EXHIBIT 10.73.3
---------------
THIRD AMENDMENT TO MASTER AGREEMENT
AND OTHER OPERATIVE DOCUMENTS
-----------------------------
THIS THIRD AMENDMENT TO MASTER AGREEMENT AND OTHER OPERATIVE DOCUMENTS is
made as of the ___ day of November, 2001 by and among CORRECTIONAL SERVICES
CORPORATION, a corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company"); each of the Subsidiaries of the Company
that is a signatory hereto or that, pursuant to Section 3.6 of the Master
Agreement (as hereinafter defined), shall become a party hereto as a lessee
(individually, together with the Company in its capacity as a lessee, a "Lessee"
and, collectively the "Lessees"); each of the Subsidiaries of the Company
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereto (individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"); ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership (the "Lessor"); certain financial institutions parties hereto as
lenders (together with any other financial institution that becomes a party
hereto as a lender, collectively referred to as "Lenders" and individually as a
"Lender"); FLEET NATIONAL BANK, a national banking association and successor by
merger to Summit Bank, as syndication agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Syndication Agent"); and
SUNTRUST BANK, NASHVILLE, N.A., a national banking association, as documentation
agent (in such capacity, the "Document Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Company, the Lessees, the Subsidiary Guarantors, the Lessor,
the Lenders, the Syndication Agent and the Documentation Agent entered into a
Master Agreement dated as of August 31, 1999, as amended by a first amendment
thereto dated as of November 10, 2000 and a second amendment thereto dated in or
about August, 2001 (collectively, the "Master Agreement"); and
WHEREAS, the Company has requested the Lessor, the Lenders, the Syndication
Agent and the Documentation Agent to make certain amendments to the Master
Agreement as more fully described herein, and the Lessor, the Lenders, the
Syndication Agent and the Documentation Agent have agreed to do so, subject to
and in accordance with 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 are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Except as otherwise indicated herein, all words and
terms defined in the Appendix A to the Master Agreement shall have the same
meanings when used herein.
2. Amendments to Master Agreement.
(a) The following definition appearing in Appendix A to the Master
Agreement is hereby amended to read in its entirety as follows:
"Applicable Margin" shall mean:
(i) with reference to Advances that are Base Rate Advances or
LIBOR Advances, an amount in excess of the Base Rate or the LIBOR Rate, as
the case may be, determined from time to time in accordance with the table
set forth below. The Applicable Margin shall change on the fifth Business
Day following receipt by the Syndication Agent of a Compliance Certificate
of the Company demonstrating that the ratio of the consolidated Total
Funded Debt of the Company and its Subsidiaries to Adjusted EBITDA as at
the last day of the immediately preceding fiscal quarter of the Company
shall be at a different level in the table below, whereupon the Applicable
Margin shall be reduced or increased to the applicable percentage set forth
in such table. Notwithstanding the foregoing, the Applicable Margin shall
not be reduced at any time during which an Event of Default shall have
occurred and be continuing:
Applicable Margin Applicable Margin
Ratio of Total for Revolving for Revolving
Funded Debt to Credit Loans that Credit Loans that
Level Adjusted EBITDA are Base Rate Loans are LIBOR Loans
----- --------------- ------------------- -----------------
I < 3.5:1 and 2.00% 3.50%
-
> 3.00:1
-
II < 3.00:1 and 1.75% 3.25%
> 2.50:1
-
III < 2.50:1 and 1.50% 3.00%
> 2.00:1
-
IV < 2.00:1 1.25% 2.75%
(b) Section 5.1(j) of the Master Agreement is hereby amended to read
in its entirety as follows:
(j) Total Funded Debt to Adjusted EBITDA Ratio.
The Company will not permit the ratio of (i) the consolidated
Total Funded Debt of the Company and its Subsidiaries as of the last day of
any fiscal quarter of the Company ending during any test period set forth
in the table below, to (ii) Adjusted EBITDA for the period of four
consecutive fiscal quarters ending on the same day, to be greater than the
ratio set forth opposite such test period below:
2
Four Fiscal
Quarters Ending Ratio
--------------- ------
September 30, 2001 3.50:1
December 31, 2001 2.50:1
and thereafter
(c) Section 5.1(l) of the Master Agreement is hereby amended to read
in its entirety as follows:
(l) Consolidated Net Worth.
The Company will not permit its Consolidated Net Worth to be less
than $45,000,000, plus the sum of the following through the date of
determination: (i) 90% of the Company's cumulative, positive (any loss
shall be treated as zero) Consolidated Net Income earned from October 1,
2001 through such date of determination plus, (ii) 100% of the net proceeds
of Equity Issuances from October 1, 2000 through such date of determination
minus (iii) the aggregate amount of Permitted Stock Repurchases made from
October 1, 2001 through such date of determination.
(d) Section 5.1(n) of the Master Agreement is hereby amended to read
in its entirety as follows:
(n) Minimum Fixed Charge Coverage Ratio.
The Company will not permit the Fixed Charge Coverage Ratio to be
less than (i) 1.25 to 1.00 as of September 30, 2001, and (ii) 1.50 to 1.00
at any time thereafter. The parties hereto acknowledge that, due to the
need to position certain documents to be recorded prior to the Initial
Closing Date, the definition of Fixed Charge Coverage Ratio set forth in
Appendix A to such recorded documents is different than the definition
thereof set forth in Appendix A to this Master Agreement; to the extent of
any such inconsistency, the definitions set forth in Appendix A to this
Master Agreement shall control.
(e) Schedule 8.2 of the Master Agreement is hereby deleted and
replaced with Schedule 8.2 attached to this Agreement.
3. Amendments to Other Operative Documents. Appendix A to each of the
Lease, the Loan Agreement, and the Construction Agency Agreement are hereby
amended to incorporate therein the changes to Appendix A to the Master Agreement
effected by paragraph 2(a) of this Agreement.
3
4. Guaranty Reaffirmation. The Company hereby reaffirms all of the terms
and conditions of the Guaranty Agreement and acknowledges and agrees that it has
no defenses, offsets or counterclaims with respect to its obligations
thereunder.
5. Representations and Warranties.
(a) In order to induce the Syndication Agent and the Lenders to enter
into this Agreement and amend the Master Agreement as provided herein, each
Obligor, as to itself, hereby represents and warrants to the other parties
hereto as follows:
(i) All of the representations and warranties of the Obligors set
forth in the Master Agreement are true, complete and correct in all material
respects on and as of the date hereof with the same force and effect as if made
on and as of the date hereof and as if set forth at length herein.
(ii) After giving effect to this Agreement, no Potential Event of
Default or Event of Default presently exists and is continuing on and as of the
date hereof.
(iii) Since the date of the Obligors' most recent financial
statements delivered to the Syndication Agent, no Material Adverse Effect has
occurred, and no event has occurred or failed to occur which has had or is
likely to have a Material Adverse Effect.
(iv) Each Obligor has full power and authority to execute,
deliver and perform any action or step which may be necessary to carry out the
terms of this Agreement and all other agreements, documents and instruments, if
any, executed and delivered by the Obligor to the Syndication Agent and the
Lenders concurrently herewith or in connection herewith (collectively, the
"Amendment Documents"); each Amendment Document to which any of the Obligors is
a party has been duly executed and delivered by such party and is the legal,
valid and binding obligation of such party enforceable in accordance with its
terms, subject to any applicable bankruptcy, insolvency, general equity
principles or other similar laws affecting the enforcement of creditors' rights
generally.
(v) The execution, delivery and performance of the Amendment
Documents will not (i) violate any provision of any existing law, statute, rule,
regulation or ordinance binding upon the Obligors, (ii) conflict with, result in
a breach of, or constitute a default under (A) the certificate of incorporation
or by-laws or other equivalent formation documents of any Obligor, (B) any
order, judgment, award or decree of any court, governmental authority, bureau or
agency, or (C) any mortgage, indenture, material lease, contract or other
material agreement or undertaking to which any Obligor is a party or by which
such party or its properties or assets may be bound, or (iii) result in the
creation or imposition of any lien or other encumbrance upon or with respect to
any property or asset now owned or hereafter acquired by any Obligor, other than
liens in favor of the Syndication Agent for the ratable benefit of the Lenders.
4
(vi) No consent, license, permit, approval or authorization of,
exemption by, notice to, report to, or registration, filing or declaration with
any Person is required in connection with the execution, delivery or performance
by the Obligors of the Amendment Documents or the transactions contemplated
thereby.
(b) The Lessor hereby represents and warrants to the other parties
hereto as follows:
(i) All of the representations and warranties of the Lessor set
forth in the Master Agreement are true, complete and correct in all material
respects on and as of the date hereof with the same force and effect as if made
on and as of the date hereof and as if set forth at length herein.
(ii) Since the date of the Lessor's most recent financial
statements delivered to the Syndication Agent, no Material Adverse Effect has
occurred, and no event has occurred or failed to occur which has had or is
likely to have a Material Adverse Effect.
(iii) The Lessor has full power and authority to execute, deliver
and perform any action or step which may be necessary to carry out the terms of
this Agreement and any other Amendment Document; each Amendment Document to
which the Lessor is a party has been duly executed and delivered by the Lessor
and is the legal, valid and binding obligation of the Lessor enforceable in
accordance with its terms, subject to any applicable bankruptcy, insolvency,
general equity principles or other similar laws affecting the enforcement of
creditors' rights generally.
(iv) The execution, delivery and performance of the Amendment
Documents will not (i) violate any provision of any existing law, statute, rule,
regulation or ordinance binding upon the Lessor, (ii) conflict with, result in a
breach of, or constitute a default under (A) the formation documents of the
Lessor, (B) any order, judgment, award or decree of any court, governmental
authority, bureau or agency, or (C) any mortgage, indenture, material lease,
contract or other material agreement or undertaking to which the Lessor is a
party or by which the Lessor or its properties or assets may be bound, or (iii)
result in the creation or imposition of any lien or other encumbrance upon or
with respect to any property or asset now owned or hereafter acquired by the
Lessor.
(v) No consent, license, permit, approval or authorization of,
exemption by, notice to, report to, or registration, filing or declaration with
any Person is required in connection with the execution, delivery or performance
by the Lessor of the Amendment Documents or the transactions contemplated
thereby.
6. Syndication Agent's Costs. The Company shall on demand reimburse the
Syndication Agent for all out-of-pocket costs, including legal fees and
expenses, incurred by the Syndication Agent in connection with this Agreement
and the other Amendment Documents and the transactions referenced herein. In the
event the Company shall fail to pay any such invoice within 10 days, the Company
irrevocably authorizes the Syndication Agent to charge the Company's account(s)
with the Syndication in the amount of such out-of-pocket costs.
5
7. No Change. Except as expressly set forth herein or modified hereby,
all of the terms and provisions of the Master Agreement and the other Operative
Documents are hereby reaffirmed in their entirety shall continue in full force
and effect.
8. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which
shall constitute one and the same instrument. This Agreement shall not be
binding upon any party until all parties hereto have executed this Agreement and
delivered it to the Syndication Agent.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized
representatives to execute and deliver this Agreement as of the day and year
first above written.
CORRECTIONAL SERVICES CORPORATION,
a Delaware corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL, INC.
a Maryland corporation
By:_________________________________
Name:
Title:
FF&E, INC., a New Jersey corporation
By:_________________________________
Name:
Title:
(Signatures continued on next page)
6
YOUTH SERVICES INTERNATIONAL
OF NORTHERN IOWA, INC., an
Iowa corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL
HOLDINGS, INC., a Delaware corporation
By:_________________________________
Name:
Title:
(Signatures continued on next page)
7
YOUTH SERVICES INTERNATIONAL
REAL PROPERTY PARTNERSHIP, LLP, a
Maryland limited liability partnership
By:_________________________________
Name:
Title: of Both Partners
YOUTH SERVICES INTERNATIONAL
OF ILLINOIS, INC., a Maryland
corporation
By:_________________________________
Name:
Title:
(Signatures continued on next page)
8
YOUTH SERVICES INTERNATIONAL
OF MINNESOTA, INC., a Maryland
corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL
OF SOUTH DAKOTA, INC., a South Dakota
corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL
OF TEXAS, INC., a Texas corporation
By:_________________________________
Name:
Title:
YSI OF CENTRAL IOWA, INC.,
an Iowa corporation
By:_________________________________
Name:
Title:
(Signatures continued on next page)
9
YOUTH SERVICES INTERNATIONAL
OF IOWA, INC., a Maryland
corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL
OF MICHIGAN, INC., a Michigan
corporation
By:_________________________________
Name:
Title:
YOUTH SERVICES INTERNATIONAL
OF MISSOURI, INC., a Missouri
corporation
By:_________________________________
Name:
Title:
(Signatures continued on next page)
10
CSC MANAGEMENT DE PUERTO RICO, INC.,
a Puerto Rico corporation
By:_________________________________
Name:
Title:
FLEET NATIONAL BANK,
as the Syndication Agent and a Lender
By:_________________________________
Name:
Title:
ATLANTIC FINANCIAL GROUP, LTD.,
as Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
By:___________________________
Name:
Title:
(Signatures continued on next page)
11
SUNTRUST BANK, NASHVILLE, N.A., as
the Documentation Agent and a Lender
By:_________________________________
Name:
Title:
12
SCHEDULE 8.2
ADDRESSES FOR NOTICES
Company: Correctional Services Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxx 00000
Attn: Skip Xxxxxx
with a copy to:
Xxxxx & Lardner
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
Lessor: Atlantic Financial Group, Ltd
c/o Grogan & Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxxxxx
Lender and Documentation Agent: SunTrust Bank, Nashville, N.A.
000 Xxxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, III
with a copy to:
SunTrust Equitable Securities Corporation
000 Xxxxxxxxx Xxxxxx, 00xx Floor
Mail Code 3943
Xxxxxxx, Xxxxxxx 00000
Attn: Mr. R. Xxxx Xxxxxxx
Lender and Syndication Agent: Fleet National Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Heal
13
