Exhibit 10.4

CREDIT AGREEMENT

dated as of July 27, 2009

BETWEEN
 
                            M/I HOMES, INC.
 
Borrower

and

THE HUNTINGTON NATIONAL BANK
Lender

Porter, Wright, Morris & Arthur LLP
41 South High Street
Columbus, Ohio 43215

 
 

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TABLE OF CONTENTS
SECTION                                           HEADING PAGE #

 
1.               DEFINITIONS.
 
1.1.        Certain Defined Terms.
1.2.        Other Definitional Provisions and Construction.
 
2.               THE CREDIT EXTENSIONS AND TERMS OF REPAYMENT.
 
2.1.        The Letters of Credit.
2.2.        Provisions Applicable to the Credit Extensions and the Letters of
Credit.
2.3.        Pending Defaults.
2.4.        Increased Costs and Capital Requirements.
2.5.        Illegality and Impossibility.
2.6.        Survival of Obligations.
 
3.               FEES.
 
3.1.        Fees.
3.2.        Method of Payment.
 
4.               COLLATERAL.
 
4.1.        Collateral Deposit Account.  All Obligations under this Agreement
shall be secured by the Collateral.
 
5.               CONDITIONS PRECEDENT.
 
5.1.        Conditions Precedent to Initial Credit Extensions.
5.2.        Conditions Precedent to Subsequent Letter of Credit Issuances.
 
6.               WARRANTIES AND REPRESENTATIONS.
 
6.1.        Organization and Authority.
6.2.        Borrowing is Legal and Authorized.
6.3.        Margin Loans and Purchase of Ineligible Securities.
6.4.        Taxes.
6.5.        Compliance with Law.
6.6.        Financial Statements; Full Disclosure.
6.7.        Litigation; Adverse Effects.
6.8.        Solvency.
6.9.        Government Consent.
6.10.            No Liens on Collateral.
6.11.            No Defaults.
 
7.               BORROWER AFFIRMATIVE AND NEGATIVE COVENANTS.
 
7.1.        Payment of Taxes and Claims.
7.2.        Place of Business; Books and Records.
7.3.        Proper Books; Collateral.
7.4.        Restriction on Fundamental Changes; Conduct of Business.
7.5.        Negative Pledge.
 
8.               FINANCIAL INFORMATION AND REPORTING.
 
 
9.               DEFAULT.
 
9.1.        Events of Default.
9.2.        Default Remedies.
 
10.               GENERAL PROVISIONS.
 
10.1.            Notices.
10.2.            Costs and Expenses.
10.3.            Survival, Successors and Assigns.
10.4.            Amendment and Waiver.
10.5.            Enforceability and Governing Law.
10.6.            Confidentiality.
10.7.            Section Headings.
10.8.            Interpretation.
10.9.            Severability of Provisions.
10.10.            Counterparts; Facsimile Execution.
10.11.            Revival and Reinstatement of Obligations.
10.12.            Integration.
10.13.            Waiver of Right to Trial by Jury.
10.14.            No Consequential Damages.
10.15.            Indemnity.
10.16.            Patriot Act Notice.

 

 
 

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EXHIBITS AND SCHEDULES
 

Exhibit A                                - Application and Agreement for Letter
of Credit
Exhibit B                                - Form of Compliance Certificate
Schedule 5.1                                - Conditions Precedent to Initial
Letter of Credit Issuance

 
 

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CREDIT AGREEMENT

This Credit Agreement (this “Agreement”) is entered into at Columbus, Ohio,
between THE HUNTINGTON NATIONAL BANK, a national banking association with a
place of business in Columbus, Ohio (“Lender”), and M/I Homes, Inc., an Ohio
corporation with its principal place of business in Columbus, Ohio (“Borrower”),
as of July 27, 2009.

1.  
Definitions.

1.1. Certain Defined Terms.

The following terms used in this Agreement or in the other Loan Documents
executed in connection herewith shall have the following meanings, applicable
both to the singular and the plural forms of the terms defined.  As used in this
Agreement:

“Affiliate” means, as applied to any Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person, or is a family member related by birth or marriage.  For purposes of
this definition only, “control” means the possession, directly or indirectly, of
the power to direct the management and policies of a Person, whether through the
ownership of equity interests, by contract, or otherwise; provided, however,
that, in any event: (i) any Person which owns directly or indirectly ten percent
(10%) or more of the securities having ordinary voting power for the election of
directors or other members of the governing body of a Person or ten percent
(10%) or more of the partnership, member or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person; (ii) each director (or manager) of a Person shall be deemed
to be an Affiliate of such Person; and (iii) each partnership or joint venture
in which a Person is a partner or joint venturer shall be deemed to be an
Affiliate of such Person.

“Agreement” means this Credit Agreement.

“Application and Agreement for Letter of Credit” shall mean an application and
agreement for standby letter of credit by, between, and among Borrower and
Lender, in a form provided by Lender substantially in the form attached hereto
as Exhibit A, either as originally executed or as it may from time to time be
supplemented, modified, amended, renewed, or extended.

“Bankruptcy Code” means Title 11 of the United States Code (11 USC, § 101 et
seq), as amended from time to time, and any successor statute thereto, including
(unless the context requires otherwise) any rules or regulations promulgated
thereunder.
 
“Base Rate” means the rate established by The Huntington National Bank from time
to time designated as its prime rate based on its consideration of economic,
money market, business and competitive factors, and such rate is not necessarily
the most favored rate of such Person.  Each change in the Base Rate shall
automatically and immediately change the interest rate on all applicable
advances bearing the Base Rate without notice to Borrower, subject to any
maximum or minimum interest rate limitation specified by applicable law.
 
“Borrower” is defined in the preamble.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which national banks are authorized or required to close.
 
“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
 
“Change of Control” means 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 of any date a majority of the board of Directors of Borrower Parent
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.

“Closing Date” means the date of the making of the initial Credit Extension
hereunder.
 
“Collateral” means all now owned or hereafter acquired right, title and interest
in property of Borrower in or upon which a first and exclusive security interest
or Lien is granted to Lender, under this Agreement, any security agreement or
under any of the other Loan Documents and shall include without limitation all
right, title and interest in any Deposit Account, monies, funds or other
property in the Deposit Collateral Account and all Proceeds thereof.

“Commitment Fee” means a commitment fee equal to 15 basis points (0.15%) of the
Letter of Credit Commitment, payable on the date hereof.

“Contingent Obligations” means any agreement, undertaking or arrangement by
which any Person assumes, guaranties, endorses, agrees to provide funding, or
otherwise becomes or is contingently liable upon the obligation or liability of
any other Person.

“Credit Extension” is defined in Section 2.1.

“Customs” is defined in Section 2.1(h)(iv).

“Default Rate” means, at any time, in respect of any Credit Extension, advance,
fee or any other amount under this Agreement or any other Loan Document that is
not paid when due to Lender (whether at stated maturity, by acceleration or
mandatory prepayment or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid in
full equal to the sum of (x) four percent (4%) per annum plus (y) the related
fixed or variable interest rate or fee otherwise applicable to such Credit
Extension, advance, fee or other amount.  In respect of failure to pay any
Reimbursement Obligation, the Default Rate shall be five percent (5.00%) per
annum in excess of the Base Rate.

“Deposit Accounts” means “deposit accounts” (as defined in the UCC), all deposit
accounts, whether general, special, time, demand, provisional, or final, all
cash or monies wherever located, any and all deposits or other sums at any time
due to such Person, which now or hereafter are at any time in the possession or
control of Lender or in the possession of any third party acting in Lender’s
behalf, without regard to whether Lender received the same in pledge for
safekeeping, as agent for collection or transmission or otherwise, or whether
Lender has conditionally released the same.

“Deposit Collateral Account” is defined in Section 2.1(g).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute thereto, including without
limitation (unless the context otherwise requires), any rules or regulations
promulgated thereunder.

“Event of Default” means an event described in Section 9.1.

“Financial Officer” means the chief executive officer, president, chief
financial officer or treasurer of Borrower.

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board, the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board as in
effect from time to time in the United States consistently applied.

“Governmental Acts” is defined in Section 2.1(f).
 
“Governmental Authority” means any nation or government, any federal, state,
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions.
 
“Indebtedness” means, at any time, (i) all indebtedness, obligations or other
liabilities (other than accounts payable arising in the ordinary course of
business payable on terms customary in the trade) which in accordance with GAAP
should be classified as liabilities on the balance sheet of such Person,
including without limitation, (A) for borrowed money or evidenced by debt
securities, debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto, (B) under profit payment
agreements or in respect of obligations to redeem, repurchase or exchange any
securities or to pay dividends in respect of any stock, (C) with respect to
letters of credit, bankers acceptances, interest rate swaps or other contracts,
currency agreement or other financial products, (D) to pay the deferred purchase
price of property or services, or (E) in respect of Capital Leases; (ii) all
indebtedness, obligations or other liabilities secured by a lien on any
property, whether or not such indebtedness, obligations or liabilities are
assumed by the owner of the same; and (iii) all Contingent Obligations.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, receivership, assignment for the benefit of
creditors, formal or informal moratorium, forbearance, composition, extension
generally with creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.

“IRC” means the Internal Revenue Code, as amended from time to time, and any
successor statute thereto, including (unless the context requires otherwise) any
rules or regulations promulgated thereunder.

“Land” means, in respect of any Person, all present and future plots or parcels
of land, whether now owned,  leased or entitled or hereafter acquired
(including, in respect of Borrower, as reflected in the most recent financial
statements) by such Person.

 
“Lender” is defined in the preamble and shall include The Huntington National
Bank or any of its Affiliates in its capacity as an issuer of Letters of Credit
under this Agreement.

“Letter of Credit” and “Letters of Credit” shall mean any letter of credit
issued by Lender as issuing bank for the account of Borrower, either as
originally issued or as the same may, from time to time, be amended or otherwise
modified, extended, or replaced.

“Letter of Credit Commitment” means the commitment of such Lender to provide
Letter of Credit Exposure in an aggregate amount not to exceed $8,750,000.

“Letter of Credit Documents” is defined in Section 2.1(b).

“Letter of Credit Draft” means a draft drawn on Lender pursuant to a Letter of
Credit.

“Letter of Credit Exposure” shall mean, as of any date of determination, the
aggregate undrawn stated amount of all outstanding Letters of Credit plus the
aggregate of all amounts drawn under Letters of Credit for which Lender has not
yet received payment or reimbursement; provided, however, that the Letter of
Credit Exposure shall at no time exceed the aggregate sum of the Letter of
Credit Commitment.

“Letter of Credit Fee” shall mean (i) a fee equal to one and one-half percent
(1.50%) per annum of the stated amount of each Letter of Credit, due and payable
in advance to Lender upon the issuance of each Letter of Credit.

“Letter of Credit Reimbursement Obligation” is defined in Section 2.1(d).

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, whether such interest shall be
based on the common law, statute, or contract, whether such interest shall be
recorded or perfected, and whether such interest shall be contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances, including the lien or security interest arising
from any mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment
(collateral or otherwise), hypothec, deposit arrangement, security agreement,
conditional sale, trust receipt, lease, consignment, or bailment for security
purposes, judgment, claim encumbrance or statutory trust and also including
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting real property.
 
“Loan Documents” means this Agreement, each Application and Agreement for Letter
of Credit, reimbursement agreements, any security agreement, any guaranties of
the Credit Extensions, any cash management agreements, subordination and
intercreditor agreements, deposit account control agreements, collateral
assignments, pledge agreements, security agreements, mortgages, deeds of trusts
and collateral agreements executed in connection with this Agreement, and all
other documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.

“Master Credit Facility” means that certain Second Amended and Restated Credit
Agreement, effective as of October 6, 2006, by and among Borrower, the lenders
party thereto, JPMorgan Chase Bank, N.A., as agent for the lenders party thereto
and the other agents party thereto, as amended, restated, supplemented or
otherwise modified from time to time.

“Master Credit Facility Default” means a default or event of default by Borrower
under the terms of the Master Credit Facility.

“Material Adverse Effect” means, at any time, a material adverse effect in
respect of Borrower upon (i) the business, condition (financial or otherwise),
operations, performance, properties or prospects of any such Person, (ii) the
ability of any such Person to perform its respective obligations under this
Agreement, any Loan Document or any document, agreement, guaranty, or instrument
executed in connection herewith, or (iii) the ability of Lender to enforce the
terms of this Agreement, any other Loan Documents, or any document, agreement,
guaranty, or instrument executed in connection herewith.

“Maturity Date” means August 31, 2011.

“Obligations” means all Credit Extensions, advances, Indebtedness, debts,
principal, interest (including without limitation any interest that but for the
provision of the Bankruptcy Code would have accrued), Contingent Obligations,
obligations, fees, charges, costs, expenses, indemnification obligations, lease
payments, liabilities, owing, or due or payable or to become due and payable by
Borrower to Lender or any affiliate of Lender of any kind or nature, present or
future under this Agreement, whether or not evidenced by any Application and
Agreement for Letter of Credit, note, draft, letter of credit, guaranty,
instrument or other Loan Document, whether direct or indirect, acquired by
assignment or otherwise, absolute or contingent, liquidated or unliquidated, due
or to become due, now existing or arising hereafter and however acquired or
incurred (including principal, interest, late charges, collection costs,
attorneys’ fees and other amounts chargeable under this Agreement or under any
other Loan Document), and any and all amendments, extensions, modifications,
supplements, renewals of or substitutes thereto, thereof and therefor, both
prior to and subsequent to any Insolvency Proceeding.

“Pending Default” is defined in Section 2.3.

“Permitted Contest” means the right of Borrower to contest or protest any Lien
(other than any such Lien that secures the Obligations), taxes (other than
payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (i) a reserve with respect to such
obligation is established on Borrower’s books and records in such amount as is
required under GAAP, (ii) any such protest is instituted promptly and prosecuted
diligently by Borrower in good faith, and (iii) Lender is satisfied in its sole,
good faith discretion, that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of Lender’s
Liens.
 
“Permitted Liens” means any Lien on the Collateral held by Lender or Affiliates
of Lender.
 
“Person” means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or any other entity of any kind or any
government or political subdivision or any agency, department or instrumentality
thereof.

“Proceeds” means, “proceeds” (as defined in the UCC), all cash and non-cash
proceeds, substitutions, replacements, additions and accessions to any
Collateral, all documents, negotiable documents, documents of title, warehouse
receipts, storage receipts, dock receipts, dock warrants, express bills, freight
bills, airbills, bills of lading, and other documents relating thereto, all
products thereof, including but not limited to, notes, drafts, checks,
instruments, insurance proceeds, indemnity proceeds, warranty and guaranty
proceeds.

“Real Property” means, in respect of any Person, the Land of such Person,
together with the right, title and interest of such Person, if any, in and to
the streets, the Land lying in the bed of any streets, roads or avenues, opened
or proposed, in front 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, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.
 
“Requirements of Law” means, as to any Person, the charter and by-laws or other
organization or governing documents of such Person, and any law, rule or
regulation, or determination 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, including
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans With Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation.

“Solvent” means, with respect to any Person, that at the time of determination:
(i) the fair market value of its assets is in excess of the total amount of its
liabilities (including, without limitation, Contingent Obligations);  (ii) the
present fair saleable value of its assets is greater than its probable liability
on its existing debts as such debts become absolute and matured; (iii) it is
then able and expects to be able to pay its debts (including, without
limitation, contingent debts and other commitments) as they mature; and (iv) it
has capital sufficient to carry on its business as conducted and as proposed to
be conducted,

“Subsidiary” of a Person means any corporation, partnership, limited liability
company or other entity in which such Person directly or indirectly owns or
controls the securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors, or appoint managers or
other persons performing similar functions.
 
“UCC” means the Ohio Uniform Commercial Code, as in effect from time to time;
provided, however, that, in the event that, by reason of mandatory provisions of
law, any of the attachment, perfection or priority of Lender’s security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Ohio, the term “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.
 
“Unused Commitment Fee” means a commitment fee accruing at a rate equal to 15
basis points (0.15%) per annum on the amount by which the Letter of Credit
Commitment exceeds the average daily Letter of Credit Exposure in effect from
time to time.
 
“Voidable Transfer” is defined in Section 10.12.
 
1.2. Other Definitional Provisions and Construction.

(a)           Any terms used in this Agreement or in any Loan Document that are
defined in the UCC shall have the meanings given such terms therein, unless
otherwise defined herein.

(b)           Any accounting terms used in this Agreement or in any Loan
Document and not specifically defined herein shall be construed in accordance
with the respective meanings given to such terms under GAAP. When used herein,
the term “financial statements” shall include the notes and schedules thereto.

(c)           Unless the context of this Agreement or any other Loan Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, and the term “including” is not
limiting, the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Loan Document, as the case may
be.  Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable.  Any reference
herein to any Person shall be construed to include such Person’s successors and
assigns.

(d)           All of the schedules and exhibits attached to this Agreement shall
be deemed incorporated herein by reference.

2.  
The Credit Extensions and Terms of Repayment.

2.1. The Letters of Credit.

Lender, as issuing bank, subject to the terms and conditions hereof, will issue
Letters of Credit and permit Letter of Credit Exposure for the account of
Borrower in the aggregate up to the amount of the Letter of Credit Commitment
(the “Credit Extensions”).  At no time shall the aggregate Letter of Credit
Exposure exceed the Letter of Credit Commitment.  Borrower unconditionally
promises to pay when due the amount of each Letter of Credit Reimbursement
Obligation, all unpaid interest and fees accrued thereon and all other
Obligations incurred by it, in accordance with the terms of this Agreement and
the other Loan Documents.  Each Letter of Credit shall be issued for the account
of Borrower through one of Lender’s branches, denominated in U.S. dollars, from
time to time during the period commencing on the date hereof and ending on the
date ninety-one (91) days prior to the Maturity Date.

(a)           Types and Amounts.  Lender shall not have any obligation to and
shall not (i) issue (or amend) any Letter of Credit if on the date of issuance
(or amendment), before or after giving effect to the Letter of Credit requested
hereunder, the aggregate outstanding dollar amount of Letters of Credit Exposure
would exceed the Letter of Credit Commitment, calculated as of the date of
issuance of any Letter of Credit; or (ii) issue any Letter of Credit which has
an expiration date, or amend any Letter of Credit such that it has an expiration
date, later than the date that is the earlier of twelve (12) months after the
date of issuance thereof or the Maturity Date.  No Letters of Credit with expiry
dates of one year or longer shall be issued after August 30, 2010.

(b)           Conditions.  In addition to the satisfaction of the conditions
contained in Sections 5.1 and 5.2, the obligation of Lender to issue any Letter
of Credit is subject to the satisfaction in full of the following conditions:
(i) Borrower shall have delivered to the Lender at such times and in such manner
as Lender may prescribe, a request for issuance of such Letter of Credit in form
acceptable to Lender, a duly executed Application and Agreement for such Letter
of Credit, and such other documents, instructions and agreements as may be
required pursuant to the terms thereof (all such applications, documents,
instructions, and agreements being referred to herein as the “Letter of Credit
Documents”), (ii) the proposed Letter of Credit shall be satisfactory to Lender
as to form and content; and (iii) as of the date of issuance no order, judgment
or decree of any court, arbitrator or Governmental Authority shall purport by
its terms to enjoin or restrain Lender from issuing such Letter of Credit and no
law, rule or regulation applicable to Lender and no request or directive
(whether or not having the force of law) from a Governmental Authority with
jurisdiction over Lender shall prohibit or request that Lender refrain from the
issuance of Letters of Credit generally or the issuance of that Letter of
Credit.

(c)           Procedure for Issuance of Letters of Credit.  (i) Subject to the
terms and conditions hereof and provided that the applicable conditions set
forth in Sections 5.1 and 5.2 hereof have been satisfied, Lender, on the
requested date, but no earlier than twenty-four (24) hours after receiving the
application for issuance, shall issue a Letter of Credit on behalf of Borrower
in accordance with Lender’s usual and customary business practices, and (ii)
Lender shall not extend or amend any Letter of Credit unless the requirements of
this Section 2.1(c) are met as though a new Letter of Credit was being requested
and issued.

(d)           Reimbursement Obligation.  Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to Lender the amount of each
advance drawn under or pursuant to a Letter of Credit or an Letter of Credit
Draft related thereto (such obligation of Borrower to reimburse Lender for an
advance made under a Letter of Credit or Letter of Credit Draft being
hereinafter referred to as a “Letter of Credit Reimbursement Obligation”), each
such reimbursement to be made by Borrower no later than the Business Day on
which Lender makes payment of each such Letter of Credit Draft. If, for any
reason, Borrower fails to repay an Letter of Credit Reimbursement Obligation on
the day such Letter of Credit Reimbursement Obligation arises, then such Letter
of Credit Reimbursement Obligation shall bear interest from and after such day,
until paid in full, at the Default Rate.

(e)           Letter of Credit Fees Upon Issuance.  Borrower agrees to pay to
Lender: (i) in advance, upon the first day of issuance of each Letter of Credit,
a Letter of Credit Fee and (ii) all customary fees and other issuance,
amendment, document examination, negotiation and presentment expenses and
related charges in connection with the issuance, amendment, presentation of
Letter of Credit Drafts, and the like customarily charged by Lender with respect
to Letters of Credit, including without limitation, standard commissions with
respect to commercial Letters of Credit payable at the time of invoice of such
amounts.

(f)           Indemnification; Exoneration.  (i) In addition to amounts payable
as elsewhere provided in this Section 2.1, Borrower hereby agrees to protect,
indemnify, pay and save harmless Lender from and against any and all liabilities
and costs which Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit other than as a result of
Lender’s gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, or (B) the failure of Lender to
honor a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority (all such acts or omissions herein called “Governmental
Acts”).

(ii)           As among Borrower and Lender, Borrower assumes all risks of the
acts and omissions of, or misuse of such Letter of Credit by, the beneficiary of
any Letters of Credit.  In furtherance and not in limitation of the foregoing,
Lender shall not be responsible, in the absence of gross negligence or willful
misconduct in connection therewith, as determined by the final judgment of a
court of competent jurisdiction, (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 Letters of Credit, 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
Letter of Credit 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 Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
transmission or otherwise; (v) for errors in interpretation of technical trade
terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of Lender,
including without limitation, any Governmental Acts.  None of the above shall
affect, impair or prevent the vesting of Lender’s rights or powers under this
Section 2.1.

(iii)           In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by Lender under
or in connection with the Letters of Credit or any related certificates shall
not, in the absence of gross negligence or willful misconduct, as determined by
the final judgment of a court of competent jurisdiction, put Lender under any
resulting liability to Borrower or relieve Borrower of any of its obligations
hereunder to Lender or to any other Person.

(iv)           Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained this
Section 2.1 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.

(g)           Cash Collateral.  Notwithstanding anything to the contrary herein,
in any Application and Agreement for Letter of Credit or other Loan Document,
prior to (i) the occurrence of a Master Credit Facility Default or Event of
Default hereunder, or (ii) the termination, cancellation, payment in full on or
other cessation of the Master Credit Facility, Borrower, not fewer than
forty-eight (48) hours prior to any issuance of any Letter of Credit, shall
deliver to Lender Collateral having a value, as determined by Lender, such that,
when added to the aggregate cash or cash equivalents in the Deposit Collateral
Account, such aggregate amount equals not less than one hundred and two percent
(102%) of the aggregate Letter of Credit Exposure.  Further, notwithstanding
anything to the contrary herein, in any Application and Agreement for Letter of
Credit or other Loan Document, after (i) the occurrence of a Master Credit
Facility Default or an Event of Default hereunder, or (ii) the termination,
cancellation, payment in full on or other cessation of the Master Credit
Facility, Borrower, not fewer than forty-eight (48) hours prior to any issuance
of any Letter of Credit, shall deliver to Lender Collateral having a value, as
determined by Lender, such that, when added to the aggregate cash or cash
equivalents in the Deposit Collateral Account, such aggregate amount equals not
less than one hundred and five percent (105%) of the aggregate Letter of Credit
Exposure.  All such Collateral shall be subject to the first and exclusive Lien
of Lender pursuant to an applicable Loan Document and shall be held by Lender in
a separate Deposit Account maintained at Lender designated as a cash collateral
account pursuant to this Agreement to secure for Borrower’s Obligations in
respect of this Agreement (such account herein called “Deposit Collateral
Account”).  All increases and interest applicable to the Deposit Collateral
Account shall be deposited in the Deposit Collateral Account and shall be
applied to reimburse Lender for drawings or payments under or pursuant to
Letters of Credit, or if no such reimbursement is required, to payment of such
of the other Obligations under this Agreement as Lender shall determine.  Any
deposit held by Lender as collateral for the payment and performance of the
obligations of Borrower under any outstanding Letter of Credit shall be under
Lender’s exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  Moneys in such account shall be applied by
Lender to reimburse Lender for Letter of Credit Reimbursement Obligations or
other disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the Letter of Credit Exposure
or any other Obligations of Borrower under this Agreement.

(h)           Evidence of Letters of Credit.

(i)           The Letter of Credit Reimbursement Obligations shall also be
evidenced by a an Application and Agreement for Letter of Credit or other
reimbursement agreement substantially in the form of Exhibit A attached hereto,
completed to the satisfaction of Lender, and, such other certificates, documents
and other papers and information as Lender may request.

(ii)           Each Letter of Credit shall, among other things, provide for the
payment of sight drafts when presented for honor thereunder in accordance with
the terms thereof and when accompanied by the documents described therein and
each Letter of Credit request and each Letter of Credit shall be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 and any amendments or
revisions thereof or International Standby Practices (promulgated by the
International Chamber of Commerce) in effect as of the time of issuance of such
Letter of Credit, and, to the extent not inconsistent therewith, the laws of the
State of Ohio.

(iii)           Borrower shall authorize and direct Lender with respect to each
Letter of Credit to name Borrower as the “Account Party” therein, shall deliver
to Lender all instruments, documents and other writings and property pursuant to
the Letter of Credit and shall accept and rely upon Lender’s good faith
instructions and agreements with respect to all matters arising in connection
with the Letter of Credit or the application therefor.

(iv)           In connection with all Letters of Credit issued or caused to be
issued by Lender under this Agreement, Borrower hereby appoints Lender, or its
designee, as its attorney, with full power and authority: (i) to sign or endorse
Borrower’s name upon any warehouse or other receipts, letter of credit
applications and acceptances; (ii) to sign Borrower’s name on bills of lading;
(iii) to clear inventory through the United States of America Customs Department
(“Customs”) in the name of Borrower or Lender or Lender’s designee, and to sign
and deliver to Customs officials powers of attorney in the name of Borrower for
such purpose; and (iv) to complete in Borrower’s name, in Lender’s name or in
the name of Lender’s designee, any order, sale or transaction, obtain the
necessary documents in connection therewith, and collect the proceeds
thereof.  Neither Lender nor its attorneys will be liable for any acts or
omissions nor for any error of judgment or mistakes of fact or law, except for
Lender’s gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction.  This power, being coupled with
an interest, is irrevocable so long as any Letters of Credit remain outstanding.

(i)           Purpose of Letters of Credit.  Letters of Credit shall be solely
for the account of Borrower and shall be used solely for lawful corporate
purposes.

2.2. Provisions Applicable to the Credit Extensions and the Letters of Credit.

(a)           Upon the occurrence of any Event of Default, Lender, at its
option, to the extent not prohibited under applicable law, may impose the
Default Rate as the applicable rate on all or any portion of the Letter of
Credit Exposure, the Letter of Credit Fee and the Unused Commitment Fee.

(b)           Interest, fees, other charges and all Obligations hereunder each
shall be calculated on a 360-day year basis and shall be based on the actual
number of days that elapse during the interest calculation period.

(c)           In no event whatsoever shall the interest rate and other charges
hereunder exceed the highest rate permissible under law that a court of
competent jurisdiction, in a final determination, shall deem applicable
hereto.  In the event such a court determines that Lender has received interest
or other charges hereunder in excess of the highest rate applicable thereto,
Lender shall promptly refund such excess amount to Borrower, and the provisions
hereof shall be deemed amended to provide for such permissible rate.

2.3. Pending Defaults.

Lender shall have no obligation to issue or renew any Letters of Credit at any
time when a set of facts or circumstances exists, which, upon the giving of
notice, the lapse of time, or both, would constitute an Event of Default under
this Agreement (a “Pending Default”).

2.4. Increased Costs and Capital Requirements.

In the event that any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect, or any interpretation or
administration thereof by any Governmental Authority, or compliance by Lender or
any Affiliate thereof with any request or directive of any Governmental
Authority, shall (a) affect the basis of taxation of payments to Lender of any
amounts payable by Borrower for Credit Extensions under the Letters of Credit
(other than taxes imposed on or measured by the overall net income of Lender by
the Governmental Authority, in which Lender has its principal office), or (b)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by Lender, or (c) impose any other condition, requirement or charge
with respect to this Agreement or the Credit Extensions (including without
limitation any capital adequacy requirement, any requirement that affects the
manner in which Lender allocates capital resources to its commitments or any
similar requirement), and the result of any of the foregoing is to increase the
cost to Lender or any Affiliate thereof of making or maintaining the Credit
Extensions or Letters of Credit, to reduce the amount of any sum receivable by
Lender thereon, or to reduce the rate of return on Lender’s capital, then
Borrower shall pay to Lender, from time to time, upon request of Lender,
additional amounts sufficient to compensate Lender for such increased cost,
reduced sum receivable or reduced rate of return to the extent Lender is not
compensated therefor in the computation of the interest rates applicable to the
Letters of Credit.  A detailed statement as to the amount of such increased
cost, reduced sum receivable or reduced rate of return, prepared in good faith
and submitted by Lender to Borrower, shall be final and conclusive, absent
manifest error in computation.

2.5. Illegality and Impossibility.

In the event that any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect, or any interpretation or
administration thereof by any Governmental Authority, or compliance by Lender
with any request or directive of a Governmental Authority, including without
limitation, exchange controls, shall make it unlawful or impossible for Lender
to maintain any advance under this Agreement, Borrower shall upon receipt of
notice thereof from Lender, immediately repay in full any Obligations owing by
Borrower to Lender under this Agreement, together with all accrued interest
thereon to the date of payment, as applicable.  This Section 2.5 shall apply
only as long as such illegality exists.

2.6. Survival of Obligations.

The provisions of Section 2.4 shall survive the termination of this Agreement
and the payment in full of all promissory notes outstanding pursuant hereto.

3.  
Fees.

3.1. Fees.

Borrower shall pay to Lender: (a) on the effective date of this Agreement, the
Commitment Fee; and

(b) in arrears, beginning on the first day of October, 2009, and continuing on
the first day of each calendar quarter thereafter, an Unused Commitment Fee.

3.2. Method of Payment.

All payments of principal, interest, fees and commissions hereunder shall be
made, without setoff, deduction or counterclaim, in immediately available funds
to Lender at Lender’s address specified in writing by Lender to Borrower, by
2:00 p.m. (Columbus, Ohio time) on the date when due.  Borrower hereby
irrevocably authorizes Lender to charge the Deposit Collateral Account and any
other account of Borrower maintained with Lender or Affiliate thereof, for any
payment of any Letter of Credit Reimbursement Obligation or Letter of Credit
Exposure, interest, fees and commissions as it becomes due hereunder.

4.  
Collateral.

4.1. Collateral Deposit Account.  All Obligations under this Agreement shall be
secured by the Collateral.

5.  
Conditions Precedent.

5.1. Conditions Precedent to Initial Credit Extensions.

This Agreement shall become effective, and Lender shall be obligated to make the
initial advance hereunder only after Lender shall have received from Borrower
each of following items in form and substance satisfactory to Lender: This
Agreement, the Application and Agreement for Letter of Credit, and the other
Loan Documents, conditions and deliveries described in Schedule 5.1 attached
hereto, each duly executed where appropriate and in form and substance
satisfactory to Lender; and the fulfillment of all the conditions described
thereon and the delivery of such additional documentation as Lender may
reasonably request.

5.2. Conditions Precedent to Subsequent Letter of Credit Issuances.

Lender shall not be required to issue any Letters of Credit subsequent to the
initial disbursement or initial issuance of a Letter of Credit, unless on the
applicable date that each such issuance is to be made:

(a)           The warranties and representations set forth in Article 6 hereof
and each of the representations and warranties contained in any Loan Document at
any time pursuant to this Agreement shall be true and correct on and as of such
date with the same effect as though such warranty or representation had been
made on and as of such date, except to the extent that such warranty or
representation is stated to expressly relate solely to an earlier date;

(b)           Borrower shall have complied and shall then be in compliance with
all the terms, covenants and conditions of this Agreement which are binding upon
it, and no Event of Default or Pending Default shall have occurred and be
continuing on such date or after giving effect to the advances requested to be
made; and

(c)           No Material Adverse Effect shall have occurred.

Each request for Credit Extension hereunder shall constitute a warranty and
representation by Borrower making such request that each of the conditions
contained in Sections 5.2(a), (b), and (c) have been satisfied.

6.  
Warranties and Representations.

In order to induce Lender to enter into this Agreement and to issue Letters of
Credit and make the other financial accommodations to Borrower under this
Agreement and the other Loan Documents, Borrower represents and warrants to
Lender that each of the following statements is true and correct:

6.1. Organization and Authority.

Borrower (a) is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority and all necessary licenses and permits to own and
operate its properties and to carry on its business as now conducted and as
presently proposed to be conducted and (c) is not doing business or conducting
any activity in any jurisdiction in which it is not duly qualified and
authorized to do business, except where the failure to do so will not have a
Material Adverse Effect.

6.2. Borrowing is Legal and Authorized.

(a) All necessary corporate action has been taken in order to duly authorize
Borrower’s execution and delivery of this Agreement and the other Loan
Documents; (b) this Agreement and the other Loan Documents constitute valid and
binding obligations enforceable in accordance with their respective terms; (c)
the execution of this Agreement and the other Loan Documents and the compliance
with all the provisions of the Loan Documents (i) are within the organizational
powers of Borrower, and (ii) will not conflict with, result in any breach in any
of the provisions of, constitute a default under, or result in the creation of
any Lien (other than a Permitted Lien) upon any property of Borrower under the
provisions of the Master Credit Facility or any other agreement, charter
instrument, bylaw, or other instrument to which Borrower is a party or by which
it may be bound; and (d) there are no limitations in any indenture, contract,
agreement, mortgage, deed of trust or other agreement or instrument to which
Borrower is now a party or by which Borrower may be bound with respect to the
payment of any Obligations under this Agreement, or, to the extent applicable,
the ability of Borrower to incur the Indebtedness pursuant to this Agreement.

6.3. Margin Loans and Purchase of Ineligible Securities.

None of the transactions contemplated in this Agreement will violate or result
in a violation of Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulation issued pursuant thereto, including without limitation,
Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II.

6.4. Taxes.

All tax returns and reports required to be filed by Borrower in any jurisdiction
have been filed, and all taxes, assessments, fees and other governmental charges
upon Borrower and upon any property, assets, income and franchises thereof,
which are shown in such returns or reports to be due and payable have been paid,
except for Permitted Contests.  Borrower knows of no proposed additional tax
assessment against it.  The accruals for taxes on the books of Borrower for the
current fiscal period have been determined in accordance with GAAP, consistently
applied, subject to year-end and audit adjustments.

6.5. Compliance with Law.

Borrower (a) is not in violation of any Requirements of Law, and (b) has not
failed to obtain any licenses, permits, franchises or other governmental or
environmental authorizations necessary to the ownership of Borrower’s properties
or to the conduct of its business, which violation or failure is reasonably
likely to have a Material Adverse Effect.

6.6. Financial Statements; Full Disclosure.

The financial statements of Borrower for the fiscal year ending December 31,
2008, which have been supplied to Lender, have been prepared in accordance with
GAAP and fairly represent Borrower’s financial condition as of such date.  The
interim financial statements of Borrower for the period ending March 31, 2009,
respectively which have been supplied to Lender have been prepared in good faith
and accurately represent Borrower’s financial condition as of the dates of such
financial information, subject to year-end and audit adjustments.

6.7. Litigation; Adverse Effects.

There is no action, suit, audit, proceeding, investigation or arbitration (or
series of related actions, suits, proceedings, investigations or arbitrations)
pending before or by any Governmental Authority or private arbitrator or, to the
knowledge of Borrower, threatened against Borrower or any property thereof (i)
challenging the validity or the enforceability of any provision of this
Agreement, or any other Loan Document or (ii) which has had, shall have or is
reasonably likely to have a Material Adverse Effect.  Borrower is not subject to
or in default with respect to any final judgment, writ, injunction, restraining
order or order of any nature, decree, rule or regulation of any court or
Governmental Authority, which individually or in the aggregate shall have or is
likely to have a Material Adverse Effect.

6.8. Solvency.

After giving effect to all Indebtedness of Borrower on the Closing Date
(including without limitation the Credit Extensions and all Contingent
Obligations) and such other dates as Letter of Credit issuances are requested,
Borrower is Solvent.

6.9. Government Consent.

Neither the nature of Borrower or its business or properties, nor any
relationship between Borrower and any other entity or person, nor any
circumstance in connection with the execution of this Agreement, is such as to
require a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority on the part of Borrower as a
condition to the execution and delivery of this Agreement and the other Loan
Documents.

6.10. No Liens on Collateral.

Borrower (a) has an indefeasible interest in all Collateral free and clear of
any Liens, and (b) has not agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of the Collateral whether
now owned or hereafter acquired to be subject to a Lien.

6.11. No Defaults.

No event has occurred and no condition exists which constitutes a Pending
Default or an Event of Default pursuant to this Agreement.  Borrower is not in
violation in any material respect of any term of any agreement, charter
instrument, bylaw or other instrument to which it is a party or by which it is
bound.

7.  
Borrower Affirmative and Negative Covenants.

Borrower covenants that on and after the date of this Agreement until terminated
pursuant to the terms of this Agreement, or so long as any Indebtedness provided
for herein remains unpaid:

7.1. Payment of Taxes and Claims.

Borrower will pay all taxes, estimated payments, assessments and governmental
charges or levies imposed upon it or its property or assets or in respect of any
of its franchises, businesses, income or property when due; other than for
Permitted Contests.

7.2. Place of Business; Books and Records.

Borrower shall (i) maintain the same principal place of business and chief
executive office in existence as of the effective date of this Agreement; (ii)
deliver to Lender at least thirty (30) days prior to the occurrence of any of
the following events, written notice of such impending events: (A) a change in
the principal place of business or chief executive office, (B) the opening or
closing of any place of business, or (C) a change in name, identity or
structure; and (iii) remain organized in the state of its organization as of the
effective date of this Agreement.

7.3. Proper Books; Collateral.

(a)           Borrower shall (i) reflect in its financial statements adequate
accruals and appropriations to reserves and keep and maintain proper books of
record and account in which entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its businesses and activities; (ii) do
or cause to be done all things reasonably necessary (A) to preserve and keep in
full force and effect its existence, rights and franchises, and (B) to maintain
its status as duly organized and existing, and in good standing, under the laws
of the state of its organization; and (iii) not be in violation of any
Requirements of Law, which violation is reasonably likely to have a Material
Adverse Effect.

(b)           Borrower shall (i) defend the right, title and interest of Lender
in and to the Collateral against all claims and demands of all persons and
entities at any time claiming the same or any interest therein; (ii) promptly
perform, on request of Lender, such acts as Lender may determine to be
reasonably necessary or advisable to create, perfect, maintain, preserve,
protect and continue the perfection of any Lien provided for in this Agreement
or the Loan Documents or otherwise to carry out the intent of this Agreement;
and (iii) advise Lender promptly, in writing and in reasonable detail of any
material encumbrance or claim asserted against any of the Collateral, of any
material change in the composition of the Collateral, and of the occurrence of
any other event that would have a material adverse effect upon the aggregate
value of the Collateral or upon the security interest of Lender.

7.4. Restriction on Fundamental Changes; Conduct of Business.

Borrower shall not (a) enter into any merger or consolidation, or liquidate,
wind up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or a series of
transactions, any substantial portion of Borrower’s business or property,
whether now or hereafter acquired.

7.5. Negative Pledge.

Borrower will not cause or permit or permit to exist or agree or consent to
cause or permit in the future (upon the happening of a contingency or
otherwise), any of the Collateral, whether now owned or hereafter acquired, to
become subject to a Lien.

8.  
Financial Information and Reporting.

Borrower shall deliver the following to Lender:

(a)           as soon as available, but in any event within one hundred twenty
(120) days after the end of each fiscal year, 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, other than a
qualification for consistency due to a change in the application of GAAP with
which Borrower’s independent certified public accountants concur;

(b)           as soon as available, but in any event within sixty (60) days
after the end of each quarterly accounting period (excluding the quarterly
accounting period for the last quarter of each fiscal year prior to the Maturity
Date), the unaudited consolidated balance sheet of Borrower and its consolidated
Subsidiaries 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 as defined in the credit agreement for the Master Credit Facility);

(c)           within sixty (60) days after the end of each fiscal quarter, a
compliance certificate, in form acceptable to Lender as attached hereto as
Exhibit B, wherein a Financial Officer of Borrower certifies that Borrower is in
compliance with all covenants, terms and conditions of the Master Credit
Facility; and

(d)           at the request of Lender, such other information as Lender may
from time to time reasonably require;

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 financial statements referred to in subparagraph (b) of this
Section 8, that such financial statements need not contain footnotes and may be
subject to year-end audit adjustments).

9.  
Default.

9.1. Events of Default.

Each of the following shall constitute an “Event of Default” hereunder:

(a)           Borrower fails to make payment on (i) any Letter of Credit
Reimbursement Obligation on or before the date such payment is due or (ii) or
any other Obligation under this Agreement on or before five (5) days after the
date such payment is due;

(b)           Borrower fails to perform or observe any covenant, agreement or
duty contained in Articles 2, 7 or 8 of this Agreement;

           (c)           Borrower fails to comply with any other provision of
this Agreement (other than as set forth in this Article 9 of this Agreement) or
fails to perform or observe any covenant, agreement or duty contained in any
Loan Document, and such failure continues for more than thirty (30) days after
the failure described in this Section 9.1(c) shall first become known or
reasonably should have become known to any Financial Officer of Borrower, or ten
(10) days after notice from Lender, if earlier;

(d)           any warranty, representation or other statement made or deemed to
be made in this Agreement or in any Loan Document is false or misleading in any
material respect;

(e)           Borrower becomes insolvent or commences any Insolvency Proceeding;

(f)           any Insolvency Proceeding is instituted against Borrower and
continues for sixty (60) days undismissed or undischarged;

           (g)           one or more final orders, judgments or arbitration
awards for (i) the payment of money aggregating in excess of $5,000,000 is or
are outstanding against Borrower, or (ii) nonmonetary relief or remedy which is
reasonably likely to have a Material Adverse Effect, and any such order,
judgment or award has not been discharged, bonded in full or stayed in all
respects;

(h)           the occurrence of any event which allows the acceleration of the
maturity of any Indebtedness of Borrower or any of its Subsidiaries to Lender or
any of Lender’s affiliates (other than evidenced by this Agreement);

(i)           the occurrence of (A) a Master Credit Facility Default or (B) any
event which allows the acceleration of the maturity of any Indebtedness in
excess of the amount of $5,000,000 of Borrower or constitutes a default or
breach under any material lease or material contract of any such Person, under
any indenture, agreement or undertaking, unless waived, extended or otherwise
consented to by the holder thereof;

(j)           the dissolution of any insurer or the default by any surety for
Borrower with respect to any obligation or liability to Lender or any of
Lender’s affiliates;

(k)           a Change of Control of Borrower shall have occurred; or

(l)           Lender, in its sole good faith discretion, determines that a
Material Adverse Effect has occurred with respect to Borrower or that a material
adverse change has occurred in the financial condition, operations or business
of Borrower, in the value of the Collateral or in Lender’s interest in the
Collateral.

9.2. Default Remedies.

(a)           Acceleration.  Upon the occurrence and during the continuance of
an Event of Default (other than an event described in clause (e) or (f) of
Section 9.1 hereof), Lender may (i) terminate all rights, if any, of Borrower to
obtain issuances of Letters of Credit hereunder, and thereupon, any such right
shall terminate immediately, (ii) declare any or all the Credit Extensions to be
due and payable, and thereupon, the Credit Extensions, together with accrued
interest thereon and all fees and other Obligations shall become due and payable
immediately, (iii) immediately exercise any right, power or remedy permitted to
Lender by law or any provision of this Agreement, and (iv) demand that Borrower
pay to Lender for deposit in a segregated non interest-bearing cash collateral
account, as security for the Obligations, such amount that, when added to the
aggregate cash or cash equivalents in the Deposit Collateral Account, equals not
less than one hundred and five percent of 105% of the Letters of Credit Exposure
then outstanding at the time such notice is given, in each case, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Borrower; provided, however, prior to presentment of
a draft in connection with any irrevocable Letter of Credit or surrender or
cancellation by a beneficiary of such Letter of Credit at any time when the
aggregate cash or cash equivalents in the Deposit Collateral Account equals not
less than one hundred and five percent of 105% of the Letters of Credit Exposure
then outstanding, such Letter of Credit will remain in full force and effect in
accordance with its terms, subject to the terms of the Loan Documents.  Upon the
occurrence of an Event of Default described in clause (e) or (f) of Section 9.1
hereof, all rights, if any, of Borrower to obtain Credit Extensions or advances
hereunder shall automatically terminate and all Credit Extensions, together with
accrued interest thereon and all fees and other Obligations shall automatically
become due and payable without any presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by Borrower.

(b)           Liquidation of Collateral.  Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the rights and remedies of
a secured party under this Agreement and the Loan Documents, under any other
instrument or agreement securing, evidencing or relating to the Obligations and
under the laws of the State in which the Collateral is located or any other
applicable state law.  Lender shall apply the net proceeds of any such
collection, recovery, receipt, appropriation or realization, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any or all of the Collateral or in any
way relating to the rights of Lender hereunder, including reasonable attorneys’
fees and legal expenses, to the payment in whole or in part of the Obligations,
in such order as Lender may elect, and only after so paying over such net
proceeds and after the payment by Lender of any other amount required by any
provision of law, need Lender account for the surplus, if any.  To the extent
permitted by applicable law, Borrower waives all claims, damages and demands
against Lender arising out of the repossession or retention of the Collateral.
Borrower shall remain liable for any deficiency if the proceeds of the
Collateral are insufficient to pay all amounts to which Lender is entitled and
shall also be liable for the costs of collecting any of the Obligations or
otherwise enforcing the terms thereof or of this Agreement, including reasonable
attorneys’ fees.

10.  
General Provisions.

10.1. Notices.

(a)           All communications under this Agreement or under the notes
executed pursuant hereto shall be in writing and shall be sent by facsimile or
by a nationally recognized overnight delivery service (i) if to Lender, at the
address set forth below Lender’s signature to this Agreement, or at such other
address as may have been furnished in writing to Borrower, by Lender; and (ii)
if to Borrower, at the address set forth below Borrower’s signature to this
Agreement, or at such other address as may have been furnished in writing to
Lender by Borrower.

(b)           Any notice so addressed and sent by telecopier shall be deemed to
be given when confirmed, and any notice sent by nationally recognized overnight
delivery service shall be deemed to be given the next day after the same is
delivered to such carrier.

10.2. Costs and Expenses.

Borrower agrees to pay service charges, analysis fees, and all costs and
expenses incidental to or in connection with this Agreement, any Loan Document
or any service provided by Lender, the enforcement of Lender’s rights in
connection with any of the foregoing, any amendment, supplement or modification
of this Agreement or any other Loan Document, any sale or attempted sale of any
interest herein to a participant or co-lender, any litigation, contest, dispute,
proceeding or action in any way relating to the Collateral, to this Agreement or
any Loan Document, whether any of the foregoing are incurred prior to or after
maturity, the occurrence of an Event of Default, or the rendering of a
judgment.  Such costs shall include, but not be limited to, fees and
out-of-pocket expenses of Lender’s counsel, recording fees, inspection fees,
revenue stamps and note and mortgage taxes.  The provisions of this Section 10.2
shall survive the termination of this Agreement and the Loan Documents.

10.3. Survival, Successors and Assigns.

All warranties, representations, and covenants made by Borrower herein or on any
certificate or other instrument delivered by it or on its behalf under this
Agreement shall be considered to have been relied upon by Lender and shall
survive the closing of the Credit Extensions regardless of any investigation
made by Lender on its behalf.  This Agreement shall inure to the benefit of and
be binding upon the heirs, successors and assigns of each of the parties.

10.4. Amendment and Waiver.

All references to this Agreement shall also include all amendments, extensions,
renewals, modifications, and substitutions thereto and thereof made in writing
and executed by both Borrower and Lender.  This Agreement may be amended, and
the observance of any term of this Agreement may be waived, with (and only with)
the written consent of Borrower and Lender; provided however that nothing herein
shall change Lender’s sole discretion or good faith discretion (as set forth
elsewhere in this Agreement) to make advances, determinations, decisions or to
take or refrain from taking other actions.  No delay or failure or other course
of conduct by Lender in the exercise of any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of the same preclude
any other or further exercise thereof, or the exercise of any other power or
right.

10.5. Enforceability and Governing Law.

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction, as to such jurisdiction, shall be inapplicable or 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.  No delay or omission on the part of Lender in exercising
any right shall operate as a waiver of such right or any other right.  All of
Lender’s rights and remedies, whether evidenced hereby or by any other agreement
or instrument, shall be cumulative and may be exercised singularly or
concurrently.  This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio (without giving effect to the conflict of
laws rules thereof). Borrower agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement may be instituted in a state or
federal court of appropriate subject matter jurisdiction in the State of Ohio,
waives any objection which it may have now or hereafter to the venue of any
suit, action or proceeding, and irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding.

10.6. Confidentiality.

Lender shall hold all non-public information obtained pursuant to the
requirements hereof and identified as such by Borrower in accordance with
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 disclosures as required or requested by any governmental authority or
any representative thereof, or pursuant to any legal process, or to its
accountants, lawyers and other advisors.

10.7. Section Headings.

Headings and numbers have been set forth herein for convenience only.  Unless
the contrary is compelled by the context, everything contained in each Section
applies equally to this entire Agreement.

10.8. Interpretation.

Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against Lender or Borrower, whether under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.
 
10.9. Severability of Provisions.

Each provision of this Agreement shall be severable from every other provision
of this Agreement for the purpose of determining the legal enforceability of any
specific provision.
 
10.10. Counterparts; Facsimile Execution.

This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by facsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement.  Any party delivering an
executed counterpart of this Agreement by facsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.

10.11. Revival and Reinstatement of Obligations.

If the incurrence or payment of the Obligations by Borrower or the transfer to
Lender of any property should for any reason subsequently be declared to be void
or voidable under any state or federal law relating to creditors’ rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if Lender is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that Lender is required or elects to repay or
restore, and as to all reasonable costs, expenses, and attorneys’ fees of Lender
related thereto, the liability of Borrower automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.

10.12. Integration.

This Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.

10.13. Waiver of Right to Trial by Jury.

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

10.14. No Consequential Damages.

No claim may be made by Borrower, or any of its officers, directors, or agents
against Lender or its affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, punitive, or consequential damages in respect
of any breach or wrongful conduct (whether the claim therefor is based in
contract, tort or duty imposed by law) in connection with, arising out of or in
any way related to the transactions contemplated and relationship established by
this Agreement, or any act, omission or event occurring in connection therewith,
and Borrower hereby waives, releases and agrees not to sue upon any such claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

10.15. Indemnity.

Borrower agrees to indemnify Lender, its directors, officers, employees, agents,
financial advisors, and consultants from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including without
limitation fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Lender in any litigation, proceeding or investigation
instituted or conducted by any governmental agency or instrumentality or any
other person or entity with respect to any aspect of, or any transaction
contemplated by, or referred to in, or any matter related to, this Agreement or
any Loan Document, whether or not Lender is a party thereto, except to the
extent that any of the foregoing arises out of the gross negligence or willful
misconduct of Lender or such Person, as determined in a final, non-appealable
judgment by a court of competent jurisdiction.  The indemnities provided for in
this Section 10.15 shall survive the termination of this Agreement and the
indefeasible payment of the Credit Extensions in full.

10.16. Patriot Act Notice.

Lender hereby notifies Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub.L.10756 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow Lender to identify Borrower in accordance with the
Act.

[Signature pages follow.]

 
 

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Each of the parties has signed this Agreement as of the date set forth in the
preamble above.

BORROWER:
M/I HOMES, INC.

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

 
Notice Address:
M/I Homes, Inc.
3 Easton Oval
Suite 210
Columbus, Ohio 43219
Fax: (614) 418-8080

with a copy to:

Thomas O. Ruby
Vorys, Sater, Seymour & Pease, LLP
52 East Gay St.
P.O. Box 1008
Columbus, Ohio 43216
Fax: (614) 719-4934

Signature Page to Credit Agreement
 
 

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LENDER:
THE HUNTINGTON NATIONAL BANK

By:                                                                           
Name:  Jeffrey D. Blendick
Title:           Vice President

Notice Address:
The Huntington National Bank
41 South High St.
HC 0735
Columbus, Ohio 43215
Attention:  Jeffrey D. Blendick
Fax:  (877) 274-8593

with a copy to:

Timothy E. Grady, Esq.
Porter, Wright, Morris & Arthur LLP
41 South High Street
Columbus, Ohio 43215
Fax: (614) 227-2100

Signature Page to Credit Agreement
 
 

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EXHIBIT A

APPLICATION AND AGREEMENT FOR LETTER OF CREDIT

 
 

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EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE