Document:

exhibit102citi.htm

Exhibit 10.2

 

 

Continuing Agreement for Standby Letters of Credit

(this “Agreement")

 

In consideration of the issuance by Citibank, N.A. ("Citibank"), in its discretion, from time to time, of one or more irrevocable standby or direct pay letters of credit (each a "Credit") substantially in accordance with the terms and conditions provided by the undersigned (the "Applicant") on the application corresponding hereto (the "Application") or as otherwise requested by Applicant in writing, and as the same may be amended from time to time, Applicant unconditionally agrees with Citibank as follows:

 

	
1.

	
Reimbursement.

Applicant will reimburse Citibank, on demand, for the amount of each payment Citibank makes against a corresponding demand under the Credit. Reimbursement shall be due, for demands made by 12:00 Noon Eastern time, on the day on which Citibank makes such payment under the Credit, and, for demands made after 12:00 Noon Eastern time, on the business day immediately following such demand.

 

	
2.

	
Commissions, Fees, Charges and Expenses.

Applicant will pay Citibank (a) commissions and fees on the Credit at such rates and times as Applicant and Citibank may agree in writing or, in the absence of such an agreement, in accordance with Citibank's standard commissions and fees then in effect, to cover the full tenor of the Credit without refund for any unused portion of such tenor, and (b) on demand, all expenses which Citibank may pay or incur in connection with the Credit.

 

	
3.

	
Payments; Interest on Past Due Amounts; Computations.

All amounts due from Applicant shall be paid to Citibank at 399 Park Avenue, New York, New York 10043 (or such other address notified to Applicant in writing), without defense, set-off, cross-claim or counterclaim of any kind, in U.S. Dollars and in same day funds, provided that if the amount due is based on Citibank's payment in a currency other than U.S. Dollars, Applicant will pay the equivalent of such amount in U.S. Dollars computed at Citibank's selling rate for cable transfers to the place where, and in the currency in which, Citibank paid such amount, or, at Citibank's option, Applicant will pay in such other currency, place, form and manner as Citibank finds reasonably acceptable. Applicant's obligation to make payments in U.S. Dollars shall not be satisfied by any tender, or any recovery by Citibank pursuant to any judgment, which is expressed in or converted into any currency other than U.S. Dollars, except to the extent that such tender or recovery results in the actual receipt by Citibank in New York of the full amount of U.S. Dollars payable under this Agreement. Any amount not paid when due shall bear interest until paid in full at a daily fluctuating interest rate per annum equal to two percent per annum above the rate of interest announced publicly from time to time by Citibank in New York as Citibank's Base Rate. Applicant authorizes Citibank to charge any account of Applicant for any amount when due. Unless otherwise agreed in writing as to the Credit and subject to any other provision of this Agreement, all computations of commissions, fees and interest shall be based on a 360-day year and actual days elapsed.

 

	
4.

	
Additional Costs.

If Citibank determines that the introduction or effectiveness of, or any change in, any law or regulation or compliance with any guideline or request from any central bank or other government or quasi-government authority (whether or not having the force of law) affects or would affect the amount of capital or reserves required or expected to be maintained by Citibank or any corporation controlling Citibank and Citibank determines that the amount of such capital or reserve is increased by or based upon the existence of the Credit, then Applicant shall pay Citibank on demand from time to time additional amounts sufficient in Citibank's judgment to compensate for the increase. Citibank's certificate as to amounts due shall be conclusive, in the absence of manifest error.

 

	
5.

	
Taxes.

All payments made to Citibank shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges, or with holdings, and all related liabilities, excluding income taxes imposed by the jurisdiction of Citibank's head office or the office issuing the Credit (all non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities are called "Taxes"). If any Taxes shall be required by law to be withheld or deducted from or in respect of any sum payable under this Agreement, (a) the sum payable under this Agreement shall be increased as may be necessary so that after making all required withholdings or deductions Citibank receives an amount equal to the sum Citibank would have received had no such with holdings or deductions been required, (b) Applicant shall be responsible for payment of the amount to the relevant taxing authority, (c) Applicant shall indemnify Citibank on demand for any Taxes paid by Citibank and any liability (including penalties, interest and expenses) arising from such payment or in respect of such Taxes, whether or not such Taxes were correctly or legally asserted, and (d) Applicant shall provide Citibank with the original or a certified copy of the receipt evidencing each Tax payment within 30 days of the tax payment date.

 

	
6.

	
Indemnification.

Applicant will indemnify and hold Citibank and its officers, directors, affiliates, employees, attorneys and agents (each, an "Indemnified Party") harmless from and against any and all claims, liabilities, losses, damages, costs and expenses, including reasonable attorneys' fees and disbursements, other dispute resolution expenses (including fees and expenses in preparation for a defense of any investigation, litigation or proceeding) and costs of collection that arise out of or in connection with: (a) the issuance of the Credit, (b) any payment or action taken or omitted to be taken in connection with the Credit (including any action or proceeding seeking (i) to restrain any drawing under the Credit, (ii) to compel or restrain the payment of any amount or the taking of any other action under the Credit, (iii) to compel or restrain the taking of any action under this Agreement, or (iv) to obtain similar relief (including by way of interpleader, declaratory judgment, attachment or otherwise), regardless of who the prevailing party is in any such action or proceeding), (c) the enforcement of this Agreement or (d) any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government authority or any other cause beyond Citibank's control, except in each of (a) through (d) above, to the extent such claim, liability, loss, damage, cost or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. Applicant will pay on demand from time to time all amounts owing under this section.

 

	
7.

	
Obligations Absolute.

Applicant's obligations under this Agreement (the "Obligations") shall be unqualified, irrevocable and payable in the manner and method provided for under this Agreement irrespective of: (i) any lack of validity or enforceability of this Agreement, the Credit, or any other agreement, application, amendment, guaranty, document, or instrument relating thereto, (ii) any change in the time, manner or place of payment of or in any other term of all or any of the Obligations of Applicant or the obligations of any person or entity that guarantees the Obligations, (iii) the existence of any claim, set-off, defense or other right that Applicant may have at any time against any beneficiary or any transferee of the Credit (or any person or entity for whom any such beneficiary or transferee may be acting), Citibank or any other person or entity, whether in connection with any transaction contemplated by this Agreement or any unrelated transaction, or any claim by Citibank or Applicant against the beneficiary of the Credit for breach of warranty, (iv) any exchange, release or non-perfection of any collateral or release or amendment or waiver of or consent to departure from the terms of any guarantee or security agreement, for all or any of the Obligations, (v) any draft, or other document presented under the Credit being forged, fraudulent or invalid or any statement therein being untrue or inaccurate, (vi) any failure by Citibank to issue the Credit (or any amendment thereto) in the form requested by or agreed with Applicant, unless Citibank receives written notice from Applicant of such failure within three business days after Applicant shall have received a copy of the Credit (or such amendment) and such failure is material and consequential, (vii) any previous Obligation, whether or not paid, arising from Citibank's payment against any draft, certificate or other document which appeared on its face to be signed or presented by the proper party but was in fact signed or presented by a party posing as the proper party, (viii) payment by Citibank under the Credit against presentation of a draft or other document that does not comply with the terms and conditions of the Credit unless Citibank receives written notice from Applicant of such discrepancy within three business days following Applicant's receipt of such draft or other document, and (ix) any action or inaction taken or suffered by Citibank or any of its affiliates or correspondents in connection with the Credit or any relevant draft, certificate or other document, if taken in Good Faith (as defined in Article 5 of the New York Uniform Commercial Code).

 

	
8.

	
Limitations of Liability.

Without limiting any other provision of this Agreement, Citibank: (i) may rely upon any oral, telephonic, telegraphic, facsimile, electronic, written or other communication believed in Good Faith to have been authorized by Applicant, whether or not given or signed by an authorized person, (ii) shall not be responsible for errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document in connection with the Credit, whether transmitted by courier, mail, telex, any other telecommunication, or otherwise, or for errors in interpretation of technical terms or in translation (and Citibank and its correspondents may transmit Credit terms without translating them), (iii) shall not be responsible for the identity or authority of any signer or the form, accuracy, genuineness, falsification or legal effect of any draft, certificate or other document presented under the Credit if such draft, certificate or other document on its face appears to comply with the terms and conditions of the Credit, (iv) shall not be responsible for any acts or omissions by or the solvency of the beneficiary of the Credit, (v) may accept or pay as complying with the terms and conditions of the Credit any draft, certificate or other document appearing on its face (A) substantially to comply with the terms and conditions of the Credit, (6) to be signed or presented by or issued to any successor of the beneficiary or any other person in whose name the Credit requires or authorizes that any draft, certificate or other document be signed, presented or issued, including any administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator, receiver, or successor by merger or consolidation, or any other person or entity purporting to act as the representative of or in place of any of the foregoing, or (C) to have been signed, presented or issued after a change of name of the beneficiary, (vi) may disregard (A) any requirement stated in the Credit that any draft, certificate or other document be presented to it at a particular hour or place and (B) any discrepancies that do not reduce the value of the beneficiary's performance to Applicant in any transaction underlying the Credit, (vii) may accept as a "draft" any written or electronic demand or other request for payment under the Credit, even if such demand or other request is not in the form of a negotiable instrument, (viii) shall not be responsible for the effectiveness or suitability of the Credit for Applicant's purpose, or be regarded as the drafter of the Credit regardless of any assistance that Citibank may, in its discretion, provide to Applicant in preparing the text of the Credit or amendments thereto, (ix) shall not be liable to Applicant for any consequential or special damages, or for any damages resulting from any change in the value of any foreign currency, services or goods or other property covered by the Credit, (x) may assert or waive application of any UCP or ISP (in each case, as defined below) article primarily benefiting bank issuers, (xi) may honor a previously dishonored presentation under the Credit, whether pursuant to court order, to settle or compromise any claim that it wrongfully dishonored or otherwise and shall be entitled to reimbursement to the same extent as if it had initially honored plus reimbursement of any interest paid by it and (xii) is authorized (but shall not be required) to disregard any non-documentary conditions stated in the Credit. None of the circumstances described in this section shall place Citibank or any of its affiliates or correspondents under any resulting liability to Applicant.

 

	
9.

	
Independence.

Applicant acknowledges that the rights and obligations of Citibank under the Credit are independent of the existence, performance or nonperformance of any contract or arrangement underlying the Credit, including contracts or arrangements between Citibank and Applicant and between Applicant and the beneficiary of the Credit. Citibank shall have no duty to notify Applicant of its receipt of a demand presented under the Credit or of its decision to honor such demand. Citibank may, without incurring any liability to Applicant or impairing its entitlement to reimbursement under this Agreement, honor the Credit despite notice from Applicant of, and without any duty to inquire into, any defense to payment or any adverse claims or other rights against the beneficiary of the Credit or any other person. Citibank shall have no duty to request or require the presentation of any document, including any default certificate, not required under the terms and conditions of the Credit. Citibank shall have no duty to seek any waiver of discrepancies from Applicant, nor any duty to grant any waiver of discrepancies that Applicant approves or requests. Citibank shall have no duty to extend the expiration date or term of the Credit or to issue a replacement letter of credit on or before the expiration date of the Credit or the end of such term.

 

	
10.

	
Transfers.

If, at Applicant's request, the Credit is issued in transferable form, Citibank shall have no duty to determine the proper identity of anyone appearing in any transfer request, draft, or other document as transferor or transferee, nor shall Citibank be responsible for the validity or correctness of any transfer.

 

	
11.

	
Extensions and Modifications of the Credit.

This Agreement shall be binding upon Applicant with respect to any extension or modification of the Credit made at Applicant's request or with Applicant's consent. Applicant's Obligations shall not be reduced or impaired in any way by any agreement by Citibank and the beneficiary of the Credit extending Citibank's time to honor or to give notice of discrepancies.

 

	
12.

	
Collateral.

If at any time and from time to time Citibank, in its discretion, requires collateral (or additional collateral), Applicant will on demand assign and deliver to Citibank as security for the Obligations, cash collateral of a value satisfactory to Citibank or make such cash payment as Citibank may require.

 

	
13.

	
Covenants of Applicant.

Applicant will (a) comply with all U.S. and non-U.S. laws, regulations and rules (including foreign exchange control regulations) now or later applicable to the Credit, transactions related to the Credit, or Applicant's execution, delivery and performance under this Agreement, and deliver to Citibank, upon reasonable request, satisfactory evidence of such compliance, (b) deliver to Citibank, upon reasonable request, independently audited financial statements and other information concerning Applicant's financial condition and business operations, (c) permit Citibank to inspect its books and records on reasonable notice and (d) inform Citibank immediately upon Applicant becoming aware of the occurrence of an Event of Default (as defined below).

 

	
14.

	
Representations and Warranties of Applicant.

Applicant represents and warrants that (a) it is validly existing and in good standing under the laws of the jurisdiction in which it is organized, (b) its execution, delivery and performance of this Agreement are within its powers, have been duly authorized, do not contravene any contract binding on or affecting it or any of its properties, do not violate any applicable law or regulation, and do not require any notice, filing or other action to or by any governmental authority, (c) this Agreement is valid and binding upon Applicant, (d) the financial statements most recently received by Citibank from Applicant fairly present its financial condition in accordance with generally accepted accounting principles, and there has been no material adverse change in the business, financial condition or operations of the Applicant and its subsidiaries, taken as a whole, since the date of such financial statements; and (e) there is no pending or threatened action which may materially adversely affect its financial condition or business or which purports to affect the validity or enforceability of this Agreement, the Credit or any transaction related to the Credit. Each request by Applicant for a Credit or any amendment thereto shall constitute its representation and warranty that the foregoing statements are true and correct as if made on the date of such request.

 

	
15.

	
Default.

Each of the following shall be an "Event of Default" under this Agreement: (a) Applicant's failure to pay when due any obligation to Citibank or its subsidiaries or affiliates (under this Agreement or otherwise), (b) Applicant's failure to perform or observe any other term or covenant of this Agreement, (c) Applicant's breach of any representation or warranty made in this Agreement or any document delivered by it under this Agreement, (d) Applicant's dissolution or termination, (e) institution by or against Applicant of any proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the appointment of a receiver, trustee, or other similar official for Applicant or for any substantial part of its property and such proceedings are not dismissed within 60 days, (f) any actual or threatened seizure, vesting or intervention by or under authority of a government by which Applicant's management is displaced or its authority or control of its business is curtailed, (g) attachment or restraint of any funds or other property which may be in, or come into, the possession or control of Citibank or of any third party acting on Citibank's behalf, for the account or benefit of Applicant, or the issuance of any order of any court or other legal process against the same, or (h) the occurrence of any of the above events with respect to any person or entity which has heretofore or hereafter guaranteed or provided any collateral security for any of the Obligations.

 

	
16.

	
Remedies.

If any Event of Default shall have occurred and be continuing, the amount of the Credit as well as any or all Obligations, whether or not matured or contingent, shall, at Citibank's option, become due and payable immediately without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Applicant; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to Applicant under applicable bankruptcy law, the amount of the Credit and all Obligations shall automatically become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Applicant.

 

	
17.

	
Set-off.

If any Event of Default shall occur and be continuing, Citibank may set off and apply any and all deposits pledged by Applicant to Citibank as security for the Credits (the “Collateral”) against any and all of the Obligations, irrespective of whether or not Citibank shall have made any demand under this Agreement and although such Collateral or Obligations may be unmatured or contingent.

 

	
18.

	
Waiver of Immunity.

Applicant acknowledges that this Agreement is, and the Credit will be, entered into for commercial purposes and, to the extent that Applicant now or later acquires any immunity from jurisdiction of any court or from any legal process with respect to itself or its property, Applicant now irrevocably waives its immunity with respect to the Obligations.

 

	
19.

	
Notices; Co-Applicants; Interpretation; Severability.

Notices shall be effective, if to Applicant, when sent to its address indicated below the signature line and, if to Citibank, when received at 399 Park Avenue, New York, New York 10043, with a copy to Citicorp North America, Inc., 3800 Citibank Center, Tampa FL 33610, or as to either party, such other address as either may notify the other in writing. Notices to the beneficiary of the Credit shall be effective when sent to the address maintained in Citibank's letter of credit records for such beneficiary, and Applicant agrees to hold Citibank harmless with respect to any claim by the beneficiary of non-receipt of such a notice. If this Agreement is signed by two or more entities, (i) each such entity shall be deemed an "Applicant" hereunder, (ii) each Applicant shall be jointly and severally liable for all Obligations and waives any defense that might otherwise be available to a guarantor of such Obligations, and (iii) notices from Citibank in connection with this Agreement or the Credit to any Applicant and notices from, or the consent of, any Applicant in connection with this Agreement or the Credit shall be sufficient to bind all Applicants. Headings are included only for convenience. The term "including" means "including without limitation." If any provision of this Agreement is held illegal or unenforceable, the validity of the remaining provisions shall not be affected.

 

	
20.

	
Successors and Assigns.

This Agreement shall be binding upon Applicant and its successors and permitted assigns, and shall inure to the benefit of and be enforceable by Citibank, its successors and assigns. Applicant shall not voluntarily transfer or otherwise assign any of its obligations under this Agreement. Citibank may transfer or otherwise assign its rights and obligations under this Agreement, in whole or in part, and shall be forever relieved from any liability with respect to the portion of Citibank's rights or obligations transferred or assigned. Applicant acknowledges that information pertaining to Applicant as it relates to this Agreement or the Credit may be disclosed to (actual or potential) transferees, assignees, affiliates, contractors or, if required by law, court order or mandate, government authorities. This Agreement shall not be construed to confer any right or benefit upon any person or entity other than Applicant and Citibank and their respective successors and permitted assigns.

 

	
21.

	
Modification; No Waiver.

None of the terms of this Agreement may be waived or amended except in a writing signed by the party against whose interest the term is waived or amended. Forbearance, failure or delay by Citibank in the exercise of a remedy shall not constitute a waiver, nor shall any exercise or partial exercise of any remedy preclude any further exercise of that or any other remedy. Any waiver or consent by Citibank shall be effective only in the specific instance and for the specific purpose for which it is given and shall not be deemed, regardless of frequency given, to be a further or continuing waiver or consent.

 

	
22.

	
Multiple Role Disclosure.

Citibank and its affiliates offer a wide range of financial services, including back-office letter of credit processing services on behalf of financial institutions and letter of credit beneficiaries. Such services are provided internationally to a wide range of customers, some of whom may be Applicant's counterparties or competitors. Applicant acknowledges and accepts that Citibank may perform more than one role in relation to a particular Credit, including to advise the Credit notwithstanding the selection by Applicant of an additional or alternative advising bank.

 

	
23.

	
Entire Agreement; Remedies Cumulative; Delivery by Facsimile.

This Agreement constitutes the entire agreement between the parties concerning Citibank's issuance of the Credit for Applicant's account and supersedes all prior or simultaneous agreements, written or oral. All rights and remedies of Citibank under this Agreement and other documents delivered in connection with this Agreement are cumulative and in addition to any other right or remedy under this Agreement, the Credit or applicable law. Applicant may submit an executed Application for the Credit in original form or it may do so by fax or via a Citibank electronic banking platform such as "CitiDirect", and Applicant will be bound by any instructions so given. Delivery of a signed signature page to this Agreement by facsimile transmission shall be effective as, and shall constitute physical delivery of, a signed original counterpart of this Agreement.

 

	
24.

	
Termination; Surviving Provisions.

This is a continuing agreement and shall remain in effect until Citibank's receipt of written notice of termination from Applicant. Termination shall not release Applicant from any liability for Obligations existing on, or resulting from, or incidental to a Credit issued on or before, or issued pursuant to any Citibank commitment existing on, the date on which Citibank receives such notice. Restrictive provisions in this Agreement, such as indemnity, tax, immunity and jurisdiction provisions shall survive termination of this Agreement. If the Credit is issued in favor of any bank, Citibank branch or other entity in support of an undertaking issued by such bank, branch or entity on behalf of Applicant or Citibank, Applicant shall remain liable under this Agreement (even after expiry of the Credit) for amounts paid and expenses incurred by Citibank with respect to the Credit or such undertaking until such time as Citibank or such other bank, branch or entity shall have no further liability, under applicable law, in connection with such undertaking.

 

	
25.

	
Governing Law; Governing Rules.

(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF APPLICANT AND CITIBANK HEREUNDER SHALL BE GOVERNED BY AND SUBJECT TO THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE U.S. FEDERAL LAWS.

(b) Applicant agrees that Citibank may issue any Credit subject to the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce ("ICC”) Publication Nos. 500 or 600 (the "VCP") or the International Standby Practices, ICC Publication No. 590 (the "ISP") or, at Citibank's option, such later revision thereof or other ICC rules in effect at the time of issuance of the Credit. Citibank's privileges, rights and remedies under ICC rules shall be in addition to, and not in limitation of, its privileges, rights and remedies expressly provided for herein. The UCP and the ISP (or such later revision of either), shall serve, in the absence of proof to the contrary, as evidence of general banking usage with respect to the subject matter thereof. (c) Applicant agrees that for matters not addressed by the UCP or the ISP, each Credit shall be subject to and governed by the laws of the State of New York and applicable U.S. Federal

 

  

 

laws. If, at Applicant's request, a Credit expressly chooses a state or country law other than New York State law, or is silent with respect to UCP, ISP or governing law, Citibank shall not be liable for any payment, cost, expense or loss resulting from any action or inaction taken by Citibank if such action or inaction is or would be justified under UCP, ISP, New York law, applicable U.S. Federal law or the law governing the Credit.

 

	
26.

	
Jurisdiction; Service of Process.

Applicant now irrevocably submits to the non-exclusive jurisdiction of any state or federal court sitting in New York, New York, for itself, and in respect of any of its property and, if a law other than New York State law has been chosen to govern the Credit, Applicant also now irrevocably submits to the non-exclusive jurisdiction of any court sitting in such jurisdiction. Applicant agrees not to bring any action or proceeding against Citibank in any jurisdiction not described in the immediately preceding sentence. Applicant irrevocably waives any objection to venue or any claim of inconvenience. Applicant agrees that any service of process or other notice of legal process may be served upon it by mail or hand delivery if sent to:

 

	
at:

	  

 

 

which Applicant now designates its authorized agent for service of process in relation to the Credit and this Agreement. (If no authorized agent is designated in the space provided above, Applicant agrees that process shall be deemed served if sent to its address given for notices under this Agreement.) Applicant agrees that nothing in this Agreement shall affect Citibank's right to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Applicant in any other jurisdiction. Applicant agrees that final judgment against it in any action or proceeding shall be enforceable in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified copy of which shall be conclusive evidence of the judgment.

 

Global Transaction Services

 

www.transactionservices.citigroup.com

 

©2007 Citibank, N.A. All rights reserved. Citi and Arc Design and CitiDirect are service marks of Citigroup Inc., used and registered throughout the world.

	
27.

	
JURY TRIAL WAIVER. APPLICANT AND CITIBANK EACH IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM, COUNTERCLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE CREDIT, OR ANY DEALINGS WITH ONE ANOTHER RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

Applicant:

 

	
Company Name

	
By:  Authorized Signer

	
Print Name

	
Title

	
Address

	  
	
Date

 

Co-Applicant (if any):

 

	
Company Name

	
By:  Authorized Signer

	
Print Name

	
Title

	
Address

	  
	
Date

(For Citibank Use Only)

	
Approvals to Issue

	
Relationship Manager (Signature & Stamp)

	
Other required Signature & Stampexhibit103region.htm

EXHIBIT 10.3

FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT (“this Amendment”) dated as of August 16, 2010 (the “Effective Date”) is entered into by M/I HOMES, INC., an Ohio corporation (the "Borrower"), and REGIONS BANK, an Alabama banking corporation (the "Lender").

 

Recitals

 

A.           The Borrower and the Lender are parties to a certain Letter of Credit Agreement dated as of July 27, 2009 (the “Credit Agreement”).

 

B.           The Borrower has requested that the Lender amend the Credit Agreement to make certain modifications to the Credit Agreement as set forth herein.

 

C.           The Lender has agreed to make such modifications, provided that the Borrower and the Lender enter into this Amendment.

 

Agreement

 

NOW, THEREFORE, in consideration of the foregoing recitals and in further consideration of the mutual agreements set forth herein, the Borrower and the Lender hereby agree as follows, with such agreements to become effective as of the Effective Date:

 

1. Rules of Construction.  This Amendment is subject to the rules of construction set forth in the Credit Agreement.

 

2. Definitions.  Capitalized terms used in this Amendment and not otherwise defined herein have the meanings defined for them in the Credit Agreement.

 

3. Representations and Warranties of Borrower.  The Borrower represents and warrants to the Lender as follows:

 

(a) Representations and Warranties in Financing Documents.  All of the representations and warranties set forth in the Financing Documents are true and correct on and as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date.

 

(b) No Default.  As of the Effective Date, the Borrower is in compliance with all the terms and provisions set forth in the Financing Documents on its part to be observed or performed, and no Event of Default, nor any event that upon notice or lapse of time or both would constitute such an Event of Default, has occurred and is continuing.

 

(c) Borrower's Organizational Documents.  The Borrower's organizational documents have not been amended since July 27, 2009.

 

4. Amendments to Credit Agreement.

 

(a) Recital A of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

A.           Borrower has asked the Bank to issue, at any time and from time to time, irrevocable standby letters of credit (the "Letters of Credit") in favor of the beneficiaries identified by Borrower (the “Beneficiaries”) in a form customarily used or otherwise approved by the Bank in an aggregate amount not to exceed $10,000,000 (the “Commitment”).

 

(b) The definition of “Minimum Coverage Amount” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“Minimum Coverage Amount” shall mean, at any time, 102% of the Letter of Credit Exposure.

 

(c) The definition of “Syndicated Credit Agreement” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“Syndicated Credit Agreement” shall mean that certain Second Amended and Restated Credit Agreement effective as of June 9, 2010, executed by Borrower, the other parties signatory thereto, PNC Bank, National Association, as Administrative Agent for itself and for the lenders and the other lenders signatory thereto, as amended, restated or supplemented from time to time.

 

(d) The definition of “Termination Date” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“Termination Date” shall mean August 31, 2011.

 

(e) Section 2.1(a)(i) of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

(i)           No Letter of Credit shall be issued that by its terms expires later than the Termination Date; provided, however, if any Letter of Credit does have an expiration date later than the Termination Date, such Letter of Credit may expire by its terms on a date later than the Termination Date (but in no event beyond a date that is twenty-four months from the Termination Date) so long as the Control and Pledge Agreement is in effect and Borrower maintains the Minimum Coverage Amount.

 

(f) Section 2.1(a)(iv) of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

(iv)           Notwithstanding any other provisions to the contrary set forth herein, Letters of Credit deemed issued hereunder may contain a statement to the effect that such credit is issued for the account of any subsidiary or affiliate of Borrower provided that notwithstanding such statement, Borrower shall be the actual account party for all purposes of this Agreement for such Letters of Credit and such statement shall not affect Borrower’s reimbursement obligations hereunder with respect to such Letters of Credit.

 

(g) Section 4.4 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

SECTION 4.4                           Minimum Coverage Amount

 

Borrower shall maintain the Minimum Coverage Amount at all times.

 

(h) The first sentence of Section 5.3 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

If an Event of Default exists under this Agreement and the Letters of Credit remain outstanding, Borrower agrees to pay to the Bank, promptly upon demand by the Bank therefor, such amount that, when added to the aggregate cash collateral in the Account (as defined in the Control and Pledge Agreement) equals 102% of the maximum amount available to be drawn under the Letters of Credit.

 

(i) The first sentence of Section 6.11 of the Credit Agreement is hereby amended to read, in its entirety, as follows:

 

Borrower may terminate this Agreement and the Commitment before the Termination Date, in whole but not in part, by giving the Bank 30 days prior written notice; provided, however, no termination by Borrower shall be effective until (a) Lender shall have received cash collateral in an amount that, when added to the aggregate cash collateral in the Account equals 102% of all Obligations which remain contingent and (b) all other Obligations have been fully and finally paid and performed.

 

5. Fees and Legal Expenses.  The Borrower hereby agrees to pay all reasonable invoiced legal costs and expenses incurred in connection with the review, analysis and preparation of this Amendment.  Such expenses and legal costs shall be payable upon the execution of this Amendment and shall be non-refundable.

 

6. References in Financing Documents.  All references in the Financing Documents to the "Credit Agreement" shall mean the Credit Agreement as amended by this Amendment.

 

7. Financing Documents to Remain in Effect.  Except as specifically modified by this Amendment, the Credit Agreement and the other Financing Documents shall remain in full force and effect in accordance with their respective terms.

 

8. No Novation, etc.  Nothing contained in this Amendment shall be deemed to constitute a novation of the terms of the Financing Documents, nor impair any liens granted to the Lender thereunder, nor release any obligor from liability for any of the Obligations, nor affect any of the rights, powers or remedies of the Lender under the Financing Documents, nor constitute a waiver of any provision thereof, except as specifically set forth in this Amendment.

 

9. Governing Law, Successors and Assigns, etc.  This Amendment shall be governed by and construed in accordance with the laws of the State of Alabama and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

10. Headings.  The descriptive headings of the sections of this Amendment are for convenient reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

11. Entire Agreement.  This Amendment constitutes the entire understanding to date of the parties hereto regarding the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements of the parties thereto with respect to the subject matter hereof.

 

12. Severability.  If any provision of this Amendment shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

13. Counterparts.  This Amendment may be executed in any number of counterparts, each of which so executed shall be deemed an original, but all such counterparts shall together constitute but one and the same instrument.

 

14. No Waiver.  Nothing contained herein shall be construed as a waiver or acknowledgement of, or consent to any breach of or Event of Default under the Credit Agreement and the Financing Documents not specifically mentioned herein, and the waivers and consents granted herein are effective only in the specific instance and for the purposes for which given.

 

15. Effect of this Amendment.  This Amendment amends and supplements the Credit Agreement and shall be construed as if it were a part thereof for all purposes.  Any representation or warranty contained herein that shall prove to be false or misleading in any material respect at the time made shall constitute an Event of Default under the Credit Agreement and the other Financing Documents in accordance with the Credit Agreement as if such representation or warranty had been contained in the Credit Agreement, and any default by the Borrower in the performance or observance of any provision of this Amendment shall constitute an Event of Default under that section as if such provision had been contained in the Credit Agreement.

 

[Remainder of page intentionally left blank]

 

 

  

 

IN WITNESS WHEREOF, the Borrower and the Lender have caused this Amendment to be executed and delivered by their duly authorized representatives to be effective as of the Effective Date.

M/I HOMES, INC.

By                                                                

Title:                                                     

REGIONS BANK

By                                                                          

Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]