AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment") dated as of March 31, 1999, to
the Credit Agreement referenced below, is by and among CORRECTIONAL SERVICES
CORPORATION, a Delaware corporation, the subsidiaries and affiliates
identified herein, the lenders identified herein, and NATIONSBANK, N.A., as
Administrative Agent. Terms used but not otherwise defined shall have the
meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $10 million credit facility has been established in favor of
CORRECTIONAL SERVICES CORPORATION, a Delaware corporation (the "Borrower"),
pursuant to the terms of that Credit Agreement dated as of March 30, 1998 (as
amended and modified, the "Credit Agreement") among the Borrower, the
Guarantors and Lenders identified therein, and NationsBank, N.A., as
Administrative Agent;
WHEREAS, the Credit Agreement has been previously amended by that
certain Amendment No. 1 to Credit Agreement dated as of October 16, 1998 (the
"First Amendment") among the Borrower, the Guarantors, the Lenders and the
Administrative Agent;
WHEREAS, in connection with the proposed merger transaction between the
Borrower and Youth Services International, Inc., the Borrower has requested
certain additional modifications to the Credit Agreement;
WHEREAS, certain of the requested modifications require the unanimous
consent of the Lenders;
WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Section 1.1 shall be amended to modify the following defined terms
as follows:
"Aggregate Revolving Committed Amount" means, (i) during the
Interim Period, TWENTY-SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($27,500,000), and (ii) after the Interim Period, TEN MILLION DOLLARS
($10,000,000); provided, in the event Borrower has received at least
$20,000,000 in proceeds from new Subordinated Debt during the Interim Period,
the term Aggregate Revolving Committed Amount after the Interim Period means
TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($12,500,000).
"Borrowing Base" means eighty-five percent (85%) of Eligible
Receivables for the Consolidated Group.
"Consolidated Current Liabilities" means, as of any date for the
Consolidated Group, current liabilities as determined in accordance with GAAP,
exclusive of those certain 7% Convertible Subordinated Debentures
("Debentures") issued by Youth Services International, Inc. ("YSI") due
2006 issued under an Indenture dated as of October 15, 1996 (the
"Indenture") between YSI and The Chase Manhattan Bank, as Trustee, but only
to the extent that such Debentures are subject to a letter agreement dated on
or about November 23, 1998 between YSI and the holder of such Debentures
whereby the holder of such Debenture has agreed, among other things, not to
surrender any of the Debentures, deliver a redemption notice or take any other
action to exercise any rights to require YSI to redeem the Debentures on the
Holder Redemption Date, as defined in the Indenture, as a result of the
contemplated merger transaction between YSI and the Borrower.
"Consolidated EBITDA" means for any period for the Consolidated
Group, the sum of Consolidated Net Income plus Consolidated Interest Expense
plus all provisions for any Federal, state or other domestic and foreign
income taxes plus depreciation and amortization minus interest income minus
any current period cash expenditures related to the costs of operating the
facilities located in Fort Worth, Texas and New York, New York, to the extent
such costs are not included in current period expenses (such cash expenditures
to include rental expense, real estate taxes, insurance costs, closure costs
and other related costs), in each case on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for purposes
hereof extraordinary gains and losses and related tax effects thereon. Except
as otherwise expressly provided, the applicable period shall be for the four
consecutive fiscal quarters ending as of the date of determination.
Notwithstanding the foregoing, any determination of Consolidated EBITDA shall
be exclusive of (i) the following charges related to the merger transaction
between Borrower and Youth Services International, Inc. ("YSI"), not to
exceed the following amounts:
Write off of redundant assets and excess capacity $ 3,000,000
Personnel costs 2,585,000
Cancellation of contractual obligations 800,000
Financial advisory fees 1,700,000
Legal and accounting services 2,000,000
Integration Costs (not included above):
Write off debt issuance costs 1,400,000
Computer integration costs 1,500,000
Travel/printing/filing fees/marketing materials 1,250,000
Merger/Litigation 500,000
YSI Pooling of Interest 306,000
YSI Sales Tax Payments 271,000
YSI College Station Facility Closure Costs 2,327,000
-----------
Total $17,639,000
-----------
-----------
and (ii) the effect of Borrower's adoption of FASB SOP 98-5 in an amount not
to exceed $18,000,000.
"Interim Period" shall mean the period from the date of this
Amendment until the earlier of (i) the date on which Borrower has received at
least $20,000,000 in proceeds from new Subordinated Debt, or (ii) June 15,
1999.
2. As of the effective date of this Amendment, the financial covenant
set forth in Section 7.9(a) relating to Consolidated Net Worth is amended and
modified to read as follows:
"(a) Consolidated Net Worth. As of the end of each fiscal
quarter, Consolidated Net Worth shall be not less than the sum of $38,000,000
plus on the last day of each fiscal quarter (commencing with the fiscal
quarter ending December 31, 1997), ninety percent (90%) of Consolidated Net
Income for the fiscal quarter then ended, such increases to be cumulative and
without deductions for losses, if any, plus one hundred percent (100%) of the
net proceeds from Equity Transactions occurring after the Closing Date."
3. As of the effective date of this Amendment, the following is added
at the end of Section 11.6 is hereby amended and modified to read as follows:
11.6 Amendments, Waivers and Consents.
Subject to the last paragraph of this Section 11.6, neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or thereof
may be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Lenders and the Borrower, provided,
however, that:
(a) without the consent of each Lender affected thereby,
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
increase in interest rates after the occurrence of an Event of
Default or on account of a failure to deliver financial statements
on a timely basis) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or any sale of assets permitted under Section 8.4,
release the Borrower or substantially all of the other Credit
Parties from its or their obligations under the Credit Documents or
release all or substantially all of the collateral securing the
obligations hereunder,
(vi) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(vii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(viii) consent to the assignment or transfer by the Borrower
(or another Credit Party) of any of its rights and obligations under
(or in respect of) the Credit Documents except as permitted thereby;
(b) without the consent of the Administrative Agent, no provision
of Section 10 may be amended;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that affects
the Loans, and each Lender acknowledges that the provisions of Section 1126(c)
of the Bankruptcy Code supersedes the unanimous consent provisions set forth
herein and (y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency proceeding.
Notwithstanding anything in this Section 11.6 or in any other Credit
Document to the contrary, so long as Summit Bank and NationsBank, N.A. are the
only Lenders, neither this Credit Agreement nor any other Credit Document nor
any of the terms hereof or thereof may be amended, changed, waived, discharged
or terminated unless such amendment, change, waiver, discharge or termination
is in writing entered into by, or approved in writing by, both Summit Bank and
NationsBank, N.A."
4. Schedule 2.1(a) of the Credit Agreement is hereby amended and
restated in its entirety to read as Schedule 2.1(a) attached hereto.
5. In the event that the Borrower has not received at least
$20,000,000 in proceeds from new Subordinated Debt during the Interim Period,
all outstanding Obligations in excess of the lesser of $10,000,000 or the
Borrowing Base, together with any interest thereon, shall be due and payable
in full on the first Business Day after the end of the Interim Period.
6. Each of the Lenders hereby waives any Default or Event of Default
arising solely from a breach of any of the covenants of the Borrower set forth
in Section 8.4 of the Credit Agreement as a result of the consummation of the
contemplated merger transaction between the Borrower and Youth Services
International, Inc.
7. This Amendment shall be effective upon the execution of this
Amendment by the Credit Parties and the Lenders.
8. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including without limitation the First Amendment and all
Schedules and Exhibits) shall remain in full force and effect.
9. The Borrower agree to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including without limitation the reasonable fees
and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC.
10. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
11. This Amendment shall be deemed to be a contract made under, and
for all purposes shall be construed in accordance with the laws of the State
of Florida.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: CORRECTIONAL SERVICES CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
GUARANTORS: ESMOR NEW JERSEY, INC.,
a New Jersey corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-In-Fact
CSC MANAGEMENT DE PUERTO RICO, INC.,
a Puerto Rico corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Director
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as
Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
SUMMIT BANK, as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Schedule 2.1(a)
Schedule of Lenders and Commitments
(During the Interim Period)
Revolving Revolving LOC
Lender Committed Amount Commitment Percentage Committed Amount
------ --------------- --------------------- ----------------
NationsBank, N.A. $21,388,895.00 77.7778% $777,777.78
Summit Bank $6,111,105.00 22.2222% $222,222.22
(After the Interim Period if Borrower does not receive at least $20,000,000
in proceeds from new Subordinated Debt)
Revolving Revolving LOC
Lender Committed Amount Commitment Percentage Committed Amount
------ --------------- --------------------- ----------------
NationsBank, N.A. $7,777,777.78 77.7778% $777,777.78
Summit Bank $2,222,222.22 22.2222% $222,222.22
(After the Interim period, provided Borrower has received proceeds of at least
$20,000,000 from new Subordinated Debt)
Revolving Revolving LOC
Lender Committed Amount Commitment Percentage Committed Amount
------ --------------- --------------------- ----------------
NationsBank, N.A. $9,722,225.00 77.7778% $777,777.78
Summit Bank $2,777,775.00 22.2222% $222,222.22
AMENDMENT NO. 2 TO THE PARTICIPATION AGREEMENT,
THE CREDIT AGREEMENT, THE TRUST AGREEMENT
AND OTHER OPERATIVE AGREEMENTS
THIS AMENDMENT NO. 2 (this "Amendment") dated as of March 31, 1999, is
by and among CORRECTIONAL SERVICES CORPORATION, a Delaware corporation (the
"Lessee" or the "Construction Agent"); the various parties listed on the
signature pages hereto as guarantors (subject to the definition of Guarantors
in Appendix A to the Participation Agreement referenced below, individually, a
"Guarantor" and collectively, the "Guarantors"); FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually but
solely as the Owner Trustee under the CSC Trust 1997-1 (the "Owner Trustee"
or the "Lessor"); the various banks and other lending institutions listed on
the signature pages hereto (subject to the definition of Lenders in Appendix A
to the Participation Agreement referenced below, individually, a "Lender"
and collectively, the "Lenders"); NATIONSBANK, N.A., a national banking
association, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of
their interests (in such capacity, the "Agent"); and the various banks and
other lending institutions listed on the signature pages hereto as holders of
certificates issued with respect to the CSC Trust 1997-1 (subject to the
definition of Holders in Appendix A to the Participation Agreement referenced
below, individually, a "Holder" and collectively, the "Holders").
Capitalized terms used in this Amendment but not otherwise defined herein
shall have the meanings set forth in Appendix A to the Participation Agreement
(hereinafter defined).
W I T N E S S E T H
WHEREAS, the parties to this Amendment are parties to that certain
Participation Agreement dated as of March 30, 1998 (the "Participation
Agreement"), certain of the parties to this Amendment are parties to that
certain Credit Agreement dated as of March 30, 1998 (the "Credit
Agreement"), certain of the parties to this Amendment are parties to that
certain Trust Agreement dated as of March 30, 1998 (the "Trust Agreement")
and certain of the parties to this Amendment are parties to the other
Operative Agreements relating to a $20 million tax retention operating lease
facility (the "Facility") that has been established in favor of the Lessee;
WHEREAS, the Participation Agreement, the Credit Agreement, the Trust
Agreement and the other Operative Agreements have been previously amended by
that certain Amendment No. 1 to the Participation Agreement, the Credit
Agreement, the Trust Agreement and Other Operative Agreements dated as of
October 16, 1998 (the "First Amendment") among the Lessee and the
Construction Agent, the Guarantors, the Owner Trustee, the Lenders, the
Holders and the Agent.
WHEREAS, in connection with the proposed merger transaction between the
Lessee and Youth Services International, Inc., the Lessee has requested
certain additional modifications to the Participation Agreement, the Credit
Agreement, the Trust Agreement and the other Operative Agreements in
connection with the Facility;
WHEREAS, certain of the requested modifications require the unanimous
consent of the Financing Parties;
WHEREAS, the Financing Parties have agreed to the requested
modifications on the terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Appendix A to the Participation Agreement shall be amended to
modify the following defined terms as follows:
"Consolidated EBITDA" means for any period for the Lessee on a
consolidated basis, the sum of Consolidated Net Income plus Consolidated
Interest Expense plus all provisions for any Federal, state or other domestic
and foreign income taxes plus depreciation and amortization minus interest
income minus any current period cash expenditures related to the costs of
operating the facilities located in Fort Worth, Texas and New York, New York,
to the extent such costs are not included in current period expenses (such
cash expenditures to include rental expense, real estate taxes, insurance
costs, closure costs and other related costs), in each case on a consolidated
basis determined in accordance with GAAP applied on a consistent basis, but
excluding for purposes hereof extraordinary gains and losses and related tax
effects thereon. Except as otherwise expressly provided, the applicable
period shall be for the four consecutive fiscal quarters ending as of the date
of determination. Notwithstanding the foregoing, any determination of
Consolidated EBITDA shall be exclusive of (i) the following charges related
to the merger transaction between Lessee and Youth Services International,
Inc. ("YSI"), not to exceed the following amounts:
Write off of redundant assets and excess capacity $3,000,000
Personnel costs 2,585,000
Cancellation of contractual obligations 800,000
Financial advisory fees 1,700,000
Legal and accounting services 2,000,000
Integration Costs (not included above):
Write off debt issuance costs 1,400,000
Computer integration costs 1,500,000
Travel/printing/filing fees/marketing materials 1,250,000
Merger/Litigation 500,000
YSI Pooling of Interest 306,000
YSI Sales Tax Payments 271,000
YSI College Station Facility Closure Costs 2,327,000
-----------
Total $17,639,000
-----------
-----------
and (ii) the effect of Lessee's adoption of FASB SOP 98-5 in an amount not to
exceed $18,000,000.
"Holder Commitments" shall mean $600,000; provided, in the event
the Lessee has received at $20,000,000 in proceeds from new Subordinated Debt
during the Interim Period, the term Holder Commitments shall mean $1,050,000;
provided, further, if there shall be more than one (1) Holder, the Holder
Commitment of each Holder shall be as set forth in Schedule I to the Trust
Agreement as such Schedule I may be amended and replaced from time to time.
"Interim Period" shall mean the period from the date of this
Amendment until the earlier of (i) the date on which Borrower has received at
least $20,000,000 in proceeds from new Subordinated Debt, or (ii) June 15,
1999.
"Lender Commitments" shall mean $19,400,000; provided, in the
event the Lessee has received at least $20,000,000 in proceeds from new
Subordinated Debt during the Interim Period, the term Lender Commitments shall
mean $33,950,000; provided, further, if there shall be more than one (1)
Lender, the Lender Commitment of each Lender shall be as set forth in Schedule
1.1 to the Credit Agreement as such Schedule 1.1 may be amended and replaced
from time to time.
2. Section 12.4 of the Participation Agreement is hereby amended and
modified as follows:
12.4 Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters.
Each Operative Agreement may be terminated, amended, supplemented,
waived or modified only by an instrument in writing signed by, subject to
Article VIII of the Trust Agreement regarding termination of the Trust
Agreement, the Majority Secured Parties and each Credit Party (to the extent
such Credit Party is a party to such Operative Agreement); provided, to the
extent no Default or Event of Default shall have occurred and be continuing,
the Majority Secured Parties shall not amend, supplement, waive or modify any
provision of any Operative Agreement in such a manner as to adversely affect
the rights of a Credit Party without the prior written consent (not to be
unreasonably withheld or delayed) of such Credit Party; provided, further, so
long as Summit Bank and NationsBank, N.A. are the only Lenders and/or Holders,
no Operative Agreement nor any of the terms thereof may be terminated,
amended, supplemented, waived or modified unless such termination, amendment,
supplement, waiver or modification is in writing entered into by, or approved
in writing by, both Summit Bank and NationsBank, N.A. In addition, (a) the
Unanimous Vote Matters shall require the consent of each Lender and each
Holder affected by such matter and (b) any provision of any Operative
Agreement incorporated by reference or otherwise referenced in a second
Operative Agreement shall remain, respecting such second Operative Agreement,
in its original form without regard to any such termination, amendment,
supplement, waiver or modification in the first Operative Agreement except if
such has been agreed to by an instrument in writing signed by, subject to
Article VIII of the Trust Agreement regarding termination of the Trust
Agreement, the Majority Secured Parties and the Lessee and/or the Construction
Agent (to the extent such Credit Party is a party to such Operative
Agreement).
Notwithstanding the foregoing, no such termination, amendment,
supplement, waiver or modification shall, without the consent of the Agent
and, to the extent affected thereby, each Lender and each Holder
(collectively, the "Unanimous Vote Matters") (i) reduce the amount of any
Note or any Certificate, extend the scheduled date of maturity of any Note,
extend the scheduled Expiration Date, extend any payment date of any Note or
Certificate, reduce the stated rate of interest payable on any Note, reduce
the stated Holder Yield payable on any Certificate (other than as a result of
waiving the applicability of any post-default increase in interest rates or
Holder Yields), modify the priority of any Lien in favor of the Agent under
any Security Document, subordinate any obligation owed to any Lender or
Holder, reduce any Lender Unused Fees or any Holder Unused Fees payable under
this Participation Agreement, extend the scheduled date of payment of any
Lender Unused Fees or any Holder Unused Fees or increase the amount or extend
the expiration date of any Lender's Commitment or the Holder Commitment of any
Holder, or (ii) terminate, amend, supplement, waive or modify any provision of
this Section 12.4 or reduce the percentages specified in the definitions of
Majority Lenders, Majority Holders or Majority Secured Parties, or consent to
the assignment or transfer by the Owner Trustee of any of its rights and
obligations under any Credit Document or release a material portion of the
Collateral (except in accordance with Section 8.8) or release any Credit Party
from its obligations under any Operative Agreement or otherwise alter any
payment obligations of any Credit Party to the Lessor or any Financing Party
under the Operative Agreements, or (iii) terminate, amend, supplement, waive
or modify any provision of Section 7 of the Credit Agreement (which shall also
require the consent of the Agent), or (iv) permit Advances for Work in excess
of the Construction Budget if, as a result of such Advances, the sum of all
Advances made or to be made under the Construction Budgets with respect to all
of the Properties will exceed the sum of the Holder Commitments and the Lender
Commitments; provided, however, that the Majority Secured Parties may permit
Advances for Work in excess of a particular Construction Budget so long as the
sum of all Advances made or to be made under the aggregate of the Construction
Budgets for all of the Properties (including the amount by which an Advance
with respect to any Property will exceed the Construction Budget for such
Property) does not exceed the sum of the Holder Commitments and the Lender
Commitments, or (v) eliminate the automatic option under Section 5.3(b) of the
Agency Agreement requiring that the Construction Agent pay certain liquidated
damages in exchange for the conveyance of a Property to the Construction
Agent. Any such termination, amendment, supplement, waiver or modification
shall apply equally to each of the Lenders and the Holders and shall be
binding upon all the parties to this Agreement. In the case of any waiver,
each party to this Agreement shall be restored to its former position and
rights under the Operative Agreements existing prior to the event or condition
waived, and any Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall
continue, the Defaulting Lender shall (unless the Lessee and the Majority
Lenders, determined as if the Defaulting Lender were not a "Lender", shall
otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Loans, shall not be treated as a "Lender"
when performing the computation of Majority Lenders or Majority Secured
Parties, and shall have no rights under this Section 12.4; provided that any
action taken pursuant to the second paragraph of this Section 12.4 shall not
be effective as against the Defaulting Lender unless it otherwise consents.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such
Holder Advance (any such Holder, a "Defaulting Holder") then, for so long as
such failure shall continue, the Defaulting Holder shall (unless the Lessee
and the Majority Holders, determined as if the Defaulting Holder were not a
"Holder", shall otherwise consent in writing) be deemed for all purposes
relating to terminations, amendments, supplements, waivers or modifications
under the Operative Agreements to have no Holder Advances, shall not be
treated as a "Holder" when performing the computation of Majority Holders or
Majority Secured Parties, and shall have no rights under this Section 12.4;
provided that any action taken pursuant to the second paragraph of this
Section 12.4 shall not be effective as against the Defaulting Holder unless it
otherwise consents."
3. If the Lessee receives at least $20,000,000 in proceeds from new
Subordinated Debt during the Interim Period, Schedule 1.1 of the Credit
Agreement shall be deemed amended and restated in its entirety on the Business
Day following confirmation by the Agent that such proceeds have been received
to read as Schedule 1.1 attached hereto and Schedule I of the Trust Agreement
shall be deemed amended and restated in its entirety on the Business Day
following confirmation by the Agent that such proceeds have been received to
read as Schedule I attached hereto.
4. Each of the Agent, the Lenders and the Holders hereby waives any
Default or Event of Default arising solely from a breach of any of the
covenants of the Lessee set forth in Section 8.3 of the Participation
Agreement or any of the Incorporated Covenants as a result of the consummation
of the contemplated merger transaction between the Borrower and Youth Services
International, Inc.
5. This Amendment shall be effective upon the execution of this
Amendment by the Credit Parties, the Lenders and the Holders.
6. Except as modified hereby, all of the terms and provisions of the
Operative Agreements (including without limitation the First Amendment and all
Schedules and Exhibits) shall remain in full force and effect.
7. The Lessee agrees to pay all reasonable costs and expenses of the
Agent in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC.
8. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
9. This Amendment shall be deemed to be a contract made under, and
for all purposes shall be construed in accordance with the laws of the State
of Florida.
[The remainder of this page has been left blank intentionally.]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.
CORRECTIONAL SERVICES CORPORATION, as the
Construction Agent, as the Lessee and as a
Tranche A Guarantor
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
ESMOR NEW JERSEY, INC., as a Guarantor
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Attorney-In-Fact
CSC MANAGEMENT DE PUERTO RICO, INC., as a
Guarantor
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Director
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly stated
herein, but solely as the Owner Trustee under
the CSC Trust 1997-1
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NATIONSBANK, N.A., as a Holder, as a Lender
and as the Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
SUMMIT BANK, as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Schedule 1.1
This Schedule 1.1 shall only be effective if the Agent has confirmed that the
Lessee has received at least $20,000,000 in proceeds from new Subordinated
Debt during the Interim Period.
Tranche A Tranche B
Commitment Commitment
---------- ----------
Name and Address
of Lenders Amount Percentage Amount Percentage
---------------- ------ ---------- ------ ----------
NATIONSBANK, N.A. $23,743,874 77.0905% $2,428,350.75 77.0905%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Ph: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SUMMIT BANK $ 7,056,126 22.9095% $ 721,649.25 22.9095%
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇. ----------- ------- -------------- -------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Ph: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TOTAL $30,800,000 100.0000% $ 3,150,000 100.0000%
SCHEDULE I
HOLDER COMMITMENTS
This Schedule I shall only be effective if the Agent has confirmed that the
Lessee has received at least $20,000,000 in proceeds from new Subordinated
Debt during the Interim Period.
Holder Commitment
-----------------
Name of Holder Amount/Percentage
-------------- -----------------
NationsBank, N.A. $1,050,000 100%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
TOTAL $1,050,000 100%