<PAGE>
EXHIBIT 10.1
AMENDMENT NO. 4 TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 4, dated as of August 9, 2000 (this "Amendment"), to the
Existing Credit Agreement (as defined below), among EVERCOM, INC., a Delaware
corporation (the "Borrower"), each of the Borrower's Subsidiaries (the
"Consenting Obligors"), Canadian Imperial Bank of Commerce, as Administrative
Agent for the Lenders and the Lenders (such capitalized term and other
capitalized terms used in this preamble and the recitals below to have the
meanings set forth in, or as defined by reference in, Article I).
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Administrative Agent and First
Source Financial LLP, as Co-Agent are parties to the Second Amended and Restated
Credit Agreement, dated as of December 19, 1997 (as heretofore modified, the
"Existing Credit Agreement", and as modified by with this Amendment, the "Credit
Agreement");
WHEREAS, the Borrower desires to amend the Existing Credit Agreement as set
forth herein; and
WHEREAS, the Required Lenders have agreed, subject to the terms and
conditions hereinafter set forth, to amend the Existing Credit Agreement in
certain respects as provided below;
NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural form thereof):
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Consenting Obligors" is defined in the preamble.
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"Credit Agreement" is defined in the first recital.
"Existing Credit Agreement" is defined in the first recital.
"Fourth Amendment Effective Date" is defined in Section 3.1.
SECTION I.2. Other Definitions. Terms for which meanings are provided in
the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Fourth Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Article II; except as so amended, the Existing Credit Agreement shall
continue in full force and effect.
SECTION II.1. Amendments to Recitals. Clause (a) of the fifth recital of
the Existing Credit Agreement is hereby amended and restated in its entirety to
read as follows:
"(a) (i) a Term Loan Commitment pursuant to which Borrowings
of Term Loans were made, in the aggregate principal amount of
$55,000,000, to the Borrower in multiple Borrowings occurring on and
subsequent to the Closing Date but prior to the Term Loan Commitment
Termination Date (collectively, the "Existing Term Loans");
(ii) an Additional Term Loan Commitment pursuant to which
Borrowings of Additional Term Loans were made, in the aggregate
principal amount of $5,500,000, to the Borrower in a single Borrowing
occurring on the Second Amendment Effective Date; and
(iii) a Second Additional Term Loan Commitment pursuant to
which Borrowings of Second Additional Term Loans will be made, in a
maximum aggregate principal amount not to exceed $7,500,000, to the
Borrower in multiple Borrowings occurring on any Business Day on or
subsequent to the Fourth Amendment Effective Date but prior to the
Second Additional Term Loan Commitment Termination Date (and the full
drawing of which are subject to the Borrower meeting certain financial
conditions described herein); and"
SECTION II.2. Amendments to Article I. Article I of the Existing Credit
Agreement is hereby amended as follows:
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SECTION II.2.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in such Section in the
appropriate alphabetical sequence:
"Amendment No. 4" means Amendment No. 4, dated as of August 9, 2000,
to the Second Amended and Restated Credit Agreement, among the Borrower,
the Administrative Agent and the Lenders parties thereto, and consented to
by the Consenting Obligors listed therein.
"Applicable Margin" means, in the case of (a) Revolving Loans and
Existing Term Loans, for Loans of each type, the applicable percentage set
forth below such type of Loan and corresponding to the relevant Total Debt
to EBITDA Ratio:
<TABLE>
<CAPTION>
Total Debt Applicable Applicable
to EBITDA Ratio Margin for LIBO Rate Loans Margin for Base Rate Loans
<S> <C> <C>
greater than or equal to 5.0:1 3.50% 2.25%
greater than or equal to 4.0:1 but less 3.25% 2.00%
than 5.0:1
greater than or equal to 3.0:1 but less 2.75% 1.50%
than 4.0:1
less than 3.0:1 2.25% 1.00%
</TABLE>
(b) Additional Term Loans, maintained as a (i) LIBO Rate Loan, 3.75%
per annum and (ii) Base Rate Loan, 2.75% per annum; and
(c) Second Additional Term Loans, maintained as a (i) LIBO Rate Loan,
4.0% per annum and (ii) Base Rate Loan, 3.0% per annum.
If the Borrower shall fail to deliver a Compliance Certificate for a given
Fiscal Quarter within the time required by clause (d) of Section 7.1.1, or if
any Event of Default shall have occurred and be continuing, then the Applicable
Margin for the period from the 46th day after the first day of such Fiscal
Quarter (or, in the case of the fourth Fiscal Quarter, the 91st day) through
(but excluding) the date such Compliance Certificate is delivered shall
conclusively equal the highest Applicable Margin set forth above for the Fiscal
Quarter during which the Compliance Certificate was not timely delivered. Any
reduction in the Applicable Margin shall be effective beginning on the date that
is three days following the date on which the Administrative Agent receives the
Borrower's Compliance Certificate pursuant to clause (d) of Section 7.1.1. If
the Applicable Margin is required to be increased as a result of an increase in
the most recently determined Total Debt to EBITDA Ratio, such higher Applicable
Margin shall be effective as of and retroactive to the first day of the Fiscal
Quarter in which such Compliance Certificate was required to be delivered.
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"Condition Date" means the date on which the Borrower delivers
evidence to the Administrative Agent in form and substance
satisfactory to the Administrative Agent that the Borrower had at
least $40,000,000 of EBITDA for the 2000 Fiscal Year.
"Fourth Amendment Effective Date" is defined in Section 3.1 of
Amendment No. 4. "Second Additional Term Loan" is defined in clause
(c) of Section 2.1.1.
"Second Additional Term Loan Commitment" means, relative to any
Lender, such Lender's obligation to make Term Loans pursuant to clause
(c) of Section 2.1.1.
"Second Additional Term Loan Commitment Amount" means, on any
date, $7,500,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Second Additional Term Loan Commitment Termination Date" means
the earliest of:
(a) April 15, 2001; or
(b) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described above, the Second
Additional Term Loan Commitment shall terminate automatically and
without any further action.
"Second Additional Term Note" means a promissory note of the
Borrower payable to any Lender, substantially in the form of Exhibit
A-4 hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding
Second Additional Term Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal
thereof.
SECTION II.2.2. Section 1.1 of the Existing Credit Agreement is hereby
amended by deleting the following definitions: "Additional Term Loan
Percentage", "Existing Term Loan Percentage", "Applicable Base Rate Margin" and
"Applicable LIBO Rate Margin".
SECTION II.2.3. Section 1.1 of the Existing Credit Agreement is hereby
amended by amending and restating the following definitions in such Section so
that they read in their entireties as follows:
"Letter of Credit Commitment Amount" means, on any date, a
maximum amount of $10,000,000, as such amount may be reduced from time
to time pursuant to the terms hereof (or, if less, the then existing
Revolving Loan Commitment Amount).
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"Percentage" means, relative to any Lender, the applicable
percentage relating to Revolving Loans, Existing Term Loans, Additional
Term Loans, Second Additional Term Loans or its aggregate percentage
for all facilities provided herein, as the case may be, as set forth
opposite its name on Schedule II hereto under the applicable column
heading or set forth in Lender Assignment Agreement(s) under the
applicable column heading, as such percentage may be adjusted from time
to time pursuant to Lender Assignment Agreement(s) executed by such
Lender and its Assignee Lender(s) and delivered pursuant to Section
10.11. A Lender shall not have (a) any Commitment to make Revolving
Loans or Second Additional Term Loans (as the case may be) or (b) made
any Existing Term Loans or Additional Term Loans (as the case may be),
in each case, if its percentage under the applicable column heading on
Schedule II is zero. As used herein, "Percentage" as it relates to a
Lender's Percentage of Letter of Credit Outstandings shall be equal to
such Lender's Percentage of Revolving Loans.
"Term Loan Commitment" means, relative to any Lender, such
Lender's obligation to make Existing Term Loans pursuant to clause (a)
of Section 2.1.1, to make Additional Term Loans pursuant to clause (b)
of Section 2.1.1, and/or to make Second Additional Term Loans pursuant
to clause (c) of Section 2.1.1, as the context may require.
"Term Loans" means, collectively, the Existing Term Loans, the
Additional Term Loans and the Second Additional Term Loans.
"Term Note" means, as the context may require, an Additional
Term Note, an Existing Term Note or a Second Additional Term Note.
SECTION II.3. Amendments to Article II. Article II of the Existing Credit
Agreement is hereby amended as follows:
SECTION II.3.1. Section 2.1.1 of the Existing Credit Agreement is hereby
amended by adding a new clause (c) at the end of such Section to read as
follows:
"(c) From time to time on any Business Day occurring on and
after the Fourth Amendment Effective Date and prior to the Second
Additional Term Loan Termination Date, each Lender with a Percentage in
excess of zero of the Second Additional Term Loan Commitment Amount
will make loans (relative to such Lender, its "Second Additional Term
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of the Borrowing of Second Additional Term Loans
requested by the Borrower to be made on such day (the commitment of
each such Lender described in this Section 2.1.1 is herein referred to
as its "Second Additional Term Loan Commitment"); provided, however,
that the Borrower may only borrow up to $5,000,000 of Second Additional
Term Loans prior to the Condition Date. No amounts paid or prepaid with
respect to any Second Additional Term Loans may be reborrowed."
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SECTION II.3.2. Section 2.1.4 of the Existing Credit Agreement is hereby
amended by adding a new clause (e) thereto to read as follows:
"(e) make any Second Additional Term Loan if, after giving
effect thereto, the aggregate outstanding principal amount of all the
Second Additional Term Loans (i) of all Lenders with an Second
Additional Term Loan Commitments would exceed the Second Additional
Term Loan Commitment Amount or (ii) of such Lender with an Second
Additional Term Loan Commitment would exceed such Lender's Percentage
of the Second Additional Term Loan Commitment Amount."
SECTION II.3.3. Section 2.6.2 of the Existing Credit Agreement is hereby
amended by deleting the words "Applicable Base Rate Margin" appearing therein
and replacing them with "Applicable Margin for Revolving Loans maintained as
Base Rate Loans".
SECTION II.4. Amendments to Article III. Article III of the Existing Credit
Agreement is hereby amended as follows:
SECTION II.4.1. Clause (j) of Section 3.1.1. of the Existing Credit
Agreement is hereby amended by inserting the words "and Second Additional Term
Loans" after the words "Additional Term Loans" appearing therein.
SECTION II.4.2. Section 3.2.1 of the Existing Agreement is hereby amended
by deleting the words "Applicable Base Rate Margin and "Applicable LIBO Rate
Margin" appearing therein and replacing them with "Applicable Margin" each time
such words appear.
SECTION II.4.3. Section 3.2.2 of the Existing Credit Agreement is hereby
amended by deleting the words "Applicable Base Rate Margin" appearing therein
and replacing them with "Applicable Margin for Revolving Loans maintained as
Base Rate Loans".
SECTION II.4.4. Section 3.3.3 of the Existing Agreement is hereby amended
by deleting the words "Applicable LIBO Rate Margin" appearing therein and
replacing them with "Applicable Margin for Revolving Loans maintained as LIBO
Rate Loans" each time such words appears.
SECTION II.5. Amendments to Article VII. Section 7.1.11 of the Existing
Credit Agreement is hereby amended by deleting the word "and" following the
words "Revolving Loans" and replacing it with a "," and inserting the words "
and Second Additional Term Loans" immediately following the words "Additional
Term Loans" in the second sentence thereof.
SECTION II.6. Schedule II to Credit Agreement. The Existing Credit
Agreement is hereby amended by adding a new Schedule II thereto in the form of
Schedule II hereto.
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SECTION II.7. Exhibit A-4 to Credit Agreement. The Existing Credit
Agreement is hereby amended by adding a new Exhibit A-4 thereto in the form of
Exhibit A-4 hereto.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SECTION III.1. Amendment Effective Date. This Amendment (and the amendments
and modifications contained herein) shall become effective, and shall thereafter
be referred to as "Amendment No. 4", on the date (the "Fourth Amendment
Effective Date") when all of the conditions set forth in this Section 3.1 have
been satisfied.
SECTION III.1.1. Execution of Counterparts. The Administrative Agent shall
have received counterparts of this Amendment, duly executed and delivered on
behalf of the Borrower, the Consenting Obligors, the Required Lenders and each
Lender with a Second Additional Term Loan Commitment.
SECTION III.1.2. Resolutions, etc. The Administrative Agent shall have
received from the Borrower a certificate, dated the Fourth Amendment Effective
Date, in form and substance satisfactory to the Administrative Agent, of its
Secretary or Assistant Secretary as to (a) resolutions of its Board of Directors
then in full force and effect authorizing the execution, delivery and
performance of this Amendment and each other Loan Document to be executed by it;
and (b) the incumbency and signatures of those of its officers authorized to act
with respect to this Amendment and each other Loan Document executed by it, upon
which certificate each Lender may conclusively rely until it shall have received
a further certificate of the Secretary or Assistant Secretary of the Borrower
canceling or amending such prior certificate.
SECTION III.1.3. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender making Second Additional Term Loans,
its Second Additional Term Notes duly executed and delivered by the Borrower.
SECTION III.1.4. Opinions of Counsel. The Administrative Agent shall have
received legal opinions, dated the Fourth Amendment Effective Date and addressed
to the Administrative Agent and all Lenders, from (a) Stutzman & Bromberg, a
professional corporation, counsel to the Obligors, and (b) Shustak, Jalil &
Heller, New York counsel to the Obligors, each satisfactory in form and
substance to the Administrative Agent.
SECTION III.1.5. Amendment Fee and Additional Term Loan Fee. The
Administrative Agent shall have received, (a) for the account of each Lender
signatory hereto prior to or on the date hereof, an amendment fee equal to .25%
of each such Lender's Percentage of the outstanding principal amount of the
Loans and Commitments; and (b) for the account of each Lender that has a Second
Additional Term Loan Commitment, an up-front fee in an amount equal to 3.00% of
each such Lender's Second Additional Term Loan Commitment Amount.
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SECTION III.1.6. Closing Fees, Expenses, etc. The Administrative Agent
shall have received for the account of each Lender, all fees, costs and expenses
due and payable pursuant to Sections 3.3 and 10.3 of the Credit Agreement or
payable hereunder, if then invoiced.
SECTION III.1.7. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and their counsel
shall have received all information and such counterpart originals or such
certified or other copies or such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
ARTICLE IV
AFFIRMATION AND CONSENT
SECTION IV.1. Acknowledgment and Reaffirmation. The Borrower and each
Consenting Obligor hereby reaffirms, as of the Fourth Amendment Effective Date,
(a) the covenants and agreements contained in each Loan Document to which it is
a party, including, in each case, as such covenants and agreements may be
modified by this Amendment and the transactions contemplated thereby, (b) its
guarantee of payment of the Obligations pursuant to the Subsidiary Guaranty and
(c) its obligations with respect to collateral security under each other Loan
Document to which it is a party.
SECTION IV.2. Representations and Warranties, etc. The Borrower and each
Consenting Obligor hereby certifies that, as of the date hereof (both before and
after giving effect to the occurrence of the Fourth Amendment Effective Date),
the representations and warranties made by it contained in the Loan Documents to
which it is a party are true and correct in all material respects with the same
effect as if made on the date hereof, except to the extent any such
representation or warranty refers or pertains solely to a date prior to the date
hereof (in which case such representation and warranty was true and correct in
all material respects as of such earlier date).
SECTION IV.3. Loan Documents. The Borrower and each Consenting Obligor
further confirms that each Loan Document to which it is a party (a) is and shall
continue to be in full force and effect and the same are hereby ratified and
confirmed in all respects, except that upon the occurrence of the Fourth
Amendment Effective Date, all references in such Loan Documents to the "Credit
Agreement", "Loan Documents", "thereunder", "thereof", or words of similar
import shall mean the Credit Agreement and the Loan Documents, as the case may
be, in each case after giving effect to the amendments and other modifications
provided for in this Amendment, (b) if such Loan Document relates to collateral
security, such document shall also expressly and completely secure all Second
Additional Term Loans and all Obligations related thereto
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and (c) if such Loan Document relates to a guarantee, such document shall also
expressly and completely guarantee all Second Additional Term Loans and all
Obligations related thereto.
SECTION IV.4. Course of Dealing, etc. Each Consenting Obligor hereby
acknowledges and agrees that the acceptance by each Lender of this document
shall not be construed in any manner to establish any course of dealing on any
Lender's part, including the providing of any notice or the requesting of any
acknowledgment not otherwise expressly provided for in any Loan Document with
respect to any future amendment, waiver, supplement or other modification to any
Loan Document or any arrangement contemplated by any Loan Document.
ARTICLE V
MISCELLANEOUS
SECTION V.1. Cross-References. References in this Amendment to any Article
or Section are, unless otherwise specified or otherwise required by the context,
to such Article or Section of this Amendment.
SECTION V.2. Loan Document Pursuant to Credit Agreement. This Amendment is
a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement.
SECTION V.3. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION V.4. Counterparts. This Amendment may be executed by the parties
hereto in several counterparts, each of which when executed and delivered shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement.
SECTION V.5. Full Force and Effect; Limited Amendment. Except as expressly
modified hereby, all of the representations, warranties, terms, covenants,
conditions and other provisions of the Existing Credit Agreement and the Loan
Documents shall remain unchanged and shall continue to be, and shall remain, in
full force and effect in accordance with their respective terms. The consents
and modifications set forth herein shall be limited precisely as provided for
herein, and shall not be deemed to be an amendment to, waiver of, consent to or
modification of any other term or provision of the Existing Credit Agreement,
any other Loan Document referred to therein or herein or of any transaction or
further or future action on the part of the Borrower or any Obligor which would
require the consent of the Lenders under the Existing Credit Agreement or any of
the Loan Documents.
SECTION V.6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the signatories hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
EVERCOM, INC.
By: /s/ Terry Matlack
Title: Chief Executive Officer
EVERCOM SYSTEMS, INC.
By: /s/ Keith Kelson
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ Laura Hom
Title: Executive Director, CIBC World Markets Corp. As Agent
CIBC INC.
By: /s/ Laura Hom
Title: Executive Director, CIBC World Markets Corp. As Agent
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FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.
its Agent/Manager
By: /s/ Kathi J. Inorio
-----------------------------------------------------
Title: Vice President
IBJ WHITEHALL BANK & TRUST
COMPANY
By: /s/ Alexander B. Wright
-----------------------------------------------------
Title: Director
ARES LEVERAGED INVESTMENT
FUND L.P.
By: Ares Management L.P.
By: /s/ J. M. Moore
-----------------------------------------------------
Title: Principal
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SCHEDULE II
<TABLE>
<CAPTION>
REVOLVING LOAN EXISTING TERM ADDITIONAL TERM SECOND ADDITIONAL AGGREGATE PERCENTAGE
COMMITMENT LOANS LOANS TERM LOANS
<S> <C> <C> <C> <C> <C>
CIBC Inc. 32.8125% 19.17613636% .36363636% 43.33333333% 27.77762642%
First Source Financial LLP 23.4375% 23.43750000% 0% 0% 19.18728205%
IBJ Whitehall Bank & Trust Company 12.5000% 12.50000000% 0% 13.33333333% 11.62816042%
Banque Paribas 12.5000% 12.5000000% 0% 0% 10.23321709%
American National Bank 18.7500% 18.75000000% 0% 0% 15.34982562%
Ares Leveraged Investment Fund L.P. 0.0000% 13.63636364% 63.63636364% 43.33333333% 15.82388840%
</TABLE>
