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LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
dated as of September 9, 1997
among
CONTIFINANCIAL CORPORATION
The Participating Banks Party Hereto
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Agent
and
DRESDNER BANK AG,
NEW YORK BRANCH,
as Issuing Bank
_________________
$275,000,000
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
and
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as Arrangers
__________________
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms .............................................. 2
SECTION 1.02. Computation of Time Periods................................. 30
SECTION 1.03. Terms Generally............................................. 30
SECTION 1.04. Accounting Terms; GAAP...................................... 31
ARTICLE II
Amount and Terms of the Letter of Credit
SECTION 2.01. The Letter of Credit........................................ 31
SECTION 2.02. Commissions and Fees........................................ 32
SECTION 2.03. Reimbursement............................................... 32
SECTION 2.04. Loans....................................................... 33
SECTION 2.05. Reimbursement of Issuing
Bank, Etc. ............................................... 35
SECTION 2.06. Prepayments................................................. 37
SECTION 2.07. Increased Costs............................................. 39
SECTION 2.08. Break Funding Payments...................................... 40
SECTION 2.09. Payments and Computations................................... 41
SECTION 2.10. Non-Business Days........................................... 43
SECTION 2.11. Termination; Reduction;
Extension................................................. 43
SECTION 2.12. Evidence of Debt............................................ 47
SECTION 2.13. Obligations Absolute........................................ 47
SECTION 2.14. Taxes....................................................... 50
SECTION 2.15. Interest Elections.......................................... 51
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers........................................ 53
SECTION 3.02. Authorization; Enforceability............................... 53
SECTION 3.03. Governmental Approvals;
No Conflicts.............................................. 53
SECTION 3.04. Financial Condition; No Material
Adverse Change............................................ 54
SECTION 3.05. Properties.................................................. 54
SECTION 3.06. Litigation and Environmental
Matters................................................... 54
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SECTION 3.07. Compliance with Laws
and Agreements............................................ 55
SECTION 3.08. Investment and Holding Company
Status.................................................... 55
SECTION 3.09. Taxes....................................................... 55
SECTION 3.10. ERISA....................................................... 56
SECTION 3.11. Disclosure.................................................. 56
SECTION 3.12. Federal Reserve Regulations................................. 56
ARTICLE IV
Conditions
SECTION 4.01. Effective Date.............................................. 57
SECTION 4.02. Issuance and Increases...................................... 59
SECTION 4.03. Each Loan................................................... 59
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information .............................................. 60
SECTION 5.02. Notices of Material Events.................................. 62
SECTION 5.03. Existence; Conduct of Business.............................. 63
SECTION 5.04. Payment of Obligations...................................... 63
SECTION 5.05. Maintenance of Properties;
Insurance................................................. 63
SECTION 5.06. Books and Records; Inspection
and Audit Rights.......................................... 64
SECTION 5.07. Compliance with Laws........................................ 64
SECTION 5.08. Purpose..................................................... 64
SECTION 5.09. Related Documents........................................... 65
SECTION 5.10. Reimbursement Account....................................... 65
ARTICLE VI
Negative Covenants
SECTION 6.01. Limitation on Indebtedness and
Preferred Stock of
Restricted Subsidiaries................................... 65
SECTION 6.02. Limitation on Liens......................................... 66
SECTION 6.03. Limitation on Mergers and
Consolidations............................................ 69
SECTION 6.04. Limitation on Sales of Assets and
Subsidiary Stock.......................................... 70
SECTION 6.05. Limitation on Loans and
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Investments............................................... 74
SECTION 6.06. Limitation on Affiliate
Transactions.............................................. 75
SECTION 6.07. Limitation on Restrictions on
Distributions from
Restricted Subsidiaries................................... 76
SECTION 6.08. Limitation on Investment
Company Status............................................ 76
SECTION 6.09. Financial Covenants......................................... 76
SECTION 6.10. Limitation on Business of the
Company................................................... 76
SECTION 6.11. Commercial Paper............................................ 76
SECTION 6.12. Issuing and Paying Agent and
Depositary................................................ 77
SECTION 6.13. Related Documents........................................... 77
ARTICLE VII
Events of Default........................................ 78
ARTICLE VIII
The Agent; the Participating Banks;
and the Issuing Bank........................................ 82
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices..................................................... 85
SECTION 9.02. Waivers; Amendments........................................ 86
SECTION 9.03. Expenses; Indemnity;
Damage Waiver............................................. 87
SECTION 9.04. Successors and Assigns...................................... 89
SECTION 9.05. Survival.................................................... 93
SECTION 9.06. Counterparts; Integration;
Effectiveness............................................. 94
SECTION 9.07. Severability................................................ 94
SECTION 9.08. Right of Setoff............................................. 94
SECTION 9.09. Governing Law; Jurisdiction;
Consent to Service of Process............................. 95
SECTION 9.10. WAIVER OF JURY TRIAL........................................ 97
SECTION 9.11. Headings.................................................... 97
SECTION 9.12. Confidentiality............................................. 97
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SCHEDULES AND EXHIBITS
Schedule 2.01 Participating Banks
Schedule 3.06 Disclosed Matters
Schedule 6.01 Indebtedness and Preferred Stock
Schedule 6.02 Existing Liens
Schedule 6.06 Affiliate Transactions
Schedule 6.07 Existing Restrictions
Exhibit A Form of Letter of Credit
Exhibit B Form of Dealer Agreement
Exhibit C Form of Issuing and Paying Agency and
Depositary Agreement
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Opinion of Pitney, Xxxxxx, Xxxx &
Xxxxx
Exhibit F Form of Opinion of Internal Counsel of the
Company
Exhibit G Form of Assignment and Acceptance
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LETTER OF CREDIT AND REIMBURSEMENT
AGREEMENT, dated as of September 9,
1997, among CONTIFINANCIAL CORPORATION,
the PARTICIPATING BANKS party hereto,
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, as Agent, and DRESDNER BANK AG,
NEW YORK BRANCH, as Issuing Bank.
INTRODUCTORY STATEMENTS: (1) The Company (such
term and each other capitalized term used but not otherwise
defined herein having the meaning assigned to such term in
Article I) has requested the Participating Banks to
establish the credit facility provided for herein in the
amount of $275,000,000 to permit the issuance of a direct
pay letter of credit to the Issuing and Paying Agent and
Depositary for the benefit of the holders of the Commercial
Paper.
(2) The Company and the CP Dealer have entered
into a Dealer Agreement pursuant to which the CP Dealer will
purchase for its own account or sell for the account of the
Company the Commercial Paper.
(3) The Company, the Issuing and Paying Agent and
Depositary, the Issuing Bank and the Agent have entered into
an Issuing and Paying Agency and Depositary Agreement in
connection with the issuance from time to time of the
Commercial Paper.
(4) The Company has requested the Issuing Bank to
issue its direct pay letter of credit, in substantially the
form of Exhibit A (such letter of credit and any successor
letter of credit being the "Letter of Credit"), for the
Stated Amount (the Issuing Bank's obligation to issue the
Letter of Credit as hereinafter provided being hereinafter
referred to as the "Commitment").
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The Participating Banks are willing to establish
such credit facility upon the terms and subject to the
conditions set forth herein. Accordingly, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms have the meanings specified
below:
"ABR", when used in reference to any Loan, refers
to whether such Loan bears interest at a rate determined by
reference to the Alternate Base Rate.
"Account" has the meaning assigned to such term in
Section 2.06(c).
"Additional Assets" means (a) any property or
assets (other than Indebtedness and Capital Stock) used or
useful in a Related Business, (b) the Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by the Company or
another Restricted Subsidiary, (c) Capital Stock constitu
ting a minority interest in any Person that at such time is
a Restricted Subsidiary; provided, however, that any such
Restricted Subsidiary described in clause (b) or (c), above,
is primarily engaged in a Related Business or (d) the
Capital Stock or Indebtedness of a Strategic Alliance
Client.
"Adjusted LIBO Rate" means, with respect to each
day during each Interest Period pertaining to a Eurodollar
Loan, an interest rate per annum equal to (a) the Applicable
Percentage plus (b) the rate determined in accordance with
the following formula (rounded upwards, if necessary, to the
next 1/16 of 1%):
LIBO Rate
---------
1.00 - Eurocurrency Reserve Requirements
"Administrative Questionnaire" means an
Administrative Questionnaire in a form supplied by the
Agent.
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"Affiliate" means, with respect to a specified
Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
"Agent" means Credit Suisse First Boston
Corporation, New York Branch, in its capacity as
administrative agent for the Participating Banks hereunder.
"Alternate Base Rate" means, for any day, a rate
per annum equal to the greater of (a)the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Percentage" means as of any time the
percentage per annum set forth below corresponding to the
then-Applicable Rating Level:
Applicable Rating
Level Adjustment
I 0.400%
II 0.450%
III 0.500%
IV 0.625%
V 0.750%
VI 1.000%
===================================== ================================
"Applicable Rating Level" shall be determined, for
any day, in accordance with the following table based upon
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the ratings by Xxxxx'x and S&P, respectively, applicable on
such date to the Company's Index Debt:
Applicable
Index Debt Ratings Rating Level
Category 1
A- or higher by S&P
A3 or higher by Xxxxx'x I
Category 2
BBB+ by S&P
Baa1 by Xxxxx'x II
Category 3
BBB by S&P
Baa2 by Xxxxx'x III
Category 4
BBB- by S&P
Baa3 by Xxxxx'x IV
Category 5
BB+ by S&P
Bal by Xxxxx'x V
Category 6 VI
Lower than BB+ by S&P
Lower than Bal by Xxxxx'x
========================================= ======================
For purposes of the foregoing, (a)if either Xxxxx'x or S&P
shall not have in effect a rating for the Company's Index
Debt (other than by reason of the circumstances referred to
in the last sentence of this definition), then such rating
agency shall be deemed to have established a rating in
Category 6; (b) if the ratings established or deemed to have
been established by Xxxxx'x and S&P for the Company's Index
Debt shall fall within different Categories, the Applicable
Rating Level shall be based on the higher of the two
ratings, except that (i)if the lower of such ratings is two
Categories below the higher of such ratings, the Applicable
Rating Level shall be determined based on the Category
between the Categories in which such ratings fall and
(ii)if the lower of such ratings is more than two
Categories below the higher of such ratings, the Applicable
Rating Level shall be determined based on the Category that
is immediately above the Category in which the lower of such
ratings falls; and (c)if the ratings established or deemed
to have been established by Xxxxx'x and S&P for the
Company's Index Debt shall be changed (other than as a
result of a change in the rating system of Xxxxx'x or S&P),
such change shall be effective as of the first Business Day
following the applicable ratings change. Each change in the
Applicable Rating Level shall apply during the period
commencing on the date on which such change is publicly
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
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announced and ending on the date immediately preceding the
effective date of the next such change. If the rating
system of Xxxxx'x or S&P shall change, or if either such
rating agency shall cease to be in the business of rating
corporate debt obligations or either Xxxxx'x or S&P shall
refuse to provide a rating of the Company's Index Debt
(provided that the Company has used its best efforts to
cause such rating agency to provide such a rating, including
the payment of any fees and the provision of any information
requested or required thereby in the ordinary course conduct
of its rating business), the Company and the Participating
Banks shall negotiate in good faith to amend this definition
to reflect such changed rating system or the unavailability
of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rating
Level shall be determined by reference to the rating most
recently in effect prior to such change or cessation.
"Asset Disposition" has the meaning assigned to it
in Section 6.04.
"Assignment and Acceptance" means an assignment
and acceptance entered into by a Participating Bank and an
assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Agent, in the
form of Exhibit G or any other form approved by the Agent.
"Average Life" means, as of the date of determina
tion, with respect to any Indebtedness or Preferred Stock,
the quotient obtained by dividing (a)the sum of the
products of the numbers of years from the date of determina
tion to the dates of each successive scheduled principal
payment of such Indebtedness or redemption or similar
payment with respect to such Preferred Stock multiplied by
the amount of such payment by (b)the sum of all such
payments.
"Board" means the Board of Governors of the
Federal Reserve System of the United States of America.
"Board of Directors" means the Board of Directors
of the Company or any committee thereof duly authorized to
act on behalf of such Board of Directors.
"Borrowing Base" means an amount by which (a)two
times the sum, without duplication, of (i)100% of Eligible
Cash & Cash Equivalents, (ii)95% of Eligible Receivables,
(iii) 85% of Eligible Fixed Income Investments, (iv)85% of
Eligible I/O Strip Securities, (v)80% of Eligible
Performance Deposits, (vi)75% of Capitalized Servicing Fees
and (vii)65% of Eligible Residuals (in each case excluding
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
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any assets set forth in clauses (i) through (vii) above that
are not Eligible Assets), exceeds (b)the sum of (i)two
times Outstanding Funded Indebtedness plus (ii)the
aggregate principal amount of all loans outstanding under
the Credit Agreement. The amount of the Borrowing Base set
forth in any Borrowing Base Certificate may be reduced by
the Company at its option for any reason, including any
failure of the Company to obtain the relevant information
from newly-acquired Restricted Subsidiaries in a timely
manner. The Borrowing Base at any time in effect shall be
determined by reference to the Borrowing Base Certificate
most recently delivered to the Agent pursuant to
Sections 4.01(f) and 5.01(g). Notwithstanding the foregoing
provisions of this definition, at any time when the Company
shall have outstanding Index Debt that shall be Investment
Grade, the Borrowing Base will be deemed to equal the Stated
Amount in effect at such time.
"Borrowing Base Certificate" means a certificate
in the form of Exhibit D prepared by the Company.
"Business Day" means a day that is not a Saturday,
Sunday or other day on which commercial banks are required
or authorized by law to close in New York City; provided
that when used in connection with any Eurodollar Loan or
Interest Period therefor, "Business Day" shall also exclude
any day on which dealings in dollar deposits are not carried
on in the London interbank market.
"Cancelation Date" has the meaning assigned to
that term in the Letter of Credit.
"Capital Lease Obligations" of any Person means
the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof,
which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall
be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" of any Person means any and all
shares, interests, share capital, rights to subscribe for or
purchase, warrants, options, participations or other
equivalents of or interests or membership interests in
(however designated) equity of such Person, including any
Preferred Stock, any limited or general partnership interest
and any limited liability company membership interest (but
excluding any debt securities convertible into such equity),
and any rights to subscribe for or purchase any thereof.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
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"Capitalized Servicing Fees" means servicing fees
capitalized and carried at fair value in accordance with
GAAP on the balance sheet of the Company and its Restricted
Subsidiaries on a consolidated basis.
"Change in Control" means the occurrence of any of
the following events:
(a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other
than any Permitted Holder, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that such person shall
be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether
such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than
35% of the total voting power of the Voting Stock of
the Company; provided, however, that the Permitted
Holders beneficially own (as defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company
than such other person and do not have the right or
ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of
Directors (for the purposes of this clause (i), such
other person shall be deemed to beneficially own any
Voting Stock of a corporation held by another
corporation (a "parent corporation"), if such other
person is the beneficial owner (as defined above for
such person), directly or indirectly, of more than 35%
of the voting power of the Voting Stock of such parent
corporation and the Permitted Holders beneficially own
(as defined above for the Permitted Holders), directly
or indirectly, in the aggregate a lesser percentage of
the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by
voting power, contract or otherwise to elect or
designate for election a majority of the board of
directors of such parent corporation);
(b) during any period of two consecutive years,
individuals who at the beginning of such period
constituted the Board of Directors (together with any
new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of
the Company was approved by a vote of 66-2/3% of the
directors of the Company then still in office who were
either directors at the beginning of such period or
whose election or nomination for election was
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in
office; or
(c) the merger or consolidation of the Company
with or into another Person or the merger of another
Person with or into the Company, or the sale of all or
substantially all the assets of the Company to another
Person (other than a Person that is controlled by the
Permitted Holders), and, in the case of any such merger
or consolidation, the securities of the Company that
are outstanding immediately prior to such transaction
and which represent 100% of the aggregate voting power
of the Voting Stock of the Company are changed into or
exchanged for cash, securities or property, unless
pursuant to such transaction such securities are
changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation
that represent immediately after such transaction, at
least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation; provided,
however, that the sale by the Company or its Restricted
Subsidiaries from time to time solely of Receivables to
a trust for the purpose solely of effecting one or more
securitizations shall not be treated hereunder as a
sale of all or substantially all the assets of the
Company.
"Change in Law" means (a)the adoption of any law,
rule or regulation after the date of this Agreement, (b)any
change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c)compliance
by any Participating Bank (or, for purposes of
Section 2.07(b), by any lending office of such Participating
Bank or by such Participating Bank's holding company, if
any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commercial Paper" means short-term promissory
notes issued by the Company pursuant to the Issuing and
Paying Agency and Depositary Agreement.
"Commitment" has the meaning assigned to that term
in the fourth Introductory Statement hereto.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
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"Company" means ContiFinancial Corporation, a
Delaware corporation.
"Consolidated EBIT" for any period, with respect
to the Company and its Restricted Subsidiaries on a xxxxxxx
dated basis, means Consolidated Net Income for such period
plus, to the extent deducted in computing Consolidated Net
Income for such period, (a)Consolidated Interest Expense
for such period and (b)foreign, Federal, state and local
income tax expense for such period.
"Consolidated Interest Coverage Ratio" for any
period means the ratio of Consolidated EBIT for such period
to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" for any period
means the total interest expense of the Company and its
Restricted Subsidiaries on a consolidated basis for such
period.
"Consolidated Leverage Ratio" as of any date of
determination means the ratio of (a)the aggregate amount of
all Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis as of such date
(excluding (i)Permitted Warehouse Indebtedness and (ii)any
Indebtedness under Hedging Agreements Incurred pursuant to
Section 6.05(b)) to (b)Consolidated Net Worth as of such
date.
"Consolidated Net Income" means the net income
from continuing operations (after taxes) of the Company and
its Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP, excluding the effect of
extraordinary or non-recurring gains or losses (as such
gains or losses are determined in accordance with GAAP).
"Consolidated Net Worth" means the total of the
amounts shown on the balance sheet of the Company and its
Restricted Subsidiaries on a consolidated basis as of the
end of the most recent fiscal quarter of the Company for
which financial statements are available, as (a)the par or
stated value of all outstanding Capital Stock of the Company
plus (b) paid-in capital or capital surplus relating to such
Capital Stock plus (c)any retained earnings or earned
surplus less (i)any accumulated deficit, (ii)any amounts
attributable to Disqualified Stock and (iii)any amounts
attributable to deferred compensation appropriately
classified as net worth in accordance with GAAP.
"Continental Grain" means Continental Grain
Company, a Delaware corporation.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
10
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative
thereto.
"CP Dealer" means Credit Suisse First Boston
Corporation, a Massachusetts corporation.
"Credit Agreement" means the Credit Agreement
dated as of January 7, 1997, among ContiFinancial
Corporation, the lenders party thereto and Credit Suisse
First Boston, New York Branch, as administrative agent.
"Dealer Agreement" means a dealer agreement dated
the date hereof between the CP Dealer and the Company
substantially in the form of Exhibit B.
"Default" means any event or condition which
constitutes an Event of Default or which upon notice, lapse
of time or both would, unless cured or waived, become an
Event of Default.
"Default Rate" means 2% per annum plus the
Alternate Base Rate in effect from time to time.
"Disclosed Matters" means the actions, suits and
proceedings and the environmental matters disclosed in
Schedule 3.06.
"Disqualified Stock" means, with respect to any
Person, any Capital Stock which by its terms (or by the
terms of any security into which it is convertible or for
which it is exchangeable) or upon the happening of any event
(a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise,(b)is convertible or
exchangeable for Indebtedness or Disqualified Stock or
(c)is redeemable at the option of the holder thereof, in
each case in whole or in part on or prior to the first
anniversary of the Termination Date; provided, however, that
any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the
right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of a "change of control"
occurring prior to the first anniversary of the Termination
Date shall not constitute Disqualified Stock if the "change
of control" provisions applicable to such Capital Stock are
not more favorable to the holders of such Capital Stock than
the Change in Control-related provisions in Article VII.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
11
"dollars" or "$" refers to lawful money of the
United States of America.
"Effective Date" means the date on which the
conditions set forth in Section 4.01 are satisfied.
"Eligible Assets" means Eligible Cash & Cash
Equivalents, Eligible Fixed Income Investments, Eligible I/O
Strip Securities, Eligible Performance Deposits, Eligible
Receivables, Eligible Residuals and Capitalized Servicing
Fees, in each case which are free and clear of all Liens
(except that Eligible Performance Deposits may be subject to
a Lien in favor of the Person providing the related
Warehouse Facility if such Lien was created in connection
with the provision of such Warehouse Facility and secures
the performance of assets relating to such Warehouse
Facility).
"Eligible Cash & Cash Equivalents" means all cash
and all Investments of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in
accordance with GAAP, specified in any of clauses (a)
through (d)of the definition of Permitted Investments.
"Eligible Excess Spread Receivables" means Excess
Spread Receivables of the Company and its Restricted
Subsidiaries on a consolidated basis created after the date
hereof; provided, however, that "Eligible Excess Spread
Receivables" shall not include any Excess Spread Receivables
created as the result of the securitization or sale of other
Excess Spread Receivables.
"Eligible Fixed Income Investments" means all
Investments of the Company and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP,
of the type specified in clause (e)of the definition of
Permitted Investments.
"Eligible I/O Strip Securities" means the book
value of all I/O Strip Securities of the Company and its
Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP, that are rated at least Baa3 by
Xxxxx'x or BBB- by S&P, Duff & Xxxxxx Credit Rating Co. or
Fitch.
"Eligible Performance Deposits" means the
aggregate amount of all Performance Deposits of the Company
and its Restricted Subsidiaries, determined on a xxxxxxx
dated basis, other than Performance Deposits relating to
Warehouse Facilities if the Company or a Restricted
Subsidiary has determined (a)in the case of purchase and
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
12
sale Warehouse Facilities, not to repurchase and subse
quently securitize or sell the related Receivables or
assets, and (b)in the case of Warehouse Facilities in the
form of a loan, not to securitize or sell the related
Receivables or assets.
"Eligible Performance Guarantees" means the
aggregate amount of all Performance Guarantees of the
Company and its Restricted Subsidiaries, determined on a
consolidated basis, other than Performance Guarantees
relating to Warehouse Facilities if the Company or a
Restricted Subsidiary has determined (a) in the case of
purchase and sale Warehouse Facilities, not to repurchase
and subsequently securitize or sell the related Receivables
or assets, and (b)in the case of Warehouse Facilities in
the form of a loan, not to securitize or sell the related
Receivables or assets.
"Eligible Receivables" shall mean all Receivables
(excluding Performance Deposits, Capitalized Servicing Fees
and Excess Spread Receivables) of the Company and its
Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP, which are held for sale and are not
past due by more than 90 days; provided, however, that the
aggregate amount of Eligible Receivables at any time shall
exclude (a)Eligible Receivables that are past due by more
than 30 days but less than 60 days to the extent that
Eligible Receivables past due by more than 30 days but less
than 60 days would otherwise constitute more than 7% of such
aggregate amount of Eligible Receivables at such time, and
(b)Eligible Receivables that are past due by 60 days or
longer to the extent that Eligible Receivables past due by
60 days or longer would otherwise constitute more than 3% of
such aggregate amount of Eligible Receivables at such time.
"Eligible Residuals" shall mean all Excess Spread
Receivables (other than Eligible I/O Strip Securities) of
the Company and its Restricted Subsidiaries, determined on a
consolidated basis, and carried at fair value, in accordance
with GAAP, excluding any such Excess Spread Receivables
created as the result of the securitization of existing
Excess Spread Receivables or the sale of Excess Spread
Receivables.
"Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promul
gated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
13
threatened release of any Hazardous Material or health and
safety matters.
"Environmental Liability" means any liability,
contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Restricted
Subsidiary directly or indirectly resulting from or based
upon (a)violation of any Environmental Law, (b)the
generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials,
(c)exposure to any Hazardous Materials,(d)the release or
threatened release of any Hazardous Materials into the
environment or (e)any contract, agreement or other
consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
"Equity Net Proceeds" means the cash proceeds from
the issuance or sale by the Company or any Restricted
Subsidiary (other than the issuance or sale to the Company
or any Wholly Owned Restricted Subsidiary) of any equity
security (or any option, warrant or right to subscribe for
or security convertible into or exchangeable for any equity
security) of the Company or any Restricted Subsidiary (other
than sales of Capital Stock of the Company to directors,
officers, consultants or employees of the Company or any
Restricted Subsidiary, in connection with permitted employee
compensation and incentive arrangements), net of all taxes
applicable to and customary fees, commissions, costs and
other expenses incurred in connection with such issuance or
sale.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) that, together with the
Company, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated
as a single employer under Section 414 of the Code.
"ERISA Event" means (a)any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b)the existence
with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
14
standard with respect to any Plan; (d) the incurrence by the
Company or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of
any Plan; (e) the receipt by the Company or any ERISA
Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from
the Company or any ERISA Affiliate of any notice, concerning
the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of
Title IV of ERISA.
"Eurocurrency Reserve Requirements" means for any
day as applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for Eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of
the Federal Reserve System of the United States of America.
"Eurodollar", when used in reference to any Loan,
refers to whether such Loan bears interest at a rate
determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to
such term in Article VII.
"Excess Spread" means, over the life of a "pool"
of Receivables that have been sold by a Person to a trust or
other Person in a securitization or sale, the rights
retained by such Person or a Restricted Subsidiary at or
subsequent to the closing of such securitization or sale to
receive for its benefit cash flows attributable to such
"pool".
"Excess Spread Receivables" of a Person means the
contractual or certificated right to Excess Spread
capitalized on such Person's consolidated balance sheet (the
amount of which shall be the present value of the Excess
Spread, calculated in accordance with GAAP).
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
15
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Excluded Taxes" means, with respect to the Agent,
any Participating Bank, or any other recipient of any
payment to be made by or on account of any obligation of the
Company hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is
located or, in the case of any Participating Bank, in which
its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which the
Company is located and (c) in the case of a Foreign
Participating Bank (other than an assignee pursuant to a
request by the Company under Section 9.04(i)), any
withholding tax that is imposed on amounts payable to such
Foreign Participating Bank at the time such Foreign
Participating Bank becomes a party to this Agreement (or
designates a new lending office) or is attributable to such
Foreign Participating Bank's failure to comply with
Section 2.14(e), except to the extent that such Foreign
Participating Bank (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Company
with respect to such withholding tax pursuant to
Section 2.14(a).
"Face Amount" means, with respect to any
Commercial Paper, (a) the aggregate face amount (if issued
on a discount basis) of such Commercial Paper or (b) the
aggregate principal amount (if issued on an interest-bearing
basis) of such Commercial Paper together with the aggregate
amount of interest to the stated maturity date thereof.
"Federal Funds Effective Rate" means, for any day,
the weighted average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day
that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for
the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected
by it.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
16
"Financial Officer" means the chief financial
officer, principal accounting officer, treasurer or
controller of the Company.
"Fitch" means Fitch Investors Service, L.P. or any
successor thereto.
"Foreign Participating Bank" means any
Participating Bank that is organized under the laws of a
jurisdiction other than that in which the Company is
located. For purposes of this definition, the United States
of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting
principles in the United States of America.
"Governmental Authority" means the government of
the United States of America, any other nation or any
political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor")
means any obligation, contingent or otherwise, of the
guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment
thereof, (c)to maintain working capital, equity capital or
any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation;
provided that the term Guarantee shall not include endorse
ments for collection or deposit in the ordinary course of
business.
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
17
or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate
protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging
arrangement.
"Incur" means issue, assume, Guarantee, incur or
otherwise become liable for; provided, however, that any
Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Person at the time it becomes
a Restricted Subsidiary. The term "Incurrence" when used as
a noun shall have a correlative meaning. The accretion of
principal of a non-interest bearing or other discount
security shall be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person
on any date of determination (without duplication), (a)the
principal of and premium (if any) in respect of
(i)indebtedness of such Person for money borrowed and
(ii)indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such
Person is responsible or liable; (b)all Capital Lease
Obligations of such Person; (c)all obligations of such
Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable and expense
accruals arising in the ordinary course of business);
(d) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other
than obligations described in (a) through (c), above)
entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn
upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following
receipt by such Person of a demand for reimbursement
following payment on the letter of credit); (e)the amount
of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any
Disqualified Stock (but excluding any accrued dividends);
(f) Warehouse Indebtedness; (g) in connection with each sale
by such Person of any Excess Spread Receivables, the maximum
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
18
aggregate contractual claim (if any) that the purchaser
thereof could have against such Person if the amounts
anticipated at the time of such sale to be received by such
purchaser in connection with such Excess Spread Receivables
are not received by such purchaser; (h)all obligations of
the type referred to in clauses(a) through (g) of other
Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (i)all
obligations of the type referred to in clauses(a) through
(h) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured and (j)to
the extent not otherwise included in this definition,
Hedging Agreements of such Person. The amount of
Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional
obligations as described above and the maximum liability,
upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, any securities issued in a
securitization by a special purpose owner trust or similar
entity formed by or on behalf of a Person and to which
Receivables or Excess Spread Receivables have been sold or
otherwise transferred by or on behalf of such Person or its
Subsidiaries shall not be treated as Indebtedness of such
Person or its Subsidiaries under this Agreement, regardless
of whether such securities are treated as indebtedness for
tax purposes.
"Indemnified Taxes" means Taxes other than
Excluded Taxes.
"Index Debt" means senior, unsecured, long-term
indebtedness for borrowed money of any Person that is not
guaranteed by any other Person or subject to any other
credit enhancement.
"Interest Election Request" has the meaning
assigned to it in Section 2.15(b).
"Interest Payment Date" means (a)with respect to
any ABR Loan, the last day of each March, June, September
and December, and (b)with respect to any Eurodollar Loan,
the last day of the Interest Period applicable to such
Eurodollar Loan.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
19
"Interest Period" means, with respect to any
Eurodollar Loan, the period commencing on the date of such
Loan and ending on the numerically corresponding day in the
calendar month that is one, two or three months thereafter,
as the Company may elect.
"Investment" in any Person means any direct or
indirect advance, loan (other than advances to customers in
the ordinary course of business that are recorded as trade
accounts on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of
any transfer of cash or other property to others or any
payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such
Person. For purposes of the definition of "Unrestricted
Subsidiary", (a)"Investment" shall include the portion
(proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of
any Subsidiary at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary in an
amount (if positive) equal to (i)the Company's "Investment"
in such Subsidiary at the time of such redesignation less
(ii) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesig
nation; and (b) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market
value at the time of such transfer, in each case as
determined in good faith by the Board of Directors.
"Investment Grade" means, when used with reference
to the Company's Index Debt, that such Index Debt shall be
rated (a)at or above Baa3 (or the equivalent) by Xxxxx'x
and (b)at or above BBB- (or the equivalent) by S&P. Each
rating of the Company's Index Debt will be effective on the
date on which such rating is publicly announced by the
applicable rating agency. If the rating system of Xxxxx'x
or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt
obligations, the Company and the Participating Banks shall
negotiate in good faith to amend this definition to reflect
such changed rating system or the unavailability of ratings
from such rating agency and, pending the effectiveness of
any such amendment, the applicable rating shall be deter
mined by reference to the rating most recently in effect
prior to such change or cessation.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
20
"I/O Strip Securities" means a certificate issued
to the Company or a Restricted Subsidiary in a securitiza
tion of a pool of Receivables (other than Excess Spread
Receivables) in the ordinary course of business of the
Company which pays a fixed or floating rate of interest on a
notional principal amount.
"Issuing and Paying Agency and Depositary
Agreement" means an issuing and paying agency and depositary
agreement dated the date hereof between the Issuing and
Paying Agent and Depositary and the Company substantially in
the form of Exhibit C.
"Issuing and Paying Agent and Depositary" means
The Chase Manhattan Bank, a New York banking corporation, as
issuing and paying agent and depositary under the Issuing
and Paying Agency and Depositary Agreement, or any successor
issuing and paying agent and depositary appointed in
accordance with this Agreement and the Issuing and Paying
Agency and Depositary Agreement.
"Issuing Bank" means Dresdner Bank AG, New York
Branch, in its capacity as the issuer of the Letter of
Credit hereunder, and its successors in such capacity as
provided in Section 9.04(j). The Issuing Bank may, in its
discretion, arrange for the Letter of Credit to be issued by
an Affiliate of the Issuing Bank, in which case the term
"Issuing Bank" shall include such Affiliate.
"Letter of Credit" has the meaning assigned to
that term in the fourth Introductory Statement hereto.
"LIBO Rate" means the rate per annum determined by
the Agent at approximately 11:00 a.m. (London time), on the
date which is two Business Days prior to the beginning of
the relevant Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits
in dollars (as set forth by any service selected by the
Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the
purpose of displaying such rates, which is currently
equivalent to such rate appearing on Page 3750 of Dow Xxxxx
Markets) for a period equal to such Interest Period (rounded
upward to the nearest whole multiple of 1/16th of 1%, if
such rate is not such a multiple); provided that to the
extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the "LIBO
Rate" shall be the interest rate per annum determined by the
Agent to be the average (rounded upward to the nearest whole
multiple of 1/16th of 1% per annum, if such average is not
such a multiple) of the rates per annum at which deposits in
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
21
dollars are offered for such relevant Interest Period to
major banks in the London interbank market in London,
England by the Reference Banks, at approximately 11:00 a.m.
(London time) on the date which is two Business Days prior
to the beginning of such Interest Period. If any of the
Reference Banks shall be unable or shall otherwise fail to
supply such rates to the Agent upon its request, the rate of
interest shall,subject to the provisions of
Section 2.04(d), be determined on the basis of the
quotations of the remaining Reference Banks or Reference
Bank.
"Lien" means, with respect to any asset, (a)any
mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such
asset, (b)the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to
such asset, (c)in the case of securities, any purchase
option, call or similar right of a third party with respect
to such securities and (d)any claim (whether direct or
indirect through subordination or other structural
encumbrance) against any Excess Spread Receivable sold
unless the seller is not liable for any losses thereon.
"Loan" has the meaning assigned to such term in
Section 2.04.
"Margin Stock" has the meaning given such term
under Regulation U.
"Material Adverse Effect" means (a)a material
adverse effect on the business, assets, operations,
prospects or condition, financial or otherwise, of the
Company and the Restricted Subsidiaries taken as a whole,
(b)a material adverse effect on the ability of the Company
to perform any of its obligations under this Agreement or
(c)a material adverse effect on the rights of or benefits
available to the Participating Banks under this Agreement.
"Material Indebtedness" means Indebtedness (other
than the Loans and the Letter of Credit), or obligations in
respect of one or more Hedging Agreements, of any one or
more of the Company and its Restricted Subsidiaries in an
aggregate principal amount exceeding $5,000,000 (or the
equivalent amount in any other currency). For purposes of
determining Material Indebtedness, the "principal amount" of
the obligations of the Company or any Restricted Subsidiary
in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
22
agreements) that the Company or such Restricted Subsidiary
would be required to pay if such Hedging Agreement were
terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc. or
any successor thereto.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Available Cash" from an Asset Disposition
means cash payments received therefrom (including any cash
payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other
consideration received in the form of assumption by the
acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any
other non-cash form) in each case net of (a)all legal,
title and recording tax expenses, commissions and other fees
and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset
Disposition, (b)all payments made on any Indebtedness which
is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets,
or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such
Asset Disposition, (c)all distributions and other payments
required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset
Disposition and (d)the deduction of appropriate amounts
provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the property
or other assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after
such Asset Disposition; provided that "Net Available Cash"
will be increased by the amount of any such reserve to the
extent such reserve is reversed.
"Non-Default Disruption" shall have the meaning
assigned to such term in Section 2.04(a).
"Other Taxes" means any and all present or future
stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this
Agreement, other than Excluded Taxes.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
23
"Outstanding" means, with respect to Commercial
Paper, all Commercial Paper issued at any time under the
Issuing and Paying Agency and Depositary Agreement except
(a) Commercial Paper which has been paid through the Issuing
and Paying Agent and Depositary and (b) matured Commercial
Paper and unmatured Commercial Paper which is deemed paid
pursuant to Sections 8(d) and 10(b), respectively, of the
Issuing and Paying Agency and Depositary Agreement.
"Outstanding Funded Indebtedness" means all
outstanding Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis excluding, without
duplication, (a)the aggregate principal amount of all loans
outstanding under the Credit Agreement, (b)any Indebtedness
constituting Hedging Agreement obligations, (c) 80% of the
aggregate amount of Eligible Performance Guarantees, (d) all
Permitted Warehouse Indebtedness, (e) the payment
obligations of the Company, whether or not contingent, under
this Agreement and (f) the aggregate Face Amount of the
Outstanding Commercial Paper.
"Participant" has the meaning assigned to such
term in Section 9.04(e).
"Participating Banks" means the banks listed on
Schedule 2.01 hereof under the caption "Participating Banks"
and any other Person which becomes a Participating Bank
pursuant to Section 9.04.
"Participation Percentage" means, as of any date
of determination, (a) with respect to a Participating Bank
initially a party hereto, the percentage set forth opposite
such Participating Bank's name on Schedule 2.01 hereof,
except as provided in clause (c) below, (b) with respect to
a Participating Bank that became a party hereto by operation
of Section 9.04, the percentage participation interest
assumed by such assignee Participating Bank as set forth in
the instrument of assignment referred to in Section 9.04,
except as provided in clause (c) below, and (c) with respect
to any Participating Bank described in clause (a) or (b)
above that assigns a percentage of its interests in accor
dance with Section 9.04, its participation percentage as
reduced by the percentage so assigned.
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
"Performance Deposits" means the right of the
Company or any Restricted Subsidiary to receive from the
purchaser or lender providing any Warehouse Facility an
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
24
amount equal to (a)the face value of the assets which are
the subject of such Warehouse Facility less (b)the sum of
(i) the amount of cash actually received by the Company or
such Restricted Subsidiary as proceeds of such Warehouse
Facility and (ii) the aggregate amount of all Performance
Guarantees provided in connection with such Warehouse
Facility; provided that no such Performance Deposit shall,
when taken together with the aggregate amount of all
Performance Guarantees relating to the applicable Warehouse
Facility, in any event exceed 10% of the face value of the
assets which are the subject of such Warehouse Facility.
"Performance Guarantee" means any Guarantee of the
Company or any Restricted Subsidiary for the benefit of the
provider of a Warehouse Facility of obligations relating to
Receivables which are the subject of a Warehouse Facility in
an amount which, when taken together with the aggregate
amount of all Performance Deposits relating to the appli
cable Warehouse Facility, is no greater than 10% of the face
value of the Receivables which are the subject of such
Warehouse Facility; provided that such Guarantee has the
same economic effect as a Performance Deposit.
"Permitted Holders" means lineal descendants of
Xxxxx Xxxxxxxx, including any individual legally adopted;
spouses of such descendants; trusts, the beneficiaries of
which are any of the foregoing; partnerships, corporations,
or other entities in which any of the foregoing (individu
ally or collectively) has a controlling interest; and
charitable organizations established by any of the
foregoing.
"Permitted Investments" means:
(a)direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are
backed by the full faith and credit of the
United States of America), in each case maturing within
one year from the date of acquisition thereof;
(b) investments in commercial paper, maturing not
more than 180 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of
the United States of America or any foreign country
recognized by the United States of America with a
rating at the time as of which any investment therein
is made of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P;
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
25
(c)investments in time deposit accounts,
certificates of deposit and money market deposits
maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company that is not
an Affiliate of the Company and which is organized
under the laws of the United States of America, any
state thereof or any foreign country recognized by the
United States of America, and which bank or trust
company has capital, surplus and undivided profits
aggregating in excess of $200,000,000 (or the foreign
currency equivalent thereof) and has outstanding debt
which is rated "A" (or such similar equivalent rating)
or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436
under the Securities Act of 1933, as amended) or any
money-market fund sponsored by a registered broker
dealer or mutual fund distributor;
(d)fully collateralized repurchase agreements
with a term of not more than 30 days for securities
described in clause (a) above and entered into with a
financial institution satisfying the criteria described
in clause(c) above; and
(e) investments in securities with maturities of
six months or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any
political subdivision or taxing authority thereof, and
rated at least "A" by S&P or "A2" by Moody's.
"Permitted Warehouse Indebtedness" means Warehouse
Indebtedness in connection with a Warehouse Facility;
provided, however, that (i) the assets as to which such
Warehouse Indebtedness relates are or, prior to any funding
under the related Warehouse Facility with respect to such
assets were, eligible to be recorded as held for sale on the
balance sheet of the Company and its Restricted Subsidiaries
in accordance with GAAP, (ii)such Warehouse Indebtedness
will be deemed to be Permitted Warehouse Indebtedness except
to the extent the holders of such Warehouse Indebtedness
have contractual recourse to the Company or its Restricted
Subsidiaries to satisfy claims in respect of such Warehouse
Indebtedness in excess of, without duplication, (a)the
realizable value of the assets to which such Warehouse
Indebtedness relates and (b)any Performance Deposit
securing such Warehouse Indebtedness or any Performance
Guarantee supporting such Warehouse Indebtedness and
(iii)any such Indebtedness has not been outstanding in
excess of 364 days.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
26
"Person" means any natural person, corporation,
limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or
other entity.
"Plan" means any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions
of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Preferred Stock", as applied to the Capital Stock
of any Person, means Capital Stock of any class or classes
(however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of
such Person.
"Prime Rate" means the rate of interest per annum
publicly announced from time to time by Credit Suisse as its
prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as
being effective.
"Receivables" means consumer and commercial loans,
leases and receivables purchased or originated by the
Company, any Restricted Subsidiary or a Strategic Alliance
Client in the ordinary course of business; provided,
however, that for purposes of determining the amount of a
Receivable at any time, such amount shall be determined in
accordance with GAAP, consistently applied, as of the most
recent practicable date.
"Reference Banks" means Credit Suisse, Dresdner
Bank AG and The Bank of New York.
"Refinance" means, in respect of any Indebtedness,
to refinance, extend, renew, refund, repay, prepay, redeem,
defease or retire, or to issue other Indebtedness in
exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative
meanings.
"Refinancing Indebtedness" means Indebtedness that
Refinances any Indebtedness of the Company or any Restricted
Subsidiary existing on the date hereof or Incurred in
compliance with this Agreement (including Indebtedness that
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27
Refinances Refinancing Indebtedness); provided, however,
that (a)such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness
being Refinanced, (b)such Refinancing Indebtedness has an
Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life
of the Indebtedness being Refinanced and (c)such
Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate
principal amount (or if Incurred with original issue
discount, the aggregate accreted value) then outstanding or
committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness
shall not include (i)Indebtedness of a Subsidiary that
Refinances Indebtedness of the Company or another Subsidiary
or (ii)Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Related Business" means any consumer or
commercial finance business or any financial service
business.
"Related Documents" means the Letter of Credit,
the Dealer Agreement, the Issuing and Paying Agency and
Depositary Agreement and any other agreement or instrument
relating thereto.
"Related Parties" means, with respect to any
specified Person, such Person's Affiliates and the
respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Required Banks" means, on any date of
determination, Participating Banks which, collectively on
such date, have Participation Percentages in the aggregate
of more than 50%.
"Restricted Subsidiary" means any Subsidiary that
is not an Unrestricted Subsidiary.
"Rolling Period" means, at any time, the fiscal
quarter most recently ended and the three immediately
preceding fiscal quarters, considered as a single accounting
period.
"S&P" means Standard & Poor's Rating Group, a
division of The XxXxxx-Xxxx Companies Inc., or any successor
thereto.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
28
"Stated Amount" means the amount of the Letter of
Credit, as determined pursuant to Section 2.01, as such
amount shall be, from time to time, (a) reduced by each
payment made pursuant to paragraph 2(a) of the Letter of
Credit, (b) increased by each reimbursement made pursuant to
paragraphs 3(a) and (d) of the Letter of Credit (subject, in
the case of any increase pursuant to Section 3(d) of the
Letter of Credit, to the expiration and non-duplication
provisions set forth in the proviso therein), (c) reduced as
provided in Section 2.11 or (d) reduced or increased as
provided in Section 2.06.
"Stated Maturity" means, with respect to any
security or Indebtedness, the date specified in such
security or Indebtedness as the fixed date on which the
final payment of principal of such security is due and
payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the
repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such
contingency has occurred).
"Strategic Alliance Client" means any Person
(other than a Restricted Subsidiary) engaged in a Related
Business to which the Company provides, or reasonably
expects to provide, financing or asset securitization
expertise in return for asset-backed underwriting or
placement agent commitments.
"subsidiary" means, with respect to any Person
(the "parent") at any date, any corporation, limited
liability company, partnership, association or other entity
the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements
if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as
of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
"Taxes" means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.
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29
"Termination Date" means September 8, 1998, as
such date may be extended from time to time pursuant to
Section 2.11.
"Transactions" means the execution, delivery and
performance by the Company of this Agreement, the borrowing
of the Loans, the issuance of the Letter of Credit and the
issuance of the Commercial Paper and the use of the proceeds
thereof.
"Unrestricted Subsidiary" means (a) any Subsidiary
that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors in the
manner provided below and (b) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may
designate any Subsidiary (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any
Capital Stock or Indebtedness of, or holds any Lien on any
property of, the Company or any other Subsidiary that is not
a Subsidiary of the Subsidiary to be so designated;
provided, however, that no Default shall have occurred and
be continuing or would occur as a result thereof and each
representation and warranty of the Company contained in
Article III shall be true and correct in all material
respects after giving effect to such designation. Any such
designation by the Board of Directors shall be evidenced by
the Company to the Agent by promptly filing with the Agent a
copy of the board resolution giving effect to such
designation and a certificate, signed by two executive
officers, certifying that such designation complied with the
foregoing provisions.
"Voting Stock" of a Person means all classes of
Capital Stock or other interests (including partnership
interests or membership interests) of such Person then
outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"Warehouse Facility" means any funding arrangement
with a financial institution or other lender or purchaser
exclusively to finance the purchase or origination of
Receivables by the Company, a Subsidiary or a Strategic
Alliance Client for the purpose of pooling such Receivables
prior to securitization or sale in the ordinary course of
business, including purchase and sale facilities pursuant to
which the Company or a Subsidiary sells Receivables or debt
of a Strategic Alliance Client secured by Receivables owned
or financed by such Strategic Alliance Client to a financial
institution and retains a right of first refusal upon the
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30
subsequent resale of such Receivables or debt by such
financial institution.
"Warehouse Indebtedness" means the greater of
(a) the consideration received by the Company or its
Restricted Subsidiaries under a Warehouse Facility and
(b) the book value of the assets financed under a Warehouse
Facility with respect to Receivables or debt of a Strategic
Alliance Client secured by Receivables owned or financed by
such Strategic Alliance Client until such time as such
Receivables or debt are (i)securitized, (ii)repurchased by
the Company or its Restricted Subsidiaries or (iii)sold by
the counterparty under the Warehouse Facility to a Person
who is not an Affiliate of the Company.
"Wholly Owned Subsidiary" means a Restricted
Subsidiary all the Capital Stock of which (other than
directors' qualifying shares and shares held by other
Persons to the extent such shares are required by applicable
law to be held by a Person other than the Company or a
Restricted Subsidiary) is owned by the Company or one or
more Wholly Owned Subsidiaries.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In
this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. Terms Generally. The definitions
of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding mascu
line, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by
the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to
such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
31
"hereunder", and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset"
and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and intan
gible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as
otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided that if the Company notifies the Agent that the
Company requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the
operation of such provision (or if the Agent notifies the
Company that the Required Banks request an amendment to any
provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP
or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective
until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
Amount and Terms of
the Letter of Credit
SECTION 2.01. The Letter of Credit. The Issuing
Bank agrees, on the terms and conditions hereinafter set
forth, to issue the Letter of Credit to the Issuing and
Paying Agent and Depositary on any Business Day during the
period from the Effective Date to but excluding the earlier
of the Termination Date and the date of termination of the
Commitment, which date of issuance shall be specified in a
notice delivered by the Company to the Issuing Bank and the
Agent not fewer than one Business Day prior to such date
(unless such date is the date hereof). The Agent shall
promptly transmit copies of such notice, if any, to the
Participating Banks. The Letter of Credit shall be in a
Stated Amount not to exceed $275,000,000, shall not exceed
the Borrowing Base in effect at the time of issuance and
shall expire on the Cancelation Date.
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32
SECTION 2.02. Commissions and Fees. (a) The
Company agrees to pay the Agent, for the account of the
Participating Banks, to be allocated among them ratably in
accordance with their respective Participation Percentages,
a fee on the Stated Amount, without regard to reductions
thereof pursuant to Section 2.06(c)(iii), from the date that
is the earlier of (i) the date that is two Business Days
after the date hereof and (ii) the date of issuance of the
Letter of Credit (with the Letter of Credit being deemed,
solely for purposes of this Section 2.02, to have been
issued on such earlier date, regardless of the actual date
of issuance) until the Termination Date, at a rate per annum
equal to the Applicable Percentage as in effect from time to
time during such period, payable quarterly in arrears on the
last day of each March, June, September and December,
commencing on December 31, 1997, and on any expiration or
termination of the Commitment or the Letter of Credit or
reduction of the Stated Amount.
(b)The Company agrees to pay to the Agent for
its own account and that of the Issuing Bank fees in the
amounts and at the times set forth in the fee letter dated
as of July 21, 1997, between the Company, the Issuing Bank
and the Agent.
SECTION 2.03. Reimbursement. Except as otherwise
specified in Section 2.04, the Company will unconditionally
pay to the Issuing Bank the amount of each disbursement made
by the Issuing Bank under the Letter of Credit, together
with accrued interest thereon, if any, not later than one
Business Day after the Company shall have received notice
from the Issuing Bank that such disbursement has been made.
Unless the Company shall reimburse the Issuing Bank for any
such disbursement in full or convert such disbursement into
a Loan pursuant to Section 2.04 on the date of such
disbursement, the unpaid amount thereof shall bear interest,
payable on demand, (a) until the date on which such amount
is due pursuant to the first sentence of this Section 2.03,
at the rate per annum that would apply to such amount if
such amount were an ABR Loan and (b) thereafter, until
payment in full, at a fluctuating interest rate per annum
equal to the Default Rate. Upon request from the Issuing
and Paying Agent and Depositary, the Issuing Bank shall
promptly notify the Issuing and Paying Agent and Depositary
of all amounts due from the Company to the Issuing Bank
pursuant to this Section 2.03. Upon receipt of repayment
for any such disbursement, together with accrued interest,
if any, thereon, pursuant to this Section 2.03, the Issuing
Bank shall promptly deliver to the Issuing and Paying Agent
and Depositary a notice in accordance with paragraph 3(a) of
the Letter of Credit.
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33
SECTION 2.04. Loans. (a)If either (i)the
market for commercial paper is disrupted or (ii)the rating
by either S&P or Moody's applicable to the Issuing Bank's
Index Debt falls below AA or Aa2, respectively, and, as a
result, either (A)the Company is unable to sell Commercial
Paper to replace maturing Commercial Paper or (B)pricing
conditions render it economically disadvantageous in any
material respect for the Company to issue the Commercial
Paper to replace maturing Commercial Paper (each of
clauses (A) and (B), individually, a "Non-Default
Disruption"), the Company may request the Issuing Bank to
convert any amount due under Section 2.03 into a loan by the
Issuing Bank (a "Loan"). Each such Loan shall initially be
an ABR Loan. More than one Loan may be outstanding at the
same time, and, subject to the terms and conditions set
forth herein, the Company may prepay the Loans. The Issuing
Bank agrees to make any Loan so requested; provided that
(x) the Agent shall have received a request therefor
pursuant to and in accordance with Section 4.03(b), (y) the
Company shall have satisfied the conditions precedent
specified in Section 4.03 on and as of the date of such
requested Loan and (z) all amounts available in the
Reimbursement Account (as defined in the Issuing and Paying
Agency and Depositary Agreement) shall have first been
applied to the repayment, to the extent not otherwise
provided for, of amounts due under Section 2.03. The
Issuing Bank shall promptly provide notice of any such Loan
to the Issuing and Paying Agent and Depositary.
(b) The principal amount of each Loan shall be
due and payable no later than the Termination Date.
Interest on each Loan shall be due and payable initially in
accordance with Section 2.04(c)(i) and thereafter in
accordance with Section 2.04(c)(i) or (ii), as applicable.
The Interest Period for each Eurodollar Loan shall begin on
the effective date of the most recent conversion or
continuation of such Eurodollar Loan and shall have the
duration specified by the Company in its notice given with
respect thereto pursuant to Section 2.15(b). No Interest
Period for a Eurodollar Loan shall end after the Termination
Date, and any Interest Period for a Loan that would
otherwise end after the Termination Date shall be deemed to
end on the Termination Date.
(c) The Company shall pay interest on the unpaid
principal amount of each Loan from the date of such Loan
until the principal amount thereof is paid in full at the
applicable rate set forth below:
(i) ABR Loans. The Company shall pay interest on
each ABR Loan from the date of such ABR Loan until such
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
34
ABR Loan is paid in full or converted to a Eurodollar
Loan, payable in arrears on each Interest Payment Date
for such ABR Loan at a fluctuating interest rate per
annum equal to the Alternate Base Rate in effect from
time to time; and
(ii) Eurodollar Loans. The Company shall pay
interest on each Eurodollar Loan at the Adjusted LIBO
Rate for the Interest Period for such Eurodollar Loan,
payable in arrears on each Interest Payment Date for
such Eurodollar Loan;
provided that (A) in the event of any repayment or
prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of
such repayment or prepayment, (B)in the event of any
conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such
conversion and (C) all accrued interest shall be payable
upon the expiration or termination of the Letter of Credit.
(d) If, prior to the commencement of any Interest
Period for a Eurodollar Loan:
(i) the Agent determines in good faith (which
determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist
for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(ii) the Agent is advised by the Required Banks
that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such
Banks of making or maintaining such Eurodollar Loan for
such Interest Period;
then the Agent shall give notice thereof to the Company and
the Participating Banks by telephone or telecopy as promptly
as practicable thereafter and, until the Agent notifies the
Company and the Participating Banks that the circumstances
giving rise to such notice no longer exist, any Interest
Election Request that requests the conversion of any ABR
Loan to, or continuation of any Eurodollar Loan as, a
Eurodollar Loan shall be ineffective.
(e) On and after the date on which the unpaid
principal amount of any Eurodollar Loan shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000,
the rate of interest applicable on each day to the unpaid
principal amount of such Loan shall be the higher of the
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
35
Adjusted LIBO Rate in effect for such Loan and the Alternate
Base Rate.
SECTION 2.05. Reimbursement of Issuing Bank, Etc.
(a)(i)By the issuance of the Letter of Credit and without
any further action on the part of the Issuing Bank or the
Participating Banks, the Issuing Bank hereby grants to each
Participating Bank, and each such Participating Bank hereby
acquires from the Issuing Bank, a participation in the
Letter of Credit equal to such Participating Bank's
Participation Percentage from time to time of the Stated
Amount, effective upon the issuance of the Letter of Credit.
In consideration and in furtherance of the foregoing, each
Participating Bank hereby absolutely and unconditionally
agrees to pay to the Agent, for the account of the Issuing
Bank, the amounts set forth in this Section 2.05.
(ii) If the Issuing Bank (A) shall not have been
reimbursed in full for any payment made by the Issuing Bank
under the Letter of Credit on the date of such payment or
(B) shall make any Loan to the Company, the Issuing Bank
shall give the Agent prompt notice thereof (an "LC Payment
Notice") no later than 12:00 noon (New York City time) on
the Business Day immediately succeeding the date of such
payment by the Issuing Bank or the date of the payment that
gave rise to such Loan, as applicable, and the Agent shall
give each Participating Bank prompt notice thereof (an
"Agent Payment Notice") no later than two hours following
the Agent's receipt of the LC Payment Notice at such
Participating Bank's address referred to in Section 9.01.
(iii) Upon receipt of an Agent Payment Notice, each
Participating Bank severally agrees to pay to the Agent, for
the account of the Issuing Bank, an amount equal to such
Participating Bank's ratable portion (according to such
Participating Bank's Participation Percentage) of such
unreimbursed amount or Loan paid or made by the Issuing
Bank, plus interest on such amount at a rate per annum equal
to the Federal Funds Effective Rate from the date of payment
by the Issuing Bank to the date of payment to the Issuing
Bank by such Participating Bank; provided that, with respect
to any such unreimbursed amount, to the extent that the
Participating Banks have made payments pursuant to this
paragraph to reimburse the Issuing Bank, the Issuing Bank
shall, promptly following receipt by the Issuing Bank of any
payment by the Company to reimburse such unreimbursed
amount, distribute such payment (including any amounts
received with respect to interest on such unreimbursed
amount from the date of payment of such unreimbursed amount
by the Issuing Bank) to the Participating Banks as their
interests may appear. The failure of the Issuing Bank, the
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
36
Agent or the Company to give such LC Payment Notice, the
Agent Payment Notice or the notice referred to in
Section 4.03(b), as the case may be, shall not affect any
Participating Bank's obligations pursuant to this
Section 2.05(a).
(iv) Each such payment by a Participating Bank
shall be made to the Agent, for the account of the Issuing
Bank, at its address referred to in Section 9.01 in dollars
in same day funds (A) not later than 2:30 p.m. (New York
City time) on the day any such Agent Payment Notice is
received by such Participating Bank, if such notice is
received at or prior to 12:00 noon (New York City time) on a
Business Day; (B) not later than 4:30 p.m. (New York City
time) on the day any such Agent Payment Notice is received
by such Participating Bank, if such notice is received after
12:00 noon (New York City time) but at or prior to 2:30 p.m.
(New York City time) on a Business Day; or (C) not later
than 12:00 noon (New York City time) on the Business Day
next succeeding the day any such Agent Payment Notice is
received by such Participating Bank, if such notice is
received after 2:30 p.m. (New York City time) on a Business
Day. Each Participating Bank's obligation to make each such
payment to the Agent, for the account of the Issuing Bank,
and the Agent's right to receive the same, for the account
of the Issuing Bank, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever,
including, without limiting the foregoing or the
circumstances set forth in Section 2.13, the occurrence or
continuance of an Event of Default or the failure of any
other Participating Bank to make any payment under this
Section 2.05. Each Participating Bank further agrees that
each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(b) The failure of any Participating Bank to make
any payment to the Agent, for the account of the Issuing
Bank, in accordance with Section 2.05(a) shall not relieve
any other Participating Bank of its obligation to make
payment, but neither the Issuing Bank nor any Participating
Bank shall be responsible for the failure of any other
Participating Bank to make such payment. If any
Participating Bank shall fail to make any payment to the
Agent, for the account of the Issuing Bank, in accordance
with Section 2.05(a)(iv), then such Participating Bank
agrees to pay to the Agent, for the account of the Issuing
Bank, forthwith on demand by the Agent or the Issuing Bank
such corresponding amount together with interest thereon for
the first two days following the day upon which any such
payment shall have been due and payable at the Federal Funds
Effective Rate and thereafter until the date such amount is
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
37
paid to the Agent, for the account of the Issuing Bank, at
the Alternate Base Rate plus 1% per annum.
(c) If any Participating Bank shall fail to make
any payment to the Agent, for the account of the Issuing
Bank, in accordance with Section 2.05(a), then, in addition
to other rights and remedies which the Issuing Bank may
have, the Agent is hereby authorized, at the request of the
Issuing Bank, to withhold that portion of any payments
received by the Agent that would otherwise be payable to
such Participating Bank and to apply such portion to the
payment of amounts owing by such Participating Bank to the
Issuing Bank and any related interest thereon.
SECTION 2.06. Prepayments. (a) The Company may,
subject to prior notice in accordance with Section 2.06(b),
prepay the outstanding amount of any Loan in whole or in
part, together with accrued interest to the date of such
prepayment on the amount prepaid to the extent required by
Section 2.04(c).
(b) The Company shall give notice to the Agent of
any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Loan, not later than 12:00 noon (New York City
time) three Business Days before the date of prepayment and
(ii)in the case of prepayment of an ABR Loan, not later
than 12:00 noon (New York City time) one Business Day before
the date of prepayment. Each such notice shall be irrevoc
able and shall specify the prepayment or payment date and
the principal amount of each Loan or portion thereof to be
prepaid or repaid; provided that, if a notice of prepayment
is given in connection with a conditional notice of
termination of the Letter of Credit as contemplated by
Section 2.11, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with
Section 2.11. Promptly following receipt of any such notice
relating to a Loan, the Agent shall advise the Participating
Banks of the contents thereof. Each partial prepayment of
any Loan (other than any prepayment pursuant to
Section 2.06(c)(i)) shall be in an aggregate amount that is
an integral multiple of $1,000,000 and not less than
$5,000,000.
(c) If at any time the aggregate principal amount
of any Loans outstanding plus any principal of amounts due
pursuant to Section 2.03 plus the Stated Amount exceeds the
Borrowing Base, the Company shall forthwith either (i) pre
pay the Loans in accordance with this Section 2.06 or pay
such principal of amounts due pursuant to Section 2.03 by an
amount as shall be necessary to eliminate such excess,
(ii) deposit an amount in cash (or a cash equivalent that is
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
38
satisfactory in form and substance to the Issuing Bank and
the Required Banks) in an account with the Agent (the
"Account"), in the name of the Agent and for the benefit of
the Issuing Bank and the Participating Banks, equal to such
excess as of such date plus any accrued and unpaid interest
thereon; provided that such cash shall not include any
assets which constituted Eligible Assets in the most recent
Borrowing Base Certificate or any proceeds thereof, or
(iii) reduce the Stated Amount by such excess by delivery to
the Issuing Bank (with a copy to the Agent) of a certificate
in accordance with paragraph 2(b) of the Letter of Credit;
provided that the Stated Amount shall not be reduced to an
amount less than the aggregate Face Amount of all the
Commercial Paper Outstanding at such time; provided further
that, if at any time the Borrowing Base exceeds the
aggregate principal amount of any Loans outstanding plus the
Stated Amount, the Company may so notify the Issuing Bank,
whereupon the Issuing Bank shall, subject to satisfaction of
the conditions set forth in Section 4.02, increase the
Stated Amount by an amount equal to such excess by delivery
to the Issuing and Paying Agent and Depositary (with a copy
to the Agent) of a notice in accordance with paragraph 3(c)
of the Letter of Credit. Notwithstanding the foregoing, the
Stated Amount shall not be so increased to an amount greater
than the original Stated Amount minus the aggregate amount
of all reductions of the Stated Amount pursuant to
Section 2.11 (excluding reductions required by clause (iii)
above). Each reduction or increase of the Stated Amount
pursuant to this Section 2.06(c) shall be applied ratably
among the Participating Banks in accordance with their
respective Participation Percentages.
(d) The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over
the Account. Other than any interest earned on the
investment of such deposits, which investments shall be made
at the option and sole discretion of the Agent and at the
Company's risk and expense (except as a result of acts or
omissions constituting the wilful misconduct or gross
negligence of the Agent), such deposits shall not bear
interest. Interest or profits, if any, on such investments
shall accumulate in the Account. Moneys in the Account
shall be applied by the Agent to reimburse the Issuing Bank
for payments under Section 2.03 for which it has not been
reimbursed and, to the extent not so applied, shall be held
for the satisfaction of the reimbursement obligations of the
Company for the Letter of Credit at such time or, if the
maturity of any Loans has been accelerated, be applied to
satisfy other obligations of the Company under this
Agreement. If at any time the Borrowing Base exceeds the
aggregate principal amount of any Loans outstanding plus the
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
39
Stated Amount, the Agent shall return to the Company an
amount of cash (to the extent not applied as aforesaid)
equivalent to such excess within three Business Days.
(e) The Company shall promptly notify the Agent
of the cessation of any Non-Default Disruption and, so long
as no other Non-Default Disruptions are continuing, shall
prepay all outstanding Loans, in accordance with this
Section 2.06, (i) within 10 Business Days after any such
cessation, in the case of all ABR Loans, or (ii) at the end
of the then current Interest Period for any such Loan, in
the case of all Eurodollar Loans. The Agent shall promptly
notify the Issuing and Paying Agent and Depositary of all
prepayments required to be made by the Company pursuant to
this Section 2.06(e). Upon receipt of any prepayment
pursuant to this Section 2.06, the Agent shall promptly
notify the Issuing Bank of the amount of such prepayment
with respect to the principal of Loans, whereupon the
Issuing Bank shall promptly deliver to the Issuing and
Paying Agent and Depositary a notice in accordance with
paragraph 3(b) of the Letter of Credit.
SECTION 2.07. Increased Costs. (a) If any
Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against letters
of credit (or participatory interests therein) issued
by, commitments or assets of, or deposits with or for
the account of, or credit extended by, the Issuing Bank
or any Participating Bank (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on the Issuing Bank or any
Participating Bank or the London interbank market any
other condition affecting this Agreement, the Letter of
Credit, any amount outstanding hereunder or any
Eurodollar Loan or participatory interests therein;
and the result of any of the foregoing shall be to increase
the cost to the Issuing Bank or such Participating Bank, as
applicable, of issuing, maintaining or participating in this
Agreement, the Letter of Credit or any Eurodollar Loan (or
agreeing to make or making, funding or maintaining any
Eurodollar Loan or participatory interest therein) or to
reduce the amount of any sum received or receivable (whether
of principal, interest or otherwise) by the Issuing Bank or
such Participating Bank, as applicable, then the Company
shall pay to the Agent for the account of the Issuing Bank
or such Participating Bank, as applicable, such additional
amount or amounts as will compensate the Issuing Bank or
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
40
such Participating Bank, as applicable, for such additional
costs incurred or reduction suffered (excluding the effect
of any Excluded Taxes).
(b)If the Issuing Bank or any Participating Bank
determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the
rate of return on the Issuing Bank's or such Participating
Bank's capital, as applicable, or on the capital of the
Issuing Bank's or such Participating Bank's holding company,
as applicable, if any, as a consequence of this Agreement,
the Letter of Credit, any amount outstanding hereunder or
any Loan or participating interest therein, to a level below
that which the Issuing Bank or such Participating Bank, as
applicable, or the Issuing Bank's or such Participating
Bank's holding company, as applicable, could have achieved
but for such Change in Law (taking into consideration the
Issuing Bank's or such Participating Bank's policies, as
applicable, and the policies of the Issuing Bank's or such
Participating Bank's holding company, as applicable, with
respect to capital adequacy), then from time to time the
Company will pay to the Issuing Bank or such Participating
Bank, as applicable, such additional amount or amounts as
will compensate the Issuing Bank or such Participating Bank,
as applicable, or the Issuing Bank's or such Participating
Bank's holding company, as applicable, for any such
reduction suffered.
(c) A certificate of the Issuing Bank or a
Participating Bank setting forth the amount or amounts
necessary to compensate the Issuing Bank or such
Participating Bank, as applicable, or its holding company,
as the case may be, as specified in Section 2.07(a) or (b)
shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay the Issuing
Bank or such Participating Bank, as applicable, the amount
shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of the Issuing
Bank or any Participating Bank to demand compensation
pursuant to this Section 2.07 shall not constitute a waiver
of the Issuing Bank's or such Participating Bank's right, as
applicable, to demand such compensation; provided that the
Company shall not be required to compensate the Issuing Bank
or a Participating Bank, as applicable, pursuant to this
Section 2.07 for any increased costs or reductions incurred
more than 270 days prior to the date that the Issuing Bank
or such Participating Bank, as applicable, notifies the
Company of the Change in Law giving rise to such increased
costs or reductions and of the Issuing Bank's or such
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
41
Participating Bank's intention, as applicable, to claim
compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall
be extended to include the period of retroactive effect
thereof.
SECTION 2.08. Break Funding Payments. In the
event of (a) the payment of any principal of any Eurodollar
Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice
may be revoked under Section 2.06(b) and is revoked in
accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the
Borrower pursuant to Section 9.04(i), then, in any such
event, the Company shall compensate each Participating Bank
for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, such loss, cost or expense
to any Participating Bank shall be deemed to include an
amount determined by such Participating Bank to be the
excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the
date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal
amount for such period at the interest rate which such
Participating Bank would bid were it to bid, at the
commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the
eurodollar market. A certificate of any Participating Bank
setting forth any amount or amounts (and, in reasonable
detail, the calculations relating thereto) that such
Participating Bank is entitled to receive pursuant to this
Section 2.08 shall be delivered to the Company and shall be
conclusive absent manifest error. The Company shall pay
such Participating Bank the amount shown as due on any such
certificate within 10 days after receipt thereof.
SECTION 2.09. Payments and Computations.
(a) The Company shall make each payment hereunder to the
Agent, at its address referred to in Section 9.01, on the
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
42
day when due without setoff or counterclaim in dollars in
same day funds not later than 12:00 noon (New York City
time); provided that payments pursuant to Sections 2.03,
2.07, 2.08, 2.14 and 9.03 shall be made directly to the
Persons entitled thereto. Any amounts received after such
time on any date may, in the discretion of the Agent, be
deemed to have been received on the next succeeding Business
Day for purposes of calculating interest thereon. The Agent
will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest, fees or
other amounts payable to the Participating Banks to whom the
same are payable at their respective addresses referred to
in Section 9.01.
(b) If, after the Agent has paid to any
Participating Bank any amount pursuant to Section 2.09(a),
such payment is rescinded or must otherwise be returned or
must be paid over by the Agent or the Issuing Bank to any
Person, whether pursuant to any bankruptcy or insolvency
law, Section 9.08(d) or otherwise, such Participating Bank
shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case
may be, an amount equal to such payment, together with any
interest required to be paid by the Agent or the Issuing
Bank with respect to such payment.
(c) If at any time insufficient funds are
received by and available to the Agent to pay fully all
amounts of principal, interest and fees then due hereunder,
such funds shall be applied (i) first, towards amounts to
reimburse the Issuing Bank for payments under Section 2.03
for which it has not been reimbursed by the Company (but
excluding any amounts with respect to which the Issuing Bank
has been reimbursed by the Participating Banks or with
respect to which a Participating Bank has failed to
reimburse the Issuing Bank), (ii) second, towards payment of
interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (iii) third,
towards payment of principal then due hereunder, ratably
among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(d) Computations of the Alternate Base Rate shall
be made by the Agent on the basis of a year of 360 days (or
365 or 366 days, as the case may be, at times when the
Alternate Base Rate is based on the Prime Rate) for the
actual number of days (including the first day but excluding
the last day) elapsed. Computations of the Adjusted LIBO
Rate and the commissions and fees under Section 2.02 shall
be made by the Agent on the basis of a year of 360 days for
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
43
the actual number of days (including the first day but
excluding the last day) elapsed.
(e) Notwithstanding any provision to the contrary
herein, the Company shall pay interest on all past-due
amounts of principal and (to the fullest extent permitted by
law) interest, costs, commissions, fees and expenses
hereunder, from the date when such amounts became due until
paid in full, payable on demand, at the Default Rate in
effect from time to time.
SECTION 2.10. Non-Business Days. Whenever any
payment to be made hereunder shall be stated to be due, or
whenever the last day of any Interest Period would otherwise
occur, on a day which is not a Business Day, such payment
shall be made, and the last day of such Interest Period
shall occur, on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of interest, commission or fee, as the case may
be; provided, however, that (a)if any Interest Period would
end on a day other than a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end
on the next preceding Business Day, and (b) any Interest
Period pertaining to a Eurodollar Loan that commences on the
last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such
Interest Period.
SECTION 2.11. Termination; Reduction; Extension.
(a)Unless previously terminated, the Commitment and the
Letter of Credit shall terminate on the Termination Date.
(b) The Commitment shall terminate upon issuance
of the Letter of Credit and may be terminated by the Company
at any time prior to issuance of the Letter of Credit. The
Company may (x) at any time cause the Issuing and Paying
Agent and Depositary to terminate the Letter of Credit by
causing the Issuing and Paying Agent and Depositary to
deliver to the Issuing Bank (with a copy to the Agent) the
Letter of Credit and a certificate in accordance with
paragraph (1) of the Letter of Credit or (y)from time to
time reduce the Stated Amount by delivering to the Issuing
Bank (with a copy to the Agent) a certificate in accordance
with paragraph 2(b) of the Letter of Credit; provided that
each such reduction pursuant to this Section 2.11(b) shall
be in an amount that is an integral multiple of $5,000,000
and not less than $10,000,000; provided further that (i) the
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44
Company shall not cause the Issuing and Paying Agent and
Depositary to terminate the Letter of Credit so long as any
Loans are outstanding or any Commercial Paper is Outstanding
at such time, any amounts are due pursuant to Section 2.03
or any other amounts are due hereunder and (ii) the Company
shall not reduce the Stated Amount if, after giving effect
to any concurrent prepayment of any Loans in accordance with
Section 2.06 and any concurrent payment of principal due
pursuant to Section 2.03, (A) the sum of (1) the aggregate
principal amount of, and accrued interest on, the Loans
outstanding at such time plus (2) the aggregate Face Amount
of any Commercial Paper Outstanding at such time plus (3)
the aggregate principal amount of, and accrued interest on,
any disbursements due pursuant to Section 2.03 and any other
amounts due hereunder would exceed (B) the difference of
(1)the original Stated Amount of the Letter of Credit minus
(2)the aggregate amount of all reductions (including the
current reduction) of the Stated Amount pursuant to this
Section 2.11.
(c) The Company shall give notice to the Agent of
any election to (i) cause the Issuing and Paying Agent and
Depositary to terminate the Letter of Credit or (ii)reduce
the Stated Amount under Section 2.11(b) at least five
Business Days prior to the effective date of such
termination or reduction, specifying the effective date of
such election. Promptly following receipt of any notice,
the Agent shall advise the Issuing Bank and the Participa
xxxx Xxxxx of the contents thereof. Each notice delivered
by the Company pursuant to this Section 2.11(c) shall be
irrevocable; provided that a notice of termination of the
Letter of Credit delivered by the Company may state that
such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked
by the Company (by notice to the Agent on or prior to the
specified effective date) if such condition is not
satisfied. Any termination of the Letter of Credit or
reduction of the Stated Amount pursuant to this Section 2.11
shall be permanent. Each reduction of the Stated Amount
pursuant to this Section 2.11 shall be applied ratably among
the Participating Banks in accordance with their respective
Participation Percentages.
(d)(i) Not less than 60 days and not more than 75
days before the Termination Date at any time in effect (the
"Current Termination Date"), the Company may request (each
such request being irrevocable) the Agent and the Issuing
Bank in writing (with copies of such request simultaneously
provided to each Participating Bank) to extend (a) the
Termination Date so that it will occur 364 days after the
Current Termination Date and (b) the Letter of Credit to a
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45
date that is 364 days after the Current Termination Date;
provided that the Company may request no more than five such
extensions pursuant to this Section 2.11(d). The Agent
shall notify each Participating Bank of the receipt of such
request within five Business Days. The Issuing Bank and
each Participating Bank shall, by notice to the Agent given
not less than 30 days and not more than 60 days prior to the
Current Termination Date, advise the Agent in writing
whether it agrees to such extension. The Agent shall, no
later than 30 days prior to the Current Termination Date,
notify the Company (with a copy of such notice to the
Issuing and Paying Agent and Depositary) which of the Agent,
the Issuing Bank and each Participating Bank consents to
such request and the conditions to any such consent
(including conditions relating to legal documentation). The
granting of any such consent shall be in the sole and
absolute discretion of the Agent, the Issuing Bank and each
Participating Bank, and the election of any such party to
such extension shall not obligate any other such party to
agree. If the Issuing Bank or any Participating Bank shall
not have notified the Agent of its agreement to such
extension, it shall be deemed not to have agreed thereto. In
the event there is at least one Participating Bank that has
not agreed to such extension, the Company may at its option
revoke its request by giving notice of such revocation to
the Agent not later than three Business Days prior to the
Current Termination Date, in which case no extension of the
Termination Date shall be effected pursuant to such request.
The Agent shall promptly advise the Issuing Bank and the
Participating Banks of any such revocation.
(ii) If (and only if) the Agent, the Issuing Bank
and Participating Banks (including Additional Participating
Banks (as defined below)) with aggregate Participation
Percentages which, when multiplied by the Stated Amount (as
reduced only by any irrevocable reductions by the Company
pursuant to Section 2.11(b) and any reductions in previous
years pursuant to this Section 2.11(d)), will equal or
exceed $200,000,000 shall have agreed to extend the
Termination Date (and the Company has not revoked its
request pursuant to subparagraph (i) above), then the
Termination Date applicable to all such parties that have so
agreed shall be the day that is 364 days after the Current
Termination Date; provided that (A)no Non-Default
Disruption shall be continuing on the Current Termination
Date, (B) the Termination Date shall not be extended with
respect to any Loans outstanding at such time, (C)no such
extension shall occur if, after giving effect to such
extension, any Participating Bank shall have a Participation
Percentage in excess of 25% and (D) no such extension shall
occur if, after giving effect to such extension and the
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46
following sentence, (1) the sum of (I)the aggregate
principal amount of, and accrued interest on, the Loans
outstanding at such time plus (II) the aggregate Face Amount
of any Commercial Paper Outstanding at such time plus
(III) the aggregate principal amount of, and accrued
interest on, any disbursements due pursuant to Section 2.03
and any other amounts due hereunder would exceed (2)the
difference of (I) the original Stated Amount of the Letter
of Credit minus (II) the aggregate amount of all reductions
(including the current reduction) of the Stated Amount
pursuant to Sections 2.11(b) and 2.11(d)(ii). In the event
of such extension, (x) the participation of each
Participating Bank that has not so agreed shall terminate on
the Current Termination Date and all amounts payable
hereunder to such Participating Bank shall become due and
payable by the Company (or by the relevant Additional
Participating Bank, if applicable, pursuant to
subparagraph (iii) below) on the Current Termination Date
and (y)the Stated Amount shall be irrevocably reduced by an
amount equal to the product of (1) the aggregate
Participation Percentages of all such non-extending
Participating Banks (to the extent not assumed by Additional
Participating Banks) and (2) the Stated Amount.
Notwithstanding the foregoing, no extension of the
Termination Date shall become effective unless, on the
Current Termination Date, the conditions set forth in
Section 4.02 shall be satisfied (with all references in such
Section to the date of such issuance or increase being
deemed to be references to the Current Termination Date),
the Agent shall have received a certificate to that effect
dated the Current Termination Date and executed by a
Financial Officer of the Company and the Company shall have
delivered to the Issuing Bank a certificate in accordance
with paragraph 2(b) of the Letter of Credit setting forth
any reduction in the Stated Amount required by the
immediately preceding sentence. Upon the occurrence of any
such extension, the Issuing Bank shall deliver to the
Issuing and Paying Agent and Depositary a certificate
setting forth the new Termination Date in accordance with
paragraph 5 of the Letter of Credit.
(iii) In the event that the conditions of
paragraph (ii) above have been satisfied, the Company shall
have the right on or before the Current Termination Date, at
its own expense, to require any Participating Bank that has
not agreed to extend the Termination Date to transfer and
assign without recourse (except as to title and the absence
of Liens created by it) (in accordance with and subject to
the restrictions contained in Section 9.04) all its
interests, rights and obligations under this Agreement to
one or more other banks or other financial institutions
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
47
(which may include any Participating Bank, each prior to the
Current Termination Date an "Additional Participating
Bank"); provided that (x) such Additional Participating
Bank, if not already a Participating Bank hereunder, shall
be subject to the approval of the Agent, the Issuing Bank
and the Company (such consent not to be unreasonably
withheld), (y) such assignment shall become effective as of
the Current Termination Date and (z) the Additional
Participating Bank shall pay to such Participating Bank that
has not agreed to extend the Termination Date in immediately
available funds on the effective date of such assignment all
amounts accrued for its account or owed to it hereunder.
The Agent shall, if requested by the Company, use its
reasonable efforts to assist the Company in finding
Additional Participating Banks.
SECTION 2.12. Evidence of Debt. The Agent shall
maintain, in accordance with its usual practice, an account
or accounts evidencing the indebtedness of the Company
resulting from each drawing under the Letter of Credit and
from each Loan made from time to time hereunder and the
amounts of principal and interest payable and paid from time
to time hereunder. In any legal action or proceeding in
respect of this Agreement, the entries made in such account
or accounts shall, in the absence of manifest error, be
conclusive evidence of the existence and amounts of the
obligations of the Company therein recorded.
SECTION 2.13. Obligations Absolute. (a) The
obligations of the Company hereunder shall be unconditional
and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement (as the same may be amended
from time to time) under all circumstances, including the
following circumstances; provided, however, that the same
shall not limit, diminish, preclude or otherwise adversely
affect any claim that may be brought by the Company under
Section 2.13(d):
(i) any lack of validity or enforceability of the
Related Documents;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of the Company in respect of the Letter of
Credit or any other amendment or waiver of or any
consent to departure from all or any of the Related
Documents;
(iii) the existence of any claim, setoff, defense or
other right which the Company may have at any time
against the Issuing and Paying Agent and Depositary or
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48
any other beneficiary, or any transferee, of the Letter
of Credit (or any Persons for whom the Issuing and
Paying Agent and Depositary, any such beneficiary or
any such transferee may be acting), the Issuing Bank,
any Participating Bank, or any other Person, whether in
connection with this Agreement, the Transactions, or
any unrelated transaction;
(iv) any statement or any other document presented
under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under the Letter
of Credit against presentation of a draft or certifi
cate which does not comply with the terms of the Letter
of Credit;
(vi) any exchange of, release of or non-perfection
of any interest in any collateral, or any release or
amendment or waiver of or consent to departure from any
guarantee, for all or any of the obligations of the
Company in respect of the Letter of Credit;
(vii) the use of the proceeds of any drawing under
the Letter of Credit by the Issuing and Paying Agent
and Depositary; or
(viii) any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing.
(b) The obligations of each Participating Bank
under Section 2.05 shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of
this Agreement (as the same may be amended from time to
time) under all circumstances, including the following
circumstances:
(i) any lack of validity or enforceability of the
Related Documents;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of the Company in respect of the Letter of
Credit or any other amendment or waiver of or any
consent to departure from all or any of the Related
Documents;
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
49
(iii) the existence of any claim, setoff, defense or
other right which the Company may have at any time
against the Issuing and Paying Agent and Depositary or
any other beneficiary, or any transferee, of the Letter
of Credit (or any Persons for whom the Issuing and
Paying Agent and Depositary, any such beneficiary or
any such transferee may be acting), the Issuing Bank,
any Participating Bank, or any other Person, whether in
connection with this Agreement, the Transactions, or
any unrelated transaction;
(iv) any statement or any other document presented
under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under the Letter
of Credit against presentation of a draft or
certificate which does not comply with the terms of the
Letter of Credit;
(vi) any exchange of, release of or non-perfection
of any interest in any collateral, or any release or
amendment or waiver of or consent to departure from any
guarantee, for all or any of the obligations of the
Company in respect of the Letter of Credit;
(vii) the use of the proceeds of any drawing under
the Letter of Credit by the Issuing and Paying Agent
and Depositary; or
(viii) any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing.
(c) Without limiting the effect of
Section 2.13(a) or (b) or any other provision hereof, the
Company and each Participating Bank agree with the Issuing
Bank that the Issuing Bank is authorized to make payments
under the Letter of Credit upon the presentation of the
documents provided for therein and without regard to whether
the Company has failed to fulfill any of its obligations
with respect to any Related Document or other default has
occurred thereunder or hereunder.
(d) As between the Issuing Bank and the
Participating Banks on the one hand, and the Company on the
other, the Company assumes all risks of the acts or
omissions of the Issuing and Paying Agent and Depositary and
any other beneficiary or transferee of the Letter of Credit
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
50
with respect to its use of the Letter of Credit. None of
the Issuing Bank, any Participating Bank and any of their
officers or directors shall be liable or responsible for:
(i)the use which may be made of the Letter of Credit or any
acts or omissions of the Issuing and Paying Agent and
Depositary and any other beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of
documents which do not comply with the terms of the Letter
of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or
(iv)any other circumstances whatsoever in making or failing
to make payment under the Letter of Credit, except that the
Company shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Company, to the extent
of any direct, as opposed to consequential, damages suffered
by the Company which were caused by (A)the Issuing Bank's
wilful misconduct or gross negligence, as determined by a
court of competent jurisdiction, in determining whether
documents presented under the Letter of Credit are genuine
or comply with the terms of the Letter of Credit or (B)the
Issuing Bank's wilful or grossly negligent failure, as
determined by a court of competent jurisdiction, to make
lawful payment under the Letter of Credit after the
presentation to it by the Issuing and Paying Agent and
Depositary of a draft and certificate strictly complying
with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the
Issuing Bank may accept original or facsimile (including
telecopy) sight drafts and accompanying certificates
presented under the Letter of Credit that appear on their
face to be in order, without responsibility for further
investigation, regardless of any notice or information to
the contrary.
SECTION 2.14. Taxes. (a) Any and all payments
by or on account of any obligation of the Company hereunder
shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the
Company shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i)the sum payable
shall be increased as necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.14) the Agent
or such Participating Bank (as the case may be) receives an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
51
deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Company shall pay any Other
Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) The Company shall indemnify the Agent and
each Participating Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by the Agent or such Participating Bank, as
the case may be, on or with respect to any payment by or on
account of any obligation of the Company hereunder
(including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this
Section 2.14) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes or Other Taxes were correctly
or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment
or liability (showing in reasonable detail the calculation
of such amount) delivered to the Company by a Participating
Bank, or by the Agent on its own behalf or on behalf of a
Participating Bank, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Company to a
Governmental Authority, the Company shall deliver to the
Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence
of such payment reasonably satisfactory to the Agent.
(e) Any Foreign Participating Bank that is
entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Company
is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall
deliver to the Company (with a copy to the Agent), at the
time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by
applicable law or reasonably requested by the Company as
will permit such payments to be made without withholding or
at a reduced rate.
SECTION 2.15. Interest Elections. (a)Each Loan
initially shall be an ABR Loan. Thereafter, the Company may
elect to convert such Loan to a different type or to
continue such Loan and, in the case of a Eurodollar Loan,
may elect Interest Periods therefor, all as provided in this
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52
Section 2.15; provided that (i) no Loan with a principal
amount of less than $1,000,000 shall be converted to, or
continued as, a Eurodollar Loan and (ii) there shall not at
any time be more than a total of three Eurodollar Loans
outstanding.
(b)To make an election pursuant to this
Section 2.15, the Company shall give notice to the Agent of
such election, specifying the information required pursuant
to Section 2.15(c), (i)if such Loan is to be an ABR Loan,
before 12:00 noon (New York City time) at least one Business
Day prior to the effective date of such conversion or
continuance or (ii) if such Loan is to be a Eurodollar Loan,
before 12:00 noon (New York City time) at least three
Business Days prior to the effective date of such conversion
or continuance (each an "Interest Election Request"). Each
such Interest Election Request shall be irrevocable.
(c) Each Interest Election Request shall specify
the following information:
(i) the Loan to which such Interest Election
Request applies;
(ii) the effective date of the election made
pursuant to such Interest Election Request, which shall
be a Business Day;
(iii) whether the resulting Loan is to be an ABR
Loan or a Eurodollar Loan; and
(iv) if the resulting Loan is a Eurodollar Loan,
the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar
Loan but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period
of one month's duration.
(d) Promptly following receipt of an Interest
Election Request, the Agent shall advise each Participating
Bank of the details thereof and of such Participating Bank's
portion of each resulting Loan.
(e) If the Company fails to deliver a timely
Interest Election Request with respect to a Eurodollar Loan
prior to the end of the Interest Period applicable thereto,
then, unless such Loan is repaid as provided herein, at the
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53
end of such Interest Period such Loan shall be converted to
an ABR Loan. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and
the Agent, at the request of the Required Banks, so notifies
the Company, then, so long as an Event of Default is
continuing (i) no outstanding Loan may be converted to or
continued as a Eurodollar Loan and (ii)unless repaid, each
Eurodollar Loan shall be converted to an ABR Loan at the end
of the Interest Period applicable thereto.
ARTICLE III
Representations and Warranties
The Company represents and warrants to the
Participating Banks that:
SECTION 3.01. Organization; Powers. Each of the
Company and its Restricted Subsidiaries is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power
and authority to carry on its business as now conducted.
Each of the Company and its Restricted Subsidiaries is
qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required,
except where the failure to be so qualified or in good
standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.02. Authorization; Enforceability. The
Transactions are within the Company's corporate powers and
have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement and the
Related Documents have been duly executed and delivered by
the Company and constitute legal, valid and binding
obligations of the Company, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a
proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No
Conflicts. The Transactions (a) do not require any consent
or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect,
(b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the
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54
Company or any of its Restricted Subsidiaries or any order
of any Governmental Authority, (c) will not violate or
result in a default under any indenture or material
agreement or other instrument binding upon the Company or
any of its Restricted Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made
by the Company or any of its Restricted Subsidiaries, and
(d) will not result in the creation or imposition of any
Lien on any asset of the Company or any of its Restricted
Subsidiaries.
SECTION 3.04. Financial Condition; No Material
Adverse Change. (a) The Company has heretofore furnished
to the Participating Banks the balance sheet and statements
of income, stockholders equity and cash flows of the Company
and its Restricted Subsidiaries on a consolidated basis
(i) as of and for the fiscal year ended March 31, 1997
reported on by Xxxxxx Xxxxxxxx LLP, independent public
accountants, and (ii)as of and for the fiscal quarter and
the portion of the fiscal year ended June 30, 1997,
certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the
financial condition and results of operations and cash flows
of the Company and its Restricted Subsidiaries on a consol
idated basis as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements
referred to in clause (ii), above.
(b) Since June 30, 1997, there has been no
material adverse change in the business, assets, operations,
prospects or condition, financial or otherwise, of the
Company and its Restricted Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the
Company and its Restricted Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects
in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Company and its Restricted
Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, service marks, copyrights, patents and other
intellectual property material to its business, and the use
thereof by the Company and its Restricted Subsidiaries does
not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggre
gate, could not reasonably be expected to result in a
Material Adverse Effect.
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55
SECTION 3.06. Litigation and Environmental
Matters. (a) There are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Restricted
Subsidiaries (i) that could reasonably be expected,
individually or in the aggregate, to result in a Material
Adverse Effect (other than the Disclosed Matters) or
(ii)that involve this Agreement, the Related Documents or
the Transactions.
(b)Except for the Disclosed Matters and except
with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Company nor any of
its Restricted Subsidiaries (i)has failed to comply with
any Environmental Law or to obtain, maintain or comply with
any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environ
mental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv)knows of
any basis for any Environmental Liability.
(c)Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agree
ments. Each of the Company and its Restricted Subsidiaries
is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property
and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
SECTION 3.08. Investment and Holding Company
Status. Neither the Company nor any of its Restricted
Subsidiaries is (a) an "investment company" as defined in,
or subject to regulation under, the Investment Company Act
of 1940 (other than any Restricted Subsidiary which is not
subject to regulation under such statute as a result of an
exemption therefrom) or (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company and its
Restricted Subsidiaries has timely filed or caused to be
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56
filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for
which the Company or such Restricted Subsidiary, as
applicable, has set aside on its books adequate reserves in
accordance with GAAP or (b) to the extent that the failure
to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred
or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected
to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of
Financial Accounting Standards No.87) did not, as of the
date of the most recent financial statements reflecting such
amounts, exceed by more than $10,000,000 the fair market
value of the assets of such Plan, and the present value of
all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such
amounts, exceed by more than $10,000,000 the fair market
value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Company has
disclosed to the Participating Banks all agreements,
instruments and corporate or other restrictions to which it
or any of its Restricted Subsidiaries is subject, and all
other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by
or on behalf of the Company to the Agent or any
Participating Bank in connection with the negotiation of
this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; provided that, with respect to projected
financial information, the Company represents only that such
information was prepared in good faith based upon assump
tions believed to be reasonable at the time; provided
further that with respect to information about third parties
the Company represents only that it has no actual knowledge
that such information is inaccurate or misleading.
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57
SECTION 3.12. Federal Reserve Regulations.
(a) Neither the Company nor any of the Restricted
Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit
for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any issuance of
the Commercial Paper will be used, whether directly or
indirectly, and whether immediately, incidentally or
ultimately, (i)to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or
carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii)in any event, for any
purpose which entails a violation of, or is inconsistent
with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligation of
the Issuing Bank to issue the Letter of Credit hereunder
shall not become effective until the date on which each of
the following conditions is satisfied (or waived in
accordance with Section 9.02):
(a) The Agent (or its counsel) shall have
received from each party hereto either (i) a counter
part of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Agent
(which may include telecopy transmission of a signed
signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) The Agent shall have received a favorable
written opinion (addressed to the Agent, the Issuing
Bank and the Participating Banks and dated the
Effective Date) of Pitney, Xxxxxx, Xxxx & Xxxxx and of
Xxxxxxx X. Xxxxxxxx, counsel for the Company,
substantially in the forms of Exhibits E and F,
respectively, and covering such other matters relating
to the Company, this Agreement, the Related Documents
or the Transactions as the Required Banks shall
reasonably request. The Company hereby requests such
counsel to deliver such opinion.
(c) The Agent shall have received such documents
and certificates as the Agent or its counsel may
reasonably request relating to the organization,
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58
existence and good standing of the Company, the
authorization of the Transactions and any other legal
matters relating to the Company, this Agreement, the
Related Documents or the Transactions, all in form and
substance satisfactory to the Agent and its counsel.
(d) The Agent shall have received a certificate,
dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Company,
confirming compliance with the conditions set forth in
Section 4.02(a) and (b).
(e) The Agent shall have received all fees and
other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company
hereunder.
(f) The Agent and each Participating Bank shall
have received (i) a Borrowing Base Certificate prepared
by the Company and reasonably satisfactory to the Agent
and showing the Borrowing Base as of the close of
business on July 31, 1997, and (ii) such other
supporting documentation and additional reports with
respect to the Borrowing Base as the Agent shall
reasonably request in writing prior to the date hereof.
(g) The Agent (or its counsel) shall have
received from each party thereto either (i) a counter
part of each of the Related Documents signed on behalf
of such party or (ii) written evidence satisfactory to
the Agent (which may include telecopy transmission of a
signed signature page) that such party has signed a
counterpart of each of the Related Documents.
(h) The Commercial Paper shall have received a
short term rating from S&P, Xxxxx'x and Fitch
equivalent to or greater than the long term rating on
the Issuing Bank's Index Debt, and in no event less
than a rating of "A-1" from S&P, "P-1" from Xxxxx'x and
"F-1" from Fitch.
(i) The Commercial Paper shall not be required to
be registered with the Securities and Exchange
Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with
any national securities exchange.
(j) All of the conditions precedent set forth in
Section 4 (other than Section 4(d)) of the Amendment
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59
dated as of September 9, 1997 to the Credit Agreement
shall have been satisfied in full.
(k) The Issuing Bank shall have approved the
offering documents with respect to the Commercial
Paper.
The Agent shall notify the Company and the Participating
Banks of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the
obligation of the Issuing Bank to issue the Letter of Credit
hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m. (New York City time)
on September 9, 1997 (and, in the event such conditions are
not so satisfied or waived, the Commitment shall terminate
at such time).
SECTION 4.02. Issuance and Increases. The
obligation of the Issuing Bank to issue the Letter of Credit
and the ability of the Company to increase the Stated Amount
pursuant to Section 2.06(c)(iii) are subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the
Company set forth in this Agreement shall be true and
correct in all material respects on and as of the date
of such issuance or increase, as applicable.
(b) At the time of and immediately after giving
effect to such issuance or increase, as applicable, no
Default shall have occurred and be continuing.
(c) The Agent shall have received the most recent
Borrowing Base Certificate required to have been
delivered pursuant to Section 5.01(g).
The issuance of the Letter of Credit and each increase of
the Stated Amount pursuant to Section 2.06(c)(iii) shall be
deemed to constitute a representation and warranty by the
Company on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section 4.02.
SECTION 4.03. Each Loan. (a) The obligation of
the Issuing Bank to make any Loan is subject to the
satisfaction of the following conditions:
(i) At the time of such making of such Loan, a
Non-Default Disruption shall have occurred and be
continuing.
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60
(ii) At the time of and immediately after giving
effect to such making of such Loan, no Default shall
have occurred and be continuing.
(iii) The Agent shall have received the most recent
Borrowing Base Certificate required to have been
delivered pursuant to Section 5.01(g).
Each such making of a Loan shall be deemed to constitute a
representation and warranty by the Company on the date
thereof as to the matters specified in subsections(i), (ii)
and (iii)of this Section 4.03(a).
(b) The obligation of the Issuing Bank to make
any Loan pursuant to Section 2.04 shall be subject to the
further condition precedent that the Agent shall have
received from the Company a notice not later than 10:00 a.m.
(New York City time) on the Business Day on which such Loan
is to be made specifying the principal amount of such Loan.
ARTICLE V
Affirmative Covenants
Until the Commitment and the Letter of Credit have
expired or been terminated and the principal of and interest
on each Loan and all fees and other amounts payable
hereunder shall have been paid in full, the Company
covenants and agrees with the Participating Banks that:
SECTION 5.01. Financial Statements and Other
Information. The Company will furnish to the Agent and each
Participating Bank:
(a) within 90 days after the end of each fiscal
year of the Company, (i) a copy of the audited xxxxxxx
dated balance sheet of the Company and its Restricted
Subsidiaries on a consolidated basis and the related
statements of operations, stockholders' equity and cash
flows, as of the end of and for such year, setting
forth in each case in comparative form the figures as
of the end of and for the previous fiscal year, all
reported on by Xxxxxx Xxxxxxxx LLP or other independent
public accountants of recognized national standing
(without a "going concern" or like qualification or
exception and without any qualification or exception as
to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all
material respects the financial condition and results
of operations of the Company and its Restricted
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61
Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, and (ii) a letter from such
independent public accountants certifying that during
the course of their audit nothing came to their atten
tion that would indicate that the Borrowing Base
Certificate, if any, relating to the last day of such
fiscal year is inaccurate in any material respect;
(b) within 60 days after the end of each of the
first three fiscal quarters of each fiscal year of the
Company, a copy of the unaudited consolidated balance
sheet of the Company and its Restricted Subsidiaries on
a consolidated basis and the related statements of
operations, stockholders' equity and cash flows, as of
the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the
corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects
the financial condition and results of operations of
the Company and its Restricted Subsidiaries on a
consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments
and the absence of footnotes;
(c) concurrently with any delivery of financial
statements under clause (a) or (b), above, a
certificate of a Financial Officer (i) certifying as to
whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto;
(ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.09;
(iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the
audited financial statements referred to in
Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial
statements accompanying such certificate; and
(iv) setting forth the aggregate amount of all
Warehouse Facilities and the aggregate portions thereof
provided on a committed and on an uncommitted basis;
(d) concurrently with any delivery of financial
statements under clause (a), above, a certificate of
the accounting firm that reported on such financial
statements stating whether they obtained knowledge
during the course of their examination of such
financial statements of any Default (which certificate
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62
may be limited to the extent required by accounting
rules or guidelines);
(e) promptly after the same become publicly
available, copies of all periodic and other reports,
proxy statements and other materials filed by the
Company or any Restricted Subsidiary with the
Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of
said Commission, or with any national securities
exchange, as the case may be;
(f) promptly following any request therefor, such
other information regarding the operations, business
affairs and financial condition of the Company or any
Restricted Subsidiary, or compliance with the terms of
this Agreement, as the Agent, on its own behalf or on
behalf of any Participating Bank, may reasonably
request;
(g)unless the Company's Index Debt is Investment
Grade, not later than 12:00 noon (New York City time)
on the fifteenth Business Day of each month, (i)a
Borrowing Base Certificate showing the Borrowing Base
as of the close of business on the last day of the
immediately preceding month, each such certificate to
be certified by a Financial Officer as complete and
correct in all material respects, and (ii) such other
supporting documentation and additional reports with
respect to the Borrowing Base as the Agent shall from
time to time reasonably request; and
(h)immediately upon (i) any revaluation, or any
event that under GAAP would require a revaluation, in
either case resulting from a change in assumptions,
performance or valuation methodology or any other
circumstance not arising in the ordinary course of the
Company's business, of the Excess Spread Receivables on
an aggregate basis on a balance sheet required to be
delivered under clause (a) or (b), above, a certificate
of a Financial Officer describing such revaluation and
the reasons therefor and (ii) notice of any change of
the rating of the Company's Index Debt.
SECTION 5.02. Notices of Material Events. The
Company will furnish to the Agent and each Participating
Bank prompt notice of the following:
(a) the occurrence of any Default;
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63
(b) the filing or commencement of any action, suit
or proceeding by or before any arbitrator or Govern
mental Authority against or affecting the Company or
any Affiliate thereof that could reasonably be expected
to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have
occurred, could reasonably be expected to result in
liability of the Company and its Restricted
Subsidiaries in an aggregate amount exceeding
$5,000,000;
(d) any other development that results in, or
could reasonably be expected to result in, a Material
Adverse Effect; and
(e) the occurrence of any Non-Default Disruption.
Each notice delivered under this Section 5.02 shall be
accompanied by a statement of a Financial Officer or other
executive officer of the Company setting forth the details
of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business.
The Company will, and will cause each of its Restricted
Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its
business; provided that the foregoing shall not prohibit
(a) any merger, consolidation, liquidation or dissolution
permitted under Section 6.03 or (b) any Asset Disposition
permitted under Section 6.04.
SECTION 5.04. Payment of Obligations. The
Company will, and will cause each of its Restricted
Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could reasonably be expected
to result in a Material Adverse Effect before the same shall
become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Company or such
Restricted Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and
(c) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse
Effect.
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64
SECTION 5.05. Maintenance of Properties;
Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good
working order and condition, ordinary wear and tear
excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and
against such risks as are customarily maintained by
companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection and
Audit Rights. (a) The Company will, and will cause each of
its Restricted Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made
of all dealings and transactions in relation to its business
and activities. The Company will, and will cause each of
its Restricted Subsidiaries to, permit any representatives
designated by the Agent or any Participating Bank, upon
reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition
with officers of the Company and its independent
accountants, all at such reasonable times and as often as
reasonably requested; provided that any such discussions
with such independent accountants pursuant to this paragraph
shall be held no more than once in any fiscal year unless
(and shall be at the sole cost and expense of the Company
if) a Default shall have occurred and be continuing. If the
Company so elects, on any visit or inspection or during any
discussion pursuant to this Section 5.06, such designated
representatives shall be accompanied by one or more
representatives of the Company.
(b) At any time upon the request of the Agent
made with reasonable prior notice, the Company will permit
the Agent or professionals (including investment bankers,
consultants, accountants, lawyers and appraisers) retained
by the Agent to conduct evaluations and appraisals of
(i)the Company's practices in the computation of the
Borrowing Base, and (ii)the assets included in the
Borrowing Base, and will pay the reasonable fees and
expenses in connection therewith; provided that such persons
shall be entitled to conduct such evaluations and appraisals
only if (A)a Default has occurred and is continuing or
(B)the Agent, or the Required Banks through the Agent,
determines that a Material Adverse Effect has occurred since
the Effective Date.
SECTION 5.07. Compliance with Laws. The Company
will, and will cause each of its Restricted Subsidiaries to,
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65
comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.08. Purpose. The Letter of Credit will
be issued only to support the issuance from time to time of
Commercial Paper to provide for the Company's financing
requirements.
SECTION 5.09. Related Documents. The Company
shall comply in all material respects with the terms of the
Related Documents.
SECTION 5.10. Reimbursement Account. At any time
after any Commercial Paper matures and a disbursement is to
be made under the Letter of Credit in connection therewith,
prior to any subsequent issuances of Commercial Paper, the
Company shall deposit in the Reimbursement Account (as
defined in the Issuing and Paying Agency and Depositary
Agreement) an amount, to be applied to the reimbursement of
such disbursement or any related Loan, equal to the amount
by which the Face Amount of such Commercial Paper exceeds
the proceeds of such Commercial Paper to be deposited in the
Reimbursement Account.
ARTICLE VI
Negative Covenants
Until the Commitment and the Letter of Credit have
expired or been terminated and the principal of and interest
on each Loan and all fees and other amounts payable
hereunder have been paid in full, the Company covenants and
agrees with the Participating Banks that:
SECTION 6.01. Limitation on Indebtedness and
Preferred Stock of Restricted Subsidiaries. The Company
will not permit any Restricted Subsidiary to Incur, or
permit to exist with respect to any Restricted Subsidiary,
directly or indirectly, any Indebtedness or Preferred Stock
except:
(a) Permitted Warehouse Indebtedness;
(b) Indebtedness or Preferred Stock issued to and
held by the Company or a Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or
transfer of any Capital Stock which results in any such
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66
Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such
Indebtedness or Preferred Stock (other than to the
Company or a Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the issuance of Indebted
ness or Preferred Stock by the issuer thereof;
(c) Indebtedness or Preferred Stock of a
Subsidiary Incurred and outstanding on or prior to the
date on which such Subsidiary was acquired by the
Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to
consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a
Subsidiary or was acquired by the Company);
(d) Indebtedness or Preferred Stock outstanding on
the date hereof and set forth in Schedule 6.01 (other
than Indebtedness described in clause (a), (b) or (c)
of this Section 6.01); and
(e) Refinancing Indebtedness Incurred in respect
of Indebtedness or Preferred Stock referred to in
clause (c) or (d) of this Section or this clause (e);
provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances
Indebtedness or Preferred Stock of a Subsidiary
described in clause (c) of this Section, such
Refinancing Indebtedness shall be Incurred only by such
Subsidiary.
SECTION 6.02. Limitation on Liens. The Company
will not, and will not permit any Subsidiary to, Incur or
permit to exist any Lien on any of its properties (including
Capital Stock of a Restricted Subsidiary), whether owned on
the date hereof or thereafter acquired, or on any income or
revenues or rights in respect of any thereof, or assign or
transfer any income or revenues or rights in respect thereof
except:
(a) pledges or deposits by such Person under
worker's compensation laws, unemployment insurance laws
or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which
such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of
cash or United States government bonds to secure surety
or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import
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67
duties or for the payment of rent, in each case
Incurred in the ordinary course of business;
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens, in each case for
sums not yet due or being contested in good faith by
appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to
which such Person shall then be proceeding with an
appeal or other proceedings for review;
(c) Liens for property taxes not yet subject to
penalties for non-payment or which are being contested
in good faith and by appropriate proceedings;
(d) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and
for the account of such Person in the ordinary course
of its business; provided, however, that such letters
of credit do not constitute Indebtedness;
(e) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for,
licenses, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use
of real property or Liens incidental to the conduct of
the business of such Person or to the ownership of its
properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate
materially adversely affect the value of said
properties or materially impair their use in the
operation of the business of such Person;
(f) Liens securing Indebtedness Incurred to
finance the construction, purchase or lease of, or
repairs, improvements or additions to, property, plant
or equipment of such Person (and in any event excluding
Capital Stock of another Person); provided, however,
that the Lien may not extend to any other asset owned
by such Person or any of its Subsidiaries at the time
the Lien is Incurred, and the Indebtedness secured by
the Lien may not be Incurred more than 180 days after
the later of the acquisition, completion of construc
tion, repair, improvement, addition or commencement of
full operation of the property subject to the Lien;
(g) Liens on Performance Deposits and any
Receivables or other assets referred to in
clause (ii)(a) of the definition of Permitted Warehouse
Indebtedness, in each case owned by the Company or a
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68
Restricted Subsidiary, as the case may be, to secure
Permitted Warehouse Indebtedness;
(h) Liens on Excess Spread Receivables (or on the
Capital Stock of any Subsidiary of such Person substan
tially all the assets of which are Excess Spread
Receivables); provided, however, that (i)(A) any such
Liens shall not pertain to any Excess Spread Receivable
existing on the date hereof, which, if created there
after, would have been an Eligible Excess Spread
Receivable unless such Excess Spread Receivable was
subject to a Lien on such date created by the Company
in respect of the financing thereof (a "predecessor
Lien"); provided further, however, that in the case of
any such Liens (a "subsequent Lien") on Excess Spread
Receivables which were subject to predecessor Liens,
the sum of (x)the aggregate book value of subordinated
interests created and retained by the Company or its
Restricted Subsidiaries as a result of the sale or
financing associated with such subsequent Liens and
(y)the aggregate book value of any Excess Spread
Receivables which were subject to predecessor Liens but
which are then no longer subject to any Lien (other
than permitted Liens described under another clause of
this Section) shall equal at least the aggregate book
value at such time of all such Excess Spread Receiv
xxxxx which are then subject to subsequent Liens, as
calculated immediately prior to the creation of each
such subsequent Lien, multiplied by a fraction the
numerator of which is the aggregate book value of the
subordinated interests associated with all predecessor
Liens on the date hereof, and the denominator of which
is the sum of (x) such aggregate book value of such
subordinated interests and (y) the outstanding balance
on the date hereof, of the related senior interests;
and (B) any such Lien on any Eligible Excess Spread
Receivables shall extend to Eligible Excess Spread
Receivables representing no more than 50% of the amount
of Eligible Excess Spread Receivables shown on the
balance sheet of the Company and its Restricted
Subsidiaries on a consolidated basis, determined and
consolidated in accordance with GAAP, as of the later
of (x)the date hereof and (y) the end of the most
recent fiscal quarter of the Company prior to the
creation of such Lien for which financial statements
are available; and (ii) for purposes of this clause
(h), any Lien on the Capital Stock of any Person
substantially all the assets of which are Excess Spread
Receivables shall be treated as a Lien on the Excess
Spread Receivables of such Person;
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69
(i) Liens existing on the date hereof and listed
on Schedule 6.02;
(j) Liens on property or shares of Capital Stock
of another Person at the time such other Person becomes
a Subsidiary of such Person; provided, however, that
such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other
Person becoming such a Subsidiary; provided further,
however, that such Lien may not extend to any other
property owned by such Person or any of its
Subsidiaries;
(k) Liens on property at the time such Person or
any of its Subsidiaries acquires the property,
including any acquisition by means of a merger or
consolidation with or into such Person or a Subsidiary
of such Person; provided, however, that such Liens are
not created, incurred or assumed in connection with, or
in contemplation of, such acquisition; provided
further, however, that the Liens may not extend to any
other property owned by such Person or any of its
Subsidiaries;
(l) Liens securing Indebtedness or other
obligations of a Subsidiary of such Person owing to
such Person or a Restricted Subsidiary of such Person;
(m) Liens (other than on any Excess Spread
Receivables) securing Hedging Agreements; and
(n) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any Indebted
ness secured by any Lien referred to in the foregoing
clauses (f), (i), (j) and (k); provided, however, that
(i) such new Lien shall be limited to all or part of
the same property that secured the original Indebted
ness (plus improvements to or on such property), and
(ii) the Indebtedness secured by such Lien at such time
is not increased to any amount greater than the sum of
(A) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under
the foregoing clauses (f), (i), (j) or (k), as the case
may be, at the time the original Lien became a Lien
permitted by this Section, and (B) an amount necessary
to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension,
renewal or replacement.
Notwithstanding the foregoing, clauses (f), (j) or
(k), above, will be deemed to exclude any Lien to the extent
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70
such Lien applies to any Additional Assets acquired directly
or indirectly with Net Available Cash pursuant to
Section 6.04.
SECTION 6.03. Limitation on Mergers and
Consolidations. The Company will not consolidate with or
merge with or into, or convey, transfer or lease, in one
transaction or a series of related transactions, all or
substantially all its assets to, any Person, unless:
(a) the Company shall be the surviving Person of
any such transaction;
(b) immediately after giving effect to such
transaction, no Default shall have occurred and be
continuing;
(c) immediately after giving effect to such
transaction, the successor company shall have
Consolidated Net Worth in an amount which is not less
than Consolidated Net Worth immediately prior to such
transaction; and
(d) the Company shall have delivered to the Agent
a certificate, signed by two executive officers, and an
opinion of counsel, each stating that such
consolidation, merger or transfer complies with this
Agreement.
Notwithstanding the foregoing clauses (b) and (c),
any Restricted Subsidiary may consolidate with, merge into
or transfer all or part of its properties and assets to the
Company or a Wholly Owned Subsidiary.
SECTION 6.04. Limitation on Sales of Assets and
Subsidiary Stock. The Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly,
consummate any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or
dispositions) by the Company or any Restricted Subsidiary,
including any disposition by means of a merger, consolida
tion or similar transaction (each referred to for the
purposes of this definition as an "Asset Disposition"), of:
(a) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares or
shares required by applicable law to be held by a
Person other than the Company or a Restricted
Subsidiary);
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71
(b) all or substantially all the assets of any
division or line of business of the Company or any
Restricted Subsidiary;
(c) any other assets of the Company or any
Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary;
(d) any Investment in a Strategic Alliance Client;
or
(e) any Excess Spread Receivables;
other than, in the case of (a), (b), (c), (d) and (e),
above, (i) an Asset Disposition by a Restricted Subsidiary
to the Company or by the Company or a Restricted Subsidiary
to a Restricted Subsidiary or (ii) an Asset Disposition
(including related assets) for an aggregate consideration of
$1,000,000 or less, unless (A) the Company or such
Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market
value (including the value of all non-cash consideration),
as determined in good faith by the Board of Directors, of
the shares and assets subject to such Asset Disposition and
at least 85% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash
or cash equivalents, and (B) an amount equal to 100% of the
Net Available Cash from such Asset Disposition is applied by
the Company (or such Restricted Subsidiary, as the case may
be) (x) to the extent the Company elects, to acquire
Additional Assets, either directly or through a Restricted
Subsidiary, within 180 days from the later of the date of
such Asset Disposition or the receipt of such Net Available
Cash, and (y) to the extent of the balance of such Net
Available Cash after application in accordance with
clause (x), to permanently reduce the Commitments (as
defined in the Credit Agreement) in accordance with
Section 2.07 of the Credit Agreement and to make any prepay
ments required by such Section in connection with such
reduction pursuant to the Credit Agreement.
Notwithstanding the foregoing provisions of this
Section, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accor
dance with this Section except to the extent that the
aggregate Net Available Cash from all Asset Dispositions
which has not been applied in accordance with this paragraph
exceeds $10,000,000. Pending application of Net Available
Cash pursuant to this Section, such Net Available Cash shall
be applied (i) to prepay outstanding Loans under and as
defined in the Credit Agreement and (ii) to the extent of
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72
the excess of Net Available Cash over the principal amount
of outstanding Loans (as defined in the Credit Agreement),
in Permitted Investments.
SECTION 6.05. Limitation on Loans and Invest
ments. (a) The Company will not, and will not permit any
of its Restricted Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was
not a Wholly Owned Subsidiary prior to such merger) any
Capital Stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any
of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other
Person, or purchase or otherwise acquire (in one transaction
or a series of transactions) any assets of any other Person
constituting a business unit, except:
(i) Permitted Investments;
(ii) Investments by the Company or any Restricted
Subsidiary in a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a
Restricted Subsidiary; provided, however, that the
primary business of such Restricted Subsidiary is a
Related Business;
(iii) a Strategic Alliance Client to the extent such
Investment consists of options, warrants or other
securities that are convertible or exchangeable for
equity securities of such Strategic Alliance Client and
is received by the Company or a Restricted Subsidiary
without the payment of any consideration other than the
concurrent provision by the Company or such Restricted
Subsidiary to such Strategic Alliance Client of xxxxx
xxxx or asset securitization expertise on terms deter
mined by the Company to be fair and reasonable to the
Company or such Restricted Subsidiary from a financial
point of view without taking into consideration any
value that may inhere in such option, warrant or
convertible or exchangeable security;
(iv) another Person if as a result of such Invest
ment such other Person is merged or consolidated with
or into, or transfers or conveys all or substantially
all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's
primary business is a Related Business;
(v) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the
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73
ordinary course of business and payable or discharge
able in accordance with customary trade terms;
(vi) payroll, travel and similar advances to cover
matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of
business;
(vii) loans or advances to employees in the ordinary
course of business in accordance with the past
practices of the Company or such Restricted Subsidiary,
but in any event not to exceed $10,000,000 in aggregate
principal amount outstanding at any one time;
(viii) stock, obligations or securities received in
settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments;
(ix) any Person to the extent such Investment
represents the non-cash portion of the consideration
received for an Asset Disposition;
(x) Receivables;
(xi)a Strategic Alliance Client to the extent such
Investment consists of (A) Indebtedness of such
Strategic Alliance Client that is secured by
Receivables owned by such Strategic Alliance Client in
an aggregate principal amount at any time outstanding
not to exceed the aggregate market value of such
Receivables; provided, however, that such Receivables
are eligible to be characterized under GAAP as held for
sale on the balance sheet of such Strategic Alliance
Client and such Indebtedness has not been outstanding
in excess of 364 days; and (B) Indebtedness of such
Strategic Alliance Client that is secured by Excess
Spread Receivables owned by such Strategic Alliance
Client; provided, however, that such Excess Spread
Receivables are attributed solely to one or more
"pools" of Receivables that were securitized in one or
more transactions in which the Company or its
Restricted Subsidiaries either acted as underwriters or
placement agent or provided all or a portion of the
financing for such "pool" prior to such securitization;
and
(xii) Excess Spread Receivables; provided, however,
that such Excess Spread Receivables represent interests
in one or more "pools" of Receivables that were
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74
securitized in one or more transactions in which the
Company or its Restricted Subsidiaries acted as
sponsor, underwriter or placement agent or provided all
or a portion of the financing for such "pool" prior to
such securitization.
(b)The Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements entered into in the
ordinary course of business to hedge or mitigate risks to
which the Company or any Restricted Subsidiary or any
Strategic Alliance Client is exposed in the conduct of its
business or the management of its liabilities; provided
that, in the case of Hedging Agreements relating to a
Strategic Alliance Client, (i)such Hedging Agreements are
not for speculative purposes of the Company or any
Restricted Subsidiary, and (ii)such Strategic Alliance
Client is contractually obligated to make the Company or
such Restricted Subsidiary whole for any loss suffered
thereby in connection therewith.
SECTION 6.06. Limitation on Affiliate Trans
actions. (a)The Company will not, and will not permit any
of its Restricted Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates
(an "Affiliate Transaction") unless the terms thereof
(i)are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who
is not such an Affiliate, (ii)if such Affiliate Transaction
involves an amount in excess of $2,000,000 (or the equiva
lent amount in any foreign currency) (A)are set forth in
writing and (B) have been approved by a majority of the
members of the Board of Directors having no personal stake
in such Affiliate Transaction and (iii)if such Affiliate
Transaction involves an amount in excess of $10,000,000 (or
the equivalent amount in any foreign currency), have been
determined by a nationally recognized investment banking
firm to be fair, from a financial standpoint, to the Company
and its Restricted Subsidiaries.
(b) The provisions of Section 6.06(a) shall not
prohibit (i)any Permitted Investment, (ii) any issuance of
securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership
plans approved by the Board of Directors, (iii) the grant of
stock options or similar rights to employees and directors
of the Company pursuant to plans approved by the Board of
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Directors, (iv)loans or advances to employees in the
ordinary course of business in accordance with the past
practices of the Company or its Restricted Subsidiaries, but
in any event not to exceed $10,000,000 (or the equivalent
amount in any foreign currency) in aggregate principal
amount outstanding at any one time, (v)the payment of
reasonable fees to directors of the Company and its
Restricted Subsidiaries who are not employees of the Company
or its Restricted Subsidiaries, (vi)any Affiliate
Transaction between the Company and a Restricted Subsidiary
or between consolidated Restricted Subsidiaries (in each
case other than any Restricted Subsidiary that is an
"affiliate" (as such term is defined in the Exchange Act) of
any Affiliate (other than any Restricted Subsidiary) of the
Company and (vii) transactions pursuant to any agreement as
in existence as of the date hereof and set forth in
Schedule 6.06 between the Company or its Restricted
Subsidiaries and Continental Grain or one of its
subsidiaries.
SECTION 6.07. Limitation on Restrictions on
Distributions from Restricted Subsidiaries. The Company
will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Company
or any Restricted Subsidiary to create, incur or permit to
exist any Lien upon any of its property or assets or (b)the
ability of any Restricted Subsidiary to pay dividends or
make any other distributions on its Capital Stock to the
Company or a Restricted Subsidiary or pay any Indebtedness
owed to the Company, to make any loans or advances to the
Company or a Restricted Subsidiary or to Guarantee
Indebtedness of or to transfer any of its property or assets
to the Company or any other Restricted Subsidiary that owns
Capital Stock therein; provided that the foregoing shall not
apply to (i)restrictions and conditions imposed by law or
by this Agreement; (ii)any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the
date hereof identified on Schedule 6.07 (but shall apply to
any extension or renewal of, or any amendment or modifica
tion expanding the scope of, any such restriction or
condition); (iii)any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an agreement
applicable to such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the
Company (other than an agreement entered into in connection
with, or in anticipation of, the transaction or series of
related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by
the Company) and outstanding on such date; (iv) any such
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76
encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder;
(v)in the case of a Restricted Subsidiary transferring any
of its property or assets to the Company, restrictions
contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such
restrictions restrict the transfer of the property subject
to such security agreements or mortgages; and (vi) any
restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary pending the closing of
such sale or disposition; and provided further that clause
(a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restric
tions or conditions apply only to the property or assets
securing such Indebtedness.
SECTION 6.08. Limitation on Investment Company
Status. The Company will not take any action, or otherwise
permit to exist any circumstance, that would require the
Company to register as an "investment company" under the
Investment Company Act of 1940.
SECTION 0.00.Xxxxxxxxx Covenants. (a) Xxxxxxx-
dated Net Worth shall not at any time be less than
(i) $400,000,000 plus (ii)an amount, for each fiscal
quarter which begins after June 30, 1997 and ends prior to
the date for which compliance with this Section 6.09 is
being determined, equal to the sum of (A) 75% of the
aggregate of positive Consolidated Net Income (without
deduction for quarterly losses) and (B) 50% of Equity Net
Proceeds.
(b) The Consolidated Leverage Ratio will not at
any time exceed 2.50 to 1.00.
(c) The Consolidated Interest Coverage Ratio for
the Rolling Period shall at no time be less than 1.50 to
1.00.
SECTION 6.10. Limitation on Business of the
Company. The Company will not engage at any time in any
business or business activity other than the business
currently conducted by it and Related Business.
SECTION 6.11. Commercial Paper. (a)The Company
shall not issue Commercial Paper (i)which will mature later
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77
than two days prior to the Termination Date, (ii) if as a
result the Stated Amount in effect after giving effect to
the application of the proceeds of such issuance and the
application of funds made available at such time by the
Company in the Reimbursement Account (as defined in the
Issuing and Paying Agency and Depositary Agreement) for the
reimbursement of principal of amounts due from the Company
to the Issuing Bank pursuant to Section 2.03 would be less
than the aggregate Face Amount of all Commercial Paper
Outstanding after giving effect to such issuance,
(iii) during the continuance of any Non-Default Disruption
or Event of Default, (iv)other than in accordance with the
terms of the Issuing and Paying Agency and Depositary
Agreement or (v)unless the condition specified in
paragraph (c) of Section 4.02 is satisfied at the time of
such issuance.
(b) The Company shall not issue Commercial Paper
or use the proceeds thereof in any manner that would violate
the Securities Act of 1933, as amended, or any other
applicable law or regulation.
(c) The Company shall not amend the offering
documents with respect to the Commercial Paper without the
prior written consent of the Issuing Bank, which consent
shall not be unreasonably withheld.
(d) The Company shall not issue any promissory
note or other obligation which could generally or commonly
be regarded as commercial paper, unless such promissory note
or other obligation is in such form, and bears such
identification and is issued under such circumstances (with
such form, identification and circumstances to be acceptable
to the Issuing Bank), as to avoid confusion in the hands of
the holder thereof or the investing public between such
promissory note or other obligation and the Commercial Paper
and so as not to indicate or imply that such promissory note
or other obligation is entitled to the benefits of the
Letter of Credit.
SECTION 6.12. Issuing and Paying Agent and
Depositary. The Company shall not appoint a successor
issuing and paying agent and depositary with respect to the
Commercial Paper without the prior written consent of the
Issuing Bank and the Agent, which consents shall not be
unreasonably withheld.
SECTION 6.13. Related Documents. The Company
shall not amend the terms of the Related Documents without
the consent of the Issuing Bank and the Agent, which
consents shall not be unreasonably withheld.
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78
ARTICLE VII
Events of Default
If any of the following events ("Events of
Default") shall occur:
(a) the Company shall fail to pay (i)any amount
under Section 2.03 or (ii)any principal of any Loan
when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) the Company shall fail to pay any interest on
any Loan or any fee or any other amount (other than an
amount referred to in clause (a) of this Article VII)
payable under this Agreement, when and as the same
shall become due and payable, and such failure shall
continue unremedied for a period of three days;
(c) any representation or warranty made or deemed
made by or on behalf of the Company or any Restricted
Subsidiary in or in connection with this Agreement or
the Related Documents or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, or
in any report, certificate, financial statement or
other document furnished pursuant to or in connection
with this Agreement or the Related Documents or any
amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been
materially incorrect when made or deemed made;
(d) the Company shall fail to observe or perform
any covenant, condition or agreement contained in
Section 5.02, 5.03 (with respect to the Company's
existence) or 5.08 or in Article VI;
(e) the Company shall fail to observe or perform
any covenant, condition or agreement contained in this
Agreement (other than those specified in clause (a),
(b) or (d) of this Article) or any Related Document,
and such failure shall continue unremedied for a period
of 30 days after notice thereof from the Agent to the
Company (which notice will be given at the request of
any Participating Bank);
(f) the Company or any Restricted Subsidiary
shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any
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79
Material Indebtedness, when and as the same shall
become due and payable;
(g) any event or condition occurs that results in
any Material Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebted
ness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity;
provided that this clause(g) shall not apply to
secured Indebtedness that becomes due as a result of
the permitted voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking
(i)liquidation, reorganization or other relief in
respect of the Company or any Restricted Subsidiary or
its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or
hereafter in effect or (ii)the appointment of a
receiver, trustee, custodian, sequestrator, conservator
or similar official for the Company or any Restricted
Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall
be entered;
(i) the Company or any Restricted Subsidiary shall
(i)voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or here
after in effect, (ii)consent to the institution of, or
fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any
Restricted Subsidiary or for a substantial part of its
assets, (iv)file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (v)make a general assignment for the
benefit of creditors or (vi)take any action for the
purpose of effecting any of the foregoing;
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80
(j) the Company or any Restricted Subsidiary shall
become unable, admit in writing or fail generally to
pay its debts as they become due;
(k) one or more judgments for the payment of money
in an aggregate amount not covered by insurance in
excess of $5,000,000 (or the equivalent amount in any
foreign currency) shall be rendered against the
Company, any Restricted Subsidiary or any combination
thereof and the same shall remain undischarged for a
period of 60 consecutive days during which execution
shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy
upon any assets of the Company or any Restricted
Subsidiary to enforce any such judgment;
(l)an ERISA Event shall have occurred that, in
the opinion of the Required Banks, when taken together
with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the
Company and its Restricted Subsidiaries in an aggregate
amount exceeding (i)$5,000,000 for any fiscal year of
the Company or (ii)$10,000,000 for all periods;
(m) a Change in Control shall occur; or
(n) any provision of this Agreement or any Related
Document to which the Company is or is to be a party
shall at any time for any reason cease to be valid and
binding on the Company, or shall be declared to be null
and void, or the Company shall deny that it has any
further liability or obligation hereunder or
thereunder;
then the Agent and the Issuing Bank shall notify the Issuing
and Paying Agent and Depositary of the occurrence and
continuance of such Event of Default (and thereafter of the
cessation of any such Event of Default), and in every such
event (other than an event with respect to the Company
described in clause (h) or (i) of this Article), and at any
time thereafter during the continuance of such event, the
Agent may, and at the request of the Required Banks shall,
take any or all of the following actions, at the same or
different times: (i) if the Letter of Credit shall not have
been issued, by notice to the Issuing Bank and the Company,
declare the Commitment to be terminated, whereupon the same
shall forthwith terminate or (ii) if the Letter of Credit
shall have been issued, (A) by notice to the Company,
declare any disbursements by the Issuing Bank that have not
yet been reimbursed by or on behalf of the Company and any
Loans then outstanding to be due and payable in whole (or in
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81
part, in which case such disbursements and any principal not
so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon such disbursements and
the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees
and other obligations of the Company accrued hereunder,
shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company, and (B)
demand the deposit of cash collateral pursuant to this
Article VII, in which case the Company shall immediately
deposit in an account with the Agent an amount in cash (or a
cash equivalent that is satisfactory in form and substance
to the Required Banks) equal to the sum of (x) the Stated
Amount at such time, (y) the aggregate amount of all
disbursements by the Issuing Bank that have not yet been
reimbursed by or on behalf of the Company at such time and
(z) the aggregate principal amount of any Loans then
outstanding, together with accrued interest thereon and all
fees and other obligations of the Company accrued hereunder
(collectively, the "Exposure"); and in the case of any event
with respect to the Company described in clause (h) or (i)
of this Article, the Commitment shall automatically
terminate or any disbursements then outstanding and the
principal of any Loans then outstanding, together with
accrued interest thereon, shall automatically become due and
payable and the obligation to deposit such cash collateral
shall become effective immediately and such deposit shall
become immediately due and payable, as applicable, and all
fees and other obligations of the Company accrued hereunder,
shall automatically become due and payable, in each case
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company. Such
deposit of cash collateral shall be held by the Agent as
collateral for the payment and performance of the
obligations of the Company under this Agreement. The Agent
shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits,
which investments shall be made at the option and sole
discretion of the Agent and at the Company's risk and
expense (except as a result of acts or omissions
constituting the wilful misconduct or gross negligence of
the Agent), such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by
the Agent to reimburse the Issuing Bank for disbursements
for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the
reimbursement obligations of the Company with respect to the
Exposure. If the Company is required to provide an amount
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82
of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Company
within three Business Days after all Events of Default have
been cured or waived. After the occurrence and during the
continuance of any Event of Default, the Issuing Bank may
direct the Issuing and Paying Agent and Depositary in
writing to make a drawing under the Letter of Credit in the
amount required to pay in full all Outstanding Commercial
Paper upon maturity and deposit such amount in the Note
Redemption Account (as defined in the Issuing and Paying
Agency and Depositary Agreement) and apply such amount in
accordance with the terms of the Issuing and Paying Agency
and Depositary Agreement. Notwithstanding the foregoing,
the Issuing Bank's obligations under the Letter of Credit
with respect to any Commercial Paper Outstanding at the time
that the Agent or the Issuing Bank notifies the Issuing and
Paying Agent and Depositary of any Event of Default shall
not be limited in any way by such Event of Default.
ARTICLE VIII
The Agent; the Participating Banks;
and the Issuing Bank
Subject to the further provisions hereof, each of
the Issuing Bank and the Participating Banks hereby
irrevocably appoints the Agent as its agent and authorizes
the Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Agent by the terms
hereof, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Agent and the bank serving
as Issuing Bank hereunder shall have the same rights and
powers in their capacity as Participating Banks as any other
Participating Bank and may exercise the same as though they
were not the Agent and the Issuing Bank, respectively, and
such banks and their Affiliates may accept deposits from,
lend money to and generally engage in any kind of business
with the Company or any Restricted Subsidiary or other
Affiliate thereof as if they were not the Agent or Issuing
Bank, respectively, hereunder.
The Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting
the generality of the foregoing, (a) the Agent shall not be
subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing, (b)the
Agent shall not have any duty to take any discretionary
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83
action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated
hereby that the Agent is required to exercise in writing by
the Required Banks (or such other number or percentage of
the Participating Banks as shall be necessary under the
circumstances as provided in Section 9.02), and (c)except
as expressly set forth herein, the Agent shall not have any
duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Company or any of
its Restricted Subsidiaries that is communicated to or
obtained by the bank serving as Agent or any of its
Affiliates in any capacity. The Agent shall not be liable
for any action taken or not taken by it with the consent or
at the request of the Required Banks (or such other number
or percentage of the Participating Banks as shall be
necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence
or wilful misconduct. The Agent shall be deemed not to have
knowledge of any Default unless and until notice thereof is
given to the Agent by the Company or a Participating Bank,
and the Agent shall not be responsible for or have any duty
to ascertain or inquire into (i)any statement, warranty or
representation made in or in connection with this Agreement
or any Related Document, (ii)the contents of any
certificate, report or other document delivered hereunder,
under any Related Document or in connection therewith,
(iii)the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or
under any Related Document, (iv) the validity, enforce
ability, effectiveness or genuineness of this Agreement, any
Related Document or any other agreement, instrument or
document, or (v)the satisfaction of any condition set forth
in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the
Agent.
The Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and
to have been signed or sent by the proper Person. The Agent
also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who
shall be counsel for the Company, internal counsel for the
Agent or a Participating Bank, or a nationally recognized
law firm), nationally recognized independent accountants and
other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
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84
The Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more
sub-agents appointed (after consultation with the Company)
by the Agent. The Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any
such sub-agent and to the Related Parties of the Agent and
any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit
facility provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a
successor Agent as provided in this paragraph, the Agent may
resign at any time by notifying the Participating Banks, the
Issuing Bank and the Company. Upon any such resignation,
the Required Banks shall have the right, in consultation
with the Company, to appoint a successor. If no successor
shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the
retiring Agent may, on behalf of the Participating Banks and
Issuing Bank, appoint a successor Agent which shall be a
bank. Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor
Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such
successor. After the Agent's resignation hereunder, the
provisions of this Article VIII and Section 9.03 shall
continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any
of them while it was acting as Agent.
Each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent or any
other Participating Bank and based on such documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Participating Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Participating Bank and based on such documents and
information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.
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85
All notices received by the Issuing Bank pursuant
to this Agreement or any other Related Document (other than
the Letter of Credit) shall be promptly delivered to the
Agent for distribution to the Participating Banks.
The Issuing Bank shall not amend or waive any
provision or consent to the amendment or waiver of any
Related Document without the consent of the Required Banks;
provided, however, that any waiver or amendment of any
provision of the Letter of Credit or consent to the
amendment or waiver of the Letter of Credit shall require
the written consent of all of the Participating Banks.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of
notices and other communications expressly permitted to be
given by telephone, all notices and other communications
provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as
follows:
(a) if to the Company, to it at ContiFinancial
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Chief Counsel and of Director of Corporate
Finance (Telecopy No.(000) 000-0000);
(b) if to the Agent, to Credit Suisse First
Boston, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(Telecopy No. (000) 000-0000), Attention of Xxxxxxxx
Xxxxxx;
(c) if to the Issuing Bank, to it at Dresdner Bank
AG, New York Branch, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention of Xxxxxxx Zoy (Telecopy No. (212)
429-2130); and
(d) if to any Participating Bank, to it at its
address (or telecopy number) set forth in its
Administrative Questionnaire.
Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to
the other parties hereto. All notices and other communica
tions given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been
given on the date of receipt.
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86
SECTION 9.02. Waivers; Amendments. (a)No
failure or delay by the Agent, the Issuing Bank or any
Participating Bank in exercising any right or power here
under shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Agent, the Issuing Bank and the
Participating Banks hereunder are cumulative and are not
exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agree
ment or consent to any departure by the Company therefrom
shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 9.02, and then
such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, neither
the making of a Loan nor issuance of the Letter of Credit
shall be construed as a waiver of any Default, regardless of
whether the Agent, the Issuing Bank or any Participating
Bank may have had notice or knowledge of such Default at the
time.
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the
Company and the Required Banks or by the Company and the
Agent with the consent of the Required Banks; provided that
no such agreement shall (i) increase the Participation
Percentage of any Participating Bank without the written
consent of such Participating Bank, (ii) reduce or forgive
any amount due pursuant to Section 2.03 or the principal
amount of any Loan or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written
consent of each Participating Bank, (iii) postpone the
scheduled date of payment of any amount due pursuant to
Section 2.03 or the principal amount of any Loan or any
interest thereon, or any fees payable hereunder, or amend
the definition of "Termination Date", or reduce the amount
of, waive or excuse any such payment, or postpone the
scheduled date of expiration of the Commitment without the
written consent of each Participating Bank affected thereby,
(iv) change Section 2.09(c) or 9.08(c) in a manner that
would alter the pro rata sharing of payments required
thereby, without the written consent of each Participating
Bank, or (v) change any of the provisions of this Section or
the definition of "Required Banks" or any other provision
hereof specifying the number or percentage of Participating
Banks required to waive, amend or modify any rights
hereunder or make any determination or grant any consent
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87
hereunder, without the written consent of each
Participating Bank; provided further that no such agreement
shall (i) increase any advance rate used in calculating the
Borrowing Base or otherwise change the computation of the
Borrowing Base or the definition of any constituent
component of the Borrowing Base, without the prior written
consent of Participating Banks representing 80% of the
aggregate Participation Percentages or (ii) amend, modify or
otherwise affect the rights or duties of the Agent or the
Issuing Bank hereunder without the prior written consent of
the Agent or the Issuing Bank, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by the Agent and its Affiliates and the
Issuing Bank and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for the Agent and
the Issuing Bank, in connection with the syndication of the
credit facility provided for herein, the preparation and
administration of this Agreement, the Letter of Credit or
any amendments, modifications or waivers of the provisions
hereof and thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment,
renewal or extension of the Letter of Credit or any demand
for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Agent, the Issuing
Bank or any Participating Bank, including the fees, charges
and disbursements of any counsel for the Agent, the Issuing
Bank or any Participating Bank, in connection with the
enforcement or protection of its rights in connection with
this Agreement and any other Related Document, including its
rights under this Section, or in connection with any Loans
made or the issuance of the Letter of Credit hereunder,
including all such reasonable out-of-pocket expenses
incurred during any workout, restructuring or negotiations
in respect of such Loans or such Letter of Credit.
(b) The Company shall indemnify the Agent, the
Issuing Bank, each Participating Bank and each Related Party
of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, the Related Documents or any
agreement or instrument contemplated hereby, the performance
by the parties hereto of their respective obligations
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
88
hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii)any Loan or the
Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Company or
any of its Restricted Subsidiaries, or any Environmental
Liability related in any way to the Company or any of its
Restricted Subsidiaries, or (iv)any actual or prospective
claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses have
resulted from the gross negligence or wilful misconduct of
such Indemnitee.
(c) To the extent that the Company fails to pay
any amount required to be paid by it to the Agent or the
Issuing Bank under paragraph (a) or (b) of this
Section 9.03, each Participating Bank severally agrees to
pay to the Agent or the Issuing Bank, as the case may be,
such Participating Bank's Participation Percentage (deter
mined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemni
fied loss, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against the
Agent or the Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, no
party shall assert, and each party hereby waives, any claim
against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, the
Related Documents or any agreement or instrument contem
plated hereby, the Transactions, any Loan or the Letter of
Credit or the use of the proceeds thereof; provided that
this paragraph(d) shall in no way limit the rights of any
Participating Bank under Section 2.07, 2.08 or 2.14.
(e) All amounts due under this Section shall be
payable not later than 10 days after written demand
therefor.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
89
SECTION 9.04. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues the Letter of
Credit), except that the Company may not assign or otherwise
transfer any of its rights or obligations hereunder without
the prior written consent of each Participating Bank (and
any attempted assignment or transfer by the Company without
such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues the
Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agent, the
Issuing Bank and the Participating Banks) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Participating Bank may assign to one or
more assignees all or a portion of its rights and obliga
tions under this Agreement (including all or a portion of
its Participation Percentage and any Loans at the time owing
to it); provided that (i)except in the case of an
assignment to a Participating Bank or an Affiliate of a
Participating Bank, each of the Company, the Issuing Bank
and the Agent must give their prior written consent to such
assignment (which consent shall not be unreasonably
withheld), (ii)except in the case of an assignment to a
Participating Bank or an Affiliate of a Participating Bank
or an assignment of the entire remaining amount of the
assigning Participating Bank's Participation Percentage, the
amount of the Participation Percentage of the assigning
Participating Bank subject to each such assignment (deter
mined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Agent) shall
be an aggregate amount that, when multiplied by the Stated
Amount (without giving effect to any reductions thereto
other than irrevocable reductions), an integral multiple of
$1,000,000 and not less than $10,000,000, unless each of the
Company and the Agent otherwise consent, (iii)each partial
assignment shall be made as an assignment of a proportionate
part of all the assigning Participating Bank's rights and
obligations under this Agreement, (iv)the parties to each
assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and (v)the assignee, if it shall
not be a Participating Bank, shall deliver to the Agent an
Administrative Questionnaire; and provided further that any
consent of the Company otherwise required under this para
graph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof
pursuant to paragraph(d) of this Section 9.04, from and
after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations
of a Participating Bank under this Agreement, and the
assigning Participating Bank thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all of
the assigning Participating Bank's rights and obligations
under this Agreement, such Participating Bank shall cease to
be a party hereto but shall continue to be entitled to the
benefits of (and therefore shall be treated as a
Participating Bank for determining entitlement to the
benefits of) Sections 2.07, 2.08, 2.14, 9.03 and 9.04(h)).
Any assignment or transfer by a Participating Bank of rights
or obligations under this Agreement that does not comply
with this paragraph shall be treated for purposes of this
Agreement as a sale by such Participating Bank of a
participation in such rights and obligations in accordance
with paragraph (e) of this Section.
(c) The Agent, acting for this purpose as an
agent of the Company, shall maintain at one of its offices
in the City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the recorda
tion of the names and addresses of the Participating Banks,
and the Participation Percentage of, and principal amount of
any Loans owing to, each Participating Bank pursuant to the
terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the
Company, the Agent, the Issuing Bank and the Participating
Banks may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Participating
Bank hereunder for all purposes of this Agreement, notwith
standing notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank
and any Participating Bank, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assign
ment and Acceptance executed by an assigning Participating
Bank and an assignee, the assignee's completed Administra
tive Questionnaire (unless the assignee shall already be a
Participating Bank hereunder), the processing and recorda
tion fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph
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90
(b) of this Section, the Agent shall accept such Assignment
and Acceptance and record the information contained therein
in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Any Participating Bank may, without the
consent of the Company, the Agent or the Issuing Bank, sell
participations to one or more banks or other entities (a
"Participant") in all or a portion of such Participating
Bank's rights and obligations under this Agreement
(including all or a portion of its Participation Percentage
and any Loans owing to it); provided that (i)such
Participating Bank's obligations under this Agreement shall
remain unchanged, (ii) such Participating Bank shall remain
solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Company, the
Agent, the Issuing Bank and the other Participating Banks
shall continue to deal solely and directly with such
Participating Bank in connection with such Participating
Bank's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Participating
Bank sells such a participation shall provide that such
Participating Bank shall retain the sole right to enforce
this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such
Participating Bank will not, without the consent of the
Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this
Section, the Company agrees that each Participant shall be
entitled to the benefits of Sections 2.07, 2.08, 2.14 and
9.04(h) to the same extent as if it were a Participating
Bank and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits
of Section 9.08 as though it were a Participating Bank,
provided such Participant agrees to be subject to
Section 9.08(c) as though it were a Participating Bank.
(f) A Participant shall not be entitled to
receive any greater payment under Section 2.14 or 9.04(h)
than the applicable Participating Bank would have been
entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to
such Participant is made with the Company's prior written
consent. A Participant that would be a Foreign
Participating Bank if it were a Participating Bank shall not
be entitled to the benefits of Section 2.14 unless the
Company is notified of the Participation sold to such
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91
Participant and such Participant agrees, for the benefit of
the Company, to comply with Section 2.14(e) as though it
were a Participating Bank.
(g)Any Participating Bank may at any time pledge
or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such
Participating Bank, including any pledge or assignment to
secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of
a security interest; provided that no such pledge or
assignment of a security interest shall release a
Participating Bank from any of its obligations hereunder or
substitute any such pledgee or assignee for such
Participating Bank as a party hereto.
(h)If any Participating Bank requests compensa
tion under Section 2.07, or if the Company is required to
pay any additional amount to any Participating Bank or any
Governmental Authority for the account of any Participating
Bank pursuant to Section 2.14, then such Participating Bank
shall use reasonable efforts, including designating a
different lending office for funding or booking its Loans
hereunder, to eliminate or reduce amounts payable pursuant
to Section 2.07 or 2.14, as the case may be, in the future;
provided that any such action would not subject such
Participating Bank to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Participating
Bank in any respect deemed significant by it. The Company
hereby agrees to pay all reasonable costs and expenses
incurred by any Participating Bank in connection with any
such action.
(i) If any Participating Bank shall have
delivered a notice, certificate or demand to the Company
described in Sections 2.04(d), 2.07 or 2.14, or shall become
a non-performing Participating Bank under Section 2.05(b) or
shall not consent to any extension of the Termination Date
requested by the Company under Section 2.11, and if and so
long as such Participating Bank shall not have withdrawn
such notice, certificate or demand or corrected such non-
performance in accordance with Section 2.05(b) or consented
to such extension, the Company, at its sole expense and
effort, or the Agent may demand that such Participating Bank
assign in accordance with paragraph (b), above, to one or
more assignees designated by either the Company or the Agent
(and reasonably acceptable to the other) all (but not less
than all) of such Participating Bank's participation and
other rights and obligations hereunder; provided that
(i)the Company shall have received the prior written
consent of the Agent, which consent shall not be
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92
unreasonably withheld, such Participating Bank shall have
received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued
and unpaid fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the
Company (in the case of all other amounts) and (iii)in the
case of any such assignment resulting from a claim for
compensation under Section 2.07 or payments required to be
made pursuant to Section 2.14, such assignment will result
in a reduction in such compensation or payments; provided
further that the Issuing Bank may also make such a demand of
a Participating Bank as provided in this Section if either
(i)such Participating Bank shall no longer be affiliated
with the Organization for Economic Cooperation and
Development or (ii) such Participating Bank's Index Debt
shall be rated less than "A" by S&P or "A2" by Xxxxx'x. A
Participating Bank shall not be required to make any such
assignment and delegation if, prior thereto, as a result of
a waiver by such Participating Bank or otherwise, the
circumstances entitling the Company to require such
assignment and delegation cease to apply.
(j) In making any claim under Section 2.07 or
2.14 or calculating any amounts due thereunder, each
Participating Bank shall treat the Company no less favorably
than the treatment afforded by such Participating Bank to
similarly situated borrowers in similar circumstances.
SECTION 9.05. Survival. All covenants, agree
ments, representations and warranties made by the Company
herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery
of this Agreement and the making of any Loans and issuance
of the Letter of Credit, regardless of any investigation
made by any such other party or on its behalf and notwith
standing that the Agent, the Issuing Bank or any
Participating Bank may have had notice or knowledge of any
Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or the Letter
of Credit is outstanding and so long as the Commitment has
not expired or terminated. The provisions of Sections 2.07,
2.08, 2.14 and 9.03 and Article VIII shall survive and
remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the
repayment of any Loans, the expiration or termination of the
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93
Letter of Credit and the Commitment or the termination of
this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration;
Effectiveness. This Agreement may be executed in counter
parts (and by different parties hereto on different
counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a
single contract. This Agreement and any separate letter
agreements with respect to fees payable to the Agent
constitute the entire contract among the parties relating to
the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall
have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. Severability. Any provision of
this Agreement held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any
other jurisdiction.
SECTION 9.08. Right of Setoff. (a) If an Event
of Default shall have occurred and be continuing, the
Issuing Bank, each Participating Bank and each of its
Affiliates are hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
obligations at any time owing by the Issuing Bank or such
Participating Bank or Affiliate, as applicable, to or for
the credit or the account of the Company against any of and
all the obligations of the Company now or hereafter existing
under this Agreement held by the Issuing Bank or such
Participating Bank, as applicable, irrespective of whether
or not the Issuing Bank or such Participating Bank, as
applicable, shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights
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94
of the Issuing Bank and each Participating Bank under this
Section 9.08 are in addition to other rights and remedies
(including other rights of setoff) which the Issuing Bank or
such Participating Bank, as applicable, may have.
(b) The Issuing Bank and each Participating Bank
agrees promptly to notify the Company after any such setoff
and application referred to in paragraph (a), above;
provided that the failure to give such notice shall not
affect the validity of such setoff and application.
(c) If any Participating Bank shall obtain any
payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise, but excluding
all proceeds received by assignments or sales of participa
tions in accordance with Section 9.04) on account of its
participatory interests in any amounts owed by the Company
pursuant to Section 2.03 or any Loan made by the Issuing
Bank pursuant to Section 2.04 (other than pursuant to
Sections 2.07 and 2.08) in excess of its ratable share of
payments on account of such amounts owed by the Company or
such Loan obtained by all the Participating Banks, such
Participating Bank shall forthwith purchase from the other
Participating Banks a participation in the portions of such
Loan owing to them as shall be necessary to cause such
purchasing Participating Bank to share the excess payment
ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered
from such purchasing Participating Bank, such purchase from
such Participating Bank shall be rescinded and such
Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such
recovery together with an amount equal to such Participating
Bank's ratable share (according to the proportion of (i)the
amount of such Participating Bank's required repayment to
(ii)the total amount so recovered from the purchasing
Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of
the total amount so recovered.
(d) Notwithstanding the foregoing, if any
Participating Bank shall obtain any such excess payment
involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks
in accordance with paragraph (c), above, on the date of
receipt of such excess payment, return such excess payment
to the Agent for distribution in accordance with
Section 2.09(b).
SECTION 9.09. Governing Law; Jurisdiction;
Consent to Service of Process. (a) This Agreement shall be
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95
construed in accordance with and governed by the law of the
State of New York (without prejudice to the provisions of
Section 5-1401 of the General Obligations Law of the State
of New York, excluding such State's principles of conflicts
of law). The Letter of Credit shall be construed in
accordance with and governed by the Uniform Customs and
Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce, Publication No.500
(other than Article 17 thereof) (the "Uniform Customs") and,
as to matters not governed by the Uniform Customs, the laws
of the State of New York, including the Uniform Commercial
Code as in effect in the State of New York.
(b)The Company hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the
United States District Court of the Southern District of
New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the
Agent, the Issuing Bank or any Participating Bank may
otherwise have to bring any action or proceeding relating to
this Agreement against the Company or its properties in the
courts of any jurisdiction.
(c)The Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section 9.09.
Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d)Each party to this Agreement irrevocably
consents to service of process in the manner provided for
notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
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96
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A)CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B)ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREE
MENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the
Agent, the Issuing Bank and the Participating Banks agrees
to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed
(a)to its Affiliates and to its and their directors,
officers, employees and agents, including accountants, legal
counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed
to keep such Information confidential) solely for use in
connection with this Agreement and the transactions
contemplated hereby and the performance by the parties
hereunder, (b)to the extent requested by any regulatory
authority, (c)to the extent required by applicable laws or
regulations or by any subpoena or similar legal process,
(d)to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (f) subject to an agreement
containing provisions substantially the same as those of
this Section 9.12, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the
consent of the Company or (h)to the extent such Information
(i)becomes publicly available other than as a result of a
breach of this Section or (ii)becomes available to the
Agent, the Issuing Bank or any Participating Bank on a
nonconfidential basis from a source other than the Company.
For the purposes of this Section, "Information" means all
information received from the Company or a Subsidiary
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97
relating to any of the Company or a Restricted Subsidiary or
its business, other than any such information that is
available to the Agent, the Issuing Bank or any Participa
ting Bank on a nonconfidential basis prior to disclosure by
the Company or such Subsidiary. Any Person required to
maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such
Information as such Person would accord to its own
confidential information. The Participating Banks agree
that the rights of the Company under this Section shall be
enforceable by specific performance.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
respective duly authorized officers as of the date first
above written.
CONTIFINANCIAL CORPORATION,
by
/s/: Xxxxxx X. Xxxxxx
-----------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
and CFO
by
/s/: Xxxxx X'Xxxxxxx
-----------------
Name: Xxxxx X' Xxxxxxx
Title: Controller
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, Individually,
and as Agent,
by
/s/: Xxxxxx X. Xxxxxx
-----------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
by
/s/: Xxx Xxxxxxxx
-----------------
Name: Xxx Xxxxxxxx
Title: Vice President
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
00
XXXXXXXX XXXX XX, XXX XXXX AND
GRAND CAYMAN BRANCHES,
Individually and as Co-Agent, and
DRESDNER BANK AG, NEW YORK BRANCH,
as Issuing Bank,
by
/s/: Xxxxxxxx X. Xxxxxx
-----------------
Name: Xxxxxxxx X. Xxxxxx
Title: Assistant Vice President
by
/s/: Xxxxxx X. Xxxxxxxx
-----------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK, Individually
and as Co-Agent,
by
/s/: Xxxxxx X. Xxxxx
-----------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
CREDIT AGRICOLE, Individually and
as Co-Agent,
by
/s/: Whakyung Xxx
-----------------
Name: Whakyung Xxx
Title: Vice President
by
/s/: Xxxxxxx Xxxxxxxxx
-----------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
DG BANK, NEW YORK BRANCH,
Individually and as Co-Agent,
by
/s/: Xxxxxx Xxxxx
-----------------
Name: Xxxxxx Xxxxx
Title: Assistant Vice
President
THE BANK OF NOVA SCOTIA,
Individually and as Co-Agent,
by
/s/: Xxxxxxx Xxxxxxxx
-----------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
99
THE CHASE MANHATTAN BANK,
Individually and as Co-Agent,
by
/s/: Xxxxxxx X. Xxxxx
-----------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
NATIONSBANK OF TEXAS, N.A.,
Individually and as Co-Agent,
by
/s/: Xxx X. Xxxxxx
-----------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
Individually and as Co-Agent,
by
/s/: X. Xxxxx
-----------------
Name: X. Xxxxx
Title: Vice President
SOCIETE GENERALE, Individually and
as Co-Agent,
by
/s/: Xxxxxxx Xxxxx-Xxxxxxxxxx
------------------------
Name: Xxxxxxx Xxxxx-Xxxxxxxxxx
Title: Vice President
COMERICA BANK,
by
/s/: Xxxxxxx X. Xxxxxxx
-----------------
Name: Xxxxxxx X. Xxxxxxx
Title: First Vice President
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
000
XXXXX XXXX XX XXXXXXXXXXX,
XXX XXXX BRANCH,
by
/s/: Xxxxxx Xxxxxxxx
-----------------
Name: Xxxxxx Xxxxxxxx
Title: Director
by
/s/: Xxxxxxx Rave
-----------------
Name: Xxxxxxx Rave
Title: Director
BHF-BANK AKTIENGESELLSCHAFT,
by
/s/: Xxxxx Xxxx
-----------------
Name: Xxxxx Xxxx
Title: Vice President
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH,
by
/s/: Xxxx Xxxxx
-----------------
Name: Xxxx Xxxxx
Title: Assistant Vice
President
BANK OF TOKYO-MITSUBISHI,
by
/s/: Xxxxx X. Xxxxxx
-----------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
SCHEDULE 2.01
Contact Person, Address and Participation
Participating Bank Telephone and Telecopy Numbers Percentage
Credit Suisse First Boston, Xxxxxxxx Xxxxxx
New York Branch 11 Madison Avenue 9.09091%
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Dresdner Bank AG, New York and Xxxxxxxx X. Xxxxxx 9.09091%
Grand Cayman Branches 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
The Bank of New York Xxxxxx X. Xxxxx 7.72727%
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Caisse Xxxxxxxxx Xx Xxxxxx Xxxxxxxx Xxx 0.00000%
Xxxxxxxx, Xxx Xxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
DG Bank, New York Branch, Xxxxxx Xxxxxx 7.72727%
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
The Bank of Nova Scotia Xxxx Xxxxxx 7.72727%
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
The Chase Manhattan Bank Xxxxx Xxxxxx 7.27273%
Xxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
NationsBank of Texas, X.X. Xxxxxxx Dolt 7.27273%
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Lyonnais New York Branch Xxxxxxxx Xxxxxxxx 7.27273%
NY Corporate Group A
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
Contact Person, Address and Participation
Participating Bank Telephone and Telecopy Numbers Percentage
Societe Generale Xxxxxxxx Xxxxxx 7.27273%
Xxxxxxx Xxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000/6882
Fax: (000) 000-0000
Comerica Bank Xxx Xxxxxxx 5.45455%
000 Xxxxxxxx Xxxxxx XX 0000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Union Bank of Switzerland, Xxxxxx Xxxxxxxx 5.45455%
New York Branch Xxxxx Xxxxxxx
000 Xxxx Xxxxxx
00xx Xxxxx/00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000/3227
Fax: (000) 000-0000/3891
BHF-Bank Aktiengesellschaft Xxxxx Xxxx 3.63636%
Xxxxxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000/5503
Fax: (000) 000-0000
The Sumitomo Bank, Limited, New Xxxxx X. Xxxxxxxx 3.63636%
York Branch 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank of Tokyo-Mitsubishi Xxxxxx Xxxxxxx 3.63636%
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
SCHEDULE 3.06
Disclosed Matters
No matters requiring disclosure.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
SCHEDULE 6.01
Indebtedness and Preferred Stock
Letters of Credit 1/ $1,830,236
Total Subsidiary Indebtedness 1,830,236
Preferred Stock 0
Total Indebtedness and Preferred
Stock of Restricted Subsidiaries 1,830,236
--------
1 Issued by Contitrade Services Corporation relating to
past securitizations.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
SCHEDULE 6.02
Existing Liens
No matters requiring disclosure.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
SCHEDULE 6.06
Affiliate Transactions
No matters requiring disclosure.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
SCHEDULE 6.07
Existing Restrictions
No matters requiring disclosure.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT A
[Form of]
Letter of Credit
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT B
[Form of]
Dealer Agreement
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT C
[Form of]
Issuing and Paying Agency and Depositary Agreement
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT D
[Form of]
Borrowing Base Certificate
To: The Participating Banks Party to
the Reimbursement Agreement
This Borrowing Base Certificate is furnished
pursuant to the Letter of Credit and Reimbursement Agreement
dated as of September 9, 1997, as amended from time to time
(the "Reimbursement Agreement"), among ContiFinancial
Corporation (the "Company"), the Participating Banks party
thereto, Credit Suisse First Boston, New York Branch, as
Agent, and Dresdner Bank AG, New York Branch, as Issuing
Bank. Each capitalized term used and not otherwise defined
herein shall have the meaning assigned to it in the
Reimbursement Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am a duly elected Financial Officer of the
Company;
2. I have reviewed the terms of the
Reimbursement Agreement and I have made, or
have caused to be made under my supervision,
a detailed review of the transactions and
conditions of the Company and its Restricted
Subsidiaries during the period covered by the
attached form; and
3. The attached form sets forth data and
computations required by and complying with
certain provisions of the Reimbursement
Agreement, all of which data and computations
are true, complete and correct in all
material respects.
The foregoing certification, together with the
data and computations, attached hereto is made and delivered
this __ day of 19__.
CONTIFINANCIAL CORPORATION,
by
_________________________
Name:
Title:
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
2
ContiFinancial Corporation
Attachment to Borrowing Base Certificate
Letter of Credit and Reimbursement Agreement
dated as of September 9, 1997
Borrowing Base data and computations as of __________, 19__
Total Contribution to
Amount Borrowing Base
Asset Not Less Advance (Total Amount x
Category 2/ Than Rate Advance Rate)
Eligible Cash & $ 100% $
Cash Equivalents
Eligible $ 95% $
Receivables
Eligible Fixed $ 85% $
Income Securities
Eligible I/O Strip $ 85% $
Securities
Eligible $ 80% $
Performance
Deposits
Capitalized $ 75% $
Servicing Fees
Eligible Residuals $ 65% $
-------------
$
multiplied by 2
--------------
Subtotal $
--------
2/ Excludes any assets that are not Eligible Assets.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
3
Outstanding Funded ($ )
Indebtedness
multiplied by 2
Loans (as defined ($ )
in the Credit
Agreement)
Borrowing
Base
Total $
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
4
EXHIBIT E
[Form of]
Opinion of Pitney, Xxxxxx, Xxxx & Xxxxx
PITNEY, XXXXXX, XXXX & XXXXX
000 XXXX 00XX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
(000) 000-0000
FACSIMILE (212) 371-8540
000 XXXXXX XXXXX
XXXXXXX XXXX, XXX XXXXXX 00000-0000
(000) 000-0000
FACSIMILE (000) 000-0000
September 9, 1997
To each of the participating banks who
are a party to that certain Letter of
Credit and Reimbursement Agreement,
dated as of the date hereof, among
CONTIFINANCIAL CORPORATION, such
participating banks, CREDIT SUISSE
FIRST BOSTON, NEW YORK BRANCH, as
Agent for such participating banks,
and DRESDNER BANK AG, NEW YORK BRANCH,
as Issuing Bank, and to Credit Suisse
First Boston, New York Branch, and
Dresdner Bank AG, New York Branch, in
such capacities.
Re: ContiFinancial Corporation
Letter of Credit and Reimbursement Agreement
dated as of September 9, 1997
Ladies and Gentlemen:
We have acted as counsel to ContiFinancial
Corporation, a Delaware corporation (the "Company"), in
connection with the Letter of Credit and Reimbursement
Agreement, dated as of September 9, 1997 (the "Reimbursement
Agreement"), among the Company, the participating banks
party thereto (the "Banks"), Credit Suisse First Boston, New
York Branch, as Agent for the Banks (the "Agent"), and
Dresdner Bank AG, New York Branch, as Issuing Bank (the
"Issuing Bank"). This opinion is being delivered to you
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
2
pursuant to Section 4.01(b) of the Reimbursement Agreement.
Capitalized terms used but not defined herein have the
meanings assigned to them in the Reimbursement Agreement.
In rendering the opinion set forth below, we
have examined originals, or copies certified or otherwise
identified to our satisfaction, of the following documents
and corporate records of the Company together with
certificates of public officials and such other documents,
instruments, records and papers as we have deemed necessary
and appropriate as a basis for rendering the opinion set
forth below: (a) the Reimbursement Agreement; (b) each of
the Related Documents, dated the date hereof; (c) the
Restated Certificate of Incorporation of the Company, dated
December 18, 1995, a copy of which is attached as Exhibit A
to this opinion; (d) the Restated By-laws of the Company;
(e) the Letter of Credit Facility Authorizing Resolution of
the Company, dated [ ], 1997, a copy of which is
attached as Exhibit B to this opinion; (f) a certificate
from the Secretary of State of the State of Delaware, dated
September 5, 1997, certifying, among other things, that the
Company is duly incorporated under the laws of the State of
Delaware and is in good standing and has a legal corporate
existence; (g) a certificate from the Secretary of State of
the State of New York, dated August 25, 1997, certifying
certain information in connection with the Company's
authority to do business in the State of New York; (h) an
Assistant Secretary's Certificate, dated the date hereof,
from the Company, a copy of which is attached as Exhibit C
to this opinion; and (i) an Officer's Certificate, dated the
date hereof, from the Company, a copy of which is attached
as Exhibit D to this opinion. We have also relied, with
respect to certain factual matters, on the representations
and warranties of the Company contained in the Reimbursement
Agreement and the Related Documents and have assumed
compliance by the Company with the terms of the
Reimbursement Agreement and the Related Documents.
In rendering the opinion expressed below, we
have, with your permission and without any further
investigation or verification, assumed (a)the genuineness
of all signatures (other than the Company), (b)the
authenticity of all documents submitted to us as originals,
(c)the conformity to originals of all documents submitted
to us as copies, and the authenticity of the originals of
such documents, (d)the legal capacity of natural persons,
(e)the parties to the Reimbursement Agreement (other than
the Company) have the full power and authority to execute
and deliver the Reimbursement Agreement and each Related
Document, the Reimbursement Agreement and each Related
Document have been duly executed and delivered by each such
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
3
party (other than the Company) and are the legal, valid and
binding obligation of each such party (other than the
Company), (f)that, to the extent that certain standards of
conduct may be imposed as a matter of law on the Banks, the
Agent or the Issuing Bank as a condition to, or as a
requirement for enforceability of, the Reimbursement
Agreement (including, without limitation, any requirement
that such parties act reasonably, in good faith, in a
commercially reasonable manner, or otherwise in compliance
with applicable law) such parties will comply with such
standards of conduct, whether or not any other conduct is
permitted by the Reimbursement Agreement, and (g)the
adequacy and accuracy of the public records reviewed by us.
We are counsel to the Company and not
guarantors, sureties, insurers, underwriters, indemnitors or
otherwise offering an assurance of the observance,
performance or fulfillment of any one or more of the terms,
covenants, conditions, agreements or provisions of the
Reimbursement Agreement and assume no responsibility for a
default or breach relating thereto and provide this opinion
solely as a legal opinion.
We express no opinion with respect to the effect
of any laws other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and the
federal laws of the United States of America. In rendering
this opinion with respect to the General Corporation Law of
the State of Delaware, we expressly advise you that (a)no
member of the firm is admitted to practice in the State of
Delaware and (b)by rendering such opinion this firm is not
holding itself out to the Banks or any other person or
entity as attorneys admitted to practice law in the State of
Delaware.
Based upon and subject to the foregoing and
subject to the qualifications, examinations, assumptions and
limitations hereinabove and hereinafter set forth, we are of
the opinion that:
1.The Company is a corporation validly
existing and in good standing under the laws of the State of
Delaware. The Company has all necessary corporate power and
authority to execute and deliver the Reimbursement Agreement
and the Related Documents and to perform its obligations
thereunder.
2.The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the State of New York.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
4
3.The execution and delivery by the Company of
the Reimbursement Agreement and the Related Documents and
the performance by the Company of its obligations thereunder
(a)have been duly authorized by all requisite corporate
action on the part of the Company and (b)will not conflict
with, result in a breach of or constitute a default under
(i)the Certificate of Incorporation or By-laws of the
Company or (ii)any law, rule or regulation of the United
States of America or the State of New York or the General
Corporation Law of the State of Delaware.
4. The Reimbursement Agreement and the Related
Documents have each been duly executed and delivered by the
Company, and each constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company
in accordance with its terms, subject to (a)applicable
bankruptcy, insolvency, rehabilitation, arrangement,
reorganization, liquidation, conservation, moratorium,
fraudulent transfer, fraudulent conveyance, receivership,
and other similar laws relating to or affecting creditor's
or debtor's rights generally from time to time in effect,
(b)general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in
a proceeding in equity or at law, (c)applicable law
limiting a party's right to waiver or otherwise not to seek
or enforce the benefit of statutory or common law rights or
waivers of the application of court rules or the requirement
of the service of process, (d) the unenforceability under
certain circumstances of provisions to the effect that the
failure to exercise or delay in exercising rights or
remedies will not operate as a waiver of the right or
remedy, and (e)the unenforceability under certain
circumstances of provisions indemnifying, or prospectively
releasing, a party against liability for its own wrongful,
affirmative or negligent acts or omissions wherein the
release or indemnification may be construed as being
contrary to public policy. With respect to the foregoing
opinion, (i)insofar as provisions contained the
Reimbursement Agreement provide for indemnification, the
enforceability thereof may be limited by public policy
considerations, (ii)the availability of a decree for
specific performance or an injunction is subject to the
discretion of the court requested to issue any such decree
or injunction and (iii)we express no opinion as to the
effect of the laws of any jurisdiction other than the State
of New York where any of the Banks may be located or where
enforcement of the Reimbursement Agreement may be sought
that limits the rates of interest legally chargeable or
collectible.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
5
5. No authorization, approval or other action
by, and no notice to, consent of, order of or filing with,
any United States federal, New York or, to the extent
required under the General Corporation Law of the State of
Delaware, Delaware governmental authority is required by the
Company in connection with the execution, delivery and
performance of the Reimbursement Agreement and the Related
Documents, other than those that have been made and obtained
and are in full force and effect or as to which the failure
to be made or obtained or to be in full force and effect
would not result, individually or in the aggregate, in a
Material Adverse Effect.
6. Neither the Letter of Credit nor the
Commercial Paper is required to be (a) registered with the
Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange or (b)
registered or filed under the Securities Act of 1933, as
amended.
This opinion is subject to the assumptions,
examinations, qualifications and limitations hereinabove set
forth and the following additional qualifications and
limitations:
A. We express no opinion herein as to (a)
Section 9.09(b) of the Reimbursement Agreement insofar as
such Section relates to the subject matter jurisdiction of
the United States District Court for the Southern District
of New York to adjudicate any controversy related to the
Reimbursement Agreement, (b) the waiver of an inconvenient
forum set forth in Section 9.09(c) of the Reimbursement
Agreement, (c) Section 9.09(d) of the Reimbursement
Agreement insofar as such Section permits a specific method
for service of process, or (d) Section 9.08 of the
Reimbursement Agreement insofar as it relates to setoffs in
respect of participations purchased in Loans.
B. This opinion is limited to the matters
expressly stated herein and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
C. The Banks' rights under the Reimbursement
Agreement may be subject to the rights of taxing or other
governmental agencies or authorities which may, by law or
agreement, have priority to the rights granted to the Banks
under the Reimbursement Agreement.
D. This opinion does not cover compliance or
non-compliance by the Company or any other person or entity
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
6
with federal or state tax, intellectual property, employee
benefit, antitrust or securities laws.
E. Certain provisions of the Reimbursement
Agreement which permit the Banks or the Agent to make
conclusive or other determinations, take action, grant or
deny consent or approve or refrain from permitting the
Company to engage in certain action may be subject to a
requirement that the Banks and the Agent act in good faith
and a commercially reasonable manner.
F. This opinion is rendered as of the date
hereof. We assume no responsibility to supplement or update
the opinions herein expressed and disclaim any obligation to
supplement or update this opinion if, after the date hereof,
something comes to our attention or there are changes in the
law or court decrees which could affect this opinion.
This opinion is rendered only to the Agent, the
Issuing Bank and the Banks and their permitted transferees
under the Reimbursement Agreement and is solely for their
benefit in connection with the above transactions. This
opinion may not be relied upon by any other person or entity
or for any other purpose or used, circulated, quoted or
otherwise referred to for any other purpose.
Very truly yours,
PITNEY, XXXXXX, XXXX &
XXXXX
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT F
[Form of]
Opinion of Internal Counsel of the Company
CONTIFINANCIAL CORPORATION
000 XXXX XXXXXX
XXX XXXX, X.X. 00000
Xxxx X. Xxxxxx
Senior Vice President,
Chief Counsel
and Secretary
September 9, 1997
To each of the participating banks
who are a party to that certain
Letter of Credit and Reimbursement
Agreement, dated as of the date
hereof, among CONTIFINANCIAL
CORPORATION, such participating
banks, CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Agent for such
participating banks, and DRESDNER
BANK AG, NEW YORK BRANCH, as Issuing
Bank, and to Credit Suisse First
Boston, New York Branch, and Dresdner
Bank AG, New York Branch, in such
capacities.
Re: ContiFinancial Corporation
Letter of Credit and Reimbursement Agreement
dated as of September 9, 1997
Ladies and Gentlemen:
I am the Chief Counsel of ContiFinancial
Corporation, a Delaware corporation (the "Company"), and
have acted as internal counsel to the Company in connection
with the Letter of Credit and Reimbursement Agreement, dated
as of September 9, 1997 (the "Reimbursement Agreement"),
among the Company, the participating banks party thereto
(the "Banks"), Credit Suisse First Boston, New York Branch,
as Agent for the Banks (the "Agent"), and Dresdner Bank AG,
New York Branch, as Issuing Bank (the "Issuing Bank"). This
opinion is being delivered to you pursuant to Section
4.01(b) of the Reimbursement Agreement. Capitalized terms
used but not defined herein have the meanings assigned to
them in the Reimbursement Agreement.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
2
In rendering the opinion set forth below, I have
examined originals, or copies certified or otherwise
identified to my satisfaction, of the following documents
and corporate records of the Company together with
certificates of public officials and such other documents,
instruments, records and papers as I have deemed necessary
and appropriate as a basis for rendering the opinion set
forth below: (a) the Reimbursement Agreement; (b) each of
the Related Documents, dated the date hereof; (c) the
Restated Certificate of Incorporation of the Company, dated
December 18, 1995, a copy of which is attached as Exhibit A
to this opinion; (d) the Restated By-laws of the Company;
(e) the Letter of Credit Facility Authorizing Resolution of
the Company, dated [ ], 1997, a copy of which is
attached as Exhibit B to this opinion; (f) a certificate
from the Secretary of State of the State of Delaware, dated
September 5, 1997, certifying, among other things, that the
Company is duly incorporated under the laws of the State of
Delaware and is in good standing and has a legal corporate
existence; (g) a certificate from the Secretary of State of
the State of New York, dated August 25, 1997, certifying
certain information in connection with the Company's
authority to do business in the State of New York; (h) an
Assistant Secretary's Certificate, dated the date hereof,
from the Company, a copy of which is attached as Exhibit C
to this opinion; and (i) an Officer's Certificate, dated the
date hereof, from an Officer of the Company, a copy of which
is attached as Exhibit D to this opinion. I have also
relied, with respect to certain factual matters, on the
representations and warranties of the Company contained in
the Reimbursement Agreement and the Related Documents and
have assumed compliance by the Company with the terms of the
Reimbursement Agreement and the Related Documents.
In rendering the opinion expressed below, I
have, with your permission and without any further
investigation or verification, assumed (a) the genuineness
of all signatures (other than the Company), (b) the
authenticity of all documents submitted to me as originals,
(c) the conformity to originals of all documents submitted
to me as copies, and the authenticity of the originals of
such documents, (d) the legal capacity of natural persons,
(e) the parties to the Reimbursement Agreement (other than
the Company) have the full power and authority to execute
and deliver the Reimbursement Agreement and each Related
Document, the Reimbursement Agreement and each Related
Document has been duly executed and delivered by each such
party (other than the Company) and is the legal, valid and
binding obligation of each such party (other than the
Company), (f) that, to the extent that certain standards of
conduct may be imposed as a matter of law on the Banks, the
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
3
Agent or the Issuing Bank as a condition to, or as a
requirement for enforceability of, the Reimbursement
Agreement (including, without limitations any requirement
that such parties act reasonably, in good faith, in a
commercially reasonable manner, or otherwise in compliance
with applicable law) such parties will comply with such
standards of conduct, whether or not any other conduct is
permitted by the Reimbursement Agreement, and (g) the
adequacy and accuracy of the public records reviewed by me.
I express no opinion with respect to the effect
of any laws other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and the
federal laws of the United States of America. In rendering
this opinion with respect to the General Corporation Law of
the State of Delaware, I expressly advise you that (a) I am
not admitted to practice in the State of Delaware and (b) by
rendering such opinion I am not holding myself out to the
Banks or any other person or entity as an attorney who is
admitted to practice law in the State of Delaware.
Based upon and subject to the foregoing and
subject to the qualifications, examinations, assumptions and
limitations hereinabove and hereinafter set forth, I am of
the opinion that:
1. The Company is a corporation validly
existing and in good standing under the laws of the State of
Delaware. The Company has all necessary corporate power and
authority to execute and deliver the Reimbursement Agreement
and the Related Documents and to perform its obligations
thereunder.
2. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such
qualification, other than jurisdictions in which the failure
to so qualify would not have a Material Adverse Effect.
3. The execution and delivery of the
Reimbursement Agreement and the Related Documents and the
performance by the Company of its obligations thereunder
will not conflict with, result in a breach of or constitute
a default under (a) the provisions of any material agreement
of the Company listed as an exhibit to the most recent
Annual Report of the Company on Form 10-K or subsequent SEC
filings of the Company or (b) to my knowledge, any order or
decree of any court or governmental agency or
instrumentality.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
4
4. Except as set forth in Schedule 3.06 to the
Reimbursement Agreement, there are no (a) pending actions,
suits or proceedings with respect to which the Company has
received service of process or (b) to my knowledge,
threatened or pending actions, suits or proceedings before
any court or governmental agency or authority or arbitrator
involving the Company or the business, assets or rights of
the Company, (i) that purport to affect the legality,
validity or enforceability of the Reimbursement Agreement or
the Related Documents or (ii) as to which there is a
probability, of an adverse determination, and which, if
adversely determined, would be likely in my judgment to have
a Material Adverse Effect, or on the ability of the Company
to perform its obligations under the Reimbursement Agreement
or the Related Documents.
5. The Company is not an "investment company"
as defined in, or subject to regulation under, the
Investment Company Act of 1940. The Company is not a
"holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
6. No authorization, approval or other action
by, and no notice to, consent of, order of or filing with,
any United States federal, New York or, to the extent
required under the General Corporation Law of the State of
Delaware, Delaware governmental authority is required by the
Company in connection with the execution, delivery and
performance of the Reimbursement Agreement and the Related
Documents, other than those that have been made and obtained
and are in full force and effect or as to which the failure
to be made or obtained or to be in full force and effect
would not result, individually, or in the aggregate, in a
Material Adverse Effect.
This opinion is subject to the assumptions,
examinations, qualifications and limitations hereinabove set
forth and the following additional qualifications and
limitations:
A. This opinion is limited to the matters
expressly stated herein and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
B. This opinion does not cover compliance or
noncompliance by the Company or any other person or entity
with federal or state tax, intellectual property, employee
benefit, antitrust or securities laws.
C. This opinion is rendered as of the date
hereof. I assume no responsibility to supplement or update
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
5
the opinions herein expressed and disclaim any obligation to
supplement or update this opinion if, after the date hereof,
something comes to my attention or there are changes in the
law or court decrees which could affect this opinion.
D. If any document, instrument, record or paper
referred to in the opinion set forth above is governed by
the law of a jurisdiction other than the State of New York,
I have for purposes of this opinion assumed that the law of
such other jurisdiction other than the State of New York was
identical to the law of the State of New York.
This opinion is rendered only to the Agent, the
Issuing Bank and the Banks and their permitted transferees
under the Reimbursement Agreement and the Related Documents
and is solely for their benefit in connection with the above
transactions. This opinion may not be relied upon by any
other person or entity or for any other purpose or used,
circulated, quoted or otherwise referred to for any other
purpose.
Very truly yours,
XXXX X. XXXXXX
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
1
EXHIBIT G
[Form of]
Assignment and Acceptance
Reference is made to the Letter of Credit and
Reimbursement Agreement dated as of September 9, 1997 (as
amended and in effect on the date hereof, the "Reimbursement
Agreement"), among ContiFinancial Corporation, the
Participating Banks party thereto, Credit Suisse First
Boston, New York Branch, as Agent, and Dresdner Bank AG, New
York Branch, as Issuing Bank. Terms defined in the
Reimbursement Agreement are used herein with the same
meanings.
The Assignor named on the reverse hereof hereby
sells and assigns, without recourse, to the Assignee named
on the reverse hereof, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as
of the Assignment Date set forth on the reverse hereof, the
interests set forth on the reverse hereof (the "Assigned
Interest") in the Assignor's rights and obligations under
the Reimbursement Agreement, including, without limitation,
the interests set forth on the reverse hereof in the
Participation Percentage of the Assignor on the Assignment
Date and Loans owing to the Assignor which are outstanding
on the Assignment Date, but excluding accrued interest and
fees to and excluding the Assignment Date. The Assignee
hereby acknowledges receipt of a copy of the Reimbursement
Agreement. From and after the Assignment Date (i) the
Assignee shall be a party to and be bound by the provisions
of the Reimbursement Agreement and, to the extent of the
Assigned Interest, have the rights and obligations of a
Participating Bank thereunder and (ii) the Assignor shall,
to the extent of the Assigned Interest, relinquish its
rights and be released from its obligations under the
Reimbursement Agreement.
This Assignment and Acceptance is being
delivered to the Agent together with, if the Assignee is not
already a Participating Bank under the Reimbursement
Agreement, an Administrative Questionnaire in the form
supplied by the Agent, duly completed by the Assignee. The
[Assignee/Assignor] shall pay the fee payable to the Agent
pursuant to Section 9.04(b) of the Reimbursement Agreement.
This Assignment and Acceptance shall be governed
by and construed in accordance with the laws of the State of
New York.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
Facility Amount Assigned
-------- ---------------
Participation %
Percentage:
Loans: $
The terms set forth above and on the reverse side hereof are
hereby agreed to:
[Name of Assignor] , as
Assignor
by
___________________________
Name:
Title:
[Name of Assignee] , as
Assignee
by
__________________________
Name:
Title:
The undersigned hereby consent to the within assignment: 3/
--------
3/ Consents to be included to the extent required by
Section 9.04(b) of the Reimbursement Agreement.
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
3
ContiFinancial Corporation, Credit Suisse First
Boston, New York Branch,
as Agent,
by by
_______________________ ____________________
Name: Name:
Title: Title:
by by
_______________________ ____________________
Name: Name:
Title: Title:
Dresdner Bank AG, New
York Branch, as Issuing
Bank,
by
____________________
Name:
Title:
by
____________________
Name:
Title:
[NYCORP2:396433.11:4417A:09/06/97--2:48a]
