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EXHIBIT 10.6
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
CORRECTIONS CORPORATION OF AMERICA
AS BORROWER,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO
AS GUARANTORS,
THE FINANCIAL INSTITUTIONS THAT ARE SIGNATORIES HERETO
THE LENDERS,
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
AS AGENT
DATED AS OF SEPTEMBER 15, 2000
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TABLE OF CONTENTS
Page
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1. DEFINITIONS AND CONSTRUCTION.............................................................................1
1.1 Definitions.....................................................................................1
1.2 Accounting Terms...............................................................................19
1.3 Code...........................................................................................20
1.4 Construction...................................................................................20
1.5 Schedules and Exhibits.........................................................................20
2. LOAN AND TERMS OF PAYMENT...............................................................................20
2.1 Revolver Advances..............................................................................20
2.2 Borrowing Procedures and Settlements...........................................................21
2.3 Payments.......................................................................................25
2.4 Overadvances...................................................................................27
2.5 Interest Rate, Payments, and Calculations......................................................27
2.6 Collection of Accounts.........................................................................27
2.7 Crediting Payments.............................................................................28
2.8 Designated Account.............................................................................28
2.9 Fees...........................................................................................28
2.10 Capital Requirements...........................................................................29
3. CONDITIONS; TERM OF AGREEMENT...........................................................................29
3.1 Conditions Precedent to the Initial Advance....................................................29
3.2 Conditions Precedent to all Advances...........................................................31
3.3 Conditions Subsequent..........................................................................32
3.4 Term...........................................................................................32
3.5 Effect of Termination..........................................................................32
3.6 Early Termination..............................................................................32
4. CREATION OF SECURITY INTEREST...........................................................................33
4.1 Grant of Security Interest.....................................................................33
4.2 Negotiable Collateral..........................................................................33
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.........................33
4.4 Delivery of Additional Documentation Required..................................................34
4.5 Power of Attorney..............................................................................34
4.6 Right to Inspect...............................................................................34
5. REPRESENTATIONS AND WARRANTIES..........................................................................34
5.1 No Encumbrances................................................................................35
5.2 Eligible Accounts..............................................................................35
5.3 Equipment......................................................................................35
5.4 Location of Inventory and Equipment............................................................35
5.5 Location of Chief Executive Office; FEIN.......................................................35
5.6 Due Organization and Qualification; Subsidiaries...............................................35
5.7 Due Authorization; No Conflict.................................................................36
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5.8 Litigation.....................................................................................37
5.9 No Material Adverse Change.....................................................................37
5.10 Fraudulent Transfer............................................................................37
5.11 Employee Benefits..............................................................................37
5.12 Environmental Condition........................................................................37
5.13 Brokerage Fees.................................................................................38
5.14 Permits and Other Intellectual Property........................................................38
5.15 Leases.........................................................................................38
5.16 Immaterial Subsidiaries........................................................................38
5.17 Compliance with Requirements...................................................................38
5.18 Governmental Regulations, Etc..................................................................38
5.19 Disclosure.....................................................................................39
6. AFFIRMATIVE COVENANTS...................................................................................39
6.1 Accounting System..............................................................................39
6.2 Collateral Reporting...........................................................................39
6.3 Financial Statements, Reports Certificates.....................................................40
6.4 Annual Projections.............................................................................42
6.5 Compliance with Terms of Leaseholds............................................................42
6.6 Audits; Inspections............................................................................42
6.7 Maintenance of Equipment.......................................................................42
6.8 Taxes..........................................................................................43
6.9 Insurance......................................................................................43
6.10 No Setoffs or Counterclaims....................................................................43
6.11 Location of Inventory and Equipment............................................................44
6.12 Compliance with Laws...........................................................................44
6.13 Leases.........................................................................................44
6.14 Environmental Laws.............................................................................44
6.15 Corporate Existence, etc.......................................................................45
6.16 Disclosure Updates.............................................................................45
6.17 Compliance with Terms of Management Contracts..................................................45
6.18 Compliance with Assignment of Claims Act.......................................................45
6.19 Quarterly Projections..........................................................................46
6.20 Compliance with Requirements...................................................................46
6.21 Additional Credit Parties......................................................................46
6.22 Assumption of Agreement........................................................................46
7. NEGATIVE COVENANTS......................................................................................46
7.1 Indebtedness...................................................................................46
7.2 Liens..........................................................................................47
7.3 Restrictions on Fundamental Changes............................................................47
7.4 Disposal of Assets.............................................................................47
7.5 Change Name....................................................................................47
7.6 Guarantee......................................................................................47
7.7 Nature of Business.............................................................................47
7.8 Prepayments and Amendments.....................................................................48
7.9 Change of Control..............................................................................48
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7.10 Distributions..................................................................................48
7.11 Accounting Methods.............................................................................48
7.12 Investments....................................................................................48
7.13 Transactions with Affiliates...................................................................48
7.14 Suspension.....................................................................................48
7.15 Compensation...................................................................................48
7.16 Use of Proceeds................................................................................49
7.17 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.............49
7.18 Accounting Changes.............................................................................49
7.19 Amendments of Contracts........................................................................49
8. EVENTS OF DEFAULT.......................................................................................50
8.1 Events of Default..............................................................................50
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................52
9.1 Rights and Remedies............................................................................52
9.2 Remedies Cumulative............................................................................54
10. TAXES AND EXPENSES......................................................................................54
11. WAIVERS; INDEMNIFICATION................................................................................55
11.1 Demand; Protest; etc...........................................................................55
11.2 The Lender Group's Liability for Collateral....................................................55
11.3 Indemnification................................................................................55
12. NOTICES................................................................................................ 55
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................56
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................................................57
14.1 Assignments and Participations.................................................................57
14.2 Successors.....................................................................................60
15. AMENDMENTS; WAIVERS.....................................................................................60
15.1 Amendments and Waivers.........................................................................60
15.2 No Waivers; Cumulative Remedies................................................................61
16. AGENT; THE LENDER GROUP.................................................................................61
16.1 Appointment and Authorization of the Agent.....................................................61
16.2 Delegation of Duties...........................................................................62
16.3 Liability of the Agent.........................................................................62
16.4 Reliance by the Agent..........................................................................62
16.5 Notice of Default or Event of Default..........................................................63
16.6 Credit Decision................................................................................63
16.7 Costs and Expenses; Indemnification............................................................64
16.8 The Agent in its Individual Capacity...........................................................64
16.9 Successor Agent................................................................................65
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16.10 Withholding Tax................................................................................65
16.11 Collateral Matters.............................................................................66
16.12 Restrictions on Actions by Lenders; Sharing of Payments........................................67
16.13 Agency for Perfection..........................................................................68
16.14 Payments by the Agent to the Lenders...........................................................68
16.15 Concerning the Collateral and Related Loan Documents...........................................68
16.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information ........................................................68
16.17 Several Obligations; No Liability..............................................................69
17. GUARANTY................................................................................................70
17.1 The Guaranty...................................................................................70
17.2 Obligations Unconditional......................................................................70
17.3 Reinstatement..................................................................................71
17.4 Certain Additional Waivers.....................................................................72
17.5 Remedies.......................................................................................72
17.6 Rights of Contribution.........................................................................72
17.7 Guarantee of Payment; Continuing Guarantee.....................................................73
18. GENERAL PROVISIONS......................................................................................73
18.1 Effectiveness..................................................................................73
18.2 Section Headings...............................................................................73
18.3 Interpretation.................................................................................73
18.4 Severability of Provisions.....................................................................73
18.5 Amendments in Writing..........................................................................73
18.6 Counterparts; Telefacsimile Execution..........................................................73
18.7 Revival and Reinstatement of Obligations.......................................................74
18.8 Integration....................................................................................74
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Schedules
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Schedule C-1 Commitments
Schedule M-1 Management Contracts
Schedule P-1 Permitted Liens
Schedule 5.5 Chief Executive Office; FEIN
Schedule 5.6 Venture, Subsidiaries and Affiliates; Outstanding Stock,
Preemptive Rights and Warrants
Schedule 5.7 Approvals, Consents and Notices
Schedule 5.8 Litigation
Schedule 5.12 Environmental Matters
Schedule 6.11 Inventory and Equipment Locations
Schedule 6.17 Notice of Defaults
Schedule 7.1 Indebtedness
Exhibits
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Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-2 Form of Compliance Certificate
Exhibit J-1 Form of Joinder Agreement
Exhibit N-1 Form of Note
Exhibit N-2 Form of Swing Line Note
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of September 15, 2000, by and among, CORRECTIONS CORPORATION OF
AMERICA, a Tennessee corporation (the "Borrower"), the Subsidiaries of the
Borrower from time to time party hereto (collectively the "Guarantors"), the
financial institutions identified on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), ▇▇▇▇▇▇ COMMERCIAL PAPER INC., a New York corporation, as agent for
the Lenders (the "Agent") .
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS.
As used in this Agreement, the following terms shall have the
following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, a General
Intangible, Investment Property, or Negotiable Collateral.
"Accounts" means all of the Borrower's currently existing and
hereafter arising accounts" (as that term is defined in the Code), and any and
all credit insurance, guaranties, or security therefor.
"Additive Amount" has the meaning set forth in Section 7.15.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder Agreement.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise. The foregoing notwithstanding, for all purposes of this Agreement,
PRT, Service Company A, and Service Company B, and their Subsidiaries, shall be
deemed Affiliates of the Borrower.
"Agent" means ▇▇▇▇▇▇, solely in its capacity as agent for the
Lenders, and shall include any successor agent.
"Agent Account" has the meaning set forth in Section 2.6.
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"Agent's Liens" has the meaning set forth in Section 4.1.
"Agent-Related Persons" means Agent together with its
Affiliates, officers, directors, employees, counsel, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Margin" means, initially, 2.25%; provided, that if
the Borrower's EBITDA, as determined from the Borrower's annual income statement
for any calendar year delivered pursuant to Section 6.3, commencing with the
income statement for the calendar year ending on December 31, 2000, is equal to
or greater than 110% of the Borrower's projected EBITDA for such calendar year,
as indicated in the projections delivered pursuant to Section 6.19, the
Applicable Margin shall be reduced by .25%, effective five Business Days after
the receipt of such income statement by the Agent.
"Applicable Prepayment Premium" has the meaning set forth in
the Fee Letter.
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" has the meaning set forth in
Section 14.1 and shall be in the form of Exhibit A-1 attached hereto.
"Authorized Person" means any officer or other employee of the
Borrower:
"Availability" means the amount that the Borrower is entitled
to borrow as Advances under Section 2.1, such amount being the difference
derived when (a) the sum of the principal amount of Advances then outstanding
(including any amounts that the Lender Group may have paid for the account of
the Borrower pursuant to any of the Loan Documents and that have not been
reimbursed by the Borrower) is subtracted from (b) the lesser of (i) the Maximum
Revolver Amount and (ii) the Borrowing Base.
"Bankruptcy Code" means the United States Bankruptcy Code, as
amended, and any successor statute.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds Rate.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which the Borrower or any Subsidiary or ERISA
Affiliate of the Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"Books" means all of the Borrower's books and records
(including all of its records indicating, summarizing, or evidencing its assets
(including the Collateral) or liabilities, all of its information relating to
its business operations or financial condition, and all of its computer
programs, disks, files, printouts, runs, or other computer prepared
information).
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"Borrower" has the meaning set forth in the preamble to this
Agreement prior to the consummation of the Merger, and means CCAAS thereafter.
"Borrower EBITDA Default" means, as of the last day of any
calendar quarter, the Borrower's EBITDA, as determined from the Borrower's
income statements for the period ending on such day delivered pursuant to
Section 6.3, is less than 85% of the Borrower's projected EBITDA for the period
ending on such day as indicated in the projections delivered pursuant to Section
6.19.
"Borrower Net Worth Default" means, as of the last day of any
calendar quarter, Borrower's consolidated net worth, as reported on the
Borrower's balance sheet as of such day delivered pursuant to Section 6.3, is
less than 85% of the Borrower's projected consolidated net worth as of such day
as indicated in the projections delivered pursuant to Section 6.19.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders to the Borrower.
"Borrowing Base" has the meaning set forth in Section 2.1(a).
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close in New
York and, with respect to provisions of the Agreement dealing with LIBOR Rate
Advances, also means a day on which banks in London, England are open for the
transaction of banking business.
"Canadian Sub" means Corrections Corporation of Canada, Inc.,
a Canadian corporation.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"CCA" means Corrections Corporation of America, a Tennessee
corporation.
"CCAAS" means CCA Acquisition Sub, Inc., a Tennessee
corporation.
"Capitalized Lease Obligation" means any Indebtedness
represented by obligations under Capital Lease.
"Change of Control" means (i) prior to the consummation of the
Merger, the occurrence of any of the following: (a) any Person or two or more
Persons acting in concert shall have acquired "beneficial ownership," directly
or indirectly, of, or shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of, control over, Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 35% or more of
the combined voting power of all Voting Stock of the Borrower, (b) during any
period of up to 24 consecutive months, commencing after the Effective Date,
individuals who at the beginning of such 24 month period were directors of the
Borrower (together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still
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in office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the Borrower then in office,
or (c) the chief executive officer of the Borrower as of the Effective Date
ceases to continue to hold such office or continue with management
responsibilities substantially similar to those existing on the Effective Date
and a replacement for such Person reasonably satisfactory to the Required
Lenders and possessing substantially similar qualifications and reputation to
the Person being replaced is not employed by the Borrower within 90 days after
such first person ceases to hold such office or continue to have such management
responsibilities; provided, however, that the acquisition of a "beneficial
interest," directly or indirectly, of 100% of the Voting Stock of the Borrower
(or other securities convertible into such Voting Stock) by PRT or CCAAS in
connection with the Merger shall not constitute a Change of Control, and (ii)
after the consummation of the Merger the Borrower shall not be a wholly owned
subsidiary of PRT. As used herein, "beneficial ownership" shall have the meaning
Provided in Rule l3d-3 of the Securities and Exchange Commission under the
Exchange Act.
"Closing Date" means the date of the making of the initial
Advance hereunder.
"Code" means the New York Uniform Commercial Code.
"Collateral" means all of the Borrower's right, title, and
interest in and to each of the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Investment Property,
(g) the Negotiable Collateral,
(h) any money, or other assets of the Borrower that now
or hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(i) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Equipment, General
Intangibles, Inventory, Investment Property, Negotiable Collateral, Real
Property, money, deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof.
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"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance reasonably satisfactory to the Agent.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of the Borrower; provided, however that the
term "Collections" shall not be deemed to include payment items received by the
Borrower or its Subsidiaries on account of the sale of Inventory at commissaries
located within a correctional facility.
"Commitment" means, with respect to each Lender, its
Commitment, and with respect to all Lenders, their Commitments in the aggregate,
in each case as such Dollar amounts are set forth beside such Lender's name
under the applicable heading on Schedule C-1 attached hereto or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Commitment Fee" has the meaning set forth in Section 2.5(c)
of this Agreement.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-2 delivered by the chief financial officer of the Borrower
to the Agent.
"Control Agreement" means a control agreement, in form and
substance reasonably satisfactory to the Agent, between the Borrower, the Agent,
and the applicable securities intermediary with respect to the applicable
Securities Account and related Investment Property.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance that it is required to make hereunder on any Funding Date and that has
not cured such failure by making such Advance within 1 Business Day after
written demand upon it by the Agent to do so.
"Defaulting Lenders Rate" means the Base Rate for the first 3
days from and after the date the relevant payment is due and, thereafter, at
that interest rate equal to the greater of (a) the interest rate then applicable
to Advances, and (b) the Base Rate.
"Designated Account" means account number [375122611] of the
Borrower maintained with the Borrower's Designated Account Bank, or such other
deposit account of the Borrower (located within the United States) that has been
designated as such, in writing, by the Borrower to the Agent.
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"Designated Account Bank" means [Bank of America, N.A., whose
office is located at ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and whose ABA number is 1110000
12].
"Dilution" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior 180 days, that is
the result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, returns, credits, or other dilutive items with respect
to the Accounts, by (b) the Borrower's Collections with respect to Accounts
(excluding extraordinary items) plus the Dollar-amount of clause (a).
"Dilution Reserve" means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts by one
percentage point for each percentage point by which Dilution is in excess of
5.0%.
"Disbursement Letter" means an instructional letter executed
and delivered by the Borrower to the Agent regarding the extensions of credit to
be made on the Closing Date, the form and substance of which shall be reasonably
satisfactory to the Agent.
"Dollars" or "$" means United States dollars.
"EBITDA" means, for any period, the amount equal to the sum of
(a) consolidated net income for such period, plus (b) an amount which, in the
determination of consolidated net income for such period, has been deducted for
(i) consolidated interest expense, (ii) total federal, state, local and foreign
income, value added and similar taxes (including the write-off of deferred
taxes) and (iii) depreciation and amortization expense, all as determined in
accordance with GAAP.
"Effective Date" means the first date on which each of the
conditions set forth in Section 3.1 shall have been fulfilled or waived.
"Eligible Accounts" means those Accounts created by the
Borrower in the ordinary course of its business, that arise out of the
Borrower's rendition of services, that comply with each and all of the
representations and warranties respecting Eligible Accounts made by the Borrower
in the Loan Documents, and that are not excluded as ineligible by virtue of the
one or more of the criteria set forth below; provided however, that such
criteria may be fixed and revised from time to time by the Agent in the Agent's
Permitted Discretion. Eligible Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed
to pay within 90 days of original invoice date or Accounts more than 60 days
past due,
(b) Accounts owed by an Account Debtor (or its
Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account
Debtor is an Affiliate or agent of the Borrower,
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(d) Accounts arising in a transaction by reason
of which the payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
(f) Accounts with respect to which the Account
Debtor either (i) does not maintain its chief executive office in the United
States, or (ii) is not organized under the laws of the United States or any
State thereof, or (iii) is the government of any foreign country or sovereign
state, or of any province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof, unless (y) the Account is supported by an irrevocable letter of credit
reasonably satisfactory to the Agent (as to form, substance, and issuer or
domestic confirming bank) that has been delivered to the Agent and is directly
drawable by the Agent, or (z) the Account is covered by credit insurance in form
and amount, and by an insurer, reasonably satisfactory to the Agent,
(g) Accounts with respect to which the Account
Debtor is a creditor of the Borrower, has or has asserted a right of setoff, has
disputed its liability, or has made any claim with respect to the Account, to
the extent of such claim, right of offset, assertion, or dispute,
(h) Accounts with respect to an Account Debtor
whose total obligations owing to the Borrower exceed 15% of all Eligible
Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage,
(i) Accounts with respect to which (i) the Account
Debtor is subject to an Insolvency Proceeding, (ii) the Borrower has received
notice of an imminent Insolvency Proceeding involving the Account Debtor or a
material impairment of the financial condition of the applicable Account Debtor,
(iii) the Account Debtor is not Solvent, or (iv) the Account Debtor goes out of
business,
(j) Accounts the collection of which the Agent,
in its Permitted Discretion, believes to be doubtful by reason of the Account
Debtor's financial condition,
(k) Accounts with respect to which the services
giving rise to such Account have not been performed and accepted by the Account
Debtor,
(l) Accounts that represent the right to receive
progress payments or other advance ▇▇▇▇▇▇▇▇ that are due prior to the completion
of performance by the Borrower of the subject contract for services, or
(m) At the election of the Agent in its
Permitted Discretion, Accounts with respect to which the Account Debtor is the
lessee directly from PRT of the correctional or detention facility managed by
the Borrower unless such Account Debtor has obtained a non-disturbance agreement
from any mortgagee of PRT in form and substance acceptable to the Agent in its
Permitted Discretion.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a
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commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country and which has total assets in excess of
$250,000,000, provided that such bank is acting through a branch or agency
located in the United States, (c) a finance company, insurance company, or other
financial institution or fund that is engaged in making, purchasing, or
otherwise investing in commercial loans in the ordinary course of its business
and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a pre-existing
Lender, (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by the Agent and the Borrower, and (f) during the
continuation of an Event of Default, any other Person approved by the Agent
"Equipment" means all of the Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts, goods
(other than consumer goods, farm products, or Inventory), wherever located,
including all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, 8 amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any corporation subject to ERISA
whose employees are treated as employed by the same employer as the employees of
the Borrower under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of the Borrower under IRC Section 414(c), (c) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any organization subject to
ERISA that is a member of an affiliated service group of which the Borrower is a
member under IRC Section 414(m), or (d) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any party subject to ERISA that is a party to
an arrangement with the Borrower and whose employees are aggregated with the
employees of the Borrower under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to:
(a) the lesser of (i) the aggregate amount of
Advances available to the Borrower as of such time (based on the applicable
advance rates set forth in Section 2.1 hereof and calculated as if no Advances
are outstanding), subject to the sublimits and availability reserves established
by the Agent under the terms hereof, and (ii) the Maximum Revolver Amount, minus
(b) the sum of (i) the amount of all then
outstanding Advances, (ii) the aggregate amount of all trade payables of the
Borrower that are more than 60 days past due as of such time, and (iii) the
aggregate amount of the Borrower's book overdrafts.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
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"Existing Lender" means Foothill Capital Corporation, a
California corporation.
"Fee Letter" means that certain fee letter, dated as of even
date herewith, between the Borrower and the Agent, in form and substance
reasonably satisfactory to the Agent.
"FEIN" means Federal Employer Identification Number.
"French Sub" means CCA France, a French societe anonyme.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means all of the Borrower's present and
future general intangibles and other personal property (including contract
rights, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, Permits, patents, trade names, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, literature,
reports, catalogs, money, deposit accounts, insurance premium rebates, tax
refunds, and tax refund claims), other than goods, Accounts, Investment
Property, and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" shall mean any federal, state, local,
or other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantors" means a collective reference to each of the
Subsidiary Guarantors, together with their successors and permitted assigns, and
"Guarantor" means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to purchase any such
Indebtedness or any property constituting security therefor, (ii) to advance or
provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance sheet
condition of such other Person (including without limitation, keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject
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to any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hire Year" has the meaning set forth in Section 7.15.
"Immaterial Subsidiaries" means International Sub, Technical
Sub, Canadian Sub, Viccor, TransCor PR, French Sub and TransCor U.S.
"Indebtedness" means (a) all obligations of the Credit Parties
for borrowed money, (b) all obligations of the Credit Parties evidenced by
bonds, debentures, notes, or other similar instruments and all reimbursement or
other obligations of the Credit Parties in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations of the Credit Parties under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any property or asset of the Credit
Parties, irrespective of whether such obligation or liability is assumed, and
(e) any obligation of the Credit Parties guaranteeing or intended to guarantee
(whether guaranteed, endorsed, co-made, discounted, or sold with recourse to any
Credit Party) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"International Sub" means CCA International, Inc., a Delaware
corporation.
"Interest Period" means, with respect to each LIBOR Rate
Advance, a period commencing on the date of the making of such LIBOR Rate
Advance and ending 1, 2, or 3 months thereafter; provided, however, that (a) if
any Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended (subject to clauses (c) - (e) below) to the next
succeeding Business Day, (b) interest shall accrue from and including the first
day of each Interest Period to, but excluding, the day on which any Interest
Period expires, (c) any
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Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall on the next
preceding Business Day, (d) with respect to an Interest Period 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), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, or 3 months after the date on which the Interest Period
began, as applicable, and (e) the Borrower may not elect an Interest Period
which will end after the Maturity Date.
"Inventory" means all present and future inventory in which
the Borrower has interest, including goods held for sale or lease or to be
furnished under a contract of service and all of the Borrower's present and
future raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide accounts receivable arising
from the sale of goods or services in the ordinary course of business consistent
with past practice), purchases or other acquisitions for consideration of
Indebtedness or Stock, and any other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Investment Property" means "investment property" as that term
is defined in the Code, whether now owned or hereafter acquired.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any successor statute.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit J-1 hereto, executed and delivered by an Additional Credit
Party in accordance with the provisions of Section 6.21.
"Legal Requirements" means all applicable international,
foreign, federal, state, and local laws, judgments, decrees, orders, statutes,
ordinances, rules, regulations, or Permits.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Commercial Paper Inc., a New York
corporation.
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1
hereof.
"Lender Group" means, individually and collectively, each of
the Lenders and the Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by the Borrower
under any of the Loan Documents that are paid or incurred by the Lender Group,
(b) actual fees or charges paid or incurred by the
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Agent in connection with the Lender Group's transactions with the Borrower,
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office), filing, recording, publication, and appraisals (including
periodic Collateral appraisals), (c) actual costs and expenses incurred by the
Agent in the disbursement of funds to the Borrower (by wire transfer or
otherwise), (d) actual charges paid or incurred by the Agent resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) reasonable costs and expenses paid or incurred by the Lender
Group in examining the Books, (g) reasonable costs and expenses of third party
claims or any other suit paid or incurred by the Lender Group in enforcing or
defending the Loan Documents or in connection with the transactions contemplated
by the Loan Documents or the Lender Group's relationship with the Borrower, (h)
the Lender's reasonable fees and expenses (including attorneys fees) incurred in
drafting, negotiating and delivering the Loan Documents (i) the Agent's
reasonable fees and expenses (including attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, amending, terminating,
enforcing (including attorneys fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning the
Borrower), defending, or concerning the Loan Documents, irrespective of whether
suit is brought, and (j) each of the Lenders' reasonable fees and expenses
(including attorneys fees) incurred in terminating, enforcing, (including
attorneys fees and expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning the Borrower), or
defending the Loan Documents, irrespective of whether suit is brought.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, counsel, and agents of such Lender.
"Lien" means any interest in property securing an obligation
owed to, or a claim by, any Person other than the owner of the property, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Loan Documents" means this Agreement, the Disbursement
Letter, the Lockbox Agreements, the Intercreditor Agreement, the Fee Letter, any
note or notes executed by the Borrower in connection with this Agreement and
payable to a member of the Lender Group, and any other agreement entered into,
now or in the future, by the Borrower and the Lender Group in connection with
this Agreement.
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"Lockbox Account" shall mean a depositary account established
pursuant to one of the Lockbox Agreements.
"Lockbox Agreements" means those certain lockbox agreements
and those certain depository agreements, in form and substance reasonably
satisfactory to the Agent, each of which is among the Borrower, the Agent, and
one of the Lockbox Banks.
"Lockbox Banks" means such banks as may be agreed to by the
Agent and the Borrower from time to time.
"Lockboxes" has the meaning set forth in Section 2.6.
"Management Contracts" means (a) those certain contracts and
other agreements related to the management and operation of correction and
detention facilities between CCA and Governmental Authorities, each of such
contracts being listed on Schedule M-1, and (b) additional or replacement
contracts and other agreements related to the management and operation of
correction and detention facilities entered into between the Borrower and
Governmental Authorities subsequent to June 30, 2000.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower or any of its
Subsidiaries, (b) the material impairment of a Credit Party's ability to perform
its obligations under the Loan Documents to which it is a party or of the Lender
Group to enforce the Obligations or realize upon the Collateral, (c) a material
adverse effect on the value of the Collateral or the amount that the Lender
Group would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of the Collateral, or (d) a
material impairment of the priority of the Agent's Liens with respect to the
Collateral.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $50,000,000.
"Merger" means the merger of the Borrower with and into CCAAS
such that substantially all of the assets of the Borrower and CCAAS as of the
date of such merger are in the same entity, and the series of related
transactions occurring immediately prior to the Merger as described in the PRT
Registration Statement.
"Negotiable Collateral" means all of the Borrower's now owned
and hereafter acquired letters of credit, notes, drafts, instruments, security
certificates, documents, and chattel paper.
"Net Worth" means, as of any date of determination, with
respect to the Borrower, total stockholders' equity determined in conformity
with GAAP.
"Non-Disturbance Agreements"' means one or more
Non-Disturbance Agreements among Bank of America, N.A., as administrative agent,
PRT and the Borrower, in
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form and substance reasonably satisfactory to the Agent, relative to each of the
Borrower's facilities that is leased from PRT.
"Note" means a promissory note of the Borrower in favor of a
Lender evidencing the Advances, provided by the Borrower to such Lender pursuant
to Section 2.1, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced.
"Obligations" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), premiums, liabilities', obligations, fees (including
the fees provided for in the Fee Letter), charges, costs, or Lender Group
Expenses (including any fees or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued), covenants, and duties owing by the
Borrower or any other Credit Party to the Lender Group of any kind and
description arising under or pursuant to the Loan Documents and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all Lender Group Expenses that the
Borrower or any other Credit Party is required to pay or reimburse by the Loan
Documents, by law, or otherwise.
"Overadvance" has the meaning set forth in Section 2.4.
"Participant" has the meaning set forth in Section 14.1(e).
"Pay-Off Confirmation" means evidence reasonably satisfactory
to the Agent that all of the obligations of the Borrower to Existing Lender have
been paid in full.
"Permits" of a Person shall mean all rights, franchises,
permits, authorities, licenses, certificates of approval or authorizations,
including licenses and other authorizations issuable by a Governmental
Authority, which pursuant to applicable Legal Requirements are necessary to
permit such Person lawfully to conduct and operate its business as currently
conducted and to own and use its assets.
"Permitted Discretion", with respect to any determination by a
member of the Lender Group, means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
"Permitted Dispositions" means (a) sales or other dispositions
of Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of the Borrower's business, (b) sales of individual items of Collateral
with a book value of less than $100,000 in the aggregate during any fiscal year,
(c) other disposition of assets by the Borrower, provided that (i) such
dispositions are for fair value, (ii) not less than 85% of the aggregate
consideration is paid in full in cash, and (iii) the aggregate amount of all
such dispositions by the Borrower does not exceed $100,000 in the aggregate for
any fiscal year, (c) the lease or sublease of any property in the ordinary
course of business, and (d) the licensing by the Borrower, on a non-exclusive
basis, of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary course of the Borrower's business.
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"Permitted Investments" means (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a maturity not exceeding one
year, (b) certificates of deposit, time deposits, banker's acceptances or other
instruments of a bank having a combined capital and surplus of not less than
$500,000,000 with a maturity not exceeding one year, (c) investments in
commercial paper rated at least A-1 or P-1 maturing within one year after the
date of acquisition thereof, (d) money market accounts and other interest
bearing deposit accounts maintained at a bank having combined capital and
surplus of no less than $500,000,000 or at any other financial institution
reasonably satisfactory to the Agent, (e) investments in negotiable instruments
for collection, and (f) advances made in connection with purchases of goods or
services in the ordinary course of business.
"Permitted Liens"' means (a) Liens held by the Agent for the
benefit of the Lender Group, (b) Liens for unpaid taxes that either (i) are not
yet due and payable or (ii) do not constitute an Event of Default hereunder and
are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d)
the interests of lessors under operating leases, (e) purchase money Liens and
the interests of lessors under Capital Leases to the extent that such Liens or
interests secure Purchase Money Indebtedness permitted under Section 7.1 hereof
and so long as the Lien only attaches to the asset purchased or acquired and the
proceeds thereof, (f) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business of the Borrower and its
Subsidiaries and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet due and payable, or (ii) are the subject of
Permitted Protests, (g) Liens arising from deposits made in connection with
obtaining worker's compensation or other unemployment insurance, (h) Liens or
deposits to secure performance of bids, tenders, or leases incurred in the
ordinary course of business of the Borrower and its Subsidiaries and not in
connection with the borrowing of money, (i) Liens arising by reason of security
for surety or appeal bonds in the ordinary course of business of the Borrower
and its Subsidiaries, (j) Liens resulting from any judgment or award that is not
an Event of Default hereunder, (k) Liens arising under guarantees made by the
Guarantors with respect to obligations under the PRT Credit Agreement, and (l)
with respect to any Real Property, reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances that do not materially interfere with or
impair the use or operation thereof by the Borrower.
"Permitted Protest" means the right of the Borrower to protest
any Lien (other than any such Lien that secures the Obligations), tax (other
than payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books in such amount as is required under GAAP,
(b) any such protest is instituted and diligently prosecuted by the Borrower in
good faith, and (c) the Agent is satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Liens of the Agent on behalf of the Lender Group in and
to the Collateral.
"Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
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"Prime Rate" means the per annum rate of interest established
from time to time by Bank of America, N.A. as its prime rate, which rate may not
be the lowest rate of interest charged by Bank of America, N.A. to its
customers.
"PRT" means Prison Realty Trust, Inc., a Maryland corporation.
"PRT Business Development Agreement" means that certain
Business Development Agreement, dated May 4, 1999, by and between PRT and CCA,
as amended by Amendment Number One to Business Development Agreement, dated June
9, 2000, as such agreement may from time to time be amended or modified.
"PRT Change of Control" means any Person or two or more
Persons acting in concert shall have acquired "beneficial ownership," directly
or indirectly, of, or shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of, control over, Voting Stock of PRT (or other
securities convertible into such Voting Stock) representing 51% or more of the
combined voting power of all Voting Stock of PRT.
"PRT Credit Agreement" means that certain Amended and Restated
Credit Agreement dated as of August 4, 1999 among PRT, the subsidiary guarantors
of PRT, as defined therein, the lenders identified therein, ▇▇▇▇▇▇ Commercial
Paper Inc., as administrative agent, Societe Generale, as documentation agent,
and The Bank of Nova Scotia, as syndication agent, SouthTrust Bank, N.A., as
Co-agent, and ▇▇▇▇▇▇ Brothers Inc., as advisor, lead arranger and book manager,
as such agreement may from time to time be amended or modified, as amended by
that certain Waiver and Amendment, dated June 9, 2000.
"PRT Lease Agreement" means any lease agreement between PRT
and CCA, as amended by the Master Amendment to Lease Agreements, dated December
31, 1999, and Second Master Amendments to Lease Agreements, dated June 9, 2000,
as such agreements may from time to time be amended or modified.
"PRT License Agreement" means that certain Service ▇▇▇▇ and
Trade Name Use Agreement dated as of December 31, 1998 between PRT and the
Borrower, as such agreement may from time to time be amended or modified.
"PRT Master Lease" means that certain Master Agreement to
Lease, dated January 1, 1999, by and between PRT and CCA, and amended by First
Amendment to Master Agreement to Lease, dated December 31, 1999, and as amended
by Second Master Amendment to Lease Agreement, dated June 9, 2000, as such
agreement may from time to time be amended or modified.
"PRT Note" means that certain Promissory Note dated December
31, 1998 executed by the Borrower and made-payable to PRT in the principal
amount of $137,000,000, as such note may from time to time be amended or
modified.
"PRT Registration Statement" means that certain Registration
Statement on Form S-4 (reg. no. 333-41778), as filed with the Securities and
Exchange Commission on July 19, 2000 and as subsequently declared effective by
the Commission on July 26, 2000, of which the
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joint proxy statement/prospectus of PRT and CCA, dated August 3, 2000, and as
supplemented on September 6, 2000, is a part.
"PRT Related Documents" means, collectively, the PRT Note, the
PRT License Agreement, the PRT Services Agreement, the PRT Tenant Incentive
Agreement, the Service Company A License Agreement, the Non-Disturbance
Agreement, the Service Company B License Agreements, and any PRT Lease Agreement
and the PRT Business Development Agreement.
"PRT Services Agreement" means that certain Amended and
Restated Services Agreement, March 5, 1999, by and between PRT and CCA, as
amended by Amendment Number One to Amended and Restated Services Agreement,
dated as of June 9, 2000, as such agreement may from time to time be amended or
modified.
"PRT Tenant Incentive Agreement" means that certain Amended
and Restated Tenant Incentive Agreement, dated as of May 4, 1999, by and between
PRT and CCA, as amended by Amendment Number One to Amended and Restated Tenant
Incentive Agreement, dated June 9,2000, as such agreement may from time to time
be amended or modified
"Projections" means the Borrower's forecasted (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements, and (d)
capitalization statements, all prepared on a consistent basis with the
Borrower's historical financial statements, together with appropriate supporting
details and a statement of underlying assumptions.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to
make Advances and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's Commitment, by
(ii) the aggregate amount of all Lenders' Commitments; and
(b) with respect to all other matters (including
the indemnification obligations arising under Section 16.7), the percentage
obtained by dividing (i) such Lender's Commitment, by (ii) the aggregate amount
of all Lenders' Commitments.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by the Borrower.
"Reserve Percentage" means, on any day, that percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that is in
effect on such date with respect to deposits of Dollars in a non-United States
or an international banking office of a bank used to fund a LIBOR Rate Advance.
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"Required Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate 51% of the Commitments, or if the Commitments have been
terminated irrevocably, 51% of the Obligations then outstanding.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the aggregate amount of Advances outstanding.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Securities Account" means a "securities account" as that term
is defined in Section 8-501 of the Code.
"Service Company A" means Prison Management Services, Inc., a
Tennessee corporation.
"Service Company A License Agreement" means that certain
Service ▇▇▇▇ and Trade Name Use Agreement dated as of December 31, 1999, between
Service Company A and the Borrower, as amended or modified from time to time.
"Service Company B" means Juvenile and Jail Facility
Management Services, Inc., a Tennessee corporation.
"Service Company B License Agreement" means that certain
Service ▇▇▇▇ and Trade Name Use Agreement dated as of December 31, 1999, between
Service Company B and the Borrower, as amended or modified from time to time.
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"Solvent" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Subordination Agreement" means that certain Subordination
Agreement among PRT, the Borrower, and the Agent, the form and substance of
which shall be reasonably acceptable to the Agent.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity. The foregoing notwithstanding, so long as the representations and
warranties contained in this Agreement relative to Immaterial Subsidiaries are
true and correct, none of the Immaterial
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Subsidiaries shall be "Subsidiaries", for purposes of this Agreement, or the
other Loan Documents.
"Subsidiary Guarantor" means each of the Subsidiaries
identified as a "Subsidiary Guarantor" on the signature pages hereto and each
Additional Credit Party which may hereafter execute a Joinder Agreement,
together with their successors and permitted assigns, and "Subsidiary Guarantor"
means any one of them.
"Swing Line Lender" means ▇▇▇▇▇▇.
"Swing Line Loans" has the meaning set forth in Section
2.1(d)(i).
"Technical Sub" means Technical and Business Institute of
America, Inc., a Tennessee corporation.
"TransCor PR" means TransCor Puerto Rico, a Puerto Rico
corporation.
"TransCor U.S." means TransCor America, LLC, a Tennessee
limited liability company.
"Triggering Event of Default" means any one or more of the
following (a) an Event of Default under Section 8.1, (b) the Borrower's failure
to perform the covenant set forth in Section 7.20, (c) any representation,
warranty or statement made by the Borrower in this Agreement, any other Loan
Document, or in any other agreement or schedule, or otherwise made by the
Borrower to the Agent or any Lender, whether orally or in writing, shall contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make such representation, warranty
or statement in light of the circumstances under which it was made, not
misleading, and the Borrower knew that such statement of material fact or
omission of material fact was false or misleading, or (d) the Borrower, directly
or indirectly, converts or appropriates or otherwise misemploys any Collateral
or the proceeds thereof contrary to the provisions of this Agreement or any
other Loan Document, including, but not limited to, the Borrower's direction to
Account Debtors to make payments on Accounts in a manner other than as required
by Section 2.6.
"Viccor" means Viccor Investments PTY. LTD., a Victoria
Australia corporation.
"Voidable Transfer" has the meaning set forth in Section 15.8.
"Voting Stock" means, with respect to any Person, Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statements" shall include the notes and schedules thereto.
Whenever the term "Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean the Borrower on a
consolidated basis unless the context clearly requires otherwise.
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1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any
other Loan Document clearly requires otherwise, references to the plural include
the singular, references to the singular include the plural, the term
"including" is not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document as the case may be. An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in writing by the Agent. Section, subsection, clause, schedule, and exhibit
references herein are to this Agreement unless otherwise specified. Any
reference in this Agreement or in the Loan Documents to this Agreement or any of
the Loan Documents shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender agrees to make
advances ("Advances") to the Borrower in an amount at any one time outstanding
not to exceed such Lender's Pro Rata Share of an amount equal to the lesser of
(i) the Maximum Revolver Amount or (ii) the Borrowing Base. For purposes of this
Agreement, "Borrowing Base," as of any date of determination, shall mean the
result of:
(y) the lesser of
(i) 85% of the amount of Eligible Accounts,
less the amount, if any, of the Dilution
Reserve, and
(ii) an amount equal to 45% of the
Borrower's Collections with respect to
Accounts for the immediately preceding 90 day
period, minus
(z) the aggregate amount of reserves, if any,
established by the Agent under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, the Agent shall have the right to establish reserves, (i) in an
amount equal to $5,000,000, provided, however, that if there shall not have
occurred a Borrower Net Worth Default or a Borrower EBITDA Default as of any
calendar quarter, commencing with the calendar quarter ending on March 31, 2001,
then such reserve amount shall be reduced by $1,250,000, effective as of the
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fifth Business Day following the receipt by the Agent of the financial
statements delivered pursuant to Section 6.3 of the Borrower for such calendar
quarter, and (ii) at any time and from time to time, in such additional amounts,
and with respect to such other matters, as the Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (A) sums that the Borrower is required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, and (B) amounts owing by
the Borrower to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral, which Lien or trust, in the reasonable determination of
the Agent (from the perspective of an asset-based lender), would be likely to
have a priority superior to the Liens of the Agent, for the benefit of the
Lender Group (such as landlord liens, ad valorem taxes, or sales taxes where
given priority under applicable law) in and to such item of the Collateral. The
Borrower hereby acknowledges and agrees that the Agent shall be establishing
reserves pursuant to the foregoing clause (i) in such amounts as are set forth
in such clause.
(c) The Lenders shall have no obligation to make further
Advances hereunder to the extent such further Advances would cause the Revolver
Usage to exceed the Maximum Revolver Amount. No Lender shall have any obligation
to make further Advances hereunder to the extent that such further Advances
would cause the aggregate outstanding amount of Advances due and owing to such
Lender to exceed such Lender's Commitment.
(d) Amounts borrowed pursuant to this Section may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
(e) The Advances made by each Lender shall be evidenced
by a duly executed promissory note of the Borrower in an original principal
amount equal to such Lender's Commitment and substantially in the form of
Exhibit N-1.
(f) The Swing Line Loan Advances made by the Swing Line
Lender under Section 2.2(d) shall be evidenced by a duly executed promissory
note of the Borrower substantially in the form of Exhibit N-2.
2.2 BORROWING PROCEDURES AND SETTLEMENTS.
(a) Procedure for Borrowing. Each Borrowing shall be made
by an irrevocable written request by an Authorized Person delivered to the Agent
(which notice must be received by the Agent no later than 2:00 p.m. (New York
time) on the Business Day immediately preceding the requested Funding Date;
provided, however, that in the case of a request for Swing Line Loans in an
amount of $5,000,000, or less, such notice will be timely received if it is
received by Agent no later than 12:00 a.m. (New York time) on the Business Day
that is the requested Funding Date) specifying (i) the amount of such Borrowing,
(ii) a detailed calculation of the Borrowing Base and (iii) the requested
Funding Date, which shall be a Business Day. At the Agent's election, in lieu of
delivering the above-described written request, any Authorized Person may give
the Agent telephonic notice of such request by the required
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time, with such telephonic notice to be confirmed in writing within 24 hours of
the giving of such notice.
(b) Agent's Election. Promptly after receipt of a request
for a Borrowing pursuant to Section 2.2(a), the Agent shall elect, in its
discretion, (i) to have the terms of Section 2.2(c) apply to such requested
Borrowing, or (ii) to request Swing Line Lender to make a Swing Line Loan
pursuant to the terms of Section 2.2(d) in the amount of the requested
Borrowing; provided, however, that if Swing Line Lender declines in its sole
discretion to make a Swing Line Loan pursuant to Section 2.2(d), the Agent shall
elect to have the terms of Section 2.2(c) apply to such requested Borrowing.
(c) Making of Advances.
(i) Promptly after receipt of a request for a
Borrowing pursuant to Section 2.2(a), the Agent shall notify
the Lenders, not later than 1:00 p.m. (New York time) on the
Business Day immediately preceding the Funding Date applicable
thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall
make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to the Agent in immediately
available funds, to such account of the Agent as the Agent may
designate, not later than 2:00 p.m. (New York time) on the
Funding Date applicable thereto. After the Agent's receipt of
the proceeds of such Advances, upon satisfaction of the
applicable conditions precedent set forth in Section 3 hereof,
the Agent shall make the proceeds of such Advances available
to the Borrower on the applicable Funding Date by transferring
same day funds equal to the proceeds of such Advances received
by the Agent to the Borrower's Designated Account; provided,
however, that, the Agent shall not request any Lender to make,
and no Lender shall have the obligation to make, any Advance
if the Agent shall have received written notice from any
Lender, or otherwise has actual knowledge, that (1) one or
more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date
for the applicable Borrowing unless such condition has been
waived, or (2) the requested Borrowing would exceed the
Availability of the Borrower on such Funding Date.
(ii) Unless the Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least 1 Business Day
prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro
Rata Share of the Borrowing, the Agent may assume that each
Lender has made or will make such amount available to the
Agent in immediately available funds on the Funding Date and
the Agent, may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such
circumstances has made available to the Borrower such amount,
that Lender shall on the Business Day following such Funding
Date make such amount available to the Agent, together with
interest at
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the Defaulting Lenders Rate for each day during such period. A
notice submitted by the Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Lender's
Advance on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent
on the Business Day following the Funding Date, the Agent will
notify the Borrower of such failure to fund and, upon demand
by the Agent, the Borrower shall pay such amount to the Agent
for the Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate
per annum equal to the interest rate applicable at the time to
the Advances composing such Borrowing. The failure of any
Lender to make any Advance on any Funding Date, shall not
relieve any other Lender of any obligation hereunder to make
an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer
to a Defaulting Lender any payments made by the Borrower to
the Agent for the Defaulting Lender's benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments
hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may
hold and, in its discretion, re-lend to the Borrower the
amount of all such payments received or retained by it for the
account of such Defaulting Lender. Solely for the purposes of
voting or consenting to matters with respect to the Loan
Documents and determining Pro Rata Shares, such Defaulting
Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero (-0-). This section
shall remain effective with respect to such Lender until (x)
the Obligations under this Agreement shall have been declared
or shall have become immediately due and payable or (y) the
requisite non-Defaulting Lenders and the Agent shall have
waived such Lender's default in writing. The operation of this
section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the
performance by the Borrower of its duties and obligations
hereunder.
(d) Making of Swing Line Loans.
(i) In the event that the Agent shall elect,
with the consent of the Swing Line Lender, to have the terms
of this Section 2.2(d) apply to a requested Borrowing as
described in Section 2.2(b), the Swing Line Lender shall make
an Advance in the amount of such Borrowing (any such Advance
made pursuant to this Section 2.2(d) being referred to as a
"Swing Line Loan" and such Advances being referred to
collectively as "Swing Line Loans") available to Borrower on
the Funding Date applicable thereto by transferring same day
funds to Borrower's Designated Account. Each Swing Line Loan
is an Advance hereunder and shall be subject to all the terms
and conditions applicable to other Advances. Subject to the
provisions of Section 2.2(i), the Agent shall not request the
Swing Line Lenders to make, and the Swing Line Lender shall
not make, any Swing Line Loan
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if the Agent shall have received written notice from any
Lender, or otherwise has actual knowledge, that (i) one or
more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date
for the applicable Borrowing unless such condition has been
waived, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. The Agent and the Swing
Line Lender shall not otherwise be required to determine
whether the applicable conditions precedent set forth in
Section 3 have been satisfied on the Funding Date applicable
thereto prior to making, in its sole discretion, any Swing
Line Loan.
(ii) The Swing Line Loans shall be secured by the
Collateral and shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances pursuant to Section 2.5 hereof.
(e) Settlement. It is agreed that each Lender's funded
portion of the Advances is intended by the Lenders to equal, at all times, such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, the Agent and the Lenders agree (which agreement shall not be
for the benefit of or enforceable by the Borrower) that in order to facilitate
the administration of this Agreement and the other Loan Documents, settlement
among them as to the Swing Line Loans shall take place on a periodic basis in
accordance with the following provisions:
(i) The Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a
more frequent basis if so determined by the Agent, by
notifying the Lenders by telecopy, telephone, or other similar
form of transmission, of such requested Settlement, no later
than 2:00 p.m. (New York time) on the Business Day immediately
prior to the date of such requested Settlement (the date of
such requested Settlement being the "Settlement Date"). Such
notice of a Settlement Date shall include a summary statement
of the amount of outstanding Swing Line Loans and Advances for
the period since the prior Settlement Date, the amount of
repayments received in such period, and the amounts allocated
to each Lender of the interest, fees, and other charges for
such period. Subject to the terms and conditions contained
herein (including Section 2.2(b)(iii)): (y) if a Lender's
balance of the Advances and Swing Line Loans exceeds such
Lender's Pro Rata Share of the Advances as of a Settlement
Date, then the Agent shall by no later than 2:00 p.m. (New
York time) on the Settlement Date transfer in immediately
available funds to the account of such Lender as such Lender
may designate, an amount such that each such Lender shall,
upon receipt of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances and Swing Line Loans; and
(z) if a Lender's balance of the Advances and Swing Line Loans
is less than such Lender's Pro Rata Share of the Advances and
Swing Line Loans as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (New York time) on the Settlement Date
transfer in immediately available funds to such account of the
Agent as the Agent may designate, an amount such that each
such Lender shall, upon transfer of such amount, have as of
the Settlement Date, its Pro Rata Share of the Advances and
Swing Line Loans. Such amounts made available to the Agent
under clause (z) of the immediately
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preceding sentence shall be applied against the amounts of the
applicable Swing Line Loan and, together with the portion of
such Swing Line Loan constitute Advances of such Lenders. If
any such amount is not made available to the Agent by any
Lender on the Settlement Date applicable thereto to the extent
required by the terms hereof, the Agent shall be entitled to
recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lenders Rate.
(ii) In determining whether a Lender's balance of
the Advances and Swing Line Loans is less than, equal to, or
greater than such Lender's Pro Rata Share of the Advances and
Swing Line Loans as of a Settlement Date, the Agent shall, as
part of the relevant Settlement, apply to such balance the
portion of payments actually received in good funds by the
Agent with respect to principal, interest, fees payable by the
Borrower and allocable to the Lenders hereunder, and proceeds
of Collateral. To the extent that a net amount is owed to any
such Lender after such application, such net amount shall be
distributed by the Agent to that Lender as part of such next
Settlement.
(f) Notation. The Agent shall record on its books the
principal amount of the Advances owing to each Lender and the interests therein
of each Lender, from time to time. In addition, each Lender is authorized, at
such Lender's option, to note the date and amount of each payment or prepayment
of principal of such Lender's Advances in its books and records, including
computer records, such books and records constituting rebuttably presumptive
evidence, absent manifest error, of the accuracy of the information contained
therein.
(g) Lenders' Failure to Perform. All Advances shall be
made by the Lenders simultaneously and in accordance with their Pro Rata Shares.
It is understood that (i) no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Advances hereunder, nor shall
any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligation to make any Advances
hereunder, and (ii) no failure by any Lender to perform its obligation to make
any Advances hereunder shall excuse any other Lender from its obligation to make
any Advances hereunder.
(h) Effect of Bankruptcy. If a case is commenced by or
against the Borrower under the Bankruptcy Code, or other statute providing for
debtor relief, then, unless otherwise agreed by all Lenders, the Lender Group
shall not make additional loans or provide additional financial accommodations
under the Loan Documents to the Borrower as debtor or debtor-in-possession, or
to any trustee for the Borrower, nor consent to the use of cash collateral
(provided that the Loan Account shall continue to be charged, to the fullest
extent permitted by law, for accruing interest, fees, and Lender Group
Expenses).
2.3 PAYMENTS.
(a) PAYMENTS BY THE BORROWER.
(i) All payments to be made by the Borrower
shall be made without set-off, recoupment, deduction, or
counterclaim, except as otherwise required by
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law. Except as otherwise expressly provided herein, all
payments by the Borrower shall be made to the Agent for the
account of the Lender Group at the Agent's address set forth
in Section 12, and shall be made in immediately available
funds, no later than 11:00 a.m. (New York time) on the date
specified herein. Any payment received by the Agent later than
11:00 a.m. (New York time), at the option of the Agent, shall
be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue
until such following Business Day.
(ii) Whenever any payment is due on a day other
than a Business Day, such payment shall be made on the
following Business Day, and such extension of time shall in
such case be included in the computation of interest or fees,
as the case may be.
(iii) Unless the Agent receives notice from the
Borrower prior to the date on which any payment is due to the
Lenders that the Borrower will not make such payment in full
as and when required, the Agent may assume that the Borrower
has made (or will make) such payment in full to the Agent on
such date in immediately available funds and the Agent may
(but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the
extent the Borrower does not make such payment in full to the
Agent on the date when due, each Lender severally shall repay
to the Agent on demand such amount distributed to such Lender,
together with interest thereon at the Base Rate for each day
from the date such amount is distributed to such Lender until
the date repaid.
(b) APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS.
Except as otherwise provided with respect to Defaulting Lenders, principal and
interest payments and payments of fees (other than fees designated for the
Agent's sole and separate account) shall, as applicable, be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each individual Lender). All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Obligations or not constituting payment of specific
fees, and all proceeds of Collateral received by the Agent, shall be applied as
in the following order:
(i) to pay any fees or expense reimbursements
then due to the Agent from the Borrower;
(ii) to pay any fees or expense reimbursements
then due to the Lenders from the Borrower;
(iii) to pay interest due in respect of all
outstanding Advances;
(iv) ratably to pay principal of all outstanding
Advances, such payment to be made, first, to the outstanding
Base Rate Advances and, second, to the outstanding LIBOR Rate
Advances (in the order of their maturity); and
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(v) ratably to pay any other Obligations due to
the Agent or any Lender by the Borrower.
2.4 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by the Borrower to the Lender Group pursuant to Sections 2.1 is
greater than either the Dollar or percentage limitations set forth in Sections
2.1 (an "Overadvance"), the Borrower immediately shall pay to the Agent, in
cash, the amount of such excess, which amount shall be used by the Agent to
reduce the Obligations in accordance with the priority set forth in Section
2.3(b). In addition, the Borrower hereby promises to pay the Obligations
(including principal, interest, fees, costs, and expenses) in Dollars in full to
the Lender Group as and when due and payable under the terms of this Agreement
and the other Loan Documents.
2.5 INTEREST RATE, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATE. All unpaid Obligations shall bear
interest on the Daily Balance thereof at a per annum rate equal to the Base
Rate, plus the Applicable Margin.
(b) DEFAULT RATE. Upon the occurrence and during the
continuation of a Triggering Event of Default, all unpaid Obligations shall bear
interest on the Daily Balance thereof at a per annum rate equal to 3 percentage
points above the per annum, rate otherwise applicable hereunder.
(c) PAYMENTS. Interest and fees payable hereunder shall
be due and payable, in arrears, on the first day of each month during the term
hereof. Any interest not paid when due shall be compounded and shall thereafter
accrue interest at the per annum rate otherwise applicable hereunder.
(d) COMPUTATION. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed. In the event the Base Rate is changed from time
to time hereafter, the applicable rates of interest hereunder automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.
(e) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. The Borrower and the Lender Group, in executing
and delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; provided, however that,
anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto as of the date of this Agreement, the Borrower is and
shall be liable only for the payment of such maximum as allowed by law, and
payment received from the Borrower in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.
2.6 COLLECTION OF ACCOUNTS. The Borrower shall establish and at
all times thereafter maintain lockboxes (the "Lockboxes"), and shall instruct
all Account Debtors to remit all
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amounts owed by them to such Lockboxes. The Borrower, the Agent, and the Lockbox
Banks shall enter into Lockbox Agreements, which among other things shall
provide for the opening of a Lockbox Account for the deposit of Collections at
the applicable Lockbox Bank. The Borrower agrees that all Collections received
by the Borrower from any Account Debtor or any other source immediately upon
receipt shall be deposited into a Lockbox Account. No Lockbox Agreement or
arrangement contemplated thereby shall be modified by the Borrower without the
prior written consent of the Agent. Upon the terms and subject to the conditions
set forth in the Lockbox Agreements, all amounts received in each Lockbox
Account shall be wired each Business Day into an account (the "Agent Account")
maintained by the Agent at a depositary selected by the Agent.
2.7 CREDITING PAYMENTS.
The receipt of any payment by the Agent (whether from
transfers to the Agent by the Lockbox Banks pursuant to the Lockbox Agreements
or otherwise) shall not be considered a payment on account unless such payment
item is a wire transfer of immediately available federal funds made to the Agent
Account or unless and until such payment item is honored when presented for
payment. Should any payment item not be honored when presented for payment, then
the Borrower shall be deemed not to have made such payment and interest shall be
calculated accordingly. Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by the Agent only if
it is received into the Agent Account on a Business Day on or before 11:00 a.m.
(New York time). If any Collection item is received into the Agent Account on a
non-Business Day or after 11:00 a.m. (New York time) on a Business Day, it shall
be deemed to have been received by the Agent as of the opening of business on
the immediately following Business Day.
2.8 DESIGNATED ACCOUNT. The Lenders are authorized to make the
Advances under this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person, or without
instructions if pursuant to Section 2.5(d). The Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by the Borrower and made by
the Lenders hereunder. Unless otherwise agreed by the Agent and the Borrower,
any Advance requested by the Borrower and made by the Lenders hereunder shall be
made to the Designated Account.
2.9 FEES. The Borrower shall pay to the Agent for the ratable
benefit of the Lender Group (except as otherwise indicated) the following fees,
which fees shall be non-refundable when paid:
(a) FINANCIAL EXAMINATION, VALUATION, AND APPRAISAL FEES.
For the sole and separate account of the Agent, a separate fee of $750 per day,
per examiner, plus out-of-pocket expenses for each financial analysis and
examination (i.e., audits) of the Borrower performed by personnel employed by
the Agent; and, in addition, from and after the occurrence and during the
continuation of an Event of Default, for the sole and separate accounts of the
Agent and each Lender that exercises its rights under Section 4.6 the actual
charges paid or incurred by the Agent or any Lender if it elects to employ the
services of one or more third Persons to perform such audits of the Borrower or
its Books, to appraise the Collateral, or to
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assess the Borrower's business valuation; it being the Agent's expectation as of
the Closing Date that, if the relevant contracts, leases, agreements, books, and
records are located at the Borrower's chief executive office in Nashville,
Tennessee, such field survey, review, and verification processes will need to be
completed solely at such office, and
(b) FEE LETTER. To the Agent, as and when provided
thereunder, the fees payable under the terms of the Fee Letter.
(c) FEES. On the first day of each month during the term
of this Agreement, a commitment fee in an amount equal to %.50 per annum times
the result of (a) the Maximum Revolver Amount, less (b) the sum of (i) the
average daily balance of Advances that were outstanding during the immediately
preceding month (the "Commitment Fee"). For purposes of computation of the
Commitment Fee, the Swing Line Loans shall not be considered an Advance.
2.10 CAPITAL REQUIREMENTS. If after the date hereof any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), the effect of reducing the return on such Lender's or such
holding company's capital as a consequence of such Lender's Commitment to make
Advances hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Lender to be material, than
such Lender may notify the Borrower and the Agent thereof. The Borrower agrees
to pay such Lender on demand the amount of such reduction of return of capital
as and when such reduction is determined, payable within 90 days after
presentation by such Lender of a statement in the amount and setting forth in
reasonable detail such Lender's calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error). In determining such amount, such Lender may use
any reasonable averaging and attribution methods.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The effectiveness
of this Agreement and the obligation of the Lender Group (or any member thereof)
to make the initial Advance are subject to the fulfillment, to the satisfaction
of the Agent and its counsel, of each of the following conditions:
(a) the Agent shall have received each of the following
documents in form and substance satisfactory to the Agent, duly executed, and
each such document shall be in full force and effect:
(i) this Agreement;
(ii) the Fee Letter;
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(iii) the Disbursement Letter;
(iv) an assignment of the Lockbox Agreements;
(v) Non-Disturbance Agreements for each of the
Borrower's facilities leased from PRT;
(vi) the Subordination Agreement; and
(vii) a Collateral Access Agreement with respect
to the Borrower's chief executive offices in Nashville,
Tennessee, in form and substance satisfactory to the Agent in
its Permitted Discretion;
(b) the Agent shall have received a certificate from the
Secretary of the Borrower and each Guarantor attesting to the resolutions of the
Borrower's and each Guarantor's Board of Directors, as the case may be,
authorizing the execution, delivery, and performance of this Agreement and the
other Loan Documents to which the Borrower and each Guarantor is a party and
authorizing specific officers of the Borrower and each Guarantor to execute the
same;
(c) the Agent shall have received copies of the
Borrower's and each Guarantor's Governing Documents, as amended, modified, or
supplemented to the Effective Date, certified by the Secretary of the Borrower
and each Guarantor, as the case may be;
(d) the Agent shall have received a certificate of status
with respect to the Borrower and each Guarantor, dated within 10 days of the
Effective Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of the Borrower and each Guarantor, as the case may
be, which certificate shall indicate that the Borrower and each Guarantor, as
the case may be, is in good standing in such jurisdiction;
(e) the Agent shall have received certificates of status
with respect to the Borrower and each Guarantor, each dated within 60 days of
the Effective Date, such certificates to be issued by the appropriate officer of
the jurisdictions in which its failure to be duly qualified or licensed would
constitute a Material Adverse Change, which certificates shall indicate that the
Borrower and each Guarantor, as the case may be, is in good standing in such
jurisdictions;
(f) the Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.9, the form and substance of which shall be satisfactory to the Agent and its
counsel;
(g) the Agent shall have received an opinion of the
Borrower's and each Guarantor's counsel in form and substance satisfactory to
the Agent in its Permitted Discretion;
(h) the Agent shall have received a copy of each of the
PRT Related Documents, certified as true and correct by the Secretary of the
Borrower;
(i) the Agent shall have received satisfactory evidence
that all tax returns required to be filed by the Borrower and each Guarantor, as
the case may be, have been timely filed and all taxes upon the Borrower and each
Guarantor or their respective properties, assets,
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income, and franchises (including real property taxes and payroll taxes), as the
case may be, have been paid prior to delinquency, except such taxes that are the
subject of a Permitted Protest;
(j) each Lender shall have received a Note in an amount
equal to such Lender's Commitment and substantially in the form of Exhibit N-1;
(k) the Agent shall have received the Pay-Off
Confirmation, together with UCC termination statements and other documentation
evidencing the termination by Existing Lender of its Liens in and to the
properties and assets of the Borrower;
(l) the Agent shall have received:
(i) all financing statements required by the
Agent duly executed by the Borrower and each Guarantor; and
(ii) all searches reflecting the filing of all
such financing statements that are to be filed with the
Tennessee Secretary of State's office and with each filing
office in each state in which any Guarantor has its chief
executive office; and
(m) the Agent shall have received UCC termination
statements relative to all UCC financing statements filed against the Borrower
with the Tennessee Secretary of State's office, and with each filing office in
each state in which any Guarantor has its chief executive office, except with
respect to such UCC financing statement filed in connection with the Borrower's
and each Guarantor's guarantee of PRT's obligation under the PRT Credit
Agreement; and
(n) all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to the
Agent and its counsel.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of the
Lender Group (or any member thereof) to make any Advance shall be subject to the
following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such advance, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date);
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such Advance, nor shall either result from the
making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of such
Advance shall have been issued and remain in force by any Governmental Authority
against the Borrower, the Agent or any Lender, or any of their Affiliates; and
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(d) the amount of the Revolver Usage, after giving effect
to the requested Advance, shall not exceed the Availability.
3.3 CONDITIONS SUBSEQUENT. As a condition subsequent to initial
closing hereunder, the Borrower shall perform or cause to be performed the
following (the failure by the Borrower to so perform or cause to be performed
constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to the
Agent the certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.9, the form and substance of
which shall be satisfactory to the Agent and its counsel; and
(b) within 15 Business Days of the Closing Date, deliver
to the Agent an opinion of the Borrower's New York counsel, in form and
substance satisfactory to the Agent in its Permitted Discretion.
3.4 TERM. This Agreement shall become effective upon the execution
and delivery hereof by the Borrower and the Lender Group and shall continue in
full force and effect for a term ending on December 31, 2002 (the "Maturity
Date"). Either the Borrower or the Agent on behalf of the Lenders may terminate
this Agreement effective on the Maturity Date or on any first year anniversary
of the Maturity Date by giving the other party at least 90 days prior written
notice. The foregoing notwithstanding, the Lender Group shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations shall immediately become due and payable without
notice or demand. No termination of this Agreement, however, shall relieve or
discharge the Borrower of the Borrower's duties, Obligations, or covenants
hereunder, continuing security interests in the Collateral, for the benefit of
the Lender Group, shall remain in effect until all Obligations have been fully
and finally discharged and the Lender Group's obligations to provide additional
credit hereunder have been terminated. Upon termination of this Agreement and
after all Obligations have been fully and finally discharged and the Lender
Group's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, the Agent will, at the Borrower's sole expense,
execute and deliver any Uniform Commercial Code termination statements, lien
releases, mortgage releases, re-assignments of trademarks, discharges of
security interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the security interests, financing statements, and all other notices of
security interests and liens previously filed by the Agent for the benefit of
the Lender Group with respect to the Obligations.
3.6 EARLY TERMINATION. The Borrower has the option, at any time
upon 10 Business Days prior written notice to the Agent, to terminate this
Agreement by paying to the Agent, for the benefit of the Lender Group, in cash,
the Obligations, in full, together with the Applicable Prepayment Premium. If
the Borrower has sent a notice of termination pursuant to the provisions of this
Section, but fails to pay the Obligations in full on the date set forth in said
notice, then the Agent, acting upon the instructions of the Required Lenders,
shall have the
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election, to be made by a notice in writing sent by the Agent to the Borrower
within 10 Business Days after the date that the Borrower had scheduled as the
early termination date, either to (a) require the Borrower to repay the
Obligations in full on a date that is 30 days after the date on which such
notice is sent, or (b) continue the terms of this Agreement as if no such early
termination notice had been sent. If the Agent terminates the Obligations of the
Lenders hereunder to extend credit under this Agreement as a result of an
occurrence of an Event of Default, then, in view of the impracticality and
extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation of the Lender's lost profits as a result
thereof, the Borrower shall pay to the Agent for the ratable benefit of the
Lenders upon the effective date of such termination, an early termination
premium in an amount equal to the Applicable Prepayment Premium. The Applicable
Prepayment Premium shall be presumed to be the amount of damages sustained by
the Lenders as a result of the early termination hereof and the Borrower agrees
that it is a reasonable estimation thereof under the circumstances existing as
of the Effective Date. The Applicable Prepayment Premium provided for in this
Section 3.6 shall be deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Credit Party hereby grants to
the Agent, for the benefit of the Lender Group, a continuing security interest
in all of such Credit Party's currently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all
Obligations of such Credit Party and in order to secure prompt performance by
such Credit Party of each of its covenants and duties under the Loan Documents
("Agent's Liens"). The Agent's Liens in and to the Collateral shall attach to
all Collateral without further act on the part of the Lender Group or the Credit
Parties. Anything contained in this Agreement or any other Loan Document to the
contrary notwithstanding, except for Permitted Dispositions, the Credit Parties
have no authority, express or implied, to dispose of any item or portion of the
Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that perfection of priority of the Agent's security interest
is dependent on possession, the applicable Credit Party, immediately upon the
request of the Agent, shall endorse and deliver physical possession of such
Negotiable Collateral to the Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, the Agent or the Agent's designee may (a) notify customers or
Account Debtors of the Credit Parties' that the Accounts, General Intangibles,
or Negotiable Collateral have been assigned to the Agent for the benefit of the
Lender Group or that the Agent for the benefit of the Lender Group has a
security interest therein, or (b) collect the Accounts, General Intangibles, and
Negotiable Collateral directly and charge the collection costs and expenses to
the Loan Account. Each Credit Party agrees that it will hold in trust for the
Lender Group, as the Lender Group's trustee, any Collections that it receives
and will immediately deliver said Collections to the Agent in their original
form as received by such Credit Party.
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4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of the Agent, the Credit Parties shall execute and deliver to
the Agent, all financing statements, fixture filings, security agreements,
pledges, assignments, endorsements of certificates of title, and all other
documents that the Agent reasonably may request, in form and substance
reasonably satisfactory to the Agent, to perfect and continue perfected the
Agent's Liens in the Collateral (whether now owned or hereafter arising or
acquired), and in order to fully consummate all of the transactions contemplated
hereby and under the other the Loan Documents.
4.5 POWER OF ATTORNEY. Each Credit Party hereby irrevocably makes,
constitutes, and appoints the Agent (and any of the Agent's officers, employees,
or agents designated by the Agent) as such Credit Party's true and lawful
attorney, with power to (a) if such Credit Party refuses to, or fails timely to
execute and deliver any of the documents described in Section 4.4, sign the name
of such Credit Party on any of the documents described in Section 4.4, (b) at
any time that an Event of Default has occurred and is continuing, sign any
Credit Party's name on any invoice or ▇▇▇▇ of lading relating to any Account,
drafts against Account Debtors, and notices to Account Debtors, (c) send
requests for verification of Accounts, (d) endorse any Credit Party's name on
any Collection item that may come into the Lender Group's possession, (e) at any
time that an Event of Default has occurred and is continuing, notify the post
office authorities to change the address for delivery of any Credit Party's mail
to an address designated by the Agent, to receive and open all mail addressed to
such Credit Party (the Agent to provide copies thereof to such Credit Party),
and to retain all mail relating to the Collateral and forward all other mail to
such Credit Party, (f) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under any Credit Party's
policies of insurance covering the Collateral or related to claims that have
been made against the Lender Group that the Lender Group asserts are covered by
such insurance and make all determinations and decisions with respect to such
policies of insurance, and (g) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting the Accounts
directly with Account Debtors, for amounts and upon terms that the Agent
determines to be reasonable, and the Agent may cause to be executed and
delivered any documents and releases that the Agent determines to be necessary.
The appointment of the Agent as each Credit Party's attorney, and each and every
one of its rights and powers, being coupled with an interest, is irrevocable
until all of the Obligations have been fully and finally repaid and performed
and the Lender Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. The Agent and each Lender (through any of
their respective officers, employees, or agents) shall have the right, from time
to time hereafter to inspect the Books and to check, test, and appraise the
Collateral in order to verify each Credit Party's financial condition or the
amount, quality, value, condition of, or any other matter relating to, the
Collateral; it being the Agent's and the Lender's expectation as of the Closing
Date, that, if the Borrower's contracts, leases, agreements, books, and records
are located at Borrower's chief executive office in Nashville, Tennessee, such
inspection, checking, testing, and appraisal would need to be completed solely
at such office.
5. REPRESENTATIONS AND WARRANTIES.
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In order to induce the Lender Group to enter into this
Agreement, each Credit Party makes the following representations and warranties
to the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete in all
material respects as of the Effective Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Credit Party has good and indefeasible
title to its assets, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. Each Account included in the Borrowing Base
is an Eligible Account with bona fide existing payment obligations created by
the rendition of services to the related Account Debtors in the ordinary course
of the Borrower's business, owed to the Borrower without defenses, disputes,
offsets, counterclaims, or rights of return or cancellation.
5.3 EQUIPMENT. All of the Equipment is used or held for use in
each Credit Party's business and is fit for such purposes.
5.4 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and
Equipment of each Credit Party, are not stored with a bailee, warehouseman, or
similar party and are located only at the locations identified on Schedule 6.11
permitted by Section 6.11.
5.5 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of each Credit Party and each of its Subsidiaries is located at the
address indicated in Schedule 5.5 and each Credit Party's FEIN is identified in
Schedule 5.5.
5.6 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each Credit Party is duly organized and existing and
in good standing under the laws of the jurisdiction of its organization and
qualified to do business in any state where the failure to be so qualified
reasonably could be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.6, is a complete and accurate
description of the authorized capital Stock of each Credit Party, by class, and,
as of the Closing Date, a description of the number of shares of each such class
that are issued and outstanding and the number of shares that are held in such
Credit Party's treasury. Other than as described on Schedule 5.6, all such
shares have been validly issued and, as of the Closing Date, are fully paid,
nonassessable shares free of contractual preemptive rights. Other than as
described on Schedule 5.6 there are no subscriptions, options, warrants, or
calls relating to any shares of any Credit Party's capital Stock, including any
right of conversion or exchange under any outstanding security or other
instrument. No Credit Party is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital Stock or any security convertible into or exchangeable for any of its
capital Stock.
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(c) Set forth on Schedule 5.6 is a complete and accurate
list of each Credit Party's direct and indirect Subsidiaries and Immaterial
Subsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Person; and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by such Credit Party. All
of the issued and outstanding capital Stock of each Subsidiary has been validly
issued, is held of record and beneficially by the Borrower and is fully paid and
non-assessable.
(d) Except as set forth on Schedule 5.6 no capital Stock
(or any securities, instruments, warrants, options, purchase rights, conversion
or exchange rights, calls, commitments or claims of any character convertible
into or exercisable for Stock) of any direct or indirect Subsidiary of any
Credit Party is subject to the issuance of any security, instrument, warrant,
option, purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.
5.7 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by each
Credit Party of this Agreement and the Loan Documents to which it is a party
have been duty authorized by all necessary action on the part of the Borrower.
(b) The execution, delivery, and performance by each
Credit Party of this Agreement and the Loan Documents to which it is a party do
not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to such Credit Party, the Governing Documents of such
Credit Party, or any order, judgment, or decree of any court or other
Governmental Authority binding on such Credit Party, (ii) conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation of such Credit Party, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Credit Party, other than
Permitted Liens, or (iv) except as set forth on Schedule 5.7, require any
approval of stockholders or any approval or consent of any Person under any
material contractual obligation of such Credit Party.
(c) Other than the taking of any action expressly
required under this Agreement and the other Loan Documents and except as set
forth on Schedule 5.7 the execution, delivery, and performance by each Credit
Party of this Agreement and the Loan Documents to which such Credit Party is a
party do not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Governmental Authority or
other Person.
(d) This Agreement and the other Loan Documents to which
each Credit Party is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Credit Party will be the legally
valid and binding obligations of such Credit Party, enforceable against such
Credit Party in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
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(e) Upon the filing of a financing statement in each
filing office in which the chief executive office of each of the Credit Parties
is located, including but not limited to the Tennessee Secretary of State's
office, the Agent's Liens granted by each Credit Party to the Agent, for the
benefit of the Lender Group, in and to its Accounts, General Intangibles, and
Investment Property are validly created, perfected, and first priority Liens,
subject only to Permitted Liens.
5.8 LITIGATION. Other than those matters disclosed on Schedule
5.8, there are no actions, suits, or proceedings pending or, to the best
knowledge of each Credit Party, threatened against such Credit Party or any of
its Subsidiaries, except for matters arising after the Closing Date that, if
decided adversely to such Credit Party or any of its Subsidiaries, as the case
may be, reasonably could not be expected to result in a Material Adverse Change.
5.9 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to the Credit Parties that have been delivered to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present each Credit Party's financial condition as of
the date thereof and results of operations for the period then ended. There has
not been a Material Adverse Change with respect to any Credit Party since June
30, 2000.
5.10 FRAUDULENT TRANSFER.
(a) Each Credit Party is Solvent.
(b) No transfer of property is being made by any Credit
Party and no obligation is being incurred by any Credit Party in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
such Credit Party.
5.11 EMPLOYEE BENEFITS. None of the Credit Parties, nor any of its
Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any
Benefit Plan.
5.12 ENVIRONMENTAL CONDITION. Other than those matters disclosed on
Schedule 5.12 and except in accordance with applicable law, none of any Credit
Party's properties or assets has ever been used by such Credit Party or, to the
best of such Credit Party's knowledge, by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials. None of any Credit Party's properties or assets has ever
been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, or a candidate for
closure pursuant to any environmental protection statute. No Lien arising under
any environmental protection statute has attached to any revenues or to any real
or personal property owned or operated by any Credit Party. No Credit Party has
received a summons, citation, notice or directive from the Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by such Credit Party resulting in the releasing or
disposing of Hazardous Materials into the environment.
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5.13 BROKERAGE FEES. No Credit Party has utilized the services of
any broker or finder in connection with obtaining financing from the Lender
Group under this Agreement and no brokerage commission or finders fee is payable
in connection herewith.
5.14 PERMITS AND OTHER INTELLECTUAL PROPERTY. Each Credit Party
owns or possesses adequate licenses or other rights to use all Permits,
trademarks, trade names, copyrights, patents, patent rights, and licenses that
are necessary to the conduct of its business as currently conducted.
5.15 LEASES. Each Credit Party enjoys peaceful and undisturbed
possession under all leases material to the business of such Credit Party and to
which it is a party or under which it is operating. All of such leases are valid
and subsisting and no material default by such Credit Party exists under any of
them.
5.16 IMMATERIAL SUBSIDIARIES. Each Person composing the Immaterial
Subsidiaries does not own or operate or possess any material asset, license,
management contract, franchise, or right and is not liable with respect to any
material Indebtedness, obligation, liability, or claim. For purposes of this
section, "material" means, (i) with respect to assets, licenses, management
contracts, franchises or rights of the Immaterial Subsidiaries (other than
TransCor U.S.) that the aggregate value of such items for the Immaterial
Subsidiaries (other than TransCor U.S.) taken as a whole does not exceed 3.0% of
the aggregate value of such items for the Borrower and its subsidiaries taken as
a whole; and with respect to Indebtedness, obligations, liabilities, and claims
of the Immaterial Subsidiaries (other than TransCor U.S.), that the aggregate
amount of such items for the Immaterial Subsidiaries (other than TransCor U.S.),
taken as a whole does not exceed 3.0% of the aggregate amount of such items for
the Borrower and its Subsidiaries taken as a whole; and (ii) with respect to
assets, licenses, management contracts, franchises or rights of TransCor U.S.,
that the aggregate value of such items excluding goodwill for TransCor U.S. does
not exceed 5.0% of the aggregate value of such items including goodwill for the
Borrower and its Subsidiaries taken as a whole; and with respect to,
Indebtedness, obligations, liabilities, and claims of TransCor U.S., that the
aggregate amount of such items for TransCor U.S. does not exceed 5.0% of the
aggregate amount of such items for the Borrower and its Subsidiaries taken as a
whole.
5.17 COMPLIANCE WITH REQUIREMENTS. The conduct of each Credit
Party's business and its management of correctional and detention facilities as
currently conducted are in compliance, in all material respects, with the
standards of the American Correctional Association and the requirements of
applicable Governmental Authorities.
5.18 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this
Agreement or the other Loan Documents (including, without limitation, the direct
or indirect use of the proceeds of the Advances) will violate or result in a
violation of the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation
T, U or X.
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(b) No Credit Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no Credit Party is
(i) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
5.19 DISCLOSURE. Neither this Agreement nor any financial
statements delivered to the Lenders nor any other document, certificate or
statement furnished to the Lenders by or on behalf of any Credit Party in
connection with the transactions contemplated hereby or the other Loan Documents
(other than projections and pro forma financial information) contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of such Credit Party to be reasonable at the time made,
it being recognized by the Lenders that such financial information as it relates
to future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.
6. AFFIRMATIVE COVENANTS.
Each Credit Party covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, such
Credit Party or its Subsidiaries, as applicable, shall do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that
enables such Credit Party to produce financial statements in accordance with
GAAP and maintain records pertaining to the assets that contain information as
from time to time reasonably may be requested by the Agent. Such Credit Party
also shall keep an inventory reporting system that shows all additions, sales,
claims, returns, and allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide the Agent with the following
documents at the following times in form reasonably satisfactory to the Agent:
(a) on a weekly basis, a collection journal and credit
register since the last such schedule and a calculation of the Borrowing Base as
of such date,
(b) on a monthly basis and, in any event, by no later
than the 10th day of each month during the term of this Agreement,
(i) a detailed calculation of the Borrowing
Base,
(ii) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed calculation of
the Borrowing Base previously provided to the Agent,
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(iii) a summary aging, by vendor, of the
Borrower's accounts payable and any book overdraft, and
(iv) a calculation of Dilution for the prior
month,
(v) notice and evidence of all new and
outstanding Liens,
(c) on a quarterly basis, evidence, satisfactory to the
Agent in its Permitted Discretion, of the Borrower's compliance with the terms
of Section 5.16, with respect to TransCor U.S.,
(d) on an annual basis, evidence, satisfactory to the
Agent in its Permitted Discretion, of the Borrower's compliance with the terms
of Section 5.16, with respect to the Immaterial Subsidiaries (other than
TransCor U.S.), and
(e) upon request of the Agent,
(i) copies of invoices, customer statements,
credit memos, remittance advises, and reports, deposit slips,
shipping and delivery documents in connection with the
Accounts,
(ii) notice of all litigation, material disputes
or claims,
(iii) a detailed list of the Borrower's customers,
and
(iv) such other reports as to the Collateral or
the financial condition of the Borrower as the Agent
reasonably may request from time to time.
6.3 FINANCIAL STATEMENTS, REPORTS CERTIFICATES. Deliver to the
Agent, with a copy to each Lender:
(a) as soon as available, but in any event within 45 days
after the end of each month during each such Credit Parties' fiscal years,
(i) (A) a company prepared balance sheet and
income statement, covering each Credit Party's operations
during such period, and (B) with respect to each such month
that is the last month of any fiscal quarter of such Credit
Party, a company prepared statement of cash flows covering
such Credit Party's operations during such fiscal quarter,
(ii) a certificate, substantially in the form of
Exhibit C-2, signed by its chief financial officer to the
effect that:
(A) the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present the
financial condition of such Credit Party,
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(B) the representations and warranties
of such Credit Party contained in this Agreement and
the other Loan Documents are true and correct in all
material respects on and as of the date of such
certificate, as though made on and as of such date
(except to the extent that such representations and
warranties relate solely to an earlier date),
(C) there does not exist any condition
or event that constitutes a Default or Event of
Default (or, to the extent of any non-compliance,
describing such non-compliance as to which he or she
may have knowledge and what action such Credit Party
has taken, is taking, or proposes to take with
respect thereto),
(iii) for each month that is the date on which a
financial covenant in Section 7.20 is to be tested, a
Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable
financial covenants contained in Section 7.20,
(b) as soon as available, but in any event within 90 days
after the end of each Credit Parties' fiscal years,
(i) financial statements of each Credit Party
for each such fiscal year, audited by independent certified
public accountants reasonably acceptable to the Agent and
certified by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of
cash flow and, if prepared, such accountants' letter to
management),
(ii) a certificate of such accountants addressed
to the Agent stating that such accountants do not have
knowledge of the existence of any Default or Event of Default
under Section 7.20,
(c) if and when filed by any Credit Party,
(i) 10-Q quarterly reports Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by any Credit Party
with the SEC, and
(iii) any other information that is provided by
each Credit Party to its shareholders generally,
(d) if and when filed by any Credit Party or as requested
by the Agent, satisfactory evidence of payment of applicable excise taxes in
each jurisdictions in which (i) such Credit Party conducts business or is
required to pay any such excise tax, (ii) where such Credit Party's failure to
pay any such applicable excise tax would result in a Lien on the properties or
assets of such Credit Party, or (iii) where such Credit Party's failure to pay
any such applicable excise tax would constitute a Material Adverse Change, and
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(e) upon the request of the Agent, any other report
reasonably requested relating to the financial condition of any Credit Party.
Each Credit Party agrees that its independent certified public
accountants are authorized to communicate with the Agent and to release to the
Agent whatever financial information concerning such Credit Party that the Agent
reasonably may request.
6.4 ANNUAL PROJECTIONS. As soon as available and in any event no
later than 30 days after the end of each fiscal year of each Credit Party,
Projections prepared by such Credit Party's management, together with a brief
description of the assumptions used in the preparation thereof, in form
reasonably satisfactory to the Agent.
6.5 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all material obligations in respect of leases of Real Property
(except to the extent that the amount or validity of such payment or other
obligation is being contested in good faith by proper proceedings in such a
manner as would not be reasonably likely to cause the termination or forfeiture
of such lease), keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Agent of any default by any party with
respect to such leases and cooperate with the Agent in all respects to cure any
such default, and cause each of its Subsidiaries to do so, notify the Agent of
any lapse, termination, forfeiture, default or cancellation of any lease
(whether or not in accordance with the terms of such lease or this Agreement),
make available to the Agent copies of any additional or replacement material
lease entered into subsequent to the Effective Date, and (i) with respect to
each such replacement or additional lease between the Borrower and PRT, deliver
to the Agent a Non-Disturbance Agreement, and (ii) with respect to each such
replacement or additional lease between the Borrower and a lessor other than
PRT, use the Borrower's best efforts to obtain and deliver to the Agent a
non-disturbance agreement in form and substance reasonably satisfactory to the
Agent from the lessor under any such replacement or additional lease.
6.6 AUDITS; INSPECTIONS. Upon reasonable notice and during normal
business hours, each Credit Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Agent, including, without
limitation, independent accountants, agents, attorneys, and appraisers to visit
and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. Each Credit Party agrees that the Agent, and its
representatives, may conduct an annual audit of its assets, at the expense of
such Credit Party.
6.7 MAINTENANCE OF EQUIPMENT. Maintain the Equipment in good
operating condition and repair (ordinary wear and tear excepted), and make all
necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved.
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6.8 TAXES. Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against each Credit Party or any of its property to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Each Credit Party shall make due and timely payment or
deposit of all such federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to the Agent,
on demand, appropriate certificates attesting to the payment thereof or deposit
with respect thereto. Each Credit Party will make timely payment or deposit of
all tax payments and withholding taxes required of it by applicable laws,
including those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish the Agent with
proof satisfactory to the Agent indicating that such Credit Party has made such
payments or deposits.
6.9 INSURANCE.
(a) Maintain at its expense, insurance respecting the
Collateral wherever located and with respect to each Credit Party's business,
covering loss or damage by fire, theft, explosion, and all other hazards and
risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses. Each Credit Party also shall maintain business interruption,
public liability, and product liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation. All such policies of
insurance shall be in such amounts and with such insurance companies as are
reasonably satisfactory to the Agent. Each Credit Party shall deliver certified
copies of all such policies to the Agent with 438 BFU lender's loss payable
endorsements or other reasonably satisfactory lender's loss payable
endorsements, naming the Agent as sole loss payee or additional insured, as
appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days prior written notice to the
Agent in the event of cancellation of the policy for any reason whatsoever. If
any Credit Party fails to provide and pay for such insurance, the Agent may, at
its option, but shall not be required to, procure the same and charge such
Credit Party's Loan Account therefor.
(b) Each Credit Party shall give the Agent prompt notice
of any loss covered by such insurance. The Agent shall have the exclusive right
to adjust any losses payable under any such insurance policies in excess of
$1,000,000, without any liability to such Credit Party whatsoever in respect of
such adjustments. Any monies in excess of $1,000,000 received as payment for any
loss under any insurance policy respecting Collateral or as payment of any award
or compensation for condemnation or taking by eminent domain, shall be paid over
to the Agent to be applied at the option of the Required Lenders either to the
prepayment of the Obligations without premium, in such order or manner as the
Required Lenders may elect, or shall be disbursed to such Credit Party under
staged payment terms reasonably satisfactory to the Required Lenders for
application to the cost of repairs, replacements, or restorations.
6.10 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder and under
the other Loan Documents by or on behalf of each Credit Party without setoff or
counterclaim and free and clear of, and without deduction or withholding for or
on account of, any federal, state, or local taxes.
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6.11 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on Schedule 6.11; provided, however,
that the Borrower may amend Schedule 6.11 so long as such amendment occurs by
written notice to the Agent not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, the Borrower provides any financing statements or
fixture filings necessary to perfect and continue perfected the Agent's Liens on
such assets and also provides to the Agent a Collateral Access Agreement.
6.12 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
6.13 LEASES. Pay when due all rents and other amounts payable under
any leases to which any Credit Party is a party or by which any Credit Party's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest. To the extent that such Credit Party fails timely to make
payment of such rents and other amounts payable when due under its leases, the
Agent shall be entitled, in its Permitted Discretion, to reserve an amount equal
to such unpaid amounts against the Borrowing Base.
6.14 ENVIRONMENTAL LAWS.
(a) Each Credit Party shall, and shall cause its
Subsidiaries to, comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and take reasonable actions
to ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to do so would not reasonably be expected to have a Material
Adverse Effect;
(b) Each Credit Party shall, and shall cause its
Subsidiaries to, conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect;
and
(c) Each Credit Party shall defend, indemnify and hold
harmless the Agent, its respective employees, agents, officers and directors,
from and against any and all 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 Law
applicable to the operations of such Credit Party or any of its Subsidiaries or
the Properties, or any orders,
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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 arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
6.15 CORPORATE EXISTENCE, ETC. At all time preserve and keep in
full force and effect each Credit Party's valid corporate existence and good
standing and any rights and franchises material to such Credit Party's
businesses.
6.16 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, (i) notify the Agent if any
written information, exhibit, or report furnished to the Lender Group contained
any untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (ii) correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgement, filing, or recordation thereof.
6.17 COMPLIANCE WITH TERMS OF MANAGEMENT CONTRACTS. Make all
payments and otherwise perform all material obligations in respect of Management
Contracts (except to the extent that the amount or validity of such payment or
other obligation is being contested in good faith by proper proceedings in such
a manner as would not be reasonably likely to cause the termination or
forfeiture of such Management Contract), keep all Management Contracts in full
force and effect and not allow any Management Contract to lapse or be terminated
or any rights to renew such Management Contract to be forfeited or cancelled,
notify the Agent of any default (except for the matters disclosed on Schedule
6.17) by any party with respect to any Management Contract and cooperate with
the Agent in all respects to cure any such default, and cause each of its
Subsidiaries to do so, notify the Agent of any lapse, termination, forfeiture,
default (except for the matters disclosed on Schedule 6.17) or cancellation of
any Management Contract (whether or not in accordance with the terms of such
Management Contract or this Agreement), and make available to the Agent copies
of any additional or replacement Management Contract entered into subsequent to
June 30, 2000. In furtherance of the foregoing, the Borrower agrees that all
Management Contracts entered into on or after the Effective Date and all
Management Agreements that are renewed on or after the Effective Date will be
entered into or renewed, as the case may be, in the name of the Borrower and not
in the name of any of its Subsidiaries or Affiliates.
6.18 COMPLIANCE WITH ASSIGNMENT OF CLAIMS ACT. At any time, and
from time to time, upon the request of the Agent, take such actions as are
required by the Agent in its Permitted Discretion to comply with (a) the
Assignment of Claims Act, 31 U.S.C. ss. 3727, for all Accounts with respect to
which the Account Debtor is the United States or any department, agency, or
instrumentality of the United States, so as to designate Agent as the payee on
all payments against such Accounts, or (b) any comparable statute of any state
or other jurisdiction for all Accounts with respect to which the Account Debtor
is such state or other jurisdiction, or any department, agency, or
instrumentality of such state or other jurisdiction, so as to designate the
Agent as the payee on all payments against such Accounts.
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6.19 QUARTERLY PROJECTIONS. As soon as available and in any event
not later than December 31, 2000, the Borrower shall deliver to the Agent
Projections for each of the Borrower's fiscal quarters beginning with the fiscal
quarter ending March 31, 2001 through the fiscal quarter ending December 31,
2004, prepared by the Borrower's management, together with a brief description
of the assumptions used in the preparation thereof. Such projections shall,
among other things, include projections at least one calendar quarter into the
future of the Borrower's cash flows, net worth and EBITDA.
6.20 COMPLIANCE WITH REQUIREMENTS. Conduct its business and its
management of correctional and detention facilities in compliance, in all
material respects, with the standards of the American Correctional Association
and the requirements of applicable Governmental Authority.
6.21 ADDITIONAL CREDIT PARTIES. As soon as practicable and in no
event within 30 days after any Person becomes a Subsidiary (or ceases to be an
Immaterial Subsidiary (but remains a Subsidiary)) of any Credit Party, the
Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person
and, provided the PRT Credit Agreement permits, shall cause such person to
execute a Joinder Agreement substantially in the form of Exhibit J-1.
6.22 ASSUMPTION OF AGREEMENT.
Upon the consummation of the Merger, CCAAS shall assume all of
CCA's obligations, rights and interests under this Agreement and take all
actions reasonably requested by the Agent to evidence such assumption by CCAAS.
7. NEGATIVE COVENANTS.
Each Credit Party covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, no
Credit Party nor any of its Subsidiaries will do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement;
(b) guarantees of Indebtedness under the PRT Credit
Agreement;
(c) Indebtedness set forth on Schedule 7.1;
(d) Purchase Money Indebtedness incurred after the
Effective Date in an aggregate amount outstanding at any one time not to exceed
$500,000;
(e) refinancings, renewals, or extensions of Indebtedness
permitted under this Section 7.1 (and continuance or renewal of any Permitted
Liens associated therewith) so long as: (i) the terms and conditions of such
refinancings, renewals, or extensions do not materially impair the prospects of
repayment of the Obligations by any of the Credit Parties, (ii) the net
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cash proceeds of such refinancings, renewals, or extensions do not result in an
increase in the aggregate principal amount of the Indebtedness so refinanced,
renewed, or extended, (iii) such refinancings, renewals, refundings, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, and (iv) to the extent that
Indebtedness that is refinanced was subordinated in right of payment to the
Obligations, then the subordination terms and conditions of the refinancing
Indebtedness must be at least as favorable to the Lender Group as those
applicable to the refinanced Indebtedness.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced under Section
7.1 and so long as the replacement Liens only encumber those assets that secured
the original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, reorganization,
or recapitalization, or reclassify its Stock; provided, however, that Immaterial
Subsidiaries may merge with and into the Borrower so long as the Borrower is the
surviving entity in such merger, and provided, further, that this Section 7.3
shall not restrict or prevent the consummation of the Merger.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Convey, sell, assign, lease, transfer, or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of its property or assets.
(d) Permit any Immaterial Subsidiary to own or operate or
possess any material asset, license, management contract, franchise, or right or
be liable with respect to any material Indebtedness, obligation, liability, or
claim.
7.4 DISPOSAL OF ASSETS. Sell, lease, assign, transfer, or
otherwise dispose of any of its properties or assets, other than pursuant to
Permitted Dispositions.
7.5 CHANGE NAME. Without providing 30 days prior written
notification thereof to the Agent and so long as, at the time of such written
notification, such Credit Party provides any financing statements necessary to
perfect and continue perfected the Agent's Liens, change its name, FEIN,
corporate structure (within the meaning of Section 9-402(7) of the Code), or
identity, or add any new fictitious name, except that CCAAS is permitted to
change its name following the Merger upon providing prior written notification
thereof to the Agent and otherwise complying with this Section 7.5.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable
with respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to its account or which are
transmitted or turned over to the Agent.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
its business.
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7.8 PREPAYMENTS AND AMENDMENTS.
(a) Prepay, redeem, retire, defease, purchase, or
otherwise acquire the Indebtedness that is the subject of the [Intercreditor
Agreement] or any of the Indebtedness that is the subject of the PRT Related
Documents, and
(b) Directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any agreement, instrument,
document, indenture, or other writing evidencing or concerning the Indebtedness
that is the subject of the [Intercreditor Agreement].
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than Stock) on, or purchase,
acquire, redeem, or retire any of its Stock, of any class, whether now or
hereafter outstanding, provided, however, that after the consummation of the
Merger, the Borrower may, in any calendar year, pay PRT amounts not to exceed
$12,000,000, or such other amount as the Agent shall approve in its Permitted
Discretion.
7.11 ACCOUNTING METHODS. Modify or change its method of accounting.
Each Credit Party waives the right to assert a confidential relationship, if
any, it may have with any accounting firm or service bureau in connection with
any information requested by the Agent pursuant to or in accordance with this
Agreement, and agrees that the Agent may contact directly any such accounting
firm or service bureau in order to obtain such information.
7.12 INVESTMENTS. Except for Permitted Investments, directly or
indirectly make, acquire, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
at any time that Advances are outstanding, the Borrower shall not have Permitted
Investments in excess of $5,000,000 outstanding at any one time without the
prior written consent of the Agent, which consent may be conditioned, at Agent's
election, on the Borrower entering into Control Agreements or similar
arrangements governing such Permitted Investments, as the Agent shall determine
in its Permitted Discretion, to perfect (and further establish) Agent's Liens in
such Permitted Investments.
7.13 TRANSACTIONS WITH AFFILIATES. Except for the PRT Documents,
directly or indirectly enter into or permit to exist any material transaction
with any Affiliate of any Credit Party except for transactions that are in the
ordinary course of such Credit Party's business, upon fair and reasonable terms,
that are fully disclosed to the Agent, and that are no less favorable to such
Credit Party than would be obtained in an arm's length transaction with a
non-Affiliate.
7.14 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.15 COMPENSATION. Increase the annual fee or per-meeting fees paid
to directors during any year by more than 15% over the prior year; pay or accrue
total cash compensation, during any year, to officers and senior management
employees in an aggregate amount in excess of 115% of that paid or accrued in
the prior year; provided, however, that if any Credit Party hires or appoints an
officer (who is not a replacement for another such officer), the total cash
compensation paid or accrued by such Credit Party with respect to such
individual (the "Additive
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Amount") during such year of hire or appointment (the "Hire Year") shall not be
included in the aggregate amount of total cash compensation paid or accrued by
such Credit Party for purposes of calculating whether such Credit Party exceeded
the aggregate amount of total cash compensation allowable during such year;
provided further, however, that, in the year following the Hire Year, the
Additive Amount (annualized if the individual was hired or appointed for less
than a full year) shall be included in the aggregate amount of total cash
compensation paid or accrued by such Credit Party for the Hire Year for the
purpose of calculating the total cash compensation paid or accrued by such
Credit Party for the prior year.
7.16 USE OF PROCEEDS. Use the proceeds of the Advances for any
purpose other than (a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest, and accrued fees and expenses owing to Existing
Lender, and (ii) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, and (b) on the Closing Date and thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted
working capital and corporate purposes.
7.17 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without providing 30 days prior written notification thereof to the Agent and so
long as, at the time of such written notification, such Credit Party provides
any financing statements or fixture filings necessary to perfect and continue
perfected the Agent's Liens and also provides to Agent a Collateral Access
Agreement with respect to such new location. The Inventory and Equipment shall
not at any time now or hereafter be stored with a bailee, warehouseman, or
similar party without the Agent's prior written consent.
7.18 ACCOUNTING CHANGES. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards, or terms in this Agreement
(including, without limitation, any such change that results in the amount of
Net Worth being different than it would have been in the absence of such
change), then each Credit Party and the Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Change with the intended result that the criteria for evaluating
such Credit Party's financial condition shall be the same after such Accounting
Change as if such Accounting Change had not been made. Until such time as such
an amendment shall have been executed and delivered by such Credit Party, the
Agent and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Change had not occurred. "Accounting Change" refers to any change in
accounting principles, or in the application or interpretation thereof by any
Credit Party's independent certified public accounts, required, or determined by
such accountants to be required, by any rule, regulations, pronouncement or
opinion by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants, or, if applicable, the Securities and Exchange
Commission, or, in each case, any successor to such entities.
7.19 AMENDMENTS OF CONTRACTS.
(a) Cancel or terminate or permit the cancellation or
termination (other than at its stated maturity) of (i) any of the Management
Contracts (other than in the ordinary course of
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business), or (ii) any of the PRT Related Documents, except in connection with
the transactions contemplated by the Merger; or
(b) amend or modify, or permit the amendment or
modification of (i) any Management Contract (other than in the ordinary course
of business), or (ii) any PRT Related Document in any material respect and in
any manner that results in such PRT Related Document being on terms and
conditions that are less favorable to the Borrower than are in effect
immediately prior to such amendment or modification, except in connection with
the transactions contemplated by the Merger, or (iii) any PRT Lease Agreement to
increase the rentals paid thereunder in any material respect other than any
increases in rentals arising in connection with additions to or expansions of
the premises leased under such PRT Lease Agreement.
8. EVENTS OF DEFAULT.
8.1 EVENTS OF DEFAULT
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
(a) If any Credit Party fails to pay when due and payable
or when declared due and payable, any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due the
Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations);
(b) If any Credit Party fails or neglects to perform,
keep, or observe (i) any covenant or other provision contained in Sections 6.2,
6.3, 6.4, 6.11, 6.12, and 6.13 hereof and such failure or neglect continues for
a period of 5 days after the date on which such failure or neglect first occurs,
(ii) any covenant or other provision contained in Sections 6.1 and 6.7 hereof
and such failure or neglect is not cured within 15 days after the date on which
such failure or neglect first occurs, or (iii) any covenant or other provision
contained in any Section of this Agreement or the other Loan Documents (other
than a Section that is expressly provided for elsewhere in this Section 8);
(c) If a Borrower Net Worth Default or a Borrower EBITDA
Default shall occur;
(d) If any material portion of any Credit Party's
properties or assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any third Person;
(e) If an Insolvency Proceeding is commenced by any
Credit Party;
(f) If an Insolvency Proceeding is commenced against any
Credit Party and any of the following events occur: (i) such Credit Party
consents to the institution of the Insolvency Proceeding against it, (ii) the
petition commencing the Insolvency Proceeding is not timely controverted, (iii)
the petition commencing the Insolvency Proceeding is not dismissed within 45
calendar days of the date of the filing thereof; provided, however, that, during
the
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pendency of such period, the Agent (including any successor agent), and any
member of the Lender Group shall be relieved of their obligation to extend
credit hereunder, (iv) an interim trustee is appointed to take possession of all
or a substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, such Credit Party, or (v) an order
for relief shall have been issued or entered therein;
(g) If any Credit Party is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of its business affairs;
(h) If a notice of Lien, levy, or assessment is filed of
record with respect to (i) any Credit Party's properties or assets by the United
States Government, or any department, agency, or instrumentality thereof, or by
any state, county, municipal, or governmental agency, or if any taxes or debts
owing at any time hereafter to any one or more of such entities becomes a Lien,
whether ▇▇▇▇▇▇ or otherwise, upon any of such Credit Party's properties or
assets and the same is not paid on the payment date thereof, (ii) an assessment
in excess of $100,000 in the aggregate is filed of record with respect to any
Credit Party's assets by any state, county, municipal, or other non-federal
Governmental Authority, or (iii) if any taxes or debts owing at any time
hereafter to any one or more of such entities in excess of $250,000 in the
aggregate becomes a Lien upon any Credit Party's assets and the same is not paid
and the same is not released, discharged, or bonded against before the earlier
of 30 days after the date it first arises or 5 days prior to the date when such
asset is subject to being forfeited by such Credit Party;
(i) If one or more settlements of any actions, suits or
proceedings, judgments or other claims involving an aggregate amount of
$250,000, or more, in excess of the amount covered by insurance, becomes a Lien
or encumbrance upon any Credit Party's assets and the same is not released,
discharged, bonded against, or stayed pending appeal before the earlier of 30
days after the date it first arises or 5 days prior to the date on which such
asset is subject to being forfeited by such Credit Party;
(j) If there is a default in one or more agreements to
which any Credit Party is a party with one or more third Persons relative to
such Credit Party's Indebtedness involving an aggregate amount of $250,000, or
more, and such default results in a right by such third Person(s), irrespective
of whether exercised, to accelerate the maturity of such Credit Party's
obligations thereunder;
(k) There shall occur an event of default under the PRT
License Agreement (subject to applicable grace or cure periods, if any);
(l) There shall occur (i) an event of default under the
PRT Master Lease (subject to applicable grace or cure periods, if any), (ii) any
payment default under any PRT Lease Agreement (not including the PRT Master
Lease) between any Credit Party and PRT, or (iii) any shortening of or
limitation on the term of any PRT Lease Agreement, except that the occurrence of
the following events shall not constitute an Event of Default under this Section
8.1 (l): (a) the deferral by Borrower of certain of the payment obligations of
PRT under the PRT Services Agreement, the PRT Tenant Incentive Agreement and the
PRT Business Development Agreement, (b) the failure by Borrower to make certain
of the rent payments due and to become due under each of the PRT leases.;
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(m) There shall occur a PRT Change of Control;
(n) If any Credit Party makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to the
payment of the Obligations, except to the extent that such payment is permitted
by the terms of the subordination provisions applicable to such Indebtedness; or
(o) If any material misstatement or misrepresentation
exists now or hereafter in any warranty, representation, statement, or report
made to the Lender Group by any Credit Party or any officer, employee, agent, or
director of any Credit Party, or if any such warranty or representation is
withdrawn.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES.
The Agent may, and at the direction of the Required Lenders shall, upon
the occurrence, and during the continuation, of an Event of Default, the
Required Lenders (at their election but without notice of their election and
without demand) may, except to the extent otherwise expressly provided or
required below, authorize and instruct the Agent to do any one or more of the
following on behalf of the Lender Group (and the Agent, acting upon the
instructions of the Required Lenders, shall do the same on behalf of the Lender
Group), all of which are authorized by the Credit Parties:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for
the benefit of the Borrower under this Agreement, under any of the Loan
Documents, or under any other agreement between the Borrower and the Lender
Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting the Agent's rights and security interests, for the benefit of
the Lender Group, in the Collateral and without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which the Agent considers advisable,
and in such cases, the Agent will credit the Borrower's Loan Account with only
the net amounts received by the Agent in payment of such disputed Accounts after
deducting all Lender Group Expenses incurred or expended in connection
therewith;
(e) Cause the Borrower to hold all returned Inventory in
trust for the Lender Group, segregate all returned Inventory from all other
property of the Borrower or in the Borrower's possession and conspicuously label
said returned Inventory as the property of the Lender Group;
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(f) Without notice to or demand upon the Borrower, make
such payments and do such acts as the Agent considers necessary or reasonable to
protect its security interests in the Collateral. The Borrower agrees to
assemble the Collateral if the Agent so requires, and to make the Collateral
available to the Agent as the Agent may designate. The Borrower authorizes the
Agent to enter the premises where the Collateral is located, to take and
maintain possession of the Collateral, or any part of it, and to pay, purchase,
contest, or compromise any encumbrance, charge, or Lien that in the Agent's
determination appears to conflict with the Agent's Liens and to pay all expenses
incurred in connection therewith. With respect to any of the Borrower's owned or
leased premises, the Borrower hereby grants the Agent a license to enter into
possession of such premises and to occupy the same, without charge, for up to
120 days in order to exercise any of the Lender Group's rights or remedies
provided herein, at law, in equity, or otherwise;
(g) Without notice to the Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of Section 9-505 of the Code),
set off and apply to the Obligations any and all (i) balances and deposits of
the Borrower held by the Lender Group (including any amounts received in the
Lockbox Accounts), or (ii) indebtedness at any time owing to or for the credit
or the account of the Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of the Borrower held by the Lender Group, and any amounts received in
the Lockbox Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. The Borrower is hereby grants to the Agent a license
or other right to use, without charge, the Borrower's labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar nature, as
it pertains to the Collateral, in completing production of, advertising for
sale, and selling any Collateral and the Borrower's rights under all licenses
and all franchise agreements shall inure to the Lender Group's benefit;
(j) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including the Borrower's premises) as
the Agent determines is commercially reasonable. It is not necessary that the
Collateral be present at any such sale;
(k) The Agent shall give notice of the disposition of the
Collateral as follows:
(i) The Agent shall give the Borrower and each
holder of a security interest in the Collateral who has filed
with the Agent a written request for notice, a notice in
writing of the time and place of public sale, or, if the sale
is a private sale or some other disposition other than a
public sale is to be made of the Collateral, then the time on
or after which the private sale or other disposition is to be
made;
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(ii) The notice shall be personally delivered or
mailed, postage prepaid, to the Borrower as provided in
Section 12, at least 5 days before the date fixed for the
sale, or, at least 5 days before the date on or after which
the private sale or other disposition is to be made; no notice
needs to be given prior to the disposition of any portion of
the Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a
recognized market. Notice to Persons other than the Borrower
claiming an interest in the Collateral shall be sent to such
addresses as they have furnished to the Agent;
(iii) If the sale is to be a public sale, the
Agent also shall give notice of the time and place by
publishing a notice one time at least 5 days before the date
of the sale in a newspaper of general circulation in the
county in which the sale is to be held;
(l) Any Lender in the Lender Group may credit bid and
purchase at any public sale; and
(m) The Lender Group shall have all other rights and
remedies available to it at law or in equity pursuant to any other Loan
Documents; and
(n) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by the Borrower. Any
excess will be returned, without interest and subject to the rights of third
Persons, by the Agent to the Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender
Group under this Agreement, the other Loan Documents, and all other agreements
shall be cumulative. The Lender Group shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If the Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, to the extent that the Agent
determines that such failure by the Borrower could result in a Material Adverse
Change, in its discretion and without prior notice to the Borrower, the Agent
may do any or all of the following: (a) make payment of the same or any part
thereof; (b) set up such reserves against the Borrowing Base as the Agent deems
necessary to protect the Lender Group from the exposure created by such failure;
or (c) obtain and maintain insurance policies of the type described in Section
6.9, and take any action with respect to such policies as the Agent deems
prudent. Any such amounts paid by the Agent shall constitute Lender Group
Expenses. Any such payments made by the Agent shall not constitute an agreement
by the Lender Group to make similar payments in the future or a waiver by the
Lender Group of any Event of Default under this
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Agreement. The Agent need not inquire as to, or contest the validity of, any
such expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. The Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by the Lender Group on which the Borrower may in any way be
liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. The Borrower
hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under Section 9-207 of the Code, the Lender Group shall not
in any way or manner be liable or responsible for: (i) the safekeeping of the
Collateral; (ii) any loss or damage thereto occurring or arising in any manner
or fashion from any cause; (iii) any diminution in the value thereof; or (iv)
any act or default of any carrier, warehouseman, bailee, forwarding agency, or
other Person; and (b) all risk of loss, damage, or destruction of the Collateral
shall be borne by the Borrower.
11.3 INDEMNIFICATION. Each Credit Party shall jointly and severally
pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related
Persons with respect to each Lender, each Participant, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest
extent permitted by law) from and against any and all claims, demands, suits,
actions, investigations, proceedings, and damages, and all reasonable attorneys
fees and disbursements and other costs and expenses actually incurred in
connection therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in connection with or as a result of or related to the execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). The Credit Parties
shall have no obligation to any Indemnified Person under this Section 11.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability for which any Credit Party was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by such Credit
Party with respect thereto.
12. NOTICES.
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Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan Document shall
be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, or telefacsimile to the relevant
party, as the case may be, at its address set forth below:
If to a Credit Party: CORRECTIONS CORPORATION OF AMERICA
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: STOKES, BARTHOLOMEW, ▇▇▇▇▇ & ▇▇▇▇▇▇
SunTrust Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to the Agent: ▇▇▇▇▇▇ COMMERCIAL PAPER INC.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. 212.526-7691
Attn: ▇▇▇ ▇▇▇▇▇
Fax No. 212.526-0035
with copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
all other parties. All notices or demands sent in accordance with this Section
12, other than notices by the Lender Group in connection with Sections 9-504 or
9-505 of the Code, shall be deemed received on the earlier of the date of actual
receipt or 3 days after the deposit thereof in the mail. The Borrower
acknowledges and agrees that notices sent by the Lender Group in connection with
Sections 9-504 or 9-505 of the Code shall be deemed sent when deposited in the
mail or personally delivered, or, where permitted by law, transmitted
telefacsimile or other similar method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
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THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED, TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE REQUIRED
LENDERS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE REQUIRED LENDERS
ELECT TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. BORROWER AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13.
BORROWER AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of the
Agent, assign and delegate to one or more assignees (provided that no written
consent of the Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Transferee) (each an "Assignee") all, or
any ratable part of all, of the Obligations, the Commitments and the other
rights and obligations of such Lender hereunder and under the other Loan
Documents, in a minimum amount of $5,000,000; provided, however, that the
Borrower and the Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have
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been given to the Borrower and the Agent by such Lender and the Assignee; (ii)
such Lender and its Assignee shall have delivered to the Borrower and the Agent
an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1
hereto (an "Assignment and Acceptance"); and (iii) the assignor Lender or
Assignee has paid to the Agent for the Agent's sole and separate account a
processing fee in the amount of $5,000. Anything contained herein to the
contrary notwithstanding, the consent of the Agent shall not be required (and
payment of any fees shall not be required) if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of such Lender.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 11.3 hereof)
and be released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto), and such
assignment shall effect a novation between the Borrower and the Assignee.
(c) 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 follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (4) such Assignee will, independently and without
reliance upon the Agent, such assigning Lender 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 decisions in taking or not taking action under
this Agreement; (5) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (6) such Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
the Agent of such
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fully executed Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of the
Agent, sell to one or more commercial banks, financial institutions, or other
Persons not Affiliates of such Lender (a "Participant") participating interests
in the Obligations, the Commitment, and the other rights and interests of that
Lender (the "originating Lender") hereunder and under the other Loan Documents
(provided that no written consent of the Agent shall be required in connection
with any sale of any such participating interests by a Lender to an Eligible
Transferee); provided, however, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Borrower and the Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating; (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating; (C) release all or a material portion of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating; (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender; or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums; and (v) all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation; except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement. The rights of any Participant
only shall be derivative through the originating Lender with whom such
Participant participates and no Participant shall have any direct rights as to
the other Lenders, the Agent, the Borrower, the Collections, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the right to
participate directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to the Borrower or the
Borrower's business.
(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR ss. 203.14, and such Federal
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Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; provided,
however, that the Borrower may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release the Borrower from its Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 14.1 hereof and, except as expressly required
pursuant to Section 14.1 hereof, no consent or approval by the Borrower is
required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Credit Party therefrom, shall be effective
unless the same shall be in writing and signed by the Required Lenders (or by
the Agent at the written request of the Required Lenders) and the requesting
Credit Party and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Lenders, the requesting Credit Party and acknowledged by the
Agent, may do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(d) change the percentage of the Commitments that is
required for the Lenders or any of them to take any action hereunder;
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(f) release Collateral other than as permitted by Section
16.11;
(g) release any Guarantor from its Guaranty Obligations;
(h) change the definition of "Required Lenders";
(i) release the Borrower from any Obligation for the
payment of money; or
(j) amend any of the provisions of Section 16.
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and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by the Agent, affect the rights or duties of the
Agent under this Agreement or any other Loan Document; provided further,
however, that no amendment, waiver or consent shall, unless in writing and
signed by ▇▇▇▇▇▇ in its individual capacity as a Lender, affect the specific
rights or duties of ▇▇▇▇▇▇ in its individual capacity as a Lender (as contrasted
with rights or duties of ▇▇▇▇▇▇ as a member of the Lender Group) under this
Agreement or any other Loan Document. The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of or with
respect to any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of the Credit Parties, shall not
require consent by or the agreement of the Credit Parties.
15.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement, any
other Loan Document, or any present or future supplement hereto or thereto, or
in any other agreement between or among the Borrower and the Agent or any
Lender, or delay by the Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by the Agent or any Lender will be effective
unless it is in writing, and then only to the extent specifically stated. No
waiver by the Agent or the Lenders on any occasion shall affect or diminish the
Agent's and each Lender's rights thereafter to require strict performance by the
Borrower of any provision of this Agreement. The Agent's and each Lender's
rights under this Agreement and the other Loan Documents will be cumulative and
not exclusive of any other right or remedy which the Agent or any Lender may
have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF THE AGENT. Each Lender hereby
designates and appoints the Agent as its agent under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
The Agent agrees to act as such on the express conditions contained in this
Section 16. The provisions of this Section 16 are solely for the benefit of the
Agent, and the Lenders, and no Credit Party shall have any rights as a third
party beneficiary of any of the provisions contained herein; provided, however,
that certain of the provisions of Section 16.10 hereof also shall be for the
benefit of the Credit Parties. Any provision to the contrary contained
elsewhere, in this Agreement or in any other Loan Document notwithstanding, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent; it
being expressly understood and agreed that the use of the word "Agent" is for
convenience only, that ▇▇▇▇▇▇ is merely the representatives of the Lenders, and
has only the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, the Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions which the Agent is
expressly entitled to take or
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assert under or pursuant to this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, or of any other provision of the Loan
Documents that provides rights or powers to the Agent, the Lenders agree that
the Agent shall have the right to exercise the following powers as long as this
Agreement remains in effect: (a) to maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the Advances,
the Collateral, the Collections, and related matters; (b) to execute or to file
any and all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents; (c) to make Advances, for itself
or on behalf of Lenders as provided in the Loan Documents; (d) to exclusively
receive, apply, and distribute the Collections as provided in the Loan
Documents; (e) to open and maintain such bank accounts and lock boxes as the
Agent deems necessary and appropriate in accordance with the Loan Documents for
the foregoing purposes with respect to the Collateral and the Collections; (f)
to perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to any Credit Party, the Obligations, the Collateral,
the Collections, or otherwise related to any of same as provided in the Loan
Documents; and (g) to incur and pay such Lender Group Expenses as the Agent may
deem necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Except as otherwise provided in this
section, the Agent may execute any of its respective duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects as long as such selection was
made in compliance with this section and without gross negligence or willful
misconduct.
16.3 LIABILITY OF THE AGENT. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Credit Party or any
Subsidiary or Affiliate of any Credit Party, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Credit Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall 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 any other Loan Document, or to inspect the Books or properties of
any Credit Party or the books or records or properties of any Credit Party's
Subsidiaries or Affiliates.
16.4 RELIANCE BY THE AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper
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Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Credit Party or counsel to any Lender), independent accountants
and other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless the Agent shall first receive such advice or concurrence of the
Lenders as it deems appropriate and until such instructions are received, the
Agent shall act, or refrain from acting, as it deems advisable. If the Agent so
requests, it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liabilities and expenses that may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Lenders and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to the Agent for the account of the
Lenders, except with respect to Events of Default of which the Agent has actual
knowledge, unless the Agent shall have received written notice from a Lender or
any Credit Party referring to this Agreement, describing such Default or Event
of Default, and stating that such notice is a "notice of default." The Agent
will promptly notify the Lenders of its receipt of any such notice or of any
Event of Default of which the Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and the Agent of such Event of Default. Each Lender shall be
solely responsible for giving any notices to its Participants, if any. Subject
to Section 16.4, the Agent shall take such action with respect to such Default
or Event of Default as may be requested by the Required Lenders in accordance
with Section 9; provided, however, that unless and until the Agent has received
any such request, the 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.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of any
Credit Party or its Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and any other Person (other than the
Lender Group) party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrower. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Credit Parties and any other
Person (other than the Lender Group) party
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to a Loan Document. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall have no duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects operations,
property, financial and other condition or creditworthiness of the Credit
Parties and any other Person party to a Loan Document that may come into the
possession of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. The Agent may incur and
pay Lender Group Expenses to the extent that the Agent reasonably deems
necessary or appropriate for the performance and fulfillment of its respective
functions, powers, and obligations pursuant to the Loan Documents, including,
without limiting the generality of the foregoing: court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not any Credit Party is obligated to
reimburse the Agent or Lenders for such expenses pursuant to the Loan Agreement
or otherwise. The Agent is authorized and directed to deduct and retain
sufficient amounts from Collections to reimburse itself for such out-of-pocket
costs and expenses prior to the distribution of any amounts to the Lenders. In
the event the Agent is not reimbursed for such costs and expenses from
Collections, each Lender hereby agrees that it is and shall be obligated to pay
to or reimburse the Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (in each case,
to the extent not reimbursed by or on behalf of the Credit Parties and without
limiting the obligation of the Credit Parties to do so), according to their Pro
Rata Shares, from and against any and all Indemnified Liabilities; provided,
however, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for such Lender's
ratable share of any costs or out-of-pocket expenses (including attorneys fees
and expenses) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Credit Parties. The undertaking in this section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
16.8 THE AGENT IN ITS INDIVIDUAL CAPACITY. ▇▇▇▇▇▇ and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Credit Parties and their Subsidiaries and Affiliates and any other Person (other
than the Lender Group) party to any Loan Documents as though ▇▇▇▇▇▇ were not the
Agent hereunder, without notice to or the consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, ▇▇▇▇▇▇ or its Affiliates may
receive information regarding the Credit Parties or their Affiliates and any
other Person (other than the Lender Group) party to any Loan Documents that is
subject to confidentiality obligations in favor of the Credit Parties or such
other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality
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obligations, which waiver the Agent will use its reasonable best efforts to
obtain), the Agent shall be under no obligation to provide such information to
them.
16.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 45 days
notice to the Lenders. If the Agent resigns under this Agreement, the Required
Lenders shall appoint a successor Agent for the Lenders. If no successor Agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders, a successor Agent. If the
Agent has materially breached or failed to perform any material provision of
this Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace the Agent with a successor Agent from among the Lenders.
In any such event, upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
Agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 16 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement, mutatis
mutandis. If no successor Agent has accepted appointment as Agent by the date
which is 45 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.
16.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership
or trust" within the meaning of the IRC and such Lender claims exemption from,
or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC,
such Lender shall deliver to the Agent and the Borrower:
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms and W-8 BEN before the
payment of any interest in the first calendar year and before
the form previously delivered expires or becomes obsolete;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the payment of any
interest is due in the first taxable year of such Lender and
before the form previously delivered expires or becomes
obsolete; and
(iii) such other form or forms as may be required
under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify the Agent and the Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
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(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrower to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the IRC.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
16.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
any Credit Party of all Obligations; (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if
such Credit Party certifies to the Agent that the sale or disposition is
permitted under Section 7 of this Agreement or the other Loan Documents (and the
Agent may rely conclusively on any such certificate, without further inquiry);
(iii) constituting property in which such Credit Party owned no interest at the
time the security interest was granted or at any time thereafter; or (iv)
constituting property leased to such Credit Party under a lease that has expired
or is terminated in a transaction permitted under this Agreement. Except as
provided above, the Agent will not execute and deliver a release of any Lien on
any Collateral without the prior written authorization of (y) if the release is
of all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by the Agent or any Credit Party
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at any time, the Lenders will confirm in writing the Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 16.11; provided, however, that (1) the Agent shall not be required
to execute any document necessary to evidence such release on terms that, in the
Agent's opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of such Credit Party in respect
of) all interests retained by such Credit Party, including, the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(b) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by such Credit Party or
is cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the terms
and conditions contained herein, the Agent may act in any manner it may deem
appropriate, in its sole discretion given the Agent's own interest in the
Collateral in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing,
except as otherwise provided herein.
16.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of the Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of the Agent, set off against the
Obligations, any amounts owing by such Lender to any Credit Party or any
accounts of any Credit Party now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so by the Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral the purpose of
which is, or could be, to give such Lender any preference or priority against
the other Lenders with respect to the Collateral.
(b) Subject to Section 16.8, if, at any time or times any Lender
shall receive (i) by payment, foreclosure, setoff or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
promptly shall (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares;
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provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
16.13 AGENCY FOR PERFECTION. The Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting the Agent's
Liens in assets which, in accordance with Article 9 of the UCC can be perfected
only by possession. Should any Lender obtain possession of any such Collateral,
such Lender shall notify the Agent thereof, and, promptly upon the Agent's
request therefor shall deliver such Collateral to the Agent in accordance with
the Agent's instructions.
16.14 PAYMENTS BY THE AGENT TO THE LENDERS. All payments to be made
by the Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds pursuant to such wire transfer
instructions as each party may designate for itself by written notice to the
Agent. Concurrently with each such payment, the Agent shall identify whether
such payment (or any portion thereof) represents principal, premium or interest
on Advances or otherwise.
16.15 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs the Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
benefit of the Lender Group. Each member of the Lender Group agrees that any
action taken by the Agent or all Lenders, as applicable, in accordance with the
terms of this Agreement or the other Loan Documents relating to the Collateral
and the exercise by the Agent or all Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
16.16 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION.
By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively,
"Reports") prepared by the Agent, and the Agent shall so furnish each
Lender with such Reports;
(b) expressly agrees and acknowledges that neither any
other Lender nor the Agent (i) makes any representation or warranty as
to the accuracy of any Report, or (ii) shall be liable for any
information contained in any Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Agent or other
party performing any audit or examination will inspect only specific
information regarding the Credit Parties and will rely significantly
upon the Books, as well as on representations of the Credit parties'
personnel;
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(d) agrees to keep all Reports and other material, non-public
information regarding the Credit Parties and their Subsidiaries, operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by the Credit Parties that in any event such
Lender may make disclosures (a) to counsel for and other advisors, accountants,
and auditors to such Lender, (b) reasonably required by any bona fide potential
or actual Assignee, transferee, or Participant in connection with any
contemplated or actual assignment or transfer by such Lender of an interest
herein or any participation interest in such Lender's rights hereunder (so long
as any such Assignee, transferee, or Participant agrees to keep all such
information confidential on substantially the same terms and conditions as are
contained in this Section), (c) of information that has become public by
disclosures made by Persons other than such Lender, its Affiliates, assignees,
transferees, or participants, or (d) as required or requested by any court,
governmental or administrative agency, pursuant to any subpoena or other legal
process, or by any law, statute, regulation, or court order; provided, however,
that, unless prohibited by applicable law, statute, regulation, or court order,
such Lender shall notify such Credit Party of any request by any court,
governmental or administrative agency, or pursuant to any subpoena or other
legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Credit Parties, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of any Credit Party; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses and other amounts (including, attorney costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
In addition to the foregoing: (x) Any Lender may from time to time request of
the Agent in writing that the Agent provide to such Lender a copy of any report
or document provided by the Borrower to the Agent that has not been
contemporaneously provided by the Borrower to such Lender, and, upon receipt of
such request, the Agent shall provide a copy of same to such Lender promptly
upon receipt thereof from the Borrower; (y) To the extent that the Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from any Credit Party, any Lender may, from time to time,
reasonably request that the Agent exercise such right as specified in such
Lender's notice to the Agent, whereupon the Agent promptly shall request of such
Credit Party the additional reports or information specified by such Lender,
and, upon receipt thereof from such Credit Party, the Agent promptly shall
provide a copy of same to such Lender; and (z) Any time that the Agent renders
to any Credit Party a statement regarding the Loan Account, the Agent shall send
a copy of such statement to each Lender.
16.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of the Agent
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in its capacity as such, and not by or in favor of the Lenders, any and all
obligations on the part of the Agent (if any) to make any credit available
hereunder shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 16.7, no member of the Lender Group shall have any
liability for the acts or any other member of the Lender Group. No Lender shall
be responsible to any Credit Party or any other Person for any failure by any
other Lender to fulfill its obligations to make credit available hereunder, nor
to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.
17. GUARANTY
17.1 THE GUARANTY. The Guarantors hereby jointly and severally
guarantee to the Agent and the Lenders, as primary obligor and not as surety,
the prompt payment of the Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Obligations are not paid
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), then the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Advances, the same will be promptly paid in
full when due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in accordance
with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein
or in any other of the Loan Documents, the obligations of each Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
17.2 OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantors
under Section 17.1 are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Loan Documents, or any other agreement or instrument referred to
therein, or any substitution, release, impairment or exchange of any Guarantor
or other guarantee of or security for any of the Advances, and, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this Section 17.2 that
the obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the
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Borrower or any other Guarantor for amounts paid under this Section 17 until
such time as the Agent and the Lenders have been paid in full, all commitments
under this Agreement have been terminated and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Agent or the Lenders in connection with monies received under the Loan
Documents. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Advances shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of
the Loan Documents or any other agreement or instrument referred to in the Loan
Documents shall be done or omitted;
(c) the maturity of any of the Advances shall be accelerated, or
any of the Advances shall be modified, supplemented or amended in any respect,
or any right under any of the Loan Documents or any other agreement or
instrument referred to in the Loan Documents shall be waived or any other
guarantee of any of the Advances or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender
as security for any of the Advances shall fail to attach or be perfected;
(e) any of the Advances shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor); or
(f) the occurrence of Insolvency Proceeding with respect to the
Borrower.
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or the Lenders exhaust any right,
power or remedy or proceed against any Person under any of the Loan Documents,
or any other agreement or instrument referred to in the Loan Documents or
against any other Person under any other guarantee of, or security for, any of
the Advances.
17.3 REINSTATEMENT. The obligations of the Guarantors under this
Section 17 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Advances is
rescinded or must be otherwise restored by any holder of any of the Advances,
whether as a result of any Insolvency Proceedings or otherwise, and each
Guarantor agrees that it will indemnify the Agent and each Lender on demand for
all reasonable costs and expenses (including, without limitation, fees and
expenses of counsel) incurred by the Agent or such other Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such
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payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
17.4 CERTAIN ADDITIONAL WAIVERS. Each Guarantor agrees that such
Guarantor shall have no right of recourse to security for the Advances, except
through the exercise of rights of subrogation pursuant to Section 17.2 and
through the exercise of rights of contribution pursuant to Section 17.6.
17.5 REMEDIES. The Guarantors agree that, to the fullest extent
permitted by law, as between the Guarantors, on the one hand, and the Agent and
the Lenders, on the other hand, the Advances may be declared to be forthwith due
and payable as provided in Section 9 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9)
for purposes of Section 17.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Advances from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or the Advances being deemed to have become
automatically due and payable), the Advances (whether or not due and payable by
any other Person) shall forthwith become due and payable by the Guarantors for
purposes of Section 17.1.
17.6 RIGHTS OF CONTRIBUTION. The Guarantors hereby agree as among
themselves that, if any Guarantor shall make an Excess Payment (as defined
below), such Guarantor shall have a right of contribution from each other
Guarantor in an amount equal to such other Guarantor's Contribution Share (as
defined below) of such Excess Payment. The payment obligations of any Guarantor
under this Section 17.6 shall be subordinate and subject in right of payment to
the prior payment in full to the Agent and the Lenders of the Guaranteed
Obligations, and none of the Guarantors shall exercise any right or remedy under
this Section 17.6 against any other Guarantor until payment and satisfaction in
full of all of such Guaranteed Obligations. For purposes of this Section 17.6
only, (a) "Guaranteed Obligations" shall mean any obligations arising under the
other provisions of this Section 17; (b) "Excess Payment" shall mean the amount
paid by any Guarantor in excess of its Pro Rata Share of any Guaranteed
Obligations; (c) "Pro Rata Share" shall mean, for any Guarantor in respect of
any payment of Guaranteed Obligations, the ratio (expressed as a percentage) as
of the date of such payment of Guaranteed Obligations of (i) the amount by which
the aggregate present fair salable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Borrower and the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and the Guarantors; provided, however, that, for
purposes of calculating the Pro Rata Shares of the Guarantors in respect of any
payment of Guaranteed Obligations, any Guarantor that became a Guarantor
subsequent to the date of any such payment shall be deemed to have been a
Guarantor on the date of such payment and the financial information for such
Guarantor as of the date such Guarantor became a Guarantor shall be utilized for
such Guarantor in connection with such payment; and (d) "Contribution Share"
shall mean, for any Guarantor in respect of any Excess Payment made by any other
Guarantor, the ratio (expressed as a percentage) as of the date of such Excess
Payment of (i) the amount by which the aggregate
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present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrower and the Guarantors other than the maker of such Excess Payment exceeds
the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Credit Parties) of the Borrower and the Guarantors other than
the maker of such Excess Payment; provided, however, that, for purposes for
purposes of calculating the Contribution Shares of the Guarantors in respect of
any Excess Payment, any Guarantor that became a Guarantor subsequent to the date
of any such Excess Payment shall be deemed to have been a Guarantor on the date
of such Excess Payment and the financial information for such Guarantor as of
the date such Guarantor became a Guarantor shall be utilized for such Guarantor
in connection with such Excess Payment.
17.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE. The guarantee in
this Section 17 is a guaranty of payment and not of collection, is a continuing
guarantee, and shall apply to all Advances whenever arising.
18. GENERAL PROVISIONS.
18.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by the Borrower and each member of the Lender Group
whose signature is provided for on the signature pages hereof.
18.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.
18.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or the
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
18.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
18.5 AMENDMENTS IN WRITING. This Agreement can only be amended by a
writing signed by the Agent, the Required Lenders, and the Borrower.
18.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
Counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement
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but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.
18.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by the Borrower or the transfer by it to the Lender
Group of any property should for any reason subsequently be declared to be void
or voidable under any state or federal law relating to creditors' rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, and other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of the
Borrower automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
18.8 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
CORRECTIONS CORPORATION OF AMERICA,
a Tennessee corporation
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Title: Treasurer
---------------------------------------------
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
a New York corporation, in its capacity as Agent
and a Lender
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Title: Authorized Signatory
---------------------------------------------
82
[Certain Schedules and Exhibits
hereto intentionally omitted]
EXHIBIT N-1
FORM OF REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE LOAN AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH LOAN AGREEMENT.
$____________ New York, New York
__________ __, 200_
FOR VALUE RECEIVED, the undersigned, Corrections Corporation
of America, a Tennessee corporation (the "Borrower"), hereby unconditionally
promises to pay to ___________________ (the "Lender") or its registered assigns
at the Payment Office specified in the Loan Agreement (as hereinafter defined)
in lawful money of the United States and in immediately available funds, on the
Revolving Credit Termination Date the principal amount of (a) FIFTY MILLION
DOLLARS ($50,000,000), or, if less, (b) the aggregate unpaid principal amount of
all Revolving Credit Loans made by the Lender to the Borrower pursuant to
Section 2.1 of the Loan Agreement. The Borrower further agrees to pay interest
in like money at such Payment Office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in Section 2.5
of the Loan Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made pursuant to the Loan Agreement and the date
and amount of each payment or prepayment of principal thereof. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
any such endorsement shall not affect the obligations of the Borrower in respect
of any Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to
in the Loan and Security Agreement dated as of September _ , 2000 (as amended,
supplemented, replaced or otherwise modified from time to time, the "Loan
Agreement"), between Corrections Corporation of America, a Tennessee
corporation, (the "Borrower"), the Lender, the other banks and financial
institutions or entities from time to time parties thereto and ▇▇▇▇▇▇ Commercial
Paper Inc., as agent (the "Agent"), (b) is subject to the provisions of the Loan
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Loan Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
83
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Loan Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein shall have the meanings given to them in the Loan
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE LOAN AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
CORRECTIONS CORPORATION OF AMERICA,
a Tennessee corporation
By:
-----------------------------------
Name:
Title:
84
EXHIBIT N-2
FORM OF SWING LINE NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$_____________ NEW YORK, NEW YORK
_______________ __, 200_
FOR VALUE RECEIVED, the undersigned, [__________________], a
__________ corporation (the "Borrower"), hereby unconditionally promises to pay
___________ (the "Swing Line Lender") or its registered assigns at the payment
office specified in the Credit Agreement (as herein defined) in lawful money of
the United States and in immediately available funds, on the Revolving Credit
Termination Date the principal amount of (a) ________ dollars ($___________),
or, if less, (b) the aggregate unpaid principal amount of all Swing Line Loans
made by the Swing Line Lender to the Borrower pursuant to [Section 2.6] of the
Credit Agreement, as hereinafter defined. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in [Section
2.15] of such Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereto or on a continuation thereof
which shall be attached hereto and made a part hereof the date and amount of
each Swing Line Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement or any error in any such
endorsement shall not affect the obligations of the Borrower in respect of any
Swing Line Loan.
This Note (a) is [one of] the Swing Line Notes[s] referred to
in the Credit Agreement dated as of ___________ __, 200_ (as amended,
supplemented, replaced or otherwise modified from time to time, the "Credit
Agreement"), among [___________, a ____________ corporation,] the Borrower, the
Swing Line Lender, the other banks and financial institutions or entities from
time to time parties thereto, ▇▇▇▇▇▇ Brothers Inc., as advisor, lead arranger
and book manager, ▇▇▇▇▇▇ Commercial Paper Inc., as administrative agent and
▇▇▇▇▇▇ Commercial Paper Inc., as syndication agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement. This Note is
secured and Guaranteed as provided in the Loan Documents. Reference is hereby
made to the Loan Documents for a description of the properties and assets in
which a security interest has been granted, the nature and extent of the
security and the guarantees, the terms and conditions upon which the security
interests and each guarantee were granted and the rights of the holder of this
Note in respect thereof.
N-2-1
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Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION [10.6] OF
THE CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[BORROWER]
BY:
--------------------------------
Name:
Title:
N-2-2
86
CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
dated as of November 30, 2000 (this "Amendment") by and among CCA of Tennessee,
Inc., a Tennessee corporation (the "Borrower"), the Lenders party hereto (the
"Lenders") and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as agent for the Lenders (in such
capacity, the "Agent").
WITNESSETH
WHEREAS, the Borrower, the Lenders and the Agent are party to
that certain Loan and Security Agreement dated as of September 15, 2000 (the
"Loan Agreement"), pursuant to which the Borrower has borrowed, and may from
time to time borrow, Loans from the Lenders;
WHEREAS, effective on December 1, 2000, the Service Company
Merger (as defined below) will occur;
WHEREAS, the Borrower has requested that the Agent and the
Lenders consent to the transactions contemplated by the Service Company Merger;
and
WHEREAS, the Borrower, the Lenders and the Agent desire to
amend the Loan Agreement in the manner and on the terms set forth herein.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows.
I. DEFINITIONS
"Service Company Merger" means the merger of Service Company A
and Service Company B with and into the Borrower such that substantially all of
the assets of Service Company A, Service Company B and the Borrower as of the
date of such merger are in the Borrower, and the series of related transactions
occurring immediately prior to or concurrently with the Service Company Merger,
including the cancellation of the Service Company A License Agreement and the
Service Company B License Agreement.
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to them in the Loan Agreement.
II. CONSENT
The Agent and the Lenders hereby consent to the Service
Company Merger.
III. AMENDMENTS TO LOAN AGREEMENT
A. The definition of "Immaterial Subsidiaries" in Section 1.1
of the Loan Agreement is hereby amended to read in its entirety as follows:
""Immaterial Subsidiaries"
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means International Sub, Technical Sub, Canadian Sub, Viccor, TransCor PR,
French Sub, TransCor U.S., UK Sub and the Service Company Subs."
B. Section 1.1 of the Loan Agreement is hereby further amended
by adding the following terms in their proper alphabetical sequence:
"Senior Notes" means PRT's $100,000,000 in principal amount of
12% Senior Notes, due 2006 (the "Initial Senior Notes"), and the senior
notes of PRT, having the same terms as the Initial Senior Notes, issued
in exchange for the Initial Senior Notes as contemplated by the Senior
Notes Documents.
"Senior Notes Documents" means the Senior Notes Indenture, the
Underwriting Agreement and the Senior Notes.
"Senior Notes Indenture" means the Indenture, dated as of June
10, 1999, among the Borrower and State Street Bank and Trust Company,
as trustee (the "Trustee"), as supplemented by that certain First
Supplemental Indenture, dated as of June 11, 1999, among PRT and the
Trustee, pursuant to which the PRT Senior Notes are issued.
"Service Company Subs" means Correctional Services Acquisition
Sub, Inc., a Tennessee corporation, and Privatized Management
Acquisition Sub, Inc., a Tennessee corporation.
"UK Sub" means CCA (UK) Limited, a company incorporated in
England and Wales.
"Underwriting Agreement" means the Underwriting Agreement
between PRT and ▇▇▇▇▇▇ Brothers Inc., entered into in connection with
the issuance of the Senior Notes.
C. Section 2.1(a)(y)(i) of the Loan Agreement is hereby
amended by deleting the percentage "85%" and substituting in replacement thereof
the percentage "80%".
D. Section 6 of the Loan Agreement is hereby amended by
deleting paragraph 6.3(a)(iii) in the entirety, and adding a new paragraph
6.3(a)(iii) containing the following words: "upon the delivery of each of the
financial statements referred to in this paragraph 6.3, the Borrower shall
deliver a Compliance Certificate to the Agent with a copy to each Lender,"
E. Section 7.1 of the Loan Agreement is hereby amended by
adding the words "and the Senior Notes" after the word "Agreement" in paragraph
(b).
F. Section 7.8 of the Loan Agreement is hereby amended by
deleting the phrase "the Indebtedness that is the subject of the Intercreditor
Agreement or" contained in paragraph (a) thereof in its entirety and by deleting
the words "Intercreditor Agreement" contained in paragraph (b) thereof and
substituting in replacement thereof the words "PRT Related Documents".
G. Section 7.10 of the Loan Agreement is hereby amended by
deleting the word "year" contained therein and substituting in replacement
thereof the word "month" and by
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deleting the amount "$12,000,000" and substituting in replacement thereof the
amount "$15,000,000".
H. Section 7.13 of the Loan Agreement is hereby amended by deleting the
words "PRT Documents" and substituting in replacement thereof the words "PRT
Related Documents", and by adding the words "and the transactions set forth on
Schedule 7.13" after the word "Documents".
I. Schedule M-1 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit I hereto.
J. Schedule 5.5 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit II hereto.
K. Schedule 5.6 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit III hereto.
L. Schedule 5.7 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit IV hereto.
M. Schedule 5.8 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit V hereto.
N. Schedule 6.11 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit VI hereto.
O. Schedule 6.17 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit VII hereto.
P. Schedule 7.1 to the Loan Agreement is hereby amended to read in its
entirety as set forth in Exhibit VIII hereto
Q. The Loan Agreement is hereby amended by adding a new Schedule 7.13
as set forth in Exhibit IX hereto.
R. Schedule 3 to Exhibit C-2 of the Loan Agreement is hereby amended to
read in its entirety as set forth in Exhibit X hereto.
IV. REPRESENTATIONS AND WARRANTIES
A. The Borrower hereby repeats and reaffirms as of the date hereof the
representations and warranties of the Borrower contained in the Loan Agreement
with the same force and effect as though such representations and warranties had
been made as of the date hereof; provided, that all references in such
representations and warranties to the Loan Agreement shall refer to the Loan
Agreement as amended by this Amendment.
B. The Borrower represents and warrants as follows:
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1. The execution, delivery and performance by it of
this Amendment are within its corporate powers, have been duly
authorized by all necessary corporate action by it, do not contravene
(A) its charter or by-laws or (B) any law or material contractual
restriction binding on or affecting it, and do not result in or require
the creation of any lien (other than pursuant to or permitted by the
Loan Agreement) upon or with respect to any of its properties; and no
transaction contemplated hereby requires compliance by it with any bulk
sales act or similar law applicable to it. This Amendment has been duly
executed and delivered by it.
2. Other than the taking of any actions expressly
required under this Amendment, the Loan Agreement as amended hereby,
any other Loan Document or any other agreement or document to be
executed and delivered by it hereunder or thereunder, all of which have
been completed, and except as set forth on Schedule 5.7 to the Loan
Agreement, no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by it of this Amendment
or any other agreement or document to be executed and delivered by it
hereunder or the performance by it of this Amendment, the Loan
Agreement as amended hereby, any other Loan Document or any other
agreement or document to be executed and delivered by it hereunder or
thereunder.
3. This Amendment constitutes a legal, valid and
binding obligation of the Borrower, enforceable against it in
accordance with its terms, except as enforcement may be limited by
equitable principles, bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights
generally.
4. Attached hereto as Exhibit A are true and correct
copies of (A) a file-stamped copy of the Articles of Merger filed with
the Secretary of State of the State of Tennessee evidencing the Service
Company Merger, (B) resolutions of the Board of Directors of the
Borrower authorizing the Service Company Merger and the execution,
delivery and performance by the Borrower of this Amendment, and (C) an
incumbency certificate indicating the name, position and true
signatures of the officers of the Borrower authorized to execute this
Amendment.
V. DELIVERABLES; FURTHER ASSURANCES.
The Borrower agrees to promptly deliver to the Agent (i) one or more
opinions of counsel to the Borrower covering the matters set forth in Article IV
above, and (ii) such other documents, agreements , instruments and certificates
as the Agent or any Lender shall reasonably request.
VI. MISCELLANEOUS
A. Agreements to Remain in Full Force and Effect. The
Borrower, the Lenders and the Agent hereby agree that, except as amended hereby,
the Loan Agreement shall remain in full force and effect and is hereby ratified,
adopted and confirmed in all respects. All references to the Loan Agreement in
any other agreement or document shall hereafter be deemed to refer to the Loan
Agreement as amended hereby.
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B. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, when taken together,
shall constitute but one and the same Amendment.
C. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
D. Severability of Provisions. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the enforceability of such provision in any other jurisdiction.
E. Captions. The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their representative officers thereunder duly
authorized, as of the date first above written.
CCA OF TENNESSEE, INC., a Tennessee
Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
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[Exhibits and Schedules intentionally omitted]