EXHIBIT 10.1
$794,409,963.20
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 7, 2001
among
CORRECTIONS CORPORATION OF AMERICA
(formerly known as Prison Realty Trust, Inc.),
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent,
SOCIETE GENERALE,
as Documentation Agent,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
SOUTHTRUST BANK, N.A.,
as Co-Agent
AND
XXXXXX BROTHERS INC.
as Lead Arranger and as Book Manager
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................................................2
1.1 Definitions.....................................................................................2
1.2 Computation of Time Periods....................................................................40
1.3 Accounting Terms...............................................................................40
1.4 Interrelationship with First Amended and Restated Credit Agreement.............................41
1.5 Confirmation of Existing Obligations...........................................................41
SECTION 2. CREDIT FACILITIES.....................................................................................41
2.1 Revolving Loans................................................................................41
2.2 Letter of Credit Subfacility...................................................................43
2.3 Swingline Loan Subfacility.....................................................................47
2.4 Term Loan......................................................................................49
2.5 Tranche C Term Loan............................................................................50
2.6 New Term Loan..................................................................................52
SECTION 3. OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................53
3.1 Default Rate...................................................................................53
3.2 Extension and Conversion.......................................................................54
3.3 Prepayments....................................................................................54
3.4 Termination and Reduction of Revolving Committed Amount........................................57
3.5 Fees...........................................................................................58
3.6 Capital Adequacy...............................................................................59
3.7 Limitation on Eurodollar Loans.................................................................60
3.8 Illegality.....................................................................................60
3.9 Requirements of Law............................................................................61
3.10 Treatment of Affected Loans....................................................................62
3.11 Taxes..........................................................................................62
3.12 Compensation...................................................................................64
3.13 Pro Rata Treatment.............................................................................65
3.13A Tranche C Pro Rata Treatment...................................................................65
3.13B New Term Loan Pro Rata Treatment...............................................................66
3.14 Sharing of Payments............................................................................66
3.15 Payments, Computations, Etc....................................................................66
3.16 Evidence of Debt...............................................................................68
SECTION 4. GUARANTY..............................................................................................69
4.1 The Guaranty...................................................................................69
4.2 Obligations Unconditional......................................................................69
4.3 Reinstatement..................................................................................70
4.4 Certain Additional Waivers.....................................................................70
4.5 Remedies.......................................................................................70
4.6 Rights of Contribution.........................................................................71
4.7 Guarantee of Payment; Continuing Guarantee.....................................................72
SECTION 5. CONDITIONS..........................................................................................72
5.1 Conditions to Effectiveness..................................................................72
5.2 Conditions to all Extensions of Credit.......................................................77
SECTION 6. REPRESENTATIONS AND WARRANTIES......................................................................78
6.1 Financial Condition..........................................................................78
6.2 No Material Change...........................................................................78
6.3 Organization and Good Standing...............................................................78
6.4 Power; Authorization; Enforceable Obligations................................................79
6.5 No Conflicts.................................................................................79
6.6 No Default...................................................................................79
6.7 Ownership....................................................................................80
6.8 Indebtedness.................................................................................80
6.9 Litigation...................................................................................80
6.10 Taxes........................................................................................80
6.11 Compliance with Law..........................................................................80
6.12 ERISA........................................................................................80
6.13 Subsidiaries.................................................................................81
6.14 Governmental Regulations, Etc................................................................82
6.15 Purpose of Loans and Letters of Credit.......................................................83
6.16 Environmental Matters........................................................................83
6.17 Intellectual Property........................................................................84
6.18 Solvency.....................................................................................84
6.19 Investments..................................................................................84
6.20 Location of Collateral.......................................................................84
6.21 Disclosure...................................................................................84
6.22 [Intentionally omitted.].....................................................................85
6.23 Labor Matters................................................................................85
6.24 Year 2000 Compliance.........................................................................85
6.25 First Priority Lien..........................................................................85
6.26 Leases.......................................................................................85
SECTION 7. AFFIRMATIVE COVENANTS...............................................................................86
7.1 Information Covenants........................................................................86
7.2 Preservation of Existence and Franchises.....................................................90
7.3 Books and Records............................................................................90
7.4 Compliance with Law..........................................................................90
7.5 Payment of Taxes and Other Indebtedness......................................................90
7.6 Insurance....................................................................................90
7.7 Maintenance of Property......................................................................91
7.8 Performance of Obligations...................................................................91
7.9 Use of Proceeds..............................................................................92
7.10 Audits/Inspections...........................................................................92
7.11 Financial Covenants..........................................................................92
7.12 Additional Credit Parties....................................................................94
7.13 Environmental Laws...........................................................................95
7.14 Collateral...................................................................................96
7.15 Leases.......................................................................................96
7.16 Year 2000 Compliance.........................................................................97
7.17 Appraisals...................................................................................97
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7.18 Hedging Agreements.............................................................................. 97
7.19 [Intentionally omitted.]........................................................................ 97
7.20 [Intentionally omitted.]........................................................................ 97
7.21 [Intentionally omitted.]........................................................................ 97
7.22 [Intentionally omitted.]........................................................................ 97
7.23 Cash Management................................................................................. 97
7.24 Management Contract............................................................................. 98
SECTION 8. NEGATIVE COVENANTS..................................................................................... 98
8.1 Indebtedness.................................................................................... 98
8.2 Liens...........................................................................................100
8.3 Nature of Business..............................................................................100
8.4 Consolidation, Merger, Dissolution, etc.........................................................100
8.5 Asset Dispositions..............................................................................101
8.6 Investments.....................................................................................101
8.7 Restricted Payments.............................................................................101
8.8 Prepayments of Indebtedness, etc................................................................102
8.9 Transactions with Affiliates....................................................................102
8.10 Fiscal Year; Organizational Documents...........................................................102
8.11 Limitation on Restricted Actions................................................................103
8.12 Ownership of Subsidiaries.......................................................................103
8.13 Sale Leasebacks.................................................................................103
8.14 No Further Negative Pledges.....................................................................103
8.15 [Intentionally omitted.]........................................................................104
8.16 Speculative Transactions........................................................................104
8.17 [Intentionally omitted.]........................................................................104
8.18 Capital Expenditures............................................................................104
SECTION 9. EVENTS OF DEFAULT......................................................................................104
9.1 Events of Default...............................................................................104
9.2 Acceleration; Remedies..........................................................................107
SECTION 10. AGENCY PROVISIONS.....................................................................................108
10.1 Appointment, Powers and Immunities..............................................................108
10.2 Reliance by Administrative Agent................................................................109
10.3 Defaults........................................................................................109
10.4 Rights as a Lender..............................................................................109
10.5 Indemnification.................................................................................110
10.6 Non-Reliance on Agents and Other Lenders........................................................110
10.7 Successor Administrative Agent..................................................................110
SECTION 11. MISCELLANEOUS.........................................................................................111
11.1 Notices.........................................................................................111
11.2 Right of Set-Off; Adjustments...................................................................112
11.3 Benefit of Agreement............................................................................112
11.3A Tranche C Assignments and Pledges...............................................................114
11.3B New Term Loan Assignments and Pledges...........................................................114
11.4 No Waiver; Remedies Cumulative..................................................................114
11.5 Expenses; Indemnification.......................................................................115
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11.6 Amendments, Waivers and Consents.............................................................116
11.6A Tranche C Amendments, Waivers and Consents...................................................117
11.6B New Term Loan Amendments, Waivers and Consents...............................................118
11.7 Counterparts.................................................................................120
11.8 Headings.....................................................................................120
11.9 Survival.....................................................................................120
11.10 Governing Law; Submission to Jurisdiction; Venue.............................................120
11.11 Severability.................................................................................121
11.12 Entirety.....................................................................................121
11.13 Binding Effect; Termination..................................................................121
11.14 Confidentiality..............................................................................121
11.15 Conflict.....................................................................................122
11.16 Existing Agreement Superseded................................................................122
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SCHEDULES
Schedule 1.1(b) Investments
Schedule 1.1(c) Liens
Schedule 2.1(a) Lenders
Schedule 5.1(f)(i) Mortgaged Properties
Schedule 6.9 Certain Litigation
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Real Property Locations
Schedule 6.20(b) Personal Property Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places of Business
Schedule 7.6 Insurance
Schedule 7.23 Excluded Accounts
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(d) Form of Term Note
Exhibit 2.5(f) Form of Tranche C Term Note
Exhibit 2.6(b) Form of Notice of Borrowing
Exhibit 2.6(f) Form of New Term Loan Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.11(d) Form of Exemption Certificate
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
v
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
7, 2001, by and among CORRECTIONS CORPORATION OF AMERICA (formerly known as
Prison Realty Trust, Inc.), a Maryland corporation (the "Borrower"), the
subsidiaries of the Borrower from time to time party hereto (collectively, the
"Subsidiary Guarantors"), the Lenders (as defined herein), XXXXXX COMMERCIAL
PAPER INC. ("LCPI"), as administrative agent for the Lenders (in such capacity,
the "Administrative Agent"), SOCIETE GENERALE, as documentation agent (in such
capacity, the "Documentation Agent"), THE BANK OF NOVA SCOTIA, as syndication
agent (the "Syndication Agent"), SOUTHTRUST BANK, N.A., as co-agent (the
"Co-Agent") and XXXXXX BROTHERS INC. ("LBI"), as book manager and lead arranger
(in such capacities, the "Lead Arranger"), AMENDS AND RESTATES IN FULL the
Amended and Restated Credit Agreement, dated as of August 4, 1999 (as heretofore
amended, modified, restated or supplemented from time to time, the "First
Amended and Restated Credit Agreement"), among the Borrower, the subsidiaries of
the Borrower party thereto (the "First Amendment and Restatement Subsidiary
Guarantors"), the several lenders party thereto from time to time (the "Original
Lenders"), the Administrative Agent, as administrative agent for the Original
Lenders, the Documentation Agent, as documentation agent, the Syndication Agent,
as syndication agent, and SouthTrust Bank, N.A., as co-agent; this amendment and
restatement of the First Amended and Restated Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time, is hereinafter
referred to as this "Credit Agreement."
W I T N E S S E T H
WHEREAS, in amendment and restatement of the Original Credit Agreement
(as defined below), the Original Lenders previously extended credit to the
Borrower under the First Amended and Restated Credit Agreement;
WHEREAS, the Borrower has requested that the First Amended and Restated
Credit Agreement be amended and restated in full as set forth herein;
WHEREAS, the Required Lenders and the Required Tranche C Term Lenders
under and as defined in the First Amended and Restated Credit Agreement (the
"Amending Lenders") are willing so to amend and restate the First Amended and
Restated Credit Agreement and to continue to extend credit to the Borrower, upon
and subject to the terms and conditions set forth herein;
WHEREAS, it is the intent of the Borrower, the First Amendment and
Restatement Subsidiary Guarantors, the Subsidiary Guarantors, the Amending
Lenders, the Administrative Agent, the Documentation Agent, the Syndication
Agent, the Co-Agent and the Lead Arranger that this Credit Agreement amend and
restate in its entirety the First Amended and Restated Credit Agreement and
that, from and after the Second Restatement Effective Date, the First Amended
and Restated Credit Agreement shall be of no force and effect except to evidence
the terms and conditions under which the Borrower heretofore has incurred
obligations and liabilities to the Original Lenders and the Administrative Agent
(as evidenced by the First Amended and Restated Credit Agreement and the
Administrative Agent's books and records); and
WHEREAS, this Credit Agreement is made in renewal, amendment,
restatement and modification of, but not in extinguishment or novation of, the
obligations under the First Amended and Restated Credit Agreement.
NOW, THEREFORE, the parties hereto hereby agree to amend and restate the
First Amended and Restated Credit Agreement as follows:
SECTION 1.
DEFINITIONS
1.1 DEFINITIONS. As used in this Credit Agreement, the following terms
shall have the meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a Subsidiary
Guarantor after the Second Restatement Effective Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable Percentage.
"Adjusted Cash Flow" means, with respect to any Real Property, as of the
end of each fiscal quarter of the Consolidated Parties for the fiscal quarter
ending on such date, the lesser of:
(a) the sum of (i) lease payments received or accrued with
respect to such Real Property for such period under all leases that
comply with Section 7.15 ("Gross Lease Revenues"); provided that, with
respect to any Real Property that is not wholly-owned by the Borrower,
the cash lease payments with respect to such Real Property included in
the calculation of Adjusted Cash Flow hereunder shall be limited to a
percentage of such cash lease payments equal to the lesser of (A) the
Borrower's percentage ownership in such Real Property and (B) the
percentage of such cash lease payments actually received by the
Borrower, less (ii) actual capital expenditures for maintenance items
for such period, with respect to such Real Property, less (iii) actual
management fees paid with respect to such Real Property during such
period, all as determined in accordance with GAAP, and
(b) the sum of (i) operating income for such period less (ii)
non-cash operating income for such period after giving effect to the
deduction resulting from the Straight-Lining of Rents less (iii) real
estate taxes for such period less (iv) property insurance premiums for
such period less (v) ground lease payments made with respect to such
Real Property for such period less (vi) a capital reserve equal to
actual capital expenditures for the maintenance, repair and upkeep of
existing properties for such period, less (vii) a management fee equal
to actual management fees paid with respect to such Real Property during
such period, all as determined in accordance with GAAP
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
Percentage.
"Administrative Agent" shall have the meaning assigned to such term in
the preamble hereto, together with any successors or assigns.
2
"Administrative Agent's Fees" shall have the meaning assigned to such
term in Section 3.5(d).
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the Capital Stock in such Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agecroft" means Agecroft Properties, Inc., a Tennessee corporation.
"Agecroft Charter" means the charter of Agecroft attached as Exhibit
1.1(a) to the First Amended and Restated Credit Agreement.
"Agecroft Facility" means the prison facility located in Salford,
England, owned by Agecroft.
"Agecroft Investment" means that certain Investment by the Borrower in
Agecroft in connection with the Agecroft Transaction in an aggregate amount not
exceeding $81,000,000 consisting of a combination of a loan (evidenced by the
Agecroft Note) and an equity investment (plus the capitalization of interest on
the Agecroft Note, not involving the transfer of funds from any Credit Party, in
an aggregate amount not exceeding $5,000,000).
"Agecroft Note" means that certain promissory note, in a maximum
principal amount equal to $65,000,000 made by Agecroft in favor of the Borrower
and pledged to the Administrative Agent as Collateral for the Credit Party
Obligations.
"Agecroft Securitization" means any transaction pursuant to which the
Borrower obtains cash in consideration of its direct or indirect ownership
interest in the Agecroft Facility and/or the Agecroft Note, including, without
limitation, any issuance of securities or incurrence of Indebtedness by Agecroft
or any of its Subsidiaries, any sale of the Agecroft Facility or of the capital
stock of Agecroft, or any sale-leaseback of the Agecroft Facility; provided,
that (i) any Indebtedness incurred or issued in connection with any such
transaction shall be Non-Recourse Debt and (ii) the Net Cash Proceeds received
by the Borrower in any such transaction shall be not less than 45,000,000 Pounds
Sterling (or the equivalent in United States Dollars on such date).
"Agecroft Transaction" means the transactions in connection with the
design, development, construction, financing, leasing and subleasing of a prison
facility located in the United Kingdom pursuant to the Agecroft Transaction
Documents.
"Agecroft Transaction Documents" means those documents listed in the
Agecroft Charter and that certain Direct Agreement, dated as of July 6, 1998,
among Agecroft, the Borrower, CCA, Agecroft Prison Management Limited ("APM")
and Her Majesty's Principal Secretary of State for the Home Department ("HMPS"),
that certain Step-In and Collateral Agreement, dated as of July 6, 1998, among
CCA, APM, HMPS and UK Detention Services Limited, and that certain Access
Agreement to be entered into by and between Agecroft, the Borrower and APM
3
following completion of construction of the prison facility, all as previously
provided to the Administrative Agent.
"Aggregate Committed Amount" means the aggregate of the Revolving
Committed Amount, the Term Loan Committed Amount, the Tranche C Term Loan
Committed Amount and the New Term Loan Committed Amount.
"Aggregate Required Lenders" means, at any time, the Required Revolving
Lenders, the Required Term Lenders and the Required Tranche C Term Lenders, each
voting as a separate class.
"Amending Lenders" shall have the meaning assigned to such term in the
recitals hereto.
"Amendment Effective Date" means June 9, 2000.
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice as the
office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the applicable rate
of the Unused Fee for any day for purposes of Section 3.5(b), or the applicable
rate of the Standby Letter of Credit Fee for any day for purposes of Section
3.5(c)(i), the appropriate applicable percentage set forth below opposite the
applicable Senior Debt Rating then in effect as of the most recent Ratings Date.
The Applicable Percentage shall be determined based on the Senior Debt Rating;
provided that (a) if the Borrower shall not have a rating for its Senior Debt by
S&P and Xxxxx'x, then the Applicable Percentages shall be based on Pricing Level
VI and, (b) if the Borrower shall have a split Senior Debt Rating the lower of
the two ratings shall apply.
4
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Applicable Percentage for Revolving Loans
--------------------------------------------------------------------------------------------------------------------
Applicable Applicable
Percentage Percentage for
Pricing Moody's for Unused Standby Letter
Level S&P Rating Rating Eurodollar Loans Base Rate Loans Fee of Credit Fee
--------------------------------------------------------------------------------------------------------------------
I > BBB+ > Baa1 3.50% through and 2.75% through and .50% 2.00%
- - including June 30, including June 30,
2002 and 4.50% 2002 and 3.75%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
II > BBB > Baa2 3.75% through and 3.00% through and .55% 2.25%
- - including June 30, including June 30,
2002 and 4.75% 2002 and 4.00%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
III > BBB- > Baa3 4.00% through and 3.25% through and .60% 2.50%
- - including June 30, including June 30,
2002 and 5.00% 2002 and 4.25%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
IV > BB+ > Ba1 4.50% through and 3.75% through and .70% 3.00%
- - including June 30, including June 30,
2002 and 5.50% 2002 and 4.75%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
V > BB > Ba2 4.75% through and 4.00% through and .75% 3.25%
- - including June 30, including June 30,
2002 and 5.75% 2002 and 5.00%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
VI < BB < Ba2 5.25% through and 4.50% through and .80% 3.75%
including June 30, including June 30,
2002 and 6.25% 2002 and 5.50%
thereafter thereafter
--------------------------------------------------------------------------------------------------------------------
The Applicable Percentages for the Revolving Loans, Unused Fee and
Standby Letter of Credit Fee shall be determined and adjusted on the date that
the Senior Debt Rating changes (each a "Ratings Date"). Each Applicable
Percentage shall be effective from and including one Ratings Date until but
excluding the next Ratings Date. Any adjustment in the Applicable Percentages
for the Revolving Loans and Standby Letter of Credit Fee shall be applicable to
all existing Revolving Loans and standby Letters of Credit as well as any new
Revolving Loans and standby Letters of Credit made or issued.
"Asset Disposition" means the disposition of any or all of the assets
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise (including
pursuant to any casualty or condemnation event). The term
5
"Asset Disposition" shall include the Agecroft Securitization and the
Headquarters Sale-Leaseback, but shall not include (a) the sale of inventory in
the ordinary course of business and (b) any single disposition of non-prison
facility assets which does not yield Net Cash Proceeds of at least $1,000,000,
provided that all such dispositions excluded under this clause (b) shall not in
the aggregate yield Net Cash Proceeds exceeding $3,000,000 during any fiscal
year of the Borrower. Asset Dispositions shall not include (i) any disposition
of cash or Cash Equivalents in the ordinary course of business, (ii) any lease
of Real Property complying with Section 7.15 or (iii) any disposition of
property by the Borrower to a Restricted Subsidiary that is a Credit Party or by
a Restricted Subsidiary to the Borrower or to another Restricted Subsidiary that
is a Credit Party.
"Availability" means, at any time, the Revolving Committed Amount minus
the Revolving Obligations at such time.
"Availability Reserve" means (a) $42,000,000 through but not including
June 30, 2000, (b) $27,000,000 from and including June 30, 2000, through but not
including July 21, 2000, (c) $22,000,000 from and including July 21, 2000,
through but not including September 30, 2000, (d) $17,000,000 from and including
September 30, 2000, through but not including December 31, 2000, and (e) $0.00
from and after December 31, 2000, provided that (x) if the Agecroft
Securitization is consummated on any date prior to September 15, 2000, the
amounts set forth in (a) through (c) above shall on such date be increased by an
amount equal to fifty percent (50%) of the Net Cash Proceeds therefrom and (y)
if the Pacific Life Investment is not consummated on or before September 15,
2000, the amounts set forth in each of (c) and (d) above shall on such date be
decreased by $12,000,000.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
6
"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.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" means the Person identified as such in the preamble hereto,
together with any permitted successors and assigns.
"Borrowing Base" means, (A) as of any day prior to consummation of the
Management Opco Merger, the sum of the Borrowing Base Values of each Borrowing
Base Property and (B) as of any day on or after consummation of the Management
Opco Merger, the sum of the Post Merger Borrowing Base Values of each Borrowing
Base Property; provided, however, that in the case of either (A) or (B) above,
so long as any First Union Letters of Credit or NationsBank Letters of Credit
are outstanding, the Borrowing Base shall be deemed reduced by the aggregate
face amount of such First Union Letters of Credit and NationsBank Letters of
Credit that remain outstanding except to the extent any amount borrowed
hereunder (and not repaid) is used to cash collateralize the Borrower's
obligations under the First Union Letters of Credit or the NationsBank Letters
of Credit.
"Borrowing Base Properties" means, collectively, (i) each Existing
Property identified on Schedule 5.1(f)(i) that satisfies each of the following
conditions and (ii) each New Property of a Credit Party that satisfies each of
the following conditions:
(a) The property shall qualify as Eligible Real Estate.
(b) The Administrative Agent shall have received a pro forma
compliance certificate with respect to the property which includes an
annualized calculation of the projected quarterly Consolidated Adjusted
EBITDA of such property and the projected quarterly Adjusted Cash Flow
with respect to any property that is proposed to be added to the
Borrowing Base prior to consummation of the Management Opco Merger, as
applicable, of such property in form and substance satisfactory to the
Lenders.
(c) The Administrative Agent shall have received and be
satisfied with, in its sole discretion, any lease or sub-lease, as
appropriate, entered into by the Borrower (as lessor or sublessor, as
applicable) in leasing such property.
(d) The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, a fully executed and
notarized Mortgage in favor of the Administrative Agent encumbering the
ownership interest of the Borrower in the property, together with such
UCC-1 financing statements as the Administrative Agent shall deem
appropriate with respect to the property.
(e) The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, an
opinion of counsel in the state in which the property is located with
respect to the enforceability of the form of Mortgage and sufficiency of
the form of UCC-1 financing statements to be recorded or filed in such
7
state and such other matters as the Administrative Agent may request, in
form and substance reasonably satisfactory to the Administrative Agent.
(f) The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, a
Mortgage Policy issued by the Title Insurance Company in an amount
satisfactory to the Administrative Agent with respect to the property,
assuring the Administrative Agent that the applicable Mortgage creates a
valid and enforceable first priority mortgage lien on the property, free
and clear of all defects and encumbrances except Permitted Liens, which
Mortgage Policy shall contain such coverage and endorsements as shall be
reasonably satisfactory to the Administrative Agent and for any other
matters that the Administrative Agent may request and provide
affirmative insurance and such reinsurance as the Administrative Agent
may request, all of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent.
(g) The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, a map or plat of a
survey of the site of the property certified to the Administrative Agent
and the Title Insurance Company in a manner satisfactory to them, dated
a date satisfactory to the Administrative Agent and the Title Insurance
Company by an independent professional licensed land surveyor reasonably
satisfactory to the Administrative Agent and the Title Insurance
Company, and otherwise in form and substance satisfactory to the
Administrative Agent.
(h) The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, a current
certification from the Borrower's registered engineer land surveyor in a
form acceptable to the Administrative Agent as to whether any of the
improvements on the property are located within any area designated by
the Director of the Federal Emergency Management Agency as a "special
flood hazard" area and if any improvements on such parcel are located
within a "special flood hazard" area, evidence of a flood insurance
policy from a company and in an amount satisfactory to the
Administrative Agent for the applicable portion of the premises, naming
the Administrative Agent, for the benefit of the Lenders, as mortgagee.
(i) The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, a copy of the
management agreement between the owner, lessee or sublessee of the
property, as applicable, and the appropriate governmental entity (if
applicable).
(j) The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, (i) for the twelve
month period preceding the date of such property's admittance as a
Borrowing Base Property (or if such property has not been in operation
for twelve months, for the period from the date of its opening through
the date of its admittance as a Borrowing Base Property) historical
operating statements and occupancy reports with respect to such property
(and, if available, historical operating statements and occupancy
reports with respect to such property for the three year period
preceding the date of such property's admittance as a Borrowing Base
Property), together with (ii) operating statements and occupancy reports
with respect to such property for the first projected year following the
property's admittance as a Borrowing Base Property.
8
(k) The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, an environmental
site assessment report for the property dated not more than twelve (12)
months prior to the date of the date of the admittance of such property
as a Borrowing Base Property.
(l) With respect to each Real Property owned by the Borrower and
leased to Management Opco, the Administrative Agent shall have received,
in form and substance satisfactory to the Administrative Agent, a
subordination of lease agreement from Management Opco with respect to
such property.
(m) With respect to each Real Property which has been in
operation for at least five (5) years, the Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent, a current engineering report for the property.
(n) With respect to each New Property, the Borrower shall,
subject to the proviso below, provide the Lenders with each of the items
identified in subsections (b) through (m) above and the Aggregate
Required Lenders and the Required New Term Loan Lenders shall have
approved the admittance of such New Property as a Borrowing Base
Property; provided, however, a Lender's failure to notify the
Administrative Agent of its objection to the admittance of such New
Property as a Borrowing Base Property within fifteen (15) days of such
Lender's receipt of notice from the Administrative Agent of its receipt
of all of the items identified in subsections (b) through (m) above
shall be deemed to constitute such Lender's consent to such New
Property's admittance as a Borrowing Base Property. The Administrative
Agent agrees to forward to any Lender copies of the items identified in
subsections (b) through (m) above upon the request of such Lender.
Notwithstanding the foregoing, the Credit Parties hereby acknowledge and
agree that prior to consummation of the Management Opco Merger (i) any property
which fails to maintain an occupancy rate of at least 75% for two consecutive
fiscal quarters shall no longer be considered a Borrowing Base Property;
provided, however, subject to satisfaction of the conditions set forth in
subsections (a) through (n) above, with respect to any New Property that does
not achieve at least a 75% occupancy level during the six month period
commencing on the date such New Property commences operations, such New Property
shall constitute a Borrowing Base Property during such six month period and 75%
of such New Property's Borrowing Base Value will be included in the Borrowing
Base during such six month period, (ii) the sum of the Borrowing Base Values of
the justice facilities of the Borrower shall not constitute more than five
percent (5%) of the sum of the Borrowing Base Values of the Borrowing Base
Properties and (iii) irrespective of the Borrower's failure to satisfy the
occupancy requirement set forth above as to such below-listed New Properties,
the Borrowing Base shall include 100% of Borrowing Base Value of (A) the,
California City Correctional Facility, located in California City, California
and (B) the Xxxxxxxx Correctional Center, located in Florence, Arizona. In the
event the aggregate value of the justice facilities of the Borrower included in
the Borrowing Base exceeds five percent (5%) of the Borrowing Base, the
Borrowing Base will be reduced by an amount equal to such excess.
"Borrowing Base Value" means, at any date of determination with respect
to each Borrowing Base Property, an amount for such Borrowing Base Property
equal to the lesser of:
9
(a) 45% of the Implied Value of such Borrowing Base
Property.
(b) the amount of indebtedness payments on which could be
covered 2 times by the Adjusted Cash Flow of such
Borrowing Base Property assuming (i) an interest rate
equal to the greater of (A) the Seven Year Treasury Rate
plus two percent (2%) per annum and (B) nine percent
(9%) per annum and (ii) a principal mortgage
amortization of 20 years.
For purposes of determining the Borrowing Base Value of any Borrowing
Base Property which has not been operational for four full fiscal quarters, the
Adjusted Cash Flow attributable to such Borrowing Base Property shall be deemed
to be the result obtained by annualizing the components of the actual Adjusted
Cash Flow attributable to such Borrowing Base Property for the period that such
Borrowing Base Property has been operational.
"Build-to-Suit Capital Expenditures" means capital expenditures
necessary to complete "build-to-suit" contracts entered into with the United
States Bureau of Prisons or any other federal or state governmental agency (such
other federal or state governmental agency to be reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders).
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan, such day
shall also be a day on which dealings between banks are carried on in U.S.
dollar deposits in London, England.
"C Corporation" has the meaning attributed thereto in the Code.
"Capitalization Rate" means eleven and one-half percent (11.5%).
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Raising Event" means any combination of the following
transactions, which together result in Net Cash Proceeds to the Borrower of at
least $100,000,000: (i) an offering made by the Borrower to its then-current
common shareholders through the distribution of rights to purchase shares of
common stock of the Borrower (based on each shareholder's then-current pro rata
share of the Borrower's common stock); (ii) an offering by the Borrower of
common or preferred stock (other than Disqualified Stock); (iii) an issuance of
Subordinated PIK Debt (provided that, anything else in this Agreement to the
contrary notwithstanding (including, without limitation, Sections 3.3(b)(ii) and
8.18), the Net Cash Proceeds of any issuance of Subordinated PIK debt shall be
immediately applied to repay the Loans in the order and in accordance with the
procedures set forth in Section 3.3(b)(iii)); or (iv) certain sales of assets of
the Borrower including, without limitation, the Headquarters Sale-Leaseback, but
excluding the Agecroft Securitization, in each case in form and substance
satisfactory to the Administrative Agent (provided that, anything else in this
Agreement to the contrary notwithstanding (including, without limitation,
Sections 3.3(b)(ii), 7.22 and 8.18), the Net Cash Proceeds of any such asset
sales shall be immediately applied to repay the Loans in the order and in
accordance with the procedures set forth in Section 3.3(b)(iii)); provided that,
in the case of each of (i) - (iv) above, (x) each such transaction shall be
consummated in accordance with all applicable federal and
10
state laws, and (y) the proceeds of each such transaction shall be applied in
accordance with the terms and conditions of this Agreement (including, without
limitation, as set forth above in this definition.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Collateral Account" shall have the meaning assigned to such term
in Section 3.3(b).
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time deposits and certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any Revolving Lender or any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270 days from
the date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements entered into by any Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"CCA" means the entity formerly known as Corrections Corporation of
America (but not CCA of Tennessee), a Tennessee corporation, which was merged
with and into the Borrower on December 31, 1998, pursuant to the Merger
Agreement.
"CCA of Tennessee" means CCA of Tennessee, Inc. (formerly known as
Corrections Corporation of America (but not CCA)), a Tennessee corporation.
"CCA of Tennessee Credit Agreement" means that certain Loan and Security
Agreement, dated as of September 15, 2000, by and among, CCA of Tennessee, as
borrower, certain subsidiaries of CCA of Tennessee party thereto from time to
time as guarantors, the financial institutions signatories thereto and LCPI, as
agent.
11
"Change of Control" means the occurrence of any of the following events:
(i) 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 9% or more of the combined voting power of all Voting
Stock of the Borrower, (ii) during any period of up to 24 consecutive months
(such period commencing at any time on or after the Original Closing 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 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, (iii)
there shall have occurred under any indenture or other instrument evidencing any
Indebtedness in excess of $1,000,000 any "change of control" (as defined in such
indenture or other evidence of Indebtedness) obligating a Credit Party to
repurchase, redeem or repay (or offer to repurchase, redeem or repay) all or
part of the Indebtedness or capital stock provided for therein or (iv) subject
to Section 9.1(q), any of the Chairman of the Board of Directors, Chief
Executive Officer or President of the Borrower as of the Second Restatement
Effective Date ceases to continue to hold such office or continue with
management responsibilities substantially similar to those existing on the
Second Restatement Effective Date and a replacement for such Person reasonably
satisfactory to the Aggregate Required Lenders and the Required New Term Loan
Lenders and possessing substantially similar qualifications and reputation to
the Person being replaced is not employed by the Borrower within ninety (90)
days after such first Person ceases to hold such office or continue to have such
management responsibilities. As used herein, "beneficial ownership" shall have
the meaning provided in Rule 13d-3 of the Securities and Exchange Commission
under the Securities Act of 1934.
"Closing Date" means the Original Closing Date.
"Co-Agent" shall, on and after the Second Restatement Effective Date,
have no meaning under this Credit Agreement or under any other Credit Document.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral Documents.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgages and such other documents executed
and delivered in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent and trademark
filings.
12
"Commitment" means the Revolving Commitment, the Swingline Commitment,
the LOC Commitment, the Term Loan Commitment, the Tranche C Term Loan Commitment
and the New Term Loan Commitment.
"Consolidated Adjusted 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 less (c) actual management fees paid by the
Consolidated Parties during such period less (d) Consolidated Capital
Expenditures for such period with respect to Real Properties in operation less
(e) an amount which, in the determination of Consolidated Net Income for such
period, is attributable to rent payments earned under the Lease Agreements but
not yet paid in cash, all as determined in accordance with GAAP. For purposes of
calculating the Leverage Ratio, with respect to any Real Property which has not
been operational for an entire twelve month period, Consolidated Adjusted EBITDA
attributable to such Real Property shall be deemed to be the result obtained by
annualizing the components of the actual Consolidated Adjusted EBITDA
attributable to such Real Property.
"Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties for the maintenance, repair and upkeep
of existing properties, determined on a consolidated basis for such period in
accordance with GAAP.
"Consolidated Current Assets" means at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set forth
under the caption "total current assets" (or any like caption) on a consolidated
balance sheet of the Consolidated Parties at such date.
"Consolidated Current Liabilities" means at any date, all amounts that
would, in conformity with GAAP, be set forth under the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Consolidated Parties at such date, but excluding the current portion of any
Funded Debt of the Consolidated Parties.
"Consolidated Interest Expense" means, for any period, interest expense
(including without limitation any fees payable in respect of any Hedging
Agreement), the interest component under Capital Leases, the implied interest
component under Synthetic Leases and dividends paid on preferred stock) of the
Consolidated Parties on a consolidated basis for such period, as determined in
accordance with GAAP.
"Consolidated Net Income" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Consolidated Parties on
a consolidated basis, as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, shareholders' equity or
net worth of the Consolidated Parties minus the sum of all rent payments that
have been earned under the Lease Agreements but not paid in cash as a result of
an agreement to defer the payment of such rent until a later date.
"Consolidated Parties" means a collective reference to the Borrower and
its Restricted Subsidiaries, and "Consolidated Party" means any one of them. For
purposes of this Credit
13
Agreement, any Special Affiliates of the Borrower shall not be considered a
Consolidated Party, notwithstanding the treatment of such Special Affiliates
under GAAP (including without limitation any requirement that such Special
Affiliates be accounted for as a Subsidiary for purposes of consolidated
financial statements under GAAP).
"Consolidated Working Capital" means at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, any related
commitment letters, the Collateral Documents and all other related agreements
and documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and "Credit
Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and the
Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including any Issuing Lender),
the Administrative Agent, the Documentation Agent, the Syndication Agent, the
Co-Agent and the Lead Arranger whenever arising, under this Credit Agreement,
the Notes, the Collateral Documents or any of the other Credit Documents
(including, but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all liabilities
and obligations, whenever arising, owing from any Credit Party to any Lender, or
any Affiliate of a Lender, arising under any Hedging Agreement.
"Debt Service Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the fiscal quarter ending on such date,
the ratio of (a) the sum of the Adjusted Cash Flow for each of the Borrowing
Base Properties for the applicable period, minus (in respect of any fiscal
quarter ended after June 30, 1999) any Tenant Incentive Fees incurred or paid by
the Borrower during such period, to (b) Implied Debt Service for the applicable
period. The Adjusted Cash Flow for any fiscal quarter for any Borrowing Base
Property that has been operational for less than the entire fiscal quarter shall
be determined by giving pro forma effect to the components of Adjusted Cash Flow
as if such Borrowing Base Property had been operational from the first day of
such fiscal quarter.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to the
terms of this Credit Agreement within one Business Day of when due, (b) other
than as set forth in (a) above, has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of assets of which) a receiver, trustee or similar official has been
appointed.
14
"Disqualified Stock" means any Capital Stock of any Credit Party that
any Credit Party is or, upon the passage of time or the occurrence of any event
(in each case prior to December 31, 2006), may become obligated to redeem,
purchase, retire, defease or otherwise make any payment in respect of, in
consideration other than Capital Stock (other than Disqualified Stock).
"Documentation Agent" shall have the meaning assigned to such term in
the preamble hereto, together with any successors and assigns.
"Dollars" and "$" means dollars in lawful currency of the United States
of America.
"Domestic Subsidiary" means, with respect to any Person, any Subsidiary
of such Person which is incorporated or organized under the laws of any State of
the United States or the District of Columbia.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Co., or any successor
or assignee of the business of such entity in the business of rating securities.
"EBITDA Reduction Amount" means, with respect to any Asset Disposition,
the amount of Post Merger EBITDA attributable to the assets sold in such Asset
Disposition in the fiscal quarter immediately preceding such Asset Disposition,
in accordance with GAAP.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other Person approved by the Administrative Agent (such approval
not to be unreasonably withheld or delayed) and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 11.3, the Borrower (such approval not to be unreasonably withheld
or delayed by the Borrower and such approval to be deemed given by the Borrower
if no objection is received by the assigning Lender and the Administrative Agent
from the Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower); provided,
however, that the approval of the Administrative Agent and the Borrower with
respect to any proposed Eligible Assignee of a Term Loan, Tranche C Term Loan or
New Term Loan is not required and provided, further, that neither the Borrower
nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Eligible Real Estate" means, as of any date of determination, any
correctional, justice or detention property that satisfies the following
criteria: (a) except as provided in clause (c) below, the property must be
located in the United States or a United States territory, (b) except as
provided in clause (c) below, the property must be wholly owned by the Borrower
in fee or consist of a leasehold property of the Borrower pursuant to a lease
acceptable to the Required Lenders, the Required Tranche C Term Lenders and the
Required New Term Loan Lenders) in their reasonable discretion, (c) with respect
to any New Property, (i) if the property is not wholly owned by the Borrower, it
must be located in the United States or a United States territory or (ii) if the
property is not located in the United States or a United States territory, it
must be wholly owned by the Borrower; provided that the value of all such
properties included in this clause (c) may not exceed five percent (5%) of Total
Value, (d) the property must be unencumbered other than any lien securing the
Credit Party Obligations, (e) the property must be free of structural and title
defects and have passed a structural inspection conducted by an architect or
engineer engaged by the Administrative Agent or the Borrower shall have provided
to the Lenders other written evidence of structural integrity with respect to
the property reasonably acceptable in form and substance to the Required
Lenders, the Required Tranche C Term Lenders and the Required New Term Loan
Lenders, (f) the Lenders must have received an environmental site assessment
15
report for the property in form and substance reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders dated not more than twelve (12) months prior to the acquisition of
such property by the Borrower, (g) the property must be fully operating and
generating revenue, (h) any lessee leasing the property from the Borrower must
be in compliance with all material terms of the facility management agreement
between such lessee and the appropriate governmental entity, (i) the Borrower
must have leased the property to a lessee or sublessee (where applicable)
reasonably acceptable to the Required Lenders, the Required Tranche C Term
Lenders and the Required New Term Loan Lenders pursuant to the terms and
conditions of a lease agreement reasonably acceptable in form and substance to
the Required Lenders, the Required Tranche C Lenders and the Required New Term
Loan Lenders and (j) the Borrower and lessee or sublessee (where applicable) of
the property must be in compliance with all material terms and conditions
contained in the lease or sublease (where applicable) agreement between the
Borrower and such lessee or sublessee (where applicable). For purposes of this
definition, the parties hereby agree that a Lender's failure to notify the
Administrative Agent of its objection to any of the items identified in this
definition within fifteen (15) days of notice from the Administrative Agent of
its receipt of all items identified in clauses (e), (f) and (i) of this
definition shall be deemed to constitute such Lender's approval of such items.
The Administrative Agent agrees to forward to any Lender copies of the items
identified in clauses (e), (f) and (i) upon the request of such Lender.
"Environmental Laws" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Issuance" means any issuance by any Consolidated Party to any
Person which is not a Credit Party of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with any
Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes any Consolidated Party and which is treated as
a single employer under Sections 414(b) or (c) of the Code.
16
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any Consolidated Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution
of a notice of intent to terminate or the actual termination of a Plan pursuant
to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
obtained by dividing (a) the Interbank Offered Rate for such Eurodollar Loan for
such Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurodollar liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning assigned to such term in
Section 9.1.
"Excess Cash Flow" means for either of (x) the first and second fiscal
quarters of any fiscal year of the Consolidated Parties or (y) the third and
fourth fiscal quarters of any fiscal year of the Consolidated Parties, the
excess, if any, of Post Merger EBITDA for such two fiscal quarters plus any
decrease in Consolidated Working Capital during such two fiscal quarters, minus
(i) the aggregate amount of cash actually paid by the Consolidated Parties
during such two fiscal quarters on account of capital expenditures, (ii) the
aggregate amount of cash actually paid by the Consolidated Parties during such
two fiscal quarters on account of taxes, (iii) any increase in Consolidated
Working Capital during such two fiscal quarters, (iv) any regularly-scheduled
amortization of the Term Loans, the Tranche C Term Loans and the New Term Loans
during such two fiscal quarters, (v) Consolidated Interest Expense for such two
fiscal quarters, and (vi) any repayment of Indebtedness during such two fiscal
quarters (other than any repayment of
17
current Indebtedness and any mandatory repayment of Term Loans, Tranche C Term
Loans and New Term Loans during such two fiscal quarters).
"Excluded CCA of Tennessee Accounts" shall have the meaning assigned to
such term in Section 7.23.
"Excluded Credit Party Accounts" shall have the meaning assigned to such
term in Section 7.23.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief financial
officer or treasurer of such Person.
"Existing Properties" shall have the meaning assigned to such term in
Section 5.1(f)(i).
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.
"First Amended and Restated Credit Agreement" shall have the meaning
assigned to such term in the preamble hereto.
"First Amendment and Restatement Subsidiary Guarantors" has the meaning
assigned to such term in the preamble hereto.
"First Union Letters of Credit" has the meaning assigned to such term in
clause (ix) of the definition of "Permitted Liens."
"Fitch" means Fitch Investors Service, or any successor or assignee of
the business of such entity in the business of rating securities.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties, for the twelve month period ending on such
date, the ratio of (i) Post Merger EBITDA for such period minus capital
expenditures made during such period to (ii) cash interest expense for such
period plus cash taxes actually paid during such period plus cash dividends
actually paid during such period on the Borrower's preferred stock plus any
regularly-scheduled amortization of the Term Loans, the Tranche C Term Loans and
New Term Loans during such period.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary
of such Person other than a Domestic Subsidiary; provided, however, that a
Foreign Subsidiary that is treated as a pass-through entity for United States
federal income tax purposes shall be deemed a Domestic
18
Subsidiary for purposes of this Credit Agreement and the other Credit Documents
while so treated.
"Funded Debt" means, as to any Person, all Indebtedness of such Person
of the types described in clauses (a) through (d) and (m) and (n) of the
definition of "Indebtedness" in this Section 1.1.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Gross Lease Revenue" shall have the meaning given to such term in the
definition of Adjusted Cash Flow.
"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 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.
"Headquarters Sale-Leaseback" means the sale by the Borrower of the
Borrower's headquarters building in Nashville, Tennessee, which results in Net
Cash Proceeds to the Borrower of at least $12,000,000, and the subsequent
leasing of such headquarters by the Borrower from the purchaser thereof, all on
terms and conditions reasonably satisfactory to the Required Lenders, the
Required Tranche C Term Lenders and the Required New Term Loan Lenders.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between the Borrower and any Lender, or any
Affiliate of a Lender.
"Implied Debt Service" means, the scheduled debt payments that would
have been due on the average outstanding loan balance under this Credit
Agreement for the prior fiscal quarter assuming a principal mortgage
amortization of 20 years and assuming an interest rate equal to the greater of
(i) nine percent (9%) per annum and (b) the Seven Year Treasury Rate plus two
percent (2.0%) per annum.
19
"Implied Value" means, with respect to any Real Property on any date, an
amount equal to the Adjusted Cash Flow of such Real Property for the four full
fiscal quarters most recently ended on or prior to such date, divided by the
Capitalization Rate. For purposes of determining the Implied Value of any Real
Property which has not been operational for four full fiscal quarters, the
Adjusted Cash Flow attributable to such Real Property shall be deemed to be the
result obtained by annualizing the components of the actual Adjusted Cash Flow
attributable to such Real Property for the period that such Real Property has
been operational.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, Property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements and similar arrangements whether or not
permitted under this Credit Agreement and whether or not any Lender or any
Affiliate of any Lender is a party thereto, (j) all obligations of such Person
to repurchase any securities which repurchase obligation is related to the
issuance thereof, (k) the undrawn face amount of all standby letters of credit
issued, trade letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (l) all preferred Capital Stock
issued by such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, by a fixed date occurring less
than twelve (12) years after the Restatement Effective Date, (m) all other
obligations of such person under any arrangement or financing structure
classified as debt (for tax purposes) by any nationally recognized rating
agency, (n) the principal portion of all obligations of such Person under
Synthetic Leases and (o) the Indebtedness of any partnership in which such
Person is a general partner, and the Indebtedness of any unincorporated joint
venture in which such Person is a joint venturer, to the extent that such Person
would, either pursuant to contract or by operation of law, be liable for such
Indebtedness.
"Intellectual Property" shall have the meaning assigned to such term in
Section 6.17.
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if
20
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Interest Coverage Ratio" means, as of the end of each fiscal quarter of
the Consolidated Parties for the twelve month period ending on such date, the
ratio of Consolidated Adjusted EBITDA for such period to Consolidated Interest
Expense for such period. Notwithstanding the foregoing, for purposes of
calculating the Interest Coverage Ratio as of the end of any fiscal quarter
ending within twelve months of the Original Closing Date, Interest Coverage
Ratio shall mean, the ratio of Consolidated Adjusted EBITDA for the period from
the Original Closing Date through such applicable fiscal quarter end to
Consolidated Interest Expense for the period from the Original Closing Date
through such applicable fiscal quarter end.
"Interest Payment Date" means (a) as to Base Rate Loans, the last day of
each calendar month, the date of repayment of principal of such Loan and the
Revolving Loan Maturity Date, Term Loan Maturity Date, Tranche C Term Loan
Maturity Date or New Term Loan Maturity Date, as applicable, and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period, the date of
repayment of principal of such Loan and the Revolving Loan Maturity Date, Term
Loan Maturity Date, Tranche C Term Loan Maturity Date or New Term Loan Maturity
Date, as applicable, and in addition where the applicable Interest Period for a
Eurodollar Loan is greater than three months, then also the date three months
from the beginning of the Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one, two,
three or six months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (a) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Revolving Loan Maturity
Date, Term Loan Maturity Date, Tranche C Term Loan Maturity Date or New Term
Loan Maturity Date, as applicable, (c) with regard to the Term Loans, no
Interest Period shall extend beyond any Principal Amortization Payment Date
unless the portion of the Term Loans comprised of Base Rate Loans together with
the portion of the Term Loans comprised of Eurodollar Loans with Interest
Periods expiring on or prior to such Principal Amortization Payment Date is at
least equal to the amount of such Principal Amortization Payment due on such
date, (d) with regard to the Tranche C Term Loans, no Interest Period shall
extend beyond any Principal Amortization Payment Date unless the portion of the
Tranche C Term Loans comprised of Base Rate Loans together with the portion of
Tranche C Term Loans comprised of Eurodollar Loans with Interest Periods
expiring on or prior to such Principal Amortization Payment Date is at least
equal to the amount of such Principal Amortization Payment due on such date, (d)
with regard to the New Term Loans, no Interest Period shall extend beyond any
Principal Amortization Payment Date unless the portion of the New Term Loans
comprised of Base Rate Loans together with the portion of New Term Loans
comprised of Eurodollar Loans with Interest Periods expiring on or prior to such
Principal Amortization Payment Date is at least equal to the amount of such
Principal Amortization Payment due on such date and (e) where an Interest Period
begins on a day for which there is no
21
numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.
"Investment" means (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of any Person or (b) any deposit with,
or advance, loan or other extension of credit to, any Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in any Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.
"Issuing Lender" means any Revolving Lender selected by the Borrower
with the consent of such Revolving Lender and with the approval of the
Administrative Agent (such approval not to be unreasonably withheld).
"Issuing Lender Fees" shall have the meaning assigned to such term in
Section 3.5(c)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in the form
of Exhibit 7.12 hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 7.12.
"LTM Post Merger EBITDA" shall have the meaning assigned to such term in
Section 7.11(i).
"Lead Arranger" shall have the meaning assigned to such term in the
preamble hereto, together with any successors and assigns.
"Lease Agreement" shall have the meaning assigned to such term in
Section 9.1(l).
"Lender" means any of the Persons identified as a "Lender" on Schedule
2.1(a) hereto, and any Person which may become a Lender by way of assignment in
accordance with the terms hereof, together with their successors and permitted
assigns.
"Letter of Credit" means any letter of credit issued by an Issuing
Lender for the account of the Borrower in accordance with the terms of Section
2.2.
"Leverage Ratio" means, with respect to the Consolidated Parties on a
consolidated basis as of the last day of any fiscal quarter, the ratio of (a)
Total Indebtedness on the last day of such fiscal quarter to (b) Consolidated
Adjusted EBITDA for the twelve month period ending on the last day of such
fiscal quarter; provided, however, for purposes of calculating the Leverage
Ratio as of the end of any fiscal quarter ending within twelve months of the
Original Closing Date, Consolidated Adjusted EBITDA for the applicable period
shall be deemed to be the result obtained by annualizing the components of
Consolidated Adjusted EBITDA for the period commencing on the Original Closing
Date and ending as of the end of such fiscal quarter.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform
22
Commercial Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).
"Litigation Settlement Debt" means the issuance by the Borrower of eight
percent (8%) zero coupon subordinate promissory notes in an aggregate principal
amount not to exceed twenty-nine million dollars ($29,000,000) in settlement of
claims pending against the Borrower as contemplated by that certain Amended
Stipulation of Settlement, dated as of January 7, 2001, among legal counsel for
the Borrower and various attorneys party thereto as legal counsel for the
plaintiffs in such claims; provided that such Litigation Settlement Debt (i)
shall be subordinate to the prior payment in full in cash of the Credit Party
Obligations and all other Indebtedness of the Borrower in accordance with the
Litigation Settlement Debt Subordination Provisions and otherwise in a manner
reasonably satisfactory to the Administrative Agent; (ii) shall have a maturity
date not earlier than January 2, 2009; (iii) shall be fully extinguished if, at
any time prior to January 2, 2009, the trading price of the Borrower's publicly
traded common stock is greater than $16.30 for any consecutive period of fifteen
(15) trading days following the issuance of the Litigation Settlement Debt; (iv)
on January 2, 2009, if such Litigation Settlement Debt has not been extinguished
pursuant to (iii) above, shall be reduced by an amount equal to the Stock Price
Premium upon the maturity of the Litigation Settlement Debt; and (v) shall
otherwise be satisfactory to the Administrative Agent.
"Litigation Settlement Debt Subordination Provisions" means (i) no
covenants or other affirmative or negative obligations (other than the promise
to pay when due); (ii) no defaults or events of default except failure to pay
when due; (iii) no right to payment of principal or interest so long as any
Credit Party Obligations have not been paid in full in cash; (iv) no
acceleration, collection or other rights or remedies upon a default or event of
default so long as any Credit Party Obligations have not been paid in full in
cash; (v) no right or ability to amend or modify the Litigation Settlement Debt
without the consent of the Administrative Agent, which consent may be granted or
withheld in the Administrative Agent's sole and absolute discretion; (vi) no
right or ability to object or consent to any amendments, modifications, or other
changes to, or refinancings or waivers of the Credit Party Obligations or any of
the Credit Documents, or the exercise or non-exercise of any rights or remedies
by any of the Secured Parties; (vii) no right or ability to challenge the
Secured Parties' claims or liens or the Litigation Settlement Debt Subordination
Provisions; (viii) the right of the Administrative Agent, as attorney-in-fact
for the holders of the Litigation Settlement Debt, to take any actions in the
name of such holders to effectuate the provisions and intent of the Litigation
Settlement Debt Subordination Provisions; (ix) the continued applicability and
enforceability of all of the Litigation Settlement Debt Subordination Provisions
subsequent to the occurrence of a Bankruptcy Event with respect to the Borrower;
(x) the right of the Secured Parties to vote the claims of the holders of the
Litigation Settlement Debt in any proceeding arising out of or relating to a
Bankruptcy Event of any Credit Party with respect to any matter to be voted
upon, including, without limitation, acceptance or rejection of a plan of
reorganization or election of a trustee; (xi) in connection with any Bankruptcy
Event with respect to the Borrower, assignment to the Secured Parties of the
right to file a proof of claim on behalf of the holders of the Litigation
Settlement Debt and agreement not to file a competing claim; (xii) agreement by
the holders of the Litigation Settlement Debt to hold in trust for the Secured
Parties and immediately to remit to the Administrative Agent any payment
received by them from the Borrower in violation of the Litigation Settlement
Debt Subordination Provisions; (xiii) agreement by the holders of the Litigation
Settlement Debt that, if there occurs a Bankruptcy Event with respect to the
Borrower, such holders will not (A) object to any plan of reorganization or
disclosure statement that is supported by the Secured Parties, (B)
23
propose or support any plan of reorganization not supported by the Secured
Parties, (C) seek any dismissal of a bankruptcy case or conversion of the case
to a case under a different chapter of the Bankruptcy Code other than in a
manner expressly consented to by the Secured Parties, (D) seek the appointment
of a trustee or examiner, (E) serve on any official committee of creditors
appointed in any proceeding relating to such Bankruptcy Event, or (F) file any
motion, pleading or other document or appear in any capacity in a bankruptcy
case without the consent of the Secured Parties; and (xiv) other subordination
provisions (both pre-bankruptcy and post-bankruptcy) required by the
Administrative Agent.
"Loan" or "Loans" means the Revolving Loans, the Term Loans, the Tranche
C Term Loans and/or the New Term Loans (or a portion of any Revolving Loan, Term
Loan, Tranche C Term Loan or New Term Loan bearing interest at the Adjusted Base
Rate or the Adjusted Eurodollar Rate) and/or any Swingline Loans individually or
collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lenders to issue
Letters of Credit, and to honor payment obligations under, Letters of Credit
hereunder in an aggregate face amount at any time outstanding (together with the
amounts of any unreimbursed drawings thereon) of up to the LOC Committed Amount
and with respect to each Revolving Lender, the commitment of each Revolving
Lender to purchase participation interests in the Letters of Credit.
"LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by an Issuing Lender but
not theretofore reimbursed by the Borrower.
"LTM EBITDA Reduction Amount" means, with respect to any Asset
Disposition, the amount of Post Merger EBITDA attributable to the assets sold in
such Asset Disposition in the four full fiscal quarters immediately preceding
such Asset Disposition, in accordance with GAAP.
"Management Opco" means Corrections Corporation of America (formerly
Correctional Management Services Corporation (and not CCA)), a Tennessee
corporation that was merged with and into CCA of Tennessee pursuant to the
Management Opco Merger.
"Management Opco Merger" means the merger of Management Opco with and
into CCA of Tennessee, with CCA of Tennessee as the surviving entity, on October
1, 2000.
"Management Opco Merger Date" means October 1, 2000.
24
"Master Lease" means that certain Master Agreement to Lease dated
December 31, 2000 between the Borrower and CCA of Tennessee, as amended or
modified from time to time as provided herein.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets or liabilities
of the Consolidated Parties taken as a whole or (ii) the rights and remedies of
the Administrative Agent or the other Secured Parties under the Credit
Documents, provided that, for purposes of Sections 5.2(e) and 6.2 only, any
failure to consummate the Pacific Life Investment shall not, in and of itself,
be deemed to constitute a Material Adverse Effect (it being understood that this
proviso shall not apply to any circumstances affecting any of the Consolidated
Parties that may have given rise to such failure).
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MDP" means MDP Ventures IV, LLC, together with any other or successor
holder of the notes issued under the MDP Note Purchase Agreement.
"MDP Note Purchase Agreement" means that certain note purchase
agreement, dated as of December 31, 1998, as amended on June 30, 2000, between
the Borrower and MDP, relating to the Borrower's 10.0% convertible subordinated
notes due December 31, 2008.
"Merger" means, collectively, those certain mergers of each of CCA and
PZN with and into the Borrower pursuant to the terms and conditions of the
Merger Agreement, which were consummated on December 31, 1998, and January 1,
1999, respectively.
"Merger Agreement" means that certain Amended and Restated Agreement and
Plan of Merger among the Borrower, PZN and CCA dated September 29, 1998.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Mortgage" shall have the meaning given to such term in Section 5.1(f).
"Mortgage Policy" shall have the meaning given to such term in Section
5.1(f).
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than the Consolidated
Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. (now known as Bank of America,
N.A.), and its successors.
"NationsBank Letters of Credit" has the meaning assigned to such term in
clause (ix) of the definition of "Permitted Liens."
25
"Net Cash Proceeds" means (i) the aggregate cash proceeds received by
the Consolidated Parties in respect of any incurrence of Indebtedness under
Section 8.1(e), any Equity Issuance or any Asset Disposition, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and (b) taxes paid or payable as a result thereof
and (ii) any cash amounts received (or deemed received) by the Borrower in
repayment of the Agecroft Note or otherwise in connection with the Agecroft
Securitization; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by the Consolidated Parties in any of the
transactions described above.
"Net Worth" means, as of any date, shareholders' equity or net worth of
the Borrower minus the sum of all rent payments that have been earned under the
Lease Agreements but not paid in cash as a result of an agreement to defer the
payment of such rent until a later date.
"New CEO" shall have the meaning assigned to such term in Section
9.1(q).
"New Properties" means any real property asset owned by the Borrower or
any leasehold estate of the Borrower (in each case other than those real
property assets and leasehold estates listed on Schedule 5.1(f)(i)) which, in
either case, qualifies as a parcel of Eligible Real Estate and satisfies each of
the conditions identified in the definition of "Borrowing Base Properties".
"New Term Loan" shall have the meaning assigned to such term in Section
2.6(a).
"New Term Loan Committed Amount" means TWO HUNDRED SIXTY NINE MILLION
FOUR HUNDRED NINE THOUSAND NINE HUNDRED SIXTY THREE DOLLARS AND TWENTY CENTS
($269,409,963.20).
"New Term Loan Commitment" means, with respect to each New Term Loan
Lender, the commitment of such New Term Loan Lender to make its portion of the
New Term Loan in a principal amount equal to such Lenders' New Term Loan
Commitment Percentage of the New Term Loan Committed Amount.
"New Term Loan Commitment Fee" shall have the meaning assigned to such
term in Section 3.5(f).
"New Term Loan Commitment Percentage" means, for any New Term Loan
Lender, the percentage identified as its New Term Loan Commitment Percentage in
the records of the Administrative Agent, as such percentage may be modified in
connection with any assignment made in accordance with the provisions of Section
11.3B.
"New Term Loan Maturity Date" means December 31, 2002.
"New Term Loan Lenders" means Lenders holding New Term Loan Commitments,
as identified on Schedule 2.1(a), and their successors and assigns.
"New Term Loans" shall have the meaning assigned to such term in Section
2.6(a).
"New Term Loan Note" means a promissory note of the Borrower in favor of
a New Term Loan Lender evidencing the New Term Loans provided by such Lender
pursuant to
26
Section 2.6, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Non-Conforming Investments" means Investments by a Consolidated Party
in undeveloped land, non-income producing properties, properties not
constituting correctional, detention or justice facilities or any other
investments not related to the ownership of correctional, justice or detention
facilities.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Borrower nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) other than a pledge of the equity interests of any
Unrestricted Subsidiary, (b) is directly or indirectly liable (as a guarantor or
otherwise) other than by virtue of a pledge of the equity interests of any
Unrestricted Subsidiary, or (c) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against any Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Obligations) of the Borrower or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders thereunder will not have any recourse to the Capital Stock or assets of
the Borrower or any of its Restricted Subsidiaries (other than the equity
interests of any Unrestricted Subsidiary).
"Non-U.S. Lender" shall have the meaning assigned to such term in
Section 3.11(d).
"Note" or "Notes" means the Revolving Notes, the Swingline Notes, the
Term Notes, the Tranche C Term Notes and/or the New Term Loan Notes, if any,
individually or collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.6(b), as required by Section 2.6(b).
"Notice of Extension/Conversion" means the written notice of extension
or conversion in substantially the form of Exhibit 3.2, as required by Section
3.2.
"Obligations" means, collectively, the Revolving Loans, the Swingline
Loans, the LOC Obligations, the Term Loans, the Tranche C Term Loans and the New
Term Loans.
"Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.
"Original Administrative Agent" shall mean NationsBank, in its capacity
as administrative agent under the Original Credit Agreement.
"Original Closing Date" shall mean January 1, 1999.
"Original Credit Agreement" shall mean the Credit Agreement, dated as of
January 1, 1999, as heretofore amended, modified, restated or supplemented prior
to the date hereof, among the Borrower, the subsidiaries of the Borrower party
thereto, the banks and other financial
27
institutions party thereto as lenders, the Original Administrative Agent, LCPI,
as documentation agent and The Bank of Nova Scotia, as the syndication agent.
"Original Lenders" shall have the meaning assigned to such term in the
preamble hereto.
"Original Term Lenders" means the Term Lenders under the First Amended
and Restated Credit Agreement immediately prior to the Second Restatement
Effective Date.
"Original Tranche C Term Lenders" means the Tranche C Term Lenders under
the First Amended and Restated Credit Agreement immediately prior to the Second
Restatement Effective Date.
"Other Taxes" shall have the meaning assigned to such term in Section
3.11.
"Pacific Life Investment" means the cash investment in the Borrower by
Pacific Life Insurance Company and/or existing holders of the Borrower's common
stock of at least $200,000,000, pursuant to the terms and conditions of that
certain Securities Purchase Agreement, dated as of April 5, 2000, and executed
as of April 16, 2000, among the Borrower, certain of the Borrower's
subsidiaries, and Pacific Life Insurance Company, as amended or otherwise
modified with the prior consent of the Required Lenders, the Required Tranche C
Term Lenders and the Required New Term Loan Lenders.
"Participation Interest" means a purchase by a Lender of a participation
in Letters of Credit or LOC Obligations as provided in Section 2.2 or in any
Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Investments" means Investments which are either (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by any
Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property received
by any Consolidated Party in settlement of accounts receivable (created in the
ordinary course of business); (iv) Investments existing as of the Second
Restatement Effective Date and set forth in Schedule 1.1(b); (v) Investments in
any Credit Party; (vi) Investments consisting of the acquisition of Real
Properties, provided that for any Real Properties located outside of the United
States or a United States territory, the provisions of clause (c) of the
definition of "Eligible Real Estate" are complied with and, if such Investment
is made through a Subsidiary of the Borrower (other than an Unrestricted
Subsidiary), the provisions of Section 7.12 are complied with respect to such
Subsidiary, and (vii) prior to Agecroft's designation as an Unrestricted
Subsidiary hereunder, the Agecroft Investment.
"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent for the benefit
of the Secured Parties to secure the Credit Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being
28
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(vii) leases or subleases granted to others not interfering in
any material respect with the business of any Consolidated Party;
(viii) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(ix) Liens on cash held by (A) (i) NationsBank, as issuing
lender under the Original Credit Agreement, to secure the Borrower's
obligations in respect of letters of credit issued under the Original
Credit Agreement and outstanding on the Restatement Effective Date (the
"NationsBank Letters of Credit") and (ii) First Union National Bank, as
issuing lender under a predecessor credit agreement to the Original
Credit Agreement, to secure the Borrower's obligations in respect of
letters of credit issued under such predecessor credit agreement and
outstanding on the Restatement Effective Date (the "First Union Letters
of Credit"), in each case so long as such liens are released within
ninety (90) days of the Restatement Effective Date and (B) SouthTrust
Bank, N.A., as issuing lender under the First Amended and Restated
Credit Agreement, to secure the Borrower's obligations in respect of
letters of credit issued under the First Amended and
29
Restated Credit Agreement and outstanding on the Second Restatement
Effective Date, so long as such liens relate to an amount not greater
than $1,250,000;
(x) Liens existing as of the Original Closing Date and set forth
on Schedule 1.1(c); provided that (a) no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Original Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be increased, extended,
renewed, refunded or refinanced;
(xi) Liens on the assets or Capital Stock of any Unrestricted
Subsidiary securing the obligations of such Unrestricted Subsidiary or
any other Unrestricted Subsidiary that owns or is owned by such
Unrestricted Subsidiary; and
(xii) Liens on certain government contracts, related accounts
receivable and other assets of CCA of Tennessee, in each case pledged to
secure the CCA of Tennessee Credit Agreement.
"Permitted Unsecured Debt" means Indebtedness incurred after the
Restatement Effective Date pursuant to Section 8.1(e) and issued in a public
offering or Rule 144A transaction.
"Permitted Unsecured Debt Documents" means the indenture, underwriting
agreement, purchase agreement, registration rights agreement and other
documentation governing any Permitted Unsecured Debt.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the amended and restated pledge agreement dated
as of the Restatement Effective Date executed in favor of the Administrative
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"PMI" means PMI Mezzanine Fund, L.P.
"PMI Note Purchase Agreement" means that certain note purchase
agreement, dated as of December 31, 1998, as amended on June 30, 2000 and on
March 5, 2001, between the Borrower and PMI, relating to the Borrower's 8.0%
Convertible Subordinated Notes due February 28, 2005.
"Post Merger Adjusted Cash Flow" means, with respect to any Real
Property, as of the end of each fiscal quarter of the Consolidated Parties, Post
Merger EBITDA (as herein defined) for the fiscal quarter ending on such date
with respect to such Real Property only.
30
"Post Merger Borrowing Base Value" means, at any date of determination
with respect to each Borrowing Base Property, an amount for such Borrowing Base
Property equal to 75% of the Post Merger Implied Value of such Borrowing Base
Property.
"Post Merger EBITDA" shall mean for any fiscal period, an amount equal
to (a) Consolidated Net Income for such period, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gains from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets
(including any fixed assets, whether tangible or intangible) and (v) any other
non-cash gains which have been added in determining Consolidated Net Income, in
each case to the extent included in the calculation of Consolidated Net Income
for such period in accordance with GAAP, but without duplication, plus (c) the
sum of (i) any provision for income taxes, (ii) Consolidated Interest Expense,
(iii) loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, and (v)
Restructuring Charges for such period, to the extent permitted by GAAP, in each
case to the extent included in the calculation of Consolidated Net Income for
such period in accordance with GAAP, but without duplication. In addition "Post
Merger EBITDA" will include payments representing principal and interest under
management agreements or direct financing leases, where such principal and
interest represent reimbursement for construction of a facility the title to
which is required to be transferred to a governmental authority.
"Post Merger Implied Value" means, with respect to any Real Property on
any date, an amount equal to the Post Merger Adjusted Cash Flow of such Real
Property for the immediately preceding four full fiscal quarters, based on
multiplying the most recently ended quarter on or prior to such date times 4,
divided by the Capitalization Rate. For purposes of determining the Post Merger
Implied Value of any Real Property which has not been operational for a full
fiscal quarter, the Post Merger Adjusted Cash Flow attributable to such Real
Property shall be deemed to be the result obtained by extrapolating from the
components of the actual Post Merger Adjusted Cash Flow attributable to such
Real Property for the period that such Real Property has been operational. The
opening calculation of Post Merger Implied Value will be based on the Post
Merger Adjusted Cash Flow for the quarter ended March 31, 2000.
"Post Merger Interest Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties, for the twelve month period ending
on such date, the ratio of Post Merger EBITDA for such period to cash interest
expense for such period.
"Prime Rate" means the per annum rate of interest established from time
to time by NationsBank as its prime rate, which rate may not be the lowest rate
of interest charged by NationsBank to its customers.
"Principal Amortization Payment" means a principal amortization payment
on the Term Loans, the Tranche C Term Loans or the New Term Loans, as set forth
in Sections 2.4(b), 2.5(d) and 2.6(d), respectively.
"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
31
"Proxy" means the Borrower's Amendment No. 1 to Proxy Statement, to be
filed with the United States Securities and Exchange Commission (the "SEC")
that, if approved by the Borrower's common shareholders, would permit, among
other things, the Change in Tax Status and the Management Opco Merger.
"PZN" means CCA Prison Realty Trust, a Maryland real estate investment
trust, which was merged with and into the Borrower on January 1, 1999, pursuant
to the Merger Agreement.
"Real Properties" means each of the Existing Properties and New
Properties, and "Real Property" means any one of them.
"Refinancing Fee" shall have the meaning given such term in Section
3.5(a).
"Register" shall have the meaning given such term in Section 11.3(c).
"Regulation T, U, or X" means Regulation T, U or X, respectively, of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof.
"REIT" means a real estate investment trust as defined in Sections
856-860 of the Code.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles) of any Materials of Environmental Concern.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means, at any time, the Required Revolving Lenders
and the Required Term Lenders, each voting as a separate class.
"Required New Term Loan Lenders" means, at any time, the New Term Loan
Lenders which are then in compliance with their obligations hereunder (as
determined by the Administrative Agent) and holding in the aggregate at least 66
2/3% of the outstanding New Term Loans.
"Required Revolving Lenders" means, at any time, the Revolving Lenders
which are then in compliance with their obligations hereunder (as determined by
the Administrative Agent) and holding in the aggregate at least 66 2/3% of (i)
the Revolving Commitments (and Participation Interests therein) or (ii) if the
Revolving Commitments have been terminated, the outstanding Revolving Loans and
Participation Interests (including the Participation Interests of the Issuing
Lender in any Letters of Credit).
"Required Term Lenders" means, at any time, the Term Lenders which are
then in compliance with their obligations hereunder (as determined by the
Administrative Agent) and holding in the aggregate at least 66 2/3% of the
outstanding Term Loans.
"Required Tranche C Term Lenders" means, at any time, the Tranche C Term
Lenders which are then in compliance with their obligations hereunder (as
determined by the
32
Administrative Agent) and holding in the aggregate at least 66 2/3% of the
outstanding Tranche C Term Loans.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its material
property is subject.
"Restatement Effective Date" means August 4, 1999.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding (including
without limitation any payment in connection with any merger or consolidation
involving any Consolidated Party), or to the direct or indirect holders of any
shares of any class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, in their capacity as such (other than dividends or distributions
payable in the same class of Capital Stock of the applicable Person or to any
Credit Party (directly or indirectly through Subsidiaries), (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding and (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of any Consolidated
Party, now or hereafter outstanding.
"Restricted Subsidiary" means, with respect to any Person, any
Subsidiary of such Person that is not an Unrestricted Subsidiary.
"Restructuring Charges" means (i) non-recurring charges or extraordinary
items applied in accordance with SAB No. 100, EITF 94-3, FAS No. 121, or APB No.
120, as applicable; (ii) severance package payments accrued through and
including March 31, 2001; and (iii) fees paid to management consultants,
financial consultants and other professionals (including legal fees), provided
that such fees shall be limited to $1,600,000, in the aggregate, for the fiscal
quarter ending December 31, 2000, and $1,500,000, in the aggregate, for each
fiscal quarter thereafter, in each case only to the extent that such fees,
extraordinary items, non recurring charges, and severance package payments are
directly related to the restructuring of the corporate and capital structure of
the Consolidated Parties.
"Revolving Commitment" means, with respect to each Revolving Lender, the
commitment of such Revolving Lender in an aggregate principal amount at any time
outstanding of up to such Revolving Lender's Revolving Commitment Percentage of
the Revolving Committed Amount, (i) to make Revolving Loans in accordance with
the provisions of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).
"Revolving Commitment Percentage" means, for any Revolving Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
33
"Revolving Committed Amount" means FOUR HUNDRED MILLION DOLLARS
($400,000,000) or such lesser amount as the Revolving Committed Amount may be
reduced from time to time pursuant to Section 3.4.
"Revolving Lender" means Lenders holding Revolving Commitments, as
identified on Schedule 2.1(a) (as such Schedule 2.1(a) may be supplemented as
necessary to reflect the prepayment of the Revolving Loans in full on the Second
Restatement Effective Date pursuant to Section 3.3(a) and the corresponding
termination and elimination of the Revolving Committed Amount pursuant to
Section 3.4), and their successors and assigns.
"Revolving Loan Maturity Date" means January 1, 2002.
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" means a promissory note of the Borrower in favor of a
Revolving Lender evidencing the Revolving Loans provided by such Lender pursuant
to Section 2.1, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Revolving Obligations" means, collectively, the Revolving Loans, the
Swingline Loans and the LOC Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to any Consolidated Party of any Property, whether owned by such
Consolidated Party as of the Original Closing Date or later acquired, which has
been or is to be sold or transferred by such Consolidated Party to such Person
or to any other Person from whom funds have been, or are to be, advanced by such
Person on the security of such Property.
"Second Restatement Effective Date" means the first date on which all of
the conditions precedent set forth in Section 5.1 have been satisfied.
"Secured Parties" means, collectively, the Administrative Agent, the
Lenders (including, without limitation, any Issuing Lender and any Affiliate of
any Lender which has entered into a Hedging Agreement with any Credit Party),
the Documentation Agent, the Syndication Agent, the Co-Agent and the Lead
Arranger and "Secured Party" means any one of them.
"Security Agreement" means the amended and restated security agreement
dated as of the Restatement Effective Date executed in favor of the
Administrative Agent by each of the Credit Parties, as amended, modified,
restated or supplemented from time to time.
"Senior Debt" shall have the meaning given such term in the definition
of Senior Debt Rating.
"Senior Debt Rating" means the publicly announced ratings by S&P and
Xxxxx'x for the senior secured (non-credit enhanced) long term debt of the
Borrower ("Senior Debt").
34
"Senior Notes" means the Borrower's $100,000,000 in principal amount of
12% Senior Notes, due 2006 (the "Initial Senior Notes"), and the senior notes of
the Borrower, 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, each as in effect on the
Restatement Effective Date.
"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 the Borrower and the Trustee, pursuant to which the
Senior Notes are issued.
"Service Company A" means Prison Management Services, Inc., a Tennessee
corporation.
"Service Company A License Agreement" means that certain Service Xxxx
and Trade Name Use Agreement dated as of December 31, 1998 between Service
Company A and Management Opco, 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 Xxxx
and Trade Name Use Agreement dated as of December 31, 1998 between Service
Company B and Management Opco, as amended or modified from time to time.
"Service Company Mergers" means the merger of Service Company A and
Service Company B with and into CCA of Tennessee (with CCA of Tennessee as the
surviving entity) on November 30, 2000.
"Seven Year Treasury Rate" means, for any date, a rate of interest equal
to the yield to maturity for actively traded U.S. Treasury securities as
determined by the Administrative Agent prior to 9:00 a.m. New York City time on
such date (based on the offer price for U.S. Treasury securities on such day as
indicated on page 5 of the so-called "Telerate Screen") having a term to
maturity as closely approximating seven (7) years as possible.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (iv) the fair value of the Property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such
35
Person and (v) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Special Affiliate" means any corporation, association or other business
entity formed for the purpose of earning income not qualified as "rents from
real property" under applicable provisions of the Code, in which the Borrower
owns substantially all of the economic interest but less than 10% of the voting
interests, and the remaining economic and voting interests are subject to
restrictions requiring that ownership of such interests be held by officers,
directors or employees of the Borrower or any non-affiliated third parties.
"Standby Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"Straight-Lining of Rents" means, with respect to any lease, the method
by which rent received with respect to such lease is considered earned equally
over the term of such lease despite the existence of (i) any free rent periods
under such lease or (ii) any rent step-up provisions under such lease.
"Stock Price Premium" means an amount equal to (i) the difference
between the average price over the immediately preceding fifty (50) day period
of the Borrower's common stock less $4.90 times (ii) 4,690,000; provided that if
such amount is less than or equal to zero, the Stock Price Premium shall be
zero.
"Subordinated PIK Debt" means unsecured, subordinated, non-guaranteed
Indebtedness of the Borrower containing terms and conditions reasonably
satisfactory to the Administrative Agent, provided that, in any event, (i) such
Indebtedness shall be subordinated in right of payment to the Loans hereunder in
a manner satisfactory to the Administrative Agent, (ii) such Indebtedness shall
have a maturity date at least one year later than the final maturity of the
Senior Notes, and (iii) payments of principal and interest under such
Indebtedness shall be made only in kind and not in cash or any other assets of
the Borrower or any other Credit Party, provided that the terms of such
Subordinated PIK Debt may provide for the payment of principal and interest in
cash upon the repayment in full in case of all amounts outstanding under this
Agreement and the other Credit Documents in accordance with the terms hereof and
thereof.
"Subsidiary" means, as to any Person at any time, (a) any corporation
more than 50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at such time, any class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock.
"Subsidiary Guarantor" means each of the Persons identified as a
"Subsidiary Guarantor" on the signature pages hereto and each Additional Credit
Party which may hereafter execute a
36
Joinder Agreement, together with their successors and permitted assigns, and
"Subsidiary Guarantor" means any one of them.
"Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding of
up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned to such
term in Section 2.3(a).
"Swingline Lender" means Xxxxxx Commercial Paper Inc.
"Swingline Loan" shall have the meaning assigned to such term in Section
2.3(a).
"Swingline Note" means a promissory note of the Borrower in favor of the
Swingline Lender in the original principal amount of $25,000,000, as such
promissory note may be amended, modified, restated or replaced from time to
time.
"Syndication Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors and assigns.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease for purposes of GAAP.
"Taxes" shall have the meaning assigned to such term in Section 3.11.
"Tenant Incentive Agreement" means the Amended and Restated Tenant
Incentive Agreement, dated as of May 4, 1999, between the Borrower and
Management Opco.
"Tenant Incentive Fees" shall mean the fees payable by the Borrower to
Management Opco pursuant to the Tenant Incentive Agreement.
"Term Lenders" means Lenders holding Term Loan Commitments, as
identified on Schedule 2.1(a) and their successors and assigns.
"Term Loan" shall have the meaning assigned to such term in Section
2.4(a).
"Term Loan Amendment Fee" shall have the meaning assigned to such term
in Section 3.5(g).
"Term Loan Committed Amount" means TWO HUNDRED FIFTY MILLION DOLLARS
($250,000,000).
"Term Loan Commitment" means, with respect to each Term Lender, the
commitment of such Term Lender to make its portion of the Term Loan in a
principal amount equal to such Lender's Term Loan Commitment Percentage (if any)
of the Term Loan Committed Amount.
"Term Loan Commitment Percentage" means, for any Term Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a),
as such percentage may
37
be modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
"Term Loan Maturity Date" means December 31, 2002.
"Term Loans" shall have the meaning assigned to such term in Section
2.4(a).
"Term Note" means a promissory note of the Borrower in favor of a Term
Lender evidencing the Term Loans provided by such Lender pursuant to Section
2.4, as such promissory note may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"Title Insurance Company" shall have the meaning given to such term in
Section 5.1(f).
"Total Aggregate Required Lenders" means the Required Revolving Lenders,
the Required Term Lenders, the Required Tranche C Term Lenders and the Required
New Term Loan Lenders, each voting as a separate class.
"Total Assets" means the total assets of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP.
"Total Beds Occupied Ratio" means the ratio (expressed as a percentage)
of (i) the average number of total beds occupied (or for which the Borrower has
been otherwise compensated) during any calendar month (which beds are located in
facilities that are both owned by a Credit Party and managed by a Credit Party
("Beds")) to (ii) the average number of total Beds available during such
calendar month.
"Total Capitalization" means, as of any date of determination, the sum
of (a) Total Indebtedness plus (b) the shareholders' equity or net worth of the
Consolidated Parties on a consolidated basis, as determined in accordance with
GAAP.
"Total Indebtedness" means, as of any date of determination, all
Indebtedness (other than under clause (i) of the definition thereof) of the
Consolidated Parties on a consolidated basis, as determined in accordance with
GAAP.
"Total Value" means, as of any date of determination, an amount equal to
the sum of (a) the aggregate Implied Value or Post Merger Implied Value, as
applicable of all Real Properties plus (b) one hundred percent (100%) of all
cash and Cash Equivalents of the Consolidated Parties.
"Trade Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Tranche C Commitment Percentage" means, for any Tranche C Term Lender,
the percentage identified as its Tranche C Term Loan Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Tranche C Term Lenders" means Lenders holding Tranche C Term Loan
Commitments, as identified on Schedule 2.1(a), and their successors and assigns.
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"Tranche C Term Loan" shall have the meaning assigned to such term in
Section 2.5(a).
"Tranche C Term Loan Amendment Fee" shall have the meaning assigned to
such term in Section 3.5(h).
"Tranche C Term Loan Committed Amount" means THREE HUNDRED FIFTY MILLION
DOLLARS ($350,000,000).
"Tranche C Term Loan Commitment" means, with respect to each Tranche C
Term Lender, the commitment of such Tranche C Term Lender to make its portion of
the Tranche C Term Loan in a principal amount equal to such Lenders' Tranche C
Term Loan Commitment Percentage of the Tranche C Term Loan Committed Amount.
"Tranche C Term Loan Maturity Date" means December 31, 2002.
"Tranche C Term Loans" shall have the meaning assigned to such term in
Section 2.5(a).
"Tranche C Term Note" means a promissory note of the Borrower in favor
of a Tranche C Term Lender evidencing the Tranche C Term Loans provided by such
Lender pursuant to Section 2.5, as such promissory note may be amended,
modified, restated, supplemented, extended, renewed or replaced from time to
time.
"Underwriting Agreement" means the Underwriting Agreement among the
Borrower and LBI.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower that the
Borrower notifies the Administrative Agent in writing is an "Unrestricted
Subsidiary", but only to the extent that such Subsidiary (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not a party to any agreement, contract,
arrangement or understanding with the Borrower or any Restricted Subsidiary of
the Borrower not permitted by Section 8.9; (c) is a Person with respect to which
neither the Borrower nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional equity interests in such
Person, except with respect to Investments permitted under Section 8.6(iii), (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results or (z) to otherwise
guarantee performance or payment; and (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Borrower or any of its Restricted Subsidiaries. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary (or is redesignated by the Borrower as a Restricted
Subsidiary), it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Credit Agreement, any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Borrower as of such date
and any Investments in such Subsidiary shall be deemed to be Investments in a
Restricted Subsidiary of the Borrower as of such date (and, if such Indebtedness
or Investments are not permitted to be incurred hereunder the Borrower shall be
in default under this Credit Agreement). At the time of any designation by the
Borrower of any Restricted Subsidiary as an Unrestricted Subsidiary, such
designation shall be deemed (A) an Investment in an Unrestricted Subsidiary in
an amount equal to the sum of (i) the net worth of such Restricted Subsidiary
immediately prior to such designation (such net worth to be calculated without
regard to any Guarantee Obligation of such Restricted Subsidiary with respect to
the Obligations) and (ii) the aggregate principal amount of any Indebtedness
owed by such designated Restricted Subsidiary to the Borrower or any other
Restricted Subsidiary immediately
39
prior to such designation, all calculated, except as set forth in the
parenthetical to clause (i), on a consolidated basis in accordance with GAAP and
(B) an Asset Disposition (unless the amount of such Investment would not
constitute an Asset Disposition because the amount thereof would be within the
limitations set forth in the second sentence of the definition of Asset
Disposition in this Section 1.1).
"Unused Fee" shall have the meaning assigned to such term in Section
3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned to such
term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period, the amount by
which (a) the then applicable Revolving Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal amount of
all Revolving Loans plus (ii) the outstanding aggregate principal amount of all
LOC Obligations.
"Voting Stock" means, with respect to any Person, Capital 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.
"Waiver and Amendment" means that certain Waiver and Amendment, dated as
of June 9, 2000, among the Borrower, certain of the Borrower's subsidiaries, the
Lenders, and the Administrative Agent.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through other Wholly Owned subsidiaries.
1.2 COMPUTATION OF TIME PERIODS. For purposes of computation of periods
of time hereunder, the word "from" means "from and including" and the words "to"
and "until" each mean "to but excluding."
1.3 ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made in accordance with GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements as at December
31, 1997); provided, however, if there occurs any revision in GAAP or the rules
promulgated thereunder, then such calculations shall be made on a basis
consistent with such revision, unless the Borrower or the Required Lenders, the
Required Tranche C Term Lenders or the Required New Term Loan Lenders shall
object in writing to the Administrative Agent not later than 60 days after
delivery of the first financial statements pursuant to Section 7.1, after the
effectiveness of such revision, in which case the Borrower shall continue to
make all calculations in accordance with GAAP and the rules and regulations
promulgated thereunder as in effect immediately prior to the effectiveness of
such revision.
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1.4 INTERRELATIONSHIP WITH FIRST AMENDED AND RESTATED CREDIT
AGREEMENT. (a) As stated in the preamble hereof, this Credit Agreement is
intended to amend and restate the provisions of the First Amended and Restated
Credit Agreement and, notwithstanding any substitution of Notes as of the Second
Restatement Effective Date, except as expressly modified herein, (x) all of the
terms and provisions of the First Amended and Restated Credit Agreement shall
continue to apply for the period prior to the Second Restatement Effective Date,
including any determinations of payment dates, interest rates, Events of Default
or any amount that may be payable to the Administrative Agent or the Original
Lenders (or their assignees or replacements hereunder), and (y) the obligations
under the First Amended and Restated Credit Agreement shall continue to be paid
or prepaid on or prior to the Second Restatement Effective Date, and shall from
and after the Second Restatement Effective Date continue to be owing and be
subject to the terms of this Credit Agreement. All references in the Notes and
the other Credit Documents to (i) the "Original Credit Agreement", the "First
Amended and Restated Credit Agreement" or the "Credit Agreement" shall be deemed
to include references to this Credit Agreement and (ii) the "Lenders" or a
"Lender" or to the "Administrative Agent" shall mean such terms as defined in
this Credit Agreement. As to all periods occurring on or after the Second
Restatement Effective Date, all of the covenants set forth in the First Amended
and Restated Credit Agreement shall be of no further force and effect, it being
understood that all obligations of the Borrower under the First Amended and
Restated Credit Agreement shall be governed by this Credit Agreement from and
after the Second Restatement Effective Date.
(b) The Borrower, the Agents and the Lenders acknowledge and agree
that all principal, interest, fees, costs, reimbursable expenses and
indemnification obligations accruing or arising under or in connection with the
Original Credit Agreement and the First Amended and Restated Credit Agreement
which remain unpaid and outstanding as of the Second Restatement Effective Date
shall be and remain outstanding and payable as an obligation under this Credit
Agreement and the other Credit Documents; provided that no Lender hereunder
which was not an Original Lender shall be liable for any obligation or
indemnification of Lenders under the First Amended and Restated Credit Agreement
or the Original Credit Agreement.
1.5 CONFIRMATION OF EXISTING OBLIGATIONS. The Borrower and each
Guarantor hereby reaffirm and admit the validity and enforceability of this
Credit Agreement and the other Credit Documents and all of their respective
obligations hereunder and thereunder and agree and admit that, as of the date
hereof, they have no defenses to, or offsets or counterclaim against, any of
their respective obligations to the Agents or any Lender under the Credit
Documents of any kind whatsoever.
SECTION 2.
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. To the extent any Revolving Loans (as
defined below) are outstanding under the First Amended and Restated Credit
Agreement on the Second Restatement Effective Date, such Revolving Loans shall
be deemed to constitute Revolving Loans outstanding hereunder from and after the
Second Restatement Effective Date. In addition, subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth herein, each Revolving Lender severally agrees to make available to the
Borrower such
41
Revolving Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to time from
the Second Restatement Effective Date until the Revolving Loan Maturity Date, or
such earlier date on which the Revolving Commitments shall have been terminated
as provided herein; provided, however, that (i) with regard to the Lenders
collectively, the aggregate principal amount of the Obligations outstanding
shall not at any time exceed the lesser of (A) the Aggregate Committed Amount
minus the Availability Reserve and (B) the Borrowing Base; and (ii) with regard
to each Revolving Lender individually, the amount of such Revolving Lender's
Revolving Commitment Percentage of the Revolving Obligations outstanding shall
not exceed such Revolving Lender's Revolving Commitment Percentage of the
Revolving Committed Amount minus the Availability Reserve. Revolving Loans may
consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than six Eurodollar Loans
shall be outstanding under this Section 2.1 at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Revolving Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings. Notwithstanding anything to the
contrary set forth in this Credit Agreement or in any other Credit Document and
for the avoidance of doubt, on and after the Second Restatement Effective Date
the Borrower shall no longer be entitled to request Revolving Loan borrowings
hereunder.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Revolving Loan Maturity Date, unless accelerated
sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the Adjusted
Base Rate.
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. If requested by a Revolving Lender, and upon
surrender to the Administrative Agent of any note issued to such Lender under
the Original Credit Facility, the Revolving Loans made by such Revolving Lender
shall be evidenced by a duly executed promissory note of the Borrower to such
Revolving Lender in an original principal amount equal to such Revolving
Lender's Revolving Commitment Percentage of the Revolving Committed Amount and
in substantially the form of Exhibit 2.1(e).
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2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the relevant
Issuing Lender may reasonably require and in reliance upon the representations
and warranties set forth herein, each Issuing Lender agrees to issue, and each
Revolving Lender severally agrees to participate in the issuance by such Issuing
Lender of Letters of Credit in Dollars from time to time from the Restatement
Effective Date until the Revolving Loan Maturity Date as the Borrower may
request, in a form acceptable to the relevant Issuing Lender; provided, however,
that (i) on and after the Second Restatement Effective Date, the LOC Obligations
outstanding shall not at any time exceed ZERO DOLLARS ($0.00) (the "LOC
Committed Amount"), (ii) on and after the Second Restatement Effective Date, LOC
Obligations with respect to trade or commercial Letters of Credit shall not at
any time exceed Zero Dollars ($0.00), (iii) with regard to the Lenders
collectively, the aggregate principal amount of the Obligations outstanding
shall not at any time exceed the Aggregate Committed Amount; provided, further,
(iv) with regard to each Revolving Lender individually, the amount of such
Revolving Lender's Revolving Commitment Percentage of the Revolving Obligations
outstanding shall not exceed such Revolving Lender's Revolving Commitment
Percentage of the Revolving Committed Amount. No Letter of Credit shall (x) have
an original expiry date more than one year from the date of issuance or (y) as
originally issued or as extended, have an expiry date extending beyond a date
five Business Days prior to the Revolving Loan Maturity Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and expiry
dates of each Letter of Credit shall be a Business Day.
(b) Notice and Reports. Notwithstanding anything to the contrary
set forth in this Credit Agreement or in any other Credit Document and for the
avoidance of doubt, on and after the Second Restatement Effective Date, no
Letters of Credit will be issued under this Credit Agreement or under any other
Credit Document. Each Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to the Administrative Agent and each of the
Revolving Lenders a detailed report specifying the Letters of Credit issued by
such Issuing Lender which are then outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the beneficiary, the face amount and the
expiry date, as well as any payment or expirations which may have occurred. Each
Issuing Lender will notify the Administrative Agent of the issuance of any
Letter of Credit by such Issuing Lender prior to such issuance as well as each
payment under each such Letter of Credit at the time of such payment.
(c) Participation. Each Revolving Lender, upon issuance of a Letter
of Credit by an Issuing Lender, shall be deemed to have purchased without
recourse a Participation Interest from such Issuing Lender in such Letter of
Credit and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective Revolving
Commitment Percentages of the Revolving Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to such Issuing
Lender and discharge when due, its pro rata share of the obligations arising
under such Letter of Credit. Without limiting the scope and nature of each
Revolving Lender's Participation Interest in any Letter of Credit, to the extent
that relevant Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such Revolving Lender shall pay to such
Issuing Lender its pro rata share of such unreimbursed drawing in same day funds
on the day of notification by such Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) below. The obligation of each
Revolving Lender to so reimburse the Issuing Lenders shall be absolute and
unconditional
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and shall not be affected by the occurrence of a Default, an Event of Default or
any other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the relevant
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the relevant Issuing Lender will promptly notify the Borrower. Unless
the Borrower shall immediately notify such Issuing Lender that the Borrower
intends to otherwise reimburse such Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Revolving Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e) below
on the related Letter of Credit, the proceeds of which will be used to satisfy
the related reimbursement obligations. The Borrower promises to reimburse the
relevant Issuing Lender on the day of drawing under any Letter of Credit (either
with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same
day funds. If the Borrower shall fail to reimburse the relevant Issuing Lender
as provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Adjusted Base Rate plus 2%. The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
relevant Issuing Lender, the Administrative Agent, the Revolving Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower or any other
Credit Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The relevant Issuing Lender will
promptly notify the other Revolving Lenders of the amount of any unreimbursed
drawing and each Revolving Lender shall promptly pay to the Administrative Agent
for the account of the Issuing Lender in Dollars and in immediately available
funds, the amount of such Revolving Lender's pro rata share of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Revolving Lender from the relevant Issuing Lender if such notice is received at
or before 1:00 P.M. (New York City time) otherwise such payment shall be made at
or before 12:00 Noon (New York City time) on the Business Day next succeeding
the day such notice is received. If such Revolving Lender does not pay such
amount to such Issuing Lender in full upon such request, such Revolving Lender
shall, on demand, pay to the Administrative Agent for the account of such
Issuing Lender interest on the unpaid amount during the period from the date of
such drawing until such Revolving Lender pays such amount to such Issuing Lender
in full at a rate per annum equal to, if paid within two (2) Business Days of
the date that such Revolving Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and thereafter at a
rate equal to the Base Rate. Each Revolving Lender's obligation to make such
payment to the relevant Issuing Lender, and the right of such Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a Revolving
Lender to the relevant Issuing Lender, such Revolving Lender shall,
automatically and without any further action on the part of such Issuing Lender
or such Revolving Lender, acquire a Participation Interest in an amount equal to
such payment (excluding the portion of such payment constituting interest owing
to the Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.
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(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.1(b)(i) with respect thereto) shall be immediately made
to the Borrower by all Revolving Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective Revolving
Commitment Percentages of the Revolving Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Revolving Lender hereby irrevocably agrees
to make its pro rata share of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for a Revolving Loan to be made
by the time otherwise required hereunder, (v) whether the date of such borrowing
is a date on which Revolving Loans are otherwise permitted to be made hereunder
or (vi) any termination of the Commitments relating thereto immediately prior to
or contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each such Revolving Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such Revolving
Lender to share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Revolving Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests pursuant to
this sentence is actually made, the purchasing Revolving Lender shall be
required to pay to the relevant Issuing Lender, to the extent not paid to such
Issuing Lender by the Borrower in accordance with the terms of subsection (d)
above, interest on the principal amount of Participation Interests purchased for
each day from and including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of the
date of the Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a), a Letter of Credit issued hereunder
may contain a statement to the effect that such Letter of Credit is issued for
the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
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(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder; provided, however, that no Letters
of Credit will be renewed or extended on and after the Second Restatement
Effective Date.
(h) [Intentionally omitted.]
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.2,
the Borrower hereby agrees to pay, and protect, indemnify and save each
Revolving Lender harmless from and against, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that such Revolving Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of such Revolving Lender to
honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority (all such acts or
omissions, herein called "Government Acts").
(ii) As between the Borrower and the Revolving Lenders
(including the relevant Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. No Revolving Lender (including the relevant Issuing
Lender) shall be responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of any Letter
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (E) for any
consequences arising from causes beyond the control of such Revolving
Lender, including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of any Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by any Revolving Lender (including the relevant Issuing Lender), under
or in connection with any Letter of Credit or the related certificates,
if taken or omitted in good faith, shall not put such Revolving Lender
under any resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Revolving Lender
(including each Issuing Lender) against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby
assumed by the Borrower (on behalf of itself and each of the other
Credit Parties), including, without limitation, any and all Government
Acts. No Revolving Lender (including the relevant Issuing Lender) shall,
in any way, be liable for any failure by such
46
Revolving Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause beyond the
control of such Revolving Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (h) shall
survive the termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Revolving Lenders (including the
Issuing Lenders) to enforce any right, power or benefit under this
Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify any
Revolving Lender (including any Issuing Lender) in respect of any
liability incurred by such Revolving Lender (A) arising solely out of
the gross negligence or willful misconduct of such Revolving Lender, as
determined by a court of competent jurisdiction, or (B) caused by such
Revolving Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court of
competent jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of each Issuing Lender hereunder to the Revolving
Lenders are only those expressly set forth in this Credit Agreement and that
each Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Revolving Lender to recover from the relevant Issuing
Lender any amounts made available by such Revolving Lender to such Issuing
Lender pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter of
credit application), this Credit Agreement shall control.
2.3 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans") from time to time from the Restatement
Effective Date until the Revolving Loan Maturity Date for the purposes
hereinafter set forth; provided, however, (i) the aggregate amount of Swingline
Loans outstanding at any time shall not exceed TWENTY FIVE MILLION DOLLARS
($25,000,000.00) (the "Swingline Committed Amount"), and (ii) with regard to the
Lenders collectively, the aggregate principal amount of the Obligations
outstanding shall not at any time exceed the Aggregate Committed Amount.
Swingline Loans hereunder shall be made in
47
accordance with the provisions of this Section 2.3, and may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Disbursement. Notwithstanding anything to the contrary set
forth in this Credit Agreement or in any other Credit Document and for
the avoidance of doubt, on and after the Second Restatement Effective
Date the Borrower shall no longer be entitled to request Swingline Loan
advances hereunder.
(ii) [Intentionally omitted.]
(iii) Repayment of Swingline Loans. The principal amount of all
Swingline Loans shall be due and payable on the Revolving Loan Maturity
Date. The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Revolving Lenders, demand
repayment of its Swingline Loans by way of a Revolving Loan advance, in
which case the Borrower shall be deemed to have requested a Revolving
Loan advance comprised solely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that any such demand shall be deemed
to have been given one Business Day prior to the Revolving Loan Maturity
Date and on the date of the occurrence of any Event of Default described
in Section 9.1 and upon acceleration of the indebtedness hereunder and
the exercise of remedies in accordance with the provisions of Section
9.2. Each Revolving Lender hereby irrevocably agrees to make its pro
rata share of each such Revolving Loan in the amount, in the manner and
on the date specified in the preceding sentence notwithstanding (I) the
amount of such borrowing may not comply with the minimum amount for
advances of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 5.2 are then satisfied, (III)
whether a Default or an Event of Default then exists, (IV) failure of
any such request or deemed request for a Revolving Loan to be made by
the time otherwise required hereunder, (V) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to
be made hereunder or (VI) any termination of the Commitments relating
thereto immediately prior to or contemporaneously with such borrowing.
In the event that any Revolving Loan cannot for any reason be made on
the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code
with respect to the Borrower or any other Credit Party), then each
Revolving Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior
to such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans ratably based upon its Revolving Commitment
Percentage of the Revolving Committed Amount (determined before giving
effect to any termination of the Commitments pursuant to Section 3.4),
provided that (A) all interest payable on the Swingline Loans shall be
for the account of the Swingline Lender until the date as of which the
respective participation is purchased and (B) at the time of any
purchase of participations pursuant to this sentence is actually made,
the purchasing Revolving Lender shall be required to pay to the
Swingline Lender, to the extent not paid to the Swingline Lender by the
Borrower in accordance with the terms of subsection (c) below, interest
on the principal amount of participation purchased for each day from and
including the day upon which such borrowing would otherwise have
occurred to but
48
excluding the date of payment for such participation, at the rate equal
to the Federal Funds Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 3.1, each Swingline Loan shall bear interest at per annum rate equal to
the Adjusted Base Rate. Interest on Swingline Loans shall be payable in arrears
on each applicable Interest Payment Date (or at such other times as may be
specified herein).
(d) Swingline Note. If requested by the Swingline Lender, and upon
surrender to the Administrative Agent of any note issued to such Lender under
the Original Credit Facility, the Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of Exhibit 2.3(d).
2.4 TERM LOAN.
(a) Term Commitment. Without extinguishing the rights of the
Original Term Lenders to receive payment for interest accrued on the Term Loans
prior to the Second Restatement Effective Date, each Term Loan made on the
Original Closing Date pursuant to Section 2.4 of the Original Credit Agreement
(a "Term Loan" and collectively with the Term Loans of each other Term Lender,
the "Term Loans") (less any regularly-scheduled Principal Amortization Payments
under the Original Credit Agreement and the First Amended and Restated Credit
Agreement made prior to the Second Restatement Effective Date) shall be deemed
to be outstanding as a Term Loan hereunder from and after the Second Restatement
Effective Date. The Term Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request; provided, however,
that no more than six Eurodollar Loans shall be outstanding under this Section
2.4 at any time (it being understood that, for purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Term Loans may not be reborrowed.
For the avoidance of doubt, the Term Loans were initially made to the Borrower
on the Original Closing Date and have remained outstanding without interruption
(subject to any regularly-scheduled Principal Amortization Payments under the
Original Credit Agreement and the First Amended and Restated Credit Agreement)
through and including the Second Restatement Effective Date, notwithstanding the
amendment and restatement of the Original Credit Agreement pursuant to the First
Amended and Restated Credit Agreement and the amendment and restatement of the
First Amended and Restated Credit Agreement pursuant to this Credit Agreement.
(b) Repayment of Term Loans. The principal amount of the Term Loans
outstanding as of the Restatement Effective Date shall be repaid in fourteen
(14) consecutive quarterly installments as follows unless accelerated sooner
pursuant to Section 9.2:
================================================================================
PRINCIPAL TERM LOAN
AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
================================================================================
September 30, 1999 $ 625,000
--------------------------------------------------------------------------------
December 31, 1999 $ 625,000
--------------------------------------------------------------------------------
March 31, 2000 $ 625,000
--------------------------------------------------------------------------------
49
================================================================================
PRINCIPAL TERM LOAN
AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
================================================================================
June 30, 2000 $ 625,000
--------------------------------------------------------------------------------
September 30, 2000 $ 625,000
--------------------------------------------------------------------------------
December 31, 2000 $ 625,000
--------------------------------------------------------------------------------
March 31, 2001 $ 625,000
--------------------------------------------------------------------------------
June 30, 2001 $ 625,000
--------------------------------------------------------------------------------
September 30, 2001 $ 625,000
--------------------------------------------------------------------------------
December 31, 2001 $ 625,000
--------------------------------------------------------------------------------
March 31, 2002 $ 625,000
--------------------------------------------------------------------------------
June 30, 2002 $ 625,000
--------------------------------------------------------------------------------
September 30, 2002 $ 625,000
--------------------------------------------------------------------------------
December 31, 2002 $240,625,000
--------------------------------------------------------------------------------
Total $248,750,000
================================================================================
(c) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the Term Loans shall bear interest
at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through and
including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the Term Loans shall bear interest at a per annum rate
equal to the Base Rate plus (A) 4.50% through and including June 30, 2002 and
(B) 5.50% thereafter. Interest on Term Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).
(d) Term Notes. If requested by a Term Lender, and upon surrender to
the Administrative Agent of any note issued to such Lender under the Original
Credit Facility, the Term Loan made by such Term Lender shall be evidenced by a
duly executed promissory note of the Borrower to such Term Lender in an original
principal amount equal to the principal amount of such Term Loan outstanding on
the Original Closing Date, substantially in the form of Exhibit 2.4(d).
2.5 TRANCHE C TERM LOAN.
(a) Tranche C Term Commitment. Without extinguishing the rights of
the Original Tranche C Term Lenders to receive payment for interest accrued on
the Tranche C Term Loans prior to the Second Restatement Effective Date, each
Tranche C Term Loan made on the Restatement Effective Date pursuant to Section
2.5 of the First Amended and Restated Credit Agreement (a "Tranche C Term Loan"
and collectively with the Tranche C Term Loans of each other Tranche C Term
Lender, the "Tranche C Term Loans") (less any regularly-scheduled Principal
Amortization Payments under the First Amended and Restated Credit Agreement made
prior to the Second Restatement Effective Date) shall be deemed to be
outstanding as a Tranche C Term Loan hereunder from and after the Second
Restatement Effective Date. The Tranche C Term Loans may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request; provided, however, that no more than six Eurodollar Loans shall be
outstanding under this Section 2.5 at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although
50
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period). Amounts repaid on the Tranche C
Term Loans may not be reborrowed. For the avoidance of doubt, the Tranche C Term
Loans were initially made to the Borrower on the Restatement Effective Date and
have remained outstanding without interruption (subject to any
regularly-scheduled Principal Amortization Payments under the First Amended and
Restated Credit Agreement) through and including the Second Restatement
Effective Date, notwithstanding the amendment and restatement of the First
Amended and Restated Credit Agreement pursuant to this Credit Agreement.
(b) Borrowing Procedures. The entire amount of the Tranche C Term
Loans was made in a single borrowing on the Restatement Effective Date. The
Borrower submitted an appropriate Notice of Borrowing to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the Business Day prior
to the Restatement Effective Date, which Notice of Borrowing was irrevocable and
specified that the funding of the Tanche C Term Loans was requested. Each
Tranche C Term Lender made its Tranche C Term Loan Commitment Percentage of the
Tranche C Term Loan available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Schedule 2.1(a),
or at such other office as the Administrative Agent may designate in writing, by
1:00 P.M. (New York City time) on Second Restatement Effective Date in Dollars
and in funds immediately available to the Administrative Agent.
(c) Minimum Amounts. Eurodollar Loans having the same Interest
Period and Base Rate Loans that comprise parts of the Tranche C Term Loan shall
be in an aggregate principal amount that is not less than $10,000,000 and
integral multiples of $1,000,000 (or the then remaining principal balance of the
Tranche C Term Loans, if less).
(d) Repayment of Tranche C Term Loans. The principal amount of the
Tranche C Term Loans shall be repaid in fourteen (14) consecutive quarterly
installments as follows unless accelerated sooner pursuant to Section 9.2:
============================================================================
PRINCIPAL TRANCHE C TERM LOAN
AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
============================================================================
September 30, 1999 $ 875,000
----------------------------------------------------------------------------
December 31, 1999 $ 875,000
----------------------------------------------------------------------------
March 31, 2000 $ 875,000
----------------------------------------------------------------------------
June 30, 2000 $ 875,000
----------------------------------------------------------------------------
September 30, 2000 $ 875,000
----------------------------------------------------------------------------
December 31, 2000 $ 875,000
----------------------------------------------------------------------------
March 31, 2001 $ 875,000
----------------------------------------------------------------------------
June 30, 2001 $ 875,000
----------------------------------------------------------------------------
September 30, 2001 $ 875,000
----------------------------------------------------------------------------
December 31, 2001 $ 875,000
----------------------------------------------------------------------------
March 31, 2002 $ 875,000
----------------------------------------------------------------------------
June 30, 2002 $ 875,000
----------------------------------------------------------------------------
September 30, 2002 $ 875,000
----------------------------------------------------------------------------
December 31, 2002 $338,625,000
----------------------------------------------------------------------------
Total $350,000,000
============================================================================
51
(e) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the Tranche C Term Loans shall bear
interest at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through
and including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the Tranche C Term Loans shall bear interest at a per
annum rate equal to the Base Rate plus (A) 4.50% through and including June 30,
2002 and (B) 5.50% thereafter. Interest on Tranche C Term Loans shall be payable
in arrears on each applicable Interest Payment Date (or at such other times as
may be specified herein).
(f) Tranche C Term Notes. If requested by a Tranche C Term Lender,
the portion of the Tranche C Term Loan made by such Tranche C Term Lender shall
be evidenced by a duly executed promissory note of the Borrower to such Tranche
C Term Lender in an original principal amount equal to the original principal
amount of such Tranche C Term Lender's Tranche C Commitment Percentage of the
Tranche C Term Loan, and substantially in the form of Exhibit 2.5(f).
2.6 NEW TERM LOAN.
(a) New Term Loan Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth herein
each New Term Loan Lender severally agrees to make available to the Borrower on
the Second Restatement Effective Date a term loan in Dollars (a "New Term Loan"
and collectively with the New Term Loans of each other New Term Loan Lender, the
"New Term Loans") in an amount equal to the New Term Loan Commitment of such New
Term Loan Lender and in an aggregate principal amount for all New Term Loan
Lenders equal to the New Term Loan Committed Amount; provided, however, that
with regard to the Lenders collectively, the sum of the aggregate principal
amount of the Obligations outstanding shall not exceed the Aggregate Committed
Amount. The New Term Loans may initially consist only of Base Rate Loans.
Subsequent to the Second Restatement Effective Date, New Term Loans may be
converted to Eurodollar Loans pursuant to Section 3.2 as the Borrower may
request; provided, however, that no more than six New Term Loans that are
Eurodollar Loans shall be outstanding at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Amounts repaid
on the New Term Loans may not be reborrowed.
(b) Borrowing Procedures. The entire amount of the New Term Loans
shall be made in a single borrowing on the Second Restatement Effective Date.
The Borrower shall submit an appropriate Notice of Borrowing to the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
Business Day prior to the Second Restatement Effective Date, which Notice of
Borrowing shall be irrevocable and shall specify that the funding of the New
Term Loans is requested. Each New Term Loan Lender shall make its New Term Loan
52
Commitment Percentage of the New Term Loan available to the Administrative Agent
for the account of the Borrower at the office of the Administrative Agent
specified in Schedule 2.1(a), or at such other office as the Administrative
Agent may designate in writing, by 1:00 P.M. (New York City time) on the Second
Restatement Effective Date in Dollars and in funds immediately available to the
Administrative Agent.
(c) Minimum Amounts. Eurodollar Loans having the same Interest
Period and Base Rate Loans that comprise parts of the New Term Loan shall be in
an aggregate principal amount that is not less than $10,000,000 and integral
multiples of $1,000,000 (or the then remaining principal balance of the New Term
Loans, if less).
(d) Repayment of New Term Loans. The principal amount of the New
Term Loans shall be repaid in five (5) consecutive quarterly installments as
follows unless accelerated sooner pursuant to Section 9.2:
============================================================================
PRINCIPAL NEW TERM LOAN
AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
============================================================================
December 31, 2001 $ 673,524.90
----------------------------------------------------------------------------
March 31, 2002 $ 673,524.90
----------------------------------------------------------------------------
June 30, 2002 $ 673,524.90
----------------------------------------------------------------------------
September 30, 2002 $ 673,524.90
----------------------------------------------------------------------------
December 31, 2002 $266,715,863.60
----------------------------------------------------------------------------
Total $269,409,963.20
============================================================================
(e) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the New Term Loans shall bear
interest at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through
and including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the New Term Loans shall bear interest at a per annum
rate equal to the Base Rate plus (A) 4.50% through and including June 30, 2002
and (B) 5.50% thereafter. Interest on New Term Loans shall be payable in arrears
on each applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) New Term Loan Notes. If requested by a New Term Loan Lender, the
portion of the New Term Loan made by such New Term Loan Lender shall be
evidenced by a duly executed promissory note of the Borrower to such New Term
Loan Lender in an original principal amount equal to the original principal
amount of such New Term Loan Lender's New Term Loan Commitment Percentage of the
New Term Loan, and substantially in the form of Exhibit 2.6(f).
SECTION 3.
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE. (i) Upon the occurrence, and during the continuance,
of an Event of Default, (ii) for any period during which the Borrower pays to
MDP a rate in excess of 10.0% per annum under the MDP Note Purchase Agreement
(other than Contingent Interest (as defined therein)), and (iii) for any period
during which the Borrower pays to PMI a rate in excess of 8.0% per annum under
the PMI Note Purchase Agreement, then, in any such case, the principal
53
of and, to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Credit Documents shall bear interest,
payable on demand, at a per annum rate 2% greater than the rate which would
otherwise be applicable (or if no rate is applicable, whether in respect of
interest, fees or other amounts, then the Adjusted Base Rate plus 2%).
3.2 EXTENSION AND CONVERSION. The Borrower shall have the option, on any
Business Day, to extend existing Loans into a subsequent permissible Interest
Period or to convert Revolving Loans, Term Loans, Tranche C Term Loans or New
Term Loans, as the case may be, to Revolving Loans, Term Loans, Tranche C Term
Loans or New Term Loans, respectively, of another interest rate type; provided,
however, that (i) except as provided in Section 3.8, Eurodollar Loans may be
converted into Base Rate Loans or extended as Eurodollar Loans for new Interest
Periods only on the last day of the Interest Period applicable thereto, (ii) no
Loans may be converted into, or continued as, Eurodollar Loans if a Default or
Event of Default is in existence and the Total Aggregate Required Lenders or the
Administrative Agent shall have determined that such conversion or continuation
is inappropriate, (iii) Loans extended as, or converted into, Eurodollar Loans
shall be subject to the terms of the definition of "Interest Period" set forth
in Section 1.1 and shall be in such minimum amounts as provided in, with respect
to the Revolving Loans, Section 2.1(b)(ii), with respect to the Term Loans,
Section 2.4(c), with respect to the Tranche C Term Loans, Section 2.5(c) or with
respect to the New Term Loans, Section 2.6(c), (iv) no more than 10 Eurodollar
Loans shall be outstanding under this Credit Agreement at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the
Administrative Agent specified in specified in Schedule 2.1(a), or at such other
office as the Administrative Agent may designate in writing, prior to 11:00 A.M.
(New York City time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable.
In the event the Borrower fails to request extension or conversion of any
Eurodollar Loan in accordance with this Section 3.2, or any such conversion or
extension is not permitted or required by this Section 3.2, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Administrative Agent shall give each
affected Lender notice as promptly as practicable of any such proposed extension
or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay any Loans in whole or in part from time to time as it may select;
provided, however, that (i) each
54
partial prepayment of Loans shall be in a minimum principal amount of
$10,000,000 and integral multiples of $5,000,000 (provided that Revolving Loans
that are Base Rate Loans may be prepaid in minimum principal amounts of
$1,000,000 and integral multiples of $100,000) and (ii) any voluntary prepayment
of the Term Loans and/or Tranche C Term Loans shall be subject to the prepayment
penalty provisions of Section 3.3(c). Subject to the foregoing terms, amounts
prepaid under this Section 3.3(a) shall be applied as the Borrower may elect;
provided that if the Borrower elects to make a voluntary prepayment with respect
to the Term Loans or the Tranche C Term Loans, the Borrower shall, to the extent
any Revolving Loans are then outstanding, be required to make a pro rata
voluntary prepayment (and corresponding permanent reduction in the Revolving
Committed Amount) with respect to the Revolving Loans. Any amounts so prepaid
shall be applied, in the case of the Term Loans, the Tranche C Term Loans and
the New Term Loans, in the inverse order of maturity thereof, and in the case of
all Loans, first to Base Rate Loans and then to Eurodollar Loans in direct order
of Interest Period maturities. All prepayments under this Section 3.3(a) shall
be subject to Section 3.12 and all prepayments of Term Loans, Tranche C Term
Loans and New Term Loans shall be subject to Section 3.3(c), but otherwise
prepayments shall be made without premium or penalty.
(b) Mandatory Prepayments.
(i) Committed Amounts. If at any time, (A) the sum of the
aggregate principal amount of the Obligations outstanding shall exceed
the Aggregate Committed Amount, (B) the amount of LOC Obligations
outstanding shall exceed the LOC Committed Amount or (C) the amount of
Swingline Loans outstanding shall exceed the Swingline Committed Amount,
the Borrower shall immediately make payment on the Revolving Loans, the
Swingline Loans and/or to a cash collateral account (any such account
into which cash collateral is deposited by the Borrower, a "Cash
Collateral Account") in respect of the LOC Obligations, in an amount
sufficient to eliminate the deficiency; provided, however, to the extent
payment on the Revolving Loans and/or to a cash collateral account in
respect of the LOC Obligations is not sufficient to eliminate such
deficiency, the Borrower shall make payment on the Term Loans in an
amount sufficient to eliminate the deficiency and a corresponding
permanent reduction in the Revolving Committed Amount. The Borrower
hereby grants to the Administrative Agent, for the ratable benefit of
the Secured Parties, a continuing security interest in all amounts at
any time on deposit in any and all cash collateral accounts to secure
all LOC Obligations from time to time outstanding and all other Credit
Party Obligations hereunder.
(ii) Asset Disposition; Etc. Immediately upon receipt by any
Consolidated Party of proceeds from any Asset Disposition, any
incurrence of Indebtedness under Section 8.1(e), a Capital Raising Event
or repayment of the Agecroft Note (other than in connection with the
Agecroft Securitization), the Borrower shall prepay the Loans in an
aggregate amount equal to the Net Cash Proceeds of the related Asset
Disposition, incurrence of Indebtedness, Capital Raising Event or
repayment (such prepayment to be applied as set forth in clause (iii)
below).
Notwithstanding the foregoing, the Borrower shall not be
required to make a prepayment pursuant to Section 3.3(b)(ii) with
respect to (x) up to $42,000,000 of Net Cash Proceeds from the sale of
the Polk County, Florida, correctional facility, and (y) up to
$5,000,000 per annum of Net Cash Proceeds from any Asset Dispositions
(other than
55
the Agecroft Securitization and the Headquarters Sale-Leaseback);
provided, that, in the case of (x) and (y) above, the Borrower advises
the Administrative Agent at the time the Net Cash Proceeds from such
Asset Dispositions or repayment are received that it intends to reinvest
such Net Cash Proceeds into replacement assets (including pursuant to
any acquisition) within 180 days after such Asset Disposition or
repayment and such Net Cash Proceeds are applied to repay the Revolving
Loans (or, if no Revolving Loans are outstanding, to provide cash
collateral for the Credit Party Obligations by deposit in a cash
collateral account) until such time as such reinvestment occurs (or such
180 day period expires); provided, however, if such Net Cash Proceeds
are not so reinvested within such 180 day period, the Borrower shall be
obligated to apply such Net Cash Proceeds to the prepayment of the Loans
at the end of such 180 day period in accordance with the terms of
Section 3.3(b)(iii).
(iii) Application of Mandatory Prepayments. All amounts required
to be paid pursuant to Sections 3.3(b)(ii) and 3.3(b)(v) shall be
applied ratably to the Revolving Obligations, the Term Loans, the
Tranche C Term Loans and the New Term Loans in accordance with the
respective outstanding amounts thereof as follows: (A) to the Revolving
Obligations (first to Revolving Loans and second to Swingline Loans and
(after all Revolving Loans and Swingline Loans have been repaid) then to
a cash collateral account to secure LOC Obligations) (with a
corresponding reduction in the Revolving Committed Amount in an amount
equal to all amounts applied to the Revolving Obligations pursuant to
this Section (b)(iii)) and (B) to the Term Loans, the Tranche C Term
Loans and the New Term Loans, in the inverse order of maturity thereof,
allocated ratably between the Term Loans, the Tranche C Term Loans and
the New Term Loans in accordance with the respective outstanding amounts
thereof. One or more holders of the Term Loans, the Tranche C Term Loans
or the New Term Loans may decline to accept a mandatory prepayment under
Section 3.3(b)(ii) to the extent there are sufficient Revolving Loans,
Term Loans or Tranche C Term Loans, as applicable, outstanding to be
paid with such prepayment. In the event one or more holders of the Term
Loans declines such a prepayment, such declined prepayments shall be
split evenly, with fifty percent (50%) of such declined prepayment
allocated toward a prepayment of the Revolving Loans (with a
corresponding reduction in the Revolving Committed Amount in an amount
equal to the amount prepaid pursuant to such prepayment) and fifty
percent (50%) of such declined prepayment being returned to the
Borrower. In the event one or more holders of the Tranche C Term Loans
declines such a prepayment, such declined prepayments shall be split as
follows: twenty-five percent (25%) of such declined prepayment shall be
allocated toward a prepayment of the Revolving Loans (with a
corresponding reduction in the Revolving Committed Amount in an amount
equal to the amount prepaid pursuant to such prepayment), twenty-five
percent (25%) of such declined prepayment shall be allocated toward a
prepayment of the Term Loans (subject to the right of the holders of the
Term Loans to decline such prepayment as provided above), and fifty
percent (50%) of such declined prepayment shall be returned to the
Borrower. In the event one or more holders of the New Term Loans
declines such a prepayment, such declined prepayments shall be split as
follows: twenty-five percent (25%) of such declined prepayment shall be
allocated toward a prepayment of the Term Loans (subject to the right of
the holders of the Term Loans to decline such prepayment as provided
above), twenty-five percent (25%) of such declined prepayment shall be
allocated toward a prepayment of the Tranche C Term Loans (subject to
the right of the holders of the Tranche C Term Loans to decline such
prepayment as provided above),
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and fifty percent (50%) of such declined prepayment shall be returned to
the Borrower. Notwithstanding the foregoing or anything to the contrary
set forth in this Credit Agreement, in no event shall the Borrower
receive greater than fifty percent (50%) of the aggregate declined
portions of any prepayment (with any excess being allocated ratably
toward a prepayment of the Term Loans, the Tranche C Term Loans and the
New Term Loans). Within the parameters of the applications set forth
above, prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(b) shall be subject to Section 3.12.
(iv) [Intentionally omitted.]
(v) Excess Cash Flow. Unless the Required Lenders, the Required
Tranche C Term Lenders and the Required New Term Loan Lenders otherwise
agree, if for any period comprised of either (a) the first and second
fiscal quarters of any fiscal year of the Consolidated Parties,
commencing with the fiscal year beginning January 1, 2001 or (b) the
third and fourth fiscal quarters of any such fiscal year of the
Consolidated Parties, there shall be Excess Cash Flow, the Borrower
shall apply seventy-five percent of such Excess Cash Flow to the
prepayment of the Loans and the reduction of the Revolving Committed
Amount as set forth in Section 3.1(b)(iii). Each such prepayment and
commitment reduction shall be made on a date no later than the date that
is three (3) Business Days after delivery of the officer's certificate
that would otherwise be due, pursuant to Section 7.1(c), at the end of
the second and fourth fiscal quarters of the Consolidated Parties.
(c) Prepayment Penalty. In the event the Borrower voluntarily elects
to prepay the Term Loan and/or the Tranche C Term Loan within one year of the
Original Closing Date as permitted by Section 3.3(a), the Borrower shall be
obligated to pay a prepayment fee equal to two percent (2.0%) of the principal
amount prepaid. In the event the Borrower voluntarily elects to prepay the Term
Loan and/or the Tranche C Term Loan between December 31, 1999 and December 31,
2000 as permitted by Section 3.3(a), the Borrower shall be obligated to pay a
prepayment fee equal to one percent (1.0%) of the principal amount prepaid.
After two years from the Original Closing Date, the Borrower may prepay the Term
Loan and/or the Tranche C Term Loan without a prepayment penalty or fee.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT. The
Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of
$10,000,000 or in integral multiples of $5,000,000 in excess thereof (or, if
less, the full remaining amount of the then applicable Revolving Committed
Amount)) upon three Business Days' prior written notice to the Administrative
Agent; provided, that, (i) no such termination or reduction shall be made which
would cause the sum of the aggregate outstanding principal amount of the
Obligations to exceed the Aggregate Committed Amount, unless, concurrently with
such termination or reduction, the Loans are repaid to the extent necessary to
eliminate such excess and (ii) no such termination or reduction shall be made
which would cause the sum of the aggregate outstanding principal amount of the
Revolving Obligations to exceed the Revolving Committed Amount. The
Administrative Agent shall promptly notify each affected Lender of receipt by
the Administrative Agent of any notice from the Borrower pursuant to this
Section 3.4.
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3.5 FEES.
(a) Refinancing Fee. In consideration of the amendments effected by
this Credit Agreement and the New Term Loan Commitments provided hereby, the
Borrower agrees to pay to the Administrative Agent for the ratable account of
each Lender a fee (the "Refinancing Fee") in an amount equal to 1.00% of the
aggregate dollar amount of all Term Loans, Tranche C Term Loans and New Term
Loans outstanding on and as of June 30, 2002. Such Refinancing Fee shall be
payable on the first Business Day after June 30, 2002. For the avoidance of
doubt, if the Borrower has prepaid all Loans hereunder and all other Obligations
hereunder have been paid in full, in each case on or before June 30, 2002, the
Borrower shall not be obligated to pay the Refinancing Fee.
(b) Unused Fee. In consideration of the Revolving Commitments of
the Revolving Lenders hereunder, the Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a fee (the "Unused
Fee") on the Unused Revolving Committed Amount computed at a per annum rate for
each day during the applicable Unused Fee Calculation Period (hereinafter
defined) equal to the Applicable Percentage in effect from time to time. The
Unused Fee shall begin accruing on the Restatement Effective Date and shall be
due and payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed Amount is
reduced as provided in Section 3.4 and the Revolving Loan Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Unused Fee is payable hereunder being herein referred to
as an "Unused Fee Calculation Period"), beginning with the first of such dates
to occur after the Restatement Effective Date. For purposes of computation of
the Unused Fee, the Swingline Loans shall not be counted toward or considered
usage under the Revolving Loan Facility.
(c) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of the issuance
of standby or any other performance related Letters of Credit hereunder, the
Borrower promises to pay to the Administrative Agent for the account of each
Revolving Lender a fee (the "Standby Letter of Credit Fee") on such Revolving
Lender's Revolving Commitment Percentage of the average daily maximum amount
available to be drawn under each such standby Letter of Credit computed at a per
annum rate for each day from the date of issuance to the date of expiration
equal to the Applicable Percentage for Eurodollar Loans. The Standby Letter of
Credit Fee will be payable quarterly in arrears on the last Business Day of each
March, June, September and December for the immediately preceding quarter (or a
portion thereof).
(ii) Trade Letter of Credit Fee. In consideration of the issuance of
trade Letters of Credit hereunder, the Borrower promises to pay to the
Administrative Agent for the account of each Revolving Lender a fee (the "Trade
Letter of Credit Fee") on such Revolving Lender's Revolving Commitment
Percentage of the amount of each drawing under any such trade Letter of Credit
equal to .125%. The Trade Letter of Credit Fee will be payable on each date of
drawing under a trade Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above and the Trade Letter of Credit
Fee payable pursuant to clause (ii) above, the Borrower promises to pay to the
Issuing Lender for its own account without
58
sharing by the other Revolving Lenders (A) a letter of credit fronting fee of
one-eighth percent (1/8%) per annum on the average daily maximum amount
available to be drawn under outstanding Letters of Credit payable quarterly in
arrears with the Standby Letter of Credit Fee and the Trade Letter of Credit
Fee, and (B) customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit (collectively, the
"Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an administrative fee in an amount
previously agreed between the Borrower and the Administrative Agent (the
"Administrative Agent's Fees"), on the Restatement Effective Date and annually
in advance prior to the date on which all Commitments under this Credit
Agreement have terminated and no Credit Party Obligations are outstanding.
(e) Other Fees. The Borrower agrees to pay to LCPI, in immediately
available funds on the Restatement Effective Date, the other fees referred to in
the Commitment Letter (and related Fee Letter), each dated as of April 26, 1999,
and as amended, among the Borrower, LCPI and LBI and as further agreed among the
Borrower, LCPI and LBI.
(f) New Term Loan Commitment Fee. In consideration of the New Term
Loan Commitments provided hereby, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each New Term Loan Lender, a fee (the "New Term Loan Commitment Fee")
in an amount equal to 1.00% of the New Term Loan Committed Amount.
(g) Term Loan Amendment Fee. In consideration of the amendments
affected by this Credit Agreement, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each Term Lender, a fee (the "Term Loan Amendment Fee") in an amount
equal to 0.25% of the aggregate dollar amount of all Term Loans outstanding on
and as of the Second Restatement Effective Date.
(h) Tranche C Term Loan Commitment Fee. In consideration of the
amendments affected by this Credit Agreement, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each Tranche C Term Lender, a fee (the "Tranche C Term Loan Amendment
Fee") in an amount equal to 0.25% of the aggregate dollar amount of all Tranche
C Term Loans outstanding on and as of the Second Restatement Effective Date.
3.6 CAPITAL ADEQUACY. If any Lender has determined, after the date
hereof, that the adoption or the becoming effective of, or any change in, or any
change by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy), then, upon notice from such Lender to the Borrower, the Borrower
shall be obligated to pay to
59
such Lender such additional amount or amounts as will compensate such Lender for
such reduction. Each determination by any such Lender of amounts owing under
this Section shall, absent manifest error, be conclusive and binding on the
parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS. If on or prior to the first day of
any Interest Period for any Eurodollar Loan:
(a) the Administrative Agent determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.
3.7A LIMITATION ON TRANCHE C EURODOLLAR LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan the Required Tranche C
Lenders determine (which determination shall be conclusive) and notify the
Administrative Agent that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Tranche C Lenders of funding Eurodollar Loans to be held
by such Tranche C Lenders during such Interest Period, then the Administrative
Agent shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, the Tranche C Lenders shall be under no obligation
to make additional Eurodollar Loans, continue Eurodollar Loans, or to convert
Base Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s)
of the then current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Eurodollar Loans or convert such Eurodollar Loans into Base
Rate Loans in accordance with the terms of this Credit Agreement.
3.7B LIMITATION ON NEW TERM LOAN EURODOLLAR LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan the Required New Term
Loan Lenders determine (which determination shall be conclusive) and notify the
Administrative Agent that the Eurodollar Rate will not adequately and fairly
reflect the cost to the New Term Loan Lenders of funding Eurodollar Loans to be
held by such New Term Loan Lenders during such Interest Period, then the
Administrative Agent shall give the Borrower prompt notice thereof, and so long
as such condition remains in effect, the New Term Loan Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.
3.8 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after
60
the Closing Date shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall
promptly give written notice of such circumstances to the Borrower and the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans, shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.13.
3.9 REQUIREMENTS OF LAW. If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable law, rule,
or regulation, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurodollar Loans,
its Notes, or its obligation to make Eurodollar Loans, or change the
basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Credit Agreement or its Notes in
respect of any Eurodollar Loans (other than taxes imposed on the overall
net income of such Lender by the jurisdiction in which such Lender has
its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the Commitment
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the
61
Administrative Agent), suspend the obligation of such Lender to make or continue
Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.10 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested. Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
3.10 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make any Eurodollar Loan or to continue, or to convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 3.8 or 3.9 hereof, such
Lender's Eurodollar Loans shall be automatically converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for such Eurodollar
Loans (or, in the case of a conversion required by Section 3.8 hereof, on such
earlier date as such Lender may specify to the Borrower with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to such conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 TAXES. (a) Any and all payments by any Credit Party to or for the
account of any Lender or the Administrative Agent hereunder or under any other
Credit Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
62
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If any Credit Party shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or any other
Credit Document to any Lender or the Administrative Agent, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.11) such Lender or the Administrative Agent receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Credit
Party shall make such deductions, (iii) such Credit Party shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Credit Party shall furnish to the
Administrative Agent, at its address referred to in Section 11.1, the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Credit
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Credit Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code (a "Non-U.S. Lender"), on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States or (ii) with
respect to any Non-U.S. Lender that is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code claiming exemption from U.S. withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest," a statement substantially in the form of Exhibit 3.11(d)
or a Form W-8 BEN certifying, in the case of (i) or (ii) above, that such Lender
is entitled to an exemption from or a reduced rate of tax on payments pursuant
to this Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d)
63
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 3.11(a) or
3.11(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.12 COMPENSATION. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 9.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, convert, continue, or prepay a
Eurodollar Loan on the date for such borrowing, conversion,
continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, continuation, or conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an
amount equal to the excess, if any, of (a) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) over
(b) the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank Eurodollar market. The
covenants of the Borrower set forth in this Section 3.12 shall survive the
repayment of the Loans,
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LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan, each payment or (subject to the
terms of Section 3.3) prepayment of principal of any Revolving Loan (other than
Swingline Loans) or reimbursement obligations arising from drawings under
Letters of Credit, each payment of interest on the Revolving Loans or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of Unused Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction in Revolving
Commitments and LOC Commitments and each conversion or extension of any
Revolving Loan, shall be allocated pro rata among the Revolving Lenders in
accordance with the respective principal amounts of their outstanding Revolving
Loans or Swingline Loans and Participation Interests. With respect to the Term
Loan, each payment or prepayment of principal on the Term Loan, each payment of
interest thereon, and each conversion or extension of any Loan comprising the
Term Loan, shall be allocated pro rata among the Term Lenders in accordance with
the respective principal amounts of their outstanding Term Loan and
Participation Interests therein.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been notified
in writing by any Lender prior to the date of any requested borrowing that such
Lender does not intend to make available to the Administrative Agent its ratable
share of such borrowing to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on the date of such borrowing, and the Administrative Agent in reliance
upon such assumption, may (in its sole discretion but without any obligation to
do so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent,
the Administrative Agent shall be able to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from the Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower at the
applicable rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Rate.
3.13A TRANCHE C PRO RATA TREATMENT. With respect to the Tranche C Term
Loans, each payment or prepayment of principal on the Tranche C Term Loans, each
payment of interest thereon and each conversion or extension of any Loan
comprising the Tranche C Term Loans, shall be allocated pro rata among the
Tranche C Term Lenders in accordance with the respective principal amounts of
their outstanding Tranche C Term Loans and Participation Interests therein.
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3.13B NEW TERM LOAN PRO RATA TREATMENT. With respect to the New Term
Loans, each payment or prepayment of principal on the New Term Loans, each
payment of interest thereon and each conversion or extension of any Loan
comprising the New Term Loans, shall be allocated pro rata among the New Term
Loan Lenders in accordance with the respective principal amounts of their
outstanding New Term Loans and Participation Interests therein.
3.14 SHARING OF PAYMENTS. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Loan, LOC
Obligations or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly purchase from the other Lenders a Participation
Interest in such Loans, LOC Obligations and other obligations in such amounts,
and make such other adjustments from time to time, as shall be equitable to the
end that all Lenders share such payment in accordance with their respective
ratable shares as provided for in this Credit Agreement. The Lenders further
agree among themselves that if payment to a Lender obtained by such Lender
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Administrative Agent shall fail to remit to the Administrative
Agent or any other Lender an amount payable by such Lender or the Administrative
Agent to the Administrative Agent or such other Lender pursuant to this Credit
Agreement on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to the Administrative Agent or such other
Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC. (a) Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Administrative
Agent in Dollars in immediately available funds, without setoff, deduction,
counterclaim or withholding of any kind, at the Administrative Agent's office
specified in Schedule 2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Administrative Agent
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of the Borrower or any
other Credit Party maintained with the Administrative Agent (with notice to the
Borrower or such other Credit Party). The Borrower shall, at the time it makes
any payment under this Credit Agreement,
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specify to the Administrative Agent the Loans, LOC Obligations, Fees, interest
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Lenders in such manner as the Administrative
Agent may determine to be appropriate in respect of obligations owing by the
Borrower hereunder, subject to the terms of Section 3.13(a)). The Administrative
Agent will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day
in like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on the
next succeeding Business Day. Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next preceding
Business Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days, except with respect to computation of interest on Base
Rate Loans which (unless the Base Rate is determined by reference to the Federal
Funds Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
the Credit Party Obligations or any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by
the Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
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SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from time
to time for any drawings under such Letters of Credit and (B) then,
following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above
in the manner provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT. (a) Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement. Each Lender will make
reasonable efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant
to Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of any Credit Party and each Lender's share thereof. The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the subaccounts referred to in the preceding sentence and to promptly update
such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Credit
Parties therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Credit Party obligations owing
to such Lender.
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SECTION 4.
GUARANTY
4.1 THE GUARANTY. The Guarantors hereby jointly and severally guarantee
to each Secured Party, as primary obligor and not as surety, the prompt payment
of the Credit Party 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 Credit Party 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), 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 Credit Party Obligations, 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 Credit Documents or Hedging Agreements, 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.
4.2 OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantors under
Section 4.1 are joint and several, absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of any of the
Credit Documents or Hedging Agreements, 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 Credit Party
Obligations, 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 4.2 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 Borrower or any other
Guarantor for amounts paid under this Section 4 until such time as the Secured
Parties have been paid in full, all Commitments under this Credit Agreement have
been terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Secured Parties in
connection with monies received under the Credit Documents or Hedging
Agreements. 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
Credit Party Obligations 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 Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
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(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Credit Party
Obligations 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 Administrative
Agent or any Secured Party as security for any of the Credit Party
Obligations shall fail to attach or be perfected;
(e) any of the Credit Party Obligations 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 any Bankruptcy Event with respect to any
Consolidated Party.
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 Administrative Agent or any other
Secured Party exhaust any right, power or remedy or proceed against any Person
under any of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements, or
against any other Person under any other guarantee of, or security for, any of
the Credit Party Obligations.
4.3 REINSTATEMENT. The obligations of the Guarantors under this Section
4 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 Credit Party Obligations
is rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each other Secured Party on demand for all
reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Administrative Agent or such other Secured Party in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS. Each Guarantor agrees that such
Guarantor shall have no right of recourse to security for the Credit Party
Obligations, except through the exercise of rights of subrogation pursuant to
Section 4.2 and through the exercise of rights of contribution pursuant to
Section 4.6.
4.5 REMEDIES. The Guarantors agree that, to the fullest extent permitted
by law, as between the Guarantors, on the one hand, and the Administrative Agent
and the other Secured Parties, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9.2 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 9.2) for purposes of Section 4.1
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notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Credit Party Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Credit Party Obligations being deemed to have
become automatically due and payable), the Credit Party Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of Section 4.1. The Guarantors acknowledge and
agree that their obligations hereunder are secured in accordance with the terms
of the Security Agreement and the other Collateral Documents and that the
Secured Parties may exercise their remedies thereunder in accordance with the
terms thereof.
4.6 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 4.6 shall be subordinate and subject in right of payment to
the prior payment in full to the Administrative Agent and the other Secured
Parties of the Guaranteed Obligations, and none of the Guarantors shall exercise
any right or remedy under this Section 4.6 against any other Guarantor until
payment and satisfaction in full of all of such Guaranteed Obligations. For
purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (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 Credit Parties 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 hereunder) of the Credit Parties; 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 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 Credit Parties 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 Credit Parties other
than the maker of such Excess Payment; provided, however, that, 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
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Guarantor shall be utilized for such Guarantor in connection with such Excess
Payment. This Section 4.6 shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under applicable law against the Borrower in respect of any payment of
Guaranteed Obligations.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE. The guarantee in this
Section 4 is a guaranty of payment and not of collection, is a continuing
guarantee, and shall apply to all Credit Party Obligations whenever arising.
SECTION 5.
CONDITIONS
5.1 CONDITIONS TO EFFECTIVENESS. The effectiveness of this amendment and
restatement of the First Amended and Restated Credit Agreement is subject to
satisfaction of each of the following conditions:
(a) Executed Credit Documents. Receipt by the Administrative Agent
of: (i) this Credit Agreement, duly executed by the Borrower, the Subsidiary
Guarantors, the Amending Lenders, the New Term Loan Lenders, the Administrative
Agent, the Documentation Agent, the Syndication Agent, the Co-Agent and the Lead
Arranger, (ii) any Notes requested by the applicable Lender (against return of
any notes issued to such Lender under the First Amended and Restated Credit
Agreement), duly executed by the Borrower, and (iii) all other Credit Documents,
duly executed by the parties thereto, each in form and substance acceptable to
the Administrative Agent.
(b) Corporate Documents. Receipt by the Administrative Agent of the
following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Credit Party certified
to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its
incorporation and certified by a secretary or assistant secretary of
such Credit Party to be true and correct as of the Second Restatement
Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Second Restatement Effective Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated therein
and authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of such Credit Party to be true and correct and
in force and effect as of the Second Restatement Effective Date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party certified
as of a recent date by the appropriate Governmental Authorities of the
state or other jurisdiction of incorporation and each other jurisdiction
in which the failure to so qualify and be in good standing could have a
Material Adverse Effect.
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(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct
as of the Second Restatement Effective Date.
(c) Financial Forecasts. The Administrative Agent shall have
received detailed financial forecasts for the Borrower and CCA of Tennessee for
the fiscal periods 2001-2002, including income statements, balance sheets and
cash flow statements, in each case based on (and including) reasonable operating
and accounting assumptions and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.
(d) Opinions of Counsel. The Administrative Agent shall have
received legal opinions from (i) New York counsel to the Credit Parties
reasonably satisfactory to the Administrative Agent, (ii) Miles & Stockbridge
and (iii) Stokes, Bartholomew, Xxxxx & Xxxxxx, each in form and substance
reasonably satisfactory to the Administrative Agent, dated the Second
Restatement Effective Date and addressed to each of the Administrative Agent,
the Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger
and each of the Lenders.
(e) Personal Property Collateral. The Administrative Agent shall
have received:
(i) As may be requested by the Administrative Agent, UCC
financing statement amendments or initial financing statements in lieu
of continuation statements, as applicable, with respect to all UCC-1
financing statements and fixture filings originally executed and
delivered prior to the Second Restatement Effective Date by the Credit
Parties under the First Amended and Restated Credit Agreement who are
parties to this Credit Agreement, in each case reflecting, if necessary,
the amendment and restatement of the First Amended and Restated Credit
Agreement by this Credit Agreement, as well as any other instruments and
documents in form and substance reasonably satisfactory to the
Administrative Agent necessary or, in the opinion of the Administrative
Agent, desirable to continue the perfection and priority of the
Administrative Agent's security interest in any Collateral after giving
effect to this Credit Agreement, including, without limitation, the
delivery of a letter from the Credit Parties to the Administrative Agent
authorizing the filing of such amendments, financing statements and
fixture filings.
(ii) all stock certificates evidencing the Capital Stock pledged
to the Administrative Agent pursuant to the Pledge Agreement, together
with duly executed in blank, undated stock powers attached thereto
(unless, with respect to the pledged Capital Stock of any Foreign
Subsidiary, such stock powers are deemed unnecessary by the
Administrative Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person);
(iii) such patent/trademark/copyright filings (or amendments
thereto) as requested by the Administrative Agent in order to perfect or
continue the perfection of the Administrative Agent's security interest
in such Collateral after giving effect to this Credit Agreement;
(iv) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may be
necessary or appropriate
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to perfect or continue the perfection of the Administrative Agent's
security interest in such Collateral after giving effect to this Credit
Agreement;
(v) duly executed consents as are necessary, in the
Administrative Agent's reasonable judgment, to perfect or continue the
perfection of the Administrative Agent's security interest in the
Collateral after giving effect to this Credit Agreement;
(vi) in the case of any personal property Collateral located at
a premises leased to a Credit Party, such estoppel letters, consents and
waivers (or amendments to any of the foregoing) from the landlords on
such real property as may be required by the Administrative Agent; and
(vii) duly-executed termination statements or other releases for
any Liens (other than Permitted Liens) existing on the Second
Restatement Effective Date.
(f) Real Property Collateral. The Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent:
(i) to the extent requested by the Administrative Agent, fully
executed and notarized amendments or amendments and restatements of all
mortgages, deeds of trust or deeds to secure debt granted in connection
with the Original Credit Agreement or the First Amended and Restated
Credit Agreement or, in the Administrative Agent's sole discretion,
mortgages, deeds of trust or deeds to secure debt in favor of the
Administrative Agent (each such amendment, restatement, mortgage, deed
of trust and deed to secure debt, together with all of the foregoing
delivered and recorded in connection with the Original Credit Agreement
or the First Amended and Restated Credit Agreement, a "Mortgage" and
collectively, "Mortgages") encumbering (a) the real property assets
owned by the Borrower set forth on Schedule 5.1(f)(i) and (b) each
leasehold estate of the Borrower set forth on Schedule 5.1(f)(i) (each
of those owned real property assets and leasehold estates on Schedule
5.1(f)(i), an "Existing Property" and collectively, the "Existing
Properties"), together with such UCC-1 financing statements (or UCC-3
amendments and/or assignments of financing statements filed in
connection with the Original Credit Agreement or the First Amended and
Restated Credit Agreement), as the Administrative Agent shall deem
appropriate with respect to each such Existing Property;
(ii) (A) Endorsements (the "Title Endorsements") to all existing
Mortgage Policies that were issued pursuant to the terms of the Original
Credit Agreement and the First Amended and Restated Credit Agreement,
which Title Endorsements shall be issued by the title insurer that
issued such Mortgage Policies and which shall specifically insure that
the insured priority of the lien of the Mortgages (as defined in the
First Amended and Restated Credit Agreement) is unaffected by this
Credit Agreement, or shall insure the first priority lien status of any
Mortgage amendment or new Mortgage contemplated hereby, and (B) with
respect to any Existing Property that was acquired after the Restatement
Effective Date or that for any other reason does not have in place a
"Mortgage Policy" (as defined in the First Amended and Restated Credit
Agreement) in accordance with the terms of the First Amended and
Restated Credit Agreement, ALTA or other appropriate form mortgagee
title insurance policies (the "Mortgage Policies") issued by a title
insurer satisfactory to the Administrative Agent
74
(the "Title Insurance Company"), in favor of the Administrative Agent,
in an amount satisfactory to the Administrative Agent with respect to
each such Existing Property, insuring that each applicable Mortgage
creates a valid and enforceable first priority mortgage lien on the
respective Existing Properties, free and clear of all defects and
encumbrances except Permitted Liens, which Title Endorsements or
Mortgage Policies shall be in form and substance satisfactory to the
Administrative Agent and contain such endorsements as shall be
satisfactory to the Administrative Agent, and providing affirmative
insurance and such reinsurance as the Administrative Agent may request,
all of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent, provided that, in the discretion of the
Administrative Agent, delivery of such Title Endorsements and/or
Mortgage Policies may be made promptly after the Second Restatement
Effective Date;
(iii) with respect to any Existing Property that was acquired
after the Restatement Effective Date or for which the Administrative
Agent has not already received such a survey, maps or plats of a survey
of the site of each such Existing Property certified to the
Administrative Agent and the Title Insurance Company in a manner
reasonably satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to the
Administrative Agent and the Title Insurance Company, and otherwise in
form and substance satisfactory to the Administrative Agent;
(iv) to the extent requested by the Administrative Agent, an
opinion of counsel (which counsel shall be satisfactory to the
Administrative Agent) in the states in which each Existing Property is
located with respect to the enforceability of any new or amended
Mortgage contemplated hereby, standard remedies with respect thereto,
the sufficiency of the form of UCC-1 financing statements or UCC-3
amendments and/or assignments to be recorded or filed in such state, the
continued perfection and priority of the Liens evidenced thereby and
such other matters as the Administrative Agent may request, in form and
substance satisfactory to the Administrative Agent, it being understood,
however, that the Administrative Agent may, in its sole discretion,
instead require letters in favor of the Administrative Agent from any
such counsel with respect to the legal opinions delivered by such
counsel in connection with the Original Credit Agreement or the First
Amended and Restated Credit Agreement;
(v) with respect to any Existing Property for which such a
certification was not delivered pursuant to the Original Credit
Agreement or the First Amended and Restated Credit Agreement,
certification from Bankers Hazard Determination Services or Borrower's
land surveyor in a form reasonably satisfactory to the Administrative
Agent or other evidence acceptable to the Administrative Agent that none
of the improvements on the Existing Properties are located within any
area designated by the Director of the Federal Emergency Management
Agency as a "special flood hazard" area; and, regardless of any
deliveries made pursuant to the Original Credit Agreement or the First
Amended and Restated Credit Agreement, if any improvements on the
Existing Properties are located within a "special flood hazard" area,
evidence of a flood insurance policy from a company and in an amount
satisfactory to the Administrative Agent for the applicable portion of
the premises, naming the Administrative Agent, for the benefit of the
Secured Parties, as mortgagee;
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(g) Subordination. With respect to each Existing Property owned by
the Borrower and leased to Management Opco or CCA of Tennessee, the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent, an amended and restated subordination of lease
agreement from Management Opco or CCA of Tennessee with respect to each such
lease agreement.
(h) Environmental Reports. Except for those Existing Properties
identified on Schedule 5.1(f)(i), for which environmental site assessment
reports were previously delivered to the Original Administrative Agent, the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent, environmental site assessment reports and related
documents with respect to all Existing Properties.
(i) Priority of Liens. The Administrative Agent shall have received
such other satisfactory evidence as it may reasonably require that, after giving
effect to this Credit Agreement, (i) the Administrative Agent, on behalf of the
Secured Parties, holds a perfected, first priority Lien on all Collateral and
(ii) none of the Collateral is subject to any Liens other than Permitted Liens.
(j) Letters of Credit. The Borrower shall have terminated or cash
collateralized all Letters of Credit, in each case in a manner reasonably
satisfactory to the Administrative Agent.
(k) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, but not limited to, naming the
Administrative Agent as sole loss payee on behalf of the Secured Parties and the
Administrative Agent and the other Secured Parties as additional insureds, each
as appropriate.
(l) Approval of Amendment. This Credit Agreement shall have been
consented to in writing by the requisite lenders under the First Amended and
Restated Credit Agreement.
(m) [Intentionally omitted.]
(n) No Default. On the Second Restatement Effective Date, no Default
or Event of Default shall have occurred and be continuing.
(o) Representations and Warranties True. On the Second Restatement
Effective Date, the representations and warranties set forth in Section 6 and in
the other Credit Documents shall be true and correct in all material respects as
of such date (except for those which expressly relate to an earlier date).
(p) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by an Executive Officer of the
Borrower as of the Second Restatement Effective Date stating that (A) each
Credit Party is in compliance with all existing material financial obligations,
(B) all material governmental, shareholder and third party consents and
approvals, if any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit, investigation or
proceeding is pending or, to the knowledge of the Borrower, threatened in any
court or before any arbitrator or
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governmental instrumentality that purports to affect any Credit Party or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect, and (D) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions contemplated
therein to occur on such date, (1) each of the Credit Parties is Solvent, (2) no
Default or Event of Default exists, (3) all representations and warranties
contained herein and in the other Credit Documents are true and correct in all
material respects, and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.11.
(q) Compliance Certificate. The Administrative Agent shall have
received a certificate executed by the chief financial officer of the Borrower,
demonstrating compliance with the financial covenants contained in Section 7.11
(based on the projections (and annualized, where appropriate) of the Borrower
for the first fiscal quarter following the Second Restatement Effective Date).
(r) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses (including, without limitation, the New Term Loan Commitment Fee, the
Term Loan Amendment Fee, the Tranche C Term Loan Amendment Fee, all fees,
disbursements and other charges of counsel and all charges of IntraLinks) owed
by them to the Lenders and the Administrative Agent for which invoices have been
presented on or before the Second Restatement Effective Date.
(s) Termination Notice. Receipt by the Administrative Agent from the
Borrower, at least three Business Days prior to the Second Restatement Effective
Date, of a notice indicating that all outstanding Revolving Loans will be
prepaid on the Second Restatement Effective Date and that the Revolving
Committed Amount will be terminated and, in connection therewith, the Revolving
Committed Amount shall have actually been terminated.
(t) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of each
Lender to make any Loan and of the Issuing Lender to issue or extend any Letter
of Credit are subject to satisfaction of the following conditions in addition to
satisfaction on the Second Restatement Effective Date of the conditions set
forth in Section 5.1:
(a) The Borrower shall have delivered to the Administrative
Agent, in the case of any New Term Loans, a Notice of Borrowing;
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and correct
in all material respects as of such date (except for those which
expressly relate to an earlier date);
(c) There shall not have been commenced against any Consolidated
Party an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
77
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No circumstances, events or conditions shall have occurred
since December 31, 1999, which would have a Material Adverse Effect; and
(f) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof), the sum of the aggregate
principal amount of outstanding Obligations shall not exceed the
Aggregate Committed Amount.
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Credit Parties of the correctness as of the date of such
delivery of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
SECTION 6.
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 FINANCIAL CONDITION. The financial statements delivered to the
Lenders pursuant to Section 5.1(c) and Section 7.1(a) and (b)(i), (A) have been
prepared in accordance with GAAP and (B) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Consolidated Parties and
Unrestricted Subsidiaries as of such date and for such periods. The financial
statements delivered to the Lenders pursuant to Section 7.1(b)(ii), (A) have
been prepared in accordance with GAAP (other than the combined nature thereof)
and (B) present fairly the consolidated results of operations of the
Consolidated Parties and Unrestricted Subsidiaries as of such date and for such
periods.
6.2 NO MATERIAL CHANGE. Since December 31, 2000 (a) there has been no
development or event relating to or affecting a Consolidated Party or
Unrestricted Subsidiary which has had or could reasonably be expected to have a
Material Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in a Consolidated Party nor has any of the Capital Stock
in a Consolidated Party been redeemed, retired, purchased or otherwise acquired
for value.
6.3 ORGANIZATION AND GOOD STANDING. Each of the Consolidated Parties and
Unrestricted Subsidiaries (a) is duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation or
organization, except, with respect to any Unrestricted Subsidiary, to the extent
the failure to be so organized, existing or in good standing could not
reasonably be expected to have a Material Adverse Effect, (b) has the corporate
or other necessary power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except, with respect to any
Unrestricted Subsidiary, to the extent the failure to have such power, authority
or right could not reasonably be expected to have a Material Adverse Effect and
(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good
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standing could have a Material Adverse Effect. Furthermore, the Borrower has
conducted its business so as to qualify as a REIT for its 1999 taxable year, and
subsequent to qualifying as a REIT for its 1999 taxable year the Borrower will
conduct its business so as to qualify as a C Corporation commencing with its
2000 taxable year.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of the Credit
Parties has the corporate or other necessary power and authority, and the legal
right, to make, deliver and perform the Credit Documents to which it is a party,
and in the case of the Borrower, to obtain extensions of credit hereunder, and
has taken all necessary corporate action to authorize the borrowings and other
extensions of credit on the terms and conditions of this Credit Agreement and to
authorize the execution, delivery and performance of the Credit Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other similar act by or in respect of, any Governmental Authority or any other
Person is required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party, except for filings to perfect
the Liens created by the Collateral Documents, and except for consents,
authorizations, filings or notices which have been obtained or made. This Credit
Agreement has been, and each other Credit Document to which any Credit Party is
a party will be, duly executed and delivered on behalf of the Credit Parties.
This Credit Agreement constitutes, and each other Credit Document to which any
Credit Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Credit Party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law). The amendments of the First Amended and Restated Credit Agreement
reflected herein have been validly approved as required under Sections 11.6 and
11.6A of the First Amended and Restated Credit Agreement and such amendments are
binding on the Lenders.
6.5 NO CONFLICTS. Neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated therein, nor
performance of and compliance with the terms and provisions thereof by such
Credit Party will (a) violate or conflict with any provision of its articles or
certificate of incorporation or bylaws or other organizational or governing
documents of such Person, (b) violate, contravene or materially conflict with
any Requirement of Law or any other law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, except for any violation, contravention or
conflict which could not reasonably be expected to have a Material Adverse
Effect, (c) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, except for any violation, contravention or conflict which
could not reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 NO DEFAULT. No Consolidated Party or Unrestricted Subsidiary is in
default in any respect under any contract, lease, loan agreement, indenture,
mortgage, security agreement or other agreement or obligation to which it is a
party or by which any of its properties is bound which default could reasonably
be expected to have a Material Adverse Effect.
79
6.7 OWNERSHIP. Each Consolidated Party is the owner of, and has good and
marketable title to, all of its respective material assets, and none of such
assets is subject to any Lien other than Permitted Liens.
6.8 INDEBTEDNESS. Except as otherwise permitted under Section 8.1, none
of the Consolidated Parties or Unrestricted Subsidiaries have any Indebtedness.
6.9 LITIGATION. Subject to Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party or
Unrestricted Subsidiary which could reasonably be expected to have a Material
Adverse Effect.
6.10 TAXES. Each Consolidated Party and Unrestricted Subsidiary has
filed, or caused to be filed, all tax returns (federal, state, local and
foreign) required to be filed and paid (a) all amounts of taxes shown thereon to
be due (including interest and penalties), and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent, (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP or (iii) that if unpaid could not reasonably
be expected to have a Material Adverse Effect. No Credit Party is aware as of
the Second Restatement Effective Date of any proposed tax assessments against
it, any other Consolidated Party or any Unrestricted Subsidiary, except to the
extent such tax assessment could not reasonably be expected to have a Material
Adverse Effect.
6.11 COMPLIANCE WITH LAW. Each Consolidated Party and Unrestricted
Subsidiary is in compliance with all Requirements of Law and all other laws,
rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply could not reasonably be expected to have a Material Adverse Effect.
6.12 ERISA. (a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any
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withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither any Consolidated Party nor any ERISA Affiliate would become
subject to any withdrawal liability under ERISA if any Consolidated Party or any
ERISA Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. Neither any Consolidated
Party nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan
is, to the best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or any
ERISA Affiliate has agreed or is required to indemnify any Person against any
such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections 404,
406 or 407 of ERISA or in connection with which a tax could be imposed pursuant
to Section 4975 of the Code. The representation by the Credit Parties in the
preceding sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source of funds
and is subject, in the event that the source of the funds used by the Lenders in
connection with this transaction is an insurance company's general asset
account, to the application of Prohibited Transaction Class Exemption 95-60, 60
Fed. Reg. 35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
exemption or similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA of a "plan" within the meaning of
Section 4975(e)(1) of the Code.
6.13 SUBSIDIARIES. Set forth on Schedule 6.13 is a complete and accurate
list as of the Second Restatement Effective Date of all Restricted Subsidiaries
of each Consolidated Party and all Unrestricted Subsidiaries of each
Consolidated Party (listed separately). The information on Schedule 6.13
includes jurisdiction of incorporation, the number of shares of each class of
Capital Stock outstanding, the number and percentage of outstanding shares of
each class owned (directly or indirectly) by such Consolidated Party or
Unrestricted Subsidiary, and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto. The outstanding Capital Stock of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
each such Consolidated Party or Unrestricted Subsidiary, directly or indirectly,
free and clear of all Liens
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(other than those arising under or contemplated in connection with the Credit
Documents and Liens on the Capital Stock of Unrestricted Subsidiaries permitted
under clause (xi) of the definition of Permitted Liens). Other than as set forth
in Schedule 6.13, no Consolidated Party or Unrestricted Subsidiary has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC. (a) No part of the Letters of Credit
or proceeds of the Loans will be used, directly or indirectly, for the purpose
of purchasing or carrying any "margin stock" within the meaning of Regulation U,
or for the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in Regulation U.
No indebtedness being reduced or retired out of the proceeds of the Loans was or
will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Consolidated Parties. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of the
proceeds of the Loans) 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.
(b) No Consolidated 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 Consolidated 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.
(c) Each Consolidated Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its respective
Property and to the conduct of its respective businesses as presently conducted,
and which failure to obtain or hold could not reasonably be expected to have a
Material Adverse Effect.
(d) No Consolidated Party or Unrestricted Subsidiary is in violation
of any applicable statute, regulation or ordinance of the United States of
America, or of any state, city, town, municipality, county or any other
jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations), which violation could reasonably be
expected to have a Material Adverse Effect.
(e) Each Consolidated Party and Unrestricted Subsidiary is current
with all material reports and documents, if any, required to be filed with any
state or federal securities commission or similar agency and is in full
compliance in all material respects with all
82
applicable rules and regulations of such commissions, except to the extent such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT. The proceeds of the Loans
hereunder shall be used solely by the Borrower (i) for working capital, (ii) to
provide funds for the development and construction of correctional, justice and
detention centers, (iii) for refinancing existing Indebtedness of the Borrower,
(iv) to acquire Real Properties, (v) for general corporate purposes and (vi) to
make dividend payments to its shareholders necessary to preserve its ability to
elect to be taxed as a REIT for its 1999 taxable year only; provided, however,
that (A) proceeds of the Tranche C Term Loan shall be used only for the purposes
set forth in clauses (iii) and (v) above, and for payment of the one-time
special dividend in fiscal year 1999, as described in, and subject to, Section
8.7 and (B) proceeds of the New Term Loans shall be used solely to repay (on the
Second Restatement Effective Date) all outstanding Revolving Loans in accordance
with Section 3.3(a). The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions, bid or proposal bonds and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business, including credit enhancement for financing incurred
by the Borrower in connection with the acquisition, construction and development
of real property.
6.16 ENVIRONMENTAL MATTERS. (a)(i) Each of the facilities and properties
owned, leased or operated by the Consolidated Parties and any Unrestricted
Subsidiaries (the "Properties") and all operations at the Properties are in
compliance with all applicable Environmental Laws, (ii) there is no violation of
any Environmental Law with respect to the Properties or the businesses operated
by the Consolidated Parties (the "Businesses"), and (iii) there are no
conditions relating to the Businesses or Properties that, in the case of the
foregoing clauses (i), (ii) and (iii) could reasonably be expected to have a
Material Adverse Effect.
(b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in amounts
or concentrations that could reasonably be expected to have a Material Adverse
Effect.
(c) No Consolidated Party or Unrestricted Subsidiary has received
any written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Businesses, nor
does any Consolidated Party or Unrestricted Subsidiary have knowledge or reason
to believe that any such notice will be received or is being threatened, if such
violation, alleged violation, non-compliance, liability or potential liability
could reasonably be expected to have a Material Adverse Effect.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf of any Consolidated Party or Unrestricted Subsidiary in a manner that
could reasonably be expected to have a Material Adverse Effect.
83
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of any Credit Party, threatened, under any
Environmental Law to which any Consolidated Party or Unrestricted Subsidiary is
or will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Consolidated Parties, the Properties or the Businesses, except to the extent
that each of the foregoing could not, individually or collectively, reasonably
be expected to have a Material Adverse Effect.
(f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations (including, without limitation, disposal) of any Consolidated
Party or Unrestricted Subsidiary in connection with the Properties or otherwise
in connection with the Businesses, in a manner that could reasonably be expected
to have a Material Adverse Effect.
6.17 INTELLECTUAL PROPERTY. Each Consolidated Party owns, or has the
legal right to use, all trademarks, tradenames, copyrights, technology, know-how
and processes (the "Intellectual Property") necessary for each of them to
conduct its business as currently conducted except for those the failure to own
or have such legal right to use could not reasonably be expected to have a
Material Adverse Effect. Set forth on Schedule 6.17 is a list of all material
Intellectual Property owned by each Consolidated Party or that any Consolidated
Party has the right to use. Except as provided on Schedule 6.17, no claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by any
Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
6.18 SOLVENCY. Each Credit Party is and, after consummation of the
transactions contemplated by this Credit Agreement, will be Solvent.
6.19 INVESTMENTS. All Investments of each Consolidated Party and
Unrestricted Subsidiary are Permitted Investments or otherwise permitted under
Section 8.6.
6.20 LOCATION OF COLLATERAL. Set forth on Schedule 6.20(a) is a list of
all real properties, whether owned or leased by any Consolidated Party, with
street address, county and state where located and, in the case of leased
properties, the date of the lease and the landlord and tenant party thereto. Set
forth on Schedule 6.20(b) is a list of all locations where any material personal
property of a Consolidated Party is located, including county and state where
located. Set forth on Schedule 6.20(c) is the chief executive office and
principal place of business of each Consolidated Party. Schedules 6.20(a),
6.20(b) and 6.20(c) may be updated from time to time by the Borrower by giving
written notice to the Administrative Agent.
6.21 DISCLOSURE. Neither this Credit 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 Consolidated Party or
Unrestricted Subsidiary in connection with the transactions contemplated hereby
(other than projections and pro forma financial information) contained as of the
date such statement, information, document or certificate was so furnished, any
untrue
84
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 the Borrower 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.
6.22 [INTENTIONALLY OMITTED.]
6.23 LABOR MATTERS. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of a Consolidated Party as of the
Second Restatement Effective Date and none of the Consolidated Parties has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.
6.24 YEAR 2000 COMPLIANCE. Each Credit Party has (i) initiated a review
and assessment of all areas within its and each of its Subsidiaries' business
and operations that could be adversely affected by the "Year 2000 Problem" (that
is, the risk that computer applications used by such Credit Party or any of its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
the timetable. Based on the foregoing, each Credit Party believes that all
computer applications that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have Material Adverse Effect.
6.25 FIRST PRIORITY LIEN. Both before and after giving effect to the
amendment of the First Amended and Restated Credit Agreement pursuant to this
Credit Agreement, the Administrative Agent, on behalf of the Secured Parties,
holds a first priority lien, subject to no other liens other than Permitted
Liens, in the Collateral.
6.26 LEASES. Each of the leases entered into between a Credit Party and
any lessee of real property owned by a Credit Party (a) has a minimum initial
lease term of five years (except for leases entered into with a governmental
entity) and (b) requires that the lessee remain solely responsible for all
operations and other liabilities with respect to the applicable property.
Furthermore, (i) eighty percent (80%) of all lease revenues of the Credit
Parties are derived from leases with Management Opco and with lessees (other
than Management Opco and with respect to current leases with Community Education
Partners, Inc.) having a senior unsecured non-credit enhanced long term debt
rating of at least BBB+ (or higher) from S&P or Baa1 (or higher) from Xxxxx'x or
if such ratings from S&P and Xxxxx'x are unavailable, an equivalent rating from
Fitch or Duff & Xxxxxx and (ii) at least ninety percent (90%) of all lease
revenues of the Credit Parties are derived from leases with Management Opco and
with lessees (other than Management Opco ) and with respect to current leases
with Community Education Partners, Inc.) having a senior unsecured non-credit
enhanced long term debt rating of at least BBB- (or higher) from S&P or Baa3 (or
higher) from Xxxxx'x or if such ratings from S&P and Xxxxx'x are unavailable, an
equivalent rating from Fitch or Duff & Xxxxxx.
85
SECTION 7.
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS. The Credit Parties will furnish, or cause to
be furnished, to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Consolidated Parties and each Unrestricted Subsidiary of the Borrower, a
consolidated balance sheet and income statement of the Consolidated
Parties and each such Unrestricted Subsidiary, as of the end of such
fiscal year, together with related consolidated statements of operations
and retained earnings and of cash flows for such fiscal year, setting
forth in comparative form consolidated figures for the preceding fiscal
year, all such financial information described above to be in reasonable
form and detail and audited by independent certified public accountants
of recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP (except
for changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern; provided, however, that such
opinion may be qualified, as to fiscal year 2000 and 2001 audited
financial statements only, to the extent that such qualification is
premised solely upon the status of the Revolving Loan Maturity Date, the
Term Loan Maturity Date, the Tranche C Term Loan Maturity Date or the
New Term Loan Maturity Date. Notwithstanding the foregoing, for any
entity that becomes a Consolidated Party in any fiscal year, audited
financial statements shall not be required for such entity for the
portion of such fiscal year prior to the date on which such entity
becomes a Consolidated Party.
(b) Quarterly, Monthly and Weekly Financial Statements.
(i) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of
each fiscal quarter of the Consolidated Parties and each
Unrestricted Subsidiary (other than the fourth fiscal quarter,
in which case 90 days after the end thereof) a consolidated
balance sheet and income statement of the Consolidated Parties
and each such Unrestricted Subsidiary, as of the end of such
fiscal quarter, together with related consolidated statements of
operations and retained earnings and of cash flows for such
fiscal quarter, in each case setting forth in comparative form
consolidated figures for the corresponding period of the
preceding fiscal year, all such financial information described
above to be in reasonable form and detail and reasonably
acceptable to the Administrative Agent, and accompanied by a
certificate of the chief financial officer of the Borrower to
the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the
Consolidated Parties and the Unrestricted Subsidiaries, as
applicable, and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end
audit adjustments.
86
(ii) Monthly Financial Statements. As soon as available,
and in any event within 45 days after the close of each calendar
month, a combined consolidated income statement and EBITDA
summary of the Consolidated Parties and each Unrestricted
Subsidiary, as of the end of such calendar month, in each case
setting forth in comparative form combined consolidated figures
for the preceding calendar month, all such financial information
described above to be in reasonable form and detail and
reasonably acceptable to the Administrative Agent, and
accompanied by a certificate of the chief financial officer of
the Borrower (which certificate may be based in part on an
accompanying certificate of the chief financial officer of each
Unrestricted Subsidiary, as applicable) to the effect that such
monthly financial statements fairly present in all material
respects the financial results of the Consolidated Parties and
the Unrestricted Subsidiaries, as applicable, and have been
prepared in accordance with GAAP (other than the combined nature
thereof), subject to changes resulting from audit and normal
year-end audit adjustments.
(iii) Weekly Forecasts and Reports. As soon as available
and in any event within five (5) Business Days after the end of
each calendar week, a statement of actual cash receipts and
disbursements of the Consolidated Parties and each Unrestricted
Subsidiary, as of the end of such calendar week, all such
financial information described above to be in reasonable form
and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of the chief financial
officer of the Borrower to the effect that such weekly forecasts
and reports are complete and accurate in all material respects
(which certificate may be based in part on an accompanying
certificate of the chief financial officer of each Unrestricted
Subsidiary, as applicable).
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b)(i)
above, a certificate of the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period, (ii)
stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof
and what action the Credit Parties propose to take with respect thereto
and (iii) stating that such person has reviewed Sections 8.1, 8.5 and
8.6 and detailing the Borrower's compliance therewith. In addition,
within five (5) Business Days of the end of each calendar month, a
certificate of the chief financial officer of the Borrower,
demonstrating compliance with the financial covenants contained in
Section 7.11(vi) (which certificate may be based in part on an
accompanying certificate of the chief financial officer of each
Unrestricted Subsidiary, as applicable) accompanied by a report setting
forth, on a facility by facility basis, the Total Beds Occupied Ratio
for such month.
(d) Annual Business Plan and Budgets. At least 30 days prior to
the end of each fiscal year of the Borrower, beginning with the fiscal
year ending December 31, 1999, an annual business plan and budget of the
Consolidated Parties containing, among other things, pro forma financial
statements for the next fiscal year.
(e) [Intentionally omitted.]
87
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of
any other report or "management letter" submitted by independent
accountants to any Consolidated Party or Unrestricted Subsidiary, in
each case in connection with any annual, interim or special audit of the
books of such Consolidated Party or Unrestricted Subsidiary, as
applicable.
(g) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as any Consolidated Party or Unrestricted Subsidiary shall send
to its shareholders or to a holder of any Indebtedness owed by any
Consolidated Party or Unrestricted Subsidiary, as applicable, in each
case in its capacity as such a holder and (ii) upon the request of the
Administrative Agent, all reports and written information to and from
the United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(h) Notices. Upon obtaining knowledge thereof, the Credit
Parties will give written notice to the Administrative Agent immediately
of (i) the occurrence of an event or condition consisting of a Default
or Event of Default, specifying the nature and existence thereof and
what action the Credit Parties propose to take with respect thereto and
(ii) the occurrence of any of the following with respect to any
Consolidated Party or Unrestricted Subsidiary (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which could reasonably be expected to have a
Material Adverse Effect, (B) the institution of any proceedings against
such Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which
could reasonably be expected to have a Material Adverse Effect, or (C)
any notice or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the Credit Parties
will give written notice to the Administrative Agent promptly (and in
any event within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment on
or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect, together with a description
of any such
88
event or condition or a copy of any such notice and a statement by the
chief financial officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if
any, which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Administrative Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(j) Environmental. Upon the reasonable written request of the
Administrative Agent, the Credit Parties will furnish or cause to be
furnished to the Administrative Agent, at the Credit Parties' expense, a
report of an environmental assessment of reasonable scope, form and
depth, (including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Administrative
Agent as to the nature and extent of the presence of any Materials of
Environmental Concern on any Properties (as defined in Section 6.16) and
as to the compliance by any Consolidated Party or Unrestricted
Subsidiary with Environmental Laws at such Properties. If the Credit
Parties fail to deliver such an environmental report within seventy-five
(75) days after receipt of such written request then the Administrative
Agent may arrange for same, and the Consolidated Parties hereby grant to
the Administrative Agent and their representatives access to the
Properties to reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable cost
of any assessment arranged for by the Administrative Agent pursuant to
this provision will be payable by the Credit Parties on demand and added
to the obligations secured by the Collateral Documents.
(k) Additional Patents and Trademarks. At the time of delivery
of the financial statements and reports provided for in Section 7.1(a),
the Credit Parties will deliver to the Administrative Agent, a report
signed by the chief financial officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to any
Consolidated Party since the last day of the immediately preceding
fiscal year and (ii) a list of all patent applications, trademark
applications, service xxxx applications, trade name applications and
copyright applications submitted by any Consolidated Party since the
last day of the immediately preceding fiscal year and the status of each
such application, all in such form as shall be reasonably satisfactory
to the Administrative Agent.
(l) Leases. At the time of delivery of the financial statements
provided for in Sections 7.1(a) and (b)(i) above, the Credit Parties
will deliver to the Administrative Agent, copies of all new leases
and/or modifications to existing leases for all of those Real Properties
for which any Credit Party receives annual rent payments equal to or in
excess of $1,500,000, and at the time of delivery of the financial
statements provided for in Section 7.1(a) above, copies of the annual
financial statements of each lessee which (i) is not a governmental
entity or public company and (ii) accounts for at least five percent
(5%) of the annual rent payments made to any Credit Party.
89
(m) Construction Budget. Within fifteen (15) days after the
close of each fiscal quarter of the Borrower, the Borrower shall deliver
to the Administrative Agent, a construction budget detailing the
construction planned by the Borrower or its Subsidiaries with respect to
each of the Real Properties for the succeeding fiscal year, together
with information detailing the amount of expenditures of the Borrower
and its Subsidiaries for construction year to date.
(n) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Administrative
Agent, the Required Lenders, the Required Tranche C Term Lenders, the
Required New Term Loan Lenders or any Lender may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES. Except as a result of or
in connection with a merger of a Subsidiary permitted under Section 8.4, each
Credit Party will, and will cause each of its Restricted Subsidiaries to, do all
things necessary to preserve and keep in full force and effect its existence,
rights, franchises and authority. Subject to the provisions of Section 8.7, the
Borrower will conduct its business so as to qualify as a REIT for its 1999
taxable year, and subsequent to qualifying as a REIT for its 1999 taxable year,
will operate so as to be taxed as a C Corporation.
7.3 BOOKS AND RECORDS. Each Credit Party will, and will cause each of
its Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW. Each Credit Party will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders, and
all applicable restrictions imposed by all Governmental Authorities, applicable
to it and its Property if noncompliance with any such law, rule, regulation,
order or restriction could reasonably be expected to have a Material Adverse
Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS. Each Credit Party will, and
will cause each of its Subsidiaries to, pay and discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, could reasonably be expected to give rise to a Lien
upon any of its properties, and (c) except as prohibited hereunder, all of its
other Indebtedness as it shall become due; provided, however, that no
Consolidated Party or Unrestricted Subsidiary shall be required to pay any such
tax, assessment, charge, levy, claim or Indebtedness which is being contested in
good faith by appropriate proceedings and as to which adequate reserves therefor
have been established in accordance with GAAP, unless the failure to make any
such payment (i) could reasonably be expected to give rise to an immediate right
to foreclose on a Lien securing such amounts or (ii) could reasonably be
expected to have a Material Adverse Effect.
7.6 INSURANCE. (a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance
90
retentions as are in accordance with normal industry practice (or as otherwise
required by the Collateral Documents). The Administrative Agent shall be named
as loss payee or mortgagee, as its interest may appear, and/or additional
insured (along with the other Secured Parties) with respect to any such
insurance providing general liability coverage or coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, that it will give the Administrative Agent thirty
(30) days prior written notice before any such policy or policies shall be
altered or canceled, and that no act or default of any Consolidated Party or any
other Person shall affect the rights of the Administrative Agent or the other
Secured Parties under such policy or policies. The present insurance coverage of
the Consolidated Parties is outlined as to carrier, policy number, expiration
date, type and amount on Schedule 7.6.
(b) In case of any material loss, damage to or destruction of any
material item of the Collateral of any Credit Party, such Credit Party shall
promptly give written notice thereof to the Administrative Agent generally
describing the nature and extent of such damage or destruction. In case of any
loss, damage to or destruction any material portion of the Collateral of any
Credit Party, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party's cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed. In
the event a Credit Party shall receive any insurance proceeds as a result of any
loss, damage or destruction with respect to the Collateral, such Credit Party
will immediately pay over such proceeds to the Administrative Agent, as cash
collateral for the Credit Party Obligations. The Administrative Agent agrees to
release such insurance proceeds to such Credit Party for replacement or
restoration of the portion of the Collateral of such Credit Party lost, damaged
or destroyed if, but only if, (A) within 30 days from the date the
Administrative Agent receives such insurance proceeds, the Administrative Agent
has received written application for such release from such Credit Party,
together with evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to its condition
immediately prior to the loss, destruction or other event giving rise to the
payment of such insurance proceeds and (B) on the date of such release no
Default or Event of Default exists. If the conditions in the preceding sentence
are not met, the Administrative Agent shall, on the first Business Day
subsequent to the date 30 days after it received such insurance proceeds, apply
such insurance proceeds as a mandatory prepayment of the Credit Party
Obligations for application in accordance with the terms of Section 3.3(b). All
insurance proceeds shall be subject to the security interest of the
Administrative Agent, for the benefit of the Secured Parties, under the
Collateral Documents.
7.7 MAINTENANCE OF PROPERTY. Each Credit Party will, and will cause each
of its Restricted Subsidiaries to, maintain and preserve its properties and
equipment material to the conduct of its business in good repair, working order
and condition, normal wear and tear and casualty and condemnation excepted, and
will make, or cause to be made, to such properties and equipment from time to
time all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS. Each Credit Party will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, leases, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound (including, without limitation, the
91
Agecroft Transaction Documents); provided, however, that no Credit Party nor any
of their respective Subsidiaries shall be required to perform any such
obligation which is being contested in good faith by appropriate proceedings (or
which, in the case of agreements other than for borrowed money, such Credit
Party has determined in its reasonable business judgment not to perform) and, in
each case, as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to perform such obligation (i) could
reasonably be expected to give rise to an immediate right to foreclose on a Lien
securing such obligation or (ii) could reasonably be expected to have a Material
Adverse Effect.
7.9 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans and
will use the Letters of Credit solely for the purposes set forth in Section
6.15.
7.10 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 Administrative 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 Administrative
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. The Credit Parties agree
that the Administrative Agent, and its representatives, may conduct an annual
audit of the Collateral, at the expense of the Credit Parties.
7.11 FINANCIAL COVENANTS.
(i) Maximum Total Leverage. At all times the ratio of Total
Indebtedness to Post Merger EBITDA of the Consolidated Parties for the
immediately preceding four full fiscal quarters ("LTM Post Merger EBITDA") shall
be equal to or less than the ratio set forth below for such fiscal quarter. For
purposes of calculating LTM Post Merger EBITDA, if any Asset Dispositions have
occurred during the immediately preceding four full fiscal quarters, LTM Post
Merger EBITDA shall be adjusted by taking into effect the decrease in Post
Merger EBITDA attributable to such Asset Dispositions, in each case, to the
extent that such Asset Dispositions have been used for purposes of determining
compliance with Section 7.11(v) hereof and reasonably proportional to the LTM
EBITDA Reduction Amounts set forth in the certificates delivered pursuant to
Section 8.5 hereof for such Asset Dispositions, in accordance with GAAP.
--------------------------------------------------------
Fiscal Quarter Ratio
--------------------------------------------------------
Q4 - 2001: 5.35:1.00
--------------------------------------------------------
Q1 - 2002: 5.35:1.00
--------------------------------------------------------
Q2 - 2002: 5.35:1.00
--------------------------------------------------------
Q3 - 2002 and each fiscal quarter 5.30:1.00
thereafter:
--------------------------------------------------------
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(ii) Post Merger Interest Coverage Ratio. The Post Merger
Interest Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties, shall be equal to or greater than the ratio set forth
below for such fiscal quarter.
-----------------------------------------------------------
Fiscal Quarter Ratio
-----------------------------------------------------------
Q4 - 2001: 1.75:1.00
-----------------------------------------------------------
Q1 - 2002: 1.75:1.00
-----------------------------------------------------------
Q2 - 2002: 1.75:1.00
-----------------------------------------------------------
Q3 - 2002 and each fiscal quarter 1.75:1.00
thereafter:
-----------------------------------------------------------
(iii) Fixed Charge Coverage. The Fixed Charge Coverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties, shall be equal
to or greater than the ratio set forth below for such fiscal quarter.
----------------------------------------------------------
Fiscal Quarter Ratio
----------------------------------------------------------
Q4 - 2001: 1.20:1.00
----------------------------------------------------------
Q1 - 2002: 1.20:1.00
----------------------------------------------------------
Q2 - 2002: 1.20:1.00
----------------------------------------------------------
Q3 - 2002 and each fiscal quarter 1.20:1.00
thereafter:
----------------------------------------------------------
(iv) Total Indebtedness to Total Capitalization. At all times the
ratio of Total Indebtedness to Total Capitalization shall be equal to or less
than 0.55:1.00. For purposes of determining compliance with this Section
7.11(iv), (A) during the third quarter of 2000, in connection with the Change in
Tax Status, the Borrower shall be entitled to make a permanent positive
adjustment to retained earnings in an amount equal to the lesser of (x) the
aggregate of any reductions in retained earnings that are caused directly by
recognizing deferred tax liabilities and/or valuation allowances recorded
against deferred tax assets in accordance with FSAS No. 109 and (y)
$200,000,000, (B) during the fourth quarter of 2000, the Borrower shall be
entitled to make a permanent positive adjustment to retained earnings in an
amount equal to the lesser of (x) the aggregate of any reductions in the
carrying value of any assets to fair market value and/or net realizable value
and any non-cash charges related solely to the Management Opco Merger, each as
determined in accordance with GAAP and (y) $600,000,000, and (C) during the
first quarter of 2002, the Borrower shall be entitled to make a permanent
positive adjustment to retained earnings in an amount equal to the lesser of (x)
the aggregate of any reductions in retained earnings that result from the
adoption by the Borrower of Statement of Financial Accounting Standard No. 142
and (y) $110,000,000.
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(v) Minimum Post Merger EBITDA. As of the last day of each fiscal
quarter of the Consolidated Parties, Post Merger EBITDA shall be equal to or
greater than the amount indicated below for such fiscal quarter; provided that
the amounts set forth below shall be reduced by an amount equal to the EBITDA
Reduction Amount of all Asset Dispositions, to the extent that such EBITDA
Reduction Amounts are set forth in a certificate delivered pursuant to Section
8.5 hereof.
-----------------------------------------------------------
Fiscal Quarter Amount
-----------------------------------------------------------
Q4 - 2001: $40,500,000
-----------------------------------------------------------
Q1 - 2002: $40,500,000
-----------------------------------------------------------
Q2 - 2002: $42,000,000
-----------------------------------------------------------
Q3 - 2002 and each fiscal quarter $50,000,000
thereafter:
-----------------------------------------------------------
(vi) Total Beds Occupied Ratio. At the end of each calendar month
the average of the Total Beds Occupied Ratios for each of the immediately
preceding three calendar months shall be equal to or greater than the amount
indicated during the period below.
-------------------------------------------------------------
Period Ratio
-------------------------------------------------------------
From the Second Restatement Effective Date
through and including June 30, 2002: 86.0%
-------------------------------------------------------------
On and after July 1, 2002: 87.0%
-------------------------------------------------------------
For purposes of determining compliance with this Section 7.11 only, the
definition of "Indebtedness" shall exclude the Litigation Settlement Debt.
7.12 ADDITIONAL CREDIT PARTIES. As soon as practicable and in any event
within 30 days after any Person becomes a Subsidiary (or ceases to be an
Unrestricted Subsidiary (but remains a Subsidiary)) of any Credit Party , the
Borrower shall provide the Administrative Agent with written notice thereof
setting forth information in reasonable detail describing all of the assets of
such Person and shall (a) if such Person is a Domestic Subsidiary (other than an
Unrestricted Subsidiary) of a Credit Party, cause such Person to execute a
Joinder Agreement in substantially the same form as Exhibit 7.12, (b) except to
the extent set forth in Section 8.6(iii) with respect to Unrestricted
Subsidiaries, cause the following to be delivered to the Administrative Agent
pursuant to an appropriate pledge agreement in form acceptable to the
Administrative Agent: (i) 100% (or, if less, the full amount owned by such
Credit Party) of the issued and outstanding shares of Capital Stock owned by
such Credit Party of each Domestic Subsidiary of such Credit Party and (ii) 65%
(or, if less, the full amount owned by such Credit Party) of the issued and
outstanding shares of each class of Capital Stock or other ownership interests
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
100% (or,
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if less, the full amount owned by such Credit Party) of the issued and
outstanding shares of each class of Capital Stock or other ownership interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
owned by such Credit Party of each Foreign Subsidiary together with, in each
case included in (i) or (ii) above, the certificates (or other agreements or
instruments), if any, representing such shares, and all options and other
rights, contractual or otherwise, with respect thereto, and undated stock powers
signed in blank (unless, with respect to a Foreign Subsidiary, such stock powers
are deemed unnecessary by the Administrative Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such Person) and (c) cause
such Person to deliver such other documentation as the Administrative Agent may
reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, real estate title insurance
policies, environmental reports, landlord's waivers, certified resolutions and
other organizational and authorizing documents of such Person, and favorable
opinions of counsel to such Person all in form, content and scope reasonably
satisfactory to the Administrative Agent. Notwithstanding the foregoing, (i) for
so long as such actions are prohibited under the Agecroft Transaction Documents,
the provisions of this Section 7.12 shall not apply to Agecroft and Agecroft
shall not be considered a "Credit Party" hereunder or under the other Credit
Documents, (ii) until designated as an "Unrestricted Subsidiary" hereunder,
Agecroft shall otherwise be deemed to be a "Restricted Subsidiary" and (iii) at
all times, all of the requirements set forth in the definitions of "Unrestricted
Subsidiary" and "Non-Recourse Debt" shall apply to Agecroft, regardless of
whether it has been designated as an Unrestricted Subsidiary hereunder; provided
that the Agecroft Transaction and the Agecroft Securitization shall be
permitted.
7.13 ENVIRONMENTAL LAWS. (a) The Consolidated Parties shall, and shall
cause the Unrestricted 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) The Consolidated Parties shall, and shall cause the
Unrestricted 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) The Consolidated Parties shall defend, indemnify and hold
harmless the Administrative Agent, the Documentation Agent, the Syndication
Agent, the Co-Agent, the Lead Arranger and the Lenders (including, without
limitation, any Issuing Lender), and their 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 the Borrower or any of its
Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without
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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; provided that
the provisions of this subsection (c) shall apply to Agecroft only to the extent
not prohibited by the Agecroft Charter. The agreements in this paragraph shall
survive repayment of the Loans and all other amounts payable hereunder, and
termination of the Commitments.
7.14 COLLATERAL. If, subsequent to the Second Restatement Effective
Date, any Credit Party shall acquire (a) any real property having a book value
in excess of $500,000 or (b) any intellectual property, securities instruments,
chattel paper or other personal property required to be delivered to the
Administrative Agent as Collateral hereunder or under any of the Collateral
Documents, the Borrower shall notify the Administrative Agent of same in each
case as soon as practicable after the acquisition thereof. Each Credit Party
shall take such action as requested by the Administrative Agent and at its own
expense, to ensure that the Administrative Agent shall have a first priority
perfected Lien in (i) all owned and developed real property of the Credit
Parties (whether now owned or hereafter acquired) having a book value in excess
of $1,000,000, (ii) to the extent deemed to be material by (A) the
Administrative Agent and (B) (x) the Required Lenders and Required New Term Loan
Lenders or (y) the Total Aggregate Required Lenders, in their sole discretion,
all owned and undeveloped real property of the Credit Parties (whether now owned
or hereafter acquired) and (iii) all personal property of the Credit Parties
(whether now owned or hereafter acquired), subject in each case only to
Permitted Liens. In addition, upon the request of the Administrative Agent, the
Borrower will assist the Administrative Agent with such post-closing lien
searches (conducted at the Borrower's expense) as the Administrative Agent shall
deem necessary or desirable to confirm the perfection and priority of the
Administrative Agent's Lien on the Collateral.
7.15 LEASES. The Credit Parties hereby agree that all leases entered
into between the Credit Party and any lessee of real property owned by the
Credit Party will (a) have a minimum initial lease term of five years (provided
any leases entered into with a governmental entity may have a lease term of less
than five years and be subject to other appropriate limitations satisfactory to
the Required Lenders, the Required Tranche C Term Lenders and the Required New
Term Loan Lenders) and (b) require that the lessee remain solely responsible for
all operations and other liabilities with respect to the applicable property;
provided, however, with respect to all leases having annual rent payments
(whether at the inception of such lease or otherwise) in excess of $1,500,000,
such leases shall be provided to the Administrative Agent in accordance with
Section 7.1(l) and be satisfactory in form and substance to the Administrative
Agent. The Credit Parties also agree that, at all times, (i) at least eighty
percent (80%) of all lease revenues of the Credit Parties shall be derived from
leases with Management Opco and with lessees other than Management Opco having a
senior unsecured non-credit enhanced long term debt rating of at least BBB+ (or
higher) from S&P or Baa1 (or higher) from Xxxxx'x (or if such ratings are
unavailable from S&P and Xxxxx'x, an equivalent rating from either Fitch or Duff
& Xxxxxx), (ii) at least ninety percent (90%) of all lease revenues of the
Credit Parties shall be derived from leases with Management Opco and with
lessees other than Management Opco having a senior unsecured non-credit enhanced
long term debt rating of at least BBB- (or higher) from S&P and Baa3 (or higher)
from Xxxxx'x (or if such ratings are unavailable from S&P and Xxxxx'x, an
equivalent rating from either Fitch or Duff & Xxxxxx), and (iii) at least ninety
percent (90%) of all lease revenues of the Credit Parties are derived from
triple-net leases that are noncancelable by the lessee.
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7.16 YEAR 2000 COMPLIANCE. Each Credit Party will promptly notify the
Administrative Agent in the event such Credit Party discovers or determines that
any computer application that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 compliant, except to the extent
that such failure could not reasonably be expected to have a Material Adverse
Effect.
7.17 APPRAISALS. If (i) the Administrative Agent, (ii) the Required
Lenders and Required New Term Loan Lenders or (iii) the Total Aggregate Required
Lenders determine that applicable law or regulation requires that appraisals of
each Real Property be prepared for the benefit of the Administrative Agent, the
Credit Parties agree that the Administrative Agent may (after notice to and
consultation with the Borrower) order appraisals of each Real Property (at the
expense of the Credit Parties). Such appraisals shall (i) be performed by a
qualified appraiser engaged by the Administrative Agent, (ii) indicate a fair
market value for each such Real Property and otherwise be in form and substance
satisfactory to the Administrative Agent and (iii) be delivered to the
Administrative Agent within 120 days of such determination that such appraisals
are necessary under applicable law or regulation. The Credit Parties further
agree that if (i) the Administrative Agent, (ii) the Required Lenders and
Required New Term Loan Lenders or (iii) the Total Aggregate Required Lenders
make the determination that appraisals of each Real Property are required by
applicable law or regulation, the Credit Parties shall, upon the purchase of a
Real Property subsequent to the Second Restatement Effective Date, provide the
Administrative Agent with a current appraisal of such Real Property (at the
expense of the Credit Parties), which appraisals shall be prepared by a
qualified appraiser engaged by the Administrative Agent, indicate a fair market
value for each such Real Property and otherwise be in form and substance
satisfactory to the Administrative Agent.
7.18 HEDGING AGREEMENTS. The Borrower shall, not later than August 16,
1999, enter into and maintain Hedging Agreements in a notional amount of at
least $325,000,000 and otherwise in form and substance acceptable to the
Administrative Agent, all pursuant to a hedging strategy reasonably acceptable
to any two of the Administrative Agent, the Syndication Agent and the
Documentation Agent.
7.19 [INTENTIONALLY OMITTED.]
7.20 [INTENTIONALLY OMITTED.]
7.21 [INTENTIONALLY OMITTED.]
7.22 [Intentionally omitted.]
7.23 CASH MANAGEMENT. The Credit Parties will (i) within forty-five (45)
days after the Amendment Effective Date (the "Account Transfer Deadline"),
transfer, and thereafter maintain, all depository and other non-disbursement
accounts of the Credit Parties (other than those accounts set forth on Schedule
7.23 (the "Excluded Credit Party Accounts")) to accounts held at any bank that
is a Lender and cause such accounts to become subject to a perfected lien in
favor of the Administrative Agent for the benefit of the Secured Parties in a
manner reasonably satisfactory to the Administrative Agent, provided that from
and after the Account Transfer Deadline, the average daily balance in all
Excluded Credit Party Accounts (other than any such accounts which on the date
hereof constitute cash collateral for obligations) shall at no time exceed
$500,000 (plus the amount of any outstanding checks) in the aggregate for a
period of 5 consecutive days, and (ii) as soon as is reasonably practicable
after consummation of the
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Management Opco Merger, (a) transfer, and thereafter maintain, all depository
accounts of CCA of Tennessee (other than (A) commissary accounts and inmate
trust accounts and (B) accounts listed on Schedule 7.23 (such accounts in this
clause (B), the "Excluded CCA of Tennessee Accounts")) to accounts held at any
bank that is a Lender and cause such accounts to become subject to a perfected
lien in favor of the Administrative Agent for the benefit of the Secured Parties
in a manner reasonably satisfactory to the Administrative Agent, and (b)
transfer, and thereafter maintain, all centralized disbursement accounts and
concentration accounts of CCA of Tennessee to accounts held at any bank that is
a Lender and cause such concentration accounts (but not the centralized
disbursement accounts) to become subject to a perfected lien in favor of the
Administrative Agent for the benefit of the Secured Parties in a manner
reasonably satisfactory to the Administrative Agent, provided that the average
daily balance in the Excluded CCA of Tennessee Accounts and the centralized
disbursement accounts shall at no time after the date that is ten (10) Business
Days after the date of consummation of the Management Opco Merger exceed
$3,000,000 (plus the amount of any outstanding checks) in the aggregate for a
period of 5 consecutive days.
In addition to the foregoing, (i) within fifteen (15) Business Days
after the Amendment Effective Date, the Borrower shall cause its investment
account at First Union (Account #00000000) to become subject to a lien in favor
of the Administrative Agent for the benefit of the Secured Parties in a manner
reasonably satisfactory to the Administrative Agent, and (ii) on and after the
date that is fifteen (15) Business Days after the Amendment Effective Date, the
average daily balance in the Borrower's operating account at First Union
(Account #2020000174639) shall at no time exceed $500,000 (plus the amount of
any outstanding checks) in the aggregate for a period of 5 consecutive days.
7.24 MANAGEMENT CONTRACT. The Borrower will at all times (i) maintain an
agreement with CCA of Tennessee, in form and substance satisfactory to the
Aggregate Required Lenders and the Required New Term Loan Lenders, pursuant to
which the Borrower will (A) permit CCA of Tennessee to manage and operate such
prison facilities as are then or thereafter owned by the Borrower and then or
thereafter managed by CCA of Tennessee or (B) lease to CCA of Tennessee such
prison facilities as are then or thereafter owned by the Borrower and then or
thereafter managed by CCA of Tennessee, in either case, in exchange for a fee to
be paid from CCA of Tennessee to the Borrower, and (ii) maintain a valid and
perfected pledge of such agreement and the proceeds to be received thereunder to
the Administrative Agent as additional Collateral for the Obligations, in a
manner satisfactory to the Administrative Agent.
SECTION 8.
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS. The Credit Parties will not permit any Consolidated
Party or Unrestricted Subsidiary to contract, create, incur, assume or permit to
exist any Indebtedness, except:
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(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower set forth in Schedule 8.1 (and
renewals, refinancings and extensions thereof on terms and conditions no
less favorable to the obligor than such existing Indebtedness);
(c) obligations of the Borrower in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
(d) Indebtedness owing by a Credit Party to another Credit
Party;
(e) subject to the provisions of Section 3.3(b)(ii), unsecured
Indebtedness of the Borrower provided that (i) no part of the principal
part of such Indebtedness shall have a maturity date earlier than the
final maturity of the Loans hereunder, (ii) after giving effect to the
incurrence of any such Indebtedness on a pro forma basis, as if such
incurrence of Indebtedness had occurred on the first day of the twelve
month period ending on the last day of the Borrower's most recently
completed fiscal quarter, the Borrower and its Subsidiaries would have
been in compliance with all the financial covenants set forth in Section
7.11 and the Borrower shall have delivered to the Administrative Agent a
certificate of its chief financial officer to such effect setting forth
in reasonable detail the computations necessary to determine such
compliance and (iii) at the time of the issuance of such Indebtedness
and after giving effect thereto, no Default or Event of Default shall
exist or be continuing;
(f) purchase money Indebtedness of the Borrower not exceeding
$1,000,000 in aggregate principal amount at any time outstanding;
(g) Indebtedness of any Unrestricted Subsidiary consisting
entirely of Non-Recourse Debt; provided, however, that (i) the aggregate
amount of all such Indebtedness that may be incurred or be owing by all
Unrestricted Subsidiaries may not at any time exceed twenty percent
(20%) of Total Value and (ii) if any such Indebtedness ceases to be
Non-Recourse Debt of such Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Borrower that was not permitted by this Section
8.1(g);
(h) Indebtedness of the Borrower in respect of the Senior Notes
and the unsecured guarantee by any Subsidiary of the Borrower that is a
Subsidiary Guarantor hereunder of the Borrower's obligations under (i)
the Senior Notes (pursuant to the Senior Notes Indenture as in effect on
the Restatement Effective Date) and (ii) the Permitted Unsecured Debt;
provided that such guarantee is not senior to the Guarantee Obligations
of such Subsidiary Guarantor hereunder;
(i) Indebtedness of a Restricted Subsidiary of the Borrower that
is a Credit Party incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company (provided that such
Indebtedness shall not be incurred (i) to provide all or any portion of
the funds utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was otherwise acquired by the Borrower or (ii)
otherwise in connection
99
with, or in contemplation of, such acquisition) and as to which the
Borrower and its other Restricted Subsidiaries are not obligated to
become liable for such Indebtedness;
(j) Indebtedness incurred by the Borrower or any of its
Restricted Subsidiaries in respect of workers' compensation claims,
self-insurance obligations, performance, proposal, completion, surety
and similar bonds and completion guarantees provided by the Borrower or
a Restricted Subsidiary of the Borrower in the ordinary course of
business; provided that the underlying obligation to perform is that of
the Borrower and its Restricted Subsidiaries and not that of the
Company's Unrestricted Subsidiaries or any other Person;
(k) prior to Agecroft's designation as an Unrestricted
Subsidiary hereunder, Indebtedness owing by Agecroft to the Borrower
pursuant to the Agecroft Note; and
(l) Indebtedness of CCA of Tennessee under the CCA of Tennessee
Credit Agreement as in effect on the date hereof, provided that any such
Indebtedness shall remain subject to the limitations set forth in
Section 9.1(o).
(m) the Litigation Settlement Debt as contemplated by and in
accordance with the definition thereof, provided that any settlement of
any shareholder litigation or similar dispute shall remain subject to
the limitations set forth in Section 9.1(r).
8.2 LIENS. The Credit Parties will not permit any Consolidated Party or
Unrestricted Subsidiary to contract, create, incur, assume or permit to exist
any Lien with respect to any of its Property, whether now owned or after
acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS. The Credit Parties will not permit any
Consolidated Party or any other Subsidiary to substantively alter the character
or conduct of the business conducted by such Person as of the Second Restatement
Effective Date. Specifically, neither the Borrower nor any Subsidiary of the
Borrower shall engage in any business other than the ownership of correctional,
justice and/or detention facilities (which may include secured charter schools)
that are managed by the lessees of the Borrower or such Subsidiary, as the case
may be (or agent of any such lessee in the event any lessee is a governmental
entity) and the operation and management of correctional, justice and detention
facilities.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC. The Credit Parties will not
permit any Consolidated Party to enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, notwithstanding the foregoing
provisions of this Section 8.4, (a) the Borrower may merge or consolidate with
any of its Restricted Subsidiaries provided that (i) the Borrower shall be the
continuing or surviving corporation, (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the
Administrative Agent may request in order to maintain the perfection and
priority of the Administrative Agent's liens on the assets of the Credit Parties
as required by Section 7.14 after giving effect to such transaction and (iii)
after giving effect to such transaction, no Default or Event of Default exists,
(b) any Credit Party other than the Borrower may merge or consolidate with any
other Credit Party other than the Borrower provided that (i) the Credit Parties
shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may request in order to maintain the
perfection and priority of the Administrative Agent's liens on the assets of the
Credit Parties as required by Section 7.14 after giving effect to such
transaction and (ii) after giving effect to such transaction,
100
no Default or Event of Default exists, (c) any Consolidated Party which is not a
Credit Party may be merged or consolidated with or into any Credit Party
provided that (i) such Credit Party shall be the continuing or surviving
corporation, (ii) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Administrative Agent may
request in order to maintain the perfection and priority of the Administrative
Agent's liens on the assets of the Credit Parties as required by Section 7.14
after giving effect to such transaction and (iii) after giving effect to such
transaction, no Default or Event of Default exists, and (d) any Consolidated
Party which is not a Credit Party may be merged or consolidated with or into any
other Consolidated Party which is not a Credit Party provided that, after giving
effect to such transaction, no Default or Event of Default exists.
8.5 ASSET DISPOSITIONS. The Credit Parties will not permit any
Consolidated Party to make any Asset Disposition (including, without limitation,
any Sale and Leaseback Transaction) unless no later than the date of
consummation of such Asset Disposition, the Administrative Agent shall have
received a certificate of an officer of the Borrower briefly describing the
assets sold or otherwise disposed of, and setting forth the net book value of
such assets, the aggregate consideration and Net Cash Proceeds received for such
assets in connection with such Asset Disposition and the corresponding EBITDA
Reduction Amount and LTM EBITDA Reduction Amount with respect to such Asset
Disposition, and the Credit Parties shall on the date of the consummation of
such Asset Disposition, apply (or cause to be applied) an amount equal to the
Net Cash Proceeds of such Asset Disposition to prepay the Loans (and to cash
collateralize the LOC Obligations) in accordance with the terms of Sections
3.3(b)(ii) and (iii) (except as expressly provided therein).
Notwithstanding the foregoing, the Borrower agrees that it shall not
sell a Borrowing Base Property unless each of the following conditions is
satisfied: (i) no Default or Event of Default exists, (ii) such Borrowing Base
Property is sold pursuant to the terms and conditions of an arms length contract
and on terms reasonably satisfactory to the Administrative Agent, (iii) either
(a) the Borrower replaces such Borrowing Base Property with a substitute
Borrowing Base Property acceptable to the Lenders or (b) the Obligations
outstanding shall not exceed the lesser of the Aggregate Committed Amount and
the Borrowing Base after giving effect to such disposition and (iv) after giving
effect to such disposition, on a pro forma basis as if such disposition had
occurred on the first day of the twelve month period ending on the last day of
the Borrower's most recently completed fiscal quarter, the Consolidated Parties
would have been in compliance with all the financial covenants set forth in
Section 7.11.
8.6 INVESTMENTS. The Credit Parties will not permit any Consolidated
Party to make Investments in or to any Person, except for (i) Permitted
Investments, (ii) so long as no Event of Default has occurred and is continuing,
Investments not otherwise prohibited under this Credit Agreement (other than in
Unrestricted Subsidiaries) in an amount not to exceed $3,000,000 in any fiscal
year of the Borrower and $15,000,000 in the aggregate, and (iii) the deemed
investment in Agecroft by virtue of its designation as an Unrestricted
Subsidiary hereunder (provided that any such designation shall not involve the
transfer of cash or any other assets from any Credit Party to Agecroft).
8.7 RESTRICTED PAYMENTS. (a) The Credit Parties will not permit any
Consolidated Party to, directly or indirectly, declare, order, make or set apart
any sum for or pay any Restricted Payment, except (i) to make dividends payable
solely in the same class of Capital
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Stock of such Person, (ii) to make dividends or other distributions payable to
the Borrower (directly or indirectly through Subsidiaries), (iii) the Borrower
may declare and pay non-cash dividends (other than in the form of Disqualified
Stock) in an aggregate amount not to exceed an amount necessary to maintain the
Borrower's status as a REIT for its 1999 taxable year, (iv) the Borrower may
repurchase Equity Interests of the Borrower to the extent such repurchases are
deemed to occur upon the exercise of stock options if such Equity Interests
represent a portion of the exercise price thereof and (v) the Borrower may pay
cash dividends (in an aggregate amount not to exceed $200,000 in any calendar
year) to the extent necessary in lieu of fractional shares on its series B
preferred stock.
(b) Notwithstanding the foregoing, the Borrower will be permitted to
declare and pay dividends as currently required by its series A preferred stock
(including, without limitation, all such dividends as are in arrears on and as
of the Second Restatement Effective Date), provided that, at the time of
declaration and payment thereof, no Default or Event of Default shall have
occurred and be continuing.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC. The Credit Parties will not permit
any Consolidated Party to (a) after the issuance thereof, amend, modify or
refinance (or permit the amendment, modification or refinancing of) any other
Indebtedness if such amendment, modification or refinancing would add or change
any terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof; provided that the
restrictions of this clause (a) shall not apply to any Indebtedness to the
extent (i) such Indebtedness, as so amended or modified, or (ii) the
Indebtedness refinancing such Indebtedness, as applicable, in each case could be
incurred under Section 8.1(e) hereof at the time of such amendment, modification
or refinancing, (b) except in connection with a refinancing of Indebtedness
permitted under clause (a) hereof, make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due) any other Indebtedness (other than Indebtedness owed
to the Borrower), or (c) except in connection with a refinancing of Indebtedness
permitted under clause (a) hereof, refund or exchange (except as provided in
clause (a) above) any other Indebtedness (or offer to do so).
8.9 TRANSACTIONS WITH AFFILIATES. The Credit Parties will not permit any
Consolidated Party to enter into or permit to exist any transaction or series of
transactions with or for the benefit of any officer, director, shareholder,
Unrestricted Subsidiary (other than, if applicable, Agecroft in connection with
the Agecroft Securitization) or Affiliate of such Person (other than another
Credit Party) other than (i) normal compensation and reimbursement of expenses
of officers and directors and (ii) except as otherwise specifically limited in
this Credit Agreement, other transactions which are entered into in the ordinary
course of such Person's business on terms and conditions substantially as
favorable to such Person as would be obtainable by it in a comparable
arms-length transaction with a Person other than an officer, director,
shareholder, Unrestricted Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. The Credit Parties will not
permit any Consolidated Party to (a) change its fiscal year without the prior
written consent of the Required Lenders, the Required Tranche C Term Lenders and
the Required New Term Loan Lenders or (b) amend, modify or change its articles
of incorporation (or corporate charter or other similar
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organizational document) or bylaws (or other similar document) in any manner
that would reasonably be likely to adversely affect the Lenders.
8.11 LIMITATION ON RESTRICTED ACTIONS. The Credit Parties will not
permit any Consolidated Party to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any such Person to (a) pay dividends or make any other
distributions to any Credit Party on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits, (b) pay any
Indebtedness or other obligation owed to any Credit Party, (c) make loans or
advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Credit Agreement and the other Credit
Documents, (ii) applicable law, (iii) the Senior Notes Documents, (iv) the
Permitted Unsecured Debt Documents and (v) the Agecroft Transaction Documents.
8.12 OWNERSHIP OF SUBSIDIARIES. Notwithstanding any other provisions of
this Credit Agreement to the contrary, the Credit Parties will not permit (A)
any Consolidated Party to (i) permit any Person (other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower) to own any Capital Stock of any
Restricted Subsidiary of the Borrower (provided that no Capital Stock of any
Restricted Subsidiary of the Borrower may be owned by an Unrestricted
Subsidiary) or (ii) permit any Restricted Subsidiary of the Borrower to issue
Capital Stock (except to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower; provided that no Capital Stock of any Restricted Subsidiary of the
Borrower may be owned by an Unrestricted Subsidiary), in each case except to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries and (iii) notwithstanding anything to the contrary
contained in clause (ii) above, permit any Subsidiary of the Borrower to issue
any shares of preferred Capital Stock or (B) any Person other than the Borrower
or its Restricted Subsidiaries to own any Capital Stock of any Unrestricted
Subsidiary; provided that the provisions of this clause (B) shall not apply to
any Capital Stock of an Unrestricted Subsidiary owned by a governmental or
quasi-governmental entity in a partnership, joint-venture or other cooperative
arrangement with the Borrower or any of its Restricted Subsidiaries.
8.13 SALE LEASEBACKS. The Credit Parties will not permit any
Consolidated Party to, directly or indirectly, become or remain liable as lessee
or as guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any Property (whether real, personal or mixed),
whether now owned or hereafter acquired, (a) which such Consolidated Party has
sold or transferred or is to sell or transfer to a Person which is not a
Consolidated Party or (b) which such Consolidated Party intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Consolidated Party to another Person which is
not a Consolidated Party in connection with such lease. Notwithstanding the
foregoing, the Borrower may consummate the Headquarters Sale-Leaseback, provided
that the Net Cash Proceeds thereof received by the Borrower shall be at least
$12,000,000 and shall be applied in accordance with Sections 3.3(b)(ii) and
(iii).
8.14 NO FURTHER NEGATIVE PLEDGES. The Credit Parties will not permit any
Consolidated Party to enter into, assume or become subject to any agreement
prohibiting or
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otherwise restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other obligation,
except pursuant to (1) provided the provisions thereof do not prohibit the Liens
created under the Loan Documents, (a) the Senior Notes Documents and the
Permitted Unsecured Debt Documents and any refinancing of any thereof otherwise
permitted under this Credit Agreement that, with respect to the matters referred
to in this Section 8.14, contain provisions no more restrictive on the Borrower
and its Subsidiaries than the Indebtedness being refinanced, (b) the Agecroft
Transaction Documents and (c) the CCA of Tennessee Credit Agreement, as in
effect as of the date hereof, and (2) this Credit Agreement and the other Credit
Documents.
8.15 [INTENTIONALLY OMITTED.]
8.16 SPECULATIVE TRANSACTIONS. The Credit Parties will not permit any
Consolidated Party to enter into any speculative hedging or similar transaction
(such as a forward equity purchase agreement).
8.17 [Intentionally omitted.]
8.18 CAPITAL EXPENDITURES. The Credit Parties will not permit any
capital expenditures for the construction of new facilities or the expansion of
existing facilities, except for, at any time after consummation of the Capital
Raising Event that consolidated EBITDA for the immediately preceding fiscal
quarter is at least $60,000,000, Build-to-Suit Capital Expenditures, provided
that (i) any such Build-to-Suit Capital Expenditures made under this clause
shall not exceed $50,000,000 in the aggregate for any calendar year and (ii) the
overall capital expenditures budget for any particular project under which any
such capital expenditures are made shall be reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders.
SECTION 9.
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of
any of the Loans or of any reimbursement obligations arising
from drawings under Letters of Credit, or
(ii) default, and such default shall continue for three
(3) or more Business Days, in the payment when due of any
interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees or
other amounts owing hereunder, under any of the other Credit
Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or
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in any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material respect on
the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.4, 7.9,
7.11, 7.12, 7.14, 7.15, 7.16 7.17, 7.18, 8.1 through 8.14,
inclusive, 8.16 or 8.18; or
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.1(a), (b),
(c), (e) or, (l) or (o) and such default shall continue
unremedied for a period of at least 5 days after the earlier of
a responsible officer of a Credit Party becoming aware of such
default or notice thereof by the Administrative Agent; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to
in subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Administrative
Agent; or
(d) Other Credit Documents; Etc. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents or the Waiver and
Amendment (subject to applicable grace or cure periods, if any), or (ii)
except as a result of or in connection with a merger of a Subsidiary
permitted under Section 8.4, any Credit Document shall fail to be in
full force and effect or to give the Administrative Agent and/or the
Lenders the Liens, rights, powers and privileges purported to be created
thereby, or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
merger of a Subsidiary permitted under Section 8.4, the guaranty given
by any Guarantor hereunder (including any Additional Credit Party) or
any provision thereof shall cease to be in full force and effect, or any
Guarantor (including any Additional Credit Party) hereunder or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $1,000,000 in the aggregate for the Consolidated
Parties taken as a whole, (A)(1) any Consolidated Party shall default in
any payment (beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, or (2) a default in the
observance or performance relating to such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event or condition
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shall occur and continue or condition exist, the effect of which default
or other event or condition is to cause, or permit the holder or holders
of such Indebtedness (or trustee or agent on behalf of such holders) to
cause (determined without regard to whether any notice or lapse of time
is required), any such Indebtedness to become due prior to its stated
maturity; or (B) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. Except to the extent confirming a settlement of a
litigation not resulting in an Event of Default under Section 9.1(r),
one or more judgments or decrees shall be entered against one or more of
the Consolidated Parties involving a liability of $1,000,000 or more in
the aggregate (to the extent not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage and has the ability
to perform) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) ERISA. Any of the following events or conditions shall
occur, if such event or condition could reasonably be expected to have a
Material Adverse Effect: (i) any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of any Consolidated Party or any
ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (iii) an
ERISA Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Administrative
Agent, likely to result in (A) the termination of such Plan for purposes
of Title IV of ERISA, or (B) any Consolidated Party or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
or (iv) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may subject any Consolidated Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability; or
(j) [Intentionally omitted]; or
(k) CCA of Tennessee Credit Agreement. There shall occur an
Event of Default (as defined in the CCA of Tennessee Credit Agreement)
under the CCA of Tennessee Credit Agreement; or
(l) Lease Agreements. There shall occur (i) an event of default
under the Master Lease (subject to applicable grace or cure periods, if
any), (ii) any payment default (beyond any applicable grace period)
under any lease agreement (not including the Master Lease) between the
Borrower and CCA of Tennessee (each such lease agreement (including the
Master Lease), a "Lease Agreement") or (iii) any shortening or
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limitation on the term of any Lease Agreement if, after giving effect
thereto, such Lease Agreement would not comply with Section 7.15; or
(m) [Intentionally omitted.]
(n) Ownership. There shall occur a Change of Control; or
(o) Amendments. CCA of Tennessee shall (a) enter into any
amendment of the CCA of Tennessee Credit Agreement which would (i)
reduce the committed amount of financing available under the CCA of
Tennessee Credit Agreement, (ii) decrease or shorten the maturity date
of the loans under the CCA of Tennessee Credit Agreement, (iii) increase
the rate at which interest is payable on the loans under the CCA of
Tennessee Credit Agreement, (iv) cause the financial covenants in the
CCA of Tennessee Credit Agreement to be more restrictive with respect to
CCA of Tennessee than those financial covenants in effect as of the
Second Restatement Effective Date, or (b) refinance the indebtedness
under the CCA of Tennessee Credit Agreement on terms and conditions less
favorable to CCA of Tennessee or the Borrower than such existing
indebtedness under the CCA of Tennessee Credit Agreement; or
(p) [Intentionally omitted.]
(q) Management. At any time after December 31, 2000, a person or
persons reasonably satisfactory to the Required Lenders, Required
Tranche C Term Lenders and Required New Term Loan Lenders fails to serve
in the capacities of Chief Executive Officer (the "New CEO") and Chief
Financial Officer of the Borrower; or
(r) Shareholder Litigation. In addition to the provisions set
forth in (h) above, the Borrower settles any shareholder litigation or
similar dispute for any cash amount not otherwise fully covered by the
Borrower's directors and officers or other insurance, other than the
Litigation Settlement Debt; or
(s) MDP Note Purchase Agreement. There occurs at any time after
the Amendment Effective Date, a "Repurchase Right Event" or a
"Termination Event" (each as defined in the MDP Note Purchase
Agreement).
9.2 ACCELERATION; REMEDIES. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the requisite Lenders (pursuant to the voting requirements of Sections
11.6, 11.6A and 11.6B) or cured to the satisfaction of the requisite Lenders
(pursuant to the voting procedures in Sections 11.6, 11.6A and 11.6B, as
applicable), the Administrative Agent shall, upon the request and direction of
(x) the Required Lenders and Required New Term Loan Lenders or (y) the Total
Aggregate Required Lenders, by written notice to the Credit Parties, take one or
more of the following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing
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by the Credit Parties to the Administrative Agent and/or any of the
other Secured Parties hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Credit
Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Administrative Agent additional cash, to be held
by the Administrative Agent, for the benefit of the Revolving Lenders,
in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount
which may be drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Administrative Agent and/or any of the other Secured Parties hereunder
automatically shall immediately become due and payable without the giving of any
notice or other action by the Administrative Agent or the other Secured Parties.
SECTION 10.
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES. (a) Each Secured Party (other
than the Administrative Agent) hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent under this Credit Agreement and the
other Credit Documents with such powers and discretion as are specifically
delegated to the Administrative Agent by the terms of this Credit Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent (which term as used in this
sentence and in Section 10.5 and the first sentence of Section 10.6 hereof shall
include its Affiliates and its own and its Affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in this Credit Agreement and shall not be a trustee or
fiduciary for any other Secured Party; (b) shall not be responsible to the other
Secured Parties for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the
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property (including the books and records) of any Credit Party or any of its
Subsidiaries or Affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Credit Document; and (e) shall
not be responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
10.2 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed, sent
or made by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel for any Credit Party),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 11.3(b) hereof. As to any matters not expressly provided for by this
Credit Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of (x) the Required Lenders and Required New Term Loan
Lenders and/or (y) the Total Aggregate Required Lenders, as the case may be, and
such instructions shall be binding on all of the Lenders; provided, however,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
any Credit Document or applicable law or unless it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking any such action.
10.3 DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Administrative Agent has received written notice from a Lender or a Credit
Party specifying such Default or Event of Default and stating that such notice
is a "Notice of Default". In the event that the Administrative Agent receives
such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by (x) the Required Lenders and Required New Term Loan Lenders and/or (y) the
Total Aggregate Required Lenders, as the case may be, provided that, unless and
until the Administrative Agent shall have received such directions, the
Administrative 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 in the best interest of the Lenders.
10.4 RIGHTS AS A LENDER. With respect to its Commitment and the Loans
made by it, LCPI (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. LCPI (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other
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business with any Credit Party or any of its Subsidiaries or Affiliates as if it
were not acting as Administrative Agent, and LCPI (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 INDEMNIFICATION. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed under Section 11.5 hereof, but without
limiting the obligations of the Credit Parties under such Section) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Credit Document or the transactions contemplated thereby or any
action taken or omitted by the Administrative Agent under any Credit Document
(including any of the foregoing arising from the negligence of the
Administrative Agent); provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs or expenses payable by the Credit Parties
under Section 11.5, to the extent that the Administrative Agent is not promptly
reimbursed for such costs and expenses by the Credit Parties. The agreements in
this Section 10.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder and shall be subject to the proviso in Section 1.4(b).
10.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Credit Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition, or business of
any Credit Party or any of its Subsidiaries or Affiliates that may come into the
possession of the Administrative Agent or any of its Affiliates.
10.7 SUCCESSOR ADMINISTRATIVE AGENT. (a) The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Credit
Parties. Upon any such resignation, the Total Aggregate Required Lenders shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Total Aggregate
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank or financial
organization organized under the laws of the United States of America or any
state thereof having combined capital and surplus of at least
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$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
(b) Societe Generale, in its capacity as Documentation Agent, The Bank
of Nova Scotia, in its capacity as Syndication Agent, SouthTrust Bank, N.A., in
its capacity as Co-Agent, and Xxxxxx Brothers Inc., in its capacity as Lead
Arranger shall have no duties or responsibilities and shall incur no liability
under this Credit Agreement or any of the other Credit Documents.
(c) The Total Aggregate Required Lenders may elect to remove LCPI, as
Administrative Agent, in the event LCPI fails to maintain a Revolving Commitment
in an amount equal to Ten Million Dollars ($10,000,000); provided that such
Total Aggregate Required Lenders shall have appointed a successor Administrative
Agent.
SECTION 11.
MISCELLANEOUS
11.1 NOTICES. Except as otherwise expressly provided herein, all notices
and other communications shall be in writing and shall have been duly given and
shall be effective (a) when delivered, (b) when transmitted via telecopy (or
other facsimile device) to the number set out below or on Schedule 2.1(a), as
applicable, (c) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Credit Parties and the Administrative Agent, set
forth below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or
at such other address as such party may specify by written notice to the other
parties hereto:
if to any Credit Party:
Corrections Corporation of America
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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if to the Administrative Agent:
Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 RIGHT OF SET-OFF; ADJUSTMENTS. Upon the occurrence and during the
continuance of any Event of Default, each Lender (and each of its Affiliates) is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender (or any of its Affiliates) to or for the credit or
the account of any Credit Party against any and all of the obligations of such
Person now or hereafter existing under this Credit Agreement, under the Notes,
under any other Credit Document or otherwise, irrespective of whether such
Lender shall have made any demand hereunder or thereunder and although such
obligations may be unmatured. Each Lender agrees promptly to notify any affected
Credit Party after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 11.2 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT. (a) This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit Parties may
assign or transfer any of its interests and obligations without prior written
consent of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this Credit
Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 (or, if less, the
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remaining amount of the Commitment being assigned by such Lender) or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Administrative Agent for its acceptance an Assignment and Acceptance
in the form of Exhibit 11.3(b) hereto, together with any Note subject to
such assignment and a processing fee of $3,500 (except that no
processing fee shall be payable (y) in connection with an assignment of
the Term Loan by or to Xxxxxx Commercial Paper Inc. or any Affiliate
thereof or (z) with respect to any assignment of the Term Loan, in the
case of an Assignee that is already a Term Lender or is an Affiliate of
a Term Lender or a Person under common management with a Term Lender).
Upon execution, delivery, acceptance and recording (as provided in paragraph (c)
below) of such Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of such assignment, have the obligations,
rights, and benefits of a Lender hereunder and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Administrative Agent and the
Credit Parties shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not a
United States person under Section 7701(a)(30) of the Code, it shall deliver to
the Credit Parties and the Administrative Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 3.11.
(c) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 11.1 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Credit Parties, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). The Register shall be available for
inspection by the Credit Parties or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit 11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under this
Credit Agreement (including
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all or a portion of its Commitment or its Loans); provided, however, that (i)
such Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Sections 3.7 through
3.12, inclusive, and the right of set-off contained in Section 11.2, and (iv)
the Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Credit Party Obligations owing
to such Lender and to approve any amendment, modification, or waiver of any
provision of this Credit Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment date
or date fixed for the payment of interest on such Loans or Notes, or extending
its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank, and any Term Lender may otherwise create security interests in any
Term Loan or Term Note in accordance with applicable law. No such assignment
shall release the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Consolidated Parties in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.14 hereof.
11.3A TRANCHE C ASSIGNMENTS AND PLEDGES. (a) No processing fee shall be
payable to the Administrative Agent (y) in connection with an assignment of the
Tranche C Term Loan by or to Xxxxxx Commercial Paper Inc. or any Affiliate
thereof or (z) with respect to any assignment of the Tranche C Term Loan, in the
case of an Assignee that is already a Tranche C Term Lender or is an Affiliate
of a Tranche C Term Lender or a Person under common management with a Tranche C
Term Lender or a fund advised by the same investment advisor as a Tranche C Term
Lender (or an Affiliate thereof).
(b) Any Tranche C Term Lender may create security interests in any
Tranche C Term Loan or Tranche C Term Note in accordance with applicable law.
11.3B NEW TERM LOAN ASSIGNMENTS AND PLEDGES. (a) No processing fee
shall be payable to the Administrative Agent (y) in connection with an
assignment of the New Term Loan by or to Xxxxxx Commercial Paper Inc. or any
Affiliate thereof or (z) with respect to any assignment of the New Term Loan, in
the case of an Assignee that is already a New Term Loan Lender or is an
Affiliate of a New Term Loan Lender or a Person under common management with a
New Term Loan Lender or a fund advised by the same investment advisor as a New
Term Loan Lender (or an Affiliate thereof).
(b) Any New Term Loan Lender may create security interests in any New
Term Loan or New Term Loan Note in accordance with applicable law.
11.4 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Administrative Agent or any other Secured Party in exercising any right,
power or privilege
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hereunder or under any other Credit Document and no course of dealing between
the Administrative Agent or any other Secured Party and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Administrative Agent or any other Secured Party would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle the Credit
Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the other Secured Parties to any other or further action in any circumstances
without notice or demand.
11.5 EXPENSES; INDEMNIFICATION. (a) The Credit Parties jointly and
severally agree to pay on demand all costs and expenses of the Administrative
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the Credit
Documents. The Credit Parties further jointly and severally agree to pay on
demand all costs and expenses of the Administrative Agent and the Lenders, if
any (including, without limitation, reasonable attorneys' fees and expenses), in
connection with the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Credit Documents and the other documents to be
delivered hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and
hold harmless the Administrative Agent and each Lender and each of their
Affiliates and their respective officers, directors, employees, agents, and
advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans (including any
of the foregoing arising from the negligence of the Indemnified Party), except
to the extent such claim, damage, loss, liability, cost, or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 11.5 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any of
the Credit Parties, their respective directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Credit Parties agree not to assert any claim against the
Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys, agents, and advisers, on
any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans.
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(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS. Neither this Credit Agreement nor
any other Credit Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing entered into by, or approved in writing
by, the Required Lenders and the Borrower, provided, however, that:
(a) without the consent of the Required Lenders and each other
Lender affected thereby, neither this Credit Agreement nor any other
Credit Document may be amended to
(i) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) thereon or Fees
hereunder,
(iii) reduce or waive the principal amount of any Loan
or of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver
of any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that
the Administrative Agent may, without consent from any other
Lender, release any Collateral that is sold or transferred by a
Credit Party in conformance with Section 8.5),
(vi) release the Borrower or substantially all of the
other Credit Parties from its or their obligations under the
Credit Documents,
(vii) amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower of all or substantially all of the other Credit Parties
of any of its or their rights and obligations under (or in
respect of) the Credit Documents except as permitted thereby;
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(b) without the consent of the Administrative Agent, no
provision of Section 10 may be amended;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended; and without the consent of the Swingline
Lender, no provision of Section 2.3 may be amended; and
(d) with the consent of the Borrower and either the Required
Term Lenders or the Required Revolving Lenders, increase the rate of
interest applicable to the Loans (such increase to be in an equal amount
for the Term Loans and the Revolving Loans).
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions
of Section 1126(c) of the Bankruptcy Code supersedes the unanimous
consent provisions set forth herein and (y) the Required Lenders may
consent to allow a Credit Party to use cash collateral in the context of
a bankruptcy or insolvency proceeding.
11.6A TRANCHE C AMENDMENTS, WAIVERS AND CONSENTS. Neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or thereof
may be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Tranche C Term Lenders, provided, however,
that:
(a) without the consent of the Required Tranche C Term Lenders
and each other Tranche C Term Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Tranche C Term
Loan,
(ii) reduce the rate or extend the time of payment of
interest in respect of Tranche C Term Loans (other than as a
result of waiving the applicability of any post-default increase
in interest rates) thereon or Fees with respect to Tranche C
Term Loan Commitments hereunder,
(iii) reduce or waive the principal amount of any
Tranche C Term Loan,
(iv) increase the Tranche C Term Loan Commitment of a
Lender over the amount thereof in effect (it being understood
and agreed that a waiver of any Default or Event of Default or
mandatory reduction in the Commitments shall not constitute such
an increase in the Commitment of any Lender),
(v) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that
the Administrative Agent may, without consent from any other
Lender, release any Collateral that is sold or transferred by a
Credit Party in conformance with Section 8.5),
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(vi) release the Borrower or substantially all of the
other Credit Parties from its or their obligations under the
Credit Documents,
(vii) amend, modify or waive any provision of this
Section 11.6A or Section 3.6, 3.7, 3.7A, 3.8, 3.9, 3.10, 3.11,
3.12, 3.13, 3.13A, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.3A, 11.5
or 11.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Tranche C Term Lenders, or
(ix) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit Parties
of any of its or their rights and obligations under (or in
respect of) the Credit Documents except as permitted thereby;
(b) with the consent of the Borrower, the Required Tranche C
Term Lenders and either the Required Term Lenders or the Required
Revolving Lenders, this Credit Agreement may be amended to increase the
rate of interest applicable to the Loans (such increase to be in an
equal amount for the Term Loans, the Tranche C Term Loans and the
Revolving Loans).
Notwithstanding the fact that the consent of all the Tranche C Term
Lenders is required in certain circumstances as set forth above, (x)
each Tranche C Term Lender is entitled to vote as such Tranche C Term
Lender sees fit on any bankruptcy reorganization plan that affects the
Tranche C Term Loans, and each Tranche C Term Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (y) the Required
Tranche C Term Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding,
provided that the Required Lenders consent as well; provided that, the
Required Lenders, on the one hand, and the Required Tranche C Term
Lenders, on the other hand, each agree not to consent to such use of
cash collateral without the affirmative consent of the other.
The definition of Aggregate Required Lenders may not be amended without
the consent of all Lenders.
11.6B NEW TERM LOAN AMENDMENTS, WAIVERS AND CONSENTS. Neither this
Credit Agreement nor any other Credit Document nor any of the terms hereof or
thereof may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing entered into
by, or approved in writing by, the Required New Term Loan Lenders, provided,
however, that:
(a) without the consent of the Required New Term Loan Lenders
and each other New Term Loan Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Loan,
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(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) thereon or Fees
hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver
of any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute such an increase in the
Commitment of any Lender),
(v) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that
the Administrative Agent may, without consent from any other
Lender, release any Collateral that is sold or transferred by a
Credit Party in conformance with Section 8.5),
(vi) release the Borrower or substantially all of the
other Credit Parties from its or their obligations under the
Credit Documents,
(vii) amend, modify or waive any provision of this
Section 11.6B or Section 3.6, 3.7, 3.7A, 3.7B, 3.8, 3.9, 3.10,
3.11, 3.12, 3.13, 3.13A, 3.13B, 3.14, 3.15, 9.1(a), 11.2, 11.3,
11.3A, 11.3B, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required New Term Loan Lenders, or
(ix) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit Parties
of any of its or their rights and obligations under (or in
respect of) the Credit Documents except as permitted thereby;
(b) with the consent of the Borrower, the Required New Term Loan
Lenders, the Required Tranche C Term Lenders and either the Required
Term Lenders or the Required Revolving Lenders, this Credit Agreement
may be amended to increase the rate of interest applicable to the Loans
(such increase to be in an equal amount for the Term Loans, the Tranche
C Term Loans and the New Term Loans).
Notwithstanding the fact that the consent of all the New Term Loan
Lenders is required in certain circumstances as set forth above, (x)
each New Term Loan Lender is entitled to vote as such New Term Loan
Lender sees fit on any bankruptcy reorganization plan that affects the
New Term Loans, and each New Term Loan Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (y) the Required New
Term Loan Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding,
provided that the Required Lenders and the Required Tranche C Term
Lenders consent as well; provided that, the Required Lenders and the
Required Tranche C Term Lenders, on the one hand, and the Required New
Term Loan Lenders, on the other hand, each agree not to consent to such
use of cash collateral without the affirmative consent of the other.
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11.7 COUNTERPARTS. This Credit Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart for each of the parties hereto.
Delivery by facsimile by any of the parties hereto of an executed counterpart of
this Credit Agreement shall be as effective as an original executed counterpart
hereof and shall be deemed a representation that an original executed
counterpart hereof will be delivered.
11.8 HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.
11.9 SURVIVAL. All indemnities set forth herein, including, without
limitation, in Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the
execution and delivery of this Credit Agreement, the making of the Loans, the
issuance of the Letters of Credit, the repayment of the Loans, LOC Obligations
and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS CREDIT
AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the courts of
the State of New York in New York County, or of the United States for the
Southern District of New York, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Administrative Agent
or any other Secured Party to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE DOCUMENTATION AGENT, THE SYNDICATION AGENT, THE CO-AGENT, THE LEAD
ARRANGER, THE LENDERS AND EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR
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RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
11.12 ENTIRETY. This Credit Agreement (including the provisions of
Sections 1.4 and 11.16 hereof) together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION. (a) This Credit Agreement shall
become effective at such time when all of the conditions set forth in Section
5.1 have been satisfied or waived by the Aggregate Required Lenders and the
Required New Term Loan Lenders and it shall have been executed by each Credit
Party and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Amending Lender and each New Term Loan Lender, and
thereafter this Credit Agreement shall be binding upon and inure to the benefit
of each Credit Party, the Administrative Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding, all of the Credit Party Obligations have been irrevocably satisfied
in full and all of the Commitments hereunder shall have expired or been
terminated.
11.14 CONFIDENTIALITY. The Administrative Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by the Credit Parties pursuant to this Credit Agreement that is
marked confidential; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee and (j) to any
financial institution which is a direct or indirect contractual counterparty in
swap agreements or such contractual counterparty's professional advisors (so
long as any such contractual counterparty or professional advisor agrees to be
bound by the provisions of this Section 11.14).
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11.15 CONFLICT. To the extent that there is a conflict or inconsistency
between any provision hereof, on the one hand, and any provision of any other
Credit Document, on the other hand, this Credit Agreement shall control.
11.16 EXISTING AGREEMENT SUPERSEDED. As set forth in Section 1.4, the
First Amended and Restated Credit Agreement is superseded by this Credit
Agreement, which has been executed in amendment, restatement and modification,
but not in extinguishment of, the obligations under the First Amended and
Restated Credit Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: CORRECTIONS CORPORATION OF AMERICA
(formerly known as Prison Realty Trust, Inc.),
a Maryland corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice-Chairman, CEO & President
SUBSIDIARY
GUARANTORS: PRISON REALTY MANAGEMENT, INC.,
a Tennessee corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, CEO & President
CCA OF TENNESSEE, INC. (f/k/a CCA
Acquisition Sub, Inc.), a Tennessee corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, CEO & President
TRANSCOR AMERICA, LLC,
a Tennessee limited liability company
By: /s/ Xxxx Xxxxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxxx
Title: VP, Treasurer
CCA INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, CEO & President
TECHNICAL AND BUSINESS INSTITUTE, INC., a Tennessee
corporation
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, CEO & President
(SIGNATURES CONTINUE)
LENDERS: XXXXXX COMMERCIAL PAPER INC.,
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
(SIGNATURES CONTINUE)
SOCIETE GENERALE,
individually in its capacity as a Lender and in its
capacity as Documentation Agent
By: /s/ Xxxxxxxxx X. Xxxx
------------------------------------------------
Name: Xxxxxxxxx X. Xxxx
Title: Director
(SIGNATURES CONTINUE)
THE BANK OF NOVA SCOTIA,
individually in its capacity as a
Lender and in its capacity
as Syndication Agent
By: /s/ X. X. Xxxxx
-------------------------------
Name: X. X. Xxxxx
Title: Managing Director
(SIGNATURES CONTINUE)
SOUTHTRUST BANK, N.A.,
individually in its capacity as a Lender and in its
capacity as Co-Agent
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
(SIGNATURES CONTINUE)
XXXXXX BROTHERS INC.,
in its capacity as Advisor,
Lead Arranger and Book Manager
By: /s/ (Authorized Signatory)
-----------------------------------
Name: (Authorized Signatory)
Title: (Authorized Signatory)
(SIGNATURES CONTINUE)
[SIGNATURE PAGES OF OTHER LENDERS INTENTIONALLY OMITTED]
[EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED]