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EXHIBIT 10.19
CREDIT AGREEMENT
DATED AS OF JULY 18, 1997,
BY AND AMONG
CCA PRISON REALTY TRUST,
AND CERTAIN SUBSIDIARIES THEREOF,
AS BORROWERS,
THE LENDERS REFERRED TO HEREIN,
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,
AND
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
AS CO-AGENT
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................... 1
SECTION 1.1. Definitions................................................................. 1
SECTION 1.2. General..................................................................... 16
SECTION 1.3. Other Definitions and Provisions............................................ 17
ARTICLE II REVOLVING CREDIT FACILITY............................................................. 17
SECTION 2.1. Revolving Credit Loans...................................................... 17
SECTION 2.2. Swingline Loans............................................................. 17
SECTION 2.3. Procedure for Advances of Revolving Credit and
Swingline Loans............................................................. 19
SECTION 2.4. Repayment of Loans.......................................................... 20
SECTION 2.5. Notes....................................................................... 21
SECTION 2.6. Permanent Reduction of the Aggregate Commitment............................. 21
SECTION 2.7. Revolving Termination Date.................................................. 22
SECTION 2.8. Use of Proceeds............................................................. 23
SECTION 2.9. Release of Security......................................................... 23
SECTION 2.10. Increase In Aggregate Commitment; Additional Lenders........................ 23
ARTICLE III LETTER OF CREDIT FACILITY............................................................. 24
SECTION 3.1. L/C Commitment.............................................................. 24
SECTION 3.2. Procedure for Issuance of Letters of Credit................................. 24
SECTION 3.3. Commissions and Other Charges............................................... 25
SECTION 3.4. L/C Participations.......................................................... 25
SECTION 3.5. Reimbursement Obligation of the Borrowers................................... 26
SECTION 3.6. Obligations Absolute........................................................ 27
SECTION 3.7. Effect of Application....................................................... 27
ARTICLE IV GENERAL LOAN PROVISIONS............................................................... 27
SECTION 4.1. Interest.................................................................... 27
SECTION 4.2. Notice and Manner of Conversion or Continuation
of Loans.................................................................... 30
SECTION 4.3. Fees........................................................................ 30
SECTION 4.4. Manner of Payment........................................................... 31
SECTION 4.5. Crediting of Payments and Proceeds.......................................... 31
SECTION 4.6. Adjustments................................................................. 32
SECTION 4.7. Nature of Obligations of Lenders Regarding
Extensions of Credit; Assumption by the
Administrative Agent........................................................ 32
SECTION 4.8. Changed Circumstances....................................................... 33
SECTION 4.9. Indemnity................................................................... 35
SECTION 4.10. Capital Requirements........................................................ 36
SECTION 4.11. Taxes....................................................................... 36
ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING.......................................... 38
SECTION 5.1. Closing..................................................................... 38
SECTION 5.2. Conditions to Closing and Initial Extensions of Credit...................... 38
SECTION 5.3. Conditions to All Loans and Letters of Credit............................... 43
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE
BORROWERS..................................................................................... 43
SECTION 6.1. Representations and Warranties.............................................. 43
SECTION 6.2. Survival of Representations and Warranties, Etc............................. 49
ARTICLE VII FINANCIAL INFORMATION AND NOTICES..................................................... 50
SECTION 7.1. Financial Statements and Projections........................................ 50
SECTION 7.2. Officer's Compliance Certificate............................................ 51
SECTION 7.3. Other Reports............................................................... 51
SECTION 7.4. Notice of Litigation and Other Matters...................................... 51
SECTION 7.5. Accuracy of Information..................................................... 52
ARTICLE VIII AFFIRMATIVE COVENANTS................................................................. 53
SECTION 8.1. Preservation of Corporate Existence and Related Matters..................... 53
SECTION 8.2. Maintenance of Property..................................................... 53
SECTION 8.3. Insurance................................................................... 53
SECTION 8.4. Accounting Methods and Financial Records.................................... 53
SECTION 8.5. Payment and Performance of Obligations...................................... 54
SECTION 8.6. Compliance With Laws and Approvals.......................................... 54
SECTION 8.7. Environmental Laws.......................................................... 54
SECTION 8.8. Compliance with ERISA....................................................... 54
SECTION 8.9. Compliance With Agreements.................................................. 55
SECTION 8.10. Conduct of Business......................................................... 55
SECTION 8.11. Visits and Inspections...................................................... 55
SECTION 8.12. Incarceration Agreements.................................................... 55
SECTION 8.13. Lease Terms and Conditions.................................................. 55
SECTION 8.14. Lease Revenues.............................................................. 56
SECTION 8.15. Hedging Agreement........................................................... 56
SECTION 8.16. Additional Borrowers........................................................ 56
SECTION 8.17. Further Assurances.......................................................... 56
ARTICLE IX FINANCIAL COVENANTS................................................................... 57
SECTION 9.1 Ratio of Total Liabilities to Total Capitalization.......................... 57
SECTION 9.2 Ratio of Total Funded Debt to Cash Flow..................................... 57
SECTION 9.3 Ratio of Dividends to Funds From Operations................................. 57
SECTION 9.4 Interest Coverage Ratio..................................................... 57
SECTION 9.5 Minimum Net Worth........................................................... 58
SECTION 9.6 Additional Secured Debt..................................................... 58
SECTION 9.7 Investment Grade Rating..................................................... 58
ARTICLE X NEGATIVE COVENANTS.................................................................... 58
SECTION 10.1. Limitations on Debt......................................................... 58
SECTION 10.2. Limitations on Contingent Obligations....................................... 59
SECTION 10.3. Limitations on Liens........................................................ 59
SECTION 10.4. Limitations on Loans, Advances, Investments and
Acquisitions................................................................ 60
SECTION 10.5. Limitations on Mergers and Liquidation...................................... 61
SECTION 10.6. Limitations on Sale of Assets............................................... 61
SECTION 10.7. Limitations on Dividends and Distributions.................................. 62
SECTION 10.8. Transactions with Affiliates................................................ 62
SECTION 10.9. Certain Accounting Changes.................................................. 62
SECTION 10.10. Amendment to Sale Leaseback Documents....................................... 62
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SECTION 10.11. Restrictions on Working Capital............................................. 63
SECTION 10.12. Restrictions on Use of Proceeds and Other Expenditures...................... 63
SECTION 10.13. Restrictive Agreements...................................................... 64
SECTION 10.14. Operating Leases............................................................ 64
ARTICLE XI DEFAULT AND REMEDIES................................................................. 64
SECTION 11.1. Events of Default........................................................... 64
SECTION 11.2. Remedies.................................................................... 67
SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; Etc............................. 67
ARTICLE XII THE ADMINISTRATIVE AGENT............................................................. 68
SECTION 12.1. Appointment................................................................. 68
SECTION 12.2. Delegation of Duties........................................................ 68
SECTION 12.3. Exculpatory Provisions...................................................... 68
SECTION 12.4. Reliance by the Administrative Agent........................................ 69
SECTION 12.5. Notice of Default........................................................... 69
SECTION 12.6. Non-Reliance on the Administrative Agent and
Other Lenders............................................................... 70
SECTION 12.7. Indemnification............................................................. 70
SECTION 12.8. The Administrative Agent in Its Individual Capacity......................... 71
SECTION 12.9. Resignation of the Administrative Agent; Successor
Administrative Agent........................................................ 71
SECTION 12.10 The Co-Agent................................................................ 71
ARTICLE XIII MISCELLANEOUS........................................................................ 72
SECTION 13.1. Notices..................................................................... 72
SECTION 13.2. Expenses; Indemnity......................................................... 73
SECTION 13.3. Set-off..................................................................... 74
SECTION 13.4. Governing Law............................................................... 74
SECTION 13.5. Consent to Jurisdiction..................................................... 74
SECTION 13.6. Binding Arbitration; Waiver of Jury Trial................................... 75
SECTION 13.7. Reversal of Payments........................................................ 76
SECTION 13.8. Accounting Matters.......................................................... 76
SECTION 13.9. Successors and Assigns; Participations...................................... 76
SECTION 13.10. Amendments, Waivers and Consents............................................ 79
SECTION 13.11. Performance of Duties....................................................... 80
SECTION 13.12. Joint and Several Liability; CCA Reit as Agent for
Borrowers................................................................... 80
SECTION 13.13. All Powers Coupled with Interest............................................ 80
SECTION 13.14. Survival of Indemnities..................................................... 80
SECTION 13.15. Titles and Captions......................................................... 80
SECTION 13.16. Severability of Provisions.................................................. 80
SECTION 13.17. Counterparts................................................................ 80
SECTION 13.18. Entire Agreement; Term of Agreement......................................... 81
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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 Account Designation
Exhibit E - Form of Notice of Conversion/
Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Security Agreement
Exhibit I - Form of Deed of Trust
Exhibit J - Form Of Assignment of Lease
SCHEDULES
Schedule 1.1 - Lenders and Commitments
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Capitalization
Schedule 6.1(h) - Environmental Matters
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
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CREDIT AGREEMENT (as amended, restated or otherwise modified, this
"Agreement"), dated as of the 18th day of July, 1997, by and among CCA PRISON
REALTY TRUST, a Maryland real estate investment trust ("CCA REIT"), and any
Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms hereof
(collectively with CCA REIT, the "Borrowers"), the financial institutions who
are or may become a party to this Agreement (the "Lenders"), and FIRST UNION
NATIONAL BANK OF TENNESSEE, as administrative agent for the Lenders (the
"Administrative Agent"), and SOUTHTRUST BANK, National Association, as Co-Agent.
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrowers 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
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pursuant to the terms hereof. On the Closing Date, the Aggregate Commitment
shall be One Hundred and Fifty Million Dollars ($150,000,000).
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified.
"Annualized" means, with respect to any ratio set forth in Article
VIII, that each financial term included in the calculation of such ratio shall
be calculated by multiplying such financial term (a) for the quarter end
immediately following the Closing Date, by four, (b) for the period of two
consecutive fiscal quarters immediately following the Closing Date, by two and
(c) for the period of three consecutive fiscal quarters immediately following
the Closing Date, by four-thirds.
"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 13.9.
"Assignments of Lease" means the collective reference to the
assignments of lease executed by any Borrower in favor of the Administrative
Agent, for the ratable benefit of itself and the Lenders, substantially in the
form of Exhibit J hereto, each as amended, restated or otherwise modified.
"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).
"Borrowers" means the collective reference to CCA REIT and any
additional Subsidiary thereof joined as a Borrower hereunder pursuant to Section
8.16.
"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
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(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 Borrowers and their
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the
Borrowers and their Subsidiaries.
"Capital Expenditure" means, with respect to the Borrowers and their
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrowers and their Subsidiaries during such period, as determined in
accordance with GAAP.
"Capital Lease" means, with respect to the Borrowers and their
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 Borrowers and their Subsidiaries.
"Cash Flow" means, for any period, the sum of (a) Funds From Operations
less (b) Required Dividends less (c) Maintenance Capital Expenditures, in each
case for such period. For purpose of determining compliance with Section 10.4(b)
and Article IX for any quarter in which an acquisition of a Correctional
Facility is to occur, Cash Flow shall be adjusted in a manner satisfactory to
the Administrative Agent to include on a pro forma basis the projected first
year Cash Flow of such Correctional Facility.
"CCA" means Corrections Corporation of America, a Tennessee
corporation, and its successors and assigns.
"Change in Control" shall have the meaning assigned thereto in Section
11.1(i).
"Closing Date" means the date of this Agreement.
"Co-Agent" means SouthTrust Bank, National Association, in its capacity
as Co-Agent.
"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 any 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 the terms hereof.
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"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 Borrowers and their 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 Borrowers and their
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 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.
"Correctional Facility" means any correctional or detention facility
owned (or if the context requires to be acquired) by any Borrower, including,
without limitation, any real property associated therewith.
"Credit Facility" means the collective reference to the Revolving
Credit Facility and the L/C Facility.
"Debt" means, with respect to the Borrowers and their 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.
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"Deeds of Trust" means the collective reference to the deeds of trust,
mortgages or similar real property security instruments executed by any Borrower
in favor of the Administrative Agent, for the ratable benefit of itself and the
Lenders, substantially in the form of Exhibit I hereto, each as amended,
restated or otherwise modified.
"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.
"Dividends" means for any period all Required Dividends plus any other
dividend or distribution paid by any Borrower with respect to its capital stock.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Co.
"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 $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 CCA REIT 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 any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of any 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.
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"ERISA Affiliate" means any Person who together with any 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.
"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.
"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.
"Excess Cash" means as of any date, the aggregate amount of
unrestricted cash and cash equivalents set forth on a Consolidated balance sheet
of the Borrowers and their Subsidiaries as of such date, in excess of
$5,000,000.
"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.
"Fiscal Year" means the fiscal year of the Borrowers and their
Subsidiaries ending on December 31.
"Fitch" means Fitch Investors Service, L.P.
"Fixed Asset Book Value" means, with respect to the Borrowers and their
Subsidiaries at any date of determination, the book value of the fixed assets
thereof as set forth on a
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Consolidated balance sheet of the Borrowers and their Subsidiaries prepared in
accordance with GAAP.
"Funds From Operations" means, with respect to the Borrowers and their
Subsidiaries for any period, the following calculated on a Consolidated basis
without duplication for such period in accordance with GAAP: (a) Net Income,
plus (b) (to the extent deducted in the determination of Net Income),
depreciation and amortization minus (c) interest income.
"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 Borrowers and their Subsidiaries throughout the period indicated
and consistent with the prior financial practice of the Borrowers and their
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.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous 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 any Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended or supplemented from
time to time.
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"Incarceration Agreement" means any agreement, as amended, restated or
otherwise modified, pursuant to which a Governmental Authority has contracted to
incarcerate, detain or otherwise house inmates, prisoners or other detainees of
such Governmental Authority at a Correctional Facility.
"Initial Facilities" means the collective reference to the Houston
Processing Center, the Laredo Processing Center, the Bridgeport Pre-Parole
Transfer Facility, the Mineral Xxxxx Pre-Parole Transfer Facility, the West
Tennessee Detention Facility, the Leavenworth Detention Center, the Xxxx
Detention Center, the Central Arizona Detention Center and the T. Xxx Xxxxx
Correctional Center, all of which Correctional Facilities shall be acquired by
CCA REIT from CCA pursuant to the Sale Leaseback Documents.
"Interest Expense" means, with respect to the Borrowers and their
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 Borrowers and their
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).
"Investment Grade Rating" means a Senior Debt Rating of at least (a)
BBB- by Standard & Poor's or (b) Baa3 by Xxxxx'x.
"Issuing Lender" means First Union in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C Commitment" means Five Million Dollars ($5,000,000).
"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 all outstanding Reimbursement
Obligations.
"L/C Participants" means the collective reference to all the Lenders
other than the Issuing Lender.
"Lease" means the collective reference to the leases, each as amended,
restated or otherwise modified, between any Borrower and any Private
Counterparty or any Public Counterparty for the lease of any Correctional
Facility; "Lease" means any of such leases.
"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.
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"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 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
----------------------------------
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,
Security Documents, the Applications, the Letters of Credit, any Hedging
Agreement executed by any Lender or any Affiliate of any Lender in connection
with hedging the interest rate exposure of any Borrower under this Agreement and
each other document, instrument and agreement executed and delivered by any
Borrower, any Subsidiary thereof or their counsel in connection with this
Agreement or otherwise referred to herein or contemplated hereby, all as may be
amended, restated or otherwise modified.
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"Maintenance Capital Expenditures" means, with respect to the Borrowers
and their Subsidiaries for any period, the aggregate cost of maintaining any
Capital Assets of the Borrowers and their Subsidiaries during such period, as
determined in accordance with GAAP.
"Master Lease Agreement" means the master lease agreement, as amended,
restated or otherwise modified, between CCA REIT and CCA pertaining to all
Correctional Facilities leased from CCA REIT by CCA.
"Material Adverse Effect" means, with respect to any Borrower or any
Subsidiary thereof, 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, the Sale Leaseback Documents or any other material agreement of any
Borrower, in each case to which it is a party, or the ability of the
Administrative 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 any Borrower or any Subsidiary thereof involving monetary liability
of or to any such Person in an amount in excess of $250,000 per annum, or (b)
any other contract or agreement, written or oral, of any Borrower or any
Subsidiary thereof, the failure of any party to comply with which could
reasonably be expected to have a Material Adverse Effect.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors and
assigns.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by any Borrower
or any Subsidiary thereof from such sale less the sum of (i) all income taxes
and other taxes assessed by a Governmental Authority as a result of such sale
and any other customary fees and expenses incurred in connection therewith and
(ii) the principal amount of, premium, if any, and interest on any Debt secured
by a Lien on the asset (or a portion thereof) sold, which Debt is required to be
and is repaid in connection with such sale, (b) with respect to any offering of
equity securities or issuance of Debt, the gross cash proceeds received by any
Borrower or any Subsidiary thereof less all legal, underwriting and other
reasonable fees and expenses incurred in connection therewith and (c) with
respect to any payment under an insurance policy or in connection with a
condemnation proceeding, the amount of cash proceeds received by any Borrower or
any Subsidiary thereof from an insurance company or Governmental Authority net
of all reasonable expenses of collection.
"Net Income" means, with respect to the Borrowers and their
Subsidiaries, the Consolidated net income (or loss) of the Borrowers and their
Subsidiaries for such period
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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
excluded from Net Income by clauses (a) and (b) above, any after-tax
extraordinary gains.
"Net Operating Income" means, for any period, the sum of the following
for such period (a) Funds From Operations plus (b) Interest Expense.
"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 Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.3(a).
"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 2.4(d).
"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 payment and other obligations owing by any Borrower
to any Lender (or its Affiliate) or the Administrative Agent under any Hedging
Agreement required pursuant to Section 8.15 to which a Lender (or its Affiliate)
is a party and (d) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by any 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.
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"Offering" means the issuance of common stock of CCA REIT in a fully
underwritten initial public offering.
"Option Agreements" means the collective reference to the option
agreements, each as amended, restated or otherwise modified, between CCA REIT
and CCA granting CCA REIT the exclusive option to obtain any or all of the
Option Facilities.
"Option Facilities" means the collective reference to the Northeast
Ohio Correctional Center, the Torrance County Detention Facility, the Southern
Colorado Correctional Facility, the North Fork Correctional Facility and the
Whiteville Correctional Facility which CCA REIT shall have the option of
acquiring from CCA pursuant to the Option Agreements.
"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 any
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of any 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.
"Preferred Stock" means any class of capital stock the terms of which
contain a preference over common stock in the payment of dividends or the
liquidation of assets, or is otherwise designated as preferred.
"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.
"Private Counterparty" means any counterparty to a Lease that is not a
Public Counterparty.
"Public Counterparty" means any Governmental Authority that is a
counterparty to a Lease.
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"Purchase Agreements" means the collective reference to the Agreement
of Sale and Purchase, each as amended, restated or otherwise modified, between
CCA REIT and CCA for the purchase of the Initial Facilities.
"Register" shall have the meaning assigned thereto in Section 13.9(d).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Dividends" means for any period all dividends required to be
distributed by CCA REIT under the Code (and any other Applicable Law) with
respect to its capital stock to maintain its status as a qualified real estate
investment trust.
"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%).
"Revolver Secured Cash Flow" means, for any period, the sum of the
following for such period (a) Net Operating Income less (b) Maintenance Capital
Expenditures, in each case with respect to properties on which there is a
perfected first priority Lien in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"Revolving Credit Loan" means any revolving loan made to any 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 Borrowers 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, restatements, 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.
"Right to Purchase Agreement" means the right to purchase agreement, as
amended, restated or otherwise modified, between CCA REIT and CCA granting CCA
REIT an option to acquire, at fair market value, any correctional or detention
facility acquired or developed and owned by CCA at any time hereafter, for a
period of three (3) years after the date on which CCA first receives inmates at
such facility.
"Sale Leaseback Documents" means the collective reference to the
Leases for the Initial Facilities and the Option Facilities, the Master Lease,
the Purchase Agreements, the Option
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Agreements, the Right to Purchase Agreement, the Trade Name Use Agreement and
each other document executed by any Borrower pertaining to or evidencing any
transaction relating to the sale of correctional or detention facilities by CCA
to any Borrower and subsequent leasing of such facilities by any Borrower to
CCA.
"Sale Leaseback Transactions" means the collective reference to the
transactions contemplated, referred to or evidenced by the Sale Leaseback
Documents and as described in the S-11 Registration Statement (the "Registration
Statement"), as amended, restated or otherwise modified, filed with the
Securities and Exchange Commission on April 24, 1997.
"Security Agreement" means the reference to the security agreement
executed by the Borrowers and their Subsidiaries in favor of the Administrative
Agent, for the ratable benefit of itself and the Lenders, substantially in the
form of Exhibit H hereto, as amended, restated or otherwise modified.
"Security Documents" means the collective reference to the Assignments
of Lease, the Deeds of Trust, the Security Agreement and each other agreement or
writing pursuant to which any 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 Rating" means the rating, as determined by either Moody's
or Standard & Poor's, of CCA REIT's senior unsecured non-credit enhanced long
term Debt; provided that, as long as the Borrowers lease all Correctional
Facilities to CCA, the applicable rating of CCA's senior unsecured non-credit
enhanced long term debt may be substituted in lieu thereof.
"Standard & Poor's" means Standard & Poor's Ratings Group, a Division
of XxXxxx-Xxxx Corporation, and its successors and assigns.
"Solvent" means, as to the Borrowers and their 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.
"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
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contingency). Unless otherwise qualified references to
"Subsidiary" or "Subsidiaries" herein shall refer to those of the Borrowers.
"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 any Borrower pursuant to Section 2.2, and all such Loans collectively as the
context requires.
"Swingline Note" means the Swingline Note made by the Borrowers 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 any 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 any 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.
"Total Liabilities" means, at any date, all liabilities, including
without limitation all Contingent Obligations and all obligations relative to
the face amount of Letters of Credit, whether or not drawn, any banker's
acceptances and Reimbursement Obligations, of the Borrowers and their
Subsidiaries, calculated on a Consolidated basis without duplication in
accordance with GAAP.
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"Total Capitalization" means, at any date, the sum of (a) Total
Liabilities plus (b) Net Worth of the Borrowers.
"Total Funded Debt" means, with respect to the Borrowers and their
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 and banker's acceptances issued for the account of any such Person.
"Total Secured Debt" means the aggregate principal amount of Total
Funded Debt secured by a Lien on any assets of any Borrower or any Subsidiary
thereof.
"Total Unsecured Debt" means the aggregate principal amount of Total
Funded Debt not secured by a Lien on any asset of any Borrower or any Subsidiary
thereof.
"Trade Name Use Agreement" means the trade name use agreement, as
amended, restated or otherwise modified, between CCA REIT and CCA, granting the
Borrowers the right to use the trade name "CCA" as part of their respective
names.
"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1993 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.
"Unleveraged Cash Flow" means, for any period, the sum of the following
for such period (a) Net Operating Income less (b) Maintenance Capital
Expenditures, in each case with respect to Correctional Facilities which are not
subject to any Lien.
"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 any Borrower and/or one or more of the
Wholly-Owned Subsidiaries thereof.
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
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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.
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 Borrowers on a joint and several basis from time to time
from the Closing Date through, but not including, the Revolving Termination Date
as requested by CCA REIT on behalf of the Borrowers 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 Borrowers shall not at
any time exceed such Lender's Commitment less such Lender's Commitment
Percentage of the L/C Obligations and Swingline Loans then outstanding. 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 Borrowers 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 Borrowers
from time to time from the Closing Date through, but not including, 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.
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(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
of which the Administrative Agent has received actual notice and which such
Event of Default 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.
(ii) The Borrowers 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, each Borrower hereby
authorizes the Administrative Agent to charge any account maintained 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 Borrowers 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 (unless the
amounts so recovered by or on behalf of the Borrowers pertain to a Swingline
Loan extended after the occurrence and during the continuance of an Event of
Default of which the Administrative Agent has received actual notice and which
such Event of Default has not been waived by the Required Lenders or the
Lenders, as applicable).
(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
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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. CCA REIT 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 the full amount of the aggregate
Available Commitment of the Lenders, or, if less, 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 $5,000,000 or an
integral multiple of $1,000,000 in excess thereof for LIBOR Rate Loans and a
minimum principal amount of $100,000 or an integral multiple of $100,000 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
Borrowers, 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 Borrowers, 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 Borrowers hereby irrevocably
authorize the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 2.3 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrowers
identified on the most recent Notice of Account Designation substantially in the
form of Exhibit D (a "Notice of Account Designation") or as otherwise agreed
upon by CCA REIT 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
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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 on the Termination Date. The Borrowers 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.
(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 Borrowers 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 Borrowers 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) Other Mandatory Repayments. The Borrowers shall also be required to
make mandatory repayments of the Loans:
(i) with the Net Cash Proceeds received from the sale of any
Correctional Facility to CCA and from the refinancing of Debt of the Borrowers
relating to any Correctional Facility, in each case which results in a
corresponding release of any Lien of the Administrative Agent for the ratable
benefit of itself or the Lenders pursuant to Section 2.9; and
(ii) with respect to the Net Cash Proceeds arising from a
payment under an insurance policy or in connection with a condemnation
proceeding, to the extent required by the applicable Deed of Trust.
Each such repayment shall be made within three (3) Business Days of
receipt of the applicable Net Cash Proceeds and shall be applied first to the
principal amount of outstanding Swingline Loans and second to the principal
amount of outstanding Revolving Credit Loans. Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
(d) Optional Repayments. The Borrowers 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
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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 $5,000,000 or an
integral multiple of $1,000,000 in excess thereof for LIBOR Rate Loans and a
minimum principal amount of $100,000 or an integral multiple of $100,000 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.
(e) Limitation on Repayment of LIBOR Rate Loans. Notwithstanding the
provisions of Section 2.4(d), the Borrowers 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.
SECTION 2.5. Notes.
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and
the obligation of the Borrowers to repay such Revolving Credit Loans shall be
evidenced by a Revolving Credit Note executed by the Borrowers payable to the
order of such Lender representing the Borrowers' 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 Borrowers 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
Borrowers to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrowers payable to the order of the Swingline Lender
representing the Borrowers' 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 Borrowers 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.
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(a) The Borrowers shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the
Administrative 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 $5,000,000 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 Administrative 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.
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) July 18, 2000 (b) the date of termination by the Borrowers
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 first and second anniversaries of the
Closing Date (each, an "Extension Date"), CCA REIT 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. 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 thirty (30) 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 aggregating less than 100% but
equal to or greater than 80% of such Aggregate Commitment so consent to such an
extension, CCA REIT 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
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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 Borrowers 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 CCA REIT 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. Subject to Sections 10.11 and 10.12, the
Borrowers shall use the proceeds of the Loans (a) to fund the acquisition of
Correctional Facilities, (b) to fund construction and further development of
Correctional Facilities and (c) for working capital and general corporate
requirements of the Borrowers and their Subsidiaries, including the payment of
certain fees and expenses incurred in connection with the transactions.
SECTION 2.9. Release of Security. Upon (i) the sale of any Correctional
Facility to CCA permitted hereunder, or (ii) the refinancing of any Debt
relating to any Correctional Facility permitted hereunder, the Liens of the
Administrative Agent for the ratable benefit of itself and the Lenders arising
under the Security Document relating to the specific assets subject to such sale
or refinancing, shall be deemed released and at the expense of the Borrowers the
Administrative Agent and Lenders shall execute all release documentation
reasonably requested and delivered by the Borrowers in order to release such
Liens; provided that, (i) the aggregate proceeds received in connection with
such refinancing or sale are the greater of (A) the fair market value, as
determined by the Independent Committee of the Board of Trustees of CCA REIT, of
such Correctional Facility and (B) the amount equal to seventy five percent
(75%) of the initial purchase price of such Correctional Facility plus the
aggregate amount of all Capital Expenditures made by the Borrowers with respect
to such Correctional Facility and (ii) the Net Cash Proceeds of such refinancing
or sale are applied to reduce outstanding Extensions of Credit in the manner set
forth in Section 2.4(c).
SECTION 2.10. Increase In Aggregate Commitment; Additional Lenders. The
Aggregate Commitment may be increased and financial institutions added as
Lenders hereunder within forty-five (45) days after receipt by the
Administrative Agent of a written request therefor from CCA REIT on behalf of
the Borrowers; provided that (a) no Default or Event of Default exists at the
time of such request or the effective date of the amendment giving effect to
such request, (b) each Lender approves (in its sole discretion) and executes
such amendment and (c)
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any increase in the Aggregate Commitment shall first be offered to Lenders party
hereto at the time of such written request before any such offer is made to any
financial institution.
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 agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters
of Credit") for the account of the Borrowers 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 $250,000, (ii) be a standby letter of credit issued to support
obligations of any Borrower or any of Subsidiary thereof, contingent or
otherwise, incurred in the ordinary course of business, (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 Borrowers
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 Borrowers. The Issuing
Lender shall furnish to CCA REIT 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.
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SECTION 3.3. Commissions and Other Charges.
(a) The Borrowers 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 on the corresponding payment date (or if sooner, the
termination date of the Letter of Credit). Such fee shall be payable quarterly
in arrears on the Business Day next succeeding the last Business Day of each
calendar quarter and on the Revolving Termination Date. 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.
(b) The Borrowers 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 Business Day next succeeding
the last Business Day of each calendar quarter as long as such Letter of Credit
is outstanding.
(c) In addition to the foregoing fees, the Borrowers 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 Participant'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 Borrowers 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.
(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
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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 Borrowers 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 Borrowers. The Borrowers
agree to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies CCA REIT 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 funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers 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 Borrowers fail to
timely reimburse the Issuing Lender on the date CCA REIT receives the notice
referred to in this Section 3.5, the Borrowers 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.
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SECTION 3.6. Obligations Absolute. The Borrowers' obligations under
this Article III (including without limitation the Reimbursement Obligation)
shall be joint and several and absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrowers may have or have had against the Issuing Lender, any
L/C Participant, the Administrative Agent or any beneficiary of a Letter of
Credit. Each 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 Borrowers' 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
any 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 any
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. Each 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 Borrowers and shall not result in any liability of the
Issuing Lender or any L/C Participant to the Borrowers. The responsibility of
the Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter 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.
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 CCA REIT on behalf of the Borrowers, 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. CCA REIT on behalf
of the Borrowers shall select the rate of interest and Interest Period, if any,
applicable to any Loan at
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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 CCA REIT on behalf of the
Borrowers 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, CCA REIT
on behalf of the Borrowers, 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 Interest Period shall be a period of one (1), two
(2), three (3) or six (6) 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 six (6) 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 the date on which the Administrative Agent receives
notice that CCA REIT has received an Investment Grade Rating, 0.25% for Base
Rate Loans and 1.50% for LIBOR Rate Loans and (ii) thereafter shall be
determined by reference to the higher Senior Debt Rating announced by Standard &
Poor's or Xxxxx'x, as applicable, as follows:
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=============================================================================================================================
Tier Senior Debt Rating Applicable Margin
=========================================================
LIBOR Base Rate
-----------------------------------------------------------------------------------------------------------------------------
I GREATER THAN OR EQUAL TO = BBB+/Baa1 1.125% 0.000%
-----------------------------------------------------------------------------------------------------------------------------
II GREATER THAN OR EQUAL TO = BBB/Baa2 1.250% 0.000%
-----------------------------------------------------------------------------------------------------------------------------
III GREATER THAN OR EQUAL TO = BBB-/Baa3 1.375% 0.125%
-----------------------------------------------------------------------------------------------------------------------------
IV LESS THAN BBB-/Baa3 1.750% 0.500%
=============================================================================================================================
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the fifth (5th) Business Day after the Administrative
Agent has received notice of a change in the Senior Debt Rating. In the event
that the above referenced rating designations are replaced by Standard & Poor's
or Xxxxx'x, as applicable, the equivalent replacement rating designation shall
be deemed automatically substituted therefor. Subject to Section 4.1(d), in the
event that the Senior Debt Rating becomes unavailable, the Applicable Margin
shall be the highest Applicable Margin set forth above until the fifth (5th)
Business Day after the Senior Debt Rating once again becomes available.
(d) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) the Borrowers 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 any 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 Business Day next succeeding the last
Business Day of each calendar quarter commencing September 30, 1997; 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 on LIBOR Rate Loans shall be computed on the basis
of a 360-day year and assessed for the actual number of days elapsed and all
other interest rates, fees and commissions provided hereunder shall be computed
on the basis of an 365/366-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 to
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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 Borrowers 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 Borrowers 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 Borrowers under Applicable Law.
SECTION 4.2. Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers 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 $5,000,000 or any whole multiple of $1,000,000 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 Borrowers desire to convert or
continue Loans as provided above, CCA REIT on behalf of the Borrowers shall give
the Administrative Agent irrevocable prior written notice in the form attached
as Exhibit E (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 Borrowers shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee on the average daily unused portion of the
Aggregate Commitment at a rate per annum which shall be 0.25%. The commitment
fee shall be payable in arrears on the Business Day next succeeding the last
Business Day of each calendar quarter during the term of this Agreement
commencing September 30, 1997, 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 Percentages.
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(b) Administrative Agent's Fee. The Borrowers agree to pay to the
Administrative Agent, for its own account, an annual Administrative Agent's fee
as set forth in the separate fee letter agreement executed by CCA REIT and the
Administrative Agent dated May 2, 1997, payable in advance on the Closing Date
and on each anniversary of the Closing Date during the term of this Agreement
thereafter.
(c) Arrangement, Upfront and Other Fees. The Borrowers agree to pay to
the Administrative Agent, for the account of itself and the Lenders, the fees
set forth in such fee letter.
SECTION 4.4. Manner of Payment. Each payment by the Borrowers 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
Administrative Agent at the Administrative 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 Administrative Agent of each
such payment, the Administrative 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 Administrative 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 L/C Participants, as the case may be. Each payment to the
Administrative Agent of Administrative Agent's fees or expenses shall be made
for the account of the Administrative 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 Administrative
Agent for the account of the applicable Lender.
SECTION 4.5. Crediting of Payments and Proceeds. In the event that any
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 any Borrower hereunder, then to all indemnity obligations then
due and payable by any Borrower hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment
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and 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 and the Reimbursement
Obligation (pro rata in accordance with all such amounts due), then to the
principal amount of the Revolving Credit Notes and Reimbursement Obligation (pro
rata in accordance with all such amounts due) and then to the cash collateral
account described in Section 11.2(b) hereof to the extent of any L/C Obligations
then outstanding, then to any termination payments due in respect of a Hedging
Agreement with any Lender or any Affiliate thereof required pursuant to Section
8.15, 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. Each 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 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 Borrowers 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
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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
Borrowers. 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 CCA
REIT. Thereafter, until the Administrative Agent notifies CCA REIT that such
circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate
Loans and the right of the Borrowers to convert any Revolving Credit Loan to or
continue any Revolving Credit Loan as a LIBOR Rate Loan shall be suspended, and
the Borrowers shall repay in full (or cause to be 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 CCA REIT and the other Lenders. Thereafter, until the Administrative Agent
notifies CCA REIT that such circumstances no longer exist, (i) the obligations
of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to
convert any Revolving Credit Loan to or continue any Revolving Credit Loan as a
LIBOR Rate Loan
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shall be suspended and thereafter the Borrowers 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 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 CCA REIT of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrowers 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 CCA REIT 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 Borrowers 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
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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 CCA REIT
through the Administrative Agent and shall be conclusively presumed to be
correct save for manifest error.
SECTION 4.9. Indemnity. Each 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
effect, fund or maintain any Loan (a) as a consequence of any failure by any
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 any 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 CCA REIT by
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.
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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 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 Borrowers 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 CCA REIT 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 Borrowers
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 any
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) such
Borrower shall make such deductions, (C) such Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) such 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).
(b) Stamp and Other Taxes. In addition, the Borrowers 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
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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. Each 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 Borrowers shall furnish to the Administrative Agent evidence of the
Borrowers' 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
CCA REIT, 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 CCA REIT, 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 change in the most recent form previously
delivered by it to CCA REIT, 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 CCA REIT 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 Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
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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 July 18, 1997, 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 Note;
(iv) the Security Agreement;
(v) an Assignment of Lease for each Lease existing on the
Closing Date; and
(vi) a Deed of Trust for each parcel of real property owned by
any Borrower on the Closing Date;
shall have been duly authorized, executed and delivered by the Borrower party
thereto, shall be in full force and effect and no default shall exist
thereunder, and the Borrowers shall have delivered original counterparts thereof
to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers's Certificate. The Administrative Agent shall
have received a certificate from the chief executive officer or chief financial
officer of CCA REIT, in form and substance satisfactory to the Administrative
Agent, to the effect that all representations and warranties of the Borrowers
contained in this Agreement and the other Loan Documents are true, correct and
complete in all material respects; that the Borrowers are 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 each
Borrower has satisfied each of the closing conditions to be satisfied by it.
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(ii) Certificate of Secretary of the Borrowers. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Borrower certifying that attached thereto is a true
and complete copy of the certificate of incorporation of such Borrower 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 Borrower 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 Borrower
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 Borrower executing the Loan Documents.
(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 Borrower under the laws of its jurisdiction of organization and
each other jurisdiction where the Borrower 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 Borrowers, including favorable
opinions of local counsel in jurisdictions where any Deed of Trust is to be
filed, addressed to the Administrative Agent and the Lenders with respect to the
Borrowers, 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.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations
that are necessary to perfect the security interests of the Lenders in the
collateral described in the Security Documents shall have been forwarded for
filing in all appropriate locations and the Administrative Agent shall have
received evidence satisfactory to the Administrative Agent that such security
interests upon such filings constitute valid and perfected first priority Liens
therein.
(ii) Lien Search. The Borrowers shall have delivered the
results of a Lien search made against the Borrowers under the Uniform Commercial
Code as in effect in any state in which any of its assets are located,
indicating among other things that its assets are free and clear of any Lien
except for Liens permitted hereunder.
(iii) Hazard and Liability Insurance. The Administrative
Agent shall have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested by the
Administrative Agent, copies (certified by an officer of CCA REIT) of insurance
policies in the form required under Section 7.3 and the
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Security Documents and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.
(iv) Title Insurance. The Administrative Agent shall
have received a marked-up commitment for a policy of title insurance, insuring
Lenders' first priority Liens and showing no Liens prior to Lenders' Liens other
than for ad valorem taxes not yet due and payable, with title insurance
companies acceptable to the Administrative Agent on the property subject to the
Deeds of Trust with the final title insurance policy, being delivered within
thirty (30) days after the Closing Date. Further, the Borrowers agree to provide
or obtain any customary affidavits and indemnities as may be required or
necessary to obtain title insurance satisfactory to the Administrative Agent.
(v) Title Exceptions. Copies of all recorded
documents creating exceptions to the title policy referred to in Section
5.2(c)(iv).
(vi) Matters Relating to Flood Hazard Properties.
Evidence, in the form of a certification by an insurance broker or a municipal
engineer, or other third party satisfactory to the Administrative Agent, stating
that each parcel of property subject to a Deed of Trust is not located in an
area having "special flood hazards."
(vii) Surveys. Copies of as-built surveys of a recent
date of each parcel of real property subject to a Deed of Trust certified as of
a recent date by a registered engineer or land surveyor. Each such survey with
an effective date of more than sixty (60) days prior to the Closing Date shall
be accompanied by an affidavit (a "Survey Affidavit") of an authorized signatory
of the owner of such property stating that there have been no improvements or
encroachments to the property since the date of the respective survey such that
the existing survey is no longer accurate. Such survey shall show the area of
such property, all boundaries of the land with courses and distances indicated,
including chord bearings and arc and chord distances for all curves, and shall
show dimensions and locations of all easements, private drives, roadways, and
other facts materially affecting such property, and shall show such other
details as the Administrative Agent may reasonably request, including without
limitation, any encroachment (and the extent thereof in feet and inches) onto
the property or by any of the improvements on the property upon adjoining land
or upon any easement burdening the property; any improvements, to the extent
constructed, and the relation of the improvements by distances to the boundaries
of the property, to any easements burdening the property, and to the established
building lines and the street lines; and if improvements are existing, (A) a
statement of the number of each type of parking space required by applicable
laws, ordinances, orders, rules, regulations, restrictive covenants and
easements affecting the improvement, and the number of each such type of parking
space provided, and (B) the locations of all utilities serving the improvement.
(viii) Environmental Assessments. A Phase I
environmental assessment of each parcel of real property subject to a Deed of
Trust by an environmental engineering firm acceptable to the Administrative
Agent showing no environmental conditions or liabilities in
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violation of Environmental Laws that could reasonably be expected to have a
Material Adverse Effect.
(ix) Other Real Property Information. The Administrative Agent
shall have received such other certificates, documents and information as are
reasonably requested by the Lenders, including, without limitation, engineering
and structural reports, permanent certificates of occupancy and evidence of
zoning compliance, each in form and substance satisfactory to the Administrative
Agent.
(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 Borrowers and
their Subsidiaries and such other financial information with respect to the
Borrowers and their Subsidiaries as may be reasonably requested by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent.
(ii) Financial Condition Certificate. CCA REIT 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 CCA REIT, that (A) each Borrower and each
of its Subsidiaries are each Solvent, (B) each Borrower's payables are current
and not past due, (C) attached thereto is a pro forma balance sheet of the
Borrowers and their Subsidiaries setting forth on a pro forma basis the
financial condition of the Borrowers and their 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
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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 Borrowers and senior management thereof as to the
projected results contained therein.
(iii) Payment at Closing; Fee Letters. There shall have been paid by
the Borrowers 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) Offering and Sale Leaseback Transactions.
(i) Offering. CCA REIT shall have completed the Offering on
terms and conditions satisfactory to the Administrative Agent and shall have
received at least $300,000,000 of Net Cash Proceeds therefrom and Doctor X.
Xxxxxx shall have purchased no less than $7,500,000 and no more than $10,000,000
of common stock of CCA REIT pursuant to the Offering.
(ii) Acquisition of Correctional Facilities. CCA REIT shall
have acquired at least eight (8) of the Initial Facilities on the terms and
conditions contained in the Purchase Agreements delivered to the Administrative
Agent and obtained the option to acquire at least five (5) of the Option
Facilities on the terms and conditions contained in the Option Agreements
delivered to the Administrative Agent.
(iii) Sale Leaseback Transaction. The Administrative Agent
shall have received duly executed copies of the Sale Leaseback Documents and
shall be reasonably satisfied with the form and substance thereof. There shall
not have been any material change to the terms of the Sale Leaseback
Transactions as described in the Registration Statement and the Sale Leaseback
Transactions shall have been consummated pursuant to the terms of the Sale
Leaseback Documents as delivered to the Administrative Agent.
(g) Miscellaneous.
(i) Notice of Borrowing; Notice of Account
Designation and Application for Letter of Credit. The Administrative Agent shall
have received written instructions from CCA REIT 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. If a Letter of Credit is to be issued on the
Closing Date, CCA REIT shall have delivered an Application.
(ii) Proceedings and Documents. All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this
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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 transactions contemplated by this Agreement and the
taking of all actions in connection therewith.
(iii) Due Diligence and Other Documents. Each
Borrower shall have delivered to the Administrative Agent such other documents,
certificates and opinions as the Administrative Agent reasonably requests,
certified by a secretary or assistant secretary of such 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 issues 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) Compliance with Use of Proceeds Restriction. CCA REIT
shall have delivered a certificate in form and substance reasonably satisfactory
to the Administrative Agent demonstrating pro forma compliance with Sections
10.11 and 10.12 of this Agreement.
(d) Officer's Compliance Certificate; Additional Documents.
The Administrative 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 BORROWERS
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 Borrowers hereby
represent and warrant to the Administrative Agent and Lenders that:
(a) Organization; Power; Qualification. Each Borrower and each
Subsidiary thereof is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its
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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. CCA REIT was organized to be and is being operated in accordance
with the rules for qualification as a "real estate investment trust" under
Sections 856 through 860 of the Code. The jurisdictions in which the Borrowers
are organized and qualified to do business are described on Schedule 6.1(a).
(b) Ownership. Each Subsidiary of each Borrower is listed on Schedule
6.1(b). The capitalization of the Borrowers and their 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 Borrowers 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 any Borrower or any Subsidiary thereof, except as
described on Schedule 6.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Borrowers and their 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 each Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of such 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 enforcement 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 performance by the Borrowers and their
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their 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 any Borrower or any Subsidiary thereof,
(ii) conflict with, result in a breach of or constitute a default under the
certificate of incorporation, bylaws or other organizational documents of any
Borrower or any Subsidiary thereof 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
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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 Borrowers
and their 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, threatened 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 Borrowers and their
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 any 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 each 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 such Borrower and any of
its Subsidiaries are in the judgment of such Borrower adequate, and such
Borrower does not anticipate any additional taxes or assessments for any of such
years.
(g) Intellectual Property Matters. Each of the Borrowers and their
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 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 any 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 any Borrower's
knowledge after due inquiry:
(i) The properties of the Borrowers and their 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
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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 Borrowers 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 any 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 any Borrower or any Subsidiary thereof 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 any Borrower, threatened, under any
Environmental Law to which any 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 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 Borrowers 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) each 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 any Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan
or any Multiemployer Plan;
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(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 any 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 Borrowers 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 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 any 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 any Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrowers 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 Borrowers 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 Borrowers 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 Borrowers and their Subsidiaries
in effect as of the Closing Date not
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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) Burdensome Provisions. Neither the Borrowers 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 Borrowers
and their 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.
(n) Financial Information. The financial information with respect to
the Borrowers which has been furnished to the Administrative Agent and each
Lender, is based on reasonable estimates and assumptions, all of which are fair
in light of the conditions which existed at the time the projections were made,
have been prepared on the basis of the assumptions stated therein, and reflect,
as of the time so furnished and the Closing Date, the reasonable estimate of
senior management of the Borrowers of the results of the operations and other
information projected therein. The Borrowers and their Subsidiaries have no
Debt, obligation or other unusual forward or long-term commitment which is not
fairly reflected in the foregoing financial information.
(o) No Material Adverse Change. Since the date hereof, there has been
no material adverse change in the properties, business, operations, prospects,
or condition (financial or otherwise) of the Borrowers and their Subsidiaries
and no event has occurred or condition arisen that could reasonably be expected
to have a Material Adverse Effect.
(p) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, each Borrower and each Subsidiary thereof
will be Solvent.
(q) Titles to Properties. Each of the Borrowers and their 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 Borrowers and their Subsidiaries delivered pursuant to
Section 6.1(n), except those which have been disposed of by the Borrowers or
their Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(r) Liens. None of the properties and assets of any 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 any 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 Borrowers
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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.
(s) Debt and Contingent Obligations. The Borrowers and their
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 any Borrower or any Subsidiary thereof exists with
respect to any such Debt or Contingent Obligation.
(t) Litigation. There are no actions, suits or proceedings pending nor,
to the knowledge of any Borrower, threatened against or in any other way
relating adversely to or affecting any 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.
(u) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by any Borrower or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which any Borrower or any Subsidiary
thereof is a party or by which any Borrower or any Subsidiary thereof or any of
their respective properties may be bound or which would require any Borrower or
any Subsidiary thereof to make any payment thereunder prior to the scheduled
maturity date therefor.
(v) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of any 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 any 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 any Borrower or any Subsidiary thereof or omits or will
omit to state a fact necessary in order to make the statements contained therein
not misleading. No Borrower is aware of any facts which it has not disclosed in
writing to the Administrative Agent having a Material Adverse Effect, or insofar
as any 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 representations
and warranties made under this Agreement. All representations and warranties
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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.
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 Borrowers 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, 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 Borrowers and their 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 Borrowers 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
CCA REIT to present fairly in all material respects the financial condition of
the Borrowers and their Subsidiaries as of their respective dates and the
results of operations of the Borrowers and their 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 Borrowers and their 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 practices during the year, and
accompanied by a report thereon by such certified public accountants that is not
qualified with respect to scope
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or limitations imposed by any Borrower or any Subsidiary thereof or with respect
to accounting principles followed by any Borrower or any of Subsidiary thereof
not in accordance with GAAP.
(c) Business Plan and Financial Projections. As soon as practicable and
in any event within thirty (30) days prior to the beginning of each Fiscal Year
and such other times as the Administrative Agent shall reasonably request, a
business plan of the Borrowers and their Subsidiaries prepared in accordance
with GAAP for the ensuing Fiscal Year, such plan to be prepared on a quarterly
basis for such period, and to include the following for each applicable period:
an operating and capital budget, a projected income statement, statement of cash
flows and balance sheet and a report containing management's discussion and
analysis of such projections, accompanied by a certificate from the chief
financial officer of CCA REIT to the effect that, to the best of such officer's
knowledge, such projections are good faith estimates of the financial condition
and operations of the Borrowers and their Subsidiaries for such fiscal period.
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 CCA REIT in the form of Exhibit F
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 any 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, copies of all financial statements and
reports that any Borrower shall send to its shareholders and copies of all
registration statements and all regular or periodic reports (including without
limitation the annual report on Form 10-K and quarterly report on Form 10-Q)
which any Borrower shall file with the Securities and Exchange Commission or any
successor commission;
(c) Promptly upon receipt by any Borrower, deliver to the
Administrative Agent and Lenders financial statements for each lessee party to
any such Lease in form and substance satisfactory to the Administrative Agent;
and
(d) Such other information regarding the operations, business affairs
and financial condition of the Borrowers or any of their 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 any Borrower obtains
knowledge thereof) telephonic and written notice of:
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(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 any Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses, the result
of which could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by any 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 any Borrower or any Subsidiary
thereof;
(d) any attachment, judgment, lien, levy or order exceeding $750,000
that may be assessed against or threatened against any 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 Incarceration Agreement or
Material Contract to which any Borrower or any Subsidiary thereof is a party or
by which any Borrower or any Subsidiary thereof or any of their respective
properties is bound or (iii) any termination prior to the stated termination
date under any Incarceration Agreement or Material Contract to which any
Borrower or any Subsidiary thereof is a party or by which any 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 any
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 any 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) any Borrower obtaining knowledge or
reason to know that any 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;
(g) any change in the Senior Debt Rating; and
(h) 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 furnished by or on behalf of any Borrower
to the
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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 Borrowers' 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, each Borrower will, and
will cause each of its Subsidiaries to:
SECTION 8.1. Preservation of Corporate Existence and Related Matters.
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, and maintain CCA
REIT's qualification as "real estate investment trust" under Sections 856
through 860 of the Code.
SECTION 8.2. Maintenance of Property. Protect and preserve (or cause
the applicable lessee to protect and preserve, in accordance with the terms of
the applicable Lease) all properties useful in and material to its business,
including copyrights, patents, trade names and trademarks; maintain (or cause
the applicable lessee to maintain, in accordance with the terms of the
applicable Lease) in good working order and condition all buildings, equipment
and other tangible real and personal property; and from time to time make (or
cause the applicable lessee to make, in accordance with the terms of the
applicable Lease) 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 (or cause the applicable lessee to
maintain, in accordance with the terms of the applicable Lease) 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 the Security Documents and Applicable Law, and from time to time
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 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
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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 such 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 any Correctional Facility or any property
subject to any Deed of Trust, any operations thereon by any Person, or the
operations of such Borrower or such Subsidiary, or any orders, requirements or
demands of 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
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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 such 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 the business of the
ownership of Correctional Facilities or any business reasonably related thereto
which such facilities shall be managed by their respective lessee or lessees (or
duly authorized agent of any such lessee in the event such lessee is a Public
Counterparty).
SECTION 8.11. Visits and Inspections. Permit representatives 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. Incarceration Agreements. Prior to the acquisition of any
Correctional Facility to be leased to a Private Counterparty, cause such Private
Counterparty to (a) obtain an Incarceration Agreement for such Correctional
Facility and (b) deliver to the Administrative Agent and Lenders a summary of
such Incarceration Agreement in form and substance reasonable satisfactory
thereto, or if so requested, provide a copy of such Incarceration Agreement to
the Administrative Agent and the Lenders.
SECTION 8.13. Lease Terms and Conditions. Cause each Lease entered into
by any Borrower or any Subsidiary thereof to be delivered to the Administrative
Agent and cause each such Lease to contain the following terms and conditions:
(a) each such Lease will be a triple net lease, (b) each such Lease will be
non-cancelable and not contingent on the maintenance of any Incarceration
Agreement relating to such Lease, (c) each such Lease will have a minimum
initial lease terms of (ten) 10 years (provided that, subject to prior Required
Lender approval, Leases with a Public Counterparty may have lease term of less
than ten (10) years and be subject to appropriations limitations imposed by
Applicable Law), (d) the lessee or lessees under each such Lease will remain
responsible for all prison operations and liabilities relating to the operation,
administration and maintenance of the Correctional Facility subject to such
Lease and (e) each such Lease (other than those governing the Initial
Facilities) contains such other terms and conditions as the Administrative Agent
shall reasonably request.
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SECTION 8.14. Lease Revenues. Cause at least seventy-five percent (75%)
of all Lease revenues to be derived from Leases where the lessee is either (a)
CCA or (b) a counterparty whose debt is rated at least A- by Standard & Poor's
or A3 by Xxxxx'x (or, if ratings for such counterparty are unavailable from both
Standard & Poor's and Xxxxx'x, rated at least A- by either Fitch or Duff &
Xxxxxx); provided the remaining percentage (not to exceed 25%) of all lease
revenues shall be derived from leases with a counterparty (x) whose debt is
rated at least BBB- by Standard & Poor's or Baa3 by Xxxxx'x (or, if ratings for
such counterparty are unavailable from both Standard & Poor's and Xxxxx'x, rated
at least BBB- by either Fitch or Duff & Xxxxxx) or (y) with any other
counterparty approved in writing in advance by the Administrative Agent and
Required Lenders.
SECTION 8.15. Hedging Agreement. Within eighteen (18) months of the
Closing Date, enter into and maintain a Hedging Agreement with a counterparty
acceptable to the Administrative Agent (unless the counterparty to such Hedging
Agreement is (a) a Lender, (b) an Affiliate of a Lender or (c) an Eligible
Assignee), and with interest rates and other terms and conditions satisfactory
to the Administrative Agent for a minimum notional amount equal to fifty percent
(50%) of Total Funded Debt.
SECTION 8.16. Additional Borrowers. Concurrently with the creation of
any additional Subsidiary of any Borrower in accordance with the terms hereof,
cause to be executed and delivered to the Administrative Agent (a) a joinder
agreement in form and substance satisfactory to the Lenders such that such
Subsidiary shall become a borrower hereunder and be bound by all of the terms
and conditions hereof, (b) supplements to the Security Documents (or additional
Security Documents) in each case in form and substance satisfactory to the
Lenders such that the assets of such Subsidiary shall become collateral security
for the Obligations, (c) a pledge agreement executed by CCA REIT (or other
applicable Subsidiary) in each case in form and substance satisfactory to the
Lenders such that the capital stock of such new Subsidiary shall become
collateral for the Obligations and (d) such other documents reasonably requested
by the Administrative Agent or Required Lenders consistent with the terms of
this Agreement which provide that such Subsidiary shall become bound by all of
the terms, covenants and agreements contained in the Loan Documents. Upon
satisfaction of the conditions set forth in this Section 8.16, each Subsidiary
shall become a Borrower hereunder and the other Loan Documents or a joint and
several basis to the same extent as if such Subsidiary had been a party hereto
and thereto on the Closing Date.
SECTION 8.17. 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.
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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 Borrowers and
their Subsidiaries on a Consolidated basis will not:
SECTION 9.1 Ratio of Total Liabilities to Total Capitalization. As of
any fiscal quarter end, permit the ratio of (a) Total Liabilities as of such
date to (b) Total Capitalization as of such date to equal or exceed .45 to 1.0.
SECTION 9.2 Ratio of Total Funded Debt to Cash Flow. As of any fiscal
quarter end, permit the ratio of (a) the sum of Total Funded Debt as of such
date less Excess Cash as of such date to (b) the product of Cash Flow for such
fiscal quarter times four, to exceed 12.0 to 1.0.
SECTION 9.3 Ratio of Dividends to Funds From Operations. As of any
fiscal quarter end, for the four consecutive fiscal quarter period ending on
such date, permit the ratio of (a) Dividends paid during such period to (b)
Funds From Operations for such period, to exceed the corresponding ratio set
forth below:
Date Ratio
Closing Date through
9/30/97 1.00 to 1.00
12/31/97 through
12/31/98 .95 to 1.00
3/31/99 and
thereafter .90 to 1.00
; provided that, for each fiscal quarter ending after the Closing Date through
and including the fiscal quarter ending on March 31, 1998, this ratio shall be
calculated on an Annualized basis.
SECTION 9.4 Interest Coverage Ratio: As of any fiscal quarter end, for
the four consecutive fiscal quarter period ending on such date, permit the ratio
of (a) the sum of (i) Funds From Operations for such period plus (ii) Interest
Expense for such period less (iii) Maintenance Capital Expenditures made during
such period to (b) the sum of (i) Interest Expense for such period plus (ii)
Dividends paid during such period with respect to any class of Preferred Stock,
to be less than 3.0 to 1.0; provided that, for each fiscal quarter ending after
the Closing
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Date through and including the fiscal quarter ending on March 31, 1998, this
ratio shall be calculated on an Annualized basis.
SECTION 9.5 Minimum Net Worth. As of any fiscal quarter end, permit Net
Worth to be less than the sum of (a) ninety five percent (95%) of the Net Cash
Proceeds of the Offering plus (b) $3,000,000 (representing the accounting
treatment of the initial equity interests of CCA REIT purchased by D. Xxxxxx
Xxxxxx, III and Xxxxxxx X. Xxxxxx) plus (c) seventy five percent (75%) of Net
Income (to the extent Net Income is positive) after the Closing Date determined
on a cumulative basis less (d) Dividends paid after the Closing Date plus (e)
100% of any Net Cash Proceeds received from the issuance of, or any Debt
satisfied on the conversion into, any capital stock of any Borrower during such
fiscal quarter.
SECTION 9.6 Additional Secured Debt. Upon the incurrence of any secured
Debt permitted hereunder during such time as any Security Document continues to
secure the Obligations, as of any fiscal quarter end, permit the ratio of (a)
the aggregate principal amount of Loans outstanding on such fiscal quarter end
to (b) the product of Revolver Secured Cash Flow for such fiscal quarter times
four, to exceed 3.25 to 1.0.
SECTION 9.7 Investment Grade Rating. As of any fiscal quarter end after
such date as CCA REIT has obtained an Investment Grade Rating, permit:
(a) the ratio of (i) Total Unsecured Debt as of such fiscal quarter end
to (ii) the product of Unleveraged Cash Flow for such fiscal quarter times four,
to exceed 3.25 to 1.0; and
(b) the ratio of (i) Total Secured Debt as of such fiscal quarter end
to (ii) Fixed Asset Book Value as of such fiscal quarter end, to exceed .25 to
1.0.
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 Borrowers have 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) Debt incurred in connection with the Hedging Agreement required by
Section 8.15 and any other Hedging Agreement with a counterparty satisfactory to
the Administrative Agent (unless the counterparty to such Hedging Agreement is
(a) a Lender, (b) an Affiliate of a Lender
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or (c) an Eligible Assignee) and upon terms and conditions reasonably
satisfactory to the Administrative Agent;
(c) Debt incurred in connection with the refinancing of Debt relating
to any Correctional Facility; provided that, the Borrowers comply with Section
2.9;
(d) Debt consisting of Contingent Obligations permitted by Section
10.2; and
(e) Debt of the Borrowers and their Subsidiaries (a) other than
provided for in clauses (a) through (d) of this Section, incurred in the
ordinary course of business of the Borrowers and their Subsidiaries not to
exceed $1,000,000 on any date of determination
; 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 any Borrower to make any payment to such Borrower or any of
its Subsidiaries (in the form of dividends, intercompany advances or otherwise)
for the purpose of enabling such 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; and
(b) guaranties incurred in the ordinary course of business in an
aggregate amount not to exceed $250,000 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;
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(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 securing Debt permitted under Section 10.1(c) and Capitalized
Leases and purchase money Debt permitted pursuant to Section 10.1(e); provided,
that (i) such Liens shall be created substantially simultaneously with the
refinancing, acquisition or lease of the related asset, (ii) such Liens do not
at any time encumber any property other than the property financed or refinanced
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 refinanced, acquired or leased; and
(g) Liens on any Correctional Facility acquired in an acquisition
permitted by Section 10.12(b)(iii).
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 (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 or
Xxxxx'x, (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
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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;
(b) investments by any Borrower or any Subsidiary thereof in the form
of acquisitions of any Correctional Facility and related assets if each such
acquisition meets all of the following requirements: (i) the total aggregate
consideration for any single acquisition shall not exceed thirty five percent
(35%) of the aggregate net Fixed Asset Book Value immediately prior to the
consummation of any such acquisition, (ii) the Borrowers 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, (iii) the Borrowers shall have delivered to the Administrative
Agent in form and substance satisfactory thereto (A) such additional Assignments
of Lease, such additional Deeds of Trust, such additional UCC-1 financing
statements and other documents as are necessary to ensure that the
Administrative Agent, on behalf of itself and the Lenders, is granted a first
priority security interest in all of the assets to be acquired pursuant to such
acquisition (or if such acquisition is permitted by Section 10.12, a second
priority security interest in all such property) and (B) such other documents,
certificate and opinions consistent with Article V as are reasonably requested
by the Administrative Agent or Required Lenders;
(c) loans from CCA REIT to CCA; provided that, (i) such loans are made
with Net Cash Proceeds of the Offering, (ii) the aggregate principal amount of
such loans do not exceed $40,000,000, (iii) the proceeds of such loans are used
solely for the construction and development of Option Facilities and (iv) each
such loan is repaid in full on the earlier of the closing of the sale of such
Option Facility to CCA REIT or January 31, 1998; and
(d) the creation of a wholly-owned Subsidiary of CCA REIT for the
purpose of providing management services to CCA REIT, including without
limitation, payroll administration; provided that, CCA REIT complies with the
applicable provision of Section 8.16.
SECTION 10.5. Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution).
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 or other disposition of assets, including any Correctional
Facility; provided that (i) the aggregate amount of the sale price of all assets
sold or disposed of during the term of this Agreement shall not exceed twenty
percent (20%) of the net Fixed Asset Book Value of
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the Borrowers (as of the Closing Date), (ii) the Borrowers comply with Section
2.9 with respect to each such sale and (iii) the Borrowers shall have
demonstrated pro forma compliance with each covenant contained in Article IX
hereof;
(b) the sale of obsolete assets no longer used or usable in the
business of any Borrower or any Subsidiary thereof; 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) any Borrower or any Subsidiary thereof may pay dividends in shares
of its own capital stock;
(b) any Subsidiary may pay cash dividends to any Borrower; and
(c) any Borrower may pay Dividends as long as immediately prior to
making such Dividend and after giving pro forma effect to the payment of such
Dividends, no Default or Event of Default has occurred and is continuing.
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. Amendment to Sale Leaseback Documents. Without the prior
written consent of the Administrative Agent, amend any Lease or any Sale
Leaseback Document in a way that could be reasonably expected to have an adverse
effect (as reasonably determined by the Administrative Agent) on any Borrower.
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SECTION 10.11. Restrictions on Working Capital. At any time during the
term of this Agreement, allow more than $5,000,000 in the aggregate to be
outstanding under the Credit Facility for working capital and general corporate
purposes.
SECTION 10.12. Restrictions on Use of Proceeds and Other Expenditures.
With respect to the Dollar amounts set forth in clauses (i), (ii) and (iii)
below, (a) allow an aggregate amount in excess of such amounts to be outstanding
under the Credit Facility for the corresponding purpose at any time during the
term of the Agreement and (b) as of any fiscal quarter end, expend an aggregate
amount in excess of such amounts for the corresponding purpose during the
consecutive four fiscal quarter period ending on such date: (i) $90,000,000 less
all amounts expended during such period pursuant to Section 10.12(b)(ii) for
further development of existing Correctional Facilities which are subject to a
Lease and if such Lease is with a Private Counterparty, there is a corresponding
Incarceration Agreement for such facility; provided that with respect to further
development of existing Correctional Facilities leased to a Private Counterparty
for which no such Incarceration Agreement exists, such amount shall not exceed
$25,000,000, (ii) $90,000,000 less all amounts expended during such period
pursuant to Section 10.12(b)(i) for the construction of up to two new
Correctional Facilities at any one time; provided that, (A) at least
seventy-five percent (75%) of the amount outstanding under the Credit Facility
at any time pursuant to Section 10.12(b)(ii) is expended on the construction of
new Correctional Facilities that are subject to a Lease with a public
counterparty whose debt is rated at least A- by Standard & Poor's or A3 by
Xxxxx'x (or, if ratings for such public counterparty are unavailable from both
Standard & Poor's and Xxxxx'x, rated at least A- by either Fitch or Duff &
Xxxxxx); provided further, that the remaining percentage (not to exceed 25%) of
the amount outstanding under the Credit Facility at any time pursuant to Section
10.12(b)(ii) is expended on the construction of new Correctional Facilities that
are subject to a Lease with a public counterparty (x) whose debt is rated at
least BBB- by Standard & Poor's or Baa3 by Xxxxx'x (or, if ratings for such
public counterparty are unavailable from both Standard & Poor's and Xxxxx'x,
rated at least BBB- by either Fitch or Duff & Xxxxxx) or (y) with any other
public counterparty approved in writing in advance by the Administrative Agent
and Required Lenders, (B) all permits and licenses required by Applicable Law
pertaining to such construction shall have been obtained prior to and maintained
after the funding of any Loan to be used to finance such construction, (C)
payment and performance bonds shall have been obtained for all such construction
prior to and maintained after the funding of any Loan to be used to finance such
construction, (D) the Administrative Agent shall have approved the construction
manager for all such construction prior to the funding of any Loan to be used to
finance such construction, (E) the Administrative Agent has received a signed
development contract in form and substance satisfactory thereto including a
description of the nature and extent of such construction prior to the funding
of any Loan to be used to finance such construction and (F) the Borrowers and
their Subsidiaries shall have complied with Section 10.4(b)(iii) and (iii)
$30,000,000 to finance the acquisition of Correctional Facilities subject to an
existing first priority Lien in favor of a third party creditor; provided, that
the Borrowers and their Subsidiaries shall have complied with the provisions of
Section 10.4(b).
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SECTION 10.13. 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.
SECTION 10.14. Operating Leases. The aggregate amount of annual base
payments under all lease agreements for personal property, other than Capital
Leases, shall not exceed $100,000 for any fiscal year.
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. Any Borrower shall default in any payment of principal of any Loan
or Note or Reimbursement Obligation when and as due (whether at maturity, by
reason of acceleration or otherwise).
(b) Other Payment Default. Any Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan or 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 any Borrower or any of Subsidiary
thereof 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. Any 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. Any
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
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a period of thirty (30) days after written notice thereof has been given to CCA
REIT by the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by any
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. Any Borrower or any Subsidiary thereof 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 $250,000 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 $250,000 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 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. (i) Any Borrower or any Subsidiary thereof
shall default in the payment when due, or in the performance or observance, of
any material obligation or condition (as determined by the Administrative Agent)
of (A) any Material Contract unless, but only as long as, the existence of any
such default is being contested by such Borrower or such Subsidiary in good
faith by appropriate proceedings and adequate reserves in respect thereof have
been established on the books of such Borrower or such Subsidiary to the extent
required by GAAP or (B) any Lease or (ii) any other default under any Lease by
CCA or any other party thereto.
(i) Change in Control or Senior Management. (i) 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 nine percent (9%) of the voting power of CCA REIT
entitled to vote in the election of members of the board of directors of CCA
REIT or there shall have occurred under any indenture or other instrument
evidencing any Debt in excess of $250,000 any "change in control" (as defined in
such indenture or other evidence of Debt) obligating any 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") or (ii) any of the Chairman of
the Board of Directors, Chief Executive Officer, President or Chief Development
Officer of CCA REIT as of the Closing Date ceases to continue to hold such
office or continue with management responsibilities substantially similar to
those existing on the Closing Date and a replacement for such Person reasonably
satisfactory to the Administrative Agent and possessing substantially similar
qualifications and reputation to the Person being replaced is not employed by
CCA REIT within ninety (90) days after such first Person ceases to hold such
office or continue to have such management responsibilities.
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(j) Voluntary Bankruptcy Proceeding. Any 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 any 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 to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for any 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 any
Borrower or any Subsidiary thereof 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) any 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, any Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$250,000 occurs or exists, whether or not waived, with respect to any Pension
Plan or (iii) any Borrower or any ERISA Affiliate as employers under one or more
Multiemployer Plan makes a complete or partial withdrawal from any such
Multiemployer 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 $250,000.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of such judgments to exceed $250,000 in any Fiscal Year
shall be entered
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against any Borrower or any Subsidiary thereof by any court and such judgment or
order shall continue undischarged or unstayed for a period of thirty (30) days.
(o) Failure to Maintain Stock Exchange Listing. CCA REIT shall fail to
maintain each class of its capital stock as eligible for listing for trading on
the New York Stock Exchange once any such class of capital stock is initially
listed thereon.
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 CCA REIT:
(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 any
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 Borrowers 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 Borrowers 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 Borrowers' 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
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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 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 any 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. The Administrative Agent
agrees that it shall administer the Loans and the Loan Documents in a manner
consistent with that ordinarily employed by the Administrative Agent in the
administration of similar loans for its own account.
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.
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
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(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
any Borrower or any of Subsidiary thereof 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 any Borrower or any Subsidiary thereof 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 any Borrower or any
Subsidiary thereof.
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 Borrowers), 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 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 CCA REIT
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
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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 any Borrower or any Subsidiary thereof,
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 evaluation of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and their 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, evaluation
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 Borrowers and their Subsidiaries. Except for
notices, reports 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 any
Borrower or any Subsidiary thereof 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 Borrowers and without limiting the obligation of the Borrowers 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 Obligations) 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. The
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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 Borrowers 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, 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 CCA REIT. 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 CCA REIT, 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 CCA REIT, 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.
SECTION 12.10 The Co-Agent. The Co-Agent, in its capacity as Co-Agent,
shall have no duties or responsibilities and no liabilities under this Agreement
or any other Loan Document.
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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 (next day delivery requested) 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 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 address as to which all the other parties
are notified in writing.
If to any Borrower: CCA Prison Realty Trust
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: D. Xxxxxx Xxxxxx, III
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxx and Barthelomew, P.A.
SunTrust Center, Suite 2800
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to First Union as
Administrative Agent:
First Union National Bank of
Tennessee
One First Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
Attention: Syndication Agency
Services
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 1.1 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 Borrowers 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 Borrowers 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
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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 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 Borrowers at any time or from
time to time, without notice to any 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 Borrowers 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. Each 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 Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. Each 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
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other manner permitted by Applicable Law or affect the right of the
Administrative Agent or any Lender to bring any action or proceeding against any
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.
(B) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND EACH 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
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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 any 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 any
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by CCA REIT, 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 Borrowers' 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 Borrowers 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 Borrowers, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrowers shall not assign or transfer any of their 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 (provided that no consents shall be required for assignments
to any Affiliate of such Lender or any other Lender), CCA REIT, 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:
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(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
$5,000,000;
(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 G
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 CCA
REIT, require the Borrowers to file a registration 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 $2,500 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 Borrowers, 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 Borrowers 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
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shall, if such Assignment and Acceptance has been completed and is substantially
in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and CCA REIT;
and
(iv) promptly deliver a copy of such Assignment and Acceptance
to CCA REIT.
Within five (5) Business Days after receipt by CCA REIT of notice, the Borrowers
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 CCA REIT.
(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 Borrowers, 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
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Document other than waivers, amendments or modifications which would
reduce the principal of or the interest rate on any Loan or
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 described in the Security
Documents; and
(vii) any such disposition shall not, without the consent of
CCA REIT, require the Borrowers 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
Borrowers 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 Borrowers furnished to such Lender by or on behalf of the Borrowers;
provided, that prior to any such disclosure, each such assignee, proposed
assignee, participant or proposed participant shall agree with the Borrowers or
such Lender to preserve the confidentiality of any confidential information
relating to the Borrowers 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 Borrowers; 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 Obligations, (c) reduce
the rate of interest or fees payable on any Loan or Reimbursement Obligations,
(d) permit any subordination of the principal or interest on any Loan or
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 Security Document (other than as specifically
permitted in this Agreement or the applicable Security Document), (g) amend
clause (i) of the proviso to Section 2.9 or (h) 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
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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 Borrowers' obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 13.12. Joint and Several Liability; CCA Reit as Agent for
Borrowers.
(a) The Obligations of the Borrowers under this Agreement, the
Applications and the Notes shall be joint and several.
(b) Each Borrower hereby irrevocably appoints and authorizes CCA Reit
(i) to provide the Administrative Agent with all notices with respect to
Extensions of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action on
behalf of the Borrowers as CCA Reit deems appropriate on its behalf to obtain
Extensions of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.
SECTION 13.13. 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 13.14. 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 13.15. 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 13.16. 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 unenforceability 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 jurisdiction.
SECTION 13.17. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so
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executed shall be 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 13.18. 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.
[Signature Pages Follow]
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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.
[SEAL] CCA PRISON REALTY TRUST
By:________________________
Name:___________________
Title:__________________
[ADMINISTRATIVE AGENT AND LENDER SIGNATURES TO FOLLOW]
[Credit Agreement]
88
EXHIBIT A-1
TO
CREDIT AGREEMENT DATED AS OF JULY 18, 1997
BY AND AMONG
CCA PRISON REALTY TRUST,
AND
CERTAIN SUBSIDIARIES THEREOF,
AS BORROWERS,
THE LENDERS PARTY THERETO,
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,
AND
SOUTHTRUST BANK, N.A.,
AS CO-AGENT
FORM OF
REVOLVING CREDIT NOTE
89
REVOLVING CREDIT NOTE
$ ________________ July ____, 1997
FOR VALUE RECEIVED, the undersigned, CCA PRISON REALTY TRUST, a
Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA
REIT that is joined as Borrower pursuant to the terms of the Credit Agreement
hereinafter referred to the "Borrowers"), hereby promise to pay to the order
of ______________________________________ (the "Bank"), at the times, at the
place and in the manner provided in the Credit Agreement hereinafter referred
to, the principal sum of up to ______________ Dollars ($_____________) or,
if less, the aggregate unpaid principal amount of all Revolving Credit Loans
disbursed by the Bank under the Credit Agreement referred to below, together
with interest at the rates as in effect from time to time with respect to each
portion of the principal amount hereof, determined and payable as provided in
Article IV of the Credit Agreement.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of July 18, 1997 (as
amended, restated or otherwise modified, the "Credit Agreement") by and among
the Borrowers, the lenders (including the Bank) who are or may become party
thereto (the "Lenders"), First Union National Bank of Tennessee, as
administrative agent for the Lenders (the "Administrative Agent") and SouthTrust
Bank, N.A., as Co-Agent. The Credit Agreement contains, among other things,
provisions for the time, place and manner of payment of this Note, the
determination of the interest rate borne by and fees payable in respect of this
Note, acceleration of the payment of this Note upon the happening of certain
stated events and the mandatory repayment of this Note under certain
circumstances.
The Borrowers agree to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of an attorney.
Presentment for payment, notice of dishonor, protest and notice of protest
are hereby waived.
THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NORTH CAROLINA.
[Signature page follows]
90
IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by a duly authorized officer as of the day and year first above
written.
CCA PRISON REALTY TRUST
[SEAL]
By:______________________
Name:_________________
Title:________________
91
EXHIBIT A-2
TO
CREDIT AGREEMENT DATED AS OF JULY 18, 1997
BY AND AMONG
CCA PRISON REALTY TRUST,
AND
CERTAIN SUBSIDIARIES THEREOF,
AS BORROWERS,
THE LENDERS PARTY THERETO,
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,
AND
SOUTHTRUST BANK, N.A.,
AS CO-AGENT
FORM OF
SWINGLINE NOTE
92
SWINGLINE NOTE
$5,000,000 July ___, 1997
FOR VALUE RECEIVED, the undersigned, CCA PRISON REALTY TRUST, a
Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA
REIT that is joined as Borrower pursuant to the terms of the Credit Agreement
hereinafter referred to the "Borrowers"), hereby promise to pay to the order of
FIRST UNION NATIONAL BANK OF TENNESSEE (the "Bank"), at the times, at the place
and in the manner provided in the Credit Agreement hereinafter referred to, the
principal sum of up to Five Million Dollars ($5,000,000), or, if less, the
aggregate unpaid principal amount of all Swingline Loans disbursed by the Bank
under the Credit Agreement referred to below, together with interest at the
rates as in effect from time to time with respect to each portion of the
principal amount hereof, determined and payable as provided in Article IV of the
Credit Agreement.
This Note is the Swingline Note referred to in, and is entitled to the
benefits of, the Credit Agreement dated as of July 18, 1997 (as amended,
restated or otherwise modified, the "Credit Agreement") by and among the
Borrowers, the lenders (including the Bank) who are or may become party thereto
(the "Lenders"), First Union National Bank of Tennessee, as administrative agent
for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as
Co-Agent. The Credit Agreement contains, among other things, provisions for the
time, place and manner of payment of this Note, the determination of the
interest rate borne by and fees payable in respect of this Note, acceleration of
the payment of this Note upon the happening of certain stated events and the
mandatory repayment of this Note under certain circumstances.
The Borrowers agree to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of an attorney.
Presentment for payment, notice of dishonor, protest and notice of
protest are hereby waived.
THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NORTH CAROLINA.
[Signature page follows]
93
IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by a duly authorized officer as of the day and year first above
written.
CCA PRISON REALTY TRUST
[SEAL]
By: _______________________
Name:__________________
Title:_________________
94
EXHIBIT B
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
NOTICE OF BORROWING
95
NOTICE OF BORROWING
First Union National Bank
of Tennessee, As Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Syndication Agency
Services
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you under Section
2.3(a) of the Credit Agreement dated as of July 18, 1997 (as amended, restated
or otherwise modified, the "Credit Agreement"), by and among CCA Prison Realty
Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as Borrower
pursuant to the terms of the Credit Agreement hereinafter referred to
(collectively, "the Borrowers"), the lenders who are or may become party
thereto (the "Lenders"), First Union National Bank of Tennessee, as
administrative agent for the Lenders (the "Administrative Agent") and SouthTrust
Bank, N.A., as Co-Agent.
1. CCA REIT, on behalf of the Borrowers hereby requests that the
Lenders make a Loan in the aggregate principal amount of $ (the
"Loan").(1)
2. CCA REIT, on behalf of the Borrowers hereby requests that the
Loan be made on the following Business Day: .(2)
3. CCA REIT, on behalf of the Borrowers hereby requests that the
Loan bear interest at the following interest rate, plus the Applicable Margin,
as set forth below:
Termination
Date for
Interest
Principal Period
Component of Interest Interest Period (if
Loan Rate (if applicable) applicable)
------------ -------- --------------- -----------
--------------
(1) Complete with an amount in accordance with Section 2.3 of the
Credit Agreement.
(2) Complete with a Business Day in accordance with Section 2.3 of the
Credit Agreement.
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4. The principal amount of all Loans and L/C Obligations
outstanding as of the date hereof (including the requested Loan) does not
exceed the maximum amount permitted to be outstanding pursuant to the terms of
the Credit Agreement.
5. All of the conditions applicable to the Loan requested herein
as set forth in the Credit Agreement have been satisfied as of the date hereof
and will remain satisfied to the date of such Loan.
6. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Borrowing this day of , .
CCA PRISON REALTY TRUST
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
97
EXHIBIT C
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
NOTICE OF PREPAYMENT
98
NOTICE OF PREPAYMENT
First Union National Bank
of Tennessee, As Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Syndication Agency
Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you by CCA Prison
Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as
Borrower pursuant to the terms of the Credit Agreement hereinafter referred to
(collectively, the "Borrowers") under Section 2.4(d) of the Credit Agreement
dated as of July 18, 1997 (together with all amendments and other
modifications, if any, from time to time made thereto, the "Credit Agreement"),
by and among the Borrowers, the lenders who are or may become party thereto
(the "Lenders"), First Union National Bank of Tennessee, as administrative
agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A.,
as Co-Agent.
1. CCA REIT, on behalf of the Borrowers hereby provides notice to the
Administrative Agent that the Borrowers shall repay the following [Base Rate
Loans] and/or (LIBOR Rate Loans]: . (Complete in accordance with
---------
Section 2.4(d) of the Credit Agreement.)
2. CCA REIT, on behalf of the Borrower, hereby provides notice that
the Borrower shall repay the above referenced Loans on the following Business
Day: __________. (Complete in accordance with Section 2.4(d) of the Credit
Agreement.)
3. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Prepayment this day of , .
------ ---------------- ------
CCA Prison Realty Trust
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
99
EXHIBIT D
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
NOTICE OF ACCOUNT DESIGNATION
100
FORM OF
NOTICE OF ACCOUNT DESIGNATION
Dated ________
First Union National Bank
of Tennessee, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by CCA Prison
Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as
Borrower pursuant to the terms of the Credit Agreement hereinafter referred to
(collectively, the "Borrowers"), under Section 2.3 (b) of the Credit Agreement
dated as of July 18, 1997 (as amended, restated or otherwise modified, the
"Credit Agreement") by and among the Borrowers, the lenders who are or may
become party thereto (collectively, the "Lenders"), First Union National Bank
of Tennessee, as administrative agent for the Lenders (the "Administrative
Agent") and SouthTrust Bank, N.A., as Co-Agent.
The Administrative Agent is hereby authorized to disburse all Loan
proceeds into the following account(s):
[Insert name of bank/
ABA routing Number/
and Account Number]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this ____ day of _____________, _____.
CCA PRISON REALTY TRUST
By: ________________________
Name: __________________
Title: _________________
101
EXHIBIT E
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
CCA Prison Realty Trust Management Company,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
NOTICE OF CONVERSION/CONTINUATION
102
FORM OF
NOTICE OF CONVERSION/CONTINUATION
First Union National Bank
of Tennessee, Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (the "Notice") is
delivered to you under Section 4.2 of the Credit Agreement dated as of July 18,
1997 (as amended, restated or otherwise modified, the "Credit Agreement"), by
and among CCA Prison Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT
that is joined as Borrower pursuant to the terms of the Credit Agreement
hereinafter referred to (collectively, the "Borrowers"), the lenders who are or
may become party thereto (the "Lenders"), First Union National Bank of
Tennessee, as administrative agent for the Lenders (the "Administrative Agent")
and SouthTrust Bank, N.A., as Co-Agent.
1. This Notice of Conversion/Continuation is submitted for the
purpose of: (Complete applicable information.)
(a) [Converting] [continuing] a ________________ Loan [into]
[as] a __________________ Loan.(1)
(b) The aggregate outstanding principal balance of such Loan is
$__________.(2)
(c) The last day of the current Interest Period for such Loan is
______________.
(d) The principal amount of such Loan to be [converted] [continued]
is $_____________.(3)
(e) The requested effective date of the [conversion] [continuation]
of such Loan is _______________.(4)
(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _________________.(5)
2. No Default or Event of Default exists, and none will exist upon
the conversion or continuation of the Loan requested herein.
103
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Continuation this ____ day of _________, 19__.
CCA Prison Realty Trust
By: _______________________________
Name: _________________________
Title: ________________________
1. Delete the bracketed language and insert "Base Rate", or "LIBOR Rate",
as applicable, in each blank.
2. Insert applicable date for any LIBOR Rate Loan being converted or
continued.
3. Complete with an amount in compliance with Section 4.2 of the Credit
Agreement.
4. Complete with a Business Day at least three (3) Business Days after the
date of this Notice.
5. Complete for any LIBOR Rate Loan with an Interest Period in compliance
with Section 4.1(b) of the Credit Agreement.
104
EXHIBIT F
to
Credit Agreement dated as of July 18, 1997
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
OFFICER'S COMPLIANCE CERTIFICATE
105
OFFICER'S COMPLIANCE CERTIFICATE
The undersigned, on behalf of CCA Prison Realty Trust, a Maryland real
estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is
joined as Borrower pursuant to the terms of the Credit Agreement hereinafter
referred to (collectively, the "Borrowers"), hereby certifies to First Union
National Bank of Tennessee, as administrative agent (the "Administrative Agent")
under the Credit Agreement referred to below, as follows:
1. This Certificate is delivered to you pursuant to Section 7.2 of the
Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise
modified, the "Credit Agreement"), by and among the Borrower, the lenders who
are or may become party thereto (the "Lenders"), the Administrative Agent and
SouthTrust Bank, N.A., as Co-Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrowers and their
Subsidiaries dated as of __________________ and for the ______________________
period[s] then ended and such statements fairly present the financial condition
of the Borrowers and their Subsidiaries as of the dates indicated and the
results of its operations and cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement, the Notes and the
related Loan Documents and have made, or caused to be made under my supervision,
a review in reasonable detail of the transactions and the condition of the
Borrowers and their Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Default or an Event of Default, nor do I
have any knowledge of the existence of any such condition or event as at the
date of this Certificate [except, [if such condition or event existed or exists,
describe the nature and period of existence thereof and what action the
Borrowers have taken, are taking and propose to take with respect thereto]].
4. The Borrowers and their Subsidiaries are in compliance with the
covenants contained in Article IX of the Credit Agreement as shown on the
attached Schedule 1 and the Borrowers and their Subsidiaries are in compliance
with the other covenants and restrictions contained in Articles VIII and X of
the Credit Agreement.
[Signature page follows]
106
WITNESS the following signatures as of the ____ day of _________, ____.
CCA Prison Realty Trust
By: _______________________________
Name: _________________________
Title: ________________________
107
EXHIBIT G
to
Credit Agreement dated as of July 18, 1997
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
ASSIGNMENT AND ACCEPTANCE
108
ASSIGNMENT AND ACCEPTANCE
Dated __________
Reference is made to the Credit Agreement dated as of July 18, 1997 (as
amended, restated or otherwise modified, the "Credit Agreement"), by and among
CCA Prison Realty Trust, a Maryland real estate investment trust ("CCA REIT"),
and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms
of the Credit Agreement hereinafter referred to, (collectively, the
"Borrowers"), the lenders who are or may become party thereto (the "Lenders"),
First Union National Bank of Tennessee, as administrative agent for the Lenders
(the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent.
Capitalized terms which are defined in the Credit Agreement and which are used
herein without definition shall have the same meanings herein as in the Credit
Agreement.
_______________________ (the "Assignor") and _________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse, representation or warranty of any kind other than as specifically set
forth herein, and the Assignee hereby purchases and assumes from the Assignor,
as of the Effective Date (as defined below), a ____% interest (the "Assigned
Interest") in and to all of the Assignor's interests, rights and obligations
under the Credit Agreement and the Assignor thereby retains ____% of its
interest therein (the "Retained Interest"). This Assignment and Acceptance is
entered pursuant to, and authorized by, Section 13.9 of the Credit Agreement.
2. The Assignor (a) represents that, as of the date hereof, (i) its
Commitment Percentage (without giving effect to assignments thereof which have
not yet become effective) under the Credit Agreement, (ii) the outstanding
balance of its Loans (unreduced by any assignments thereof which have not yet
become effective) under the Credit Agreement, and (iii) the outstanding balance
of its Commitment Percentage of the L/C Obligations (unreduced by any
assignments thereof which have not yet become effective), are each set forth in
Section 2 of Schedule I hereto; (b) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto, other than that the Assignor
is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; (c)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or their Subsidiaries or the
performance or
109
observance by the Borrowers or their Subsidiaries of any of their obligations
under the Credit Agreement or any other Loan Document; and (d) attaches the
Revolving Credit Note delivered to it under the Credit Agreement and requests
that the Borrowers exchange such Note for new Notes payable to each of the
Assignor and the Assignee as follows:
Revolving Credit Note
Payable to the order of: Principal Amount of Note:
------------------------ -------------------------
$
------------------------ ----------
$
------------------------ ----------
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (c)
agrees that it will, independently and without reliance upon the Assignor or
any other Lender or the Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (d)
in taking or not taking action under the Credit Agreement; (d) confirms that it
is an Eligible Assignee; (e) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
the Credit Agreement and the other Loan Documents as are delegated to the agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (f) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement and the other Loan
Documents are required to be performed by it as a Lender; and (g) agrees that
it will keep confidential all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents in accordance with Section
13.9(g) of the Credit Agreement.
4. The effective date for this Assignment and Acceptance shall be as
set forth in Section 1 of Schedule I hereto (the "Effective Date"). Following
the execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for consent thereby and acceptance and recording in the
Registrar.
5. Upon such consents, acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the other Loan Documents to which Lenders are parties and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Lender under each such agreement, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
2
110
released from its obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such consents, acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal, interest, fees
and other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT
UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
-------------------------------------
COMMITMENT PERCENTAGE %
-------------
By:
----------------------------------
Title:
-------------------------------
ASSIGNEE
-------------------------------------
COMMITMENT PERCENTAGE %
-------------
By:
----------------------------------
Title:
-------------------------------
3
111
ACKNOWLEDGED AND CONSENTED TO:
CCA PRISON REALTY TRUST
By:
----------------------------------
NAME:
--------------------------------
Title:
-------------------------------
CONSENTED TO AND ACCEPTED:
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT
By:
----------------------------------
NAME:
--------------------------------
Title:
-------------------------------
4
112
Schedule I
----------
to
Assignment and Acceptance
-------------------------
1. Effective Date
-------------- ---------------, ----
2. Assignor's Interest
Prior to Assignment
-------------------
(a) Commitment Percentage %
of Assignor ---------
(b) Outstanding balance $
of Assignor's Loans ---------
(c) Outstanding balance of
Assignor's Commitment
Percentage of the L/C $
Obligations ---------
3. Assigned Interest
(from Section 1) %
----------------- ---------
4. Assignee's Extensions of Credit
After Effective Date
-------------------------------
(a) Outstanding balance of
Assignee's Loans $
(line 2(b) times lines 3) ---------
(b) Outstanding balance of Assignee's
Commitment Percentage of L/C
Obligations (line 2(c) times $
line 3) ---------
(c) Assignee's Extensions of Credit
After Effective Date
5. Retained Interest of Assignor after
Effective Date
-----------------------------------
(a) Retained Interest (from Section 1) %
---------
(b) Outstanding balance of Assignor's $
Loans (line 2(b) times line 5(a)) ---------
6. Payment Amounts
---------------
(a) Payable by Assignee to Assignor $
---------
(b) Payable by Assignor to Assignee $
---------
5
113
7. Payment Instructions
--------------------
(a) If payable to Assignor,
to the account of Assignor to:
_______________________________
_______________________________
_______________________________
Routing No.:___________________
Account No.:___________________
Attn:__________________________
Reference:_____________________
(b) If payable to Assignee, to the account
of Assignee to:
_______________________________
_______________________________
_______________________________
Routing No.:___________________
Account No.:___________________
Attn:__________________________
Reference:_____________________
6
114
with respect to any of the foregoing, including, without limitation, damages or
payments for past or future infringements of any of the foregoing; (d) the
right to xxx for past, present and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of North Carolina; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than North Carolina, "UCC"
means the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect or
perfection or non-perfection.
"Vehicles" means all cars, trucks, trailers, construction and earth
moving equipment of any Grantor and other vehicles covered by a certificate of
title law of any state, and all tires and other appurtenances to any of the
foregoing.
SECTION 2. The Security Interests.
(a) In order to secure the Credit Agreement in accordance with the
terms thereof, and to secure the payment and performance of all of the Secured
Obligations, each Grantor hereby grants to the Administrative Agent, for the
ratable benefit of itself and the Lenders, a continuing security interest in
and to all of such Grantor's estate, right, title and interest in and to all of
the following property, whether now or hereafter owned or acquired by such
Grantor or in which such Grantor now have or hereafter have or acquire any
estate right, title or interest, and wherever located (collectively, along with
any other property of such Grantor which may from time to time secure the
Secured Obligations, the "Collateral"):
(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) Vehicles;
6
115
(ix) The Collateral Account, all cash deposited therein from
time to time, the investments made pursuant to Section 6 and other
monies and property of any kind of any Grantor in the possession or
under the control of the Administrative Agent or any Lender;
(x) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Grantor pertaining to any of the
Collateral;
(xi) All other goods and personal property of any Grantor,
whether tangible or intangible; and
(xii) All products and Proceeds of all or any of the Collateral
described in clauses (i) through (xi) hereof.
(b) The Security Interests are granted as security only and shall not
subject the Administrative Agent or any Lender to, or transfer to the
Administrative Agent or any Lender, or in any way affect or modify, any
obligation or liability of the Grantor with respect to any of the Collateral
or any transaction in connection therewith.
SECTION 3. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) Such Grantor has the corporate power and authority and the legal
right to execute and deliver, to perform its obligations under, and to grant
the Security Interests in the Collateral pursuant to, this Agreement and has
taken all necessary corporate action to authorize its execution, delivery and
performance of, and grant of the Security interests on the Collateral pursuant
to, this Agreement.
(b) This Agreement constitutes a legal, valid and binding and
obligation of such Grantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(c) The execution, delivery and performance of this Agreement will not
violate any provision of any Applicable Law or contractual obligation of such
Grantor and will not result in the creation or imposition of any Lien on any of
the properties or revenues of such Grantor pursuant to any Applicable Law or
contractual obligation of such Grantor, except as contemplated hereby.
(d) No consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other person (including, without limitation, any stockholder or creditor of
such Grantor), is required in connection
7
116
with the execution, delivery, performance, validity or enforceability of this
Agreement, except those which have been obtained, UCC filings and required
notices under the Federal Assignment of Claims Act or any corresponding state
law.
(e) No actions, suits or proceedings are pending nor, to the knowledge
of such Borrower, are threatened against or in any other way relate adversely
to or affect such Grantor or any of its properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority, which, if
adversely determined, are reasonably likely to have a Material Adverse Effect.
(f) Such Grantor has good and marketable title to all of its
respective collateral, free and clear of any Liens other than Permitted Liens
and as otherwise permitted by the Credit Agreement.
(g) Such Grantor has not performed any acts that would prevent or
hinder the Administrative Agent from enforcing any of the terms of this
Agreement. Other than financing statements or other similar or equivalent
documents or instruments with respect to Permitted Liens, no financing
statement, mortgage, security agreement or similar or equivalent document or
instrument covering all or any part of the Collateral is on file or of record
in any jurisdiction. No Collateral is in the possession of any Person (other
than such Grantor) asserting any claim thereto or security interest therein,
except that the Administrative Agent or its designee may have possession of
Collateral as contemplated hereby.
(h) All of the information set forth in the Perfection Certificate is
true and correct in all material respects as of the Closing Date.
(i) With respect to the Intellectual Property of such Grantor which is
material to the conduct of its business:
(i) such Intellectual Property is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(ii) such Intellectual Property is valid and enforceable;
(iii) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property,
including, without limitation, recordations of all of its interests in
the Patents and Trademarks in the United States Patent and Trademark
Office and its claims to the Copyrights in the United States Copyright
Office;
(iv) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property and such Grantor has not received any
8
117
written claim that the use of such Intellectual Property does not or
may violate the asserted rights of any third party; and
(v) such Grantor has performed all acts and has paid all
required fees and taxes to maintain each and every item of Intellectual
Property in full force and effect.
(j) The Financing Statements are in appropriate form and when filed in
the offices specified in the Perfection Certificate and upon payment of the
filing fees, the Security Interests will constitute valid and perfected
security interests in the Collateral, prior to all other Liens and rights of
others therein except for the Permitted Liens (to the extent that a security
interest therein may be perfected by filing pursuant to the UCC) and all
filings and other actions necessary or desirable to perfect and protect such
Security Interests have been duly taken.
(k) The Inventory, Fixtures, Equipment and Vehicles are insured in
accordance with the requirements hereof and of the Credit Agreement.
(l) All Inventory, if any, has or will have been produced in
substantial compliance in all material respects with the applicable
requirements of the Fair Labor Standards Act, as amended.
SECTION 4. Further Assurances; Covenants.
(a) General.
(i) No Grantor shall change the location of its chief
executive office or principal place of business in any state unless it shall
have given the Administrative Agent thirty (30) days prior written notice
thereof and executed and delivered to the Administrative Agent all financing
statements and financing statement amendments which the Administrative Agent
may reasonably request in connection therewith. No Grantor shall change the
locations where it keeps or holds any Collateral or any records relating
thereto from the applicable location described in the Perfection Certificate
unless such Grantor shall have given the Administrative Agent thirty (30) days
prior written notice of such change of location and executed and delivered to
the Administrative Agent all financing statements and financing statement
amendments which the Administrative Agent may reasonably request in connection
therewith; provided, however, that such Grantor may keep Inventory at, or in
transit to, any location described in the Perfection Certificate. No Grantor
shall in any event change the location of any Collateral if such change would
cause the Security Interests in such Collateral to lapse or cease to be
perfected.
9
118
financing statements with respect to any consigned Inventory showing such
Grantor as debtor and the Administrative Agent as secured party; (D) after all
financing statements referred to in clauses (B) and (C) above shall have been
filed, conduct a search of all filings made against the Consignee in all
jurisdictions in which the Inventory to be consigned is to be located while on
consignment, and deliver to the Administrative Agent copies of the results of
all such searches; (E) notify, in writing, all creditors of the Consignee which
would be holders of security interests in the Inventory to be consigned that
such Grantor expects to deliver certain Inventory to the Consignee, all of
which Inventory shall be described in such notice by item or type, and (F) if
requested by the Administrative Agent, deliver an opinion of counsel to the
effect that all financing statements and amendments or supplements thereto,
continuation statements and other documents required to be recorded or filed in
order to perfect and protect the Security Interests and priority thereof
against all creditors of and purchasers of such Grantor and such Consignee have
been filed in each filing office necessary or desirable for such purposes and
that all filing fees and taxes, if any, payable in connection with such filings
have been paid in full.
(d) Equipment, Etc. With the exception of Equipment disposed of in accordance
with Section 10.6 of the Credit Agreement, each Grantor will maintain each item
of Equipment in the same condition, repair and working order as when acquired,
ordinary wear and tear excepted, and will provide all maintenance, service and
repairs necessary for such purpose and will promptly furnish to the
Administrative Agent a statement respecting any material loss or damage to any
of the Equipment in an amount in excess of $250,000.
(e) Intellectual property.
(i) Each Grantor shall notify the Administrative Agent promptly (a) of
its acquisition after the Closing Date of any Patent, Patent License, Trademark
or Trademark License and (b) if it knows, or has reason to know of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office or any court) regarding such Grantor's
ownership of any Patent or Trademark, its right to register the same, or to
keep and maintain the same. In no event shall any Grantor, either itself or
through any agent, employee or licensee, file an application for the
registration of any Patent or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, unless promptly thereafter it informs the
Administrative Agent, and, promptly after issuance of such
14
119
EXHIBIT I
to
Credit Agreement dated as of July 18, 1997
by and among
CCA prison Realty Trust,
and
certain Subsidiaries there,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,\as Co-Agent
FORM OF
DEED OF TRUST
120
STATE OF
COUNTY OF
DEED OF TRUST
AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") is
made and entered into as of the ______ day of July, 1997, by and among
CCA PRISON REALTY TRUST, a Maryland real estate investment trust, whose
address is 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000 ("Grantor");
_______________________, whose address is __________________________
("Trustee"); and
FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking association,
as Administrative Agent for Lenders (as hereinafter defined), whose
address is 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000
("Administrative Agent").
Statement of Purpose
Pursuant to the terms of that certain Credit Agreement of even date
herewith, as amended, restated or otherwise modified (the "Credit Agreement")
among the Grantor and any subsidiary thereof that is joined as a borrower
pursuant to the terms thereof (collectively with the Grantor, the "Borrowers"),
Administrative Agent, SouthTrust Bank, N.A., as Co-Agent and the lenders who are
or may become a party to the Credit Agreement (as therein defined, "Lenders"),
Lenders have agreed to extend certain credit facilities to Borrowers of up to
One Hundred Fifty Million Dollars ($150,000,000.00) as evidenced by the Notes
executed by Borrowers and payable to the order of Lenders. All of the promises,
terms, conditions, agreements and obligations imposed on Borrowers under the
Notes, the Letters of Credit, the Credit Agreement and the other Loan Documents
are to be secured by this Deed of Trust. Defined terms used herein, as indicated
by the initial capitalization thereof, shall have the meanings
121
ascribed to such terms in the Credit Agreement, unless otherwise provided
herein.
NOW, THEREFORE, in order to secure the Obligations, and in
consideration of Lenders' agreement under the Credit Agreement to make the
Extensions of Credit to Borrowers and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Borrower by these presents does (i) give, grant, bargain, sell, alienate,
remise, warrant, convey, release, confirm, assign, transfer and set over unto
Trustee, his heirs, successors and assigns, IN TRUST, WITH POWER OF SALE, for
the benefit and security of Administrative Agent, for the ratable benefit of
itself and Lenders, all of Grantor's right, title and interest in and to the
"Land" and the "Improvements" (collectively, the "Premises"), as described below
and any real or mixed property referred to in Paragraph E below, TO HAVE AND TO
HOLD same unto Trustee, and its successors and assigns forever and (ii) convey
and grant a security interest unto Administrative Agent, for the ratable benefit
of itself and Lenders, and their successors and assigns in all of Grantor's
right, title and interest in and to the "Equipment", the "Proceeds" and any
personal property referred to in Paragraph E below. The property and rights
(collectively, the "Property") subject to this Deed of Trust are as follows:
COLLATERAL IS OR INCLUDES FIXTURES
A. All of the right, title and interest of Grantor in and to the real
estate, as more specifically described in EXHIBIT A attached hereto, together
with all of Grantor's rights, title and interest under all easements, rights of
way, restrictive covenants, parking agreements, encroachment agreements,
licenses, streets, alleys, passages, walkways, strips of land, sewer rights,
waters, water courses, water privileges, tenements, hereditaments and other
appurtenances and rights, including, but not limited to, air rights, surface
rights and subsurface rights relating or appertaining to such real estate
(collectively, the "Land").
B. All facilities, buildings, structures, fixtures, improvements and
parking areas now or hereafter located on the Land and all replacements thereof
and additions thereto (collectively, the "Improvements"); without limiting the
foregoing, the term "Improvements" shall include: all buildings, components xx
xxxxxxxxx, xxxxx, xxxxxxx, curbs, gutters,
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sidewalks and pedestrian ways; all storm drainage, water systems, sewer systems,
electrical systems, gas systems and other utilities equipment; and all
improvements relating to easements appurtenant to the Land and landscaping,
whether or not located on the Land, which are necessary or appropriate to fully
benefit and serve the Improvements located on the Land.
C. All chattels, machinery, equipment, goods, construction materials
and articles of personal property now or hereafter attached to, incorporated in,
or located on the Premises or on appurtenant easements and used or usable in
connection with any present or future construction, operation or letting of the
Property or the activities at any time conducted therein or thereon which are
owned by Grantor (collectively, the "Equipment"), including, but not limited to,
any and all types of machinery and equipment, heating, venting and
air-conditioning, lighting, laundry, incinerating and power equipment and
machinery, plumbing, cleaning, smoke detention, fire prevention and fire
extinguishing systems, communications apparatus, sprinkler systems, gas and
electric fixtures, awnings, screens, window shades, storm doors and windows,
cabinets, ducts and compressors, rugs, carpets, draperies and linens, elevators,
escalators, pumps, motors, engines, conduits, dynamos, refrigerators, freezers,
incinerators, plants, flowers and shrubbery, and all other machinery, equipment,
appliances, fittings, furniture, furnishings, chattels and articles of
personalty of every kind and nature used in the operation of the Improvements
and structures now or hereafter situated on and constituting part of the
Property or on appurtenant easements, together with any and all replacements
thereof and additions thereto;
D. Any unearned insurance premiums and any insurance proceeds realized
from or as a result of Grantor's ownership or operation of any Property and any
and all awards, including interest thereon, heretofore and hereafter made to
Grantor for any taking by eminent domain, or by any proceeding or purchase in
lieu thereof, of the whole or any part of the Property, including any awards for
changes of grade of streets, which awards are hereby assigned to Administrative
Agent, for the ratable benefit of itself and Lenders, who is hereby authorized
to collect and receive the proceeds of such awards and to give proper receipts
and acquittances therefor and to apply the same to the Obligations, to the
extent hereinafter provided (all of the foregoing being referred to herein as
the "Proceeds");
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E. All the property of every kind and description, whether real,
personal or mixed, which at any time hereafter, by indenture or indentures
supplemental hereto, and by other instruments of transfer, may be expressly
conveyed, mortgaged or pledged, delivered, assigned or transferred to
Administrative Agent, for the ratable benefit of itself and Lenders, by or on
behalf of Grantor, as and for additional or substitute security for the
Obligations.
PROVIDED, HOWEVER, if the Obligations shall be paid and performed when
due and if Grantor shall keep, perform and observe each of the covenants,
agreements and provisions in this Deed of Trust to be kept, performed and
observed by Grantor, then this Deed of Trust and the estate and rights hereby
granted shall terminate and be of no further force and effect and the lien
created by this Deed of Trust shall be released, any and all costs associated
with such release to be borne by Grantor.
ARTICLE I
Representations, Warranties and
Covenants of Grantor
Grantor represents, warrants, and covenants with Trustee,
Administrative Agent and Lenders as follows
Section 1.01. Payment and Performance of Obligations. Grantor will pay
and perform when due the Obligations.
Section 1.02. Priority of Lien. This Deed of Trust is and, prior to the
performance and payment of the Obligations in full, shall remain a [first](1)
Lien on all of the Property, subject only to those matters in the title
insurance policy insuring the lien of the Deed of Trust as delivered as of the
date hereof which Administrative Agent has agreed to accept, excepting therefrom
all preprinted and/or standard exceptions (the "Permitted Exceptions") or
otherwise approved by Administrative Agent in advance. Grantor shall pay or
cause to be discharged within twenty (20) days after they shall be payable, or
shall make adequate provisions for the satisfaction or discharge of, all lawful
claims and demands of mechanics, laborers and materialmen
--------------------
(1) To permit a second priority Lien where allowed under the Credit Agreement.
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which, if unpaid, might be a lien or charge on the Property (or any part
thereof) or the income therefrom.
Pursuant to the terms of the Credit Agreement, Lenders may be required
to make Extensions of Credit from time to time. This Deed of Trust secures the
payment of all present and future disbursements, including, without limitation,
any future loans, advances or readvances on a revolving basis which may be made
by Lenders pursuant to the Credit Agreement, and all of which disbursements
shall be equally secured with and of the same priority as any amounts advanced
on the date hereof. Although the amount of the Extensions of Credit, including
present and future obligations, which Lenders may make to Borrowers may decrease
or increase from time to time, the maximum amount which may be outstanding at
any time is One Hundred Fifty Million Dollars ($150,000,000.00) plus interest
thereon and any other charges, in addition to any disbursements made for the
payment of taxes, levies, or insurance on the Property, whether or not such
payments are obligatory or are made at the option of Administrative Agent on
behalf of Lenders, and any amounts owed to Lenders as a result of any Hedging
Agreement required pursuant to Section 8.15 of the Credit Agreement or for other
purposes as permitted by the terms of the Loan Documents, together with interest
on such disbursements as may be provided herein or therein. The period within
which such future advances may be made does not extend more than ten (10) years
beyond the date of this Deed of Trust.
Section 1.03. Intentionally Deleted.
Section 1.04. Adequate Access. The Improvements have adequate rights of
access to public ways.
Section 1.05. Parking. Parking sufficient to satisfy zoning
requirements for the utilization of the Improvements as intended and all
requirements of any Lease is available to the Premises by permanent easement or
otherwise and is encumbered by this Deed of Trust.
Section 1.06. Expenses. If any action or proceeding is commenced to
which Trustee, Administrative Agent or Lenders (or any of them) become or are
made a party arising out of or in connection with any of the Loan Documents or
the Extensions of Credit, or in which it becomes necessary to enforce, defend or
uphold the lien of this Deed of Trust, all court costs and
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litigation costs (including, without limitation, attorneys' fees and expenses)
incurred by Trustee, Administrative Agent and Lenders shall be paid by
Borrowers, and any such sum shall be a lien on the Property, prior to any right,
or title to, interest in, or claim upon the Property attaching or accruing
subsequent to the lien of this Deed of Trust, and shall be deemed to be secured
by this Deed of Trust. In any action or proceeding to foreclose the lien of this
Deed of Trust or to recover, collect or compel the performance of the
Obligations, the provisions of law respecting the recovery of costs,
disbursements and allowances shall prevail unaffected by this covenant.
Section 1.07. Insurance.
(a) Grantor will maintain, or cause to be maintained, in full
force and effect all insurance coverage and policies required
to be maintained under the terms of the Credit Agreement or
any other Loan Document and as set forth herein. Insurance
coverage shall include:
(i) insurance against loss or damage to the Property
by fire, windstorm, tornado and hail and against
loss or damage by such other, further and
additional risks as may be now or hereafter
embraced by an "all risk" form insurance policy
with Extended Coverage Endorsement and
replacement cost broad form fire and collapse
insurance on the Property with a company or
companies approved by Administrative Agent and
with coverages and in form, content and amount
reasonably acceptable to Administrative Agent.
Such policy shall also extend coverage for acts
of vandalism and malicious mischief, without co-
insurance, in an amount equal to 100% of the
replacement cost of the Improvement. For
buildings equipped with automatic sprinkler
systems designed to discharge an extinguishing
agent, including, but not limited to, water,
chemicals or gas, such policy shall include
Sprinkler Leakage as a covered cause of loss;
(ii) for buildings equipped with boilers, heating and
ventilating systems, refrigeration equipment,
air conditioning units, pumps, compressors,
motors, blowers, generators, transformers and
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other types of heavy equipment, Administrative
Agent shall require Boiler and Machinery
Insurance to cover the sudden and accidental
breakdown of such equipment;
(iii) if any Improvements (now or hereafter existing)
on the Land are or will be located in an area
identified by the U.S. Department of Housing and
Urban Development or Federal Emergency
Management Agency as an area having "special
flood hazards", Grantor shall also furnish flood
insurance in the amount which is the lesser of
(A) the outstanding balance of the Extensions of
Credit or (B) the maximum limited of coverage
available under the National Flood Insurance Act
of 1968, the Flood Disaster Protection Act of
1973, and the Housing and Community Development
Acts of 1974 and 1977, all as amended;
(iv) such worker's compensation insurance as is
required by Applicable Law;
(v) rental loss insurance or loss of business income
insurance in an amount sufficient to compensate for
all rents or income at the Property and real estate
taxes and insurance premiums for a period of at
least (6) six months;
(vi) single limit comprehensive general public
liability insurance against claims for bodily
injury, death or property affording protection
in respect of injury or death to any person or
damage to property of any one owner, and in
respect of injury or death to more than one
person or damage to property of more than one
owner arising from any one accident or
occurrence, each to the limit required by
Administrative Agent; and
(vii) such other insurance on the Property or on any
replacements or substitutions thereof or
additions thereto as may from time to time be
required by Administrative Agent against other
insurable hazards or casualties which at the
time are commonly insured against in the case of
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property similarly situated, including, without
limitation, Sinkhole, Mine Subsidence and
Earthquake insurance, due regard being given to
the height and type of buildings, their
construction, location, use and occupancy.
(b) During the term of the Credit Agreement, the premium on each
insurance policy described above shall be prepaid and the
policy term renewed annually in the same form and with at
least the same coverage as the preceding year, with
Administrative Agent to receive notice of renewal at least
thirty (30) days prior to expiration. Further, no such policy
shall be subject to cancellation, nonrenewal or reduction of
coverage unless the insurer has given Administrative Agent at
least thirty (30) days' prior written notice of such action.
All policies described herein must be issued by insurance
companies and agencies licensed by the Insurance Commission of
the State in which the Property is located to conduct business
in said State and approved by Administrative Agent.
Administrative Agent shall have the right to approve each and
every insurance carrier and policy.
(c) All policies shall include a standard, non-contributory
mortgagee clause naming Administrative Agent and/or Lenders
(as may be required) as additional insured under all liability
insurance policies, as [FIRST] mortgagee on all property
insurance policies and as the loss payee on all loss of rents
insurance policies. All policies shall be in form and content
as approved by Administrative Agent.
(d) All Insurance Proceeds under any insurance policies which are
payable by reason of damage, loss or destruction to any
portion of the Improvements during the term of the Credit
Agreement will be paid directly to Administrative Agent and
applied in accordance with Section 1.12 hereof.
Section 1.08. Removal of Improvements. No Improvements shall be
removed, demolished or materially altered without Administrative Agent's prior
written consent.
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Section 1.09. Security Interest. Grantor shall promptly execute and
cause to be filed (as directed by Administrative Agent) any and all documents,
including UCC Financing Statements (the "Financing Statements") pursuant to the
Uniform Commercial Code of the State in which the Property is located as now
enacted and subsequently amended from time to time (the "Code"), as may be
necessary, or as Administrative Agent may reasonably request, to preserve and
maintain the [first] lien priority of the interest created hereby on all
fixtures and personal property constituting part of the Property. Such Financing
Statements shall be filed in such places as Administrative Agent reasonably
determines. Grantor hereby authorizes and empowers Administrative Agent to
execute and file, on Grantor's behalf, all Financing Statements and refilings
and continuations thereof as Administrative Agent deems reasonably necessary or
advisable to perfect, preserve and protect Trustee's, Administrative Agent's and
Lenders' interest in such fixtures and personal property, and Grantor hereby
irrevocably appoints Administrative Agent as Grantor's agent and
attorney-in-fact (such appointment being coupled with an interest) so to do.
This Deed of Trust is deemed a "Security Agreement" (as defined in the Code)
and, with respect to the personal property encumbered by this Deed of Trust, the
remedies for any violation of the covenants, terms and conditions and agreements
contained in the Loan Documents shall be as prescribed (i) herein (Grantor
agreeing that all such personal property may be sold by Trustee as part of any
sale under his power of sale or any foreclosure sale provided for in Section
3.01(d) hereof), (ii) by Applicable Law or (iii) by the Code, all at
Administrative Agent's sole election.
Section 1.10. Sale; Liens; Subdivision. Except as permitted under the
Credit Agreement, any other Loan Document or in this Section, Grantor shall not,
directly or indirectly, sell, transfer, convey, lease or further encumber or
mortgage, whether voluntary, involuntary or by operation of law, or suffer or
permit the same, all or any part of the Property or any interest therein or in
Grantor. A taking of a portion of the Property by eminent domain (or a
conveyance in lieu thereof) will not be considered a violation of this Section
so long as (a) no portion of any Improvements are taken (or so conveyed); (b)
after such taking (or such conveyance) the Property still complies with all
Applicable Law (including all zoning and parking requirements); (c)
Administrative Agent, in the exercise of its reasonable judgment, determines
that such taking (or such conveyance) will not have a material adverse effect on
the operation or leasing of
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the Property; and (d) such taking (or such conveyance) will not give any tenant
the right to terminate its lease or xxxxx its rent.
Except as otherwise provided in the Credit Agreement or any other Loan
Document, Grantor may sell, transfer, convey or otherwise dispose of obsolete,
damaged or dilapidated Equipment from time to time without Lender's prior
written consent, provided that such obsolete, damaged or dilapidated Equipment
is promptly replaced with new Equipment of like kind and number and being of a
quality and having a value comparable to the original (i.e., new) quality and
value of the Equipment disposed of.
Grantor shall not subdivide the Property, submit the Property, or any
portion thereof, to multiple form of ownership, or dedicate any portion of the
Property to public ownership, without the prior written consent of
Administrative Agent.
Section 1.11. Eminent Domain. Administrative Agent is hereby authorized
and empowered to settle, adjust or compromise any and all claims and rights
arising from any eminent domain or condemnation action relating to part or all
of the Property (or any interest therein) and to collect and receive the
proceeds relating to or arising therefrom (collectively, the "Condemnation
Proceeds"). Each entity which may hereafter exercise a power of eminent domain
or condemnation with respect to part or all of the Property is hereby authorized
and directed to pay Condemnation Proceeds directly to Administrative Agent, for
the ratable benefit of itself and Lenders, instead of to Grantor and
Administrative Agent jointly. In the event any entity which may hereafter
exercise a power of eminent domain or condemnation with respect to part or all
of the Property fails to disburse Condemnation Proceeds directly and solely to
Administrative Agent but disburses such Condemnation Proceeds instead either
solely to Grantor or to Grantor and Administrative Agent jointly, Grantor agrees
to immediately endorse and transfer such Condemnation Proceeds to Administrative
Agent. Upon the failure of Grantor to immediately endorse and transfer such
Condemnation Proceeds as aforesaid, Administrative Agent may execute such
endorsements or transfers for and in the name of Grantor, and Grantor hereby
irrevocably appoints Administrative Agent as Grantor's agent and
attorney-in-fact (such appointment being coupled with an interest) so to do. The
Condemnation Proceeds shall be applied to the Obligations in the manner set
forth in Section 4.5 of the Credit Agreement. If such taking by exercise of a
power of
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eminent domain or condemnation is not a violation of Section 1.10, then
Administrative Agent will disburse from that portion of the Condemnation
Proceeds, if any, remaining after the application of such proceeds pursuant to
the preceding sentence, an amount which it determines in its reasonable
discretion shall be necessary to allow Grantor to repair or restore the
Improvements to the condition (as near as possible) it was in prior to such
taking or conveyance, and Grantor shall promptly do so. In the event the
Condemnation Proceeds remaining after the application of such proceeds pursuant
to Section 4.5 of the Credit Agreement are not sufficient to fully restore the
Improvements to such condition, Grantor shall immediately upon demand by
Administrative Agent promptly deposit any such deficiency with Administrative
Agent to be disbursed in connection with such restoration. Such proceeds and
additional funds as supplied by Grantor will be disbursed in accordance with
procedures substantially similar to those set forth in the Credit Agreement for
the disbursement of the original proceeds of the Extensions of Credit. The
repair or restoration will be in accordance with plans and specifications
subject to Administrative Agent's reasonable approval and in compliance with all
Applicable Laws and in accordance with the timetable reasonably approved by
Administrative Agent.
Section 1.12. Insurance Proceeds.
(a) Administrative Agent is hereby authorized and empowered to
settle, adjust or compromise any claims or rights under any
insurance policies maintained pursuant to this Deed of Trust
and to collect and receive the proceeds from any such policy
or policies (collectively, the "Insurance Proceeds"). Each
insurance company is hereby authorized and directed to pay all
Insurance Proceeds directly to Administrative Agent, for the
ratable benefit of itself and Lenders, instead of to Grantor
and Administrative Agent jointly. In the event any insurance
company fails to disburse Insurance Proceeds directly and
solely to Administrative Agent but disburses such Insurance
Proceeds instead either solely to Grantor or to Grantor and
Administrative Agent jointly, Grantor agrees to immediately
endorse and transfer such Insurance Proceeds to Administrative
Agent. Upon the failure of Grantor to endorse and transfer
such Insurance Proceeds as aforesaid, Administrative Agent may
execute such
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endorsements or transfers for and in the name of Grantor, and
Grantor hereby irrevocably appoints Administrative Agent as
Grantor's agent and attorney-in-fact (such appointment being
coupled with an interest) so to do. The Insurance Proceeds
shall be applied to the Obligations in the manner set forth in
Section 4.5 of the Credit Agreement. If Administrative Agent
elects, in its sole discretion, to make the proceeds available
to Grantor in order to restore the Improvements, the
disbursement of such proceeds will be subject to such
reasonable restrictions and requirements as Administrative
Agent shall impose.
(b) Notwithstanding the provisions of Section 1.12(a) above,
so long as (i) that certain Master Agreement to Lease
dated ________, 1997 (the "Master Lease") and that
certain Lease Agreement dated _________, 1997 relating
to the Property (the "Supplemental Lease") (the Master
Agreement and the Supplemental Lease collectively
referred to as the "Leases") between Grantor and
Corrections Corporation of America, a Tennessee
corporation ("CCA"), are in full force and effect, (ii)
there has been no default under the Leases which was not
cured within any applicable cure period under the
Leases, (iii) CCA is unconditionally obligated to
restore the Property after the occurrence of the
applicable casualty, taking by right of eminent domain
or condemnation and to continue to lease the Property
without a permanent reduction in rent and (iv)
Administrative Agent determines in the exercise of its
reasonable discretion that CCA is financially able to
bear any costs of such rebuilding which are not covered
by the insurance proceeds or condemnation awards, then
if:
(i) no Default or Event of Default has occurred and is
continuing beyond any applicable grace period
under the Loan Documents; and
(ii) the Property can, in Administrative Agent's
judgment, with diligent restoration and repair, be
returned to a condition at least equal to the
condition thereof that existed prior to the
casualty or taking causing the loss or damage from
the earlier to occur of (1) six (6) months
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after receipt of insurance proceeds or condemnation
awards by either Grantor or Administrative Agent,
and (2) the Revolving Termination Date; and
(iii) all necessary Governmental Approvals can be
obtained to allow the rebuilding and the re-
occupancy of the Property as described in Section
(b)(ii) above; and
(iv) there are sufficient sums available through
insurance proceeds or condemnation awards and
contributions by Grantor or CCA, the full amount
of which shall at Administrative Agent's option
have been deposited with Administrative Agent, for
such restoration and repair (including, without
limitation, for any costs and expenses incurred by
Administrative Agent in administering said
restoration or repair); and
(v) Grantor so elects by written notice delivered to
Administrative Agent within five (5) days after
settlement of the aforesaid insurance or
condemnation claim,
then, Administrative Agent shall, solely for the
purposes of such restoration and repair, advance so
much of the remainder of such sums as may be
required for such restoration or repair and to
comply with Grantor's obligations under the terms
of Section 10.01 of the Master Lease, and any funds
deposited by Grantor or CCA therefore, to Grantor
in the manner and upon such terms and conditions as
would be required by a prudent interim construction
lender (but nevertheless in accordance with the
terms of Section 10.01 of the Master Lease),
including, but not limited to, the prior approval
by Administrative Agent of plans and
specifications, contractors and form of
construction contracts and the furnishing to
Administrative Agent of permits, bonds, lien
waivers, invoices, receipts and affidavits from
contractors and subcontractors in form and
substance satisfactory to Administrative Agent in
its discretion, with any remainder being distrib-
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uted to Grantor (except as otherwise provided in
the Master Lease). In addition, to the extent that
Administrative Agent receives any rental loss or
loss of business income insurance proceeds in
excess of amounts required to ensure no Default
occurs with respect to any payment becoming due and
payable under the Extensions of Credit for any
period of time in which CCA is not required to pay
rent due to the casualty or condemnation, and
provided further that all operating expenses of the
Property have been paid in full, then any such
excess shall be distributed by Administrative Agent
to Grantor (except as otherwise provided in the
Master Lease).
ARTICLE II
Possession and Administration
of the Property
Section 2.01. Impositions. (a) Grantor will pay or cause to be paid in
a timely manner all taxes, assessments and other charges now or hereafter levied
against the Property, or any part thereof, and also any and all license fees or
similar charges which may be imposed by the municipality in which the Premises
are situated for the use of walks, areas, air space, parking areas and other
space or facilities beyond the lot line and on or abutting the public sidewalks
in front of or adjoining the Premises, together with any penalties or interest
on any of the foregoing; and in the case of default in the payment thereof,
Administrative Agent may (but shall not be obligated to) pay the same and
Grantor will repay or cause to be repaid such sum with interest at the Default
Rate under the Credit Agreement, and such sum shall be added to the indebtedness
secured by this Deed of Trust.
(b) Grantor will not claim any credit on or make any deduction
from the interest or principal of the Obligations by reason of the payment of
any taxes levied or to be levied on the Property, or any part thereof, during
the continuance of the lien of this Deed of Trust.
Section 2.02. Warranty of Title. Grantor warrants that Grantor is
indefeasibly seized of the Property in fee simple absolute, free and clear from
all encumbrances (subject only to
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the Permitted Exceptions), and that Grantor has full power and lawful authority
to convey and encumber the same; that Grantor shall and will make, execute,
acknowledge and deliver all such further or other deeds, instruments or
assurances as may at any time hereafter be reasonably desired or required by
Administrative Agent to more fully and effectually convey the Property for the
purposes aforesaid unto the Trustee and his successors or assigns and unto all
and every person or persons deriving any estate, right, title or interest
therein under this Deed of Trust; and that Grantor will warrant and defend the
Property against all persons whomsoever, except for claims arising pursuant to
the Permitted Exceptions.
Section 2.03. Waste. Grantor will cause the Improvements now or
hereafter constructed on, and constituting part of, the Property to be protected
and to be kept in good order and repair and will not commit or suffer any waste,
deterioration or impairment of the Property whereby the value of the Property
might be materially impaired. In the event that such waste, deterioration or
impairment of the Property shall occur, which such waste, deterioration or
impairment is not promptly cured by Grantor, Administrative Agent may (but shall
not be obligated to) take such action as may be necessary to remedy such
condition and Grantor shall repay or cause to be repaid all costs and expenses
associated with such remedy with interest at the Default Rate under the Credit
Agreement, and such sum shall be added to the indebtedness secured by this Deed
of Trust.
Section 2.04. Inspection. Administrative Agent and any persons
authorized by Administrative Agent shall have the right to enter and inspect the
Property at all reasonable times.
Section 2.05. Compliance with Governmental Authorities. Grantor will
comply with or cause to be complied with, all statutes, ordinances and
requirements of any governmental authority relating to the Property. Grantor
will not initiate, join in, or consent to any change in any private restrictive
covenant, zoning ordinance or other public or private restrictions, limiting or
defining the uses which may be made of the Premises, or any part thereof,
without the prior written consent of Administrative Agent.
ARTICLE III
Remedies
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Section 3.01. Remedies. Upon the occurrence of an Event of Default, and
at any time thereafter during the continuance of such Event of Default, to the
extent permitted by Applicable Law, Administrative Agent may, and upon the
request of the Required Lenders shall, exercise any or all of the following
remedies:
(a) Administrative Agent may enter into and upon all or any
part of the Property and may exclude Grantor and its agents and servants wholly
therefrom, and having and holding the same may use, operate, develop, manage and
control the Property, or any part thereof, and conduct the business of Grantor,
including, without limitation, exercising any and all rights of Grantor under
the Leases (as defined in that certain Assignment of Rents, Leases and Profits
of even date herewith, as amended, restated or otherwise modified (the
"Assignment of Leases")) either personally, or by Administrative Agent's agents,
attorneys, receivers or trustees, in such manner as Administrative Agent may
deem to be to Administrative Agent's best advantage. To the extent permitted by
Applicable Law, Administrative Agent, or at Administrative Agent's direction,
Trustee, shall be entitled to collect and receive all Rents (as defined in the
Assignment of Leases), for the ratable benefit of itself and Lenders, or to
otherwise exercise all of Grantor's rights with respect to the Rents after
deducting all associated expenses, and all necessary repairs, maintenance,
renewals, replacements, alterations, additions, betterments and improvements,
and all payments which may be made for taxes, assessments, insurance and other
charges creating liens on the Property, or any part thereof, as well as
reasonable compensation for their own services and for the services of their
counsel, agents, clerks, servants and other employees by them properly engaged
and employed. Administrative Agent or Trustee, as the case may be, shall apply
the balance of the money derived from the operation and management of the
Property and business towards payment in full of the balance due on the
Obligations in the manner set forth in Section 4.5 of the Credit Agreement. The
surplus, if any, shall be paid to Grantor, its successors or assigns, or to
whomsoever as shall be lawfully entitled to receive same, or as a court of
competent jurisdiction may direct.
(b) Administrative Agent may bring an appropriate action to
recover any sums required to be paid by Grantor under the terms of the Loan
Documents, as they become due, without regard to whether or not the principal
indebtedness or any other sums evidenced by the Notes and secured by this Deed
of Trust
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shall be due, and without prejudice to the right of Administrative Agent or
Trustee thereafter to bring an action of foreclosure, or any other action, for
any Event of Default by Grantor existing at the time the earlier action was
commenced.
(c) Administrative Agent may declare the Obligations to be
immediately due and payable, and unless same are paid or performed on demand,
Administrative Agent and Trustee may resort to any and all remedies provided in
any Loan Document or by law and in equity.
(d) Administrative Agent may cause the Trustee to foreclose
the lien of this Deed of Trust or to cause the Trustee to sell the Property by
power of sale.
Should Administrative Agent or the Required Lenders elect to have
Trustee foreclose the lien of this Deed of Trust or to sell the Property under
the power of sale herein contained, Administrative Agent shall so notify Trustee
and shall deposit with Trustee this Deed of Trust, the Notes, the Letters of
Credit and such receipts and evidence of expenditures as have been made and
secured hereby. Upon the direction of Administrative Agent, it shall be lawful
for and the duty of Trustee, and Trustee is hereby authorized and empowered, to
expose to sale and to sell the Property or any part thereof, at public auction
for cash, after having first complied with all applicable requirements of the
laws of the State in which the Property is located as may be in effect on the
date of commencement of said proceeding with respect to the exercise of powers
of sale contained in deeds of trust; and upon such sale, Trustee, or any officer
of any court empowered to do so, shall convey title to the purchaser in fee
simple. After retaining from the proceeds of such sale reasonable compensation
for Trustee's services and all expenditures incurred by Trustee, Trustee shall
apply the residue of the proceeds in the manner set forth in Section 4.5 of the
Credit Agreement. Grantor agrees that in the event of sale hereunder,
Administrative Agent, Lenders, or any of them shall be entitled to bid at such
sale. In the event a foreclosure is commenced under the power of sale contained
herein but such foreclosure is not completed, Grantor shall pay all expenses
incurred by Trustee, including attorneys' fees.
To the extent permitted by Applicable Law, the Property may be sold as
a whole or as separate parcels, and such sales may be conducted simultaneously
or otherwise, all as the Trustee, in its
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reasonable discretion, deems to be in the best interest of the parties. To the
extent permitted by Applicable Law, should Trustee elect to sell the Property as
separate parcels, the exercise of the power of sale with respect to one or more
of such parcels shall not extinguish or otherwise affect the right to exercise
the power of sale with respect to the remainder of the Property. Further, in the
event the Property, or any portion thereof, is sold pursuant to any writ of
execution on a judgment obtained by virtue of any Loan Document or pursuant to
any other judicial proceedings under any Loan Document, the Property may be sold
as a whole or as separate parcels and in such manner or order as Administrative
Agent in its reasonable discretion may elect.
To the extent permitted by Applicable Law, any sale or sales made under
or by virtue of this Deed of Trust, whether under the power of sale hereby
granted or under or by virtue of any judicial proceedings, shall operate to
divest all right, title, interest, claim and demand whatsoever, either at law on
in equity, of Grantor in and with respect to the Property sold and shall be a
perpetual bar, both at law and in equity, against Grantor, its successors and
assigns, and against any and all persons claiming the Property, or any part
thereof, through or under Grantor.
(e) Administrative Agent may (and may cause Trustee to)
exercise any or all of the remedies available to a secured party under the Code,
including, but not limited to, selling, leasing or otherwise disposing of any
fixtures and personal property which is encumbered hereby at public sale, with
or without having such fixtures or personal property at the place of sale, and
upon such terms and in such manner as Administrative Agent may determine.
Administrative Agent and Lenders, or any of them, may be a purchaser at any such
sale of such fixtures or personal property.
(f) Administrative Agent may proceed to protect and enforce
Administrative Agent's and Lenders' rights under this Deed of Trust and any
other Loan Document by a suit or suits in equity or at law, whether for the
specific performance of any covenant or agreement, assistance in connection with
the execution of any power granted herein or other appropriate legal or
equitable remedy.
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(g) Administrative Agent may apply to an appropriate court for
the appointment of a receiver of the Rents of the Property, and Administrative
Agent shall be entitled to the appointment of such a receiver as a matter of
right without consideration of the value of the Property as security for the
amounts due Administrative Agent and the Lenders or the solvency of any person
or entity liable for the payment of such amounts.
Section 3.02. Remedies Not Exclusive. Trustee, Administrative Agent and
Lenders, and each of them, shall be entitled to enforce payment and performance
of the Obligations secured hereby and to exercise all rights and powers under
this Deed of Trust or any other Loan Document or any laws now or hereafter
enforced, notwithstanding that some of the Obligations may now or hereafter be
otherwise secured. Neither the acceptance of this Deed of Trust nor its
enforcement, whether by court action or pursuant to the power of sale contained
herein or other powers set forth herein, shall prejudice or in any manner affect
Trustee's, Administrative Agent's or Lenders' right to realize upon or enforce
any other security now or hereafter held by Trustee, Administrative Agent or by
Lenders, it being agreed that Trustee, Administrative Agent and Lenders, and
each of them, shall be entitled to enforce this Deed of Trust and any other
security now or hereafter held by Administrative Agent, Lenders or Trustee in
such order and manner as they or either of them may in their absolute discretion
determine. No remedy herein conferred upon or reserved to Trustee,
Administrative Agent or Lenders is intended to be exclusive of any other remedy
herein or by Applicable Law provided or to preclude any other remedy herein or
by Applicable Law provided or permitted, but each such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity. Every power or remedy given by any of
the Loan Documents to Trustee, Administrative Agent or Lenders, or to which
either of them may be otherwise entitled, may be exercised concurrently or
independently from time to time and as often as may be deemed expedient by
Trustee, Administrative Agent or Lenders.
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Section 3.03. Powers and Rights Not Waived. Any failure by
Administrative Agent or Lenders to insist upon the strict performance by Grantor
of any of the terms and provisions hereof shall not be deemed to be a waiver of
any of the terms and provisions hereof, and Administrative Agent and Lenders,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by Grantor of any and all of the terms and provisions of
this Deed of Trust to be performed by Grantor. Neither Grantor nor any other
person now or hereafter obligated for the payment of the whole or any part of
the sums now or hereafter secured by this Deed of Trust shall be relieved of
such obligation by reason of the failure of Administrative Agent or Lenders to
comply with any request of Grantor, or of any other person so obligated, to take
action to foreclose this Deed of Trust or otherwise enforce any of the
provisions of this Deed of Trust or any obligations secured by this Deed of
Trust, or by reason of the release, regardless of consideration, of the whole or
any part of the security held for the indebtedness secured by this Deed of
Trust, or by reason of any agreement or stipulation between any subsequent owner
or owners of the Property and Administrative Agent extending the time of payment
or modifying the terms of the Obligations or of this Deed of Trust without first
having obtained the consent of Grantor or such other person, and in the latter
event, Grantor and all such other persons shall continue to be liable to make
such payments according to the terms of any such agreement of extension or
modification unless expressly discharged in writing by Administrative Agent.
Regardless of consideration, Administrative Agent may, or at the request of the
Required Lenders shall, release the obligation of any party at any time liable
for any of the Obligations without in any way impairing or affecting the lien
hereof, and Administrative Agent and Lenders may resort for the payment of the
Obligations to any other security therefor held by Administrative Agent and
Lenders in such order and manner as it may elect.
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ARTICLE IV
Miscellaneous
Section 4.01. Notices. Any notice, demand or other communication which,
by any provision of this Deed of Trust, is required or permitted to be given or
served by or to Trustee, Administrative Agent, Lenders or Grantor shall be
conclusively deemed to have been properly given or served by the sending party
and to be effective if made in compliance with Section 13.1 of the Credit
Agreement.
Section 4.02. Severability. To the extent any provision of this Deed of
Trust may be deemed invalid or unenforceable under any Applicable Law, such
provision shall be deemed void and inoperative and shall not form part of this
Deed of Trust, but the remainder of this Deed of Trust shall remain in full
force and effect. The parties hereto specifically declare that they would have
entered into this Deed of Trust if any such void provisions had been omitted
herefrom.
Section 4.03. Governing Law. This Deed of Trust shall be deemed to be a
contract entered into pursuant to the laws of the State of North Carolina and
shall in all respects 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; provided, however, that with respect to the
creation, perfection, priority and enforcement of the lien or interest of this
Deed of Trust, the laws of the State where the Property is located shall apply.
Section 4.04. Stamp Tax Indemnity. Except as may be prohibited by
Applicable Law, if at any time the United States of America, any state thereof
or any governmental subdivision of such state having jurisdiction, shall require
revenue, excise or documentary stamps to be affixed to this Deed of Trust, or
other tax to be paid on or in connection therewith, Grantor will pay the same
with any interest or penalties imposed in connection therewith.
Section 4.05. Credit Agreement. The terms and provisions of the Credit
Agreement are incorporated in this Deed of Trust by reference.
Section 4.06. Successor Trustee. Administrative Agent shall at any time
have the irrevocable right to remove Trustee
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herein named without notice or cause and to appoint a successor thereto by an
instrument in writing, duly acknowledged, in such form as may be required or by
law in the State in which the Property is located as to entitle such written
instrument to be recorded, if required; and in the event of the death,
incapacity or resignation of Trustee herein named, Administrative Agent shall
have the right to appoint a successor thereto by such written instrument, and
any Trustee so appointed shall be vested with title to the Property and shall
possess all the powers, duties and obligations herein conferred on Trustee in
the same manner and to the same extent as if originally named herein as Trustee.
Section 4.07. 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, this
Deed of Trust or any other Loan Document ("Disputes"), between or among parties
to the Notes, this Deed of Trust 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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Section 4.08. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, GRANTOR HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL
WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS DEED OF TRUST, ANY RIGHTS OR OBLIGATION HEREUNDER OR
UNDER ANY OF THE LOAN DOCUMENTS, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. THIS WAIVER IS A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT AND
LENDERS IN MAKING THE EXTENSIONS OF CREDIT.
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IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be
executed, sealed and delivered by its duly authorized representative all as of
the day and year first above written.
"GRANTOR"
CCA PRISON REALTY TRUST,
a Maryland real estate
investment trust [SEAL]
By:_____________________________________
Name:________________________________
Title:_______________________________
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[ADD APPROPRIATE NOTARY CLAUSE]
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145
EXHIBIT A
TO
DEED OF TRUST AND SECURITY AGREEMENT
* * * * * * * * * *
[Description of the real property]
146
EXHIBIT J
to
Credit Agreement dated as of July 18, 1997
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent
FORM OF
ASSIGNMENT OF RENTS, LEASES AND PROFITS
147
ASSIGNMENT OF RENTS, LEASES AND PROFITS
THIS ASSIGNMENT OF RENTS, LEASES AND PROFITS (this
"Assignment") is executed and delivered as of the ____ day of July, 1997, by CCA
PRISON REALTY TRUST, a Maryland real estate investment trust, whose address is
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 ("Assignor"), to
and in favor of FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking
association, as Administrative Agent for Lenders (as hereinafter defined), whose
address is 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, its successors
or assigns ("Administrative Agent");
STATEMENT OF PURPOSE
Pursuant to the terms of that certain Credit Agreement among the
Assignor, Administrative Agent, SouthTrust Bank, N.A., as Co-Agent and the
lenders who are or may become a party to the Credit Agreement (as therein
defined, "Lenders") of even date herewith, as amended, restated or otherwise
modified (the "Credit Agreement"), Lenders have agreed to extend certain credit
facilities to the Borrowers of up to One Hundred Fifty Million Dollars
($150,000,000.00) as evidenced by the Notes executed by Borrowers and payable to
the order of Lenders. All of the defined terms used herein, as indicated by the
initial capitalization thereof, shall have the meanings ascribed to such terms
in the Credit Agreement unless otherwise provided herein. Repayment of Notes and
the Reimbursement Obligation is secured by, among other things, a certain
Deed of Trust and Security Agreement of even date herewith from the Assignor to
Trustee for the ratable benefit of Administrative Agent and Lenders (together
with any future restatements, amendments or modifications thereof, the "Deed
of Trust") which is a first Lien against the Land of the Assignor more
particularly described on EXHIBIT A attached hereto and incorporated herein by
reference.
Lenders, as a condition to making the Extensions of Credit and to
obtain additional security therefor, have required the Assignor to make the
assignment of certain additional property on the terms and conditions contained
herein.
148
NOW THEREFORE, in order to further secure the payment of the
Obligations and in further consideration of the sum of TEN AND 00/l00 DOLLARS
($10.00) in hand paid to Assignor, the receipt and sufficiency of which are
hereby acknowledged, Assignor does hereby sell, assign, transfer and set over
unto Administrative Agent, for the ratable benefit of itself and Lenders, all of
its right, title and interest in and to and under (i) all leases, subleases, and
any other agreements however characterized and whether oral or in writing
pertaining to the occupancy or the use of all or any part of the Property (as
defined in the Deed of Trust) whether now in existence or arising hereafter
including all renewals, extensions and modifications of any of the foregoing
(collectively, the "Leases") and (ii) all income, accounts, cash, rents, issues,
profits, royalties, general intangibles, escrows, reserves, receivables,
deposits, concessions, rebates and other benefits from or pertaining to the
Property or related to the operation thereof, together with any and all other
amounts due or to become to Assignor with respect to the Property including all
payments and fees received or receivable from concessionaires operating on or in
the Property (collectively, the "Rents"). Assignor hereby agrees to execute and
deliver such further assignments of said Leases as Administrative Agent may from
time to time request.
This Assignment is absolute and effective immediately and without
possession; however, Assignor shall have a revocable license to receive, collect
and enjoy the Rents accruing from the Property until an Event of Default has
occurred. Upon the occurrence of an Event of Default, the license shall be
revoked automatically, without need of notice, possession, foreclosure or any
other act or procedure, and all Rents assigned hereby shall thereafter be
payable to Administrative Agent, for the ratable benefit of itself and Lenders.
PROVIDED ALWAYS, however, that if Assignor shall pay unto
Administrative Agent and Lenders the Obligations, and if Assignor shall duly,
promptly and fully perform, discharge, execute, effect, complete, comply with
and abide by each of the agreements, conditions and covenants of the Loan
Documents, then this Assignment and the estates and interests hereby granted and
created shall terminate.
1. REPRESENTATIONS AND WARRANTIES OF ASSIGNOR. In furtherance of the
foregoing assignment, Assignor:
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A. represents and warrants that it is the owner in fee simple
of the Property and has good title to the Leases and Rents hereby assigned and
good right to assign the same, and that no other person, entity, firm or
corporation has any right, title or interest therein; that Assignor has not
previously sold, assigned, transferred, mortgaged or pledged said Leases and
Rents of the Property; and that payment of any of the same has not otherwise
been anticipated, waived, released, discounted, set off or otherwise discharged
or compromised;
B. agrees and warrants that, without the prior written consent
of Administrative Agent, the terms of any and all Leases will not be amended,
altered, modified or changed in a way that could be reasonably expected to have
an adverse effect (as determined by Administrative Agent) on Assignor, nor will
they be surrendered or canceled, nor will any proceedings for dispossession or
eviction of any lessee under said Leases be instituted by Assignor;
C. agrees and warrants that no request will be made of any
lessee to pay any Rent, and no rent will be accepted by Assignor, for more than
one (1) month in advance of the date such rent becomes due and payable under the
terms of any and all Leases, it being agreed by Assignor that rent shall be paid
as provided in said Leases and not otherwise;
D. authorizes Administrative Agent, by and through its
employees or agents or a duly appointed receiver, at its option, after the
occurrence of an Event of Default, to enter upon the Property and to collect, in
the name of Assignor, as its lawful attorney, or in its own name, for the
ratable benefit of itself and Lenders, any Rents accrued but unpaid or in
arrears at the date of such Event of Default, as well as the Rents thereafter
accruing and becoming payable during the period of the continuance of the said
Default or any other Event of Default; and to this end, Assignor further agrees
that it will cooperate with and facilitate, in all reasonable ways,
Administrative Agent's collection of said Rents and will, upon request by
Administrative Agent or the Required Lenders, execute a written notice to each
tenant, occupant or licensee directing said tenant, occupant or licensee to pay
directly to Administrative Agent on behalf of Lenders all Rents due and payable
under said Leases; provided, however, that such notice to said tenant, occupant
or licensee of the effectiveness of this Assignment may be provided without
giving notice to Assignor or requesting Assignor to give such notice or join in
such notice;
E. authorizes Administrative Agent, upon such entry, at its
option, to take over and assume the management, operation and maintenance of the
Property and to perform all acts necessary
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150
and proper and to expend such sums out of the Rents of the Property as in
Administrative Agent's sole discretion may be reasonable or necessary in
connection therewith, in the same manner and to the same extent as Assignor
theretofore might do; Assignor hereby releases all claims against Administrative
Agent and Lenders arising out of such management, operation and maintenance;
F. agrees to execute, upon the request of Administrative
Agent, any and all other instruments requested by Administrative Agent to
effectuate this Assignment or to accomplish any other purpose deemed by
Administrative Agent to be necessary or appropriate in connection with this
Assignment; and
G. agrees and acknowledges that nothing in this Assignment
shall be construed to limit or restrict in any way the rights and powers granted
to Administrative Agent and Lenders in the other Loan Documents; and agrees that
the collection and application of the Rents as described herein shall not
constitute a waiver of any default which might at the time of application or
thereafter exist under any of the other Loan Documents, and the exercise by
Administrative Agent and Lenders, or any of them, of the rights herein provided
shall not prevent Administrative Agent's or Lenders', or any of their, exercise
of any rights provided under any of the other Loan Documents.
2. RIGHTS FOLLOWING DEFAULT BY BORROWERS. Administrative Agent may, and
upon the request of the Required Lenders shall, after the occurrence of an Event
of Default, from time to time, appoint and dismiss such agents or employees as
shall be necessary or reasonable for the collection of the Rents derived from
the Property and for the proper care and operation of the Property, and Assignor
hereby grants to Administrative Agent the authority to give such agents or
employees so appointed full and irrevocable authority on Assignor's behalf to
manage the Property and to do all acts relating to such management, including,
without limitation, the entry into and execution of new leases in the name of
Assignor or otherwise, the alteration or amendment of existing leases, the
authorization to repair or replace any items necessary in order to maintain the
building or buildings and chattels incidental thereto in good and tenantable
condition, and the effectuation of such alterations or improvements as in the
judgment of Administrative Agent may be reasonable or necessary to maintain or
increase the income from the Property. Administrative Agent shall have the sole
control of such agents or employees, whose remuneration shall be paid out of the
Rents as hereinabove provided, at the rate of compensation accepted in the
community wherein the Property is situated.
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3. APPLICATION BY ADMINISTRATIVE AGENT OF NET INCOME FROM THE PROPERTY.
Administrative Agent shall, after payment of all proper charges and expenses
enumerated under Paragraph 2 above, credit the net income received by
Administrative Agent from the Property, by virtue of this Assignment, to any
amounts due and owing to Administrative Agent and Lenders by the Borrowers under
and pursuant to the terms of the Loan Documents in the manner set forth in
Section 4.5 of the Credit Agreement. Administrative Agent shall make a
reasonable effort to collect Rents, reserving, however, within its sole
discretion, the right to determine the method of collection and the extent to
which enforcement of the collection of delinquent Rents shall be prosecuted.
Notwithstanding the foregoing, no such credit shall be given by Administrative
Agent for any sum or sums received from the Rents until the sums collected are
actually received by Administrative Agent at its principal office as stated
above (or at such other place as Administrative Agent shall designate in
writing), and no credit shall be given for any uncollected Rents nor shall
credit be given for any Rents under any order of court or by operation of law
until such amounts are actually received by Administrative Agent at its
principal offices as stated above. The net amount of Rents received by
Administrative Agent hereunder and applied by Administrative Agent to the
amounts due and owing by the Borrowers shall not serve to cure any default under
any of the other Loan Documents, nor shall any amounts received by
Administrative Agent hereunder be in full satisfaction of the Obligations unless
such amounts are sufficient to pay such Obligations in full (including any
prepayment premiums, late payment charges and advancements) in accordance with
the terms of the other Loan Documents.
4. LIMITATION OF LIABILITY. Neither Administrative Agent or Lenders
shall be obligated to perform or discharge any obligation under the Leases
hereby assigned or under or by reason of this Assignment, and Assignor hereby
agrees to indemnify and hold Administrative Agent and Lenders harmless against
any and all liability, loss or damage which Administrative Agent and Lenders, or
any of them, might incur under the Leases or under or by reason of this
Assignment and of and from any and all claims and demands whatsoever which may
be asserted against Administrative Agent and Lenders, or any of them, by reason
of any alleged obligation or undertaking on Administrative Agent's, Lenders' or
any of their part to perform or discharge any of the terms of such Leases,
except for claims and demands arising by reason of Administrative Agent's,
Lenders' or any of their gross negligence or willful misconduct.
5. REINSTATEMENT AFTER DEFAULT. In the event that Borrowers shall, with
the consent of Administrative Agent, reinstate the Obligations completely in
good standing, having
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152
complied with all the terms, covenants and conditions of the Loan Documents,
then, in such event, Administrative Agent or Lenders, as the case may be, shall
return possession of the Property to Assignor, and Assignor shall remain in
possession of the Property unless and until another Event of Default occurs, at
which time Administrative Agent may, or at the request of the Required Lenders
shall, again take possession of the Property under authority of and pursuant to
the terms and provisions of this Assignment.
6. TENANT'S NOTIFICATION OF ASSIGNMENT. Upon request by Administrative
Agent, at any time, Assignor will deliver a written notice to each of the
tenants and lessees of the Property, which notice shall inform such tenants and
lessees of this Assignment and instruct them that upon receipt of notice by them
from Administrative Agent of the existence of an Event of Default, all Rent due
thereafter shall be paid directly to Administrative Agent, for the ratable
benefit of itself and Lenders.
7. SATISFACTION OF DEED OF TRUST; SATISFACTION OF ASSIGNMENT. This
Assignment shall remain in full force and effect as long as the Obligations
remain unpaid in whole or in part. A complete release or satisfaction of the
Deed of Trust shall operate as a complete release or satisfaction of all of
Administrative Agent's and Lenders' rights and interest hereunder.
8. CAPTIONS. The captions set forth at the beginning of the various
paragraphs of this Assignment are for convenience only and shall not be used to
interpret or construe the provisions of this Assignment.
9. MISCELLANEOUS.
A. The provisions of this Assignment shall inure to the
benefit of Administrative Agent and Lenders, and their respective successors and
assigns, and shall be binding upon Assignor, its heirs, personal
representatives, successors and assigns. The creation of rights and powers under
this Assignment in favor of, or available to, Administrative Agent and Lenders,
or any of them, shall, in no way whatsoever, be construed to impose concomitant
duties or obligations on Administrative Agent and Lenders, or any of them, in
favor of Assignor except as expressly set forth herein.
B. This Assignment shall be deemed to be a contract entered
into pursuant to the laws of the State of North Carolina and shall in all
respects be governed by, construed and enforced in accordance with the laws of
the State of North Carolina,
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153
without reference to the conflicts or choice of law principles thereof;
provided, however, that with respect to the creation, perfection priority and
enforcement of this Assignment, the laws of the state where the Property is
located shall apply.
C. 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, this Assignment or any
other Loan Document ("Disputes"), between or among parties to the Notes, this
Assignment 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.
D. TO THE EXTENT PERMITTED BY APPLICABLE LAW, ASSIGNOR HEREBY
IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
ASSIGNMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR UNDER ANY OF THE LOAN
DOCUMENTS, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THIS WAIVER IS A
MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT AND LENDERS IN MAKING THE EXTENSIONS
OF CREDIT.
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154
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed,
sealed and delivered by its duly authorized representative all as of the day and
year first above written.
"ASSIGNOR"
CCA PRISON REALTY TRUST, a Maryland real
estate investment trust
[SEAL]
By:_____________________________________
Name:___________________________________
Title:__________________________________
8
155
[ADD APPROPRIATE NOTARY CLAUSE]
9
156
EXHIBIT A
TO
ASSIGNMENT OF RENTS, LEASES AND PROFITS
BY
CCA PRISON REALTY TRUST
IN FAVOR OF
FIRST UNION NATIONAL BANK OF TENNESSEE, AS ADMINISTRATIVE AGENT
**********
[Description of the real property]
10
157
SCHEDULE 1.1(b)
Revolving
Credit Commitment
Lender Commitment Percentage
------ ----------- ----------
First Union National Bank $30,000,000 20.000000000%
of Tennessee
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
First Union National Bank
Of Tennessee
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SouthTrust Bank, National Association $25,000,000 16.0000000000%
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
AmSouth Bank $20,000,000 13.3333333333%
000 Xxxxx Xxxxxx, #000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
[Credit Agreement]
158
CIBC Inc. $15,000,000 10.0000000000%
Two Paces West
2727 Paces Ferry Road, Ste. 1200
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Comerica Bank $15,000,000 10.0000000000%
0xx Xxxxx XX 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
First Tennessee Bank $10,000,000 6.0000000000%
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Mercantile Bank, National Association $10,000,000 6.0000000000%
000 Xxxxxx Xxxxxx, XXXX 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Union Planters National Bank $10,000,000 6.0000000000%
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
[Credit Agreement]
159
Bank Hapoalim, B.M. $10,000,000 6.0000000000%
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Bank of Scotland $5,000,000 3.3333333333%
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
------------ ------------
$150,000,000 100%
[Credit Agreement]
160
SCHEDULE 6.1(a)
Jurisdictions of Organization and Qualification
(CCA Prison Realty Trust)
Organization: Maryland
Qualification: Tennessee
Kansas
161
SCHEDULE 6.1(b)
Subsidiaries and Capitalization
Subsidiaries: None
Capitalization:
As Adjusted(2)
(dollars in thousands)
Preferred Shares, $0.01 par value, 10,000,000 shares
authorized, no shares issued and outstanding $ -0-
Common Shares, $0.01 par value, 90,000,000 shares
authorized, 1,000 shares issued and outstanding;
18,801,000 shares, as adjusted, issued and
outstanding(1) 188
Additional paid-in capital 361,017
========
Total shareholders' equity 361,205
--------
Total capitalization $361,205
========
(1) Does not include 1,850,000 Common Shares reserved for issuance pursuant to
the Company's Share Incentive Plan or the Company's Non-Employee Trustees'
Plan of which 1,075,000 shares will be outstanding upon consummation of
the Offering.
(2) Includes (i) 1,000 founder's shares, and (ii) 300,000 shares issued to D.
Xxxxxx Xxxxxx, III and Xxxxxxx X. Xxxxxx as a development fee and as
reimbursement for certain expenses incurred in connection with the
promotion and formation of the Company and the consummation of the
offering which are valued based upon the initial public offering price.
162
SCHEDULE 6.1(b)
Environmental Matters
Matters shown on the following reports and all amendments and supplements
thereto:
1. Project: Laredo Processing Center, Laredo, Texas
Date: April, 1997
Prepared By: Resources Consultants
2. Project: Central Arizona Detention Center, Florence, Arizona
Date: April 12, 1997
Prepared By: Continental Envirotech, Inc. and signed by
Xxxx XxxXxxxxxxxx, Director of Operations
3. Project: Mineral Wells, Texas Facility
Date: April, 1997
Prepared By: LCA Environmental, Inc. and executed by Y. Xxxx Xxxxx,
REM and Xxxx X. Xxxxx
4. Project: T. Xxx Xxxxx Correctional Center, Taylor, Texas
Date: May, 1995 ESA, updated April 16, 1997, and May, 1995
Wetlands Study
Prepared By: Update: Rust Environment & Infrastructure, Inc. and
executed by Xxxxxxx X. Xxxx, Project Manager
5. Project: Houston Processing Center, Houston, Texas
Date: April, 1997
Prepared By: Resource Consultants
6. Project: West Tennessee Detention Facility, Mason, Tennessee
Date: April, 1997
Prepared By: Resource Consultants, Inc.
163
7. Project: Bridgeport, Texas Facility, Bridgeport, Texas
Date: April, 1997
Prepared by: LCA Environmental, Inc., executed by Y. Xxxx Xxxxx,
REM and Xxxx X. Xxxxx
8. Project: Correctional Facility, Youngstown, Ohio
Date: April 16, 1997
Prepared by: Resource International Engineering Consultants and
executed by Xxxxxxxx X. Xxxxx, Staff Geologist and
Xxxxxxxxxxx Xxxxxxx, P.E., Director-Geotechnical/
Environmental Engineering
9. Project: CCA Xxxx Detention Center, Eloy, Arizona
Date: April 16, 1997
Prepared by: Continental Envirotech, Inc.
10. Project: Leavenworth Correctional Facility, Leavenworth, Kansas
Date: April 18, 1997
Prepared by: Terracon Environmental, Inc. and executed by Xxxxx X.
Xxxx, Project Geologist and Xxxxxxx X. Xxxxxx, CHMM,
Project Manager
164
SCHEDULE 6.1(I)
ERISA Plans
None.
165
SCHEDULE 6.1(l)
Material Contracts
None.
