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EXHIBIT 10.33
CREDIT AGREEMENT
Dated as of January 1, 1999
among
PRISON REALTY CORPORATION,
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A.,
as Administrative Agent
AND
XXXXXX COMMERCIAL PAPER INC.,
as Documentation Agent
AND
THE BANK OF NOVA SCOTIA,
as Syndication Agent
AND
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXX BROTHERS INC.
THE BANK OF NOVA SCOTIA
as Co-Arrangers and Co-Book Managers
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS............................................................................................1
1.1 Definitions..........................................................................................1
1.2 Computation of Time Periods.........................................................................31
1.3 Accounting Terms....................................................................................31
SECTION 2 CREDIT FACILITIES......................................................................................31
2.1 Revolving Loans.....................................................................................31
2.2 Letter of Credit Subfacility........................................................................33
2.3 Swingline Loan Subfacility..........................................................................38
2.4 Term Loan...........................................................................................40
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................42
3.1 Default Rate........................................................................................42
3.2 Extension and Conversion............................................................................43
3.3 Prepayments.........................................................................................43
3.4 Termination and Reduction of Revolving Committed Amount.............................................45
3.5 Fees................................................................................................46
3.6 Capital Adequacy....................................................................................47
3.7 Limitation on Eurodollar Loans......................................................................47
3.8 Illegality..........................................................................................48
3.9 Requirements of Law.................................................................................48
3.10 Treatment of Affected Loans........................................................................49
3.11 Taxes..............................................................................................50
3.12 Compensation.......................................................................................52
3.13 Pro Rata Treatment.................................................................................52
3.14 Sharing of Payments................................................................................53
3.15 Payments, Computations, Etc........................................................................54
3.16 Evidence of Debt...................................................................................56
SECTION 4 GUARANTY..............................................................................................56
4.1 The Guaranty........................................................................................56
4.2 Obligations Unconditional...........................................................................57
4.3 Reinstatement.......................................................................................58
4.4 Certain Additional Waivers..........................................................................58
4.5 Remedies............................................................................................59
4.6 Rights of Contribution..............................................................................59
4.7 Guarantee of Payment; Continuing Guarantee..........................................................60
SECTION 5 CONDITIONS............................................................................................60
5.1 Closing Conditions..................................................................................60
5.2 Conditions to all Extensions of Credit..............................................................66
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SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................67
6.1 Financial Condition.................................................................................67
6.2 No Material Change..................................................................................68
6.3 Organization and Good Standing......................................................................68
6.4 Power; Authorization; Enforceable Obligations.......................................................68
6.5 No Conflicts........................................................................................69
6.6 No Default..........................................................................................69
6.7 Ownership...........................................................................................69
6.8 Indebtedness........................................................................................69
6.9 Litigation..........................................................................................69
6.10 Taxes..............................................................................................69
6.11 Compliance with Law................................................................................70
6.12 ERISA..............................................................................................70
6.13 Subsidiaries.......................................................................................71
6.14 Governmental Regulations, Etc......................................................................72
6.15 Purpose of Loans and Letters of Credit.............................................................73
6.16 Environmental Matters..............................................................................73
6.17 Intellectual Property..............................................................................74
6.18 Solvency...........................................................................................74
6.19 Investments........................................................................................74
6.20 Location of Collateral.............................................................................74
6.21 Disclosure.........................................................................................74
6.22 No Burdensome Restrictions.........................................................................75
6.23 Labor Matters......................................................................................75
6.24 Year 2000 Compliance...............................................................................75
6.25 First Priority Lien................................................................................75
6.26 Leases.............................................................................................75
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................76
7.1 Information Covenants...............................................................................76
7.2 Preservation of Existence and Franchises............................................................80
7.3 Books and Records...................................................................................80
7.4 Compliance with Law.................................................................................80
7.5 Payment of Taxes and Other Indebtedness.............................................................80
7.6 Insurance...........................................................................................80
7.7 Maintenance of Property.............................................................................81
7.8 Performance of Obligations..........................................................................82
7.9 Use of Proceeds.....................................................................................82
7.10 Audits/Inspections.................................................................................82
7.11 Financial Covenants................................................................................82
7.12 Additional Credit Parties..........................................................................83
7.13 Environmental Laws.................................................................................83
7.14 Collateral.........................................................................................84
7.15 Leases.............................................................................................84
7.16 Year 2000 Compliance...............................................................................85
7.17 Appraisals.........................................................................................85
7.18 Hedging Agreements.................................................................................85
7.19 Environmental Site Assessments.....................................................................86
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SECTION 8 NEGATIVE COVENANTS....................................................................................86
8.1 Indebtedness........................................................................................86
8.2 Liens...............................................................................................87
8.3 Nature of Business..................................................................................87
8.4 Consolidation, Merger, Dissolution, etc.............................................................87
8.5 Asset Dispositions..................................................................................87
8.6 Investments.........................................................................................88
8.7 Restricted Payments.................................................................................88
8.8 Prepayments of Indebtedness, etc....................................................................89
8.9 Transactions with Affiliates........................................................................89
8.10 Fiscal Year; Organizational Documents..............................................................89
8.11 Limitation on Restricted Actions...................................................................89
8.12 Ownership of Subsidiaries..........................................................................90
8.13 Sale Leasebacks....................................................................................90
8.14 No Further Negative Pledges........................................................................90
8.15 Master Lease.......................................................................................90
SECTION 9 EVENTS OF DEFAULT.....................................................................................91
9.1 Events of Default...................................................................................91
9.2 Acceleration; Remedies..............................................................................94
SECTION 10 AGENCY PROVISIONS....................................................................................95
10.1 Appointment, Powers and Immunities.................................................................95
10.2 Reliance by Administrative Agent...................................................................95
10.3 Defaults...........................................................................................96
10.4 Rights as a Lender.................................................................................96
10.5 Indemnification....................................................................................97
10.6 Non-Reliance on Agents and Other Lenders...........................................................97
10.7 Successor Administrative Agent.....................................................................97
SECTION 11 MISCELLANEOUS........................................................................................98
11.1 Notices............................................................................................98
11.2 Right of Set-Off; Adjustments......................................................................99
11.3 Benefit of Agreement..............................................................................100
11.4 No Waiver; Remedies Cumulative....................................................................102
11.5 Expenses; Indemnification.........................................................................102
11.6 Amendments, Waivers and Consents..................................................................103
11.7 Counterparts......................................................................................104
11.8 Headings..........................................................................................104
11.9 Survival..........................................................................................105
11.10 Governing Law; Submission to Jurisdiction; Venue.................................................105
11.11 Severability.....................................................................................106
11.12 Entirety.........................................................................................106
11.13 Binding Effect; Termination......................................................................106
11.14 Confidentiality..................................................................................106
11.15 Conflict.........................................................................................107
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SCHEDULES
Schedule 1.1(a) Borrowing Base Properties
Schedule 1.1(b) Investments
Schedule 1.1(c) Liens
Schedules 1.1(d) Property Valuation
Schedule 2.1(a) Lenders
Schedule 5.1(g)(i) Mortgaged Properties
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Real Property Locations
Schedule 6.20(b) Personal Property Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places of Business
Schedule 7.6 Insurance
Schedule 7.19 Environmental Assessments
Schedule 8.1 Indebtedness
Schedule 9.1(o) Form of Management Opco Letter
Schedule 10.1(b) Form of Standstill Agreement
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(f) Form of Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.1(d) Form of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of January 1, 1999 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among PRISON REALTY CORPORATION, a Maryland corporation (the
"Borrower"), the Subsidiary Guarantors (as defined herein), the Lenders (as
defined herein), NATIONSBANK, N.A., as Administrative Agent for the Lenders (in
such capacity, the "Administrative Agent"), XXXXXX COMMERCIAL PAPER INC., as
Documentation Agent (in such capacity, the "Documentation Agent") and THE BANK
OF NOVA SCOTIA, as Syndication Agent (in such capacity, the "Syndication
Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$650,000,000 credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Cash Flow" means, with respect to any Real Property,
as of the end of each fiscal quarter of the Consolidated Parties for
the fiscal quarter ending on such date, the lesser of:
(a) the sum of (i) cash lease payments received with
respect to such Real Property for such period under all leases
that require the lessee to pay all utilities, insurance and
property tax costs ("Gross Lease Revenues") less (ii) a
capital reserve
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equal to the greater of (A) actual capital expenditures for
such period, with respect to such Real Property and (B) four
percent (4%) of Gross Lease Revenues for such period less
(iii) a management fee equal to the greater of (A) actual
management fees paid with respect to such Real Property during
such period and (B) four percent (4%) of Gross Lease Revenues
for such period, all as determined in accordance with GAAP,
and
(b) the sum of (i) operating income for such period
less (ii) non-cash operating income for such period after
giving effect to the deduction resulting from the
Straight-Lining of Rents less (iii) real estate taxes for such
period less (iv) property insurance premiums for such period
less (v) ground lease payments made with respect to such Real
Property for such period less (vi) a capital reserve equal to
the greater of (A) actual capital expenditures for such
period, and (B) four percent (4%) of Gross Lease Revenues for
such period, less (vii) a management fee equal to the greater
of (A) actual management fees paid with respect to such Real
Property during such period and (B) four percent (4%) of Gross
Lease Revenues for such period, all as determined in
accordance with GAAP.
Notwithstanding the foregoing, for purposes of calculating the
Borrowing Base Value of the Borrowing Base Properties on the Closing
Date, Adjusted Cash Flow of each Borrowing Base Property shall be based
on the projections of the Borrower in a form satisfactory to the
Lenders for the fiscal quarter subsequent to the Closing Date for those
components of Adjusted Cash Flow of such Borrowing Base Property.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means NationsBank, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attn:
Agency Services, or such other address as may be identified by written
notice from the Administrative Agent to the Borrower.
"Aggregate Committed Amount" means the aggregate of the
Revolving Committed Amount and the Term Loan Committed Amount.
"Administrative Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
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"Administrative Agent's Fee Letter" means that certain letter
agreement, dated as of October 30, 1998, between the Administrative
Agent and the Borrower, as amended, modified, restated or supplemented
from time to time.
"Administrative Agent's Fees" shall have the meaning assigned
to such term in Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower
by written notice as the office by which its Eurodollar Loans are made
and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b), or the applicable rate of the Standby Letter of Credit Fee for
any day for purposes of Section 3.5(c)(i), the appropriate applicable
percentage set forth below opposite the applicable Senior Debt Rating
then in effect as of the most recent Ratings Date. The Applicable
Percentage shall be determined based on the Senior Debt Rating;
provided that (a) for the first six (6) months following the Closing
Date the Applicable Percentages shall be based on Pricing Level V
(regardless of whether a Senior Debt Rating has been issued), (b) if
the Borrower shall not have a rating for its Senior Debt by S&P and
Xxxxx'x, then the Applicable Percentages shall be based on Pricing
Level VI and (c) if the Borrower shall have a split Senior Debt Rating
the lower of the two ratings shall apply.
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Applicable Percentage for Revolving Loans
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Applicable Applicable Percentage
Percentage for Standby Letter of
Pricing S&P Rating Xxxxx'x Eurodollar Base Rate for Unused Credit
Level Rating Loans Loans Fee Fee
---------------------------------------------------------------------------------------------------------------
I >BBB+ >Baa1 1.375% .25% .50% 1.375%
- -
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II >BBB >Baa2 1.50% .25% .50% 1.50%
- -
---------------------------------------------------------------------------------------------------------------
III >BBB- >Baa3 1.75% .25% .55% 1.75%
- -
---------------------------------------------------------------------------------------------------------------
IV >BB+ >Ba1 2.25% .75% .620% 2.25%
- -
---------------------------------------------------------------------------------------------------------------
V >BB >Ba2 2.50% 1.0% .70% 2.50%
- -
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