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Exhibit 10.157
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CREDIT AGREEMENT
DATED AS OF SEPTEMBER 6, 1996,
BY AND AMONG
CORRECTIONS CORPORATION OF AMERICA,
AS BORROWER,
THE LENDERS REFERRED TO HEREIN,
AND
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS..................................................................... 1
SECTION 1.1. Definitions.......................................... 1
SECTION 1.2. General.............................................. 14
SECTION 1.3. Other Definitions and Provisions..................... 14
ARTICLE II
REVOLVING CREDIT FACILITY....................................................... 15
SECTION 2.1. Revolving Credit Loans. ............................ 15
SECTION 2.2. Swingline Loans...................................... 15
SECTION 2.3. Procedure for Advances of Revolving
Credit and Swingline Loans........................... 16
SECTION 2.4. Repayment of Loans................................... 17
SECTION 2.5. Notes................................................ 18
SECTION 2.6. Permanent Reduction of the Aggregate Commitment...... 19
SECTION 2.7. Revolving Termination Date........................... 19
SECTION 2.8. Use of Proceeds...................................... 21
ARTICLE III
LETTER OF CREDIT FACILITY....................................................... 21
SECTION 3.1. L/C Commitment....................................... 21
SECTION 3.2. Procedure for Issuance of Letters of Credit.......... 21
SECTION 3.3. Commissions and Other Charges........................ 22
SECTION 3.4. L/C Participations................................... 22
SECTION 3.5. Reimbursement Obligation of the Borrower............. 24
SECTION 3.6. Obligations Absolute................................. 24
SECTION 3.7. Effect of Application................................ 25
SECTION 3.8. Taylor, Texas Letter of Credit....................... 25
ARTICLE IV
GENERAL LOAN PROVISIONS......................................................... 25
SECTION 4.1. Interest............................................. 25
SECTION 4.2. Notice and Manner of Conversion or Continuation
of Loans............................................. 28
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SECTION 4.3. Fees................................................. 28
SECTION 4.4. Manner of Payment.................................... 29
SECTION 4.5. Crediting of Payments and Proceeds................... 30
SECTION 4.6. Adjustments.......................................... 30
SECTION 4.7. Nature of Obligations of Lenders Regarding
Extensions of Credit; Assumption by the
Administrative Agent................................. 31
SECTION 4.8. Changed Circumstances................................ 31
SECTION 4.9. Indemnity............................................ 33
SECTION 4.10. Capital Requirements................................. 34
SECTION 4.11. Taxes................................................ 35
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING.................................... 37
SECTION 5.1. Closing.............................................. 37
SECTION 5.2. Conditions to Closing and Initial Extensions
of Credit............................................ 37
SECTION 5.3. Conditions to All Loans and Letters of Credit........ 40
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................................. 41
SECTION 6.1. Representations and Warranties....................... 41
SECTION 6.2. Survival of Representations and Warranties, Etc...... 48
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES............................................... 48
SECTION 7.1. Financial Statements and Projections................. 48
SECTION 7.2. Officer's Compliance Certificate..................... 49
SECTION 7.3. Other Reports........................................ 49
SECTION 7.4. Notice of Litigation and Other Matters............... 50
SECTION 7.5. Accuracy of Information.............................. 51
ARTICLE VIII
AFFIRMATIVE COVENANTS........................................................... 51
SECTION 8.1. Preservation of Corporate Existence and
Related Matters...................................... 51
SECTION 8.2. Maintenance of Property.............................. 51
SECTION 8.3. Insurance............................................ 51
SECTION 8.4. Accounting Methods and Financial Records............. 52
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SECTION 8.5. Payment and Performance of Obligations............... 52
SECTION 8.6. Compliance With Laws and Approvals................... 52
SECTION 8.7. Environmental Laws................................... 52
SECTION 8.8. Compliance with ERISA................................ 53
SECTION 8.9. Compliance With Agreements........................... 53
SECTION 8.10. Conduct of Business.................................. 53
SECTION 8.11. Visits and Inspections............................... 53
SECTION 8.12. Additional Guarantors................................ 53
SECTION 8.13. Further Assurances................................... 54
ARTICLE IX
FINANCIAL COVENANTS............................................................. 54
SECTION 9.1 Minimum Net Worth.................................... 54
SECTION 9.2. Leverage Ratio....................................... 54
SECTION 9.3 Senior Leverage Ratio................................ 54
SECTION 9.4. Interest Coverage Ratio.............................. 54
ARTICLE X
NEGATIVE COVENANTS.............................................................. 55
SECTION 10.1. Limitations on Debt.................................. 55
SECTION 10.2. Limitations on Contingent Obligations................ 56
SECTION 10.3. Limitations on Liens................................. 56
SECTION 10.4. Limitations on Loans, Advances, Investments
and Acquisitions..................................... 57
SECTION 10.5. Limitations on Mergers and Liquidation............... 59
SECTION 10.6. Limitations on Sale of Assets........................ 59
SECTION 10.7. Limitations on Dividends and Distributions........... 60
SECTION 10.8. Transactions with Affiliates......................... 60
SECTION 10.9. Certain Accounting Changes........................... 60
SECTION 10.10. Amendments; Payments and Prepayments of
Subordinated Debt.................................... 60
SECTION 10.11. Restrictive Agreements............................... 60
ARTICLE XI
DEFAULT AND REMEDIES............................................................ 61
SECTION 11.1. Events of Default.................................... 61
SECTION 11.2. Remedies............................................. 63
SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; etc...... 64
ARTICLE XII
THE ADMINISTRATIVE AGENT........................................................ 65
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SECTION 12.1. Appointment.......................................... 65
SECTION 12.2. Delegation of Duties................................. 65
SECTION 12.3. Exculpatory Provisions............................... 65
SECTION 12.4. Reliance by the Administrative Agent................. 66
SECTION 12.5. Notice of Default.................................... 66
SECTION 12.6. Non-Reliance on the Administrative Agent and
Other Lenders........................................ 67
SECTION 12.7. Indemnification...................................... 67
SECTION 12.8. The Administrative Agent in Its Individual
Capacity............................................. 68
SECTION 12.9. Resignation of the Administrative Agent;
Successor Administrative Agent....................... 68
ARTICLE XIII
MISCELLANEOUS................................................................... 69
SECTION 13.1. Notices.............................................. 69
SECTION 13.2. Expenses; Indemnity.................................. 70
SECTION 13.3. Set-off.............................................. 71
SECTION 13.4. Governing Law........................................ 71
SECTION 13.5. Consent to Jurisdiction.............................. 71
SECTION 13.6. Binding Arbitration; Waiver of Jury Trial............ 72
SECTION 13.7. Reversal of Payments................................. 73
SECTION 13.8. Accounting Matters................................... 73
SECTION 13.9. Successors and Assigns; Participations............... 74
SECTION 13.10. Amendments, Waivers and Consents..................... 77
SECTION 13.11. Performance of Duties................................ 77
SECTION 13.12. All Powers Coupled with Interest..................... 77
SECTION 13.13. Survival of Indemnities.............................. 77
SECTION 13.14. Titles and Captions.................................. 78
SECTION 13.15. Severability of Provisions........................... 78
SECTION 13.16. Counterparts......................................... 78
SECTION 13.17. Term of Agreement.................................... 78
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Exhibits and Schedules
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Prepayment
Exhibit D - Form of Notice of Conversion/
Continuation
Exhibit E - Form of Officer's Certificate
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Guaranty
Exhibit H - Form of Pledge Agreement
Exhibit I - Form of Intercompany Subordination
Agreement
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 1.2 - First Union Letters of Credit
Schedule 6.1(a) - Jurisdictions of Organization and
Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(h) - Environmental Matters
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining
Agreements
Schedule 6.1(f) - Debt and Contingent Obligations
Schedule 6.1(u) - Litigation
Schedule 10.3 - Existing Liens
Schedule 10.4 - Existing Loans, Advances and Investments
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CREDIT AGREEMENT, dated as of the 6th day of September, 1996, by and
among Corrections Corporation of America, a corporation organized under the laws
of Delaware (the "Borrower"), the Lenders who are or may become a party to this
Agreement, and FIRST UNION NATIONAL BANK OF TENNESSEE, as Administrative Agent
for the Lenders (the "Administrative Agent").
STATEMENT OF PURPOSE
The Borrower has requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrower on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
13.1.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to Section
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2.6. On the Closing Date, the Aggregate Commitment shall be One Hundred and
Seventy Million Dollars ($170,000,000).
"Agreement" means this Credit Agreement, as amended or supplemented
from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto
in Section 4.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Assignment and Acceptance" shall have the meaning assigned
thereto in Section 13.10.
"Available Commitment" means, as to any Lender at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Extensions of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 4.1(a).
"Borrower" means Corrections Corporation of America in its
capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York are open for the
conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Capital Asset" means, with respect to the Borrower and its
Subsidiaries, any asset that should, in accordance with GAAP, be
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classified and accounted for as a capital asset on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Capital Lease" means, with respect to the Borrower and its
Subsidiaries, any lease of any property that should, in accordance with
GAAP, be classified and accounted for as a capital lease on a
Consolidated balance sheet of the Borrower and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto
in Section 11.1(i).
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to
make Loans to and issue or participate in Letters of Credit issued for the
account of the Borrower hereunder in an aggregate principal or face amount at
any time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule 1.1 hereto, as the same may be reduced or modified at any time
or from time to time pursuant to Sections 2.5 and 13.9.
"Commitment Percentage" means, as to any Lender at any time, the ratio
of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment of all of the Lenders.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Contingent Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment
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thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, that the term Contingent Obligation shall not include
endorsements for collection or deposit in the ordinary course of business.
"Credit Facility" means the collective reference to the Revolving
Credit Facility and the L/C Facility.
"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
payables arising in the ordinary course of business not more than ninety (90)
days past due, (c) all obligations of any such Person as lessee under Capital
Leases, (d) all Debt of any other Person secured by a Lien on any asset of any
such Person, (e) all Contingent Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, including without limitation
any Reimbursement Obligation, and banker's acceptances issued for the account of
any such Person, (g) all obligations to redeem, repurchase, exchange, defease or
otherwise make payments in respect of capital stock or other securities of such
Person and (h) all termination payments which would be due and payable by any
such Person pursuant to a Hedging Agreement.
"Default" means any of the events specified in Section 11.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBIT" means, with respect to the Borrower and its Subsidiaries for any
period, the following, calculated on a Consolidated basis without duplication
for such period in accordance with GAAP: (a) Net Income for such period, plus
(b) the sum of the following to the extent deducted in the determination of Net
Income: (i) income and franchise taxes and (ii) Interest Expense.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of
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$1,000,000,000, (b) a finance company, insurance company, investment bank or
other financial institution which in the ordinary course of business extends
credit of the type extended hereunder and that has total assets in excess of
$3,000,000,000, (c) already a Lender hereunder (whether as an original party to
this Agreement or as the assignee of another Lender), (d) the successor (whether
by transfer of assets, merger or otherwise) to all or substantially all of the
commercial lending business of the assigning Lender, or (e) any other Person
that has been approved in writing as an Eligible Assignee by the Borrower and
the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
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"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Letters of Credit" means (a) the Letter of Credit issued by
First Union National Bank of North Carolina in favor of Liberty Bank Trust
Company of Tulsa, National Association, as Trustee, in the face amount of
$25,156,781.00 which has an expiration date of June 15, 1997, (b) the Letter of
Credit issued by First Union National Bank of North Carolina in favor of MBIA
Investment Management Corporation, NationsBank of Florida and Correctional
Privatization Commission in the face amount of $1,492,835.00 which has an
expiration date of February 15, 1997 and (c) the Letter of Credit issued by
First Union National Bank of North Carolina in favor of National Fire Insurance
Company of Pittsburgh in the face amount of $1,600,000.00 which has an
expiration date of March 31, 1997.
"Extensions of Credit" means, as to any Lender at any time, an amount
equal to the sum of (a) the aggregate principal amount of all Loans made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"First Union" means First Union National Bank of Tennessee, a national
banking association, and its successors.
"First Union Letters of Credit" means the letters of credit issued by
First Union more particularly described on Schedule 1.2 attached hereto and
incorporated herein by reference.
"First Union Letter of Credit Facility Agreement" means the Letter of
Credit Facility Agreement of even date between First
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Union and the Borrower, pursuant to which First Union has agreed to issue
letters of credit for the benefit of the Borrower in an aggregate face amount
not to exceed $2,500,000.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on December 31.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower and its
Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantors" means Transcor America, Inc.; Concept Incorporated;
Correction Management Affiliates, Inc.; Correctional Services Group, Inc.; CCA
International, Inc.; Corrections Partners, Inc.; Mineral Xxxxx R.E. Holding
Corp.; and each other Person that becomes party to the Guaranty Agreement from
time to time (including, without limitation, United Concept, Limited Partnership
which shall become a party to the Guaranty Agreement at the earlier to occur of
(a) such time as the Notes issued pursuant to the Indenture dated as of November
15, 1993 between United-Concept, Limited Partnership and The First National Bank
of Chicago, as Trustee, have been paid in full or (b) the holders of such Notes
consent to United Concept, Limited Partnership becoming a party to the Guaranty
Agreement).
"Guaranty Agreement" means the Unconditional Guaranty Agreement of even
date executed by each of the Guarantors in favor of the Administrative Agent,
for the ratable benefit of itself, the Lenders, the Issuing Lender and any
Affiliate of a Lender party to a Hedging Agreement permitted pursuant to Section
10.1, substantially in the form of Exhibit G hereto, as amended or supplemented
from time to time.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous
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substances, pollutants, contaminants, chemical substances or mixtures or
toxic substances under any Environmental Law, (b) which are toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise harmful to human health or the environment and are or become
regulated by any Governmental Authority, (c) the presence of which require
investigation or remediation under any Environmental Law or common law, (d) the
discharge or emission or release of which requires a permit or license under
any Environmental Law or other Governmental Approval, (e) which are deemed to
constitute a nuisance, a trespass or pose a health or safety hazard to persons
or neighboring properties, (f) which are materials consisting of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower under this Agreement, and any
confirming letter executed pursuant to such hedging agreement, all as amended or
supplemented from time to time.
"Holdenville Letter of Credit" means the Letter of Credit issued by
First Union National Bank of North Carolina in favor of Liberty Bank and Trust
Company of Oklahoma City, N.A., as Trustee, in the face amount $34,346,301.00
which has an expiration date of September 16, 1996.
"Holdenville Letter of Credit Obligations" means the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Holdenville
Letter of Credit and (b) the aggregate amount of drawings under the Holdenville
Letter of Credit which have not then been reimbursed by the Borrower.
"Immaterial Subsidiaries" means Technical and Business Institute of
America, Inc.; United Concept, Inc.; Concept Incorporated Xxxxxxx; CCA France,
Inc.; and CCA(UK), Limited.
"Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement of even date executed by the Loan Parties in favor of
the Administrative Agent for the benefit of itself and the Lenders,
substantially in the form of Exhibit I, as amended or supplemented from time to
time.
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"Interest Expense" means, with respect to the Borrower and its
Subsidiaries for any period, the gross interest expense (including without
limitation, interest expense attributable to Capital Leases and all net
obligations pursuant to Hedging Agreements) of the Borrower and its
Subsidiaries, determined for such period on a Consolidated basis in accordance
with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
4.1(b).
"Issuing Lender" means First Union or First Union National Bank of
North Carolina, each in its capacity as issuer of any Letter of Credit, or any
successor thereto.
"L/C Commitment" means (a) One Hundred Thirty-Six Million Dollars
($136,000,000) minus (b) the Holdenville Letter of Credit Obligations.
"L/C Facility" means the letter of credit facility established pursuant
to Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
other than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.9.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Letters of Credit" shall have the meaning assigned thereto
in Section 3.1.
"LIBOR" means the rate for deposits in Dollars for a period equal to
the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate is
not available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, Dollars in the amount of $5,000,000 are
being offered to leading banks at approximately
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11:00 a.m. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
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1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which 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 relating to such asset.
"Loans" means the collective reference to the Revolving Credit Loans
and the Swingline Loans and "Loan" means any of such Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, the Letters of Credit, any Hedging Agreement executed by any
Lender, the Guaranty Agreement, the Pledge Agreement, the Intercompany
Subordination Agreement, the First Union Letter of Credit Facility Agreement and
each other document, instrument and agreement executed and delivered by the
Borrower, its Subsidiaries or their counsel in connection with this Agreement or
otherwise referred to herein or contemplated hereby, all as may be amended or
supplemented from time to time.
"Loan Parties" means the collective reference to the Borrower and the
Guarantors and "Loan Party" means any one of them individually.
"Material Adverse Effect" means, with respect to the Borrower or any of
its Subsidiaries, a material adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise) of any such Person,
the ability of any such Person to perform its obligations under the Loan
Documents or Material Contracts, in each case to which it is a party, or
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the ability of the Agent or any Lender to enforce its respective rights and
remedies under the Loan Documents.
"Material Contract" means (a) any contract or other agreement, written
or oral, of the Borrower or any of its Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of $1,000,000 per annum, or (b)
any other contract or agreement, written or oral, of the Borrower or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Cash Proceeds" means, with respect to any offering of capital
stock or any exercise of warrants or options exercisable in respect of its
capital stock, the gross cash proceeds received by the Borrower or any of its
Subsidiaries therefrom less, all legal, underwriting and similar fees and
expenses incurred in connection therewith.
"Net Income" means, with respect to the Borrower and its Subsidiaries,
the Consolidated net income (or loss) of the Borrower and its Subsidiaries for
such period determined in accordance with GAAP; provided, that there shall be
excluded from net income (or loss): (a) the income (or loss) of any Person
(other than a Subsidiary of such Person) in which such Person has an ownership
interest unless received by such Person in a cash distribution, (b) the income
(or loss) of any Person accrued prior to the date it became a Subsidiary of such
first Person or is merged into or consolidated with such first Person, and (c)
to the extent not included in clauses (a) and (b) above, any after-tax
extraordinary gains and non-cash losses.
"Net Worth" means, with respect to any Person, at any date, the
stockholders' equity (including capital stock, additional paid-in capital and
retained earnings, after deducting treasury stock) of such Person on such date
determined in accordance with GAAP.
"Notes" means the collective reference to the Revolving Credit Notes
and the Swingline Notes and "Note" means any of such Notes.
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.3(a).
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"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.5(c).
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, (c) all obligations of the Borrower owing to First Union in
connection with the First Union Letters of Credit and the First Union Letter of
Credit Facility Agreement, (d) all payment and other obligations owing by the
Borrower to any Lender (or its Affiliate) or the Administrative Agent under any
Hedging Agreement permitted pursuant to Section 10.1 to which a Lender (or its
Affiliate) is a party and (e) all other fees and commissions (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower to the
Lenders or the Administrative Agent, of every kind, nature and description,
direct or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any note,
and whether or not for the payment of money under or in respect of this
Agreement, any Note, any Letter of Credit or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section
4.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any of their current
or former ERISA Affiliates.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, business trust, joint venture, joint
stock company, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental Authority or any other form of entity or group
thereof.
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"Pledge Agreements" means each of the Pledge Agreements dated as of
even date executed by the Borrower and certain of the Guarantors in favor of the
Administrative Agent, for the ratable benefit of itself, the Lenders, the
Issuing Lender and any Affiliate of a Lender party to a Hedging Agreement
permitted pursuant to Section 10.1, substantially in the form of Exhibit H
hereto, as amended or supplemented from time to time.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Project Letter of Credit" means any Letter of Credit issued in support
of Project Related Debt.
"Project Related Debt" means any Debt of the Borrower issued in
connection with the acquisition, construction or development of a correctional
facility.
"Register" shall have the meaning assigned thereto in Section 13.9(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of at
least sixty-six and two-thirds percent (66-2/3%) of the aggregate Extensions of
Credit, or if no Extensions of Credit are outstanding, any combination of
Lenders whose Commitment Percentages aggregate at least sixty-six and two-thirds
percent (66-2/3%).
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"Revolving Credit Loan" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such Loans collectively as the context
requires.
"Revolving Credit Notes" means the separate Revolving Credit Notes made
by the Borrower payable to the order of each Lender, substantially in the form
of Exhibit A-1 hereto, evidencing the Revolving Credit Facility, and any
amendments and modifications thereto, any substitutes therefor, and any
replacements, restate-
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ments, renewals or extension thereof, in whole or in part; "Revolving Credit
Note" means any of such Notes.
"Revolving Termination Date" means the earliest of the dates referred
to in Section 2.7.
"Security Documents" means the collective reference to the Guaranty
Agreement, the Pledge Agreement, and each other agreement or writing pursuant to
which the Borrower or any Subsidiary thereof pledges or grants a security
interest in any property or assets securing the Obligations or any such Person
guaranties the payment and/or performance of the Obligations.
"Senior Debt" means, as of any date of determination, the Consolidated
Debt of the Borrower and its Subsidiaries as of such date minus all Subordinated
Debt as of such date.
"Senior Leverage Ratio" means the ratio determined in accordance with
Section 9.3 hereof.
"Solvent" means, as to the Borrower and its Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means the collective reference to Debt on Schedule
6.1(t) hereof designated as Subordinated Debt and any other Debt of the Borrower
or any Subsidiary thereof subordinated in right and time of payment to the
Obligations and containing terms and conditions satisfactory to the Required
Lenders.
"Subsidiary" means as to any Person, any corporation, partnership or
other entity, domiciled within the United States, of which more than fifty
percent (50%) of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity is at the time,
directly or indirectly, owned by or the management is otherwise controlled by
such Person (irrespective of whether, at the time, capital stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency). Unless otherwise qualified
references to "Subsidiary" or "Subsidiaries" herein shall refer to those of the
Borrower.
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"Swingline Commitment" means Five Million Dollars ($5,000,000).
"Swingline Lender" means First Union in its capacity as swingline
lender hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender
to the Borrower pursuant to Section 2.2, and all such Loans collectively as the
context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable
to the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part.
"Swingline Termination Date" means the earlier to occur of (a) the
resignation of First Union as Administrative Agent in accordance with Section
12.9 and (b) the Revolving Termination Date.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA, or (b) the withdrawal of the Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
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"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of
the shares of capital stock or other ownership interests of which are, directly
or indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2. General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3. Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
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ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1. Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Revolving
Credit Loans to the Borrower from time to time from the Closing Date through the
Revolving Termination Date as requested by the Borrower in accordance with the
terms of Section 2.3; provided, that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to any amount requested)
shall not exceed the Aggregate Commitment less the sum of all outstanding
Swingline Loans and the L/C Obligations and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed such Lender's Commitment. Each Revolving Credit Loan by a Lender
shall be in a principal amount equal to such Lender's Commitment Percentage of
the aggregate principal amount of Revolving Credit Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Revolving Credit Loans hereunder until the Revolving
Termination Date.
SECTION 2.2. Swingline Loans.
(a) Availability. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time from the Closing Date through the Swingline Termination Date;
provided, that the aggregate principal amount of all outstanding Swingline Loans
(after giving effect to any amount requested), shall not exceed the lesser of
(i) the Aggregate Commitment less the sum of all outstanding Revolving Credit
Loans and the L/C Obligations and (ii) the Swingline Commitment.
(b) Refunding.
(i) Swingline Loans (except with respect to any Swingline Loan
extended after the occurrence and during the continuance of an Event of Default
which has not been waived by the Required Lenders or the Lenders, as applicable)
shall be refunded by the Lenders on demand by the Swingline Lender. Such
refundings shall be made by the Lenders in accordance with their respective
Commitment Percentages and shall thereafter be reflected as Revolving Credit
Loans of the Lenders on the books and records of the Administrative Agent. Each
Lender shall fund its respective Commitment Percentage of Revolving Credit Loans
as required to repay Swingline Loans outstanding to the Swingline Lender upon
demand by the Swingline Lender but in no event later than 2:00 p.m. (Charlotte
time) on the next succeeding Business Day after such demand is made. No Lender's
obligation to fund its respective Commitment Percentage of a Swingline Loan
shall be affected by any other Lender's failure to fund its Commitment
Percentage of a Swingline Loan, nor shall any Lender's Commitment Percentage be
increased as a result of any such failure of any other Lender to fund its
Commitment Percentage.
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(ii) The Borrower shall pay to the Swingline Lender on demand
the amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account maintained by it with
the Swingline Lender (up to the amount available therein) in order to
immediately pay the Swingline Lender the amount of such Swingline Loans to the
extent amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Commitment Percentages.
(iii) Each Lender acknowledges and agrees that its obligation
to refund Swingline Loans (except any Swingline Loan extended after the
occurrence and during the continuance of an Event of Default which has not been
waived by the Required Lenders or the Lenders, as applicable) in accordance with
the terms of this Section 2.2 is absolute and unconditional and shall not be
affected by any circumstance whatsoever; provided, that if prior to the
refunding of any outstanding Swingline Loans pursuant to this Section 2.2, one
of the events described in Section 11.1(j) or (k) shall have occurred, each
Lender will, on the date the applicable Revolving Credit Loan would have been
made, purchase an undivided participating interest in the Swingline Loan to be
refunded in an amount equal to its Commitment Percentage of the aggregate amount
of such Swingline Loan. Each Lender will immediately transfer to the Swingline
Lender, in immediately available funds, the amount of its participation and upon
receipt thereof the Swingline Lender will deliver to such Lender a certificate
evidencing such participation dated the date of receipt of such funds and for
such amount. Whenever, at any time after the Swingline Lender has received from
any Lender such Lender's participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded).
SECTION 2.3. Procedure for Advances of Revolving Credit and Swingline
Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit B
(a "Notice of Borrowing") not later than 12:00 noon (Charlotte time) (i) at
least one Business Day before each Base Rate Loan (other than a Swingline Loan),
(ii) on the same Business Day as each Swingline Loan and (iii) at least three
Business Days before each LIBOR Rate Loan, of its intention to borrow,
specifying (A) the date of such borrowing, which shall be a Business Day, (B)
the amount of such borrowing, which shall be in a minimum principal amount of
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$1,000,000 or an integral multiple of $100,000 in excess thereof for Base Rate
Loans, a minimum principal amount of $2,500,000 or an integral multiple of
$500,000 in excess thereof for LIBOR Rate Loans and a minimum principal amount
of $500,000 or an integral multiple of $50,000 in excess thereof for Swingline
Loans, (C) whether such Loan is to be a Revolving Credit Loan or a Swingline
Loan, (D) in the case of a Revolving Credit Loan, whether the Loans are to be
LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR Rate Loan,
the duration of the Interest Period applicable thereto. Notices received after
12:00 noon (Charlotte time) shall be deemed received on the next Business Day.
The Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing with respect to a Revolving Credit Loan.
(b) Disbursement of Revolving Credit and Swingline Loans. Not later
than 2:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender
will make available to the Administrative Agent, for the account of the
Borrower, at the office of the Administrative Agent in funds immediately
available to the Administrative Agent, such Lender's Commitment Percentage of
the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made to the Borrower on such borrowing date. The Borrower hereby irrevocably
authorizes the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 2.3 in immediately available funds by
crediting such proceeds to a deposit account of the Borrower maintained with the
Administrative Agent or by wire transfer to such account as may be agreed upon
by the Borrower and the Administrative Agent from time to time. Subject to
Section 4.7 hereof, the Administrative Agent shall not be obligated to disburse
the proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3
to the extent that any Lender has not made available to the Administrative Agent
its Commitment Percentage of such Loan. Revolving Credit Loans to be made for
the purpose of refunding Swingline Loans shall be made by the Lenders as
provided in Section 2.2(b) hereof.
SECTION 2.4. Repayment of Loans.
(a) Repayment. The Borrower shall repay the outstanding principal
amount of (i) all Revolving Credit Loans on the Revolving Termination Date, if
not sooner repaid, and (ii) all Swingline Loans in accordance with Section
2.2(b), together, in each such case, with all accrued but unpaid interest
thereon.
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(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
principal amount of all Loans plus the L/C Obligations exceeds the Aggregate
Commitment, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Extensions of Credit in an amount equal to such excess with each
such repayment applied first to the principal amount of outstanding Swingline
Loans, second to the principal amount of outstanding Revolving Credit Loans, and
third, with respect to any Letters of Credit then outstanding, a payment of cash
collateral into a cash collateral account opened by the Borrower with the
Administrative Agent for the benefit of the Lenders (such cash collateral to be
applied in accordance with Section 11.2(b)). Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit Loans, in whole or in part, by providing
irrevocable prior written notice, in the form attached hereto as Exhibit C (a
"Notice of Prepayment"), to the Administrative Agent not later than 12:00 noon
(Charlotte time) at least one (1) Business Day prior to such repayment with
respect to LIBOR Rate Loans repaid at the maturity of such LIBOR Rate Loans,
three (3) Business Days prior to such repayment with respect to any other LIBOR
Rate Loans and one (1) Business Day prior to such repayment with respect to Base
Rate Loans, specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans (and if so, which LIBOR Rate Loans), Base Rate
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice.
Partial repayments shall be in a minimum principal amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof for Base Rate Loans, a minimum
principal amount of $2,500,000 or an integral multiple of $500,000 in excess
thereof for LIBOR Rate Loans and a minimum principal amount of $500,000 or an
integral multiple of $50,000 in excess thereof for Swingline Loans. Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. Notwithstanding the
provisions of Section 2.4(c), the Borrower may not repay any LIBOR Rate Loan on
any day other than on the last day of the Interest Period applicable thereto
unless such repayment is accompanied by any amount required to be paid pursuant
to Section 4.9 hereof.
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SECTION 2.5. Notes.
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and
the obligation of the Borrower to repay such Revolving Credit Loans shall be
evidenced by a Revolving Credit Note executed by the Borrower payable to the
order of such Lender representing the Borrower's obligation to pay such Lender's
Commitment or, if less, the aggregate unpaid principal amount of all Revolving
Credit Loans made and to be made by such Lender to the Borrower hereunder, plus
interest and all other fees, charges and other amounts due thereon. Each
Revolving Credit Note shall be dated the date hereof and shall bear interest on
the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 4.1.
(b) Swingline Notes. The Swingline Loans and the obligation of the
Borrower to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrower payable to the order of the Swingline Lender
representing the Borrower's obligation to pay the Swingline Lender's Swingline
Commitment or, if less, the aggregate unpaid principal amount of all Swingline
Loans made by the Swingline Lender to the Borrower hereunder, plus interest on
such principal amounts and all other fees, charges and other amounts due
thereon. The Swingline Note shall be dated the date hereof and shall bear
interest on the unpaid principal amount thereof at the applicable interest rate
per annum specified in Section 4.1.
SECTION 2.6. Permanent Reduction of the Aggregate Commitment.
(a) The Borrower shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the Agent, to
permanently reduce, in whole at any time or in part from time to time, without
premium or penalty, the Aggregate Commitment in a minimum principal amount not
less than $2,500,000 or any whole multiple of $1,000,000 in excess thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.6
shall be accompanied by a payment of principal (and with respect to L/C
Obligations, furnishing of cash collateral) sufficient to reduce the aggregate
outstanding Extensions of Credit of the Lenders after such reduction to the
Aggregate Commitment as so reduced. Any reduction of the Aggregate Commitment to
zero shall be accompanied by payment of all outstanding Obligations (and
furnishing of cash collateral satisfactory to the Agent for all L/C Obligations)
and, if such reduction is permanent, termination of the Commitments and Credit
Facility. Such cash collateral shall be applied in accordance with Section
11.2(b). If the reduction of the Aggregate Commitment requires the repayment of
any LIBOR Rate Loan, such reduction may be made only on the last day of the then
current Interest Period applicable thereto unless such repayment is accompanied
by any amount required to be paid pursuant to Section 4.9 hereof.
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SECTION 2.7. Revolving Termination Date. The Credit Facility (subject
to Section 2.2(a) with respect to Swingline Loans) shall terminate on the
earliest of (a) September 6, 1999 (b) the date of termination by the Borrower
pursuant to Section 2.6(a), and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section 11.2(a);
provided, that not earlier than the ninetieth (90th) day and not later than the
sixtieth (60th) day prior to each of the second and third anniversaries of the
Closing Date (each, an "Extension Date"), the Borrower may, by written notice
(an "Extension Request") given to the Administrative Agent, request that the
date set forth in clause (a) above be extended in each such instance to a date
that is one (1) year after such date then in effect; provided, however, that
such date shall not thereby be extended beyond September 6, 2001. The
Administrative Agent shall promptly advise each Lender of its receipt of any
Extension Request and furnish each Lender with a copy thereof. Each Lender may,
in its sole discretion, consent to a requested extension by giving written
notice thereof to the Administrative Agent not later than the Business Day (the
"Extension Confirmation Date") immediately preceding the date which is sixteen
(16) days after receipt of the Extension Request. No Lender shall be under any
obligation or commitment to extend such date and no such obligation or
commitment on the part of any Lender shall be inferred from the provisions of
this Section 2.7. Failure on the part of any Lender to respond to an Extension
Request by the applicable Extension Confirmation Date shall be deemed to be a
denial of such request by such Lender. The requested extension shall not be
granted unless Lenders holding Commitments aggregating at least 80% of the
Aggregate Commitment as of the date the Extension Request is given shall have
consented in writing to such extension. If Lenders holding Commitments aggre
gating less than 100% but equal to or greater than 80% of such Aggregate
Commitment so consent to such an extension, the Borrower may elect by written
notice to the Administrative Agent and Lenders to (i) continue the Credit
Facility for such additional period with an Aggregate Commitment equal to the
then effective Aggregate Commitment less the total Commitments of Lenders who
have not consented to such an extension ("Non-Consenting Lenders") or (ii)
require any such Non-Consenting Lender to transfer and assign without recourse
(in accordance with the provisions of Section 13.9) its Commitment and other
interests, rights and obligations under this Agreement to an Eligible Assignee,
which shall assume such obligations; provided that (A) no such assignment shall
conflict with any Applicable Law, (B) such assignment shall be at the expense of
the Borrower and (C) the purchase price to be paid to such Non-Consenting Lender
shall be an amount equal to the outstanding principal amount of Loans of such
Non-Consenting Lender plus all interest accrued and unpaid thereon and all other
amounts owing to such Non-Consenting Lender hereunder. Promptly following the
applicable Extension Confirmation Date and in any event within five (5) Business
Days, the Administrative Agent shall provide notice to the Borrower in writing
as to whether the requested extension has been granted and, if applicable, the
list of Non-Consenting Lenders (an "Extension Confirmation Notice"). If granted,
such extension shall become effective with respect to each Lender consenting
thereto pursuant to the terms hereof upon the date of issuance of such Extension
Confirmation Notice. The Administrative Agent shall promptly thereafter provide
a copy of such Extension Confirmation Notice to each Lender.
SECTION 2.8. Use of Proceeds. The Borrower shall use the proceeds of
the Loans (a) to finance the acquisition of Capital Assets and (b) for working
capital and general corporate require ments of the Borrower and its
Subsidiaries, including the payment of certain fees and expenses incurred in
connection with the transactions.
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ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1. L/C Commitment. Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agree ments of the other Lenders
set forth in Section 3.4(a), agrees to issue standby or direct pay letters of
credit ("Letters of Credit") for the account of the Borrower on any Business Day
from the Closing Date through but not including the Revolving Termination Date
in such form as may be approved from time to time by the Issuing Lender;
provided, that the Issuing Lender shall have no obligation to issue any Letter
of Credit if, after giving effect to such issuance, (a) the L/C Obligations
would exceed the L/C Commitment or (b) the Available Commitment of any Lender
would be less than zero. Each Letter of Credit shall (i) be denominated in
Dollars in a minimum amount of $1,000,000, (ii) be a standby or direct pay
letter of credit issued to support obligations of the Borrower or any of its
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business (including without limitation in support of obligations in connection
with Project Related Debt) (iii) expire on a date satisfactory to the Issuing
Lender, which date shall be no later than the Revolving Termination Date and
(iv) be subject to the Uniform Customs and, to the extent not inconsistent
therewith, the laws of the State of North Carolina. The Issuing Lender shall not
at any time be obligated to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuing Lender or any L/C Participant
to exceed any limits imposed by, any Applicable Law. References herein to
"issue" and derivations thereof with respect to Letters of Credit shall also
include extensions or modifications of any existing Letters of Credit, unless
the context otherwise requires.
SECTION 3.2. Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish to the Borrower a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
participation therein pursuant to Section 3.4(a), all promptly following the
issuance of such Letter of Credit.
SECTION 3.3. Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, a letter of credit fee with
respect to each Letter of Credit in an amount equal to the product of (i) a per
annum fee equal to the Applicable Margin in effect with respect to LIBOR Rate
Loans as set forth in Section 4.1(c) and (ii) the face amount of such Letter of
Credit. Such fee shall be payable quarterly in arrears on the last Business Day
of each fiscal quarter of the Borrower and on the Revolving Termination Date.
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The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and L/C Participants all commissions received
by the Administrative Agent in accordance with their respective Commitment
Percentages. Notwithstanding the foregoing, fees payable with respect to the
Holdenville Letter of Credit shall be payable for the account of First Union
National Bank of North Carolina in such amounts and payable on such dates as
currently required by such Holdenville Letter of Credit until such time as such
Holdenville Letter of Credit are replaced with Letters of Credit issued pursuant
to Section 3.1 hereof.
(b) The Borrower shall pay to the Issuing Lender a fronting fee with
respect to each Letter of Credit in an amount equal to the product of (i) 0.125%
(on a per annum basis) and (ii) the face amount of such Letter of Credit. Such
fee shall be payable quarterly in arrears on the last Business Day of each
fiscal quarter of the Borrower as long as such Letter of Credit is outstanding.
(c) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
SECTION 3.4. L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Partici pant's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand
at the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Commitment Percentage of the amount of such draft, or any
part thereof, which is not so reimbursed and such payments shall thereafter be
reflected as Extensions of Credit of the Lenders on the books and records of the
Administrative Agent.
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(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.4, the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
share thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.5. Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available
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funds. Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Article III from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Base Rate Loans which were
then overdue. If the Borrower fails to timely reimburse the Issuing Lender on
the date the Borrower receives the notice referred to in this Section 3.5, the
Borrower shall be deemed to have timely given a Notice of Borrowing hereunder to
the Administrative Agent requesting the Lenders to make a Base Rate Loan on such
date in an amount equal to the amount of such drawing and, subject to the
satisfaction or waiver of the conditions precedent specified in Article V, the
Lenders shall make Base Rate Loans in such amount, the proceeds of which shall
be applied to reimburse the Issuing Lender for the amount of the related drawing
and costs and expenses.
SECTION 3.6. Obligations Absolute. The Borrower's obliga tions under
this Article III (including without limitation the Reimbursement Obligation)
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any L/C Participant,
the Agent or any beneficiary of a Letter of Credit. The Borrower also agrees
with the Issuing Lender and each L/C Participant that neither the Issuing Lender
nor any L/C Participant shall be responsible for, and the Borrower's
Reimbursement Obligation under Section 3.5 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of a Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrower agrees that any
action taken or omitted by the Issuing Lender or any L/C Participant under or in
connection with any Letter of Credit or the related drafts or documents, if done
in the absence of gross negligence or willful misconduct and in accordance with
the standards of care specified in the Uniform Customs and, to the extent not
inconsistent therewith, the UCC, shall be binding on the Borrower and shall not
result in any liability of the Issuing Lender or any L/C Participant to the
Borrower. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter
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of Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit.
SECTION 3.7. Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
SECTION 3.8. Existing Letters of Credit. As of the Closing Date, the
Existing Letters of Credit shall be deemed to be Letters of Credit issued
pursuant to and subject to the terms and conditions of this Agreement and each
of the L/C Participants shall be deemed to have purchased an interest in such
Existing Letters of Credit pursuant to the terms and conditions set forth in
Section 3.4 hereof.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1. Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
4.1, at the election of the Borrower, the aggregate principal balance of the
Revolving Credit Notes or any portion thereof shall bear interest at the Base
Rate or the LIBOR Rate plus, in each case, the Applicable Margin as set forth
below; provided that the LIBOR Rate shall not be available until three Business
Days after the Closing Date. The Borrower shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given pursuant to Section 2.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2. Each Loan or portion
thereof bearing interest based on the Base Rate shall be a "Base Rate Loan" and
each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a
"LIBOR Rate Loan." Any Swingline Loan shall bear interest at the Base Rate. Any
Loan or any portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Loan,
which
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Interest Period shall be a period of one (1), two (2) or three (3) months;
provided that:
(i) the Interest Period shall commence on the date of advance of
or conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period with respect to a LIBOR Rate
Loan would otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving
Termination Date; and
(v) there shall be no more than seven (7) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Loans (the "Applicable Margin") shall be (i) during
the period from the Closing Date through and including the date which is five
(5) Business Days following receipt by the Administrative Agent of the financial
statements and Officer's Compliance Certificate for the fiscal quarter ending
June 30, 1996 required pursuant to Sections 7.1 and 7.2, respectively, 0.00% for
Base Rate Loans and 0.75% for LIBOR Rate Loans and (ii) on the fifth (5th)
Business Day after receipt by the Administrative Agent of such financial
statements for the Borrower and its Subsidiaries noted in (i) above and the
accompanying Officer's Compliance Certificate and for each fiscal quarter
thereafter, determined by reference to the Senior Leverage Ratio as of the end
of the fiscal quarter immediately preceding the delivery of the applicable
Officer's Compliance Certificate as follows:
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Applicable Margin Per Annum
Tier Senior Leverage Ratio Base Rate + LIBOR Rate +
---- --------------------- -------------------------
I less than 0.30 0.00% .50%
II greater than or equal to
0.30 and less than or equal
to 0.45 0.00% .75%
III greater than .45 0.00% 1.00%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the tenth (10th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Borrower and its
Subsidiaries and the accompanying Officer's Compliance Certificate setting forth
the Senior Leverage Ratio of the Borrower and its Subsidiaries as of the most
recent fiscal quarter end. Subject to Section 4.1(d), in the event the Borrower
fails to deliver such financial statements and certificate within the time
required by Sections 7.1 and 7.2 hereof, the Applicable Margin shall be the
highest Applicable Margin set forth above until the tenth (10th) Business Day
after delivery of such financial statements and certificate.
(d) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) the Borrower shall no longer have the option to request
LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a
rate per annum two percent (2%) in excess of the rate then applicable to LIBOR
Rate Loans until the end of the applicable Interest Period and thereafter at a
rate equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a
rate per annum equal to two percent (2%) in excess of the rate then applicable
to Base Rate Loans. Interest shall continue to accrue on the Notes after the
filing by or against the Borrower of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each fiscal quarter
commencing September 30, 1996; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant
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to the terms of this Agreement or pursuant to any of the Notes exceed the
highest rate permissible under any Applicable Law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lenders have charged or received
interest hereunder in excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law and the Lenders shall at the Administrative Agent's option
promptly refund to the Borrower any interest received by Lenders in excess of
the maximum lawful rate or shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrower not pay or contract
to pay, and that neither the Administrative Agent nor any Lender receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by the Borrower under Applicable Law.
SECTION 4.2. Notice and Manner of Conversion or Continua tion of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
its outstanding Base Rate Loans (other than Swingline Loans) in a minimum
principal amount equal to $2,500,000 or any whole multiple of $500,000 in excess
thereof into one or more LIBOR Rate Loans; or (b) upon the expiration of any
Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans
in a minimum principal amount equal to $1,000,000 or a whole multiple of
$100,000 in excess thereof into Base Rate Loans, or (ii) continue such LIBOR
Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert or
continue Loans as provided above, the Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached as Exhibit D (a
"Notice of Conversion/ Continuation") not later than 12:00 noon (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period therefor, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.3. Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee on the
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average daily unused portion of the Aggregate Commitment (provided, that the
Holdenville Letter of Credit Obligations shall not be deemed to be useage of the
Aggregate Commitment) at a rate per annum which shall be (i) during the period
from the Closing Date through and including the date which is five (5) Business
Days following receipt by the Administrative Agent of the financial statements
and Officer's Compliance Certificate for the fiscal quarter ending June 30, 1996
required pursuant to Sections 7.1 and 7.2, respectively, 0.20% and (ii) on the
fifth (5th) Business Day after receipt by the Administrative Agent of such
financial statements for the Borrower and its Subsidiaries noted in (i) above
and the accompanying Officer's Compliance Certificate and for each fiscal
quarter thereafter, determined by reference to the Senior Leverage Ratio as of
the end of the fiscal quarter immediately preceding the delivery of the
applicable Officer's Compliance Certificate, as follows:
Tier Senior Leverage Ratio Commitment Fee
---- --------------------- --------------
I less than 0.30 .1875%
II greater than or equal to
0.30 and less than or equal
to 0.45 .20%
III greater than .45 .25%
Adjustments, if any, in the commitment fee shall be made by the Administrative
Agent on the tenth (10th) Business Day after receipt by the Administrative Agent
of quarterly financial statements for the Borrower and its Subsidiaries and the
accompanying Officer's Compliance Certificate setting forth the Senior Leverage
Ratio of the Borrower and its Subsidiaries as of the most recent fiscal quarter
end. In the event the Borrower fails to deliver such financial statements and
certificate within the time required by Sections 7.1 and 7.2 hereof, the
commitment fee shall be the highest commitment fee set forth above until the
tenth (10th) Business Day after delivery of such financial statements and
certificate. The commitment fee shall be payable in arrears on the last Business
Day of each fiscal quarter during the term of this Agreement commencing
September 30, 1996, and on the Revolving Termination Date. Such commitment fee
shall be distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders' respective Commitment Percentag es.
(b) Administrative Agent's and Other Fees. The Borrower agrees to pay
to the Administrative Agent, for its account, the fees set forth in the separate
fee letter agreement
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executed by the Borrower and the Administrative Agent dated June 4, 1996.
SECTION 4.4. Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 2:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the Agent at the
Agent's Office, for the account of the Lenders pro rata in accordance with their
respective Commitment Percentages (other than as specifically set forth below),
in Dollars, in immediately available funds and shall be made without any
set-off, counterclaim or deduction whatsoever. Any payment received after such
time but before 3:00 p.m. (Charlotte time) on such day shall be deemed a payment
on such date for the purposes of Section 11.1, but for all other purposes shall
be deemed to have been made on the next succeeding Business Day. Any payment
received after 3:00 p.m. (Charlotte time) shall be deemed to have been made on
the next succeeding Business Day for all purposes. Upon receipt by the Agent of
each such payment, the Agent shall distribute to each Lender at its address for
notices set forth herein its pro rata share of such payment in accordance with
this Section 4.4 and shall wire advice of the amount of such credit to each
Lender. All payments received on or before 12:00 Noon (Charlotte, North Carolina
time) shall be remitted by the Administrative Agent to each of the Lenders in
accordance with this Section 4.4 on the same Business Day that such payments are
received. Any payments received after 12:00 Noon (Charlotte, North Carolina
time) shall be remitted by the Administrative Agent to the Lenders in accordance
with this Section 4.4 on the next succeeding Business Day. Each payment to the
Agent of the Issuing Lender's fees or L/C Participants' commissions shall be
made in like manner, but for the account of the Issuing Lender or the L/C
Participants, as the case may be. Each payment to the Agent of Agent's fees or
expenses shall be made for the account of the Agent and any amount payable to
any Lender under Sections 4.8, 4.9, 4.10, 4.11 or 13.2 shall be paid to the
Agent for the account of the applicable Lender.
SECTION 4.5. Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment and
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other fees and commissions then due and payable, then to accrued and unpaid
interest on the Swingline Note to the Swingline Lender, then to the principal
amount outstanding under the Swingline Note to the Swingline Lender, then to
accrued and unpaid interest on the Revolving Credit Notes, the Reimbursement
Obligation and any termination payments due in respect of a Hedging Agreement
with any Lender permitted pursuant to Section 10.1 (pro rata in accordance with
all such amounts due), then to the principal amount of the Revolving Credit
Notes and Reimbursement Obligation and then to the cash collateral account
described in Section 11.2(b) hereof to the extent of any L/C Obligations then
outstanding, in that order.
SECTION 4.6. Adjustments. If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Extensions of Credit, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect of its Extensions of Credit (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Extensions of Credit, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, with interest (only if the
Benefitted Lender must pay interest) ratably, based on the amount which each
such Lender must return to the aggregate amount which must be returned by the
Benefitted Lender. The Borrower agrees that each Lender so purchasing a portion
of another Lender's Extensions of Credit may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
SECTION 4.7. Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the
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Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the proposed borrowing date in accordance with
Section 2.3(b) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If such amount is made available to the Administrative Agent on a date after
such borrowing date, such Lender shall pay to the Administrative Agent on demand
an amount, until paid, equal to the product of (a) the amount of such Lender's
Commitment Percentage of such borrowing, times (b) the daily average Federal
Funds Rate during such period as determined by the Administrative Agent, times
(c) a fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such Lender's Commitment
Percentage of such borrowing shall have become immediately available to the
Administrative Agent and the denominator of which is 360. A certificate of the
Administrative Agent with respect to any amounts owing under this Section shall
be conclusive, absent manifest error. If such Lender's Commitment Percentage of
such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days of such borrowing date, the Administrative Agent
shall be entitled to recover such amount made available by the Administrative
Agent with interest thereon at the rate per annum applicable to Base Rate Loans
hereunder, on demand, from the Borrower. The failure of any Lender to make its
Commitment Percentage of any Loan available shall not relieve it or any other
Lender of its obligation, if any, hereunder to make its Commitment Percentage of
such Loan available on such borrowing date, but no Lender shall be responsible
for the failure of any other Lender to make its Commitment Percentage of such
Loan available on the borrowing date.
SECTION 4.8. Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via Telerate Page
3750 or offered to the Administrative Agent or such Lender for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Borrower. Thereafter, until the Administrative Agent notifies the Borrower that
such circumstances no longer exist, the obligation of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Revolving Credit Loan to
or continue any Revolving Credit Loan as a LIBOR Rate Loan shall be suspended,
and the Borrower shall repay in full (or cause to be
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repaid in full) the then outstanding principal amount of each such LIBOR Rate
Loan together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Revolving Credit Loan to or continue any Revolving
Credit Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower
may select only Base Rate Loans hereunder, and (ii) if any of the Lenders may
not lawfully continue to maintain a LIBOR Rate Loan to the end of the then
current Interest Period applicable thereto as a LIBOR Rate Loan, the applicable
LIBOR Rate Loan shall immediately be converted to a Base Rate Loan for the
remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders or the Issuing Lender, as
Issuing Lender (or any of their respective Lending Offices) to any tax, duty or
other charge with respect to any Note, Letter of Credit or Application or shall
change the basis of taxation of payments to any of the Lenders (or any of their
respective Lending Offices) of the principal of or interest on any Note, Letter
of Credit or Application or any other amounts
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due under this Agreement in respect thereof (except for changes in the rate of
tax on the overall net income of any of the Lenders or any of their respective
Lending Offices imposed by the jurisdiction in which such Lender is organized or
is or should be qualified to do business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrower of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Lenders for such increased cost or reduction.
The Administrative Agent will promptly notify the Borrower of any event of which
it has knowledge which will entitle such Lender to compensation pursuant to this
Section 4.8(c); provided, that the Administrative Agent shall incur no liability
whatsoever to the Lenders or the Borrower in the event it fails to do so. The
amount of such compensation shall be determined, in the applicable Lender's sole
discretion, based upon the assumption that such Lender funded its Commitment
Percentage of the LIBOR Rate Loans in the London interbank market, and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.9. Indemnity. The Borrower hereby indemnifies each of the
Lenders against any loss or expense (including, without limitation, any
administrative fees and expenses) which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
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effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow on a
date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation or (c) due to any payment, prepayment or conversion
(other than a conversion pursuant to Section 4.8(b)(ii)) of any LIBOR Rate Loan
on a date other than the last day of the Interest Period therefor. The amount of
such loss or expense shall be determined, in the applicable Lender's sole
discretion, based upon the assumption that such Lender funded its Commitment
Percentage of the LIBOR Rate Loans in the London interbank market, using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical, and pursuant to the following formula:
Indemnified Amount = (COFO-COFBD) times P times D
----------------------------
360
where:
"COFO" means the cost of deposits or funds in connection with any Loan
referred to in this Section 4.9 at the origination of such Loan, as
determined by the applicable Lender.
"COFBD" means the cost of deposits or funds in connection with any Loan
referred to in this Section 4.9 on the breakage date giving rise to the
compensation provided for in this Section 4.9 for the days remaining in
the Interest Period applicable to such Loan, as determined by the
applicable Lender.
"P" means the aggregate principal amount of such Loan subject to
compensation under this Section 4.9.
"D" means the number of days remaining in the original Interest Period
applicable to such Loan referred to in this Section 4.9.
A certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrower through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
SECTION 4.10. Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other
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Governmental Authority (whether or not having the force of law), has or would
have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by any such Lender, the Borrower shall pay to such Lender from
time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrower and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 4.11. Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrower shall make such deductions, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) the Borrower shall deliver to the Administrative Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 4.11(d).
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(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Upon the request of the Administrative Agent,
the Borrower shall furnish to the Administrative Agent evidence of the
Borrower's payment of any Taxes or Other Taxes in the form of the original or a
certified copy of a receipt of payment thereof or other evidence of payment
satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrower,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a
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change in the most recent form previously delivered by it to the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrower and the Administrative Agent that it is
not entitled to receive payments without deduction or withholding of United
States federal income taxes) and, in the case of a Form W-8 or W- 9,
establishing an exemption from United States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1. Closing. The closing shall take place at the offices of
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx at 10:00 a.m. on September 6, 1996, or on such other date as the
parties hereto shall mutually agree.
SECTION 5.2. Conditions to Closing and Initial Extensions of Credit.
The obligation of the Lenders to close this Agreement and to make the initial
Loan or issue the initial Letter of Credit is subject to the satisfaction of
each of the following conditions:
(a) Executed Loan Documents. The following Loan Documents, in form and
substance satisfactory to the Administrative Agent and each Lender:
(i) this Agreement;
(ii) the Revolving Credit Notes;
(iii) the Swingline Notes;
(iv) the Guaranty Agreement;
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(vi) the Pledge Agreement; and
(viii) the Intercompany Subordination Agreement;
shall have been duly authorized, executed and delivered by the Loan Parties
party thereto, shall be in full force and effect and no default shall exist
thereunder, and the Borrower shall have delivered original counterparts thereof
to the Administrative Agent.
(b) Pledged Stock. The Administrative Agent shall have received
original stock certificates evidencing the capital stock pledged pursuant to the
Pledge Agreement, together with an appropriate undated stock power for each
certificate duly executed in blank by the registered owner thereof.
(c) Closing Certificates; etc.
(i) Officers's Certificate of the Borrower. The Administrative
Agent shall have received a certificate from the chief executive officer or
chief financial officer of the Borrower, in form and substance satisfactory to
the Administrative Agent, to the effect that all representations and warranties
of the Borrower contained in this Agreement and the other Loan Documents are
true, correct and complete in all material respects; that the Borrower is not in
violation of any of the covenants contained in this Agreement and the other Loan
Documents; that, after giving effect to the transactions contemplated by this
Agreement, no Default or Event of Default has occurred and is continuing; and
that the Borrower has satisfied each of the closing conditions.
(ii) Certificate of Secretary of the Borrower. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Loan Party certifying that attached thereto is a
true and complete copy of the certificate of incorporation of such Loan Party
and all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation; that attached
thereto is a true and complete copy of the bylaws of such Loan Party as in
effect on the date of such certification; that attached thereto is a true and
complete copy of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party; and as to the incumbency and genuineness of the signature of each
officer of such Loan Party executing Loan Documents to which it is a party.
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(iii) Certificates of Good Standing. The Administrative Agent
shall have received long-form certificates as of a recent date of the good
standing of each Loan Party under the laws of its jurisdiction of organization
and each other jurisdiction where such Loan Party is qualified to do business
and a certificate of the relevant taxing authorities of such jurisdictions
certifying that such Person has filed required tax returns and owes no
delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of counsel to the Borrower and each other Loan Party
addressed to the Administrative Agent and the Lenders with respect to the Loan
Parties, the Loan Documents and such other matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section
4.11(e) hereof.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents, if any be required, of any Person and of
all Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan Documents shall
have been obtained.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received recent annual and interim financial statements of the Borrower and its
Subsidiaries and such other financial information with respect to the Borrower
and its Subsidiaries as may be reasonably requested by the Administrative
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Agent, all in form and substance satisfactory to the Administrative Agent.
(ii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by the chief
executive officer or chief financial officer of the Borrower, that (A) the
Borrower and each of its Subsidiaries are each Solvent, (B) the Borrower's
payables are current and not past due, (C) attached thereto is a pro forma
balance sheet of the Borrower and its Subsidiaries setting forth on a pro forma
basis the financial condition of the Borrower and its Subsidiaries on a
Consolidated basis as of that date, reflecting on a pro forma basis the effect
of the transactions contemplated herein, including all fees and expenses in
connection therewith, and evidencing compliance on a pro forma basis with the
covenants contained in Articles IX and X hereof and (D) attached thereto are the
financial projections previously delivered to the Administrative Agent
representing the good faith opinions of the Borrower and senior management
thereof as to the projected results contained therein.
(iii) Payment at Closing; Fee Letters. There shall have been
paid by the Borrower to the Administrative Agent and the Lenders the fees set
forth or referenced in Section 4.3 and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses), and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes, fees
and other charges in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents. The Administrative Agent shall
have received duly authorized and executed copies of the fee letter agreement
referred to in Section 4.3(b).
(f) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received written instructions from the Borrower to the Administrative Agent
directing the payment of any proceeds of Loans made under this Agreement that
are to be paid on the Closing Date.
(ii) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Lenders. The Lenders shall have received copies of all other instruments and
other evidence as the Lender may reasonably request, in form and substance
satisfactory to the Lenders, with respect to the
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transactions contemplated by this Agreement and the taking of all actions in
connection therewith.
(iii) Due Diligence and Other Documents. The Borrower shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent reasonably requests, including without
limitation copies of each document evidencing or governing the Subordinated
Debt, certified by a secretary or assistant secretary of the Borrower as a true
and correct copy thereof.
SECTION 5.3. Conditions to All Loans and Letters of Credit. The
obligations of the Lenders to make any Loan or issue any Letter of Credit is
subject to the satisfaction of the following conditions precedent on the
relevant borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties.
The representations and warranties contained in Article VI shall be true and
correct on and as of such borrowing or issuance date with the same effect as if
made on and as of such date.
(b) No Existing Default. No Default or Event of
Default shall have occurred and be continuing hereunder (i) on the borrowing
date with respect to such Loan or after giving effect to the Loans to be made on
such date or (ii) the issue date with respect to such Letter of Credit or after
giving affect to such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional
Documents. The Agent shall have received the financial statements and Officer's
Compliance Certificate required pursuant to Sections 7.1 and 7.2 respectively
and each additional document, instrument, legal opinion or other item of
information reasonably requested by it.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 6.1. Representations and Warranties. To induce the
Administrative Agent to enter into this Agreement and the Lenders to make the
Loans or issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to the Administrative Agent and Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is duly organized, validly
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existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the power and authority to own its properties
and to carry on its business as now being and hereafter proposed to be conducted
and is duly qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification and authorization, except in those jurisdictions in which the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect. The jurisdictions in which the Borrower and its Subsidiaries are
organized and qualified to do business are described on Schedule 6.1(a).
(b) Ownership. Each Subsidiary of the Borrower is listed on Schedule
6.1(b). The capitalization of the Borrower and its Subsidiaries consists of the
number of shares, authorized, issued and outstanding, of such classes and
series, with or without par value, described on Schedule 6.1(b). All outstanding
shares have been duly authorized and validly issued and are fully paid and
nonassessable. The shareholders of the Subsidiaries of the Borrower and the
number of shares owned by each are described on Schedule 6.1(b). There are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrower or its Subsidiaries, except as
described on Schedule 6.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Borrower and its Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of the Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforce ment of
creditors' rights in general and the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and perfor xxxxx by the Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their
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respective terms, the borrowings hereunder and the transactions contemplated
hereby do not and will not, by the passage of time, the giving of notice or
otherwise, (i) require any Governmental Approval or violate any Applicable Law
relating to the Borrower or any of its Subsidiaries, (ii) conflict with, result
in a breach of or constitute a default under the certificate of incorporation,
bylaws or other organizational documents of the Borrower or any of its
Subsidiaries or any indenture, agreement or other instrument to which such
Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threat ened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable. No Governmental Authority has
asserted any Lien or other claim against the Borrower or any Subsidiary thereof
with respect to unpaid taxes which has not been discharged or resolved. The
charges, accruals and reserves on the books of the Borrower and any of its
Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof since the organization of the Borrower and any of its
Subsidiaries are in the judgment of the Borrower adequate, and the Borrower does
not anticipate any additional taxes or assess ments for any of such years.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are
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required to conduct its business, except where the failure to so own or possess
could not reasonably be expected to have a Material Adverse Effect. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such rights, and neither the Borrower nor
any Subsidiary thereof is liable to any Person for infringement under Applicable
Law with respect to any such rights as a result of its business operations.
(h) Environmental Matters. Except those matters in existence on the
Closing Date and set forth on Schedule 6.1(h), to the best of the Borrower's
knowledge after due inquiry:
(i) The properties of the Borrower and its Subsidiaries do not
contain, and have not previously contained, any Hazardous Materials in amounts
or concentrations which (A) constitute or constituted a violation of, or (B)
could give rise to liability under, applicable Environmental Laws;
(ii) Such properties and all operations conducted in
connection therewith are in compliance, and have been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
such properties or such operations which could interfere with the continued
operation of such properties or impair the fair saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does the Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed
of from the properties of the Borrower or any of its Subsidiaries in violation
of, or in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other
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decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to such properties or such operations; and
(vi) There has been no release, or threat of release, of
Hazardous Materials at or from such properties, in violation of or in amounts or
in a manner that could give rise to liability under Environmental Laws.
(i) ERISA.
(i) Neither the Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit Plans other
than those identified on Schedule 6.1(i);
(ii) the Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. No
liability has been incurred by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan
or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code) been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due and owing
as required by Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under Section 412 of
the Code or Section 302 of ERISA, nor has there been any event requiring any
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any
Pension Plan;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding
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other than the payment of premiums and there are no premium payments which are
due and unpaid, (C) failed to make a required contribution or payment to a
Multiemployer Plan, or (D) failed to make a required installment or other
required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by the Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Borrower nor any Subsidiary thereof is, or
after giving effect to any Extension of Credit will be, subject to regulation
under the Public Utility Holding Company Act of 1935 or the Interstate Commerce
Act, each as amended, or any other Applicable Law which limits its ability to
incur or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 6.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof.
(m) Employee Relations. Each of the Borrower and its Subsidiaries has a
stable work force in place and is not,
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except as set forth on Schedule 6.1(m), party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its
employees. The Borrower knows of no pending, threatened or contemplated strikes,
work stoppage or other collective labor disputes involving its employees or
those of its Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary
thereof is a party to any indenture, agreement, lease or other instrument, or
subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could be reasonably expected to have a Material Adverse Effect. The Borrower and
its Subsidiaries do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(o) Financial Statements. The (i) Consolidated balance sheets of the
Borrower and its Subsidiaries as of December 31, 1995 and the related statements
of income and retained earnings and cash flows for the Fiscal Year then ended
and (ii) unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries as of June 30, 1996 and related unaudited interim statements of
revenue and retained earnings, copies of which have been furnished to the
Administrative Agent and each Lender, are complete and correct and fairly
present the assets, liabilities and financial position of the Borrower and its
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrower and its Subsidiaries have no Debt, obligation
or other unusual forward or long-term commitment which is not fairly reflected
in the foregoing financial statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1995, there has been
no material adverse change in the properties, business, operations, prospects,
or condition (financial or otherwise) of the Borrower and its Subsidiaries and
no event has occurred or condition arisen that could reasonably be expected to
have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Borrower and each of its Subsidiaries
will be Solvent.
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(r) Titles to Properties. Each of the Borrower and its Subsidiaries has
such title to the real property owned by it as is necessary or desirable to the
conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Section 6.1(o), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names the Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.3 hereof.
(t) Debt and Contingent Obligations. Schedule 6.1(f) is a complete and
correct listing of all Debt and Contingent Obligations of the Borrower and its
Subsidiaries in excess of $250,000. The Borrower and its Subsidiaries have
performed and are in compliance with all of the terms of such Debt and
Contingent Obligations and all instruments and agreements relating thereto, and
no default or event of default, or event or condition which with notice or lapse
of time or both would constitute such a default or event of default on the part
of the Borrower or its Subsidiaries exists with respect to any such Debt or
Contingent Obligation.
(u) Litigation. Except for those matters in existence on the Closing
Date as set forth on Schedule 6.1(u), there are no actions, suits or proceedings
pending nor, to the knowledge of the Borrower, threatened against or in any
other way relating adversely to or affecting the Borrower or any Subsidiary
thereof or any of their respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority the result of
which could reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of De fault, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of
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default by the Borrower or any Subsidiary thereof under any Material Contract or
judgment, decree or order to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower or any of its Subsidiaries or any of their
respective properties may be bound or which would require the Borrower or any of
its Subsidiaries to make any payment thereunder prior to the scheduled maturity
date therefor.
(w) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Borrower or
any Subsidiary thereof and furnished to the Lenders were, at the time the same
were so furnished, complete and correct in all respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Borrower or any Subsidiary thereof in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of the Borrower or its Subsidiaries or omits or will omit
to state a fact necessary in order to make the statements contained therein not
misleading. The Borrower is not aware of any facts which it has not disclosed in
writing to the Administrative Agent having a Material Adverse Effect, or insofar
as the Borrower can now foresee, could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.2. Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute repre
sentations and warranties made under this Agreement. All repre sentations and
warranties made under this Agreement shall be made or deemed to be made at and
as of the Closing Date, shall survive the Closing Date and shall not be waived
by the execution and delivery of this Agreement, any investigation made by or on
behalf of the Lenders or any borrowing hereunder and shall continue until the
Obligations hereunder have been finally and indefeasibly paid and satisfied in
full and the Commitments terminated.
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ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.10 hereof, the Borrower will
furnish or cause to be furnished to the Administrative Agent at the
Administrative Agent's Office at the address set forth in Section 13.1 hereof
and to each Lender at its respective address as set forth on Schedule 1.1(b), or
such other office as may be designated by the Administrative Agent or such
Lender from time to time:
SECTION 7.1. Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter, an
unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal quarter and unaudited Consolidated statements of income
and cash flows for the fiscal quarter then ended and that portion of the Fiscal
Year then ended, including the notes thereto, all in reasonable detail setting
forth in comparative form the corresponding figures for the preceding Fiscal
Year and prepared by the Borrower in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the period, and certified by the chief financial officer of the
Borrower to present fairly in all material respects the financial condition of
the Borrower and its Subsidiaries as of their respective dates and the results
of operations of the Borrower and its Subsidiaries for the respective periods
then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm acceptable to the Administrative
Agent in accordance with GAAP and, if applicable, containing disclosure of the
effect on the financial position or results of operation of any change in the
application of accounting principles and
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practices during the year, and accompanied by a report thereon by such certified
public accountants that is not qualified with respect to scope or limitations
imposed by the Borrower or any of its Subsidiaries or with respect to accounting
principles followed by the Borrower or any of its Subsidiaries not in accordance
with GAAP.
SECTION 7.2. Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 7.1(a) or (b) a certificate of the
chief financial officer or the treasurer of the Borrower in the form of Exhibit
E attached hereto (an "Officer's Compliance Certificate").
SECTION 7.3. Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any management report and any management responses thereto;
(b) As soon as practicable and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters and within ninety (90)
days after the end of the fourth fiscal quarter, a projection of sources and
uses of funds for the following twelve (12) month period;
(c) At least ten (10) days prior to the issuance of any Project Letter
of Credit, a summary report of the applicable correctional facility (including
without limitation, the project cost, size and location, anticipated
incarceration and management terms and expectations of permanent financing); and
(d) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
SECTION 7.4. Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses, the
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result of which could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrower or any Subsidiary
thereof;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against or threatened against the Borrower or any
Subsidiary thereof;
(e) (i) any Default or Event of Default, (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any Material Contract to which
the Borrower or any of its Subsidiaries is a party or by which the Borrower or
any Subsidiary thereof or any of their respective properties may be bound or
(iii) any termination prior to the stated termination date under any Material
Contract to which the Borrower or any of its Subsidiaries is a party or by which
the Borrower or any Subsidiary thereof or any of their respective properties may
be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect.
SECTION 7.5. Accuracy of Information. All written information, reports,
statements and other papers and data
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furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender (other than financial forecasts) whether pursuant to this Article VII or
any other provision of this Agreement, or any of the Security Documents, shall
be, at the time the same is so furnished, complete and correct in all material
respects to the extent necessary to give the Administrative Agent or any Lender
complete, true and accurate knowledge of the subject matter based on the
Borrower's knowledge thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner provided for in Section 13.10, the Borrower will, and
will cause each of its Subsidiaries to:
SECTION 8.1. Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
SECTION 8.2. Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names and trademarks; maintain in good working order and
condition all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 8.3. Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law (including without limitation, general liability insurance in a
minimum amount of $30,000,000), and on the Closing Date and from time to time
thereafter deliver to the Administrative Agent upon its request a detailed list
of the insurance then in effect, stating the names of the insurance companies,
the amounts and
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rates of the insurance, the dates of the expiration thereof and the properties
and risks covered thereby.
SECTION 8.4. Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5. Payment and Performance of Obligations. Pay and perform
all Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Borrower or such Subsidiary may contest any item
described in this Section 8.5 in good faith so long as adequate reserves are
maintained with respect thereto in accordance with GAAP.
SECTION 8.6. Compliance With Laws and Approvals. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business.
SECTION 8.7. Environmental Laws. In addition to and without limiting
the generality of Section 8.6, (a) comply with, and use its best efforts to
ensure such compliance by all agents, contractors, tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply with and
maintain, and use its best efforts to ensure that all agents, contractors,
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower or such
Subsidiary, or any orders, requirements or demands of
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Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 8.8. Compliance with ERISA. In addition to and without limiting
the generality of Section 8.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent.
SECTION 8.9. Compliance With Agreements. Comply in all respects with
each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract; provided, that the Borrower or such
Subsidiary may contest any such lease, agreement or other instrument in good
faith through applicable proceedings so long as adequate reserves are maintained
in accordance with GAAP.
SECTION 8.10. Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date
and in lines of business reasonably related thereto.
SECTION 8.11. Visits and Inspections. Permit representa tives of the
Administrative Agent or any Lender, from time to time, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files,
including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.
SECTION 8.12. Additional Guarantors. Upon the creation of any
Subsidiary permitted by this Agreement, cause to be executed and delivered to
the Agent within ten (10) Business Days after
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the creation of such Subsidiary, (a) a supplement substantially in the form of
the Supplement attached to the Guaranty Agreement executed by such new
Subsidiary, (b) the supplement substantially in the form of the Supplement
attached to the Pledge Agreement executed by the Borrower, (c) the closing
documents and certificates required of each of the Loan Parties pursuant to
Section 5.2(c) hereof with respect to such new Subsidiary and (d) such other
documents reasonably requested by the Administrative Agent in order that such
Subsidiary shall become bound by and entitled to the benefits of all of the
terms, covenants and agreements contained in the Guaranty Agreement and the
capital stock of such Subsidiary shall become Collateral for the Obligations.
Upon satisfaction of the conditions set forth in this Section 8.12, such
Subsidiary shall become a Guarantor under the Guaranty Agreement, as of such
date, as if an original signatory thereto.
SECTION 8.13. Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.10 hereof, the Borrower and its
Subsidiaries on a Consolidated basis will not:
SECTION 9.1 Minimum Net Worth. Permit the Consolidated Net Worth of the
Borrower and its Subsidiaries at any time to be less than (a) $95,000,000 plus
(b) fifty percent (50%) of Consolidated Net Income of the Borrower and its
Subsidiaries (if positive) as of each fiscal quarter end occurring after
December 31, 1995 plus (c) one hundred percent (100%) of the aggregate Net Cash
Proceeds with respect to any offering of capital stock or any exercise of
warrants or options exercisable with respect to capital stock of the Borrower or
any of its Subsidiaries received after December 31, 1995 plus (d) the aggregate
amount of any Subordinated Debt converted into capital stock of the Borrower or
any of its Subsidiaries after December 31, 1995.
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SECTION 9.2. Leverage Ratio. As of the end of any fiscal quarter,
permit the ratio of (a) the Consolidated Debt of the Borrower and its
Subsidiaries as of such fiscal quarter end to (b) the sum of (i) Consolidated
Net Worth of the Borrower and its Subsidiaries plus (ii) the Consolidated Debt
of the Borrower and its Subsidiaries, each as of such fiscal quarter end, to
exceed 0.65 to 1.00.
SECTION 9.3 Senior Leverage Ratio. As of the end of any fiscal quarter,
permit the ratio of (a) Senior Debt as of such fiscal quarter end to (b) the sum
of (i) Consolidated Net Worth of the Borrower and its Subsidiaries plus (ii) the
Consolidated Debt of the Borrower and its Subsidiaries, each as of such fiscal
quarter end, to exceed 0.55 to 1.00.
SECTION 9.4. Interest Coverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) Consolidated EBIT of the Borrower and its
Subsidiaries for the period of four (4) consecutive fiscal quarters ending on
such fiscal quarter to (b) Interest Expense for such period of four (4)
consecutive fiscal quarters, to be less than 3.00 to 1.00.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.10 hereof, the Borrower has not
and will not permit any of its Subsidiaries to:
SECTION 10.1. Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) the Existing Letter of Credit;
(c) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions reasonably satisfactory to the
Administrative Agent;
(d) Subordinated Debt;
(e) Debt existing on the Closing Date and not otherwise permitted under
this Section 10.1, as set forth on Schedule 6.1(f) and the renewal and
refinancing (but not the increase) thereof;
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(f) Debt of the Borrower and its Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $5,000,000 on any
date of determination;
(g) purchase money Debt of the Borrower and its Subsidiaries in an
aggregate amount not to exceed $5,000,000 on any date of determination;
(h) Debt consisting of Contingent Obligations permitted by Section
10.2;
(i) intercompany Debt between the Borrower and the Guarantors (provided
that such Debt is subordinated in right and time of payment to the Obligations
and on terms and conditions and in form satisfactory to the Required Lenders);
and
(j) unsecured Debt of the Borrower not otherwise permitted herein in an
aggregate amount not to exceed $10,000,000 outstanding at any time;
provided, that none of the Debt permitted to be incurred by this Section shall
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of the Borrower to make any payment to the Borrower or any of its
Subsidiaries (in the form of dividends, intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.
SECTION 10.2. Limitations on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligations except:
(a) Contingent Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(b) Contingent Obligations existing on the Closing Date and not
otherwise permitted under this Section 10.2, as set forth on Schedule 6.1(f);
(c) guaranties incurred in the ordinary course of business in an
aggregate amount not to exceed Twenty-Five Million Dollars ($25,000,000) at any
time; provided that not more than Five Million Dollars ($5,000,000) in
guaranties under this subsection shall be incurred to secure Debt other than
Project Related Debt;
(d) guaranties incurred to secure Project Related Debt to the extent
that a Letter of Credit has been issued and is in effect in connection therewith
(to the extent it is less than or equal to the aggregate amount of such Letter
of Credit); and
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(e) guaranties incurred to secure the obligations of the trustee or
administrator under the Corrections Corporation of America Employee Savings and
Stock Ownership Plan (or any successor plan) in an aggregate amount not to
exceed $10,000,000 at any time.
SECTION 10.3. Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation.
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 10.3 and in existence
on the Closing Date and described on Schedule 10.3; and
(g) Liens securing Debt permitted under Sections 10.1(e) and (f);
provided, that (i) such Liens shall be created substantially simultaneously with
the acquisition or lease of the
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related asset, (ii) such Liens do not at any time encumber any property other
than the property financed by such Debt, (iii) the amount of Debt secured
thereby is not increased and (iv) the principal amount of Debt secured by any
such Lien shall at no time exceed one hundred percent (100%) of the original
purchase or lease price of such property at the time it was acquired or leased.
SECTION 10.4. Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all of the
business or assets of any other Person or any other investment or interest
whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person, or enter into, directly or
indirectly, any commitment or option in respect of the foregoing except:
(a) investments in Subsidiaries existing on the Closing Date and the
other loans, advances and investments existing on the Closing Date and described
on Schedule 10.4;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 180 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 180 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Rating's Group, a Division of XxXxxx-Xxxx Corporation or Xxxxx'x Investors
Service, Inc., (iii) certificates of deposit maturing no more than 180 days from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States of America, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of "A" or
better by a nationally recognized rating agency; provided, that the aggregate
amount invested in such certificates of deposit shall not at any time exceed
$5,000,000 for any one such certificate of deposit and $10,000,000 for any one
such bank, or (iv) time deposits maturing no more than 30 days from the date of
creation thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits of which
are insured by the FDIC and in amounts not exceeding the maximum amounts of
insurance thereunder; and
(c) investments by the Borrower or any Subsidiary in the form of
acquisitions of at least eighty percent (80%) of
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the business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person if each such acquisition meets all of
the following requirements: (i) the Person to be acquired shall engage in a
business or the assets being acquired are used in a business described in
Section 8.10, (ii) the Borrower or a Guarantor shall be the surviving Person and
no Change of Control shall have been effected thereby, (iii) the Borrower shall
have demonstrated pro forma compliance with each covenant contained in Article
IX hereof prior to consummating the acquisition and no Default or Event of
Default shall have occurred and be continuing both before and after giving
effect to the acquisition, (iv) a description of the acquisition shall have been
delivered to the Administrative Agent at least ten (10) days prior to the
consummation of the acquisition and (v) the acquisition shall have been approved
by the Board of Directors of the Person being acquired; provided, that the fair
market value of all consideration paid in connection with all such acquisitions
shall not exceed $50,000,000 in the aggregate, of which cash consideration paid
and Debt assumed shall not exceed $25,000,000;
(d) investments by the Borrower or any Guarantor after the Closing Date
in Immaterial Subsidiaries or loans and advances by the Borrower or any
Guarantor after the Closing Date to Immaterial Subsidiaries in an aggregate
amount not to exceed $1,000,000;
(e) investments after the Closing Date in other Persons in an aggregate
amount not to exceed $10,000,000, provided that (i) such Person shall be engaged
in the businesses described in Section 8.10 hereof and (ii) no Default or Event
of Default shall have occurred and be continuing both before and after giving
effect to such investment;
(f) intercompany loans and advances to the extent permitted by Section
10.1(i); and
(g) investments by the Borrower after the Closing Date in (i) the Bent
County Colorado Corrections Facility in an aggregate amount not to exceed
$12,500,000, (ii) the Xxxxxx County, Indiana Correctional Facility in an
aggregate amount not to exceed $4,500,000 and (iii) the rights and interest of
First Trust National Association, as trustee, with respect to the bonds issued
by Appleton Prison Corporation and secured by the Prairie Corrections Facility
in an aggregate amount not to exceed $25,000,000.
SECTION 10.5. Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any
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other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation
or dissolution) except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge with any
other Wholly-Owned Subsidiary of the Borrower; provided that the survivor of
such merger is or becomes a Guarantor;
(b) any Wholly-Owned Subsidiary of the Borrower may merge with the
Borrower; provided that the survivor of such merger is the Borrower; and
(c) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 10.4(c); provided that the survivor of such merger is or
becomes a Guarantor.
SECTION 10.6. Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of the Borrower or any of its Subsidiaries; and
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof.
SECTION 10.7. Limitations on Dividends and Distributions. Declare or
pay any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; provided that:
(a) the Borrower or any Subsidiary may pay dividends in shares of its
own capital stock; and
(b) any Subsidiary may pay cash dividends to the Borrower.
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SECTION 10.8. Transactions with Affiliates. Directly or indirectly: (a)
make any loan or advance to, or purchase or assume any note or other obligation
to or from, any of its officers, directors, shareholders or Affiliates, or to or
from any member of the immediate family of any of its officers, directors,
shareholders or Affiliates, or subcontract any operations to any of its
Affiliates, or (b) enter into, or be a party to, any transaction with any of its
Affiliates, except pursuant to the reasonable requirements of its business and
upon fair and reasonable terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with a Person not its Affiliate.
SECTION 10.9. Certain Accounting Changes. Change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices except as
required by GAAP.
SECTION 10.10. Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with respect
thereto money or securities before due for the purpose of paying when due) any
Subordinated Debt.
SECTION 10.11. Restrictive Agreements. Enter into any Debt which
contains any negative pledge on assets or any covenants more restrictive than
the provisions of Articles VIII, IX and X hereof, or which restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such Debt.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1. Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement
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Obligation when and as due (whether at maturity, by reason of acceleration or
otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for five (5)
Business Days.
(c) Misrepresentation. Any representation or warranty made (or deemed
to be made pursuant to Section 5.3(a)) by the Borrower or any of its
Subsidiaries under this Agreement, any Loan Document or any amendment hereto or
thereto, shall at any time prove to have been incorrect or misleading in any
material respect when made (or deemed made pursuant to Section 5.3(a)).
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Sections 7.4(e) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement and such amount is not paid within five (5)
Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which is in excess
of $1,000,000 beyond the period of grace if any, provided in the instrument or
agreement under which such Debt was created, or (ii) default in the observance
or performance of any other agreement or condition relating to any Debt (other
than the Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which is in excess of $1,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or
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holders of such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, any such Debt to become due
prior to its stated maturity (any applicable grace period having expired).
(h) Other Cross-Defaults. The Borrower or any of its Subsidiaries shall
default in the payment when due, or in the performance or observance, of any
obligation or condition of any Material Contract unless, but only as long as,
the existence of any such default is being contested by the Borrower or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of the Borrower or such
Subsidiary to the extent required by GAAP.
(i) Change in Control. (a) Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of more
than twenty-five percent (25%) of the voting power of the Borrower entitled to
vote in the election of members of the board of directors of the Borrower or
there shall have occurred under any indenture or other instrument evidencing any
Debt in excess of $1,000,000 any "change in control" (as defined in such
indenture or other evidence of Debt) obligating the Borrower to repurchase,
redeem or repay all or any part of the Debt or capital stock provided for
therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating
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to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or any Subsidiary thereof or for all or any substantial part of
their respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive days, or
an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(l) Failure of Agreements. Any provision of any Loan Document (other
than this Agreement) shall for any reason cease to be valid and binding on the
Borrower or Subsidiary party thereto or any such Person shall so state in
writing, or any Loan Document (other than this Agreement) shall for any reason
cease to create a valid and perfected first priority Lien on, or security
interest in, any of the collateral purported to be covered thereby, in each case
other than in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following events:
(i) the Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 occurs or exists, whether or not waived, with respect to any Pension
Plan or (iii) the Borrower or any ERISA Affiliate as employers under one or more
Multiemployer Plan makes a complete or partial withdrawal from any such Multi
employer Plan and the plan sponsor of such Multiemployer Plans notifies such
withdrawing employer that such employer has incurred a withdrawal liability
requiring payments in an amount exceeding $1,000,000.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of such judgments to exceed $1,000,000 in any Fiscal Year
shall be entered against the Borrower or any of its Subsidiaries by any court
and such judgment or order shall continue undischarged or unstayed for a period
of thirty (30) days.
SECTION 11.2. Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower:
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(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Obligations, to be forthwith due
and payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 11.1(j) or (k),
the Credit Facility shall be automatically terminated and all Obligations shall
automatically become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower or such other Person
which may be entitled thereto.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other
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right or remedy given hereunder or under the Loan Documents or that may now or
hereafter exist in law or in equity or by suit or otherwise. No delay or failure
to take action on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default.
No course of dealing between the Borrower, the Administrative Agent and the
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1. Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents and each such Lender irrevocably
authorizes First Union as Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents (with the consent of the Required Lenders or all of the Lenders as
required pursuant to Section 13.10) and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement and such other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent.
SECTION 12.2. Delegation of Duties. The Administrative Agent may
execute any of its respective duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by the Administrative Agent with
reasonable care.
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SECTION 12.3. Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of the Borrower or any of its
Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.
SECTION 12.4. Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless such Note shall have
been transferred in accordance with Section 13.9 hereof. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders (or, when expressly required
hereby or by the relevant other Loan Document, all the Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action except as a result of its own
gross negligence or willful misconduct. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and
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the Notes in accordance with a request of the Required Lenders (or, when
expressly required hereby, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
SECTION 12.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
SECTION 12.6. Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans and issue or participate in Letters of Credit hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative 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 credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports
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and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of the Administrative
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 12.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct or collection of sums
due pursuant to the Holdenville Letter of Credit. The agreements in this Section
12.7 shall survive the payment of the Notes, any Reimbursement Obligation and
all other amounts payable hereunder and the termination of this Agreement.
SECTION 12.8. The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not an Administrative Agent
hereunder. With respect to any Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued by it or participated in
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Administrative Agent,
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and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
SECTION 12.9. Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders (and, so long as no Default or Event of Default has occurred
and is continuing, with the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed) shall have the right to appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the Administrative Agent's giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders (and,
so long as no Default or Event of Default has occurred and is continuing, with
the consent of the Borrower, which consent shall not be unreasonably withheld or
delayed), appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 12.9 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 Administrative Agent.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on
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the third Business Day following the date sent by certified mail, return receipt
requested. A telephonic notice to the Administrative Agent as understood by the
Administrative Agent will be deemed to be the controlling and proper notice in
the event of a discrepancy with or failure to receive a confirming written
notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other ad dress as to which all the other parties
are notified in writing.
If to the Borrower: Corrections Corporation of America
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxx and Xxxxxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX
Attention: Xxxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to First Union as
Administrative Agent: First Union National Bank
of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency
Services
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Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
First Union National Bank
of Tennessee
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the Address set forth on
Schedule 1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above for First Union
National Bank of North Carolina, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrower and Lenders, as the
Administrative Agent's Office referred to herein, to which payments due are to
be made and at which Loans will be disbursed and Letters of Credit issued.
SECTION 13.2. Expenses; Indemnity. The Borrower will (a) pay all
out-of-pocket expenses of the Administrative Agent in connection with: (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all out-of-pocket
expenses of the Administrative Agent and each Lender in connection with the
administration and enforcement of any rights and remedies of the Administrative
Agent and Lenders under the Credit Facility, including consulting with
appraisers, accountants, engineers, attorneys and other Persons concerning the
nature, scope or value of any right or remedy of the Administrative Agent or any
Lender
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hereunder or under any other Loan Document or any factual matters in connection
therewith, which expenses shall include without limitation the reasonable fees
and disbursements of such Persons, and (c) defend, indemnify and hold harmless
the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with the Agreement, any other Loan
Document or the Loans, including without limitation reasonable attorney's and
consultant's fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 13.3. Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 13.9 are hereby authorized by the Borrower at any time or from time
to time, without notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of the
Borrower against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Administrative Agent shall have declared any
or all of the Obligations to be due and payable as permitted by Section 11.2 and
although such Obligations shall be contingent or unmatured.
SECTION 13.4. Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 13.5. Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan
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Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations. The Borrower hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by the Administrative Agent or any Lender in connection with
this Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 13.1.
Nothing in this Section 13.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against the Borrower or its properties in the courts of any
other jurisdictions.
SECTION 13.6. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("Disputes"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
Hedging Agreement that is a Loan Document.
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(b) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property, collection of rents and set
off, (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and in
filing an involuntary bankruptcy proceeding, and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute.
SECTION 13.7. Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 13.8. Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there
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is an express written direction by the Administrative Agent to the contrary
agreed to by the Borrower, be performed in accordance with GAAP as in effect on
the Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
SECTION 13.9. Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrower, which consents shall not be unreasonably
withheld, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Extensions of Credit at the time owing to it
and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and
obligations under this Agreement;
(ii) if less than all of the assigning Lender's Commitment is
to be assigned, the Commitment so assigned shall not be less than
$10,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance in the form of Exhibit F
attached hereto (an "Assignment and Acceptance"), together with any
Note or Notes subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration
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statement with the Securities and Exchange Commission or apply
to or qualify the Loans or the Notes under the blue sky laws
of any state; and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,000 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable
upon any assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
or Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit F:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
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(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender. Each surrendered Note
or Notes shall be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate
on any Loan or
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Reimbursement Obligation, extend the term or increase the amount of the
Commitment, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal of any Loan
or, except as expressly contemplated hereby or thereby, release
substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement
with the Securities and Exchange Commission to apply to qualify the
Loans or the Notes under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information. Any Lender may, in
connection with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 13.9, disclose to the assignee,
participant, proposed assignee or proposed participant, any information relating
to the Borrower furnished to such Lender by or on behalf of the Borrower;
provided, that prior to any such disclosure, each such assignee, proposed
assignee, participant or proposed participant shall agree with the Borrower or
such Lender to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.10. Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent
with the consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrower; provided, that
no amendment, waiver or consent shall (a) increase the amount or extend the time
of the obligation of the Lenders to make Loans or issue or participate in
Letters of Credit (including without limitation pursuant to Section 2.7), (b)
extend the originally scheduled time or times of payment of the principal of any
Loan or Reimbursement Obligation or the time or times of payment of interest or
any fee on any Loan, Letter of Credit or Reimbursement Obligation, (c) reduce
the rate of interest or fees payable on any Loan or Reimbursement Obligation,
(d) permit any subordination of the principal or interest on any Loan or
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Reimbursement Obligation, (e) extend the expiration date of any Letter of Credit
beyond the Revolving Termination Date, (f) release any material portion of the
Collateral or release any Guarantor or Security Document (other than as
specifically permitted in this Agreement or the applicable Security Document) or
(g) amend the provisions of this Section 13.10 or the definition of Required
Lenders, without the prior written consent of each Lender. In addition, no
amendment, waiver or consent to the provisions of (a) Article XII shall be made
without the written consent of the Administrative Agent and (b) Article III
without the written consent of the Issuing Lender.
SECTION 13.11. Performance of Duties. The Borrower's obligations under
this Agreement and each of the Loan Documents shall be performed by the Borrower
at its sole cost and expense.
SECTION 13.12. All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
SECTION 13.13. Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIII and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before.
SECTION 13.14. Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.15. Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unen forceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdic tion.
SECTION 13.16. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be
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deemed to be an original and shall be binding upon all parties, their successors
and assigns, and all of which taken together shall constitute one and the same
agreement.
SECTION 13.17. Entire Agreement; Term of Agreement. This Agreement,
together with the other Loan Documents, constitutes the entire agreement with
respect to the subject matter hereof and supersedes all prior agreements with
respect to the subject matter hereof. This Agreement shall remain in effect from
the Closing Date through and including the date upon which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full and the
Commitments terminated. No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] CORRECTIONS CORPORATION OF AMERICA
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[AGENT AND LENDER SIGNATURES TO FOLLOW]
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FIRST UNION NATIONAL BANK OF
TENNESSEE, as Administrative Agent,
Issuing Lender, Swingline Lender
and Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Issuing Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CIBC INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE SUMITOMO BANK, LIMITED
By:
---------------------------------
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Name:
-------------------------------
Title:
------------------------------
FUJI BANK, LIMITED, ATLANTA AGENCY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
UNION BANK OF CALIFORNIA, N.A.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MERCANTILE BANK OF ST. LOUIS, N.A.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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SCHEDULE 1.1: LENDERS AND COMMITMENTS
LENDER COMMITMENT ADDRESS
------ ---------- -------
First Union $50,000,000 First Union National Bank
National Bank of Tennessee
of Tennessee
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
CIBC Inc. $25,000,000 Two Paces West
0000 Xxxxx Xxxxx Xxxx, Xxx. 0000
Xxxxxxx, XX 00000
Attn:Xxxxxxx X. Xxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
Fuji Bank, Limited,
Atlanta Agency $15,000,000 Marquis One Tower
000 Xxxxxxxxx Xxxxxx Xxxxxx, X.X.
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Suite 2100
Xxxxxxx, Xx 00000
Attn:Xxxxx Xxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
Union Bank of
California, N.A. $15,000,000 000 Xxxxx Xxxxxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn:Xxxx X. Xxxxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
Mercantile Bank of
St. Louis, N.A. $15,000,000 0xx & Xxxxxxxxxx
Xx. Xxxxx, XX 00000
Attn:Xxxxxx X. Xxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
The Sumitomo Bank,
Limited $15,000,000 000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn:Xxxxx Xxxxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
SouthTrust Bank of
Alabama, National
Association $25,000,000 000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xx 00000
Attn:Xxx Xxxxxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
-93-
99
First Tennessee
Bank
National
Association $10,000,000 Xxxx X. Xxxxxxx
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn:Xxxx Xxxxxxx
Telephone:(000) 000-0000
Telecopy:(000) 000-0000
-94-
100
Schedule 1.2
First Union Letters of Credit
Beneficiary Amount Expiration Date
----------- ------ ---------------
Northfield Insurance Co. $300,000.00 3/31/97
Xxxxxxxx Gas Co. $ 9,200.00 9/30/96
Electric Power Board of
Chattanooga $ 20,000.00 7/19/97
Chattanooga Gas Co. $ 21,000.00 7/19/97
Louisiana Power & Light
Co. $ 40,000.00 5/31/97
National Union Fire Ins.
Co. of Pittsburgh, PA. $224,000.00 3/31/97
National Union Fire Ins.
Co. of Pittsburgh, PA $697,000.00 3/31/97
District of Columbia $ 50,000.00 8/05/97
Xxxxxxxxx Gas Co. $ 4,274.00 7/31/97
-95-
