Amendment No. 5 to Loand & Security Agrement



 Exhibit 10.74.8 
  
 $19,000,000.00 
  
 AMENDMENT NO. 5 
  
 TO 
  
 LOAN AND SECURITY AGREEMENT 
  
 originally dated as of October 30, 2002 
  
 by and among 
  
 CORRECTIONAL SERVICES CORPORATION

 CSC MANAGEMENT DE PUERTO RICO INC. 
 YOUTH SERVICES INTERNATIONAL HOLDINGS, INC. 
 YOUTH SERVICES INTERNATIONAL REAL PROPERTY
PARTNERSHIP, LLP 
 YOUTH SERVICES INTERNATIONAL, INC. 
 YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC. 
 YOUTH SERVICES INTERNATIONAL OF SOUTH DAKOTA,
INC. 
 YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC. 
 YOUTH SERVICES INTERNATIONAL OF TEXAS, INC. 
 YOUTH SERVICES INTERNATIONAL OF ILLINOIS, INC.

 YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC. 
  
 and 
  
 GENERAL ELECTRIC CAPITAL CORPORATION 
  
 Amended as of March         , 2005 
  


					
	 GE Capital Credit Agreement Amendment No 5
	 	 	 	 









 AMENDMENT NO. 5 TO 
 LOAN AND SECURITY AGREEMENT 
  
 THIS AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of this              day of March, 2005, by
and among CORRECTIONAL SERVICES CORPORATION, a Delaware corporation, CSC MANAGEMENT DE PUERTO RICO INC., a Puerto Rico corporation, YOUTH SERVICES INTERNATIONAL HOLDINGS, INC., a Delaware corporation, YOUTH SERVICES
INTERNATIONAL REAL PROPERTY PARTNERSHIP, LLP, a Maryland limited liability partnership, YOUTH SERVICES INTERNATIONAL, INC., a Maryland corporation, YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC., an Iowa corporation, YOUTH
SERVICES INTERNATIONAL OF SOUTH DAKOTA, INC., a South Dakota corporation, YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC., a Missouri corporation, YOUTH SERVICES INTERNATIONAL OF TEXAS, INC., a Texas corporation, YOUTH SERVICES
INTERNATIONAL OF ILLINOIS, INC., a Maryland corporation, and YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC., a Michigan corporation (collectively, “Borrower”), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (“Lender”). 
  
 RECITALS

  
 A. Pursuant to that certain Loan and Security
Agreement dated as of October 30, 2002 by and between Borrower and Lender (as amended, modified and restated from time to time, the “Loan Agreement”), the parties have established certain financing arrangements that allow Borrower
to borrow funds from Lender in accordance with the terms and conditions set forth in the Loan Agreement. 
  
 B. The parties now desire to amend the Loan Agreement in accordance with the terms and conditions set forth below. 
  
 NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower have agreed to the following amendments to the Loan Agreement. Capitalized
terms used but not defined in this Amendment shall have the meanings that are set forth in the Loan Agreement. 
  
 1. New Section 1.52a of Loan Agreement. The Loan Agreement is hereby amended by inserting the following new Section 1.52a immediately
following the existing Section 1.52: 
  
 Section 1.52a. Reserve Amount. “Reserve Amount” means (i) during the period commencing on the date of Amendment No. 5 to this Agreement through April 30, 2005, $0.00, (ii) during the period commencing May 1, 2005
through May 31, 2005, $250,000.00, (iii) during the period commencing June 1, 2005 through June 30, 2005, 

  


					
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$500,000.00, (iv) during the period commencing July 1, 2005 through July 31, 2005, $750,000.00, and (v) August 1, 2005 and thereafter, $1,000,000.00. 

  
 2. Amendment to Section 2.1A(d) of Loan
Agreement. Subsection (d) of Section 2.1A of the Loan Agreement is hereby amended by deleting the first sentence of such subsection (d) in its entirety and by inserting in lieu thereof the following sentence: 
  
 Subject to the terms and conditions of this Agreement, advances under the
Revolving Loan shall be made and Letters of Credit shall be issued against a borrowing base equal to eighty-five percent (85%) of Qualified Accounts due and owing from any Account Debtor less the Reserve Amount (the “Borrowing Base”).
 
  
 3. Amendment to Section 2.1C(a) of Loan
Agreement. Subsection (a) of Section 2.1C of the Loan Agreement is hereby amended by deleting the first sentence of such subsection (a) in its entirety and by inserting in lieu thereof the following sentence.  
  
 Borrower has requested that Lender issue or cause to be issued, and Lender
has agreed to issue or cause to be issued by Issuing Party for Borrower’s account and guaranteed by Lender, one or more Letters of Credit, for the benefit of one or more Beneficiaries, in a maximum Face Amount of (i) effective from the date of
Amendment No. 5 to this Agreement through July 31, 2005, $12,500,000, and (ii) effective from and after August 1, 2005, $10,500,000. 
  
 4. Amendment to Section 2.1C(e) of Loan Agreement. Subsection (e) of Section 2.1C of the Loan Agreement is hereby amended by deleting from
clause (z) of such subsection (e) the dollar amount “$200,000” and by inserting in lieu thereof “the Reserve Amount”. 
  
 5. Special Covenant Regarding Capital Expenditures. Borrower covenants that, for the period commencing on the date of this Amendment
through the date (if any) on which Letter of Credit No. SE444600W dated September 17, 2004 issued to U.S. Bank, National Association, as Trustee (and any replacement letter of credit), either expires, is surrendered or is fully drawn with all draws
reimbursed to Lender or there shall have occurred any combination of such events such that no further draws are possible and all draws made are fully reimbursed, Borrower’s capital expenditures, other than any capital expenditures made in
connection with the detention complex under construction in Frio County, Texas, will not exceed $1,500,000.00. 
  
 6. Confirmation of Representations and Warranties. Borrower hereby (a) confirms that all of the representations and warranties
set forth in Article IV of the Loan Agreement are true and correct in all material respects, and (b) specifically represents and warrants to Lender that it has good and marketable title to all of its respective Collateral, free and clear of any lien
or security interest in favor of any other person or entity. 
  
 7. Updated Schedules. As a condition precedent to Lender’s agreement to enter into this Amendment, and in order for this Amendment to be effective, Borrower shall revise, update and deliver to Lender all Schedules
to the Loan Agreement, to the extent necessary, (a) to 

  


					
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reflect updated and accurate information with respect to Borrower, and (b) to update all other information as necessary to make the Schedules previously
delivered correct. Borrower hereby represents and warrants that the information set forth on the Schedules attached to the Loan Agreement (as amended per the Schedules attached hereto, if any) is true and correct as of the date of this Amendment.

  
 8. Fees. In consideration of this
Amendment, Borrower agrees to pay a fee of Five Thousand and No/100 Dollars ($5,000.00), which amount shall be added to the balance of the Revolving Credit Advances on the date hereof. 
  
 9. Costs and Expenses. Borrower agrees to pay all costs and expenses incurred by Lender in connection
with this Amendment. 
  
 10.
Enforceability. This Amendment constitutes the legal, valid and binding obligation of each Borrower and is enforceable against each such Borrower in accordance with its terms. 
  
 11. Reference to the Effect on the Loan Agreement. 

 
 (a) Upon the effectiveness of this Amendment, each
reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended by this Amendment. 
  
 (b) Except as specifically amended above, the Loan Agreement
and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. 
  
 (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in this Amendment, operate as a
waiver of any right, power or remedy of Lender, nor constitute a waiver of any provision of the Loan Agreement, or any other documents, instruments and agreements executed or delivered in connection with the Loan Agreement. 
  
 (d) This Amendment (together with any other document
executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Loan Agreement. 
  
 12. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Maryland. 
  
 13. Headings. Section headings in this Amendment are included
for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 
  
 14. Counterparts. This Amendment may be executed in counterparts, and such counterparts taken together shall be deemed to constitute one and
the same instrument. 
  


					
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 IN WITNESS WHEREOF, intending to be legally bound, the parties have caused this Amendment to be
executed as of the date first written above. 
  

					
	 LENDER:
  
 GENERAL ELECTRIC CAPITAL CORPORATION
 a Delaware corporation

			
	 By:
	 	 	 	 
	 Name:
	 	 	 	 
	 Title:
	 	 	 	 
	
	 BORROWER:
  
 CORRECTIONAL SERVICES CORPORATION
 a Delaware corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner

	 Title:
	 	 Senior Vice President & CFO

	
	 CSC MANAGEMENT DE PUERTO RICO INC.
 a Puerto Rico corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner

	 Title:
	 	 Senior Vice President & CFO

	
	 YOUTH SERVICES INTERNATIONAL HOLDINGS, INC.
 a Delaware corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner

	 Title:
	 	 Senior Vice President & CFO



  


					
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	 YOUTH SERVICES INTERNATIONAL REAL
PROPERTY PARTNERSHIP, LLP
 a Maryland limited liability partnership

			
	 By:
	 	 Youth Services International, Inc.
 a Maryland corporation
 its Managing Partner
	 	 
			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL, INC.
 a Maryland corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL OF NORTHERN IOWA, INC.
 an Iowa corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL OF SOUTH DAKOTA, INC.
 a South Dakota corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL OF MISSOURI, INC.
 a Missouri corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 


  


					
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	 YOUTH SERVICES INTERNATIONAL OF TEXAS, INC.
 a Texas corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL OF ILLINOIS, INC.
 a Maryland corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 
	
	 YOUTH SERVICES INTERNATIONAL OF MICHIGAN, INC.
 a Michigan corporation

			
	 By:
	 	 	 	(SEAL)
	 Name:
	 	 Bernard A. Wagner
	 	 
	 Title:
	 	 Senior Vice President & CFO
	 	 


  


					
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 LIST OF SCHEDULES 
  

			
	 Schedule 1.41 -
	  	Mortgages
		
	 Schedule 1.45 -
	  	Permitted Liens
		
	 Schedule 3.6   -
	  	Officers with Power of Attorney
		
	 Schedule 4.1   -
	  	Subsidiaries
		
	 Schedule 4.2   -
	  	State of Organization
		
	 Schedule 4.5   -
	  	Litigation
		
	 Schedule 4.7   -
	  	Tax Identification Numbers; Fiscal Years
		
	 Schedule 4.9   -
	  	Exceptions to Ownership
		
	 Schedule 4.10 -
	  	Tax Liability
		
	 Schedule 4.14 -
	  	Environmental Matters
		
	 Schedule 4.15 -
	  	Places of Business; Record Owner; Chief Executive Office
		
	 Schedule 4.16 -
	  	Intellectual Property
		
	 Schedule 4.17 -
	  	Capitalization; Ownership
		
	 Schedule 4.19 -
	  	Borrowings and Guarantees
		
	 Schedule 4.20 -
	  	Business Interruptions
		
	 Schedule 4.21 -
	  	Trade Names
		
	 Schedule 4.22 -
	  	Joint Ventures
		
	 Schedule 4.27 -
	  	Funds from Restricted Grants
		
	 Schedule 4.29 -
	  	Assignment of Claims Laws
		
	 Schedule 4.30 -
	  	Unrecorded Leases
		
	 Schedule 4.35 -
	  	Unrecorded Contracts

  


					
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	 Schedule 4.42 -
	  	Other Liens
		
	 Schedule 4.43 -
	  	Agreements to Transfer Title
		
	 Schedule 6.7   -
	  	Insurance
		
	 Schedule 6.24 -
	  	Post-Closing Obligations
		
	 Schedule 6.38 -
	  	Operating Accounts

  


					
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