Document:

exhibitcoll.htm

    

    Exhibit 10.2

    

    
      

       

      

    

    COLLATERAL
AGREEMENT

     

    made
by

     

    M/I
HOMES, INC.,

     

    and
certain of its Subsidiaries

     

     

    in favor
of

     

    PNC BANK,
NATIONAL ASSOCIATION,

     

    as
Collateral Agent

     

    Dated as
of January 15, 2009

     

    

     

    
      

       

      

    

    

    
      
        
          
            

             

          

           

        

        
           

          
            

          

        

        
          
            TABLE
OF CONTENTS

            Page

          

        

      

    

    

    
      	
              Section 1.

            	
              DEFINED
      TERMS 

            	
              2

            

    

     

    
      	
               
      

            	
              1.1

            	
              Definitions 

            	
              2

            

    

     

    
      	
               
      

            	
              1.2

            	
              Other
      Definitional Provisions 

            	
              4

            

    

     

    
      	
              Section
      2.

            	
              GRANT
      OF SECURITY INTEREST 

            	
              4

            

    

     

    
      	
              Section
      3.

            	
              REPRESENTATIONS
      AND WARRANTIES 

            	
              5

            

    

     

    
      	
               
      

            	
              3.1

            	
              Title;
      No Other Liens 

            	
              5

            

    

     

    
      	
               
      

            	
              3.2

            	
              Perfected
      First Priority Liens 

            	
              6

            

    

     

    
      	
               
      

            	
              3.3

            	
              Jurisdiction
      of Organization:  Chief Executive Office 

            	
              6

            

    

     

    
      	
               
      

            	
              3.4

            	
              Farm
      Products 

            	
              6

            

    

     

    
      	
               
      

            	
              3.5

            	
              Investment
      Property 

            	
              6

            

    

     

    
      	
               
      

            	
              3.6

            	
              Intellectual
      Property 

            	
              6

            

    

     

    
      	
              Section
      4.

            	
              COVENANTS 

            	
              6

            

    

     

    
      	
               
      

            	
              4.1

            	
              Maintenance
      of Insurance 

            	
              7

            

    

     

    
      	
               
      

            	
              4.2

            	
              Payment
      of Obligations 

            	
              7

            

    

     

    
      	
               
      

            	
              4.3

            	
              Maintenance
      of Perfected Security Interest; Further
Documentation 

            	
              7

            

    

     

    
      	
               
      

            	
              4.4

            	
              Changes
      in Name, etc 

            	
              7

            

    

     

    
      	
               
      

            	
              4.5

            	
              Notices 

            	
              7

            

    

     

    
      	
               
      

            	
              4.6

            	
              Receivables 

            	
              8

            

    

     

    
      	
               
      

            	
              4.7

            	
              Intellectual
      Property 

            	
              8

            

    

     

    
      	
              Section
      5.

            	
              INVESTING
      AMOUNTS IN THE CASH ACCOUNTS 

            	
              8

            

    

     

    
      	
               
      

            	
              5.1

            	
              Investments 

            	
              8

            

    

     

    
      	
               
      

            	
              5.2

            	
              Liability 

            	
              9

            

    

     

    
      	
              Section
      6.

            	
              REMEDIAL
      PROVISIONS 

            	
              9

            

    

     

    
      	
               
      

            	
              6.1

            	
              Certain
      Matters Relating to Receivables 

            	
              9

            

    

     

    
      	
               
      

            	
              6.2

            	
              Communications
      with Obligors; Grantors Remain Liable 

            	
              9

            

    

     

    
      	
               
      

            	
              6.3

            	
              Proceeds
      to be Turned Over To Collateral Agent 

            	
              10

            

    

     

    
      	
               
      

            	
              6.4

            	
              Application
      of Proceeds 

            	
              10

            

    

     

    
      	
               
      

            	
              6.5

            	
              Code
      and Other Remedies 

            	
              10

            

    

     

    
      	
               
      

            	
              6.6

            	
              Subordination 

            	
              11

            

    

     

    
      	
               
      

            	
              6.7

            	
              Deficiency 

            	
              11

            

    

     

    
      	
              Section
      7.

            	
              COLLATERAL
      AGENT 

            	
              11

            

    

     

    
      	
               
      

            	
              7.1

            	
              Collateral
      Agent’s Appointment as Attorney-in-Fact. etc 

            	
              11

            

    

     

    
      
        -i-

      

    

    
      
         

        
          
            

          

        

        
           

          
            TABLE
OF CONTENTS

            (continued)

            Page

          

        

      

    

    

    
      	
               
      

            	
              7.2

            	
              Duty
      of Collateral Agent 

            	
              13

            

    

     

    
      	
               
      

            	
              7.3

            	
              Execution
      of Financing Statements 

            	
              13

            

    

     

    
      	
               
      

            	
              7.4

            	
              Authority
      of Collateral Agent 

            	
              13

            

    

     

    
      	
              Section
      8.

            	
              MISCELLANEOUS 

            	
              13

            

    

     

    
      	
               
      

            	
              8.1

            	
              Amendments
      in Writing 

            	
              14

            

    

     

    
      	
               
      

            	
              8.2

            	
              Notices 

            	
              14

            

    

     

    
      	
               
      

            	
              8.3

            	
              No
      Waiver by Course of Conduct; Cumulative Remedies 

            	
              14

            

    

     

    
      	
               
      

            	
              8.4

            	
              Payment
      of Expenses and Taxes 

            	
              14

            

    

     

    
      	
               
      

            	
              8.5

            	
              Successors
      and Assigns 

            	
              14

            

    

     

    
      	
               
      

            	
              8.6

            	
              Counterparts 

            	
              14

            

    

     

    
      	
               
      

            	
              8.7

            	
              Severability 

            	
              14

            

    

     

    
      	
               
      

            	
              8.8

            	
              Section
      Headings 

            	
              15

            

    

     

    
      	
               
      

            	
              8.9

            	
              Integration 

            	
              15

            

    

     

    
      	
               
      

            	
              8.10

            	
              Governing
      Law 

            	
              15

            

    

     

    
      	
               
      

            	
              8.11

            	
              Submission
      to Jurisdiction 

            	
              15

            

    

     

    
      	
               
      

            	
              8.12

            	
              Acknowledgements 

            	
              15

            

    

     

    
      	
               
      

            	
              8.13

            	
              Additional
      Grantors 

            	
              15

            

    

     

    
      	
               
      

            	
              8.14

            	
              Releases 

            	
              15

            

    

     

    
      	
               
      

            	
              8.15

            	
              WAIVER
      OF JURY TRIAL 

            	
              16

            

    

     

    

    

    
      
        
          
            
              	 
      	
                      -ii-

                    	 
      

            

             

          

           

        

        
           

          
            

          

        

         

      

    

    

    COLLATERAL
AGREEMENT

     

    COLLATERAL
AGREEMENT, dated as of January 15, 2009, 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 collateral agent (in such capacity, the
“Collateral Agent”), for JPMorgan Chase Bank, N.A., as Agent (the “Agent”), and the
lenders (the “Lenders”) from time
to time parties to the Second Amended and Restated Credit Agreement dated as of
October 6, 2006 (as amended by a First Amendment to Second Amended and Restated
Credit Agreement dated as of August 28, 2007, a Second Amendment to Second
Amended and Restated Credit Agreement dated as of March 27, 2008, a Third
Amendment (as defined below) and as further amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”),
among M/I Homes, Inc., an Ohio corporation (“Borrower”), the
Lenders and JPMorgan Chase Bank, N.A. as Agent (“Agent”).

     

    W I T N E S S E T H:

     

    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,
pursuant to the Third Amendment to Second Amended and Restated Credit Agreement
dated as of January 15, 2009 (the “Third Amendment”), to
and under the Credit Agreement, Borrower and the other Grantors have agreed to
enter into this Agreement in order to 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 10(c) of the Third Amendment, it is required that the
Grantors shall, have executed and delivered this Agreement to Collateral 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 Third Amendment and to induce the Lenders to make their
respective extensions of credit to Borrower under the Credit Agreement, each
Grantor hereby agrees with Collateral Agent, for the ratable benefit of the
Secured Parties, as follows:

     

    SECTION
1.                                DEFINED
TERMS

     

    1.1           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 New York
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.   

     

    (b)           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 Collateral Agent, 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 New York 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.

     

    “Collateral
Account”:  any collateral account established by Collateral
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.

    

    
      
        
          
            

             

          

        

        
          2 

          
            

          

        

         

      

    

    

    “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, Collateral 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.

     

    “New York
UCC”:  the Uniform Commercial Code as from time to time in
effect in the State of New York.

     

    “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.

     

     Proceeds”:  all
“proceeds” as such term is defined in Section 9-102(a)(64) of the New York 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 performance.  “Receivable” includes any
Account.

     

    “Secured
Parties”:  the collective reference to the Agent, Collateral
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.

     

    

    
      
        
          
             

            3

          

           

        

        
          
            

          

        

         

      

    

    

    “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.

     

    1.2           Other Definitional
Provisions.  i) 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.

     

    (b)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

     

    (c)           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
2.      GRANT OF SECURITY INTEREST

     

    Each
Grantor hereby grants to Collateral 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;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (m)          
all
Inventory;

     

    (n)           all
Investment Property;

     

    (o)           all
Letter-of-Credit Rights;

     

    (p)           to
the extent not otherwise described above, all rights to receipt of federal
income tax refunds for the 2008 fiscal year of Borrower (collectively, “Tax
Refunds”) and all other personal property (except for 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 (including, without limitation,
an Aircraft Security Agreement dated as of April 4, 2008 between Wachovia
Financial Services, Inc. and M/I Properties LLC) 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
3.        REPRESENTATIONS AND
WARRANTIES

     

    To induce
Agent and the Lenders to enter into the Third Amendment 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,
Collateral Agent and each Lender that:

     

    3.1           Title; No Other
Liens.  Except for the security interest granted to Collateral
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
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are permitted by the Credit Agreement.

    
       

      
        5

        
          

        

      

      
        
        

      

    

    3.2           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 Collateral 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 Collateral 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, for Liens
permitted by the Credit Agreement.

     

    3.3           Jurisdiction of
Organization:  Chief Executive Office.  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 Collateral 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.

     

    3.4           Farm
Products.  None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

     

    3.5           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.

     

    3.6           Intellectual
Property.  ii) 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.

     

    (b)           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.

     

    (c)           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
4.       COVENANTS

     

    Each
Grantor covenants and agrees with the Agent, Collateral 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):

    

    
      
        
          
            6

          

           

        

        
          
            

          

        

         

      

    

                  
4.1         Maintenance of
Insurance.  iii) 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. 

     

    (b)           Borrower
shall deliver to Collateral Agent evidence with respect to such insurance as
Collateral Agent may from time to time reasonably request in
writing.

     

    4.2           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
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.

     

    4.3           Maintenance of Perfected
Security Interest; Further Documentation.  iv) 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.

     

    (b)           At
any time and from time to time, upon the written request of Collateral 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 Collateral 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 Collateral 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 Collateral Agent in a writing identifying with reasonable specificity
any commercial tort claim that becomes Collateral hereunder.

     

    (c)           Concurrently,
with the filing of the Borrower’s 2008 Federal tax return claiming a Tax Refund,
the Borrower will submit a Form 8302 to the United States Internal Revenue
Service directing that all amounts refunded to the Borrower be paid directly
into the Secured Borrowing Base Account.

     

    4.4           Changes in Name,
etc.  Such Grantor will not, except upon prior written notice
to Collateral Agent and delivery to Collateral Agent of all additional executed
financing statements and other documents reasonably requested by Collateral
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. 

    
      
        
        

      

      
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    4.5          
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 Collateral 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.

     

    4.6           Intentionally
Omitted.

     

    4.7           Intellectual
Property.  v) 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, (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 Collateral 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.

     

    (b)           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.

     

    (c)           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.

     

    (d)           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.

     

    (e)           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.

     

    (f)           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
5.       INVESTING AMOUNTS IN THE CASH
ACCOUNT

    
      
        
        

      

      
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        5.1     Investments.  To
the extent that the security interest of Collateral Agent is the Cash Account is
perfected by control pursuant to an agreement restricting Borrower’s access
thereto, if requested by Borrower, Collateral 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 Collateral Agent or a
nominee of Collateral Agent and in a manner that preserves Borrower’s ownership
of, and Collateral 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.  Collateral 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 Collateral Agent or Agent may require
Borrower to execute any documents to implement or effectuate the provisions of
this Agreement.

     

    5.2           Liability.  Collateral 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 Collateral Agent’s gross
negligence or willful misconduct as determined by a final and nonappealable
decision of a court of competent jurisdiction.

     

    SECTION
6.      REMEDIAL PROVISIONS

     

    6.1           Certain Matters Relating to
Receivables.  vi) At any time during the
continuance of an Event of Default, Collateral 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 Collateral Agent may require in connection with
such test verifications.

     

    (b)           Collateral
Agent hereby authorizes each Grantor to collect such Grantor’s Receivables but
Collateral 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 Collateral 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 Collateral Agent if required, in a Collateral
Account maintained under the sole dominion and control of Collateral Agent,
subject to withdrawal by Collateral 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 Collateral Agent and the Lenders, segregated from other
funds of such Grantor.

     

    (c)           At
Collateral Agent’s written request at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall deliver to Collateral
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.

     

    6.2           Communications with
Obligors; Grantors Remain Liable.  vii) Collateral 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 Collateral Agent’s
satisfaction the existence, amount and terms of any Receivables.

     

          
(b)    Upon the
written request of Collateral 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
Collateral Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to Collateral
Agent.

     

    
      
        
        

      

      
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    (c)           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, Collateral 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, Collateral Agent or any Lender of any payment relating
thereto, nor shall the Agent, Collateral 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.

     

    6.3          Proceeds to be Turned Over
To Collateral Agent.  In addition to the rights of the Agent,
Collateral 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 Collateral 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, Collateral Agent and the Lenders, segregated
from other funds of such Grantor, and shall, forthwith upon receipt by such
Grantor, be turned over to Collateral Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to Collateral Agent, if
requested).  All Proceeds received by Collateral Agent hereunder
shall be held by Collateral Agent in a Collateral Account maintained under its
sole dominion and control.  All such Proceeds while held by Collateral
Agent in a Collateral Account (or by such Grantor in trust for the Agent,
Collateral Agent and the 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.

     

    6.4          Additional Rights of
Collateral Agent.  If an Event of Default shall occur and be
continuing, the Collateral 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.

     

    6.5         Application of
Proceeds.  At such intervals as may be agreed upon by Borrower
and Collateral Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at Collateral Agent’s election, Collateral Agent shall
pay over to Agent, and, 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 Collateral Agent and 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

    
 

    
      
        
          
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    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 Collateral
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.

     

    6.6           Code and Other
Remedies.  If an Event of Default shall occur and be
continuing, Collateral Agent, on behalf of Agent and 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 New York UCC
or any other applicable law.  Without limiting the generality of the
foregoing, Collateral 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, Collateral 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, Collateral 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 Collateral Agent’s request,
to assemble the Collateral and make it available to Collateral Agent at places
which Collateral Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere.  Collateral Agent shall apply the net proceeds
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, Collateral 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 Collateral Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the New York UCC,
need Collateral 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 Agent, Collateral
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.

     

    6.7          Subordination.  Each
Grantor hereby agrees that, upon the occurrence and during the continuance of an
Event of Default, unless otherwise agreed by Collateral 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.

     

    6.8         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, Collateral Agent or any Lender to
collect such deficiency.

     

    
      
        
        

      

      
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    SECTION
7.   COLLATERAL AGENT

     

    7.1           Collateral Agent’s
Appointment as Attorney-in-Fact. etc.  viii) Each Grantor hereby
irrevocably constitutes and appoints Collateral 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 Collateral 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 Collateral 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 Collateral Agent
may request to evidence the Agent’s, Collateral 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 indorsements,
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 of any and all moneys due or to become due thereunder directly to
Collateral Agent or as Collateral 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 Collateral 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 Collateral 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 Collateral Agent were the absolute
owner

     

    
      
        
        

      

      
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    thereof
for all purposes, and do, at Collateral Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which Collateral
Agent deems necessary to protect, preserve or realize upon the Collateral and
the Agent’s, Collateral 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.

     

    (b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, Collateral Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement.

     

    (c)           The
expenses of Collateral 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 Collateral Agent to the date reimbursed by the relevant Grantor,
shall be payable by such Grantor to Collateral Agent on demand.

     

    (d)           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.

     

    7.2           Duty of Collateral
Agent.  Collateral 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 New York UCC or otherwise, shall be to
deal with it in the same manner as Collateral Agent deals with similar property
for its own account.  Neither Agent, Collateral 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, Collateral Agent and the
Lenders hereunder are solely to protect the Agent’s, Collateral Agent’s and the
Lenders’ interests in the Collateral and shall not impose any duty upon the
Agent, Collateral Agent or any Lender to exercise any such
powers.  Agent, Collateral 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.

     

    7.3           Execution of Financing
Statements.  Pursuant to any applicable law, each Grantor
authorizes Collateral Agent to file or record financing statements and 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
Collateral Agent determines appropriate to perfect the security of Collateral
Agent under this Agreement.  Each Grantor authorizes Collateral Agent
to use the collateral description “all personal property” in any such financing
statements.  Each Grantor hereby ratifies and authorizes the filing by
Collateral Agent of any financing statement with respect to the Collateral made
prior to the date hereof.

     

    7.4           Authority of Collateral
Agent.  Each Grantor acknowledges that the rights and
responsibilities of Collateral Agent under this Agreement with respect to any
action taken by Collateral Agent or the exercise or non-exercise by Collateral
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, Collateral 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, Collateral Agent
and the Grantors, the Agent and Collateral 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.

    
      
        
        

      

      
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    SECTION
8.   MISCELLANEOUS

     

    8.1           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.

     

    8.2           Notices.  All
notices, requests and demands to or upon Collateral 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.

     

    8.3           No Waiver by Course of
Conduct; Cumulative Remedies.  No failure to exercise and no
delay in exercising, on the part of the Agent, Collateral 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.

     

    8.4           Payment of Expenses and
Taxes.  Each Grantor agrees:

     

    (a)           to
pay or reimburse Collateral 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 Collateral Agent and Agent;

     

    (b)           to
pay or reimburse Agent, Collateral 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, Collateral
Agent and each Lender; and

     

    (c)           to
pay, and to save Agent, Collateral Agent and the Lenders harmless from, any and
all liabilities with 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.

     

    8.5           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,
Collateral 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 Collateral Agent.

     

    8.6           Intentionally
Omitted.

     

    8.7    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 Collateral Agent of executed counterparts
of this Agreement by each of the parties hereto.

    
      
        
        

      

      
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    8.8           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.

     

    8.9           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.

     

    8.10           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.

     

    8.11           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 State of New York but giving effect
to federal laws applicable to national banks.

     

    8.12           Submission to
Jurisdiction.  Each Grantor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York, New York 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.

     

    8.13           Acknowledgements.  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, Agent and Collateral Agent shall be
solely that of borrower and lender. Neither Agent, Collateral Agent nor any
Lender shall have any fiduciary responsibilities to any Grantor. Neither Agent,
Collateral 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.

    

    
      
        
          
             

            15

          

           

        

        
           

          
            

          

        

         

      

    

                   
8.14          Additional
Grantors.  Each Subsidiary of Borrower (other than M/I
Financial Corp. and M/I Title Agency Ltd.) that is required to become a
Guarantor pursuant to subsection 6.14 or 6.15 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.

     

    8.15           Releases.  The
Borrower may request in writing that Collateral Agent release its Lien on all or
a portion of the Collateral in accordance with the terms and provisions of the
Credit Agreerment.

     

    8.16           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.

     

    

    
      
        
          
             

            16

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      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

      

      

      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 M/I
Homes, Inc., its sole member

       

       

                                      By:                                                                               

                             
Name:                Phillip
G. Creek

                         
Title:                  Executive
Vice President and Chief Financial 

                                                
Officer

      
        
        

      

      

      

      MHO, LLC,
a Florida limited liability company

       

      

      By:                                                                                

      Name:                 J.
Thomas Mason

      Title:                   President
and Assistant Secretary

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      MHO
HOLDINGS, LLC, a Florida limited liability company

       

      

      By:                                                                            

      Name:                J.
Thomas Mason

      Title:                  Executive
Vice President, General

                
Counsel and Secretary

      

      

      

      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 and Chief Financial

                
Officer

      
        
        

      

      

      

      M/I HOMES
OF TAMPA, LLC, a Florida limited liability company

       

      

      By:                                                                                

      Name:               Phillip
G. Creek

      Title:         Executive
Vice President and Chief Financial

                Officer

      
        
        

      

      

    

    

    

    
      
        
          
            2

          

           

        

        
           

          
            

          

        

         

      

    

    

    
      
      

    

    
      M/I HOMES
OF WEST PALM BEACH, LLC, a Florida 

      limited
liability company

       

      

      By:                                                                                

      Name:               Phillip
G. Creek

      Title:        
Executive Vice President and Chief Financial

                Officer

      
        
        

      

      

      

      K-TAMPA,
LLC, a Florida limited liability company, 

      by M/I
Homes of Tampa, LLC, its manager

       

      

      By:                                                                                 

      Name:               Phillip
G. Creek

      Title:        
Executive Vice President and Chief Financial

                Officer

      
        
        

      

      

      

      M/I HOMES
OF DC, LLC, a Delaware limited liability company

       

      

      By:                                                                                

      Name:               Phillip
G. Creek

      Title:        
Executive Vice President and Chief Financial

                Officer

      
        
        

      

      

      

      M/I HOMES
OF CHARLOTTE, LLC, a Delaware 

      limited
liability company

       

      

      By:                                                                                 

      Name:               Phillip
G. Creek

      Title:        
Executive Vice President and Chief Financial

                       
Officer

      
        
        

      

      

      

      M/I HOMES
OF RALEIGH, LLC, a Delaware 

      limited
liability company

       

      

      By:                                                                                

      Name:              Phillip
G. Creek

      Title:       
Executive Vice President and Chief Financial

               Officer

    

     

    
      
      

    

    

    
      
        
          
            3

          

           

        

        
           

          
            

          

        

         

      

    

    

    
      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 and Cheif Financial

                     Officer

      
        
        

      

      

      

      M/I HOMES
OF CINCINNATI, LLC, an Ohio limited

      liability
company

      

      

      By:                                                                                

      Name:            Phillip
G. Creek

      Title:      Executive Vice
President and Cheif Financial

                    
Officer

    

    
      
      

    

    

    
      
      

    

     

    

     

    
      
        
          
            4

          

           

        

        
          
            

          

        

         

      

    

     

    
      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 and Chief Financial

                           
Officer

      
        
        

      

      

      

      M/I HOMES
FIRST INDIANA LLC, an Indiana limited

       liability
company

      

      

      By:                                                                            

      Name:           Phillip
G. Creek

      Title:     Executive Vice
President and Chief Financial

                   
Officer

      
        
        

      

      

      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

      
        
        

      

      

      

      TRANSOHIO
RESIDENTIAL TITLE AGENCY, LTD.,

      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

      
        
        

      

      
 

    

    
      
        
          
             

          

          5 

        

        
           

          
            

          

        

         

      

    

    

    
      M/I-MAJESTIC
OAKS GP, LLC, a Florida limited 

      liability
company

      By:  M/I
Homes of Tampa, LLC, 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 and Chief Financial

                   
Officer

      
        
        

      

       

      
 

      M/I TITLE
AGENCY LTD., a Ohio limited liability 

      company

      

      

      By:                                                                            

      Name:          
Phillip G. Creek

      Title:     Executive Vice
Preseident and Chief Financial

                   
Officer

      
        
        

      

      

    

     

    

    

    
      
        
          
             

          

          6 

        

        
           

          
            

          

        

         

      

    

    Annex 1
to

    Collateral
Agreement

     

    ASSUMPTION
AGREEMENT, dated as of ______________, 20___, made by
_________________________(the “Additional Grantor”),
in favor of PNC Bank, National Association, as Collateral Agent (in such
capacity, the “Collateral 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.

     

    W I T N E S S E T H :

     

    WHEREAS,
M/I Homes, Inc., (the “Borrower”), the
Lenders and the JPMorgan Chas Bank, N.A. as Agent have entered into a Second
Amended and Restated Credit Agreement, dated as of October 6, 2006 (as amended
by a First Amendment to Second Amended and Restated Credit Agreement dated as of
August 28, 2007, by a Second Amendment to Second Amended and Restated Credit
Agreement dated as of March 27, 2008, by a Third Amendment to Second Amended and
Restated Credit Agreement dated as of January 15, 2009 and as further amended,
supplemented or otherwise modified from time to time, the “Credit
Agreement”);

     

    WHEREAS,
in connection with the Third Amendment to Second Amended and Restated Credit
Agreement dated as of January 15, 2009, Borrower and certain of its Subsidiaries
(other than the Additional Grantor) have entered into the Collateral Agreement,
dated as of January 15, 2009 (as amended, supplemented or otherwise modified
from time to time, the “Collateral
Agreement”) in favor of Collateral 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 STATE OF NEW
YORK.

     

     

    
      
        
        

      

      
        Annex -
1

        
          

        

      

      
        
        

      

    

    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:                         

     

     

     

     

       

    

    
      
        
          
            Annex -
2

             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    Annex 1-A
to

     

    Assumption
Agreement

     

     

    Supplement to Schedule
1

     

    

     

    Supplement to Schedule
2

     

    

     

    Supplement to Schedule
3

     

    

    
      
        
          
            Annex -
3

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Schedule
1

     

    NOTICE
ADDRESS OF GRANTORS

     

    

     

    
      	
              GRANTOR

            	
              ADDRESS

            
	
              M/I
      Homes, Inc.

            	
              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 Service, 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
      Properties LLC

            	
              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 Orlando, 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

              West
      Palm Beach, LLC

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              K-TAMPA,
      LLC

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I
      Homes of DC, 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 Raleigh, 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 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 of Indiana, L.P.

            	
              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 Second Indiana LLC

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              TransOhio
      Residential Title Agency Ltd.

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I-Majestic
      Oaks GP, LLC

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I
      Homes of Chicago, LLC

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio
43219

            

    

    

    
      
        
          
            S-
1

          

           

        

        
           

          
            

          

        

         

      

    

    

    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 Collateral
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 Collateral Agent to exercise remedies
in respect thereof.

     

    

     

    

    
      
        
          
            S-2

             

          

           

        

        
           

          
            

          

        

         

      

    

    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

            
	
              Northeast
      Office Venture, Limited Liability Company

            	
              Delaware

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I
      Homes Service, LLC

            	
              Ohio

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              MHO,
      LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              MHO
      Holdings, LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              M/I
      Properties LLC

            	
              Ohio

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I
      Homes of Florida, LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              M/I
      Homes of Orlando, LLC

            	
              Florida

            	
              300
      Colonial Center Parkway Suite 200, Lake Mary,
      FL  32746

            
	
              M/I
      Homes of Tampa, LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL 33634-6329

            
	
              M/I
      Homes of

              West
      Palm Beach, LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              K-TAMPA,
      LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              M/I
      Homes of DC, LLC

            	
              Delaware

            	
              21355
      Ridgetop Circle Suite 220 Sterling, VA 20166-6503

            
	
              M/I
      Homes of Charlotte, LLC

            	
              Delaware

            	
              9335
      Harris Corners Parkway, Suite 100  Charlotte, NC
      28269

            
	
              M/I
      Homes of Raleigh, LLC

            	
              Delaware

            	
              1511
      Sunday Drive Suite 100 Raleigh, NC  27607

            
	
              The
      Fields At Perry Hall, L.L.C.

            	
              Maryland

            	
              21355
      Ridgetop Circle Suite 220 Sterling, VA 20166-6503

            
	
              Wilson
      Farm, L.L.C.

            	
              Maryland

            	
              21355
      Ridgetop Circle Suite 220 Sterling, VA 20166-6503

            
	
              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 Boulevard,

              Suite
      110

              Loveland,
      OH 45140

            
	
              M/I
      Homes of Indiana, L.P.

            	
              Indiana

            	
              8500
      Keystone Crossing Ste. 190 Indianapolis,
    IN  46240

            
	
              M/I
      Homes First Indiana LLC

            	
              Indiana

            	
              8500
      Keystone Crossing Ste. 190 Indianapolis,
    IN  46240

            
	
              M/I
      Homes Second Indiana LLC

            	
              Indiana

            	
              8500
      Keystone Crossing Ste. 190 Indianapolis,
    IN  46240

            
	
              TransOhio
      Residential Title Agency Ltd.

            	
              Ohio

            	
              3
      Easton Oval, Suite 500, Columbus, Ohio 43219

            
	
              M/I-Majestic
      Oaks GP, LLC

            	
              Florida

            	
              4343
      Anchor Plaza Parkway Suite 200

              Tampa,
      FL  33634-6329

            
	
              M/I
      Homes of Chicago, LLC

            	
              Delaware

            	
              East
      West Corporate Center

              Suite
      160

              1751
      West Diehl Road

              Naperville,
      IL 60563

            

    

     

    
      
        
          
            S-3

          

        

        
          
            

          

        

         

      

    

    Schedule
4

     

    PERMITTED
INVESTMENTS

     

    (a)           cash

     

    (b)           marketable
direct obligations of the United States of America or any agency thereof backed
by the full faith and credit of the United States of America;

     

    (c)           certificates
of deposit, demand deposits, time deposits or repurchase agreements issued by
any bank, other than a Defaulting Lender, with a capital and surplus of at least
$25,000,000 organized under the laws of the United States of America or any
state thereof;

     

    (d)           state
or municipal securities with a rating of A-1 or better (or equivalent) by
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. and any successor thereto or Moody’s Investors Service, Inc. and any
successor thereto or F-1 by Fitch Ratings; and

     

    (e)           money
market funds holding assets primarily of the type described in clauses (a)
through (d) above;

     

    provided
that investments of the type described in clauses (b) through (d) above shall
have a maturity of less than 180 days from the date of purchase.

     

    

     

    

     

    

    
      
        
          
            S-4

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Schedule
5

     

    CASH
ACCOUNT

     

    

     

    PNC Bank,
National Association Account Number 4006908659

     

    

     

     

     

     

     

     

    S-5amendedcreditfac.htm

     

    Exhibit
10.1

     

    
 

    AMENDMENT NO.
1

    (Amended
and Restated Credit Agreement)

    

    This Amendment No. 1 ("Agreement") dated as
of January 16, 2009 ("Effective Date") is
among Abraxas Energy Partners, L.P., a Delaware limited partnership ("Borrower"), the
lenders party to the Credit Agreement described below from time to time as
Lenders, and Société Générale, as Administrative Agent (in such capacity, the
"Administrative
Agent") and as Issuing Lender (in such capacity, the "Issuing
Lender").

    

    RECITALS

    

    A.                      The
Borrower, the Lenders, the Issuing Lender and the Administrative Agent are
parties to the Amended and Restated Credit Agreement dated as of January 31,
2008, (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement";
each capitalized term defined in the Credit Agreement and used herein without
definition shall have the meaning assigned to such term in the Credit Agreement,
unless expressly provided to the contrary).

    

    B.                      Contemporaneously
herewith, the Borrower, the Subordinated Agent and the Subordinated Lenders
(each as defined in the Credit Agreement) propose to make certain amendments to
the Subordinated Credit Agreement (as defined in the Credit Agreement) pursuant
to that certain Amendment No. 1 dated as of January 16, 2009 (the "Subordinated Credit
Agreement Amendment") among the Borrower, the Subordinated Agent and the
Subordinated Lenders.

    

    C.                      The
Borrower has requested that the Lenders (a) consent to (i) the Subordinated
Credit Agreement Amendment and (ii) the terms of that certain Amendment No. 1 to
Intercreditor Agreement and Subordination dated as of January 16, 2009 (the
"Intercreditor
Amendment") among the Administrative Agent, the Subordinated Agent, the
Borrower and the Guarantors, (b) redetermine the amount of the Borrowing Base as
provided herein, and (c) make certain amendments to the Credit Agreement as
provided herein.

    

    THEREFORE, the Borrower, the Lenders,
the Issuing Lender and the Administrative Agent hereby agree as
follows:

    

    ARTICLE
I.

     

    DEFINITIONS

     

    Section
1.01Terms
Defined Above.  As used in this Agreement, each of the terms
defined in the opening paragraph and the Recitals above shall have the meanings
assigned to such terms therein.

     

    Section
1.02Other
Definitional Provisions.
The words "hereby", "herein", "hereinafter", "hereof", "hereto" and
"hereunder" when used in this Agreement shall refer to this Agreement as a whole
and not to any particular Article, Section, subsection or provision of this
Agreement.  Article, Section, subsection and Exhibit references herein
are to such Articles, Sections, subsections and Exhibits of this Agreement
unless otherwise specified. All titles or

     

    

    
      
        
          
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    headings
to Articles, Sections, subsections or other divisions of this Agreement or the
exhibits hereto, if any, are only for the convenience of the parties and shall
not be construed to have any effect or meaning with respect to the other content
of such Articles, Sections, subsections, other divisions or exhibits, such other
content being controlling as the agreement among the parties
hereto.  Whenever the context requires, reference herein made to the
single number shall be understood to include the plural; and likewise, the
plural shall be understood to include the singular.  Words denoting
gender shall be construed to include the masculine, feminine and neuter, when
such construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative.  Definitions of terms
defined in the singular or plural shall be equally applicable to the plural or
singular, as the case may be, unless otherwise indicated.

     

    ARTICLE
II.

     

    CONSENT

     

    Section
2.01Consent;
Acknowledgment; Agreement.  Subject to the terms of this
Amendment, the Administrative Agent and the Lenders hereby consent to (a) the
execution and delivery of the Intercreditor Amendment and the terms and
conditions thereof and (b) the execution and delivery of the Subordinated Credit
Agreement Amendment and the terms and conditions thereof.  The
consents by the Lenders and by the Administrative Agent described in this
Section 2.01 are collectively referred to herein as the
"Consents."  The Consents are contingent upon the satisfaction of the
conditions precedent described in Article VI below.  Such Consents are
strictly limited to the extent described herein.  Nothing contained
herein shall be construed to be a consent to or a permanent waiver of the
Sections covered by the Consents provided for herein or any other terms,
provisions, covenants, warranties or agreements contained in the Credit
Agreement or any other Loan Document.  The Lenders reserve the right
to exercise any rights and remedies available to them in connection with any
other present or future defaults with respect to any provision of the Credit
Agreement or any other Loan Document.  The descriptions herein of the
Consents are based upon the information provided to the Lenders on or prior to
the date hereof, and, to the extent that material information is incorrect or
omitted with respect to any activity, event or circumstance that could result in
a Default or Event of Default, such Consent shall not be deemed to apply to such
activity, event or circumstance.  The failure of the Lenders to give
notice to the Borrower of any such Defaults or Events of Default is not intended
to be nor shall be a waiver thereof.  The Borrower hereby agrees and
acknowledges that the Lenders require and will require strict performance by the
Borrower of all of its obligations, agreements and covenants contained in the
Credit Agreement and the other Loan Documents pursuant to the terms thereof, and
no inaction or action regarding any Default or Event of Default is intended to
be or shall be a waiver thereof.

     

    ARTICLE
III.

     

    BORROWING
BASE

     

    Section
3.01Redetermination
of Borrowing Base.  Subject to the terms of this Amendment, the
parties hereto agree that, as of the Effective Date, the Borrowing Base shall be
equal to $140,000,000 and such Borrowing Base shall remain in effect at such
amount until the Borrowing Base is redetermined in accordance with the Credit
Agreement.

     

    

    
      
        
          
             

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    ARTICLE
IV.

     

    AMENDMENTS

     

    

     

    Section
4.01Section 1.01 of the Credit Agreement is hereby amended as
follows:

     

    (a)           Each
of the following defined terms is deleted in its entirety and replaced with the
following:

     

    "Adjusted Reference
Rate" means, for any day, the fluctuating rate per annum of interest
equal to the greatest of (a) the Reference Rate in effect on such day, (b) the
Federal Funds Rate in effect on such day plus 1⁄2 of 1%, and (c) a rate determined
by the Administrative Agent to be the Daily One-Month LIBOR plus
1.50%.  Any change in the Adjusted Reference Rate due to a change in
the Reference Rate, the Federal Funds Rate or the Daily One-Month LIBOR shall be
effective on the effective date of such change in the Reference Rate, Federal
Funds Rate or Daily One-Month LIBOR.

     

    "Applicable Margin"
means, with respect to any Advance, (a) during such times as any Event of
Default exists, 3% per annum plus the rate per annum otherwise applicable under
clause (b) below, and (b) at all other times:

     

    (i)           for
any day during the Subordinated Loan Period, the rate per annum set forth below
for the relevant Type of such Advance based on the relevant Utilization
applicable from time to time, and

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Utilization

                                	
                                  Eurodollar
      Rate Advances

                                	
                                  Reference
      Rate Advances

                                
	
                                  Less
      than or equal to 25%

                                	
                                  2.50%

                                	
                                  1.50%

                                
	
                                  Greater
      than 25% but less than 50%

                                	
                                  2.75%

                                	
                                  1.75%

                                
	
                                  Equal
      to or greater than 50% but less than 75%

                                	
                                  3.00%

                                	
                                  2.00%

                                
	
                                  Equal
      to or greater than 75% but less than 85%

                                	
                                  3.25%

                                	
                                  2.25%

                                
	
                                  Equal
      to or greater than 85%

                                	
                                  3.50%

                                	
                                  2.50%

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

    

     

    (ii)           for
any day other than a day during the Subordinated Loan Period, the rate per annum
set forth below for the relevant Type of such Advance based on the relevant
Utilization applicable from time to time.

     

    
      
        
          
            
              
                
                  
                    	
                            Utilization

                          	
                            Eurodollar
      Rate Advances

                          	
                            Reference
      Rate Advances

                          
	
                            Less
      than or equal to 25%

                          	
                            2.00%

                          	
                            1.00%

                          
	
                            Greater
      than 25% but less than 50%

                          	
                            2.25%

                          	
                            1.25%

                          
	
                            Equal
      to or greater than 50% but less than 75%

                          	
                            2.50%

                          	
                            1.50%

                          
	
                            Equal
      to or greater than 75% but less than 85%

                          	
                            2.75%

                          	
                            1.75%

                          
	
                            Equal
      to or greater than 85%

                          	
                            3.00%

                          	
                            2.00%

                          

                  

                

              

            

          

        

      

    

    

    The
Applicable Margin for any Advance shall change when and as the relevant date or
Utilization changes, when and as the Subordinated Loan Period ends and when and
as any such Event of Default commences or terminates.

     

    "Commitment Fee Rate"
means the per annum commitment fee rate set forth below and applicable from time
to time.  The Commitment Fee Rate shall change when and as the
relevant Utilization changes:

     

    
      
        
          
            
              
                	
                        Utilization

                      	
                        Rate

                      
	
                        Less
      than or equal to 25%

                      	
                        0.300%

                      
	
                        Greater
      than 25% but less than 50%

                      	
                        0.375%

                      
	
                        Equal
      to or greater than 50% but less than 75%

                      	
                        0.375%

                      
	
                        Equal
      to or greater than 75% but less than 85%

                      	
                        0.500%

                      
	
                        Equal
      to or greater than 85%

                      	
                        0.500%

                      

              

            

          

        

      

    

    (b)           The
following new terms are added in alphabetical order:

     

    "Amendment No. 1 Effective
Date" means January 16, 2009.

     

    "APC Letter of Credit"
means the "APC Letter of Credit" as defined in the Subordinated Credit
Agreement.

     

    "Capital Expenditures"
means, for the Borrower and its Subsidiaries for any period, the aggregate of
all expenditures and costs paid or, without duplication, accrued by the Borrower
and such Subsidiaries during such period that are for items which should be
capitalized in accordance with GAAP, including intangible drilling and
development expenditures.

     

    "Daily One-Month
LIBOR" means, for any day, the rate of interest per annum (rounded
upward, if necessary, to the nearest whole 1/8 of 1%) determined pursuant to the
following formula:

     

    Daily
One Month LIBOR
=                               Base
LIBOR                                           

    100%
- LIBOR Reserve Percentage

     

     For
purposes of this definition:

     

    (a)           "Base LIBOR" means the
rate per annum for United States dollar deposits quoted by the Administrative
Agent for the purpose of

     

    

    
      
        
          
             

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    calculating
effective rates of interest for loans making reference to the "Daily One-Month
LIBOR", as the inter-bank offered rate in effect from time to time for delivery
of funds for one (1) month in amounts approximately equal to the principal
amount of such loans; provided that the
Administrative Agent may base its quotation of the inter-bank offered rate upon
such offers or other market indicators of the inter-bank market as the
Administrative Agent in its discretion deems appropriate including, but not
limited to, the Eurodollar Rate.

     

    (b)           "LIBOR Reserve
Percentage" means the reserve percentage prescribed by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
adjusted by the Administrative Agent for expected changes in such reserve
percentage during a one (1) month period.

     

    "Subordinated
Loan Period" means the
period from and including the Amendment No. 1 Effective Date to and including
the Subordinated Loan Termination Date.

     

    "Subordinated Loan
Termination Date" means the first date on which (a) the Subordinated Debt
(other than contingent expense reimbursement and indemnification obligations)
has been paid in cash in full, (b) all Hedge Contracts between the Borrower or
any of its Subsidiaries and any Subordinated Lender that is not also a Lender
hereunder or any Affiliate of such a Subordinated Lender have been terminated,
(c) the Subordinated Loan Documents have been terminated (except as to expense
reimbursement and indemnification provisions), and (d) the Subordinated Lenders
have executed and delivered to the Administrative Agent all documents and
instruments required to release and terminate the Liens securing the
Subordinated Obligations.

     

    Section
4.02Section 2.03(e)(ii) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

     

    (ii)
in the case of a payment to be made by the Borrower, the interest rate
applicable to Reference Rate Advances.

     

    Section
4.03Section 6.05 of the Credit Agreement is hereby amended by (a) adding
the phrase "and pursuant to the Exchange Agreement" after the phrase "pursuant
to the Registration Rights Agreement" in the lead-in to such Section, and (b) by
deleting clause (b) of such Section and replacing it in its entirety with the
following:

     

    (b)
the Borrower may declare and pay quarterly cash distributions to its equity
interest holders of Available Cash so long as before and after giving effect to
such distribution and any redetermination of the Borrowing Base as a result of
such distribution (1) no Default exists and (2) no Borrowing Base Deficiency
exists; provided
that:

     

    

    
      
        
          
             

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    (i)no
such cash distribution shall be made using the proceeds of any Advance unless
the Unused Commitment Amount, as it may have been calculated as a result of such
distribution, is greater than or equal to 10% of the lesser of (A) the then
effective Borrowing Base or (B) the aggregate Commitments;

     

    (ii)           with
respect to the cash distribution scheduled to be made on or about May 15, 2009
attributable to the first quarter of 2009, no such distribution shall be made
unless (A) the sum of the Borrower’s unrestricted cash and Unused Commitment
Amount after giving effect to such distribution shall be at least $20,000,000;
provided that,
for the avoidance of doubt, the undrawn amount of the APC Letter of Credit or
any proceeds received from a draw thereunder shall not constitute unrestricted
cash, or (B) the Subordinated Loan Termination Date shall have occurred;
and

     

    (iii)           with
respect to cash distributions made during the Subordinated Loan Period, no such
distribution shall exceed $0.44 per unit of Equity Interests of the Borrower
then outstanding per quarter; and

     

    Section
4.04Article VI of the Credit Agreement is hereby amended by adding a new
Section 6.21 to the end thereof as follows:

     

    Section
6.21                                Limitation on Capital
Expenditures.  The Borrower shall not, nor shall it permit any
of its Subsidiaries to, make or commit to any Capital Expenditure at any time
during the Subordinated Loan Period, except Capital Expenditures in the ordinary
course of business not exceeding $12,500,000 in the aggregate.

     

    Section
4.05Section 9.01(a) of the Credit Agreement is hereby amended by (A)
deleting the semicolon after clause (x) and replacing it with "; or" and (B)
adding the new clause (xi) to the end thereof as follows:

     

    (xi)
amend or waive Section 6.05;

     

    ARTICLE
V.

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
5.01Representations
and Warranties.  The Borrower represents and warrants that: (a)
its representations and warranties contained in Article IV of the Credit
Agreement and its representations and warranties contained in the Security
Instruments, the Guaranties, and each of the other Loan Documents to which it is
a party are true and correct in all material respects on and as of the Effective
Date, as though made on and as of such date, except those representations and
warranties that speak of a certain date, which representations and warranties
were true and correct as of such date; (b) no Default has occurred and is
continuing; (c) the execution, delivery and performance of this Agreement are
within the corporate power and authority of  the Borrower and have
been duly authorized by appropriate corporate action and proceedings; (d) this
Agreement constitutes the legal, valid, and binding obligation of the Borrower
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity; (e) there
are no governmental or other third party consents, licenses and

     

    

    
      
        
          
             

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    approvals
required in connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security
Instruments are valid and subsisting and secure the Borrower's obligations under
the Loan Documents.

     

    ARTICLE
VI.

     

    CONDITIONS

     

    This
Agreement shall become effective and enforceable against the parties hereto upon
the occurrence of the following conditions precedent:

    

    Section
6.01Documentation.  The
Administrative Agent shall have received multiple original counterparts, as
requested by the Administrative Agent, of (a) this Agreement duly and validly
executed and delivered by duly authorized officers of the Borrower, the
Administrative Agent, the Issuing Lender and the Lenders and (b) the
Intercreditor Amendment.

     

    Section
6.02Subordinated
Credit Agreement Amendment.  The Administrative Agent shall
have received true and correct copies of the fully-executed Subordinated Credit
Agreement Amendment and such agreement shall have become effective.

     

    Section
6.03No
Default.  No Default shall have occurred and be continuing as
of the Effective Date.

     

    Section
6.04Representations.  The
representations and warranties in this Agreement shall be true and correct in
all material respects.

     

    Section
6.05Fees and
Expenses.  The Borrower shall have paid (a) an amendment fee in
the amount of $350,000 to the Administrative Agent for the pro rata account of
the Lenders and (b) all fees and expenses of the Administrative Agent's outside
legal counsel and other consultants pursuant to all invoices presented for
payment on or prior to the Effective Date.

     

    ARTICLE
VII.

     

    MISCELLANEOUS

     

    Section
7.01Effect on
Loan Documents;
Acknowledgments.

     

    (a)           The
Borrower acknowledges that on the date hereof all Obligations are payable
without defense, offset, counterclaim or recoupment.

     

    (b)           The
Administrative Agent, the Issuing Lender, and the Lenders hereby expressly
reserve all of their rights, remedies, and claims under the Loan
Documents.  Nothing in this Agreement shall constitute a waiver or
relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of
the Loan Documents, (iii) any rights or remedies of the Administrative Agent,
the Issuing Lender or any Lender with respect to the Loan Documents, or (iv) the
rights of the Administrative Agent, any Issuing Lender or any Lender to collect
the full amounts owing to them under the Loan Documents.

     

    (c)           Each
of the Borrower, the Administrative Agent, the Issuing Lender, and the Lenders
does hereby adopt, ratify, and confirm the Credit Agreement, and acknowledges
and

     

    

    
      
        
          
             

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    agrees
that the Credit Agreement and all other Loan Documents are and remain in full
force and effect, and the Borrower acknowledges and agrees that its liabilities
under the Credit Agreement and the other Loan Documents are not impaired in any
respect by this Agreement or the consent and amendment granted
hereunder.

    (d)           This
Agreement is a Loan Document for the purposes of the provisions of the other
Loan Documents.  Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement shall be a
Default or Event of Default, as applicable, under the Credit
Agreement.

     

    Section
7.02Counterparts.  This
Agreement may be signed in any number of counterparts, each of which shall be an
original and all of which, taken together, constitute a single
instrument.  This Agreement may be executed by facsimile signature and
all such signatures shall be effective as originals.

     

    Section
7.03Successors
and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the Lenders, the Borrower, the Administrative Agent, the Issuing
Lender and their respective successors and assigns permitted pursuant to the
Credit Agreement.

     

    Section
7.04Invalidity.  In
the event that any one or more of the provisions contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.

     

    Section
7.05Governing
Law.  This Agreement
shall be deemed to be a contract made under and shall be governed by and
construed in accordance with the laws of the State of New York.

     

    Section 7.06Entire
Agreement.
THIS AGREEMENT, THE
CREDIT AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

     

    THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     

    

    

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