Exhibit 10.110
THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Third Amendment")
made as of the 30th day of November, 1998 by and among FIRST UNION NATIONAL
BANK, successor to SIGNET BANK, successor by merger to SIGNET BANK/MARYLAND (the
"Bank"), and YOUTH SERVICES INTERNATIONAL, INC., a Maryland corporation ("YSI"),
and certain of its wholly-owned subsidiaries, namely: YOUTH SERVICES
INTERNATIONAL OF IOWA, INC., a Maryland corporation; YOUTH SERVICES
INTERNATIONAL OF TENNESSEE, INC., a Maryland corporation; YOUTH SERVICES
INTERNATIONAL OF MARYLAND, INC., a Maryland corporation; YOUTH SERVICES
INTERNATIONAL OF BALTIMORE, INC., a Maryland corporation; YOUTH SERVICES
INTERNATIONAL OF NORTHERN IOWA, INC., an Iowa corporation; YOUTH SERVICES
INTERNATIONAL OF SOUTH DAKOTA, INC., a South Dakota corporation; YOUTH SERVICES
INTERNATIONAL OF TEXAS, INC., a Texas corporation; YOUTH SERVICES INTERNATIONAL
OF MISSOURI, INC., a Missouri corporation; YOUTH SERVICES INTERNATIONAL OF
VIRGINIA, INC., a Virginia Corporation; YOUTH SERVICES INTERNATIONAL OF
DELAWARE, a Delaware corporation; YOUTH SERVICES INTERNATIONAL OF MINNESOTA, a
Minnesota corporation; YOUTH SERVICES OF ILLINOIS, a Illinois corporation; YOUTH
SERVICES INTERNATIONAL OF MICHIGAN, INC., a Michigan corporation; YOUTH SERVICES
INTERNATIONAL SOUTHEASTERN PROGRAMS, INC., a Maryland corporation; and YSI OF
CENTRAL IOWA, INC., an Iowa corporation (collectively, with YSI, the
"Borrowers").
Recitals
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A. The Bank and YSI and certain of YSI's wholly-owned subsidiaries executed a
Loan and Security Agreement dated June 20, 1995 (the "Loan Agreement") which
generally provided for the extension of a line of credit facility to YSI and
such subsidiaries.
B. The Bank and YSI and certain of YSI's wholly-owned subsidiaries entered
into a First Amendment to Loan and Security Agreement dated as of December 12,
1996 (the "First Amendment") and an Amended and Restated Master Revolving
Promissory Note (the "Line of Credit Note"), which generally amended certain
terms of the Loan Agreement and provided for the addition of certain wholly-
owned subsidiaries to the Loan Agreement, as amended.
C. The Bank and YSI and certain YSI's wholly-owned subsidiaries entered into
a Second Amendment to Loan and Security Agreement dated as of October 31, 1997
(the "Second Amendment") and a First Allonge to the Line of Credit Note which
generally released and discharged certain of YSI's wholly-owned subsidiaries
that had executed the Loan Agreement and/or the First Amendment and the Line of
Credit Note.
D. The Bank issued a letter dated June 11, 1998 to YSI whereby the Bank
amended the Loan Agreement, as amended, to reduce the unused Line of Credit fee
(the "Letter Amendment").
E. Youth Services International of Texas, Inc., Youth Services International
of Delaware, Inc., Youth Services International of Minnesota, Inc., Youth
Services International of Illinois, Inc., Youth Services International of
Michigan, Inc., and Youth Services International Southeastern Programs, Inc.
(collectively, the "New Borrowers") are wholly-owned subsidiaries of YSI and
have this date executed an Assumption Agreement evidencing their agreement to be
bound by the terms of the Loan Agreement, as amended, and the Line of Credit
Note.
F. The Bank and the Borrowers agree to amend the Loan Agreement, as amended
by the First Amendment, the Second Amendment and the Letter Amendment, upon the
terms and conditions set forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
Section 1. Defined Terms. All terms defined in the Loan Agreement shall have
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the same meaning when used in this Third Amendment. As used hereafter, the term
"Loan Agreement" shall mean the Loan and Security Agreement dated June 20, 1995
as amended by the First Amendment, the Second Amendment, the Letter Agreement
and this Third Amendment. The Recitals are incorporated in and a part of this
Third Amendment.
Section 2. Amendment. Subject to satisfaction of the conditions of this
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Third Amendment, the Loan Agreement is amended in the following respects, and
shall be construed and interpreted to give effect to the modifications and
amendments expressly set forth herein.
(a) The Maturity Date of the Line of Credit Note shall be extended to
February 28, 1999, and such Maturity Date shall be reflected in the Second
Allonge referred to in Section 6 below.
(b) The New Borrowers shall be, and hereby are, bound by the terms of the
Loan Agreement and Line of Credit Note, as amended, as if original signatories
thereto.
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The Borrower shall pay to the Bank an extension fee of Two Thousand Five Hundred
Dollars ($2,500) upon execution of this Third Amendment.
Section 3. Representations and Warranties of Borrowers. Borrowers hereby
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represent and warrant to Bank that (i) execution of this Third Amendment has
been duly authorized by all requisite action of Borrowers; (ii) no consents are
necessary from any third parties for Borrowers' execution, delivery or
performance of this Third Amendment, (iii) this Third Amendment and the Loan
Agreement as amended constitute the legal, valid and binding obligations of
Borrowers enforceable against Borrowers in accordance with their terms, except
to the extent that the enforceability thereof against Borrowers may be limited
by bankruptcy, insolvency or other laws affecting the enforceability of
creditors rights generally or by equity principles of general application, (iv)
except as otherwise disclosed to the Bank in writing, all of the representations
and warranties contained in Article V of the Loan Agreement, as amended hereby,
are true and correct in all material respects with the same force and effect as
if made on and as of the effective date of this Third Amendment, except that
with respect to the representations and warranties made regarding Financial
Statements, such representations and warranties are hereby made with respect to
the most recent Financial Statements delivered by Borrowers to Bank, (v) there
exists no default which is continuing and no Event of Default has occurred other
than those that have been expressly waived by the Bank, and (vi) no default or
Event of Default will occur immediately or with the passage of time or giving of
notice as a consequence of this Third Amendment becoming effective.
Section 4. Chief Executive Offices. The location of each Borrower's original
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entry books and records and the place where its records relating to Accounts are
maintained as identified in the Loan Agreement is, and continues to be, accurate
and complete.
Section 5. Reaffirmation. Borrowers hereby acknowledge and confirm that (i)
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except as expressly amended hereby, the Loan Agreement and other Loan Documents
remain in full force and effect, (ii) the Line of Credit Note evidences the
indebtedness outstanding and owing to the Bank (which as of November 30, 1998 is
0), (iii) Borrowers have no defenses to their respective obligations under the
Loan Agreement and the other Loan Documents, (iv) the Liens of the Bank under
the Loan Documents continue in full force and effect and have the same priority
as before this Third Amendment, and (v) Borrowers have no claim against Bank
arising from or in connection with the Loan Agreement or the other Loan
Documents.
Section 6. Allonge to Amended and Restated Master Revolving Promissory Note.
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The terms of the Line of Credit Note shall be amended by the affixation of a
Second Allonge to the Amended and Restated Master Revolving Promissory Note
executed and delivered on December 12, 1996.
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Section 7. Effect of Amendment. Except as hereby amended, the terms and
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conditions of the Loan Agreement and all other Loan Documents are hereby
approved, ratified and confirmed and shall remain in force and effect until all
principal, accrued interest and all other charges and costs due under the Loan
Agreement and any and all notes have been paid, in full. The execution and
delivery of this Third Amendment shall not constitute a novation, shall not
extinguish, terminate, affect or impair the obligations of the Borrowers, and
shall not waive, extinguish, terminate, affect or impair any security, right or
remedy of the Bank against the Borrowers, the Borrowers' property or any other
person obligated under the Loan Documents. The execution and delivery of this
Third Amendment shall not constitute a waiver of any provision of the Loan
Agreement, any of the other Loan Documents or any existing default or Event of
Default, nor act as a release or subordination of the Liens and security
interests of Bank in the Collateral.
Section 8. Effective Date. Regardless of the date of execution and delivery
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of this Third Amendment or any other instrument referenced herein, it is
intended that the terms of this Third Amendment and the modification and
amendments provided for herein shall be effective as of November 30, 1998,
regardless of the date of actual execution.
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IN WITNESS WHEREOF, the parties hereto execute this Second Amendment the date
and year first above written.
WITNESS/ATTEST: FIRST UNION NATIONAL BANK
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxx Xxxxx (SEAL)
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Xxxxx Xxxxx
Vice President
YOUTH SERVICES INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Senior Vice President - -
Chief Financial Officer and
General Counsel
YOUTH SERVICES INTERNATIONAL OF IOWA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
------------------ ---------------------
Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF TENNESSEE, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
[SIGNATURES CONTINUED]
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YOUTH SERVICES INTERNATIONAL OF MARYLAND, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF BALTIMORE, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YSI OF CENTRAL IOWA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
[SIGNATURES CONTINUED]
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YOUTH SERVICES INTERNATIONAL OF VIRGINIA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF SOUTH DAKOTA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF TEXAS, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF DELAWARE, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
[SIGNATURES CONTINUED]
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YOUTH SERVICES INTERNATIONAL OF MINNESOTA, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF ILLINOIS, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
------------------ ---------------------
Xxxx X. Xxxxxxx
Vice President
YOUTH SERVICES INTERNATIONAL SOUTHEASTERN
PROGRAMS, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxxxx
Vice President
[SIGNATURES END]
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ACKNOWLEDGMENTS
STATE OF MARYLAND, CITY/COUNTY OF BALTIMORE, TO WIT:
I HEREBY CERTIFY, that on this 15 day of December, 1998, before me,
the undersigned, a Notary Public of the State aforesaid, personally appeared
Xxxxx Xxxxx, who acknowledged himself to be the Vice President of FIRST UNION
NATIONAL BANK, successor by merger to SIGNET BANK, and that he, as such Vice
President, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by himself as
Vice President.
/s/ Xxxxxx X. Xxxxx
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Notary Public
My Commission Expires:
[SEAL]
STATE OF MARYLAND, CITY/COUNTY OF BALTIMORE, TO WIT:
I HEREBY CERTIFY, that on this 15 day of December, 1998, before me,
the undersigned, a Notary Public of the State aforesaid, personally appeared
Xxxx X. Xxxxxxx, who acknowledged himself to be the Senior Vice President - -
Chief Financial Officer and General Counsel of Youth Services International,
Inc., a corporation, and that he, as such Senior Vice President - - Chief
Financial Officer and General Counsel, being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation by himself as Senior Vice President - - Chief Financial Officer
and General Counsel.
/s/ Xxxxxx X. Xxxxx
-------------------
Notary Public
My Commission Expires:
[SEAL]
0
XXXXX XX XXXXXXXX, XXXX/XXXXXX XX XXXXXXXXX, TO WIT:
I HEREBY CERTIFY, that on this 15 day of December, 1998, before me,
the undersigned, a Notary Public of the State aforesaid, personally appeared
Xxxx X. Xxxxxxx, who acknowledged himself to be the Vice President of Youth
Services International of Iowa, Inc., Youth Services International of Tennessee,
Inc., Youth Services International of Maryland, Inc., Youth Services
International of Baltimore, Inc., Youth Services International of Northern Iowa,
Inc., YSI of Central Iowa, Inc., Youth Services International of Virginia, Inc.,
Youth Services International of South Dakota, Inc., Youth Services International
of Missouri, Inc., Youth Services International of Texas, Inc., Youth Services
International of Delaware, Inc., Youth Services International of Minnesota,
Inc., Youth Services International of Illinois, Inc., Youth Services
International of Michigan, Inc., and Youth Services International Southeastern
Programs, Inc. and that he, as Vice President of each such corporation, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing the name of each of the corporations by himself as Vice
President.
/s/ Xxxxxx X. Xxxxx
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Notary Public
My Commission Expires:
[SEAL]
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