Exhibit 10.2
CREDIT AGREEMENT
effective as of June 9, 2010
by and among
M/I HOMES, INC.,
 
as Borrower
and
the Lenders Party Hereto
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent for the Lenders
and
JPMORGAN CHASE BANK, N.A. and THE HUNTINGTON NATIONAL BANK
as Co-Syndication Agents
and
FIFTH THIRD BANK and US BANK NATIONAL ASSOCIATION
as Co-Documentation Agents
with
PNC CAPITAL MARKETS LLC,
 
as Sole Lead Arranger and Bookrunner

 

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TABLE OF CONTENTS
SECTION 1:   DEFINITIONS    
1.1    Defined Terms.    
1.2    Other Definitional Provisions.    
SECTION 2:   AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT LOANS,

 

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SWINGLINE LOANS AND FACILITY L/CS    
2.1    Commitments.    
2.2    Notes.    
2.3    Procedure for Borrowing.    
2.4    Commitment Fee.    
2.5    Interest: Default Interest.    
2.6    Termination or Reduction of Aggregate Commitment; Mandatory
Reduction.    
2.7    Maturity Date of Commitment    
2.8    Computation of Interest and Fees.    
2.9    Increased Costs.    
2.10    Use of Proceeds.    
2.11    Payments; Pro Rata Treatment.    
2.12    Swingline Loans.    
2.13    The Facility L/Cs.    
2.14    Designation or Resignation of LC Issuer.    
2.15    Issuance of Facility L/Cs.    
2.16    Facility L/C Participations.    
2.17    Payments.    
2.18    Facility L/C Fees.    
2.19    Letter of Credit Reserves.    
2.20    Further Assurances.    
2.21    Obligations Absolute.    
2.22    LC Issuer Reporting Requirements.    
2.23    Indemnification; Nature of LC Issuer's Duties.    
2.24    Defaulting Lenders.    
SECTION 3:   GENERAL PROVISIONS APPLICABLE TO LOANS    
3.1    Conversion/Continuation Options.    
3.2    Inability to Determine Interest Rate.    
3.3    Availability of Eurodollar Rate Loans.    
3.4    Requirements of Law.    
3.5    Indemnity.    
3.6    Taxes.    
3.7    Lender Statements; Survival of Indemnity.    
3.8    Telephonic Notices.    

 

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3.9    Non-Receipt of Funds by Agent.    
3.10    Replacement of Certain Lenders.    
SECTION 4:   REPRESENTATIONS AND WARRANTIES    
4.1    Financial Statements.    
4.2    Existence; Compliance with Law.    
4.3    Power; Authorization; Enforceable Obligations.    
4.4    No Legal Bar.    
4.5    No Material Litigation.    
4.6    Regulation U.    
4.7    Investment Company Act.    
4.8    ERISA.    
4.9    Disclosure.    
4.10    Subsidiary Information.    
4.11    Schedules.    
4.12    Environment.    
4.13    Force Majeure Events.    
4.14    Other Agreements.    
4.15    No Defaults on Outstanding Judgments or Orders.    
4.16    Ownership and Liens.    
4.17    Operation of Business.    
4.18    Taxes.    
4.19    Security Documents.    
SECTION 5:   CONDITIONS PRECEDENT    
5.1    Conditions to Initial Loan(s).    
5.2    Conditions to All Loans.    
SECTION 6:   AFFIRMATIVE COVENANTS    
6.1    Financial Statements.    
6.2    Certificates; Other Information.    
6.3    New York Stock Exchange    
6.4    Payment of Obligations.    
6.5    Maintenance of Existence; Compliance.    
6.6    Maintenance of Property; Insurance.    
6.7    Inspection of Property; Books and Records; Discussions.    

 

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6.8    Notices.    
6.9    Maintenance of Consolidated Tangible Net Worth.    
6.10    Maintenance of Leverage Ratio.    
6.11    Maintenance of Interest Coverage Ratio.    
6.12    Intentionally Omitted.    
6.13    Subsidiary Guarantors.    
6.14    Environment.    
6.15    Minimum Liquidity.    
SECTION 7:   NEGATIVE COVENANTS    
7.1    Limitation on Secured Indebtedness.
7.2    Limitation on Liens.    
7.3    Limitation on Fundamental Changes.    
7.4    Limitation on Acquisitions.    
7.5    Land Inventory.    
7.6    Limitation on Investments.    
7.7    Transactions with Affiliates and Officers.
7.8    Sale and Leaseback.    
7.9    Limitation on Payments of Subordinated Indebtedness and Modification of
Subordination Agreements.    
7.10    Sale of Guarantor Securities.    
7.11    Limitation on Payment of Senior Notes    
7.12    Limitation on Negative Pledges.    
7.13    Housing Inventory.    
7.14    Refinancing of Senior Notes    
SECTION 8:   CASH COLLATERAL    
8.1    Facility L/C Collateral Account.    
8.2    Event of Default under Paragraph (5) of Section 9.    
8.3    Other Events of Default.    
8.4    Cure; Termination.    
SECTION 9:   DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER EVENT
OF DEFAULT    
SECTION 10:   THE AGENT    
10.1    Appointment.    

 

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10.2    Delegation of Duties.    
10.3    Exculpatory Provisions.    
10.4    Reliance by Agent.    
10.5    Notice of Default.    
10.6    Non-Reliance on Agent and Other Lenders.    
10.7    Indemnification.    
10.8    Agent in Its Individual Capacity.    
10.9    Delegation to Affiliates.    
10.10    Successor Agent.    
10.11    Syndication Agent, Documentation Agent and Co-Agent.    
10.12    Security Administration.    
10.13    Agent's Fee.    
10.14    No Reliance on Agent's Customer Identification Program    
SECTION 11:   MISCELLANEOUS
11.1    Amendments and Waivers.    
11.2    Notices.    
11.3    No Waiver; Cumulative Remedies.    
11.4    Participants.    
11.5    Survival of Representations and Warranties.    
11.6    Payment of Expenses.    
11.7    Successors and Assigns; Assignment.    
11.8    Adjustments; Set-off.    
SCHEDULES
1    -    Commitments of Lenders
2    -    Existing L/Cs
3    -    Principal Places of Business, etc. of All Subsidiaries
4    -    Financial Subsidiaries    
5    -    List of Pool Real Property where Mortgages will be filed as of
Closing    
 
EXHIBITS
A    -    Form of Borrowing Base Certificate
B    -    Form of Guaranty Agreement
C    -    Form of Note
D    -    Intentionally Omitted
E    -    Intentionally Omitted
F    -    Form of Responsible Officer's Certificate

 

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G    -    Form of Chief Financial Officer's Certificate
H    -    Form of Assignment and Assumption Agreement    
I    -    Administration of Security and Borrowing Base    
J    -    Form of Collateral Agreement    
 
 
 

 

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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made to be effective as of June 9,
2010, by and among M/I HOMES, INC., an Ohio corporation ("Borrower"), the
Lenders party hereto (each a "Lender", and collectively, the "Lenders"), PNC
BANK, NATIONAL ASSOCIATION, as administrative agent for Lenders ("Agent"),
JPMORGAN CHASE BANK, N.A. and THE HUNTINGTON NATIONAL BANK, each in their
capacity as co-syndication agent for the Lenders (each, a "Syndication Agent")
and FIFTH THIRD BANK and US BANK NATIONAL ASSOCIATION, as co-documentation
agents for the Lenders (each, a "Documentation Agent"). For valuable
consideration, the receipt of which is hereby acknowledged, Borrower, Lenders
and Agent, each intending to be legally bound, hereby recite and agree as
follows:
BACKGROUND INFORMATION
A.    Borrower has requested that the Lenders and Agent provide a revolving
credit facility to Borrower in an aggregate principal amount not to exceed
$140,000,000 with a letter of credit sub-facility in an aggregate amount not to
exceed $25,000,000.
B.    The Lenders and Agent are willing to provide such credit facility on and
subject to the terms and conditions herein.
Accordingly, Borrower, Lenders and Agent hereby agree as follows:
AGREEMENT
DEFINITIONS
1.Defined Terms.
As used in this Agreement, the following terms have the following respective
meanings:
"ABR Loan" shall mean any Loan when and to the extent that the interest rate
thereon is determined by reference to the Alternate Base Rate.
"Acceptable Appraisal" shall mean an appraisal commissioned by and addressed to
Agent (reasonably acceptable to Agent as to form, assumptions, substance and
appraisal date) prepared by a qualified licensed professional appraiser
reasonably acceptable to Agent and complying in all material respects with the
requirements of the Federal Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"ACFO Ratio" shall mean, for the period ending the last day of any fiscal
quarter, the ratio of (i) Adjusted Cash Flow from Operations for the four fiscal
quarters then ended to (ii) Consolidated Interest Incurred by the Borrower and
its Subsidiaries for such four fiscal quarters.
"Acquisition" shall mean any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which Borrower or any
Guarantor (i) acquires all or substantially all of

 

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the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes or by percentage of voting
power) of the Common Equity of another Person.
"Adjusted Cash Flow from Operations" shall mean, for any period of four
consecutive fiscal quarters of the Borrower, the sum of (a) cash provided by
(used in) operating activities, as calculated using the "net cash provided by
(used in) operating activities" line item of the Borrower and its Subsidiaries'
Consolidated Statement of Cash Flow for the four consecutive quarters then ended
as determined in accordance with GAAP, plus (b) Consolidated Interest Incurred
of the Borrower and its Subsidiaries on a consolidated basis for such four
consecutive fiscal quarters.
"Adjusted Land Value" means, at any date, (i) the book value of all Land, less
(ii) the sum of (a) the book value of all Land under Contract and all Lots under
Contract and (b) the lesser of (1) the product of (x) the number of Housing
Units with respect to which Borrower and its Subsidiaries entered into bona fide
contracts of sale with Persons that are not Subsidiaries or Affiliates during
the six-month period ending on such date and (y) the average book value of all
Finished Lots and Lots under Contract at such date and (2) twenty-five
percent (25%) of Consolidated Tangible Net Worth at such date.
"Affected Lender" shall have the meaning set forth in subsection 3.10 hereof.
"Affiliate" shall mean (a) any Person (other than a Subsidiary of Borrower)
which, directly or indirectly, controls, is controlled by or is under common
control with Borrower or (b) any Person who is a director, officer or key
employee of Borrower, any Subsidiary of Borrower or any Person described in
clause (a) of this definition. For purposes of this definition, "control" of a
Person means the power, direct or indirect, to vote twenty percent (20%) or more
of the securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble hereof, and shall
include its successors and assigns.
"Agent's Fee Letter" shall mean that certain fee letter dated April 9, 2010 from
the Agent and Arranger to Borrower dated and accepted by Borrower on April 12,
2010.
"Aggregate Commitment" shall mean the aggregate Commitments of all the Lenders
as reduced or increased from time to time pursuant to the terms of this
Agreement; as of the date of this Agreement, the Aggregate Commitment is
$140,000,000.
"Aggregate Outstandings" shall mean, at any time, the sum of the aggregate
principal amount of all Loans and the Facility L/C Obligations, in each case
outstanding at such time.
"Agreement" shall mean this Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Open
Rate in effect on such day plus ½ of 1% and (c) the Daily LIBOR Rate plus 1%.
Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Federal Funds Open Rate or the Daily LIBOR Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Open Rate or the Daily LIBOR Rate, respectively.
"Anti-Terrorism Laws" shall mean any Laws relating to terrorism or money
laundering, including

 

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Executive Order No. 13224, the USA Patriot Act, the Laws comprising or
implementing the Bank Secrecy Act, and the Laws administered by the United
States Treasury Department's Office of Foreign Asset Control (as any of the
foregoing Laws may from time to time be amended, renewed, extended or replaced).
"Applicable ABR Margin" shall mean 3.50%.
"Applicable Commitment Rate" shall mean 0.75%.
"Applicable Eurodollar Margin" shall mean 4.50%.
"Applicable Facility L/C Rate" shall mean 4.50%.
"Applicable Margin(s)" shall mean the Applicable ABR Margin and/or the
Applicable Eurodollar Margin, as the case may be.
"Appraised Value" shall mean, with respect to any Real Property or any portion
thereof, the appraised value of such Real Property or portion thereof set forth
in the most-recent Acceptable Appraisal obtained by Agent pursuant to the Loan
Documents. The Appraised Value of Real Property shall be adjusted to take into
account any portion that has been sold or otherwise transferred. The Appraised
Value of a portion of Real Property shall be calculated based on the Acceptable
Appraisal for such Real Property and allocated to such portion of such Real
Property by Borrower based on the methodology described in Exhibit I. The
Appraised Value of all or any portion of a Real Property shall be adjusted to
take into account the value of ongoing or completed construction of Housing
Units and improvements to Lots under Development based on the methodology
described in Exhibit I.
"Arranger" shall mean PNC Capital Markets LLC, as sole Lead Arranger and
Bookrunner.
"Assignment and Assumption Agreement" shall mean an assignment and assumption
agreement substantially in the form of Exhibit H hereto.
"Bankruptcy Code" shall mean Title 11, U.S.C. as amended from time to time.
"Blocked Account Control Agreement" shall mean a blocked account control
agreement by and among Borrower, PNC Bank, National Association, as depositary
bank and/or securities intermediary, and PNC Bank, National Association, as
Agent, all of which shall be in form and substance reasonably satisfactory to
Agent and Borrower.
"Board" means the Board of Governors of the Federal Reserve System of the United
States of America.
"Borrower" shall mean M/I Homes, Inc., an Ohio corporation.
"Borrowing Base Certificate" shall mean a certificate in the form of Exhibit A
hereto, certified by a Responsible Officer of Borrower.
"Borrowing Date" shall mean any Business Day specified pursuant to (a)
subsection 2.3 hereof as a date on which Lenders make a disbursement of the
Revolving Credit Loans hereunder, (b) subsection 2.12 hereof as a date on which
Swingline Lender makes, at Borrower's request, a disbursement of the Swingline
Loans hereunder, or (c) subsection 2.13 hereof as a date on which an LC Issuer
issues, at Borrower's request, a Facility L/C hereunder.
"Business Day" shall mean (a) with respect to any borrowing, payment or rate
selection of Eurodollar

 

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Rate Loans, a day (other than a Saturday or Sunday) on which banks generally are
open in Pittsburgh, Pennsylvania for the conduct of substantially all of their
commercial lending activities and on which dealings in United States dollars are
carried on in the London interbank market and (b) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in
Pittsburgh, Pennsylvania for the conduct of substantially all of their
commercial lending activities.
"Capital Lease" shall mean all leases which have been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Cash Equivalents" shall mean (1) securities, certificates and notes with
maturities of 364 days or less from the date of acquisition that are within one
of the following classifications: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) mortgage
backed securities issued or fully guaranteed or insured by the Federal Home Loan
Mortgage Corporation, Federal National Mortgage Association, or a similar
government sponsored enterprise or mortgage agency, (c) securities issued by
States, territories and possessions of the United States and their political
subdivisions (municipalities), with ratings of at least "A" or the equivalent
thereof by Standard & Poor's Corporation or Moody's Investors Services, Inc.,
(d) time deposits, certificates of deposit, bankers' acceptances, or similar
short-term notes issued by a commercial bank domiciled and registered in the
United States with capital and surplus in excess of $200 million, and which has
(or the holding company of which has) a commercial paper rating of at least A-l
or the equivalent thereof by Standard & Poor's Corporation or P-l or the
equivalent thereof by Moody's Investors Services, Inc., or (e) commercial paper
of a domestic issuer rated at least A-l or the equivalent thereof by Standard &
Poor's Corporation or P-l or the equivalent thereof by Moody's Investors
Services, Inc.; and (2) money market mutual funds which invest in securities
listed in (a) through (e) above with a weighted average maturity of less than
one year.
"Closing Date" shall mean June 9, 2010.
"Code" shall mean the Internal Revenue Code of 1986, as amended or superseded
from time to time. Any reference to a specific provision of the Code shall be
construed to include any comparable provision of the Code as hereafter amended
or superseded.
"Collateral Agreement" shall mean the Collateral Agreement executed by Borrower
and each other Loan Party, in the form of Exhibit J hereto.
"Collateral Shortfall Amount" shall have the meaning set forth in subsection 8.2
hereof.
"Commitment" shall have the meaning set forth in subsection 2.1(a) hereof.
"Commitment Fee" shall have the meaning set forth in subsection 2.4 hereof.
"Commitment Period" shall mean the period from and including the date hereof to
the Maturity Date, or such earlier or later date as the Aggregate Commitment
shall terminate as provided herein.
"Common Equity" of any Person shall mean any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable), participations, or
other equivalents of or interests in (however designated) the equity (which
includes, but is not limited to, common stock, preferred stock and partnership
and joint venture interests) of such Person (excluding any debt securities
convertible into, or exchangeable for, such equity) to the extent that the
foregoing is entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or other persons that will
control the management and policies of such Person.
"Commonly Controlled Entity" shall mean an entity, whether or not incorporated,
which is under

 

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common control with Borrower within the meaning of Section 414(b) or (c) of the
Code.
"Consolidated Earnings" shall mean, for any period, the amount which would be
set forth opposite the caption "net income" (or any like caption) in a
consolidated statement of income or operations of Borrower and Borrower's
Subsidiaries for such period prepared in accordance with GAAP.
"Consolidated Indebtedness" shall mean, at any date, the consolidated
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, and adding thereto Borrower's and any of its
Subsidiaries' pro rata share of Indebtedness of any Joint Venture in respect of
which Borrower or any of its Subsidiaries has made an Investment in Joint
Venture, all determined as of such date.
"Consolidated Interest Expense" shall mean, for any period, interest expense on
Indebtedness of Borrower and Borrower's Subsidiaries for such period, in each
case determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Incurred" shall mean, for any period, all interest
incurred during such period on outstanding Indebtedness of Borrower and
Borrower's Subsidiaries irrespective of whether such interest is expensed or
capitalized by Borrower or Borrower's Subsidiaries, in each case determined on a
consolidated basis.
"Consolidated Tangible Net Worth" shall mean, at any date, the consolidated
stockholders equity of Borrower determined in accordance with GAAP, less
Intangible Assets, all determined as of such date.
"Construction Bonds" shall mean bonds issued by surety bond companies for the
benefit of, and as required by, municipalities or other political subdivisions
to secure the performance by Borrower or any Subsidiary of its obligations
relating to lot improvements and subdivision development and completion.
"Contingent Obligation" shall mean, as to any Person, any reimbursement
obligations (including, in the case of Borrower, the Reimbursement Obligations)
of such Person in respect of drafts that may be drawn under Letters of Credit,
any reimbursement obligations of such Person in respect of surety bonds
(including reimbursement obligations in respect of Construction Bonds), and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations primarily to pay money
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including without limitation any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation, or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the obligee under any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the obligee under such primary
obligation against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include (A) endorsements of instruments for
deposit or collection in the ordinary course of business, (B) mortgage loan
repurchase obligations of any Financial Subsidiary and (C) obligations
(including indemnity obligations) under land purchase contracts entered into in
the ordinary course of business.
"Contractual Obligation" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Daily LIBOR Rate" shall mean, for any day, the rate per annum determined by the
Agent by dividing

 

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(x) the Published Rate by (y) a number equal to 1.00 minus the Statutory Reserve
Rate on such day.
"Default" shall mean any of the events specified in Section 9 hereof, whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Defaulting Lender" shall mean any Lender, as determined by Agent, that has (a)
failed to fund any portion of its Loans or participations in Letters of Credit
or Swingline Loans within three Business Days of the date required to be funded
by it hereunder, (b) otherwise failed to pay over to Agent or any other Lender
any other amount required to be paid by it hereunder within three Business Days
of the date when due, unless the subject of a good faith dispute, or (c) (i)
become or is insolvent or has a parent company that has become or is insolvent
or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.
"Deferred Tax Valuation Allowance" shall mean any valuation allowance applied to
deferred income tax assets as determined in accordance with GAAP and included in
the financial statements of the Borrower.
"Dollars" and "$" shall mean dollars in lawful currency of the United States of
America.
"EBITDA" shall mean, for any period, on a consolidated basis for Borrower and
its Subsidiaries, the sum of the amounts for such period of (a) Consolidated
Earnings, plus (b) charges against income for federal, state and local income
taxes, plus (c) Consolidated Interest Expense, plus (d) depreciation and
amortization expense, plus (e) extraordinary losses (and all other non-cash
items reducing Consolidated Earnings, including but not limited to impairment
charges for land and other long-lived assets and option deposit forfeitures) for
such period, all determined in accordance with GAAP, minus (x) interest income,
minus (y) all extraordinary gains (and all other non-cash gains that have been
included in the determination of Consolidated Earnings) for such period, all
determined in accordance with GAAP. EBITDA shall include net income from Joint
Ventures only to the extent distributed to Borrower or a Subsidiary.
"Eligible Assignee" shall mean (a) any Lender or any affiliate of a Lender and
(b) any other commercial bank, financial institution, institutional lender or
"accredited investor" (as defined in Regulation D promulgated under the
Securities Act of 1933 by the Securities and Exchange Commission) with capital
of at least $500,000,000 and with an office in the United States.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Eurodollar Rate Loans" shall mean any Revolving Credit Loan when and to the
extent that the interest rate thereon is determined by reference to the
Eurodollar Rate.
"Event of Default" shall mean any of the events specified in Section 9 hereof,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excluded Taxes" shall mean, in the case of each Lender or applicable Lending
Installation and Agent,

 

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(a) taxes imposed on its overall net income, franchise taxes and backup
withholding taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender, Lending Installation or Agent is incorporated or organized,
(ii) the jurisdiction in which Agent's or such Lender's principal executive
office or such Lender's applicable Lending Installation is located, or
(iii) reason of any connection between the jurisdiction imposing such tax and
such Lender, applicable Lending Installation or Agent other than a connection
arising principally from such Lender having executed, delivered or performed its
obligations under, or received payment under or enforced, this Agreement, and
(b) any branch profits taxes imposed by the United States or any similar tax
imposed by any other jurisdiction described in clause (a) above.
"Existing L/Cs" shall mean those certain Letters of Credit issued by JPMorgan
Chase Bank (or by Bank One, NA, prior to its merger with JPMorgan Chase Bank for
the account of Borrower prior to the date hereof and listed on Schedule 2
hereto.
"Facility L/C" shall mean an irrevocable standby Letter of Credit, including any
extensions or renewals, (a) issued by an LC Issuer pursuant to this Agreement or
(b) in the case of the Existing L/Cs, previously issued by JPMorgan Chase Bank
(or by Bank One, NA prior to its merger with JPMorgan Chase Bank) and which will
remain in place as of the first Borrowing Date, in which each Lender agrees to
purchase a participation equal to its Ratable Share and the LC Issuer agrees to
make payments in Dollars for the account of Borrower, on behalf of Borrower or
any Subsidiary thereof in respect of obligations of Borrower or such Subsidiary
incurred pursuant to contracts made or performances undertaken or to be
undertaken or like matters relating to contracts to which Borrower or such
Subsidiary is or proposes to become a party in the ordinary course of Borrower's
or such Subsidiary's business. The term "Facility LC" shall include the Existing
LCs, but shall not include any Letters of Credit issued by any Lender other than
pursuant to this Agreement or as provided in clause (b) of this definition.
"Facility L/C Application" shall have the meaning set forth in subsection
2.15(a) hereof and shall also include each reimbursement agreement delivered to
an LC Issuer prior to the date hereof with respect to any Existing L/C.
"Facility L/C Collateral Account" shall have the meaning set forth in
subsection 8.1 hereof.
"Facility L/C Fee" shall mean a fee, payable with respect to each Facility L/C
issued by an LC Issuer, in an amount per annum equal to the product of the face
amount of such Facility L/C and the Applicable Facility L/C Rate, in each case
as such Applicable Facility L/C Rate is determined on a daily basis during the
period in respect of which such fee is payable hereunder.
"Facility L/C Obligations" shall mean, at any date, the sum of (i) the aggregate
undrawn face amount of all outstanding Facility L/Cs on such date, plus (ii) the
aggregate unpaid amount of all Reimbursement Obligations on such date.
"Federal Funds Effective Rate" for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any date, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Federal Funds Open Rate" shall mean, for any day, the rate per annum (based on
a year of 360 days

 

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and actual days elapsed) which is the daily federal funds open rate as quoted by
ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen
BTMM for that day opposite the caption "OPEN" (or on such other substitute
Bloomberg Screen that displays such rate), or as set forth on such other
recognized electronic source used for the purpose of displaying such rate as
selected by Agent (for purposes of this definition, an "Alternate Source") (or
if such rate for such day does not appear on the Bloomberg Screen BTMM (or any
substitute screen) or on any Alternate Source, or if there shall at any time,
for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate determined by
Agent at such time (which determination shall be conclusive absent manifest
error); provided, however, that if such day is not a Business Day, the Federal
Funds Open Rate for such day shall be the "open" rate on the immediately
preceding Business Day. If and when the Federal Funds Open Rate changes, the
rate of interest with respect to any ABR Loan to which Federal Funds Open Rate
applies will change automatically without notice to the Borrower, effective on
the date of such change.
"Financial Letter of Credit" means a Letter of Credit that is not a Performance
Letter of Credit.
"Financial Subsidiary" shall mean (i) each of M/I Financial Corp., M/I Title
Agency, Ltd., TransOhio Residential Title Agency, Ltd. and Washington/Metro
Residential Title Agency, LLC and (ii) each other now owned or hereafter created
or acquired Subsidiary of any of the Loan Parties in which Investments are made
as permitted under subsection 7.6(g) and which are primarily engaged in the
business of mortgage financing, the origination of mortgages for resale, title
insurance or similar financial businesses, in each case, directly and solely
related to the Loan Parties' homebuilding and home sale business.
Notwithstanding the foregoing, any Financial Subsidiary may execute and deliver
to the Agent a Guaranty Agreement or Supplemental Guaranty in accordance with
subsection 6.13 hereof and thereby become a Guarantor hereunder at which time
such Subsidiary shall cease to be a Financial Subsidiary.
"Finished Lots" shall mean all Lots (excluding Lots under Contract) owned by
Borrower or any Guarantor with respect to which (i) development has been
completed to such an extent that permits that allow use and construction,
including building, sanitary sewer and water, could be obtained for a Housing
Unit on each such Lot, and (ii) Start of Construction has not occurred. The book
value of Finished Lots shall be calculated in accordance with GAAP and shall
include all associated costs required to be capitalized under GAAP.
"GAAP" shall mean generally accepted accounting principles in the United States
of America as in effect at the time any determination is made or financial
statement is required hereunder as promulgated by the American Institute of
Certified Public Accountants, the Accounting Principles Board, the Financial
Accounting Standards Board or any other body existing from time to time which is
authorized to establish or interpret such principles, applied on a consistent
basis throughout any applicable period, subject to any change required by a
change in GAAP; provided, however, that if any change in generally accepted
accounting principles from those applied in preparing the financial statements
referred to in subsection 4.1 hereof affects the calculation of any financial
covenant contained herein, Borrower, Lenders and Agent hereby agree to amend the
Agreement to the effect that each such financial covenant is not more or less
restrictive than such covenant as in effect on the date hereof using generally
accepted accounting principles consistent with those reflected in such financial
statements.
"Governmental Authority" shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantor" shall mean each of Borrower's Subsidiaries that has executed a
Guaranty Agreement, and each Subsidiary of Borrower which becomes a "Guarantor"
pursuant to a Supplemental Guaranty as

 

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provided in subsection 6.13 hereof. Each Financial Subsidiary and/or
Non-Guarantor Subsidiary that has not executed a Guaranty Agreement or a
Supplemental Guaranty shall not be a Guarantor.
"Guaranty Agreement" shall mean the Guaranty Agreement substantially in the form
of Exhibit B attached to this Agreement, executed by one or more Guarantors in
favor of Agent (for the benefit of the Lenders), as the same shall be modified
and supplemented and in effect from time to time.
"Housing Unit" shall mean a detached or attached (including townhouse
condominium or condominium) single-family house (but excluding mobile homes)
owned by Borrower or a Guarantor (i) which is completed or for which there has
been a Start of Construction and (ii) which has been or is being constructed on
Land which immediately prior to the Start of Construction constituted a Lot
hereunder. The book value of Housing Units shall be calculated in accordance
with GAAP and shall include all associated costs (including the applicable Lot
costs) required to be capitalized under GAAP, provided that the cost of
obtaining commitments for financing terms to be provided to the buyers of
Housing Units shall be excluded.
"Housing Unit Closing" shall mean a closing of the sale of a Housing Unit by the
Borrower or a Guarantor to a bona fide purchaser for value that is not a
Subsidiary or Affiliate.
"Housing Unit under Contract" shall mean, at any date, a Housing Unit owned by
the Borrower or a Guarantor as to which the Borrower or such Guarantor has
entered into a bona fide contract of sale (a) in a form customarily employed by
the Borrower or such Guarantor, (b) not more than fifteen (15) months prior to
such date, (c) with a Person who is not a Subsidiary or Affiliate, (d) which
provides for closing on or before the later of thirty (30) days after completion
of such Housing Unit or sixty (60) days after the date of such Contract, and (e)
under which no defaults then exist; provided, however, that in the case of any
Housing Unit the purchase of which is to be financed in whole or in part by a
loan insured by the Federal Housing Administration or guaranteed by the Veterans
Administration, the required minimum down payment shall be the amount (if any)
required under the rules of the relevant agency. A Housing Unit shall not
constitute a Housing Unit under Contract, at any date of determination, if (i)
such Housing Unit is not completed and (ii) the Start of Construction thereof
occurred more than nine (9) months prior to such date.
"Indebtedness" shall mean, without duplication, with respect to any Person
(1) indebtedness or liability for borrowed money, including, without limitation,
subordinated indebtedness (other than trade accounts payable and accruals
incurred in the ordinary course of business); (2) obligations evidenced by
debentures, notes, bonds, or other similar instruments; (3) obligations for the
deferred purchase price of property (including, without limitation, seller
financing of any inventory) or services, provided, however, that "Indebtedness"
shall not include obligations with respect to options to purchase real property
that have not been exercised; (4) obligations as lessee under Capital Leases to
the extent that the same would, in accordance with GAAP, appear as liabilities
in such Person's consolidated balance sheet; (5) current liabilities in respect
of unfunded vested benefits under Plans and incurred withdrawal liability under
any Multiemployer Plan; (6) obligations under acceptance facilities; (7) all
Contingent Obligations, provided, however, that "Indebtedness" shall not include
reimbursement obligations in respect of Performance Letters of Credit or
guaranties of performance obligations (such as bid or performance surety bonds)
except to the extent that any such reimbursement obligations or guaranties of
performance obligations have been drawn or called upon; (8) obligations secured
by any Liens on any property of such Person, whether or not the obligations have
been assumed; and (9) net liabilities under interest rate swap, exchange or cap
agreements (valued as the termination value thereof, computed in accordance with
a method approved by the International Swaps and Derivatives Association and
agreed to by such Person in the applicable agreement).
"Initial Borrowing Base" shall mean 100% of Secured Borrowing Base Cash.
"Initial Period" shall mean the period from and including the date of this
Agreement until such time

 

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as the Agent has determined in its reasonable discretion that a Mortgage has
been filed with respect to each Pool Real Property included in Schedule 5
hereto.
"Intangible Assets" shall mean, at any time, the amount (to the extent reflected
in determining consolidated stockholders equity of Borrower) of all unamortized
debt discount and expense, unamortized deferred charges, good will, patents,
trademarks, service marks, trade names, copyrights and all other items which
would be treated as intangibles on a consolidated balance sheet of Borrower
prepared in accordance with GAAP.
"Interest Coverage Ratio" shall mean, for any rolling period of four fiscal
quarters, the ratio of (a) EBITDA to (b) Consolidated Interest Incurred for such
period.
"Interest Payment Date" shall mean, (a) with respect to any ABR Loan (whether a
Revolving Credit Loan or a Swingline Loan), the first day of each calendar
month, commencing on the first of such days to occur after the first Borrowing
Date, (b) with respect to any Eurodollar Rate Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) with respect
to any Eurodollar Rate Loan having an Interest Period longer than three months,
(x) each day which is three months, or a whole multiple thereof, after the first
day of such Interest Period, and (y) the last day of such Interest Period.
"Interest Period" shall mean with respect to any Eurodollar Rate Loan:
(i)initially, the period commencing on the Borrowing Date or conversion date, as
the case may be, with respect to such Eurodollar Rate Loan and ending one, two,
three or six months thereafter, as selected by Borrower in Borrower's Notice of
Conversion/Continuation, as the case may be, given with respect thereto; and
(ii)thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Rate Loan and ending one, two,
three or six months thereafter, as selected by Borrower by irrevocable notice to
the Agent not less than three Business Days prior to the last day of the then
current Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1)if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(2)any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month; and
(3)no Interest Period shall be for less than one month, and Borrower shall not
select an Interest Period for a Eurodollar Rate Loan as a Revolving Credit Loan
if the last day of such Interest Period would be after the last day of the
Commitment Period.
"Interest Rate Contract" shall mean any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate insurance
arrangement, or any other agreement or arrangement designed to provide
protection against fluctuation in interest rates.
"Investments" shall have the meaning set forth in subsection 7.6 hereof.
"Investment in Joint Venture" shall mean any Investment in a Joint Venture that
is formed for the purpose of acquiring land, the majority of which land is zoned
residential and is to be developed into residential lots for attached or
detached single family housing (including a townhouse condominium building or

 

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condominium building), and/or performing such development and/or the
construction and sale of homes. The value of each Investment in Joint Ventures
shall be calculated in accordance with GAAP.
"ISP" means the International Standby Practices, 1998, published by the
International Chamber of Commerce or amendment thereof or successor thereto
referenced in any LC Issuer's issued Letter of Credit.
"JPMorgan Chase Bank" means JPMorgan Chase Bank, N.A.
"Joint Venture" shall mean any Person (other than a Subsidiary) in which the
Borrower or a Subsidiary holds any stock, partnership interest, joint venture
interest, limited liability company interest or other equity interest.
"Land" shall mean land owned by Borrower or a Guarantor, which land is being
developed or is held for future development or sale.
"Land Under Contract" means Land (other than Lots) owned by Borrower or a
Guarantor as to which Borrower or such Guarantor has entered into a bona fide
contract of sale with a Person who is not a Subsidiary or Affiliate.
"LC Issuer" shall mean (i) PNC Bank (or any Subsidiary or affiliate of PNC Bank
designated by PNC Bank), (ii) JPMorgan Chase Bank (or any Subsidiary or
affiliate of JPMorgan Chase Bank designated by JPMorgan Chase Bank or Bank One,
NA, prior to its merger with JPMorgan Chase Bank) in its capacity as issuer of
those Existing L/Cs identified in Schedule 2 hereto as having been issued by
JPMorgan Chase Bank, and (iii) any other Lender that may from time to time be
designated as an LC Issuer in accordance with the provisions of subsection 2.14
hereof.
"Lenders" shall have the meaning set forth in the preamble hereof.
"Lending Installation" shall mean with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent identified
on the signature pages hereof or otherwise selected by such Lender or the Agent
pursuant to subsection 2.3 hereof.
"Letter of Credit" of a Person shall mean a letter of credit or similar
instrument which is issued by a financial institution upon the application of
such Person or upon which such Person is an account party or for which such
Person is in any way liable.
"Leverage Ratio" shall mean the ratio of Consolidated Indebtedness to
Consolidated Tangible Net Worth.
"LIBO Rate" means, with respect to any Eurodollar Rate Loan for any Interest
Period, the rate appearing on Bloomberg Page BBAM1 (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period, or the rate
which is quoted by another source selected by Agent which has been approved by
the British Bankers' Association as an authorized information vendor for the
purpose of displaying rates at which US dollar deposits are offered by leading
banks in the London interbank deposit market (for purposes of this definition,
an "Alternate Source"), at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period as the London interbank
offered rate for U.S. dollars for an amount comparable to such Eurodollar

 

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Rate Loan and having a borrowing date and a maturity comparable to such Interest
Period (or if there shall at any time, for any reason, no longer exist a
Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a
comparable replacement rate determined by Agent at such time (which
determination will be conclusive absent manifest error).
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, charge, encumbrance, lien (statutory or other),
preference, priority or other security agreement or similar preferential
arrangement of any kind or nature whatsoever (including without limitation any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
authorized filing by or against a Person of any financing statement as debtor
under the Uniform Commercial Code or comparable law of any jurisdiction). A
restriction, covenant, easement, right of way, or similar encumbrance affecting
any interest in real property owned by Borrower and which does not secure an
obligation to pay money is not a Lien.
"Limited Permitted Liens" shall mean, as of any date, (a) Liens permitted under
subsections 7.2(a), 7.2(c), 7.2(d), 7.2(g) or 7.2(h) of this Agreement and (b)
Liens that are allowed exceptions to coverage in the applicable Title Insurance
Policy.
"Loan Documents" shall mean this Agreement, the Notes, the Guaranty Agreements,
the Security Documents and the Facility L/C Applications and all other documents
(if any) from time to time executed and delivered by Borrower or a Guarantor
that evidence, secure or guaranty any of the Obligations.
"Loan Party" shall mean the Borrower or any Guarantor.
"Loans" shall mean the Revolving Credit Loans and the Swingline Loans.
"Lot Closing" shall mean the closing of the sale of a Lot under Contract by
Borrower or a Guarantor to a bona fide purchaser for value that is not a
Subsidiary or Affiliate.
"Lots" shall mean all Land owned by Borrower or a Guarantor which is zoned, by
the applicable Governmental Authority having jurisdiction, for construction and
use as Housing Units and with respect to which Borrower or such Guarantor has
obtained all necessary approvals for its subdivision for construction thereon of
Housing Units; provided, however, that the term "Lots" shall not include any
Land upon which the Start of Construction has occurred. The value of Lots shall
be calculated in accordance with GAAP and shall include all associated costs
required to be capitalized in accordance with GAAP.
"Lots under Contract" shall mean all Lots owned by Borrower or a Guarantor as to
which Borrower or such Guarantor has entered into a bona fide contract of sale
with a Person who is not a Subsidiary or Affiliate.
"Lots under Development" shall mean all Lots owned by Borrower or a Guarantor
with respect to which construction of streets or other subdivision improvements
has commenced but which are not Finished Lots or Lots under Contract. The value
of Lots under Development shall be calculated in accordance with GAAP and shall
include all associated costs required to be capitalized in accordance with GAAP.
"Mandatory Borrowing" shall have the meaning set forth in subsection 2.12(d)
hereof
"Maturity Date" shall mean June 9, 2013.
"Maximum Swingline Amount" shall mean Ten Million Dollars ($10,000,000).
"M/I Financial Corp." shall mean M/I Financial Corp., an Ohio corporation and
wholly-owned

 

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Subsidiary of Borrower.
"Minimum Tangible Net Worth" shall have the meaning set forth in subsection 6.9
hereof.
"Model Houses" shall mean (a) all Housing Units owned by Borrower or any
Guarantor which are being used as sales models and (b) all Housing Units owned
by Borrower or any Guarantor for which there has been a Start of Construction
which upon completion will be used as sales models.
"Moody's" shall mean Moody's Investors Service, Inc.
"Mortgage" shall mean each of the mortgages, deeds of trust and similar
instruments (including any spreader, amendment, restatement or similar
modification of any existing Mortgage) made by any Loan Party in favor or for
the benefit of Agent for the benefit of itself and the Lenders, in form and
substance reasonably satisfactory to Agent and Borrower.
"Mortgaged Property" shall mean the Real Property of the Loan Parties, as to
which there has been granted, for the benefit of Agent and the Lenders, a Lien
pursuant to a Mortgage. Mortgaged Property includes Qualified Real Property.
"Multiemployer Plan" means a Plan covered by Title IV of ERISA which is a
multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.
"New Lender" shall have the meaning set forth in subsection 2.6(b)(i) hereof.
"Non-Guarantor Subsidiary" shall mean (i) M/I Homes Foundation, an Ohio
nonprofit corporation, and (ii) each now owned or hereafter created or acquired
Subsidiary of Borrower or a Guarantor (A) in which Investments are made as
permitted under subsection 7.6(g) hereof and (B) which is owned in part by a
Person who is not a Borrower, Guarantor or Joint Venture. Notwithstanding the
foregoing, any Non-Guarantor Subsidiary may execute and deliver to the Agent a
Guaranty Agreement or Supplemental Guaranty in accordance with subsection 6.13
hereof and thereby become a Guarantor hereunder at which time such Subsidiary
shall cease to be a Non-Guarantor Subsidiary.
"Note" or "Notes" shall mean a promissory note or notes substantially in the
form of Exhibit C hereto, executed and delivered by Borrower payable to the
order of a Lender, and delivered pursuant to subsection 2.2, subsection 2.6(b)
or subsection 11.7(b) hereof, as the same may be modified, amended, supplemented
or replaced from time to time.
"Notice of Borrowing" shall have the meaning set forth in subsection 2.3(a)
hereof.
"Notice of Conversion/Continuation" shall have the meaning set forth in
subsection 3.1 hereof.
"Obligations" shall mean all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of Borrower to the
Lenders or to any Lender, Agent, LC Issuer or any indemnified party arising
under the Loan Documents.
"Operating Account" shall mean a deposit account or securities account (to which
are credited only cash) maintained by Borrower with Agent or its designee in
which Agent has for the ratable benefit of the Lenders and Agent a first
priority perfected security interest and Lien as collateral security for the
Obligations.
"Other Taxes" shall have the meaning set forth in subsection 3.6(b) hereof.

 

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"Participants" shall have the meaning set forth in subsection 11.4 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Performance Letter of Credit" shall mean any Letter of Credit of the Borrower
or a Guarantor that is issued for the benefit of a municipality, other
governmental authority, utility, water or sewer authority, or other similar
entity for the purpose of assuring such beneficiary of the Letter of Credit of
the proper and timely completion of construction work.
"Permitted Acquisition" means any Acquisition (other than by means of a hostile
takeover, hostile tender offer or other similar hostile transaction) of a
business or entity engaged primarily in the business of home building, land
acquisition or land development, provided, that, immediately before and after
giving effect to such Acquisition, no Default or Event of Default has occurred
and is continuing and, in the case of any such Acquisition involving expected
total consideration in excess of $20,000,000, that Borrower delivers to Agent
not less than ten (10) days prior to the consummation thereof, a certificate so
stating (which notice shall be promptly forwarded by Agent to each Lender).
"Person" shall mean an individual, a partnership (including without limitation a
joint venture), a limited liability company (including without limitation a
joint venture), a corporation (including without limitation a joint venture), a
business trust, a joint stock company, a trust, an unincorporated association, a
Governmental Authority or any other entity of whatever nature (including without
limitation a joint venture).
"Plan" shall mean any pension plan which is covered by Title IV of ERISA and in
respect of which Borrower or a Commonly Controlled Entity is an "employer" as
defined in Section 3(5) of ERISA.
"PNC" shall mean PNC Bank, National Association, and its successors and assigns.
"Pool Real Property" shall mean Real Property owned by a Loan Party subject to a
Mortgage as of the Closing Date of this Agreement and any other Real Property
owned by a Loan Party which becomes subject to a Mortgage thereafter in
accordance with this Agreement and listed on Schedule 5 hereto, as the same may
be updated or otherwise revised from time to time.
"Prime Rate" means the rate of interest per annum publicly announced from time
to time by the Agent as its prime rate in effect at its principal office in
Pittsburgh, Pennsylvania; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Prior Credit Agreement" shall mean a certain Amended and Restated Credit
Agreement, effective as of October 6, 2006, by and among the Borrower, the
lender parties thereto and JPMorgan Chase Bank, N.A., as agent for the lenders,
as amended.
"Proceeds after Default" shall have the meaning set forth in Section 9 hereof.
"Published Rate" shall mean the rate of interest published each Business Day in
The Wall Street Journal "Money Rates" listing under the caption "London
Interbank Offered Rates" for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published by another publication
selected by Agent).
"Qualified Real Property" shall mean, with respect to any Loan Party or Loan
Parties as of any date, Real Property that is owned solely or jointly and
severally by such Person(s) where:

 

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(a)     Agent shall have received an Acceptable Appraisal (the fees and expenses
associated with such Acceptable Appraisal to be paid by Borrower in accordance
with the terms of this Agreement);
(b)     Agent shall have received environmental assessment reports, in form and
substance reasonably satisfactory to Agent from an environmental consulting firm
reasonably satisfactory to Agent, and within 15 days after such reports are made
available to the Lenders by Agent, Agent shall not have received notice from the
Required Lenders that such reports or firm are(is) not satisfactory to the
Required Lenders;
(c)     Agent shall have received, upon its request, a copy of all recorded
documents referred to, or listed as exceptions to title in, the Title Insurance
Policy (as defined in clause (e) below) and a copy of all other material
documents affecting such Real Property;
(d)     Agent shall have received a Mortgage covering such Real Property duly
executed and delivered by a duly authorized officer of each party thereto and
recorded and filed or insured under a Title Insurance Policy (or other evidence
satisfactory to Agent that such Mortgage has been recorded and filed) in the
appropriate offices in order to create valid and perfected first priority Liens
on such Real Property in favor of Agent and Agent shall have received such other
evidence that all other actions that Agent may reasonably deem necessary or
desirable in order to create valid and perfected first priority Liens on such
Real Property have been taken;
(e)    Agent shall have received from a title insurance company acceptable to
Agent (the "Title Insurance Company") in respect of such Real Property a
mortgagee's title insurance policy (or policies) and endorsements thereto or
marked up unconditional commitment for such insurance (the "Title Insurance
Policy"), in each case in form and substance reasonably satisfactory to Agent
and containing such endorsements as Agent may reasonably require;
(f)    Agent shall have received evidence satisfactory to it that such Real
Property is covered by property and liability insurance that is reasonably
satisfactory to Agent and, in the case of property insurance, names Agent an
additional insured and as mortgagee;
(g)     Agent shall have received evidence satisfactory to it that all premiums
in respect of the policies referred to in clause (e) above, all charges for
mortgage recording tax, recording charges and all related expenses, if any, have
been paid or have been provided for;
(h)     Agent shall have received (i) a flood hazard certificate, (ii) a policy
of flood insurance to the extent improvements on such Real Property are located
in a federally designated "Flood Zone", which policy provides coverage in an
amount not less than the book value of such Real Property located in a "Flood
Zone" or the maximum limit of coverage made available with respect to the
particular type of Real Property located in the "Flood Zone" under the National
Flood Insurance Act of 1968, whichever is less, to the extent available and
(iii) evidence satisfactory to Agent that all actions relating such Real
Property as are required by regulations implementing the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 with respect
to loans in areas having special flood hazards have been accomplished;
(i)     Agent shall have received an opinion letter from local counsel
reasonably requested by Agent addressed to Agent and the Lenders in the
jurisdiction in which such Real Property is located with respect to the
enforceability, validity and form of the Mortgage and any related fixture
filings, all in form and substance reasonably satisfactory to Agent;
(j)    Borrower shall have executed and delivered or caused to be executed and
delivered at Borrower's sole cost and expense, any reports, financing or
continuation statements and other agreements,

 

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amendments, documents, assignments, statements or instruments in each case in
form and substance satisfactory to Agent as may be reasonably necessary to
evidence, perfect or otherwise implement and maintain the Lien on such Real
Property as collateral security for the Obligations (in the case of the
Borrower) or for the Guaranteed Obligations (as defined in the Guaranty
Agreement in the case of the Guarantors); and
(l)    Such Real Property is subject to a valid enforceable first priority Lien
and perfected security interest in favor of Agent for the ratable benefit of the
Lenders and Agent (subject only to Limited Permitted Liens) as collateral
security for the Obligations (in the case of the Borrower) or for the Guaranteed
Obligations (as defined in the Guaranty Agreement in the case of the
Guarantors).
"Quarterly ICR" shall mean, for any fiscal quarter, the ratio of (a) EBITDA for
such fiscal quarter to (b) Consolidated Interest Incurred for such fiscal
quarter.
"Quarterly Payment Date" shall have the meaning set forth in subsection 2.18
hereof.
"Ratable Share" shall mean, with respect to any Lender on any date, (a) the
ratio of (i) the amount of the Commitment of such Lender to (ii) the Aggregate
Commitment or (b) if the Aggregate Commitment has terminated, the ratio of (i)
the outstanding Revolving Credit Loans of such Lender to (ii) all outstanding
Revolving Credit Loans.
"Real Property" shall mean Land owned, leased or hereafter acquired or leased by
a Loan Party, together with the right, title and interest of such Loan Party in
and to the streets, the land lying in the bed of any streets, roads or avenues,
opened or proposed, in or of, the air space and development rights pertaining to
the Land and the right to use such air space and development rights, all rights
of way, privileges, liberties, tenements, hereditaments and appurtenances
belonging or in any way appertaining thereto, all fixtures, all easements now or
hereafter benefiting the Land and all royalties and rights appertaining to the
use and enjoyment of the Land necessary for the residential development of such
Land, together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto and all related
personal property.
"Reimbursement Obligations" shall mean Borrower's obligations to reimburse an LC
Issuer as a result of draws on one or more Facility L/Cs.
"Replacement Lender" shall have the meaning set forth in subsection 3.10 hereof.
"Reportable Event" shall mean any of the events set forth in Section 4043(b) of
ER1SA or the regulations thereunder.
"Required Lenders" shall mean, at any particular time, Lenders having at least
66-2/3% of the aggregate amount of the Revolving Credit Loans then outstanding
or, if no Revolving Credit Loans are then outstanding, Lenders having at least
66-2/3% of the Aggregate Commitment.
"Requirement of Law" shall mean as to any Person, the Certificate (or Articles)
of Incorporation, By-Laws (or Code of Regulations), Close Corporation Agreement
(where applicable) or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination, including
without limitation all environmental laws, rules, regulations and
determinations, of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean as to Borrower or any of Borrower's
Subsidiaries, the Chairman, President, Chief Operating Officer, Chief Executive
Officer, an Executive Vice President, a Senior Vice

 

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President or General Counsel of such Person and, with respect to financial
matters and matters described in subsection 3.8 hereof, the Chief Financial
Officer, Treasurer, Controller or Chief Accounting Officer of such Person, in
each case acting in his or her capacity as such.
"Revolving Credit Loans" shall mean the revolving credit loans made pursuant to
this Agreement that are more particularly described in subsection 2.1 hereof.
"S&P" shall mean Standard & Poor's Rating Services.
"S Corporation" shall have the meaning set forth in Section 1361(a)(1) of the
Code.
"Second Borrowing Base" shall mean, as of any date, an amount calculated as
follows: (i) 100% of Secured Borrowing Base Cash plus (ii) 35% of the aggregate
book value of the Pool Real Property subject to a filed Mortgage or a Mortgage
insured by a Title Insurance Policy. The book value of Pool Real Property shall
be calculated in accordance with GAAP and shall include all associated costs
required to be capitalized under GAAP.
"Second Period" shall mean the period from and including the date of the
expiration of the Initial Period until such time as each Pool Real Property is
determined to be a Qualified Real Property by Agent, in its reasonable
discretion.
"Secured Borrowing Base" shall mean, as of any date, an amount calculated as
follows: (a) 100% of Secured Borrowing Base Cash plus (b) 45% of the aggregate
Appraised Value of Qualified Real Property. Notwithstanding anything to the
contrary herein, the Secured Borrowing Base shall be subject to the following
limitations, calculated based on book value as in effect from time to time: (i)
not more than 25% of the aggregate Secured Borrowing Base shall be comprised of
Qualified Real Property in a Single Market, except Columbus Ohio; (ii) not more
than 35% of the aggregate Secured Borrowing Base shall be comprised of Qualified
Real Property in the Columbus, Ohio Single Market; (iii) not more than 25% of
the aggregate Secured Borrowing Base shall be comprised of Lots under
Development; (iv) not more than 30% of the aggregate Secured Borrowing Base
shall be comprised of Unimproved Entitled Land and (v) not more than 50% of the
aggregate Secured Borrowing Base shall be comprised of the sum of Lots under
Development and Unimproved Entitled Land. The Secured Borrowing Base shall not
include any unimproved, unentitled Real Property.
"Secured Borrowing Base Account" shall mean one or more deposit accounts or
securities accounts (to which are credited only cash and Secured Borrowing Base
Permitted Investments) maintained by Borrower with Agent or its designee in
which Agent has for the ratable benefit of the Lenders and Agent a first
priority security interest and Lien, perfected by control pursuant to a Blocked
Account Control Agreement, as collateral security for the Obligations.
"Secured Borrowing Base Cash" shall mean cash and Secured Borrowing Base
Permitted Investments held or maintained in the Secured Borrowing Base Account
in which Agent has for the ratable benefit of the Lenders and Agent a first
priority security interest and Lien, perfected by control pursuant to a Blocked
Account Control Agreement, as collateral security for the Obligations.
"Secured Borrowing Base Permitted Investments" shall mean those investments
listed on Schedule 4 to the Collateral Agreement.
"Secured Indebtedness" shall mean, as of any date, all Indebtedness (including
without limitation purchase money Indebtedness, non-recourse Indebtedness and
Capital Lease obligations) of Borrower or any of its Subsidiaries (excluding
Indebtedness owing (i) to Borrower or any of its Subsidiaries or (ii) under

 

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this Agreement or any other Loan Document) that is non-recourse or fully secured
by a Lien on assets of Borrower or any of its Subsidiaries.
"Security" shall mean all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Documents.
"Security Documents" shall mean, collectively, the Collateral Agreement, the
Mortgages, the Blocked Account Control Agreement and all other security
documents hereafter delivered to Agent granting a Lien on any property of any
Person to secure the Obligations (in the case of Borrower) or of the amounts
guaranteed by the Guaranty Agreement (in the case of a Guarantor).
"Senior Notes" shall mean the 6-7/8% Senior Notes due 2012 issued under and
pursuant to the Indenture dated as of March 24, 2005 among Borrower, the
guarantors named therein and US Bank National Association, as Trustee.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer Plan (as
defined in ERISA).
"Single Market" shall mean, as of any date, a metropolitan statistical area as
defined by the United States Office of Management and Budget for use by federal
statistics agencies.
"Speculative Housing Unit" shall mean any Housing Unit owned by the Borrower or
a Guarantor that is not a Housing Unit under Contract and shall include, without
limitation, all Model Houses.
"Start of Construction" shall mean the commencement of the digging of the
foundation or footer for a detached or attached single family house (including a
townhouse condominium building or condominium building) on Land that immediately
prior thereto constituted a Lot hereunder.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject, with respect to the
Eurodollar Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Rate Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Subordinated Indebtedness" shall mean, at any date, all unsecured subordinated
Indebtedness of Borrower, the terms and manner (including without limitation the
terms and manner with respect to subordination) of which are satisfactory to
Required Lenders in their sole discretion and approved in writing by Required
Lenders and which is subordinate to the Obligations.
"Subsidiary" shall mean, as to any Person, a corporation, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
limited liability company or other entity are at the time owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person, and with respect to Borrower
shall include all Subsidiaries of Subsidiaries of Borrower.
"Supplemental Guaranty" shall have the meaning set forth in the Guaranty
Agreement.

 

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"Swingline Expiry Date" shall mean the date which is ten (10) Business Days
prior to the Maturity Date.
"Swingline Lender" means PNC in its capacity as lender of Swingline Loans.
"Swingline Loan" shall have the meaning set forth in subsection 2.12 hereof.
"Taxes" shall mean any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Title Insurance Policy" shall have the meaning given in clause (e) of the
definition of Qualified Real Property.
"Tranche" shall mean the collective reference to those Eurodollar Rate Loans,
the then current Interest Periods with respect to all of which begin on the same
date and end on the same date (whether or not such Eurodollar Rate Loans shall
originally have been made on the same day).
"Uniform Customs" shall mean the Uniform Customs and Practice for Documentary
Credits, 1993 revision, ICC Publication No. 500, or amendment thereof or
successor thereto referenced in any LC Issuer's issued Letters of Credit.
"Unimproved Entitled Land" shall mean all Lots that are neither Lots under
Development, Finished Lots or Lots under Contract.
"Unrestricted Cash" shall mean cash and Cash Equivalents of the Loan Parties
free and clear of all Liens (other than Liens securing the Obligations) and not
subject to any restrictions on the use thereof to pay Indebtedness and other
obligations of the Borrower and its Subsidiaries.
"USA Patriot Act" shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
2.Other Definitional Provisions.
(a)All terms defined in this Agreement shall have the defined meanings when used
in the Notes or any certificate or other document made or delivered pursuant
hereto or thereto unless otherwise defined therein.
(b)As used herein, in the Notes or in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms relating to Borrower and
Borrower's Subsidiaries not defined in subsection 1.1 hereof, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c)Any reference to "value" of property shall mean the lower of cost or market
value of such property, determined in accordance with GAAP.
(d)The definition of any document or instrument includes all schedules,
attachments and exhibits thereto and all renewals, extensions, supplements and
amendments thereof; terms otherwise defined herein have the same meanings
throughout this Agreement.
(e)Unless otherwise specified, all references herein to times of day shall be
references to Eastern Time.
(f)"Hereunder," "herein," "hereto," "this Agreement" and words of similar import
refer to this entire document; "including" is used by way of illustration and
not by way of limitation, unless the context clearly indicates the contrary; and
the singular includes the plural and conversely.

 

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SECTION 1:AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT LOANS, SWINGLINE
LOANS AND FACILITY L/CS
1.Commitments.
(a)Each Lender severally agrees, on the terms and conditions hereinafter set
forth, to make Revolving Credit Loans to the Borrower from time to time during
the Commitment Period, and to purchase undivided interests and participations in
Facility LCs in accordance with subsection 2.16 hereof, in an aggregate
principal amount of Loans made by such Lender and of such Lender's Ratable Share
of the Facility L/C Obligations not to exceed at any time outstanding the amount
set forth for such Lender in Schedule 1 hereto (such Lender's obligations to
make Revolving Credit Loans and to purchase undivided interests and
participations in Facility L/Cs in accordance with subsection 2.16 hereof in
such amounts, as reduced, increased or otherwise modified from time to time
pursuant to the terms of this Agreement, being herein referred to as such
Lender's "Commitment"), subject to the limitations set forth in subsection
2.1(b) hereof.
(b)Borrowing Base Coverage.
(i)Availability. During the Initial Period, the Aggregate Outstandings shall not
at any time exceed the lesser of the Initial Borrowing Base and the Aggregate
Commitment and shall be subject to prepayment in accordance with subsection
2.6(b), and no Loan shall be made, and no Facility L/C shall be issued or
amended if after giving effect to the incurrence of such Loan or the issuance or
amendment of such Facility L/C, the Aggregate Outstandings would exceed the
lesser of the Initial Borrowing Base and the Aggregate Commitment. After the end
of the Initial Period and during the Second Period, the Aggregate Outstandings
shall not at any time exceed the lesser of the Second Borrowing Base and the
Aggregate Commitment and shall be subject to prepayment in accordance with
subsection 2.6(b), and no Loan shall be made and no Facility L/C shall be issued
or amended if after giving effect to the incurrence of such Loan or the issuance
or amendment of such Facility L/C, the Aggregate Outstandings would exceed the
lesser of the Second Borrowing Base and the Aggregate Commitment. After the end
of the Second Period, the Aggregate Outstandings shall not at any time exceed
the lesser of the Secured Borrowing Base and the Aggregate Commitment and shall
be subject to prepayment in accordance with subsection 2.6(b), and no Loan shall
be made and no Facility L/C shall be issued or amended if after giving effect to
the incurrence of such Loan or the issuance or amendment of such Facility L/C,
the Aggregate Outstandings would exceed the lesser of the Secured Borrowing Base
and the Aggregate Commitment.
(ii)Releases of Security During Second Period. During the Second Period,
Borrower may request the release of all or any portion of a Mortgaged Property
from the Liens of Agent, whereupon Agent shall release its Liens on such
Mortgaged Property within ten (10) Business Days after receipt of such request
so long as (A) no Default or Event of Default has occurred and is continuing;
(B) after giving effect to such release and any substitution of Mortgaged
Properties (or any portion thereof), the Aggregate Outstandings do not exceed
the lesser of the Aggregate Commitment and the Second Borrowing Base, (C) if
such release is of any Secured Borrowing Base Cash or if Mortgaged Property
subject to the request for a release constitutes more than 10% of the Second
Borrowing Base, Borrower has delivered to Agent a current Borrowing Base
Certificate evidencing compliance with this Agreement, and (D) concurrently with
such release the net proceeds, if any, from the disposition of such Mortgaged
Property are deposited into the Operating Account. Upon the release of Agent's
Liens on any Mortgaged Property, such Mortgaged Property shall no longer be
included in the calculation of the Second Borrowing Base.
(iii)Releases of Security after Second Period. After the Second Period, Borrower
may request in writing that Agent release its Lien on Secured Borrowing Base
Cash or Mortgaged Property, or any portion or combination thereof. Agent shall
release its Lien on Secured

 

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Borrowing Base Cash or Mortgaged Property (or any portion thereof, including any
related personal property) within ten (10) days of receipt by Agent of a notice
pursuant to this subsection (iii) so long as (and by requesting a release
Borrower shall be deemed to have represented and warranted to Agent and the
Lenders that the following conditions have been satisfied): (A) no Default or
Event of Default has occurred and is then continuing or would result therefrom;
(B) after giving effect to such release and any substitution of Mortgaged
Properties (or any portion thereof), the Aggregate Outstandings do not exceed
the lesser of the Aggregate Commitment and the Secured Borrowing Base, (C) if
such release is of any Secured Borrowing Base Cash or if Mortgaged Property
subject to the request for a release constitutes more than 10% of the Secured
Borrowing Base, Borrower has delivered to Agent a current Borrowing Base
Certificate evidencing compliance with this Agreement, and (D) concurrently with
such release the net proceeds, if any, from any disposition of such Mortgaged
Property are deposited into the Operating Account. Notwithstanding the
foregoing, Borrower may not request, and Agent shall not be required to,
release, as of any date, Secured Borrowing Base Cash from the Secured Borrowing
Base in an amount less than $1,000,000 and any $10,000 increments in excess
thereof, with such increments being calculated by rounding down to the nearest
multiple of $10,000. Upon the release of Agent's Liens on any Secured Borrowing
Base Cash or Mortgaged Property, such Secured Borrowing Base Cash or Mortgaged
Property shall no longer be included in the calculation of the Secured Borrowing
Base.
(iv)Modifications to Mortgaged Property. A Loan Party may, without consent of
any Lender, Agent or any Person (A) make immaterial dispositions (including, but
not limited to, lot line adjustments) of portions of any Mortgaged Property for
dedication to the public and permit the creation of Liens to secure the levy of
special assessments in favor of, Governmental Authorities, community development
districts and property owners' associations, (B) make immaterial dispositions of
portions of the Mortgaged Property to third parties for the purposes of
resolving any encroachments issues, (C) grant easements, restrictions,
covenants, reservations and rights-of-way for resolving minor encroachment
issues or for access, water and sewer lines, telephone cable and internet lines,
electric lines or other utilities or for other similar purposes, and (D) consent
to or join in any land use or other development approval documents (including
subdivision plats, easements and the like) provided that such disposition, grant
or consent does not materially impair the value, utility or operation of the
applicable Mortgaged Property. In connection with any disposition or creation of
any Lien or any grant or consent permitted pursuant to this subsection (iv),
Agent shall execute and deliver or cause to be executed and delivered any
instrument reasonably necessary or appropriate in the case of the dispositions
referred to above to release the portion of the Mortgaged Property affected by
such disposition from the Lien of the applicable Mortgage, or to subordinate the
Lien of the applicable Mortgage, or acknowledgement that the Lien of any
Mortgage is subordinate, to such Liens, easements, restrictions, covenants,
reservations and rights-of-way or other similar grants, or to evidence such
consent or joinder, in each case upon receipt by Agent of (I) ten (10) Business
Days' prior written notice thereof; (II) a copy of the applicable instrument or
instruments of disposition or subordination; and (III) a certificate from an
officer of Borrower stating that such disposition does not materially impair the
value, utility or operation of the applicable Mortgaged Property.
(v)Appraisals. Agent shall be entitled to obtain, and at the request of Agent or
Required Lenders shall obtain, at Borrower's expense, a new Acceptable Appraisal
of each Real Property (or any portion thereof) included in the Secured Borrowing
Base not more than once every twelve (12) months during the term of this
Agreement. In addition to the foregoing, Agent will be entitled to obtain (A) at
Borrower's expense, additional Acceptable Appraisals of any

 

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such Real Property (or any portion thereof) if (I) an Event of Default exists,
or (II) an appraisal is required under applicable Requirements of Law and (B) at
the Lenders' expense, such additional and other Acceptable Appraisals at any
time and from time to time as Agent shall request.
(vi)Administration of Borrowing Base. The Initial Borrowing Base, the Second
Borrowing Base and the Secured Borrowing Base shall be administered by Agent in
accordance with such reasonable requirements as may be established by Agent, as
such requirements are described in a notice to Borrower prior to giving effect
thereto. Administration of the Initial Borrowing Base, the Second Borrowing
Base, and the Secured Borrowing Base shall include, without limitation those
activities described on Exhibit I.
(vii)Costs and Expenses. Subject to the limitations and conditions contained in
this Agreement, Borrower shall pay all reasonable fees and expenses associated
with any of the actions taken under this subsection 2.1(b) including, without
limitation, (A) all reasonable fees and charges with respect to any appraisal,
re-appraisal, and survey costs, (B) title insurance charges and premiums, (C)
title search or examination costs, including abstracts, abstractors'
certificates and uniform commercial code searches, (D) judgment and tax lien
searches for each Loan Party, (E) reasonable fees and costs of environmental
investigations, site assessments and remediations, (F) recordation taxes,
documentary taxes, transfer taxes and mortgage taxes, (G) filing and recording
fees, (H) reasonable legal fees and expenses and (I) reasonable subcontractor
costs and expenses.
(viii)Calculation of Secured Borrowing Base. (A) Within thirty (30) days after
the end of each calendar month, beginning with the calendar month ending June
30, 2010, (B) on demand by Agent so long as an Event of Default has occurred and
is continuing, and (C) at such other times as required by this Agreement,
Borrower shall provide Agent with a Borrowing Base Certificate showing
Borrower's calculations of the components of the Initial Borrowing Base, the
Second Borrowing Base or the Secured Borrowing Base, as applicable. On demand
from Agent, Borrower shall provide Agent with all documentation and other data
supporting such calculations as Agent may require. In the event that Agent
notifies Borrower in writing of any inaccuracy in a Borrowing Base Certificate,
the amount calculated as the Initial Borrowing Base, the Second Borrowing Base
or the Secured Borrowing Base, as applicable, in such Borrowing Base Certificate
shall be revised as reasonably determined by Agent.
(ix)Other Releases and Subordinations; Satisfaction of Aggregate Commitments.
Agent and Lenders agree that:
(A)Borrower may request the release or subordination of the security interests
and Liens of Agent on the Security that is (A) uneconomical, excess, damaged,
obsolete or worn out or scrap personal property, (B) other personal property
being replaced with personal property of substantially equivalent value or (C)
being pledged to a secured party providing Secured Indebtedness, whereupon Agent
shall release (or to the extent approved by any such secured party subordinate)
such security interests and Liens within ten (10) Business Days after receipt of
such request so long as (and by requesting a release or subordination Borrower
shall be deemed to have represented to Agent and the Lenders that) the following
conditions have been satisfied: (I) no Default or Event of Default has occurred
and is then continuing or would result therefrom; (II) to the extent such
Security is being pledged to a secured party providing Secured Indebtedness,
such Secured Indebtedness is permitted under subsection 7.1, (III) after giving
effect to such release or subordination Aggregate Outstandings do not exceed the
lesser of the Aggregate Commitment and the Secured Borrowing Base (or, during
the Second Period, the Second Borrowing Base) and (IV) concurrently with any
such release or subordination of a Mortgaged Property the net proceeds from such
Secured Indebtedness, if any, secured by such Mortgaged Property are deposited
into the Operating Account.
(B)Release of Liens Upon Termination of Commitments. Agent and

 

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Lenders agree that, upon the termination of the Commitments, termination or
expiration of all Facility L/Cs and indefeasible payment and satisfaction in
full of Aggregate Outstandings, all of the security interests in, and Liens on,
the Security shall be released, discharged and terminated, and Agent shall (I)
execute (as applicable) and deliver Uniform Commercial Code termination
statements (and does hereby authorize the Loan Parties from and after such date,
to file or cause to be filed such termination statements), intellectual property
release documents and such other instruments of release and discharge pertaining
to the security interests and other Liens granted to Agent pursuant to the
Security Documents in any of the Security being so released as Borrower may
reasonably request to effectuate or to reflect of public record the release and
discharge of any such security interests and Liens, and (II) deliver promptly
all Security in its possession to the extent that the Liens on such Security are
being released, discharged or terminated. All of the foregoing deliveries shall
be at the expense of Borrower, with no liability to Agent or any Lender and with
no representation or warranty by or recourse to Agent or any Lender.
(x)Maintenance of the Borrowing Base. Borrower shall maintain cash and Cash
Equivalents in the Secured Borrowing Base Account (or, as applicable, in the
Facility L/C Collateral Account) as required pursuant to subsection 2.1(b)(i)
hereof. Borrower agrees at all times to cause the Initial Borrowing Base, the
Second Borrowing Base and the Secured Borrowing Base to be not less than the
Aggregate Outstandings.
(xi)Operating Account. So long as any Commitment remains in effect, any portion
of any Note or Reimbursement Obligation remains outstanding and unpaid, any
Facility L/C remains outstanding that is not fully collateralized with cash in a
manner satisfactory to the LC Issuer thereof and to Agent, or any other amount
is owing to Agent or any Lender, Borrower agrees that it will maintain the
Operating Account pursuant to arrangements satisfactory to Agent at Agent's
office in the name of Borrower but subject to the control of Agent, for the
benefit of the Lenders and LC Issuers. Borrower hereby pledges, assigns and
grants to Agent, on behalf of and for the ratable benefit of the Lenders and LC
Issuers, a security interest in all of Borrower's right, title and interest in
and to the Operating Account and all funds which may from time to time be on
deposit in the Operating Account to secure prompt and complete payment and
performance of the Obligations. Unless and until an Event of Default shall occur
and be continuing, Agent will honor all withdrawal, payment, transfer and other
fund disposition or instructions from Borrower that Borrower is otherwise
entitled to give in respect of the Operating Account. So long as an Event of
Default has occurred and is continuing, Agent shall be entitled to cease
honoring all such instructions concerning the Account, and Borrower shall have
no right or ability to access or withdraw or transfer funds from the Operating
Account.
(c)No Revolving Credit Loans shall be made at any time that any Swingline Loan
is outstanding, except for Revolving Credit Loans that are used, on the day on
which made, to repay in full the outstanding principal balance of the Swingline
Loans. During the Commitment Period and as long as no Default or Event of
Default exists, Borrower may borrow, prepay in whole or in part and reborrow
Revolving Credit Loans, all in accordance with the terms and conditions hereof.
(d)Subject to the terms and conditions of this Agreement (including the
limitations on the availability of Eurodollar Rate Loans and including the
termination of the Aggregate Commitment as set forth in Section 9 hereof), the
Revolving Credit Loans may from time to time be (i) Eurodollar Rate Loans, (ii)
ABR Loans, or (iii) a combination thereof, as determined by Borrower and
notified to Agent in accordance with subsection 2.3 hereof, provided (a) that no
Revolving Credit Loan shall be made as a Eurodollar Rate Loan after the day that
is one month prior to the last day of the Commitment Period, and (b) that the
maximum number of Tranches that may be outstanding at any one time as Revolving
Credit Loans may not exceed six in the aggregate.
2.Notes.
The Revolving Credit Loans made by Lenders pursuant hereto shall be evidenced by
Notes, payable to the

 

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order of each Lender in the amount of its Commitment and evidencing the
obligation of Borrower to pay the aggregate unpaid principal amount of the
Revolving Credit Loans made by such Lender, with interest thereon as prescribed
in subsection 2.5 hereof. Each Lender is hereby authorized to record
electronically or otherwise the date and amount of each Revolving Credit Loan
disbursement made by such Lender, and the date and amount of each payment or
prepayment of principal thereof, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded; provided,
however, the failure of such Lender to make, or any error in making, any such
recordation(s) shall not affect the obligation of Borrower to repay outstanding
principal, interest, or any other Obligation due hereunder or under the Notes in
accordance with the terms hereof and thereof. Each Note shall (a) be dated as of
the date hereof, (b) be stated to mature on the Maturity Date, and (c) bear
interest for the period from and including the date thereof on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in subsection 2,5 hereof.
Interest on each Revolving Credit Loan shall be payable as specified in
subsection 2.5 hereof.
3.Procedure for Borrowing.
(a)Borrower may borrow under the Commitments (subject to the limitations on the
availability of Eurodollar Rate Loans), during the Commitment Period, provided
Borrower shall give Agent written (which may be by electronic mail) notice (the
"Notice of Borrowing"), which Notice of Borrowing must be received (i) prior to
12:00 noon, at least three (3) Business Days prior to the requested Borrowing
Date for that part of the requested borrowing that is to be Eurodollar Rate
Loans, or (ii) prior to 11:00 a.m., on or before the requested Borrowing Date
for that part of the requested borrowing that is to be ABR Loans which Notice of
Borrowing, in the case of ABR Loan(s), shall be irrevocable. Each Notice of
Borrowing shall specify (A) the Borrowing Date (which shall be a Business Day),
(B) the amount of the requested borrowing, (C) whether the borrowing is to be of
Eurodollar Rate Loans, ABR Loans or a combination thereof and (D) if the
borrowing is to be entirely or partly of Eurodollar Rate Loans, the amount of
each ABR Loan, if any, and the respective amounts of each such Eurodollar Rate
Loan and the respective lengths of the initial Interest Periods therefor. Each
borrowing pursuant to the Commitments shall be in the principal amount (1) in
the case of ABR Loans, of $1,000,000 or any larger amount which is an even
multiple of $100,000, and (2) in the case of Eurodollar Rate Loans, of
$10,000,000 or any larger amount which is an even multiple of $1,000,000.
(b)After the Borrower gives Notice of Borrowing with respect to Eurodollar Rate
Loans, Agent, by 10:00 a.m., two Business Days prior to the requested Borrowing
Date, shall advise the Borrower of the applicable interest rate(s) (which is the
sum of the applicable Eurodollar Rate(s) and the Applicable Eurodollar Margin)
for the Eurodollar Rate Loan(s) and Interest Period(s) requested in the Notice
of Borrowing. Not more than two hours thereafter, the Borrower shall give Agent
written irrevocable confirmation of whether or not the Borrower selects
Eurodollar Rate Loan(s) on such Borrowing Date and, if so, the amount(s) and
Interest Period(s) of such Eurodollar Rate Loan(s). If the Borrower's written
confirmation is timely made, the Borrower shall be deemed to be requesting
borrowing(s) of Eurodollar Rate Loan(s) in the amount(s) and for the Interest
Period(s) stated in the confirmation. If the Borrower's confirmation is not
timely made, the Borrower shall be deemed to have requested a borrowing entirely
as an ABR Loan in the aggregate amount and on the Borrowing Date specified in
the Notice of Borrowing
(c)By 1:00 p.m., (i) with respect to any ABR Loan, on the requested Borrowing
Date and (ii) with respect to any Eurodollar Rate Loan, two Business Days prior
to the requested Borrowing Date, Agent shall give notice by facsimile to each
Lender of such request, specifying (A) the Borrowing Date (which shall be a
Business Day), (B) the amount of the requested borrowing, (C) whether the
borrowing is to be of Eurodollar Rate Loans, ABR Loans or a combination thereof,
and (D) if the borrowing is to be entirely or partly of Eurodollar Rate Loans,
the amount of each ABR Loan, if any, and the respective amounts of each such
Eurodollar Rate Loan, the applicable Eurodollar Rate for each such Eurodollar
Rate Loan and the respective lengths of the initial Interest Periods therefor.
Subject to satisfaction of the terms and conditions

 

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of this Agreement, each Lender shall deposit funds with Agent for the account of
Borrower by 3:00 p.m. on the Borrowing Date by wire transfer or other
immediately available funds equal to its Ratable Share of the Revolving Credit
Loans to be made on the Borrowing Date. The Loan(s) will then be made available
to Borrower by Agent crediting the account of Borrower on the books of Agent
with the aggregate amounts made available to Agent by Lenders, and in like funds
as received by Agent.
(d)Each Lender may book its Loans and its participations in Facility L/Cs at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and the Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender and LC Issuer may, by written notice to the Agent and Borrower in
accordance with subsection 11.2 hereof, designate replacement or additional
Lending Installations through which Loans will be made by it or Facility L/Cs
will be issued by it and for whose account Loan payments or a payment with
respect to Facility L/Cs are to be made.
(e)Each ABR Loan shall continue as an ABR Loan unless and until such ABR Loan is
converted into a Eurodollar Rate Loan pursuant to subsection 3.1 or is repaid in
accordance with subsection 2.11. Each Eurodollar Rate Loan shall continue as a
Eurodollar Rate Loan until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loan shall be automatically
converted into an ABR Loan unless (x) such Eurodollar Loan is or was repaid in
accordance with subsection 2.11 or (y) such Eurodollar Rate Loan is continued as
a Eurodollar Rate Loan in accordance with subsection 3.1.
4.Commitment Fee.
Borrower agrees to pay to Agent for the benefit of each Lender a commitment fee
(the "Commitment Fee") for the Commitment Period, computed at the Applicable
Commitment Rate per annum on the average daily unused amount of each Lender's
Commitment during the Commitment Period, payable quarterly in arrears and due on
each Quarterly Payment Date and on the last day of the Commitment Period,
commencing on the first of such dates to occur after the date hereof. For
purposes of determining the unused portion of the Aggregate Commitment and the
unused portion of a Lender's Commitment hereunder, (a) the Aggregate Commitment
shall be deemed used to the extent of the aggregate face amount of the
outstanding Facility L/Cs and such Lender's Commitment shall be deemed used to
the extent of such Lender's Ratable Share of the aggregate face amount of the
outstanding Facility L/Cs and (b) Swingline Loans shall constitute usage of the
Swingline Lender's Commitment only.
5.Interest: Default Interest.
(a)(i) the Revolving Credit Loans shall bear interest on the unpaid principal
amount thereof at a rate per annum equal to (y) in the case of ABR Loans, the
Alternate Base Rate in effect from time to time, plus the Applicable ABR Margin,
and (z) in the case of Eurodollar Rate Loans, if permitted hereunder at such
time, the Eurodollar Rate determined for each Interest Period then in effect,
plus the Applicable Eurodollar Margin, and (ii) the Swingline Loans shall bear
interest on the unpaid principal amount thereof at a rate per annum equal to the
Prime Rate in effect from time to time, plus the Applicable ABR Margin.
(b)If all or a portion of the principal amount of any of the Revolving Credit
Loans made hereunder (whether as ABR Loans or Eurodollar Rate Loans or a
combination thereof) or the Swingline Loans or any installment of interest on
any Revolving Credit Loan or Swingline Loan or any Commitment Fee or Facility
L/C Fees shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), any such overdue principal amount and, to the extent
permitted by applicable law, any overdue installment of interest on any
Revolving Credit Loan or Swingline Loan or any overdue payment of Commitment
Fees or Facility L/C Fees hereunder shall, without limiting any other rights of
Lenders, bear interest at a rate per annum which is the sum of the Alternate
Base Rate in effect from time to time, plus the Applicable ABR Margin, plus one
percent (1%), from the date of such non-payment until paid in full (before, as
well as after, judgment); provided, however, if all or any portion of any
principal on any Revolving Credit

 

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Loan made as a Eurodollar Rate Loan hereunder shall not be paid when due and the
then current Interest Period for such Eurodollar Rate Loan has not yet expired,
the entire principal amount of such Eurodollar Rate Loan and, to the extent
permitted by applicable law, any overdue installment of interest on such
Eurodollar Rate Loan shall, without limiting any other rights of Lenders, bear
interest at a rate per annum which is the sum of one percent (1%) plus the
applicable non-default interest rate (which is the sum of the applicable
Eurodollar Rate and the Applicable Eurodollar Margin) on such Eurodollar Rate
Loan then in effect from the date of such non-payment until the expiration of
the then current Interest Period with respect to such Eurodollar Rate Loan
(before, as well as after, judgment); thereafter, the entire principal amount of
such Eurodollar Rate Loan and, to the extent permitted by applicable law, any
overdue installment of interest on such Eurodollar Rate Loan shall, without
limiting any other rights of Lenders, bear interest at a rate per annum which is
the sum of the Alternate Base Rate in effect from time to time, plus the
Applicable ABR Margin, plus one percent (1%), until paid in full (before, as
well as after, judgment).
(c)Interest shall be payable in arrears and shall be due on each Interest
Payment Date.
6.Termination or Reduction of Aggregate Commitment; Mandatory Reduction.
(a)(i)    Borrower shall have the right to terminate the Aggregate Commitment
or, from time to time (and so long as no Default or Event of Default exists),
reduce the amount of the Aggregate Commitment, upon not less than five (5)
Business Days' written notice to each Lender specifying (A) either a reduction
or termination and (B) in the case of a reduction, whether any prepayment, if
required by this Agreement, shall be of ABR Loans, Eurodollar Rate Loans or a
combination thereof, and, in each case if a combination thereof, the principal
allocable to each.
(i)Any such reduction of the Aggregate Commitment shall be in the amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce
permanently the amount of the Aggregate Commitment then in effect. Any such
reduction shall be accompanied by (A) prepayment of the Revolving Credit Loans
made hereunder to the extent, if any, that the sum of the amount of such
Revolving Credit Loans, the Swingline Loans and the Facility L/C Obligations
then outstanding exceeds the amount of the Aggregate Commitment, as then
reduced, together with accrued interest on the amount so prepaid to the date of
such prepayment, and (B) if a Revolving Credit Loan is a Eurodollar Rate Loan
that is prepaid other than at the end of the Interest Period applicable thereto,
by any amounts payable pursuant to subsection 3.5 hereof.
(ii)Any such termination of the Aggregate Commitment shall be accompanied (A) by
prepayment in full of the Loans then outstanding hereunder, together with
accrued interest thereon to the date of such prepayment, and the payment of any
unpaid Commitment Fee then accrued hereunder; (B) with respect to Facility L/Cs,
by Borrower's compliance with the terms of subsection 2.15 hereof; and (C) if a
Revolving Credit Loan is a Eurodollar Rate Loan that is prepaid other than at
the end of the Interest Period applicable thereto, by any amounts payable
pursuant to subsection 3.5 hereof.
(iii)Any such reduction or termination of the Aggregate Commitment shall be
allocated to each Lender's Commitment ratably in proportion to its Ratable
Share.
(b)If as of any date, (i) during the Initial Period, the Aggregate Outstandings
exceed the lesser of the Initial Borrowing Base and the Aggregate Commitment or
(ii) during the Second Period, the Aggregate Outstandings exceed the lesser of
the Second Borrowing Base and the Aggregate Commitment or (iii) after the end of
the Second Period, the Aggregate Outstandings exceed the lesser of the Secured
Borrowing Base and the Aggregate Commitment, then Borrower shall within three
Business Days thereafter prepay Loans and/or cash collateralize the Facility L/C
Obligations in accordance with the procedures set forth in Section 8 in an
aggregate amount equal to such excess.
(c)If, as of any date, Borrower fails to maintain a Consolidated Tangible Net
Worth of at least $250,000,000, the Aggregate Commitment will be immediately
reduced by $25,000,000. Any such reduction of the Aggregate Commitment shall be
allocated to each Lender's Commitment ratably in proportion

 

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to its Ratable Share. If, as a result of any restatement of or other adjustment
to the financial statements of Borrower or a calculation error, Borrower or
Agent determines that (i) the Consolidated Tangible Net Worth as calculated by
Borrower as of any applicable date was inaccurate, and (ii) a proper calculation
of the Consolidated Tangible Net Worth would have resulted in a reduction of the
Aggregate Commitment, the Aggregate Commitment will be immediately reduced. This
subsection 2.6(c) shall not limit the rights of Agent, any Lender or any LC
Issuer as the case may be under Section 9. Any such reduction shall be
accompanied by (A) prepayment of the Revolving Credit Loans made hereunder to
the extent, if any, that the sum of the amount of such Revolving Credit Loans,
the Swingline Loans and the Facility L/C Obligations then outstanding exceeds
the amount of the Aggregate Commitment, as then reduced, together with accrued
interest on the amount so prepaid to the date of such prepayment, and (B) if a
Revolving Credit Loan is a Eurodollar Rate Loan that is prepaid other than at
the end of the Interest Period applicable thereto, by any amounts payable
pursuant to subsection 3.5 hereof.
(d)If, as of April 1, 2011, the Senior Notes have not been refinanced in full
(including a repurchase by the Borrower permitted by this Agreement), the
maximum Aggregate Outstandings permitted under this Agreement (but subject to
subsection 2.1(b)(i)) will immediately reduce to $98,000,000 (or to a lesser
amount equal to 30% of the Aggregate Commitment then in effect if the Borrower
has reduced the Aggregate Commitment pursuant to subsection 2.6(a)(i) hereof),
and the Borrower shall immediately (A) prepay the Revolving Credit Loans made
hereunder to the extent, if any, that the sum of the amount of such Revolving
Credit Loans, the Swingline Loans and the Facility L/C Obligations then
outstanding exceeds $98,000,000 (or such lesser amount), together with accrued
interest on the amount so prepaid to the date of such prepayment, and (B) if a
Revolving Credit Loan is a Eurodollar Rate Loan that is prepaid other than at
the end of the Interest Period applicable thereto, pay any amounts payable
pursuant to subsection 3.5 hereof. Thereafter, in the event the Senior Notes are
refinanced prior to July 1, 2011, the maximum Aggregate Outstandings permitted
under this Agreement (but subject to subsection 2.1(b)(i)) will be increased to
$140,000,000 (or the Aggregate Commitment as of such date, if less). If, as of
July 1, 2011, the Senior Notes have not been refinanced in full (including a
repurchase by the Borrower permitted by this Agreement), the Aggregate
Commitment will be immediately reduced by fifty percent (50%). If, as of October
1, 2011, the Senior Notes have not been refinanced in full (including a
repurchase by the Borrower permitted by this Agreement), the Aggregate
Commitment will be immediately reduced to $0 and terminate. Any such reduction
or termination of the Aggregate Commitment shall be allocated to each Lender's
Commitment ratably in proportion to its Ratable Share. This subsection 2.6(d)
shall not limit the rights of Agent, any Lender or any LC Issuer as the case may
be under Section 9. Any such reduction or termination shall be accompanied by
(A) prepayment of the Revolving Credit Loans made hereunder to the extent, if
any, that the sum of the amount of such Revolving Credit Loans, the Swingline
Loans and the Facility L/C Obligations then outstanding exceeds the amount of
the Aggregate Commitment, as then reduced, together with accrued interest on the
amount so prepaid to the date of such prepayment, and (B) if a Revolving Credit
Loan is a Eurodollar Rate Loan that is prepaid other than at the end of the
Interest Period applicable thereto, by any amounts payable pursuant to
subsection 3.5 hereof.
7.Maturity Date of Commitment»
. Unless earlier terminated pursuant to the terms of this Agreement, the
Aggregate Commitment shall terminate on the Maturity Date, and the unpaid
balance of the Revolving Credit Loans and Swingline Loans outstanding shall be
paid on the Maturity Date.
8.Computation of Interest and Fees.
Commitment Fees on the Commitment and interest in respect of the Revolving
Credit Loans shall be calculated on the basis of a 360-day year for the actual
days elapsed (other than interest in respect of the ABR Loans, which shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed). Any change in the interest rate on the Loans and the Notes
resulting from a change in the Alternate Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening

 

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of business of the day on which such change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements shall become effective, without notice to
Lenders or Borrower. However, Agent shall give Borrower and Lenders prompt
notice of all changes in the Alternate Base Rate or the Eurocurrency Reserve
Requirements. Each determination of an interest rate by Agent pursuant to any
provision of this Agreement shall be conclusive and binding on Lenders and
Borrower in the absence of manifest error.
9.Increased Costs.
If a Lender or an LC issuer determines that the amount of capital required or
expected to be maintained by such Lender or such LC Issuer, any Lending
Installation of such Lender or an LC Issuer, or any corporation controlling such
Lender or LC Issuer is increased as a result of a Change, then, within fifteen
(15) days of written notice by such Lender or LC Issuer (which notice shall be
given not later than 180 days after the Change resulting in such increase),
Borrower shall pay such Lender or LC Issuer the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender or LC Issuer determines is attributable to this Agreement, its
Loans or its issuance of or participation in Facility L/Cs or its Commitment to
make Loans or to issue or to participate in Facility L/Cs, as the case may be,
hereunder (after taking into account such Lender's or LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or LC Issuer or any Lending Installation
or any corporation controlling any Lender or LC Issuer. "Risk-Based Capital
Guidelines" means (a) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (b) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
Such Lender's written notice to Borrower for compensation hereunder shall set
forth in reasonable detail the computation of any additional amounts payable to
such Lender by Borrower, and such request and computation shall be conclusive
and binding in the absence of manifest error. This provision shall remain in
full force and effect with respect to the Loans until the later of (1) the
termination of this Agreement or (2) the payment in full of all Notes (provided
that before accepting final payment on the Notes, a Lender shall calculate any
amounts due it in accordance with this subsection 2.9 and give notice to
Borrower of such amounts as stated herein, and Borrower shall include such
amounts in Borrower's final payment). This provision shall survive the
termination of all Facility L/Cs and, with respect to Facility L/Cs, shall
remain in full force and effect until there is no existing or future obligation
of Agent or any Lender under any Facility L/C. The provisions of this subsection
2.9 shall be supplemented by the provisions of Section 3 hereof.
10.Use of Proceeds.
The proceeds of the Revolving Credit Loans made hereunder shall be used by
Borrower for repayment of the Prior Credit Agreement and for lawful purposes in
Borrower's business.
11.Payments; Pro Rata Treatment.
(a)Each borrowing by Borrower from Lenders hereunder, each payment (including
each prepayment) by Borrower on account of principal of and interest on the
Revolving Credit Loans, each payment by Borrower on account of any Commitment
Fee hereunder and any reduction of the Commitments shall be made pro rata
according to the respective Lenders' Ratable Shares. All payments (including
prepayments) to be made by Borrower hereunder and under the Notes, whether on
account of principal, interest, fees or otherwise, shall be made without set-off
or counterclaim and shall be made prior to 12:00 noon on the due date thereof to
Agent, for the account of Lenders, at Agent's office in Pittsburgh, Pennsylvania
(or such other

 

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office as designated in writing from time to time by Agent), in Dollars and in
immediately available funds. Agent shall distribute such payments to Lenders
upon receipt in like funds as received, which distributions shall be made by
Agent on the day that it receives such funds if received by 12:00 noon and
otherwise not later than the next succeeding Business Day. If the Agent does not
distribute such payments to Lenders when required, each Lender shall be entitled
to recover from Agent interest on such corresponding amount in respect of each
day from the date such payments were required to be distributed to such Lender
to the date such corresponding amount is actually delivered to such Lender by
Agent, at a rate per annum equal to the Federal Funds Open Rate for the first
three days and thereafter at the Alternate Base Rate. If any payment hereunder
on an ABR Loan becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment hereunder on a Eurodollar
Rate Loan becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension) unless the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(b)Borrower may from time to time pay, without penalty or premium, all
outstanding ABR Loans, or, in a minimum aggregate amount of $500,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
ABR Loans upon notice to Agent not later than 12:00 noon on the date of payment.
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by subsection 3.5 but without penalty or
premium, all outstanding Eurodollar Rate Loans, or, in a minimum aggregate
amount of $5,000,000 or any integral multiple of $1,000,000 in excess thereof,
any portion of the outstanding Eurodollar Rate Loans upon two days' notice to
Agent.
12.Swingline Loans.
(a)Subject to the terms and conditions of this Agreement, Swingline Lender
agrees to make at any time and from time to time after the initial Borrowing
Date and prior to the Swingline Expiry Date swingline loans to Borrower
("Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
ABR Loans, (ii) shall be denominated in Dollars, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed, in
aggregate principal amount at any one time outstanding, the lesser of (A) the
Maximum Swingline Amount and (B) the amount by which Swingline Lender's
Commitment exceeds its share of the sum of all Revolving Credit Loans and
Facility L/C Obligations and (v) shall be subject to the limitations set forth
in subsection 2.1(b) hereof. Swingline Lender will not make a Swingline Loan
after it has received written notice from Borrower or the Required Lenders
stating that a Default or an Event of Default exists until such time as
Swingline Lender shall have received a written notice of (i) rescission of such
notice from the party or parties originally delivering the same or (ii) a waiver
of such Default or Event of Default, as required by this Agreement.
(b)Borrower shall give Swingline Lender irrevocable telephonic or written notice
prior to 3:00 p.m. on the requested Borrowing Date specifying the amount of the
requested Swingline Loan which shall be in a minimum amount of $500,000 or whole
multiples of $100,000 in excess thereof. The Swingline Loans will then be made
available to Borrower by Swingline Lender by crediting the account of Borrower
on the books of Swingline Lender.
(c)The Swingline Loans shall be evidenced by the Note held by Swingline Lender.
Swingline Lender is hereby authorized to record electronically or otherwise the
date and amount of each Swingline Loan, and the date and amount of each payment
or prepayment of principal thereof, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded, provided,
however, the failure of Swingline Lender to make, or any error in making, any
such recordation(s) shall not affect the obligation of Borrower to repay
outstanding principal, interest, or any other amount due hereunder in accordance
with the terms hereof and thereof. The Swingline Loan shall (i) mature on the
Swingline Expiry Date, and (ii) bear interest for the period from and including
the date thereof on the unpaid principal

 

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amount thereof from time to time outstanding at the applicable interest rate per
annum determined as provided in subsection 2.5 hereof. Interest on each
Swingline Loan shall be payable as specified in subsection 2.5 hereof.
(d)Swingline Lender, at any time and in its sole and absolute discretion, may
(and, not later than three (3) Business Days after the making of a Swingline
Loan, shall), on behalf of Borrower (which hereby irrevocably directs Swingline
Lender to act on Borrower's behalf), request each Lender, including Swingline
Lender, to make a Revolving Credit Loan (each, a "Mandatory Borrowing") in an
amount equal to such Lender's Ratable Share of the amount of the Swingline Loans
(provided that each such request shall be deemed to have been automatically
given upon the occurrence of a Default or an Event of Default under Section 9 or
upon the exercise of any of the remedies provided in the last paragraph of
Section 9), in which case each Lender shall make the proceeds of its Revolving
Credit Loan available to Swingline Lender, on the Business Day immediately
following Agent's notice to the Lenders, in its Ratable Share thereof, and the
proceeds thereof shall be applied directly to repay Swingline Lender for such
outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make ABR
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified by Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the minimum borrowing amount otherwise
required hereunder, (ii) whether any conditions specified in Section 5 are then
satisfied, (iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing, (v) any reduction in the
Commitments after any such Swingline Loans were made, (vi) Borrower's compliance
with Secured Borrowing Base requirements, (vii) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against Swingline
Lender, Borrower or any other Person for any reason whatsoever, or (viii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of Borrower), each Lender (other than Swingline Lender) hereby
agrees that it shall forthwith purchase from Swingline Lender (without recourse
or warranty) a participation interest in such outstanding Swingline Loans as
shall be necessary to cause the Lenders to hold participation interests in such
Swingline Loans in the proportion of their respective Ratable Shares thereof,
provided that all interest payable on the Swingline Loans shall be for the
account of Swingline Lender until the date the Mandatory Borrowing is made or
the date the applicable Lender has purchased its participation interest, as the
case may be, and, to the extent attributable to the Mandatory Borrowing for such
participation interest, shall be payable to the Lender making such Mandatory
Borrowing or purchasing such participation interest from and after the date such
Mandatory Borrowing is made or such participation interest is purchased.
(e)Whenever, at any time after Swingline Lender has received from any Lender
such Lender's assigned interest in a Swingline Loan and Swingline Lender
receives any payment on account thereof Swingline Lender will distribute to such
Lender its assigned interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender's
assigned interest was outstanding and funded); provided, however, that in the
event that such payment received by Swingline Lender is required to be returned,
such Lender will return to Swingline Lender any portion thereof previously
distributed by Swingline Lender to it.
13.The Facility L/Cs.
So long as no Default or Event of Default exists, PNC and each other Lender that
is designated as an LC Issuer in this Agreement or in accordance with subsection
2.14(a) hereof, agree to issue Facility L/Cs, on the terms and conditions
hereof, provided that (a) the aggregate of all Facility L/C Obligations at any
one time outstanding shall not exceed Twenty Five Million Dollars ($25,000,000)
and (b) the sum of the aggregate amount of all Loans and the aggregate amount of
all Facility L/C Obligations at any one time outstanding shall not exceed the
Aggregate Commitment.
14.Designation or Resignation of LC Issuer.

 

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(a)Upon request by Borrower, a Lender may at any time agree to be designated as
an LC Issuer hereunder, which designation shall be set forth in a written
instrument or instruments delivered by Borrower and such Lender to Agent. Agent
shall promptly notify the other Lenders of such designation. From and after such
designation and unless and until such Lender resigns as an LC Issuer in
accordance with subsection 2.14(b) below, such Lender shall have all of the
rights and obligations of an LC Issuer hereunder.
(b)An LC Issuer shall continue to be an LC Issuer unless and until (i) it shall
have given Borrower and Agent notice that it has elected to resign as LC Issuer
and (ii) unless there is, at the time of such notice, at least one other LC
Issuer, another Lender shall have agreed to be the replacement LC Issuer and
shall have been approved in writing by Borrower. A resigning LC Issuer shall
continue to have the rights and obligations of the LC Issuer hereunder solely
with respect to Facility L/Cs theretofore issued by it, notwithstanding the
designation of a replacement LC Issuer hereunder, but upon its notice of
resignation (or, if at the time of such notice, there is not at least one other
LC Issuer, then upon such designation of a replacement LC Issuer), the resigning
LC Issuer shall not thereafter issue any Facility L/C (unless it shall again
thereafter be designated as an LC Issuer in accordance with the provisions of
this subsection 2.14). The assignment of, or grant of a participation interest
in, all or any part of its Commitment or Loans by a Lender that is also an LC
Issuer shall not constitute an assignment or transfer of any of its rights or
obligations as an LC Issuer.
15.Issuance of Facility L/Cs.
(a)Borrower may request an LC Issuer to issue a Facility L/C by delivering to
such LC Issuer (with a copy to Agent if Agent is not the LC Issuer), no later
than 11:00 a.m. (local time at the LC Issuer's office designated herein) two (2)
Business Days prior to the date on which issuance of the Facility L/C is
requested by Borrower, a standby letter of credit application and reimbursement
agreement in LC Issuer's then customary form (the "Facility L/C Application")
completed to the satisfaction of LC Issuer, together with the proposed form of
such letter of credit (which shall comply with the applicable requirements of
subsection 2.15(b) below) and such other certificates, documents and other
papers and information as LC Issuer may reasonably request.
(b)Each Facility L/C issued hereunder shall, among other things, (i) be in such
form requested by Borrower as shall be acceptable to the LC Issuer in its sole
discretion, and (ii) have an expiry date (taking into account any automatic
renewal provisions thereof) occurring not later than one year following the
Maturity Date. If the Aggregate Commitment is terminated (whether by
acceleration, demand, or otherwise), then, not later than simultaneously with
such termination, all outstanding Facility L/Cs shall be returned to the LC
Issuer thereof or Borrower shall cash collateralize all outstanding Facility
L/Cs in accordance with Section 8 hereof. Each Facility L/C Application and each
Facility L/C shall be subject to the Uniform Customs or the ISP, as determined
by the LC Issuer, and, to the extent not inconsistent therewith, the laws of the
state in which is located the LC Issuer's office from which such Facility L/C is
issued.
(c)An LC Issuer shall not issue, amend or extend, at any time, any Facility L/C:
(i)if the aggregate maximum amount then available for drawing under Letters of
Credit issued by such LC Issuer, after giving effect to the Facility L/C or
amendment or extension thereof requested hereunder, shall exceed any limit
imposed by law or regulation upon such LC Issuer;
(ii)if, after giving effect to the issuance, amendment or extension of the
Facility L/C requested hereunder, the aggregate principal amount of the Facility
L/C Obligations would exceed the lesser of (A) $25,000,000 and (B) the Aggregate
Commitment;
(iii)if, after giving effect to the issuance, amendment or extension of the
Facility L/C requested hereunder the Aggregate Outstandings would exceed the
amount permitted by subsection 2.1(b);
(iv)if such LC Issuer receives written notice from the Agent at or before
12:00 noon on the proposed date of issuance, amendment or extension of such
Facility L/C that one or more of the conditions precedent contained in
subsection 2.15(d) below would not on such date be

 

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satisfied, unless such conditions are thereafter satisfied or waived and written
notice of such satisfaction is given to such LC Issuer by the Agent; or
(v)that is in a currency other than Dollars.
(d)The issuance, amendment or extension of any Facility L/C is subject to the
satisfaction in full of the following conditions on the date of such issuance,
amendment or extension:
(i)the conditions of subsection 5.2 hereof are satisfied; and
(ii)no order, judgment or decree of any court, arbitrator or governmental
authority shall enjoin or restrain such LC Issuer from issuing the Facility L/C
and no law, rule or regulation applicable to the LC Issuer and no directive from
any governmental authority with jurisdiction over the LC Issuer shall prohibit
such LC Issuer from issuing Letters of Credit generally or from issuing that
Facility L/C.
(e)Upon receipt of any Facility L/C Application from Borrower, the LC Issuer
will process such Facility L/C Application, and the other certificates,
documents and other papers delivered to such LC Issuer in connection therewith,
in accordance with its customary procedures and, upon satisfaction of all
conditions contained in this Agreement, shall promptly issue the original of
such Facility L/C and deliver it to the beneficiary thereof, or to Borrower
which shall deliver such original Facility L/C to the beneficiary, and furnish a
copy thereof to Borrower. The LC Issuer shall give Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance of a
Facility L/C, and Agent shall promptly thereafter so notify all Lenders.
(f)No LC Issuer shall extend or amend any Facility L/C unless the requirements
of this subsection 2.15 are met as though a new Facility L/C were being
requested and issued.
(g)Any Lender may, but shall not be obligated to, issue to Borrower or any of
its Subsidiaries Letters of Credit (that are not Facility L/Cs) for its own
account, and at its own risk.
16.Facility L/C Participations.
(a)Each LC Issuer irrevocably agrees to grant and hereby grants to each Lender,
and, to induce the LC Issuers to issue Facility L/Cs hereunder, each Lender
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the applicable LC Issuer, on the terms and conditions hereinafter stated, for
such Lender's own account and risk, an undivided interest equal to such Lender's
Ratable Share in such LC Issuer's obligations and rights under each Facility L/C
(including the Existing L/Cs) and the amount of each draft paid by such LC
Issuer.
(b)Upon receipt from the beneficiary of any Facility L/C of any demand for
payment under such Facility L/C, the LC Issuer shall notify Agent and Agent
shall promptly notify Borrower and each other Lender as to the amount to be paid
by such LC Issuer as a result of such demand and the proposed payment date. The
responsibility of the LC Issuer to Borrower and each Lender shall be only to
determine that the documents (including each demand for payment) delivered under
each Facility L/C in connection with such presentment shall be in conformity in
all material respects with such Facility L/C. The LC Issuer shall exercise the
same care in the issuance and administration of the Facility L/Cs as it does
with respect to Letters of Credit in which no participations are granted, it
being understood that, in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of an Event of Default or
any condition precedent whatsoever, to reimburse the LC Issuer on demand for (i)
such Lender's Ratable Share of the amount of each payment made by the LC Issuer
on each Facility L/C to the extent such amount is not reimbursed by Borrower
pursuant to subsection 2.17 hereof, plus interest thereon to the extent provided
in subsection 2.16(c) below.
(c)If any amount required to be paid by any Lender to an LC Issuer in respect of
any unreimbursed portion of any payment made by such LC Issuer under any
Facility L/C is not paid to such LC Issuer on the date such payment is due but
is paid within three (3) Business Days after such payment is due, such Lender
shall pay to such LC Issuer on demand an amount equal to the product of (i) such
amount, multiplied by (ii) the daily average Federal Funds Effective Rate during
the period from and including the date such payment is required to the date on
which such payment is immediately available to such LC Issuer,

 

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multiplied by (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any Lender pursuant to this subsection 2.16 is not
paid to such LC Issuer by such Lender within three (3) Business Days after the
date such payment is due, such LC Issuer shall be entitled to recover from such
Lender, on demand, such amount with interest thereon calculated from the fourth
Business Day after such due date until paid at the rate per annum applicable to
Loans made as ABR Loans hereunder. A certificate of such LC Issuer submitted to
any Lender with respect to any amounts owing under this subsection 2.16 shall be
conclusive in the absence of manifest error.
(d)Whenever, at any time after such LC Issuer has made payment under any
Facility L/C and has received from any Lender its Ratable Share of such payment,
such LC Issuer receives any payment related to such Facility L/C (whether
directly from Borrower or otherwise, including proceeds of collateral applied
thereto by such LC Issuer), or any payment of interest on account thereof, such
LC Issuer will distribute to such Lender its Ratable Share thereof; provided,
however, that in the event that any such payment received by such LC Issuer
shall be required to be returned by such LC Issuer, such Lender shall return to
such LC Issuer the portion thereof previously distributed by such LC Issuer to
it.
17.Payments.
Borrower agrees (a) to reimburse each LC Issuer, for the pro rata benefit of the
Lenders in accordance with each Lender's respective Ratable Share, forthwith
upon its or Agent's demand and otherwise in accordance with the terms of the L/C
Application relating thereto, for any expenditure or payment made by such LC
Issuer under any Facility L/C, and (b) to pay interest on any unreimbursed
portion of any such payments from the date of such payment until reimbursement
in full thereof at a rate per annum equal to (i) prior to the date which is (A)
one (1) Business Day after the day on which such LC Issuer demands reimbursement
from Borrower for such payment if such demand is made prior to 11:00 a.m. or (B)
two (2) Business Days after the day on which such LC Issuer or Agent demands
reimbursement if such demand is made at or after 11:00 a.m. the rate which would
then be payable on any outstanding ABR Loan which is not in default, and (ii)
thereafter, the rate which would then be payable on any outstanding ABR Loan
which is in default.
18.Facility L/C Fees.
In lieu of any letter of credit commissions and fees provided for in any
Facility L/C Application (other than standard issuance, amendment, negotiation
and administration fees and expenses), Borrower agrees to pay Agent, in the case
of each Facility L/C, for the account of the Lenders and LC Issuer (as
hereinafter provided), the Facility L/C Fee therefor, on the average daily
undrawn stated amount under such Facility L/C. The Facility L/C Fees shall be
due and payable quarterly in arrears not later than the day ("Quarterly Payment
Date") that is five (5) Business Days following Agent's delivery to Borrower of
the quarterly statement of Facility L/C Fees and, to the extent any such fees
are then accrued and unpaid, on the Maturity Date. Facility L/C Fees shall be
calculated, for the period to which such payment applies, for actual days on
which such Facility L/C was outstanding during such period (excluding, in the
case of the Existing L/Cs, the portion of such period prior to the date of this
Agreement), on the basis of a 360-day year. Agent shall promptly remit such
Facility L/C Fees, when paid, as follows: (i) to each LC Issuer, solely for its
own account, with respect to each Facility L/C issued by such LC Issuer, an
amount per annum equal to the product of (A) 0.125% per annum and (B) the face
amount of such Facility L/C and (ii) to all Lenders, their Ratable Shares of the
balance of such Facility L/C Fees. In addition, an LC Issuer may charge and
retain for its own account, and Borrower agrees to pay, such LC Issuer's usual
and customary charges with respect to the issuance, amendment, negotiation and
administration of the Facility L/C.
19.Letter of Credit Reserves.
If any change in any law or regulation or in the interpretation or application
thereof by any court or other governmental authority charged with the
administration thereof shall either (a) impose, modify, deem or make applicable
any reserve, special deposit, assessment or similar requirement against letters
of credit issued

 

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by an LC Issuer, or (b) impose on an LC Issuer or any Lender any other condition
regarding this Agreement or any Facility L/C, and the result of any event
referred to in clause (a) or (b) above shall be to increase the cost to an LC
Issuer or any Lender of issuing or maintaining any Facility L/C (which increase
in cost shall be the result of an LC Issuer's or any Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by an LC Issuer or any Lender, Borrower shall immediately pay
to Agent, for the pro rata benefit of such Lender(s), from time to time as
specified by Agent or such Lender(s), additional amounts which shall be
sufficient to compensate Agent or such Lender(s) for such increased cost,
together with interest on each such amount from the date demanded until payment
in full thereof at a rate per annum equal to the then applicable interest rate
on ABR Loans. A certificate as to such increased cost incurred by an LC Issuer
or such Lender(s), submitted by an LC Issuer or such Lender(s) to Borrower,
shall be conclusive, absent manifest error, as to the amount thereof. This
provision shall survive the termination of this Agreement and shall remain in
full force and effect until there is no existing or future obligation of any LC
Issuer or any Lender under any Facility L/C.
20.Further Assurances.
Borrower hereby agrees to do and perform any and all acts and to execute any and
all further instruments reasonably requested by Agent or an LC Issuer more fully
to effect the purposes of this Agreement and the issuance of Facility L/Cs
hereunder, and further agrees to execute any and all instruments reasonably
requested by an LC Issuer in connection with the obtaining and/or maintaining of
any insurance coverage applicable to any Facility L/C.
21.Obligations Absolute.
(a)The obligations of the other Lenders to an LC Issuer with respect to Facility
L/Cs issued by such LC Issuer, and the Reimbursement Obligations of Borrower
with respect to Facility L/Cs, under this Agreement shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including without limitation the following:
(i)the existence of any claim, set-off, defense or other right which Borrower
may have at any time against any beneficiary, or any transferee, of any Facility
L/C (or any Persons for whom any such beneficiary or any such transferee may be
acting), any LC Issuer or any other Person, whether in connection with this
Agreement, the transaction contemplated herein, or any unrelated transaction
(including any underlying transaction between Borrower or any Subsidiary and the
beneficiary of such Facility L/C);
(ii)any draft, certificate, statement or any other document presented under any
Facility L/C proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iii)payment by an LC Issuer under any Facility L/C against presentation of a
draft or certificate which does not comply with the terms of such Facility L/C,
provided that LC Issuer has made such payment to the beneficiary set forth on
the face of such Facility L/C;
(iv)the occurrence or any Default or Event of Default; or
(v)any other circumstances or happening whatsoever, whether or not similar to
any of the foregoing.
(b)Each LC Issuer shall be entitled to rely, and shall be fully protected in
relying, upon any Facility L/C, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, statement, order or other document
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by such LC Issuer.
Each LC Issuer shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or

 

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continuing to take such action. Notwithstanding any other provision of this
subsection 2.21, each LC Issuer shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Lenders and any future holders of a
participation in any Facility L/Cs.
22.LC Issuer Reporting Requirements.
Each LC Issuer shall, no later than the third (3rd) Business Day following the
last day of each month, provide to Agent a schedule of the Facility L/Cs issued
by it showing the issuance date, account party, original face amount, amount (if
any) paid thereunder, expiration date and the reference number of each Facility
L/C outstanding at any time during such month (and whether it is a Financial
Letter of Credit or Performance Letter of Credit) and the aggregate amount (if
any) payable by the Borrower to such LC Issuer during the month pursuant to
subsection 2.19 hereof. Copies of such reports shall be provided promptly to
each Lender by the Agent. The Agent shall, with reasonable promptness following
receipt from all LC Issuers of the reports provided for in this subsection 2.22
for the months of March, June, September and December, respectively, deliver to
the Borrower (with a copy to each Lender) a quarterly statement of the Facility
L/C Fees and Commitment Fees then due and payable.
23.Indemnification; Nature of LC Issuer's Duties.
(a)In addition to amounts payable as elsewhere provided in this Agreement,
Borrower hereby agrees to protect, indemnify, pay and save Agent, each LC Issuer
and each Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) arising from the claims of third parties against Agent, any LC
Issuer or any Lender as a consequence, direct or indirect, of (i) the issuance
of any Facility L/C other than, in the case of an LC Issuer, as a result of its
willful misconduct or gross negligence, or (ii) the failure of an LC Issuer to
honor a drawing under a Facility L/C Credit as a result of any act or omission,
whether rightful or wrongful, of any court or other Governmental Authority.
(b)As among Borrower, Lenders, Agent and each LC Issuer, Borrower assumes all
risks of the acts and omissions of, or misuse of Facility L/Cs by, the
respective beneficiaries of such Facility L/Cs. In furtherance and not in
limitation of the foregoing, neither an LC Issuer nor Agent nor any Lender shall
be responsible (other than, in the case of an LC Issuer, as a result of its
gross negligence or willful misconduct): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of the Facility
L/Cs, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility L/C or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a Facility
L/C to comply fully with conditions required in order to draw upon such Facility
L/C; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile
transmission or otherwise; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Facility L/C or of the proceeds
thereof; (vii) for the misapplication by the beneficiary of a Facility L/C of
the proceeds of any drawing under such Facility L/C; or (viii) for any
consequences arising from causes beyond the control of Agent, such LC Issuer and
the Lenders including, without limitation, any act or omission, whether rightful
or wrongful, of any government, court or other governmental agency or authority.
None of the above shall affect, impair, or prevent the vesting of any of such LC
Issuer's rights or powers under this subsection 2.23.
(c)In furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by an LC Issuer under or in
connection with the Facility L/Cs issued by it or any related certificates, if
taken or omitted in good faith, shall not put such LC Issuer, Agent or any
Lender under any resulting liability to Borrower or relieve Borrower of any of
its Obligations hereunder to any such Person.

 

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(d)Notwithstanding anything to the contrary contained in this subsection 2.23,
Borrower shall have no obligation to indemnify an LC Issuer under this
subsection 2.23 in respect of any liability incurred by an LC Issuer arising out
of the wrongful dishonor by such LC Issuer of a proper demand for payment made
under the Facility L/Cs issued by such LC Issuer, unless such dishonor was made
at the request of Borrower.
24.Defaulting Lenders.
Notwithstanding any provision of this Agreement to the contrary, if any Lender
is or becomes a Defaulting Lender, then, for so long as such Lender is a
Defaulting Lender:
(a)the Commitment and Obligations of such Defaulting Lender shall not be
included in determining the Required Lenders for purposes of taking any action
hereunder; and
(b)Borrower shall within three Business Days following notice by Agent cash
collateralize such Defaulting Lender's Ratable Share of the Facility L/C
Obligations and Swingline Loans by depositing cash collateral at Agent's office
in accordance with the procedures set forth in Section 8 for so long as any such
Facility L/C Obligations or Swingline Loans remain outstanding.
This subsection 2.24 may not be amended without the prior written consent of the
Swingline Lender, the LC Issuer and Required Lenders.
SECTION 2:
GENERAL PROVISIONS APPLICABLE TO LOANS

1.Conversion/Continuation Options.
Subject to the limitations on the availability of Eurodollar Rate Loans,
Borrower may elect from time to time to convert outstanding Revolving Credit
Loans from ABR Loans to Eurodollar Rate Loans or to continue any Eurodollar Rate
Loan as such upon the expiration of the then current Interest Period thereof by
giving the Agent telephonic or written (which may be by electronic mail) notice
(the "Notice of Conversion/Continuation"), which Notice of
Conversion/Continuation must be received prior to 12:00 noon at least three (3)
Business Days prior to the requested date for the conversion or continuation,
which notice shall specify (i) the date for the conversion or continuation
(which shall be a Business Day); (ii) the aggregate amount of ABR Loans to be
converted or Eurodollar Rate Loans to be continued; and (iii) for each such ABR
Loan to be converted to a Eurodollar Rate Loan and Eurodollar Rate Loan to be
continued as a Eurodollar Rate Loan, the respective amount and the respective
length of the initial Interest Period. Each conversion from ABR Loans to
Eurodollar Rate Loans and each continuation of Eurodollar Rate Loans shall be in
the principal amount of $10,000,000 or any larger amount which is an even
multiple of $1,000,000. After Borrower gives the Notice of
Conversion/Continuation requesting continuation of a Eurodollar Rate Loan,
Agent, by 10:00 a.m. two Business Days prior to the end of the Interest Period,
shall advise Borrower of the applicable interest rate(s) (which is the sum of
the applicable Eurodollar Rate(s) and the Applicable Eurodollar Margin) for the
Eurodollar Rate Loan(s) and Interest Period(s) requested in such notice. Not
more than two hours thereafter, Borrower shall give Agent written irrevocable
confirmation of whether or not Borrower wants to continue the Eurodollar Rate
Loan(s) as such and, if so, the amount and the Interest Period for each such
Eurodollar Rate Loan. If Borrower's confirmation is not timely made, Borrower
shall be deemed to have withdrawn Borrower's notice for a continuation and the
Eurodollar Rate Loan(s) that were the subject of such request shall convert
automatically to an ABR Loan upon the expiration of the then current Interest
Period. If Borrower's written confirmation is timely made, Borrower shall be
deemed to be requesting a continuation of the Eurodollar Rate Loan(s) in the
amount(s) and for the Interest Period(s) stated in such notice. Agent shall give
prompt telephonic or written notice to each Lender of Borrower's request for
conversion or continuation, specifying (i) the date for the conversion or
continuation; (ii) the aggregate amount of ABR Loans to be converted or
Eurodollar Rate Loan to be continued; and (iii) for each such ABR Loan to be
converted to a Eurodollar Rate Loan and each continuation of any Eurodollar Rate
Loan, the respective amount, the respective Eurodollar Rate, and the respective
length of the initial Interest Period applicable thereto. All or any part of
outstanding ABR Loans may be converted or Eurodollar Rate Loans continued

 

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as provided herein, provided that (i) (unless the Required Lenders otherwise
consent) no ABR Loan may be converted into a Eurodollar Rate Loan nor any
Eurodollar Rate Loan continued as a Eurodollar Rate Loan upon the expiration of
the current Interest Period therefor when any Default or Event of Default has
occurred and is continuing and (ii) no ABR Loan may be converted into a
Eurodollar Rate Loan nor any Eurodollar Rate Loan continued as a Eurodollar Rate
Loan upon the expiration of the current Interest Period therefor after the date
that is one month prior to the last day of the Commitment Period.
2.Inability to Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent or the Required
Lenders shall have determined (which determination shall be conclusive and
binding upon Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Agent shall give telecopy,
telephonic or written notice thereof to Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar Rate Loans
requested to be made on the first day of such Interest Period shall be made as
ABR Loans and (y) any Loans that were to have been converted on the first day of
such Interest Period to or continued as Eurodollar Rate Loans shall be converted
to or continued as ABR Loans. Until such notice has been withdrawn by the Agent,
no further Eurodollar Rate Loans shall be made or continued as such, nor shall
Borrower have the right to convert ABR Loans to Eurodollar Rate Loans.
3.Availability of Eurodollar Rate Loans.
If any Lender determines that maintenance of its Eurodollar Rate Loans at a
suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if the
Required Lenders determine that (i) deposits of a type and maturity appropriate
to match fund Eurodollar Rate Loans are not available or (ii) the interest rate
applicable to Eurodollar Rate Loans does not accurately reflect the cost of
making or maintaining Eurodollar Rate Loans, then the Agent shall suspend the
availability of Eurodollar Rate Loans and require any affected Eurodollar Rate
Loans to be repaid or converted to ABR Loans at the end of the applicable
Interest Period.
4.Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or its
applicable Lending Installation, branch or any affiliate thereof, or any LC
Issuer or compliance by any Lender, or its applicable Lending Installation,
branch or any affiliate thereof, or any LC Issuer with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority, in each case made subsequent to the date hereof (or, if
later, the date on which such Lender becomes a Lender hereunder pursuant to any
permitted assignment or pursuant to subsection 2.6(b) hereof):
(a)shall subject such Lender, or its applicable Lending Installation, branch or
any affiliate thereof, or any LC Issuer to any tax of any kind whatsoever (other
than Taxes covered by Section 3.6 hereof) with respect to any Eurodollar Rate
Loans made by it or its obligation to make Eurodollar Rate Loans, or to issue or
to participate in Facility L/Cs, or change the basis of taxation of payments to
such Lender or LC Issuer in respect thereof other than changes in the rate of
taxes measured by or imposed upon the overall net income, or franchise taxes, or
taxes measured by or imposed upon overall capital or net worth, or branch taxes
(in the case of such capital, net worth or branch taxes, imposed in lieu of such
net income tax), of such Lender or its applicable Lending Installation, branch,
or any affiliate thereof or any LC Issuer;
(b)shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender or
any LC Issuer which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or

 

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(c)shall impose any other condition the result of which is or would be to
increase the cost to the Lender or any applicable Lending Installation or LC
Issuer of making, funding or maintaining its Eurodollar Rate Loans or issuing or
participating in Facility L/Cs or shall reduce any amount receivable by any
Lender or any applicable Lending Installation or LC Issuer in connection with
its Eurodollar Rate Loans or Facility L/Cs or participations therein, or shall
require any Lender or any applicable Lending Installation or LC Issuer to make
any payment calculated by reference to the amount of Eurodollar Rate Loans or
Facility L/Cs or participations therein held or interest received by it, by an
amount deemed material by such Lender;
and the result of any of the foregoing is or would be to increase the cost to
such Lender or LC Issuer, by an amount which such Lender or LC Issuer, or its
applicable Lending Installation, branch or any affiliate thereof, deems to be
material, of making, converting into, continuing or maintaining Eurodollar Rate
Loans or its Commitment or of issuing or participations in any Facility L/Cs or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, upon notice to Borrower from such Lender, through the Agent, in accordance
herewith, Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender or LC Issuer for such
increased cost or reduced amount receivable. lf any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall provide
prompt notice thereof to Borrower, through the Agent, certifying (x) that one of
the events described in this subsection has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount receivable hereunder resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to Borrower shall be conclusive and binding upon the Borrower in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
5.Indemnity.
Borrower agrees to indemnify each Lender and to hold each Lender harmless from
any loss or expense which such Lender may sustain or incur (other than through
such Lender's gross negligence or willful misconduct) as a consequence of (a)
default by Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Rate Loans after Borrower has given Agent written irrevocable
confirmation that Borrower selects such Eurodollar Rate Loans in accordance with
subsection 2.3 or subsection 3.1 hereof, as appropriate, of this Agreement, (b)
default by Borrower in making any prepayment or conversion of a Eurodollar Rate
Loan after Borrower has given a notice thereof in accordance with the provisions
of this Agreement or (c) the making of a prepayment of Eurodollar Rate Loans on
a day which is not the last day of an Interest Period with respect thereto
(whether by acceleration, demand or otherwise). Such indemnification may
include, without limitation, an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or
converted, or not so borrowed, converted or continued, for the period from the
date of such prepayment or conversion or of such failure to borrow, convert or
continue to the last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Eurodollar Rate Loans provided for herein over (ii) the amount
of interest (as reasonably determined by such Lender, which determination shall
be conclusive and binding upon Borrower, absent manifest error) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
6.Taxes.
(a)All payments by Borrower to or for the account of any Lender, any LC Issuer
or Agent hereunder or under any Note or Facility L/C Application shall be made
free and clear of and without deduction

 

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for any and all Taxes. If Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any Lender, any LC Issuer or
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this subsection 3.6) such Lender, LC Issuer or Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law and (iv) Borrower shall furnish to the Agent the
original copy of a receipt evidencing payment thereof within 30 days after such
payment is made.
(b)In addition, Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or Facility
L/C Application or from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note or Facility L/C Application ("Other Taxes").
(c)Borrower hereby agrees to indemnify each Lender, LC Issuer and Agent for the
full amount of Taxes or Other Taxes as set forth in subsections 3.6(a) and (b)
(including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this subsection 3.6) paid by such Lender, LC Issuer or Agent and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. Payments due under this indemnification shall be made
within thirty (30) days of the date such Lender, LC Issuer or Agent makes demand
therefor pursuant to subsection 3.7, which demand shall be made not later than
180 days after such Lender, Agent or LC Issuer incurs the Taxes, Other Taxes or
other liability so arising.
(d)Each Lender that is not incorporated (or otherwise formed or established)
under the laws of the United States of America or a state thereof (each a
"Non-U.S. Lender") agrees that it will, not more than ten (10) Business Days
after the date of this Agreement or such later date on which it becomes a party
to this Agreement (but in no event later than the first date on which any
payment for the account of such Non-U.S. Lender is made hereunder), (i) deliver
to each of Borrower and Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of Borrower and Agent a United States Internal Revenue Service
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of Borrower and Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by
Borrower or Agent. All forms or amendments described in the preceding sentence
shall certify that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred subsequent to the date such Lender became a party to
this Agreement but prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(e)For any period during which a Non-U.S. Lender has failed to provide the
Borrower with appropriate forms pursuant to subsection 3.6(d) above establishing
a complete exemption from United States withholding tax (unless such failure is
due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority,
occurring subsequent to (i) the date on which a form originally was required to
be provided or (ii) if an assignment of a portion of the Loans is made pursuant
to Section 11.7 hereof to a Person already a Lender, then, with respect to such
assigned portion of the Loans, the date of such assignment), such Non-U.S.
Lender shall not be entitled to additional payments or indemnification under
this subsection 3.6 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of

 

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withholding tax become subject to Taxes because of its failure to deliver a form
required under subsection 3.6(d) above, Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to
recover such Taxes.
(f)Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments under this Agreement or any Note pursuant to the
law of any relevant jurisdiction or any treaty shall deliver to Borrower (with a
copy to Agent), at the time or times prescribed by applicable law and prior to
the date of any applicable payment, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding.
(g)If the U.S. Internal Revenue Service or any other Governmental Authority of
the United States or any other country or any political subdivision thereof
asserts a claim that Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (because the appropriate form was not delivered or
properly completed, because such Lender failed to notify Agent of a change in
circumstances which rendered its exemption from withholding ineffective, or for
any other reason), such Lender shall indemnify Agent fully for all amounts paid,
directly or indirectly, by Agent as tax, withholding therefor, or otherwise,
including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to Agent under this subsection, together with
all costs and expenses related thereto (including attorneys fees and time
charges of attorneys for Agent, which attorneys may be employees of Agent). The
obligations of the Lenders under this subsection 3.6(g) shall survive the
payment of the Obligations and termination of this Agreement.
7.Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate an alternate
Lending Installation with respect to its Eurodollar Loans to reduce any
liability of Borrower to such Lender under subsections 2.9 and 3.4 or to avoid
the unavailability of Eurodollar Advances under subsection 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to Borrower
(with a copy to Agent) as to the amount due, if any, under subsection 2.9, 3.4,
3.5 or 3.6. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on Borrower in the absence of manifest error.
Determination of amounts payable under such subsections in connection with a
Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by Borrower of such written
statement. The obligations of the Borrower under subsections 2.9, 3.4, 3.5 and
3.6 shall survive payment of the Obligations and termination of this Agreement.
8.Telephonic Notices.
Borrower hereby authorizes the Lenders and Agent to extend, convert or continue
Loans, to effect selections of Eurodollar Rate Loans and the Interest Period
thereof and ABR Loans and to transfer funds, in each case based on telephonic
notices made by any Person or Persons who Agent or any Lender in good faith
believes to be acting on behalf of Borrower, it being understood that the
foregoing authorization is specifically intended to allow Notices of Borrowing
and Notices of Conversion to be given telephonically. Borrower agrees to deliver
promptly to Agent a written confirmation, if such confirmation is requested by
Agent or any Lender, of each telephonic notice signed by a Responsible Officer.
If the written confirmation differs in any material respect from the action
taken by Agent and Lenders, the records of Agent and Lenders shall govern,
absent manifest error.
9.Non-Receipt of Funds by Agent.
Unless Borrower or a Lender, as the case may be, notifies Agent prior to the
date on which it is scheduled

 

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to make payment to Agent of (i) in the case of a Lender, the proceeds of a Loan
or (ii) in the case of Borrower, a payment of principal, interest or fees to
Agent for the account of the Lenders, that it does not intend to make such
payment, Agent may assume that such payment has been made. Agent may, but shall
not be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Agent, the recipient of such
payment shall, on demand by Agent, repay to Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by Agent until the date
Agent recovers such amount at a rate per annum equal to (x) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day for the first
three days and, thereafter, the interest rate applicable to the relevant Loan or
(y) in the case of payment by Borrower, the interest rate applicable to the
relevant Loan.
10.Replacement of Certain Lenders.
In the event a Lender ("Affected Lender"): (i) shall have requested compensation
from Borrower under subsections 2.9 or 3.4 hereof to recover additional costs
incurred by such Lender that are not being incurred generally by the other
Lenders, (ii) shall have delivered a notice pursuant to subsection 3.3 hereof
claiming that such Lender is unable to extend Eurodollar Rate Loans to Borrower
for reasons not generally applicable to the other Lenders or (iii) shall have
invoked subsection 11.17 hereof, then, in any such case, Borrower or Agent may
make written demand on such Affected Lender (with a copy to Agent in the case of
a demand by Borrower and a copy to Borrower in the case of a demand by Agent)
for the Affected Lender to assign, and, if a Replacement Lender (as hereinafter
defined) notifies the Affected Lender of its willingness to purchase the
Affected Lender's interest and Agent and Borrower consent thereto in writing,
then such Affected Lender shall assign pursuant to one or more duly executed
assignment and assumption agreements in substantially and in all material
respects in the form and substance of Exhibit H five (5) Business Days after the
date of such demand, to one or more Lenders or Eligible Assignees that Borrower
or Agent, as the case may be, shall have engaged for such purpose ("Replacement
Lender"), all of such Affected Lender's rights and obligations (from and after
the date of such assignment) under this Agreement and the other Loan Documents
(including, without limitation, its Commitment and all Loans owing to it) in
accordance with subsection 11.7(b) hereof. As a condition to any such
assignment, the Affected Lender shall concurrently receive in cash or by wire
transfer, all amounts due and owing to the Affected Lender hereunder or under
any other Loan Document, including, without limitation, the aggregate
outstanding principal amount of the Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment, amounts payable
under subsections 2.9, 3.4, 3.5, 3.6, 11.6 or 11.14 hereof with respect to such
Affected Lender and the fees payable to such Affected Lender under subsections
2.4 and 2.18 hereof; provided that, upon such Affected Lender's replacement,
such Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of subsections 2.9, 3.4, 3.5, 3.6, 11.6 and 11.14
hereof, as well as to any other fees accrued for its account hereunder and not
yet paid, and shall continue to be obligated under subsection 10.7 with respect
to obligations and liabilities accruing prior to the replacement of such
Affected Lender. If the Affected Lender is an LC Issuer, Borrower shall, at the
time of or prior to replacement of such Affected Lender hereunder, cause all
Facility L/Cs issued by such Affected Lender to be canceled and returned to such
Affected Lender or, to the extent any one or more of such Facility L/Cs is not
so canceled and returned, provide to such Affected Lender, as security for the
Reimbursement Obligations in respect of such Facility L/Cs, cash collateral or a
Letter of Credit issued by a Lender, and in form and substance, reasonably
satisfactory to such Affected Lender. If and for as long as any Facility L/C
issued by an Affected Lender remains outstanding after the replacement of such
Affected Lender, such Affected Lender shall continue to have (but solely with
respect to such outstanding Facility L/Cs issued by it prior to its replacement)
the rights and obligations of an LC Issuer hereunder (including the right to
receive the portion of the Facility L/C Fees payable to the LC Issuer in respect
of such Facility L/Cs under clause (i) of subsection 2.18 hereof). Any Facility
L/Cs that remain outstanding and have been issued by an Affected Lender that is
replaced hereunder shall not be

 

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extended, modified or amended (other than to reduce the amount thereof).
SECTION 3:
REPRESENTATIONS AND WARRANTIES

In order to induce Lenders, the LC Issuers and Agent to enter into this
Agreement and to make the Revolving Credit Loans and Swingline Loans and to
issue the Facility L/Cs herein provided for, Borrower hereby covenants,
represents and warrants to each Lender, LC Issuer and Agent that on the date
hereof:
1.Financial Statements.
Borrower has heretofore furnished to each Lender the consolidated balance sheet
of Borrower and its Subsidiaries as of December 31, 2009 (and as of March 31,
2010), and the related consolidated statements of income, of stockholders'
equity and of cash flows for the fiscal year (or fiscal quarter) of Borrower
then ended, which, in the case of the statements as of December 31, 2009, have
been certified by an independent public accountant of recognized national
standing. The foregoing financial statements fairly present, in all material
respects, the financial condition of Borrower and its Subsidiaries as of the
date thereof and the results of the operations of Borrower and its Subsidiaries
for the period then ended and, from the date of the foregoing financial
statements to the date hereof, there has been no material adverse change in such
condition.
2.Existence; Compliance with Law.
Each of Borrower and each Guarantor (a) is duly organized or formed, as
appropriate, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, formation or organization, as appropriate,
(b) has the requisite corporate, partnership or limited liability company power
and authority to conduct the business in which it is currently engaged, (c) is
qualified as a foreign entity to do business under the laws of any jurisdiction
where the failure to so qualify would have a material adverse effect on the
business of Borrower and the Guarantors taken as a whole, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, have a material adverse effect on
the business, operations, property or financial or other condition of Borrower
and the Guarantors taken as a whole and would not materially adversely affect
the ability of Borrower or the Guarantors to perform their obligations under the
Loan Documents.
3.Power; Authorization; Enforceable Obligations.
Borrower and each Guarantor has the corporate, partnership or limited liability
company (as applicable) power and authority to make, deliver and perform the
Loan Documents to which it is a party and (in the case of Borrower) to borrow
hereunder, and has taken all corporate or other action necessary to be taken by
it to authorize (a) (in the case of Borrower) the borrowings on the terms and
conditions of this Agreement and the Notes, and (b) the execution, delivery and
performance of the Loan Documents to which it is a party. No consent, waiver or
authorization of, or filing with any Person (including without limitation any
Governmental Authority) is required to be made or obtained by Borrower in
connection with the borrowings hereunder or by Borrower or any Guarantor in
connection with the execution, delivery, performance, validity or enforceability
of the Loan Documents to which it is a party. This Agreement has been, and each
Note and Guaranty Agreement will be, duly executed and delivered on behalf of
Borrower or each Guarantor (as the case may be), and this Agreement constitutes,
and each Note and Guaranty Agreement when executed and delivered hereunder will
constitute, a legal, valid and binding obligation of Borrower or the Guarantors
(as the case may be), enforceable against Borrower or the Guarantors (as the
case may be), in accordance with its terms, subject to the effect, if any, of
bankruptcy, insolvency, reorganization, arrangement or other similar laws
relating to or affecting the rights of creditors generally and the limitations,
if any, imposed by the general principles of equity and public policy.
4.No Legal Bar.
The execution, delivery and performance of this Agreement and the Notes, the
borrowings hereunder and the use of the proceeds thereof and the execution,
delivery and performance by the Guarantors of the Guaranty

 

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Agreement (a) do not and will not violate any Requirement of Law or Contractual
Obligation of Borrower or any of the Guarantors, (b) do not contravene the
articles of incorporation, charter, bylaws, partnership agreement, articles or
certificate of formation, operating agreement or other organizational documents
of Borrower or any of the Guarantors and (c) do not and will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any Requirement of Law or Contractual Obligation.
5.No Material Litigation.
No litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Borrower, threatened
by or against Borrower or any of the Guarantors or against any of their
respective properties or revenues (a) with respect to this Agreement, the Notes
or any Guaranty Agreement or any of the transactions contemplated hereby or
thereby, or (b) which could reasonably be expected to have a material adverse
effect on the business, operations, property or financial or other condition of
Borrower and the Guarantors taken as a whole.
6.Regulation U.
Neither Borrower nor any of the Guarantors is engaged, nor will either of them
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any loans
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors. If requested by
Agent, Borrower and each of the Guarantors will furnish to Agent a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in said
Regulation U to the foregoing effect.
7.Investment Company Act.
Neither Borrower nor any of the Guarantors is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
8.ERISA.
Borrower and Borrower's Subsidiaries are in compliance in all material respects
with ERISA. There has been no Reportable Event with respect to any Plan. There
has been no institution of proceedings or any other action by PBGC or Borrower
or any Commonly Controlled Entity to terminate or withdraw or partially withdraw
from any Plan under any circumstances which could lead to material liabilities
to PBGC or, with respect to a Multiemployer Plan, the Reorganization or
Insolvency (as each such term is defined in ERISA) of the Plan.
9.Disclosure.
No representations or warranties made by Borrower or any Guarantor in this
Agreement or any other Loan Document or in any other document furnished from
time to time in connection herewith or therewith (as such other documents may be
supplemented from time to time) contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under which
they were made, not misleading.
10.Subsidiary Information.
Schedule 3 attached hereto contains the name, principal place of business, and
percentage of ownership of all of the Subsidiaries of Borrower, indicating
whether or not such Subsidiary is a Guarantor, a Financial Subsidiary or a
Non-Guarantor Subsidiary. Schedule 4 attached hereto contains the name and
principal place of business of all Financial Subsidiaries.
11.Schedules.

 

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Each of the Schedules to this Agreement contains true, complete and correct
information in all material respects.
12.Environment.
Borrower and the Guarantors have been issued and will maintain all required
federal, state, and local permits, licenses, certificates and approvals relating
to (a) emissions; (b) discharges to surface water or groundwater; (c) noise
emissions; (d) solid or liquid waste disposal; (e) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or hazardous wastes;
or (f) other environmental, health or safety matters, except to the extent the
failure to have any such permit, license, certificate or approval would not have
a material adverse effect on Borrower's consolidated operations, business or
financial condition. Neither Borrower nor any of the Guarantors have received
notice of, or has actual knowledge of any material violations of any federal,
state or local environmental, health or safety laws, codes or ordinances or any
rules or regulations promulgated thereunder. Except in accordance with a valid
governmental permit, license, certificate or approval, there has been no
material emission, spill, release or discharge into or upon (i) the air; (ii)
soils; (iii) surface water or groundwater; (iv) the sewer, septic system or
waste treatment, storage or disposal system servicing any property of Borrower
or any of the Guarantors of any toxic or hazardous substances or hazardous
wastes at or from such property; and accordingly no such property has been
adversely affected, in any material respect, by any toxic or hazardous
substances or wastes. There has been no complaint, order, directive, claim,
citation or notice by any Governmental Authority or any person or entity with
respect to material violations of law or damages by reason of Borrower or the
Guarantors (1) air emissions; (2) spills, releases or discharges to soils or
improvements located thereon, surface water, groundwater or the sewer, septic
system or waste treatment, storage or disposal system servicing the premises;
(3) noise emissions; (4) solid or liquid waste disposal; (5) use, generation,
storage, transportation or disposal of toxic or hazardous substances or
hazardous wastes; or (6) other environmental, health or safety matters affecting
Borrower or any of the Guarantors. Neither Borrower nor any of the Guarantors
have any material indebtedness, obligation or liability, absolute or contingent,
matured or unmatured, with respect to the storage, treatment, cleanup or
disposal of any solid waste, hazardous wastes, or other toxic or hazardous
substances. For purposes of this subsection 4.12, a violation, emission, spill,
release, discharge, damage, adverse effect, indebtedness, obligation or
liability shall be deemed material if, and only if, such violation, emission,
spill, release, discharge, damage, adverse effect, indebtedness, obligation or
liability, in any one case or in the aggregate, would have a material adverse
effect on Borrower's consolidated operations, business or financial condition.
13.Force Majeure Events.
Neither the business nor the properties of Borrower or any Guarantor are
affected by any fire, explosion, accident, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy, or other casualty (whether or not
covered by insurance), materially and adversely affecting such business or
properties or the operation of Borrower and the Guarantors taken as a whole.
14.Other Agreements.
Neither Borrower nor any Guarantor is a party to any indenture, loan, or credit
agreement, or to any lease or other agreement or instrument or subject to any
charter, corporate or other restriction which could have a material adverse
effect on the business, properties, assets, operations, or conditions, financial
or otherwise, of Borrower and the Guarantors, taken as a whole, or the ability
of Borrower or any Guarantor to carry out its obligations under the Loan
Documents to which it is a party. Neither Borrower nor any Guarantor is in
default in any material respect in the performance, observance, or fulfillment
of any of the obligations, covenants, or conditions contained in any agreement
or instrument material to the business of Borrower and the Guarantors, taken as
a whole.
15.No Defaults on Outstanding Judgments or Orders.
Except for judgments with respect to which the liability of Borrower and each
Subsidiary does not exceed

 

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$5,000,000 in the aggregate for all such judgments, (a) Borrower and each
Subsidiary have satisfied all unstayed and unappealed judgments, and (b) neither
Borrower nor any Subsidiary is in default with respect to any judgment, or any
material writ, injunction, decree, rule, or regulation of any court, arbitrator,
or federal, state, municipal, or other governmental authority, commission,
board, bureau, agency, or instrumentality, domestic or foreign applicable to
Borrower or any Subsidiary.
16.Ownership and Liens.
Borrower and each Guarantor have title to, or valid leasehold interests in, all
of their respective properties and assets, real and personal, including the
properties and assets and leasehold interests reflected in the financial
statements referred to in subsection 4.1 (other than (i) any properties or
assets disposed of in the ordinary course of business, (ii) properties
capitalized on Borrower's balance sheet in accordance with GAAP but identified
in such financial statements or accompanying footnotes as "inventory not owned"
and (iii) those properties or assets which are under contract for purchase by
Borrower or any Guarantor in the ordinary course of business but not yet closed
and owned in fee title, and which are reflected in the financial statements by
the amount of any deposit and predevelopment costs). None of the properties and
assets owned by Borrower or any Guarantor and none of their leasehold interests
is subject to any Lien, except such as may be permitted pursuant to subsection
7.2 of this Agreement.
17.Operation of Business.
Borrower and each Subsidiary possess all material licenses, permits, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, required to
conduct their respective businesses substantially as now conducted and as
presently proposed to be conducted and neither Borrower nor any of its
Subsidiaries is in violation of any valid rights of others with respect to any
of the foregoing where the failure to possess such licenses, permits,
franchises, patents, copyrights, trademarks, trade names or rights thereto or
the violation of the valid rights of others with respect thereto may, in any one
case or in the aggregate, adversely affect in any material respect the financial
condition, operations, properties, or business of Borrower or any Subsidiary or
the ability of Borrower and the Guarantors, taken as a whole, to perform their
obligations under the Loan Documents to which they are a party.
18.Taxes.
All income tax liabilities or income tax obligations of Borrower and each
Guarantor (other than those being contested in good faith by appropriate
proceedings) have been paid or have been accrued by or reserved for by Borrower.
Borrower constitutes the parent or an affiliated group of corporations for
filing a consolidated United States federal income tax return.
19.Security Documents.
Subject to the release provisions of subsection 2.1(b), the Collateral Agreement
is effective to create in favor of Agent, for the benefit of the Lenders, a
legal, valid and enforceable security interest in the Security described therein
and proceeds thereof. The account(s) (and the cash and Secured Borrowing Base
Permitted Investments maintained therein) described in the Collateral Agreement
and the Blocked Account Control Agreement is(are) subject to a security interest
perfected by control. When financing statements in appropriate form are filed in
the appropriate jurisdictions, the security interest created by the Collateral
Agreement shall constitute a fully perfected Lien on all right, title and
interest of Borrower and the Guarantors in such Security (other than such
Security in which a security interest cannot be perfected by filing a financing
statement under the Uniform Commercial Code as in effect at the relevant time in
the relevant jurisdiction), as security for the Obligations (in the case of
Borrower) or for the Guaranteed Obligations (as defined in the Guaranty
Agreement in the case of the Guarantors), in each case prior and superior in
right to any other Person except (other than with respect to the Secured
Borrowing Base Cash), Limited Permitted Liens and Liens permitted by subsection
7.2(b).
SECTION 4:
CONDITIONS PRECEDENT

 

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1.Conditions to Initial Loan(s).
The obligation of the Lenders to make the initial Loan(s), of the Swingline
Lender to make Swingline Loans and of any LC Issuer to issue, amend or extend
any Facility L/C hereunder on the first Borrowing Date is subject to the
satisfaction of the following conditions precedent on or prior to such date:
(a)Notes. Each Lender shall have received its respective Note, conforming to the
requirements hereof and duly executed and delivered by a duly authorized officer
of Borrower.
(b)Guaranty Agreement. The Guaranty Agreement shall have been duly executed and
delivered by all Guarantors to Agent.
(c)Security Documents. Counterpart copies of the Collateral Agreement and the
Blocked Account Control Agreement shall have been duly executed and delivered to
Agent by each party thereto, together with each Uniform Commercial Code
financing statement required by the Security Documents or under law or
reasonably requested by Agent to be filed, registered or recorded in order to
create in favor of Agent, for the benefit of Lenders, a perfected Lien on the
Security described therein, in each case in proper form for filing, registration
or recordation.
(d)Secured Borrowing Base Cash. Any Secured Borrowing Base Cash required under
subsection 2.1(b)(i) or (x) hereof shall have been deposited in the Secured
Borrowing Base Account subject to the Blocked Account Control Agreement.
(e)Borrowing Base and Financial Covenant Compliance. Borrower shall have
delivered to each Lender and Agent a Borrowing Base Certificate, certified by a
Responsible Officer of Borrower, which shows compliance with the provisions of
subsection 2.1(b) hereof as of the effective date of this Agreement and a
certificate, in the form required in subsection 6.2(a) hereof with respect to
the Borrower's compliance with the financial covenants set forth herein as of
March 31, 2010, on a pro forma basis.
(f)Legal Opinion of Counsel to Borrower. Agent shall have received an executed
legal opinion of (i) Vorys, Sater, Seymour and Pease LLP, counsel to Borrower
and the Guarantors, and (ii) special Pennsylvania counsel to Borrower and the
Guarantors, dated as of the date hereof and addressed to Lenders and Agent, in
form and substance reasonably satisfactory to each Lender and Agent and covering
such matters with respect to the transactions contemplated hereby as each Lender
and Agent or their respective counsel may reasonably require.
(g)Corporate Proceedings of Borrower. Agent shall have received a copy of the
resolutions (in form and substance satisfactory to Agent) of the board of
directors of Borrower authorizing (i) the execution, delivery and performance,
of this Agreement, (ii) the consummation of the transactions contemplated
hereby, (iii) the borrowings herein provided for, and (iv) the execution,
delivery and performance of the Notes and the other documents provided for in
this Agreement, all certified by the Secretary or the Assistant Secretary of
Borrower as of the date hereof. Such certificate shall state that the
resolutions set forth therein have not been amended, modified, revoked or
rescinded as of the date hereof.
(h)Proceedings of Guarantors. Agent shall have received a copy of the respective
resolutions (in form and substance reasonably satisfactory to Agent) of the
board of directors, management committee or other governing body of each of the
Guarantors (or of Borrower or another Subsidiary of Borrower as the sole
shareholder or sole member of the applicable Guarantor), each resolution
authorizing the execution, delivery and performance of the Guaranty Agreement,
all certified by the Secretary or Assistant Secretary (or other person in a
comparable position) of the respective Guarantor (or Borrower or Subsidiary) as
of the date hereof. Such certificate shall state that the resolutions set forth
therein have not been amended, modified, revoked or rescinded as of the date
hereof.
(i)Incumbency Certificate of Borrower. Agent shall have received a certificate
of the Secretary or an Assistant Secretary of Borrower, dated the date hereof,
as to the incumbency and signature of the officer(s) of each executing this
Agreement, the Notes and any certificate or other documents to be delivered
pursuant hereto or thereto.
(j)Incumbency Certificates of Guarantors. Agent shall have received a
certificate of the

 

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Secretary (or other person in a comparable position) of each of the Guarantors,
dated the date hereof, as to the incumbency and signatures of the officer(s) (or
other person(s) in a comparable position) of each executing the Guaranty
Agreement.
(k)Articles of Incorporation of Borrower. Agent shall have received copies of
(i) the articles of incorporation of Borrower, together with all amendments, and
a certificate of good standing, all certified by the appropriate governmental
officer in its jurisdiction of incorporation and (ii) the bylaws or code of
regulations of Borrower certified by the Secretary or Assistant Secretary of
Borrower.
(l)Organizational Documents of Guarantors. Agent shall have received (i) with
respect to each Guarantor that is a corporation (A) copies of its articles or
certificates of incorporation, including all amendments thereto, and a
certificate of good standing, all certified by the appropriate governmental
officer in its jurisdiction of incorporation and (B) the bylaws or code of
regulations of such Guarantor certified by the Secretary (or other person in a
comparable position) of each Guarantor, (ii) with respect to any Guarantor that
is a partnership, a true copy of its partnership agreement, including all
amendments thereto, certified by an officer of such partnership or of its
general partner, together with (in the case of any limited partnership) copies
of the certificates of limited partnerships and a certificate of good standing,
all certified by the appropriate governmental officer in its jurisdiction of
organization, and (iii) with respect to each Guarantor that is a limited
liability company, a copy of its operating agreement, including all amendments
thereto, certified by an officer of such limited liability company or of its
managing member, and a copy of its articles or certificate of formation and a
certificate of good standing, all certified by the appropriate officer of the
state of its formation.
(m)No Proceeding or Litigation; No Injunctive Relief. No action, suit or
proceeding before any arbitrator or any Governmental Authority shall have been
commenced, no investigation by any Governmental Authority shall have been
commenced and no action, suit, proceeding or investigation by any Governmental
Authority shall have been threatened, against Borrower or any Guarantor or any
of the officers, directors or managers of Borrower or any Guarantor, seeking to
restrain, prevent or change the transactions contemplated by this Agreement in
whole or in part or questioning the validity or legality of the transactions
contemplated by this Agreement or seeking damages in connection with such
transactions.
(n)Consents, Licenses, Approvals, etc. Agent shall have received true copies
(certified to be such by Borrower or other appropriate party) of all consents,
licenses and approvals required in accordance with applicable law in connection
with the execution, delivery, performance, validity and enforceability of the
Loan Documents, if the failure to obtain such consents, licenses or approvals,
individually or in the aggregate, would have a material adverse effect on
Borrower and the Guarantors taken as a whole, or would adversely affect the
validity or enforceability of any of the foregoing documents, and approvals
obtained shall be in full force and effect and be satisfactory in form and
substance to Agent.
(o)Compliance with Law. Neither Borrower nor any of Borrowers' Subsidiaries
shall be in violation in any material respect of any applicable statute,
regulation or ordinance, including without limitation statutes, regulations or
ordinances relating to environmental matters, of any governmental entity, or any
agency thereof, in any respect materially and adversely affecting the business,
property, assets, operations or condition, financial or otherwise, of Borrower
and the Borrowers' Subsidiaries taken as a whole.
(p)No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing hereunder prior to or after giving effect to the
making of the initial Loans (including the issuance of Facility L/Cs) or the
purchase by Lenders of participation interests in the Existing L/Cs on the first
Borrowing Date hereunder.
(q)No Material Adverse Change. There shall have been no material adverse change
in the consolidated financial condition or business or operations of Borrower
and Borrowers' Subsidiaries from the date of Borrower's December 31, 2009
consolidated financial statements to the first Borrowing Date.
(r)Fees. Borrower shall have paid to Agent the fees provided for in the Agent's
Fee Letter (which fees (except for any paid for the account of Agent or
Arranger) shall be paid by the Agent to the Lenders).

 

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(s)Facility L/C Application. If the issuance of any Facility L/C is part of the
initial loan(s), Borrower shall have delivered to the applicable LC Issuer a
Facility L/C Application in accordance with subsection 2.15 hereof for each
Facility L/C that Borrower has requested such LC Issuer to issue on the first
Borrowing Date.
(t)Payoff of Prior Credit Agreement. Evidence that the Prior Credit Agreement
has been terminated, and all outstanding obligations thereunder have been paid.
(u)Additional Matters. All corporate and other proceedings and all other
documents and legal matters in connection with the transactions contemplated by
the Loan Documents shall be reasonably satisfactory in form and substance to
each Lender and Agent and their respective counsel.
Agent shall furnish to each Lender copies of all documents received by Agent in
satisfaction of the foregoing conditions.
2.Conditions to All Loans.
In addition to the other terms and conditions of this Agreement with respect to
the making of Loans and the issuance of Facility L/Cs, the obligation of each
Lender to make any Loan and of the LC Issuers to issue, amend or extend any
Facility L/C hereunder on any date (including without limitation the first
Borrowing Date) is subject to the satisfaction of the following conditions
precedent as of such date:
(a)Representations and Warranties. The representations and warranties made by
Borrower in this Agreement and any representations and warranties made by
Borrower or any Guarantor which are contained in any certificate, document or
financial or other statement furnished at any time under or in connection
herewith or therewith, shall be true and correct in all material respects on and
as of the date of such Loan or issuance of such Facility L/C as if made on and
as of such date unless stated to relate to a specific earlier date.
(b)No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Loan to be
made or Facility L/C to be issued, amended or extended on such date and no
material adverse change has occurred in the consolidated financial condition or
business or operations of the Borrower and its Subsidiaries since the date of
delivery of the most recent financial statements of the Borrower under
subsection 6.1 hereof.
(c)Facility L/C Application. In the case of the issuance, amendment or extension
of any Facility L/C, Borrower shall have delivered to the applicable LC Issuer a
Facility L/C Application in accordance with subsection 2.15 hereof for each
Facility L/C that Borrower has requested such LC Issuer to issue, amend or
extend.
(d)Borrowing Base. Such borrowing or the issuance, amendment or extension of
such Facility L/C shall not violate the provisions of subsection 2.1(b) hereof.
Each borrowing by Borrower and each submission of a Facility L/C Application
under this Agreement shall constitute a representation and warranty by Borrower
as of the date of such borrowing or submission of such Facility L/C Application
that the conditions contained in the foregoing paragraphs (a), (b), (c) and (d)
of this subsection 5.2 have been satisfied.
SECTION 5:
AFFIRMATIVE COVENANTS

Borrower hereby agrees that, from the date hereof and so long as any Commitment
remains in effect, any portion of any Note or Reimbursement Obligation remains
outstanding and unpaid, any Facility L/C remains outstanding that is not fully
collateralized with cash in a manner satisfactory to the LC Issuer thereof and
to Agent, or any other amount is owing to Agent or any Lender hereunder,
Borrower shall, and in the case of subsections 6.4, 6.5, 6.6, 6.7, 6.13 and
6.14, shall cause each Guarantor to:
1.Financial Statements.
Furnish to Agent (with sufficient copies for each Lender and which Agent shall
promptly furnish to each Lender):

 

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(a)as soon as available, but in any event within 90 days after the end of each
fiscal year of Borrower, a copy of the audited consolidated balance sheet of
Borrower and its consolidated Subsidiaries as of the end of such year and the
related audited consolidated statements of income, of stockholders' equity and
of cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, together with the opinion of independent
certified public accountants of nationally recognized standing, which opinion
shall not contain a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit or qualification which would
affect the computation of financial covenants contained herein other than a
qualification for consistency due to a change in the application of GAAP with
which Borrower's independent certified public accountants concur; and
(b)as soon as available, but in any event not later than 60 days after the end
of each quarterly accounting period (excluding the quarterly accounting period
for the last quarter of each fiscal year of the Commitment Period), the
unaudited consolidated balance sheet of Borrower and its consolidated
Subsidiaries as of the end of each such quarter and the related unaudited
consolidated statements of income and of stockholders' equity of Borrower and
its consolidated Subsidiaries for such quarter and the portion of the fiscal
year through such date setting forth in each case in comparative form the
figures for the previous year, and including in each case: (i) the relevant
figures broken down with respect to each division of Borrower and its
Subsidiaries and (ii) a summary of all Land, Land under Contract, Lots, Lots
under Development, Finished Lots and Lots under Contract;
all such financial statements to be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP (except,
in the case of the financial statements referred to in subparagraph (b) of this
subsection 6.1, that such financial statements need not contain footnotes and
may be subject to year-end audit adjustments).
(c)Reports required to be delivered pursuant to subsections 6.1(a) and 6.1(b)
shall be deemed to have been delivered on the date on which such report is
posted on the SEC's website at www.sec.gov, and such posting shall be deemed to
satisfy the reporting requirements of such subsections 6.1(a) and 6.1(b).
2.Certificates; Other Information.
Furnish to each Lender and Agent:
(a)within five (5) Business Days after the posting on the SEC's website of each
financial statement referred to in subsection 6.1 (a) above and each financial
statement referred to in subsection 6.1(b) above, a certificate of a Responsible
Officer of Borrower (in the form of Exhibit F attached hereto or such other form
as shall be reasonably acceptable to each Lender and Agent) stated to have been
made after due examination by such Responsible Officer (i) stating that, to the
best of such officer's knowledge, Borrower and each of the Guarantors during
such period has observed or performed in all material respects all of its
covenants and other agreements, and satisfied every condition contained in this
Agreement and the Notes to be observed, performed or satisfied by it, and that
such officer has obtained no knowledge of any Default or Event of Default except
as specified in such certificate, (ii) showing in detail the calculations
supporting such statement in respect of subsections 6.9, 6.10, 6.11, 6.15, 7.1,
7.5, 7.6(b), 7.6(e)-(g) and 7.13 hereof, and (iii) to the extent not previously
disclosed in writing to the Agent, an update of Schedules 3 and 4 hereto with
respect to the formation or acquisition of any Guarantor, Non-Guarantor
Subsidiary or Financial Subsidiary;
(b)not later than March 31 of each year, comprehensive projections for that
year, setting forth projected income and cash flow for each quarter of that
year, and the projected balance sheet as of the end of each quarter of that
year, together with a summary of the assumptions upon which such projections are
based and a certificate in the form of Exhibit G hereto of the chief financial
officer, the controller, the treasurer or the chief accounting officer of
Borrower with respect to such projections;

 

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(c)promptly after the same are sent, copies of all financial statements, reports
and notices which Borrower or any Guarantor sends to its stockholders as
stockholders and, so long as Borrower is a reporting company under the
Securities Exchange Act of 1934, promptly after the same are filed, copies of
all financial statements which Borrower may make to, or file with, and copies of
all material notices it receives from, the Securities and Exchange Commission or
any public body succeeding to any or all of the functions of the Securities and
Exchange Commission;
(d)promptly upon receipt thereof, copies of all final reports submitted to
Borrower by independent certified public accountants in connection with each
annual, interim or special audit of the books of Borrower or any Guarantor made
by such accountants, including without limitation any final comment letter
submitted by such accountants to management in connection with their annual
audit; and
(e)promptly, on reasonable notice to Borrower, such additional financial and
other information as any Lender may from time to time reasonably request.
3.New York Stock Exchange»
. Maintain the listing of Borrower's Common Equity on the New York Stock
Exchange.
4.Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its Indebtedness and other material
obligations of whatever nature, except (a) without prejudice to the
effectiveness of paragraph (5) of Section 9 hereof, any Indebtedness or other
obligations (including any obligations for taxes), when the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Borrower or the Guarantors, as the case may be, and (b) any
Indebtedness secured by a mortgage on real estate if such Indebtedness is, by
its terms, non-recourse to Borrower and the Guarantors.
5.Maintenance of Existence; Compliance.
Except as may be permitted under subsection 7.3 hereof, preserve, renew and keep
in full force and effect its corporate existence and take all reasonable action
to maintain all rights, privileges, contracts, copyrights, patents, trademarks,
trade names and franchises necessary or desirable in the normal conduct of its
business, and comply with all Contractual Obligations and Requirements of Law
except to the extent that the failure to take such actions or comply with such
Contractual Obligations and Requirements of Law would not, in the aggregate,
have a material adverse effect on the business, operations, property or
financial or other condition of Borrower or of Borrower and the Guarantors,
taken as a whole. Borrower and the Guarantors have no duty to renew or extend
contracts which expire by their terms.
6.Maintenance of Property; Insurance.
Keep all property useful in and necessary to its business in good working order
and condition; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, general liability and
business interruption insurance) as are usually insured against in the same
general area by companies engaged in the same or a similar business; and furnish
to Agent, upon written request, full information as to the insurance carried.
7.Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities, subject in
the case of interim statements to year-end audit adjustments; and permit
representatives of each Lender and Agent to visit and inspect any of its
properties, and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be requested, and to discuss
the business, operations, properties and financial and other condition of
Borrower and the Guarantors with officers and employees of Borrower and the
Guarantors and, if notice thereof is given to Borrower prior

 

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to the date of such discussions, with its independent certified public
accountants.
8.Notices.
Promptly give notice to Agent (which notice Agent shall promptly furnish to the
Lenders):
(a)of the occurrence of any Default or Event of Default;
(b)of any (i) default or event of default under any loan or Letter of Credit
agreement binding upon Borrower or any of its Subsidiaries, (ii) default under
any other Contractual Obligation that would enable the obligee of the
Contractual Obligations to compel Borrower or any of its Subsidiaries to
immediately pay all amounts owing thereunder or otherwise accelerate payments
thereunder and would have a material adverse effect on Borrower and its
Subsidiaries taken as a whole, or (iii) litigation, investigation or proceeding
which may exist at any time between Borrower or any Subsidiary and any
Governmental Authority, which, if adversely determined, would have a material
adverse effect on the business, operations, property or financial or other
condition of Borrower and its Subsidiaries taken as a whole;
(c)of any litigation or proceeding affecting Borrower or any of its Subsidiaries
(i) (A) in which the amount involved is $2,000,000 or more and not covered by
insurance, or (B) which, in the reasonable opinion of a Responsible Officer of
Borrower, would, if adversely determined, have a material adverse effect on
Borrower and its Subsidiaries taken as a whole, or (ii) in which injunctive or
similar relief is sought and which, in the reasonable opinion of a Responsible
Officer of Borrower, would, if adversely determined, have a material adverse
effect on Borrower and its Subsidiaries taken as a whole;
(d)of the following events, as soon as possible and in any event within 30 days
after Borrower knows or has reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan with respect to which the PBGC has not
waived the 30 day reporting requirement, or (ii) the institution of proceedings
or the taking or expected taking of any other action by PBGC or Borrower or any
Commonly Controlled Entity to terminate or withdraw or partially withdraw from
any Plan under circumstances which could lead to material liability to the PBGC
or, with respect to a Multiemployer Plan, the Reorganization or Insolvency (as
each such term is defined in ERISA) of the Plan and in addition to such notice,
deliver to each Lender and Agent whichever of the following may be applicable:
(A) a certificate of a Responsible Officer of Borrower setting forth details as
to such Reportable Event and the action that Borrower or Commonly Controlled
Entity proposes to take with respect thereto, together with a copy of any notice
of such Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such proceedings or
any notice to PBGC that such Plan is to be terminated, as the case may be; and
(e)of a material adverse change in the business, operations, property or
financial or other condition of Borrower and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection 6.8 shall be accompanied by a statement
of the chief executive officer or chief financial officer or other Responsible
Officer of Borrower setting forth details of the occurrence referred to therein
and stating what action Borrower proposes to take with respect thereto. For all
purposes of clause (d) of this subsection 6.8, Borrower shall be deemed to have
all knowledge or knowledge of all facts attributable to the administrator of
such Plan if such Plan is a Single Employer Plan.
9.Maintenance of Consolidated Tangible Net Worth.
Maintain, at all times during the Commitment Period, a Consolidated Tangible Net
Worth ("Minimum Tangible Net Worth") in amounts equal to or exceeding (i)
$200,000,000 plus (ii) fifty percent (50%) of Consolidated Earnings (without
deduction for losses and excluding the effect of any decreases in any Deferred
Tax Valuation Allowance) earned for each completed fiscal quarter ending after
March 31, 2010 to the date of determination, excluding any quarter in which the
Consolidated Earnings are less than zero) plus (iii) the amount of any reduction
or reversal in Deferred Tax Valuation Allowance for each completed fiscal
quarter ending after March 31, 2010 minus (iv) the costs of the Borrower's
repurchase of Senior Notes up to

 

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$10,000,000.
10.Maintenance of Leverage Ratio.
Maintain during the Commitment Period a Leverage Ratio not in excess of 1.50 to
1.00.
11.Maintenance of Interest Coverage Ratio.
As of the end of each fiscal quarter, maintain during the Commitment Period, an
Interest Coverage Ratio of not less than 1.50 to 1.00. Notwithstanding the
foregoing, the maintenance of an Interest Coverage Ratio of less than 1.50 to
1.00 as of the end of any fiscal quarter shall not constitute a violation of
this subsection 6.11 as long as Borrower, as of the end of such fiscal quarter,
is in compliance with subsection 6.15.
12.Intentionally Omitted.
  
13.Subsidiary Guarantors.
Cause each Subsidiary (other than a Financial Subsidiary or a Non-Guarantor
Subsidiary, in each case, so long as the Investment in such Subsidiary is
permitted under subsection 7.6 hereof) of Borrower or any Guarantor formed or
acquired after the date hereof to become a "Guarantor" by execution and delivery
of a Supplemental Guaranty by such Subsidiary to Agent, and to deliver such
proof of corporate or other appropriate action, incumbency of officers, opinions
of counsel and other documents delivered by the Guarantors pursuant to
subsection 5.1 hereof or as the Agent shall have requested. Borrower may, from
time to time, cause any Financial Subsidiary or Non-Guarantor Subsidiary to
become a Guarantor under this Agreement by execution and delivery of a
Supplemental Guaranty in accordance with this subsection 6.13.
14.Environment.
(a) Comply with all federal, state and local environmental, health and safety
laws, codes and ordinances and all rules and regulations issued thereunder
except to the extent the failure to do so would not have a material adverse
effect on the consolidated operations, business or financial condition of
Borrower and the Guarantors; (b) notify the Agent promptly of any notice of a
hazardous discharge or environmental complaint received from any Governmental
Authority or any other Person (and the Agent shall notify the Lenders promptly
following its receipt of any such notice) that, if adversely determined, could
have a material adverse effect on the consolidated operations, business or
financial condition of Borrower and the Guarantors; and (c) notify the Agent
promptly of any hazardous discharge from or affecting its premises (and the
Agent shall notify the Lenders promptly following its receipt of any such
notice) that could have a material adverse effect on the consolidated
operations, business or financial condition of Borrower and the Guarantors. In
the case of clauses (b) and (c) above, (i) promptly contain and remove any such
hazardous discharge, in compliance with all applicable laws; (ii) promptly pay
any fine or penalty assessed in connection therewith; (iii) permit the Agent to
inspect the premises, to conduct tests thereon and to inspect all books,
correspondence and records pertaining thereto; and (iv) at the Agent's request,
and at Borrower's expense, provide a report of a qualified environmental
engineer, satisfactory in scope, form and content to the Required Lenders, that
the condition has been corrected.
15.Minimum Liquidity.
If, for the period ending the last day of any fiscal quarter during the
Commitment Period (a) the Interest Coverage Ratio is less than 1.50 to 1.00 and
(b) the ACFO Ratio is less than 1.50 to 1.00, the Borrower shall thereafter
maintain Unrestricted Cash at the Agent in an amount not less than $25,000,000
until the last day of the next succeeding fiscal quarter when either the
Interest Coverage Ratio is not less than 1.50 to 1.00 or the ACFO Ratio is not
less than 1.50 to 1.00.
SECTION 6:
NEGATIVE COVENANTS

 

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Borrower hereby agrees that, from the date hereof and so long as the Commitment
remains in effect, any portion of any Note or Reimbursement Obligation remains
outstanding and unpaid, any Facility L/C remains outstanding that is not fully
collateralized with cash in accordance with the provision of Section 8 hereof,
or any other amount is owing to Agent, any LC Issuer or any Lender hereunder,
Borrower shall not, and shall not permit any Guarantor to, directly or
indirectly:
1.Limitation on Secured Indebtedness.
Create, incur or suffer to exist any Secured Indebtedness exceeding $25,000,000
at any time outstanding (other than Secured Indebtedness in an aggregate amount
not in excess of $50,000,000 in the nature of Contingent Obligations in respect
of Letters of Credit fully executed by a Lien on cash and Cash Equivalents).
2.Limitation on Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether owned or hereafter acquired, except:
(a)Liens in favor of Agent, for the ratable benefit of Lenders;
(b)Liens securing Indebtedness permitted under subsection 7.1 hereof;
(c)Liens for taxes and special assessments not yet due or which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of Borrower and the Guarantors in
accordance with GAAP;
(d)carriers', warehousemen's, mechanics', materialmen's, repairmen's, or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of Borrower and the Guarantors in accordance with GAAP;
(e)pledges or deposits in connection with workers' compensation, unemployment
insurance and other social security legislation other than Liens imposed by the
PBGC;
(f)(i)    deposits to secure the performance of: bids; trade contracts (other
than for borrowed money or the purchase price of property or services); leases;
statutory and other obligations required by law; surety, appeal and performance
bonds (including Construction Bonds); and other obligations of a like nature
incurred in the ordinary course of business; and (ii) Liens in favor of surety
bond companies pursuant to indemnity agreements to secure the reimbursement
obligations of Borrower or any Guarantor on Construction Bonds, provided (A) the
Liens securing Construction Bonds shall be limited to the assets of, as
appropriate, Borrower or such Guarantor at, and the rights of, as appropriate,
Borrower or such Guarantor arising out of, the projects that are the subject of
the Construction Bonds, (B) the Liens shall not attach to any real estate and
(C) the aggregate amount of such Liens at any time shall not exceed the dollar
amount of Construction Bonds then outstanding;
(g)Liens of landlords, arising solely by operation of law, on fixtures and
moveable property located on premises leased in the ordinary course of business;
provided, however, that the rental payments secured thereby are not yet due;
(h)Liens arising as a result of a judgment or judgments against Borrower or any
of the Guarantors which do not in the aggregate exceed $2,500,000 at any one
time outstanding, which are being diligently contested in good faith, which are
not the subject of any attachment, levy or enforcement proceeding, and as to
which appropriate reserves have been established in accordance with GAAP; and
(i)Liens securing community development district bonds or similar bonds issued
by Governmental Authorities to accomplish similar purposes.
3.Limitation on Fundamental Changes.
Except for (a) any Investments permitted pursuant to subsection 7.6(d) hereof
and (b) any Permitted Acquisition, enter into any transaction of merger,
consolidation, amalgamation or reorganization (including without limitation any
election to be taxed as an S Corporation), or liquidate, wind up or dissolve
itself (or

 

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suffer any liquidation or dissolution), or, except for the sale of land, lots
and houses from inventory in the ordinary course of business, and the sale of
rights to the stream of utility or similar assessment payments from homeowners,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its business or assets,
whether now owned or hereafter acquired, or make any material change in the
method by which it conducts business, except any Subsidiary of Borrower may (i)
be merged, amalgamated or consolidated with or into Borrower or any Guarantor,
(ii) transfer its ownership to Borrower or any other Guarantor, or (iii) be
liquidated, wound up or dissolved into, or all or substantially all of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Borrower or any Guarantor; provided, however, that, in the case of such a
merger, liquidation or consolidation, Borrower or such Guarantor, as the case
may be, shall be the continuing or surviving corporation.
4.Limitation on Acquisitions.
Except for any Permitted Acquisition and the acquisition of land, lots and
houses in the ordinary course of business to the extent not otherwise prohibited
hereunder, enter into any Acquisition without the prior written consent of the
Required Lenders.
5.Land Inventory.
Permit at any time Adjusted Land Value to exceed 110% of Consolidated Tangible
Net Worth.
6.Limitation on Investments.
Make or commit to make any advance, loan, extension of credit or capital
contribution to, or purchase of any stock, bonds, note, debenture or other
security of, or make any other investment in, any Person (all such transactions
being herein called "Investments"), except the following (to the extent not
otherwise prohibited hereunder):
(a)Investments in Cash Equivalents;
(b)extensions of credit in connection with the sale of land which do not exceed
in the aggregate at any one time outstanding an amount ten percent (10%) of
Consolidated Tangible Net Worth, and which have a maximum maturity of five
years;
(c)loans and advances to officers and employees of Borrower or any Guarantor, to
other Persons in the ordinary course of business or as permitted by the code of
regulations of Borrower, which do not exceed in the aggregate $2,000,000 at any
one time outstanding;
(d)any Investments in any Guarantor identified in Schedule 3 hereto or any other
Subsidiary that becomes a Guarantor in accordance with the terms hereof;
(e)Investments in the Senior Notes to the extent permitted by Section 7.11 of
this Agreement and any refinancings thereof pursuant to Section 7.14 of this
Agreement;
(f)any Investment in Joint Venture, the aggregate cost of which, as determined
in accordance with GAAP (excluding, however, Borrower's or such Guarantor's
equity in the undistributed earnings or losses in each such Joint Venture), does
not at any one time outstanding exceed twenty percent (20%) of Consolidated
Tangible Net Worth; provided, however, that (A) with respect to each such Joint
Venture, Borrower or such Guarantor shall have at least a 20% ownership interest
in such Joint Venture and all material decisions with respect to the management
and control of each such Joint Venture's business (other than decisions with
respect to development of undeveloped land owned by such Joint Venture) shall
require the consent and approval of Borrower or such Guarantor; (B) no such
Investment may be made if it causes or results (singly or with other actions or
events) in (i) any violation of any other covenant or condition hereof or (ii)
any other Default or Event of Default; and (C) in connection with such
Investment, Borrower or such Guarantor shall not have assumed or become subject
to any monetary obligations, liabilities or commitments related to such Joint
Venture (including its capital contribution or any guaranty) which is recourse
to the Borrower or such Guarantor except to the extent that the aggregate amount
of such monetary obligations,

 

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liabilities or commitments to all such Joint Ventures do not exceed $5,000,000
at any time; and
(g)Investments in Non-Guarantor Subsidiaries and in Financial Subsidiaries,
provided that, the aggregate cost for all Investments in any such Subsidiaries
that are not Guarantors, when combined with the aggregate cost of all Investment
in Joint Venture, each as determined in accordance with GAAP (excluding,
however, Borrower's or any Guarantor's equity in the undistributed earnings or
losses in each such Joint Venture, Financial Subsidiary or Non-Guarantor
Subsidiary), does not at any one time outstanding exceed thirty percent (30%) of
Consolidated Tangible Net Worth; further provided, that no such Investment may
be made if it causes or results (singly or with other actions or events) in (i)
any violation of any other covenant or condition hereof or (ii) any other
Default or Event of Default; and
(h)to the extent not otherwise prohibited and subject to the other provisions of
this Agreement, other Investments (not specifically listed in items (a) through
(g) of this Section 7.6) in the ordinary course of business and directly related
to the Borrower's homebuilding business.
7.Transactions with Affiliates and Officers.
(a)Except for compensation arrangements in the ordinary course of business with
the officers, directors, and employees of Borrower and Borrower's Subsidiaries,
enter into any transaction, including without limitation the purchase, sale or
exchange of property or the rendering of any services, with any Affiliate or any
officer or director thereof, or enter into, assume or suffer to exist any
employment or consulting contract with any Affiliate or an officer or director
thereof, except any transaction or contract which is in the ordinary course of
Borrower's or any of Borrower's Subsidiaries' business and which is upon fair
and reasonable terms no less favorable to Borrower or Borrower's Subsidiaries
than it would obtain in a comparable arm's length transaction with a Person not
an Affiliate;
(b)make any advance or loan to any Affiliate or any director or officer thereof
or of Borrower or any Subsidiary of Borrower or to any trust of which any of the
foregoing is a beneficiary, or to any Person on the guarantee of any of the
foregoing, except as expressly permitted by subsection 7.6(c) hereof; or
(c)pay any fees or expenses to, or reimburse or assume any obligation for the
reimbursement of any expenses incurred by, any Affiliate or any officer or
director thereof, except as may be permitted in accordance with clauses (a) and
(b) of this subsection 7.7.
8.Sale and Leaseback.
Enter into any arrangement with any Person providing for the leasing by Borrower
or any of Borrower's Subsidiaries of real or personal property which has been or
is to be sold or transferred by Borrower or any of Borrower's Subsidiaries to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of
Borrower or any of Borrower's Subsidiaries; provided, however, that such
arrangements shall be permitted with respect to Model Houses, so long as any
such arrangement with respect to Model Houses does not result in (a) the
creation of a lease which is required to be capitalized in accordance with GAAP;
(b) the initial term of such arrangement plus any options or renewals
exercisable by lessor or lessee exceeding four years; or (c) the violation of
any term, condition or covenant hereof.
9.
Limitation on Payments of Subordinated Indebtedness and Modification of
Subordination Agreements.

Without the prior written consent of the Required Lenders,
(a)repay, prepay, purchase, redeem, or otherwise acquire any Subordinated
Indebtedness; or
(b)make any other payments, including without limitation payment of interest, on
any Subordinated Indebtedness if an Event of Default exists or if such payment
would cause an Event of Default to occur; or
(c)permit the modification, waiver or amendment of any of the terms of any
Subordinated

 

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Indebtedness, except for modifications, waivers or amendments that do not (i)
increase the interest rate or change the maturity date of such Subordinated
Indebtedness or (ii) change the subordination provisions of such Subordinated
Indebtedness; or
(d)permit (whether or not within the control of Borrower or any of Borrower's
Subsidiaries) the modification, waiver, or amendment of, or release of any
parties to, any subordination agreement with respect to any Subordinated
Indebtedness;
provided, however, nothing contained in this subsection 7.9 shall prevent
Borrower from making regularly scheduled payments on any Subordinated
Indebtedness if no Event of Default exists and the payment would not cause an
Event of Default to occur.
10.Sale of Guarantor Securities.
Sell any security or equity of any Guarantor, or permit any Guarantor to sell or
issue any security or equity to any Person other than security or equity sold or
issued to Borrower. The provisions of this subsection 7.10 shall not restrict
the sale of mortgage loans in the ordinary course of business.
11.Limitation on Payment of Senior Notes»
. Except for payments made when due on the Senior Notes in accordance with this
Agreement, Borrower shall not directly or indirectly prepay, redeem or otherwise
acquire any Senior Note or make any payments, transfers on account of or, unless
contemporaneously therewith effective provision is made to similarly secure the
Obligations on an equal and ratable basis, provide a Lien to secure the Senior
Notes; provided, however, Borrower may repurchase up to $50,000,000 in the
aggregate of the Senior Notes so long as no Loans are outstanding under this
Agreement and immediately thereafter not less than $10,000,000 in Unrestricted
Cash remains.
12.Limitation on Negative Pledges.
Enter into any agreement (other than (a) this Agreement, (b) any indenture or
other agreement (i) governing any notes or bonds issued by the Borrower
evidencing Indebtedness of the Borrower that is permitted under this Agreement
and that does not constitute Subordinated Indebtedness and (ii) that provides
that the Borrower or any Guarantor may not create or incur any Lien upon any of
its assets, rights, revenues or property, unless the Lien also secures, on a
pari passu basis such Indebtedness and (c) any document evidencing or securing
Secured Indebtedness (i) that is permitted under this Agreement or (ii) that
prohibits other Liens against the property that secures such Secured
Indebtedness) which prohibits or limits the ability of Borrower or any Guarantor
to create, incur, assume or suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired.
13.Housing Inventory.
Permit the number of Speculative Housing Units, as at the end of any fiscal
quarter, to exceed the greater of (a) the number of Housing Unit Closings
occurring during the period of twelve (12) months ending on the last day of such
fiscal quarter, multiplied by thirty-five percent (35%) or (b) the number of
Housing Unit Closings occurring during the period of six (6) months ending on
the last day of such fiscal quarter, multiplied by seventy percent (70%).
14.Refinancing of Senior Notes»
. Enter into one or more agreements and/or transactions or series of agreements
and/or transactions for the refinancing of the Senior Notes which provide for a
maturity date of less than one year after the Maturity Date.
SECTION 7:
CASH COLLATERAL

1.Facility L/C Collateral Account.
Borrower agrees that it will, upon the request of Agent or the Required Lenders
and until the final expiration

 

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date of any Facility L/C and thereafter as long as any amount is payable to any
LC Issuer or the Lenders in respect of any Facility L/C, maintain a special
collateral account pursuant to arrangements satisfactory to Agent (the "Facility
L/C Collateral Account") at Agent's office in the name of Borrower but under the
sole dominion and control of Agent, for the benefit of the Lenders and LC
Issuers and in which Borrower shall have no interest other than set forth in
subsections 8.2, 8.3 or 8.4 hereof. Borrower hereby pledges, assigns and grants
to Agent, on behalf of and for the ratable benefit of the Lenders and LC
Issuers, a security interest in all of Borrower's right, title and interest in
and to all funds which may from time to time be on deposit in the Facility L/C
Collateral Account to secure the prompt and complete payment and performance of
the Obligations. Agent will invest any funds on deposit from time to time in the
Facility L/C Collateral Account in certificates of deposit of Agent having a
maturity not exceeding 30 days. Nothing in this subsection 8.1 shall either
require Borrower to deposit any funds in the Facility L/C Collateral Account,
obligate Agent to require Borrower to deposit any funds in the Facility L/C
Collateral Account or limit the right of Agent to release any funds held in the
Facility L/C Collateral Account, in each case other than as required by
subsections 2.24, 8.2, 8.3 or 8.4 hereof.
2.Event of Default under Paragraph (5) of Section 9.
Upon the occurrence of an Event of Default specified in paragraph (5) of Section
9, Borrower will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to Agent an amount in immediately
available funds, which funds shall be held in the Facility L/C Collateral
Account, equal to the difference of (x) 102% of the amount of Facility L/C
Obligations at such time, less (y) the amount on deposit in the Facility L/C
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount").
3.Other Events of Default.
If any Event of Default (other than an Event of Default specified in paragraph
(5) of Section 9) occurs, the Required Lenders (or Agent with the consent of the
Required Lenders) may, upon notice to Borrower and in addition to the continuing
right to demand payment of all amounts payable under the Loan Documents, make
demand on Borrower to pay, and Borrower will, forthwith upon such demand and
without any further notice or act, pay to Agent the Collateral Shortfall Amount,
which funds shall be deposited in the Facility L/C Collateral Account.
4.Cure; Termination.
(a)Except as otherwise contemplated in subsection 2.24, if the Event of Default
that resulted in the requirement for deposit of funds in the Facility L/C
Collateral Account is cured, and provided no other Event of Default has occurred
that is then continuing, Agent shall, promptly upon request from Borrower, pay
to or as directed by Borrower the amount on deposit in the Facility L/C
Collateral Account. Nothing contained in this paragraph shall waive, limit or
otherwise affect the rights of Agent or the Lenders or the obligations of
Borrower under this Section 8 if any other Event of Default shall occur.
(b)If the Aggregate Commitment is terminated (whether by acceleration, demand or
otherwise), then, not later than simultaneously with such termination, and
without limitation of Agent's and each Lender's right to demand payment of all
amounts payable under the Loan Documents, Borrower shall pay to Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility L/C
Collateral Account; provided, however, that (i) if all Obligations of Borrower
(other than Facility L/C Obligations in respect of issued and outstanding
Facility L/Cs that have not been drawn upon) have been paid in full, and (ii)
Borrower shall have provided to Agent and the LC Issuers, as security for the
remaining Facility L/C Obligations, one or more Letters of Credit, in an
aggregate amount at least equal to such remaining Facility L/C Obligations,
issued by a Lender or Lenders, and in form and substance, reasonably
satisfactory to Agent and the LC Issuers, the foregoing requirement for deposit
of funds in the Facility L/C Collateral Account

 

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shall not apply.
SECTION 8:DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER EVENT OF
DEFAULT
Upon the occurrence of any of the following events:
(1)    Borrower shall fail to pay any principal of any Note or make any
reimbursement (including payment of Reimbursement Obligations) in connection
with any Facility L/C when due in accordance with the terms thereof; or
(2)    Borrower shall fail to pay (a) any interest on any Note or in connection
with any Facility L/C, or (b) any fee, charge or other amount payable hereunder,
within three (3) days after Agent or any Lender notifies Borrower that such
interest, fee or amount has become due in accordance with the terms thereof or
hereof and has not been paid; or Borrower shall fail to comply with the
provisions of any one or more of subsections 6.3, 6.8(e), 6.13, 6.15, 7.3, 7.4,
7.8, 7.9, 7.10, 7.11 or 7.12; or
(3)    any representation or warranty made or deemed made by Borrower, herein or
which is contained in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith, shall prove
to have been incorrect in any material respect on or as of the date made or
deemed made; or
(4)    Borrower shall default in the observance or performance of any covenant
or agreement contained in (a) subsection 2.1(b)(viii) hereof and such default
remains uncured for five (5) days (notice to Borrower from Agent or any Lender
of such default is not required), (b) subsections 6.2(c), 6.2(d), 6.4, 6.8
(other than subsection 6.8(e)), 6.9, 6.10, 6.11, 6.14, 6.15, 7.1, 7.2, 7.6 or
7.7 hereof and such default remains uncured ten days after Agent or any Lender
notifies Borrower that such default has occurred, (c) subsection 6.7 hereof and
such default remains uncured for ten (10) days after Agent or any Lender
notifies Borrower that such default has occurred, provided, that for any default
under subsection 6.7 hereof for which cure cannot reasonably be accomplished
within ten days, if cure is commenced within such ten (10)-day period, Borrower
may have an additional period of up to thirty (30) days after notice to cure
such default before it is an Event of Default, (d) any one or more of
subsections 6.1(b), 6.2(a) or 6.2(b) hereof and such default remains uncured
fifteen (15) days after Agent or any Lender notifies Borrower that such default
has occurred, or (e) any other provision of this Agreement (including without
limitation subsections 6.1(a), 6.2(e), 6.5 and 6.6 hereof) which default shall
remain uncured thirty (30) days after Agent or any Lender notifies Borrower that
such a default has occurred, which notice shall specify the nature of the
default; or
(5)    (a) Borrower or any of Borrower's Subsidiaries shall commence any case,
proceeding or other action (i) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(ii) seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or Borrower or
any of Borrower's Subsidiaries shall make a general assignment for the benefit
of its creditors; or (b) there shall be commenced against Borrower or any of
Borrower's Subsidiaries any case, proceeding or other action of a nature
referred to in clause (a) above which (i) results in the entry of an order for
relief of any such adjudication or appointment, and (ii) remains undismissed,
undischarged or unbonded for a period of 60 days; or (c) there shall be
commenced against Borrower or any of Borrower's Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (d) Borrower or any of Borrower's
Subsidiaries shall take any action

 

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in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clauses (a), (b) or (c) above; or (e) Borrower
or any of Borrower's Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or
(6)    Borrower or any Subsidiary of Borrower shall (a) default in any payment
of principal of or interest on any Indebtedness (other than the Obligations) or
in the payment of any Contingent Obligation beyond the period of grace or cure,
if any, provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created, and the aggregate principal amount then
outstanding of all such Indebtedness and Contingent Obligations of Borrower and
all Subsidiaries exceeds $5,000,000 in any one instance or $10,000,000 in the
aggregate, or (b) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Contingent
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due or to be repurchased, prepaid,
defeased or redeemed prior to its stated maturity or such Contingent Obligation
to become payable; provided, however, that it shall not constitute a Default or
Event of Default if (x) Borrower or any Subsidiary of Borrower defaults on
Indebtedness secured by a mortgage on real estate if such Indebtedness is by its
terms non-recourse to Borrower and Borrower's Subsidiaries, or (y) a draw is
made on a standby Letter of Credit or payment is made on a performance bond, so
long as any reimbursement obligation of Borrower with respect to such Letter of
Credit or performance bond is made within the time required by the document
creating the reimbursement obligation; or
(7)    (a)    any party in interest (as defined in Section 3(14) of ERISA)
affiliated with Borrower or any of Borrower's Subsidiaries shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (b) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (c) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings is, in the opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of
such Reportable Event unremedied for thirty (30) days after notice of such
Reportable Event pursuant to Section 4043 (a), (c) or (d) of ERISA is given or,
in the case of institution of proceedings, the continuance of such proceedings
for thirty (30) days after commencement thereof, (d) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, or (e) any other event or
condition shall occur or exist with respect to a Single Employer Plan and in
each case in clauses (a) through (e) above, such event or condition, together
with all other such events or conditions, if any, could subject Borrower or any
of Borrower's Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of Borrower or of Borrower and Borrower's
Subsidiaries taken as a whole; or
(8)    one or more judgments or decrees shall be entered against Borrower, or
any of Borrower's Subsidiaries involving in the aggregate a liability (not
covered by insurance) of $5,000,000 or more and all such judgments or decrees in
excess of $5,000,000 shall not have been vacated, satisfied, discharged, or
stayed or bonded pending appeal within 30 days from the entry thereof; or
(9)    the occurrence of any of the following: (a) any Person or group (as that
term is understood under Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations thereunder) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of
Borrower equal to at least fifty percent (50%); or (b) as

 

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of any date a majority of the Board of Directors of Borrower consists of
individuals who were not either (i) directors of Borrower as of the
corresponding date of the previous year, (ii) selected or nominated to become
directors by the Board of Directors of Borrower of which a majority consisted of
individuals described in clause (b)(i) above or (iii) selected or nominated to
become directors by the Board of Directors of Borrower of which a majority
consisted of individuals described in clause (b)(i) above and individuals
described in clause (b)(ii) above; or
(10)    any subordination agreement that evidences any Subordinated Indebtedness
(i) ceases to be the legal, valid and binding agreement of any Person party
thereto, enforceable against such Person in accordance with its terms or a
payment is made by Borrower in violation of any provision thereof, or (ii) shall
be terminated, invalidated or set aside, or be declared ineffective or
inoperative or the Indebtedness related thereto is in any way not fully
subordinate to all of Borrower's Indebtedness and other liabilities to Lenders
and Agent under this Agreement and the Notes (subject to subsection 7.9 hereof)
and to Borrower's obligations, if any, as a guarantor or otherwise of the
Indebtedness and other liabilities of M/I Financial Corp.;
(11)    Except with respect to releases of Liens permitted under this Agreement,
any of the Security Documents shall cease, for any reason, to be in full force
and effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall fail or cease
to be enforceable and of the same effect and priority purported to be created
thereby; or
(12)    Any Loan Party shall default in the observance of any term, covenant or
agreement contained in any Security Document and such default shall continue
unremedied for 30 consecutive days.
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (5) above, the Commitments, if still outstanding, shall
automatically and immediately terminate and all Obligations shall immediately
become due and payable and Borrower shall immediately cash collateralize all
outstanding Facility L/Cs in accordance with Section 8 hereof, and (b) if such
event is any other Event of Default and is continuing, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
Agent may, or upon the request of the Required Lenders, Agent shall, by notice
to Borrower, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate and, upon demand by Agent, Borrower
shall fully cash collateralize all outstanding Facility L/Cs in accordance with
Section 8 hereof; and (ii) with the consent of the Required Lenders, Agent may,
or upon the request of the Required Lenders, Agent shall, by notice of default
to Borrower, declare the full amount of all outstanding Obligations to be due
and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
Additionally, Agent and each Lender may exercise any and all other rights and
remedies available to Agent and each Lender at law or in equity to the extent
not inconsistent with the rights specifically granted to Agent and each Lender
hereunder.
Notwithstanding any provisions concerning distribution of payments to the
contrary in this Agreement, so long as any Event of Default exists that has not
been waived by all Lenders, each Lender shall share in any payments or proceeds,
including proceeds of any collateral, received by Agent or any Lender made or
received at any time from and after any Event of Default ("Proceeds after
Default") in an amount equal to such Lender's Ratable Share of the Proceeds
after Default; provided, however, if any one or more of the Lender(s) has not
made any funding when required hereunder, the distribution of Proceeds after
Default shall be adjusted so that each Lender shall receive Proceeds after
Default in an amount equal to (a) the Proceeds after Default multiplied by (b)
the percentage (rounded to five decimal places) of the total amount outstanding
funded by all Lenders that such Lender has actually funded (including the amount
of such Lender's participation in outstanding Facility L/Cs). If necessary,
Agent and each Lender shall use the adjustments procedure set forth in
subsection 11.8(a) hereof to make the appropriate distributions to Lenders as
set forth

 

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in this paragraph of this Section 9.
SECTION 9:
THE AGENT

1.Appointment.
Each Lender hereby irrevocably designates and appoints PNC Bank, National
Association, as Agent of such Lender under this Agreement and each of the Notes
and the Guaranty Agreement, and each Lender hereby irrevocably authorizes PNC
Bank, National Association, as Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement, the Notes and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement, the Notes and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or any
Note or the other Loan Documents, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any Note or the other Loan Documents or otherwise exist against
Agent. The provisions of this Section 10 are solely for the benefit of the
Agent, the Lenders and the LC Issuer, and neither Borrower nor any other Loan
Party shall have rights as a third party beneficiary of any of such provisions.
2.Delegation of Duties.
Agent may perform any and all of its duties and exercise its rights and powers
under this Agreement or any other Loan Document by or through any one or more
sub-agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The exculpatory provisions of
this Section 10 shall apply to any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
3.Exculpatory Provisions.
Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. Without limiting the generality of the
foregoing, Agent:
(a)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or Event of Default has occurred and is continuing;
(b)    shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents); provided that Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable Law; and
(c)    shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Agent or any of its
affiliates in any capacity.
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other

 

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agreement, instrument or document or (v) the satisfaction of any condition set
forth in Section 5 or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to Agent.
4.Reliance by Agent.
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, the other Loan Documents, writing, resolution, notice, consent,
certificate, affidavit, letter, facsimile, telecopy, statement, order or other
document or conversation believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to Borrower or any of Borrower's Subsidiaries), independent accountants and
other experts selected by Agent. Agent may deem and treat the payee of any Note
as the owner thereof for all purposes. Agent shall be fully justified in failing
or refusing to take any action under this Agreement, the Notes or the other Loan
Documents unless it shall first receive such advice or concurrence of the
Required Lenders or, in the case of items set forth in subsection 11.1 hereof
that require written consent of all Lenders, all Lenders as it deems appropriate
or it shall first be indemnified to its satisfaction by all Lenders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement, the Notes and the
other Loan Documents (i) in accordance with a request of the Required Lenders
or, in the case of items set forth in subsection 11.1 hereof that require
written consent of all Lenders, all Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all Lenders and
all future holders of the Notes or (ii) in the absence of its own gross
negligence or willful misconduct.
5.Notice of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder (other than any failure of Borrower to pay
amounts payable under this Agreement or the other Loan Documents) unless Agent
has received notice from any Lender or Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". If Agent receives such a notice, Agent shall give notice
thereof to Lenders. Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders or, in
the case of items set forth in subsection 11.1 hereof that require written
consent of all Lenders; provided that, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall reasonably deem advisable in the best interests of
Lenders.
6.Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by Agent hereinafter taken,
including any review of the affairs of Borrower and Borrower's Subsidiaries
shall be deemed to constitute any representation or warranty by Agent to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Borrower and Borrower's Subsidiaries and made
its own decision to make its extensions of credit hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, the Notes and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
Borrower and Borrower's Subsidiaries. Except for notices, reports and other
documents expressly required to be

 

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furnished to the Lenders by Agent hereunder, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of Borrower or any of Borrower's Subsidiaries which may come
into the possession of Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
7.Indemnification.
Each Lender agrees to indemnify Agent in its capacity as such (to the extent not
reimbursed by Borrower and any Guarantor and without limiting the obligation of
Borrower and each Guarantor to do so), ratably according to its Ratable Share,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of this Agreement, the
Notes, the other Loan Documents or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted by
Agent under or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Notes and all other amounts payable hereunder.
8.Agent in Its Individual Capacity.
Agent (in its individual capacity) and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Borrower or any
of Borrower's Subsidiaries as though Agent were not the Agent hereunder. With
respect to its loans made or renewed by it and any Note issued to it and with
respect to any Facility L/C issued by it, Agent (in its individual capacity)
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall include Agent in its individual capacity.
9.Delegation to Affiliates.
Borrower and Lenders agree that the Agent may delegate any of its duties under
this Agreement to any of its affiliates. Any such affiliate (and such
affiliate's directors, officers, agents and employees) which performs duties in
connection with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the Agent is
entitled under Sections 10 and 11 hereof.
10.Successor Agent.
Agent (a) may resign as agent upon 30 days' notice to the Lenders and (b) may be
removed at any time with cause by the Required Lenders, provided, however, that,
as long as no Event of Default has occurred that is continuing, such removal of
the Agent shall be subject to Borrower's written approval, which shall not be
unreasonably withheld, conditioned or delayed. Upon any such resignation or
removal, the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, provided, however, that, as long as no Event of Default
has occurred that is continuing, such appointment of a successor agent shall be
subject to Borrower's written approval, which shall not be unreasonably
withheld, conditioned or delayed. Any successor agent appointed as herein
provided shall succeed to the rights, powers and duties of Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. If PNC resigns as Agent
under this subsection 10.10, PNC shall also resign as a LC Issuer and Swingline
Lender. Upon the appointment of a successor Agent hereunder, such successor
shall (i) succeed to all of the rights, powers, privileges and duties of PNC as
the retiring LC Issuer and Swingline Lender and Agent and PNC shall be
discharged from all of its respective duties and obligations as LC Issuer,
Swingline Lender and Agent under the Loan Documents, and (ii) issue letters of
credit in substitution for the Letters of Credit issued by PNC,

 

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if any, outstanding at the time of such succession or make other arrangement
satisfactory to PNC to effectively assume the obligations of PNC with respect to
such Letters of Credit. After any retiring Agent's resignation hereunder as
agent, the provisions of this Section 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
11.Syndication Agent, Documentation Agent and Co-Agent.
None of the Lenders identified in this Agreement as a "Syndication Agent,"
"Documentation Agent" or "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of such
Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgements with respect to such
Lenders as it makes with respect to the Agent in subsection 10.6.
12.Security Administration.
(a)Without limiting the authority of Agent hereafter to act or to appoint others
to act as agent for itself and the Lenders under this Agreement and other Loan
Documents, pursuant to subsection 10.2, Agent is authorized to assign and
delegate to an agent (the "Collateral Agent") some or all of Agent's rights and
duties in respect of Security, including without limitation, the administration
of the Initial Borrowing Base, the Second Borrowing Base and the Secured
Borrowing Base as contemplated by Exhibit I, and Agent and the Lenders agree
that Section 10 of this Agreement shall apply to any Collateral Agent in respect
of the Security as if Section 10 were restated in full in favor of Agent and any
Collateral Agent, as applicable. Agent is authorized, directly or indirectly, to
acquire, hold and enforce Liens on Security and to exercise related powers and
perform such related duties in respect of Security, together with such other
powers as are reasonably incidental thereto. Except to the extent expressly
provided in this Agreement or any other Loan Document with respect to Security,
neither Agent nor any of its agents in such capacity shall have any duties or
responsibilities or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent or any of its agents.
(b)References to Agent in this Agreement and the other Loan Documents include,
as applicable, references to agents of Agent, including any Collateral Agent,
and references to Lenders entitled to the benefit of Security include, without
limitation, Agent and its agents. Each Person acting as agent for Agent shall be
(i) entitled to the same benefits of the indemnification, waiver and other
protective provisions to which Agent is entitled under this Agreement
(including, without limitation, the right to resign pursuant to subsection
10.10), (ii) entitled to take actions in its own name, including, without
limitation, the creation and termination of Liens on Security by any Collateral
Agent in accordance with this Agreement, and (iii) subject to removal by Agent,
in its sole discretion, or by the Required Lenders in accordance with subsection
10.10.
(c)Each Lender hereby irrevocably authorizes and directs Agent, directly or
indirectly, to (i) enter into the Security Documents for the benefit of such
Lender and hereby agrees that any action taken by Required Lenders in accordance
with terms of this Agreement or the Security Documents and the exercise by the
Required Lenders of the powers set forth herein or therein, together with such
other powers are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders and (ii) take (but shall have no obligation to take) any
action with respect to any Security or Security Documents which may be necessary
or desirable to perfect or maintain perfected Liens upon the Security on behalf
of the Lenders, without the necessity of any notice to or further consent from
any Lender.
(d)Each Lender hereby irrevocably authorizes Agent to release any Lien in
accordance with subsection 2.1(b). Upon request by Agent at any time, each
Lender will confirm in writing Agent's authority to release Security pursuant to
this subsection 10.12(d) and to take other actions in respect of Security.
(e)Subject to subsection 10.12(d), Agent, directly or indirectly, shall (and is
hereby

 

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irrevocably authorized by each Lender) to execute such documents as may be
necessary to evidence the release of Liens granted directly or indirectly to
Agent on Security; provided that (i) Agent shall not be required to execute any
such document on terms which, in Agent's opinion, would expose Agent or any of
its agents to or create any liability or entail any consequences other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations.
(f)Neither Agent nor any of its agents shall have any obligation to any Lender
or any other Person to assure that Security exists or is owned by Borrower or
any other Loan Party or is cared for, protected or insured or that the Liens
granted directly or indirectly to Agent herein or in any of the Security
Documents or pursuant hereto or thereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority or to exercise or to continue exercising at all or in any
matter any of the rights, authorities or powers directly or indirectly granted
or available to Agent under this subsection 10.12 or in any of the Security
Documents or under any duty of care, disclosure or fidelity.
(g)In accordance with subsection 10.4, Agent and its agents shall be fully
protected in writing on any Loan Document and any other writing or communication
believed by it in good faith to be genuine and correct. Except as expressly
provided herein, neither Agent nor any of its agents shall be under any
obligation independently to investigate, evaluate or exercise discretion with
respect to any matter, including, without limitation, any appraisal,
environmental assessment, survey, flood hazard certificates, insurance
certificates or policies, title policies or title documents.
13.Agent's Fee.
Borrower shall pay to Agent a nonrefundable fee (the "Agent's Fee") under the
terms of the Agent's Fee Letter, as amended from time to time.
14.No Reliance on Agent's Customer Identification Program»
. Each Lender acknowledges and agrees that neither such Lender, nor any of its
affiliates, participants or assignees, may rely on the Agent to carry out such
Lender's, affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP Regulations"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties, their
Affiliates or their agents, the Loan Documents or the transactions hereunder or
contemplated hereby: (i) any identity verification procedures, (ii) any
recordkeeping, (iii) comparisons with government lists, (iv) customer notices or
(v) other procedures required under the CIP Regulations or such other laws.
SECTION 10:
MISCELLANEOUS

1.Amendments and Waivers.
Agent and Borrower may, from time to time, with the written consent of the
Required Lenders, enter into written amendments, supplements or modifications
for the purpose of adding any provisions to this Agreement or the Notes or
changing in any manner the rights of Lenders or Borrower hereunder or
thereunder, and with the consent of the Required Lenders. Agent, on behalf of
Lenders, may execute and deliver to Borrower a written instrument waiving, on
such terms and conditions as Agent may specify in such instrument, any of the
requirements of this Agreement, the Notes or any Default or Event of Default and
its consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall extend the final maturity of any Note or reduce
the rate or extend the time of payment of interest or fees thereon or reduce the
principal amount thereof, or change the amount or terms of any Lender's
Revolving Credit Loan or Ratable Share or the amount of any Lender's Commitment
(except (i) for changes resulting from an assignment permitted hereunder or (ii)
as provided in subsection 2.6(b) or 3.10 hereof), or change the Initial
Borrowing Base, Second Borrowing Base or Secured Borrowing Base, or amend,
modify, change any provision of the Guaranty Agreement, or release the
guaranties provided under the Guaranty Agreement, or

 

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amend, modify, change or waive any provision of this subsection, or reduce the
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by Borrower of any of its rights and obligations under
this Agreement, or consent to the modification or termination of any
subordination agreement or provisions that evidence Subordinated Indebtedness
(except as otherwise provided in subsection 7.9), increase the dollar amount set
forth in subsection 2.6(b)(i)(C) or consent to the release of any collateral, or
amend, modify or change any other provision of this Agreement that requires the
consent of all Lenders, in each case without the written consent of all Lenders;
and provided, further, that no such waiver and no such amendment, supplement or
modification shall alter in any way Swingline Lender's rights or obligations
with respect to Swingline Loans without the consent of Swingline Lender; and
provided, further, that no such waiver and no such amendment, supplement or
modification shall amend, modify, change or waive any provision relating to the
rights or obligations of Agent without the consent of Agent. Any such waiver and
any such amendment, supplement or modification shall be binding upon Borrower,
Agent and each Lender, and all future holders of the Notes. In the case of any
waiver, Borrower, Agent and each Lender shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
2.Notices.
All notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing or by telecopy or other electronic facsimile and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or when deposited in the United States
mail, Registered or Certified, Return Receipt Requested, postage prepaid, or, in
the case of telecopy or other electronic facsimile notice, when receipt
confirmed by sender's electronic facsimile machine, addressed as follows in the
case of Borrower, as set forth below its signature on the signature pages hereof
in the case of Agent and as set forth in its administrative questionnaire
furnished to Agent in the case of each Lender, or to such other address as may
be hereafter notified by the respective parties hereto and any future holders of
any Note:
Borrower:    M/I Homes, Inc.
3 Easton Oval
Columbus, Ohio 43219
Attention: Phillip G. Creek
Facsimile: (614) 418-8080
with a copy to: J. Thomas Mason, Esq.
Facsimile: (614) 418-8622
3.No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of Agent or any
Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and, except for
rights the exercise of which require consent of the Required Lenders or all
Lenders, as appropriate, under this Agreement, not exclusive of any rights,
remedies, powers and privileges provided by law.

 

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4.Participants.
(a)Any Lender may, in the ordinary course of its commercial banking business and
in accordance with applicable law, at any time sell to one or more Lenders or
other financial institutions ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Note held by such Lender, any
interest (including any Reimbursement Obligation) in any Facility L/C with
respect to such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder; provided, however, that upon the sale of any
participating interest the selling Lender shall provide promptly to Borrower and
Agent notice of such sale together with payment of a $3,500 processing and
recording fee; and provided further, however, that (except as otherwise provided
in subsection (c) below) no Participant's consent shall be required to approve
any amendments, waivers or other modifications of this Agreement or of any
document contemplated by this Agreement, and no participation agreement shall
provide any Participant with such rights. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, and such Lender shall remain the holder of any such Note for all
purposes under this Agreement, and, except as provided in the immediately
following sentence, Borrower, the other Lenders, and Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. However, any Participant that is an
affiliate of any Lender shall have the right to deal directly with any other
Lender and Borrower with respect to any matter that is the subject of this
Agreement, and Lenders and Borrower agree to deal directly with such affiliate
Participant(s); provided, however, that each Lender needs to deal only with
other Lenders (and not such other Lenders' affiliate Participant(s)), in those
matters in which the consent of any one or more Lenders is required. The rights
set forth in the immediately preceding sentence shall apply only to Participants
that are affiliates of any Lender, and such rights do not apply to any
Participants that are not affiliates of any Lender. Borrower agrees that if
amounts outstanding under this Agreement or the Notes are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of a Default or an Event of Default, each Participant shall be deemed
to have the right of set-off provided to Lenders in this Agreement in respect of
its participating interest in amounts owing under this Agreement or any Note or
Reimbursement Obligation to the same extent as if the amount of its
participating interests were owing directly to it as a Lender under this
Agreement, any Note or any Facility L/C or participation in any Facility L/C.
(b)Borrower authorizes each Lender and Agent to disclose to any Participant and
any prospective Participant any and all financial information in such Lender's
or Agent's possession concerning Borrower and any of Borrower's Subsidiaries
which has been delivered to such Lender or Agent by Borrower or Borrower's
Subsidiaries pursuant to this Agreement or which has been delivered to such
Lender or Agent by Borrower or Borrower's Subsidiaries in connection with such
Lender's or Agent's credit evaluation of Borrower and Borrower's Subsidiaries
prior to entering into this Agreement. Any Participant or prospective
Participant shall be subject to the confidentiality provisions of this
Agreement.
(c)Each Lender shall with respect to its Participants, if any, retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan or Commitment in
which such Participant has an interest which forgives principal, interest or
fees (other than Agent's fees) or reduces the interest rate or fees (other than
Agent's fees) payable with respect to any such Loan or Commitment, postpones any
date fixed for any regularly scheduled payment of principal of, or interest or
fees (other than Agent's fees) on, any such Loan or Commitment or releases any
Guarantor. No Participant shall be a "Lender" for purposes of this Agreement.
(d)Borrower agrees that each Participant shall be deemed to have the rights of
set-off provided in subsection 11.8 hereof in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of set-off
provided in

 

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subsection 11.8 hereof with respect to the amount of participating interests
sold to each Participant. Lenders agree to share with each Participant, and each
Participant, by exercising the right of set-off provided in subsection 11.8
hereof, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of set-off, such amounts to be shared in accordance with
subsection 11.8 hereof as if each Participant were a Lender.
(e)Except for the sale of participating interests as described in this
subsection 11.4 and the assignments as described in subsection 11.7 hereof, no
Lender may sell or assign its rights and interests under this Agreement without
the written consent of each Lender and Borrower, provided that after the
occurrence of a Default or an Event of Default that has not been waived by all
Lenders, Borrower's consent to such sale or assignment shall not be required.
5.Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and
shall remain in full force and effect until this Agreement is terminated, all
Facility L/Cs are cancelled or are fully collateralized with cash in accordance
with Section 8 hereof and all Obligations (including Facility L/C Obligations
that are not fully collateralized with cash) are paid in full.
6.Payment of Expenses.
Borrower agrees:
(a)to pay or reimburse Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement, the Notes, the
Guaranty Agreement, the Facility L/Cs and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including without limitation the reasonable fees and
disbursements of counsel to Agent; and
(b)to pay or reimburse Agent and each Lender for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the Notes, the Guaranty Agreement, the Facility L/Cs and any
such other documents, including without limitation the reasonable fees and
disbursements of counsel to Agent and each Lender.
7.Successors and Assigns; Assignment.
(a)This Agreement shall be binding upon and inure to the benefit of Borrower,
Agent and each Lender, all future holders of the Notes and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of all Lenders, which consent may be withheld by any Lender in its sole
discretion; and provided further that the rights of each Lender to transfer or
assign its rights and/or obligations hereunder shall be limited as set forth
below in part (b) of this subsection 11.7. Notwithstanding the above (including
anything set forth in part (b) of this subsection 11.7), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans hereunder
to a Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, (B) granting assignments in such Lender's Loans and/or
Commitment hereunder to its parent company and/or to any affiliate of such
Lender or to any existing Lender or affiliate thereof and (C) selling
participations as set forth in subsection 11.4 hereof,
(b)In addition to the assignments permitted by subsection 11.7(a) hereof, any
Lender may at any time assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that any such
assignment shall be subject to the following conditions:
(A)Minimum Amounts.
(1)in the case of an assignment of the entire remaining amount of the assigning
Lender's Commitment and the Loans at the time owing to it or in the case of an
assignment to an Eligible

 

--------------------------------------------------------------------------------

 

Assignee, no minimum amount need be assigned; and
(2)in any case not described in clause (A)(1) of this subsection 11.7(b), the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Agent or, if
"Trade Date" is specified in the Assignment and Assumption Agreement, as of the
Trade Date) shall not be less than $5,000,000, unless each of Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).
(B)Proportionate Amounts. Each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loan or the Commitment assigned.
(C)Required Consents. No consent shall be required for any assignment except for
the consent of Agent (which shall not be unreasonably withheld or delayed) and:
(1)the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to an
Eligible Assignee; provided that the Borrower shall be deemed to have consented
to any such assignment unless it shall object thereto by written notice to Agent
within five (5) Business Days after having received notice thereof; and
(2)the consent of the LC Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding).
(D)Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to Agent an Assignment and Assumption Agreement, together
with a processing and recordation fee of $3,500, and the assignee, if it is not
a Lender, shall deliver to Agent an administrative questionnaire provided by
Agent.
(E)No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower's Affiliates or Subsidiaries.
(F)No Assignment to Natural Persons. No such assignment shall be made to a
natural person.
Subject to acceptance and recording thereof by Agent, from and after the
effective date specified in each Assignment and Assumption Agreement, the
assignee thereunder shall be a "Lender" for all purposes of this Agreement and
the other documents contemplated hereby and, to the extent of the interest
assigned by such Assignment and Assumption Agreement, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of subsections 3.2, 3.4, 3.5 and 11.14 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection 11.7(b) shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection 11.4.
8.Adjustments; Set-off.
(a)If any Lender (a "benefited Lender") shall at any time receive any payment of
all or part of its Loans or Reimbursement Obligations owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in paragraph (5) of Section 9 hereof, or otherwise) in a greater
proportion than any such

 

--------------------------------------------------------------------------------

 

payment to any other Lender in respect of such other Lender's Loans or
Reimbursement Obligations owing to it, or interest thereon, such benefited
Lender shall purchase for cash from the other Lenders such portion of each such
other Lender's Loans or Reimbursement Obligations owing to it, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans or Reimbursement Obligations owing to it may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(b)In addition to those rights and remedies of each Lender provided by law,
subject to the terms and conditions of this Agreement, upon the occurrence of an
Event of Default and acceleration of the Obligations, each Lender shall have the
right, without prior notice to Borrower or the Guarantors, any such notice being
expressly waived by Borrower and each Guarantor to the extent permitted by
applicable law, to set-off and apply against any indebtedness, whether matured
or unmatured, of Borrower or such Guarantor to such Lender, any amount held by
or owing from such Lender to or for the credit or the account of Borrower or a
Guarantor at, or at any time after, the happening of any of the above-mentioned
events, and the aforesaid right of set-off may be exercised by each Lender
against Borrower and any Guarantor or against any trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, receiver, custodian
or execution, judgment or attachment creditor of Borrower and Guarantors, or
against anyone else claiming through or against Borrower and Guarantors or such
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, receiver, custodian or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance of, or service
upon such Lender of, or of notice of, any such petition; assignment for the
benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify Borrower and, if set-off is made against any
Guarantor, such Guarantor after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
. EACH LENDER AND BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING
OUT OF THE AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE AGREEMENT OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NONE OF AGENT,
ANY LENDER OR BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT
BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY OF AGENT,
ANY LENDER OR BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE COMMITMENT
HEREUNDER.
Agent and each Lender shall hold all confidential information obtained pursuant
to the requirements of this Agreement which has been identified as such by
Borrower in accordance with Agent's or such Lender's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure to its examiners,
affiliates, outside auditors, counsel and other professional advisors in
connection with this Agreement or as reasonably required by any

 

--------------------------------------------------------------------------------

 

bona fide Participant or assignee or prospective Participant or assignee in
connection with any contemplated assignment thereof or participation therein or
as required or requested by any governmental agency or representative thereof or
pursuant to legal process. Without limiting the foregoing, it is expressly
understood that such confidential information which, at the time of disclosure
is in the public domain or which, after disclosure, other than disclosure by
Agent or any Lender, becomes part of the public domain or information which is
obtained by Agent or any Lender prior to the time of disclosure and
identification by Borrower under this subsection, or information received by
Agent or any Lender from a third party shall not be subject to the
confidentiality requirements of this subsection 11.10. Nothing in this
subsection or otherwise shall prohibit Agent or any Lender from disclosing any
confidential information to any other Lender in connection with the Loans
contemplated by this Agreement or render it liable in connection with any such
disclosure.
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement shall become effective upon the receipt by Agent and each Lender of
executed counterparts of this Agreement by each of the parties hereto.
This Agreement, the Notes and the rights and obligations of the parties under
this Agreement and the Notes shall be governed by, and construed and interpreted
in accordance with the internal laws of the Commonwealth of Pennsylvania but
giving effect to federal laws applicable to national banks.
This Agreement (including Borrower's obligation to pay the fees as provided in
the Agent's Fee Letter referred to herein) and the Loan Documents contain the
entire agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto.
Borrower hereby agrees to defend, indemnify, and hold Agent, Arranger, each LC
Issuer and each Lender and their respective directors, officers, employees and
agents harmless from and against all claims, damages, judgments, penalties,
costs, and expenses (including attorney fees and court costs now or hereafter
arising from the aforesaid enforcement of this clause) which any of them may pay
or incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder except to the extent
that they are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. This indemnity shall survive
the termination of this Agreement.
Any provision of any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of such Loan Document or affecting the validity or enforceability of
such provision in any other jurisdiction.
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Western District of Pennsylvania and of any court of the
Commonwealth of Pennsylvania sitting in Allegheny County for purposes of all
legal proceedings which may arise hereunder or under the Notes. Borrower
irrevocably waives to the fullest extent permitted by law, any objection which
it may have or hereafter have to the laying of the venue of any such proceeding
brought in such a court, and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum. Borrower consents to process
being served in any such proceeding by the mailing of a copy thereof by
registered or certified mail, postage prepaid, to its address specified in
subsection 11.2 hereof or in any other manner permitted by law.
. Anything contained in this Agreement to the contrary notwithstanding, no
Lender shall be obligated to extend credit to Borrower in violation of any
limitation or prohibition provided by any

 

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applicable statute or regulation.
The relationship between Borrower and Lenders and Agent shall be solely that of
borrower and lender. Neither Agent nor any Lender shall have any fiduciary
responsibilities to Borrower. Neither Agent nor any Lender undertakes any
responsibility to Borrower to review or inform the Borrower of any matter in
connection with any phase of Borrower's business or operations.
The headings of the sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof.
For purposes of determining compliance with the financial covenants in this
Agreement, the application of Financial Accounting Standards Board
Interpretation No. 46 shall be disregarded with respect to financial
consolidation of any entity that is not a subsidiary of the Borrower.
Each Lender that is subject to the requirements of the USA PATRIOT Act (Title
III of Pub. L. 107-56) (signed into law October 26, 2001)) (the "Act") hereby
notifies Borrower that pursuant to the requirements of the Act, it is required
to obtain, verify and record information that identifies Borrower and
Guarantors, which information includes the name and address of Borrower and
Guarantors and other information that will allow such Lender to identify
Borrower and Guarantors in accordance with the Act.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
 
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
M/I HOMES, INC.
 
 
By: /s/ Phillip G. Creek________
Name:    Phillip G. Creek
Title:    Executive Vice President and Chief
Financial Officer
SIGNATURE PAGE TO CREDIT
AGREEMENT WITH M/I HOMES, INC.
LENDERS
PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Lender

 

--------------------------------------------------------------------------------

 

 
 
By: /s/ Luis Donoso____
Name:    Luis Donoso
Title: Vice President
 
Address:
 
PNC Real Estate Finance
2 Tower Center, 18th Floor
East Brunswick, NJ 08816
Attention: Luis Donoso, Vice President
Phone: (732) 220-3541
Fax: (732) 220-3744
Email: luis.donoso@pnc.com
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
THE HUNTINGTON NATIONAL BANK
as Co-Syndication Agent and as a Lender
 
By: _/s/ Michael L. Kauffman____
Name:    Michael L. Kauffman
Title: Senior Vice President
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
JPMORGAN CHASE BANK, N.A.,
as Co-Syndication Agent and as a Lender
 

 

--------------------------------------------------------------------------------

 

 
By: _/s/ Mohammad Hasan_____
Name:     Mohammad Hasan
Title: Associate
 
 
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
FIFTH THIRD BANK,
as Co-Documentation Agent and as a Lender
 
 
By: _/s/ Michael J. Schaltz, Jr.___
Name:     Michael J. Schaltz, Jr.
Title: Vice President
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
US BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and as a Lender
 
 
By: _/s/ Anthony J. Matthena___
Name:     Anthony J. Matthena
Title: Vice President
 
 
 
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 

 

--------------------------------------------------------------------------------

 

REGIONS BANK
 
 
By: _/s/ Daniel McClurkin___
Name:     Daniel McClurkin
Title: Vice President
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
WELLS FARGO BANK, N.A.
 
 
By: _/s/ John Cory Bennett___
Name:     John Cory Bennett
Title: Relationship Manager
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
CITIBANK N.A.
 
 
By: _/s/ Daniel Gouger___
Name:     Daniel Gouger                    
Title: Vice President
 
SIGNATURE PAGE TO CREDIT AGREEMENT WITH M/I HOMES, INC.
 
COMERICA BANK
 
 
By: _/s/ Adam Sheets___

 

--------------------------------------------------------------------------------

 

Name:     Adam Sheets
Title: Vice President
 
 
SCHEDULE 1-1
SCHEDULE 1
COMMITMENTS

 

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Lender
 
Commitment The Commitments indicated in this Schedule I are calculated based on
an Aggregate Commitment of $140,000,000 and are subject to periodic
proportionate reduction or increase upon reduction or increase of the Aggregate
Commitment.
 
Ratable Share
PNC Bank, National Association
 
$22,500,000
 
16.07142857%
The Huntington National Bank
 
$22,500,000
 
16.07142857%
JPMorgan Chase Bank, N.A.
 
$15,000,000
 
10.71428571%
Fifth Third Bank
 
$15,000,000
 
10.71428571%
US Bank National Association
 
$15,000,000
 
10.71428571%
Regions Bank
 
$15,000,000
 
10.71428571%
Wells Fargo Bank, N.A.
 
$15,000,000
 
10.71428571%
Citibank N.A.
 
$10,000,000
 
7.14285714%
Comerica Bank
 
$10,000,000
 
7.14285714%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$140,000,000.00
 
100%

 
 
SCHEDULE 2-1
SCHEDULE 2
 

 

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OUTSTANDING LETTERS OF CREDIT
 
 
 
 
 
 
 
 
 
 
 
 
DATE OF
LETTER OF
 
 
LOC
 
EXPIRE
 
 
 
 
   LC
CREDIT #
BENEFICIARY
REFERENCE
AMOUNT
 
   DATE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
L
6/12/2009
CPCS-765811
CITY OF COLS TRANSPORTATION
WOODS @ JEFF - CEDAR RUN 3
$
37,706.78
 
JP
6/11/2010
 
 
 
L
6/11/2007
CPCS-335116
TOWN OF CARY
STONEBRIDGE SF TRACT C PH 1
$
76,935.75
 
JP
6/13/2010
 
 
 
L
7/8/2009
CPCS-778588
CITY OF COLS TRANSPORTATION
UPPER ALBANY WEST 4
$
291,738.00
 
JP
7/13/2010
 
 
 
L
7/16/2009
CPCS-781753
CITY OF CONCORD
GLEN GROVE 2-12
$
48,851.15
 
JP
7/17/2010
 
 
 
L
7/16/2009
CPCS-781756
CITY OF CONCORD
GLEN GROVE 2-10
$
26,007.23
 
JP
7/17/2010
 
 
 
L
7/16/2009
CPCS-781757
CITY OF CONCORD
GLEN GROVE 2-11
$
20,021.19
 
JP
7/17/2010
 
 
 
 
7/11/2007
CPCS-342764
SMB AUBURN LLC
CENTENNIAL
$
258,186.00
 
JP
8/1/2010
 
 
 
L
2/3/2003
CPCS-636150
BD OF CNTY SUPER OF FAIRFAX
LORTON VALLEY PLAN # 1126-SP-01
$
258,000.00
 
JP
8/3/2010
 
 
 
L
2/10/2003
CPCS-636155
BD OF CNTY SUPER OF FAIRFAX
LORTON VALLEY NORTH SEC 1
$
108,000.00
 
JP
8/10/2010
 
 
 
L
8/31/2007
CPCS-388909
TOWN OF CARY
STONEBRIDGE SF TRACT C PH 2
$
64,863.75
 
JP
8/31/2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,190,309.85
 
 
 
 
 
 
 
 
BOLD EXPIRATION DATE INDICATES AUTOMATIC RENEWAL
 
 
 
 

 
SCHEDULE 3
SUBSIDIARIES OF BORROWER (CONTINUED)
 
SCHEDULE 3-6
SCHEDULE 3
SUBSIDIARIES OF BORROWER
* Subsidiaries marked by an asterisk are Financial Subsidiaries
and are not Guarantors as of the Closing Date
** Subsidiaries marked by two asterisks are Non-Guarantor Subsidiaries
and are not Guarantors as of the Closing Date
1.Name of Subsidiary:
M/I Financial Corp. an Ohio corporation*
Principal Place of Business:
3 Easton Oval, Suite 210
Columbus, Ohio 43219

 

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2.Name of Subsidiary:
M/I Homes of Central Ohio, LLC, an Ohio limited liability company
Principal Place of Business:
3 Easton Oval, Suite 310
Columbus, Ohio 43219
3.Name of Subsidiary:
M/I Homes of Cincinnati, LLC, an Ohio limited liability company
Principal Place of Business:
6279 Tri-Ridge Blvd. Suite 110
Loveland, Ohio 45140
4.Name of Subsidiary:
M/I Homes Service, LLC, an Ohio limited liability company
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
5.Name of Subsidiary:
M/I Properties LLC, an Ohio limited liability company
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
6.Name of Subsidiary:
Northeast Office Venture, Limited Liability Company, a Delaware limited
liability company
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
7.Name of Subsidiary:
TransOhio Residential Title Agency Ltd., an Ohio limited liability company*
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
8.Name of Subsidiary:
M/I Homes of Raleigh, LLC, a Delaware limited liability company
Principal Place of Business:
1511 Sunday Drive, Suite 100
Raleigh, North Carolina 27607
9.Name of Subsidiary:
M/I Homes of Charlotte, LLC, a Delaware limited liability company
Principal Place of Business:
9335 Harris Corners Parkway, Suite 100
Charlotte, North Carolina 28269
10.Name of Subsidiary:
M/I Homes of DC, LLC, a Delaware limited liability company
Principal Place of Business:
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
The following Subsidiaries (nos. 11, 12 and 13) are 100% owned by M/I Homes of
DC, LLC:
 
11.Name of Subsidiary:
The Fields at Perry Hall, L.L.C., a Maryland limited liability company
Principal Place of Business:
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
12.Name of Subsidiary:
Wilson Farm, L.L.C., a Maryland limited liability company
Principal Place of Business:
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
13.Name of Subsidiary:
Prince Georges Utilities, LLC, a Maryland limited liability company
Principal Place of Business:
21355 Ridgetop Circle
Sterling, Virginia 20166
14.Name of Subsidiary:
M/I Homes Second Indiana LLC, an Indiana limited liability company

 

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Principal Place of Business:
8500 Keystone Crossing, Suite 160
Indianapolis, Indiana 46240
15.Name of Subsidiary:
M/I Homes First Indiana LLC, an Indiana limited liability company
Principal Place of Business:
8500 Keystone Crossing, Suite 160
Indianapolis, Indiana 46240
The following Subsidiary (no. 16) is owned 99% by M/I Homes Second Indiana, LLC
(as limited partner) and 1% by M/I Homes First Indiana LLC (as general partner):
 
16.Name of Subsidiary:
M/I Homes of Indiana, L.P., an Indiana limited partnership
Principal Place of Business:
8500 Keystone Crossing, Suite 160
Indianapolis, Indiana 46240
17.Name of Subsidiary:
M/I Homes of Florida, LLC, a Florida limited liability company
Principal Place of Business:
4343 Anchor Plaza Parkway, Suite 200
Tampa, Florida 33634
The following Subsidiaries (nos. 18, 19, 20 and 21) are each 100% owned by M/I
Homes of Florida, LLC
 
18.Name of Subsidiary:
M/I Homes of Tampa, LLC, a Florida limited liability company
Principal Place of Business:
4343 Anchor Plaza Parkway, Suite 200
Tampa, Florida 33634
19.Name of Subsidiary:
M/I Homes of Orlando, LLC, a Florida limited liability company
Principal Place of Business:
237 South Westmonte Drive, Suite 111
Altamonte Springs, Florida 32714

 

 

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20.    Name of Subsidiary:
M/I Homes of West Palm Beach, LLC, a Florida limited liability company
Principal Place of Business:
2000 Palm Beach Lakes Blvd., Suite 602, Tower 1
West Palm Beach, Florida 33409
21.Name of Subsidiary:
MHO Holdings, LLC, a Florida limited liability company
Principal Place of Business:
4343 Anchor Plaza Parkway, Suite 200
Tampa, Florida 33634-6329
The following Subsidiary (no. 22) is 100% owned by MHO Holdings, LLC:
 
22.Name of Subsidiary:
MHO, LLC, a Florida limited liability company
Principal Place of Business:
4343 Anchor Plaza Parkway, Suite 200
Tampa, Florida 33634-6329
23.Name of Subsidiary:
M/I Title Agency, Ltd., an Ohio limited liability company* wholly-owned
subsidiary of M/I Financial Corp.
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
24.Name of Subsidiary:
M/I Homes of Chicago, LLC, a Delaware limited liability company
Principal Place of Business:
1751 West Diehl Road
Napierville, Illinois 60563
25.Name of Subsidiary:
M/I Homes of Houston, LLC, a Delaware limited liability company
Principal Place of Business:
7906 North Sam Houston Parkway West, Suite 101
Houston, Texas 77064
26.Name of Subsidiary:
Washington/Metro Residential Title Agency, LLC, a Maryland limited liability
company * and **(70% owned by M/I Financial Corp., 30% owned by Potomac
Settlement Services, Inc.)
Principal Place of Business:
11781 Lee Jackson Memorial Highway, Suite 390
Fairfax, Virginia 22033
27.Name of Subsidiary:
M/I Homes Foundation, an Ohio nonprofit corporation** and wholly owned
subsidiary of M/I Homes, Inc.
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
28. Name of Subsidiary:
K-Tampa, LLC, a Florida limited liability company** (50% owned by M/I Homes of
Tampa, LLC and 50% owned by M Tampa, LLC)
Principal Place of Business:
4343 Anchor Plaza Parkway, Suite 200
Tampa, Florida 33634
 
 

 
SCHEDULE 4-1
 
 
SCHEDULE 4
 

 

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FINANCIAL SUBSIDIARIES
 
1.    Name of Subsidiary:
M/I Financial Corp. an Ohio corporation
Principal Place of Business:
3 Easton Oval, Suite 210
Columbus, Ohio 43219
2. Name of Subsidiary:
TransOhio Residential Title Agency Ltd., an Ohio limited liability company
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
3. Name of Subsidiary:
M/I Title Agency, Ltd., an Ohio limited liability company and wholly-owned
subsidiary of M/I Financial Corp.
Principal Place of Business:
3 Easton Oval, Suite 500
Columbus, Ohio 43219
4.Name of Subsidiary:
Washington/Metro Residential Title Agency, LLC, a Maryland limited liability
company (70% owned by M/I Financial Corp., 30% owned by Potomac Settlement
Services, Inc.)
Principal Place of Business:
11781 Lee Jackson Memorial Highway, Suite 390
Fairfax, Virginia 22033

SCHEDULE 5-3
SCHEDULE 5
 
POOL REAL PROPERTY SUBJECT TO
A MORTGAGE AT CLOSING
 
 
SCHEDULE 5 TO CREDIT AGREEMENT

 

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State
Owner Entity Name
Community
County
City
Zip Code
Property #
 
 
 
 
 
 
 
North Carolina
M/I Homes of Charlotte, LLC
Glen Grove
Cabarrus
Concord
28,027
NC-270-104
North Carolina
M/I Homes of Charlotte, LLC
Northbridge Crossing
Iredell
Mooresville
28,115
NC-270-113
North Carolina
M/I Homes of Charlotte, LLC
Centennial 70'
Mecklenburg
Charlotte
28,277
NC-270-099
North Carolina
M/I Homes of Charlotte, LLC
Callonwood - 50'
Union
Matthews
28,104
NC-270-117
 
M/I Homes of Charlotte, LLC
Cureton 50'
Union
Waxhaw
28,173
NC-270-114
 
M/I Homes of Charlotte, LLC
Cureton 60'
Union
Waxhaw
28,173
NC-270-103
 
M/I Homes of Charlotte, LLC
Cureton 95'
Union
Waxhaw
28,173
NC-270-115
North Carolina
M/I Homes of Raleigh, LLC
Greystone
Wake
Carey
27,519
NC-275-106
 
M/I Homes of Raleigh, LLC
Stonebridge
Wake
Carey
27,519
NC-275-113
Ohio
M/I Homes of Cincinnati, LLC
Estates @ Shayler Ridge
Clermont
Cincinnati
45,245
OH-220-113
 
M/I Homes of Cincinnati, LLC
Liberty Crossing
Clermont
Cincinnati
45,245
OH-220-122
 
M/I Homes of Cincinnati, LLC
Wetherby Farms
Clermont
Cincinnati
45,245
OH-220-120
Ohio
M/I Homes of Central Ohio, LLC
Mansard Estates
Delaware
Galena
43,021
OH-210-806
 
M/I Homes of Central Ohio, LLC
Woods of Powell North
Delaware
Powell
43,065
OH-210-263
 
M/I Homes of Central Ohio, LLC
Millstone Creek
Delaware
Westerville
43,082
OH-210-205
Ohio
M/I Homes of Central Ohio, LLC
Pinecrest
Franklin
Columbus
43,004
OH-210-802
 
M/I Homes of Central Ohio, LLC
Towne Park
Franklin
Columbus
43,219
OH-210-580
 
M/I Homes of Central Ohio, LLC
Upper Albany West
Franklin
Columbus
43,081
OH-210-583
 
M/I Homes of Central Ohio, LLC
Upper Clarenton
Franklin
New Albany
43,054
OH-210-228
Ohio
M/I Homes of Cincinnati, LLC
Estates @ Hawthorne Manor
Warren
Mainsville
45,039
OH-220-114
 
M/I Homes of Cincinnati, LLC
Regency Park - Encore
Warren
Mainsville
45,039
OH-220-56
 
M/I Homes of Cincinnati, LLC
Regency Park - Horizon
Warren
Mainsville
45,039
OH-220-108

 
 
Ex. A-4
EXHIBIT A
BORROWING BASE CERTIFICATE
To:     Agent and each Lender
Ladies and Gentlemen:
This letter is to comply with subsection 2.1(b)(viii) of the Credit Agreement
dated June 9, 2010 (as amended, the "Credit Agreement"), among M/I Homes, Inc.,
as Borrower, the Lenders party thereto and PNC Bank, National Association as
Agent and is for the monthly accounting period ended. Capitalized terms used but
not defined herein have the meanings given to such terms in the Credit
Agreement.
Attached hereto is the calculation of the [Initial Borrowing Base] [Second
Borrowing Base] [Secured Borrowing Base]. All figures in this calculation are as
at the end of the monthly accounting period set forth in the first paragraph of
this letter. The undersigned certifies that, to the best knowledge of the

 

--------------------------------------------------------------------------------

 

undersigned, the calculation set forth herein is true and accurate in all
material respects.
Certified by:
__________________________________
[Chief Financial Officer, Treasurer, Controller or Chief Accounting Officer] of
M/I Homes, Inc.
 
Attachment
Attachment to
M/I Homes, Inc.
Initial Period Borrowing Base Certificate
______________, 201_
 
$000's
1.Secured Borrowing Base Cash:
$
2.Borrowing Base Percentages:
 
A.Secured Borrowing Base Cash:
100%
3.Borrowing Base:
 
A.Line 1 times Line 2.A.:
$
4.Aggregate Outstandings:
$
5.Line 4 minus Line 3 (Availability (Overadvance)):
$

 
Attachment to
M/I Homes, Inc.
Second Period Borrowing Base Certificate
______________, 201_
 
1.    Secured Borrowing Base Cash:
$
2.Current Book Value of Pool Real Property subject to a Mortgage
$
3.Borrowing Base Percentages:
 
A.Secured Borrowing Base Cash:
100%
B.Pool Real Property subject to a Mortgage:
35%
4.Borrowing Base:
 
A.Line 1 times Line 3.A.:
$
B.Line 2 times Line 3.B.
$
C.Sum of Line 4.A. plus 4.B.:
$
5.Aggregate Outstandings:
$
6.Line 4 minus Line 5 (Availability (Overadvance)):
$

Attachment to
M/I Homes, Inc.
Secured Borrowing Base Certificate

 

--------------------------------------------------------------------------------

 

______________, 201_
 
$000's
1.Secured Borrowing Base Cash:
$
2.Appraised Value of Qualified Real Property:
 
3.Current book value of following Qualified Property in Secured Borrowing Base:
 
A.Qualified Real Property by Single Markets:
 
1
$
2
$
3
$
B.Current book value of Lots Under Development:
$
C.Current book value of Unimproved Entitled Land:
$
4.Borrowing Base Percentages:
 
A.Secured Borrowing Base Cash:
100%
B.Qualified Real Property:
45%
5.Gross Borrowing Base:
 
A.Line 1 times Line 4.A.:
$
B.Line 2 times Line 4.B.
$
C.Sum of Line 5.A. plus 5.B.:
$
6.Limitations on Borrowing Base:
 
A.Line 3.A.1. times Line 4.B.:
 
B. Line 3.A.2. times Line 4.B.:
 
C.Line 3.A.3. times Line 4.B.
 
D.Line 3.B. times Line 4.B.:
 
E.Line 3.C. times Line 4.B.:
 
F.Aggregate amount by which any of Lines 6.A., 6.B. and 6.C. exceed 25% (35% in
the case of Columbus Ohio) of Line 5.C.
$
G.Amount by which Line 6.D. exceeds 25% of Line 5.C.:
$
H.Amount by which Line 6.E. exceeds 30% of Line 5.C.:
$
I.Amount by which Line 6.D plus 6.E. exceeds 50% of Line 5.C.:
$
7.Borrowing Base (Line 5.E. minus Line 6.F.minus Line 6.G. minus Line 6.H.):
$
8.Aggregate Outstandings:
$
9.7 minus Line 8 (Availability (Overadvance)):
$

Ex. B-12
EXHIBIT B
GUARANTY AGREEMENT
(GUARANTY, SUBORDINATION AND SUBROGATION AGREEMENT)
THIS GUARANTY AGREEMENT, effective as of June __, 2010 between: the corporations
and other entities identified under the caption "GUARANTORS" on the signature
pages hereto (the "Guarantors") and PNC BANK, NATIONAL ASSOCIATION, as agent
(the "Agent") for the Lenders or other financial institutions that are parties
as lenders (collectively, the "Lenders"), to the Credit Agreement referred to
below.
RECITALS
A.    M/I HOMES, INC. ("Borrower"), the Agent and the Lenders are parties to a
Credit Agreement effective as of June 9, 2010 (such agreement, together with any
amendments, supplements or other

 

--------------------------------------------------------------------------------

 

modifications thereto from time to time, collectively, the "Credit Agreement")
providing, subject to the terms and conditions thereof, for extensions of credit
(by making of loans and issuing letters of credit) to be made by the Lenders to
Borrower in an aggregate principal or face amount not exceeding $140,000,000.
B.    Under and pursuant to the Credit Agreement, Borrower and each Guarantor
desire to utilize their borrowing potential on a consolidated basis to the same
extent possible as if they were to merge into a single corporate entity.
C.    Each of the Guarantors has determined that it will benefit specifically
and materially from the borrowings contemplated by the Credit Agreement.
D.    It is both a condition precedent to the obligations of the Lenders to make
the loans and take other actions contemplated by the Credit Agreement and a
desire of each Guarantor that each other Guarantor execute and deliver to the
Agent for the benefit of the Lenders a counterpart of this Guaranty Agreement.
E.    Borrower and the Guarantors have requested and bargained for the structure
and terms of the borrowings contemplated by the Credit Agreement.
Therefore, in consideration of the mutual covenants and agreements contained in
the Credit Agreement and to induce Lenders and Agent to make the extensions of
credit thereunder, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantors have agreed to
enter into this Guaranty Agreement. Accordingly, the parties hereto agree as
follows:
1.    Incorporation; Definitions, Construction; Terms. The Credit Agreement,
including defined terms (unless otherwise defined herein), rules of construction
and terms and conditions, is hereby incorporated herein and made a part hereof.
2.    Guaranteed Obligations. The term "Guaranteed Obligations" shall mean (i)
the unpaid principal of and interest on (including, without limitation, interest
accruing after the maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) the
Notes, the Reimbursement Obligations and all other obligations (including the
Obligations) and liabilities of Borrower to the Lenders or Agent, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Notes, the Facility L/Cs or any other document made,
delivered or given in connection therewith, whether on account of principal,
interest, fees, indemnities, costs, expenses (including, without limitation, all
fees and expenses of counsel to the Lenders and to Agent and all disbursements)
or otherwise and (ii) all amounts from time to time owing to the Lenders or the
Agent by any Guarantor hereunder or under the Credit Agreement, the Notes, the
Facility L/Cs or any other document made, delivered or given in connection
therewith.
3.    Payment Guaranty. The Guarantors hereby jointly and severally
unconditionally and absolutely guarantee to each Lender and the Agent, for the
benefit of each Lender, and their successors and assigns, the due and punctual
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the Guaranteed Obligations, without deduction for any claim, setoff or
counterclaim of Borrower or any of the Guarantors or for the loss of
contribution of any Guarantor, and the due and punctual performance and
observance by Borrower of all the terms, covenants and conditions of the Credit
Agreement and the Notes, whether according to the present terms thereof, at any
earlier or accelerated date or dates as provided therein,

 

--------------------------------------------------------------------------------

 

or pursuant to any extension of time, whether one or more, or to any change or
changes in the terms, covenants and conditions thereof, now or at any time
hereafter made or granted. The obligations of each of the Guarantors are joint
and several, primary, continuing and absolute and unconditional obligations of
payment and performance, enforceable with or without proceeding against
Borrower, any Guarantor or any security and/or before, after or
contemporaneously with proceeding against Borrower, any Guarantor or any
security. This Guaranty Agreement shall be effective regardless of the solvency
or insolvency of Borrower or any Guarantor at any time, the extension or
modification of the Guaranteed Obligations by operation of law or otherwise, or
the subsequent incorporation, reorganization, merger or consolidation of
Borrower or any Guarantor, or any other change in composition, nature,
personnel, ownership or location of Borrower or any Guarantor.
4.    Waiver, Notice, Amendments to Guaranteed Obligations. In regard to any of
the Guaranteed Obligations, or any evidence thereof, each of the Guarantors
hereby expressly jointly and severally waive diligence, presentment, protest,
notice of dishonor, demand for payment, extension of time for payment (whether
one or more), notice of acceptance of this Guaranty Agreement, notice of
nonpayment at maturity, notice of indulgences, notice of Borrower or any
Guarantor incurring at any time any additional obligation to the Lenders or
Agent which will be guaranteed hereunder, notice of any defaults or disputes
involving Borrower or any Guarantor, of any settlement or adjustment of such
defaults or disputes and of any settlement with or release of any Guarantor and
notices of any other kind, and consents to any and all forbearances and
extensions, whether one or more, of the time for payments set forth in the
Credit Agreement and the Notes, and to any and all changes, amendment or waiver
in the terms, covenants and conditions thereof hereafter made or granted and to
any and all substitutions, exchanges or releases of any or all collateral
therefor. The Guarantors also hereby jointly and severally consent to and waive
notice of any arrangements or settlements made in or out of court in the event
of receivership, liquidation, readjustment, reorganization, arrangement or
assignment for the benefit of creditors of Borrower or any Guarantor, any
proceeding or case under the Bankruptcy Code, or in which a custodian (as
defined in the Bankruptcy Code) is appointed or existing, and anything
whatsoever, whether or not herein specified, which may be done or waived by or
between or among Agent, the Lenders and Borrower and/or Agent, the Lenders and
any Guarantor. Each of the Guarantors shall remain jointly and severally liable
under this Guaranty until all of the Guaranteed Obligations shall have been
fully paid and all of the terms, covenants and conditions of the Credit
Agreement and the Notes shall have been fully performed and observed by Borrower
and the Commitments have terminated, notwithstanding any act, commission or
thing which might otherwise operate as a legal or equitable discharge of such
Guarantor. Each of the Guarantors waive any defense to the Guaranteed
Obligations based on any lack of genuineness, legality, validity, enforceability
or allowability (in a bankruptcy, insolvency, reorganization or similar
proceeding, or otherwise) or the perfection or validity of any security interest
in or lien on any of the collateral securing (or purporting to secure) any of
the Guaranteed Obligations.
5.    Collection Costs. If any of the Guarantors fails to pay any of the
Guaranteed Obligations to Agent for the account and benefit of the Lenders
promptly upon demand therefor and any Lender or Agent on behalf of any Lender
subsequently files one or more suits against such Guarantor to collect on and
enforce this Guaranty Agreement, each Guarantor hereby jointly and severally
agrees to pay all of such Lender's and Agent's costs related thereto, including
without limitation all reasonable attorneys' fees, court costs and other legal
expenses. If, by other than the express agreement of the Lenders and Agent, the
accrual of fees and/or interest, or the payment thereof by Borrower, as a part
of the Guaranteed Obligations is at any time delayed or precluded as to
Borrower, the Guaranteed Obligations, for purposes of this Guaranty Agreement
and the obligations of each of the Guarantors hereunder, shall be calculated
without regard to such delay or preclusion.
6.    No Conditions to Enforcement. The Guarantors agree that this Guaranty may
be enforced by any Lender or Agent for the benefit of the Lenders without first
resorting to or exhausting any

 

--------------------------------------------------------------------------------

 

other security or collateral or without first having recourse to any property
through foreclosure proceedings or otherwise; however, nothing contained herein
shall prevent any Lender or Agent for the benefit of the Lenders from
instituting and maintaining suit on, foreclosing or causing to be foreclosed any
lien(s) or from exercising any other rights thereunder, and if such foreclosure
or other remedy is availed of, only the net proceeds therefrom, after deduction
of all charges and expenses of every kind and nature whatsoever, shall be
applied to the reduction of the Guaranteed Obligations, and no Lender or Agent
shall be required to institute or prosecute proceedings to recover any
deficiency as a condition of payment hereunder or of enforcement hereof. At any
sale or other disposition of any or all of any security or collateral for any or
all of the Guaranteed Obligations, whether by trustee's sale, sale by a court of
competent jurisdiction, foreclosure or otherwise, any Lender or Agent for the
benefit of any Lender may at its discretion purchase all or any part of such
collateral so sold or offered for sale or other disposition for its own
account(s) and may apply the amount bid therefor, and any proceeds of sale or
other disposition against the Guaranteed Obligations or any part(s) thereof in
any order(s) or amount(s) as such Lender or Agent for the benefit of the Lenders
sees fit in its sole judgment.
7.    No Assignment. The obligations of each of the Guarantors hereunder cannot
be assigned or transferred in any manner whatever, directly or indirectly, by
operation of law or otherwise, without the prior written consent of all of the
Lenders, which consent may be withheld in any circumstances. However, each of
the Guarantors agrees that this Guaranty shall inure to the benefit of and may
be enforced by any Lender and/or Agent for the benefit of the Lenders and by any
subsequent holder or assignee of any or all of the Guaranteed Obligations and
shall be binding upon and enforceable against such Guarantor and upon its legal
representatives, successors and permitted assigns.
8.    Waiver of Subrogation. The Guarantors hereby irrevocably waive any and all
rights they may now or hereafter have under any agreement or at law or in equity
(including without limitation any law subrogating such Guarantor to the rights
of the Lenders and/or Agent for the benefit of the Lenders) to assert any claim
against or seek contribution, indemnification or any other form of reimbursement
from the Borrower or any other Guarantor for any payment made by such Guarantor
under or in connection with this Guaranty or otherwise.
9.    Subordination. All indebtedness and obligations of Borrower or any other
Guarantor to any of the Guarantors (collectively, the "Claims"), whether secured
or unsecured, now existing or hereafter arising, direct or indirect, absolute or
contingent, are hereby subordinated to the priority of all of the Guaranteed
Obligations. The Guarantors agree that, until all of the Guaranteed Obligations
have been paid and satisfied in hill and the Commitments have terminated, (a)
except on behalf of and pursuant to instructions of Agent for the benefit of the
Lenders, the Guarantors will not ask, demand, sue for, take or receive all or
any part of the Claims or any security therefor, whether or not upon any
distribution of assets or readjustment of indebtedness of Borrower or any
Guarantor, and (b) the Guarantors will deliver to Agent for the benefit of the
Lenders from time to time such instruments, assignments, evidences of
indebtedness and such other things as, in the judgment of Agent, are necessary
or appropriate to effect the objectives of this Section 9.
10.    Successive Actions. Any one or more successive and/or concurrent actions
may be brought hereon against any of the Guarantors, whether in the same action,
if any, brought against Borrower, the then owner of any collateral securing
Borrower's obligations and/or any other party, or in separate actions, as often
as the Lenders or Agent for the benefit of the Lenders or the legal holder or
holders of or assigns of the Lenders or Agent for the benefit of the Lenders in
their sole discretion, may deem advisable.
11.    Acceleration; Default. All or any part of the Guaranteed Obligations
shall be immediately due and payable, and all liabilities shall mature
immediately, at the option of Agent for the benefit of the Lenders and without
notice or demand, upon the occurrence of any one or more of the following:

 

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(a) any Event of Default under the Credit Agreement or the Notes; or (b) any
default by any of the Guarantors hereunder; or (c) any warranty, representation
or statement made or furnished to the Lenders or Agent by or on behalf of any of
the Guarantors proves to have been false in any material respect when made or
furnished; or (d) the transfer by any of the Guarantors of a substantial portion
of its property not in the ordinary course of its business as constituted on the
date hereof to any party or entity other than Borrower, provided that any such
transfer to Borrower is not otherwise prohibited by the provisions of any other
document or agreement executed by and binding upon such Guarantor.
12.    Limitation on Obligations. (a) The provisions of this Guaranty are
severable, and in any action or proceeding involving any state corporate or
other formation, governance and organizational law, or any state, federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under this Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of such Guarantor's liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the Guarantors,
Agent or any Lender, be automatically limited and reduced to the highest amount
that is valid and enforceable as determined in such action or proceeding (such
highest amount determined hereunder being the relevant Guarantor's "Maximum
Liability"). This Section 12(a) with respect to the Maximum Liability of the
Guarantors is intended solely to preserve the rights of Agent and Lenders
hereunder to the maximum extent not subject to avoidance under applicable law,
and neither the Guarantors nor any other Person shall have any right or claim
under this Section 12(a) with respect to the Maximum Liability, except to the
extent necessary so that the obligations of the Guarantors hereunder shall not
be rendered voidable under applicable law.
(b)    Each of the Guarantors agrees that the Guaranteed Obligations may at any
time and from time to time exceed the Maximum Liability of each Guarantor, and
may exceed the aggregate Maximum Liability of all other Guarantors, without
impairing this Guaranty or affecting the rights and remedies of the Agent
hereunder. Nothing in this Section 12(b) shall be construed to increase any
Guarantor's obligations hereunder beyond its Maximum Liability.
(c)    In the event any Guarantor (a "Paying Guarantor") shall make any payment
or payments under this Guaranty or shall suffer any loss as a result of any
realization upon any collateral granted by it to secure its obligations under
this Guaranty, each other Guarantor (each a "Non-Paying Guarantor") shall
contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor's "Pro Rata Share" of such payment or payments made, or losses
suffered, by such Paying Guarantor. For the purposes hereof, each Non-Paying
Guarantor's "Pro Rata Share" with respect to any such payment or loss by a
Paying Guarantor shall be determined as of the date on which such payment or
loss was made by reference to the ratio of (i) such Non-Paying Guarantor's
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from Borrower after
the date hereof (whether by loan, capital infusion or by other means) to (ii)
the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Guarantors, the
aggregate amount of all monies received by such Guarantors from Borrower after
the date hereof (whether by loan, capital infusion or by other means). Nothing
in this Section 12(c) shall affect any Guarantor's several liability for the
entire amount of the Guaranteed Obligations (up to such Guarantor's Maximum
Liability). Each of the Guarantors covenants and agrees that its right to
receive any contribution under this Guaranty from a Non-Paying Guarantor shall
be subordinate and junior in right of payment to all the Guaranteed Obligations.
The provisions of this Section 12(c) are for the benefit of both Agent (and
Lenders) and the Guarantors and may be enforced by

 

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any one, or more, or all of them in accordance with the terms hereof.
13.    Records. Nothing herein shall be construed as an obligation on any
Lender's or Agent's part to continue to extend credit to Borrower in any manner
whatsoever. Each Lender's and Agent's records showing the account(s) between
Borrower and the Lenders and/or Agent shall be admissible in evidence in any
action or proceeding involving this Guaranty Agreement, and such records shall
be prima facie proof of the items therein set forth.
14.    Warranties. As an inducement for and in consideration of the Guaranteed
Obligations, each of the Guarantors warrants and represents to the Lenders and
Agent for the benefit of the Lenders, which warranties and representations shall
expressly survive the execution and delivery hereof, that: (a) the Obligations
guaranteed hereby were, and are being, incurred for purposes permitted by all
applicable laws and by the articles, bylaws, code of regulations and other
corporate legislation of such Guarantor; (b) this Guaranty Agreement has been
duly and validly authorized, executed and delivered by such Guarantor; and (c)
this Guaranty Agreement constitutes the valid and binding obligation of such
Guarantor, enforceable in accordance with its terms against such Guarantor.
15.    Laws; Entire Agreement. Each of the Guarantors agrees that this Guaranty
Agreement shall be governed by, and construed and interpreted in accordance with
the internal laws of the Commonwealth of Pennsylvania but giving effect to
federal laws applicable to national banks. However, if any provision hereof is
or becomes invalid or unenforceable under any law of mandatory application, it
is the intent of each of the Guarantors, the Lenders and Agent that such
provision shall be deemed severed and omitted herefrom, the remaining portions
hereof to remain in full force and effect as written. This Guaranty Agreement
sets forth the entire agreement of the parties in regard to the subject matter
hereof, and no representations, warranties or agreements of any kind have been
made by the Lenders or Agent except as specifically set forth herein and in the
Credit Agreement. No amendment hereto shall be effective against the Lenders and
Agent unless in writing, agreed to by all Lenders and signed by all Lenders. No
express or implied waiver by the Lenders or Agent of any default or the exercise
of any right or remedy hereunder shall in any way be, or be deemed to be, a
waiver of any future or subsequent default, right or remedy, whether similar in
kind or otherwise. Any provision hereof which becomes unenforceable by reason of
the commencement of a case under the Bankruptcy Code shall again be valid and
enforceable at the termination of that case. The rights and remedies provided
herein for the Lenders and Agent for the benefit of the Lenders are cumulative
and may be exercised singly or concurrently with, and are not exclusive of, any
rights or remedies provided at law or in equity.
16.    Jurisdiction; Service. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR THE
LENDERS AND AGENT TO EXTEND CREDIT GIVING RISE TO THE GUARANTEED OBLIGATIONS,
EACH OF THE GUARANTORS HAS AGREED THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT
OF OR ARISING FROM OR OUT OF THIS GUARANTY, ITS VALIDITY OR PERFORMANCE, AT THE
SOLE OPTION OF THE LENDERS OR AGENT, THEIR RESPECTIVE SUCCESSORS OR ASSIGNS,
SHALL BE INITIATED AND PROSECUTED AS TO ALL PARTIES AND THEIR SUCCESSORS AND
ASSIGNS AT PITTSBURGH, PENNSYLVANIA. EACH OF THE LENDERS, AGENT AND EACH OF THE
GUARANTORS CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS
PERSON BY ANY COURT SITUATED AT PITTSBURGH, PENNSYLVANIA, AND HAVING
JURISDICTION OVER THE SUBJECT MATTER.
17.    Notices. Any notice required or permitted to be given to or by any of the
Guarantors hereunder shall be deemed to have been given (a) to such Guarantor by
the Agent, when addressed to Borrower (whether or not specifically identifying
such Guarantor), and (b) to any Lender and Agent when given by Borrower (and
specifically identifying such Guarantor), and in each instance delivered in
compliance with

 

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the Credit Agreement.
18.    Waiver of Jury Trial. THE LENDERS, AGENT AND EACH OF THE GUARANTORS,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS GUARANTY AGREEMENT OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NONE OF THE
LENDERS, AGENT OR ANY OF THE GUARANTORS SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY OF THE LENDERS, AGENT OR ANY OF THE GUARANTORS EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
19.    Effectiveness. This Guaranty is intended to be made and to be effective
at and only when delivered and accepted by Agent at the place designated by
Agent and shall become effective only upon such delivery and upon acceptance by
the Agent at such place. Each of the Guarantors hereby waives notice of such
acceptance.
20.    Counterparts. This Guaranty may be executed by one or more of the parties
on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
21.    Supplemental Guaranties. Pursuant to Subsection 6.13 of the Credit
Agreement, additional Subsidiaries shall become obligated as Guarantors
hereunder (each as fully as though an original signatory hereto) by executing
and delivering to the Agent a supplemental guaranty in the form of Exhibit A
attached hereto (with blanks appropriately filled in) (each, a "Supplemental
Guaranty"), together with such additional supporting documentation required
pursuant to the Credit Agreement.
IN WITNESS WHEREOF, each of the Guarantors has caused these presents to be
executed by its duly authorized representative as of the day and year first
above written.
GUARANTORS:
 
NORTHEAST OFFICE VENTURE, LIMITED LIABILITY COMPANY, a Delaware limited
liability company, by M/I Homes, Inc., its sole member
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES SERVICE, LLC,
an Ohio limited liability company
By:     

 

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Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
MHO, LLC, a Florida limited liability company,
by MHO Holdings, LLC, its sole member
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
MHO HOLDINGS, LLC,
a Florida limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I PROPERTIES LLC, an Ohio limited liability company, by M/I Homes, Inc., its
sole member
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES OF FLORIDA, LLC, a Florida limited liability company, by M/I Homes,
Inc., its sole member
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES OF ORLANDO, LLC,
a Florida limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF TAMPA, LLC,
a Florida limited liability company

 

--------------------------------------------------------------------------------

 

By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer and Treasurer
 
M/I HOMES OF WEST PALM BEACH, LLC,
a Florida limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Assistant Secretary
 
M/I HOMES OF DC, LLC,
a Delaware limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF CHARLOTTE, LLC,
a Delaware limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF RALEIGH, LLC,
a Delaware limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
THE FIELDS AT PERRY HALL, L.L.C.,
a Maryland limited liability company
By:     
Name:    Phillip G. Creek
Title:    Senior Vice President,

 

--------------------------------------------------------------------------------

 

Chief Financial Officer and Assistant Secretary
 
WILSON FARM, L.L.C.,
a Maryland limited liability company
By:     
Name:    Phillip G. Creek
Title:    Senior Vice President,
Chief Financial Officer and Assistant Secretary
 
M/I HOMES OF CENTRAL OHIO, LLC,
an Ohio limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF CINCINNATI, LLC,
an Ohio limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF INDIANA, L.P., an Indiana limited partnership, by M/I Homes First
Indiana LLC, its sole general partner
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES FIRST INDIANA LLC,
an Indiana limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 

 

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M/I HOMES SECOND INDIANA LLC,
an Indiana limited liability company,
by M/I Homes, Inc., its sole member
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
 
M/I HOMES OF CHICAGO, LLC,
a Delaware limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF HOUSTON, LLC,
a Delaware limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
PRINCE GEORGES UTILITIES, LLC,
a Maryland limited liability company
By:     
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
Ex. B-13
EXHIBIT A TO GUARANTY
 
SUPPLEMENTAL GUARANTY
__________ ___, 201__

 

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PNC Bank, National Association, as Agent
for the Lenders under the Credit Agreement
Ladies and Gentlemen:
Reference is hereby made to (i) that certain Credit Agreement, dated as of June
9, 2010, among M/I Homes, Inc., the Lenders from time to time party thereto, and
PNC Bank, National Association, as agent ("Agent") for the Lenders (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") and (ii) that certain Guaranty Agreement, dated as of June 9, 2010
executed and delivered by the Guarantors parties thereto in favor of Agent, for
the benefit of the Lenders (as amended, restated, supplemented or otherwise
modified from time to time, the "Guaranty"). Terms not defined herein which are
defined in the Credit Agreement shall have for the purposes hereof the
respective meanings provided therein.
In accordance with subsection 6.13 of the Credit Agreement and Section 21 of the
Guaranty, the undersigned, _________________________, a corporation [limited
partnership/limited liability company] organized under the laws of
_____________________, hereby agrees to be a "Guarantor" for all purposes of the
Credit Agreement and the Guaranty, respectively, effective from the date hereof.
Without limiting the generality of the foregoing, the undersigned hereby agrees
to perform all the obligations of a Guarantor under, and to be bound in all
respects by the terms of, the Guaranty, to the same extent and with the same
force and effect as if the undersigned were a direct signatory thereto.
This Supplemental Guaranty shall be governed by, in construed and interpreted in
accordance with the internal laws of the Commonwealth of Pennsylvania but giving
effect to federal laws applicable to national banks.
IN WITNESS WHEREOF, this Supplemental Guaranty has been duly executed by the
undersigned as of the date set forth above.
[GUARANTOR]
By:    
Name:
Title:
Ex. C-3
EXHIBIT C
NOTE
__________ ___, 201___
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the order of
________________________ ("Lender"), at the office of PNC Bank, National
Association, as Agent ("Agent") for Lender, at Agent's office in Pittsburgh,
Pennsylvania (or such other office of Agent as it may, from time to time in
writing, designate), or at such other place as the holder hereof may, from time
to time, in writing designate, the principal sum of ______________ Dollars
($_________), or so much thereof as may be disbursed to, or for the benefit of,
the undersigned and remain unpaid, together with interest and

 

--------------------------------------------------------------------------------

 

payable at such interest rates and for such periods and in such manner, time(s)
and place(s) as are specified in the Credit Agreement hereinafter defined.
This note ("Note") is the Note to Lender identified in the Credit Agreement
dated as of June 9, 2010 (such agreement, together with any amendments,
supplements or other modifications thereto from time to time, collectively, the
"Credit Agreement"), between Borrower, Lender, the other Lenders party thereto,
and Agent, as agent for the Lenders, as the same may hereafter be amended,
modified, or supplemented from time to time, and said Credit Agreement is hereby
incorporated into this Note and made a part hereof. Capitalized terms used but
not defined herein shall have the meanings set forth in the Credit Agreement.
Interest and principal shall be calculated and be payable as set forth in the
Credit Agreement, and:
Lender's records of the principal, accrued interest and other charges due
hereunder, as well as applicable interest rates and periods are, absent manifest
error, conclusive as to and binding upon all Persons.
The entire unpaid principal balance evidenced by this Note plus any accrued but
unpaid interest thereon and any other indebtedness with respect to Loans owing
by Borrower to Lender under the Credit Agreement shall be paid in full on or
before the Maturity Date.
The indebtedness evidenced hereby may be prepaid in whole or in part without
penalty subject to the terms of the Credit Agreement. All payments (including
prepayments) received by Agent for the account of Lender (a) shall be applied to
the payment of all costs and expenses incurred by Lender in accordance with the
Credit Agreement, (b) shall, with respect to scheduled payments, be applied,
first, to accrued interest, and second, to principal; (c) shall, with respect to
prepayment, be applied to principal; (d) shall be in lawful money of the United
States; and (e) shall be credited as of the time received by Agent for the
account of Lender in cash or equivalent or when finally collected. Pursuant to
the terms of the Credit Agreement, repayments of principal shall be eligible for
reborrowing by Borrower. Lender shall not be obligated to extend any credit
after the expiration of the term of this Note or the occurrence of a Default or
an Event of Default. Any part of the indebtedness evidenced by this Note
outstanding on the Maturity Date shall be repaid on the Maturity Date.
Upon occurrence of an Event of Default, the whole or any part of the unpaid
indebtedness evidenced hereby shall, at once or at any time thereafter, at the
option of the holder or holders hereof, become due and payable without notice or
demand therefor, the same being expressly waived. A failure of the holder
thereof to insist upon strict compliance with the terms hereof or to assert any
right hereunder shall not be a waiver of any default and shall not be deemed to
constitute a modification of the terms hereof or to establish any claim or
defense.
No delay or omission on the part of the holder in exercising any right hereunder
shall operate as a waiver of such right or of any other right under this Note. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
such right and/or remedy on any future occasion.
All persons now or hereafter liable, primarily or secondarily, for the payment
of the indebtedness evidenced hereby or any part thereof, do hereby expressly
waive presentment for payment, notice of dishonor, protest and notice of
protest, and agree that the time for payment or payments of any part of the
indebtedness evidenced hereby may be extended without releasing or otherwise
affecting their liability hereon.

 

--------------------------------------------------------------------------------

 

Borrower agrees that this Note shall be governed by, and construed and
interpreted in accordance with the internal laws of the Commonwealth of
Pennsylvania but giving effect to federal laws applicable to national banks.
However, if any provision hereof is or becomes invalid or unenforceable under
any law of mandatory application, it is the intent of Borrower, Lender and all
parties primarily or secondarily liable hereunder, that such provision will be
deemed severed and omitted herefrom, the remaining portions hereof to remain in
full force and effect as written.
To the extent that the terms and provisions of this Note are inconsistent with
the terms and provisions of the Credit Agreement, the terms and provisions of
this Note shall control.
As a specifically bargained inducement for Lender to extend credit giving rise
to the indebtedness evidenced hereby, the undersigned and Lender agree that: ANY
ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING FROM OR OUT OF THIS NOTE,
ITS MAKING, VALIDITY OR PERFORMANCE, AT THE SOLE OPTION OF LENDER OR AGENT FOR
THE BENEFIT OF LENDER OR LEGAL HOLDER HEREOF, SHALL BE PROSECUTED AS TO ALL
PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT PITTSBURGH, PENNSYLVANIA. THE
BORROWER, LENDER AND AGENT EACH CONSENTS TO AND SUBMITS TO THE EXERCISE OF
JURISDICTION OVER ITS PERSON BY ANY COURT SITUATED AT PITTSBURGH, PENNSYLVANIA,
AND HAVING JURISDICTION OVER THE SUBJECT MATTER.
BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE, THE
CREDIT AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF LENDER. BORROWER SHALL NOT
SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN
MODIFIED IN ANY RESPECT OR RELINQUISHED BY LENDER EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY IT AND THE HOLDER OF THE NOTE.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as of
the day and year first above written.
M/I HOMES, INC.
 
By:        
Name:     Phillip G. Creek
Title:     Executive Vice President and Chief Financial Officer
Ex. D-3
EXHIBIT D
 
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance") dated as of

 

--------------------------------------------------------------------------------

 

_________ ___, 201_, is entered into among the parties listed on the signature
pages hereof.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Credit Agreement dated June 9, 2010 by and
among M/I Homes, Inc., PNC Bank, National Association, as Agent, and the Lenders
party thereto (as amended, modified, supplemented or restated from time to time,
the "Credit Agreement").
Pursuant to subsection 2.6(b) of the Credit Agreement, Borrower has requested an
increase in the Aggregate Commitment from $__________ to $_______________. Such
increase in the Aggregate Commitment is to become effective on __________ ___,
____ (the "Increase Date").** This date is to be agreed upon by Borrower, Agent
and Accepting Lender. See subsection 2.6(b)(ii) of the Credit Agreement. In
connection with such requested increase in the Aggregate Commitment, Borrower,
Agent and _________________________ ("Accepting Lender") hereby agree as
follows:
1.    ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase Date,
[Accepting Lender shall become a party to the Credit Agreement as a Lender,
shall have (subject to the provisions of subsection 2.6(b) of the Credit
Agreement) all of the rights and obligations of a Lender thereunder, shall agree
to be bound by the terms and provisions thereof and shall thereupon have a
Commitment under and for purposes of the Credit Agreement in the] [the
Commitment of Accepting Lender under the Credit Agreement shall be increased
from $_______________ to the] amount set forth opposite Accepting Lender's name
on the signature pages hereof.
2.    REPRESENTATIONS AND AGREEMENTS OF ACCEPTING LENDER. [Accepting Lender (a)
represents and warrants that (i) it has full power and authority, and has taken
all action necessary, to execute and deliver this Commitment and Acceptance and
to consummate the transactions contemplated hereby] and to become a Lender under
the Credit Agreement, (ii) it satisfies the requirements, if any, specified in
the Credit Agreement that are required to be satisfied by it in order to become
a Lender, (iii) from and after the Increase Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
its Commitment, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to subsection 6.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment and Acceptance on the basis
of which it has made such analysis and decision independently and without
reliance on the Agent or any other Lender, and (v) if it is a Non-U.S. Lender,
attached to this Commitment and Acceptance is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Accepting Lender; and (b) agrees that (i) it will,
independently and without reliance on the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.*
*If the Accepting Lender is already a party to the Credit Agreement prior to the
Increase Date, only the bracketed provision needs to be included.
3.    REPRESENTATIONS OF BORROWER. Borrower hereby represents and warrants that,
as of the date hereof and as of the Increase Date, (a) no event or condition
shall have occurred and then

 

--------------------------------------------------------------------------------

 

be continuing which constitutes a Default or Event of Default and (b) the
representations and warranties contained in Section 4 of the Credit Agreement
are true and correct in all material respects (except to the extent any such
representation or warranty is stated to relate solely to an earlier date).
4.    AGENT'S FEE. On or before the Increase Date, Borrower shall pay to Agent
an administrative fee in the amount of $3,500.
5.    GOVERNING LAW. This Commitment and Acceptance shall be governed by the
internal laws of the Commonwealth of Pennsylvania but giving effect to federal
laws applicable to national banks.
IN WITNESS WHEREOF, the parties hereto have executed this Commitment and
Acceptance by their duly authorized officers as of the date first above written.
M/I HOMES, INC.
By:    
Name:    
Title:    
 
 
PNC BANK, NATIONAL ASSOCIATION, as Agent
 
By:    
Name:    
Title:     
 
$        [NAME OF ACCEPTING LENDER]
 
By:    
Name:    
Title:     
 
Ex. E-1
EXHIBIT E
intentionally omitteD
Ex. F-1
EXHIBIT F
 
COMPLIANCE CERTIFICATE
 
[LETTERHEAD OF M/I HOMES, INC.]
[DATE]
To: Agent and each Lender

 

--------------------------------------------------------------------------------

 

Ladies and Gentlemen:
This letter is being sent to you to comply with subsection 6.2 of the Credit
Agreement effective as of June 9, 2010 (as amended, the "Credit Agreement") and
is being delivered to you for the period of [insert yearly or quarterly period
as appropriate] for which period the undersigned has heretofore delivered, or is
herewith delivering, the financial statements provided for in subsection 6.1 of
the Credit Agreement (the "Financial Statements"). [The undersigned hereby
certifies that such Financial Statements are true and accurate in all material
respects, subject to normal year-end audit adjustments (Note: only required with
delivery of unaudited Financial Statements)]. Capitalized terms used but not
defined herein have the meanings given to such terms in the Credit Agreement.
The undersigned certifies that, after due examination by the undersigned and to
the best of the knowledge of the undersigned, M/I Homes, Inc. and each of its
Subsidiaries during the period stated above has observed or performed in all
material respects all of its covenants and other agreements, and satisfied every
condition, contained in the Credit Agreement, the Notes, the Guaranty Agreement
and the Security Documents to be observed, performed or satisfied by it, and
that the undersigned has no knowledge of any Default or Event of Default except
[list any Defaults or Events of Default; if none, end sentence before "except"].
Additionally, I have enclosed a statement showing in detail the calculation of
ratios and other covenants, in accordance with corresponding subsections of the
Credit Agreement, as required by the Credit Agreement.
Yours very truly,
By:        
Printed Name:     
Title:     
Enclosure
 
Ex. F-5
 
Ex. F-2
CONFIDENTIAL
STATEMENT OF CALCULATION OF CERTAIN COVENANTS
[Date]
Subsection No.
Covenant

 

--------------------------------------------------------------------------------

 

1/6/2009
Maintain a Minimum Tangible Net Worth of at least: (i) $200,000,000 plus (ii)
50% of Consolidated Earnings (without deduction for losses and excluding the
effect of any decreases in any Deferred Tax Valuation Allowance) earned for each
completed fiscal quarter ending after March 31, 2010 to the date of
determination plus (iii) the amount of any reduction or reversal in Deferred Tax
Valuation Allowance for each completed fiscal quarter ending after March 31,
2010 minus (iv) the costs of the Borrower's repurchase of Senior Notes up to
$10,000,000
(i) above:$200,000,000
Plus (ii) above:$___________
Plus (iii) above:$___________
Minus (iii) above:$___________
Required Minimum Tangible Net Worth:$___________
Consolidated Tangible Net Worth =$____________
2/6/2010
Maintain a Leverage Ratio not in excess of 1.50  to 1.00.
 
Consolidated Indebtedness:$
 
Consolidated Tangible Net Worth:$
 
Leverage Ratio = _____________ to 1.00
3/6/2011
Maintain an Interest Coverage Ratio of not less than 1.50 to 1.00.
 
The maintenance of an Interest Coverage Ratio of less than 1.50 to 1.00 as of
the end of any fiscal quarter shall not constitute a violation of subsection
6.11 as long as Borrower, as of the end of such fiscal quarter, is in compliance
with subsection 6.15.
 
EBITDA (for four quarters)$
 
Consolidated Interest Incurred (for four quarters):$
 
Interest Coverage Ratio = _____________ to 1.00
4/6/2015
If, for the period ending the last day of the most recently ended fiscal quarter
(a) the Interest Coverage Ratio is less than 1.50 to 1.00 and (b) the ratio of
(i) Adjusted Cash Flow from Operations ("ACFO Ratio") for the four fiscal
quarters then ended to (ii) Consolidated Interest Incurred by the Borrower and
its Subsidiaries for such four fiscal quarters is less than 1.50 to 1.00, until
the end of the next fiscal quarter when the Interest Coverage Ratio is not less
than 1.50 to 1.00 or the ACFO Ratio is not less than 1.50 to 1.00, the Borrower
shall maintain Unrestricted Cash in an amount not less than $25,000,000.
 
(i) Adjusted Cash Flow From Operations:$
 
(ii) Consolidated Interest Incurred:$
 
(iii) Ratio of (i) to (ii) (AFCO Ratio) _______ to _____
 
Unrestricted Cash = $_____________
5/7/2001
Secured Indebtedness not to exceed $25,000,000.
 
Secured Indebtedness = $
 
Secured Indebtedness in the nature of Contingent Obligations in respect of
Letters of Credit fully executed by a Lien on cash and Cash Equivalents not to
exceed $50,000,000 ("Secured Contingent Obligations")

 

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Secured Contingent Obligations = $
6/7/2005
Adjusted Land Value not to exceed 110% of Consolidated Tangible Net Worth.
 
Adjusted Land Value
 
(i) book value of all Land:$
less
(ii) the sum of
 
     (a) book value of Land and Lots under Contract: $
      and
(b) the lesser of :
            (1) the product of (x) the number
                   of Housing Units contracted for during the last
                    six months and (y) average book value of all
                  Finished Lots and Lots under Contract and: $
 
             (2) 25% of Consolidated Tangible Net Worth: $
 
Adjusted Land Value:$
 
Consolidated Tangible Net Worth:$
 
X 1.10 =$
7.7.6(b)
Limit on extension of credit in connection with$
the sale of land of 10% of Consolidated
Tangible Net Worth.
 
10% of Consolidated Tangible Net Worth: $
 
Aggregate amount of extensions of credit in$
connection with the sale of Land: 
 
Maximum maturity of any such extensions of
credit not to exceed five years:________________
8.7.6(e)
Limit on Investments in Joint Ventures of twenty percent (20%) of Consolidated
Tangible Net Worth, provided that Borrower has no less than a 20% interest in
each such joint venture and that management and control decisions for each such
joint venture require Borrower's consent and approval.
 
20% of Consolidated Tangible Net Worth:$
 
Investments in Joint Ventures:$
 
Lowest percentage interest of Borrower in a joint venture: ___________%

 

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9/7/2013
The number of Speculative Housing Units, as at the end of any fiscal quarter,
not to exceed the greater of (a) the number of Housing Unit Closings occurring
during the period of twelve (12) months ending on the last day of such fiscal
quarter, multiplied by thirty-five percent (35%) or (b) the number of Housing
Unit Closings occurring during the period of six (6) months ending on the last
day of such fiscal quarter, multiplied by seventy percent (70%).
 
Speculative Housing Units:
 
(a) Housing Unit Closings in last 12 months:________ x 35% =
 
(b) Housing Unit Closings in last 6 months:________ x 70% =
 
(c) Speculative Housing Units:

 
Ex. G-1
EXHIBIT G
CERTIFICATE CONCERNING PROJECTIONS
[Date]
TO: Agent and each Lender
The undersigned certifies to Agent and each Lender, the following:
The attached financial projections of M/I Homes, Inc. (the "Company") present,
to the best knowledge and belief of the undersigned, the Company's expected
results for the projected periods. The projections reflect the Company's
management's judgment as of the date of the projections of the expected
conditions and expected course of action. The projections state all of the
principal assumptions on which the projections are predicated, and the
projections, in fact, have been made on the basis of the stated principal
assumptions.
The undersigned makes no representation that the Company's actual results will
conform to the projections.
This certificate is provided pursuant to subsection 6.2(b) of the Credit
Agreement effective as of June 9, 2010 among the Company as borrower and the
Lenders and Agent defined therein.
                        
[Chief Financial Officer, Treasurer, Controller or Chief Accounting Officer]
of M/I Homes, Inc.
Date:                        
Attachment (Projections)
 
Ex. H-2
Ex. H-1

 

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EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
 
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is dated as of the
Effective Date set forth below and is entered into by and between
____________________________________________________ (the "Assignor") and
________________________________________________ (the "Assignee"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended, the "Credit Agreement"), receipt
of a copy of which is hereby acknowledged by each Assignee. The Standard Terms
and Conditions set forth in Annex 1 are hereby agreed to and incorporated herein
by reference and made a part of this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to each Assignee, and each Assignee hereby irrevocably purchases and assumes
from the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by Agent
as contemplated below, the interest in and to all of the Assignor's rights and
obligations under the Credit Agreement and any other documents or instruments
delivered pursuant thereto that represents the amount and percentage interests
identified below each Assignee's name on the signature pages hereto, of all of
the Assignor's outstanding rights and obligations under the respective
facilities identified on the signature pages hereto (including, to the extent
included in any such facilities, letters of credit and swingline loans) (each an
"Assigned Interest" and collectively the "Assigned Interests"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment, without representation or warranty by the Assignor.
1.    Assignor:     ______________________________
2.    Assignee:     ______________________________
[and is an Affiliate/Eligible Assignee of [identify Lender] Select as
applicable.]
3.    Borrower(s):    M/I HOMES, INC.
4.    Agent:    PNC Bank, National Association, as the administrative agent
under the Credit Agreement
5.    Credit Agreement:    The Credit Agreement dated __________ by and among
the Borrower, the Lenders parties thereto, PNC Bank, National Association, as
Agent, and the Guarantors now or hereafter party thereto, as the same may be
amended, restated or supplemented from time to time.
 
 
6.    Assigned Interest:

 

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Facility Assigned
Aggregate Amount of Commitment/
Loans for all Lenders
Amount of Commitment/ Loans Assigned
Percentage Assigned of Commitment/Loans Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
CUSIP Number
Revolving Credit Commitment
$
$
%
 

 
7.    [Trade Date:        ______________] To be completed if the Assignor and
the Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.
8.    Effective Date: ________________, 20___ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.] Assignor shall pay a fee of $3,500 to the Administrative Agent in
connection with the Assignment and Assumption.
 
 
[SIGNATURE PAGES FOLLOW]
Ex. H-4
Ex. H-3
 
[SIGNATURE PAGE - ASSIGNMENT AND ASSUMPTION AGREEMENT]
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
 
[NAME OF ASSIGNOR]
 
 
By:    
Name:    
Title:    
 
 
ASSIGNEE
 
[NAME OF ASSIGNEE]
 
 
By:    
Name:    
Title:    
 
 
 
 
 
Consented to and Accepted:
 
PNC BANK, NATIONAL ASSOCIATION,

 

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as Agent
 
 
By:    
Name:    
Title:    
 
 
 
[Consented to:] To be added only if the consent of the Borrower is required by
the terms of the Credit Agreement.
 
BORROWER
 
M/I HOMES, INC.
 
By:    
Name:    
Title:    
 
 
 
ANNEX 1-2
 
ANNEX 1
 
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION AGREEMENT
 
 
1.    Representations and Warranties.
1.1    Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interests, (ii) the Assigned
Interests are free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with any Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or document
delivered pursuant thereto, other than this Assignment (herein collectively the
"Loan Documents"), or any collateral thereunder, (iii) the financial condition
of the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2    Assignee. Each Assignee severally (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements, if any, of an eligible assignee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement and, to the extent of its Assigned Interests, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to subsection 6.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase its Assigned
Interests on the basis of which it has

 

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made such analysis and decision, and (v) if such Assignee is not incorporated or
organized under the laws of the United States of America or any State thereof,
attached to the Assignment is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
such Assignee; and (b) agrees that (i) it will, independently and without
reliance on Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it as a
Lender.
2.    Payments. From and after the Effective Date, Agent shall make all payments
in respect of each Assignee's Assigned Interests (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the respective Assignee
for amounts which have accrued from and after the Effective Date.
3.    General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
This Assignment may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania.
 
 
 
 
Ex. I-3
EXHIBIT I
ADMINISTRATION OF SECURITY AND BORROWING BASE
Subject to the prior written consent of Agent, which Agent may exercise in its
sole discretion:
 
(a)    Security Documents. The Collateral Agreement, the Blocked Account Control
Agreement, each Mortgage and all other Security Documents shall be in form and
substance satisfactory to Agent.
 
(b)    Security Generally. On or prior to date of this Agreement, Agent shall
receive duly executed copies of the Collateral Agreement and Blocked Account
Control Agreement and, promptly thereafter, searches of records evidencing that
financing statements have been filed in all appropriate jurisdictions to perfect
a security interest conforming to the representation contained in Section 4.19
of this Agreement, and, at all times thereafter, Agent shall receive such other
agreements, amendments, documents, assignments, statements or instruments, in
each case in form and substance satisfactory to Agent, as may be reasonably
necessary to evidence, perfect or otherwise implement the Lien created by the
Security Documents as collateral security for the performance and repayment of
the Obligations (in the case of Borrower) or of the Guaranteed Obligations (as
defined in the Guaranty Agreement in the case of the Guarantors) in accordance
with the requirements of the Credit Agreement.
 
(c)    Secured Borrowing Base Cash. So long as the Initial Borrowing Base,
Second Borrowing Base or Secured Borrowing Base includes Secured Borrowing Base
Cash, such Secured

 

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Borrowing Base Cash will be held by or on behalf of Agent in the Secured
Borrowing Base Account subject to the Blocked Account Control Agreement.
 
(d)    Qualified Real Property. So long as the Secured Borrowing Base includes
Qualified Real Property, Agent shall have received those documents, instruments
and agreements contemplated for the Real Property by the definition of Qualified
Real Property.
 
(e)    Review of Borrowing Base Certificates. Each Borrowing Base Certificate
will be subject to review and testing pursuant to such methodologies as Agent
shall reasonably determine.
 
(f)    Calculation of Book Value of Pool Real Property and Second Borrowing
Base. The book value of any Pool Real Property included in the Second Borrowing
Base shall be subject to adjustments from time to time approved by Agent in its
reasonable discretion to take into account partial dispositions, costs of
improvement, damage, destruction, other casualty, condemnation, eminent domain,
contamination and other adverse events. Except as otherwise reasonably
determined by Agent in its discretion, Borrower may, but shall not be required
to, (i) calculate the book value of Pool Real Property as the actual book value
plus the book value of improvements since the prior measurement date and (ii)
upon disposition of any such Pool Real Property, deduct from the book value an
amount equal to (A) cost of goods sold as a result of such disposition times (B)
a fraction equal to the most recent adjusted book value of such Pool Real
Property divided by the corresponding book value of such Pool Real Property
(including improvements thereto). Agent may determine that the book value of a
Pool Real Property is $0.00 as a result of material damage, destruction, other
casualty, condemnation, eminent domain, contamination or other adverse event
affecting such Qualified Real Property.
 
(g)    Calculation of Appraised Value of Qualified Real Property and Secured
Borrowing Base. The Appraised Value of any Qualified Real Property included in
the Secured Borrowing Base shall be subject to adjustments from time to time
approved by Agent in its reasonable discretion to take into account partial
dispositions, costs of improvement, damage, destruction, other casualty,
condemnation, eminent domain, contamination and other adverse events. Except as
otherwise reasonably determined by Agent in its discretion, Borrower may, but
shall not be required to, (i) calculate the Appraised Value of Qualified Real
Property as the actual Appraised Value plus the book value of improvements since
the prior measurement date and (ii) upon disposition of any such Qualified Real
Property, deduct from the Appraised Value an amount equal to (A) cost of goods
sold as a result of such disposition times (B) a fraction equal to the most
recent adjusted Appraised Value of such Qualified Real Property divided by the
corresponding book value of such Qualified Real Property (including improvements
thereto). Agent may determine that the Appraised Value of a Qualified Real
Property is $0.00 as a result of material damage, destruction, other casualty,
condemnation, eminent domain, contamination or other adverse event affecting
such Qualified Real Property.
 
(h)    Inspections. Agent or its employees, agents or representatives shall be
entitled to inspect Pool Real Property and Qualified Real Property from time to
time, as follows:
 
(i)     at Agent's option, but no more than twice in any calendar year unless an
Event of Default has occurred and is continuing, Agent may review the inventory
status from the financial records of the Loan Parties, which will include sales
reports, copies of contracts, paid invoices, etc.;
 
(ii)     at Agent's option, a portion of any material vertical construction may
be

 

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selected at random;
 
(iii)    land development work for Pool Real Property and Qualified Real
Property will be inspected periodically, but not more than twice in any calendar
year unless an Event of Default has occurred and is continuing, by Agent in its
discretion; and
 
(iv)     material negative variances between calculations of the Second
Borrowing Base or Secured Borrowing Base made by Borrower as adjusted by Agent's
calculations will be discussed with Borrower and, if not satisfactorily
resolved, will be reflected in the next Borrowing Base Certificate delivered
hereunder.
 
All inspections made by Agent or its employees, agents or representatives, shall
be made solely and exclusively for the protection and benefit of the Lenders and
neither Borrower nor any other Person shall be entitled to claim any loss or
damage against Agent, Agent, any Lender or any of their respective employees,
agents or representatives for failure to properly discharge any alleged duties
of Agent.
 
(i)    Work-in-Progress Documentation. Agent shall be entitled to inspect not
more than once each quarter documentation with a scope reasonably identified by
Agent with respect to any work-in-progress, including, without limitation, sales
contracts, loan commitments, buyer deposits, lot purchase closing statements,
certificates of occupancy, notices of commencement, etc.
 
(j)    Budget. Upon request of Agent from time to time, a budget setting forth
the estimates of the total cost of construction for specific Housing Units of a
reasonable number and size included in the Secured Borrowing Base shall be
provided by Borrower to Agent, at Borrower's sole expense.
 
(k)    Plan and Cost Review. Upon request of Agent from time to time, plans and
cost budgets with respect to land development work in respect of Pool Real
Property and Qualified Real Property of a reasonable size shall be provided by
Borrower to Agent, at Borrower's expense.
 
(l)    Title Updates. So long as an Event of Default has occurred and is
continuing, Agent may require, from time to time, such title updates (including
without limitation, ownership and encumbrance reports) with respect to Pool Real
Property and Qualified Real Property to confirm the lien status of such Security
(in particular, that the Security Documents continue to constitute a first lien
on and security interest in such Security subject only to Limited Permitted
Liens), as Agent deems reasonably prudent all at the Borrower's sole expense.
 
(m)    Appraisals. From time to time, Agent will require Appraisals to be made
in accordance with Section 2.1(b).
 
 
Ex. J-26
EXHIBIT J
 
FORM OF COLLATERAL AGREEMENT
 
 
 
 
                                                    
 
COLLATERAL AGREEMENT
 

 

--------------------------------------------------------------------------------

 

 
made by
 
 
M/I HOMES, INC.,
 
 
and certain of its Subsidiaries
 
 
in favor of
 
 
PNC BANK, NATIONAL ASSOCIATION,
 
as
 
Administrative Agent
 
 
Dated as of June 9, 2010
 
                                                    
 
 
 
TABLE OF CONTENTS
Page
 
SECTION 1.    DEFINED TERMS    5
1.1    Definitions    5
1.2    Other Definitional Provisions    8
section 2.    GRANT OF SECURITY INTEREST    8
section 3.    REPRESENTATIONS AND WARRANTIES    10
3.1    Title; No Other Liens    10
3.2    Perfected First Priority Liens    10
3.3    Jurisdiction of Organization    10
3.4    Farm Products    10
3.5    Investment Property    10
3.6    Intellectual Property    10
SECTION 4.    COVENANTS    11
4.1    Maintenance of Insurance    11
4.2    Payment of Obligations    11

 

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4.3    Maintenance of Perfected Security Interest; Further Documentation    11
4.4    Changes in Name, etc    12
4.5    Notices    12
4.6    Intentionally Omitted    12
4.7    Intellectual Property    12
SECTION 5.    INVESTING AMOUNTS IN THE CASH ACCOUNT    13
5.1    Investments    13
5.2    Liability    13
SECTION 6.    REMEDIAL PROVISIONS    14
6.1    Certain Matters Relating to Receivables    14
6.2    Communications with Obligors; Grantors Remain Liable    14
6.3    Proceeds to be Turned Over To Agent    15
6.4    Additional Rights of Agent    15
6.5    Application of Proceeds    15
6.6    Code and Other Remedies    16
6.7    Subordination    16
6.8    Deficiency    16
SECTION 7.    AGENT    17
7.1    Agent's Appointment as Attorney-in-Fact. etc.    17
7.2    Duty of Agent    18
7.3    Execution of Financing Statements    18
7.4    Authority of Agent    19
SECTION 8.    MISCELLANEOUS    19
8.1    Amendments in Writing    19
8.2    Notices    19
8.3    No Waiver by Course of Conduct; Cumulative Remedies    19
8.4    Payment of Expenses and Taxes    19
8.5    Successors and Assigns    20
8.6    Intentionally Omitted    20
8.7    Counterparts    20
8.8    Severability    20
8.9    Section Headings    20
8.10    Integration    20

 

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8.11    Governing Law    20
8.12    Submission to Jurisdiction    20
8.13    Acknowledgements    21
8.14    Additional Grantors    21
8.15    Releases    21
8.16    WAIVER OF JURY TRIAL    21
 
ANNEXES
1 - Assumption Agreement
1A - Supplements
SCHEDULES
1 - Notice Address of Grantors
2 - Filings and Other Actions
3 - Location of Jurisdiction of Organization and Chief Executive Office
4 - Permitted Investments
5 - Cash Account
 
COLLATERAL AGREEMENT
 
 
COLLATERAL AGREEMENT, dated as of June 9, 2010, made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, the "Grantors"), in favor of PNC Bank, National Association, as
administrative agent (the "Agent") and the lenders (the "Lenders") from time to
time parties to the Credit Agreement dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among M/I Homes, Inc., an Ohio corporation ("Borrower"), the Lenders and the
Agent.
WITNESSETH:
 
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, Borrower is a member of an affiliated group of companies that includes
each other Grantor,
WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
businesses;
WHEREAS, Borrower and the other Grantors are engaged in related businesses, and
each Grantor will derive substantial direct and indirect benefit from the making
of the extensions of credit under the Credit Agreement;
WHEREAS, Borrower and the other Grantors have agreed to enter into this
Agreement in order to

 

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grant a valid, binding, enforceable and perfected security interest in, and Lien
on, certain of its assets, for the ratable benefit of the Secured Parties; and
WHEREAS, pursuant to Section 5.1(c) of the Credit Agreement, it is required that
the Grantors shall, have executed and delivered this Agreement to the Agent for
the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce Agent and the
Lenders to enter into the Credit Agreement and to induce the Lenders to make
their respective extensions of credit to Borrower under the Credit Agreement,
each Grantor hereby agrees with Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 11:
DEFINED TERMSSECTION 1.    DEFINED TERMS

1.Definitions1.1    Definitions.
(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement, and
the following terms are used herein as defined in the Pennsylvania UCC: Account,
Chattel Paper, Commercial Tort Claims, Document, Equipment, Farm Products,
Fixtures, General Intangible, Goods, Instrument, Inventory, Investment Property,
Letter-of-Credit Right and Supporting Obligation.
(a)The following terms shall have the following meanings:
"Agreement": this Collateral Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.
"Borrower Obligations": "Obligations" as defined in the Credit Agreement and
shall in any event include interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Facility L/C, or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to Agent or to the Lenders that are required
to be paid by Borrower pursuant to the terms of any of the foregoing
agreements).
"Cash Account": collectively, each of Borrower's Deposit Accounts and securities
accounts (as defined in the Pennsylvania UCC) identified on Schedule 5 and any
subaccount, substitute or successor account that is identified in writing as a
substitute or successor account. The Cash Account is comprised of the Secured
Borrowing Base Account.
"Cash Collateral": the collective reference to:
(a)    all cash, instruments, securities and funds deposited from time to time
in the Cash Account;
(b)    all investments of funds in the Cash Account and all instruments and
securities evidencing such investments; and
(c)    all interest, dividends, cash, instruments, securities and other property
received in respect of, or as proceeds of, or in substitution or exchange for,
any of the foregoing.
"Collateral": as defined in Section 2.

 

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"Collateral Account": any collateral account established by the Agent as
provided in Section 6.1 or 6.3.
"Copyright Licenses": any written agreement naming any Grantor as licensor or
licensee, granting any right under any Copyright, including, without limitation,
the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.
"Copyrights": (i) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof whether registered or
unregistered and whether published or unpublished, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Guarantor Obligations": with respect to any Guarantor, all obligations and
liabilities of such Guarantor or any other Guarantor which may arise under or in
connection with the Guaranty Agreement or any other Loan Document, to which such
Guarantor or any other Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Agent or to the Lenders that are required to be paid by such
Guarantor or any other Guarantor pursuant to the terms of the Guaranty Agreement
or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than Borrower.
"Intellectual Property": the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Issuers": the collective reference to each issuer of any Investment Property.
"Obligations": (i) in the case of Borrower, Borrower Obligations, and (ii) in
the case of each Guarantor, its Guarantor Obligations.
"Patent License": all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent.
"Patents": (i) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, (ii) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof; and (iii) all rights to obtain any reissues or
extensions of the foregoing.
"Pennsylvania UCC": the Uniform Commercial Code as from time to time in effect
in the Commonwealth of Pennsylvania.
"Proceeds": all "proceeds" as such term is defined in Section 9-102(a)(64) of
the Pennsylvania UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by

 

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performance. "Receivable" includes any Account.
"Secured Parties": the collective reference to the Agent, the Lenders and any
other parties to which Borrower Obligations or Guarantor Obligations, as
applicable, are owed.
"Securities Act": the Securities Act of 1933, as amended.
"Trademark License": any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark.
"Trademarks": (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all goodwill associated therewith,
now existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
and (ii) the right to obtain all renewals thereof.
2.Other Definitional Provisions1.2    Other Definitional Provisions.
(a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.
(a)The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
(b)Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 12:GRANT OF SECURITY INTERESTsection 2.    GRANT OF SECURITY INTEREST
Each Grantor hereby grants to Agent, for the ratable benefit of the Secured
Parties, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a)all Accounts;
(b)all Cash Collateral;
(c)all Chattel Paper;
(d)the Cash Account;
(e)all Commercial Tort Claims;
(f)all Documents;
(g)all Equipment;
(h)all Fixtures;
(i)all General Intangibles;
(j)all Goods;
(k)all Instruments;
(l)all Intellectual Property;
(m)all Inventory;
(n)all Investment Property;
(o)all Letter-of-Credit Rights;
(p)to the extent not otherwise described above, all other personal property
(except for

 

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any property specifically excluded from any clause in this section above, and
any property specifically excluded from any defined term used in any clause of
this section above);
(q)all books and records pertaining to the Collateral; and
(r)to the extent not otherwise included, all Proceeds, Supporting Obligations
and products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;
provided, however, that notwithstanding any of the other provisions set forth in
this Section 2, this Agreement shall not constitute a grant of a security
interest in, and the term Collateral shall not include, (i) any property now
owned or hereafter acquired by any Grantor to the extent that such grant of a
security interest is prohibited by any requirements of law of a governmental
authority, requires a consent not obtained of any governmental authority
pursuant to such requirement of law or is prohibited by, or constitutes a breach
or default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
to which such property or such Grantor is subject or evidencing or giving rise
to such property or, in the case of any Investment Property, any applicable
shareholder or similar agreement, except to the extent that such requirement of
law or the term in such contract, license, agreement, instrument or other
document (other than (1) any such contract, license, agreement instrument or
document evidencing Indebtedness, guarantee obligations or similar financing
arrangements of any Grantor or (2) any shareholder, joint-venture or similar
agreement, in each case to the extent permitted under the Credit Agreement)
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law, (ii) any intent-to-use trademark
application to the extent and for so long as creation by a Grantor of a security
interest therein would result in the loss by such Grantor of any material rights
therein and (iii) any property now owned or hereafter acquired of any Grantor
subject to a Lien or security interest in favor of any third party on the date
hereof permitted under the Credit Agreement and any replacement Lien or security
interest with respect to such property permitted under the Credit Agreement.
SECTION 13:
REPRESENTATIONS AND WARRANTIESsection 3.    REPRESENTATIONS AND WARRANTIES

To induce Agent and the Lenders to enter into the Credit Agreement and to induce
the Lenders to make their respective extensions of credit to Borrower under the
Credit Agreement, each Grantor hereby represents and warrants to the Agent and
each Lender that:
1.Title; No Other Liens3.1    Title; No Other Liens.
Except for the security interest granted to the Agent for the ratable benefit of
the Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on the Collateral by the Credit Agreement, such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Agent, for the ratable benefit of the Secured
Parties, pursuant to this Agreement or as are permitted by the Credit Agreement.
2.Perfected First Priority Liens3.2    Perfected First Priority Liens.
The security interests granted pursuant to this Agreement (a) upon completion of
the filings and other actions specified on Schedule 2 (which, in the case of all
filings and other documents referred to on said Schedule, have been delivered to
the Agent in completed and duly executed form) will constitute valid perfected
(to the extent such security interest can be perfected by such filings or
actions) security interests in all of the Collateral in favor of the Agent, for
the ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except, in the case of Collateral
other than the Cash Collateral,

 

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for Liens permitted by the Credit Agreement.
3.Jurisdiction of Organization3.3    Jurisdiction of Organization.
On the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 3. Such Grantor has
furnished to the Agent a certified charter, certificate of incorporation or
other organization document and good standing certificate as of a date which is
recent to the date hereof.
4.Farm Products3.4    Farm Products.
None of the Collateral constitutes, or is the Proceeds of, Farm Products.
5.Investment Property3.5    Investment Property.
Such Grantor is the record and beneficial owner of, and has good and marketable
title to, the Investment Property pledged by it hereunder, free of any and all
Liens or options in favor of or claims of, any other Person, except the security
interest created by this Agreement and the Liens permitted by the Credit
Agreement.
6.Intellectual Property3.6    Intellectual Property.
(a) On the date hereof, all Intellectual Property material to such Grantor's
business is valid, subsisting, unexpired and enforceable, has not been abandoned
and does not infringe the intellectual property rights of any other Person.
(a)No holding, decision or judgment has been rendered by any governmental
authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have, in any one case or in the aggregate, a
materially adversely affect on the financial condition, operations, properties,
or business of Borrower or any Guarantor or any Subsidiary of Borrower or the
ability of Borrower or any Guarantor to perform its obligations under the Loan
Documents to which it is a party.
(b)No action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof (i) seeking to limit, cancel or question the
validity of any Intellectual Property material to such Grantor's business or
such Grantor's ownership interest therein, or (ii) which, if adversely
determined, would have a material adverse effect on the value of any
Intellectual Property material to such Grantor's business.
SECTION 14:COVENANTSSECTION 4.    COVENANTS
Each Grantor covenants and agrees with the Agent and the Lenders that, from and
after the date of this Agreement until the Maturity Date and the payment in full
of all outstanding Obligations (or, with respect to outstanding Facility L/Cs,
cash collateralization or other arrangements reasonably satisfactory to Issuers
of and Agent):
1.Maintenance of Insurance4.1    Maintenance of Insurance.
(a) Such Grantor will maintain, with financially sound and reputable companies,
insurance policies insuring the Inventory and Equipment against loss by fire,
explosion, theft and such other casualties as required by the Credit Agreement.
(a)Borrower shall deliver to the Agent evidence with respect to such insurance
as the Agent may from time to time reasonably request in writing.
2.Payment of Obligations4.2    Payment of Obligations.
Such Grantor will pay and discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the

 

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Collateral or in respect of income or profits therefrom, as well as all claims
of any kind (including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that no such charge
need be paid if the amount or validity thereof is currently being contested in
good faith by appropriate proceedings, reserves in conformity with GAAP with
respect thereto (to the extent required by GAAP) have been provided on the books
of such Grantor and such proceedings could not reasonably be expected to result
in the sale, forfeiture or loss of any material portion of the Collateral or any
interest therein.
3.Maintenance of Perfected Security Interest; Further
Documentation4.3    Maintenance of Perfected Security Interest; Further
Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest to the extent required by this Agreement having
at least the priority described in Section 3.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever other than, in
the case of Collateral other than the Cash Collateral, any holder of Liens
permitted by the Credit Agreement, subject to the rights of such Grantor under
the Loan Documents to dispose of the Collateral.
(a)At any time and from time to time, upon the written request of the Agent, and
at the sole expense of such Grantor, such Grantor will promptly and duly execute
and deliver, and have recorded, such further instruments and documents and take
such further actions as the Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, (i) filing any
financing or continuation statements under the Uniform Commercial Code (or other
similar laws) in effect in any jurisdiction with respect to the security
interests created hereby, (ii) in the case of the Cash Account and any other
relevant Collateral, taking any actions necessary to enable the Agent to obtain
"control" (within the meaning of the applicable Uniform Commercial Code) with
respect thereto, (iii) in the case of Investment Property comprised of
certificated securities and any other relevant Collateral (other than Goods,
Instruments and Chattel Paper received held in the ordinary course of business),
delivering such certificates together with such stock powers and other writings
as shall be necessary or appropriate to perfect the security interest of
Collateral by delivery or possession and (iv) promptly notify the Agent in a
writing identifying with reasonable specificity any commercial tort claim that
becomes Collateral hereunder.
4.Changes in Name, etc4.4    Changes in Name, etc.
Such Grantor will not, except upon prior written notice to the Agent and
delivery to the Agent of all additional executed financing statements and other
documents reasonably requested by the Agent to maintain the validity, perfection
and priority of the security interests provided for herein, (i) change its
jurisdiction of organization or (ii) change its name.
5.Notices4.5    Notices.
Such Grantor will advise Agent promptly, in reasonable detail, of:
(a)any Lien (other than security interests created hereby or Liens permitted
under the Credit Agreement) on any of the Collateral which would adversely
affect the ability of the Agent to exercise any of its remedies hereunder; and
(b)of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
6.Intentionally Omitted4.6    Intentionally Omitted.
7.Intellectual Property4.7    Intellectual Property.
(a) Such Grantor (either itself or through licensees) will (i) continue to use
each material Trademark on each and every trademark class of goods applicable to
its current line as reflected in its current catalogs, brochures and price lists
in order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark,

 

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(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable requirements of law, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of
such Trademark unless the Agent, for the ratable benefit of the Secured Parties,
shall obtain a perfected security interest in such mark pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(a)Such Grantor (either itself or through licensees) will not do any act, or
omit to do any act, whereby any material Patent may become forfeited, abandoned
or dedicated to the public.
(b)Such Grantor (either itself or through licensees) (i) will employ each
material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
(c)Such Grantor (either itself or through licensees) will not do any act that
knowingly uses any material Intellectual Property to infringe the intellectual
property rights of any other Person.
(d)Such Grantor will take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(e)In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property.
SECTION 15:INVESTING AMOUNTS IN THE CASH ACCOUNTSECTION 5.    INVESTING AMOUNTS
IN THE CASH ACCOUNT
1.Investments5.1    Investments.
To the extent that the security interest of the Agent is the Cash Account is
perfected by control pursuant to an agreement restricting Borrower's access
thereto, if requested by Borrower, the Agent will, from time to time, invest
amounts on deposit in the Cash Account in investments listed on Schedule 4. All
investments shall be made in the name of the Agent or a nominee of the Agent and
in a manner that preserves Borrower's ownership of, and the Agent's perfected
first priority Lien on, such investments. All income received from such
investments shall accrue for the benefit of Borrower (subject to application of
Cash Collateral in accordance with the terms of this Agreement) and shall be
credited to the Cash Account. The Agent will only make investments in which it
can obtain a first-priority, perfected security interest, and Borrower hereby
agrees to execute promptly any documents which the Agent or Agent may require
Borrower to execute any documents to implement or effectuate the provisions of
this Agreement.
2.Liability5.2    Liability.
The Agent shall have no responsibility to Borrower for any loss or liability
arising in respect of the investments of the Cash Collateral (including, without
limitation, as a result of the liquidation of any thereof before maturity),
except to the extent that such loss or liability is found to be based on the
Agent's gross negligence or willful misconduct as determined by a final and
nonappealable decision of a court of competent jurisdiction.
 
SECTION 16:
REMEDIAL PROVISIONSSECTION 6.    REMEDIAL PROVISIONS

1.Certain Matters Relating to Receivables6.1    Certain Matters Relating to
Receivables.

 

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(a) At any time during the continuance of an Event of Default, the Agent shall
have the right to make test verifications of the Receivables in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Agent may require in
connection with such test verifications.
(a)the Agent hereby authorizes each Grantor to collect such Grantor's
Receivables but the Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
requested in writing by the Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
Section 6.4, and (ii) until so turned over, shall be held by such Grantor in
trust for the Agent and the Lenders, segregated from other funds of such
Grantor.
(b)At the Agent's written request at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall deliver to the Agent
all original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables that are Collateral, including,
without limitation, all original orders, invoices and shipping receipts.
2.Communications with Obligors; Grantors Remain Liable6.2    Communications with
Obligors; Grantors Remain Liable.
(a) the Agent in its own name or in the name of others may after the occurrence
and during the continuance of an Event of Default communicate with obligors
under the Receivables that are Collateral to verify with them to the Agent's
satisfaction the existence, amount and terms of any Receivables.
(a)Upon the written request of the Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that are Collateral that the Receivables have been
assigned to the Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Agent.
(b)Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables that are Collateral to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Agent nor any Lender shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by the Agent or any Lender of any
payment relating thereto, nor shall the Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
3.Proceeds to be Turned Over To Agent6.3    Proceeds to be Turned Over To Agent.
In addition to the rights of the Agent and the Lenders specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, upon written request from the Agent, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held by
such Grantor in trust for the Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Agent, if requested). All Proceeds received by the Agent
hereunder shall be held by the Agent in a Collateral Account maintained under
its sole dominion and control. All such Proceeds while held by the Agent in a
Collateral Account (or by such Grantor in trust for the Agent and the

 

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Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.4.
4.Additional Rights of Agent6.4    Additional Rights of Agent.
If an Event of Default shall occur and be continuing, the Agent may take
possession of the Collateral and without liability for trespass to enter any
premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, exercise the Debtor's right to bill
and receive payment for completed work, prepare the Collateral for sale and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law.
5.Application of Proceeds6.5    Application of Proceeds.
At such intervals as may be agreed upon by Borrower and the Agent, or, if an
Event of Default shall have occurred and be continuing, at any time at the
Agent's election, in accordance with the Credit Agreement, Agent may apply, all
or any part of the Cash Collateral or the Proceeds constituting Collateral,
whether or not held in the Cash Account or any other Collateral Account, and any
proceeds of the Guarantees, in payment of the Obligations in the following
order:
First, to pay incurred and unpaid reasonable fees and expenses of the Agent
under the Loan Documents;
Second, to Agent, for application by it towards payment and cash
collateralization of amounts then due and owing and remaining unpaid in respect
of the Obligations, pro rata among the Secured Parties according to the amounts
of the Obligations then due and owing and remaining unpaid to the Secured
Parties;
Third, to the Agent, for application by it towards prepayment of the
Obligations, pro rata among the Secured Parties according to the amounts of the
Obligations then held by the Secured Parties; and
Fourth, any balance remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to Borrower or to whomsoever may be lawfully
entitled to receive the same.
6.Code and Other Remedies6.6    Code and Other Remedies.
If an Event of Default shall occur and be continuing, the Agent, on behalf the
Lenders, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Pennsylvania UCC or any other applicable law. Without limiting
the generality of the foregoing, the Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor further agrees, at the
Agent's request, to assemble the Collateral and make it available to the Agent
at places which the Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Agent shall apply the net proceeds

 

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of any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as provided by
Section 6.5, and only after such application and after the payment by the Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the Pennsylvania UCC, need the Agent account
for the surplus, if any, to any Grantor. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
the Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
7.Subordination6.7    Subordination.
Each Grantor hereby agrees that, upon the occurrence and during the continuance
of an Event of Default, unless otherwise agreed by the Agent, all Indebtedness
owing by it to Borrower or any Subsidiary of Borrower shall be fully
subordinated to the indefeasible payment in full in cash of such Grantor's
Obligations.
8.Deficiency6.8    Deficiency.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay its Obligations
and the fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
SECTION 17:
AGENTSECTION 7.    AGENT

1.Agent's Appointment as Attorney-in-Fact. etc.7.1    Agent's Appointment as
Attorney-in-Fact. etc.»
(a) Each Grantor hereby irrevocably constitutes and appoints the Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name for
the purpose of carrying out the terms of this Agreement, so long as an Event of
Default has occurred and is continuing, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i)in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Agent for the purpose of collecting any and all such moneys due under any
Receivable or with respect to any other Collateral whenever payable;
(ii)in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the Agent
may request to evidence the Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(iii)pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any insurance called for by the terms of
this Agreement and pay all or any part of the premiums therefor and the costs
thereof;
(iv)execute, in connection with any sale provided for in Section 6.5, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and
(v)(1) direct any party liable for any payment under any of the Collateral to
make payment

 

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of any and all moneys due or to become due thereunder directly to the Agent or
as the Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3) sign
and indorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as the Agent may
deem appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions, and
in such manner, as the Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Agent were the absolute owner thereof for all purposes, and do, at the Agent's
option and such Grantor's expense, at any time, or from time to time, all acts
and things which the Agent deems necessary to protect, preserve or realize upon
the Collateral and the Agent's and the Lenders' security interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
(a)If any Grantor fails to perform or comply with any of its agreements
contained herein, the Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement.
(b)The expenses of the Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at a rate per annum
equal to the highest rate per annum at which interest would then be payable on
any category of past due ABR Loans under the Credit Agreement, from the date of
payment by the Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Agent on demand.
(c)Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
2.Duty of Agent7.2    Duty of Agent.
The Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Pennsylvania UCC or otherwise, shall be to deal with it in the same manner as
the Agent deals with similar property for its own account. Neither Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Agent and the
Lenders hereunder are solely to protect the Agent's and the Lenders' interests
in the Collateral and shall not impose any duty upon the Agent or any Lender to
exercise any such powers. The Agent and the Lenders shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
3.Execution of Financing Statements7.3    Execution of Financing Statements.
Pursuant to any applicable law, each Grantor authorizes the Agent to file or
record financing statements and

 

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other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Agent determines appropriate to perfect the security of the Agent
under this Agreement. Each Grantor authorizes the Agent to use the collateral
description "all personal property" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Agent of any financing
statement with respect to the Collateral made prior to the date hereof.
4.Authority of Agent7.4    Authority of Agent.
Each Grantor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and the Grantors, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full, and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
SECTION 18:
MISCELLANEOUSSECTION 8.    MISCELLANEOUS

1.Amendments in Writing8.1    Amendments in Writing.
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with subsection 11.1 of
the Credit Agreement.
2.Notices8.2    Notices.
All notices, requests and demands to or upon the Agent or any Grantor hereunder
shall be effected in the manner provided for in subsection 11.2 of the Credit
Agreement; provided that any such notice, request or demand to or upon any
Grantor other than Borrower shall be addressed to such Grantor at its notice
address set forth on Schedule 1.
3.No Waiver by Course of Conduct; Cumulative Remedies8.3    No Waiver by Course
of Conduct; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Agent or
any Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and are not
exclusive of any rights, remedies, powers and privileges provided by law.
4.Payment of Expenses and Taxes8.4    Payment of Expenses and Taxes.
Each Grantor agrees:
(a)to pay or reimburse the Agent and Agent for all their out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement, any Loan
Documents to which such Grantor is a party and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including without limitation the reasonable fees and
disbursements of counsel to the Agent;
(b)to pay or reimburse Agent and each Lender for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the and any such other documents, including without limitation
the reasonable fees and disbursements of counsel to Agent and each Lender; and
(c)to pay, and to save Agent and the Lenders harmless from, any and all
liabilities with

 

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respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
The agreements in this Section 8.4 shall survive repayment of the Obligations
and all other amounts payable under the Credit Agreement and the other Loan
Documents.
5.Successors and Assigns8.5    Successors and Assigns.
This Agreement shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Agent and the Lenders and their successors
and assigns; provided that except as permitted by the Credit Agreement, no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Agent.
6.Intentionally Omitted8.6    Intentionally Omitted.
7.Counterparts8.7    Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement shall become effective upon the receipt by the Agent of executed
counterparts of this Agreement by each of the parties hereto.
8.Severability8.8    Severability.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.Section Headings8.9    Section Headings.
The headings of the Sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof.
10.Integration8.10    Integration.
This Agreement and the other Loan Documents contain the entire agreement between
the parties relating to the subject matter hereof and supersede all oral
statements and prior writings with respect thereto.
11.Governing Law8.11    Governing Law.
This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by, and construed and interpreted in accordance with
the internal laws of the Commonwealth of Pennsylvania but giving effect to
federal laws applicable to national banks.
12.Submission to Jurisdiction8.12    Submission to Jurisdiction.
Each Grantor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Western District of Pennsylvania and of any
Pennsylvania State court sitting in Allegheny County for purposes of all legal
proceedings which may arise hereunder or under any other Loan Document to which
it is a party. Each Grantor irrevocably waives to the fullest extent permitted
by law, any objection which it may have or hereafter have to the laying of the
venue of any such proceeding brought in such a court, and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum. Each Grantor consents to process being served in any such proceeding by
the mailing of a copy thereof by registered or certified mail, postage prepaid,
to its address specified in subsection 8.2 hereof or in any other manner
permitted by law.
13.Acknowledgements8.13    Acknowledgements.

 

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Each Grantor hereby acknowledges that:
(a)it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;
(b)the relationship between Grantors and Lenders and Agent shall be solely that
of borrower and lender. Neither Agent nor any Lender shall have any fiduciary
responsibilities to any Grantor. Neither Agent nor any Lender undertakes any
responsibility to any Grantor to review or inform any Grantor of any matter in
connection with any phase of a Grantor's business or operations;
(c)no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among Grantors and the Lenders; and
(d)the waivers and agreements of each Guarantor contained in the Guaranty
Agreement in respect of Guaranteed Obligations as defined therein are
incorporated herein by reference as thought set forth at length in respect of
Guarantor Obligations.
14.Additional Grantors8.14    Additional Grantors.
Each Subsidiary of Borrower that is required to become a Guarantor pursuant to
subsection 6.13 of the Credit Agreement shall also become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.
15.Releases8.15    Releases.
The Borrower may request in writing that the Agent release its Lien on all or a
portion of the Collateral in accordance with the terms and provisions of the
Credit Agreement.
16.WAIVER OF JURY TRIAL8.16    WAIVER OF JURY TRIAL.
EACH GRANTOR, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THE
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NO GRANTOR SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY ANY OF AGENT, ANY GRANTOR EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT TO
THE LENDERS TO PROVIDE THE COMMITMENT PURSUANT TO THE CREDIT AGREEMENT.
 
IN WITNESS WHEREOF, each of the undersigned has caused this Collateral Agreement
to be duly executed and delivered as of the date first above written.
M/I HOMES, INC., an Ohio corporation
 
 
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and Chief Financial
Officer
 

 

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NORTHEAST OFFICE VENTURE, LIMITED LIABILITY COMPANY, a Delaware limited
liability company, by M/I Homes, Inc., its sole member
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES SERVICE LLC,
an Ohio limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
MHO, LLC, a Florida limited liability company,
by MHO Holdings, LLC, its sole member
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
MHO HOLDINGS, LLC,
a Florida limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I PROPERTIES LLC, an Ohio limited liability company, by M/I Homes, Inc., its
sole member
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES OF FLORIDA, LLC, a Florida limited liability company, by M/I Homes,
Inc., its sole member
By:                                
Name:    Phillip G. Creek

 

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Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES OF ORLANDO, LLC,
a Florida limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF TAMPA, LLC,
a Florida limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer and Treasurer
 
M/I HOMES OF WEST PALM BEACH, LLC,
a Florida limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Assistant Secretary
 
M/I HOMES OF DC, LLC,
a Delaware limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF CHARLOTTE, LLC,
a Delaware limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF RALEIGH, LLC,

 

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a Delaware limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
THE FIELDS AT PERRY HALL, L.L.C.,
a Maryland limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Senior Vice President,
Chief Financial Officer and Assistant Secretary
 
WILSON FARM, L.L.C.,
a Maryland limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Senior Vice President,
Chief Financial Officer and Assistant Secretary
 
M/I HOMES OF CENTRAL OHIO, LLC,
an Ohio limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF CINCINNATI, LLC,
an Ohio limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF INDIANA, L.P., an Indiana limited partnership, by M/I Homes First
Indiana LLC, its sole general partner
By:                                

 

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Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES FIRST INDIANA LLC,
an Indiana limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES SECOND INDIANA LLC,
an Indiana limited liability company,
by M/I Homes, Inc., its sole member
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President and
Chief Financial Officer
 
M/I HOMES OF CHICAGO, LLC,
a Delaware limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
M/I HOMES OF HOUSTON, LLC,
a Delaware limited liability company
By:                                
Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
PRINCE GEORGES UTILITIES, LLC,
a Maryland limited liability company
By:                                

 

--------------------------------------------------------------------------------

 

Name:    Phillip G. Creek
Title:    Executive Vice President,
Chief Financial Officer and Treasurer
 
 
 

 

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ANNEX 1
ASSUMPTION AGREEMENT, dated as of ______, 201_, made by ____________________
(the "Additional Grantor"), in favor of PNC Bank, National Association, as
Administrative Agent (in such capacity, the " Agent") for the banks and other
financial institutions or entities (the "Lenders") parties to the Credit
Agreement referred to below. All capitalized terms not defined herein shall have
the meaning ascribed to them in such Credit Agreement.
WITNESSETH:
 
WHEREAS, M/I Homes, Inc., (the "Borrower"), the Lenders and the Agent have
entered into a Credit Agreement, dated as of June 9, 2010 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, Borrower and certain of its
Subsidiaries (other than the Additional Grantor) have entered into the
Collateral Agreement, dated as of June 9, 2010 (as amended, supplemented or
otherwise modified from time to time, the "Collateral Agreement") in favor of
Agent for the ratable benefit of the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1.    Collateral Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.14 of the Collateral
Agreement, hereby becomes a party to the Collateral Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder. The information
set forth in Annex 1-A hereto is hereby added to the information set forth in
the Schedules to the Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 3 of the Collateral Agreement is true and correct on and as
the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date.
2.    Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF
PENNSYLVANIA.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
 
 
By:                
Name:
Title:

 

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Annex 1-A
 
 
Supplement to Schedule 1
 
Supplement to Schedule 2
 
Supplement to Schedule 3
 

 

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Schedule 1
 
NOTICE ADDRESS OF GRANTORS

 

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GRANTOR
ADDRESS
M/I Homes, Inc.
3 Easton Oval, Suite 500
Columbus, Ohio 43219
 
M/I Homes of Central Ohio, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Cincinnati, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes Service LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Properties LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
Northeast Office Venture, Limited Liability Company
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Raleigh, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Charlotte, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of DC, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
The Fields at Perry Hall, L.L.C.
3 Easton Oval, Suite 500
Columbus, Ohio 43219
Wilson Farm, L.L.C.
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes Second Indiana LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes First Indiana LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Indiana, L.P.
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Florida, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Tampa, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Orlando, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of West Palm Beach, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
MHO, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
MHO Holdings, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Chicago, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Houston, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219
Prince Georges Utilities, LLC
3 Easton Oval, Suite 500
Columbus, Ohio 43219

 
 

 

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Schedule 2
FILINGS AND OTHER ACTIONS
 
1.    With respect to each Loan Party organized under the laws of a State or the
District of Columbia, the filing of a Uniform Commercial Code Financing
Statement that reasonably identifies with Collateral with the office designated
for central filing in such jurisdiction.
 
2.    With respect to the Cash Account, the bank or securities intermediary
maintaining such account the authentication of a record by which such bank or
securities intermediary agrees to comply with instructions originated by the
Agent without further consent of the relevant Grantor.
 
3.    With respect to Copyrights, Patents and Trademarks in which any Grantor
has an interest that is of record with the United States Copyright Office or
United States Patent and Trademark Office, as applicable, the recordation with
such office of a security agreement identifying such interest and the delivery
of a related power of attorney authorizing the Agent to exercise remedies in
respect thereof.
 
 
 
 

 

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Schedule 3
 
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
 
 
GRANTOR
JURISDICTION OF
ORGANIZATION
LOCATION OF CHIEF
EXECUTIVE OFFICE
M/I Homes, Inc.
Ohio
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Central Ohio, LLC
Ohio
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Cincinnati, LLC
Ohio
6279 Tri-Ridge Blvd., Suite 110
Loveland, Ohio 45140
M/I Homes Service LLC
Ohio
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Properties LLC
Ohio
3 Easton Oval, Suite 500
Columbus, Ohio 43219
Northeast Office Venture, Limited Liability Company
Delaware
3 Easton Oval, Suite 500
Columbus, Ohio 43219
M/I Homes of Raleigh, LLC
Delaware
1511 Sunday Drive, Suite 100
Raleigh, North Carolina 27607
M/I Homes of Charlotte, LLC
Delaware
9335 Harris Corners Parkway Suite 100
Charlotte, North Carolina 28269
M/I Homes of DC, LLC
Delaware
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
The Fields at Perry Hall, L.L.C.
Maryland
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
Wilson Farm, L.L.C.
Maryland
21355 Ridgetop Circle, Suite 220
Sterling, Virginia 20166
M/I Homes Second Indiana LLC
Indiana
8500 Keystone Crossing
Suite 160
Indianapolis, Indiana 46240
M/I Homes First Indiana LLC
Indiana
8500 Keystone Crossing
Suite 160
Indianapolis, Indiana 46240
M/I Homes of Indiana, L.P.
Indiana
8500 Keystone Crossing
Suite 160
Indianapolis, Indiana 46240
M/I Homes of Florida, LLC
Florida
4343 Anchor Plaza Parkway
Suite 200
Tampa, Florida 33634
M/I Homes of Tampa, LLC
Florida
4343 Anchor Plaza Parkway
Suite 200
Tampa, Florida 33634

 

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M/I Homes of Orlando, LLC
Florida
237 South Westmonte Drive
Suite 111
Altamonte Springs, Florida 32714
M/I Homes of West Palm Beach, LLC
Florida
2000 Palm Beach Lakes Blvd.
Suite 602, Tower 1
West Palm Beach, Florida 33409
MHO, LLC
Florida
4343 Anchor Plaza Parkway
Suite 200
Tampa, Florida 33634-6329
MHO Holdings, LLC
Florida
4343 Anchor Plaza Parkway
Suite 200
Tampa, Florida 33634-6329
M/I Homes of Chicago, LLC
Delaware
1751 West Diehl Road
Naperville, Illinois 60563
M/I Homes of Houston, LLC
Delaware
7906 North Sam Houston Parkway West, Suite 101
Houston, Texas 77064
Prince Georges Utilities, LLC
Maryland
21355 Ridgetop Circle
Sterling, Virginia 20166

 

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Schedule 4
PERMITTED INVESTMENTS
 
(1) securities, certificates and notes with maturities of 364 days or less from
the date of acquisition that are within one of the following classifications:
(a) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) mortgage backed securities issued or fully
guaranteed or insured by the Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association, or a similar government sponsored enterprise or
mortgage agency, (c) securities issued by States, territories and possessions of
the United States and their political subdivisions (municipalities), with
ratings of at least "A" or the equivalent thereof by Standard & Poor's
Corporation or Moody's Investors Services, Inc., (d) time deposits, certificates
of deposit, bankers' acceptances, or similar short-term notes issued by a
commercial bank domiciled and registered in the United States with capital and
surplus in excess of $200 million, and which has (or the holding company of
which has) a commercial paper rating of at least A-l or the equivalent thereof
by Standard & Poor's Corporation or P-l or the equivalent thereof by Moody's
Investors Services, Inc., or (e) commercial paper of a domestic issuer rated at
least A-l or the equivalent thereof by Standard & Poor's Corporation or P-l or
the equivalent thereof by Moody's Investors Services, Inc.; and (2) money market
mutual funds which invest in securities listed in (a) through (e) above with a
weighted average maturity of less than one year.
 
 
 

 

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Schedule 5
 
CASH ACCOUNT
 
PNC Bank, National Association Account Number xxxxxx8878