Exhibit 10.1
AMENDMENT AGREEMENT NO. 5 TO CREDIT AGREEMENT
THIS AMENDMENT AGREEMENT NO. 5 TO CREDIT AGREEMENT ("Amendment Agreement")
is made and entered into this 10th day of April, 2003, by and among CPT
OPERATING PARTNERSHIP L.P., a Delaware limited partnership (the "Borrower"),
CORRECTIONAL PROPERTIES TRUST, a Maryland real estate investment trust ("CPV"),
BANK OF AMERICA, N.A., as successor in interest to NationsBank, National
Association (the "Agent"), as Agent for the lenders (the "Lenders") party to a
Credit Agreement dated October 2, 1998 among such Lenders, Borrower, CPV and the
Agent, as amended by Amendment Agreement No. 1 to Credit Agreement dated as of
March 10, 2000, Amendment Agreement No. 2 to the Credit Agreement dated as of
March 16, 2001, Amendment Agreement No. 3 to the Credit Agreement dated as of
March 16, 2001 and Amendment Agreement No. 4 to the Credit Agreement dated as of
June 22, 2001 (collectively, the "Agreement").
W I T N E S S E T H:
WHEREAS, the Borrower, CPV, the Agent and the Lenders have entered into
the Agreement pursuant to which the Lenders have agreed to make Revolving Loans
to the Borrower in the principal amount of $110,000,000 as evidenced by the
Notes (as defined in the Agreement); and
WHEREAS, the Borrower desires to purchase from Community Corrections
Corporation ("CCC") a correctional and detention facility known as Xxxxxxx Xxxx,
located in Newark, New Jersey, and to lease such facility to CCC on the terms
and conditions described in Exhibit A hereto (the "Xxxxxxx Xxxx Transaction")
and has requested that the Lenders approve the Xxxxxxx Xxxx Transaction; and
WHEREAS, the Borrower has requested that the Agreement be amended in the
manner herein set forth effective as of the date hereof;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. Definitions. The term "Agreement" as used herein and in the Loan
Documents (as defined in the Agreement) shall mean the Agreement as hereby
amended and modified. Unless the context otherwise requires, all terms used
herein without definition shall have the definition provided therefor in the
Agreement.
2. Amendment to Section 1.1 of the Agreement. Subject to the terms and
conditions hereof, Section 1.1 of the Agreement is hereby amended to add new
definitions in appropriate alphabetical order for "CCC", "Cash Collateral
Account" and "Xxxxxxx Xxxx Property" and to amend and restate in their entirety
the definitions of "Eligible Property" and "Mortgage", to read as follows:
"CCC" means Community Corrections Corporation, a Delaware
corporation.
"Cash Collateral Account" means a blocked account held by the Agent,
from which the Borrower shall not be permitted to withdraw any funds
except as provided in
Section 4.5 and upon which the Agent shall have a Lien for the benefit of
itself and the Lenders.
"Xxxxxxx Xxxx Property" means that certain correctional and
detentional facility known as Xxxxxxx Xxxx and located at 000-000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxx.
"Eligible Property" means, as of any date of determination, any
Qualifying Property, including the real property upon which it is
situated, in which the Borrower or any Guarantor has a fee simple interest
or a leasehold interest for a term exceeding that of the related Security
Lease, and which, as evidenced in an Eligible Property Compliance
Certificate, is:
(a) located in the United States or one of its territories;
and
(b) unencumbered by any Liens, encumbrances, easements,
restrictions or other matters of record except for
Permitted Encumbrances and the related Security Lease;
and
(c) free of structural defects and has passed a structural
inspection by an architect or engineer engaged by the
Agent, the results of which have been detailed in
writing and are satisfactory to the Agent in its
reasonable discretion; and
(d) in compliance with all Environmental Laws as evidenced
by a Phase I environmental assessment (and, if required
or recommended by the results of the Phase I
environmental assessment, a Phase II environmental
assessment) in form and substance satisfactory to the
Agent, addressed to the Agent, and (i) dated not earlier
than six months prior to the date of such Eligible
Property Compliance Certificate or (ii) supplemented by
a "bring-down" letter dated not earlier than six months
prior to the date of such Eligible Property Compliance
Certificate if such environmental assessment is dated an
earlier date; and
(e) subject to a Security Lease containing terms and
provisions acceptable to the Agent; and
(f) in full compliance with the terms and conditions
contained in the related Security Lease, which Security
Lease is with a Lease Party; and
(g) in full compliance with the material terms and
conditions contained in the management or operating
agreement, if any, relating to such facility, between
such Lease Party and the related Contract Party;
provided, however, that in the case of the Xxxxxxx Xxxx
Property only, full compliance by all parties with the
material terms and conditions contained in both (i) the
Support Services Provider Agreement between CCC and
Education & Health
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Centers of America, Inc. ("Education") dated August 7,
1996, as amended, and (ii) the management or operating
agreement between Education and the related Contract
Party shall satisfy the requirements of this subsection
(g); or
(h) otherwise acceptable to the Required Lenders in their sole
and absolute discretion.
"Mortgage" means, collectively, each of the instruments entitled
Credit Line Deed of Trust, Mortgage, Open-End Mortgage, Deed of Trust,
Deed to Secure Debt, Leasehold Mortgage, Open-End Leasehold Mortgage,
Leasehold Deed of Trust, Leasehold Deed to Secure Debt, Security
Agreement, Fixture Filing, Assignment of Leases and Rents and Financing
Statement in substantially the form of Exhibit K-1, in the case of a lease
to Wackenhut or a subsidiary of Wackenhut, or Exhibit K-2 in all other
cases, and such other mortgages, deeds of trust and deeds to secure debt
executed by the Borrower, CPV, or any other Guarantor granting a Lien to
the Agent (or a trustee for the benefit of the Agent) for the benefit of
the Lenders in the Pledged Properties, or other Qualifying Property if
such mortgage is being delivered pursuant to Section 4.5, as such
documents may be amended, modified, supplemented or restated from time to
time.
3. Amendment to Section 2.13(b) of the Agreement. Subject to the terms and
conditions hereof, Section 2.13(b) of the Agreement is hereby amended and
restated in its entirety to read as follows:
(b) The Borrower shall make, or shall cause each applicable
Guarantor, to make, a payment from the Net Proceeds from each private or
public offering of the equity securities of the Borrower or such
Guarantor, to the extent that such Net Proceeds are not deposited in a
Cash Collateral Account and used as described in Section 4.5, in an amount
equal to 100% of such Net Proceeds, each such payment to be made within
ten Business Days of receipt of such Net Proceeds and upon not less than
three Business Days' written notice to the Agent, which notice shall
include a certificate of an Authorized Representative setting forth in
reasonable detail the calculations used in computing the amount of such
payment.
4. Amendment to Article IV of the Agreement. Subject to the terms and
conditions hereof, Article IV of the Credit Agreement is hereby amended to add a
new Section 4.5 to read as follows:
4.5 Pledging of Qualifying Properties from Net Proceeds of Equity
Offering. Upon the issuance of any equity securities by the
Borrower, the Net Proceeds of which are not used to prepay Revolving
Loans as provided in Section 2.13(b), the Borrower shall deposit
such Net Proceeds into a Cash Collateral Account. Such Net Proceeds
may not be withdrawn or released from such Cash Collateral Account
unless the Borrower shall deliver to the Agent (i) evidence
satisfactory to it that such Net Proceeds are being used to purchase
one or more Qualifying Properties, and with respect to each such
Qualifying Property so purchased (ii) a an executed and recorded
Mortgage, (iii) a title insurance commitment (followed
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by a final policy) for an ALTA Lender's title policy insuring fee
simple title in such Qualifying Property and reflecting a first
priority Lien vested in the Agent; (iv) to the extent available, an
appraisal, (v) to the extent available, a Phase I environmental
assessment, and (vi) a certificate as to federally designated flood
zones. Notwithstanding that any such Qualifying Property may be an
Eligible Property, such Qualifying Property so pledged to the Agent
shall not be included in the Pledge Pool unless the conditions set
forth in Section 4.4 are satisfied with respect to such Qualifying
Property. In the event that Net Proceeds deposited into a Cash
Collateral Account pursuant to this Section 4.5 are not used prior
to the Revolving Credit Termination Date, such Net Proceeds
remaining on deposit shall be applied first to the payment of any
outstanding Obligations and then any balance remaining shall be paid
to the Borrower.
5. Amendment of Section 9.24 of the Agreement. Subject to the terms and
conditions hereof, Section 9.24 of the Agreement is amended to change the
percentage in line 4 thereof from 75% to 60%.
6. Amendment of Section 10.2 of the Agreement. Subject to the terms and
conditions hereof, Section 10.2 of the Agreement is hereby amended to restate
the parenthetical phrase in lines 2 and 4 thereof to read as follows: "(other
than the Acquisition of an Eligible Property or a Qualifying Property that is
mortgaged to the Agent pursuant to Section 4.5)".
7. Amendment to Exhibit L to the Agreement. Subject to the terms and
conditions hereof, Exhibit L to the Agreement is hereby amended and restated in
its entirety as set forth in Exhibit C hereto.
8. Representations and Warranties. The Borrower and CPV hereby certify
that:
(a) The representations and warranties made by Borrower and CPV in
Article VIII of the Agreement and Exhibit B to this Amendment Agreement
are true on and as of the date hereof except that the financial statements
referred to in Section 8.6(a) shall be those most recently furnished to
each Lender pursuant to Section 9.1(a) and (b);
(b) There has been no material change in the condition, financial or
otherwise, of CPV, and its Subsidiaries since the date of the most recent
financial reports of CPV received by each Lender under Section 9.1 of the
Agreement, other than changes in the ordinary course of business, none of
which has been a material adverse change;
(c) The business and properties of CPV and its Subsidiaries are not,
and since the date of the most recent financial report of CPV and its
Subsidiaries received by each Lender under Section 9.1 of the Agreement
have not been, adversely affected in any substantial way as the result of
any fire, explosion, earthquake, accident, strike, lockout, combination of
workers, flood, embargo, riot, activities of armed forces, war or acts of
God or the public enemy, or cancellation or loss of any major contracts;
(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constituted a Default
or an Event
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of Default on the part of the Borrower under the Agreement or the Notes
either immediately or with the lapse of time or the giving of notice, or
both; and
(e) The Appraised Value of the Xxxxxxx Xxxx Property does not exceed
20% of Consolidated Total Value, on a pro forma basis including the
Xxxxxxx Xxxx Property, and (ii) the approval of CCC as a Lease Party will
not result in the aggregate Appraised Value of all Pledged Properties that
are leased to Persons other than Pre-Approved Lessees exceeding 50% of
Consolidated Total Value, on a pro forma basis including the Xxxxxxx Xxxx
Property.
9. Conditions. As a condition to the effectiveness of this Amendment
Agreement, the Borrower and CPV shall deliver, or cause to be delivered to the
Agent, the following:
(a) evidence of the consummation of the Xxxxxxx Xxxx Transaction
for an aggregate purchase price not in excess of $22,000,000;
(b) eleven (11) executed counterparts of this Amendment Agreement;
(c) a resolution of the Borrower authorizing the execution of this
Amendment Agreement;
(d) an amendment fee payable to each Lender consenting hereto in
an amount equal to .05% of its Revolving Credit Commitment
(per the terms of the Agent's March 27, 2003 letter to the
Lenders); and
(e) payment of all fees stipulated in the fee letter dated March
28, 2003 with Bank of America, N.A. in connection with the
negotiation of this Amendment Agreement.
10. Approval of Xxxxxxx Xxxx Transaction and Waiver of Default of Lien
Covenant and Appraisal Requirement. Subject to the terms and conditions hereof,
and based upon the representations of the Borrower set forth in Exhibit B
hereto, the Lenders hereby approve and consent to the Xxxxxxx Xxxx Transaction
on the terms and conditions set forth in Exhibit A hereto, including
specifically but not with limitation, (i) the approval of CCC as a Lease Party
with respect to the Xxxxxxx Xxxx Property, (ii) the grant by CCC to the Comerica
Bank, N.A., as agent, of a leasehold mortgage encumbering the Security Lease
relating to the Xxxxxxx Xxxx Property and (iii) the delivery by the Borrower to
the Agent of an Appraisal relating to the Xxxxxxx Xxxx Property that is dated
more than six months prior to the date of such delivery, notwithstanding the
requirements of Schedule 4.4 of the Agreement.
11. Other Documents. All instruments and documents incident to the
consummation of the transactions contemplated hereby shall be satisfactory in
form and substance to the Agent and its counsel; the Agent shall have received
copies of all additional agreements, instruments and documents which it may
reasonably request in connection therewith, including evidence of the authority
of CPV and the Borrower to enter into the transactions contemplated by this
Amendment Agreement, in each case such documents, when appropriate, to be
certified by appropriate corporate or governmental authorities; and all
proceedings of CPV and the Borrower relating to the matters provided for herein
shall be satisfactory to the Agent and its counsel.
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12. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as in this Amendment Agreement or otherwise expressly stated, no
representations, warranties or commitments, express or implied, have been made
by any other party to the other. None of the terms or conditions of this
Amendment Agreement may be changed, modified, waived or canceled orally or
otherwise, except as provided in the Agreement.
13. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Agreement and all of the other Loan
Documents are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
CPT OPERATING PARTNERSHIP L.P.
WITNESS:
----------------------------------- By: Correctional Properties Trust,
General Partner
----------------------------------- By:
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
CORRECTIONAL PROPERTIES TRUST
WITNESS:
By:
----------------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
-----------------------------------
BANK OF AMERICA, N.A.
as Agent
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
As Lender
By:
-----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Principal
0
XXX XXXX XX XXXX XXXXXX
By:
-----------------------------------
Name: Xxxx Xxxxxxx
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
-----------------------------------
Name: Xxxxxxxxx Xxxxxxxxxxx
Title: Vice President
PNC BANK, N.A.
By:
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By:
-----------------------------------
Name: D. Xxx Xxxxxxxxx
Title: Senior Vice President
SUNTRUST BANK, N.A.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BANKATLANTIC
By:
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
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BANK ONE, OKLAHOMA, N.A.
By:
-----------------------------------
Name: Xxx Xxxxxxx
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG,
New York Branch as Successor in merger
with BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
By:
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
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EXHIBIT A
Xxxxxxx Xxxx Transaction
The Borrower will purchase from Community Corrections Corporation, a
Delaware corporation ("CCC") and its affiliate Community Corrections Urban
Renewal Corporation, for a total purchase price not in excess of $22,000,000, a
correctional and detention facility known as Xxxxxxx Xxxx and located at 000-000
Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx (the "Xxxxxxx Xxxx Property"). The Borrower
will lease the Xxxxxxx Xxxx Property to CCC pursuant to a Lease (such Lease
being the "Security Lease"). CCC will operate the facility on behalf of
Education and Health Centers of America, Inc., a New Jersey non-profit
corporation ("E&H"), pursuant to a Support Services Provider Agreement dated as
of August 7, 1996, as amended March, 2001 (the "Support Agreement"), in order
for E&H to fulfill its obligations under certain management and operating
agreements under which CCC is currently housing residents for the County of
Essex, New Jersey, the County of Union, New Jersey and the New Jersey Department
of Corrections (the "Governmental Agencies") (such managing and operating
agreements between E&H and such Governmental Agencies being collectively, the
"Management Agreements"). Under the terms of the Credit Agreement, in order for
the Xxxxxxx Xxxx Property to be an Eligible Property, the Management Agreements
must be between a Lease Party (which, in the case of the Xxxxxxx Xxxx Property,
would be CCC) and a Contract Party (which, in the case of Xxxxxxx Xxxx Property,
would be the Governmental Agencies). As indicated above, the Management
Agreements are between E&H and such Governmental Agencies. The Management
Agreements will not be assigned to the Agent as collateral for the benefit of
the Lenders.
The Borrower will enter into an "Agreement, Acknowledgement and Consent to
Leasehold Mortgage for Community Corrections," pursuant to which the Borrower
will approve the grant by CCC to Comerica Bank, N.A., as agent for a lender
group, of a leasehold mortgage encumbering CCC's interest in the Security Lease
relating to the Xxxxxxx Xxxx Property, among other things.
The Appraisal relating to the Xxxxxxx Xxxx Property is dated June 3, 2002,
which date is more than six months prior to the date of delivery thereof to the
Agent as required by Schedule 4.4 of the Credit Agreement.
With respect to the Xxxxxxx Xxxx Transaction, in establishing or
maintaining compliance with the requirements of section G of the Eligible
Property Compliance Certificate, replacements to or substitutions for the
Management Agreements described above shall be permitted so long as (i) one or
more management and operating agreements are in effect between E&H and one or
more Governmental Authority (as defined in the Agreement) for the Xxxxxxx Xxxx
Property, and (ii) the occupancy rate of the Xxxxxxx Xxxx Property does not fall
below 70% for more than two consecutive months.
A-1
EXHIBIT B
Borrower's Representations as to Xxxxxxx Xxxx Transaction
Under New Jersey law, public entities that contract with third party
correctional facility service providers may only contract with such providers
that are non-profit entities; however, such non-profit service providers may
subcontract for specific services (housing, supervision, food service, medial
care services, etc.) with related and unrelated for-profit entities.
Accordingly, the Governmental Agencies cannot contract directly with CCC, but
may contract with E&H, which is a non-profit entity, which may then subcontract
with CCC. The Support Agreement described in Exhibit A between CCC and E&H is a
permitted subcontract under the Management Agreements between E&H and the
Governmental Agencies described in Exhibit A. The Management Agreements may not
be assigned to the Agent as collateral for the benefit of the Lenders because
under the terms of the Management Agreements and New Jersey law, the
Governmental Agencies must agree to and approve any substitute service provider,
which must be a non-profit entity. However, the Security Lease between CCC and
the Borrower includes specific provisions that set forth how and when the
Borrower and its lenders may exercise certain rights of E&H and/or CCC to
negotiate with the Governmental Agencies and enter into new or substitute
Management Agreements or a Support Agreement to replace E&H and/or CCC in the
event of a default by CCC and/or E&H under the Security Lease, the Support
Agreement and/or the Management Agreements.
CCC's lender group under a proposed syndicated credit facility has
required that CCC grant a mortgage encumbering its leasehold interest in the
Xxxxxxx Xxxx Property to Comerica Bank, N.A., as its agent ("Comerica"), to
secure CCC's obligations under such facility. In connection with such facility,
Comerica has requested that the Borrower enter into that certain "Agreement,
Acknowledgement and Consent to Leasehold Mortgage for Community Corrections",
pursuant to which the Borrower will, among other things, approve the grant by
CCC to Comerica of a leasehold mortgage encumbering CCC's interest in the
Security Lease relating to the Xxxxxxx Xxxx Property.
B-1
EXHIBIT C
Exhibit L
Eligible Property Compliance Certificate
Bank of America, N.A.,
as Agent
Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telefacsimile: (000) 000-0000
Bank of America, N.A.,
as Agent
NC1-007-17-15
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of October 2,
1998 (the "Agreement") among CPT Operating Partnership L.P., a Delaware limited
partnership (the "Borrower"), Correctional Properties Trust, a Maryland real
estate investment trust, the Lenders (as defined in the Agreement) and Bank of
America, N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but
not otherwise defined herein shall have the respective meanings therefor set
forth in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as follows with respect to that certain
real property and the improvements located thereon commonly known as
__________________ (the "___________ Facility":
[The ____________ Facility qualifies as an Eligible Property by satisfying
the requirements of items (a) through (g) of the definition thereof as follows:
A. The ____________ Facility is located in ______________ [must be
within the United States or one of its territories]
B. As evidenced by the title report attached hereto as Exhibit A, the
_________ Facility is unencumbered by any Liens, encumbrances,
easements, restriction or other matters of record except for
Permitted Encumbrances and the related Security Lease.
C. Attached hereto as Exhibit B is a structural inspection report
performed by ___________, which evidences that the ___________
Facility is free from structural defects.
D. Attached hereto as Exhibit C is a Phase I environmental assessment
dated not earlier than six months prior to the date hereof (and if
required or recommended by the results of such Phase I environmental
assessment, a Phase II environmental assessment).
C-1
E. Attached hereto as Exhibit D is the Security Lease relating to the
________ Facility, with which the Borrower is in full compliance.
F. The Lease Party to the Security Lease is [Wackenhut Corrections
Corporation][a Governmental Authority whose unsecured long-term
Indebtedness is rated A or better by S&P and Xxxxx'x][__[other
entity approved by the Agent (or, in the case of the Xxxxxxx Xxxx
Property only, CCC)]___].
G. Attached hereto as Exhibit E is the operating or management
agreement relating to the _________ Facility, under which the Lease
Party is in full compliance; [in the case of the Xxxxxxx Xxxx
Property only, attached hereto, as Exhibits E and F are (i) the
Support Services Provider Agreement between CCC and Education &
Health Centers of America, Inc. ("Education") dated August 7, 1996,
as amended, and (ii) the management or operating agreement between
Education and the related Contract Party, under which all parties
thereto are in full compliance]
[The _________ Facility qualifies as an Eligible Property under item (h)
of the definition thereof and [add listing of other items required by the
Required Lenders under (h)].
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, _____.
By:
-----------------------------------
Authorized Representative
Name:
----------------------------------
Title:
---------------------------------
C-2
