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Centex - Letter of Credit And Reimbursement Agreement
EXHIBIT 10.2
Published CUSIP Number: 15231JAC1
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
among
CENTEX CORPORATION,
Borrower
BANK OF AMERICA, N.A.,
Administrative Agent
and
THE LENDERS NAMED HEREIN,
Lenders
$300,000,000
DATED AS OF JULY 16, 2004
JPMORGAN CHASE BANK
and
ROYAL BANK OF SCOTLAND,
Co-Syndication Agents
CITICORP NORTH AMERICA, INC.,
Documentation Agent
BNP PARIBAS,
CALYON NEW YORK BRANCH,
and
CREDIT SUISSE FIRST BOSTON,
Managing Agents
BANC OF AMERICA SECURITIES LLC,
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page SECTION 1 DEFINITIONS AND TERMS.................................................................................. 1
1.1 Definitions.................................................................................... 1
1.2 Number and Gender of Words; Other References................................................... 15
1.3 Accounting Principles.......................................................................... 16
1.4 Time References................................................................................ 16
1.5 Letter of Credit Amounts....................................................................... 16
SECTION 2 CREDIT EXTENSION PROVISIONS............................................................................ 16
2.1 Letters of Credit.............................................................................. 16
2.2 Lenders; Increase in Total Commitment.......................................................... 25
2.3 Voluntary Termination or Reduction of Commitments.............................................. 26
SECTION 3 TERMS OF PAYMENT....................................................................................... 26
3.1 Notes and Payments............................................................................. 26
3.2 Mandatory Payments............................................................................. 27
3.3 Default Rate................................................................................... 27
3.4 Interest Recapture............................................................................. 27
3.5 Interest Calculations.......................................................................... 27
3.6 Maximum Rate................................................................................... 28
3.7 Order of Application........................................................................... 28
3.8 Right of Set-off; Adjustments.................................................................. 29
3.9 Booking Borrowings............................................................................. 29
SECTION 4 CHANGE IN CIRCUMSTANCES................................................................................ 30
4.1 Increased Cost and Reduced Return.............................................................. 30
4.2 Limitation on Types of Borrowings.............................................................. 31
4.3 Illegality..................................................................................... 31
4.4 Treatment of Affected Loans.................................................................... 31
4.5 Compensation................................................................................... 32
4.6 Taxes.......................................................................................... 32
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT i
SECTION 5 FEES................................................................................................... 34
5.1 Treatment of Fees.............................................................................. 34
5.2 Fees of Administrative Agent................................................................... 34
5.3 Letter of Credit Fees.......................................................................... 34
5.4 Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer...................... 34
5.5 Unused Fee..................................................................................... 35
SECTION 6 CONDITIONS PRECEDENT................................................................................... 35
6.1 Conditions Precedent to Closing................................................................ 35
6.2 Conditions to all Credit Extensions............................................................ 36
SECTION 7 REPRESENTATIONS AND WARRANTIES......................................................................... 37
7.1 Purpose of Letter of Credit Facility........................................................... 37
7.2 Existence, Good Standing, Authority, and Authorizations........................................ 37
7.3 Subsidiaries; Capital Stock.................................................................... 37
7.4 Authorization and Contravention................................................................ 37
7.5 Binding Effect................................................................................. 38
7.6 Financial Statements........................................................................... 38
7.7 Litigation, Claims, Investigations............................................................. 38
7.8 Taxes.......................................................................................... 38
7.9 Environmental Matters.......................................................................... 38
7.10 Employee Benefit Plans......................................................................... 39
7.11 Properties; Liens.............................................................................. 39
7.12 Government Regulations......................................................................... 39
7.13 Transactions with Affiliates................................................................... 39
7.14 No Default..................................................................................... 39
7.15 Solvency....................................................................................... 39
7.16 Compliance with Legal Requirements............................................................. 39
7.17 Full Disclosure................................................................................ 40
7.18 Senior Debt.................................................................................... 40
SECTION 8 AFFIRMATIVE COVENANTS.................................................................................. 40
8.1 Use of Proceeds................................................................................ 40
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT ii
8.2 Books and Records.............................................................................. 40
8.3 Items to be Furnished.......................................................................... 40
8.4 Inspections.................................................................................... 42
8.5 Taxes.......................................................................................... 42
8.6 Payment of Obligations......................................................................... 42
8.7 Maintenance of Existence, Assets, and Business................................................. 42
8.8 Insurance...................................................................................... 43
8.9 Preservation and Protection of Rights.......................................................... 43
8.10 Environmental Laws............................................................................. 43
8.11 Compliance with Legal Requirements............................................................. 43
8.12 Designation of Unrestricted Subsidiaries....................................................... 43
SECTION 9 NEGATIVE COVENANTS..................................................................................... 44
9.1 Employee Benefit Plans......................................................................... 44
9.2 Liens.......................................................................................... 45
9.3 Subsidiary Indebtedness; Limitations on Upstreaming............................................ 46
9.4 Transactions with Affiliates................................................................... 46
9.5 Compliance with Documents...................................................................... 46
9.6 Assignment..................................................................................... 46
9.7 Fiscal Year and Accounting Methods............................................................. 46
9.8 Government Regulations......................................................................... 47
9.9 Sale of Assets................................................................................. 47
9.10 Mergers and Dissolutions; Sale of Capital Stock................................................ 47
9.11 New Business................................................................................... 47
9.12 Financial Covenants............................................................................ 47
SECTION 10 DEFAULT............................................................................................... 48
10.1 Payment of Obligation.......................................................................... 48
10.2 Covenants...................................................................................... 48
10.3 Debtor Relief.................................................................................. 48
10.4 Judgments and Attachments...................................................................... 48
10.5 Government Action.............................................................................. 49
10.6 Misrepresentation.............................................................................. 49
10.7 Change of Control.............................................................................. 49
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT iii
10.8 Default Under Other Debt and Agreements........................................................ 49
10.9 Employee Benefit Plans......................................................................... 49
10.10 Validity and Enforceability of Loan Documents.................................................. 50
SECTION 11 RIGHTS AND REMEDIES................................................................................... 50
11.1 Remedies Upon Default.......................................................................... 50
11.2 Borrower Waivers............................................................................... 51
11.3 Performance by Administrative Agent............................................................ 51
11.4 Delegation of Duties and Rights................................................................ 51
11.5 Not in Control................................................................................. 51
11.6 Course of Dealing.............................................................................. 51
11.7 Cumulative Rights.............................................................................. 52
11.8 Application of Proceeds........................................................................ 52
11.9 Certain Proceedings............................................................................ 52
11.10 Expenses; Indemnification...................................................................... 52
SECTION 12 ADMINISTRATIVE AGENT.................................................................................. 53
12.1 Appointment and Authorization of Administrative Agent.......................................... 53
12.2 Delegation of Duties........................................................................... 54
12.3 Liability of Administrative Agent.............................................................. 54
12.4 Reliance by Administrative Agent............................................................... 54
12.5 Notice of Event of Default..................................................................... 55
12.6 Credit Decision; Disclosure of Information by Administrative Agent............................. 55
12.7 Indemnification of Administrative Agent........................................................ 56
12.8 Administrative Agent in its Individual Capacity................................................ 56
12.9 Successor Administrative Agent................................................................. 56
12.10 Administrative Agent May File Proofs of Claims................................................. 57
12.11 Other Agent; Arrangers; and Managers........................................................... 57
SECTION 13 MISCELLANEOUS......................................................................................... 58
13.1 Headings....................................................................................... 58
13.2 Nonbusiness Days............................................................................... 58
13.3 Communications................................................................................. 58
13.4 Form and Number of Documents................................................................... 59
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT iv
13.5 Exceptions to Covenants........................................................................ 59
13.6 Survival....................................................................................... 59
13.7 GOVERNING LAW.................................................................................. 59
13.8 Invalid Provisions............................................................................. 59
13.9 Entirety....................................................................................... 59
13.10 Jurisdiction; Venue; Service of Process; Jury Trial............................................ 60
13.11 Amendments, Consents, Conflicts, and Waivers................................................... 60
13.12 Multiple Counterparts.......................................................................... 61
13.13 Successors and Assigns; Assignments and Participations......................................... 61
13.14 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.................... 64
13.15 Limited Waiver................................................................................. 64
13.16 Confidentiality................................................................................ 64
13.17 USA Patriot Act Notice......................................................................... 65
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT v
SCHEDULES AND EXHIBITS
Schedule 1.1 - Existing Letters of Credit Schedule 2.1 - Lenders and Commitments; Addresses for Notice Schedule 7.3 - Subsidiaries and Stock
Exhibit A - Form of Note Exhibit B - Form of Compliance Certificate Exhibit C - Form of Notice of Conversion/Continuation Exhibit D - Form of Opinion of Counsel Exhibit E - Form of Assignment and Acceptance Agreement
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT vi
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT is entered into as of July 16, 2004 (the "CLOSING DATE") among CENTEX CORPORATION, a Nevada corporation ("BORROWER"), Lenders (hereinafter defined), and BANK OF AMERICA, N.A., as Administrative Agent (hereinafter defined).
R E C I T A L S
A. Borrower has requested that Lenders extend credit to Borrower in the form of this Agreement, providing for, among other things, a letter of credit facility in the aggregate principal amount of up to $300,000,000.
B. Upon and subject to the terms and subject to the conditions of this Agreement, Lenders are willing to extend such credit to Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 DEFINITIONS. As used herein:
ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement for such Eurodollar Borrowing for such Interest Period.
ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted successors and assigns as "Administrative Agent" for Lenders under this Agreement.
AFFILIATE of any Person means any other Person who directly or indirectly controls, or is controlled by, or is under common control with, such Person, and, for purposes of this definition only, "control," "controlled by," and "under common control with" mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract, or otherwise).
AGENT-RELATED PERSONS means Administrative Agent, together with its Affiliates (including Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.
AGREEMENT means this Letter of Credit and Reimbursement Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time).
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
APPLICABLE LENDING OFFICE means, for each Lender, the "Lending Office" of such Lender (or an Affiliate of such Lender) designated on SCHEDULE 2.1 or such other office as such Lender may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof as the office by which its Credit Extensions are to be made and maintained.
APPLICABLE MARGIN means, as of any date of determination, the interest margin over the Prime Rate or the Adjusted Eurodollar Rate, and the applicable fees payable pursuant to SECTION 5.5 that corresponds to the Moody's Rating and the S & P Rating set forth below on such date of determination:
Applicable Margin for
Eurodollar Borrowings Applicable
Applicable Margin for and Letter of Credit Margin for Level Moody's Rating S & P Rating Prime Rate Borrowings Fees Unused Fees 1 A3 or higher A- or higher 0.0000% 0.5000% 0.1000%
2 Baa1 BBB+ 0.0000% 0.6000% 0.1250%
3 Baa2 BBB 0.0000% 0.7500% 0.1500%
4 Baa3 BBB- 0.0000% 1.0250% 0.2000%
5 Ba1 or lower BB+ or lower or 0.2500% 1.2500% 0.2500%
or Not Rated
Not Rated
For purposes of the foregoing: (a) if the Moody's Rating and the S & P Rating shall fall within different LEVELS, then the Applicable Margin shall be determined by reference to the numerically higher LEVEL (e.g., if the S & P Rating is in LEVEL 1 and the Moody's Rating is in LEVEL 2, then the Applicable Margin shall be determined by reference to LEVEL 2); and (b) if either Moody's or S & P no longer publishes ratings and Borrower and Administrative Agent cannot agree on another ratings agency to replace Moody's or S & P, as the case may be, then the Moody's Rating or the S & P Rating, as the case may be, shall be deemed to be "Not Rated." Each change in the Applicable Margin shall be effective on the earlier of: (i) the actual date of delivery by Borrower to Administrative Agent of notice of a change in S & P Rating or Moody's Rating pursuant to SECTION 8.3(G); and (ii) the date on which Borrower is obligated to deliver notice of a change in S & P Rating or Moody's Rating to Administrative Agent pursuant to SECTION 8.3(g).
APPROVED FUND is defined in SECTION 13.13(g).
ARRANGER means Banc of America Securities LLC, and its successors and permitted assigns in its capacity as "Sole Lead Arranger" under the Loan Documents.
ATTORNEY COSTS means and includes all reasonable fees, expenses, and disbursements of any law firm or other external counsel.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 2
AUTHORIZATIONS means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority.
BORROWER is defined in the preamble to this Agreement.
BORROWING means any Prime Rate Borrowing or Eurodollar Borrowing pursuant to SECTION 2.1(c).
BUSINESS DAY means (a) for all purposes, any day other than Saturday, Sunday, and any other day on which commercial banking institutions are required or authorized by any Legal Requirement to be closed at the place of Administrative Agent's Payment Office or payments cannot be made on the United States Fedwire System, and (b) in addition to the foregoing, in respect of any Eurodollar Borrowing, a day on which dealings in United States dollars are conducted in the London interbank market and commercial banks are open for international business in London.
CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital Leases taken at the amount thereof accounted for as liabilities in accordance with GAAP.
CAPITAL LEASE means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP.
CASH COLLATERALIZE is defined in SECTION 2.1(i).
CHANGE IN CONTROL means, with respect to any Person, any event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person or group shall be deemed to have "beneficial ownership" of all securities that such Person or group has the right to acquire (such right, an "OPTION RIGHT"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right); or
(b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 3
or more directors by any Person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).
CLOSING DATE is defined in the preamble to this Agreement.
COMMITMENT means, for any Lender at any date of determination, the amount stated beside each Lender's name as set forth on SCHEDULE 2.1 or on the most-recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13 (which amount is subject to increase, reduction, or cancellation in accordance with this Agreement).
COMPANIES means, as of any date, Borrower and each of its Subsidiaries, and COMPANY means any one of the Companies.
COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer, substantially in the form of EXHIBIT B.
CONSEQUENTIAL LOSS is defined in SECTION 4.5.
CONSOLIDATED ADJUSTED NET INCOME means, for any period of determination, consolidated net earnings (after income taxes and without deduction for losses) of the Companies, but excluding (a) gains from extraordinary items for such period, and (b) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by the Companies (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)).
CONSOLIDATED DEBT means, as of any date of determination, (a) all Debt of the Restricted Companies, on a consolidated basis, minus (b) Excess Cash not subject to any Liens or other restrictions not inherent in the particular investment or obligation; provided that, for purposes of SECTION 8.12, Consolidated Debt means, as of the date of determination, all Debt of the Restricted Companies, on a consolidated basis.
CONSOLIDATED EBITDA means, for any period of determination and without duplication, the EBITDA of the Restricted Companies, on a consolidated basis.
CONSOLIDATED INTEREST EXPENSE means, for any period of determination, the Interest Expense of the Restricted Companies, on a consolidated basis.
CONSOLIDATED TANGIBLE NET WORTH means, as of any date of determination, Tangible Net Worth of the Companies (other than any Excluded Subsidiary), on a consolidated basis determined in accordance with GAAP.
CONSTITUENT DOCUMENTS means, with respect to any Person, its articles or certificate of incorporation, bylaws, partnership agreement, organizational documents, limited liability company agreement, trust agreement, or such other documents as may govern such Person's formation, organization, and management.
CONTINGENT OBLIGATIONS means as to any Person any obligation of such Person guaranteeing any Debt, leases, dividends, or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 4
OBLIGOR") in any manner, whether directly or indirectly, and any other obligation of such Person, whether or not contingent, pursuant to which such Person is liable under or with respect to a primary obligation of a primary obligor, in each case that would be included on a balance sheet of such Person (or disclosed and assigned a monetary value in the footnotes thereto) properly prepared in accordance with GAAP as a "Contingent Obligation."
CONTINUE, CONTINUATION, and CONTINUED refers to the continuation pursuant to SECTION 2.1(c) of a Eurodollar Borrowing from one Interest Period to the next Interest Period.
CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to SECTION 2.1(c) of one Type of Borrowing into another Type of Borrowing.
CREDIT EXTENSION means each of the following: (a) a Borrowing; and (b) an L/C Credit Extension.
CREDIT PARTIES means Administrative Agent and Lenders, and CREDIT PARTY means any one of the Credit Parties.
CUMULATIVE CONSOLIDATED NET INCOME means the sum of Quarterly Consolidated Net Income for the fiscal quarter ended June 30, 2004, and for each succeeding fiscal quarter during the term hereof.
CURRENT FINANCIALS means, at the time of any determination thereof, the most recently delivered to the Credit Parties of either (a) the Financial Statements for the fiscal year ended March 31, 2004, calculated on a consolidated basis for the Companies, or (b) the Financial Statements required to be delivered under SECTION 8.3(a) or 8.3(b), as the case may be.
DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person for money borrowed; (b) all liabilities, obligations, and indebtedness of such Person which is evidenced by bonds, notes, debentures, or other similar instruments; (c) all Capitalized Lease Obligations of such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person, and obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business that are not past-due for more than ninety (90) days); (e) all Contingent Obligations of such Person; (f) all obligations of the type referred to in CLAUSES (a) and (b) preceding of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person); (g) the face amount of all letters of credit and banker's acceptances issued for the account of such Person, and without duplication, all drafts drawn and unpaid thereunder; (h) all Stock of such Person subject to repurchase or redemption by such Person other than at the sole option of such Person; (i) all obligations of such Person to purchase Stock (or other property) which arise out of or in connection with the sale by such Person of the same or substantially similar Stock (or property); and (j) net obligations of such Person arising under Financial Hedges entered into by such Person as determined in accordance with GAAP.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent transfer or conveyance, suspension of payments, or similar Legal Requirements from time to time in effect affecting the Rights of creditors generally.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 5
DEFAULTING LENDER means, as of any date, any Lender that has (a) failed to make a Credit Extension required to be made by it hereunder, or (b) given notice to Administrative Agent or Borrower that it will not make, or that it has disaffirmed or repudiated any obligation to make, any Credit Extension hereunder (unless such notice is given by all Lenders).
DEFAULT RATE means, (i) with respect to any Borrowing, on any date, a per annum rate of interest equal from day to day to the lesser of (a) the non-default interest rate applicable to such Borrowing, plus two percent (2%) and (b) the Maximum Rate, and (ii) with respect to any other Obligation under the Loan Documents, the lesser of (a) the Prime Rate plus the then-effective Applicable Margin for Prime Rate Borrowings, plus two percent (2%) and (b) the Maximum Rate.
DOLLARS and the symbol $ mean lawful money of the United States of America.
EBITDA means, with respect to any Person for any fiscal period, an amount equal to (a) consolidated net income of such Person for such period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gains from extraordinary items for such period, and (iv) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)), in each case to the extent included in the calculation of consolidated net income of such Person for such period in accordance with GAAP, but without duplication, minus (c) any cash payments made in respect of any item of extraordinary loss accrued during a prior period and added back to EBITDA in such prior period pursuant to CLAUSE (d)(v) below, plus (d) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) the amount of depreciation and amortization for such period, (iv) the amount of any deduction to consolidated net income as the result of any stock option expen...
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