EXHIBIT 10.26
WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
This WAIVER AND THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment"or "Third Amendment") dated as of March 15, 2002
("Effective Date") by and among AMERICA SERVICE GROUP INC., a Delaware
corporation (the "Borrower"), the subsidiaries of the Borrower who are parties
to the Credit Agreement (the "Guarantors"), and BANK OF AMERICA, N.A., a
national banking association as administrative agent and issuing bank
("Administrative Agent") for itself, AMSOUTH BANK, XXXXXX TRUST AND SAVINGS
BANK, and COMERICA BANK (collectively the "Lenders") (as defined in the Credit
Agreement described below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, the Lenders, and the Administrative
Agent are parties to that certain Amended and Restated Credit Agreement dated as
of August 1, 2000, as amended by that Amendment No. 1 dated August 28, 2001 and
as further amended by that Waiver and Second Amendment to Amended and Restated
Agreement dated November 13, 2001, (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein without definition shall have the meaning ascribed to such terms in the
Credit Agreement);
WHEREAS, the Borrower is in default under the terms of the
Credit Agreement; and
WHEREAS, pursuant to certain terms and conditions contained
herein, the Administrative Agent, on behalf of the Lenders, is willing to waive
those defaults; and
WHEREAS, the parties seek to amend the Credit Agreement as
follows;
NOW THEREFORE, for and in consideration of the mutual
covenants contained herein and other valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
SECTION 1. Waiver. The Borrower acknowledges that it failed to
comply with (i) the Fixed Charge Coverage Ratio, (ii) the Leverage Ratio, and
(iii) EBITDA covenant for the Fiscal Quarter ending December 31, 2001 ("Fourth
Fiscal Quarter"), all of which are required by Article 10.1 of the Credit
Agreement; and further that it failed to make the principal reductions as
required by Section 2.1.3(b) on March 1, 2002 in contemplation of the
effectiveness of this Amendment. (The foregoing defaults are referred to as the
"Specified Defaults".) As requested by the Borrower, the Lenders hereby waive
any Default or Event of Default caused by such failure of the Borrower to comply
with Sections 10.1.2, 10.1.3 and 10.1.5 for the Fourth Fiscal Quarter and for
the failure to make the reduction as required under 2.1.3(b). The waivers
provided herein shall extend to and cover only the matters expressly described
herein and shall be effective and limited to the time period specifically
provided herein. This waiver shall not act as or constitute waivers of or
consents to any other Defaults or Events of
Default or to any other transaction, act or omission, whether related or
unrelated to the foregoing. Further, said waivers shall not extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
waived hereby.
SECTION 2. Amendments to Credit Agreement. Effective as of the
date of this Agreement, the Credit Agreement is hereby amended as follows:
(a) Definitions. Section 1.1 of the Credit Agreement is hereby
amended to insert the following new definitions in the appropriate locations
according to alphabetical order, or to amend and restate existing definitions to
read as indicated, as applicable:
"Applicable Intangibles Advances Rate Margin" shall mean the
margin to be added to the Base Rate for purposes of determining the
interest rate applicable to the Intangible Advances from time to time
which shall be determined as provided in Section 2.13.
"Borrowing Base" shall mean 85% of Eligible Trade Accounts
Receivable plus 60% of Eligible Other Accounts Receivable.
"EBITDA" shall mean, for the Borrower and its Subsidiaries on
a consolidated basis for any period, the sum of Consolidated Net
Income, plus Interest Expense, plus any provision for taxes based on
income or profits that was deducted in computing Consolidated Net
Income, plus depreciation, amortization of intangible assets and other
non-recurring non-cash charges, which non-cash charges may not exceed
$500,000 in any month or any Fiscal Quarter and $2,000,000 in any
Fiscal Year minus losses charged against Borrower's (or its
Subsidiaries') loss contract reserves.
"Eligible Accounts" shall mean all accounts of the Borrower
and the Guarantors arising from the provision of goods and services in
the ordinary course of business on ordinary terms net of credits or
allowances given to the account debtor and not subject to counterclaim,
defense or offset in which the Administrative Agent, for the benefit of
itself, the Lenders and the issuing bank, has been granted a
first-in-priority perfected security interest, excluding all items that
the Administrative Agent reasonably determines to be ineligible,
including any invoices which remain unpaid for longer than 90 days,
accounts arising from debt owed between Borrower and Guarantors, income
tax receivables and accounts subject to other liens. Eligibility may be
further adjusted by the Administrative Agent as it reasonably
determines to be appropriate. Without limiting the foregoing, upon two
weeks notice from the Administrative Agent, with the concurrence of
Requisite Lenders, the Administrative Agent may impose such additional
eligibility limitations as it deems appropriate, in the exercise of its
discretion.
"Eligible Other Accounts Receivable" shall mean all those
Eligible Accounts arising from the rights to payment owed to Borrower
and Guarantors arising from overpayments by the Borrower and the
Guarantors, unbilled accounts receivable, and reimbursable costs in
excess of contractual limits.
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"Eligible Trade Accounts Receivable" shall mean those Eligible
Accounts excluding Eligible Other Accounts Receivable.
"Facilities Credit Base" shall mean, as of the last day of
each month occurring during the Commitment Period, an aggregate amount
equal to the sum of the Borrowing Base plus Intangibles Availability.
Notwithstanding, the foregoing, the Agent, with the concurrence of the
Requisite Lenders, reserves the right to require a determination of the
Facilities Credit Base on a more frequent basis.
"Intangible Advances" shall mean the Revolving Loans or
Swingline Loans described in Section 2.2.7.
"Intangibles Availability" shall mean the lesser of (i) the
amount of Intangible Advances available to Borrower from time to time
as those amounts are specified in the chart in Section 2.1.3; or (ii)
the excess of the Commitments over an amount equal to the Borrowing
Base.
"Interest Payment Date" shall mean, with respect to any Loan,
the first day of each month beginning April 1, 2002, or such other
date as Borrower and Lenders may agree in writing.
"Material Litigation" shall mean any legal action or
proceeding brought against the Borrower or any Guarantors in which a
party is seeking a recovery of $300,000 or more against the Borrower or
any Guarantor, and which recovery, if granted, would not be covered by
insurance.
"Net Proceeds" shall mean:
(a) with respect to any Asset Disposition, the
aggregate of all amounts paid to the Borrower or a Guarantor in cash,
as and when received, including (i) deferred payments pursuant to a
promissory note, an account receivable or otherwise (other than
interest payable in respect thereof), and (ii) with respect to Asset
Disposition resulting from the loss, destruction or taking of or damage
to property, the proceeds of insurance or condemnation claims and
amounts paid or payable in settlement thereof, net of ordinary,
necessary and reasonable sale expenses, fees and commissions incurred
and taxes paid or expected to be paid within the thirty (30) days
following such loss, destruction, taking or damage, and net of any
amounts required to be paid in respect of any Indebtedness secured by a
Lien on such property or asset, and
(b) with respect to the offering or sale of any
equity securities (or any securities convertible into equity
securities) or the incurrence of any Indebtedness, the gross
proceeds received in the transaction, less ordinary, necessary
and reasonable transaction expenses.
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"Third Amendment" shall mean that Waiver and Third Amendment
to the Amended and Restated Credit Agreement executed between
Borrower, Guarantors and Lenders on March ____, 2002.
(b) Commitments. Section 2.1.1.(c)(ii) regarding the Letter of
Credit Commitment is amended to increase the Letter of Credit Commitment from
$5,000,000 to $6,600,000.
(c) Commitments Reductions. Section 2.1.3 of the Credit Agreement
is amended by restating Section 2.1.3:
2.1.3. Mandatory Reductions of Commitments.
(a) On the forty-fifth (45th) day following the end of each
Fiscal Quarter ending on each of the dates specified below, the
Commitments shall be permanently reduced by an amount equal to
seventy-five percent (75%) of the amount by which EBITDA for such
Fiscal Quarter exceeds the EBITDA amount specified below for such
Fiscal Quarter.
Fiscal Quarter EBITDA
-------------- ------
March 31, 2002 $3,000,000
June 30, 2002 $2,600,000
September 30, 2002 $3,800,000
December 31, 2002 $3,700,000
(b) The Commitments shall also be permanently reduced on each
date set forth below by the corresponding amount specified for such
date.
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Commitments Reduction/ Intangibles Advances
Date Commitments Total Reduction/Intangibles Availability
-----------------------------------------------------------------------------------------------------------
Effective Date $1,000,000/$57,000,000 $0/$11,000,000
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July 1, 2002 $0/$57,000,000 $1,000,000/$10,000,000
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September 1, 2002 $1,000,000/$56,000,000 $0/$10,000,000
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October 1, 2002 $1,000,000/$55,000,000 $1,000,000/$9,000,000
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November 1, 2002 $0/$55,000,000 $0/$9,000,000
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December 1, 2002 $1,000,000/$54,000,000 $0/$9,000,000
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February 1, 2003 $1,000,000/$53,000,000 $0/$9,000,000
-----------------------------------------------------------------------------------------------------------
March 1, 2003 $1,000,000/$52,000,000 $0/$9,000,000
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Maturity Date Remaining Commitments/$0 Remaining Intangibles Advances/$0
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The reduction dates set forth above shall not be
extended, nor shall the scheduled amount of any reduction set forth
above be reduced without the written consent of the Administrative
Agent and all of the Lenders. The scheduled reductions of the
Commitments shall be made by the Borrower regardless of any other
payments made pursuant to paragraphs (a), (c) or (d) of this section.
(c) The Borrower anticipates receiving a tax refund during the
first Fiscal Quarter of 2002. The Borrower agrees to pay to Lenders
100% of any tax refund proceeds over $3,600,000 upon receipt. Such
payment shall be a permanent reduction to the Commitments and to the
Intangibles Availability.
(d) To the extent that any Net Proceeds are received by the
Borrower or Guarantors from an Asset Disposition out of the ordinary
course of business, from the sale of stock or from the issuance of any
debt other than debt incurred under the Credit Agreement , the Net
Proceeds shall be paid promptly to Administration Agent for payment of
the Loans and shall be applied as permanent reductions to the
Commitments and the Intangibles Availability.
(d) Intangible Advances. Article 2 of the Credit Agreement is
amended to add a new Section 2.2.7:
2.2.7. Intangible Advances.
(a) To the extent that Revolving Loans are made in amounts
which exceed the Borrowing Base, that portion of the Revolving Loans
shall be deemed to be Intangible Advances. The amount of the
Intangible Advances may not exceed the Intangibles Availability for
any application period.
(b) The Intangibles Advances shall be considered Revolving
Loans for all purposes of the Agreement and the Loan Documents, and
shall be subject to all terms, conditions and provisions of this
Agreement and the Loan Documents applicable to Revolving Loans.
(c) Notwithstanding the provisions of paragraph (b) of this
section, the Swing Line Lender may make Swing Line Loans in amounts
not to exceed $6,000,000 for the purpose of funding Intangibles
Advances. These Swing Line Loans shall be made in accordance with the
provisions in Section 2.2.6, and the Swing Line Lender shall have all
the rights and remedies provided therein.
(d) Intangibles Advances and Swing Line Loans, which fund
Intangible Advances, shall bear interest at the Base Rate plus the
Applicable Intangibles Advances Rate Margin.
(e) Fees. Section 2.11 is amended as follows:
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(a) Section 2.11.1. is restated as follows:
2.11.1. Administrative Agent's Fees. The Borrower
agrees to pay the Administrative Agent a fee in the amount of
$12,000.00 at the end of each Fiscal Quarter during the Commitment
Period beginning March 31, 2002.
(b) A new Section 2.11.5 shall be added as follows:
2.11.5. Waiver Fees. In consideration of the
agreements of the Lenders set forth in the Third Amendment, the
Borrower agrees to pay to Administrative Agent for the pro rata
benefit of the Lenders (based on their respective Commitments) a fee
upon execution of the Third Amendment of $100,000. In addition, on
June 30, 2002, Borrower agrees to pay a fee to Lenders of one-quarter
of one percent (.25%) of the Commitments existing at that date. On
September 30, 2002, Borrower agrees to pay to Lenders a fee of
three-quarters of one percent (.75%) of the Commitments existing on
that date. On December 31, 2002, Borrower agrees to pay to Lenders a
fee of one percent (1%) of the Commitments existing on that date. In
the event (i) the Commitments are $45,000,000 or below on the fee
payment dates of September 30, 2002, or December 31, 2002; (ii) the
Intangible Advances are not utilized and have been cancelled by the
respective payment date; and (iii) there is no Default which has
occurred and is continuing on the payment date, the fees due and
payable on September 30, 2002, and/or December 31, 2002, shall be
reduced to one-quarter of one percent (.25%) of the Commitments
existing on such date(s).
(f) Interest Rates. Section 2.13 of the Credit Agreement is hereby
amended to read as follows:
2.13. Interest and Fees Margins. For purposes of interest and
fee computations hereunder involving the Applicable Base Rate Margin,
the Applicable Letter of Credit Fee Percentage, the Applicable
Commitment Fee Percentage, and the Applicable Intangible Advances Rate
Margin shall be as follows:
Applicable Base Rate Margin 3.0%
Applicable Letter of Credit Fee Percentage 4.5%
Applicable Commitment Fee Percentage 0.5%
Applicable Intangible Advances Rate Margin 5.0%
(g) Reporting. Section 8.2 of the Credit Agreement is hereby
amended by deleting Section 8.2.10, and adding new Sections 8.2.10 through
8.2.16 as below relating to additional information and certificates which the
Borrower and the Guarantors shall furnish to Administrative Agent:
8.2.10. Thirteen Week Cash Flow. On a weekly basis, a cash
flow report for a rolling thirteen (13) week period in the form
attached on Schedule 8.2.10 or such form as
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may be reasonably requested by the Administrative Agent, including
information indicating the variances of actual cash flow from
projected cash flow.
8.2.11. Accounts Receivable Agings and Accounts Payable
Agings. Not later than ten (10) Business Days following month end, a
report of accounts receivable agings and account payable agings.
8.2.12. Certificate of Compliance. Within thirty (30) days of
each month end, forty-five (45) days of the end of each Fiscal Quarter
and ninety (90) days of the end of the Fiscal Year, a certificate from
the Borrower in the form attached on Schedule 8.2.12 evidencing
compliance with the financial covenants under the Credit Agreement and
the status of the Facilities Credit Base.
8.2.13. Professional Liabilities Claims. As soon as available,
and in any event not later than forty-five (45) days after the end of
each Fiscal Quarter of the Borrower, the independent actuarial report
and a copy of the then current loss run maintained by the Borrower's
or the Guarantor's third party administrator on the professional
liability claims made against the Borrower or the Guarantors and a
report of professional liability claims paid by the Borrower or the
Guarantors.
8.2.14. Pending Litigation and Material Contract Defaults.
Within ten (10) Business Days of each month end, a report on the
status of any pending Material Litigation and the occurrence and
continuation of a default in any Material Contract.
8.2.15. Monthly Cash Flow. In addition to the information
provided pursuant to Section 8.1.3, a cash flow report within thirty
(30) days of each month end.
8.2.16. Additional Information. Promptly, such additional
financial and other information as the Administrative Agent or any
Lender from time to time may reasonably request.
(h) The Field Audits. Section 8.22 relating to field examinations
of the accounts of the Borrower and the Guarantors shall be amended by restating
Section 8.22 as follows:
8.22. Field Examinations and Report. Permit field examinations
of the operations and the status of Collateral of the Borrower and the
Guarantors to be made by the Administrative Agent or its designee on a
quarterly basis, or more frequently in the discretion of the
Administrative Agent, at the expense of the Borrower and the
Guarantors, such that a report with respect to such operations and the
status of Collateral (the "Field Examination Report") can be delivered
to the Lenders.
(i) Warrants. Section 8 of the Credit Agreement is amended to add
a new section 8.25 entitled Warrants as follows:
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8.25 Warrants.
(a) In the event that any Obligations or Guaranteed
Obligations are outstanding on December 31, 2002, the Borrower shall
deliver to each Lender, or such Lender's designee, a warrant in the
form attached as Exhibit 8.25 entitling the holder of the warrant or
its assignees to purchase, at a price of $.01 per share, the number of
validly authorized and issued, fully paid and nonassessable shares
("Warrant Shares") of the Borrower's common stock ("Common Stock")
which would cause such Lender to hold a proportionate share of five
percent (5%) of the fully diluted Common Stock of the Borrower on the
date of the issuance of the Warrant Shares (the "Exercise Date") equal
to that Lender's proportionate share of the Commitments existing on
the Exercise Date; provided, however, the aggregate number of shares
issuable upon exercise of the warrant shall be reduced to 2.5% of the
fully diluted Common Stock of the Borrower if: (i) on December 31,
2002, the Commitments have been reduced to $45,000,000 or below; (ii)
no Intangibles Advances are outstanding; and (iii) no Event of Default
has occurred and is continuing.
(b) The Borrower agrees that, at all times from the date of the
Third Amendment:
(i) it shall reserve and keep available such number of
authorized but unissued shares of Common Stock, free from all
preemptive or similar rights therein, as will be sufficient
to permit the exercise of the warrants in full;
(ii) it shall not in any way modify the rights attached to
the shares of Common Stock as a class or attach any
restrictions thereto; and
(iii) it shall not increase the par value of the Common Stock.
(j) Indebtedness.
(a) Section 9.1(c) is amended by adding the following language
at the end of the paragraph, "provided, however, that Indebtedness
incurred for Capitalized Leases shall be included in Ordinary Capital
Expenditures and be subject to the limitations in Section 10.1.4.
(b) Section 9.1(i) is amended by deleting the language "or (h)
of Section 9.4" and inserting "and" between "(d)" and "(e)".
(b) Section 9.1(j) is hereby deleted.
(k) Permitted Liens. Section 9.2(l) is restated as follows:
Section 9.2(l). Other non-consensual Liens not securing
Indebtedness , the amounts of which in the aggregate do not exceed
$100,000; provided, however, that any Lien permitted by the clause (l)
is permitted for only so long as is reasonably necessary
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for the Borrower or affected Subsidiary, using its best efforts to
remove or eliminate such Liens.
(l) Sale or Transfer of Assets. Section 9.3(d) is amended by
restating the paragraph as follows:
(d) sale(s) of assets, not otherwise permitted by this Section
9.3 in an aggregate amount not to exceed, in any Fiscal Year, an
amount equal to five percent (5%) of the consolidated assets of the
Borrower and its Subsidiaries, determined in conformity with GAAP, as
of the end of the most recently completed Fiscal Year of the Borrower,
provided that the sale is an arm's length transaction for fair value
to an unaffiliated third party.
(m) Investments. Section 9.4, paragraph (h) regarding investments
in Permitted Non-Guarantor Entities, and paragraph (i) relating to Insurance
Subsidiaries are deleted.
(n) Restrictions on Investments in Permitted Non-Guarantor
Entities. Section 9.13 is amended by restating the section as follows:
9.13 Restrictions on Investments in Permitted Non-Guarantor
Entities. Make new or additional investments in Permitted
Non-Guarantor Entities.
(o) Net Worth Covenant. Section 10.1.1 of the Credit Agreement is
hereby amended to read as follows:
10.1.1. Minimum Net Worth. Permit Net Worth as of the end of
any Fiscal Quarter ending on or after the period specified below to be
less than the amounts indicated.
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PERIOD NET WORTH MINIMUM
--------------------------------------------------------------
12/31/01-3/30/02 ($4,000,000)
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3/31/02-6/29/02 ($3,250,000)
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6/30/02-9/29/02 ($2,500,000)
--------------------------------------------------------------
9/30/02-12/30/02 ($1,000,000)
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12/31/02-Maturity Date $0
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(p) Other Financial Covenants Deleted. Section 10.1.2. regarding
the Fixed Charge Ratio, Section 10.1.3. regarding the Leverage Ratio, and
Section 10.2 regarding Solvency are hereby deleted.
(q) Capital Expenditures. Section 10.1.4 of the Credit Agreement
is hereby amended to read as follows:
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10.1.4. Capital Expenditures. Make Ordinary Capital
Expenditures in an aggregate amount in excess of $375,000 in any
Fiscal Quarter and no more than $1,500,000 for Fiscal Year 2002. An
amount equal to the difference between expenditures actually made in a
Fiscal Quarter and $375,000 may be carried forward to Subsequent
Fiscal Quarters so long as the cumulative Ordinary Capital
Expenditures do not exceed the limit of $1,500,000 for the Fiscal Year
2002.
(r) EBITDA Covenant. Section 10.1.5 is hereby amended to read as
follows:
10.1.5. EBITDA. Permit cumulative EBITDA from January 1, 2002,
through the end of for each month ending on each of the respective
dates set forth below to be less than the EBITDA specified for the
respective period ending on such date:
Monthly Cumulative
Period Ending Minimum EBITDA
------------- --------------
January 31, 2002 $350,000
February 28, 2002 $1,500,000
March 31, 2002 $1,800,000
April 30, 2002 $2,450,000
May 31, 2002 $2,775,000
June 30, 2002 $3,600,000
July 31, 2002 $4,275,000
August 31, 2002 $5,300,000
September 30, 2002 $6,800,000
October 31, 2002 $7,950,000
November 30, 2002 $9,200,000
December 31, 2002 $10,000,000
Each month thereafter, the Borrower shall maintain a
minimum monthly EBITDA of $500,000.
(s) Defaults.
(a) Section 11.1.1 regarding failure to pay loans is
amended by deleting the following language beginning in the first line:
"within five days of the due date."
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(b) Section 11.1.3 regarding failures to perform
covenants be amended by reducing the number of days from thirty (30)
to twenty-one (21).
SECTION 3. Payment of Expenses. As a condition precedent to
the effectiveness of this waiver in Section 1 of this Amendment, the Borrower
agrees to pay all outstanding fees and expenses owed to the professionals of the
Administrative Agent and which have been invoiced to the Borrower prior to
execution of this Agreement. In addition, the Borrower shall pay interest
current through the date of this Amendment.
SECTION 4. Effectiveness. This Amendment shall be effective
only upon execution and delivery by the Borrower, the Guarantors, the
Administrative Agent, the Issuing Bank and Lenders.
SECTION 5. Representations and Warranties of the Borrower and
the Guarantors. As an inducement to the Administrative Agent, the Issuing Bank
and the Lenders to enter into this Amendment, the Borrower and the Guarantors
hereby represent and warrant to the Administrative Agent, the Issuing Bank and
the Lenders that, on and as of the date hereof:
(a) the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct, except for (i)
representations and warranties that expressly relate to an earlier date, which
remain true and correct as of said earlier date, and (ii) representations and
warranties that have become untrue or incorrect solely because of changes
permitted by the terms of the Credit Agreement and the other Loan Documents;
(b) no Default or Event of Default other than the Specified
Defaults has occurred and is continuing;
(c) the outstanding balances reflected on the attached Exhibit
5(c) due to Borrower under the Pledged Notes as defined in the Amended and
Restated Pledge and Security Agreement dated August 1, 2000 are the amounts owed
as of the date specified; and
(d) Harbour Insurance and Unisource, Inc., former Subsidiaries of
the Borrower, have no assets and are no longer in operation.
SECTION 6. Effect of Amendment; Continuing Effectiveness of
Credit Agreement and Loan Documents; Reaffirmation.
(a) Neither this Amendment nor any other indulgences that may have
been granted to the Borrower or any of the Guarantors by the Administrative
Agent, the Issuing Bank or any Lender shall constitute a course of dealing or
otherwise obligate the Administrative Agent, the Issuing Bank or any Lender to
modify, expand or extend the agreements contained herein, to agree to any other
amendments to the Credit Agreement or to grant any consent to, waiver of or
indulgence with respect to any other noncompliance with any provision of the
Loan Documents.
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(b) This Amendment shall constitute a Loan Document for all
purposes of the Credit Agreement and the other Loan Documents. Any noncompliance
by the Borrower or any Guarantor with any of the covenants, terms, conditions or
provisions of this Agreement shall constitute an Event of Default. Except to the
extent amended hereby, the Credit Agreement, the other Loan Documents and all
terms, conditions and provisions thereof shall continue in full force and effect
in all respects.
(c) The Borrower and the Guarantors ratify and reaffirm the Loan
Documents and their respective Obligations and Guaranteed Obligations
thereunder.
SECTION 7. Release and Waiver. The Borrower and the Guarantors
hereby stipulate, acknowledge and agree that they have no claims or causes of
action of any kind whatsoever against the Lenders, the Administrative Agent or
the Issuing Bank. The Borrower and the Guarantors hereby release the Lenders,
the Administrative Agent and the Issuing Bank from any and all claims, causes of
action, demands and liabilities of any kind whatsoever, whether direct or
indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, that the Borrower or the Guarantors may now or
hereafter have relating in any way to any event, circumstance, action or failure
to act on or before the date of this Amendment. The release by the Borrower and
the Guarantors herein, together with the other terms and provisions of this
Amendment, are entered into by Borrower and Guarantors advisedly and without
compulsion, coercion or duress, the Borrower and Guarantors having determined
that this Amendment and all of its terms, conditions and provisions are in the
economic best interests of the Borrower and the Guarantors. The Borrower and the
Guarantors represent that they are entering into this Amendment freely and with
the advice of counsel as to their legal alternatives.
SECTION 8. Counterparts. This Amendment may be executed in
multiple counterparts or copies, each of which shall be deemed an original
hereof for all purposes. One or more counterparts or copies of this Agreement
may be executed by one or more of the parties hereto, and some different
counterparts or copies may be executed by one or more of the other parties. Each
counterpart or copy hereof executed by any party hereto shall be binding upon
the party executing same even though other parties may execute one or more
different counterparts or copies, and all counterparts or copies hereof so
executed shall constitute but one and the same agreement. Each party hereto, by
execution of one or more counterparts or copies hereof, expressly authorizes and
directs any other party hereto to detach the signature pages and any
corresponding acknowledgment, attestation, witness or similar pages relating
thereto from any such counterpart or copy hereof executed by the authorizing
party and affix same to one or more other identical counterparts or copies
hereof so that upon execution of multiple counterparts or copies hereof by all
parties hereto, there shall be one or more counterparts or copies hereof to
which is (are) attached signature pages containing signatures of all parties
hereto and any corresponding acknowledgment, attestation, witness or similar
pages relating thereto.
SECTION 9. Ratification of Prior Amendment by Secure Pharmacy
Plus, Inc. In addition to executing this Amendment for the purposes set forth
herein, Secure Pharmacy Plus, Inc. hereby consents to and assumes all of the
obligations of a party to the Second Amendment
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and shall be fully liable thereunder to the Administrative Agent, the Issuing
Bank and the Lenders to the same extent and with the same effect as though
Secure Pharmacy Plus, Inc. had been one of the Guarantors originally executing
the Second Amendment.
SECTION 10. Miscellaneous.
(a) This Amendment shall be governed by, construed and enforced in
accordance with the laws of the State of Tennessee, without reference to the
conflicts or choice of law principles thereof.
(b) The headings in this Amendment and the usage herein of defined
terms are for convenience of reference only and shall not be construed as
amplifying, limiting or otherwise affecting the substantive provisions hereof.
(c) Any reference herein to any instrument, document or agreement,
by whatever terminology used, shall be deemed to include any and all amendments,
modifications, supplements, extensions, renewals, substitutions and/or
replacements thereof as the context may require.
(d) When used herein, (i) the singular shall include the plural,
and vice versa, and the use of the masculine, feminine or neuter gender shall
include all other genders, as appropriate, (ii) "include", "includes" and
"including" shall be deemed to be followed by "without limitation" regardless of
whether such words or words of like import in fact follow same, and (iii) unless
the context clearly indicates otherwise, the disjunctive "or" shall include the
conjunctive "and".
13
IN WITNESS WHEREOF, the parties have executed this Waiver and
Third Amendment to the Amended and Restated Credit Agreement through their
authorized officers as of the date first written above.
BORROWER:
AMERICA SERVICE GROUP INC., a
Delaware corporation
By:________________________________
Name:
Title:
GUARANTORS:
PRISON HEALTH SERVICES, INC.,
a Delaware corporation
By:________________________________
Name:
Title:
PRISON HEALTH SERVICES OF
INDIANA, L.L.C., an Indiana limited
liability company
By:________________________________
Prison Health Services, Inc., a
Delaware corporation being the
duly authorized general manager
thereof
EMSA GOVERNMENT SERVICES, INC.,
a Florida corporation
By:________________________________
Name:
Title:
14
EMSA CORRECTIONAL CARE, INC.,
a Florida corporation
By:________________________________
Name:
Title:
EMSA MILITARY SERVICES, INC.,
a Florida corporation
By:________________________________
Name:
Title:
EMSA LIMITED PARTNERSHIP, a Florida
limited partnership
By:________________________________
EMSA Correctional Care, Inc.,
a Florida Corporation being the
duly authorized general partner
thereof
CORRECTIONAL HEALTH SERVICES, INC.,
a New Jersey corporation
By:________________________________
Name:
Title:
SECURE PHARMACY PLUS, INC., a
Tennessee corporation
By:_________________________________
Name:
Title:
[SIGNATURE PAGE TO WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
15
BANK OF AMERICA, N.A., as
Administrative Agent
By:________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By:________________________________
Name:
Title:
16
[SIGNATURE PAGE TO WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
XXXXXX TRUST AND SAVINGS BANK,
as a Lender and Co-Agent
By:________________________________
Name:
Title:
17
[SIGNATURE PAGE TO WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
COMERICA BANK, as a Lender
By:________________________________
Name:
Title:
18
[SIGNATURE PAGE TO WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
AMSOUTH BANK, as Lender and Co-Agent
By:_________________________________
Name:
Title:
19
[SIGNATURE PAGE TO WAIVER AND THIRD AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
SCHEDULE 8.2.10
THIRTEEN WEEK CASHFLOW FORM
20
SCHEDULE 8.2.12
BORROWING BASE COMPLIANCE CERTIFICATE
21
EXHIBIT 5(C)
PLEDGED NOTE BALANCES
MAKER AMOUNT OWED AS OF _______________, 2002
----- ---------------------------------------
Prison Health Services, Inc.
Prison Health Services of Indiana, L.L.C.
EMSA Government Services, Inc.
EMSA Military Services, Inc.
EMSA Correctional Care, Inc.
EMSA Limited Partnership
Correctional Health Services, Inc.
Secure Pharmacy Plus, Inc.
22
EXHIBIT 8.25
FORM OF WARRANT
23
