EXHIBIT 10.1
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CORNELL CORRECTIONS, INC.
and
SUBSIDIARY GUARANTORS
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SUBORDINATED BRIDGE LOAN AGREEMENT
Dated as of October 14, 1999
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ING (U.S.) CAPITAL LLC,
as Agent
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PAGE
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.............................11
1.03 Types of Loans..................................................12
Section 2. Commitments, Loans, Notes and Prepayments.......................12
2.02 Borrowings of Loans.............................................12
2.03 Changes of Commitments..........................................12
2.04 Lending Offices.................................................12
2.05 Several Obligations; Remedies Independent.......................12
2.06 Notes...........................................................13
2.07 Optional Prepayments and Conversions or Continuations of Loans..13
2.08 Mandatory Prepayments...........................................13
Section 3. Payments of Principal and Interest..............................14
3.01 Repayment of Principal..........................................14
3.02 Interest........................................................14
Section 4. Payments; Pro Rata Treatment; Computations; Etc.................15
4.01 Payments........................................................15
4.02 Pro Rata Treatment..............................................16
4.03 Computations....................................................16
4.04 Minimum Amounts.................................................16
4.05 Certain Notices.................................................16
4.06 Non-Receipt of Funds by the Agent...............................17
4.07 Sharing of Payments, Etc........................................18
Section 5. Yield Protection, Etc...........................................18
5.01 Additional Costs................................................18
5.02 Limitation on Types of Loans....................................20
5.03 Illegality......................................................21
5.04 Treatment of Eurodollar Loans...................................21
5.05 Compensation....................................................21
5.06 Substitution of Lenders.........................................22
Section 6. Guarantee.......................................................22
6.01 The Guarantee...................................................22
6.02 Obligations Unconditional.......................................22
6.03 Reinstatement...................................................23
6.04 Subrogation.....................................................23
6.05 Remedies........................................................23
6.06 Instrument for the Payment of Money.............................24
6.07 Continuing Guarantee............................................24
6.08 Rights of Contribution..........................................24
6.09 General Limitation on Guarantee Obligations.....................24
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PAGE
Section 7. Conditions Precedent............................................25
7.01 Conditions Precedent to Initial Borrowing.......................25
7.02 Conditions Precedent to Financing the Interventions Acquisition.25
7.03 Initial and Subsequent Loans....................................25
Section 8. Representations and Warranties..................................26
8.01 Corporate Existence.............................................26
8.02 Financial Condition.............................................26
8.03 Litigation......................................................26
8.04 No Breach.......................................................26
8.05 Action..........................................................26
8.06 Approvals.......................................................27
8.07 Use of Credit...................................................27
8.08 ERISA...........................................................27
8.09 Taxes...........................................................27
8.10 Investment Company Act..........................................27
8.11 Public Utility Holding Company Act..............................27
8.12 Material Agreements and Liens...................................27
8.13 Environmental Matters...........................................28
8.14 Capitalization..................................................29
8.15 Subsidiaries, Etc...............................................29
8.16 Title to Assets.................................................30
8.17 True and Complete Disclosure....................................30
Section 9. Covenants of the Company........................................30
9.01 Financial Statements; Etc.......................................30
9.02 Litigation......................................................33
9.03 Existence, Etc..................................................33
9.04 Insurance.......................................................33
9.05 Prohibition of Fundamental Changes..............................34
9.06 Limitation on Liens.............................................34
9.07 Indebtedness....................................................35
9.08 Investments.....................................................35
9.09 Dividend Payments...............................................36
9.10 EBITDA Ratio....................................................36
9.11 Interest Coverage Ratio.........................................36
9.12 The Xxxxxxx Xxx Group, L.P......................................36
9.13 Sale Lease-back Transactions....................................36
9.14 Discount of Accounts............................................36
9.15 Lines of Business...............................................37
9.16 Transactions with Affiliates....................................37
9.17 Use of Proceeds.................................................37
9.18 Certain Obligations Respecting Subsidiaries.....................37
9.19 Modifications of Certain Documents..............................37
Section 10. Events of Default...............................................37
Section 11. The Agent.......................................................40
11.01 Appointment, Powers and Immunities..............................40
11.02 Reliance by Agent...............................................40
11.03 Defaults........................................................40
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PAGE
11.04 Rights as a Lender..............................................41
11.05 Indemnification.................................................41
11.06 Non-Reliance on Agent and Other Lenders.........................41
11.07 Failure to Act..................................................41
11.08 Resignation or Removal of Agent.................................41
Section 12. Miscellaneous...................................................42
12.01 Waiver..........................................................42
12.02 Notices.........................................................42
12.03 Expenses, Etc...................................................42
12.04 Amendments, Etc.................................................43
12.05 Successors and Assigns;.........................................43
12.06 Assignments and Participations..................................43
12.07 Survival........................................................45
12.08 Captions........................................................45
12.09 Counterparts....................................................45
12.10 Governing Law; Submission to Jurisdiction.......................45
12.11 Waiver of Jury Trial............................................45
12.12 Confidentiality.................................................45
SCHEDULE I - Certain Litigation
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Capital Stock, Equity Rights and Registration Rights
SCHEDULE VI - Existing Property, Indebtedness and Liabilities of
The Xxxxxxx Xxx Group, L.P.
SCHEDULE VII - Loans to Xxxxx Xxxxxxx and Xxxxxx Xxxxx
EXHIBIT A - Form of Company 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
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SUBORDINATED BRIDGE LOAN AGREEMENT dated as of October 14, 1999 (as
further amended, supplemented or modified from time to time, 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 LLC, a Delaware limited liability company, as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"AGENT").
The Obligors have requested the Lenders to make loans to the Company
in an aggregate principal amount not exceeding $50,000,000, and the Lenders are
willing, on the terms and conditions herein set forth, to make such loans to the
Company. Accordingly, the parties hereto hereby agree 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, (a) 4.00% for Base Rate Loans and
(b) 6.00% for Eurodollar Loans, provided that each such rate shall increase by
an additional 1/2 of 1% on each three-month anniversary of the Closing Date.
"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.
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"BASIC DOCUMENTS" shall mean, collectively, this Agreement and the
Notes.
"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 that the initial Loans are made
hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT" shall mean, for each Lender, the obligation of such
Lender to make one or more Loans in an aggregate amount up to but not exceeding
the amount set opposite the name of such Lender on the signature pages hereof
under the caption "Commitment." The original aggregate principal amount of the
Commitments is $50,000,000.
"COMMITMENT LETTER" shall mean the letter dated October 14, 1999
from ING Barings to the Company (including the Term Sheet annexed thereto)
relating to the credit facility provided for by this Agreement.
"COMMITMENT TERMINATION DATE" shall mean December 31, 1999.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.07 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 2.07 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.
"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.
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"DESIGNATED SENIOR INDEBTEDNESS" shall mean the obligations of the
Company and the Subsidiary Guarantors under the following:
(a) the Revolving Credit Facility;
(b) the 1998 Synthetic Lease Facility; and
(c) the 1998 Senior Notes.
"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, 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" means, 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
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(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 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" 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
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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 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
Dow Xxxxx Market Screen 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.
"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 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
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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.
"FEE LETTER" shall mean the letter from ING Barings to the Company
dated October 14, 1999 relating to certain fees to be paid by the Company.
"FUTURE SYNTHETIC LEASE FINANCING" shall mean one or more Synthetic
Lease Financings entered into after the Closing Date.
"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
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
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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. For the avoidance of doubt, the principal components of the 1998
Synthetic Lease Facility and any Future Synthetic Lease Financing shall
constitute "Indebtedness."
"ING BARINGS" shall mean ING (U.S.) Capital LLC.
"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), PLUS (d) the interest
component of any payments in respect of the 1998 Synthetic Lease Facility and
any Future Synthetic Lease Financing accrued or capitalized during such period
(whether or not actually paid during such period).
"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 Principal Payment Date, such
Interest Period shall not be available, and (ii) 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.
"INTERVENTIONS ACQUISITION" shall mean the acquisition by the
Company of substantially all of the assets of Interventions, an Illinois
not-for-profit corporation, and IDDRS Foundation, an Illinois not-for-profit
corporation, in accordance with the terms of the Interventions Acquisition
Agreement.
"INTERVENTIONS ACQUISITION AGREEMENT" shall mean the Asset Purchase
Agreement dated as of May 10, 1999 among Interventions, an Illinois
not-for-profit corporation, IDDRS Foundation, an Illinois not-for-profit
corporation, and the Company.
"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
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otherwise, to resell such Property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 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.
"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 term loans provided for by Section 2.01
hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"MAJORITY LENDERS" shall mean Lenders holding at least 51% of the
aggregate unpaid principal amount of Loans (or, if no Loans have yet been made,
holding at least 51% of the aggregate Commitments).
"MARGIN STOCK" shall mean "margin stock" within the meaning of
Regulations 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 or other amounts payable in connection
therewith.
"MONTHLY DATE" shall mean the last Business Day of each calendar
month.
"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.
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"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.
"1998 SENIOR NOTES" shall mean the Company's 7.74% Senior Secured
Notes due July 15, 2010 issued under each of the Note Purchase Agreements dated
July 15, 1998.
"1998 SYNTHETIC LEASE FACILITY" shall mean the Master Agreement
dated as of December 3, 1998 among the Obligors, Atlantic Financial Group, Ltd.,
the B Lenders referred to therein, ING (U.S.) Capital LLC, as Syndication Agent,
and Suntrust Bank, Atlanta, as Documentation Agent.
"NOTES" shall mean the promissory notes provided for by Section
2.06(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.
"OUTSTANDING PROMISSORY NOTE" shall mean the $10,000,000 Promissory
Note of the Company dated April 22, 1999, payable to the order of ING Barings.
"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).
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"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 or any other amount under any 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).
"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.
"PRINCIPAL PAYMENT DATE" shall mean the 363rd day after the Closing
Date.
"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, U AND X" shall mean, respectively, Regulations A,
D, 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.
"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.
"REVOLVING CREDIT FACILITY" shall mean Third Amended and Restated
Credit Agreement dated as of December 3, 1998 among the Obligors, Atlantic
Financial Group, Ltd., the lenders referred to therein and ING (U.S.)
Capital LLC, as agent for said lenders.
"SENIOR NOTES" shall mean, collectively, the following:
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(a) the 1998 Senior Notes; and
(b) additional Indebtedness of the Company, in an aggregate
principal amount not to exceed $10,000,000, which may be secured by a Lien
upon substantially all of the Property of the Company and its
Subsidiaries, with terms and conditions, and pursuant to documentation,
either (i) substantially similar to the terms and conditions of, and the
documentation for, the 1998 Senior Notes or (ii) otherwise satisfactory to
the Agent.
"SENIOR NOTES DOCUMENTATION" shall mean any note purchase agreement,
promissory note or other document or instrument evidencing or governing the
Senior Notes.
"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, 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.
"SYNTHETIC LEASE FINANCING" shall have the meaning given to that
term in the Revolving Credit Facility.
"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, 1998 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, 1998 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
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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 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.
Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.
2.01 LOANS. Each Lender severally agrees, on the terms and
conditions of this Agreement, to make up to three term loans to the Company in
Dollars during the period from and including the Closing Date to and 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 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 2.07
hereof) or Continue Eurodollar Loans from one Interest Period to the next
Interest Period (as provided in Section 2.07 hereof). No more than four 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 066 297 311 maintained by the
Agent with The Chase Manhattan Bank (ABA No. 000000000), in immediately
available funds, for account of the Company. The amount so received by the Agent
in respect of Loans 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. The aggregate amount of the Commitments
shall automatically be reduced to zero on the Commitment Termination Date.
2.04 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.
2.05 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
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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.
2.06 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.
2.07 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.
2.08 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, and subject to the provisions
of Section 9.13 hereof, 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,
subject to clause (e) of this Section 2.08, prepay the Loans 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 the date hereof (other than Indebtedness described
in clause (d), (e), or (f) of Section 9.07 hereof), the Company shall prepay the
Loans in an aggregate amount equal to 100% of the Net Available Proceeds
thereof.
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(c) EQUITY ISSUANCE. Upon any Equity Issuance (other than any Equity
Issuance by a Designated Subsidiary), the Company shall prepay the Loans in an
aggregate amount equal to 100% 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 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 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.
(e) APPLICATION AFTER PAYMENT OF CERTAIN SENIOR INDEBTEDNESS. Any
prepayment of Loans otherwise required under this Section 2.08 to be made with
respect to any Net Available Proceeds shall not be required to be made to the
extent that any Designated Senior Indebtedness is required to be prepaid with
such Net Available Proceeds, or if the prepayment of the Loans with such Net
Available Proceeds would constitute a default under any Designated Senior
Indebtedness.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF PRINCIPAL. The Company hereby promises to pay to
the Agent for the account of each Lender the entire outstanding principal of
such Lender's Loans, and each Lender's Loans shall mature, on the Principal
Payment Date.
3.02 INTEREST.
(a) RATE OF 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:
(i) during such periods as such Loan is a Base Rate Loan, the
lesser of (x) the Base Rate (as in effect from time to time) PLUS the
Applicable Margin and (y) 18% per annum;
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(ii) during such periods as such Loan is a Eurodollar Loan,
for each Interest Period relating thereto, the lesser of (x) the
Eurodollar Rate for such Loan for such Interest Period PLUS the Applicable
Margin and (y) 18% per annum.
(b) CAPITALIZED INTEREST -- So long as no Default shall be
continuing, during any period during which the rate per annum at which interest
on any Loan accrues exceeds 15% per annum, the Company may, by notifying the
Agent as provided in Section 4.05 hereof, elect to capitalize such interest in
excess of 15% per annum. Any interest so capitalized shall constitute a Loan
hereunder, shall bear interest as provided in this Agreement and shall be
payable on the Principal Payment Date. The capitalization of any such interest
shall not constitute a utilization of the Commitments.
(c) POST-DEFAULT INTEREST -- 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, 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.
(d) PAYMENT OF INTEREST -- Except for interest that is capitalized
as provided in Section 3.02(b) hereof, 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 one month, at one-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.
(e) NOTICE OF INTEREST RATES -- 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, and other amounts to be made by the Company under this
Agreement and the Notes, and, except to the extent otherwise provided therein,
shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at account number 066 297 311 maintained
by the Agent with The Chase Manhattan Bank (ABA No. 000000000), 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 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
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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).
(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 holding Commitments, 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 ratably in accordance with
the amounts of their respective Commitments, (b) the making, Conversion and
Continuation of Loans of a particular Type of Loan (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 and
such Type shall be coterminous; (c) each payment or prepayment of principal of
Loans 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 shall be made for the account of the Lenders pro
rata in accordance with the amounts of interest on Loans then due and payable to
the Lenders.
4.03 COMPUTATIONS. Except as otherwise provided herein, interest on
Loans 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 2.08 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 $1,000,000 or a larger
multiple of $1,000,000 (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, of the
duration of Interest Periods and of the capitalization of interest 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:
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Number of
Business Days
NOTICE PRIOR NOTICE Termination or reduction of Commitments 3 Borrowing or
prepayment of, or Conversio Base Rate Loans, or capitalization of inns into,
Conversion into a Base Rate Loan) terest (upon same day Borrowing or prepayment
of, Conversions into, 3 Continuations as, or duration of Interest Period for,
Eurodollar Loans, or capitalization of interest (upon Conversion into a
Eurodollar Loan)
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 and the
(subject to Section 4.04 hereof), 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. Each such notice of capitalization of interest shall
specify the interest to which such capitalization is to relate. 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
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(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, 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 owing to it or payment of any other amount
under this Agreement 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 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 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 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
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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
(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
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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), "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 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:
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(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 2.07 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 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:
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(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 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.
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 the Notes, 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.
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,
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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
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 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
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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 CONDITIONS PRECEDENT TO INITIAL BORROWING. The obligation of
any Lender to make any Loan 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) NOTES. The Notes, duly completed and executed.
(d) OPINIONS OF TEXAS COUNSEL TO THE OBLIGORS. An opinion, dated the
Closing Date, of Xxxxx Xxxxxxx & Xxxx, 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).
(e) OPINIONS OF NEW YORK COUNSEL TO ING BARINGS. An opinion, dated
the Closing Date, of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING
Barings, substantially in the form of Exhibit B-2 hereto.
(f) REPAYMENT OF OUTSTANDING SUBORDINATED PROMISSORY NOTE. Evidence
satisfactory to the Agent that the Outstanding Subordinated Promissory Note,
together with all accrued interest thereon and all other amounts payable
thereunder, shall be paid in full from the proceeds of the initial Loans
hereunder.
(g) FEES. Evidence satisfactory to the Agent that all amounts
payable by the Company under the Fee Letter on or prior to the Closing Date
shall have been paid (or will concurrently with the making of the initial Loans
be paid) in full.
(h) OTHER DOCUMENTS. Such other documents as the Agent or any Lender
or special New York counsel to ING Barings may reasonably request.
7.02 CONDITIONS PRECEDENT TO FINANCING THE INTERVENTIONS
ACQUISITION. The obligation of any Lender to make any Loan the proceeds of which
are to be used to finance all or any part of the Interventions Acquisition is
subject to the further conditions precedent that the Agent shall have received
the following, each of which shall be satisfactory to the Agent in form and
substance:
(a) A true and complete copy of the Interventions Acquisition
Agreement; and
(b) Evidence satisfactory to the Agent that the Interventions
Acquisition shall be consummated concurrently with the making of such Loans.
7.03 INITIAL AND SUBSEQUENT LOANS. The obligation of any Lender to
make any Loan upon the occasion of each borrowing hereunder is subject to the
further conditions precedent that, both immediately prior to the making of such
Loan 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 Basic Documents to which it is a party, shall be true and complete
on and
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as of the date of the making of such Loan 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, 1998 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 June 30,
1999 and the related consolidated and consolidating statements of income and
retained earnings of the Company and its Subsidiaries for the six-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 six-month
period ended on said dates (subject, in the case of such financial statements as
at June 30, 1999, 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, 1998, 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. Schedule I
hereto sets forth a description of certain legal proceedings and related matters
with respect to operations of the Obligors in the Commonwealth of Pennsylvania.
8.04 NO BREACH. None of the execution and delivery of the 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 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.
8.05 ACTION. Each Obligor has all necessary power, authority and
legal right to execute, deliver and perform its obligations under the Basic
Documents to which it is a party. The execution, delivery and
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performance by each Obligor 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 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.
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 II 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 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 II.
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(b) Part B of Schedule II 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 II.
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 III 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
(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.
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(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 IV 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 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 IV hereto, (x) each of the
Company and its Subsidiaries owns, free and clear of Liens, 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 IV hereto, (y) all of the issued
and outstanding
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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 IV 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 IV 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 IV hereto, each of the Company and its
Subsidiaries owns, free and clear of all Liens, 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 the 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 the 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.
Section 9. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the Lenders and the Agent that, so long as any Commitment or Loan 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;
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(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;
(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 clause (d) above,
promptly after the receipt by the Company thereof, copies of each report
submitted to any Obligor by independent accountants in connection
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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;
(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
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Company will be in compliance with its obligations under Sections 9.10, 9.11 and
9.12 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 and 9.12 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 and 9.12 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;
(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).
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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.
9.05 PROHIBITION OF FUNDAMENTAL CHANGES.
(a) 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).
(b) 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 (i) purchases of inventory and other
Property to be sold or used in the ordinary course of business, (ii) Investments
permitted under Section 9.08 hereof, (iii) Capital Expenditures permitted under
Section 9.12 hereof and (iv) the Interventions Acquisition.
(c) 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, (iii) other dispositions so long as the aggregate fair market
value of all Property so disposed of does not exceed $250,000), (iv) the
granting of Liens to secure the 1998 Senior Notes and the 1998 Synthetic Lease
Financing, and (v) sale lease-back transactions permitted by Section 9.13
hereof.
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 in existence on the date hereof and listed in Part B of
Schedule II hereto;
(b) 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;
(c) 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 10.01(h) hereof;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) 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;
(f) 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
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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;
(g) 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);
(h) Liens on the Property of a Designated Subsidiary securing
Indebtedness permitted pursuant to Section 9.07(e) hereof; and
(i) Liens on any Property subject to a sale lease-back transaction
permitted under Section 9.13 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 II hereto;
(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(g) hereof up to but not exceeding
$500,000 at any one time outstanding;
(e) Indebtedness consisting of the 1998 Senior Notes and the 1998
Synthetic Lease Facility; 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 IV 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;
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(e) Interest Rate Protection Agreements permitted to be entered into
under the Revolving Credit Facility;
(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) the following loans or advances:
(i) loans or advances by the Company or any of its
Subsidiaries to employees in the ordinary course of business in an
aggregate amount any one time outstanding not to exceed $100,000,
and
(ii) loans or advances made by the Company to Mr. Xxxxx
Xxxxxxx and Xx. Xxxxxx Xxxxx, respectively, with the terms and
conditions set forth on Schedule VII to this Agreement, in an
aggregate amount not to exceed $300,000;
(i) Investments by the Company in Designated Subsidiaries made with
the proceeds of extensions of credit under the Revolving Credit Facility
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;
PROVIDED that the Company may repurchase shares of its capital stock so long as
the aggregate amount paid by the Company for all such repurchases does not
exceed $10,000,000.
9.10 EBITDA RATIO. The Company will not permit the EBITDA Ratio to
exceed 5.35 to 1 at any time.
9.11 INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio to be less than 1.90 to 1 at any time..
9.12 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.
9.13 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 UNLESS both of the following
conditions are satisfied:
(a) the consideration received by the Company or such Subsidiary in
connection with such transfer is at least equal to the fair market value
of the Property so transferred (as reasonably determined by the Board of
Directors of the Company), and
(b) all of the net proceeds received by the Company or any of its
Subsidiaries in connection with any such transaction are used by the
Company, within 12 months of the receipt thereof, to either (i) acquire
other Property in compliance with the term of this Agreement and/or (ii)
repay or prepay Indebtedness of the Company or any of its Subsidiaries.
9.14 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.
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9.15 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.
9.16 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 (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.
9.17 USE OF PROCEEDS. The Company will use the proceeds of the Loans
solely to repay in full the Outstanding Promissory Note and accrued interest
thereon, to finance the Interventions Acquisition and for general corporate
purposes; PROVIDED that neither the Agent nor any Lender shall have any
responsibility as to the use of any of such proceeds.
9.18 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) 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.
9.19 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.
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 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 under the Basic
Documents when due and such default shall have continued unremedied for 30
days; 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
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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
(d) The Company shall default in the performance of any of its
obligations under any of Sections 9.01(i), 9.05, 9.06, 9.07, 9.08, 9.09,
9.10, 9.11, 9.13 or 9.14 hereof; Company shall fail to perform any
obligation with respect to the Take-out Financing set forth in the
Commitment Letter (SO LONG AS (1) the Agent shall have given the Company
ten Business Days' prior notice stated that the Agent believes the Company
to have so failed and (2) after the end of such ten-Business Day period,
another ten-Business Day period shall have elapsed); 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,
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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 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) 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 (k) and the following clause (l), 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
(l) 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;
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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 and all other amounts payable by the Obligors hereunder and 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, provided that such acceleration shall not be effective until the
earlier of (x) the acceleration of the maturity of any of the Designated Senior
Indebtedness and (y) five days after receipt of notice from the Agent of such
acceleration ; 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 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.
Section 11. THE AGENT.
11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under the
Basic Documents with such powers as are specifically delegated to the Agent by
the terms of the 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 the Basic Documents, and shall not by reason
of the Basic Documents be a trustee for any Lender; (b) shall not be responsible
to the Lenders for any recitals, statements, representations or warranties
contained in the Basic Documents, or in any certificate or other document
referred to or provided for in, or received by any of them under, the Basic
Documents, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Basic Documents 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.
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
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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 Barings (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 Barings
(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 Barings 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) 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, 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 under the 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
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
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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.
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 (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.
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 Barings) in
connection with (i) the negotiation, preparation, execution and delivery of the
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
the 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 the Basic
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other
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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 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 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,
PROVIDED THAT the Company shall not be liable 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 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 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 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 ASSThis 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 assign any of its
Loans, its Notes 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
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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 or Commitment shall be made in such manner so that the same portion
of its Loans 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
E hereto pursuant to which such assignee agrees to become a "Lender"
hereunder (if not already a Lender) having the Commitment(s) 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) and Loans (or portion thereof) assigned to it (in addition
to the Commitment(s) 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 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 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 the Basic Documents (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 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 and Commitments, and as if such Lender were funding each of such
Loan 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 under the Basic Documents 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 Loans 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 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 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 11.06, 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.
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(f) Anything in this Section 12.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan 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 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,
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: /s/ XXXX X. XXXXXXX
Chief Financial Officer
Address for Notices:
Cornell Corrections, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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SUBSIDIARY GUARANTORS
CORNELL CORRECTIONS MANAGEMENT, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL COMPANIES, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL CORRECTIONS OF RHODE ISLAND, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
THE XXXXXXX XXX GROUP, L.P.
By: CORNELL CORRECTIONS OF NORTH
AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL CORRECTIONS OF NORTH AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL CORRECTIONS OF TEXAS, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL CORRECTIONS OF CALIFORNIA, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
-00-
XXXXXXX XXXXXXXXXXX XX XXXXXX, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL CORRECTIONS OF OKLAHOMA, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
INTERNATIONAL SELF HELP SERVICES, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
WBP LEASING, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL ABRAXAS GROUP, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
CORNELL INTERVENTIONS, INC.
By: /s/ XXXX X. XXXXXXX
Chief Financial Officer
-48-
LENDERS
COMMITMENT
$50,000,000
ING (U.S.) CAPITAL LLC
By: /s/ XXXXX X. XXXXXXXXXX
Director
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
-49-
ING (U.S.) CAPITAL LLC,
as Agent
By: /s/ XXXXX X. XXXXXXXXXX
Director
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
-50-
