposes of said Section, but, except as
otherwise provided in Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Note or any other Basic Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Company to any Lender under Section 5
hereof in respect of Loans and Letter of Credit Interest held by it, and its
Commitments, shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest and
Commitments, and as if such Lender were funding each of such Loan, Letter of
Credit Interest and Commitments in the same way that it is funding the portion
of such Loan and Commitments in which no participations have been sold. In no
event shall a Lender that sells a participation agree with the Participant to
take or refrain from taking any action hereunder or under any other Basic
Document except that such Lender may agree with the Participant that it will
not, without the consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the reduction or
termination, of such Lender's related Commitment, (ii) extend the date fixed for
the payment of principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon, or any fee hereunder
payable to the Participant, to a level below the rate at which the Participant
is entitled to receive such interest or fee, (v) alter the rights or obligations
of the
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Company to prepay the related Loans or (vi) consent to any modification,
supplement or waiver hereof or of any of the other Basic Documents to the extent
that the same, under Section 11.10 or 12.04 hereof, requires the consent of each
Lender.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.06, any Lender may (without
notice to the Company, the Agent or any other Lender and without payment of any
fee) (i) assign and pledge all or any portion of its Loans and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii) assign all or
any portion of its rights under this Agreement and its Loans and its Notes to an
affiliate. No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) A Lender may furnish any information concerning the Company
or any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 12.12 hereof.
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan or
Reimbursement Obligation held by it hereunder to the Company or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
12.07 SURVIVAL. The obligations of the Company under Sections
5.01, 5.05 and 12.03 hereof, the obligations of each Subsidiary Guarantor under
Section 6.03 hereof, and the obligations of the Lenders under Section 11.05
hereof, shall survive the repayment of the Loans and the Reimbursement
Obligations and the termination of the Commitments.
12.08 CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.09 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
12.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement
and the Notes shall be governed by, and construed in accordance with, the law of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. Each Obligor irrevocably waives, to the
fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
12.11 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
12.12 CONFIDENTIALITY. Each Lender and the Agent agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company pursuant to this Agreement,
PROVIDED that nothing herein shall limit the disclosure of any such information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) to counsel for any of the Lenders or the Agent, (iii) to bank examiners,
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auditors or accountants, (iv) to the Agent or any other Lender, (v) in
connection with any litigation to which any one or more of the Lenders or the
Agent is a party relating to any of the Obligors or the transactions
contemplated hereby, (vi) to a subsidiary or affiliate of such Lender or (vii)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality Agreement
substantially in the form of Exhibit C hereto; PROVIDED, FURTHER, that in no
event shall any Lender or the Agent be obligated or required to return any
materials furnished by the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
CORNELL CORRECTIONS, INC.
By_________________________
Title:
Address for Notices:
Cornell Corrections, Inc.
0000 Xxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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SUBSIDIARY GUARANTORS
CORNELL CORRECTIONS MANAGEMENT,
INC.
By _________________________
Title:
CORNELL CORRECTIONS CONSULTING,
INC.
By _________________________
Title:
CORNELL CORRECTIONS OF
RHODE ISLAND, INC.
By __________________________
Title:
THE XXXXXXX XXX GROUP, L.P.
By CORNELL CORRECTIONS OF NORTH
AMERICA, INC.
By _____________________
Title:
CORNELL CORRECTIONS OF NORTH
AMERICA, INC.
By __________________________
Title:
CORNELL CORRECTIONS OF
TEXAS, INC.
By __________________________
Title:
-00-
XXXXXXX XXXXXXXXXXX XX
XXXXXXXXXX, INC.
By ___________________________
Title:
INTERNATIONAL SELF HELP
SERVICES, INC.
By ___________________________
Title:
WBP LEASING, INC.
By ___________________________
Title:
ABRAXAS GROUP, INC.
By ___________________________
Title:
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LENDERS
COMMITMENT ING (U.S.) CAPITAL CORPORATION
$30,000,000
By_________________________
Title:
Lending Office for all Loans:
ING Capital
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Address for Notices:
ING Capital
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Merchant Banking Group
-- New York
Xx. Xxxxx Xxxxxxxxxx
Xx. Xxxxx Xxxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
COMMITMENT BHF-BANK AKTIENGESELLSCHAFT
$15,000,000
By_________________________
Title:
Lending Office for all Loans:
BHF-Bank Aktiengesellschaft
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Address for Notices:
BHF-Bank Aktiengesellschaft
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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COMMITMENT CREDITANSTALT CORPORATE FINANCE, INC.
$15,000,000
By_________________________
Title:
By_________________________
Title:
Lending Office for all Loans:
Creditanstalt Corporate Finance, Inc.
c/o Creditanstalt - Bankverein
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Address for Notices:
Creditanstalt Corporate Finance, Inc.
c/o Creditanstalt - Xxxxxxxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-63-
ING (U.S.)CAPITAL CORPORATION,
as Agent
By_________________________
Title:
Address for Notices to
ING as Agent:
ING Capital
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Merchant Banking Group
-- New York
Xx. Xxxxx Xxxxxxxxxx
Xx. Xxxxx Xxxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-64-
