Exhibit 10.24
U.S. $50,000,000
REVOLVING CREDIT AGREEMENT
Dated as of July 1, 1999
Among
AMBAC CREDIT PRODUCTS, LLC
as Borrower
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and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
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and
THE BANK OF NEW YORK
as Agent
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.................................... 1
SECTION 1.02. Computation of Time Periods.............................. 10
SECTION 1.03. Accounting Terms......................................... 10
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances............................................. 10
SECTION 2.02. Making the Advances...................................... 10
SECTION 2.03. Fees..................................................... 11
SECTION 2.04. Termination or Reduction of the Commitments.............. 12
SECTION 2.05. Repayment................................................ 12
SECTION 2.06. Interest................................................. 12
SECTION 2.07. Interest Rate Determination.............................. 14
SECTION 2.08. Optional Conversion of Advances.......................... 14
SECTION 2.09. Optional Prepayments..................................... 14
SECTION 2.10. Increased Costs.......................................... 15
SECTION 2.11. Illegality............................................... 15
SECTION 2.12. Payments and Computations................................ 16
SECTION 2.13. Taxes.................................................... 17
SECTION 2.14. Sharing of Payments, Etc................................. 19
SECTION 2.15. Use of Proceeds.......................................... 20
SECTION 2.16. Extension of Commitment Termination Date................. 20
SECTION 2.17. Increase of Commitments.................................. 21
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.... 22
SECTION 3.02. Conditions Precedent to Each Borrowing................... 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower........... 24
ARTICLE V COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants.................................... 26
SECTION 5.02. Negative Covenant........................................ 27
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default........................................ 28
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Page
ARTICLE VII THE AGENT
SECTION 7.01. Authorization and Action......................... 30
SECTION 7.02. Agent's Reliance, Etc............................ 30
SECTION 7.03. BNY and Affiliates............................... 31
SECTION 7.04. Lender Credit Decision........................... 31
SECTION 7.05. Indemnification.................................. 31
SECTION 7.06. Successor Agent.................................. 32
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc.................................. 32
SECTION 8.02. Notices, Etc..................................... 33
SECTION 8.03. No Waiver; Remedies.............................. 33
SECTION 8.04. Costs and Expenses............................... 33
SECTION 8.05. Right of Set-off................................. 34
SECTION 8.06. Binding Effect................................... 34
SECTION 8.07. Assignments and Participations................... 35
SECTION 8.08. Confidentiality.................................. 37
SECTION 8.09. Governing Law.................................... 37
SECTION 8.10. Execution in Counterparts........................ 37
SECTION 8.11. Waiver of Jury Trial............................. 38
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Schedules
Schedule I - List of Applicable Lending Offices
Schedule 4.01(h) - Contingent Liabilities
Schedule 5.02 - Ongoing Debt
Exhibits
Exhibit A - Form of Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Surety Bond
Exhibit E - Form of Opinion of Xxxx X. Xxxx, First Vice President, Assistant
General Counsel and Secretary of Ambac Financial
Exhibit F - Form of Opinion of Xxxxx X. Xxxxx, Managing Director and General
Counsel, Specialized Finance, of the Guarantor
Exhibit G - Form of Opinion of XxXxxx, Xxxx & Xxxxxxx, S.C., Wisconsin Special
Counsel to the Guarantor
Exhibit H - Form of Opinion of Shearman & Sterling, Special New York Counsel to
the Borrower
REVOLVING CREDIT AGREEMENT
Dated as of July 1, 1999
AMBAC CREDIT PRODUCTS, LLC, a Delaware limited liability company (the
"Borrower"), the banks, financial institutions and other institutional lenders
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(the "Initial Lenders") listed on the signature pages hereof, and THE BANK OF
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NEW YORK ("BNY"), as agent (the "Agent") for the Lenders (as hereinafter
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defined), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower pursuant to
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Article II, and refers to a Base Rate Advance or a Eurodollar Rate Advance
(each of which shall be a "Type" of Advance).
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"Affiliate" means, as to any Person, any other Person that, directly
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or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
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Agent at BNY with its office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. GLA 111556, Attention: Xxxxx Xxxxxxxxx.
"Ambac Financial" means Ambac Financial Group, Inc.
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"Applicable Lending Office" means, with respect to each Lender, such
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Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
2
"Applicable Margin" means, as of any date, a percentage per annum
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determined by reference to the Financial Strength Rating in effect on such
date as set forth below:
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Financial Strength Rating Applicable Margin
S&P/Moody's
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Level 1
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Aaa/AAA or above 0.375%
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Xxxxx 0
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Aa1/AA+ 0.500%
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Level 3
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Aa2/AA 0.650%
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Level 4
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Aa3/AA- 1.00%
Level 5
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A1/A+ or below 1.50%
===========================================================
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in effect from
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time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNY in New York,
New York, from time to time, as BNY's prime rate; and
(b) the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
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in Section 2.06(a)(i).
"Borrowing" means a borrowing consisting of Advances of the same Type
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made on the same day by the Lenders.
"Business Day" means a day of the year on which banks are not required
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or authorized by law to close in New York City and, if the applicable
Business Day relates
3
to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Commitment" has the meaning specified in Section 2.01.
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"Commitment Date" has the meaning specified in Section 2.17.
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"Commitment Termination Date" means the earlier of (a) the date which
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is 364-days after the Effective Date, as such date may be extended pursuant
to Section 2.16, and (b) the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.
"Confidential Information" means information that the Borrower
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furnishes to the Agent or any Lender, but does not include any such
information that is or becomes generally available to the public.
"Consolidated" refers to the consolidation of accounts in accordance
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with GAAP.
"Controlled Group" means all members of a controlled group of
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corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with
either Borrower, are treated as a single employer under Section 414(b) or
414(c) of the Internal Revenue Code or Section 4001 of ERISA.
"Convert", "Conversion" and "Converted" each refers to a conversion of
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Advances of one Type into Advances of the other Type pursuant to Section
2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all obligations
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of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures or notes; (b) all obligations, contingent
or otherwise, of such Person relative to the face amount of all letters of
credit, whether or not drawn, and banker's acceptances issued for the
account of such Person; (c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with GAAP, recorded as
capitalized lease liabilities; (d) all Debt of others referred to in
clauses (a) through (c) above secured by a Lien on property owned by such
Person; and (e) all Debt of others referred to in clauses (a) to (c) above
guaranteed by such Person.
4
"Declining Lender" has the meaning specified in Section 2.16.
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"Default" means any Event of Default or any event that would
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constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
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office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
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"Eligible Assignee" means (a) the Federal Reserve Bank of the United
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States; (b) except in the event of an assignment demanded by the Borrower
pursuant to Section 8.07, an Eligible Transferee; and (c) any other Person
approved by the Agent and, unless an Event of Default has occurred and is
continuing at the time any assignment is effected in accordance with
Section 8.07, the Borrower, such approval not to be unreasonably withheld
or delayed; provided, however, that neither the Borrower nor an Affiliate
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of the Borrower shall qualify as an Eligible Assignee.
"Eligible Transferee" means a commercial bank or other financial
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institution having the Required Lender Rating.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
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Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
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office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
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Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to
5
the rate per annum at which deposits in U.S. dollars are offered by the
principal office of BNY in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to BNY's
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period and for a period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
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provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
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Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
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"Extending Lender" has the meaning specified in Section 2.16.
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"Extension Request" has the meaning specified in Section 2.16.
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"Federal Funds Rate" means, for any period, a fluctuating interest
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rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding 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 of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"Financial Strength Rating" means, as of any date, the rating that has
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been most recently announced by either S&P or Moody's, as the case may be,
for the financial strength of the Guarantor. For purposes of the
foregoing, (a) if the ratings established by S&P and Moody's shall fall
within different levels, the Applicable Margin shall be
6
based upon the lower rating; (b) if any rating established by S&P or
Moody's shall be changed, such change shall be effective as of the date on
which such change is first announced publicly by the rating agency making
such change; and (c) if S&P or Moody's shall change the basis on which
ratings are established, each reference to the Financial Strength Rating
announced by S&P or Moody's, as the case may be, shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.
"GAAP" has the meaning specified in Section 1.03.
----
"Guarantor" means Ambac Assurance Corporation, a Wisconsin stock
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insurance corporation.
"Increase Date" has the meaning specified in Section 2.17.
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"Increase Request" has the meaning specified in Section 2.17.
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"Increasing Lender" has the meaning specified in Section 2.17.
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"Increasing Extending Lender" has the meaning specified in Section
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2.16
"Interest Period" means, for each Eurodollar Rate Advance, the period
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commencing on the date of such Eurodollar Rate Advance or the date of the
Conversion of any Base Rate Advance into such Eurodollar Rate Advance and
ending on the last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one, two, three,
six months, or, if available, 12 months, as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
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(a) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance that ends after any principal repayment
installment date unless, after giving effect to such selection, the
aggregate principal amount of Base Rate Advances and of Eurodollar
Rate Advances having Interest Periods that end on or prior to such
principal repayment installment date shall be at least equal to the
aggregate principal amount of Advances due and payable on or prior to
such date;
7
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided, however, that, if such extension would cause
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the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
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amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Lenders" means the Initial Lenders and each Person that shall become
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a party hereto pursuant to Section 8.07.
"Lien" means any security interest, mortgage, pledge, hypothecation,
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assignment, encumbrance, lien (statutory or otherwise), charge against or
interest in property to secure payment of a debt, or the interest of any
vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement.
"Loan Documents" means this Agreement, the Notes and the Surety Bond.
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"Material Adverse Change" means any material adverse change in the
-----------------------
business, financial condition or operations of the Guarantor and its
Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
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business, financial condition or operations of the Guarantor and its
Subsidiaries, taken as a whole.
"Material Subsidiary" means, at any date of determination, any
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Subsidiary of the Borrower that, together with its Subsidiaries, as of the
end of the most recent fiscal year, was the owner of (or, in the case of
any Subsidiary that is acquired following such fiscal year end, would have
been the owner of) at least 10% of the consolidated assets of the Borrower
and its Subsidiaries at the end of such fiscal year, all as set forth
8
on the most recently available consolidated financial statements of the
Borrower for such fiscal year.
"Maturity Date" means the third anniversary of the earlier of (a) the
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date which is 364-days after the Effective Date, as such date may be
extended pursuant to Section 2.16, and (b) the date of termination in whole
of the Commitments pursuant to Section 2.04.
"Moody's" means Xxxxx'x Investors Service, Inc.
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"Note" means a promissory note of the Borrower payable to the order of
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any Lender, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the
Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02.
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"Other Taxes" has the meaning specified in Section 2.13(b).
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"Pension Plan" means a "pension plan", as such term is defined in
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Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a) (3) of ERISA), and to
which either Borrower or any corporation, trade or business that is, along
with such Borrower, a member of a Controlled Group, may have liability,
including any liability by reason of having been a substantial employer
within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing
sponsor under section 4069 of ERISA.
"Permitted Liens" means: (a) Liens for taxes, assessments and
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governmental charges or levies; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 60 days; (c)
pledges or deposits to secure obligations under workers' compensation laws
or similar legislation or to secure public or statutory obligations; and
(d) encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect the
use of such property for its present purposes.
"Person" means an individual, partnership, corporation (including a
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business trust), joint stock company, trust, unincorporated association,
joint venture, limited
9
liability company or other entity, or a government or any political
subdivision or agency thereof.
"Register" has the meaning specified in Section 8.07(c).
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"Replacement Lenders" has the meaning specified in Section 2.16.
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"Required Lenders" means at any time Lenders owed at least a majority
----------------
in interest of the then aggregate unpaid principal amount of the Advances
owing to Lenders, or, if no such principal amount is then outstanding,
Lenders having at least a majority in interest of the Commitments.
"Required Lender Rating" means an unsecured short-term senior debt
----------------------
rating of not less than A-1 from Moody's and P-1 from S&P.
"Responsible Officer" means [the president, chief financial officer or
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treasurer] of the Borrower.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
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Companies, Inc.
"Subsidiary" of any Person means any corporation, partnership, joint
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venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Surety Bond" has the meaning specified in Section 3.01(c)(iv).
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"Taxes" has the meaning specified in Section 2.13(a).
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"Voting Stock" means capital stock issued by a corporation, or
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equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
10
"Welfare Plan" means a "welfare plan", as such term is defined in
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section 3(1) of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
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computation of periods 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
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on the
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terms and conditions hereinafter set forth, to make Advances to the Borrower
from time to time on any Business Day during the period from the Effective Date
until the Commitment Termination Date in an aggregate amount not to exceed at
any time outstanding the amount set forth opposite such Lender's name on the
signature pages hereof or, if such Lender has entered into any Assignment and
Acceptance, set forth for such Lender in the Register maintained by the Agent
pursuant to Section 8.07(c), as such amount may be reduced pursuant to Section
2.04 or increased pursuant to Section 2.16 or 2.17 (such Lender's "Commitment").
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Each Borrowing shall be in an aggregate amount of $2,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of Advances of the
same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.09 and
reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made
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on notice, given not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or 2:00 P.M. (New York City
time) on the Business Day of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Agent, which shall give
to each Lender prompt notice thereof by telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately
-------------------
in writing or by telecopier, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and
(iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Advance. Each
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Lender shall, before 11:00 A.M. (New York City time) on the date of such
Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or
3:00 P.M. (New York City time) on the date of such Borrowing in the case of a
Borrowing consisting of Base Rate Advances, make available for the account of
its Applicable Lending Office to the Agent at the Agent's Account, in same day
funds, such Lender's ratable portion of such Borrowing. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Agent will make such funds available to the Borrower
at the Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding, (i)
the Borrower may not select Eurodollar Rate Advances for any Borrowing if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.07 or 2.11 and (ii) no more than 12 separate
Interest Periods may be outstanding at any time.
(c) In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Borrowing when such Advance, as a result of such failure,
is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the Agent such
Lender's ratable portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of
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any other Lender to make the Advance to be made by such other Lender on the date
of any Borrowing.
SECTION 2.03. Fees. (a) Facility Fee. The Borrower shall pay to
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each Lender a facility fee on the aggregate amount of such Lender's Commitment
from the Effective Date in the case of each Initial Lender and from the later of
the Effective Date and the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
until the Commitment Termination Date at a rate per annum as may from time to
time be agreed between the Borrower and such Lender, payable in arrears
quarterly on the final day of each March, June, September and December,
commencing September 30, 1999, and on the Commitment Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own account
------------
such fees as may from time to time be agreed between the Borrower and the Agent.
SECTION 2.04. Termination or Reduction of the Commitments. The
-------------------------------------------
Borrower shall have the right, upon at least five Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that each partial reduction
--------
shall be in the aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.05. Repayment. The Borrower shall repay on the Maturity
---------
Date to the Agent for the ratable account of the Lenders the aggregate principal
amount of any Advances outstanding on the Commitment Termination Date.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower shall
-------- ------------------
pay interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
------------------
Rate Advance, a rate per annum equal at all times to the Base Rate in
effect from time to time, payable in arrears monthly on the final day of
each month during such periods and on the date such Base Rate Advance shall
be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
------------------------
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Margin in
----
effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest
13
Period every three months from the first day of such Interest Period and on
the date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of a
----------------
Default under Section 6.01(a) as a consequence of any failure by the Borrower to
pay when due hereunder any amount of principal, interest, fee or other amount
payable hereunder, the Borrower shall pay interest on such amount of principal,
interest, fee or other amount that is not paid when due, from the date such
Default shall occur until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to the sum of the Base Rate in effect from time to time plus
2% per annum. Any interest payable pursuant to this Section 2.06(b) on any
amount of principal of an Advance shall be in lieu of interest which would
otherwise be payable on such amount of principal pursuant to Section 2.06(a).
(c) Additional Interest on Eurodollar Rate Advances. The Borrower shall
-----------------------------------------------
pay to each Lender, so long as and to the extent such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Lender, from the date of such
Eurodollar Rate Advance until such principal amount is paid in full, at an
interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the then existing Interest Period for
such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
-----
Lender for such Interest Period, payable on each date on which interest is
payable on such Advance. Each Lender shall, as promptly as practicable after an
authorized officer of such Lender having direct and ongoing involvement in the
decisions made in respect of this Agreement obtains knowledge of such
circumstances and the determination of such Lender to request additional
interest from the Borrower pursuant to this Section 2.06(c), provide notice to
the Agent and the Borrower of the circumstances entitling such Lender to such
additional interest, which notice shall (A) specify the amount of any such
additional interest incurred in connection with such Eurodollar Rate Advance
and/or to be incurred in connection with Eurodollar Rate Advances made by such
Lender from time to time thereafter and (B) certify that such Lender's claim for
payment of such additional interest is not inconsistent with its treatment of
other borrowers that, as a credit matter, are substantially similar to the
Borrower and that are subject to comparable provisions in the loan or other
credit documentation to which such borrowers are parties; provided, however,
-------- -------
that no Lender shall be entitled to additional interest on any Eurodollar Rate
Advance pursuant to this Section 2.06(c) for any Interest Period ending more
than 90 days prior to the date that notice of such additional interest is first
provided by such Lender to the Borrower. A notice delivered by any Lender to
the Borrower pursuant to the terms of this Section 2.06(c) shall be conclusive
and binding, absent manifest error. A Lender that delivers a notice under this
Section 2.06(c) shall
14
promptly notify the Agent and the Borrower if the circumstances that gave rise
to such notice no longer exist.
SECTION 2.07. Interest Rate Determination. (a) The Agent shall give
---------------------------
prompt notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.06(a)(i) or (ii) or 2.06(b).
(b) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.
(c) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances having the same Interest Period shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(d) Upon the occurrence and during the continuance of any Event of Default
under Section 6.01(a), (i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.08. Optional Conversion of Advances. The Borrower may on
-------------------------------
any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that (a) any Conversion of Eurodollar Rate Advances
-------- -------
into Base Rate Advances shall be made only on the last day of an Interest Period
for such Eurodollar Rate Advances and (b) no Conversion of any Advances shall
result in more separate Interest Periods than permitted under Section 2.02(b).
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Advance.
SECTION 2.09. Optional Prepayments. The Borrower may, upon at least
--------------------
one Business Days' notice to the Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amount of the Advances comprising part
of the same Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount
15
prepaid; provided, however, that in the event of any such prepayment of a
-------- -------
Eurodollar Rate Advance other than on the last day of the Interest Period for
such Advance, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(c). Each such prepayment of any Advance
shall be applied to the installments thereof in order of maturity.
SECTION 2.10. Increased Costs. If, due to either (a) the
---------------
introduction of or any change after the date hereof in or in the interpretation
of any law or regulation or (b) the compliance with any guideline or request
promulgated after the date hereof from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in (i) the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances (excluding for purposes of this Section
2.10 any such increased costs resulting from changes in the basis or rate of
taxation of net income or gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is subject to tax as a
result of a present or former connection between such Lender and such foreign
jurisdiction or state) or (ii) the amount of capital required to be maintained
by such Lender or any corporation controlling such Lender based on the existence
of its Commitment hereunder, then the Borrower shall from time to time, upon a
written demand by such Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender additional amounts as shall accrue from
and after the date of demand by such Lender to compensate such Lender for such
increased cost or such increase of capital; provided, however, that before
-------- -------
making any such demand, each Lender agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to minimize such
additional amounts and to designate a different Applicable Lending Office if the
making of such a designation would avoid the need for, or reduce the amount of,
such increased cost or such increase of capital and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender; and
provided, further, that the Borrower shall be required to pay to such Lender
-------- -------
only such additional amounts as shall be required to compensate such Lender for
such increased cost or such increase of capital as shall accrue from and after
the date of demand by such Lender. In determining such additional amounts, such
Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided that such Lender's
--------
determination of compensation owing under this Section 2.10 shall be conclusive
and binding, absent manifest error. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 2.10, will give
prompt written notice thereof to the Borrower, which notice shall show the basis
for the calculation of such additional amounts. Notwithstanding anything herein
to the contrary, the Borrower shall have the right to unilaterally terminate the
Commitment of any Lender demanding additional amounts under this Section 2.10
sixty (60) days after providing to such Lender a notice of termination. The
Borrower shall, concurrent with such termination, pay to such Lender the
aggregate amount if any at such time, payable by the Borrower to such Lender
under this Agreement. Notwithstanding any provision of this
16
Agreement to the contrary, Section 2.13 shall provide the exclusive remedy to
the Lenders in respect of Taxes and Other Taxes.
SECTION 2.11. Illegality. Notwithstanding any other provision of
----------
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change after the date hereof in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts after the date hereof that it is unlawful, for any Lender or
its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) each Eurodollar Rate Advance will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders
to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist; provided, however, that
-------- -------
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Eurodollar Lending Office if the making of such a
designation would allow such Lender or its Eurodollar Lending Office to continue
to perform its obligations to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.12. Payments and Computations. (a) The Borrower shall
-------------------------
make each payment hereunder and under the Notes not later than 11:00 A.M. (New
York City time) on the day when due in U.S. dollars to the Agent at the Agent's
Account in same day funds. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest ratably
(other than amounts payable pursuant to Section 2.10, 2.13 or 8.04(c)) to the
Lenders for the account of their respective Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) All computations of interest based on the Base Rate and of facility
fees shall be made by the Agent on the basis of a year of 365 or 366 days, as
the case may be, and all computations of interest based on the Eurodollar Rate
or the Federal Funds Rate shall be made by the Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such
17
interest or facility fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
-------- -------
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings imposed by the United
States or by any political subdivision thereof or therein with respect to such
payments, and all penalties and interest with respect thereto, excluding, in the
---------
case of each Lender and the Agent, taxes imposed on or measured by its net
income or net profit, and branch profit taxes, franchise taxes, taxes on doing
business and taxes measured by or imposed upon its capital or net worth, in each
case imposed as a result of a present or former connection between the Agent or
such Lender and the jurisdiction imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection arising
solely from the Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced this Agreement or the
Notes) (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "Taxes"). If the Borrower shall be required by
-----
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.13) such
Lender or the Agent (as the case may be) receives an amount equal to the sum it
would have received had no
18
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from the execution, delivery or registration of this Agreement
or the Notes (hereinafter referred to as "Other Taxes"); provided, however, that
----------- -------- -------
the Borrower shall have no obligation to pay Other Taxes that may arise as a
result of a participation referred to in Section 2.14 or 8.07.
(c) The Borrower shall indemnify each Lender and the Agent for and hold it
harmless against the full amount of Taxes or Other Taxes imposed on or paid by
such Lender or the Agent (as the case may be) and any liability for penalties,
interest and expenses arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Each Lender that is not a "United States person" within the meanings
specified in Section 7701 of the Internal Revenue Code, on or prior to the date
of its execution and delivery of this Agreement in the case of each Initial
Lender and on the date of the Assignment and Acceptance pursuant to which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter as requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide each of the Agent and the
Borrower with (i) two accurate and complete original signed copies of Internal
Revenue Service Form 1001 or 4224, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement or the Notes or (ii) if the
Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, (A) a certificate in form and substance satisfactory to the
Agent and the Borrower stating that such Lender is not a "person" described in
Section 871(h)(3) or Section 881(c)(3) of the Code (a "Foreign Lender
Certificate") and (B) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Foreign Lender Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from United
States withholding tax with respect to payments under this Agreement and any
Note or it shall immediately notify the Borrower and the Agent of its inability
to deliver any such form or certificate, in which case such Lender shall not be
required to deliver any such form or certificate pursuant to this Section
19
2.13(d) for so long as such payments may be made free from United States
withholding tax. Notwithstanding the foregoing, no Lender shall be required to
deliver any such form or certificate described in the immediately preceding
sentence if a change in treaty, law or regulation has occurred prior to the date
on which such delivery would otherwise be required that renders any such form or
certificate inapplicable or would prevent the Lender from duly completing and
delivering any such form or certificate with respect to it and such Lender so
advises the Borrower.
(e) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form described in Section 2.13(d), such Lender
shall not be entitled to indemnification under Section 2.13(a) or (c) with
respect to Taxes or Other Taxes imposed by the United States by reason of such
failure.
(f) Any Lender claiming additional amounts payable pursuant to this
Section 2.13 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to minimize such additional
amounts and to change the jurisdiction of its Applicable Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
(g) If a Lender changes its Applicable Lending Office (other than pursuant
to subsection (f) above or Section 2.11 or 2.12) and the effect of such change,
as of the date of such change, would be to cause the Borrower to become
obligated to pay any additional amounts under subsection 2.14, the Borrower
shall not be obligated to pay such additional amounts.
(h) If the Borrower is required to pay any amounts pursuant to the
provisions of this Section 2.13, and if thereafter the Lender shall receive or
be granted a credit against or remission or other relief for any taxes payable
by the Lender solely in respect of the amounts so paid by the Borrower, the
Lender shall to the extent that it can do so without prejudice to the retention
of the amount of such credit, remission or other relief, pay to the Borrower
twenty days after the date on which the Lender effectively obtains the benefit
of such credit, remission or effectively obtains the benefit of such credit,
remission or other relief in an amount which the Lender reasonably determines to
be equal to such credit, remission or other relief less any sum which the Lender
is required by law to deduct therefrom. The Lender may, in its reasonable
discretion, determine the order of utilization of all charges, deductions,
credits and expenses which reduce Taxes imposed on its net income. Nothing in
this Section 2.13(h) shall be construed as requiring the Lender to conduct its
business or to arrange or alter in any respect its tax or financial affairs so
that it is entitled to receive such credit, remission or other relief other than
performing any ministerial acts necessary to be entitled to receive such credit,
remission or other relief.
(i) If requested by the Borrower, the Lender shall take such steps as may
be appropriate to seek a refund of any Taxes paid by it and shall permit the
Borrower to participate in the preparation of any such refund claim. If the
Lender receives a refund in respect of any
20
Taxes for which the Lender has received payments from the Borrower hereunder,
the Lender, within 15 days of such receipt, shall deliver to the Borrower, the
amount of such refund. In addition, within 15 days of a written request of the
Borrower, the Lender shall execute and deliver to the Borrower such
certificates, forms or other documents which can be reasonably furnished
consistent with the facts and which are reasonably necessary to assist the
Borrower in applying for refunds of Taxes remitted hereunder.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain
------------------------
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender 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 Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (a) the amount of such Lender's required
repayment to (b) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.15. Use of Proceeds. The Borrower shall use the proceeds
---------------
of the Advances for general corporate or company purposes of the Borrower and
its Subsidiaries.
SECTION 2.16. Extension of Commitment Termination Date. (a) Within
----------------------------------------
30 days prior to the then scheduled Commitment Termination Date (but no later
than the twentieth day prior to the then scheduled Commitment Termination Date),
the Borrower may make a written request (an "Extension Request") to the Agent
-----------------
who shall forward a copy to each Lender that the Commitment Termination Date be
extended to the date that occurs exactly 364 days after the then scheduled
Commitment Termination Date. Such Extension Request shall include a
certification by a senior officer of the Borrower that no Default or Event of
Default has occurred and is continuing and all representations and warranties
contained herein are true and correct in all material aspects on and as of the
date of the Extension Request (it being understood and agreed that any
representation or warranty which expressly refers by its terms to a specified
date shall be required to be true and correct in all material respects only as
of such date). If by the date occurring 10 days next succeeding the Agent's
receipt of such Extension Request, any Lender agrees thereto in writing by so
indicating on counterparts of the Extension Request and delivering
21
such counterpart to the Borrower, "Commitment Termination Date" as to such
---------------------------
Lender shall mean the date occurring 364 days after the Commitment Termination
Date then in effect; provided, however, that if such date is not a Business Day,
-------- -------
the Commitment Termination Date shall extend to the Business Day next preceding
the date that is exactly 364 days after the then scheduled Termination Date;
and, provided, further, that any failure to so notify the Borrower shall be
-------- -------
deemed to be a disapproval by such Lender of the Borrower's Extension Request.
The Commitment of any Lender which does not so agree shall terminate upon the
Commitment Termination Date then in effect. No Lender shall be obligated to
grant any extension pursuant to this Section 2.16 and any such extension shall
be in the sole discretion of each Lender.
(b) If less than all of the Lender's consent to an Extension Request (each
Lender that has not so consented being a "Declining Lender", and each other
----------------
Lender being an "Extending Lender"), the Borrower shall have the right to
----------------
require any Declining Lender to assign in full its rights and obligations under
this Agreement (i) to any one or more Extending Lenders designated by the
Borrower that have offered in their returned counterpart of the Extension
Request to increase their respective Commitments in an aggregate amount at least
equal to the amount of such Declining Lender's Commitment (each such Extending
Lender being an "Increasing Extending Lender") and (ii) to the extent of any
---------------------------
shortfall in the aggregate amount of extended Commitments, to any one or more
Eligible Assignees designated by the Borrower that agree to assume all of such
rights and obligations (each such Eligible Assignee being a "Replacement
-----------
Lender"), provided that (A) such Declining Lender shall have received payment of
------ --------
all amounts owing under its Note and this Agreement on the effective date of
such assignment, (B) such assignment shall otherwise have occurred in compliance
with Section 8.07 and (C) the effective date of such assignment shall be the
date specified by the Borrower and agreed to by the Replacement Lender or
Increasing Extending Lender, as the case may be, which date shall be on or prior
to the applicable Commitment Termination Date.
SECTION 2.17. Increase of Commitments. (a) The Borrower may, at any
-----------------------
time but in any event not more than one time during any period of six
consecutive calendar months, make a written request (an "Increase Request") to
----------------
the Agent (who shall forward a copy to each Lender) that the Commitments of the
Lenders be increased by an aggregate amount, together with the aggregate amount
by which the Commitments of the Lenders were previously increased pursuant to
this Section 2.17, not to exceed $50,000,000 in excess of the aggregate amount
of the Commitments as of the date of this Agreement. Such Increase Request
shall include a certification by a senior officer of the Borrower that no
Default or Event of Default has occurred and is continuing and all
representations and warranties contained herein are true and correct in all
material respects on and as of the date of the Increase Request (it being
understood and agreed that any representation or warranty which expressly refers
by its terms to a specified date shall be required to be true and correct in all
material respects only as of such date). Any such increase in Commitments shall
be effective as of a date (the "Increase Date") specified in the related
-------------
Increase Notice that is (i) prior to the Commitment Termination Date and (ii) at
least 10 days after the date of such Increase Notice. Each Increase Notice
shall specify the date by which Lenders who wish
22
to increase their Commitment must consent to such increase (the "Commitment
----------
Date"), which date shall be no later than five Business Days prior to the
----
related Increase Date. Each Lender that is willing to increase its Commitment
(each an "Increasing Lender"), shall notify the Agent on or prior to the
-----------------
Commitment Date of the amount by which it is willing to increase its Commitment,
which amount shall not exceed the respective amount specified in the relevant
Increase Notice. No Lender shall be obligated to increase its Commitment
pursuant to this Section 2.17 and any such increase shall be in the sole
discretion of each Lender. If the Lenders notify the Agent that they are willing
to increase the amount of their respective Commitments by an aggregate amount
that exceeds the amount of the requested increase, the requested increase shall
be allocated among the Lenders willing to participate therein ratably in
accordance with the amount by which they offered to increase their respective
Commitments on the Commitment Date.
(b) Promptly following each Commitment Date, the Agent shall notify the
Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested increase. If the aggregate amount by which the
Lenders are willing to increase their Commitments on any such Commitment Date is
less than the requested amount, then any one or more Eligible Transferees
designated by the Borrower that agree to provide Commitments for the shortfall
may become party to this Agreement by executing and delivering a counterpart of
this Agreement.
(c) On each Increase Date, each Eligible Transferee that accepts an offer
to participate in a requested Commitment increase in accordance with Section
2.17(b) shall become a Lender party to this Agreement as of such Increase Date
and the Commitment of each Increasing Lender shall be increased as of such
Increase Date by the amount set forth in its notice delivered to the Agent in
accordance with Section 2.17(a) (or by the amount allocated to such Lender
pursuant to the last sentence of Section 2.17(a)).
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.
-----------------------------------------------------
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
--------------
been satisfied:
(a) There shall have occurred no Material Adverse Change since December
31, 1998
(b) On the Effective Date, the following statements shall be true and the
Agent shall have received for the account of each Lender a certificate signed by
a duly authorized officer of the Borrower, dated the Effective Date, stating
that:
23
(i) The representations and warranties contained in Section 4.01
are correct on and as of the Effective Date (it being understood and agreed
that any representation or warranty which expressly refers by its terms to
a specified date shall be required to be correct in all material respects
only as of such date), and
(ii) No event has occurred and is continuing that constitutes a
Default.
(c) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the Agent
and (except for the Notes) in sufficient copies for each Lender:
(i) The Notes to the order of the Lenders, respectively.
(ii) Certified copies of the resolutions of the Board of Directors
of the Borrower approving this Agreement and the Notes, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary of the
Borrower and the Guarantor certifying the names and true signatures of the
officers of the Borrower and the Guarantor, respectively, authorized to
sign this Agreement, the Notes and the Surety Bond (as appropriate) and the
other documents to be delivered hereunder.
(iv) A surety bond in substantially the form of Exhibit D (as
amended, supplemented or otherwise modified from time to time in accordance
with its terms, the "Surety Bond"), duly executed by the Guarantor.
-----------
(v) An opinion of Xxxx X. Xxxx, First Vice President, Assistant
General Counsel and Secretary of Ambac Financial, substantially in the form
of Exhibit E hereto.
(vi) An opinion of Xxxxx X. Xxxxx, Managing Director and General
Counsel, Specialized Finance, of the Guarantor, substantially in the form
of Exhibit F hereto.
(vii) An opinion of XxXxxx, Xxxx & Xxxxxxx, S.C., Wisconsin special
counsel to the Guarantor, substantially in the form of Exhibit G hereto.
(viii) An opinion of Shearman & Sterling, counsel for the Borrower,
substantially in the form of Exhibit H hereto.
24
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation
--------------------------------------
of each Lender to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and on the date of such Borrowing:
(a) The following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in Section 4.01
(other than the final sentence of subparagraph (e) thereof) are correct on
and as of the date of such Borrowing, before and after giving effect to
such Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date (it being understood and agreed that any
representation or warranty which expressly refers by its terms to a
specified date shall be required to be true and correct in all material
respects only as of such date), and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, that
constitutes a Default; and
(b) The Financial Strength Rating shall be above Level 5.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
----------------------------------------------
Borrower represents and warrants as follows:
(a) Each of the Borrower and its Material Subsidiaries (i) is a
limited liability company, corporation or partnership duly formed or
organized and existing and in good standing under the laws of the
jurisdiction of its formation or organization, as the case may be, (ii) is
duly registered or qualified to do business as a foreign limited liability
company, corporation or partnership in each jurisdiction where the nature
of its business requires such registration or qualification and (iii) holds
all requisite governmental licenses, permits and other approvals to own and
hold under lease its property and to conduct its business substantially as
conducted by it, except where the failure to be so qualified or hold such
licenses, permits and approvals, singly
25
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(b) The execution, delivery and performance by the Borrower of each
Loan Document to which it is party are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower's certificate of formation or limited
liability company agreement; (ii) contravene any contractual restriction,
law or governmental regulation or court decree or order binding on or
affecting the Borrower; or (iii) result in, or require the creation or
imposition of, any Lien on any of the Borrower's properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or other
Person is required for the due execution, delivery or performance by the
Borrower of any Loan Document to which the Borrower is a party. The
Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(d) Each Loan Document to which the Borrower is a party constitutes
the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms.
(e) The consolidated balance sheets of Ambac Financial and its
Subsidiaries at December 31, 1998, and the related consolidated statements
of operations and cash flows of Ambac Financial and its Subsidiaries for
the fiscal year ended on such date and the consolidated balance sheet of
Ambac Financial and its Subsidiaries at March 31, 1999, and the related
consolidated statements of operations and cash flows of Ambac Financial and
its Subsidiaries for the three months then ended, heretofore furnished to
the Agent, have been prepared in accordance with GAAP consistently applied
and fairly present, subject, in the case of such balance sheet at March 31,
1999, and such statements of operations and cash flows for the three months
then ended, to year-end audit adjustments, the consolidated financial
condition of Ambac Financial and its Subsidiaries as at the respective
dates thereof and the results of their operations for the respective
periods then ended. Since December 31, 1998, there has been no Material
Adverse Change.
(f) There is no pending or, to the best knowledge of the Borrower,
threatened litigation, action, proceedings or labor controversy affecting
the Borrower or any Material Subsidiary or any of their respective
properties, businesses, assets or revenues which may reasonably be expected
to have a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of any Loan Document.
26
(g) Each of the Borrower and its Material Subsidiaries has filed all
tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except
any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP (or statutory accounting principles, as appropriate)
shall have been set aside on its books and except where the failure to file
said returns or reports or to pay such taxes or charges could not
reasonably be expected to have a Material Adverse Effect.
(h) During the twelve-consecutive-month period prior to the date of
the execution and delivery of this Agreement and prior to the date of any
Borrowing hereunder, except as disclosed in Schedule 4.01(h), no steps have
been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction
has occurred with respect to any Pension Plan which might result in the
incurrence by either Borrower or any member of the Controlled Group of any
material liability, fine or penalty other than a non-defaulted obligation
to make a contribution under Section 302 of ERISA. Except as disclosed in
Schedule 4.01(h), the Borrower and each member of the Controlled Group does
not have any contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for continuation
coverage described in Part 6 of Title I of ERISA.
(i) After applying the proceeds of each Advance, not more than 25% of
the value of the assets of the Borrower are margin stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
---------------------
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Statutes, Etc. Comply, and cause each of its
-----------------------------
Material Subsidiaries to comply, in all material respects with all
applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property,
except where noncompliance therewith could not reasonably be expected to
have, in the aggregate, a Material Adverse Effect.
27
(b) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Material Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Material Subsidiary operates; provided, however, that the Borrower and its
-------- -------
Material Subsidiaries may self-insure to the same extent as other companies
engaged in similar businesses and owning similar properties in the same
general areas in which the Borrower or such Material Subsidiary operates
and to the extent consistent with prudent business practice.
(c) Preservation of Corporate Existence, Etc. Preserve and maintain,
----------------------------------------
and cause each of its Material Subsidiaries to preserve and maintain, its
material rights, franchises and licenses; provided, however, that nothing
-------- -------
in this Section 5.01(c) shall prevent the withdrawal, lapse or termination
by the Borrower or any of its Material Subsidiaries of any right, franchise
or license where such withdrawal, lapse or termination could not reasonably
be expected to have a Material Adverse Effect.
(d) Keeping of Books; Visitation Rights. (i) Keep, and cause each of
-----------------------------------
its Material Subsidiaries to keep, books of record and account which
accurately reflect all of its business affairs and transactions; and (ii)
permit, and cause each of its Material Subsidiaries to permit, officers and
designated representatives of the Agent to visit and inspect, under
guidance of officers of the Borrower or such Material Subsidiary, any of
the properties of the Borrower or such Material Subsidiary, and to examine
the books of record and account of the Borrower or such Material Subsidiary
and discuss the affairs, finances and accounts of the Borrower or such
Material Subsidiary with, and be advised as to the same by, its and their
officers, all at such reasonable times and intervals (and, prior to the
occurrence of any Default, with reasonable prior notice) and to such
reasonable extent as any Lender may reasonably request.
(e) Reporting Requirements. Furnish to the Agent:
----------------------
(i) Quarterly Financial Statements of Ambac Financial. Within 60
-------------------------------------------------
days after the end of each of the first three quarterly accounting
periods in each fiscal year of Ambac Financial, the consolidated
balance sheets of Ambac Financial and its consolidated Subsidiaries as
at the end of such quarterly period and the related consolidated
statements of operations and cash flows for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period all of which shall be certified by the chief
financial officer or treasurer of Ambac Financial, subject to year-end
audit adjustments.
28
(ii) Annual Financial Statements of Ambac Financial. Within 120
----------------------------------------------
days after the end of each fiscal year of Ambac Financial, a copy of
the annual report for such fiscal year for Ambac Financial and its
consolidated Subsidiaries, including therein the consolidated balance
sheets of Ambac Financial and its consolidated Subsidiaries as at the
end of such fiscal year and the related consolidated statements of
operations, stockholders' equity and of cash flow for such fiscal
year, in each case, certified, in the case of the consolidated
financial statements, by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent; and
(iii) Occurrence of Default. As soon as possible and in any
---------------------
event within five days after a Responsible Officer of the Borrower
shall obtain actual knowledge of the occurrence of a Default
continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such
Default and the action that the Borrower has taken and proposes to
take with respect thereto.
SECTION 5.02. Negative Covenant. So long as any Advance shall remain
-----------------
unpaid or any Lender shall have any Commitment hereunder, the Borrower shall not
create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, to secure Debt of
the Borrower except: (a) Liens granted prior to the date hereof securing Debt
existing as of the Effective Date which is identified in Schedule 5.02 ("Ongoing
-------
Debt"); (b) any Lien on any asset granted to secure payment of Debt incurred or
----
assumed for the purpose of financing the acquisition of such asset, provided
that such Lien attaches to such asset no later than the ninetieth day after such
acquisition; (c) any Lien existing on any asset prior to the acquisition thereof
by the Borrower and not created in contemplation of such acquisition; (d) any
Lien arising out of the refinancing, extension, renewal or refunding of any Debt
secured by any Lien permitted in clause (a), (b) or (c), provided that such Debt
--------
is not increased and is not secured by any additional assets; (e) Permitted
Liens; and (f) other Liens where the aggregate principal amount of Debt secured
thereby at any time outstanding does not exceed $50,000,000 in the aggregate.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
-----------------
29
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable and the Guarantor shall fail to make
payment in respect of such principal when the same becomes due and payable
under the Surety Bond; or the Borrower shall fail to pay any interest on
any Advance or make any other payment of fees or other amounts payable
under this Agreement or any Note within five Business Days after the same
becomes due and payable and the Guarantor shall fail to make payment in
respect of such interest, fees or other amounts when the same becomes due
and payable under the Surety Bond; or
(b) Any representation or warranty made by the Borrower herein shall
prove to have been incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe any term, covenant
or agreement contained in this Agreement on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the Agent or any
Lender; or
(d) The Borrower or any of its Material Subsidiaries shall (i) fail
to pay any principal of or premium or interest on any Debt that is
outstanding in a principal or notional amount of at least $30,000,000 in
the aggregate (but excluding Debt outstanding hereunder) of the Borrower or
such Material Subsidiary (as the case may be), when the same becomes due
and payable, and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or (ii) any other event shall occur or condition shall exist under
any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or (iii) any such
Debt shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to
the stated maturity thereof; or
(e) The Borrower or any of its Material Subsidiaries or the Guarantor
shall generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or
(f) Any proceeding shall be instituted by or against the Borrower or
any of its Material Subsidiaries or the Guarantor seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment,
30
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 90 days, or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of
its property) shall occur; or the Borrower or any of its Material
Subsidiaries or the Guarantor shall take any corporate action to authorize
any of the actions set forth above in subsection (e) or in this subsection
(f); or
(g) Any judgment or order for the payment of money in excess of
$30,000,000, shall be rendered against the Borrower or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that the amount of any such judgment
-------- -------
or order shall not be considered in determining whether a Default or an
Event of Default exists under this Section 6.01(f) if and to the extent
that (i) the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least "A" by
A.M. Best Company, has been notified of, and has not disputed the claim
made for payment of, the amount of such judgment or order; or
(h) The Surety Bond shall be determined in a final, non-appealable
judgement by a court or any governmental authority of competent
jurisdiction to be invalid and not binding on or unenforceable against the
Guarantor or the Guarantor shall so state in writing; or
(i) The Financial Strength Rating shall be withdrawn by Xxxxx'x or
S&P or shall be lower than A3, in the case of Xxxxx'x, or A-, in the case
of S&P;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided,
--------
31
however, that in the event of an actual or deemed entry of an order for relief
-------
with respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
------------------------
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the Surety Bond as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by this Agreement and the Surety Bond (including,
without limitation, enforcement or collection of the Notes), the Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
-------- -------
exposes the Agent to personal liability or that is contrary to this Agreement or
the Surety Bond or applicable law. The Agent agrees to give to each Lender
prompt notice of each notice given to it by the Borrower and the Guarantor
pursuant to the terms of this Agreement or the Surety Bond.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
---------------------
its directors, officers, agents or employees shall be liable to any Lender for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement and the Surety Bond, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (i) may treat the payee of any Note as the holder thereof
until the Agent receives and accepts an Assignment and Acceptance entered into
by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in connection
with this Agreement and the Surety Bond; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Borrower or of the
Surety Bond on the part of the Guarantor or to inspect the property
32
(including the books and records) of the Borrower or the Guarantor; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, this Agreement, the Surety
Bond or any other instrument or document furnished pursuant hereto; and (vi)
shall incur no liability under or in respect of this Agreement or the Surety
Bond by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 7.03. BNY and Affiliates. With respect to its Commitment,
------------------
the Advances made by it and the Note issued to it, BNY shall have the same
rights and powers under this Agreement or the Surety Bond as any other Lender
and may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include BNY in its
individual capacity. BNY and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, the Guarantor, any of their Subsidiaries and any Person who may do
business with or own securities of the Borrower, the Guarantor or any such
Subsidiaries, all as if BNY were not the Agent and without any duty to account
therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
----------------------
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
---------------
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Notes then held by each of them (or if no
Notes are at the time outstanding) ratably according to the respective amounts
of their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way arising out of this Agreement or
any action taken or omitted by the Agent under this Agreement (collectively, the
"Indemnified Costs"), provided that no Lender shall be liable for any portion of
----------------- --------
the Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement
33
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrower. In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 7.05 applies whether any such investigation,
litigation or proceeding is brought by the Agent, any Lender or a third party.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
---------------
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
34
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement, the Notes or the Surety Bond, nor consent to any
departure by the Borrower or the Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
-------- -------
no amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) except as provided in Sections 2.16 and 2.17, increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Notes or other amounts payable
hereunder, (d) except as a consequence of any extension of the Commitment
Termination Date as provided in Section 2.16, postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, (e) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Lenders, that
shall be required for the Lenders or any of them to take any action hereunder,
(f) reduce or limit the obligations of the Guarantor under the Surety Bond, or
(g) amend this Section 8.01; and provided further that no amendment, waiver or
-------- -------
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications
------------
provided for hereunder shall be in writing (including telecopier) and mailed,
telecopied or delivered, if to the Borrower, at its address at Xxx Xxxxx Xxxxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx,
Treasurer; if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at Insurance Division, Xxx
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxx;
or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively, except that notices and communications to
the Agent pursuant to Article II, III or VII shall not be effective until
received by the Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
35
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
-------------------
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
------------------
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under this Agreement. The Borrower further agrees to pay on
demand all costs and expenses of the Agent and the Lenders, if any (including,
without limitation, reasonable counsel fees and expenses), in connection with
the enforcement of this Agreement, the Notes and the other documents to be
delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and each
Lender and each of their Affiliates and their officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against any and all
-----------------
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
the Notes, this Agreement, the Surety Bond or the actual or proposed use of the
proceeds of the Advances except to the extent such claim, damage, loss,
liability or expense results from such Indemnified Party's gross negligence or
willful misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.07(c), 2.09 or 2.11, acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other reason, the
Borrower shall, upon written demand by such Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment or Conversion,
including any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal and
interest payable hereunder and under the Notes.
36
SECTION 8.05. Right of Set-off. Upon the occurrence and during the
----------------
continuance of any Default under Section 6.01(f) or any Event of Default and the
making of the request or the granting of the consent specified by Section 6.01
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, whether or not such Lender shall have made any
demand under this Agreement or such Note. Each Lender agrees promptly to notify
the Borrower after any such set-off and application, provided that the failure
--------
to give such notice shall not affect the validity of such set-off and
application.
SECTION 8.06. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Initial Lender that such Initial Lender
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
------------------------------
and, if demanded by the Borrower in the event that at any time any Lender shall
cease to have the Required Lender Rating, upon at least 5 Business Days' notice
to such Lender and the Agent, will assign to one or more Persons all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
-------- -------
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the amount of
the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, and (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender
37
hereunder and (B) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement and
the Surety Bond or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Surety Bond or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the Guarantor or the
performance or observance by the Borrower or the Guarantor of any of its
obligations under this Agreement or the Surety Bond or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the Surety Bond, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the Surety Bond as are delegated to the Agent by the
terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement and the Surety Bond are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in Section 8.02 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Advances owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
--------
and binding for all purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
38
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Note to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit A
hereto.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) such Lender's obligations
-------- -------
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation or reduce or limit the
obligations of the Guarantor under the Surety Bond.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower
39
furnished to such Lender by or on behalf of the Borrower; provided that, prior
--------
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Confidential
Information relating to the Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender
---------------
shall disclose any Confidential Information to any other Person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(f), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process and (c) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
-------------
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Waiver of Jury Trial. Each of the Borrower, the Agent
--------------------
and the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AMBAC CREDIT PRODUCTS, LLC
By_________________________________
Title:
The BANK OF NEW YORK ,
as Agent
By_________________________________
Title:
Initial Lenders
---------------
Commitment
----------
$50,000,000 THE BANK OF NEW YORK
By_________________________________
Title:
__________________________
$50,000,000 Total of the Commitments
===========
SCHEDULE I
AMBAC CREDIT PRODUCTS, LLC
REVOLVING CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
---------------------- ----------------------- -------------------------
The Bank of New York 000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
ABA #: 000000000 ABA #: 000000000
Loan Servicing Dept. Loan Servicing Dept.
BBK#: GLA 111556 BBK#: GLA 111556
EXHIBIT A - FORM OF
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 1999
FOR VALUE RECEIVED, the undersigned, AMBAC CREDIT PRODUCTS, LLC, a
Delaware limited liability company (the "Borrower"), HEREBY PROMISES TO PAY on
--------
the Maturity Date (as defined in the Credit Agreement referred to below) to the
order of _________________________ (the "Lender") for the account of its
------
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the aggregate principal amount of the Advances made by the Lender to the
Borrower pursuant to the Credit Agreement dated as of July 1, 1999 among the
Borrower, the Lender and certain other lenders parties thereto, and The Bank of
New York, as Agent for the Lender and such other lenders (as amended or modified
from time to time, the "Credit Agreement"; the terms defined therein being used
----------------
herein as therein defined) outstanding on the Commitment Termination Date.
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to The Bank of New York, as Agent, at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, in same day funds. Each Advance owing to the Lender by
the Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.
2
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
AMBAC CREDIT PRODUCTS, LLC
By _____________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
=============================================================================
Amount of
Amount of Principal Unpaid Notation
Date Advance Paid Principal Made By
or Prepaid Balance
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
=============================================================================
EXHIBIT B - FORM OF
NOTICE OF BORROWING
The Bank of New York, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 [Date]
Attention: Xxxxx Xxxxxxxxx
Ladies and Gentlemen:
The undersigned, Ambac Credit Products, LLC, refers to the Credit
Agreement, dated as of July 1, 1999 (as amended or modified from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
----------------
defined), among the undersigned, certain Lenders parties thereto and The Bank of
New York, as Agent for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
--------
Borrowing") as required by Section 2.02(a) of the Credit Agreement:
---------
(i) The Business Day of the Proposed Borrowing is _______________,
199_.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is __________ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Section 4.01
(other than the final sentence of subparagraph (e) thereof) of the Credit
Agreement are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom,
that constitutes a Default.
Very truly yours,
AMBAC CREDIT PRODUCTS, LLC
By______________________________
Title:
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July 1, 1999 (as
amended or modified from time to time, the "Credit Agreement") among Ambac
----------------
Credit Products, LLC, a Delaware limited liability company (the "Borrower"), the
--------
Lenders (as defined in the Credit Agreement) and The Bank of New York, as agent
for the Lenders (the "Agent"). Terms defined in the Credit Agreement are used
-----
herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of
the date hereof equal to the percentage interest specified on Schedule 1
hereto of all outstanding rights and obligations under the Credit
Agreement. After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Advances owing to the Assignee will be as
set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or the Guarantor or the performance
or observance by the Borrower or the Guarantor of any of its obligations
under the Credit Agreement or the Surety Bond, respectively, or any other
instrument or document furnished pursuant thereto; and (iv) attaches the
Note held by the Assignor and requests that the Agent exchange such Note
for a new Note payable to the order of the Assignee in an amount equal to
the Commitment assumed by the Assignee pursuant hereto or new Notes payable
to the order of the Assignee in an amount equal to the Commitment assumed
by the Assignee pursuant hereto and the Assignor in an amount equal to the
Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred
to in Section 4.01
2
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (v) agrees
that it will perform in accordance with their terms all of the obligations
that by the terms of the Credit Agreement are required to be performed by
it as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms
required under Section 2.13 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date")
--------------
shall be the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
facility fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of
3
Schedule 1 to this Assignment and Acceptance by telecopier shall be
effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment:
$_______________
Aggregate outstanding principal amount of Advances
assigned:
$_______________
Principal amount of Note payable to Assignee:
$_______________
Principal amount of Note payable to Assignor:
$_______________
Effective Date*: _______________, ____
[NAME OF ASSIGNOR], as Assignor
By ____________________________________
Title:
Dated: _______________, _____
[NAME OF ASSIGNEE], as Assignee
By ____________________________________
Title:
Domestic Lending Office:
[Address]
________________
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
Eurodollar Lending Office:
[Address]
Accepted [and Approved] this
__________ day of _______________, _____
_________________________, as Agent
By ____________________________
Title:
[Approved this __________ day
of _______________, _____
AMBAC CREDIT PRODUCTS, LLC
By ____________________________]
Title:
EXHIBIT H - FORM OF OPINION OF
SHEARMAN & STERLING
[Effective Date]
To each of the Lenders listed on
Schedule I hereto and
The Bank of New York,
as Agent
Ambac Credit Products, LLC
--------------------------
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(c)(viii) of
the Credit Agreement, dated as of July 1, 1999 (the "Credit Agreement"), among
----------------
Ambac Credit Products, LLC (the "Borrower"), the Lenders parties thereto and The
--------
Bank of New York, as Agent for said Lenders. Terms defined in the Credit
Agreement are used herein as therein defined.
We have acted as special New York counsel for the Borrower in
connection with the preparation, execution and delivery of the Credit Agreement.
In that connection, we have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Article III of
the Credit Agreement.
We have also examined the originals, or copies certified to our satisfaction, of
such certificates of officers of the Borrower and agreements, instruments,
other documents, as we have deemed necessary as a basis for the opinions
expressed below. As to questions of fact material to such opinions, we have,
when relevant facts were not independently established by us, relied upon
certificates of the Borrower
In our examination of the documents, certificates and instruments
referred to above, we have assumed the authenticity of all such documents,
certificates and instruments submitted to us as originals, the genuineness of
all signatures, the due authority of the parties executing such documents,
certificates and instruments, and the conformity to the originals of all
2
such documents, certificates or instruments submitted to us as copies. We have
also assumed, without independent investigation, that (a) the Borrower (i) is a
limited liability company duly formed and validly existing under the laws of the
state of its formation and (ii) has full power and authority to enter into and
perform its obligations under the Credit Agreement and the Notes, (b) the
execution, delivery and performance by the Borrower of the Credit Agreement and
the Notes have been duly authorized by all necessary company, member, manager or
officer action and do not violate or contravene any statutory law, rule or
regulation applicable to the Borrower or any agreement, instrument or other
document binding on or affecting the Borrower or any constituent document of the
Borrower, (c) no authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other Person
is required for the due execution, delivery or performance by the Borrower of
the Credit Agreement or the Notes, or if any such authorization, approval,
action, notice or filing is required therefor, it has been duly obtained or made
and is in full force and effect, (d) the Credit Agreement has been duly executed
and delivered, with all necessary power and authority (corporate and otherwise),
by each of you, and (e) the Credit Agreement [has] [and the Notes have been, or
when executed by the Borrower will have been] duly executed and delivered on
behalf of the Borrower.
Based upon the foregoing and upon such investigation as we have deemed
necessary and subject to the qualifications set forth below, we are of the
opinion that the Credit Agreement is, and if a Loan were made, each of the Notes
evidencing such Loan would be, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms.
Our opinion above is subject to the following qualifications:
(a) Our opinion is subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditors'
rights generally.
(b) Our opinion is also subject to the effect of 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) We express no opinion (i) as to the enforceability of the
indemnification provisions set forth in Section 8.04(b) of the Credit
Agreement to the extent enforcement thereof is contrary to the public
policy regarding exculpation of criminal violations, intentional harm and
acts of gross negligence or recklessness and (ii) as to the effect of the
law of any jurisdiction other than the State of New York wherein any Lender
may be located or wherein enforcement of the Credit Agreement or the Notes
may be sought that limits the rates of interest legally chargeable or
collectible.
3
Our opinion is limited to the law of the State of New York and the
federal law of the United States, and we do not express any opinion herein
concerning any other law.
A copy of this opinion letter may be delivered by each of you to any
Eligible Assignee in connection with and at the time of any assignment and
delegation by any of you as a Lender to such Eligible Assignee of a portion of
your Loans and Commitment in accordance with the provisions of the Credit
Agreement, and such Eligible Assignee may rely on the opinion expressed above
with respect to the Credit Agreement as if this opinion letter were addressed
and delivered to such Eligible Assignee on the date hereof.
This opinion letter speaks only as of the date hereof. We expressly
disclaim any responsibility to advise any of you or any other Person who is
permitted to rely on the opinion expressed herein as specified in the next
preceding paragraph of any development or circumstance of any kind including any
change of law or fact that may occur after the date of this opinion letter even
though such development, circumstance or change may affect the legal analysis, a
legal conclusion or any other matter set forth in or relating to this opinion
letter. Accordingly, any Lender relying on this opinion letter at any time
should seek advice of its counsel as to the proper application of this opinion
letter at such time.
Very truly yours,
SCHEDULE 5.02
AMBAC CREDIT PRODUCTS, LLC
REVOLVING CREDIT AGREEMENT
ONGOING-DEBT
None
SCHEDULE 4.01(h)
AMBAC CREDIT PRODUCTS, LLC
REVOLVING CREDIT AGREEMENT
CONTINGENT LIABILITIES
None
