EXHIBIT 10.2
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AMENDED AND RESTATED MASTER AGREEMENT
Dated as of July 21, 2000
among
CORNELL COMPANIES, INC.,
as a Lessee and Guarantor,
CERTAIN SUBSIDIARIES OF CORNELL COMPANIES, INC.,
as Lessees,
CERTAIN SUBSIDIARIES OF CORNELL COMPANIES, INC.,
as Subsidiary Guarantors,
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as B Lenders,
ING (U.S.) CAPITAL LLC,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
SUNTRUST EQUITABLE SECURITIES CORPORATION,
as Documentation Agent
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; INTERPRETATION.................................. 2
ARTICLE II ACQUISITION, CONSTRUCTION AND LEASE;
FUNDINGS;NATURE OF TRANSACTION............................... 2
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease....... 2
(a) Land.............................................. 2
(b) Building.......................................... 2
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs.................................... 2
(a) Initial Funding and Payment of Purchase Price for
Land and Development Costs on Closing Date........ 2
(b) Subsequent Fundings and Payments of Construction
Costs during Construction Term.................... 3
(c) Aggregate Limits on Funded Amounts................ 3
(d) Notice, Time and Place of Fundings................ 4
(e) Lessee's Deemed Representation for Each Funding... 4
(f) Not Joint Obligations............................. 5
(g) Non-Pro Rata Fundings............................. 5
(h) Adjustments for New Commitment Percentages........ 5
(i) Information Regarding Leased Property............. 5
SECTION 2.3 Funded Amounts and Interest and Yield Thereon;
Facility Fee.......................................... 5
SECTION 2.4 Lessee Owner for Tax Purposes......................... 7
SECTION 2.5 Amounts Due Under Lease............................... 7
ARTICLE III CONDITIONS PRECEDENT; DOCUMENTS.............................. 8
SECTION 3.1 Conditions to the Obligations of the Funding Parties
on each Closing Date.................................. 8
(a) Documents......................................... 8
(i) Deed and Purchase Agreement................ 8
(ii) Lease Supplement........................... 8
(iii) Mortgage and Assignment of Lease and Rents. 8
(iv) Security Agreement and Assignment.......... 8
(v) Survey..................................... 9
(vi) Title and Title Insurance.................. 9
(vii) Appraisal.................................. 10
(viii) Environmental Audit and related
Reliance Letter............................ 10
(ix) Evidence of Insurance...................... 10
(x) UCC Financing Statement; Recording Fees;
Transfer Taxes............................. 10
(xi) Opinions................................... 11
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(xii) Good Standing Certificates................. 11
(b) Litigation........................................ 11
(c) Legality.......................................... 11
(d) No Events......................................... 11
(e) Representations................................... 12
(f) Cutoff Date....................................... 12
(g) Transaction Expenses.............................. 12
(h) Approval.......................................... 12
(i) California Property............................... 12
SECTION 3.2 Additional Conditions for the Initial Closing Date.... 12
SECTION 3.3 Conditions to the Obligations of Lessee............... 13
(a) General Conditions................................ 13
(b) Legality.......................................... 14
(c) Purchase Agreement; Ground Lease.................. 14
SECTION 3.4 Conditions to the Obligations of the Funding Parties
on each Funding Date.................................. 14
(a) Funding Request................................... 14
(b) Condition Fulfilled............................... 14
(c) Representations................................... 14
(d) No Bonded Stop Notice or Filed Mechanics Lien..... 14
(e) Lease Supplement.................................. 15
(f) Funding Termination Date.......................... 15
(g) Credit Agreement Conditions....................... 15
(h) Additional Requirements for Fundings to Finance
Construction...................................... 15
SECTION 3.5 Completion Date Conditions............................ 15
(a) Title Policy Endorsements; Architect's
Certificate...................................... 15
(b) Construction Completion........................... 16
(c) Construction Agent Certification.................. 16
SECTION 3.6 Addition of Lessees................................... 17
SECTION 3.7 Reaffirmations of Operative Documents................. 18
SECTION 3.8 Certain Deliveries.................................... 18
ARTICLE IV REPRESENTATIONS.............................................. 18
SECTION 4.1 Representations of Obligors........................... 18
(a) Corporate Existence............................... 18
(b) Financial Condition............................... 18
(c) Litigation........................................ 19
(d) No Breach......................................... 19
(e) Action............................................ 19
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(f) Approvals......................................... 20
(g) Use of Credit..................................... 20
(h) ERISA............................................. 20
(i) Taxes............................................. 20
(j) Investment Company Act............................ 20
(k) Public Utility Holding Company Act................ 21
(l) Material Agreements and Liens..................... 21
(m) Environmental Matters............................. 21
(n) Capitalization.................................... 23
(o) Subsidiaries, Etc................................. 24
(p) Title to Assets................................... 24
(q) True and Complete Disclosure...................... 25
(r) Real Property..................................... 25
(s) Purpose of Fundings............................... 25
(t) Hazardous Materials - Leased Properties........... 25
(u) Leased Property................................... 27
SECTION 4.2 Survival of Representations and Effect of Fundings.... 27
(a) Survival of Representations and Warranties........ 27
(b) Each Funding a Representation..................... 27
SECTION 4.3 Representations of the Lessor......................... 27
(a) Securities Act.................................... 27
(b) Due Organization, etc............................. 27
(c) Due Authorization; Enforceability, etc............ 28
(d) No Conflict....................................... 28
(e) Litigation........................................ 28
(f) Lessor Liens...................................... 28
(g) Employee Benefit Plans............................ 28
(h) General Partner................................... 28
(i) Financial Information............................. 28
(j) No Offering....................................... 29
SECTION 4.4 Representations of each Lender........................ 29
(a) Securities Act.................................... 29
(b) Employee Benefit Plans............................ 29
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ARTICLE V COVENANTS OF THE COMPANY AND THE LESSOR...................... 29
SECTION 5.1 Affirmative Covenants................................. 29
(a) Financial Statements, Etc......................... 29
(b) Litigation........................................ 33
(c) Existence, Etc.................................... 33
(d) Insurance......................................... 34
(e) Prohibition of Fundamental Changes................ 36
(f) Limitation on Liens............................... 37
(g) Indebtedness...................................... 38
(h) Investments....................................... 39
(i) Dividend Payments................................. 39
(j) EBITDAR Ratio I................................... 40
(k) EBITDAR Ratio II.................................. 40
(l) Net Worth......................................... 41
(m) Interest Coverage Ratio........................... 41
(n) Fixed Charges Ratio............................... 42
(o) Capital Expenditures.............................. 42
(p) Sale Lease-back Transactions...................... 42
(q) Discount of Accounts.............................. 43
(r) Lines of Business................................. 43
(s) Transactions with Affiliates...................... 43
(t) Use of Proceeds................................... 43
(u) Certain Obligations Respecting Subsidiaries....... 43
(v) Modifications of Certain Documents................ 44
(w) The Cornell Cox Group, L.P........................ 44
(x) Prepayment of 2000 Subordinated Debt.............. 44
SECTION 5.2 Further Assurances.................................... 44
SECTION 5.3 Additional Required Appraisals........................ 44
SECTION 5.4 Lessors Covenants..................................... 45
ARTICLE VI TRANSFERS BY LESSOR AND LENDERS.............................. 46
SECTION 6.1 Lessor Transfers...................................... 46
SECTION 6.2 Lender Transfers...................................... 46
ARTICLE VII INDEMNIFICATION.............................................. 48
SECTION 7.1 General Indemnification............................... 48
SECTION 7.2 Environmental Indemnity............................... 49
SECTION 7.3 Proceedings in Respect of Claims...................... 51
SECTION 7.4 General Tax Indemnity................................. 52
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(a) Tax Indemnity..................................... 52
(b) Exclusions from General Tax Indemnity............. 53
(c) Contests.......................................... 55
(d) Reimbursement for Tax Savings..................... 56
(e) Payments.......................................... 57
(f) Reports........................................... 57
(g) Verification...................................... 57
SECTION 7.5 Increased Costs, etc.................................. 58
(a) Sharing of Payments, Etc.......................... 58
(b) Yield Protection, Etc............................. 59
(c) Limitation on Types of Advances................... 63
(d) Illegality........................................ 63
(e) Treatment of Eurodollar Advances.................. 64
(f) Compensation...................................... 64
(g) Substitution of Funding Parties................... 65
SECTION 7.6 End of Term Indemnity................................. 66
SECTION 7.7 Guarantee............................................. 66
(a) The Guarantee..................................... 66
(b) Obligations Unconditional......................... 67
(c) Reinstatement..................................... 68
(d) Subrogation....................................... 68
(e) Remedies.......................................... 68
(f) Instrument for the Payment of Money............... 68
(g) Continuing Guarantee.............................. 68
(h) Rights of Contribution............................ 68
(i) General Limitation on Guarantee Obligations....... 69
ARTICLE VIII MISCELLANEOUS................................................ 70
SECTION 8.1 Survival of Agreements................................ 70
SECTION 8.2 Notices............................................... 70
SECTION 8.3 Counterparts.......................................... 70
SECTION 8.4 Amendments............................................ 70
SECTION 8.5 Headings, etc......................................... 72
SECTION 8.6 Parties in Interest................................... 72
SECTION 8.7 GOVERNING LAW......................................... 72
SECTION 8.8 Expenses.............................................. 72
SECTION 8.9 Severability.......................................... 73
SECTION 8.10 Liabilities of the Funding Parties.................... 73
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SECTION 8.11 Submission to Jurisdiction; Waivers................... 73
SECTION 8.12 Liabilities of the Administrative Agent; References... 73
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APPENDIX A Definitions and Interpretation
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SCHEDULES
SCHEDULE 2.2 Commitments
SCHEDULE 8.2 Notice Information
SCHEDULE I Indebtedness; Liens
SCHEDULE II Environmental Matters
SCHEDULE III Subsidiaries; Investments
SCHEDULE IV Real Property Interests
SCHEDULE V Capital Stocks
SCHEDULE VI Cornell Cox Group Property
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Assignment of Lease and Rents
EXHIBIT C Form of Security Agreement and Assignment
EXHIBIT D Form of Mortgage
EXHIBIT E Form of Joinder Agreement
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G Forms of Opinions of Counsel
EXHIBIT H Form of Certification of Construction Completion
EXHIBIT I Form of Payment Date Notice
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AMENDED AND RESTATED MASTER AGREEMENT
THIS AMENDED AND RESTATED MASTER AGREEMENT, dated as of July 21, 2000 (as
it may be further amended or modified from time to time in accordance with the
provisions hereof, and including the Original Master Agreement for as long as it
was in effect, this "MASTER AGREEMENT"), is among CORNELL COMPANIES, INC.
(formerly known as Cornell Corrections, Inc.), a Delaware corporation (the
"COMPANY"), certain Subsidiaries of the Company that are now, or pursuant to
Section 3.6 may hereafter become, parties hereto as lessees (individually,
together with the Company in its capacity as a lessee, a "LESSEE" and
collectively the "LESSEES"), each of the Subsidiaries of the Company identified
under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto
(individually, a "SUBSIDIARY GUARANTOR" and collectively, the "SUBSIDIARY
GUARANTORS"), ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
"LESSOR"), certain financial institutions parties hereto as lenders (together
with any other financial institution that becomes a party hereto as a lender,
collectively referred to as "B LENDERS" and individually as a "B LENDER"), ING
(U.S.) CAPITAL LLC, a Delaware limited liability company (formerly known as ING
(U.S.) Capital Corporation), as administrative agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), BANK OF AMERICA, N.A., a national banking
association, as syndication agent (in such capacity, the "SYNDICATION AGENT")
and SUNTRUST EQUITABLE SECURITIES CORPORATION, a Tennessee corporation, as
documentation agent (the "DOCUMENTATION AGENT").
PRELIMINARY STATEMENT
The Company, the Lessees, the Subsidiary Guarantors, the Lessor, certain
of the B Lenders, the Syndication Agent and the Documentation Agent are parties
to that certain Master Agreement, dated as of December 3, 1998 (the "ORIGINAL
MASTER AGREEMENT"), which Original Master Agreement the parties hereto desire to
amend and restate in its entirety.
In accordance with the terms and provisions of this Master Agreement, the
Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring Land and, in certain cases, the Buildings thereon
identified by the Company from time to time, and leasing such Land and Buildings
thereon to a Lessee, (ii) the Company, as Construction Agent for the Lessor,
wishes, in certain instances, to construct Buildings on Land for the Lessor and,
when completed, the related Lessee wishes to lease such Buildings from the
Lessor as part of the Leased Properties under the Lease, (iii) the Company, as
agent for the Lessor, wishes to obtain, and the Lessor is willing to provide,
funding for the acquisition of the Land and Buildings, or, in certain instances,
the construction of Buildings, and (iv) the Lessor wishes to obtain, and the B
Lenders are willing to provide, from time to time, financing of a portion of the
funding of the acquisition of the Land and Buildings and, if applicable, the
construction of the Buildings.
In consideration of the mutual agreements contained in this Master
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in APPENDIX A hereto for
all purposes hereof; and the rules of interpretation set forth in APPENDIX A
hereto shall apply to this Master Agreement.
ARTICLE II
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;NATURE OF TRANSACTION
SECTION 2.1. AGREEMENT TO ACQUIRE, CONSTRUCT, FUND AND LEASE.
(a) LAND. Subject to the terms and conditions of this Master
Agreement, with respect to each parcel of Land identified by the Company,
on the related Closing Date (i) the Lessor agrees to acquire such interest
in the related Land, and any Building thereon, from the applicable Seller
as is transferred, sold, assigned and conveyed to the Lessor pursuant to
the applicable Purchase Agreement or to lease such interest in the related
Land, and any Building thereon, from the applicable Ground Lessor as is
leased to the Lessor pursuant to the applicable Ground Lease, (ii) the
Lessor hereby agrees to lease, or sublease, as the case may be, such Land
and any Building thereon to the related Lessee pursuant to the Lease, and
(iii) the related Lessee hereby agrees to lease, or sublease, as the case
may be, such Land, and any Building thereon, from the Lessor pursuant to
the Lease.
(b) BUILDING. With respect to each parcel of Land on which a
Building is to be constructed, subject to the terms and conditions of this
Master Agreement, from and after the Closing Date relating to such Land
(i) the Construction Agent agrees, pursuant to the terms of the
Construction Agency Agreement, to construct and install the Building on
such Land for the Lessor prior to the Scheduled Construction Termination
Date, (ii) the B Lenders and the Lessor agree to fund the costs of such
construction and installation (and interest and yield thereon), (iii) the
Lessor shall lease, or sublease, as the case may be, such Building as part
of such Leased Property to the related Lessee pursuant to the Lease, and
(iv) the related Lessee shall lease, or sublease, as the case may be, such
Building from the Lessor pursuant to the Lease.
SECTION 2.2 FUNDINGS OF PURCHASE PRICE, DEVELOPMENT COSTS AND CONSTRUCTION
COSTS.
(a) INITIAL FUNDING AND PAYMENT OF PURCHASE PRICE FOR LAND AND
DEVELOPMENT COSTS ON CLOSING DATE. Subject to the terms and conditions of
this Master Agreement, on the Closing Date for any Land, and any Building
thereon, each B Lender shall make available to the Lessor its initial B
Loans with respect to such Land, and any Building thereon, in an amount
equal to the product of such B Lenders Commitment Percentage times the
purchase price for the Land, and any Building thereon, and the
development, transaction and closing costs incurred by the Construction
Agent, as agent, through such Closing Date (the "ACQUISITION COSTS" for
such Land
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and Building, if any), which funds the Lessor shall use, together with (1)
the Lessor's own funds in an amount equal to the product of the Lessors
Commitment Percentage times the Acquisition Costs for the related Land and
any Building thereon, and (2) the proceeds of the Synthetic Lease Loans
made to Lessor on such Closing Date pursuant to Section 2.01(b) of the
Credit Agreement, which Synthetic Lease Loans shall be in an aggregate
amount equal to the A Percentage of the Acquisition Costs for the related
Land and any Building thereon, to purchase the Land, and any Building
thereon, from the applicable Seller pursuant to the applicable Purchase
Agreement or lease the Land and any Building thereon, from the applicable
Ground Lessor pursuant to the applicable Ground Lease, as the case may be,
and to pay to the Construction Agent the amount of such development,
transaction and closing costs, and the Lessor shall lease, or sublease, as
the case may be, such Land to the related Lessee pursuant to the Lease.
(b) SUBSEQUENT FUNDINGS AND PAYMENTS OF CONSTRUCTION COSTS DURING
CONSTRUCTION TERM. Subject to the terms and conditions of this Master
Agreement, if a Building is to be constructed on Land, on each Funding
Date following the Closing Date for each such parcel of Land until the
related Construction Term Expiration Date (provided that Fundings may be
made with respect to each Leased Property not later than 120 days after
the related Construction Term Expiration Date for Construction costs
incurred for such Leased Property during such period), (i) each B Lender
shall make available to the Lessor a B Loan in an amount equal to the
product of such B Lenders Commitment Percentage times the amount of
Funding requested by the Construction Agent for such Funding Date, which
funds the Lessor hereby directs each B Lender to pay over to the
Construction Agent as set forth in PARAGRAPH (D), (ii) the Lessor shall
request, and shall pay over to the Construction Agent the proceeds of,
Synthetic Lease Loans pursuant to the Credit Agreement in an aggregate
amount equal to the product of the A Percentage times the amount of
Funding requested by the Construction Agent for such Funding Date, and
(iii) the Lessor shall pay over to the Construction Agent its own funds
(which shall constitute a part of, and an increase in, the Lessors
Invested Amount with respect to such Leased Property) in an amount equal
to the product of the Lessors Commitment Percentage times the amount of
Funding requested by the Construction Agent for such Funding Date.
(c) AGGREGATE LIMITS ON FUNDED AMOUNTS. The aggregate amount that
the Funding Parties shall be committed to provide as Funded Amounts under
this Master Agreement and the Loan Agreement, and as Synthetic Lease Loans
under the Credit Agreement, shall not exceed (x) with respect to each
Leased Property the costs of purchase and construction of such Leased
Property and the related development, transaction and closing financing
costs, or (y) $100,000,000 in the aggregate for all Leased Properties. In
the event that a Lessee exercises a Partial Purchase Option, the
Commitments shall be reinstated, PRO RATA among the Funding Parties, in
the amount equal to the Leased Property Balance paid in connection with
such Partial Purchase Option. The aggregate amount that any Operative
Party shall be committed to fund under this Master Agreement and the Loan
Agreement shall not exceed the lesser of (i) such Operative Party's
Commitment and (ii) such Operative Partys Commitment Percentage of the
aggregate Fundings requested under this Master Agreement. In no event
shall the Funding Parties be committed to provide Funding for development,
transaction or other soft costs related
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to any Leased Property prior to the acquisition by the Lessor of the Land
related thereto (it being understood that such costs may be included in a
Funding for a Leased Property on or after the date that the related Land
is acquired by the Lessor).
(d) NOTICE, TIME AND PLACE OF FUNDINGS. With respect to each
Funding, Lessee or the Construction Agent, as the case may be, shall give
the Lessor and the Agent an irrevocable prior written notice not later
than 12:00 noon, New York City time, at least two Business Days prior to
the proposed Closing Date or other Funding Date, as the case may be,
pursuant, in each case, to a Funding Request in the form of EXHIBIT A (a
"FUNDING REQUEST"), specifying the Closing Date or subsequent Funding
Date, as the case may be, the amount of Funding requested, whether such
Funding shall be a Eurodollar Advance or a Base Rate Advance or a
combination thereof and the Rent Period(s) therefor (it being understood
that the Funded Amounts, including the Synthetic Lease Loans, shall be
allocated among Eurodollar Advances, including the Rent Periods therefor,
and the Base Rate Advance, if any, on a pro rata basis). All documents and
instruments required to be delivered on such Closing Date pursuant to this
Master Agreement shall be delivered at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603, or at such other
location as may be determined by the Lessor, the Construction Agent and
the Administrative Agent. Each Funding shall occur on a Business Day and
shall be in an amount equal to $1,000,000 or an integral multiple of
$100,000 in excess thereof. All remittances made by any B Lender and the
Lessor for any Funding shall be made in immediately available funds by
wire transfer to or, as is directed by, the Construction Agent, with
receipt by the Construction Agent not later than 2:00 p.m., New York City
time, on the applicable Funding Date, upon satisfaction or waiver of the
conditions precedent to such Funding set forth in SECTION 3; such funds,
together with the proceeds of the related Synthetic Lease Loans, shall (1)
in the case of the initial Funding on a Closing Date, be used to pay the
purchase price to the applicable Seller for the related Land and pay
development, transaction and closing costs related to such Land, and (2)
in the case of each subsequent Funding be paid to the Construction Agent,
for the payment or reimbursement of Construction costs incurred through
such Funding Date and not previously paid or reimbursed or to pay for
Construction costs incurred not later than 120 days after the Completion
Date for the related Leased Property.
(e) LESSEE'S DEEMED REPRESENTATION FOR EACH FUNDING. Each Funding
Request by a Lessee or the Construction Agent shall be deemed a
reaffirmation of each Lessees indemnity obligations in favor of the
Indemnitees under the Operative Documents and a representation and
warranty by such Lessee or the Construction Agent, as the case may be, to
the Lessor, the Administrative Agent, the Synthetic Lease Loan Lenders and
the B Lenders that on the proposed Closing Date or Funding Date, as the
case may be, (i) the amount of Funding requested represents amounts owing
in respect of the purchase price of the related Land, and any Building
thereon, and development, transaction and closing costs in respect of the
Leased Property (in the case of the initial Funding on a Closing Date) or
amounts that are then due to third parties in respect of the Construction,
or amounts paid by the Construction Agent to third parties in respect of
the Construction for which the Construction Agent has not previously been
reimbursed by a Funding (in the case of any Funding), or amounts for
Construction costs incurred by the related Lessee not later than 120 days
after the Completion Date for the related Leased Property, (ii) no
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Event of Default or Potential Event of Default exists, and (iii) the
representations and warranties of each Obligor set forth in SECTION 4.1
are true and correct in all material respects as though made on and as of
such Funding Date, except to the extent such representations or warranties
relate solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date.
(f) NOT JOINT OBLIGATIONS. Notwithstanding anything to the
contrary set forth herein or in the other Operative Documents, each B
Lender's and the Lessor's commitments shall be several, and not joint. In
no event shall any Funding Party be obligated to fund an amount in excess
of such Funding Party's Commitment Percentage of any Funding, or to fund
amounts in the aggregate in excess of such Funding Party's Commitment.
(g) NON-PRO RATA FUNDINGS. Notwithstanding anything to the
contrary set forth in this Master Agreement, at the Administrative Agent's
option, Fundings may be made by drawing on the Lessor's Commitment until
such Commitment is fully funded before drawing on the Lenders'
Commitments. In such event, when the Lessor's Commitment is fully funded,
the B Lenders and the Synthetic Lease Loan Lenders will fund, on a pro
rata basis as among themselves, 100% of the amount of the Fundings
thereafter. In no event shall any Funding Party have any obligation to
fund any amount in excess of the amount of such Funding Partys Commitment.
(h) ADJUSTMENTS FOR NEW COMMITMENT PERCENTAGES. On the first
Payment Date to occur after the date hereof, each Lender that is a new
Lender on such date, and each Lender that has increased its Commitment
such that its new Commitment Percentage is greater than it was pursuant to
the Original Master Agreement, shall fund or increase, as the case may be,
its Loans, and the outstanding Loans of the existing Lenders shall be
prepaid, without premium, penalty or fee, in each case, in such amounts
that, after giving effect to such Funding and such prepayment, each
Lenders outstanding Loans will be equal to its Commitment Percentage of
the outstanding Funded Amounts on such date.
(i) INFORMATION REGARDING LEASED PROPERTY. The Construction Agent
or the Lessee shall provide the Administrative Agent with a general
description of each property that it proposes to include in the
Transaction at least ten (10) Business Days prior to the proposed Closing
Date therefor, and the Administrative Agent shall distribute such
description to the Funding Parties on or before two (2) Business Days
thereafter. The Construction Agent or the related Lessee shall deliver to
the Administrative Agent copies of any and all contracts and documents
related to such proposed Leased Property promptly upon receipt of a
request therefor by the Administrative Agent or any Funding Party and the
Administrative Agent shall distribute such copies to each Funding Party
that requests such copies.
SECTION 2.3 FUNDED AMOUNTS AND INTEREST AND YIELD THEREON; FACILITY FEE.
(a) The Lessor's Invested Amount for any Leased Property
outstanding from time to time shall accrue yield ("YIELD") at the Lessor
Rate, computed using the actual number of days
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elapsed and a 360 day year. If all or a portion of the principal amount of
or yield on the Lessor's Invested Amounts shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall, without limiting the rights of the Lessor under the
Lease, to the maximum extent permitted by law, accrue yield at the Overdue
Rate, from the date of nonpayment until paid in full (both before and
after judgment).
(b) Each B Lender's Funded Amount for any Leased Property
outstanding from time to time shall accrue interest as provided in the
Loan Agreement. Each Synthetic Lease Loan Lender's Funded Amount for any
Leased Property outstanding from time to time shall accrue interest as
provided in the Credit Agreement.
(c) During the Construction Term and for the period from the
Completion Date to the 120th day after the Completion Date, in lieu of the
payment of accrued interest, on each Payment Date, each Lender's Funded
Amount in respect of a Construction Land Interest shall automatically be
increased by the amount of interest accrued and unpaid on the related
Loans pursuant to the Loan Agreement during the Rent Period ending
immediately prior to such Payment Date (except to the extent that at any
time such increase would cause such Lenders Funded Amount to exceed such
Lender's Commitment, in which event the related Lessee shall pay such
excess amount to such Lender in immediately available funds on such
Payment Date). Similarly, in lieu of the payment of accrued Yield, on each
Payment Date, the Lessor's Invested Amount in respect of a Construction
Land Interest shall automatically be increased by the amount of Yield
accrued on the Lessor's Invested Amount in respect of such Leased Property
during the Rent Period ending immediately prior to such Payment Date
(except to the extent that at any time such increase would cause the
Lessor's Invested Amount to exceed the Lessor's Commitment, in which event
the related Lessee shall pay such excess amount to the Lessor in
immediately available funds on such Payment Date). Such increases in
Funded Amounts shall occur without any disbursement of funds by the
Funding Parties.
(d) Three Business Days prior to the last day of each Rent
Period, the Company shall deliver to the Lessor and the Administrative
Agent a notice substantially in the form of EXHIBIT I (each, a "PAYMENT
DATE NOTICE"), appropriately completed, specifying the allocation of the
Funded Amounts related to such Rent Period to Eurodollar Advances and Base
Rate Advances and the Rent Periods therefor (IT BEING UNDERSTOOD that the
Funded Amounts, including the Synthetic Lease Loans, shall be allocated
among Eurodollar Advances and the Base Rate Advance, if any, on a pro rata
basis), PROVIDED that no such allocation shall be in an amount less than
$1,000,000. Each such Payment Date Notice shall be irrevocable. If no such
notice is given, the Funded Amounts shall be allocated to a Eurodollar
Advance with a Rent Period of three (3) months.
(e) The Company hereby agrees to pay to each B Lender a facility
fee for each day from the date hereof until the Lease Termination Date
equal to (i) 0.50% PER ANNUM TIMES (ii) the mount of such B Lender's
Commitment, MINUS such B Lenders Funded Amount on such day, TIMES (iii)
1/360. The Company hereby agrees to pay to the Lessor a facility fee for
each day from the date hereof until the Lease Termination Date equal to
(i) 0.50% PER ANNUM TIMES (ii) the
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amount of the Lessor's Commitment, MINUS the Lessor's Invested Amount on such
day, TIMES (iii) 1/360. Such facility fee shall be payable in arrears on each
Quarterly Date and on the date that such Commitments are reduced to zero.
SECTION 2.4 LESSEE OWNER FOR TAX PURPOSES. With respect to each Leased
Property, it is the intent of the Lessees and the Funding Parties that for
federal, state and local tax and commercial law purposes the Lease shall be
treated as the repayment and security provisions of a loan by the Lessor to the
Lessees, and that the related Lessee shall be treated as the legal and
beneficial owner entitled to any and all benefits of ownership of such Leased
Property and all payments of Basic Rent during the Lease Term shall be treated
as payments of interest and, if applicable, principal. Each Lessee and each
Funding Party agree to file tax returns consistent with such intent.
Nevertheless, each of the Company and each Lessee acknowledges and agrees that
no Funding Party or any other Person has made any representations or warranties
concerning the tax, financial, accounting or legal characteristics or treatment
of the Operative Documents and that Lessee has obtained and relied solely upon
the advice of its own tax, accounting and legal advisors concerning the
Operative Documents and the accounting, tax, financial and legal consequences of
the transactions contemplated therein.
SECTION 2.5 AMOUNTS DUE UNDER LEASE. With respect to each Leased Property,
anything else herein or elsewhere to the contrary notwithstanding, it is the
intention of the Lessees and the Funding Parties that: (i) subject to CLAUSES
(II) and (III) below, the amount and timing of Basic Rent due and payable from
time to time from the related Lessee under the Lease shall be equal to the
aggregate payments due and payable with respect to interest on the B Loans and
the Synthetic Lease Loans in respect of such Leased Property and Yield on the
Lessors Invested Amounts in respect of such Leased Property on each Payment
Date; (ii) if the related Lessee elects the Purchase Option with respect to a
Leased Property or becomes obligated to purchase such Leased Property under the
Lease, the Funded Amounts in respect of such Leased Property, all interest and
Yield thereon and all other obligations of the related Lessee owing to the
Funding Parties in respect of such Leased Property shall be paid in full by
Lessee, (iii) if the related Lessee properly elects the Remarketing Option, the
principal amount of, and accrued interest on, the Synthetic Lease Loans in
respect of the Leased Properties, will be paid out of the Recourse Deficiency
Amount, and the related Lessee shall only be required to pay to the B Lenders in
respect of the principal amount of the B Loans and to the Lessor in respect of
the Lessors Invested Amounts, the proceeds of the sale of the Leased Properties
in accordance with Section 14.6 of the Lease; and (iv) upon an Event of Default
resulting in an acceleration of the related Lessees obligation to purchase the
Leased Properties under the Lease, the amounts then due and payable by the
Lessees under the Lease shall include all amounts necessary to pay in full the B
Loans and the Synthetic Lease Loans, and accrued interest thereon, the Lessors
Invested Amounts and accrued Yield thereon and all other obligations of the
Lessees owing to the Funding Parties pursuant to the Operative Documents and the
Credit Agreement.
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ARTICLE III
CONDITIONS PRECEDENT; DOCUMENTS
SECTION 3.1 CONDITIONS TO THE OBLIGATIONS OF THE FUNDING PARTIES ON EACH
CLOSING DATE. The obligations of the Lessor and each B Lender to carry out their
respective obligations under SECTION 2 of this Master Agreement to be performed
on the Closing Date with respect to any Leased Property shall be subject to the
fulfillment to the reasonable satisfaction of, or waiver by, each such party
hereto (acting directly or through its counsel) on or prior to such Closing Date
of the following conditions precedent, PROVIDED that the obligations of any
Funding Party shall not be subject to any conditions contained in this SECTION
3.1 which are required to be performed by such Funding Party:
(a) DOCUMENTS. The following documents shall have been executed
and delivered by the respective parties thereto:
(i) DEED AND PURCHASE AGREEMENT. The related original Deed
duly executed by the applicable Seller and in recordable form, and
copies of the related Purchase Agreement, assigned to the Lessor,
shall each have been delivered to the Administrative Agent by the
Company, with copies thereof to each other Funding Party or the
related Ground Lease assigned to the Lessor shall have been
delivered to the Administrative Agent, with copies thereof to each
other Funding Party, as applicable (IT BEING UNDERSTOOD, that each
Purchase Agreement and each Ground Lease shall be satisfactory in
form and substance to the Lessor and the Lenders).
(ii) LEASE SUPPLEMENT. The original of the related Lease
Supplement, duly executed by the related Lessee and the Lessor and
in recordable form, shall have been delivered to the Administrative
Agent by the related Lessee.
(iii) MORTGAGE AND ASSIGNMENT OF LEASE AND RENTS. Counterparts
of the Mortgage (substantially in the form of EXHIBIT D attached
hereto), duly executed by the Lessor and in recordable form, shall
have been delivered to the Administrative Agent (which Mortgage
shall secure all of the debt to the Lenders unless such mortgage is
subject to a tax based on the amount of indebtedness secured
thereby, in which case the amount secured will be limited to debt in
an amount equal to 125% of the projected cost of acquisition and
construction of such Leased Property); and the Assignment of Lease
and Rents (substantially in the form of EXHIBIT B attached hereto)
in recordable form, duly executed by the Lessor, shall have been
delivered to the Administrative Agent by the Lessor.
(iv) SECURITY AGREEMENT AND ASSIGNMENT. If Buildings are to be
constructed on the Land, counterparts of the Security Agreement and
Assignment (substantially in the form of EXHIBIT C attached hereto),
duly executed by the Construction Agent, with an acknowledgment and
consent thereto satisfactory to
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the Lessor and the Administrative Agent duly executed by the related
General Contractor and the related Architect, as applicable, and
complete copies of the related Construction Contract and the related
Architect's Agreement certified by the Construction Agent, shall
have been delivered to the Lessor and the Administrative Agent (it
being understood and agreed that if no related Construction Contract
or Architects Agreement exists on such Closing Date, such delivery
shall not be a condition precedent to the Funding on such Closing
Date, and in lieu thereof the Construction Agent shall deliver
complete copies of such Security Agreement and Assignment and
consents concurrently with the Construction Agents entering into
such contracts).
(v) SURVEY. The related Lessee shall have delivered, or shall
have caused to be delivered, to the Lessor and the Administrative
Agent, at such Lessees expense, an accurate survey certified to the
Lessor and the Administrative Agent in a form reasonably
satisfactory to the Lessor and the Administrative Agent and showing
no state of facts unsatisfactory to the Lessor or the Administrative
Agent and prepared within ninety (90) days of such Closing Date by a
Person reasonably satisfactory to the Lessor and the Administrative
Agent. Such survey shall (1) be acceptable to the Title Insurance
Company for the purpose of providing extended coverage to the Lessor
and a lenders comprehensive endorsement to the Administrative Agent,
(2) show no encroachments on such Land by structures owned by
others, and no encroachments from any part of such Leased Property
onto any land owned by others, and (3) disclose no state of facts
reasonably objectionable to the Lessor, the Administrative Agent or
the Title Insurance Company, and be reasonably acceptable to each
such Person.
(vi) TITLE AND TITLE INSURANCE. On such Closing Date, the
Lessor shall receive from a title insurance company acceptable to
the Lessor and the Administrative Agent an ALTA Owners Policy of
Title Insurance issued by such title insurance company and the
Administrative Agent shall receive from such title insurance company
an ALTA Mortgagee's Policy of Title Insurance issued by such title
insurance company, in the amount of (A) the Lessor's Commitment
Percentage of projected cost of acquisition and construction of such
Leased Property, in the case of the ALTA Owner's Policy of Title
Insurance and (B) the sum of the A Percentage and the B Percentage
of the projected cost of acquisition and construction of such Leased
Property, in the case of the ALTA Mortgagee's Policy of Title
Insurance, in each case reasonably acceptable in form and substance
to the Lessor and the Administrative Agent, respectively
(collectively, the "TITLE POLICY"). The Title Policy shall be dated
as of such Closing Date, and, to the extent permitted under
Applicable Law, shall include such affirmative endorsements as the
Lessor or the Administrative Agent shall reasonably request.
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(vii) APPRAISAL. Each Funding Party shall have received a
report of the Appraiser (an "APPRAISAL"), paid for by the Company or
the related Lessee, which shall meet the requirements of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989,
shall be satisfactory to such Funding Party and shall state in a
manner satisfactory to such Funding Party the estimated "as vacant"
value of such Land and existing Buildings or any Building to be
constructed thereon. Such Appraisal must show that the "as vacant"
value of such Leased Property (if a Building is to be constructed on
the Land, determined as if the Building had already been completed
in accordance with the related Plans and Specifications and by
excluding from such value the amount of assessments on such Leased
Property) is at least 75% of the total cost of such Leased Property,
including the trade fixtures, equipment and personal property
utilized in connection with the Leased Property and to be funded by
the Funding Parties. In the case of Land without any Building
thereon or any Plans and Specifications for a Building on the
related Closing Date, an Appraisal meeting the foregoing
requirements need not be delivered on or prior to the Closing Date
but shall be delivered on or before the 45th day following the
development of Plans and Specifications for a Building thereon; if
the "as vacant" value shown in the Appraisal so obtained by the
Funding Parties fails to meet the requirement of the preceding
sentence, such failure shall constitute an Event of Default.
(viii) ENVIRONMENTAL AUDIT AND RELATED RELIANCE LETTER. The
Lessor and the Administrative Agent shall have received an
Environmental Audit for such Leased Property, which shall be
conducted in accordance with ASTM standards and shall not include a
recommendation for further investigation and is otherwise
satisfactory to the Lessor and the Administrative Agent; and the
firm that prepared the Environmental Audit for such Leased Property
shall have delivered to the Lessor and the Administrative Agent a
letter stating that the Lessor, the Administrative Agent and the
Lenders may rely upon such firm's Environmental Audit of such Land,
IT BEING UNDERSTOOD that the Lessor's and the Administrative Agent's
acceptance of any such Environmental Audit shall not release or
impair Lessee's obligations under the Operative Documents with
respect to any environmental liabilities relating to such Leased
Property.
(ix) EVIDENCE OF INSURANCE. The Lessor and the Administrative
Agent shall have received from the related Lessee certificates of
insurance evidencing compliance with the provisions of Article VIII
of the Lease (including the naming of the Lessor, the Administrative
Agent and the Lenders as additional insured or loss payee with
respect to such insurance, as their interests may appear), in form
and substance reasonably satisfactory to the Lessor and the
Administrative Agent.
(x) UCC FINANCING STATEMENT; RECORDING FEES; TRANSFER TAXES.
Each Funding Party shall have received satisfactory evidence of (i)
the execution and delivery to Administrative Agent of a UCC-1 and,
if required by applicable law,
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UCC-2 financing statement to be filed with the Secretary of State of
the applicable State (or other appropriate filing office) and the
county where the related Land is located, respectively, and such
other Uniform Commercial Code financing statements as any Funding
Party deems necessary or desirable in order to perfect such Funding
Party's interests and (ii) the payment of all recording and filing
fees and taxes with respect to any recordings or filings made of the
related Deed, the Lease, the related Lease Supplement, the related
Mortgage and the related Assignment of Lease and Rents.
(xi) OPINIONS. An opinion of local counsel for the related
Lessee qualified in the jurisdiction in which such Leased Property
is located, substantially in the form set forth in EXHIBIT G-2
attached hereto, and containing such other matters as the parties to
whom they are addressed shall reasonably request, shall have been
delivered and addressed to each of the Lessor, the Administrative
Agent and the Lenders. To the extent requested by the Administrative
Agent, opinions supplemental to those delivered under Section
3.2(vi) and reasonably satisfactory to the Administrative Agent
shall have been delivered and addressed to each of the Lessor, the
Administrative Agent and the Lenders.
(xii) GOOD STANDING CERTIFICATES. The Administrative Agent and
the Company shall have received good standing certificates for the
Lessor and the related Lessee from the appropriate offices of the
state where the related Land is located.
(b) LITIGATION. No action or proceeding shall have been
instituted or, to the knowledge of any Funding Party, threatened nor shall
any governmental action, suit, proceeding or investigation be instituted
or threatened before any Governmental Authority, nor shall any order,
judgment or decree have been issued or proposed to be issued by any
Governmental Authority, to set aside, restrain, enjoin or prevent the
performance of this Master Agreement or any transaction contemplated
hereby or by any other Operative Document or which could reasonably be
expected to result in a Material Adverse Effect.
(c) LEGALITY. In the reasonable opinion of such Funding Party or
its counsel, the transactions contemplated by the Operative Documents
shall not violate any Applicable Law, and no change shall have occurred or
been proposed in Applicable Law that would make it illegal for such
Funding Party to participate in any of the transactions contemplated by
the Operative Documents.
(d) NO EVENTS. (i) No Event of Default, Potential Event of
Default, Event of Loss or Event of Taking relating to such Leased Property
shall have occurred and be continuing, (ii) no action shall be pending or
threatened by a Governmental Authority to initiate a Condemnation or an
Event of Taking, and (iii) there shall not have occurred any
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event that could reasonably be expected to have a Material Adverse Effect
since December 31, 1999.
(e) REPRESENTATIONS. Each representation and warranty of the
parties hereto or to any other Operative Document contained herein or in
any other Operative Document shall be true and correct in all material
respects as though made on and as of such Closing Date, except to the
extent such representations or warranties relate solely to an earlier
date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date.
(f) CUTOFF DATE. No Closing Date shall occur after the Funding
Termination Date.
(g) TRANSACTION EXPENSES. The related Lessee shall have paid the
transaction costs then accrued and invoiced which the Lessees have agreed
to pay pursuant to SECTION 8.8.
(h) APPROVAL. The Administrative Agent shall have approved such
Leased Property in writing for inclusion in the Transaction.
(i) CALIFORNIA PROPERTY. If such Leased Property is located in
California, the related Lessee and the Company shall have entered into
such amendments to the Operative Documents as reasonably requested by any
Funding Party in order to mitigate the effects of the "one action" rule.
SECTION 3.2 ADDITIONAL CONDITIONS FOR THE INITIAL CLOSING DATE. The
obligations of the Lessor and each B Lender to carry out their respective
obligations under SECTION 2 of this Master Agreement to be performed on the
first Funding Date to occur after the date of this Amended and Restated Master
Agreement shall be subject to the satisfaction of, or waiver by, each such party
hereto (acting directly or through its counsel) on or prior to the such date of
the following conditions precedent in addition to those set forth in SECTION
3.1, PROVIDED that the obligations of any Funding Party shall not be subject to
any conditions contained in this SECTION 3.2 which are required to be performed
by such Funding Party:
(i) B NOTE. A replacement B Note, duly executed by the Lessor,
shall have been delivered to the Administrative Agent.
(ii) MASTER AGREEMENT. Counterparts of this Master Agreement,
duly executed by the parties hereto, shall have been delivered to
each of the parties hereto.
(iii) AMENDMENTS. Counterparts of the First Amendment to
Construction Agency Agreement, First Amendment to Loan Agreement and
First Amendment to Master Lease Agreement, each duly executed by the
parties thereto shall have been delivered to each of the parties
hereto.
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(iv) CREDIT AGREEMENT. The Administrative Agent and the
Funding Parties shall have received executed copies of the Credit
Agreement.
(v) OBLIGOR'S RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC.
Each of the Administrative Agent and the Lessor shall have received
(x) a certificate of the Secretary or an Assistant Secretary of each
Obligor on the date hereof, attaching and certifying as to (i) the
Board of Directors (or appropriate committees) resolution duly
authorizing the execution, delivery and performance by it of each
Operative Document to which it is or will be a party, (ii) the
incumbency and signatures of persons authorized to execute and
deliver such documents on its behalf, (iii) its articles or
certificate of incorporation, certified as of a recent date by the
Secretary of State of the state of its incorporation and (iv) its
by-laws, and (y) good standing certificates for such Obligor from
the appropriate offices of the States of such Obligors incorporation
and principal place of business.
(vi) OPINIONS OF COUNSEL. The opinion of Locke, Liddell & Sapp
LLP, dated the date hereof, substantially in the form set forth in
EXHIBIT G-1 attached hereto, and containing such other matters as
the parties to whom it is addressed shall reasonably request, shall
have been delivered and addressed to each of the Lessor, the
Administrative Agent and the Lenders.
(vii) GOOD STANDING CERTIFICATE. The Administrative Agent and
the Company shall have received a good standing certificate for the
Lessor from the appropriate office of the State of Texas.
(viii) LESSOR'S CONSENTS AND INCUMBENCY CERTIFICATE, ETC. The
Administrative Agent and the Company shall have received (A) a
certificate of the Secretary or an Assistant Secretary of the
General Partner of the Lessor attaching and certifying as to (i) the
consents of the partners of the Lessor duly authorizing the
execution, delivery and performance by it of each Operative Document
to which it is or will be a party, (ii) the incumbency and
signatures of persons authorized to execute and deliver such
documents on its behalf, and (iii) the Partnership Agreement and (B)
a certificate of limited partnership from the Secretary of State of
Texas.
SECTION 3.3 CONDITIONS TO THE OBLIGATIONS OF LESSEE. The obligations of
any Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the related Closing Date to the satisfaction of, or waiver by,
such Lessee, of the following conditions precedent:
(a) GENERAL CONDITIONS. The conditions set forth in SECTIONS 3.1
and 3.2 that require fulfillment by the Lessor or the Lenders shall have
been satisfied, including the delivery of good standing certificates by
the Lessor pursuant to SECTIONS 3.1(A)(XII) and 3.2(VIII) and the
execution and delivery of the Operative Documents to be executed by the
Lessor or the Lenders in connection with such Leased Property. The Lease
shall be in full force and effect and enforceable against the Lessor.
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(b) LEGALITY. In the opinion of such Lessee or its counsel, the
transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in
Applicable Law that would make it illegal for such Lessee to participate
in any of the transactions contemplated by the Operative Documents.
(c) PURCHASE AGREEMENT; GROUND LEASE. The Purchase Agreement and,
if applicable, the Ground Lease and all documents to be delivered under
the Purchase Agreement or Ground Lease, including title insurance, survey
and environmental audit, shall be reasonably satisfactory to such Lessee.
SECTION 3.4. CONDITIONS TO THE OBLIGATIONS OF THE FUNDING PARTIES ON EACH
FUNDING DATE. The obligations of the Lessor and each B Lender to carry out their
respective obligations under SECTION 2 of this Master Agreement to be performed
on each Funding Date shall be subject to the fulfillment to the satisfaction of,
or waiver by, each such party hereto (acting directly or through their
respective counsel) on or prior to each such Funding Date of the following
conditions precedent, PROVIDED that the obligations of any Funding Party shall
not be subject to any conditions contained in this SECTION 3.4 which are
required to be performed by such Funding Party:
(a) FUNDING REQUEST. The Lessor and the Administrative Agent
shall have received from the Construction Agent or a Lessee the Funding
Request therefor pursuant to SECTION 2.2(D).
(b) CONDITION FULFILLED. As of such Funding Date, the condition
set forth in SECTION 3.1(D)(I) shall have been satisfied.
(c) REPRESENTATIONS. As of such Funding Date, after giving effect
to the Funding requested by the Construction Agent or a Lessee on such
date, the representations and warranties that each Obligor is deemed to
make pursuant to SECTION 2.2(E) shall be true and correct in all material
respects on and as of such Funding Date as though made on and as of such
Funding Date, except to the extent such representations or warranties
relate solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date.
(d) NO BONDED STOP NOTICE OR FILED MECHANICS LIEN. As of such
Funding Date, and as to any Funded Amount requested for any Leased
Property on such Funding Date, (i) none of the Lessor, the Administrative
Agent or any Lender has received (with respect to such Leased Property) a
bonded notice to withhold Loan funds that has not been discharged by the
related Lessee or the Construction Agent, and (ii) no mechanics liens or
materialmens liens have been filed against such Leased Property that have
not been discharged by the related Lessee, bonded over or around in a
manner reasonably
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satisfactory to the Administrative Agent or insured over and around by the
Title Insurance Company.
(e) LEASE SUPPLEMENT. If the Funding relates to a Building that
will be leased under a Lease Supplement separate from the Lease Supplement
for the related Land, the original of such separate Lease Supplement, duly
executed by the related Lessee and the Lessor and in recordable form,
shall have been delivered to the Administrative Agent.
(f) FUNDING TERMINATION DATE. The Funding Termination Date shall
not have occurred.
(g) CREDIT AGREEMENT CONDITIONS. Each condition precedent to the
making of Synthetic Lease Loans by the Synthetic Lease Loan Lenders on
such date pursuant to the Credit Agreement shall have been satisfied.
(h) ADDITIONAL REQUIREMENTS FOR FUNDINGS TO FINANCE CONSTRUCTION.
As of such Funding Date, and as to any Funded Amount requested for any
Leased Property on such Funding Date the Administrative Agent shall have
received the following: (i) a copy of each construction contract,
architects agreement and similar agreement and all amendments to each with
respect to such Leased Property;(ii) a project budget for the construction
on the Leased Property certified by the chief financial officer of Lessee
outlining amounts spent to date, current funding requirements and balance
of budget available for completion; (iii) copies of all change orders for
the construction on the Leased Property; (iv) copies of all requests for
payment together with supporting documentation submitted by the architect
or general contractor; (v) a down-date endorsement to the Title Policy for
the Leased Property dated the date of the requested advance; (vi) a
statement by the chief financial officer for the Lessee reconciling the
budget previously delivered with the construction expenses to the date of
the requested Advance; (vii) lien waivers from the General Contractor and
the subcontractors that previous invoices have been paid and the only
outstanding amount is the current request; and (viii) and such other
supporting information as the Administrative Agent may reasonably request
from time to time.
SECTION 3.5 COMPLETION DATE CONDITIONS. The occurrence of the Completion
Date with respect to any Leased Property shall be subject to the fulfillment to
the satisfaction of, or waiver by, each party hereto (acting directly or through
its counsel) of the following conditions precedent:
(a) TITLE POLICY ENDORSEMENTS; ARCHITECT'S CERTIFICATE. The
Construction Agent shall have furnished to each Funding Party (1) the
following endorsements to the related Title Policy, if available under
Applicable Law affecting the Title Insurance Company (each of which shall
be subject to no exceptions other than those reasonably acceptable to the
Administrative Agent): a date-down endorsement (redating and confirming
the coverage provided under the Title Policy and each endorsement thereto)
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and a "Form 9" endorsement (if available in the applicable jurisdiction),
in each case, effective as of a date not earlier than the date of
completion of the Construction, and (2) a certificate of the Architect
dated at or about the Completion Date, in form and substance reasonably
satisfactory to the Administrative Agent, the Lessor and the B Lenders,
and stating that (i) the related Building has been completed substantially
in accordance with the Plans and Specifications therefor, and such Leased
Property is ready for occupancy, (ii) such Plans and Specifications comply
in all material respects with all Applicable Laws in effect at such time,
and (iii) to the best of the Architects knowledge, such Leased Property,
as so completed, complies in all material respects with all Applicable
Laws in effect at such time. The Construction Agent shall also deliver to
the Administrative Agent true and complete copies of: (A) an "as built" or
"record" set of the Plans and Specifications, (B) an as-built survey of
such Leased Property, and (C) copies of a certificate or certificates of
occupancy for such Leased Property or other legally equivalent permission
to occupy such Leased Property.
(b) CONSTRUCTION COMPLETION. Any related Construction shall have
been completed substantially in accordance with the related Plans and
Specifications, the related Deed and all Applicable Laws, and such Leased
Property shall be ready for occupancy and operation.
(c) CONSTRUCTION AGENT CERTIFICATION. The Construction Agent
shall have furnished the Lessor, the Administrative Agent and each Lender
with a certification of the Construction Agent (substantially in the form
of EXHIBIT H) that:
(i) all amounts owing to third parties for the related
Construction have been paid in full (other than contingent
obligations for which the Construction Agent has made adequate
reserves), and no litigation or proceedings are pending, or to the
best of the Construction Agents knowledge, are threatened, against
such Leased Property or the Construction Agent or the related Lessee
which could reasonably be expected to have a Material Adverse
Effect;
(ii) all material consents, licenses and permits and other
governmental authorizations or approvals required for such
Construction of such Leased Property have been obtained and are in
full force and effect;
(iii) such Leased Property has available all services of
public facilities and other utilities necessary for use and
operation of such Leased Property for its intended purposes
including, without limitation, adequate water, gas and electrical
supply, storm and sanitary sewerage facilities, telephone, other
required public utilities and means of access between the related
Building and public highways for pedestrians and motor vehicles;
(iv) all material agreements, easements and other rights,
public or private, which are necessary to permit the lawful use and
operation of such
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Leased Property as the related Lessee intends to use such Leased
Property under the Lease and which are necessary to permit the
lawful intended use and operation of all then intended utilities,
driveways, roads and other means of egress and ingress to and from
the same have been obtained and are in full force and effect and
neither the Construction Agent nor the related Lessee has any
knowledge of any pending modification or cancellation of any of the
same; and the use of such Leased Property does not depend on any
variance, special exception or other municipal approval, permit or
consent that has not been obtained and is in full force and effect
for its continuing legal use;
(v) all of the requirements and conditions set forth in
SECTION 3.5(B) hereof have been completed and fulfilled with respect
to such Leased Property and the related Construction; and
(vi) such Leased Property is in compliance in all material
respects with all applicable zoning laws and regulations.
SECTION 3.6 ADDITION OF LESSEES. After the date hereof, additional
Subsidiaries of the Company may become Lessees hereunder and under the
other Operative Documents upon satisfaction of the following conditions
precedent:
(a) such Subsidiary and the Guarantor shall have executed and
delivered to the Administrative Agent and the Lessor a Joinder Agreement,
substantially in the form of EXHIBIT E;
(b) such Subsidiary shall have delivered to each of the
Administrative Agent and the Lessor (x) a certificate of the Secretary or
an Assistant Secretary of such Subsidiary, attaching and certifying as to
(i) the Board of Directors resolution duly authorizing the execution,
delivery and performance by it of each Operative Document to which it is
or will be a party, (ii) the incumbency and signatures of persons
authorized to execute and deliver such documents on its behalf, (iii) its
certificate of incorporation, certified as of a recent date by the
Secretary of State of its incorporation and (iv) its by-laws, and (y) good
standing certificates from the appropriate offices of the States of such
Subsidiarys incorporation and principal place of business;
(c) such Subsidiary shall have delivered an opinion of Locke,
Liddell & Sapp, LLP, addressed to each of the Lessor, the Administrative
Agent and the Lenders, substantially in the form set forth in EXHIBIT G-1;
and
(d) the Administrative Agent, the Lessor and the Lenders shall
have received such other documents, certificates and information as any of
them shall have reasonably requested that are consistent with the type of
such documentation delivered on the Initial Closing Date.
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SECTION 3.7 REAFFIRMATIONS OF OPERATIVE DOCUMENTS. The Company hereby
reaffirms that the Guaranty Agreement is in full force and effect, and the
Lessor and each Lessee hereby reaffirms that the Lease is in full force and
effect, in each case, after giving effect to this Amended and Restated Master
Agreement. The Agent and the Lenders hereby approve each of the First Amendment
to Construction Agency Agreement, the First Amendment to Loan Agreement and the
First Amendment to Master Lease Agreement, each dated as of the date hereof.
SECTION 3.8 CERTAIN DELIVERIES. The Company hereby agrees to deliver to
the Administrative Agent within sixty (60) days of the date hereof (i) an
Appraisal of the Moshannon Leased Property meeting the requirements of SECTION
3.1(A)(VII) and (ii) amendments to the Title Policies relating to the Leased
Properties that are in the Transaction on the date hereof increasing the
coverage thereunder by an amount equal to (A) 60% TIMES (B) the A Percentage of
the Funded Amounts related thereto, if such Leased Property is completed, or of
the projected cost of acquisition and construction of such Leased Property, if
such Leased Property is still under construction.
ARTICLE IV
REPRESENTATIONS
SECTION 4.1 REPRESENTATIONS OF OBLIGORS. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each
Obligor represents and warrants to each of the other parties hereto as follows:
(a) CORPORATE EXISTENCE. Each Obligor: (i) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (ii) has
all requisite corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business and is in good standing
in all jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to qualify could
reasonably be expected to (either individually or in the aggregate) have a
Material Adverse Effect.
(b) FINANCIAL CONDITION. The Obligors have heretofore furnished
to each of the Funding Parties the consolidated and consolidating balance
sheets of the Company and its Subsidiaries as at December 31, 1999 and the
related consolidated and consolidating statements of income, retained
earnings and cash flow of the Company and its Subsidiaries for the fiscal
year ended on said date, with the opinion thereon (in the case of said
consolidated balance sheet and statements) of Arthur Andersen LLP, and the
unaudited consolidated and consolidating balance sheets of the Company and
its Subsidiaries as at March 31, 2000 and the related consolidated and
consolidating statements of income and retained earnings of the Company
and its Subsidiaries for the
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three-month period ended on such date. All such financial statements are
complete and correct and fairly present the consolidated financial
condition of the Obligors, and (in the case of said consolidating
financial statements) the respective unconsolidated financial condition of
the Obligors, as at said dates and the consolidated and unconsolidated
results of their operations for the fiscal year and three-month period
ended on said dates (subject, in the case of such financial statements as
at March 31, 2000, to normal year-end audit adjustments), all in
accordance with generally accepted accounting principles and practices
applied on a consistent basis, except as otherwise indicated in the notes
thereto. None of the Obligors has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, in each case, of a type required to be reflected
in a balance sheet prepared in accordance with GAAP, except as referred to
or reflected or provided for in said balance sheets as at said dates.
Since December 31, 1999, there has been no material adverse change in the
consolidated financial condition, operations, business or prospects taken
as a whole of the Obligors from that set forth in said financial
statements as at said date.
(c) LITIGATION. There are no legal or arbitral proceedings, or
any proceedings by or before any governmental or regulatory authority or
agency, now pending or (to the knowledge of the Company) threatened
against any Obligor that, if adversely determined could be reasonably
expected to (either individually or in the aggregate) have a Material
Adverse Effect.
(d) NO BREACH. None of the execution and delivery of this Master
Agreement and the other Operative Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms
and provisions hereof and thereof will conflict with or result in a breach
of, or require any consent under, the charter or by-laws of any Obligor,
or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement
or instrument to which any Obligor is a party or by which any of them or
any of their Property is bound or to which any of them is subject (other
than such consents as have been obtained and are in full force and
effect), or constitute a default under any such agreement or instrument,
or (except for the Liens created pursuant to the Operative Documents)
result in the creation or imposition of any Lien upon any Property of the
Obligors pursuant to the terms of any such agreement or instrument.
(e) ACTION. Each Obligor has all necessary power, authority and
legal right to execute, deliver and perform its obligations under each of
the Operative Documents to which it is a party; the execution, delivery
and performance by each Obligor of each of the Operative Documents to
which it is a party have been duly authorized by all necessary corporate
action on its part (including, without limitation, any required
shareholder approvals); and this Master Agreement has been duly and
validly executed and delivered by each Obligor and constitutes, and each
of the other Operative Documents to which it is a party when executed and
delivered by such Obligor will
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constitute, its legal, valid and binding obligation, enforceable against
each Obligor in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium
or similar laws of general applicability affecting the enforcement of
creditors rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(f) APPROVALS. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange, are necessary for the execution,
delivery or performance by any Obligor of the Operative Documents to which
it is a party or for the legality, validity or enforceability hereof or
thereof, except for filings and recordings in respect of the Liens created
pursuant to the Operative Documents.
(g) USE OF CREDIT. None of the Obligors is engaged principally,
or as one of its important activities, in the business of extending credit
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any extension of
credit hereunder will be used to buy or carry any Margin Stock.
(h) ERISA. Each Plan, and, to the knowledge of each Obligor, each
Multiemployer Plan, is in compliance in all material respects with, and
has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or State
law, and no event or condition has occurred and is continuing as to which
any Obligor would be under an obligation to furnish a report to the
Funding Parties under SECTION 5.1(A)(VIII) hereof.
(i) TAXES. The Obligors are members of an affiliated group of
corporations filing consolidated returns for Federal income tax purposes,
of which the Company is the "common parent" (within the meaning of Section
1504 of the Code) of such group. Each Obligor has filed (either directly,
or indirectly through the Company) all Federal income tax returns and all
other material tax returns that are required to be filed by them and have
paid (either directly, or indirectly through the Company) all taxes due
pursuant to such returns or pursuant to any assessment received by any
Obligor, except for any taxes being contested by an Obligor in good faith
by proper proceedings as to which no Liens have been created on any
Property of any Obligor. The charges, accruals and reserves on the books
of the Obligors in respect of taxes and other governmental charges are, in
the opinion of the Obligors, adequate. The Company has not given or been
requested to give a waiver of the statute of limitations relating to the
payment of Federal, state, local and foreign taxes or other impositions.
(j) INVESTMENT COMPANY ACT. None of the Obligors is an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
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(k) PUBLIC UTILITY HOLDING COMPANY ACT. None of the Obligors is a
"holding company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(l) Material Agreements and Liens.
(i) PART A of SCHEDULE I hereto is a complete and correct
list, as of the date of this Master Agreement, of each credit
agreement, loan agreement, indenture, purchase agreement, guarantee,
letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or
commitment for any extension of credit) to, or guarantee by, any
Obligor, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is correctly
described in PART A of said SCHEDULE I.
(ii) PART B of SCHEDULE I hereto is a complete and correct
list, as of the date of this Master Agreement, of each Lien securing
Indebtedness of any Person and covering any Obligor, and the
aggregate Indebtedness secured (or that may be secured) by each such
Lien and the Property covered by each such Lien is correctly
described in PART B of said SCHEDULE I.
(m) ENVIRONMENTAL MATTERS. Each Obligor has obtained all
environmental, health and safety permits, licenses and other
authorizations required under all applicable Environmental Laws to carry
on its business as now being or as currently proposed to be conducted,
except to the extent failure to have any such permit, license or
authorization would not (either individually or in the aggregate) have a
Material Adverse Effect. Each of such permits, licenses and authorizations
is in full force and effect and each of the Obligors is in compliance with
the terms and conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any
applicable Environmental Law, except to the extent failure to comply
therewith would not (either individually or in the aggregate) have a
Material Adverse Effect.
In addition, except as set forth in SCHEDULE II hereto:
(i) No notice, notification, demand, request for information,
citation, summons or order has been issued to any Obligor or about
which any Obligor has otherwise become aware, no complaint has been
filed against any Obligor or about which any Obligor has otherwise
become aware, no penalty has been assessed against any Obligor or
about which any Obligor has otherwise become aware and no
investigation or review is pending or, to the knowledge of any
Obligor, threatened by any governmental authority or other entity
with respect to
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any alleged failure by any Obligor to have any environmental, health
or safety permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of
any Obligor or with respect to any generation, treatment, storage,
recycling, transportation, discharge or disposal, or any Release of
any Hazardous Materials generated by any Obligor, which has either
not been resolved to the satisfaction of the issuing authority or
which would not individually or in the aggregate have a Material
Adverse Effect.
(ii) None of the Obligors owns, operates or leases a
treatment, storage or disposal facility requiring a permit under the
Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and
1) no polychlorinated biphenyls (PCBs) are or have been
present at any site or facility now or previously owned,
operated or leased by any Obligor;
2) no asbestos or asbestos-containing materials that are
friable or bear a reasonable chance of becoming friable are or
have been present at any site or facility now or previously
owned, operated or leased by any Obligor;
3) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any site or facility now or
previously owned, operated or leased by any Obligor that are
not in material compliance with all applicable Environmental
Laws, and there are no surface impoundments for Hazardous
Materials, active or abandoned at any site or facility now or
previously owned, operated or leased by any Obligor;
4) no Hazardous Materials have been Released at, on or
under any site or facility now or previously owned, operated
or leased by any Obligor in a reportable quantity established
by any applicable Environmental Law; and
5) no Hazardous Materials have been otherwise Released
at, on or under any site or facility now or previously owned,
operated or leased by any Obligor that would (either
individually or in the aggregate) have a Material Adverse
Effect.
(iii) None of the Obligors has transported or arranged for the
transportation of any Hazardous Material to any location that is
listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"),
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listed for possible inclusion on the NPL by the Environmental
Protection Agency in the Comprehensive Environmental Response and
Liability Information System, as provided for by 40 C.F.R. (ss)300.5
("CERCLIS"), or on any similar state or local list or that is the
subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims against the
Company or any of its Subsidiaries, which individually or in the
aggregate would have a Material Adverse Effect.
(iv) No Hazardous Material generated by the Company or any of
its Subsidiaries has been recycled, treated, stored, disposed of or
Released by any Obligor at any facility which is subject to an
Environmental Claim which would reasonably be expected individually
or in the aggregate to have a Material Adverse Effect.
(v) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company or
any of its Subsidiaries and no site or facility now or previously
owned, operated or leased by any Obligor is listed or to the
knowledge of any Obligor (upon due investigation) proposed for
listing on the NPL, CERCLIS or any similar state list of sites
requiring investigation or clean-up, in each case, which has either
not been resolved to the satisfaction of the issuing authority or
which would not individually or in the aggregate have a Material
Adverse Effect.
(vi) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated or leased
by any Obligor, and no government action has been taken or is in
process that could subject any such site or facility to such Liens
and none of the Obligors would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any
site or facility owned by it in any deed to the real property on
which such site or facility is located.
(vii) All investigations, studies, audits, tests, reviews or
other analyses conducted by or that are in the possession of any
Obligor relating to environmental matters at or affecting any site
or facility now or previously owned, operated or leased by any
Obligor and that reveal facts, circumstances or conditions that
could reasonably be expected to result in a Material Adverse Effect
have been made available to the Funding Parties.
(n) CAPITALIZATION. SCHEDULE V hereto correctly sets forth the
number of shares of authorized capital stock of the Company, the class of
such shares, the number of each such class outstanding and the par value
thereof. All of such outstanding shares are duly and validly issued and
outstanding, and (to the Companys knowledge) each of which shares is fully
paid and nonassessable. SCHEDULE V hereto correctly sets forth, as of the
date hereof, the names of the Persons owning 5% or more of any class of
such
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capital stock, the class or classes of such capital stock owned by each
such Person and percentage of the total number of shares of such class
owned by each such Person. As of the date hereof, (x) except for those set
forth in SCHEDULE V hereto, there are no outstanding Equity Rights with
respect to the Company and (y) except for those set forth in SCHEDULE V
hereto, there are no outstanding obligations of any Obligor to repurchase,
redeem, or otherwise acquire any shares of capital stock of any Obligor to
make payments to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market value or
equity value of any Obligor.
(o) SUBSIDIARIES, ETC.
(i) Set forth in PART A of SCHEDULE III hereto is a complete
and correct list, as of the date hereof, of all of the Subsidiaries
of the Company, together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person
holding ownership interests in such Subsidiary and (iii) the nature
of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in PART A of SCHEDULE III
hereto, (x) each of the Company and its Subsidiaries owns, free and
clear of Liens (other than Liens created pursuant to the Operative
Documents), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in PART A
of SCHEDULE III hereto, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
(ii) Set forth in PART B of SCHEDULE III hereto is a complete
and correct list, as of the date of this Master Agreement, of all
Investments (other than Investments disclosed in PART A of said
SCHEDULE III hereto) held by the Company or any of its Subsidiaries
in any Person (other than Investments which are Permitted
Investments or deposits maintained with banks in the ordinary course
of business) and, for each such Investment, (x) the identity of the
Person or Persons holding such Investment and (y) the nature of such
Investment. Except as disclosed in PART B of SCHEDULE III hereto,
each of the Company and its Subsidiaries owns, free and clear of all
Liens (other than Liens created pursuant to the Operative
Documents), all such Investments.
(p) TITLE TO ASSETS. Each Obligor owns and has on the date hereof
good and marketable title or valid and subsisting leaseholds (subject only
to Liens permitted by SECTION 5.1(F) hereof) to the Properties shown to be
owned in the most recent financial statements referred to in SECTION
4.1(B) hereof (other than Properties disposed of in the ordinary course of
business or otherwise permitted to be disposed of pursuant to SECTION
5.1(E) hereof). Each Obligor (a) owns and has on the date hereof, good and
marketable title to, or has on the date hereof a valid and subsisting
leasehold estate in, and (b) enjoys
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on the date hereof (and will enjoy on the Initial Closing Date), peaceful
and undisturbed possession of, all Properties (subject only to Liens
permitted by SECTION 5.1(F) hereof) that are necessary for the operation
and conduct of its businesses.
(q) TRUE AND COMPLETE DISCLOSURE. The information (other than
projections), reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of the Obligors to the Administrative
Agent or any Funding Party in connection with the negotiation, preparation
or delivery of this Master Agreement and the other Operative Documents or
included herein or therein or delivered pursuant hereto or thereto, when
taken as a whole do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. All projections furnished by or on behalf of the Obligors in
writing to the Administrative Agent or any Funding Party for purposes of
or in connection with this Agreement or the transactions contemplated
hereby were prepared by the Company in good faith based on assumptions
determined to be reasonable by the Company under the then existing facts
and circumstances. All written information furnished after the date hereof
by any Obligor to the Administrative Agent and the Operative Parties in
connection with this Master Agreement and the other Operative Documents
and the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect, or (in the case of
projections) based on reasonable assumptions, on the date, and under the
facts and circumstances, as of which such information is stated or
certified. There is no fact actually known to any Obligor that could have
a Material Adverse Effect that has not been disclosed herein, in the other
Operative Documents or in a report, financial statement, exhibit,
schedule, disclosure letter or other writing furnished to the B Lenders
for use in connection with the transactions contemplated hereby or
thereby.
(r) REAL PROPERTY. Set forth on SCHEDULE IV hereto is a list, as
of the date hereof, of all of the real property interests held by the
Company and its Subsidiaries, indicating in each case whether the
respective Property is owned or leased and the location of the respective
Property.
(s) PURPOSE OF FUNDINGS. The proceeds of the Fundings shall be
used by the Lessees to purchase the Land from the applicable Sellers and
for Construction and related costs.
(t) HAZARDOUS MATERIALS - Leased Properties. (i) To the best
knowledge of the related Lessee, on the Closing Date for each Leased
Property, there are no Hazardous Materials present at, upon, under or
within such Leased Property or released or transported to or from such
Leased Property (except in compliance in all material respects with all
Applicable Law).
(i) On the related Closing Date, no Governmental Actions have
been taken or, to the best knowledge of the related Lessee, are in
process or have been
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threatened, which could reasonably be expected to subject such
Leased Property, any Lender or the Lessor to any Claims or Liens
with respect to such Leased Property under any Environmental Law
which would have a material adverse effect, or would have a Material
Adverse Effect on the Lessor or any Lender.
(ii) The related Lessee has, or will obtain on or before the
date required by Applicable Law, all Environmental Permits necessary
to operate each Leased Property in accordance with Environmental
Laws and is complying with and has at all times complied with all
such Environmental Permits, except to the extent the failure to
obtain such Environmental Permits or to so comply would not have a
Material Adverse Effect.
(iii) Except as set forth in the related Environmental Audit
or in any notice subsequently furnished by the related Lessee to the
Administrative Agent and approved by the Administrative Agent in
writing prior to the respective times that the representations and
warranties contained herein are made or deemed made hereunder, no
notice, notification, demand, request for information, citations,
summons, complaint or order has been issued or filed to or with
respect to such Lessee, no penalty has been assessed on such Lessee
and no investigation or review is pending or, to its best knowledge,
threatened by any Governmental Authority or other Person in each
case relating to any Leased Property with respect to any alleged
material violation or liability of such Lessee under any
Environmental Law. To the best knowledge of such Lessee, no material
notice, notification, demand, request for information, citations,
summons, complaint or order has been issued or filed to or with
respect to any other Person, no material penalty has been assessed
on any other Person and no investigation or review is pending or
threatened by any Governmental Authority or other Person relating to
any Leased Property with respect to any alleged material violation
or liability under any Environmental Law by any other Person.
(iv) Each Leased Property and each portion thereof are
presently in compliance in all material respects with all
Environmental Laws, and, to the best knowledge of the related
Lessee, there are no present or past facts, circumstances,
activities, events, conditions or occurrences regarding such Leased
Property (including without limitation the release or presence of
Hazardous Materials) that could reasonably be anticipated to (A)
form the basis of a material Claim against such Leased Property, any
Funding Party or such Lessee, (B) cause such Leased Property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law, (C) require the filing
or recording of any notice or restriction relating to the presence
of Hazardous Materials in the real estate records in the county or
other appropriate municipality in which such Leased Property is
located, or (D) prevent or materially interfere with the continued
operation and maintenance of such Leased Property as contemplated by
the Operative Documents.
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(u) LEASED PROPERTY. Except as disclosed by the related Lessee to
the Administrative Agent in writing and approved by the Administrative
Agent in writing prior to the respective times that the representations
and warranties contained herein are made or deemed made, the present
condition of each Leased Property conforms in all material respects with
all conditions or requirements of all existing material permits and
approvals issued with respect to such Leased Property, and the related
Lessees future intended use of such Leased Property under the Lease does
not, in any material respect, violate any Applicable Law. To the best
knowledge of the related Lessee, no material notices, complaints or orders
of violation or non-compliance have been issued or threatened or
contemplated by any Governmental Authority with respect to any Leased
Property or any present or intended future use thereof. All material
agreements, easements and other rights, public or private, which are
necessary to permit the lawful use and operation of each Leased Property
as the related Lessee intends to use such Leased Property under the Lease
and which are necessary to permit the lawful intended use and operation of
all presently intended utilities, driveways, roads and other means of
egress and ingress to and from the same have been, or to such Lessees best
knowledge will be, obtained and are or will be in full force and effect,
and Lessee has no knowledge of any pending material modification or
cancellation of any of the same.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND EFFECT OF FUNDINGS.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in SECTION 4.1 shall survive delivery
of the Operative Documents and every Funding, and shall remain in effect
until all of the Obligations are fully and irrevocably paid.
(b) EACH FUNDING A REPRESENTATION. Each Funding accepted by any
Lessee or the Construction Agent shall be deemed to constitute a
representation and warranty by each Obligor to the effect of SECTION 4.1.
SECTION 4.3 REPRESENTATIONS OF THE LESSOR. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, in each
case, with respect to each of the Leased Properties, the Lessor represents and
warrants to the Administrative Agent, the Lenders, the Company and the Lessees
as follows:
(a) SECURITIES ACT. The interest being acquired or to be acquired
by the Lessor in such Leased Property is being acquired for its own
account, without any view to the distribution thereof or any interest
therein, PROVIDED that the Lessor shall be entitled to assign, convey or
transfer its interest in accordance with SECTION 6.1.
(b) DUE ORGANIZATION, ETC. The Lessor is a limited partnership
duly organized and validly existing in good standing under the laws of
Texas and each state in which a Leased Property is located and has full
power, authority and legal right to execute, deliver and perform its
obligations under the Lease, this Master Agreement and each other
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Operative Document to which it is or will be a party.
(c) DUE AUTHORIZATION; ENFORCEABILITY, ETC. This Master Agreement
and each other Operative Document to which the Lessor is or will be a
party have been or will be duly authorized, executed and delivered by or
on behalf of the Lessor and are, or upon execution and delivery will be,
legal, valid and binding obligations of the Lessor enforceable against it
in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws
affecting creditors rights generally and by general equitable principles.
(d) NO CONFLICT. The execution and delivery by the Lessor of the
Lease, this Master Agreement and each other Operative Document to which
the Lessor is or will be a party, are not or will not be, and the
performance by the Lessor of its obligations under each will not be,
inconsistent with its Partnership Agreement, do not and will not
contravene any Applicable Law and do not and will not contravene any
provision of, or constitute a default under, any Contractual Obligation of
Lessor, do not and will not require the consent or approval of, the giving
of notice to, the registration with or taking of any action in respect of
or by, any Governmental Authority, except such as have been obtained,
given or accomplished, and the Lessor possesses all requisite regulatory
authority to undertake and perform its obligations under the Operative
Documents.
(e) LITIGATION. There are no pending or, to the knowledge of the
Lessor, threatened actions or proceedings against the Lessor before any
court, arbitrator or administrative agency with respect to any Operative
Document or that would have a material adverse effect upon the ability of
the Lessor to perform its obligations under this Master Agreement or any
other Operative Documents to which it is or will be a party.
(f) LESSOR LIENS. No Lessor Liens (other than those created by
the Operative Documents) exist on any Closing Date on the Leased Property,
or any portion thereof, and the execution, delivery and performance by the
Lessor of this Master Agreement or any other Operative Document to which
it is or will be a party will not subject any Leased Property, or any
portion thereof, to any Lessor Liens (other than those created by the
Operative Documents).
(g) EMPLOYEE BENEFIT PLANS. The Lessor is not and will not be
making its investment hereunder, and is not performing its obligations
under the Operative Documents, with the assets of an "employee benefit
plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
ERISA, or "plan" (as defined in Section 4975(e)(1)) of the Code.
(h) GENERAL PARTNER. The sole general partner of the Lessor is
Atlantic Financial Managers, Inc.
(i) FINANCIAL INFORMATION. (A) The unaudited balance sheet of the
Lessor as
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of December 31, 1999 and the related statements of income, partners
capital and cash flows for the year then ended, copies of which have been
delivered to the Administrative Agent and Lessee, fairly present, in
conformity with sound accounting principles, the financial condition of
the Lessor as of such date and the results of operations and cash flows
for such period.
(B) Since December 31, 1999, there has been no event, act,
condition or occurrence having a material adverse effect upon the
financial condition, operations, performance or properties of the Lessor,
or the ability of the Lessor to perform in any material respect its
obligations under the Operative Documents.
(j) NO OFFERING. The Lessor has not offered the Notes to any
Person in any manner that would subject the issuance thereof to
registration under the Securities Act or any applicable state securities
laws.
SECTION 4.4 REPRESENTATIONS OF EACH LENDER. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each B
Lender represents and warrants to the Lessor and to the Lessees as follows:
(a) SECURITIES ACT. Such B Lender has not assigned, conveyed or
transferred its interest in the Loans in violation of the Securities Act.
(b) EMPLOYEE BENEFIT PLANS. Such B Lender is not and will not be
making its investment hereunder, and is not performing its obligations
under the Operative Documents, with the assets of an "employee benefit
plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
ERISA, or "plan" (as defined in Section 4975(e)(1)) of the Code.
ARTICLE V
COVENANTS OF THE COMPANY AND THE LESSOR
SECTION 5.1 AFFIRMATIVE COVENANTS. The Company covenants and agrees that:
(a) FINANCIAL STATEMENTS, ETC. The Company shall deliver to each
of the Administrative Agent, the Lessor and the B Lenders (in such form as
shall be satisfactory to the Administrative Agent):
(i) no later than January 15 of each year, a budget (on a
monthly basis) for the Company and its Subsidiaries for such year
(including consolidating and consolidated statements of income, cash
flow and balance sheets prepared in accordance with GAAP); and
promptly after any material revision to such budget, such budget as
so revised;
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(ii) as soon as available and in any event within 30 days
after the end of each month, consolidated and consolidating
statements of income and retained earnings of the Company and its
Subsidiaries for such month and for the period from the beginning of
the respective fiscal year to the end of such month, and the related
consolidated balance sheets of the Company and its Subsidiaries as
at the end of such month, setting forth in each case in comparative
form the corresponding consolidated and consolidating figures
provided in the budget required under SECTION 5.1(A)(I) hereof for
such period, accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said
consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Company and its
Subsidiaries, and said consolidating financial statements fairly
present the respective individual unconsolidated financial condition
and results of operations of the Company and of each of its
Subsidiaries, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and
for, such month (subject to normal year-end audit adjustments with
the absence of footnotes);
(iii) as soon as available and in any event within 45 days
after the end of each quarterly fiscal period of each fiscal year of
the Company, (A) a statement of occupancy rates at each of the
facilities owned or maintained by the Company and its Subsidiaries
as at the end of such period, and a statement of occupancy revenues
and the direct costs of occupancy for each Correctional and
Detention Facility Contract for such period and for the period from
the beginning of the respective fiscal year to the end of such
fiscal quarter, in each case setting forth in comparative form the
corresponding figures for the corresponding periods in the budget
required under SECTION 5.1(A)(I) hereof and (B) an analysis of the
chief financial officer of the financial condition of the Company
and its Subsidiaries, on a consolidated and consolidating basis, as
of the end of such period, including (without limitation) a
reconciliation to the budget required under SECTION 5.1(A)(I)
hereof;
(iv) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, consolidated and
consolidating statements of income and retained earnings, and a
consolidated statement of cash flow, of the Company and its
Subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of the Company and its Subsidiaries as
at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated and consolidating
figures for the preceding fiscal year, and accompanied (A) in the
case of said consolidated statements and balance sheet of the
Company, by an opinion thereon of independent certified public
accountants of recognized national standing (which opinion shall not
contain any Impermissible Qualification), which opinion shall state
that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
Company and its Subsidiaries as at the end of, and for, such fiscal
year in accordance with generally accepted accounting principles,
and by a management letter or similar letter submitted to the
Company by such accountants and (B) in the case of said
consolidating statements and balance sheets, by a certificate of a
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senior financial officer of the Company, which certificate shall
state that said consolidating financial statements fairly present
the respective individual unconsolidated financial condition and
results of operations of the Company and of each of its
Subsidiaries, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and
for, such fiscal year;
(v) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that
the Company shall have filed with the Securities and Exchange
Commission (or any governmental agency substituted therefor) or any
national securities exchange;
(vi) to the extent not previously furnished to the Lessor, the
B Lenders or the Administrative Agent in such capacity, promptly
upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy
statements so mailed;
(vii) without duplication of any provision of SUBSECTION (IV)
above, promptly after the receipt by the Company thereof, copies of
each report submitted to any Obligor by independent accountants in
connection with any annual, interim or special audit of the books of
any Obligor made by such accountants, or any management letters or
similar documents submitted to any Obligor by such accountants;
(viii) as soon as possible, and in any event within ten days
after the Company knows or has reason to believe that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by a
senior financial officer of the Company setting forth details
respecting such event or condition and the action, if any, that the
Company or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or
given to PBGC by the Company or an ERISA Affiliate with respect to
such event or condition):
1) any reportable event, as defined in Section 4043(b)
of ERISA and the regulations issued thereunder, with respect
to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (PROVIDED that
a failure to meet the minimum funding standard of Section 412
of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a
required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
2) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by
the Company or an
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ERISA Affiliate to terminate any Plan;
3) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such
Multiemployer Plan;
4) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company
or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
5) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
6) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Company or an ERISA
Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;
(ix) without prejudice as to whether a Default has occurred,
promptly after the Company knows or has reason to believe that any
Default has occurred, a notice of such Default describing the same
in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company
has taken or proposes to take with respect thereto;
(x) promptly after the termination or expiration of any
Correctional and Detention Facility Agreement, PRO FORMA financial
projections prepared by the Company demonstrating that after giving
effect to such termination or expiration (and any replacement
Correctional and Detention Facility Agreement therefor) the Company
will be in compliance with its obligations under SECTIONS 5.1(J),
(K), (L), (M), (N) and (O) hereof for the period commencing on the
date of such termination and ending on the Lease Termination Date;
and
(xi) from time to time such other information regarding the
financial condition, operations, business or prospects of the
Company or any of its Subsidiaries (including,
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without limitation, any Plan or Multiemployer Plan and any reports
or other information required to be filed under ERISA) available to
the Company, as any B Lender, the Lessor or the Administrative Agent
may reasonably request.
The Company will furnish to each of the Lessor, each B Lender and the
Administrative Agent, at the time it furnishes each set of financial statements
pursuant to PARAGRAPH (II), (III) or (IV) above, a certificate of a senior
financial officer of the Company to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing, describing the
same in reasonable detail and describing the action that the Company has taken
or proposes to take with respect thereto). In addition, at the time the Company
furnishes to each of the Lessor, each B Lender and the Administrative Agent, the
financial statements required pursuant to PARAGRAPH (III) above, the Company
shall furnish to each of the Lessor, each B Lender and the Administrative Agent,
a certificate of a senior financial officer setting forth in reasonable detail
the computations necessary to determine whether the Company is in compliance
with SECTIONS 5.1(I), (K), (L), (M),(N) and (O) hereof as of the date as of
which such financial statements have been provided. Further, upon the request of
any B Lender, at the time the Company furnishes the financial statements
required pursuant to paragraph (ii) above, the Company shall furnish to each of
the Lessor, each B Lender and the Administrative Agent, a certificate of a
senior financial officer setting forth in reasonable detail the computations
necessary to determine whether the Company is in compliance with SECTIONS
5.1(I), (K), (L), (M), (N) and (O) hereof as of date as of which such financial
statements have been provided.
(b) LITIGATION. The Company will promptly give to each B Lender
and the Administrative Agent notice of all legal or arbitral proceedings,
and of all proceedings by or before any governmental or regulatory
authority or agency, and any material development in respect of such legal
or other proceedings, affecting the Company or any of its Subsidiaries,
except proceedings that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect.
(c) EXISTENCE, ETC. The Company will, and will cause each of its
Subsidiaries to:
(i) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises;
(ii) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements could be
reasonably expected to (either individually or in the aggregate)
have a Material Adverse Effect;
(iii) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are
being maintained;
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(iv) maintain all of its Properties necessary to the conduct
of its business in good working order and condition, ordinary wear
and tear excepted;
(v) keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted
accounting principles consistently applied; and
(vi) upon notice to the Company, permit representatives of any
B Lender, the Lessor or the Administrative Agent, during normal
business hours, to examine, copy and make extracts from its books
and records, to inspect any of its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such B Lender, the Lessor or the Administrative Agent
(as the case may be).
(d) INSURANCE. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations of comparable size engaged in the same
or similar business and similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily maintained by such
corporations. The Company will in any event maintain (with respect to
itself and each of its Subsidiaries):
(i) CASUALTY INSURANCE -- insurance against loss or damage
covering all of the tangible real and personal Property and
improvements of the Company and each of its Subsidiaries by reason
of any Peril (as defined below) in such amounts (subject to such
reasonable and customary deductibles as shall be satisfactory to the
Required Lenders) as shall be reasonable and customary and
sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy but in any event in an
amount (A) in the case of fixed assets and equipment (including,
without limitation, vehicles), at least equal to 100% of the actual
replacement cost of such assets, subject to deductibles as aforesaid
and (B) in the case of inventory, not less than the fair market
value thereof, subject to deductibles as aforesaid, PROVIDED that
insurance in respect of Perils consisting of floods shall not be
required to be obtained except upon 30 days prior notice from the
Administrative Agent.
(ii) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY AND
PROPERTY DAMAGE -- insurance against liability for bodily injury and
property damage in respect of all vehicles (whether owned, hired or
rented by the Company or any of its Subsidiaries) at any time
located at, or used in connection with, its Properties or operations
in such amounts as are then customary for vehicles used in
connection with similar Properties and businesses, but in any event
to the extent required by applicable law.
(iii) COMPREHENSIVE GENERAL LIABILITY INSURANCE -- insurance
against claims for bodily injury, death or Property damage occurring
on, in or about the Properties (and adjoining streets, sidewalks and
waterways) of the Company and its Subsidiaries, in such
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amounts as are then customary for Property similar in use in the
jurisdictions where such Properties are located.
(iv) WORKERS COMPENSATION INSURANCE -- workers compensation
insurance (including, without limitation, Employers Liability
Insurance) to the extent required by applicable law.
(v) BUSINESS INTERRUPTION INSURANCE -- insurance against loss
of operating income (up to an aggregate amount equal to $20,000,000
and subject to a deductible, or self-insured amount, not in excess
of $100,000) by reason of any Peril.
(vi) PROFESSIONAL LIABILITY INSURANCE -- professional
liability insurance in an amount equal to at least $10,000,000.
Such insurance shall be written by financially responsible companies selected by
the Company and (except for automobile insurance) having an A.M. Best rating of
"A" or better and being in a financial size category of VII or larger (or, with
respect to professional liability insurance only, an equivalent rating by a
European equivalent of A.M. Best), or by other companies acceptable to the
Required Lenders, and (other than for workers compensation) shall name the
Administrative Agent as loss payee (to the extent covering risk of loss or
damage to tangible property) and as an additional named insured as its interests
may appear (to the extent covering any other risk). Each policy referred to in
this SECTION 5.1(D) shall provide that it will not be canceled or reduced, or
allowed to lapse without renewal, except after not less than 30 days notice to
the Administrative Agent and shall also provide that the interests of the
Administrative Agent and the Funding Parties shall not be invalidated by any act
or negligence of the Company or any Person having an interest in any Property
covered by the Mortgage (as defined in the Credit Agreement) nor by occupancy or
use of any such Property for purposes more hazardous than permitted by such
policy nor by any foreclosure or other proceedings relating to such Property.
The Company will advise the Administrative Agent promptly of any significant
policy cancellation (other than any such cancellation in connection with the
replacement thereof), reduction or amendment.
On or before the Initial Closing Date, the Company will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Company hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage and showing
that such insurance will remain in effect through the December 31 falling at
least six months after the date hereof, subject only to the payment of premiums
as they become due. Thereafter, the Company will maintain all insurance required
to be maintained by the Company hereunder through the December 31 of each
subsequent calendar year, subject only to the payment of premiums as they become
due and the availability of such coverage. In addition, the Company will not
modify any of the provisions of any policy with respect to professional
liability insurance without delivering the original copy of the endorsement
reflecting such modification to the Administrative Agent accompanied by a
written report of Summit Global Partners, or any
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other firm of independent insurance brokers of nationally recognized standing,
stating that, in their opinion, such policy (as so modified) adequately protects
the interests of the Funding Parties and the Administrative Agent, is in
compliance with the provisions of this SECTION 5.1(D), and is comparable in all
respects with insurance carried by responsible owners and operators of
businesses similar to those of the Company and its Subsidiaries. The Company
will not obtain or carry separate insurance concurrent in form or contributing
in the event of loss with that required by this SECTION 5.1(D) unless the
Administrative Agent is the named insured thereunder, with loss payable as
provided herein. The Company will immediately notify the Administrative Agent
whenever any such separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.
Without limiting the obligations of the Company under the foregoing
provisions of this SECTION 5.1(D), in the event the Company shall fail to
maintain in full force and effect insurance as required by the foregoing
provisions of this SECTION 5.1(D), then the Administrative Agent may (upon
notice to the Company), but shall have no obligation so to do, procure insurance
covering the interests of the Lenders and the Administrative Agent in such
amounts and against such risks as the Administrative Agent (or the Required
Lenders) shall deem appropriate, and the Company shall reimburse the
Administrative Agent in respect of any premiums paid by the Administrative Agent
in respect thereof.
For purposes hereof, the term "PERIL" shall mean, collectively, fire,
lightning, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
all other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of the Company and its Subsidiaries are
located.
(e) PROHIBITION OF FUNDAMENTAL CHANGES. The Company will not, nor
will it permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution). The Company will not,
nor will it permit any of its Subsidiaries to, acquire any business or
Property from, or capital stock of, or be a party to any acquisition of,
any Person except for (w) purchases of inventory and other Property to be
sold or used in the ordinary course of business, (x) Investments permitted
under SECTION 5.1(H) hereof, (y) Capital Expenditures permitted under
SECTION 5.1(O) hereof and (z) other acquisitions so long as the aggregate
consideration paid by the Obligors for all such acquisitions does not
exceed $250,000. The Company will not, nor will it permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in
one transaction or a series of transactions, any part of its business or
Property, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests, but excluding (i)
obsolete or worn-out Property, tools or equipment no longer used or useful
in its business, or any inventory or other Property sold or disposed of in
the ordinary course of business and on ordinary business terms (so long as
the aggregate fair market value of all such Property disposed of shall not
exceed (x) $3,000,000 in the aggregate and (y) $1,000,000 in any year),
(ii) the granting of Liens to secure the Senior Notes, the Obligations and
any Future Synthetic Lease Financing, (iii) Municipal Transaction
Transfers so long as (x) the aggregate consideration received by the
Obligors in connection with any Municipal Transaction Transfer is
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not less than the depreciated book value of the Property that is the
subject of such Municipal Transaction Transfer, and (y) the aggregate Net
Available Proceeds of all Municipal Transaction Transfer does not exceed
$175,000,000, (iv) sale lease-back transactions that the Obligors are
permitted to enter into pursuant to Section 5.1(p) hereof, and (v) other
dispositions so long as the aggregate fair market value of all Property so
disposed of does not exceed $250,000).
(f) LIMITATION ON LIENS. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired,
except (without duplication):
(i) Liens created pursuant to the Security Documents (as
defined in the Credit Agreement) or the Operative Documents;
(ii) Liens in existence on the date hereof and listed in PART
B of SCHEDULE I hereto;
(iii) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or the
affected Subsidiaries, as the case may be, in accordance with GAAP;
(iv) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or
that are being contested in good faith and by appropriate
proceedings and Liens securing judgments but only to the extent for
an amount and for a period not resulting in an Event of Default
under Section 10(h) hereof;
(v) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(vi) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(vii) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(viii) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by the Company or any of its
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Subsidiaries, each of which Liens either (A) existed on such
Property before the time of its acquisition and was not created in
anticipation thereof or (B) was created solely for the purpose of
securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction)
of such Property; PROVIDED that (i) no such Lien shall extend to or
cover any Property of the Company or such Subsidiary other than the
Property so acquired and improvements thereon and (ii) the principal
amount of Indebtedness secured by any such Lien shall at no time
exceed 80% of the fair market value (as determined in good faith by
a senior financial officer of the Company) of such Property at the
time it was acquired (by purchase, construction or otherwise);
(ix) Liens on the Property of a designated subsidiary securing
Indebtedness permitted pursuant to SECTION 5.1(G)(V) hereof;
(x) Liens securing the Senior Notes that are PARI PASSU with
the Liens under the Security Documents (as defined in the Credit
Agreement); and
(xi) Liens securing any Future Synthetic Lease Financing that
are PARI PASSU with the Liens under the Security Documents.
(g) INDEBTEDNESS. The Company will not, nor will it permit any of
its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except (without duplication):
(i) Indebtedness arising pursuant to the Operative Documents
and Indebtedness arising under the Credit Agreement;
(ii) Indebtedness outstanding on the date hereof and listed in
PART A of SCHEDULE I hereto;
(iii) Indebtedness of Subsidiaries of the Company to the
Company or to other Subsidiaries of the Company;
(iv) Indebtedness of the Company and its Subsidiaries secured
by Liens permitted under SECTION 5.1(F) hereof up to but not
exceeding $1,000,000 at any one time outstanding;
(v) Indebtedness of one or more newly-created Subsidiaries of
the Company that the Company requests be permitted to incur
Indebtedness under this SECTION 5.1(G)(V) and the Combined
Determination Parties agree shall be permitted to incur Indebtedness
under SECTION 5.1(G)(V) (provided that the Funding Parties shall not
condition their agreement on the payment of a fee), in an aggregate
principal amount not to exceed $30,000,000 at any one time
outstanding;
(vi) Indebtedness consisting of the Senior Notes, any
Subordinated Notes, the Obligations and any Future Synthetic Lease
Financing; and
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(vii) additional Indebtedness of the Company and its
Subsidiaries (including, without limitation, Capital Lease
Obligations) up to but not exceeding $2,000,000 at any one time
outstanding.
(h) INVESTMENTS. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(i) The loans identified in PART B of SCHEDULE III hereto,
with the terms and conditions set forth in PART B of SCHEDULE III
hereto, PROVIDED that the aggregate principal amount of such loans,
together with accrued interest thereon, does not exceed $1,300,000;
(ii) operating deposit accounts with banks;
(iii) Permitted Investments;
(iv) Investments by the Company and its Subsidiaries in
capital stock of Subsidiaries of the Company to the extent
outstanding on the date of the financial statements of the Company
and its Subsidiaries referred to in Section 4.1(B) hereof and
advances by the Company and its Subsidiaries to Subsidiaries of the
Company in the ordinary course of business or in connection with a
Relevant Transaction financed with Loans;
(v) Interest Rate Protection Agreements required to be
maintained under the Credit Agreement;
(vi) additional Investments up to but not exceeding $200,000
in the aggregate;
(vii) existing and future Investments comprised of stocks,
bonds and notes of existing or former account debtors of the
Obligors if such Investment was received pursuant to the
consummation of a bankruptcy plan of reorganization or similar
proceedings of such account debtor
(viii) loans or advances by the Company or any of its
Subsidiaries to employees in the ordinary course of business in an
aggregate amount at anyone time outstanding not to exceed $250,000.
(i) DIVIDEND PAYMENTS. The Company will not, nor will it permit
any of its Subsidiaries to, declare or make any Dividend Payment at any
time; PROVIDED that the Company may (i) repurchase shares of its capital
stock so long as the aggregate amount paid by the Company for all such
repurchases does not exceed $2,500,000 in any fiscal year of the Company
and $7,500,000 in the aggregate and (ii) declare or make stock splits
which do not decrease the percentage ownership of any Person in any class
of the capital stock of the Company.
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(j) EBITDAR RATIO I. The Company will not permit the EBITDAR
Ratio I with respect to any period ending on a date that falls within any
period set forth below under the column entitled "Period" to exceed the
applicable ratio set forth under the caption "Ratio" opposite such period:
PERIOD RATIO
------------------------------ ---------
The date hereof through and
including March 31, 2001 3.75 to 1
April 1, 2001 through and
including December 31, 2001 3.50 to 1
January 1, 2002 through and
including June 30, 2002 3.25 to 1
July 1, 2002 through and
including December 31, 2002 3.00 to 1
January 1, 2003 through and
including June 30, 2003 2.75 to 1
July 1, 2003 through and
including June 30, 2004 2.50 to 1
July 1, 2004 and all times
thereafter 2.25 to 1
(k) EBITDAR RATIO II. The Company will not permit the EBITDAR
Ratio II with respect to any period ending on a date that falls within any
period set forth below under the column entitled "Period" to exceed the
applicable ratio set forth under the caption "Ratio" opposite such period:
PERIOD RATIO
------------------------------ ---------
The date hereof through and
including March 31, 2001 5.00 to 1
April 1, 2001 through and
including September 30, 2001 4.50 to 1
October 1, 2001 through and
including March 31, 2002 4.25 to 1
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April 1, 2002 through and
including September 30, 2002 4.00 to 1
October 1, 2002 through and
including March 31, 2003 3.75 to 1
April 1, 2003 through and
including June 30, 2004 3.50 to 1
July 1, 2004 and all times
thereafter 3.25 to 1
(l) NET WORTH. The Company will not permit its Net Worth, as at
the last day of any fiscal quarter of the Company (a "CALCULATION DATE")to
be less than the sum of the following
(i) $90,000,000, PLUS
(ii) an amount equal to 50% of the aggregate net income of the
Company and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP) for each fiscal quarter of the Company for
which such net income is a positive number, commencing with the
fiscal quarter ending on September 30, 2000 and ending with the
fiscal quarter ending on the Calculation Date, PLUS
(iii) an amount equal to the aggregate Net Available Proceeds
received in respect of Equity Issuances during the period commencing
on July 1, 2000 and ending on the last day of such fiscal quarter.
(m) INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio with respect to any period ending on a date that
falls within any period set forth below under the column entitled "Period"
to be less than the applicable ratio set forth under the caption "Ratio"
opposite such period:
PERIOD RATIO
------------------------------ ---------
the date hereof through and
including March 31, 2003 2.00 to 1
April 1, 2003 through and
including December 31, 2003 2.25 to 1
January 1, 2004 through and
including June 30, 2004 2.50 to 1
July 1, 2004 and all times
thereafter 2.75 to 1
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(n) FIXED CHARGES RATIO. The Company will not permit the Fixed
Charges Ratio with respect to any period ending on a date that falls
within any period set forth below under the column entitled "Period" to be
less than the applicable ratio set forth under the caption "Ratio"
opposite such period:
PERIOD RATIO
------------------------------ ---------
The Date hereof through and
including March 31, 2001 1.55 to 1
April 1, 2001 through and
including June 30, 2003 1.60 to 1
July 1, 2003 and all times
thereafter 1.50 to 1
(o) CAPITAL EXPENDITURES. The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures at any
time, except for the following:
(i) maintenance Capital Expenditures in an aggregate amount in
any year not to exceed an amount equal to 3% of the total revenues
of the Company and its Subsidiaries for such year; and
(ii) Capital Expenditures made in connection with Eligible
Acquisitions and Eligible New Contracts.
(p) SALE LEASE-BACK TRANSACTIONS. Except for Municipal
Transactions, the Company will not, and will not permit any of its
Subsidiaries to, enter into any arrangement with any Person whereby the
Company or such Subsidiary shall sell or otherwise transfer any of its
Property, whether now owned or hereafter acquired, and thereafter rent or
lease such Property or similar Property for substantially the same use or
uses as the Property sold or transferred unless the following conditions
are satisfied: (1)the consideration received by the Company or such
Subsidiary in connection with such transfer is at least equal to the fair
market value of the Property so transferred (as reasonably determined by
the board of directors of the Company), (2) all of the net proceeds
received by the Company or any of its Subsidiaries in connection with any
such transaction are used by the Company, within 12 months of the receipt
thereof, to either (a) acquire other Property in compliance with the term
of this Agreement and/or (b) repay or prepay Indebtedness of the Company
or any of its Subsidiaries (other than any Subordinated Notes) and (3) the
aggregate consideration received by the Obligors in connection with all
such sale lease-back transactions entered into after the date hereof shall
not exceed $20,000,000.
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(q) DISCOUNT OF ACCOUNTS. The Company will not, and will not
permit any of its Subsidiaries to, sell (with or without recourse) or
discount any of their accounts receivable.
(r) LINES OF BUSINESS. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than the business of operating correctional and/or
detention facilities, juvenile facilities, pre-release facilities and
substance abuse rehabilitation facilities and related lines of business.
(s) TRANSACTIONS WITH AFFILIATES. Except as expressly permitted
by this Master Agreement, the Company will not, nor will it permit any of
its Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase
or acquire Property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, Guarantees and assumptions of obligations
of an Affiliate); PROVIDED that (x) any Affiliate who is an individual may
serve as a director, officer or employee of the Company or any of its
Subsidiaries and receive reasonable compensation for his or her services
in such capacity and (y) the Company and its Subsidiaries may enter into
transactions (other than extensions of credit by the Company or any of its
Subsidiaries to an Affiliate or the payment of management or similar fees
by the Company or a Subsidiary to an Affiliate) providing for the leasing
of Property, the rendering or receipt of services or the purchase or sale
of inventory and other Property in the ordinary course of business if the
monetary or business consideration arising therefrom would be
substantially as advantageous to the Company and its Subsidiaries as the
monetary or business consideration that would obtain in a comparable
transaction with a Person not an Affiliate.
(t) USE OF PROCEEDS. The Lessees will use the proceeds of the
Fundings solely to acquire Land and Buildings and fund Construction and
related costs.
(u) Certain Obligations Respecting Subsidiaries.
(i) The Company will, and will cause each of its Subsidiaries
to, take such action from time to time as shall be necessary to
ensure that each of its Subsidiaries is a Wholly Owned Subsidiary.
(ii) In the event that any additional shares of capital stock
shall be issued by any Subsidiary of the Company, the respective
Obligor agrees forthwith to deliver to the Administrative Agent
pursuant to the Security Agreement (as defined in the Credit
Agreement) the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank and to take
such other action as the Administrative Agent shall request to
perfect the security interest created therein pursuant to the
Security Agreement.
(iii) The Company will take such action, and will cause each
of its Subsidiaries to take such action, from time to time as shall
be necessary to ensure that all Subsidiaries
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of the Company are Subsidiary Guarantors and, thereby, "Obligors"
hereunder. Without limiting the generality of the foregoing, in the
event that the Company or any of its Subsidiaries shall form or
acquire any new Subsidiary, the Company or the respective Subsidiary
will cause such new Subsidiary to become a "Subsidiary Guarantor"
(and, thereby, an "Obligor") hereunder pursuant to a written
instrument in form and substance satisfactory to each Lender and the
Administrative Agent, and to deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as
any Funding Party or the Administrative Agent shall have requested.
(v) MODIFICATIONS OF CERTAIN DOCUMENTS. No Obligor will consent
to any material modification, supplement or waiver of any of the
provisions of any Correctional and Detention Facility Contract or any of
the subordination provisions of the 2000 Subordinated Notes Documentation
(except to the extent permitted by Section 2.11 of the 2000 Subordination
Agreement) or any other Subordinated Notes Documents.
(w) THE CORNELL COX GROUP, L.P. The Cornell Cox Group, L.P., a
Delaware limited partnership, shall not hold or acquire any Property and
shall not incur any Indebtedness or other liabilities in addition to those
in existence as of the date hereof, which are correctly set forth on
SCHEDULE VI hereto.
(x) PREPAYMENT OF 2000 SUBORDINATED DEBT. Neither the Company nor
any of its Subsidiaries shall purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Notes, except for regularly scheduled payments of principal
and interest in respect thereof required pursuant to the instruments
evidencing such Subordinated Notes; provided that any such prepayments may
be made so long as (i) no Funded Amounts are outstanding and (ii) no
Default shall be continuing.
SECTION 5.2 FURTHER ASSURANCES. Upon the written request of the Lessor or
the Administrative Agent, each Lessee, at its own cost and expense, will cause
all financing statements (including precautionary financing statements), fixture
filings and other similar documents, to be recorded or filed at such places and
times in such manner, as may be necessary to preserve, protect and perfect the
interest of the Lessor, the Administrative Agent and the B Lenders in the Leased
Properties as contemplated by the Operative Documents.
SECTION 5.3 ADDITIONAL REQUIRED APPRAISALS. If, as a result of any change
in Applicable Law after the date hereof, an appraisal of all or any of the
Leased Properties is required during the Lease Term under Applicable Law with
respect to any Funding Partys interest therein, such Funding Partys Funded
Amount with respect thereto or the Operative Documents, then the related
Lessee(s) shall pay the reasonable cost of such appraisal, but no more than one
time during each 24 month period after the Initial Closing Date.
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SECTION 5.4 LESSOR'S COVENANTS. The Lessor covenants and agrees that,
unless the Administrative Agent, the Company, and the B Lenders shall have
otherwise consented in writing:
(a) the proceeds of the Loans received from the Lenders will be
used by the Lessor solely to acquire the related Leased Property and to
pay the Construction Agent or the related Lessee for certain closing,
development and transaction costs associated therewith and, if applicable,
for the costs of Construction (including capitalized interest and fees).
No portion of the proceeds of the Loans will be used by the Lessor (i) in
connection with, whether directly or indirectly, any tender offer for, or
other acquisition of, stock of any corporation with a view towards
obtaining control of such other corporation or (ii) directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock;
(b) it shall not engage in any business or activity, or invest
in any Person, except for the Transaction and lease transactions similar
to the Transaction;
(c) it will maintain tangible net worth in an amount no less
than the sum of (i) $100,000 PLUS (ii) 3% of its total assets (calculated
assuming no reduction in the value of any leased property from its
original cost to the Lessor);
(d) it will deliver to the Administrative Agent and the
Company, as soon as available and in any event within 90 days after the
end of each fiscal year, a balance sheet of the Lessor as of the end of
such fiscal year and the related statements of income, partners capital
and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, together with
copies of its tax returns, all certified by an officer of the General
Partner (and if the Lessor ever prepares audited financial statements, it
shall deliver copies thereof to the Administrative Agent and the Company);
(e) it will permit the Administrative Agent, the Company and their
respective representatives to examine, and make copies from, the Lessors
books and records, and to visit the offices and properties of the Lessor
for the purpose of examining such materials, and to discuss the Lessors
performance hereunder with any of its, or its general partners, officers
and employees;
(f) it shall not consent to the creation of any easement or other
restriction against any Leased Property other than as permitted pursuant
to Article VI of the Lease;
(g) it shall promptly discharge each Lessor Lien and shall
indemnify and hold harmless the B Lenders and the Lessees for any costs or
expenses related to a Lessor Lien and discharging such Lessor Lien,
including, without limitation, any diminution in value of any Leased
Property resulting from such Lessor Liens;
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(h) it may not consolidate with or merge into any other Person or
sell all or substantially all of its assets to any Person;
(i) it shall not sell, mortgage or encumber or assign or
otherwise grant any Lien upon, its right, title, interest or obligations
in the Leased Property or under any Operative Document, other than an
assignment and security interest to the Administrative Agent and the B
Lenders pursuant to the Loan Documents; and
(j) it shall comply with all of its obligations under the
Operative Documents, except to the extent that compliance is prevented by
any failure on the part of any Lessee or the Company to perform its
obligations under the Lease.
ARTICLE VI
TRANSFERS BY LESSOR AND LENDERS
SECTION 6.1 LESSOR TRANSFERS. The Lessor shall not assign, convey or
otherwise transfer all or any portion of its right, title or interest in, to or
under any Leased Property or any of the Operative Documents without the prior
written consent of the Lenders and the Company. Any proposed transferee of the
Lessor shall make the representation set forth in SECTION 4.3 to the other
parties hereto.
SECTION 6.2 LENDER TRANSFERS.
(a) Any B Lender may make, carry or transfer its B Loans at, to
or for the account of, any of its branch offices or the office of an
Affiliate of such B Lender.
(b) Each B Lender may assign all or a portion of its interests,
rights and obligations under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitment and the B Loans at the time
owing to it) to any Eligible Assignee; PROVIDED, HOWEVER, that (i) subject
to Section 14.9(c) of the Lease, the Administrative Agent and, except
during the continuance of a Default, the Company must give its prior
written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is to an
Affiliate of the assigning B Lender, (ii) unless such B Lender is
assigning all of its Commitment, after giving effect to such assignment,
the Commitment of both the assignor and the assignee is at least
$1,000,000,(iii) such B Lender will assign its Commitment hereunder and
its commitment under the Credit Agreement, and its B Loans and its
Synthetic Lease Loans, together, on a pro rata basis, and (iv) the parties
to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and, unless such assignment is to an
Affiliate of such B Lender, a processing and recordation fee of $3,000. No
Lessee shall be responsible for such processing and recordation fee or any
costs or expenses incurred by any B Lender or the Administrative Agent in
connection with such assignment. From and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, the assignee
thereunder shall be a party
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hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Master
Agreement and the Loan Agreement.
(c) Each B Lender may, without the consent of the Company or any
Lessee, sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Master Agreement and
the Loan Agreement (including all or a portion of its Commitment and the B
Loans owing to it), PROVIDED, HOWEVER, that (i) such B Lenders obligations
under this Master Agreement and the Loan Agreement shall remain unchanged,
(ii) such B Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participating
bank or other entity shall not be entitled to any greater benefit than its
selling Lender under the cost protection provisions contained in Section
7.5 of this Master Agreement, and (iv) each Lessee, the Administrative
Agent and the other Lenders shall continue to deal solely and directly
with such B Lender in connection with such B Lenders rights and
obligations under this Master Agreement and the other Operative Documents,
and such B Lender shall retain the sole right to enforce the obligations
of Lessor relating to the B Loans and to approve any amendment,
modification or waiver of any provisions of this Master Agreement and the
Loan Agreement (except that such Lender may permit the participant to
approve any amendment, modification or waiver which would reduce the
principal of or the interest rate on its B Loan, extend the term of such B
Lenders Commitment, reduce the amount of any fees to which such
participant is entitled or extend the final scheduled payment date of any
B Loan). Any B Lender selling a participation hereunder shall provide
prompt written notice to the Administrative Agent of the name of such
participant.
(d) Any B Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation,
pursuant to this Section, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Company
or its Subsidiaries furnished to such B Lender by or on behalf of the
Company. With respect to any disclosure of confidential, non-public,
proprietary information, such proposed assignee or participant shall agree
to use the information only for the purpose of making any necessary credit
judgments with respect to this facility and not to use the information in
any manner prohibited by any law, including without limitation, the
securities laws of the United States. The proposed participant or assignee
shall agree not to disclose any of such information except as permitted by
this Master Agreement. The proposed participant or assignee shall further
agree to return all documents or other written material and copies thereof
received from any Lender, the Administrative Agent or Lessee relating to
such confidential information unless otherwise properly disposed of by
such entity.
(e) Any B Lender may at any time assign all or any portion of its
rights under this Master Agreement and the Notes to a Federal Reserve
Bank; PROVIDED that no such assignment shall release such B Lender from
any of its obligations hereunder.
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ARTICLE VII
INDEMNIFICATION
SECTION 7.1 GENERAL INDEMNIFICATION. Each of the Company and each Lessee,
jointly and severally, agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and to
indemnify, protect, defend, save and hold harmless each Indemnitee, on an
After-Tax Basis, from and against, any and all Claims that may be imposed on,
incurred by or asserted, or threatened to be asserted, against such Indemnitee,
whether or not such Indemnitee shall also be indemnified as to any such Claim by
any other Person and whether or not such Claim arises or accrues prior to any
Closing Date or after the Lease Termination Date, in any way relating to or
arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in respect
thereof; or
(b) any Land, any Building or any part thereof or interest
therein, including any Ground Lease;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition,
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to the Lease), return or other disposition
of all or any part of any interest in any Leased Property or the
imposition of any Lien, other than a Lessor Lien (or incurring of any
liability to refund or pay over any amount as a result of any Lien, other
than a Lessor Lien) thereon, including, without limitation: (i) Claims or
penalties arising from any violation or alleged violation of law or in
tort (strict liability or otherwise), (ii) latent or other defects,
whether or not discoverable, (iii) any Claim based upon a violation or
alleged violation of the terms of any restriction, easement, condition or
covenant or other matter affecting title to any Leased Property or any
part thereof, (iv) the making of any Alterations in violation of any
standards imposed by any insurance policies required to be maintained by
any Lessee pursuant to the Lease which are in effect at any time with
respect to any Leased Property or any part thereof, (v) any Claim for
patent, trademark or copyright infringement, (vi) Claims arising from any
public improvements with respect to any Leased Property resulting in any
charge or special assessments being levied against any Leased Property or
any Claim for utility "tap-in" fees, and (vii) Claims for personal injury
or real or personal property damage occurring, or allegedly occurring, on
any Land, Building or Leased Property;
(d) the breach or alleged breach by any Lessee or the Company of
any representation or warranty made by it or deemed made by it in any
Operative Document or any certificate required to be delivered by any
Operative Document;
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(e) the retaining or employment of any broker, finder or
financial advisor by the Company or any Lessee to act on its behalf in
connection with this Master Agreement, or the incurring of any fees or
commissions to which the Lessor, the Administrative Agent or any Lender
might be subjected by virtue of their entering into the transactions
contemplated by this Master Agreement (other than fees or commissions due
to any broker, finder or financial advisor retained by the Lessor, the
Administrative Agent or any Lender);
(f) the existence of any Lien (other than Lessor Liens) on or
with respect to any Leased Property, the Construction, any Basic Rent or
Supplemental Rent, title thereto, or any interest therein, including any
Liens which arise out of the possession, use, occupancy, construction,
repair or rebuilding of any Leased Property or by reason of labor or
materials furnished or claimed to have been furnished to the Construction
Agent, any Lessee, or any of its contractors or agents or by reason of the
financing of any personalty or equipment purchased or leased by any Lessee
or Alterations constructed by any Lessee;
(g) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction described in
Section 4975(c) of the Code; or
(h) any act or omission by the Company or any Lessee under any
Purchase Agreement or any other Operative Document, and any breach of any
requirement, condition, restriction or limitation in any Deed, Purchase
Agreement or Ground Lease;
PROVIDED, HOWEVER, the neither the Company nor the Lessee shall be required to
indemnify any Indemnitee under this SECTION 7.1 for any Claim to the extent that
such Claim results from the willful misconduct, gross negligence or
misrepresentation of such Indemnitee, or from the failure of the Indemnitee to
comply with its obligations under any of the Operative Documents; and, PROVIDED,
FURTHER, that with respect to each Construction Land Interest, each Lessees
indemnity obligations with respect to such Leased Property shall be governed by
Section 3.3 of the Construction Agency Agreement during the Construction Term
therefor. It is expressly understood and agreed that the indemnity provided for
herein shall survive the expiration or termination of, and shall be separate and
independent from any other remedy under this Master Agreement, the Lease or any
other Operative Document.
SECTION 7.2 ENVIRONMENTAL INDEMNITY. In addition to and without limitation
of SECTION 7.1 or Section 3.3 of the Construction Agency Agreement, each of the
Company and each Lessee, jointly and severally, agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including without limitation third party claims for personal injury or real or
personal property damage), losses (including but not limited to any loss of
value of any Leased Property), damages, liabilities, fines, penalties, charges,
suits, settlements, demands, administrative and judicial proceedings (including
informal proceedings and investigations) and orders, judgments, remedial action,
requirements, enforcement actions of
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any kind, and all reasonable costs and expenses actually incurred in connection
therewith (including, but not limited to, reasonable attorneys and/or paralegals
fees and expenses), including, but not limited to, all costs incurred in
connection with any investigation or monitoring of site conditions or any
clean-up, remedial, removal or restoration work by any federal, state or local
government agency, arising directly or indirectly, in whole or in part, out of
(i) the presence on or under any Land of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials
on, under, from or onto any Land,
(ii) any activity, including, without limitation,
construction, carried on or undertaken on or off any Land, and
whether by a Lessee or any predecessor in title or any employees,
agents, contractors or subcontractors of a Lessee or any predecessor
in title, or any other Person, in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Materials that at any time are located or
present on or under or that at any time migrate, flow, percolate,
diffuse or in any way move onto or under any Land,
(iii) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource
damages), or death or injury to any Person, and all expenses
associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by
or under Environmental Laws, in each case to the extent related to
any Leased Property,
(iv) any claim concerning any Leased Propertys lack of
compliance with Environmental Laws, or any act or omission causing
an environmental condition on or with respect to any Leased Property
that requires remediation or would allow any governmental agency to
record a lien or encumbrance on the land records, or
(v) any residual contamination on or under any Land, or
affecting any natural resources on any Land, and to any
contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or
disposal of any such Hazardous Materials on or from any Leased
Property; in each case irrespective of whether any of such
activities were or will be undertaken in accordance with applicable
laws, regulations, codes and ordinances;
in any case with respect to the matters described in the foregoing CLAUSES (I)
through (V) that arise or occur
(w) prior to or during the Lease Term,
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(x) at any time during which a Lessee or any Affiliate thereof
owns any interest in or otherwise occupies or possesses any Leased
Property or any portion thereof, or
(y) during any period after and during the continuance of any
Event of Default;
PROVIDED, HOWEVER, neither the Company nor any Lessee shall be required to
indemnify any Indemnitee under this SECTION 7.2 for any Claim to the extent that
such Claim results from the willful misconduct or gross negligence of such
Indemnitee. It is expressly understood and agreed that the indemnity provided
for herein shall survive the expiration or termination of and shall be separate
and independent from any other remedy under this Master Agreement, the Lease or
any other Operative Document.
SECTION 7.3 PROCEEDINGS IN RESPECT OF CLAIMS. With respect to any amount
that a Lessee is requested by an Indemnitee to pay by reason of SECTION 7.1 or
7.2, such Indemnitee shall, if so requested by such Lessee and prior to any
payment, submit such additional information to such Lessee as such Lessee may
reasonably request and which is in the possession of, or under the control of,
such Indemnitee to substantiate properly the requested payment. In case any
action, suit or proceeding shall be brought against any Indemnitee, such
Indemnitee promptly shall notify the Company of the commencement thereof
(PROVIDED that the failure of such Indemnitee to promptly notify the Company
shall not affect the Companys or any Lessees obligation to indemnify hereunder
except to the extent that any Lessees ability to contest is materially
prejudiced by such failure), and a Lessee shall be entitled, at its expense, to
participate in, and, to the extent that a Lessee desires to, assume and control
the defense thereof with counsel reasonably satisfactory to such Indemnitee;
PROVIDED, HOWEVER, that such Indemnitee may pursue a motion to dismiss such
Indemnitee from such action, suit or proceeding with counsel of such Indemnitees
choice at the Lessees expense; and PROVIDED FURTHER that a Lessee may assume and
control the defense of such proceeding only if the Company shall have
acknowledged in writing its and each Lessees obligations to fully indemnify such
Indemnitee in respect of such action, suit or proceeding, Lessees shall pay all
reasonable costs and expenses related to such action, suit or proceeding as and
when incurred and the related Lessee shall keep such Indemnitee fully apprised
of the status of such action suit or proceeding and shall provide such
Indemnitee with all information with respect to such action suit or proceeding
as such Indemnitee shall reasonably request; and, PROVIDED FURTHER, that no
Lessee shall be entitled to assume and control the defense of any such action,
suit or proceeding if and to the extent that, (A) in the reasonable opinion of
such Indemnitee, (x) such action, suit or proceeding involves any possibility of
imposition of criminal liability or any material risk of civil liability on such
Indemnitee in excess of $5,000,000 or (y) the control of such action, suit or
proceeding would involve an actual or potential conflict of interest, (B) such
proceeding involves Claims not fully indemnified by the Lessees which the
Lessees and the Indemnitee have been unable to sever from the indemnified
claim(s), or (C) an Event of Default has occurred and is continuing. The
Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by a Lessee in accordance with the
foregoing.
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If the Lessees fails to fulfill the conditions to a Lessees assuming the
defense of any claim after receiving notice thereof on or prior to the date that
is fifteen (15) days prior to the date that an answer or response is required,
the Indemnitee may undertake such defense, at the Lessees expense. No Lessee
shall enter into any settlement or other compromise with respect to any Claim
which is entitled to be indemnified under SECTION 7.1 or 7.2 that is in excess
of $1,000,000 or that acknowledges guilt or fault on the part of the related
Indemnitee without the prior written consent of the related Indemnitee, which
consent shall not be unreasonably withheld. Unless an Event of Default shall
have occurred and be continuing, no Indemnitee shall enter into any settlement
or other compromise with respect to any claim which is entitled to be
indemnified under SECTION 7.1 or 7.2 without the prior written consent of the
Company, which consent shall not be unreasonably withheld, unless such
Indemnitee waives its right to be indemnified under SECTION 7.1 or 7.2 with
respect to such Claim.
Upon payment in full of any Claim by the Lessees pursuant to SECTION 7.1
or 7.2 to or on behalf of an Indemnitee, Lessees, without any further action,
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessees and give
such further assurances as are reasonably necessary or advisable to enable
Lessees vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to SECTION 7.1 or 7.2 shall
be paid to such Indemnitee promptly upon, but in no event later than thirty (30)
days after, receipt of a written demand therefor from such Indemnitee,
accompanied by a written statement describing in reasonable detail the basis for
such indemnity and the computation of the amount so payable.
If for any reason the indemnification provided for in SECTION 7.1 or 7.2
is unavailable to an Indemnitee or is insufficient to hold an Indemnitee
harmless, then each Lessee agrees to contribute to the amount paid or payable by
such Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnitee on the one hand and by each Lessee on the other hand but also
the relative fault of such Indemnitee as well as any other relevant equitable
considerations. It is expressly understood and agreed that the right to
contribution provided for herein shall survive the expiration or termination of
and shall be separate and independent from any other remedy under this Master
Agreement, the Lease or any other Operative Document.
SECTION 7.4 GENERAL TAX INDEMNITY.
(a) TAX INDEMNITY. Except as otherwise provided in this
SECTION 7.4, each of the Company and each Lessee, jointly and severally,
shall pay on an After-Tax Basis, and on written demand shall indemnify and
hold each Tax Indemnitee harmless from and against, any and all fees
(including, without limitation, documentation, recording, license and
registration fees), taxes
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(including, without limitation, income, gross receipts, sales, rental,
use, turnover, value-added, property, excise and stamp taxes), levies,
imposts, duties, charges, assessments or withholdings of any nature
whatsoever, together with any penalties, fines or interest thereon or
additions thereto (any of the foregoing being referred to herein as
"TAXES" and individually as a "TAX" (for the purposes of this SECTION 7.4,
the definition of "Taxes" includes amounts imposed on, incurred by, or
asserted against each Tax Indemnitee as the result of any prohibited
transaction, within the meaning of Section 406 or 407 of ERISA or Section
4975(c) of the Code, arising out of the transactions contemplated hereby
or by any other Operative Document)) imposed on or with respect to any Tax
Indemnitee, any Lessee, the Company, any Leased Property or any portion
thereof or any Land, or any sublessee or user thereof, by the United
States or by any state or local government or other taxing authority in
the United States in connection with or in any way relating to (i) the
acquisition, financing, mortgaging, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
purchase, ownership, possession, rental, lease, sublease, maintenance,
repair, storage, transfer of title, redelivery, use, operation, condition,
sale, return or other application or disposition of all or any part of any
Leased Property or the imposition of any Lien (or incurrence of any
liability to refund or pay over any amount as a result of any Lien)
thereon, (ii) Basic Rent or Supplemental Rent or the receipts or earnings
arising from or received with respect to any Leased Property or any part
thereof, or any interest therein or any applications or dispositions
thereof, (iii) any other amount paid or payable pursuant to the Notes or
any other Operative Documents, (iv) any Leased Property, any Land or any
part thereof or any interest therein (including, without limitation, all
assessments payable in respect thereof, including, without limitation, all
assessments noted on the related Title Policy), (v) all or any of the
Operative Documents, any other documents contemplated thereby, any
amendments and supplements thereto, and (vi) otherwise with respect to or
in connection with the transactions contemplated by the Operative
Documents.
(b) Exclusions from General Tax Indemnity. Section 7.4(a) shall
not apply to:
(i) Taxes on, based on, or measured by or with respect to net
income of the Lessor, the Administrative Agent and the Lenders
(including, without limitation, minimum Taxes, capital gains Taxes,
Taxes on or measured by items of tax preference or alternative
minimum Taxes) other than (A) any such Taxes that are, or are in the
nature of, sales, use, license, rental or property Taxes, and (B)
withholding Taxes imposed by the United States or any state in which
Leased Property is located (i) on payments with respect to the
Notes, to the extent imposed by reason of a change in Applicable Law
occurring after the date on which the holder of such Note became the
holder of such Note or (ii) on Rent, to the extent the net payment
of Rent after deduction of such withholding Taxes would be less than
amounts currently payable with respect to the Funded Amounts;
(ii) Taxes on, based on, or in the nature of or measured by
Taxes on doing business, business privilege, franchise, capital,
capital stock, net worth, or mercantile license or similar taxes
other than (A) any increase in such Taxes imposed on such Tax
Indemnitee by any state in which Leased Property is located, net of
any decrease in such taxes realized by such Tax Indemnitee, to the
extent that such tax increase would not
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have occurred if on each Funding Date the Lessor and the Lenders had
advanced funds to a Lessee or the Construction Agent in the form of
loans secured by the Leased Property in an amount equal to the
Funded Amounts funded on such Funding Date, with debt service for
such loans equal to the Basic Rent payable on each Payment Date and
a principal balance at the maturity of such loans in a total amount
equal to the Funded Amounts at the end of the Lease Term, or (B) any
Taxes that are or are in the nature of sales, use, rental, license
or property Taxes relating to any Leased Property;
(iii) Taxes that are based on, or measured by, the fees or
other compensation received by a Person acting as Administrative
Agent (in its individual capacities) or any Affiliate of any thereof
for acting as trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or omission, or are
attributable to any period of time, that occurs after the earlier of
(A) the expiration of the Lease Term with respect to any Leased
Property and, if such Leased Property is required to be returned to
the Lessor in accordance with the Lease, such return and (B) the
discharge in full of the Lessees' obligations to pay the Lease
Balance, or any amount determined by reference thereto, with respect
to any Leased Property and all other amounts due under the Lease,
unless such Taxes relate to acts, events or matters occurring prior
to the earlier of such times or are imposed on or with respect to
any payments due under the Operative Documents after such expiration
or discharge;
(v) Taxes imposed on a Tax Indemnitee that result from any
voluntary sale, assignment, transfer or other disposition or
bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of
any interest in any Leased Property or any part thereof, or any
interest therein or any interest or obligation arising under the
Operative Documents, or from any sale, assignment, transfer or other
disposition of any interest in such Tax Indemnitee or any related
Tax Indemnitee, it being understood that each of the following shall
not be considered a voluntary sale: (A) any substitution,
replacement or removal of any of the Leased Property by any Lessee,
(B) any sale or transfer resulting from the exercise by any Lessee
of any termination option, any purchase option or sale option, (C)
any sale or transfer while an Event of Default shall have occurred
and be continuing under the Lease, and (D) any sale or transfer
resulting from the Lessors exercise of remedies under the Lease;
(vi) any Tax which is being contested in accordance with the
provisions of SECTION 7.4(c), during the pendency of such contest;
(vii) any Tax that is imposed on a Tax Indemnitee as a result
of such Tax Indemnitees gross negligence or willful misconduct
(other than gross negligence or willful misconduct imputed to such
Tax Indemnitee solely by reason of its interest in any Leased
Property);
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(viii) any Tax that results from a Tax Indemnitee engaging,
with respect to any Leased Property, in transactions other than
those permitted by the Operative Documents;
(ix) to the extent any interest, penalties or additions to tax
result in whole or in part from the failure of a Tax Indemnitee to
file a return or pay a Tax that it is required to file or pay in a
proper and timely manner, unless such failure (A) results from the
transactions contemplated by the Operative Documents in
circumstances where Lessee did not give timely notice to such Tax
Indemnitee of such filing or payment requirement that would have
permitted a proper and timely filing of such return or payment of
such Tax, as the case may be, or (B) results from the failure of a
Lessee to supply information necessary for the proper and timely
filing of such return or payment of such Tax, as the case may be,
that was not in the possession of such Tax Indemnitee; and
(x) as to Lessor, any Tax that results from the breach by the
Lessor of its representation and warranty made in SECTION 4.2(g) or
as to any Lender the breach of such Lender of its representation and
warranty made in SECTION 4.3(b).
(c) CONTESTS. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax
Indemnitee (including a written notice of such proceeding) for any Taxes
as to which Lessees may have an indemnity obligation pursuant to SECTION
7.4, or if any Tax Indemnitee shall determine that any Taxes as to which
the Lessees may have an indemnity obligation pursuant to SECTION 7.4 may
be payable, such Tax Indemnitee shall promptly notify the Company. The
Company shall be entitled, at its expense, to participate in, and, to the
extent that the Company desires to, assume and control the defense
thereof; PROVIDED, HOWEVER, that the Company shall have acknowledged in
writing its obligation to fully indemnify such Tax Indemnitee in respect
of such action, suit or proceeding if the contest is unsuccessful; and,
PROVIDED FURTHER, that the Company shall not be entitled to assume and
control the defense of any such action, suit or proceeding (but the Tax
Indemnitee shall then contest, at the sole cost and expense of the
Company, on behalf of the Company with representatives reasonably
satisfactory to the Company) if and to the extent that, (A) in the
reasonable opinion of such Tax Indemnitee, such action, suit or proceeding
involves any meaningful risk of imposition of criminal liability or any
material risk of civil liability on such Tax Indemnitee in excess of
$5,000,000,(B) such proceeding involves Claims not fully indemnified by
the Lessees which the Company and the Tax Indemnitee have been unable to
sever from the indemnified claim(s), (C) an Event of Default has occurred
and is continuing, (D) such action, suit or proceeding involves matters
which extend beyond or are unrelated to the Transaction and if determined
adversely could be materially detrimental to the interests of such Tax
Indemnitee notwithstanding indemnification by Lessees or (E) such action,
suit or proceeding involves the federal or any state income tax liability
of the Tax Indemnitee. With respect to any contests controlled by a Tax
Indemnitee, (i) if such contest relates to the federal or any state income
tax liability of such Tax Indemnitee, such Tax Indemnitee shall be
required to conduct such contest only if the Company shall have provided
to such Tax Indemnitee an opinion of independent tax counsel selected by
the Tax Indemnitee and reasonably satisfactory to the Company stating that
a reasonable basis exists to contest such claim or (ii) in the case of an
appeal of an adverse
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determination of any contest relating to any Taxes, an opinion of such
counsel to the effect that such appeal is more likely than not to be
successful, PROVIDED, HOWEVER, such Tax Indemnitee shall in no event be
required to appeal an adverse determination to the United States Supreme
Court. The Tax Indemnitee may participate in a reasonable manner at its
own expense and with its own counsel in any proceeding conducted by the
Company in accordance with the foregoing.
Each Tax Indemnitee shall at Lessees expense supply the Company with
such information and documents in such Tax Indemnitees possession
reasonably requested by the Company as are necessary or advisable for the
Company to participate in any action, suit or proceeding to the extent
permitted by this SECTION 7.4. Unless an Event of Default shall have
occurred and be continuing, no Tax Indemnitee shall enter into any
settlement or other compromise with respect to any Claim which is entitled
to be indemnified under this SECTION 7.4 without the prior written consent
of the Company, which consent shall not be unreasonably withheld, unless
such Tax Indemnitee waives its right to be indemnified under this SECTION
7.4 with respect to such Claim.
Notwithstanding anything contained herein to the contrary, (a) a Tax
Indemnitee will not be required to contest (and the Company shall not be
permitted to contest except on its own behalf if it is subject thereto) a
claim with respect to the imposition of any Tax if such Tax Indemnitee
shall waive its right to indemnification under this SECTION 7.4 with
respect to such claim (and any related claim with respect to other taxable
years the contest of which is precluded as a result of such waiver) and
(b) no Tax Indemnitee shall be required to contest any claim if the
subject matter thereof shall be of a continuing nature and shall have
previously been decided adversely, unless there has been a change in law
which in the opinion of Tax Indemnitees counsel creates substantial
authority for the success of such contest. Each Tax Indemnitee and the
Company shall consult in good faith with each other regarding the conduct
of such contest controlled by either.
(d) REIMBURSEMENT FOR TAX SAVINGS. If (x) a Tax Indemnitee shall
obtain a credit or refund of any Taxes paid by the Company or any Lessee
pursuant to this SECTION 7.4 or (y) by reason of the incurrence or
imposition of any Tax for which a Tax Indemnitee is indemnified hereunder
or any payment made to or for the account of such Tax Indemnitee by the
Company or any Lessee pursuant to this SECTION 7.4, such Tax Indemnitee at
any time realizes a reduction in any Taxes for which Lessees are not
required to indemnify such Tax Indemnitee pursuant to this SECTION 7.4,
which reduction in Taxes was not taken into account in computing such
payment by Lessee to or for the account of such Tax Indemnitee, then such
Tax Indemnitee shall promptly pay to the Company (xx) the amount of such
credit or refund, together with the amount of any interest received by
such Tax Indemnitee on account of such credit or refund or (yy) an amount
equal to such reduction in Taxes, as the case may be; PROVIDED that no
such payment shall be made so long as an Event of Default shall have
occurred and be continuing and, PROVIDED, FURTHER, that the amount payable
to the Company by any Tax Indemnitee pursuant to this SECTION 7.4(D) shall
not at any time exceed the aggregate amount of all indemnity payments made
by the Company and the Lessees under this SECTION 7.4 to such Tax
Indemnitee with respect to the Taxes which gave rise to the credit or
refund or with respect to the Tax which gave rise to the
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reduction in Taxes less the amount of all prior payments made to the
Company by such Tax Indemnitee under this SECTION 7.4(D). Each Tax
Indemnitee agrees to act in good faith to claim such refunds and other
available Tax benefits, and take such other actions as may be reasonable
to minimize any payment due from Lessees pursuant to this SECTION 7.4. The
disallowance or reduction of any credit, refund or other tax savings with
respect to which a Tax Indemnitee has made a payment to the Company under
this SECTION 7.4(D) shall be treated as a Tax for which Lessees are
obligated to indemnify such Tax Indemnitee hereunder without regard to
SECTION 7.4(B) hereof.
(e) PAYMENTS. Any Tax indemnifiable under this SECTION 7.4 shall
be paid by Lessees directly when due to the applicable taxing authority if
direct payment is practicable and permitted. If direct payment to the
applicable taxing authority is not permitted or is otherwise not made, any
amount payable to a Tax Indemnitee pursuant to SECTION 7.4 shall be paid
within thirty (30) days after receipt of a written demand therefor from
such Tax Indemnitee accompanied by a written statement describing in
reasonable detail the amount so payable, but not before the date that the
relevant Taxes are due. Any payments made pursuant to SECTION 7.4 shall be
made to the Tax Indemnitee entitled thereto or the Company, as the case
may be, in immediately available funds at such bank or to such account as
specified by the payee in written directions to the payor, or, if no such
direction shall have been given, by check of the payor payable to the
order of the payee by certified mail, postage prepaid at its address as
set forth in this Master Agreement. Upon the request of any Tax Indemnitee
with respect to a Tax that Lessees are required to pay, the Company shall
furnish to such Tax Indemnitee the original or a certified copy of a
receipt for Lessees payment of such Tax or such other evidence of payment
as is reasonably acceptable to such Tax Indemnitee.
(f) REPORTS. If any Lessee knows of any report, return or
statement required to be filed with respect to any Taxes that are subject
to indemnification under this SECTION 7.4, such Lessee shall, if such
Lessee is permitted by Applicable Law, timely file such report, return or
statement (and, to the extent permitted by law, show ownership of the
applicable Leased Property in such Lessee); PROVIDED, HOWEVER, that if
such Lessee is not permitted by Applicable Law or does not have access to
the information required to file any such report, return or statement,
such Lessee will promptly so notify the appropriate Tax Indemnitee, in
which case Tax Indemnitee will file such report. In any case in which the
Tax Indemnitee will file any such report, return or statement, such Lessee
shall, upon written request of such Tax Indemnitee, prepare such report,
return or statement for filing by such Tax Indemnitee or, if such Tax
Indemnitee so requests, provide such Tax Indemnitee with such information
as is reasonably available to such Lessee.
(g) VERIFICATION. At the Company's request, the amount of any
indemnity payment by Lessee or any payment by a Tax Indemnitee to the
Company pursuant to this SECTION 7.4 shall be verified and certified by an
independent public accounting firm selected by the Company and reasonably
acceptable to the Tax Indemnitee. Unless such verification shall disclose
an error in the Companys favor of 5% or more of the related indemnity
payment, the costs of such verification shall be borne by the Company. In
no event shall the Company have the right to
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review the Tax Indemnitee's tax returns or receive any other confidential
information from the Tax Indemnitee in connection with such verification.
The Tax Indemnitee agrees to cooperate with the independent public
accounting firm performing the verification and to supply such firm with
all information reasonably necessary to permit it to accomplish such
verification, PROVIDED that the information provided to such firm by such
Tax Indemnitee shall be for its confidential use. The parties agree that
the sole responsibility of the independent public accounting firm shall be
to verify the amount of a payment pursuant to this Master Agreement and
that matters of interpretation of this Master Agreement are not within the
scope of the independent accounting firms responsibilities.
SECTION 7.5 Increased Costs, etc.
(a) SHARING OF PAYMENTS, ETC.
(i) The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a
Funding Party may otherwise have, each Funding Party shall be
entitled, at its option, to offset balances held by it for account
of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such
Funding Party's Funded Amounts or any other amount payable to such
Funding Party hereunder, that is not paid when due (regardless of
whether such balances are then due to the Company), in which case it
shall promptly notify the Company and the Administrative Agent
thereof, PROVIDED that such Funding Party's failure to give such
notice shall not affect the validity thereof.
(ii) If any Funding Party shall obtain from any Obligor
payment of any principal of or interest on any Funded Amount owing
to it or payment of any other amount under this Master Agreement or
any other Operative Document through the exercise of any right of
set-off, bankers lien or counterclaim or similar right or otherwise
(other than from the Administrative Agent as provided herein or in
any other Operative Document), and, as a result of such payment,
such Funding Party shall have received a greater percentage of the
principal of or interest on such Funded Amounts or such other
amounts then due hereunder or thereunder by such Obligor to such
Funding Party than the percentage received by any other Funding
Party, it shall promptly purchase from such other Funding Parties
participations in (or, if and to the extent specified by such
Funding Party, direct interests in) Funded Amounts or such other
amounts, respectively, owing to such other Funding Parties (or in
interest due thereon, as the case may be) in such amounts, and make
such other adjustments from time to time as shall be equitable, to
the end that all the Funding Parties shall share the benefit of such
excess payment (net of any expenses that may be incurred by such
Funding Party in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal of and/or interest on
the Funded Amounts or such other amounts, respectively, owing to
each of the Funding Parties. To such end all the Funding Parties
shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
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(iii) The Company agrees that any Funding Party so purchasing
such a participation (or direct interest) may exercise all rights of
set-off, banker's lien, counterclaim or similar rights with respect
to such participation as fully as if such Funding Party were a
direct holder of Funded Amounts or other amounts (as the case may
be) owing to such Funding Party in the amount of such participation.
(iv) Nothing contained herein shall require any Funding Party
to exercise any such right or shall affect the right of any Funding
Party to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of any
Obligor. If, under any applicable bankruptcy, insolvency or other
similar law, any Funding Party receives a secured claim in lieu of a
set-off to which this SECTION 7.5(A) applies, such Funding Party
shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the
Funding Parties entitled under this SECTION 7.5(A) to share in the
benefits of any recovery on such secured claim.
(b) Yield Protection, Etc.
(i) ADDITIONAL COSTS.
1) The Company shall pay directly to each Funding
Party from time to time such amounts as such Funding
Party may determine to be necessary to compensate such
Funding Party for any costs actually incurred by such
Funding Party that such Funding Party determines are
attributable to its making or maintaining of any
Eurodollar Advances or its obligation to make any
Eurodollar Advances under the Operative Documents, or
any reduction in any amount receivable by such Funding
Party under the Operative Documents in respect of any of
such Advances or such obligation (such increases in
costs and reductions in amounts receivable being herein
called "ADDITIONAL COSTS"), resulting from any
Regulatory Change that:
(A) shall subject any Funding Party (or its
Applicable Lending Office for any of such
Advances) to any tax, duty or other charge in
respect of such Funded Amounts or changes the
basis of taxation of any amounts payable to such
Funding Party under the Operative Documents in
respect of any of such Funded Amounts (excluding
(A) franchise taxes imposed on it or (B) changes
in the rate of tax on the overall net income of
such Funding Party or of such Applicable Lending
Office, in each case, by the jurisdiction in which
such Funding Party has its principal office or
such Applicable Lending Office); or
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(B) imposes or modifies any reserve, special
deposit or similar requirements (other than, in
the case of any Funding Party for any period as to
which the Company is required to pay any amount
under PARAGRAPH 5) below, the reserves and
"Eurocurrency liabilities" under Regulation D
referred to therein) relating to any extensions of
credit or other assets of, or any deposits with or
other liabilities of, such Funding Party
(including, without limitation, any of such
Advances or any deposits referred to in the
definition of "Eurodollar Rate") or any commitment
of such Funding Party (including, without
limitation, the Commitments of such Funding Party
hereunder); or
(C) imposes any other condition affecting
the Operative Documents (or any of such extensions
of credit or liabilities) or its Commitments.
If any Funding Party requests compensation from the Company under this
SECTION 7.5(B), the Company may, by notice to such Funding Party (with a copy to
the Administrative Agent), suspend the obligation of such Funding Party
thereafter to make or continue Eurodollar Advances, or to convert Base Rate
Advances into Eurodollar Advances, until the Regulatory Change giving rise to
such request ceases to be in effect (in which case the provisions of SECTION
7.5(E) hereof shall be applicable), PROVIDED that such suspension shall not
affect the right of such Funding Party to receive the compensation so requested.
2) Without limiting the effect of the other
provisions of this SECTION 7.5(B), in the event that, by
reason of any Regulatory Change, any Funding Party
either (i) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a
category of deposits or other liabilities of such
Funding Party that includes deposits by reference to
which the interest rate on Eurodollar Advances is
determined as provided in this Master Agreement or a
category of extensions of credit or other assets of such
Funding Party that includes Eurodollar Advances or (ii)
becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold,
then, if such Funding Party so elects by notice to the
Company (with a copy to the Administrative Agent), the
obligation of such Funding Party to make or continue, or
to convert Base Rate Advances into, Eurodollar Advances
hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the
provisions of SECTION 7.5(E) hereof shall be
applicable).
3) Without limiting the effect of the foregoing
provisions of this SECTION 7.5(B) (but without
duplication), the Company shall pay directly to each
Funding Party from time to time on request such amounts
as such Funding Party may determine to be necessary to
compensate such
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Funding Party (or, without duplication, the bank holding
company of which such Funding Party is a subsidiary) for
any costs actually incurred by such Funding Party that
it determines are attributable to the maintenance by
such Funding Party (or any Applicable Lending Office or
such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request
(whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) of
any court or governmental or monetary authority (i)
following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement
(whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful)
heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at
the national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of
the Board of Governors of the Federal Reserve System (12
C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
Appendix A) and the Final Risk-Based Capital Guidelines
of the Office of the Comptroller of the Currency (12
C.F.R. Part 3, Appendix A)), of capital in respect of
its Commitments or Advances (such compensation to
include, without limitation, an amount equal to any
reduction of the rate of return on assets or equity of
such Funding Party (or any Applicable Lending Office or
such bank holding company) to a level below that which
such Funding Party (or any Applicable Lending Office or
such bank holding company) could have achieved but for
such law, regulation, interpretation, directive or
request). For purposes of this SECTION 7.5(B) and
SECTION 7.5(F) hereof, "BASLE ACCORD" shall mean the
proposals for risk-based capital framework described by
the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and
Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any
replacement thereof.
4) Each Funding Party shall notify the Company of
any event occurring after the date of this Master
Agreement entitling such Funding Party to compensation
under PARAGRAPH 1) or 3) of this SECTION 7.5(B) as
promptly as practicable, but in any event within 45
days, after such Funding Party obtains actual knowledge
thereof; PROVIDED that (i) if any Funding Party fails to
give such notice within 45 days after it obtains actual
knowledge of such an event, such Funding Party shall,
with respect to compensation payable pursuant to this
SECTION 7.5(B) in respect of any costs resulting from
such event, only be entitled to payment under this
SECTION 7.5(B) for costs incurred from and after the
date 45 days prior to the date that such Funding Party
does give such notice and (ii) each Funding Party will
designate a different Applicable Lending Office for the
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Funded Amounts of such Funding Party affected by such
event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in
the sole opinion of such Funding Party, be
disadvantageous to such Funding Party, except that such
Funding Party shall have no obligation to designate an
Applicable Lending Office located in the United States
of America. Each Funding Party will furnish to the
Company a certificate setting forth the basis and amount
of each request by such Funding Party for compensation
under PARAGRAPH 1) or 3) of this SECTION 7.5(B)
Determinations and allocations by any Funding Party for
purposes of this SECTION 7.5(B) of the effect of any
Regulatory Change pursuant to PARAGRAPH 1) or 3) of this
SECTION 7.5(B), or of the effect of capital maintained
pursuant to PARAGRAPH 3) of this SECTION 7.5(B), on its
costs or rate of return of maintaining Funded Amounts or
its obligation to make Funded Amounts, or on amounts
receivable by it in respect of Funded Amounts, and of
the amounts required to compensate such Funding Party
under this SECTION 7.7(B), shall be conclusive, absent
demonstrable error, PROVIDED that such determinations
and allocations are made and attributed on a reasonable
basis.
5) Without limiting the effect of the foregoing,
the Company shall pay to each Funding Party on the last
day of each Rent Period so long as such Funding Party is
maintaining reserves against "Eurocurrency liabilities"
under Regulation D (or, unless the provisions of
PARAGRAPH 2) above are applicable, so long as such
Funding Party is, by reason of any Regulatory Change,
maintaining reserves against any other category of
liabilities which includes deposits by reference to
which the interest rate on Eurodollar Advances is
determined as provided in the Operative Documents or
against any category of extensions of credit or other
assets of such Funding Party (which includes any
Eurodollar Advances) an additional amount (determined by
such Funding Party and notified to the Company through
the Administrative Agent) equal to the product of the
following for each Eurodollar Advance for each day
during such Rent Period:
(A) the principal amount of such Eurodollar
Advance outstanding on such day; and
(B) the remainder of (x) the fraction the
numerator of which is the rate (expressed as a
decimal) at which interest accrues on such
Eurodollar Advance for such Rent Period as
provided in this Master Agreement or the Loan
Agreement (less the Applicable Margin) and the
denominator of which is one MINUS the effective
rate (expressed as a decimal) at which such
reserve requirements
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are imposed on such Funding Party on such day
MINUS (y) such numerator; and
(C) 1/360.
6) Notwithstanding anything in this SECTION 7.7(B)
to the contrary, to the extent that any Funding Party
does not charge all of its customers who are similarly
situated to the Company in respect of any Additional
Costs or other cost or compensation referred to this
SECTION 7.7(B), such Funding Party shall not charge the
Company for such Additional Cost or other cost or
compensation.
(c) LIMITATION ON TYPES OF ADVANCES. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any
Eurodollar Rate for any Rent Period:
(i) the Administrative Agent determines, which determination
shall be conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate"
are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Eurodollar Advances as provided herein; or
(ii) if the Required Funding Parties determine, which
determination shall be conclusive, and notify (or notifies, as the
case may be) the Administrative Agent that the relevant rates of
interest referred to in the definition of "Eurodollar Rate" upon the
basis of which the rate of interest for Eurodollar Advances for such
Rent Period is to be determined do not adequately cover the cost to
such Funding Parties of making or maintaining Eurodollar Advances
for such Rent Period;
then the Administrative Agent shall give the Company and each Funding Party
prompt notice thereof and, so long as such condition remains in effect, the
Funding Parties shall be under no obligation to make additional Eurodollar
Advances, to continue Eurodollar Advances or to convert Base Rate Advances into
Eurodollar Advances, and the Company shall, on the last day(s) of the then
current Rent Period(s) for the outstanding Eurodollar Advances, either prepay
such Advances or convert such Advances into Base Rate Advances in accordance
with SECTION 2.08 hereof.
(d) ILLEGALITY. Notwithstanding any other provision of this
Master Agreement, in the event that it becomes unlawful for any Funding
Party or its Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Advances hereunder, then such Funding Party shall
promptly notify the Company thereof (with a copy to the Administrative
Agent) and such Funding Party's obligation to make or continue, or to
convert Base Rate Advances into, Eurodollar Advances shall be suspended
until such time as such Funding Party may again make and maintain
Eurodollar Advances (in which case the provisions of SECTION 7.5(E) hereof
shall be applicable).
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(e) TREATMENT OF EURODOLLAR ADVANCES. If the obligation of any
Funding Party to make Eurodollar Advances or to continue, or to convert
Base Rate Advances into, Eurodollar Advances shall be suspended pursuant
to SECTION 7.5(B) or 7.5(D) hereof, such Funding Party's Eurodollar
Advances shall be automatically converted into Base Rate Advances on the
last day(s) of the then current Rent Period(s) for Eurodollar Advances
(or, in the case of a conversion required by SECTION 7.5(B) or 7.5(D)
hereof, on such earlier date as such Funding Party may specify to the
Company with a copy to the Administrative Agent) and, unless and until
such Funding Party gives notice as provided below that the circumstances
specified in SECTION 7.5(B) or 7.5(D) hereof that gave rise to such
conversion no longer exist:
(i) to the extent that such Funding Party's Eurodollar
Advances have been so converted, all payments and prepayments of
principal that would otherwise be applied to such Funding Party's
Eurodollar Advances shall be applied instead to its Base Rate
Advances; and
(ii) all Advances that would otherwise be made or continued by
such Funding Party as Eurodollar Advances shall be made or continued
instead as Base Rate Advances, and all Advances of such Funding
Party that would otherwise be converted into Eurodollar Advances
shall be converted instead into (or shall remain as) Base Rate
Advances.
If such Funding Party gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in SECTION 7.5(B) or
7.5(D) hereof that gave rise to the conversion of such Funding Party's
Eurodollar Advances pursuant to this SECTION 7.5(E) no longer exist (which such
Funding Party agrees to do promptly upon such circumstances ceasing to exist) at
a time when Eurodollar Advances made by other Funding Parties are outstanding,
such Funding Party's Base Rate Advances shall be automatically converted, on the
first day(s) of the next succeeding Rent Period(s) for such outstanding
Eurodollar Advances, to the extent necessary so that, after giving effect
thereto, all Advances held by the Funding Parties holding Eurodollar Advances
and by such Funding Party are held pro rata (as to principal amounts, types and
Rent Periods) in accordance with their respective Commitments.
(f) COMPENSATION. The Company shall pay to the Administrative
Agent for account of each Funding Party, upon the request of such Funding
Party through the Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Funding Party) to compensate
it for any loss, cost or expense actually incurred that such Funding Party
determines is attributable to:
(i) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Advance made by such Funding Party for
any reason on a date other than the last day of the Rent Period for
such Loan; or
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(ii) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in SECTION 3 hereof to be satisfied) to draw a Eurodollar
Advance from such Funding Party on the date for such borrowing
specified in the relevant notice of borrowing given pursuant to
SECTION 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any, of (i)
the amount of interest that otherwise would have accrued on the principal
amount so paid, prepaid, converted or not funded (other than the portion
thereof consisting of the Applicable Margin) for the period from the date
of such payment, prepayment, conversion or failure to fund to the last day
of the then current Rent Period for such Advance (or, in the case of a
failure to fund, the Rent Period for such Advance that would have
commenced on the date specified for such Funding) at the applicable rate
of interest for such Advance provided for herein or in the Loan Agreement
over (ii) the amount of interest that otherwise would have accrued on such
principal amount at a rate per annum equal to the interest component of
the amount such Funding Party would have bid in the London interbank
market for Dollar deposits of leading banks in amounts comparable to such
principal amount and with maturities comparable to such period (as
reasonably determined by such Funding Party). Notwithstanding anything to
the contrary set forth herein or in any of the other Operative Documents,
neither any Lessee, any Guarantor or the Company shall have any obligation
to pay or reimburse any other Person for breakage costs payable under this
Master Agreement or any other Operative Document which arise solely by
reason of acceleration of the maturity of Lessors obligations under the
Loan Agreement at a time when no Event of Default exists.
(g) SUBSTITUTION OF FUNDING PARTIES. In the event that the
Company becomes obligated to pay additional amounts to any Funding Party
pursuant to SECTION 7.5(b) hereof, then (unless such Funding Party has
theretofore taken steps to remove or cure, and has removed or cured, the
conditions creating the cause for such obligation to pay such additional
amounts), then the Company may, so long as no Default shall be continuing,
within 60 days after the demand by such Funding Party for such additional
amounts, designate another bank which is acceptable to the Administrative
Agent and the Required Funding Parties (such other bank being herein
called a "REPLACEMENT FUNDING PARTY") to purchase all of the Funded
Amounts of such Funding Party and all of such Funding Party's rights and
obligations hereunder (without recourse to or warranty by, or expense to,
such Funding Party) for a purchase price equal to the outstanding
principal amount of such Funding Party's Funded Amount plus any accrued
but unpaid interest thereon and any accrued but unpaid fees in respect of
such Funding Party's Commitments and any other amounts then payable to
such Funding Party under the Operative Documents, and to assume all of the
obligations of such Funding Party hereunder (except for such rights as
survive the repayment of the Advances) and, upon such purchase such
Funding Party shall no longer be a party hereto or have any rights
hereunder (except for those that survive repayment of the Advances) and
shall be released from all of its obligations under the Operative
Documents, and the Replacement Funding Party shall succeed to the rights
and obligations of such Funding Party under the Operative Documents.
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SECTION 7.6. END OF TERM INDEMNITY. In the event that at the end of the
Lease Term for the Leased Properties: (i) the related Lessee elects the option
set forth in Section 14.6 of the Lease, and (ii) after the Lessor receives the
sales proceeds from the Leased Properties under Section 14.6 or 14.7 of the
Lease, together with Lessees' payment of the Recourse Deficiency Amount, the
Lessor shall not have received the entire Lease Balance, then, within 90 days
after the end of the Lease Term, the Lessor or the Administrative Agent may
obtain, at Lessees' sole cost and expense, a report from the Appraiser (or, if
the Appraiser is not available, another appraiser reasonably satisfactory to the
Lessor or the Administrative Agent, as the case may be, and approved by the
Company, such approval not to be unreasonably withheld) in form and substance
satisfactory to the Lessor and the Administrative Agent (the "REPORT") to
establish the reason for any decline in value of the Leased Properties from the
Lease Balance. Lessees, jointly and severally, shall promptly reimburse the
Lessor for the amount equal to such decline in value to the extent that the
Report indicates that such decline was due to
(w) extraordinary use, failure to maintain, to repair, to
restore, to rebuild or to replace, failure to comply with all Applicable
Laws, failure to use, good workmanship, method of installation or removal
or maintenance, repair, rebuilding or replacement, or any other cause or
condition within the power of a Lessee to control or effect resulting in
the Building failing to be of the type and quality contemplated by the
Appraisal (excepting in each case ordinary wear and tear), or
(x) any Alteration made to, or any rebuilding of, any Leased
Property or any part thereof by any Lessee, or
(y) any restoration or rebuilding carried out by any Lessee or
any condemnation of any portion of any Leased Property pursuant to Article
X of the Lease, or
(z) any use of any Leased Property or any part thereof by any
Lessee other than as permitted by the Lease, or any act or omission
constituting a breach of any requirement, condition, restriction or
limitation set forth in the related Deed or the related Purchase
Agreement.
SECTION 7.7. GUARANTEE.
(a) THE GUARANTEE. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Funding Party and the Administrative Agent and
their respective successors and assigns the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) of the
Obligations and all other amounts from time to time owing to the Funding
Parties hereunder or under the other Operative Documents, in each case
strictly in accordance with the terms thereof (such obligations being
herein collectively called the "GUARANTEED OBLIGATIONS"). The Subsidiary
Guarantors hereby further jointly and severally agree that if the Company
shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the GUARANTEED OBLIGATIONS, the
Subsidiary Guarantors will promptly pay the same, without any
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demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will
be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension
or renewal.
(b) OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
Guarantors under SECTION 7.7(A) hereof are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of the Company under this
Master Agreement, or any other agreement or instrument referred to herein
or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the
intent of this SECTION 7.7(B) that the obligations of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of
the following shall not alter or impair the liability of the Subsidiary
Guarantors hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Master Agreement or any other agreement or instrument referred
to herein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any right under
this Master Agreement or any other agreement or instrument referred
to herein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for
any of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
the Administrative Agent, the Lessor or any Lender exhaust any right, power or
remedy or proceed against the Company under any Operative Document or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
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(c) REINSTATEMENT. The obligations of the Subsidiary Guarantors
under this SECTION 7.7 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in
respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise and
the Subsidiary Guarantors jointly and severally agree that they will
indemnify the Administrative Agent, the Lessor and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees
of counsel) incurred by the Administrative Agent or such Lender 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.
(d) SUBROGATION. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the
Commitments of the Funding Parties under this Master Agreement they shall
not exercise any right or remedy arising by reason of any performance by
them of their guarantee in SECTION 7.7(A) hereof, whether by subrogation
or otherwise, against the Company or any other guarantor of any of the
Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
(e) REMEDIES. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Funding Parties,
the obligations of the Lessee under the Lease may be declared to be
forthwith due and payable as provided in Article XIII of the Lease (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Article XIII) for purposes of SECTION 7.7(A)
hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company or any Lessee and
that, in the event of such declaration (or such obligations being deemed
to have become automatically due and payable), such obligations (whether
or not due and payable by the Company) shall forthwith become due and
payable by the Subsidiary Guarantors for purposes of said SECTION 7.7(A).
(f) INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor hereby
acknowledges that the guarantee in this SECTION 7.7 constitutes an
instrument for the payment of money, and consents and agrees that any
Lender, the Lessor or the Administrative Agent, at its sole option, in the
event of a dispute by such Guarantor in the payment of any moneys due
hereunder, shall have the right to bring motion-action under New York CPLR
Section 3213.
(g) CONTINUING GUARANTEE. The guarantee in this SECTION 7.7 a
continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
(h) RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Subsidiary Guarantor of any Guaranteed
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Obligations, each other Subsidiary Guarantor shall, on demand of such
Excess Funding Guarantor (but subject to the next sentence), pay to such
Excess Funding Guarantor an amount equal to such Subsidiary Guarantor's
Pro Rata Share (as defined below and determined, for this purpose, without
reference to the Properties, debts and liabilities of such Excess Funding
Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor
to any Excess Funding Guarantor under this SECTION 7.7(H) shall be
subordinate and subject in right of payment to the prior payment in full
of the obligations of such Subsidiary Guarantor under the other provisions
of this SECTION 7.7 and such Excess Funding Guarantor shall not exercise
any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.
For purposes of this SECTION 7.7(H), (i) "EXCESS FUNDING GUARANTOR" shall
mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "PRO RATA SHARE" shall mean, for any
Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by
which the aggregate present fair saleable value of all Properties of such
Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Initial Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Initial Closing Date, then for purposes of this SECTION 7.7(H)
such subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Initial Closing Date and the aggregate present fair saleable
value of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Initial Closing Date shall be deemed to be equal
to such value and amount on the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
(i) GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
SECTION 7.7(A) hereof would otherwise, taking into account the provisions of
SECTION 7.7(H) hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said SECTION 7.7(A), then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest
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amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. SURVIVAL OF AGREEMENTS. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Master Agreement and any of the other Operative Documents, the transfer of
any Land to the Lessor as provided herein (and shall not be merged into any
Deed), any disposition of any interest of the Lessor in any Leased Property, the
purchase and sale of the Note and any Fundings hereunder and shall be and
continue in effect notwithstanding any investigation made by any party hereto or
to any of the other Operative Documents and the fact that any such party may
waive compliance with any of the other terms, provisions or conditions of any of
the Operative Documents.
SECTION 8.2. NOTICES. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be addressed to such parties at the addresses therefor as set forth
in SCHEDULE 8.2, or such other address as any such party shall specify to the
other parties hereto, and shall be deemed to have been given (i) the Business
Day after being sent, if sent by overnight courier service; (ii) the Business
Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and
confirmed electronically or otherwise during business hours of a Business Day
(or on the next Business Day if otherwise sent by facsimile and confirmed
electronically or otherwise); or (iv) three Business Days after being sent, if
sent by registered or certified mail, postage prepaid.
SECTION 8.3.COUNTERPARTS. This Master Agreement may be executed by the
parties hereto in separate counterparts (including by facsimile), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 8.4. AMENDMENTS. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified with
respect to the Company, any Lessee or any Operative Party, except (a) in the
case of a termination, amendment, supplement, waiver or modification to be
binding on the Lessees, with the written agreement or consent of the Company,
and (b) in the case of a termination, amendment, supplement, waiver or
modification to be binding on the Operative Parties, with the written agreement
or consent of the Required Operative Parties; PROVIDED, HOWEVER, that
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(w) notwithstanding the foregoing provisions of this SECTION 8.4
or CLAUSE (Y) below, the consent of each Operative Party affected thereby
shall be required for any amendment, modification or waiver directly:
(i) modifying any of the provisions of this SECTION 8.4,
changing the definition of "REQUIRED OPERATIVE PARTIES" or "REQUIRED
LENDERS", or increasing the Commitment of such Operative Party;
(ii) amending, modifying, waiving or supplementing any of the
provisions of SECTION 3 of the Loan Agreement or the representations
of such Operative Party in SECTION 4.2 or 4.3 or the covenants of
such Operative Party in SECTION 6 of this Master Agreement;
(iii) reducing any amount payable to such Operative Party
under the Operative Documents or extending the time for payment of
any such amount, including, without limitation, any Rent, any Funded
Amount, any fees, any indemnity, any Leased Property Balance, the
Lease Balance, any Funding Party Balance, the Recourse Deficiency
Amount, interest or Yield; or
(iv) consenting to any assignment of the Lease or the
extension of the Lease Term, releasing any of the collateral
assigned to the Administrative Agent and the B Lenders pursuant to
any Mortgage and any Assignment of Lease and Rents (but excluding a
release of any rights that the B Lenders may have in any Leased
Property, or the proceeds thereof as contemplated in the definition
of "RELEASE DATE"), releasing any Lessee from its obligations in
respect of the payments of Rent and the Lease Balance, releasing the
Company from its payment obligations under the Operative Documents
or changing the absolute and unconditional character of any such
obligation; and
(x) no such termination, amendment, supplement, waiver or
modification shall, without the written agreement or consent of the
Lessor, the Administrative Agent and the Required Lenders, be made to the
Lease or any Security Agreement and Assignment;
(y) subject to the foregoing CLAUSES (W) and (X), so long as no
Event of Default has occurred and is continuing, the Lessor, the
Administrative Agent and the B Lenders may not amend, supplement, waive or
modify any terms of the Loan Agreement, the Note, the Mortgages and the
Assignments of Lease and Rents without the consent of the Company (such
consent not to be unreasonably withheld or delayed); PROVIDED that in no
event may the Loan Agreement or the Note be amended so as to increase the
amount of Basic Rent payable by the Lessees without the consent of the
Company; and
(z) Notwithstanding the foregoing, (i) SECTIONS 5.1(A) through
(S) and 5.1(U) through (W) may only be amended or waived with the consent
of the Combined
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Determination Parties, and any determination as to whether the events
described in Article XII (j), (k), (l) or (m) of the Lease have occurred
and the giving of any consent by the Administrative Agent under the 2000
Subordination Agreement shall require the agreement of the Combined
Determination Parties and (ii) the provisions of Section 3 of the Loan
Agreement and any provisions of the Lease or any other Operative Document
with respect to any amount payable to, or for the benefit of, any
Synthetic Lease Loan Lender including, without limitation, any Basic Rent,
any Funded Amount, any indemnity, any Leased Property Balance, the Lease
Balance, any Funding Party Balance or the Recourse Deficiency Amount shall
not be terminated, amended, supplemented, waived or modified with the
consent of each affected Synthetic Lease Loan Lender.
SECTION 8.5. HEADINGS, ETC. The Table of Contents and headings of the
various Articles and Sections of this Master Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 8.6. PARTIES IN INTEREST. Except as expressly provided herein
(including as expressly provided herein with respect to the Synthetic Lease Loan
Lenders), none of the provisions of this Master Agreement is intended for the
benefit of any Person except the parties hereto and their respective successors
and permitted assigns. Each Synthetic Lease Lender is an intended and
third-party beneficiary of each provision of this Master Agreement that is
stated to be for the benefit of the Synthetic Lease Loan Lenders, the Lenders or
the Funding Parties.
SECTION 8.7. GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN,
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 8.8. EXPENSES. Whether or not the transactions herein contemplated
are consummated, Lessees, jointly and severally agree to pay, all actual,
reasonable and documented out-of-pocket costs and expenses of the Lessor, the
Administrative Agent and the Lenders in connection with the preparation,
execution and delivery of the Operative Documents and the documents and
instruments referred to therein and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
Mayer, Brown & Platt, but not including any fees and disbursements for any other
outside counsel representing any Lender) and of the Lessor, the Administrative
Agent and the Lenders in connection with endeavoring to enforce the Operative
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees actually incurred and disbursements of
counsel for the Lessor, the Administrative Agent and the Lenders). All
references in the Operative Documents to "ATTORNEYS FEES" or "REASONABLE
ATTORNEYS FEES" shall mean reasonable attorney's fees actually incurred, without
regard to any statutory definition thereof.
72
<PAGE>
SECTION 8.9. SEVERABILITY. Any provision of this Master Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 8.10 LIABILITIES OF THE FUNDING PARTIES. No Funding Party shall
have any obligation to any other Funding Party or to the Company or any Lessee
with respect to the transactions contemplated by the Operative Documents except
those obligations of such Funding Party expressly set forth in the Operative
Documents or except as set forth in the instruments delivered in connection
therewith, and no Funding Party shall be liable for performance by any other
party hereto of such other partys obligations under the Operative Documents
except as otherwise so set forth. No Lender shall have any obligation or duty to
the Company or any Lessee, any other Funding Parties or any other Person with
respect to the transactions contemplated hereby except to the extent of the
obligations and duties expressly set forth in this Master Agreement or the Loan
Agreement.
SECTION 8.11 SUBMISSION TO JURISDICTION; WAIVERS. Each party hereto hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Master Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York sitting in the Borough of Manhattan,
the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to such party at its address set forth in SCHEDULE
8.2 or at such other address of which the other parties hereto shall
have been notified pursuant to SECTION 8.2; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
SECTION 8.12 LIABILITIES OF THE ADMINISTRATIVE AGENT; REFERENCES. The
Administrative Agent shall have no duty, liability or obligation to any party to
this Master Agreement with respect to the transactions contemplated hereby
except those duties, liabilities or obligations
73
<PAGE>
expressly set forth in this Master Agreement or the Loan Agreement, and any such
duty, liability or obligations of the Administrative Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be. All
parties to this Master Agreement acknowledge that the Administrative Agent is
not, and will not be, performing any due diligence with respect to documents and
information received pursuant to this Master Agreement or any other Operative
Agreement including, without limitation, any Environmental Audit, Title Policy
or survey. The acceptance by the Administrative Agent of any such document or
information shall not constitute a waiver by any Funding Party of any
representation or warranty of the Company or any Lessee even if such document or
information indicates that any such representation or warranty is untrue. Each
reference to the "SYNDICATION AGENT" in the Operative Documents, other than this
Master Agreement, shall be deemed to be a reference to the Administrative Agent.
74
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
CORNELL COMPANIES, INC.,
as Guarantor and as a Lessee
By _____________________________________________
Name ___________________________________________
Title __________________________________________
WBP LEASING, INC.,
as a Lessee
By _____________________________________________
Name ___________________________________________
Title __________________________________________
SUBSIDIARY GUARANTORS
CORNELL CORRECTIONS MANAGEMENT, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS CONSULTING, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF RHODE ISLAND, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-75 MASTER AGREEMENT
<PAGE>
THE CORNELL COX GROUP, L.P.
By CORNELL CORRECTIONS OF NORTH AMERICA, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF GEORGIA, L.P.
By: CCG I Corporation
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF OKLAHOMA, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
WBP LEASING, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF NORTH AMERICA, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-76 MASTER AGREEMENT
<PAGE>
CORNELL CORRECTIONS OF CALIFORNIA, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF TEXAS, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
INTERNATIONAL SELF HELP SERVICES, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CCG I CORPORATION
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL CORRECTIONS OF ALASKA, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
CORNELL INTERVENTIONS, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-77 MASTER AGREEMENT
<PAGE>
CORNELL ABRAXAS GROUP, INC.
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-78 MASTER AGREEMENT
<PAGE>
ATLANTIC FINANCIAL GROUP, LTD., as Lessor
By: Atlantic Financial Managers, Inc., its
General Partner
By _____________________________________________
Name Printed: Stephen Brookshire
Title: President
AMENDED AND RESTATED
S-79 MASTER AGREEMENT
<PAGE>
SUNTRUST BANK, as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
SUNTRUST EQUITABLE SECURITIES CORPORATION,
as Documentation Agent
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-80 MASTER AGREEMENT
<PAGE>
ING (U.S.) CAPITAL LLC, as Administrative
Agent and as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-81 MASTER AGREEMENT
<PAGE>
COMERICA BANK, as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-82 MASTER AGREEMENT
<PAGE>
GUARANTY FEDERAL BANK, F.S.B., as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-83 MASTER AGREEMENT
<PAGE>
FIRSTAR BANK, N.A., as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-84 MASTER AGREEMENT
<PAGE>
BHF (USA) CAPITAL CORPORATION, as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-85 MASTER AGREEMENT
<PAGE>
SOUTHTRUST BANK, as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-86 MASTER AGREEMENT
<PAGE>
SUMMIT BANK, as a B Lender
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-87 MASTER AGREEMENT
<PAGE>
BANK OF AMERICA, N.A., as a B Lender and as
Syndication Agent
By _____________________________________________
Name ___________________________________________
Title __________________________________________
AMENDED AND RESTATED
S-88 MASTER AGREEMENT
<PAGE>
SCHEDULE 2.2
AMOUNT OF EACH FUNDING PARTY'S COMMITMENT
Lessor Commitment Percentage: 3.0%
Lessor Commitment: $3,500,000
B Lender Commitment Percentages:
SunTrust Bank 1.7621%
ING (U.S.) Capital LLC 2.1586%
Comerica Bank 1.7181%
Guaranty Federal Bank 1.7181%
Firstar Bank 1.7181%
BHF (USA) Capital 1.3216%
SouthTrust 1.3216%
Summit Bank 1.3216%
Bank of America 2.0705%
B Lender Commitments:
SunTrust Bank $1,762,104.41
ING (U.S.) Capital LLC $2,158,577.90
Comerica Bank $1,718,051.80
Guaranty Federal Bank $1,718,051.80
Firstar Bank $1,718,051.80
BHF (USA) Capital $1,321,578.31
SouthTrust $1,321,578.31
Summit Bank $1,321,578.31
Bank of America $2,070,472.68
Total $15,110,045.33
<PAGE>
Synthetic Lease Loan Lenders
Commitment Percentages:
SunTrust Bank 9.4195%
ING (U.S.) Capital LLC 11.6271%
Comerica Bank 9.2543%
Guaranty Federal Bank 9.2543%
Firstar Bank 9.2543%
BHF (USA) Capital 7.1187%
SouthTrust 7.1187%
Summit Bank 7.1187%
Bank of America 11.1526%
Synthetic Lease Loan Lender Commitments:
SunTrust Bank $9,491,539.90
ING (U.S.) Capital LLC $11,627,136.38
Comerica Bank $9,254,251.41
Guaranty Federal Bank $9,254,251.41
Firstar Bank $9,254,251.41
BHF (USA) Capital $7,118,654.93
SouthTrust $7,118,654.93
Summit Bank $7,118,654.93
Bank of America $11,152,559.39
Total $81,389,954.67
<PAGE>
SCHEDULE 8.2
ADDRESSES FOR NOTICES
Company: Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
Attn: Mr. John L. Hendrix
Facsimile: 713/623-2853
Telephone: 713/235-9321
with a copy to:
Liddell Sapp
600 Travis, Suite 3200
Houston, Texas 77002
Attn: Brett Hamilton
Facsimile: 713/223-3717
Telephone: 713/226-1298
Lessor: Atlantic Financial Group, Ltd.
1000 Ballpark Way, Suite 304
Arlington, Texas 76011
Attn: Stephen Brookshire
Facsimile: 817/265-0537
Telephone: 817/265-1263
B Lender: SunTrust Bank
Corporate and Investment Banking
201 4th Avenue North
Nashville, Tennessee 37219
Attn: William Crawford
Facsimile: 615/748-5269
Telephone: 615/748-4629
with a copy to:
SunTrust Equitable Securities Corporation
303 Peachtree Street, 24th Floor
Mail Code 3943
Atlanta, Georgia 30308
Attn: Kevin Vermillion
Facsimile: 404/230-1344
<PAGE>
Telephone: 404/588-7844
B Lender and ING (U.S) Capital LLC
Administrative Agent: 55 East 52nd Street
New York, New York 10055
Attn: Merchant Banking Group - New York
Facsimile: 212/409-5879
Telephone: 212/409-1955
BANK OF AMERICA, N.A.
700 Louisiana Street, 7th Floor
Houston, Texas 77002
Attn: Craig S. Wall
Facsimile: 713/247-7748
Telephone: 713/247-6559
COMERICA BANK
US Bank Department
4100 Spring Valley Road, Ste. 400
Dallas, TX 75244
Attn: Brian O. Donley
Facsimile: 972/361-2550
Telephone: 972/361-2548
GUARANTY FEDERAL BANK, F.S.B.
333 Clay Street, Suite 4430
Houston, Texas 77002
Attn: Richard Menchaca
Facsimile: 713/759-0765
Telephone: 713/759-9134
FIRSTAR BANK, N.A.
One Firstar Plaza
St. Louis, MO 63101
Attn: J. Eric Hartman
Facsimile: 314/418-3859
Telephone: 314/418-2336
BHF (USA) CAPITAL CORPORATION
590 Madison Avenue
New York, NY 10022-2540
Attn: Andrew Shipman
Facsimile: 212/756-5536
<PAGE>
Telephone: 212/756-5988
SOUTHTRUST BANK
One Riverway, Suite 400
Houston, TX 77056
Attn: John Elam
Facsimile: 713/627-1492
Telephone: 713/402-3603
SUMMIT BANK
210 Main Street
Hackensack, NJ 07601
Attn: Lisa Cohen
Facsimile: 201/488-6185
Telephone: 201/646-5465
<PAGE>
APPENDIX A
to
Master Agreement, Lease,
LOAN AGREEMENT AND CONSTRUCTION AGENCY AGREEMENT
DEFINITIONS AND INTERPRETATION
A. INTERPRETATION. In each Operative Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and VICE
VERSA;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative Document),
document or instrument means such agreement, document or instrument as
amended, supplemented or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents and reference to any promissory note includes
any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision of
any Applicable Law means that provision of such Applicable Law from time
to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or
other provision;
(vi) reference in any Operative Document to any ARTICLE, SECTION,
APPENDIX, SCHEDULE or EXHIBIT means such ARTICLE or SECTION thereof or
APPENDIX, SCHEDULE or EXHIBIT thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar import
shall be deemed references to an Operative Document as a whole and not to
any particular ARTICLE, SECTION, paragraph or other provision of such
Operative Document;
<PAGE>
(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(ix) "or" is not exclusive; and
(x) relative to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding".
B. ACCOUNTING TERMS. (i) Except as otherwise expressly provided herein,
all accounting terms used in each Operative Document shall be interpreted, and
all financial statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent or the Operative Parties
under the Operative Documents shall (unless otherwise disclosed to the Operative
Parties in writing at the time of delivery thereof in the manner described in
SUBSECTION (Y) below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the Administrative
Agent or the Operative Parties under the Master Agreement (which, prior to the
delivery of the first financial statements under Section 5.1(a) of the Master
Agreement shall mean the audited financial statements as at December 31, 1999).
All calculations made for the purposes of determining compliance with the Master
Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Administrative Agent or the Operative
Parties pursuant to Section 5.1(a) of the Master Agreement (or, prior to the
delivery of the first financial statements under Section 5.1(a) of the Master
Agreement, used in the preparation of the audited financial statements as at
December 31, 1999) unless (x) the Company shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements or (y) the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.1(a) of the Master Agreement
hereof, shall mean the audited financial statements as at December 31, 1999).
(ii) The Company shall deliver to the Operative Parties at the same time
as the delivery of any annual or quarterly financial statement under Section
5.1(a) of the Master Agreement (i) a description in reasonable detail of any
material variation
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<PAGE>
between the application of accounting principles employed in the preparation of
such statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
SUBSECTION (I) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(iii) To enable the ready and consistent determination of compliance with
the covenants set forth in Section 5.1 of the Master Agreement, the Company will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30, September 30 and December 31 of each year, respectively.
C. CONFLICT IN OPERATIVE DOCUMENTS. If there is any conflict between any
Operative Documents, each such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Master Agreement shall
prevail and control.
D. LEGAL REPRESENTATION OF THE PARTIES. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring any Operative Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. DEFINED TERMS. Unless a clear contrary intention appears, terms defined
herein have the respective indicated meanings when used in each Operative
Document.
"A COLLATERAL CONTRIBUTION" shall have the meaning given to that term in
clause (d) of the definition of "Synthetic Lease Financing".
"A LOAN" means the A Percentage of Fundings made pursuant to the Loan
Agreement, the Credit Agreement and the Master Agreement.
"A PERCENTAGE" means (i) 79% with respect to Fundings related to the
Taylor Street Leased Property, (ii) 80% with respect to Fundings related to the
New Morgan Leased Property, (iii) 82% with respect to Fundings related to
Moshannon Leased Property and (iv) 85% with respect to all other Fundings.
"ADDRESS" means with respect to any Person, its address set forth in
Schedule 8.2 to the Master Agreement or such other address as it shall have
identified to the parties to the Master
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<PAGE>
Agreement in writing in the manner provided for the giving of notices
thereunder.
"ADMINISTRATIVE AGENT" means ING, in its capacity as administrative agent
under the Master Agreement and the Loan Agreement.
"ADVANCE" means a Eurodollar Advance or a Base Rate Advance.
"AFFILIATE" shall mean any Person that directly or indirectly controls, or
is under common control with, or is controlled by, the Company and, if such
Person is an individual, any member of the immediate family (including parents,
spouse, children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "CONTROL" (including, with its correlative meanings, "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise). Notwithstanding the foregoing, (a) no individual shall
be an Affiliate solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries, (b) none of the Wholly Owned
Subsidiaries of the Company shall be Affiliates and (c) neither the
Administrative Agent nor any of the Funding Parties shall be an Affiliate.
"AFTER-TAX BASIS" means (a) with respect to any payment to be received by
an Indemnitee (which, for purposes of this definition, shall include any Tax
Indemnitee), the amount of such payment supplemented by a further payment or
payments so that, after deducting from such payments the amount of all Taxes
(net of any current credits, deductions or other Tax benefits arising from the
payment by the Indemnitee of any amount, including Taxes, for which the payment
to be received is made) imposed currently on the Indemnitee by any Governmental
Authority or taxing authority solely with respect to such payments, the balance
of such payments shall be equal to the original payment to be received and (b)
with respect to any payment to be made by any Indemnitee, the amount of such
payment supplemented by a further payment or payments so that, after increasing
such payment by the amount of any current credits or other Tax benefits realized
by the Indemnitee under the laws of any Governmental Authority or taxing
authority resulting solely from the making of such payments, the sum of such
payments (net of such credits or benefits) shall be equal to the original
payment to be made; PROVIDED, HOWEVER, for the purposes of this definition, and
for purposes of any payment to be made to either Lessee or an Indemnitee on an
after-tax basis, it shall be
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<PAGE>
assumed that (i) federal, state and local taxes are payable at the highest
combined marginal federal and state statutory income tax rate (taking into
account the deductibility of state income taxes for federal income tax purposes)
applicable to corporations from time to time and (ii) such Indemnitee or Lessee
has sufficient income to utilize any deductions, credits (other than foreign tax
credits, the use of which shall be determined on an actual basis) and other Tax
benefits arising from any payments described in CLAUSE (B) of this definition.
"ALTERATIONS" means, with respect to any Leased Property, fixtures,
alterations, improvements, modifications and additions to such Leased Property.
"APPLICABLE LAW" means all applicable laws (including Environmental Laws),
rules, regulations (including income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of any
Governmental Authority, and applicable judgments, decrees, injunctions, writs or
orders of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment (including, without limitation,
wetlands) and those pertaining to the construction, use or occupancy of any
Leased Property).
"APPLICABLE LENDING OFFICE" shall mean, for each B Lender and for each
type of Advance, the "Lending Office" of such B Lender (or of an affiliate of
such B Lender) designated for such type of Advance (or, if no Lending Office is
so designated, the address for such B Lender specified) on Schedule 8.2 to the
Master Agreement or such other office of such B Lender (or of an affiliate of
such B Lender) as such B Lender may from time to time specify to the
Administrative Agent and the Company as the office by which its Advances of such
type are to be made and maintained.
"APPLICABLE MARGIN" shall mean 2.50% for Base Rate Advances and 3.50% for
Eurodollar Advances; PROVIDED that if EBITDAR Ratio II as at the last day of any
fiscal quarter of the Company after the first six months from July 21, 2000
shall fall within any of the ranges set forth in Schedule A below then, subject
to the delivery to the Administrative Agent of a certificate of a senior
financial officer of the Company demonstrating such fact, the "Applicable
Margin" shall be reduced to the applicable percentage set forth in Schedule A
below opposite such range (where "x" is EBITDAR Ratio II) as of the fifth
Business Day following delivery of such certificate through the fifth Business
Day following the date of delivery of such a certificate with respect to the
next succeeding fiscal quarter (except that notwithstanding the foregoing, the
Applicable Margin shall not as a consequence of
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<PAGE>
this PROVISO be reduced at any time (i) prior to July 21, 2000 or (ii) during
which a Default shall have occurred and be continuing):
Schedule A
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
ADVANCES THAT ARE ADVANCES THAT ARE
EBITDAR RATIO II BASE RATE ADVANCES EURODOLLAR ADVANCES
---------------- --------------------- ---------------------
x greater than or
equal to 4.00 2.50% 3.50%
4.00 > X greater
than or equal
to 3.50 2.25% 3.25%
3.50 > X greater
than or equal
to 3.00 2.00% 3.00%
3.00 > X greater
than or equal
to 2.50 1.75% 2.75%
X less than 2.50 1.50% 2.50%
"APPRAISAL" is defined in Section 3.1 of the Master Agreement.
"APPRAISER" means an MAI appraiser reasonably satisfactory to the
Administrative Agent.
"ARCHITECT" means with respect to any Leased Property the architect
engaged in connection with the construction of the related Building, if any, who
may be an employee of the General Contractor for such Leased Property.
"ARCHITECT'S AGREEMENT" means, with respect to any Leased Property, the
architectural services agreement, if any, between a Lessee and the related
Architect.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption agreement,
substantially in the form of Exhibit F to the Master Agreement.
"ASSIGNMENT OF LEASE AND RENTS" means, with respect to any Leased
Property, the Assignment of Lease and Rents, dated as of the related Closing
Date, from the Lessor to the Administrative Agent, substantially in the form of
Exhibit B to the Master Agreement.
"AWARD" means any award or payment received by or payable to the Lessor or
a Lessee on account of any Condemnation or Event of Taking (less the actual
costs, fees and expenses, including reasonable attorneys' fees, incurred in the
collection thereof, for which the Person incurring the same shall be reimbursed
from such award or payment).
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<PAGE>
"B AND C COLLATERAL CONTRIBUTION" shall have the meaning given to that
term in clause (e) of the definition of "Synthetic Lease Financing".
"B LENDER" is defined in the preamble to the Master Agreement.
"B LOAN" means the B Percentage of Fundings made pursuant to the Loan
Agreement and the Master Agreement.
"B NOTE" is defined in Section 2.2 of the Loan Agreement.
"B PERCENTAGE" means (i) 18% with respect to Fundings related to the
Taylor Street Leased Property, (ii) 17% with respect to Fundings related to the
New Morgan Leased Property, (iii) 15% with respect to Fundings related to the
Moshannon Leased Property and (iv) 12% with respect to all other Fundings.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended.
"BASE RATE" shall mean, for any day, a rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"BASE TERM" means, with respect to any Leased Property, (a) the period
commencing on the related Closing Date and ending on July 21, 2005 or (b) such
shorter period as may result from earlier termination of the Lease as provided
therein.
"BASE RATE ADVANCE" means that portion of the Funded Amount bearing
interest at the Base Rate.
"BASIC RENT" means the rent payable pursuant to Section 3.1 of the Lease,
determined in accordance with the following: each installment of Basic Rent
payable on any Payment Date shall be in an amount equal to the sum of (A) the
aggregate amount of Lender Basic Rent payable on such Payment Date, PLUS (B) the
aggregate amount of Lessor Basic Rent payable on such Payment Date, in each case
for the Leased Property or Properties that are then subject to the Lease.
"BOARD" means the Board of Governors of the Federal Reserve System and any
successor thereto or to the functions thereof.
"BOARD OF DIRECTORS", with respect to a corporation, means either the
Board of Directors or any duly authorized committee of
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<PAGE>
that Board which pursuant to the by-laws of such corporation has the same
authority as that Board as to the matter at issue.
"BUILDING" means, with respect to any Leased Property, the buildings,
structures and improvements located or to be located on the related Land, along
with all fixtures used in connection with the operation of such Leased Property,
including, without limitation, all furnaces, boilers, compressors, elevators,
fittings, pipings, connectives, conduits, ducts, partitions, equipment and
apparatus of every kind and description now or hereafter affixed or attached to
the Building, equipment and goods, if any, financed by the Lessor and/or the
Lenders and all Alterations (including all restorations, repairs, replacements
and rebuilding of such buildings, improvements and structures) thereto (but in
each case excluding trade fixtures and equipment financed other than by the
Lessor or the Lenders).
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banks are required or authorized to be closed for business in Atlanta,
Georgia, New York, New York or Houston, Texas and, if the applicable Business
Day relates to a LIBOR Advance, on which trading is not carried on by and
between banks in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant, furniture, fixtures
and equipment (including renewals, improvements and replacements thereof, but
excluding repairs made in the ordinary course of business) during such period
computed in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of the Master Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CASUALTY" means an event of damage or casualty relating to all or part of
any Leased Property that does not constitute an Event of Loss.
"CASUALTY EVENT" shall mean, with respect to any Property of any Person,
any loss of or damage to, or any condemnation or other taking of, such Property
for which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
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"CHANGE OF CONTROL" means the occurrence of any of the following:
(a) if any person (as such term is used in section 13(d) and
14(d)(2) of the Securities Exchange Act as in effect on the Closing Date)
or related persons constituting a group (as such term is used in Rule
13d-5 under the Securities Exchange Act) become the "beneficial owners"
(as such term is used in Rule 13d-3 under the Securities Exchange Act as
in effect on July 21, 2000), directly or indirectly, of more than forty
percent (40%) of the issued and outstanding common stock or the total
voting power of the Company; or
(b) the failure of Initial Directors to constitute a majority of the
board of directors of the Company.
"CLAIMS" means liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, proceedings, settlements,
utility charges, costs, expenses and disbursements (including, without
limitation, reasonable legal fees and expenses) of any kind and nature
whatsoever.
"CLOSING DATE" means, with respect to each parcel of Land, the date on
which such Land is acquired by the Lessor pursuant to a Purchase Agreement or
such Land is leased to the Lessor pursuant to a Ground Lease and the initial
Funding occurs with respect to such Land under the Master Agreement.
"CODE" or "TAX CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL SHARING DOCUMENTATION" shall mean the Intercreditor
Agreement.
"COLLATERAL SHARING DOCUMENTATION AMENDMENT" shall mean an amendment or
other modification to the Collateral Sharing Documentation, in form and
substance satisfactory to the Administrative Agent, providing that, irrespective
of the respective priorities of the Liens of the Administrative Agent, the
Lenders (as defined in the Credit Agreement) and the holders of the Senior Notes
in the Property of the Company and its Subsidiaries.
(x) subject to the A Collateral Contribution, the Liens of the
Administrative Agent, the Lenders (as defined in the Credit Agreement),
the holders of the Senior Notes and the A Lenders in such Property shall,
as between the Administrative Agent, the Lenders (as defined in the Credit
Agreement), the holders of the Senior Notes and the A Lenders, rank PARI
PASSU, and
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(y) subject to the B and C Collateral Contribution, the Liens of the
Administrative Agent, the Lenders (as defined in the Credit Agreement),
the holders of the Senior Notes and the B Lenders, and the interest of the
Lessor, in such Property shall, as between the Administrative Agent, the
Lenders (as defined in the Credit Agreement), the holders of the Senior
Notes, the B Lenders and the Lessor, rank PARI PASSU.
"COMBINED DETERMINATION PARTIES" means, at any time, the Funding Parties
and the Revolving Credit Lenders (as defined in the Credit Agreement) holding an
aggregate outstanding principal amount of Funded Amounts (or Commitments prior
to the termination thereof) and Revolving Credit Loans (as defined in the Credit
Agreement) (or commitments prior to the termination thereof) equal to at least
51% of the aggregate Funded Amounts (or Commitments prior to the termination
thereof) and Revolving Credit Loans (or commitments prior to the termination
thereof).
"COMMITMENT" means as to each Funding Party, its obligation to make
Fundings as investments in each Leased Property, or to make Loans to the Lessor,
in an aggregate amount not to exceed at any one time outstanding the amount set
forth for such Funding Party on Schedule 2.2 to the Master Agreement (as it may
be adjusted from time to time to reflect an assignment pursuant to Section 6 of
the Master Agreement) or, in the case of the Synthetic Lease Loan Lenders, the
Synthetic Lease Loan Commitment (as defined in the Credit Agreement).
"COMMITMENT PERCENTAGE" means as to any Funding Party, at a particular
time, the percentage of the aggregate Commitments in effect at such time
represented by such Funding Party's Commitment, as such percentage is shown for
such Funding Party on Schedule 2.2 to the Master Agreement (as it may be
adjusted from time to time to reflect an assignment pursuant to Section 6 of the
Master Agreement or pursuant to Section 13.06 of the Credit Agreement, as the
case may be).
"COMPANY" is defined in the preamble to the Master Agreement.
"COMPLETION DATE" with respect to any Leased Property means the Business
Day on which the conditions specified in Section 3.5 of the Master Agreement
have been satisfied or waived with respect to such Leased Property.
"CONDEMNATION" means any condemnation, requisition, confiscation, seizure
or other taking or sale of the use, occupancy or title to any Leased Property or
any part thereof in, by or on account of any actual eminent domain proceeding or
other action by any Governmental Authority or other Person under the
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power of eminent domain or any transfer in lieu of or in anticipation thereof,
which in any case does not constitute an Event of Taking. A Condemnation shall
be deemed to have "occurred" on the earliest of the dates that use is prevented
or occupancy or title is taken.
"CONSTRUCTION" means, with respect to any Leased Property, the
construction of the related Building pursuant to the related Plans and
Specifications and the preparation of such Leased Property for full operation.
"CONSTRUCTION AGENCY AGREEMENT" means the Construction Agency Agreement,
dated as of December 3, 1998, between the Company and the Lessor.
"CONSTRUCTION AGENCY EVENT OF DEFAULT" is defined in Section 5.1 of the
Construction Agency Agreement.
"CONSTRUCTION AGENT" means the Company in its capacity as construction
agent pursuant to the Construction Agency Agreement.
"CONSTRUCTION BUDGET" is defined in Section 2.4 of the Construction Agency
Agreement.
"CONSTRUCTION CONDITIONS" means the conditions set forth in Section 3.5 of
the Master Agreement.
"CONSTRUCTION CONTRACT" means, with respect to any Leased Property, that
certain construction contract, if any, between Lessee or the Construction Agent
and a General Contractor for the Construction of the related Building, provided
that such contract shall be collaterally assigned to the Lessor, and such
assignment shall be consented to by such General Contractor, pursuant to an
assignment of such construction contract substantially in the form of the
Security Agreement and Assignment set forth as Exhibit D to the Master
Agreement.
"CONSTRUCTION FAILURE PAYMENT" with respect to any Leased Property means
an amount equal to the sum of (i) 100% of the acquisition cost of the related
Land, PLUS (ii) 89.9% of the Construction costs (including development and
transaction costs, but excluding any up-front structuring fees) related to such
Leased Property that have been incurred through the date of payment, PLUS (iii)
any amounts owed with respect to such Leased Property pursuant to Section 3.3 of
the Construction Agency Agreement or Section 7.2 or 7.5 of the Master Agreement,
PLUS (iv) the cost of tenant improvements that were not part of the Construction
Budget for such Leased Property.
"CONSTRUCTION FORCE MAJEURE EVENT" means, with respect to any Leased
Property:
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(a) an act of God arising after the related Closing Date, or
(b) any change in any state or local law, regulation or other legal
requirement arising after such Closing Date and relating to the use
of the Land or the construction of a building on the Land, or
(c) strikes, lockouts, labor troubles, unavailability of materials,
riots, insurrections or other causes beyond Lessee's control
which prevents the Construction Agent from completing the Construction prior to
the Scheduled Construction Termination Date and which cannot be remedied by the
Construction Agent through the exercise of all commercially reasonable efforts.
"CONSTRUCTION LAND INTEREST" means each parcel of Land for which the
Completion Date has not yet occurred.
"CONSTRUCTION TERM" means, with respect to any Leased Property, the period
commencing on the related Closing Date and ending on the related Construction
Term Expiration Date, or such shorter period as may result from earlier
termination of the Lease as provided therein.
"CONSTRUCTION TERM EXPIRATION DATE" means, with respect to any Leased
Property, the earliest of the following:
(a) the related Completion Date,
(b) the date on which the aggregate Funded Amounts equal the
Commitments, and
(c) the related Scheduled Construction Termination Date.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any Securities issued by that Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting any of the properties of such Person).
"CORRECTIONAL AND DETENTION FACILITY CONTRACT" shall mean any contract
with a municipal, state or federal government, or agency, instrumentality or
political subdivision thereof, relating to the management by the Company or its
Subsidiaries of a correctional and/or detention facility or to other related
lines of business, as amended or modified from time to time.
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"CREDIT AGREEMENT" means the Fourth Amended and Restated Credit Agreement,
dated as of July 21, 2000, among the Obligors, the lenders party thereto and the
Administrative Agent.
"DEBT SERVICE" shall mean, for any period, the sum, for the Company and
its Subsidiaries, (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all payments of principal of
Indebtedness (including, without limitation, the principal component of any
payments in respect of Capital Lease Obligations) scheduled to be made during
such period PLUS (b) all Interest Expense for such period.
"DEED" means, with respect to any Land, a General Warranty Deed (or, if
the related Title Policy is acceptable to Lessee and the Administrative Agent, a
Special or Limited Warranty Deed), dated the applicable Closing Date, from the
applicable Seller to the Lessor, conveying such Land.
"DEFAULT" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property, other than any disposition in connection with a
Municipal Transaction (whether now owned or hereafter acquired) by the Company
or any of its Subsidiaries to any other Person excluding any sale, assignment,
transfer or other disposition of any Property sold or disposed of in the
ordinary course of business and on commercially reasonable terms.
"DIVIDEND PAYMENT" shall mean dividends (in cash, Property or obligations)
on, or other payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of the
Company or of any warrants, options or other rights to acquire the same (or to
make any payments to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market or equity value
of the Company or any of its Subsidiaries), but excluding dividends payable
solely in shares of common stock of the Company.
"DOCUMENTATION AGENT" means SunTrust Equitable Securities Corporation, in
its capacity as Documentation Agent under the Master Agreement.
"DOLLARS" and the sign "$" means lawful money of the United States of
America.
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"EBITDAR" means, for any period, the sum of the following for the Company
and its Subsidiaries (determined without duplication in accordance with GAAP):
(a) net income for such period, LESS extraordinary gains for such
period to the extent included in net income for such period, PLUS
(b) Interest Expense for such period, PLUS
(c) provisions for federal, state, local and foreign income taxes
(other than taxes on extraordinary gains), whether paid or deferred, made
during such period, to the extent deducted in determining net income for
such period, PLUS
(d) the aggregate amount of depreciation and amortization expense
for such period, to the extent deducted in determining net income for such
period, PLUS
(e) the aggregate amount of (i) accretion expense with respect to
options or rights to acquire the Company's common stock and (ii) any
write-off of expenses arising in connection with the Loans, in each case
to the extent deducted in determining net income for such period, PLUS
(f) the net income of any Person that is accounted for by the equity
method of accounting, but only to the extent of dividends paid to the
Company or any of its Subsidiaries, PLUS
(g) the aggregate amount of non-cash expense for such period
associated with the closure and post-closure reserves of a plant or
facility owned by the Company or any of its Subsidiaries, PLUS
(h) the aggregate amount of all other non-cash expenses for such
period, to the extent not specifically described above in this definition;
PLUS
(i) the aggregate amount of Rent Expense for such period; PLUS
(j) the aggregate amount of Pre-opening Expenses and Start-up
Expenses for such period;
PROVIDED, that with respect to:
(i) any Eligible Acquisition made during such period, "EBITDAR"
shall include the actual EBITDAR attributable to the business acquired in
such Eligible Acquisition for the
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12 month period ending on the last day of such period, including, if
necessary, EBITDAR prior to consummation of such Eligible Acquisition so
that is represents the equivalent of 12 months of EBITDAR (and may reflect
Pro Forma Adjustments); and
(ii) any Eligible New Contract entered into by the Company or any of
its Subsidiaries during such period, "EBITDAR" shall include the
following:
(x) if the Company or such Subsidiary has provided services
pursuant to such Eligible New Contract for less than three calendar
months after the end of the Start-up Period, an amount equal to the
estimated "EBITDAR" attributable to the operations resulting from
such Eligible New Contract (and may reflect Pro Forma Adjustments)
for the 12-month period beginning on the date on which the Company
or such Subsidiary began providing services pursuant to such
Eligible New Contract, or
(y) if the Company or such Subsidiary has provided services
pursuant to such Eligible New Contract for three calendar months or
more after the end of the Start-up Period, an amount equal to actual
EBITDAR attributable to the operations resulting from such Eligible
New Contract for each complete month that has elapsed since the date
three months after the end of the Start-up Period (such amount to be
annualized so that it represents the equivalent of 12 months of
EBITDAR).
"EBITDAR RATIO I" shall mean, at any date, the ratio of the following:
(a) all Indebtedness of the Obligors on such date (other than the B
Guarantee (as defined in the definition of Synthetic Lease Financing) and
any Subordinated Notes), to
(b) EBITDAR for the period of 12 consecutive months ending on or
most recently ended prior to such date.
"EBITDAR RATIO II" shall mean, at any date, the ratio of the following:
(a) all Indebtedness of the Obligors on such date, to
(b) EBITDAR for the period of 12 consecutive months ending on or
most recently ended prior to such date.
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"ELIGIBLE ACQUISITION" shall mean any acquisition by any Obligor
(regardless of the structure of the transaction) of the capital stock of, or all
or substantially all of the assets of, any Person (or of a line of business or
business segment of any Person) that was, immediately prior to such acquisition,
engaged primarily in the business of operating correctional and/or detention
facilities, juvenile facilities, pre-release facilities, substance abuse
rehabilitation facilities or related lines of business.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the laws
of the United States, or any state thereof, or any foreign bank that has a
branch or agency in the United States, having total assets in excess of
$1,000,000,000 or any commercial finance or asset based lending Affiliate of any
commercial bank and (ii) any Lender or any Affiliate of any Lender.
"ELIGIBLE NEW CONTRACT" shall mean any acquired (or to be acquired)
Correctional and Detention Facility Contract, a newly executed Correctional and
Detention Facility Contract, an amendment to an existing Correctional and
Detention Facility Contract or an expansion under an existing Correctional and
Detention Facility Contract.
"ENVIRONMENTAL AUDIT" means, with respect to each parcel of Land, a Phase
I Environmental Assessment, dated no more than 60 days prior to the related
Closing Date, by an environmental services firm reasonably satisfactory to the
Funding Parties and the related Lessee.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any written
or oral notice, claim, demand or other communication (collectively, a "CLAIM")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
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"ENVIRONMENTAL LAWS" means and include the Resource Conservation and
Recovery Act of 1976, (RCRA) 42 U.S.C. ss.ss. 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. ss.ss. 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. ss.ss. 1801-1812, the
Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Clean Air Act, 42
U.S.C. ss.ss. 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. ss.ss. 136 et seq., and all similar federal, state and local
environmental laws, ordinances, rules, orders, statutes, decrees, judgments,
injunctions, codes and regulations, and any other federal, state or local laws,
ordinances, rules, codes and regulations, relating to the environment, human
health or natural resources or the regulation or control of or imposing
liability or standards of conduct concerning human health, the environment,
Hazardous Materials or the clean-up or other remediation of any Leased Property,
or any part thereof, as any of the foregoing may have been from time to time
amended, supplemented or supplanted.
"ENVIRONMENTAL PERMITS" means all permits, licenses, authorizations,
certificates and approvals of Governmental Authorities required by Environmental
Laws.
"EPA" shall mean the United States Environmental Protection Agency.
"EQUITY ISSUANCE" shall mean (a) any issuance or sale by the Company or
any of its Subsidiaries after December 3, 1998 of (i) any capital stock, (ii)
any warrants or options exercisable in respect of capital stock (other than any
warrants or options issued to directors, officers or employees of the Company or
any of its Subsidiaries pursuant to the Incentive Compensation Plan and any
capital stock of the Company issued upon the exercise of such warrants or
options or (iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the Company or any of
its Subsidiaries or (b) the receipt by the Company or any of its Subsidiaries
after December 3, 1998 of any capital contribution (whether or not evidenced by
any equity security issued by the recipient of such contribution); PROVIDED that
Equity Issuance shall not include (A) any such issuance or sale by any
Subsidiary of the Company to the Company or any Wholly Owned Subsidiary of the
Company, or (B) any capital contribution by the Company or any Wholly Owned
Subsidiary of the Company to any Subsidiary of the Company.
"EQUITY RIGHTS" shall mean, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any
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stockholders' or voting trust agreements) for the issuance, sale, registration
or voting of, or securities convertible into, any additional shares of capital
stock of any class, or partnership or other ownership interests of any type in,
such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor federal statute.
"ERISA AFFILIATE" shall mean any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the Company
is a member.
"EURODOLLAR ADVANCE" means that portion of the Funded Amount bearing
interest at a rate based on the Eurodollar Rate.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Advance for
any Rent Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%), reported, at 11:00 a.m. (London time) on the date two
Business Days prior to the first day of such Rent Period, on Telerate Access
Service Page 3750 (British Bankers Association Settlement Rate) as the London
Interbank Offered Rate for Dollar deposits having a term comparable to such Rent
Period and in an amount equal to or greater than $1,000,000.
"EVENT OF DEFAULT" means any event or condition designated as an "Event of
Default" in Article XII of the Lease.
"EVENT OF LOSS" is defined in Section 10.1 of the Lease.
"EVENT OF TAKING" is defined in Section 10.2 of the Lease.
"EXCESS CASH FLOW" shall mean, for any period, the excess of:
(i) the sum of the following (without duplication): (i) EBITDAR for
such period (calculated without reference to the PROVISO at the end of the
definition thereof), PLUS (ii) proceeds of business interruption or
similar insurance received during such period, PLUS (iii) decreases in
Working Capital of the Obligors for such period, PLUS (iv) all tax refunds
received by the Obligors in cash during such period, OVER
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(ii) the sum of the following (without duplication): (i) Debt
Service for such period, PLUS (ii) Rent Expense for such period, PLUS
(iii) Capital Expenditures made during such period, PLUS (iv) increases in
Working Capital of the Obligors for such Period, plus (v) the aggregate
amount of cash taxes actually paid by the Obligors during such period.
For purposes of this definition of "Excess Cash Flow," "WORKING CAPITAL" shall
have the meaning given to that term by GAAP, PROVIDED that Working Capital shall
not include any loans under the Credit Agreement or any current maturities of
any long-term debt.
"EXECUTIVE OFFICER" means with respect to any Person, the Chief Executive
Officer, President, Vice Presidents (if elected by the Board of Directors of
such Person), Chief Financial Officer, Treasurer, Secretary and any Person
holding comparable offices or duties (if elected by the Board of Directors of
such Person).
"FAIR MARKET RENTAL VALUE" means, with respect to any Leased Property, the
fair market rent as determined by an independent appraiser chosen by the Lessor
or, so long as any Loans are outstanding, the Administrative Agent, and, unless
an Event of Default has occurred, reasonably acceptable to the related Lessee
that would be obtained in an arm's-length lease between an informed and willing
lessee and an informed and willing lessor, in either case under no compulsion to
lease, and neither of which is related to or affiliated with the Lessor or the
related Lessee for the lease of such Leased Property on the terms (other than
the amount of Basic Rent) set forth, or referred to, in the Lease. Such fair
market rent shall be calculated as the value for the use of such Leased Property
to be leased in place at the Land, assuming, in the determination of such fair
market rental value, that such Leased Property is in the condition and repair
required to be maintained by the terms of the Lease (unless such fair market
rental value is being determined for the purposes of Section 13.1 of the Lease
and except as otherwise specifically provided in the Lease, in which case this
assumption shall not be made).
"FAIR MARKET SALES VALUE" means, with respect to any Leased Property or
any portion thereof, the fair market sales value as determined by an independent
appraiser chosen by the Lessor or, so long as any Loans are outstanding, the
Administrative Agent, and, unless an Event of Default has occurred, reasonably
acceptable to the related Lessee, that would be obtained in an arm's-length
transaction between an informed and willing buyer (other than a lessee currently
in possession) and an informed and willing seller, under no compulsion,
respectively, to buy or sell and neither of which is related to the Lessor or
the related
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Lessee, for the purchase of such Leased Property. Such fair market sales value
shall be calculated as the value for such Leased Property, assuming, in the
determination of such fair market sales value, that such Leased Property is in
the condition and repair required to be maintained by the terms of the Lease
(unless such fair market sales value is being determined for purposes of Section
13.1 of the Lease and except as otherwise specifically provided in the Lease or
the Master Agreement, in which case this assumption shall not be made).
"FEDERAL FUNDS RATE" shall mean, 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 the day for which such rate is to be determined 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 such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be the average
of quotations for such day on transactions, received by the Administrative Agent
(or any of its Affiliates) from three federal funds brokers of recognized
standing selected by it.
"FF&E LEASE" shall mean the Lease Agreement, dated as of November 23,
1999, among the Company and certain of its Subsidiaries, as lessees, and First
Security Bank, National Association, as owner trustee, as lessor, as the same
may be modified and supplemented and in effect from time to time and any other
transaction entered into by the Obligors that is a lease of furniture, fixtures
and equipment.
"FINAL RENT PAYMENT DATE" with respect to any Leased Property is defined
in Section 13.1(e) of the Lease.
"FIXED CHARGES RATIO" shall mean, as at any date, the ratio of:
(i) the sum of (i) EBITDAR for the period of 12-consecutive months
ending on or most recently ended prior to such date, MINUS (ii) Capital
Expenditures made by the Company and its Subsidiaries during such period
pursuant to Section 5.1(o) of the Master Agreement, MINUS (iii) taxes paid
in cash during such period, TO
(ii) Debt Service for such period.
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"FUNDED AMOUNT" means, as to the Lessor, the Lessor's Invested Amounts, as
to each B Lender, the outstanding principal amount of such B Lender's B Loans
and as to each Synthetic Lease Loan Lender, the outstanding principal amount of
such Synthetic Lease Loan Lender's Synthetic Lease Loans.
"FUNDING" means any funding by the Funding Parties pursuant to Section 2.2
of the Master Agreement and Section 2.01(b) of the Credit Agreement.
"FUNDING DATE" means each Closing Date and each other date during the
Construction Term on which a Funding occurs under Section 2 of the Master
Agreement.
"FUNDING PARTIES" means the Lessor and the Lenders, collectively.
"FUNDING PARTY BALANCE" means, with respect to any Leased Property, (i)
for the Lessor as of any date of determination, an amount equal to the sum of
the outstanding related Lessor's Invested Amount, all accrued and unpaid Yield
on such outstanding related Lessor's Invested Amount, all unpaid related fees
owing to the Lessor under the Operative Documents, and all other related amounts
owing to the Lessor by the Company or any Lessee under the Operative Documents,
(ii) for any B Lender as of any date of determination, an amount equal to the
sum of the outstanding related B Loans of such B Lender, all accrued and unpaid
interest thereon, all unpaid related fees owing to such B Lender under the
Operative Documents, and all other related amounts owing to such B Lender by the
Lessor, the Company or any Lessee under the Operative Documents and (iii) for
any Synthetic Lease Loan Lender as of any date of determination, an amount equal
to the sum of the outstanding related Synthetic Lease Loans of such Synthetic
Lease Loan Lender, all accrued and unpaid interest thereon, all unpaid related
fees owing to such Synthetic Lease Loan Lender under the Credit Agreement and
all other related amounts owing to such Synthetic Lease Loan Lender by the
Lessor, the Company or any Lessee under the Credit Agreement or the Operative
Documents.
"FUNDING REQUEST" is defined in Section 2.2 of the Master Agreement.
"FUNDING TERMINATION DATE" means July 21, 2005.
"FUTURE SYNTHETIC LEASE FINANCING" means one or more Synthetic Lease
Financings entered into after the date of the Master Agreement.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those that in accordance with
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paragraph B of this Appendix A are to be used in making the calculations for
purposes of determining compliance with the Master Agreement.
"GENERAL PARTNER" means Atlantic Financial Managers, Inc., a Texas
corporation.
"GOVERNMENTAL ACTION" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law and shall include, without limitation, all environmental and operating
permits and licenses that are required for the use, occupancy, zoning and
operation of any Leased Property.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUND LEASE" means, with respect to any Land, the ground lease between
the related Ground Lessor and the Lessor pursuant to which a leasehold estate is
conveyed in the Land to the Lessor.
"GROUND LESSOR" means, as to any Land, the ground lessor of such Land.
"GUARANTEE" shall mean a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning.
"GUARANTY AGREEMENT" means the Guaranty Agreement, dated as of December 3,
1998, issued by the Company.
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"HAZARDOUS MATERIAL" means any substance, waste or material which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction
thereof, petroleum derivatives, by products and other hydrocarbons, or which is
or becomes regulated under any Environmental Law by any Governmental Authority,
including any agency, department, commission, board or instrumentality of the
United States, any jurisdiction in which a Leased Property is located or any
political subdivision thereof and also including, without limitation, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBS") and radon
gas.
"IMPERMISSIBLE QUALIFICATION" shall mean any qualification, exception or
other statement in any opinion or certification of any independent public
accounts which either (a) is of a "going concern" or similar nature; or (b)
relates to the limited scope of examination of matters relevant to the financial
statements referred to in such opinion or certification not customarily
contained in a report of independent public accountants.
"INCENTIVE COMPENSATION PLAN" shall mean a plan established by the Company
for the benefit of certain of its employees, or any other written agreement to
which the Company is a party, providing for the issuance to employees of
warrants or options in respect of the Company's capital stock, PROVIDED that (a)
the aggregate amount of capital stock that such warrants and options would
represent if exercised cannot exceed 20% of aggregate amount of the Company's
capital stock that would then be outstanding and (b) all other terms and
conditions of such plan or other written agreement shall be satisfactory to the
Combined Determination Parties.
"INDEBTEDNESS" shall mean, for any Person: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (d) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person and, in the case of the
Company, the assumed principal component of the
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lease obligations under the FF&E Lease (net of the amount of unamortized gain
under the FF&E Lease); (e) Capital Lease Obligations of such Person; and (f)
Indebtedness of others Guaranteed by such Person. For the avoidance of doubt,
the Synthetic Lease Loans and the B Loans, together with the principal
components of each Synthetic Lease Financing entered into after July 21, 2000
shall constitute "Indebtedness".
"INDEMNITEE" means the Administrative Agent (in its individual capacity
and in its capacity as Administrative Agent), each Lender and the Lessor, and
their respective Affiliates, successors, permitted assigns, permitted
transferees, employees, officers, directors and agents; PROVIDED, HOWEVER, that
in no event shall the Company or any Lessee be an Indemnitee.
"INDEMNITEE GROUP" means the respective Affiliates, employees, officers,
directors and agents of the Administrative Agent (in its individual capacity),
each Lender or the Lessor, as applicable; PROVIDED, HOWEVER, that in no event
shall the Company or any Lessee be a member of the Indemnitee Group.
"ING" shall mean ING (U.S.) Capital LLC, a Delaware limited liability
company.
"INITIAL CLOSING DATE" means the Closing Date for the first Leased
Property acquired by the Lessor, which date was December 3, 1998.
"INITIAL DIRECTORS" means (i) a member of the board of directors of the
Company as of July 21, 2000 and (ii) a member of the board of directors of the
Company nominated by the vote of at least sixty percent (60%) of the members of
the board of directors of the Company as of July 21, 2000.
"INTEREST COVERAGE RATIO" shall mean, as of any date, the ratio of (a)
EBITDAR for the period of 12 consecutive months ending on or most recently ended
prior to such date to (b) Interest Expense for such period.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency
Agreement, dated as of July 15, 1998 by and among ING, as collateral agent and
as Administrative Agent for the lenders under the Credit Agreement and the
holders of the Senior Notes.
"INTEREST EXPENSE" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness (including, without limitation, the interest component of any
payments in respect of Capital Lease Obligations) accrued or
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capitalized during such period (whether or not actually paid during such
period), PLUS (b) the net amount payable (or MINUS the net amount receivable)
under Interest Rate Protection Agreements during such period (whether or not
actually paid or received during such period), MINUS (c) direct reimbursements
received by an Obligor during such period by a party to a Correctional and
Detention Facility Agreement, to the extent that such reimbursements relate to
interest expense of the Company or one of its Subsidiaries, PLUS (d) the
interest component of any payments in respect of any Synthetic Lease Financing
accrued or capitalized during such period (whether or not actually paid during
such period)."
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
(c) the entering into of any Guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Interest Rate Protection Agreement.
"JOINDER AGREEMENT" means an agreement substantially in the form of
Exhibit E to the Master Agreement pursuant to which a Subsidiary of the Company
shall become a Lessee.
"LAND" means the land described in the related Lease Supplement.
"LAWS" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, treaties or decrees of any Governmental Authority, or of any
court.
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"LEASE" means the Master Lease Agreement, dated as of December 3, 1998
together with each Lease Supplement thereto, among the Lessees and the Lessor.
"LEASE BALANCE" means, with respect to all of the Leased Properties, as of
any date of determination, an amount equal to the aggregate sum of the
outstanding Funded Amounts of all Funding Parties, all accrued and unpaid
interest on the Loans, all accrued and unpaid Yield on the Lessor's Invested
Amounts, all unpaid fees owing to the Funding Parties under the Operative
Documents and, to the extent related to the Synthetic Lease Loan Lenders in
their capacity as such, under the Credit Agreement and the other Basic Documents
(as defined in the Credit Agreement), plus all other amounts owing to the
Funding Parties by the Company or any Lessee under the Operative Documents.
"LEASE SUPPLEMENT" is defined in Section 2.1 of the Lease.
"LEASE TERM" means (a) the Base Term, as it may be renewed pursuant to
Section 14.9 of the Lease or (b) such shorter period as may result from earlier
termination of the Lease as provided therein.
"LEASE TERMINATION DATE" means the last day of the Lease Term.
"LEASED PROPERTY" means Land and the related Building(s). For purposes of
the Lease, a "Leased Property" means the Land identified in a Lease Supplement
and the Buildings related thereto, unless the context provides otherwise.
"LEASED PROPERTY BALANCE" means, with respect to any Leased Property, as
of any date of determination, an amount equal to the aggregate sum of the
outstanding related Funded Amounts of all Funding Parties, all accrued and
unpaid interest on the related Loans, all accrued and unpaid Yield on the
related Lessor Invested Amounts, all related unpaid fees owing to the Funding
Parties under the Operative Documents or, to the extent related to the Synthetic
Lease Loan Lenders in their capacity as such, the Credit Agreement and the other
Basic Documents (as defined in the Credit Agreement), and all other amounts
owing to the Funding Parties by the related Lessee under the Operative Documents
with respect to such Leased Property.
"LENDER BASIC RENT" means, for any Rent Period under the Lease, the sum of
(i) the aggregate amount of interest accrued on the B Loans pursuant to Section
2.4 of the Loan Agreement during such Rent Period, PLUS (ii) the aggregate
amount of interest accrued on the Synthetic Lease Loans pursuant to Section
3.02(b) of the Credit Agreement during such Rent Period.
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"LENDERS" means the B Lenders and the Synthetic Lease Loan Lenders.
"LENDING OFFICE" for each B Lender means the office such B Lender
designates in writing from time to time to the Company and the Administrative
Agent or, if no such office is designated, the office listed for such B Lender
on Schedule 8.2 to the Master Agreement.
"LESSEE" is defined in the preamble to the Master Agreement. The "related"
Lessee with respect to any Leased Property means the Lessee that is a party to
the Lease Supplement for such Leased Property.
"LESSOR" is defined in the preamble to the Master Agreement.
"LESSOR BASIC RENT" means, for any Rent Period under the Lease, the
aggregate amount of Yield accrued and unpaid on the Lessor's Invested Amounts
pursuant to Section 2.3(a) of the Master Agreement during such Rent Period.
"LESSOR LIENS" means Liens on or against any Leased Property, the Lease,
any other Operative Document or any payment of Rent (a) which result from any
act or omission of, or any Claim against, the Lessor unrelated to the
Transaction or from Lessor's failure to perform as required under the Operative
Documents or (b) which result from any Tax owed by the Lessor, except any Tax
for which the Company or a Lessee is obligated to indemnify (including, without
limitation, in the foregoing exception, any assessments with respect to any
Leased Property noted on the related Title Policy or assessed in connection with
any construction or development by the related Lessee or the Construction
Agent).
"LESSOR RATE" means the Eurodollar Rate or the Base Rate, as the case may
be, PLUS the Applicable Margin, PLUS 0.75%.
"LESSOR SIDE LETTER" means the letter agreement, dated as of December 3,
1998, between the Company and the Lessor.
"LESSOR'S INVESTED AMOUNT" means the amounts funded by the Lessor pursuant
to Section 2 of the Master Agreement that are not proceeds of Loans by a Lender,
as such amount may be increased during the related Construction Term pursuant to
Section 2.3(c) of the Master Agreement.
"LIEN" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of the Operative Documents, a Person shall be deemed to
own subject to a Lien any Property that it has acquired or holds subject to the
interest of
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a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement (other than an operating lease) relating to such
Property.
"LOAN" means a B Loan or a Synthetic Lease Loan.
"LOAN AGREEMENT" means the Loan Agreement, dated as of December 3, 1998,
among the Lessor, the Administrative Agent and the B Lenders.
"LOAN DOCUMENTS" means the Loan Agreement, the Note, the Assignments of
Lease and Rents, the Mortgages and all documents and instruments executed and
delivered in connection with each of the foregoing.
"LOAN EVENT OF DEFAULT" means any of the events specified in Section 5.1
of the Loan Agreement, PROVIDED that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, event or act has been
satisfied.
"LOAN POTENTIAL EVENT OF DEFAULT" means any event, condition or failure
which, with notice or lapse of time or both, would become a Loan Event of
Default.
"LOSS PROCEEDS" is defined in Section 10.6 of the Lease.
"MAJORITY SYNTHETIC LEASE A AND B LENDERS" is defined in the Credit
Agreement.
"MARGIN REGULATIONS" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.
"MASTER AGREEMENT" means the Amended and Restated Master Agreement, dated
as of July 21, 2000, among the Company, the Lessees, the Subsidiary Guarantors,
the Lessor, the Administrative Agent, the Documentation Agent, the Syndication
Agent and the B Lenders, and shall include the Original Master Agreement for as
long as it was in effect.
"MATERIAL ADVERSE EFFECT" means with respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a materially adverse
effect on (i) the business, operations, revenues, financial condition, property,
capitalization or business prospects of the Company and its Subsidiaries taken
as a whole, (ii) the ability of the Company or any Lessee to perform its
obligations under any Operative Document, or (iii) the value, utility or useful
life of any Leased Property, or the validity, enforceability or legality
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of any of the Operative Documents, or the priority, perfection or status of any
Funding Party's interest in any Leased Property.
"MONTHLY DATE" means the last Business Day of each calendar month.
"MORTGAGE" means, with respect to any Leased Property, that certain
mortgage, deed of trust or security deed, dated as of the related Closing Date,
by the Lessor to the Administrative Agent, in the form of Exhibit D attached to
the Master Agreement, with such modifications as are satisfactory to the Lessor
and the Administrative Agent in conformity with Applicable Law to assure
customary remedies in favor of the Administrative Agent in the jurisdiction
where the Leased Property is located.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and that is covered by Title IV of ERISA.
"MUNICIPAL TRANSACTION" shall mean a transaction:
(a) in which the Company or one of its Subsidiaries transfers one or
more correctional and/or detention facilities (a "Transferred Facility")
to a Person that is not a Subsidiary or Affiliate of the Company and that
is created exclusively for purposes of consummating such transaction (an
"SPV") for a consideration consisting of cash (a "Municipal Transaction
Transfer");
(b) in which such SPV incurs Indebtedness; and
(c) in which the Company and such SPV enter into a management
agreement, lease or similar arrangement pursuant to which the Company
agrees to manage or lease-back such Transferred Facility;
provided that:
(i) the Company shall have furnished to each of the Funding
Parties copies of all of the documentation for such transaction;
(ii) the Combined Determination Parties shall have approved such
transaction (provided that the Funding Parties shall not condition their
approval on the payment of a fee and such approval shall not be
unreasonably withheld); and
(iii) the Company shall have complied with its obligations under the
Credit Agreement with respect to such transaction.
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"NET AVAILABLE PROCEEDS" shall mean:
a. in the case of any Disposition or any Municipal
Transaction Transfer, the amount of Net Cash Payments received in
connection with such Disposition or Municipal Transaction Transfer;
b. in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Company and its Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by the Company and its Subsidiaries in
connection therewith and (B) contractually required repayments of
Indebtedness and any income and transfer taxes payable by the Company or
any of its Subsidiaries in respect of such Casualty Event;
c. in the case of any incurrence of Indebtedness, the
aggregate amount of all cash received by the Company and its
Subsidiaries in respect of such incurrence net of fees and expenses
incurred by Company and its Subsidiaries in connection therewith; and
d. in the case of any Equity Issuance, the aggregate amount of
all cash received by the Company and its Subsidiaries in respect of such
Equity Issuance net of fees and expenses incurred by the Company and its
Subsidiaries in connection therewith.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition or
Municipal Transaction Transfer, the aggregate amount of all cash payments, and
the fair market value of any non-cash consideration, received by the Company and
its Subsidiaries directly or indirectly in connection with such Disposition or
Municipal Transaction Transfer; PROVIDED that (a) Net Cash Payments shall be net
of (i) the amount of any legal, title and recording tax expenses, commissions
and other fees and expenses paid by the Company and its Subsidiaries in
connection with such Disposition or Municipal Transaction Transfer, (ii) any
federal, state, local and foreign taxes estimated to be payable by the Company
and its Subsidiaries as a result of such Disposition or Municipal Transaction
Transfer (but only to the extent that such estimated taxes are in fact paid to
the relevant Federal, state or local governmental authority within three months
of the date of such Disposition or Municipal Transaction Transfer) and (iii) any
required deposits or hold backs (until such time as such required deposit or
hold back is released), (b) Net Cash Payments shall be net of any repayments by
the Company or any of its Subsidiaries of Indebtedness to the extent that (i)
such Indebtedness is secured by a Lien on the Property that is the subject of
such Disposition or Municipal Transaction Transfer and (ii) the transferee of
(or holder of a Lien on) such Property requires that such Indebtedness be repaid
as a condition to the purchase of such Property and (c) Net Cash Payments shall
exclude the amount of any reasonable reserves established by the Company or such
Subsidiary, in accordance with GAAP, against any liabilities retained by the
Company or its Subsidiaries, which liabilities are associated with the Property
that is the subject of such Disposition or Municipal
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Transaction Transfer (but only during such period as such reserves are actually
maintained), including (without limitation) any indemnification obligations,
pension and other post-employment benefit liabilities, workers' compensation
liabilities, liabilities associated with retiree benefits, liabilities relating
to environmental matters and liabilities relating to any Guarantee of
Indebtedness secured by a Lien on such Property.
"NET WORTH" shall mean, as at any date for any Person, the sum for such
Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(i) the amount of capital stock; PLUS
(ii) the amount of surplus and retained earnings (or, in the case of
a surplus or retained earnings deficit, MINUS the amount of such deficit);
PLUS
(iii) any warrant accretion expense (as that term is used in GAAP)
or any original issue discount accretion expense (as such term is used in
GAAP) arising after December 3, 1998; PLUS
(iv) the value ascribed to any warrants issued to a Lender and the
cumulative effect of any change in the valuation of such warrants;
PROVIDED that any predecessor basis adjustment required under GAAP shall be
disregarded in calculating "Net Worth."
"NOTE" means the B Note issued by the Lessor under the Loan Agreement, and
any and all notes issued in replacement or exchange therefor in accordance with
the provisions thereof.
"OBLIGATIONS" means all indebtedness (whether principal, interest, fees or
otherwise), obligations and liabilities of the Company and each Lessee to the
Funding Parties (including without limitation all extensions, renewals,
modifications, rearrangements, restructures, replacements and refinancings
thereof, whether or not the same involve modifications to interest rates or
other payment terms of such indebtedness, obligations and liabilities), whether
arising under any of the
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Operative Documents or otherwise, and whether now existing or hereafter created,
absolute or contingent, direct or indirect, joint or several, secured or
unsecured, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, or acquired by Funding Parties
outright, conditionally or as collateral security from another, including but
not limited to the obligation of the Company and each Lessee to repay future
advances by the Funding Parties, whether or not made pursuant to commitment and
whether or not presently contemplated by the Company or any Lessee and the
Funding Parties hereunder.
"OBLIGOR" means the Company or any Subsidiary Guarantor.
"OFFICER'S CERTIFICATE" of a Person means a certificate signed by the
Chairman of the Board or the President or any Executive Vice President or any
Senior Vice President or any other Vice President of such Person signing with
the Treasurer or any Assistant Treasurer or the Controller or any Assistant
Controller or the Secretary or any Assistant Secretary of the such Person, or by
any Vice President who is also Controller or Treasurer signing alone.
"OPERATIVE DOCUMENTS" means the Master Agreement, the Purchase Agreements,
the Joinder Agreements, the Lease, the Security Agreement and Assignment, the
Notes, the Loan Agreement, the Guaranty Agreement, the Assignments of Lease and
Rents, the Mortgages, the Ground Leases, the Construction Agency Agreement and
the other documents delivered in connection with the transactions contemplated
by the Master Agreement.
"OPERATIVE PARTIES" means the Administrative Agent, the Lessor and the B
Lenders.
"ORIGINAL MASTER AGREEMENT" is defined in the Preliminary Statement to
the Master Agreement.
"OVERDUE RATE" means the lesser of (a) the highest non-usurious interest
rate permitted by Applicable Law and (b) an interest rate per annum (calculated
on the basis of a 365-day (or 366-day, if appropriate) year equal to 2.0% above
the Base Rate plus the Applicable Margin in effect from time to time or, in the
case of Yield, 2% above the Lessor Rate.
"PARTIAL PURCHASE OPTION" is defined in Section 14.1(b) of the Lease.
"PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of AFG,
dated as of February 28, 1996, among the General Partner and the persons listed
on Schedule A thereto as limited partners.
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"PAYMENT DATE" means (i) with respect to each Eurodollar Advance, the last
day of each Rent Period (and if such Rent Period is longer than three months,
the day that is 90 days after the first day of such Rent Period) or, if such day
is not a Business Day, the next Business Day and (ii) with respect to each Base
Rate Advance, each Monthly Date.
"PAYMENT DATE NOTICE" is defined in Section 2.3(e) of the Master
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, and any successor
thereto.
"PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the United
States of America, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Corporation or Moody's Investors Service, Inc., respectively, maturing not more
than six months from the date of acquisition thereof; (d) commercial paper of
any Lender (or any Affiliate thereof located in the United States of America)
that is rated A-1 or better or P-1 by Standard and Poor's Corporation or Moody's
Investors Service, Inc., respectively, maturing not more than six months from
the date of acquisition thereof; (e) repurchase agreements entered into with any
Lender or with any bank or trust company satisfying the conditions of clause (b)
hereof that is secured by any obligation of the type described in CLAUSES (A)
through (D) of this definition; and (f) money market funds acceptable to the
Required Lenders.
"PERMITTED LIENS" means the following with respect to any Leased Property:
(a) the respective rights and interest of the related Lessee, the Lessor, the
Administrative Agent and any Lender, as provided in the Operative Documents, (b)
Liens for Taxes either not yet due or being contested in good faith and by
appropriate proceedings, so long as enforcement thereof is stayed pending such
proceedings, (c) materialmen's, mechanics', workers', repairmen's, employees' or
other like Liens arising after the related Closing Date in the ordinary course
of business for amounts either not yet due or being contested in good faith and
by appropriate proceedings, so long as enforcement thereof is stayed pending
such proceedings, (d) Liens arising after such Closing Date out of judgments or
awards with respect to which at the time an appeal or proceeding for review is
being prosecuted
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in good faith, so long as the enforcement thereof has been stayed pending such
appeal or review, (e) easements, rights of way, reservations, servitudes and
rights of others against the Land which do not materially and adversely affect
the value or the utility of such Leased Property, (f) other Liens incidental to
the conduct of the related Lessee's business which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit
and which do not in the aggregate materially detract from the value of such
Leased Property or materially impair the use thereof, (g) assignments, and
subleases expressly permitted by the Operative Documents and (h) Liens as
provided in the Intercreditor Agreement.
"PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, nonincorporated
organization or government or any agency or political subdivision thereof.
"PLAN" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"PLANS AND SPECIFICATIONS" means with respect to any Building the final
plans and specifications for such Building prepared by the Architect, and, if
applicable, referred to by the Appraiser in the Appraisal, as such Plans and
Specifications may be hereafter amended, supplemented or otherwise modified from
time to time.
"POTENTIAL EVENT OF DEFAULT" means any event, condition or failure which,
with notice or lapse of time or both, would become an Event of Default.
"PRE-OPENING EXPENSES" shall mean operating expenses attributable to the
operations of an Eligible New Contract (including, but not limited to, salaries
and wages, fringe benefits, training costs, supplies, and professional fees)
incurred prior to the date on which the Company began providing services
pursuant to such Eligible New Contract, but only to the extent that such
expenses have been reviewed and approved by the Administrative Agent and are
determined in accordance with GAAP.
"PRIME RATE" shall mean the arithmetic average of the rates of interest
publicly announced by The Chase Manhattan Bank, Citibank, N.A. and Morgan
Guaranty Trust Company of New York (or their respective successors) as their
respective prime commercial lending rates (or, as to any such bank that does not
announce such a rate, such bank's "base" or other rate reasonably determined by
the Administrative Agent to be the equivalent rate announced by such bank),
EXCEPT THAT, if any such bank shall, for
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any period, cease to announce publicly its prime commercial lending (or
equivalent) rate, the Administrative Agent shall, during such period, reasonably
determine the "prime rate" based upon the commercial lending (or equivalent)
rates announced publicly by the other such banks.
"PRO FORMA ADJUSTMENTS" shall mean reasonable adjustments for (a)
non-recurring or extraordinary expenses, (b) operating efficiencies, (c) census
levels and (d) per diem rates that have been received and consented to by the
Administrative Agent.
"PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"PURCHASE AGREEMENT" means with respect to any Land, the purchase
agreement with the Seller for the conveyance of such Land to the Lessor.
"PURCHASE OPTION" is defined in Section 14.1(a) of the Lease.
"QUARTERLY DATES" shall mean the last Business Day of March, June, October
and December in each year, the first of which shall be October 31, 2000.
"RECOURSE DEFICIENCY AMOUNT" means, as of any date of determination
thereof, the sum of (i) the aggregate principal amount of the Synthetic Lease
Loans then outstanding, PLUS (ii) all accrued and unpaid interest on the
Synthetic Lease Loans.
"REGULATIONS A, D, U AND X" shall mean, respectively, Regulations A, D, U
and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any change
after the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
the date of this Agreement of any interpretation, directive or request applying
to a class of banks including such Lender of or under any Federal, state or
foreign law or regulations (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System.
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"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System.
"REGULATIONS" means the income tax regulations promulgated from time to
time under and pursuant to the Code.
"RELEASE" means the release, deposit, disposal or leak of any Hazardous
Material into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.
"RELEASE DATE" means, with respect to any Leased Property, the date that
the related Leased Property Balance has been paid in full, unless an Event of
Default has occurred and is continuing, in which case the Release Date shall be
the date on which the Lease Balance has been paid in full.
"REMARKETING OPTION" is defined in Section 14.6 of the Lease.
"RENT" means Basic Rent and Supplemental Rent, collectively.
"RENT EXPENSE" shall mean, for any period:
(a) the aggregate amount of rent payments made by the Obligors
during such period in respect of any Synthetic Lease Financing (including,
without limitation, Basic Rent); and
(b) the aggregate amount of rent payments, minus the amount of
amortized gain, made by the Obligors during such period in respect of the
FF&E Lease.
For the avoidance of doubt, the parties agree that any other rent payments
(including rent payments in respect of any Municipal Transaction) shall not
constitute "Rent Expense" for purposes of the Master Agreement.
"RENT PERIOD" means (i) in the case of Base Rate Advances, means the
period from, and including, a Monthly Date to, but excluding, the next
succeeding Monthly Date; and (ii) with respect to any Eurodollar Advance:
(1) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Advance and ending one, two, three or six months
thereafter, as selected by the Lessee in its Funding Notice or
Payment
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Date Notice, as the case may be, given with respect thereto;
and
(2) thereafter, each period commencing on the last day of the next
preceding Rent Period applicable to such Eurodollar Advance
and ending one, two, three or six months thereafter, as
selected by the Lessee by irrevocable notice to the
Administrative Agent in its related Payment Date Notice;
PROVIDED, HOWEVER that:
(a) The initial Rent Period for any Funding shall commence on
the Funding Date of such Funding and each Rent Period occurring
thereafter in respect of such Funding shall commence on the day on
which the next preceding Rent Period expires;
(b) If any Rent Period would otherwise expire on a day which
is not a Business Day, such Rent Period shall expire on the next
succeeding Business Day, PROVIDED that if any Rent Period in respect
of Eurodollar Advances would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further
Business Day occurs in such month, such Rent Period shall expire on
the next preceding Business Day;
(c) Any Rent Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Rent Period shall, subject
to PARAGRAPH (D) below, expire on the last Business Day of such
calendar month; and
(d) No Rent Period shall extend beyond the Lease Termination
Date.
"REPORT" is defined in Section 7.6 of the Master Agreement.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss.2615.
"REQUIRED FUNDING PARTIES" means, at any time, Funding Parties
holding an aggregate outstanding principal amount of Funded Amounts equal to at
least 51% of the aggregate outstanding principal amount of all Funded Amounts.
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"REQUIRED LENDERS" means, at any time, B Lenders holding an
aggregate outstanding principal amount of B Loans equal to at least 51% of the
aggregate outstanding principal amount of all B Loans.
"REQUIRED OPERATIVE PARTIES" means, at any time, the Operative
Parties holding aggregate Commitments (or aggregate Funded Amounts if such
Commitments have terminated) equal to at least 51% of an amount equal to the sum
of (i) the Lessor's Commitment (or the Lessor's Invested Amount if such
Commitment has terminated), plus (ii) the B Lenders' Commitments (or the
principal amount of the B Loans if such Commitments have terminated).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and any
law, rule or regulation, permit, approval, authorization, license or variance,
order 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
property or to which such Person or any of its property is subject, including,
without limitation, the Securities Act, the Securities Exchange Act, Regulations
T, U and X of the Board of Governors of the Federal Reserve System, and any
building, environmental or land use requirement or permit or occupational safety
or health law, rule or regulation.
"RESPONSIBLE OFFICER" means the Chairman of the Board of Directors,
President, the chief executive officer, the chief operating officer, the chief
financial officer, Treasurer, any Assistant to the Treasurer, or any Vice
President in charge of a principal business unit or division
"SCHEDULED CONSTRUCTION TERMINATION DATE" means with respect to any
Building the earlier of (i) eighteen months after the Closing Date for the
related Land and (ii) the last day of the Lease Term.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"SECURITY AGREEMENT AND ASSIGNMENT" means, with respect to any
Leased Property, the Security Agreement and Assignment (Construction Contract,
Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans,
Specifications and
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Drawings) from the Construction Agent to the Lessor, substantially in the form
of Exhibit C to the Master Agreement.
"SELLER" means as to any Leased Property, the seller thereof to the
Lessor on the related Closing Date.
"SENIOR NOTES" shall mean, collectively, the following:
(a) promissory notes of the Company, in an aggregate principal
amount not to exceed $50,000,000, secured by a Lien upon
substantially all of the Property of the Company and its
Subsidiaries (the "1998 SENIOR NOTES"); and
(b) additional Indebtedness of the Company, in an aggregate
principal amount not to exceed $10,000,000 which may be secured by a
Lien upon substantially all of the Property of the Company and its
Subsidiaries, with terms and conditions, and pursuant to
documentation, either (i) substantially similar to the terms and
conditions of, and the documentation for, the 1998 Senior Notes or
(ii) otherwise satisfactory to the Administrative Agent.
"SENIOR NOTES DOCUMENTATION" shall mean any note purchase agreement,
promissory note or other document or instrument evidencing or governing the
Senior Notes.
"START-UP EXPENSES" shall mean operating expenses attributable to
the operations of an Eligible New Contract incurred during the Start-up Period
therefor, net of the revenues recognized under such Eligible New Contract during
the Start-up Period, but only to the extent that such expenses have been
reviewed and approved by the Administrative Agent.
START-UP PERIOD" shall mean, with respect to any Eligible New
Contract, the period of time, not to exceed six months, commencing on the date
the Company began providing service pursuant to such Eligible New Contract until
the last day of the month in which 90% of the maximum occupancy under such
Eligible New Contract was reached and are determined in accordance with GAAP.
"SUBORDINATED BRIDGE" shall mean Indebtedness of the Obligors under
the Subordinated Bridge Loan Agreement dated as of October 14, 1999 between the
Obligors, the lenders referred to therein and ING as agent for said lenders.
"SUBORDINATED NOTES" shall mean Indebtedness of the Company
(including the 2000 Subordinated Notes) in an aggregate principal amount not to
exceed $50,000,000, which are not secured
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by any Property of the Company or any Subsidiary Guarantor but which may be
guaranteed by each of the Subsidiaries of the Company, and which is subordinated
to the prior payment in full of the principal of and interest on the Loans (as
defined in the Credit Agreement) on terms and conditions (including
subordination terms), and pursuant to documentation, that is (i) on market terms
and the time it is entered into and (ii) is otherwise satisfactory to the
Administrative Agent.
"SUBORDINATED NOTES DOCUMENTATION" shall mean any note purchase
agreement, promissory note or other document or instrument evidencing or
governing the Subordinated Notes.
"SUBSIDIARY" means with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"SUBSIDIARY GUARANTOR" is defined in the preamble of the Master
Agreement.
"SUNTRUST BANK" means SunTrust Bank, a Georgia banking corporation.
"SUPPLEMENTAL RENT" means any and all amounts, liabilities and
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to the Lessor, the Administrative Agent, any
Lender or any other party, including, without limitation, amounts under Article
XVI of the Lease, and indemnities and damages for breach of any covenants,
representations, warranties or agreements, and all overdue or late payment
charges in respect of any Funded Amount.
"SYNDICATION AGENT" means Bank of America, N.A., in its capacity
as syndication agent under the Master Agreement.
"SYNTHETIC LEASE DOCUMENTATION" shall mean any master agreement,
lease agreement, loan agreement or other document or instrument evidencing or
governing any Synthetic Lease Financing.
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"SYNTHETIC LEASE FINANCING" shall mean one or more transactions
consisting of the following (provided that any such transaction need not include
the matters described in clause (e) below):
(a) the Company or one of its Subsidiaries enters into a lease
(as lessee) of real Property and improvements (to be used for a
correctional and/or detention facility) with another Person (the
"Lessor");
(b) pursuant to a loan agreement (the "Loan Agreement"), the
Lessor borrows money from one or more lenders denominated "A
Lenders" (the "A Lenders") and one or more lenders denominated "B
Lenders" (the "B Lenders");
(c) the Lessor (or another Person, which may be an Affiliate
of the Lessor) makes an investment (the "C Investment") to pay a
portion of the cost of such real Property and improvements;
(d) the Company and its Subsidiaries enter into a Guarantee of
the Lessor's obligations to the A Lenders under the Loan Agreement
(the "A Guarantee"), and, as provided in the Collateral Sharing
Documentation Amendment:
(x) the A Guarantee is secured by Liens on substantially
all of the collateral for the Loans (as defined in the Credit
Agreement), Reimbursement Obligations (as defined in the
Credit Agreement) and the Senior Notes, and
(y) the Loans (as defined in the Credit Agreement),
Reimbursement Obligations (as defined in the Credit Agreement)
and the other obligations of the Company under the Credit
Agreement and under the other Basic Documents (as defined in
the Credit Agreement), together with the Senior Notes, are
secured by Liens in any collateral securing the Lessor's
obligations to the A Lenders under the Loan Agreement (the "A
Collateral Contribution"); and
(e) the Company and its Subsidiaries enter into a Guarantee
of the Lessor's obligations to the B Lenders under the Loan Agreement (the
"B Guarantee"), and, as provided in the Collateral Sharing Documentation
Amendment:
(x) the B Guarantee and the C Investment
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is secured by Liens on substantially all of the collateral for
the Loans (as defined in the Credit Agreement) and the Senior
Notes, and
(y) the Loans (as defined in the Credit Agreement),
Reimbursement Obligations (as defined in the Credit Agreement)
and the other obligations of the Company under the Credit
Agreement and under the other Basic Documents (as defined in
the Credit Agreement), together with the Senior Notes, are
secured by Liens in any collateral securing the Lessor's
obligations to the B Lenders under the Loan Agreement or
securing the C Investment (the "B and C Collateral
Contribution").
"SYNTHETIC LEASE LOAN" is defined in the Credit Agreement.
"SYNTHETIC LEASE LOAN LENDER" is defined in the Credit Agreement.
"TAX" or "TAXES" is defined in Section 7.4 of the Master Agreement.
"TAX CODE" means the Internal Revenue Code of 1986, as amended and
in effect from time to time.
"TAX INDEMNITEE" means the Lessor, the Administrative Agent, each
Lender and their respective Affiliates, successors, permitted assigns, permitted
transferees, employees, officers, directors and agents thereof, PROVIDED,
HOWEVER, that in no event shall the Company or any Lessee be a Tax Indemnitee.
"TITLE INSURANCE COMPANY" means the company that has or will issue
the title policies with respect to a Leased Property, which company shall be
reasonably acceptable to the Funding Parties.
"TITLE POLICY" is defined in Section 3.1 of the Master Agreement.
"TRANSACTION" means all the transactions and activities referred to
in or contemplated by the Operative Documents.
"2000 SUBORDINATED NOTES" shall mean Indebtedness evidenced by the
2000 Subordinated Notes Documents.
"2000 SUBORDINATED NOTES DOCUMENTS" shall mean collectively, (a) the
Note and Equity Purchase Agreement dated as of July __, 2000, among the Company,
its Subsidiaries listed on Annex B thereto, American Capital Strategies, Ltd., a
Delaware
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corporation and Teachers Insurance and Annuity Association, a New York
corporation, (b) the Note Documents (as that term is defined in said Note and
Equity Purchase Agreement) and (c) the 2000 Subordination Agreement.
"2000 SUBORDINATION AGREEMENT" shall mean the Subordination
Agreement dated as of July 21, 2000 among the holders of the 2000 Subordinated
Notes, the Obligors, the Administrative Agent and the agent under the Master
Agreement, as the same may be modified and supplemented and in effect from time
to time.
"UCC" means the Uniform Commercial Code of Georgia, as in effect
from time to time.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
"YIELD" is defined in Section 2.3 of the Master Agreement.
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