Exhibit 10.74.2
$19,000,000.00
AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
originally dated as of October 30, 2002
by and among
CORRECTIONAL SERVICES CORPORATION
CSC MANAGEMENT DE PUERTO RICO INC.
YOUTH SERVICES INTERNATIONAL HOLDINGS, INC.
youth services international real property partnership, llp
YOUTH SERVICES INTERNATIONAL, INC.
YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC.
YOUTH SERVICES INTERNATIONAL OF SOUTH DAKOTA, INC.
YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC.
YOUTH SERVICES INTERNATIONAL OF TEXAS, INC.
YOUTH SERVICES INTERNATIONAL OF ILLINOIS, INC.
YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC.
and
GENERAL ELECTRIC CAPITAL CORPORATION
Amended as of May 15th, 2003
AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
made as of this 15th day of May, 2003, by and among CORRECTIONAL SERVICES
CORPORATION, a Delaware corporation, CSC MANAGEMENT DE PUERTO RICO INC., a
Puerto Rico corporation, YOUTH SERVICES INTERNATIONAL HOLDINGS, INC., a Delaware
corporation, YOUTH SERVICES INTERNATIONAL REAL PROPERTY PARTNERSHIP, LLP, A
Maryland limited liability partnership, YOUTH SERVICES INTERNATIONAL, INC., a
Maryland corporation, YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC., an
Iowa corporation, YOUTH SERVICES INTERNATIONAL OF SOUTH DAKOTA, INC., a South
Dakota corporation, YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC., a Missouri
corporation, YOUTH SERVICES INTERNATIONAL OF TEXAS, INC., a Texas corporation,
YOUTH SERVICES INTERNATIONAL OF ILLINOIS, INC., a Maryland corporation, and
YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC., a Michigan corporation
(collectively, "Borrower"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation ("Lender").
RECITALS
A. Pursuant to that certain Loan and Security Agreement dated as of October
30, 2002 by and between Borrower and Lender (as amended, modified and restated
from time to time, the "Loan Agreement"), the parties have established certain
financing arrangements that allow Borrower to borrow funds from Lender in
accordance with the terms and conditions set forth in the Loan Agreement.
B. The parties now desire to amend the Loan Agreement in accordance with
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises set forth above, the terms
and conditions contained in this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender and Borrower have agreed to the following amendments to the Loan
Agreement. Capitalized terms used but not defined in this Amendment shall have
the meanings that are set forth in the Loan Agreement.
1. Amendment to Section 1.17. Clause (g) of Section 1.17 of the Loan
Agreement is hereby amended by deleting the existing clause (g) and by inserting
in lieu thereof the following new clause (g):
(g) any non-cash, non-recurring charges related to the discontinuation of
operations at a Facility or any loss contract reserves for a Facility, to
the extent either is reflected as an expense in determining consolidated
net income,
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2. Amendment to Section 1.40. Section 1.40 of the Loan Agreement is hereby
amended by deleting the first (1/st/) sentence thereof and by inserting in lieu
thereof the following sentence:
"Minimum Net Worth" shall mean Tangible Net Worth (defined below) equal to
(i) $33,200,000 plus (ii) 75% of cumulative net income, on a consolidated
basis, from July 1, 2002 through the measurement date.
3. Amendment to Section 6.33(b). Clause (i) of Section 6.33(b) of the Loan
Agreement is hereby amended by deleting the existing clause (i) thereof and by
inserting in lieu thereof the following new clause (i):
(i) Borrower shall maintain minimum quarterly EBITDA equal to at least
the following amounts for each of the following calendar quarters:
Quarter Ending Minimum EBITDA
December 31, 2002 $2,438,000
March 31, 2003 2,000,000
June 30, 2003 1,690,000
September 30, 2003 2,100,000
December 31, 2003 2,100,000
March 31, 2004 2,000,000
June 30, 2004 2,200,000
September 30, 2004 2,200,000
December 31, 2004 2,400,000
March 31, 2005 2,400,000
June 30, 2005 2,400,000
4. Fee. In consideration for this Amendment, Borrower shall pay a fee equal
to $8,000, which amount shall be added to the balance of the Revolving Credit
Loans on the date hereof.
5. Confirmation of Representations and Warranties. Borrower hereby (a)
confirms that all of the representations and warranties set forth in Article IV
of the Loan Agreement are true and correct, and (b) specifically represents and
warrants to Lender that it has good and marketable title to all of its
respective Collateral, free and clear of any lien or security interest in favor
of any other person or entity.
6. Updated Schedules. As a condition precedent to Lender's agreement to
enter into this Amendment, and in order for this Amendment to be effective,
Borrower shall revise, update and deliver to Lender all Schedules to the Loan
Agreement to (a) reflect updated and
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accurate information with respect to Borrower, and (b) to update all other
information as necessary to make the Schedules previously delivered correct.
Borrower hereby represents and warrants that the information set forth on the
attached Schedules is true and correct as of the date of this Amendment. The
attached Schedules are hereby incorporated into the Loan Agreement as if
originally set forth therein.
7. Costs and Expenses. Borrower agrees to pay all costs and expenses
incurred by Lender in connection with this Amendment, including legal fees of
Lender's in-house counsel in the amount of $2,000, which amount shall be added
to the balance of the Revolving Credit Loans on the date hereof.
8. Enforceability. This Amendment constitutes the legal, valid and binding
obligation of each Borrower and is enforceable against each such Borrower in
accordance with its terms.
9. Reference to the Effect on the Loan Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
similar import shall mean and be a reference to the Loan Agreement as amended by
this Amendment.
(b) Except as specifically amended above, the Loan Agreement and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided in this Amendment, operate as a waiver of any
right, power or remedy of Lender, nor constitute a waiver of any provision of
the Loan Agreement, or any other documents, instruments and agreements executed
or delivered in connection with the Loan Agreement.
(d) This Amendment (together with any other document executed in
connection herewith) is not intended to be, nor shall it be construed as, a
novation of the Loan Agreement.
10. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Maryland.
11. Headings. Section headings in this Amendment are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
12. Counterparts. This Amendment may be executed in counterparts, and such
counterparts taken together shall be deemed to constitute one and the same
instrument.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, intending to be legally bound, the parties have caused
this Amendment to be executed as of the date first written above.
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
a Delaware corporation
By: /s/ J. Xxxxxxx Xxxxxx
---------------------------------------
Name: J. Xxxxxxx Xxxxxx
Title: Vice President
BORROWER:
CORRECTIONAL SERVICES CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
CSC MANAGEMENT DE PUERTO RICO INC.
a Puerto Rico corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL HOLDINGS,
INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
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YOUTH SERVICES INTERNATIONAL REAL PROPERTY
PARTNERSHIP, LLP
a Maryland limited liability partnership
By: Youth Services International, Inc.
a Maryland corporation
its Managing Partner
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL, INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL OF
NORTHERN IOWA, INC.
an Iowa corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL OF SOUTH
DAKOTA, INC.
a South Dakota corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
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YOUTH SERVICES INTERNATIONAL OF
MISSOURI, INC.
a Missouri corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL OF TEXAS,
INC.
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL OF ILLINOIS,
INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
YOUTH SERVICES INTERNATIONAL OF MICHIGAN,
INC.
a Michigan corporation
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. VP/CFO
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LIST OF SCHEDULES
Schedule 1.41 - Mortgages
Schedule 1.45 - Permitted Liens
Schedule 3.6 - Officers with Power of Attorney
Schedule 4.1 - Subsidiaries
Schedule 4.2 - State of Organization
Schedule 4.5 - Litigation
Schedule 4.7 - Tax Identification Numbers; Fiscal Years
Schedule 4.9 - Exceptions to Ownership
Schedule 4.10 - Tax Liability
Schedule 4.14 - Environmental Matters
Schedule 4.15 - Places of Business; Record Owner; Chief Executive Office
Schedule 4.16 - Intellectual Property
Schedule 4.17 - Capitalization; Ownership
Schedule 4.19 - Borrowings and Guarantees
Schedule 4.20 - Business Interruptions
Schedule 4.21 - Trade Names
Schedule 4.22 - Joint Ventures
Schedule 4.27 - Funds from Restricted Grants
Schedule 4.29 - Assignment of Claims Laws
Schedule 4.30 - Unrecorded Leases
Schedule 4.35 - Unrecorded Contracts
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Schedule 4.42 - Other Liens
Schedule 4.43 - Agreements to Transfer Title
Schedule 6.7 - Insurance
Schedule 6.24 - Post-Closing Obligations
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