FACILITY AGREEMENT

Exhibit 10.1

 

 

 

 

 

 

 

FACILITY AGREEMENT

among

PULTE HOMES, INC.,

VARIOUS FINANCIAL INSTITUTIONS,

and

DEUTSCHE BANK AG, NEW YORK BRANCH,

as Issuing Bank and as Administrative Agent

 

Dated as of June 23, 2009

 

 

 

 

TABLE OF CONTENTS

 

i

TABLE OF CONTENTS

 

ii

TABLE OF CONTENTS

 

iii

FACILITY AGREEMENT

THIS FACILITY AGREEMENT (this “ Agreement ”) dated as of June 23, 2009 is among Pulte Homes, Inc., a Michigan corporation (“ Pulte ”), the financial institutions that from time to time are parties hereto (the “ Banks ”) and Deutsche Bank AG, New York Branch (“ DB ”), as sole initial Bank, as the Issuing Bank (as defined below) and as administrative agent (together with any successor in such capacity, the “ Administrative Agent ”).

As contemplated by the Pricing Agreement (as defined below), the parties hereto have agreed to enter into this Agreement to provide for the issuance of letters of credit from time to time for the account of Pulte.

NOW, THEREFORE , the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS AND INTERPRETATION

1.01       Certain Defined Terms .  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ Administrative Agent ” - see the Preamble .

“ Advance ” has the meaning specified in Section 2.02(g) .

“ Affected Bank ” means any Bank other than the Issuing Bank that has made, or notified Pulte that an event or circumstance has occurred that may give rise to, a demand for compensation under Section 2.06(a) or (b)  or Section 2.08 (but only so long as the event or circumstance giving rise to such demand or notice is continuing).

“ Affiliate ” means, as to any Person, any other Person that, directly 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 5% or more of the equity interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of equity interests, by contract or otherwise.

“ Agreement ” - see the Preamble .

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 8.07 and in substantially the form of Exhibit A .

“ Attributable Debt ” means, in respect of a Sale and Leaseback Transaction, the present value (discounted at the rate prescribed in the Indenture) of the obligation of the lessee for rental payments during the remaining term of the lease entered into in connection with such

transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended or, if earlier, until the earliest date on which the lessee may terminate such lease upon payment of a penalty (in which case for purposes of this definition the obligation of the lessee for rental payments shall include such penalty), after excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges.

“ Available Amount ” means, with respect to any LOC, the maximum amount available to be drawn under such LOC under any circumstance, including any amount that has been the subject of a drawing by the applicable beneficiary but has not yet been paid by the Issuing Bank.

“ Bankruptcy Law ” means Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“ Banks ” - see the Preamble . For the avoidance of doubt, references herein to Banks shall include the Issuing Bank unless otherwise specified.

“ Base Rate ” means a fluctuating interest rate per annum equal to at any time the higher of (a) the sum of the Federal Funds Rate plus 0.5% and (b) the prime lending rate most recently announced by DB (or any U.S. Affiliate of DB if no such rate is announced by DB) as its prime lending rate, which rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.

“ Business Day ” means a day of the year on which banks are not required or authorized by law to close in New York, New York or London, England.

“ Closing Date ” means the first date on which the conditions set forth in Article III shall have been satisfied.

“ Commitment ” means, with respect to any Bank, the commitment of such Bank to issue (in the case of the Issuing Bank) or participate in LOCs hereunder in an amount equal to its Commitment Amount.

“ Commitment Amount ” means, with respect to any Bank at any time, the amount set forth opposite such Bank’s name on Schedule I under the caption “Commitment Amount” or, if such Bank has entered into one or more Assignment and Acceptances, the amount set forth for such Bank in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as such Bank’s “Commitment Amount”, as such amount may be reduced at or prior to such time pursuant to Section 2.04 .

“ Confidential Information ” means information that Pulte or any Affiliate thereof furnishes to the Administrative Agent or any Bank, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by the Administrative Agent or any Bank of its obligations hereunder or that is or becomes available to the Administrative Agent or such Bank from a source other than Pulte or an Affiliate thereof that is not, to the best of the Administrative Agent’s or such Bank’s knowledge, acting in violation of a confidentiality agreement with Pulte or any Affiliate thereof.

 

2

“ Consolidated ” refers to the consolidation of accounts in accordance with GAAP.

“ Consolidated Net Tangible Assets ” means the total amount of assets which would be included on a combined balance sheet of Pulte’s Subsidiaries (not including Pulte) together with the total amount of assets that would be included on Pulte’s balance sheet, not including its Subsidiaries, under GAAP (less applicable reserves and other properly deductible items) after deducting therefrom:

(a)         all short-term liabilities and liability items, except for (i) liabilities and liability items payable by their terms more than one year from the date of determination (or renewable or extendible at the option of the obligor for a period ending more than one year after such date) and (ii) liabilities in respect of retiree benefits other than pensions for which the Subsidiaries are required to accrue pursuant to Statement of Financial Accounting Standards No. 106;

(b)         investments in Subsidiaries; and

(c)         all goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of debt and other intangible assets.

“ Credit Exposure ” means at any time the sum at such time of (a) the aggregate outstanding amount of all Advances, (b) the aggregate Available Amounts of all outstanding LOCs and (c) the aggregate Available Amounts of all LOCs that have been requested by Pulte to be issued hereunder but have not yet been so issued.

“ DB ” - see the Preamble .

“ Default ” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“ Eligible Assignee ” means (i) a Bank, (ii) an Affiliate of a Bank, or (iii) a commercial bank, a savings bank or other financial institution that is approved by the Administrative Agent, the Issuing Bank and, so long as there then exists no Event of Default, Pulte (such approvals not to be unreasonably withheld or delayed); provided that neither Pulte nor any Affiliate thereof shall qualify as an Eligible Assignee.

“ Equity Interests ” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ Event of Default ” has the meaning specified in Section 6.01 .

 

3

“ Federal Funds Rate ” means, for any period, a fluctuating interest 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 for such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

“ GAAP ” has the meaning specified in Section 1.03 .

“ Hedge Agreements ” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

“ Indemnified Party ” has the meaning specified in Section 8.04(b) .

“ Indenture ” means that certain Indenture dated as of October 24, 1995, as supplemented from time to time, by Pulte Homes, Inc. (formerly known as Pulte Corporation), Pulte Home Corporation and certain wholly-owned subsidiaries of Pulte Home Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee.

“ Internal Revenue Code ” means the Internal Revenue Code of 1986.

“ Issuing Bank ” means DB in its capacity as the issuer of LOCs hereunder.

“ Lending Office ” means, with respect to a Bank, the office of such Bank that is to make and receive payments hereunder as specified to the Administrative Agent from time to time.

“ Lien ” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“ Loan Documents ” means (i) this Agreement, (ii) the Pricing Agreement and (iii) each LOC Application.

“ LOC ” has the meaning specified in Section 2.01 .

“ LOC Application ” has the meaning specified in Section 2.02(a) .

“ LOC Participating Interest ” has the meaning specified in Section 2.02(e) .

“ LOC Related Documents ” has the meaning specified in Section 2.03(b) .

“ Material Adverse Change ” means any material adverse change in the business, financial condition, operations or properties of Pulte and its Subsidiaries, taken as a whole.

 

4

“ Material Adverse Effect ” means a material adverse effect on (a) the business, financial condition, operations or properties of Pulte and its Subsidiaries, taken as a whole, (b) the rights and remedies of the Administrative Agent or any Bank under any Loan Document or (c) the ability of Pulte to perform its obligations under the Loan Documents.

“ Material Financial Obligation ” means a principal amount of debt under any loan agreement, note, indenture or other financing agreement and/or payment obligations in respect of any Hedge Agreement of Pulte and/or one or more of its Subsidiaries arising in one or more related or unrelated transactions exceeding in the aggregate $10,000,000; provided that Non-Recourse Land Financing shall not be deemed a Material Financial Obligation.

“ Nonconsenting Bank ” means any Bank other than the Issuing Bank that does not approve a consent, waiver or amendment to any Loan Document requested by Pulte or the Administrative Agent and that requires the approval of all Banks under Section 8.01 (or all Banks directly affected thereby) when the Super-Majority Banks have agreed to such consent, waiver or amendment.

“ Non-Recourse Land Financing ” means any debt of Pulte or any of its Subsidiaries for which the holder of such debt has no recourse, directly or indirectly, to Pulte or such Subsidiary for the principal of, premium, if any, and interest on such debt, and for which Pulte or such Subsidiary is not, directly or indirectly, obligated or otherwise liable for the principal of, premium, if any, and interest on such debt, except pursuant to mortgages, deeds of trust or other Liens or other recourse, obligations or liabilities in respect of specific land or other real property interests of Pulte or such Subsidiary; provided that recourse, obligations or liabilities of Pulte or such Subsidiary solely for indemnities, covenants or breach of warranty, representation or covenant in respect of any debt will not prevent debt from being classified as Non-Recourse Land Financing.

“ OFAC ” means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.

“ Other Taxes ” has the meaning specified in Section 2.08(b) .

“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Pricing Agreement ” means the Fee Pricing Agreement dated as of June 2, 2009 between Pulte and DB.

“ Pro Rata Share ” means, for any Bank, the percentage share that its Commitment Amount is of the aggregate Commitment Amount of all Banks (or, if the Commitments have terminated, that the amount of such Bank’s participating interest in the Advances and LOCs is of the Credit Exposure).

 

5

“ Pulte ” - see the Preamble .

“ Register ” has the meaning specified in Section 8.07(d) .

“ Required Banks ” means, at any time, Banks with aggregate Pro Rata Shares of more than 50%.

“ Responsible Officer ” means the Chairman, Chief Executive Officer, President, Chief Financial Officer, Chief Accounting Officer, Treasurer or General Counsel of Pulte.

“ Restricted Subsidiary ” means any Subsidiary as of the date of this Agreement and any successor to such Subsidiary other than (i) Pulte Financial Companies, Inc., Pulte Mortgage LLC, Pulte Diversified Companies, Inc. or North American Builders Indemnity Corporation; (ii) any other Subsidiary acquired by Pulte (directly or indirectly) whose business primarily involves mortgage banking, insurance or other financial services; and (iii) any Subsidiary that is a successor to any of the Subsidiaries described in clauses (i) and (ii).

“ Sale and Leaseback Transaction ” means any sale or transfer made by Pulte or one of its Subsidiaries (except a sale or transfer made to Pulte or one or more Subsidiaries) of any property which is either (i) a manufacturing plant, warehouse or office building whose book value constitutes 1% or more of Consolidated Net Tangible Assets as of the date of determination, or (ii) any property which is a parcel of real property other than a manufacturing plant, warehouse, office building, or model home whose book value constitutes 5% or more of Consolidated Net Tangible Assets as of the date of determination, if such sale or transfer is made with the intention of leasing, or as part of an arrangement involving the lease, of such property to Pulte or a Subsidiary.

“ Secured Debt ” means any debt which is secured by (i) a Lien on any property of Pulte or any of its Restricted Subsidiaries or a portion thereof or (ii) a Lien on any Equity Interests owned directly or indirectly by Pulte or any of its Restricted Subsidiaries or in the rights of Pulte or any of its Restricted Subsidiaries in respect of debt of a corporation, partnership or other entity in which Pulte or a Restricted Subsidiary has an Equity Interest; provided , that “Secured Debt” shall not include Non-Recourse Land Financing that consists exclusively of “land under development,” “land held for future development” or “improved lots and parcels,” as such categories of assets are determined in accordance with GAAP. The securing in the foregoing manner of any debt which immediately prior thereto was not Secured Debt shall be deemed to be the creation of Secured Debt at the time such security is given.

“ Significant Subsidiary ” means any Subsidiary (i) whose revenues exceed 10% of the total revenues of Pulte, in each case for the most recent fiscal year, or (ii) whose net worth exceeds 10% of the total stockholders’ equity of Pulte, in each case as of the end of the most recent fiscal year.

“ Solvent ” and “ Solvency ” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend

 

6

to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“ Subsidiary ” of any Person means any corporation, partnership, joint 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 partnership, joint venture or limited liability company 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.

“ Super-Majority Banks ” means Banks with aggregate Pro Rata Shares of 66  ² / 3 % or more.

“ Taxes ” has the meaning specified in Section 2.08(a) .

“ Termination Date ” means March 20, 2015.

“ Voting Interests ” means shares of capital stock issued by a corporation, or equivalent Equity 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.

1.02       Computation of Time Periods; Other Definitional Provisions .  In this Agreement and the other Loan Documents in the 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”. Except as otherwise expressly provided herein, any reference to (a) an agreement or contract shall mean such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time; (b) a law shall mean such law as amended, supplemented or otherwise modified from time to time (including any successor thereto) and all rules, regulations, guidelines and decisions interpreting or implementing such law; (c) an Article , a Section , an Exhibit or a Schedule shall mean an Article or a Section hereof or an Exhibit or a Schedule hereto, and (d) a time of day shall mean such time in New York, New York. The term “including” means “including without limitation” and derivatives of such term have a corresponding meaning.

1.03       Accounting Terms and Determinations .  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time in the

 

7

United States of America (“ GAAP ”), applied on a basis consistent (except for changes concurred in by Pulte’s independent public accountants) with the most recent audited consolidated financial statements of Pulte and its Subsidiaries delivered to the Banks; provided that, if Pulte notifies the Administrative Agent that Pulte wishes to amend any covenant in Article V to eliminate the effect of any change in generally accepted accounting principles on the operation of such covenant (or if the Administrative Agent notifies Pulte that the Required Banks wish to amend Article V for such purpose), then Pulte’s compliance with such covenant shall be determined on the basis of generally accepted accounting principles in effect immediately before the relevant change in generally accepted accounting principles became effective (and, concurrently with the delivery of any financial statements required to be delivered hereunder, Pulte shall provide a statement of reconciliation conforming such financial information to such generally accepted accounting principles as previously in effect), until either such notice is withdrawn or such covenant is amended in a manner satisfactory to Pulte and the Required Banks.

ARTICLE II.

AMOUNTS AND TERMS OF

THE LETTERS OF CREDIT

2.01       The Letters of Credit .  The Issuing Bank agrees, on the terms and subject to the conditions herein set forth, to issue standby letters of credit substantially in the form of Exhibit B , or in such other form as the Issuing Bank may approve (such approval not to be unreasonably withheld or delayed so long as such form complies with the following provisions of this Section 2.01) (each an “ LOC ” and collectively the “ LOCs ”), and extend or increase the amount of LOCs, for the account of Pulte on any Business Day from time to time during the period from the Closing Date to the Termination Date; provided that (a) the Issuing Bank shall not have any obligation to issue, extend or increase the amount of any LOC if (i) the aggregate Credit Exposure (after giving effect to such issuance, extension or increase) would exceed the LOC Availability Amount (as defined in the Pricing Agreement) scheduled to be outstanding at any time during the period from the date of such issuance, extension or increase to the stated expiration date of such LOC; or (ii) such issuance, extension or increase would conflict with or cause the Issuing Bank to exceed any limit imposed by applicable law or any applicable requirement thereof; (b) each LOC shall be denominated in U.S. dollars and shall be in a face amount not less than $50,000 (or such lesser amount as the Issuing Bank may agree); (c) each LOC shall be payable only against sight drafts (and not time drafts); (d) no LOC shall have a scheduled expiration date (including all rights of Pulte or the beneficiary to require extension thereof) later than the tenth (10 ^th ) Business Day prior to the date on which the aggregate Credit Exposure (including the subject LOC) would exceed the aggregate LOC Availability Amount scheduled to be outstanding at any time during such period if such subject LOC remained outstanding on such date; and (e) each LOC shall provide that such LOC shall expire on the tenth (10 ^th ) Business Day following written notice by the Issuing Lender to the beneficiary of the occurrence of a “Credit Event” with respect to Pulte consisting of a “Failure to Pay” or a “Bankruptcy” (as each such term is defined in the 2003 ISDA Credit Derivatives Definitions published by the International Swaps and Derivatives Association, Inc.). Such written notification by the Issuing Lender to the beneficiary of a Credit Event (which may be in electronic form) shall initially be substantially in the form of Exhibit A to the form of Letter of Credit attached hereto as Exhibit B delivered to not fewer than two persons designated by the

 

8

beneficiary to receive such notification at such address (which may include an email address) as specified by the beneficiary, and shall be followed by not fewer than two subsequent written reminder notices delivered by the Issuing Lender to the beneficiary (which may be in electronic form) of such initial notification prior to such expiry, absent prior written response from the beneficiary to request payment by the Issuing Bank under such LOC. An LOC may by its terms be automatically extendible annually; provided , that the Issuing Bank shall not permit any such automatic extension if it has determined that such extension would not be permitted, or the Issuing Bank would have no obligation, at such time to issue such LOC as extended under the terms hereof, in which case the Issuing Bank shall notify the beneficiary thereof of its election not to extend such LOC (which the Issuing Bank agrees to do on and subject to the terms of Section 2.02(c)) . LOCs may be issued for the benefit of any Subsidiary of Pulte; provided that Pulte shall be the account party with respect to any such LOC.

2.02       Issuance and Extensions and Drawings, Participations and Reimbursement with Respect to Letters of Credit .

(a)         Request for Issuance .  Pulte may from time to time request, upon at least three Business Days’ notice (given not later than 11:00 A.M.), that the Issuing Bank issue an LOC by delivering to the Issuing Bank (i) a written request substantially in the form of Exhibit C (an “ LOC Application ”) specifying the date on which such LOC is to be issued (which shall be a Business Day), the expiration date thereof, the Available Amount thereof and the name and address of the beneficiary thereof; and (ii) such other documents as may be required pursuant to the Issuing Bank’s customary practices for the issuance of letters of credit.

If the requirements set forth in the proviso to the first sentence of Section 2.01 and in Article III are satisfied, the Issuing Bank shall issue the applicable LOC on the date requested in such LOC Application. Upon the issuance of an LOC, the Issuing Bank shall (A) deliver the original of such LOC to the beneficiary thereof or as Pulte shall otherwise direct and (B) promptly notify the Administrative Agent thereof and furnish a copy thereof to the Administrative Agent. The Issuing Bank may issue LOCs through any of its branches or Affiliates (whether domestic or foreign) that issue letters of credit.

(b)         Request for Extension or Increase .  Pulte may from time to time request, upon at least three Business Days’ notice (given not later than 11:00 A.M.), that the Issuing Bank extend the expiration date of an outstanding LOC or increase (or, with the consent of the beneficiary, decrease) the Available Amount of an outstanding LOC by delivering to the Issuing Bank a written request therefor. Any such request for an extension or increase shall for all purposes hereof (including for purposes of Section 2.02(a)) be treated as though Pulte had requested issuance of a replacement LOC (except that the Issuing Bank may, if it elects, issue a notice of extension or increase in lieu of issuing a new LOC in substitution for the outstanding LOC).

(c)         Automatic Extensions .  If any LOC shall provide for the automatic extension of the expiry date thereof unless the Issuing Bank gives notice that such expiry date shall not be extended, then the Issuing Bank shall allow such LOC to be extended unless it shall have received, at least five days prior to the date on which such notice of non-extension must be delivered under such LOC (or such shorter period acceptable to the Issuing Bank), (i) notice from the Required Banks (or the Administrative Agent on their behalf) stating that the conditions

 

9

precedent to the extension of such LOC have not been satisfied or (ii) notice from Pulte directing the Issuing Bank not to permit the extension of such LOC (and the Issuing Bank shall not permit any LOC to be automatically extended if it has received a timely notice of the type described in the foregoing clause (i)  or (ii) ).

(d)         Limitations on Issuance, Extension and Increase of LOCs .  As between the Issuing Bank, on the one hand, and the Administrative Agent and the other Banks, on the other hand, the Issuing Bank shall be justified and fully protected in issuing a proposed LOC, extending the expiration date or increasing the Available Amount of an outstanding LOC or permitting an outstanding LOC to be automatically extended if the Issuing Bank has not received notice that it is not authorized to issue, increase the Available Amount of or extend such LOC as described in the foregoing provisions of this Section 2.02 , in each case notwithstanding any subsequent notice to the Issuing Bank, any knowledge the Issuing Bank may have of a Default or of the failure of any condition specified the proviso to the first sentence of Section 2.01 or in Article III to be satisfied, or any other event, condition or circumstance whatsoever. The Issuing Bank may amend, modify or supplement LOCs or LOC Applications, or waive compliance with any condition of issuance, extension or payment, without the consent of, and without liability to, the Administrative Agent or any Bank, provided that any such amendment, modification or supplement that extends the expiration date or increases the Available Amount of or the amount available to be drawn on an outstanding LOC shall be subject to Section 2.01 .

(e)         Letter of Credit Participating Interests .  Concurrently with the issuance of each LOC, the Issuing Bank automatically shall be deemed, irrevocably and unconditionally, to have sold, assigned, transferred and conveyed to each other Bank, and each other Bank automatically shall be deemed, irrevocably and unconditionally, severally to have purchased, acquired, accepted and assumed from the Issuing Bank, without recourse to, or representation or warranty by, the Issuing Bank, an undivided interest, in a proportion equal to such Bank’s Pro Rata Share, in all of the Issuing Bank’s rights and obligations in, to or under such LOC, the related LOC Application, all reimbursement obligations with respect to such LOC, and all collateral, guarantees and other rights from time to time directly or indirectly securing or supporting the foregoing (such interest of each Bank being referred to herein as an “ LOC Participating Interest ”, it being understood that the LOC Participating Interest of the Issuing Bank is the interest not otherwise attributable to the LOC Participating Interests of the other Banks). On the date that any assignee becomes a party to this Agreement in accordance with Section 8.07 , LOC Participating Interests in all outstanding LOCs held by the Bank from which such assignee acquired its interest hereunder shall be proportionately reallocated between such assignee and such assignor Bank. Notwithstanding any other provision hereof, each Bank hereby agrees that its obligation to participate in each LOC, its obligation to make the payments specified in Section 2.02(f) and the right of the Issuing Bank to receive such payments in the manner specified therein are each absolute, irrevocable and unconditional and shall not be affected by any event, condition or circumstance whatever. The failure of any Bank to make any such payment shall not relieve any other Bank of its funding obligation hereunder on the date due, but no Bank shall be responsible for the failure of any other Bank to meet its funding obligations hereunder.

(f)         Payment by Banks on Account of Unreimbursed Draws .  If the Issuing Bank makes a payment under an LOC and is not reimbursed in full therefor in accordance with

 

10

Section 2.03 , the Issuing Bank may notify the Administrative Agent thereof (which notice may be by telephone), and the Administrative Agent shall forthwith notify each Bank thereof (which notice may be by telephone promptly confirmed in writing). No later than the Administrative Agent’s close of business on the date such notice is given (if notice is given by 2:00 P.M. on a Business Day) or 10:00 A.M. on the following Business Day (if notice is given after 2:00 P.M. on a Business Day), each Bank will pay to the Administrative Agent, for the account of the Issuing Bank, in immediately available funds, an amount equal to such Bank’s Pro Rata Share of the unreimbursed portion of such payment by the Issuing Bank. Amounts received by the Administrative Agent for the account of the Issuing Bank shall be forthwith transferred, in immediately available funds, to the Issuing Bank. To the extent that any Bank fails to make such payment to the Administrative Agent for the account of the Issuing Bank on such date, such Bank shall pay such amount on demand, together with interest, for the Issuing Bank’s own account, from the date such payment is due from such Bank to the Issuing Bank to the date of payment to the Issuing Bank (before and after judgment) at a rate per annum for each day (i) from the date such payment is due from such Bank to the Issuing Bank to the third Business Day thereafter equal to the Federal Funds Rate and (ii) thereafter equal to the Base Rate.

(g)          Advances .  The term “ Advance ” is used in this Agreement in accordance with the meanings set forth in this Section 2.02(g) . The making of any payment by the Issuing Bank under an LOC is sometimes referred to herein as the making of an Advance by the Issuing Bank in the amount of such payment. The making of any payment by a Bank for the account of the Issuing Bank under Section 2.02(f) on account of an unreimbursed drawing on an LOC is sometimes referred to as the making of an Advance by such Bank. The making of an Advance by a Bank with respect to an unreimbursed drawing on an LOC shall reduce, by a like amount, the outstanding Advance of the Issuing Bank with respect to such unreimbursed drawing.

(h)          LOC Reports .  The Issuing Bank will furnish to the Administrative Agent prompt written notice of each issuance or extension, or increase in the amount, of an LOC (including the Available Amount and expiration date thereof), amendment to an LOC, cancellation of an LOC and payment on an LOC. The Administrative Agent will furnish to each Bank prior to the fifteenth Business Day of each calendar quarter a written report summarizing issuance, extension and expiration dates of LOCs issued or extended during the preceding calendar quarter and payments and reductions in Available Amounts during such calendar quarter on all LOCs.

2.03       Reimbursement Obligations .

(a)         Pulte agrees to reimburse the Issuing Bank (by making payment to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.07 ) in the amount of each Advance made by the Issuing Bank, such reimbursement to be made on the date such Advance is made by the Issuing Bank (but not earlier than one Business Day after notice of the drawing giving rise to such Advance is given to Pulte). Such reimbursement obligation shall be payable without further notice, protest or demand, all of which are hereby waived, and an action therefor shall immediately accrue. To the extent such payment by Pulte is not timely made, such unpaid reimbursement obligation shall be treated as a matured loan extended to Pulte under this Agreement in respect of which interest shall accrue and be payable. Pulte agrees to pay to the Administrative Agent, for the respective accounts of the Issuing Bank and the Banks that have funded their respective shares of such amount remaining unpaid by Pulte, on demand,

 

11

interest at a rate per annum equal to the Base Rate plus 2% for each day from the date on which Pulte is to reimburse the Issuing Bank to the date such obligation is paid in full. For the avoidance of doubt, the payment by Pulte of interest pursuant to this Section 2.03(a) shall not affect the calculation of fees under the Loan Documents.

(b)         The obligation of Pulte to reimburse the Issuing Bank for any Advance made by the Issuing Bank, and the obligation of each Bank under Section 2.02(f) with respect thereto, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, the applicable LOC Application and any other applicable agreement or instrument under all circumstances, including the following circumstances:

(i)        any lack of validity or enforceability of any Loan Document, any LOC Application, any LOC or any other agreement or instrument relating thereto (all of the foregoing, collectively, the “ LOC Related Documents ”);

(ii)       any change in the time, manner or place of payment of, or in any other term of, any obligation of Pulte or any other Person in respect of any LOC Related Document or any other amendment or waiver of or any consent to departure from any LOC Related Document;

(iii)       the existence of any claim, set-off, defense or other right that Pulte or any other Person may have at any time against any beneficiary or any transferee of an LOC (or any Person for which any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with the transactions contemplated by the LOC Related Documents or any unrelated transaction;

(iv)      any statement or any other document presented under an LOC proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v)       payment by the Issuing Bank under an LOC against presentation of a draft or certificate that does not strictly comply with the terms of such LOC; provided that such payment is not the result of the gross negligence or willful misconduct of the Issuing Bank;

(vi)      any exchange, release or non-perfection of any collateral granted to secure any obligation of Pulte or any other Person in connection with any Loan Document; or

(vii)      any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Pulte.

(c)         If any amount received by the Issuing Bank on account of any Advance shall be avoided, rescinded or otherwise returned or paid over by the Issuing Bank for any reason at any time, whether before or after the termination of this Agreement (or the Issuing Bank believes in good faith that such avoidance, rescission, return or payment is required, whether or not such matter has been adjudicated), each Bank will (except to the extent a corresponding amount received by such Bank on account of its Advance relating to the same payment on an LOC has

 

12

been avoided, rescinded or otherwise returned or paid over by such Bank), promptly upon notice from the Administrative Agent or the Issuing Bank, pay over to the Administrative Agent for the account of the Issuing Bank its Pro Rata Share of such amount, together with its Pro Rata Share of any interest or penalties payable with respect thereto.

2.04       Termination or Reduction of the Commitments .  Subject to the Pricing Agreement, Pulte may at any time, upon at least five Business Days’ notice to the Administrative Agent, terminate the Commitments in whole or reduce in part the unused portion of the Commitment Amounts; provided that each partial reduction (i) shall be in an aggregate amount of $10,000,000 or a higher integral multiple of $1,000,000 and (ii) shall be made ratably among the Banks in accordance with their Commitment Amounts.

2.05       Fees .  Pulte agrees to pay the fees set forth in the Pricing Agreement.

2.06       Increased Costs, Etc.

(a)        If, due to either (i) the introduction of or any change in or in the interpretation of, in each case after the date hereof, any law or regulation or (ii) compliance with any guideline or request issued 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 the cost to any Bank of agreeing to issue or of issuing or maintaining or participating in LOCs or the making of Advances (excluding, for purposes of this Section 2.06 , any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.08 shall govern) and (y) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Bank is organized or has its Lending Office or any political subdivision thereof), then Pulte agrees to pay, from time to time, within ten days after demand by such Bank (with a copy of such demand to the Administrative Agent), which demand shall include a statement of the basis for such demand and a calculation in reasonable detail of the amount demanded, to the Administrative Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost. A certificate as to the amount of such increased cost, submitted to Pulte by such Bank, shall be conclusive and binding for all purposes, absent manifest error.

(b)        If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation, in each case after the date hereof, or (ii) compliance with any guideline or request issued 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 the amount of capital required or expected to be maintained by any Bank or any corporation controlling such Bank as a result of or based upon the existence of such Bank’s commitment to extend credit hereunder and other commitments of such type, then, within ten days after demand by such Bank or such corporation (with a copy of such demand to the Administrative Agent), which demand shall include a statement of the basis for such demand and a calculation in reasonable detail of the amount demanded, Pulte agrees to pay to the Administrative Agent for the account of such Bank, from time to time as specified by such Bank, additional amounts sufficient to compensate such Bank in the light of such circumstances, to the extent that such Bank reasonably determines such increase in capital to be allocable to the existence of such Bank’s commitment to issue or participate in LOCs hereunder or to the issuance or maintenance of or participation in any LOC.

 

13

A certificate as to such amounts submitted to Pulte by such Bank shall be conclusive and binding for all purposes, absent manifest error.

(c)        Each Bank shall promptly notify Pulte and the Administrative Agent of any event of which it has actual knowledge that will result in, and will use reasonable commercial efforts available to it (and not, in such Bank’s good faith judgment, otherwise disadvantageous to such Bank) to mitigate or avoid, any obligation of Pulte to pay any amount pursuant to Section 2.06(a) or 2.06(b) above or pursuant to Section 2.08 (and, if any Bank has given notice of any such event and thereafter such event ceases to exist, such Bank shall promptly so notify Pulte and the Administrative Agent). Without limiting the foregoing, each Bank will designate a different Lending Office if such designation will avoid (or reduce the cost to Pulte of) any event described in the preceding sentence and such designation will not, in such Bank’s good faith judgment, be otherwise disadvantageous to such Bank.

(d)        Notwithstanding the provisions of Section 2.06(a) , 2.06(b) or 2.08 (and without limiting Section 2.06(c) above), if any Bank fails to notify Pulte of any event or circumstance that will entitle such Bank to compensation pursuant to Section 2.06(a) , 2.06(b) or 2.08 within 90 days after such Bank obtains actual knowledge of such event or circumstance, then such Bank shall not be entitled to compensation from Pulte for any amount arising prior to the date that is 90 days before the date on which such Bank notifies Pulte of such event or circumstance.

2.07       Payments and Computations .

(a)        Pulte shall make each payment hereunder irrespective of any right of counterclaim or set-off not later than 1:00 P.M. on the day when due, in U.S. dollars, to the Administrative Agent at such account as the Administrative Agent shall reasonably direct in immediately available funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day. The Administrative Agent will promptly thereafter distribute to each Bank its portion of such payment in accordance with the terms hereof. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register, the Administrative Agent shall make all payments hereunder in respect of the interest assigned thereby to the Bank 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 on Advances when the Base Rate is determined by reference to DB’s prime rate shall be made by the Administrative Agent on the basis of a year of 365 or, if applicable, 366 days; all other computations of interest shall be made by the Administrative Agent on the basis of a year of 360 days. All such computations shall be made for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c)        Whenever any payment hereunder 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 be included in the computation of any payment of interest or fees.

 

14

2.08       Taxes .

(a)        All payments by Pulte hereunder shall be made, in accordance with Section 2.07 , free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank and the Administrative Agent, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Bank or the Administrative Agent, as the case may be, is organized or any political subdivision thereof and, in the case of each Bank, taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Bank’s Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder, “ Taxes ”). If Pulte shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Bank or the Administrative Agent, (i) the sum payable by Pulte shall be increased as may be necessary so that after Pulte and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.08) such Bank or the Administrative Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) Pulte shall make all such deductions and (iii) Pulte shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b)        In addition, Pulte shall pay any present or future stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or any other Loan Document (any of the foregoing, “ Other Taxes ”).

(c)        Pulte shall indemnify each Bank and the Administrative Agent for and hold each of them harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.08 , imposed on or paid by such Bank or the Administrative Agent (as the case may be) and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. Any such indemnification payment shall be made within 30 days from the date such Bank or the Administrative Agent (as the case may be) makes written demand therefor.

(d)        Within 30 days after the date of any payment of Taxes, Pulte shall furnish to the Administrative Agent, at its address referred to in Section 8.02 , the original or a certified copy of a receipt evidencing such payment. In the case of any payment hereunder by or on behalf of Pulte through an account or branch outside the United States or by or on behalf of Pulte by a payor that is not a United States person, if Pulte determines that no Taxes are payable in respect thereof, Pulte shall furnish, or shall cause such payor to furnish, to the Administrative Agent, at such address, an opinion of counsel reasonably acceptable to the Administrative Agent stating that such payment is exempt from Taxes. For purposes of this Section 2.08(d) and Section 2.08(e) , the terms “United States” and “United States person” shall have the meanings specified in Sections 7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.

 

15

(e)        Each Bank organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each initial Bank, and on the date of the Assignment and Acceptance pursuant to which it becomes a Bank in the case of each other Bank, and from time to time thereafter as requested in writing by Pulte (but only so long as such Bank remains lawfully able to do so), provide each of the Administrative Agent and Pulte with two original Internal Revenue Service forms W-8BEN or W-8ECI or (in the case of a Bank that has certified in writing to the Administrative Agent that it is not a “bank” as defined in Section 881(c)(3)(A) of the Internal Revenue Code) form W-8 (and, if such Bank delivers a form W-8, a certificate representing that such Bank is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of Pulte and is not a controlled foreign corporation related to Pulte (within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Bank is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or, in the case of a Bank providing a form W-8, certifying that such Bank is a foreign corporation, partnership, estate or trust. If the forms provided by a Bank at the time such Bank first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Bank provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered excluded from Taxes only for periods governed by such forms; provided that if, at the effective date of the Assignment and Acceptance pursuant to which a Bank becomes a party to this Agreement, the Bank assignor was entitled to payments under Section 2.08(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Bank assignee on such date. If any form or document referred to in this Section 2.08(e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8BEN, W-8ECI or W-8 (and the related certificate described above), that the Bank reasonably considers to be confidential, the Bank shall give notice thereof to Pulte and shall not be obligated to include in such form or document such confidential information.

(f)        For any period with respect to which a Bank which may lawfully do so has failed to provide Pulte with the appropriate form described in Section 2.08(e) above ( other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under Section 2.08(e) above), such Bank shall not be entitled to indemnification under Sections 2.08(a) or 2.08(c) with respect to Taxes imposed by the United States by reason of such failure; provided that should a Bank become subject to Taxes because of its failure to deliver a form required hereunder, Pulte shall take such steps as such Bank shall reasonably request to assist such Bank to recover such Taxes.

(g)        Each Bank represents and warrants to Pulte that, as of the date such Bank becomes a party to this Agreement, such Bank is entitled to receive payments hereunder from Pulte without deduction or withholding for or on account of any Taxes.

 

16

(h)        If the Administrative Agent or a Bank determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by Pulte or with respect to which Pulte has paid additional amounts pursuant to this Section 2.08 , it shall pay over such refund to Pulte (but only to the extent of indemnity payments made, or additional amounts paid, by Pulte under this Section 2.08 with respect to the Taxes and Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Bank and without interest (other than any interest paid by the relevant governmental authority with respect to such refund); provided that Pulte, upon the request of the Administrative Agent or such Bank, agrees to repay the amount paid over to Pulte (plus any penalties, interest or other charges imposed by the relevant governmental authority) to the Administrative Agent or such Bank in the event the Administrative Agent or such Bank is required to repay such refund to such governmental authority. This Section 2.08(h) shall not be construed to require the Administrative Agent or any Bank to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Pulte or any other Person.

2.09       Sharing of Payments, Etc.   If any Bank shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 8.07) (a) on account of obligations due and payable to such Bank hereunder at such time in excess of its ratable share (according to the proportion of (i) the amount of such obligations due and payable to such Bank at such time to (ii) the aggregate amount of the obligations due and payable to all Banks hereunder at such time) of payments on account of the obligations due and payable to all Banks hereunder at such time obtained by all the Banks at such time or (b) on account of obligations owing (but not due and payable) to such Bank hereunder at such time in excess of its ratable share (according to the proportion of (i) the amount of such obligations owing to such Bank at such time to (ii) the aggregate amount of the obligations owing (but not due and payable) to all Banks hereunder at such time) of payments on account of the obligations owing (but not due and payable) to all Banks hereunder at such time obtained by all of the Banks at such time, such Bank shall forthwith purchase from the other Banks such interests or participating interests in the obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them; provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Bank, such purchase from each other Bank shall be rescinded and such other Bank shall repay to the purchasing Bank the purchase price to the extent of such Bank’s ratable share (according to the proportion of (i) the purchase price paid to such Bank to (ii) the aggregate purchase price paid to all Banks) of such recovery together with an amount equal to such Bank’s ratable share (according to the proportion of (i) the amount of such other Bank’s required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. Pulte agrees that