THIRD AMENDMENT dated as of May 28, 1999
(this "Amendment") to the Letter of Credit and
Reimbursement Agreement dated as of September 9, 1997
(as heretofore amended, the "Reimbursement
Agreement"), among ContiFinancial Corporation, a
Delaware corporation (the "Borrower"), the
Participating Banks party thereto, Credit Suisse
First Boston, New York Branch, as Agent, and Dresdner
Bank AG, New York Branch, as Issuing Bank.
A. Pursuant to the Reimbursement Agreement, the Participating
Banks have extended and agreed to extend credit to the Borrower on the terms and
subject to the conditions set forth therein.
B. The Borrower has requested that certain provisions of the
Reimbursement Agreement be amended as set forth herein. The undersigned
Participating Banks are willing to amend such provisions on the terms and
subject to the conditions set forth herein.
Accordingly, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Definitions. Each capitalized term used but not
defined herein shall have the meaning assigned to it in the Reimbursement
Agreement as amended hereby. The principles of construction set forth in Section
1.03 of the Reimbursement Agreement shall apply equally to this Amendment.
SECTION 2. Amendments of Covenants.
(a) Section 2.06(c). The requirement of Section 2.06(c) of the
Reimbursement Agreement that the Borrower prepay Loans or deposit cash
collateral to the extent necessary in order that the sum of the Loans
outstanding plus any principal of amounts due pursuant to Section 2.03
of the Reimbursement Agreement plus the Stated Amount will not exceed
the Borrowing Base is deleted.
(b) Section 6.09. The requirement that the Borrower comply
with the financial covenants set forth in paragraphs (a), (b) and (c)
of Section 6.09 of the Reimbursement Agreement is deleted.
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SECTION 3. Other Amendments.
(a) Amendment of Section 1.01. Section 1.01 of the
Reimbursement Agreement is hereby amended by
(i) inserting in the appropriate alphabetical order
the following definitions:
"'Credit Agreement Loans' means the "Loans" under and
as defined in the Credit Agreement.
'Credit Agreement Amount' means, at any time, the
aggregate outstanding principal amount of the Loans under and
as defined in the Credit Agreement.
'Reimbursement Agreement Amount' means, at any time,
the aggregate principal amount of the Loans plus any principal
of amounts due under Section 2.03 plus the undrawn amount of
the Letter of Credit.";
(ii) deleting the definition of "Credit Agreement" in
its entirety and substituting therefor the following
definition:
"'Credit Agreement' means the Credit Agreement dated
as of January 7, 1997, as amended, among the Company, the
Lenders party thereto and Credit Suisse First Boston, New York
Branch, as Administrative Agent.";
(iii) deleting "2.375%" in the definition of
"Applicable Percentage" and inserting in its place "(a) prior
to March 31, 1999, 2.375%, (b) on or after March 31, 1999, and
prior to June 1, 1999, 2.750% and (c) on or after June 1,
1999, 3.00%", and deleting the proviso in the definition of
"Applicable Percentage"; and
(iv) deleting the words "by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or" in
clause (b) of the definition of "Net Available Cash", and
inserting the words "and approved by the Administrative Agent"
immediately after the words "provided by the seller" in clause
(d) of such definition.
(b) Amendment of Section 2.06. Section 2.06 of the
Reimbursement Agreement is hereby amended by the insertion therein of
the following new paragraphs (f) and (g):
"(f) In the event the Company or any Subsidiary shall
receive any Net Available Cash from any Asset Disposition by
the Company or any Subsidiary referred to in subparagraphs (a)
through (e) of Section 6.04 involving Triad Financial
Corporation, the Company will forthwith apply or cause the
applicable Subsidiary to apply 75% of all such Net Available
Cash to prepay Loans (and, after the Loans shall have been
repaid in full, to cash collateralize the Letter of Credit by
deposit of cash in the Account) and Credit Agreement Loans
ratably in accordance with the aggregate amounts of the
Reimbursement Agreement Amount and the Credit Agreement
Amount.
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(g) In the event the Company or any Subsidiary shall
receive any cash representing the proceeds of any repayment or
prepayment, whether before or after maturity, of loans or
advances made or other credit extended by the Company or any
Subsidiary to Triad Financial Corporation, the Company will
forthwith apply or cause the applicable Subsidiary to apply
75% of all such cash to prepay Loans (and, after the Loans
shall have been repaid in full, to cash collateralize the
Letter of Credit by deposit of cash in the Account) and Credit
Agreement Loans ratably in accordance with the aggregate
amounts of the Reimbursement Agreement Amount and the Credit
Agreement Amount."
(c) Amendment of Section 6.02. Section 6.02 of the
Reimbursement Agreement is hereby amended by the insertion at the end
thereof of the following new paragraph:
"The Company will not, and will not permit any
Subsidiary to, enter into any agreement other than as to a
Warehouse Facility (including any amendment of an existing
agreement) that contains any "negative pledge" or similar
provision limiting its ability or the ability of any
Subsidiary to grant, incur or permit to exist Liens on its
properties or assets."
(d) Amendment of Section 6.04. Section 6.04 of the
Reimbursement Agreement is hereby amended by
(i) deleting subclause (B) of clause (ii) of the
paragraph immediately following subsection (e) thereof and
inserting in its place "(B) an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the
Company to prepay Loans pursuant to Section 2.06"; and
(ii) deleting the first sentence of the last
paragraph of such Section only as it applies to any amounts
payable under Section 3(b) of this Amendment.
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The amendment effected by paragraph (a) (ii) above shall apply retroactively to
March 31, 1999, and shall be taken into account in computing all interest
accrued or accruing under the Reimbursement Agreement after such date. All such
retroactive payments shall be due no later than June 30, 1999.
SECTION 4. Payment upon Sale of Borrower. The Borrower hereby
irrevocably agrees that the Letter of Credit will be terminated or cash
collateralized in full and all outstanding Loans and amounts due under Section
2.03 paid in full (together with all applicable fees, interest and other amounts
due under the Reimbursement Agreement) upon the purchase by any Person or group
of Persons acting in concert, pursuant to any agreement with the Borrower or any
holders of the Borrower's capital stock, of the Borrower or any controlling
equity interest therein (including pursuant to any merger, consolidation or
similar transaction), and that no cash or other proceeds of any such purchase,
and no assets of the Borrower, will be received by any holder of the Borrower's
capital stock in respect of such capital stock prior to such termination or cash
collateralization and payment; provided that the foregoing provisions shall not
apply if the Borrower's obligations under the Reimbursement Agreement shall have
been unconditionally and irrevocably guaranteed on terms approved by the
Required Banks by Residential Funding Corporation, a subsidiary of General
Motors Acceptance Corporation, or any other corporation of established
reputation, rated at least investment grade by at least two nationally
recognized rating agencies, that in either case shall have entered into a
definitive agreement with the Borrower to acquire (by purchase, merger or
otherwise) 100% of the equity interests in the Borrower, subject only to the
approval of the purchaser's board of directors and any necessary regulatory
approvals.
SECTION 5. Representations and Warranties. The Borrower
represents and warrants to the Administrative Agent and each Participating Bank
that:
(a) The representations and warranties set forth in the
Reimbursement Agreement are true and correct in all material respects
as of and with the same effect as if made on the date hereof (except to
the extent such representations and warranties expressly relate to an
earlier date) after giving effect to this Amendment, and with all
references in such representations to (i) the "Transactions" being
deemed to include the execution, delivery and performance by the
Borrower of this Amendment and (ii) "this Agreement" being deemed to
include this Amendment.
(b) After giving effect to this Amendment, the Borrower is in
compliance in all material respects with all the terms and provisions
contained in the Reimbursement Agreement required to be observed or
performed by it.
(c) After giving effect to this Amendment, no Default has
occurred and is continuing to the best of the Borrower's knowledge.
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The foregoing representations and warranties shall survive the execution and
delivery of this Amendment.
SECTION 6. Effectiveness. This Amendment shall become
effective when the Administrative Agent has received counterparts hereof that,
when taken together, bear the signatures of the Borrower and the Required Banks;
provided that the amendments set forth in Section 2 above shall become effective
only when each of the following conditions shall have been satisfied:
(a) the Administrative Agent shall have received the Amendment Fee (as
defined below) and any fees, expenses or other amounts payable by the Borrower
under Section 8 below for which invoices shall have been submitted to the
Borrower;
(b) the Administrative Agent shall have received an opinion of Xxxxx
Xxxxxxxxxx LLP, in form reasonably satisfactory to the Administrative Agent and
covering such matters relating to this Amendment as the Administrative Agent
shall reasonably request;
(c) the Administrative Agent shall have received such documents and
certificates as the Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower or the authorization
of this Amendment and any other legal matters relating to the Borrower or this
Amendment, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel; and
(d) an amendment under the Credit Agreement, substantially in the form
of this Amendment, shall have been executed and delivered by the Borrower and
the "Required Lenders" (as defined in the Credit Agreement), and the amendments
set forth therein shall have become effective (or shall become effective
concurrently with the effectiveness of the amendments set forth in Section 2).
SECTION 7. Amendment Fee. The Borrower agrees to pay to the
Administrative Agent an amendment fee (the "Amendment Fee") the amount of
$793,750.00 to be distributed to each Participating Bank that executes and
delivers a copy of this Amendment to the Administrative Agent (or its counsel)
on or prior to May 28, 1999, pro rata based on such Participating Bank's
Commitment and the total Commitments of all Participating Banks entitled to
share in the Amendment Fee pursuant to this Section 7; provided that the
Borrower shall have no liability for the Amendment Fee if this Amendment does
not become effective.
SECTION 8. Fees and Expenses. Without limiting the Borrower's
obligations under Section 9.03 of the Credit Agreement, the Borrower agrees to
pay all reasonable out-of-pocket expenses incurred by the Agent, the Issuing
Bank, the Co-Arrangers identified on the cover page of the Reimbursement
Agreement and their respective Affiliates, including the reasonable fees and
disbursements of all counsel for such parties, in connection with the
preparation, negotiation, execution and delivery of this Amendment and the
evaluation by such parties of their rights and the rights of the Participating
Banks under the Reimbursement Agreement or any related documentation.
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SECTION 9. Miscellaneous. (a) Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of or otherwise affect the rights and remedies of the
Participating Banks, the Agent or the Issuing Bank under the Reimbursement
Agreement, and shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the
Reimbursement Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. Nothing herein shall be deemed to
entitle the Borrower or any Subsidiary to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Reimbursement Agreement in similar or
different circumstances. This Amendment shall apply and be effective only with
respect to the provisions of the Reimbursement Agreement specifically referred
to herein. The Borrower hereby ratifies, affirms, acknowledges and agrees that
the Reimbursement Agreement and the Loans and reimbursement obligations
thereunder represent the valid, enforceable and collectible obligations of the
Borrower, and acknowledges that there are no existing claims, defenses, personal
or otherwise, or rights of setoff whatsoever with respect to the Reimbursement
Agreement or the Loans or reimbursement obligations thereunder.
(b) As used in the Reimbursement Agreement, the terms
"Agreement", "herein", "hereinafter", "hereunder", "hereto", and words of
similar import shall mean, from and after the date hereof, the Reimbursement
Agreement as amended by this Amendment.
(c) Section headings used herein are for convenience of
reference only and are not to affect the construction of, or to be taken into
consideration in interpreting, this Amendment.
(d) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(e) This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.
CONTIFINANCIAL CORPORATION,
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: VP & Treasurer
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: SVP & CFO
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, Individually,
and as Agent,
By: /s/ Xxx Xxxxx
-----------------------------------
Name: Xxx Xxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES,
By: /s/ X. Xxxxxx Beaudouin
-----------------------------------
Name: X. Xxxxxx Xxxxxxxxx
Title: First Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
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XXX XXXX XX XXX XXXX,
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
CREDIT AGRICOLE INDOSUEZ,
By: /s/ Whakyung Xxx
-----------------------------------
Name: Whakyung Xxx
Title: Vice President
By: X. Xxxxxxxxxx
-----------------------------------
Name: X. Xxxxxxxxxx
Title: SVP
THE BANK OF NOVA SCOTIA,
By: /s/ A.T.D. Xxxxxx
-----------------------------------
Name: A.T.D. Xxxxxx
Title: Senior Manager
THE CHASE MANHATTAN BANK,
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
NATIONSBANK, N.A.,
By: /s/ Xxxxxxx Xxxx
-----------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK
BRANCH,
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxx
Title: First Vice President - Manager
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SOCIETE GENERALE,
By: /s/ Xxx Xxxxx
-----------------------------------
Name: Xxx Xxxxx
Title: Managing Director
COMERICA BANK,
By: /s/ Von X. Xxxxxxx
-----------------------------------
Name: Von X. Xxxxxxx
Title: First Vice President
UBS AG, NEW YORK BRANCH,
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: AD
By: /s/ Xxxxxx XxXxxxx
-----------------------------------
Name: Xxxxxx XxXxxxx
Title: AD
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH,
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Joint General Manager
BW CAPITAL MARKETS, INC.,
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
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SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: AVP
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
