EXHIBIT 10.2
Execution Copy
CREDIT AGREEMENT
effective as of March 6, 2002
by and among
M/I SCHOTTENSTEIN HOMES, INC.,
as Borrower
and
BANK ONE, NA,
as Agent for the Banks
and
THE HUNTINGTON NATIONAL BANK,
as Documentation Agent
and
U.S. BANK, N.A.,
NATIONAL CITY BANK,
AMSOUTH BANK,
and
SUNTRUST BANK,
as Co-Agents
and
BANK ONE, NA,
THE HUNTINGTON NATIONAL BANK,
U.S. BANK, N.A.,
NATIONAL CITY BANK,
AMSOUTH BANK,
SUNTRUST BANK,
COMERICA BANK,
FIFTH THIRD BANK, CENTRAL OHIO,
PNC BANK, NATIONAL ASSOCIATION,
WASHINGTON MUTUAL BANK, FA,
FLEET NATIONAL BANK and
GUARANTY BANK,
as Banks
with
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Book Runner
TABLE OF CONTENTS
SECTION 1: DEFINITIONS....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................20
SECTION 2: AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT LOANS, SWINGLINE LOANS AND FACILITY
L/CS..........................................................................................21
2.1 Commitments....................................................................................21
2.2 Notes..........................................................................................21
2.3 Procedure for Borrowing........................................................................22
2.4 Commitment Fee.................................................................................23
2.5 Interest; Default Interest.....................................................................24
2.6 Termination, Reduction or Increase of Aggregate Commitment.....................................26
2.7 Maturity Date of Commitment; Extension.........................................................28
2.8 Computation of Interest and Fees...............................................................29
2.9 Increased Costs................................................................................29
2.10 Use of Proceeds................................................................................30
2.11 Payments; Pro Rata Treatment...................................................................30
2.12 Swingline Loans................................................................................31
2.13 The Facility L/Cs..............................................................................33
2.14 Designation or Resignation of Issuing Bank.....................................................33
2.15 Issuance of Facility L/Cs......................................................................33
2.16 Facility L/C Participations....................................................................35
2.17 Payments.......................................................................................36
2.18 Facility L/C Fees..............................................................................37
2.19 Letter of Credit Reserves......................................................................37
2.20 Further Assurances.............................................................................38
2.21 Obligations Absolute...........................................................................38
2.22 Issuing Bank Reporting Requirements............................................................39
2.23 Indemnification; Nature of Issuing Bank's Duties...............................................39
SECTION 3: GENERAL PROVISIONS APPLICABLE TO LOANS........................................................40
3.1 Conversion/Continuation Options................................................................40
3.2 Inability to Determine Interest Rate...........................................................41
3.3 Availability of Eurodollar Rate Loans..........................................................41
3.4 Requirements of Law............................................................................41
3.5 Indemnity......................................................................................43
3.6 Taxes..........................................................................................43
3.7 Bank Statements; Survival of Indemnity.........................................................45
3.8 Telephonic Notices.............................................................................45
3.9 Non-Receipt of Funds by Agent..................................................................45
3.10 Replacement of Certain Banks...................................................................46
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SECTION 4: REPRESENTATIONS AND WARRANTIES................................................................47
4.1 Financial Statements...........................................................................47
4.2 Existence; Compliance with Law.................................................................47
4.3 Power; Authorization; Enforceable Obligations..................................................47
4.4 No Legal Bar...................................................................................48
4.5 No Material Litigation.........................................................................48
4.6 Regulation U...................................................................................48
4.7 Investment Company Act.........................................................................49
4.8 ERISA..........................................................................................49
4.9 Disclosure.....................................................................................49
4.10 Subsidiary Information.........................................................................49
4.11 M/I Ancillary Businesses Information...........................................................49
4.12 Schedules......................................................................................49
4.13 Environment....................................................................................49
4.14 Force Majeure Events...........................................................................50
4.15 Other Agreements...............................................................................50
4.16 No Defaults on Outstanding Judgments or Orders.................................................50
4.17 Ownership and Liens............................................................................50
4.18 Operation of Business..........................................................................51
4.19 Taxes..........................................................................................51
SECTION 5: CONDITIONS PRECEDENT..........................................................................51
5.1 Conditions to Initial Loan(s)..................................................................51
5.2 Conditions to All Loans........................................................................54
SECTION 6: AFFIRMATIVE COVENANTS.........................................................................54
6.1 Financial Statements...........................................................................55
6.2 Certificates; Other Information................................................................55
6.3 Borrowing Base Certificate.....................................................................56
6.4 Compliance with Borrowing Base Requirements....................................................56
6.5 Interest Rate Protection.......................................................................56
6.6 Payment of Obligations.........................................................................57
6.7 Maintenance of Existence.......................................................................57
6.8 Maintenance of Property, Insurance.............................................................57
6.9 Inspection of Property; Books and Records; Discussions.........................................58
6.10 Notices........................................................................................58
6.11 Maintenance of Consolidated Tangible Net Worth.................................................59
6.12 Maintenance of Debt to Worth...................................................................59
6.13 Maintenance of Interest Coverage Ratio.........................................................59
6.14 Guaranties of Wholly-Owned M/I Ancillary Businesses............................................59
6.15 Subsidiary Guarantors..........................................................................59
6.16 Environment....................................................................................60
6.17 Certificate Regarding Authority to Make Fleet Payment..........................................60
SECTION 7: NEGATIVE COVENANTS............................................................................60
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7.1 Limitation on Secured Indebtedness.............................................................61
7.2 Limitation on Liens............................................................................61
7.3 Limitation on Fundamental Changes..............................................................62
7.4 Limitation on Acquisitions.....................................................................62
7.5 Land Inventory.................................................................................62
7.6 Limitation on Investments......................................................................62
7.7 Transactions with Affiliates and Officers......................................................64
7.8 Sale and Leaseback.............................................................................64
7.9 Limitation on Payments of Subordinated Indebtedness and Modification of Subordination
Agreements.....................................................................................65
7.10 Sale of Subsidiary Securities..................................................................66
7.11 Limitation on Investments in Commercial Real Estate............................................66
7.12 Limitation on Negative Pledges.................................................................66
7.13 Housing Inventory..............................................................................66
SECTION 8: CASH COLLATERAL...............................................................................66
8.1 Facility L/C Collateral Account................................................................66
8.2 Event of Default under Paragraph (5) of Section 9..............................................67
8.3 Other Events of Default........................................................................67
8.4 Cure; Termination..............................................................................67
SECTION 9: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER EVENT OF DEFAULT..................67
SECTION 10: THE AGENT.....................................................................................71
10.1 Appointment....................................................................................71
10.2 Delegation of Duties...........................................................................72
10.3 Exculpatory Provisions.........................................................................72
10.4 Reliance by Agent..............................................................................72
10.5 Notice of Default..............................................................................73
10.6 Non-Reliance on Agent and Other Banks..........................................................73
10.7 Indemnification................................................................................73
10.8 Bank One in Its Individual Capacity............................................................74
10.9 Delegation to Affiliates.......................................................................74
10.10 Successor Agent................................................................................74
10.11 Documentation Agent and Co-Agents..............................................................74
SECTION 11: MISCELLANEOUS.................................................................................74
11.1 Amendments and Waivers.........................................................................74
11.2 Notices........................................................................................75
11.3 No Waiver; Cumulative Remedies.................................................................76
11.4 Participants...................................................................................76
11.5 Survival of Representations and Warranties.....................................................77
11.6 Payment of Expenses and Taxes..................................................................78
11.7 Successors and Assigns; Assignment.............................................................78
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11.8 Adjustments; Set-off...........................................................................79
11.9 WAIVER OF JURY TRIAL...........................................................................80
11.10 Confidentiality................................................................................81
11.11 Counterparts; Effective Date...................................................................81
11.12 Governing Law..................................................................................81
11.13 Integration....................................................................................81
11.14 Indemnity......................................................................................81
11.15 Severability of Provisions.....................................................................82
11.16 Submission to Jurisdiction.....................................................................82
11.17 Governmental Regulation........................................................................82
11.18 No Fiduciary Duty..............................................................................82
11.19 Headings.......................................................................................82
SCHEDULES
1 -- Commitments of Banks
2 -- Existing L/Cs
3 -- Principal Places of Business, etc. of All Subsidiaries
4 -- Principal Places of Business, etc. of M/I Ancillary Businesses
EXHIBITS
A -- Form of Borrowing Base Certificate
B -- Form of Guaranty Agreement
C -- Form of Note
D -- Form of Commitment and Acceptance
E -- Form of Opinion of Xxxx X. Xxxxxx, Esq.
F -- Form of Responsible Officer's Certificate
G -- Form of Chief Financial Officer's Certificate
H -- Form of No Default Certificate/Certificate of Default
I -- Form of Assignment Agreement
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CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT (this "AGREEMENT") is made to be
effective as of March 6, 2002, by and among M/I SCHOTTENSTEIN HOMES, INC., an
Ohio corporation ("Borrower"), BANK ONE, NA, a national banking association
having its main office in Chicago, Illinois ("BANK ONE"), THE HUNTINGTON
NATIONAL BANK, a national banking association, U.S. BANK, N.A. (formerly known
as Firstar Bank, N.A.), a national banking association, NATIONAL CITY BANK, a
national banking association, AMSOUTH BANK, an Alabama corporation, SUNTRUST
BANK, a national banking association, COMERICA BANK, a Michigan banking
corporation, FIFTH THIRD BANK, CENTRAL OHIO, an Ohio banking corporation, PNC
BANK, NATIONAL ASSOCIATION, a national banking association, WASHINGTON MUTUAL
BANK, FA, a federal association, FLEET NATIONAL BANK, a national banking
association, and GUARANTY BANK, a federal savings bank (each of such banking
institutions, including Bank One, and each other lender that shall become a
"Bank" pursuant to subsection 2.6(b) or subsection 11.7 hereof, each a "Bank"
and, collectively, "BANKS") and BANK ONE, NA, a national banking association, as
agent for Banks ("AGENT"). For valuable consideration, the receipt of which is
hereby acknowledged, Borrower, Banks and Agent, each intending to be legally
bound, hereby recite and agree as follows:
BACKGROUND INFORMATION
----------------------
A Borrower, M/I Homes, Inc., an Arizona corporation and
wholly-owned Subsidiary of Borrower ("M/I Homes"), certain of the Banks and
Agent are parties to a certain Revolving Credit Loan, Swingline Loan and Standby
Letter Credit Agreement effective as of August 23, 2000 (the "EXISTING CREDIT
AGREEMENT").
B. Borrower, Banks and Agent wish to renew the Existing Credit
Agreement as set forth herein by, among other things, (i) adding Washington
Mutual Bank, FA and Guaranty Bank as Banks, (ii) combining the Revolving Loan
Commitment and L/C Commitment (both as defined in the Existing Credit Agreement)
of each Bank into a single Commitment of each Bank hereunder, (iii) reallocating
the Commitments, (iv) extending the Maturity Date, (v) removing M/I Homes as a
borrower and making it a guarantor and (vi) modifying certain covenants and
other provisions of the Existing Credit Agreement.
Accordingly, Borrower, Banks and Agent hereby agree as
follows:
AGREEMENT
---------
SECTION 1: DEFINITIONS
-----------
1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the following respective meanings:
"601RS, LLC" shall mean 601RS, LLC, an Ohio limited liability
company and wholly-owned Subsidiary of Borrower.
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"ABR LOAN" shall mean any Loan when and to the extent that the
interest rate thereon is determined by reference to the Alternate Base Rate.
"ACQUISITION" shall mean any transaction, or any series of
related transactions, consummated on or after the date of this Agreement, by
which Borrower or any of its Subsidiaries (i) acquires any going concern or all
or substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes or by percentage
of voting power) of the Common Equity of another Person.
"ADDITIONAL BANK" shall have the meaning set forth in
subsection 2.6(b)(i) hereof.
"ADJUSTED LAND VALUE" means, at any date, (i) the book value
of all Land, less (ii) the sum of (a) the book value of all Lots under Contract
and (b) the lesser of (1) the product of (x) the number of Housing Units with
respect to which Borrower and its Subsidiaries entered into bona fide contracts
of sale with Persons that are not Subsidiaries or Affiliates during the
six-month period ending on such date and (y) the average book value of all
Finished Lots and Lots under Contract at such date and (2) twenty-five percent
(25%) of Consolidated Tangible Net Worth at such date.
"AFFECTED BANK" shall have the meaning set forth in subsection
3.10 hereof.
"AFFILIATE" shall mean (a) any Person (other than a Subsidiary
of Borrower) which, directly or indirectly, controls, is controlled by or is
under common control with Borrower or (b) any Person who is a director, officer
or key employee of Borrower, any Subsidiary of Borrower or any Person described
in clause (a) of this definition. For purposes of this definition, "control" of
a Person means the power, direct or indirect, to vote twenty percent (20%) or
more of the securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"AGENT" shall have the meaning set forth in the preamble
hereof.
"AGENT'S FEE LETTER" shall mean that certain fee letter dated
December 26, 2001 from the Agent and Arranger to Borrower and accepted by
Borrower on December 28, 2001.
"AGGREGATE COMMITMENT" shall mean the aggregate Commitments of
all the Banks, as reduced or increased from time to time pursuant to the terms
of this Agreement. As of the date of this Agreement, the Aggregate Commitment is
$315,000,000.
"AGREEMENT" shall mean this Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" shall mean a fluctuating rate per annum
equal to the higher of (i) the Prime Rate, changing when and as said rate
changes (without notice), or (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate then in effect.
2
"APPLICABLE ABR MARGIN" shall mean, as at any date of
determination, the margin indicated in subsection 2.5(b) hereof as then
applicable to ABR Loans (under subsection 2.5(a) hereof).
"APPLICABLE COMMITMENT RATE" shall mean, as at any date of
determination, the rate per annum indicated in subsection 2.5(b) hereof as then
applicable in the determination of the commitment fee (under subsection 2.4
hereof).
"APPLICABLE EURODOLLAR MARGIN" shall mean, as at any date of
determination, the margin indicated in subsection 2.5(b) hereof as then
applicable to Eurodollar Rate Loans (under subsection 2.5(a) hereof).
"APPLICABLE MARGIN(S)" shall mean the Applicable ABR Margin
and/or the Applicable Eurodollar Margin, as the case may be.
"ARRANGER" shall mean Banc One Capital Markets, Inc.
"BANK ONE" shall mean Bank One, NA, having its main office in
Chicago, Illinois.
"BANKRUPTCY CODE" shall mean Title 11, U.S.C. as amended from
time to time.
"BANKS" shall have the meaning set forth in the preamble
hereof.
"BORROWER" shall mean M/I Schottenstein Homes, Inc., an Ohio
corporation.
"BORROWING BASE" shall mean, at any date of determination, an
amount equal to the sum of the following unencumbered assets of the Borrower and
the Guarantors:
(i) one hundred percent (100%) of the Receivables, plus
(ii) ninety percent (90%) of the book value of Housing
Units under Contract and Lots under Contract, plus
(iii) seventy-five percent (75%) of the book value of
Speculative Housing Units, plus
(iv) seventy percent (70%) of the book value of Finished
Lots (subject to the limitation set forth below),
plus
(v) fifty percent (50%) of the book value of Lots under
Development (subject to the limitation set forth
below), plus
(vi) the lesser of (a) twenty percent (20%) of the book
value of Unimproved Entitled Land and (b) $25,000,000
(subject to the limitation set forth below).
Notwithstanding the foregoing, the Borrowing Base shall not
include any amounts under clauses (iv), (v) and (vi) above to the extent that
the sum of such amounts exceeds fifty
3
percent (50%) of the total Borrowing Base as determined as of any Inventory
Valuation Date on or before December 31, 2003 or forty-five percent (45%) of the
total Borrowing Base at any time on or after January 1, 2004. The term
"unencumbered" means that such asset is not subject to any Lien (except for
Liens permitted under subsections 7.2(c) and (d) hereof).
"BORROWING BASE CERTIFICATE" shall mean a certificate in the
form of Exhibit A hereto, certified by a Responsible Officer of Borrower.
"BORROWING BASE INDEBTEDNESS" shall mean at any date (i) the
sum of (a) Consolidated Indebtedness and (b) an amount equal to ten percent
(10%) of the aggregate commitment under the M/I Financial Corp. Loan Agreement,
LESS (ii) the sum of (a) Secured Indebtedness, (b) Subordinated Indebtedness and
(c) Indebtedness under the M/I Financial Corp. Loan Agreement, all as of such
date.
"BORROWING DATE" shall mean any Business Day specified
pursuant to (a) subsection 2.3 hereof as a date on which Banks make a
disbursement of the Revolving Credit Loans hereunder, (b) subsection 2.12 hereof
as a date on which Bank One makes, at Borrower's request, a disbursement of the
Swingline Loans hereunder, or (c) subsection 2.13 hereof as a date on which an
Issuing Bank issues, at Borrower's request, a Facility L/C hereunder.
"BUSINESS DAY" shall mean (a) with respect to any borrowing,
payment or rate selection of Eurodollar Rate Loans, a day (other than a Saturday
or Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (b) for all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago for the conduct of substantially all of
their commercial lending activities.
"CAPITAL LEASE" shall mean all leases which have been or
should be capitalized on the books of the lessee in accordance with GAAP.
"CASH EQUIVALENTS" shall mean (a) securities with maturities
of 180 days or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit and bankers' acceptances, each issued by a Bank hereunder and each
with a maturity of 180 days or less from the date of acquisition, and (c)
commercial paper of a domestic issuer rated at least A-l by Standard & Poor's
Corporation or P-l by Xxxxx'x Investors Service, Inc. with a maturity of not
more than 180 days.
"CERTIFICATE OF DEFAULT" shall have the meaning set forth in
subsection 6.17 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended or superseded from time to time. Any reference to a specific provision
of the Code shall be construed to include any comparable provision of the Code
as hereafter amended or superseded.
"COLLATERAL SHORTFALL AMOUNT" shall have the meaning set forth
in subsection 8.2 hereof.
4
"COMMITMENT" shall have the meaning set forth in subsection
2.1(a) hereof.
"COMMITMENT AND ACCEPTANCE" shall have the meaning set forth
in subsection 2.6(b)(i) hereof.
"COMMITMENT PERIOD" shall mean the period from and including
the date hereof to the Maturity Date, or such earlier or later date as the
Aggregate Commitment shall terminate as provided herein.
"COMMON EQUITY" of any Person shall mean any and all shares,
rights to purchase, warrants or options (whether or not currently exercisable),
participations, or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities convertible into, or exchangeable for, such equity) to the extent
that the foregoing is entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or other
persons that will control the management and policies of such Person.
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or
not incorporated, which is under common control with Borrower within the meaning
of Section 414(b) or (c) of the Code.
"CONSOLIDATED EARNINGS" shall mean, at any date, the amount
which would be set forth opposite the caption "net income" (or any like caption)
in a consolidated statement of income or operations of Borrower and Borrower's
Subsidiaries at such date prepared in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" shall mean, at any date, the
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis, including Borrower's and its Subsidiaries' pro rata share of Indebtedness
of any Joint Venture in respect of which Borrower has made an Investment in
Joint Venture, all determined as of such date.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period,
interest expense on Indebtedness of Borrower and Borrower's Subsidiaries for
such period, in each case determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED INTEREST INCURRED" shall mean, for any rolling
twelve (12)-month period, all interest incurred during such period on
outstanding Indebtedness of Borrower and Borrower's Subsidiaries irrespective of
whether such interest is expensed or capitalized by Borrower or Borrower's
Subsidiaries, in each case determined on a consolidated basis.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, at any date, the
consolidated stockholders equity of Borrower determined in accordance with GAAP,
less Intangible Assets, all determined as of such date.
"CONSTRUCTION BONDS" shall mean bonds issued by surety bond
companies for the benefit of, and as required by, municipalities or other
political subdivisions to secure the
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performance by Borrower or any Subsidiary of its obligations relating to lot
improvements and subdivision development and completion.
"CONTINGENT OBLIGATION" shall mean, as to any Person, any
reimbursement obligations (including, in the case of Borrower, the Reimbursement
Obligations) of such Person in respect of drafts that may be drawn under Letters
of Credit, any reimbursement obligations of such Person in respect of surety
bonds (including reimbursement obligations in respect of Construction Bonds),
and any obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations primarily to pay money
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including without limitation any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation, or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the obligee under any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the obligee under such primary
obligation against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include (A) endorsements of instruments for
deposit or collection in the ordinary course of business, (B) Mortgage Loan
Repurchase Obligations and (C) obligations under lot purchase contracts entered
into in the ordinary course of business.
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEBT/CAP RATIO" shall mean, at any date, the quotient
(expressed as a percentage) obtained by dividing (a) Consolidated Indebtedness
as of such date by (b) the sum of Consolidated Indebtedness and Consolidated
Tangible Net Worth as of such date.
"DEFAULT" shall mean any of the events specified in Section 9
hereof, whether or not any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"DOLLARS" and "$" shall mean dollars in lawful currency of the
United States of America.
"EBITDA" shall mean, for any rolling twelve (12)-month period,
on a consolidated basis for Borrower and its Subsidiaries, the sum of the
amounts for such period of (a) Consolidated Earnings, plus (b) charges against
income for federal, state and local income taxes, plus (c) Consolidated Interest
Expense, plus (d) depreciation and amortization expense, plus (e) extraordinary
losses exclusive of any such losses that are attributable to the write-down or
other downward revaluation of assets (including the establishment of reserves),
minus (x) interest income, minus (y) all extraordinary gains. EBIDTA shall
include net income from Joint Ventures only to the extent distributed to
Borrower or a Subsidiary.
6
"ELIGIBLE ASSIGNEE" shall mean (a) any Bank or any affiliate
of a Bank and (b) any other commercial bank, financial institution,
institutional lender or "accredited investor" (as defined in Regulation D
promulgated under the Securities Act of 1933 by the Securities and Exchange
Commission) with capital of at least $500,000,000 and with an office in the
United States.
"ELIGIBLE MORTGAGE LOAN" shall mean at any date an original
(not a rewritten or renewed) loan evidenced by a note and secured by a first
mortgage on residential real property which (a) M/I Financial Corp. has made to
enable a natural person or persons to purchase a home from Borrower, any
Subsidiary of Borrower or another Person that is substantially completed, (b) is
not more than sixty (60) days old as determined by the date of the note which
evidences such loan, and (c) is subject, or M/I Financial Corp. reasonably
believes is subject, to a Purchase Commitment; provided, however, that the
amount of Eligible Mortgage Loans consisting of loans made by M/I Financial
Corp. for the purchase of homes from any Person other than Borrower or any
Subsidiary of Borrower shall not, in the aggregate at any one time outstanding,
exceed the amount of $5,000,000.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS" shall mean, for any day as
applied to a Eurodollar Rate Loan, the aggregate (without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto) dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System) maintained by a member
bank of the Federal Reserve System.
"EURODOLLAR BASE RATE" shall mean, with respect to each
Eurodollar Rate Loan for the relevant Interest Period, the applicable British
Bankers' Association Interest Settlement Rate for deposits in Dollars appearing
on Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, (i) if Reuters Screen FRBD is not available to
the Agent for any reason, the applicable Eurodollar Base Rate for the relevant
Interest Period shall instead be the applicable British Bankers' Association
Interest Settlement Rate for deposits in Dollars as reported by any other
generally recognized financial information services as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available to the Agent, the
applicable Eurodollar Base Rate for the relevant Interest Period shall instead
be the rate determined by the Agent to be the rate at which Bank One or one of
its affiliate banks offers to place deposits in Dollars with first-class banks
in the London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of the relevant Eurodollar Rate Loan and having a maturity equal to such
Interest Period.
7
"EURODOLLAR RATE" shall mean, with respect to each day during
each Interest Period pertaining to a Eurodollar Rate Loan, a rate per annum
determined for such day in accordance with the following formula (rounded upward
to the nearest 1/100th of 1%):
EURODOLLAR BASE RATE
----------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR RATE LOANS" shall mean any Revolving Credit Loan
when and to the extent that the interest rate thereon is determined by reference
to the Eurodollar Rate.
"EVENT OF DEFAULT" shall mean any of the events specified in
Section 9 hereof, provided that any requirement for the giving of notice, the
lapse of time, or both, has been satisfied.
"EXCLUDED TAXES" shall mean, in the case of each Bank or
applicable Lending Installation and Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Bank, Lending Installation or Agent is incorporated or
organized, (ii) the jurisdiction in which Agent's or such Bank's principal
executive office or such Bank's applicable Lending Installation is located, or
(iii) reason of any connection between the jurisdiction imposing such tax and
such Bank, applicable Lending Installation or Agent other than a connection
arising principally from such Bank having executed, delivered or performed its
obligations under, or received payment under or enforced, this Agreement.
"EXISTING CREDIT AGREEMENT" shall have the meaning set forth
in paragraph A of the "Background Information" on page 1 of this Agreement.
"EXISTING L/CS" shall mean those certain Letters of Credit
issued by Bank One or SunTrust for the account of Borrower prior to the date
hereof and listed on Schedule 2 hereto.
"EXTENSION REQUEST" shall have the meaning set forth in
subsection 2.7(b) hereof.
"FACILITY INCREASE REQUEST" shall have the meaning set forth
in subsection 2.6(b)(i) hereof.
"FACILITY L/C" shall mean an irrevocable standby Letter of
Credit, including any extensions or renewals, (a) issued by an Issuing Bank
pursuant to this Agreement or (b) in the case of the Existing L/Cs, previously
issued by Bank One or SunTrust and which will remain in place as of the first
Borrowing Date, in which each Bank agrees to purchase a participation equal to
its Ratable Share and the Issuing Bank agrees to make payments in Dollars for
the account of Borrower, on behalf of Borrower or any Subsidiary thereof in
respect of obligations of Borrower or such Subsidiary incurred pursuant to
contracts made or performances undertaken or to be undertaken or like matters
relating to contracts to which Borrower or such Subsidiary is or proposes to
become a party in the ordinary course of Borrower's or such Subsidiary's
business. The term "Facility L/C" shall not include any Letters of Credit issued
(x) pursuant to the HNB Joint Ventures Letter of Credit Agreement or (y) by any
Bank other than pursuant to this Agreement or as provided in clause (b) of this
definition.
8
"FACILITY L/C APPLICATION" shall have the meaning set forth in
subsection 2.15(a) hereof and shall also include each reimbursement agreement
delivered to an Issuing Bank prior to the date hereof with respect to any
Existing L/C.
"FACILITY L/C COLLATERAL ACCOUNT" shall have the meaning set
forth in subsection 8.1 hereof.
"FACILITY L/C FEE" shall mean a fee, payable with respect to
each Facility L/C issued by an Issuing Bank, in an amount per annum equal to the
product of (i) the face amount of such Facility L/C and (ii) (A) in the case of
a Facility L/C that is a Performance Letter of Credit, the Applicable Eurodollar
Margin less 0.25% per annum, and (B) in the case of any other Facility L/C, the
Applicable Eurodollar Margin, in each case as such Applicable Eurodollar Margin
is determined on a daily basis during the period in respect of which such fee is
payable hereunder.
"FACILITY L/C OBLIGATIONS" shall mean, at any date, the sum of
(i) the aggregate undrawn face amount of all outstanding Facility L/Cs on such
date, plus (ii) the aggregate unpaid amount of all Reimbursement Obligations on
such date.
"XXXXXX XXX" shall mean the Federal National Mortgage
Association, or any successor thereto.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided, however, that (a) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day
as so published on the next succeeding Business Day, and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to the Agent on such Business Day on such
transactions as determined by the Agent.
"FINISHED LOTS" shall mean all Lots (excluding Lots under
Contract) owned by Borrower or any Guarantor with respect to which (i)
development has been completed to such an extent that permits that allow use and
construction, including building, sanitary sewer and water, could be obtained
for a Housing Unit on each such Lot, and (ii) Start of Construction has not
occurred. The book value of Finished Lots shall be calculated in accordance with
GAAP and shall include all associated costs required to be capitalized under
GAAP.
"FITCH" shall mean Fitch, Inc.
"FLEET AGREEMENT" shall mean the credit agreement dated August
29, 1997 between Borrower and BankBoston, N.A. (now known as Fleet National
Bank), in its capacities as lender and as agent, and any other parties which
have become or may hereafter become lenders thereunder, and any subsequent
successors or assigns, as such credit agreement has been amended by First
Amendment to Credit Agreement dated September 15, 2000 and extended by Credit
Agreement dated September 28, 2001 and further amended by Second Amendment to
9
Credit Agreement dated as of even date herewith among Borrower, Fleet National
Bank in its capacities as lender and as agent, and Bankers Trust Company, and as
such credit agreement may hereafter be modified or amended, subject to and in
accordance with the terms of this Agreement, which credit agreement governs
certain Subordinated Indebtedness in the principal amount of $50,000,000,
provided that such Indebtedness shall not be deemed to be Subordinated
Indebtedness for the purpose of calculating financial covenants and Borrowing
Base requirements hereunder beginning with the quarter ending September 30,
2005.
"FLEET NOTES" shall mean the "Notes" as defined in the Fleet
Agreement.
"FLEET PAYMENT" shall mean the payment of the principal
balance of the Fleet Notes pursuant to the Fleet Agreement on the Fleet Payment
Date.
"FLEET PAYMENT DATE" shall mean August 29, 2006 or the next
succeeding Business Day (as defined in the Fleet Agreement) thereafter.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect at the time any determination is made
or financial statement is required hereunder as promulgated by the American
Institute of Certified Public Accountants, the Accounting Principles Board, the
Financial Accounting Standards Board or any other body existing from time to
time which is authorized to establish or interpret such principles, applied on a
consistent basis throughout any applicable period, subject to any change
required by a change in GAAP; provided, however, that if any change in generally
accepted accounting principles from those applied in preparing the financial
statements referred to in subsection 4.1 hereof affects the calculation of any
financial covenant contained herein, Borrower, Banks and Agent hereby agree to
amend the Agreement to the effect that each such financial covenant is not more
or less restrictive than such covenant as in effect on the date hereof using
generally accepted accounting principles consistent with those reflected in such
financial statements.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTOR" shall mean each of Borrower's Subsidiaries listed
on Schedule 3 hereto and each M/I Ancillary Business and Subsidiary of Borrower
which becomes a "Guarantor" pursuant to a Supplemental Guaranty as provided in
subsections 6.14 and 6.15 hereof.
"GUARANTY AGREEMENT" shall mean the Guaranty Agreement
substantially in the form of Exhibit B attached to this Agreement, executed by
one or more Guarantors in favor of Agent (for the benefit of the Banks), as the
same shall be modified and supplemented and in effect from time to time.
"HNB" shall mean The Huntington National Bank.
"HNB JOINT VENTURES LETTER OF CREDIT AGREEMENT" shall mean the
Agreement to Issue Letters of Credit dated as of June 8, 1994, between Borrower
and HNB, as heretofore or
10
hereafter from time to time amended, with respect to standby Letters of Credit
issued or to be issued by HNB for the account of certain joint ventures of which
Borrower is a partner.
"HOUSING UNIT" shall mean a detached or attached (including
townhouse condominium or condominium) single-family house (but excluding mobile
homes) owned by Borrower or a Guarantor (i) which is completed or for which
there has been a Start of Construction and (ii) which has been or is being
constructed on Land which immediately prior to the Start of Construction
constituted a Lot hereunder. The book value of Housing Units shall be calculated
in accordance with GAAP and shall include all associated costs (including the
applicable Lot costs) required to be capitalized under GAAP, provided that the
cost of obtaining commitments for financing terms to be provided to the buyers
of Housing Units shall be excluded.
"HOUSING UNIT CLOSING" shall mean a closing of the sale of a
Housing Unit by the Borrower or a Guarantor to a bona fide purchaser for value
that is not a Subsidiary or Affiliate.
"HOUSING UNIT UNDER CONTRACT" shall mean, at any date, a
Housing Unit owned by the Borrower or a Guarantor as to which the Borrower or
such Guarantor has entered into a bona fide contract of sale (a) in a form
customarily employed by the Borrower or such Guarantor, (b) not more than
fifteen (15) months prior to such date, (c) with a Person who is not a
Subsidiary or Affiliate, (d) which provides for closing on or before the later
of thirty (30) days after completion of such Housing Unit or sixty (60) days
after the date of such Contract, and (e) under which no defaults then exist;
provided, however, that in the case of any Housing Unit the purchase of which is
to be financed in whole or in part by a loan insured by the Federal Housing
Administration or guaranteed by the Veterans Administration, the required
minimum downpayment shall be the amount (if any) required under the rules of the
relevant agency. A Housing Unit shall not constitute a Housing Unit under
Contract, at any date of determination, if (i) such Housing Unit is not
completed and (ii) the Start of Construction thereof occurred more than nine (9)
months prior to such date.
"INCREASE DATE" shall have the meaning set forth in subsection
2.6(b)(ii) hereof.
"INDEBTEDNESS" shall mean, without duplication, with respect
to any Person (1) indebtedness or liability for borrowed money, including,
without limitation, subordinated indebtedness (other than trade accounts payable
and accruals incurred in the ordinary course of business); (2) obligations
evidenced by debentures, notes, bonds, or other similar instruments; (3)
obligations for the deferred purchase price of property (including, without
limitation, seller financing of any inventory) or services, provided, however,
that "Indebtedness" shall not include obligations with respect to options to
purchase real property that have not been exercised; (4) obligations as lessee
under Capital Leases to the extent that the same would, in accordance with GAAP,
appear as liabilities in such Person's consolidated balance sheet; (5) current
liabilities in respect of unfunded vested benefits under Plans and incurred
withdrawal liability under any Multiemployer Plan; (6) obligations under
acceptance facilities; (7) all Contingent Obligations, provided, however, that
"Indebtedness" shall not include reimbursement obligations in respect of
Performance Letters of Credit or guaranties of performance obligations (such as
bid or performance surety bonds) except that to the extent that any such
reimbursement obligations or guaranties of performance obligations have been
drawn or called upon; (8) obligations secured
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by any Liens on any property of such Person, whether or not the obligations have
been assumed; and (9) net liabilities under interest rate swap, exchange or cap
agreements (valued as the termination value thereof, computed in accordance with
a method approved by the International Swaps and Derivatives Association and
agreed to by such Person in the applicable agreement).
"INTANGIBLE ASSETS" shall mean, at any time, the amount (to
the extent reflected in determining consolidated stockholders equity of
Borrower) of all unamortized debt discount and expense, unamortized deferred
charges, good will, patents, trademarks, service marks, trade names, copyrights
and all other items which would be treated as intangibles on a consolidated
balance sheet of Borrower prepared in accordance with GAAP.
"INTEREST COVERAGE RATIO" shall mean, for any period, the
ratio of (a) EBITDA to (b) Consolidated Interest Incurred.
"INTEREST PAYMENT DATE" shall mean, (a) with respect to any
ABR Loan (whether a Revolving Credit Loan or a Swingline Loan), the first day of
each calendar month, commencing on the first of such days to occur after the
first Borrowing Date, (b) with respect to any Eurodollar Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) with respect to any Eurodollar Rate Loan having an Interest Period
longer than three months, (x) each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period, and (y) the last
day of such Interest Period.
"INTEREST PERIOD" shall mean with respect to any Eurodollar
Rate Loan:
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such Eurodollar Rate Loan
and ending one, two, three or six months thereafter, as selected by Borrower in
Borrower's Notice of Conversion/Continuation, as the case may be, given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Rate Loan and
ending one, two, three or six months thereafter, as selected by Borrower by
irrevocable notice to the Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise
end on a day that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
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(3) no Interest Period shall be for less
than one month, and Borrower shall not select an Interest Period for a
Eurodollar Rate Loan as a Revolving Credit Loan if the last day of such Interest
Period would be after the last day of the Commitment Period.
"INTEREST RATE CONTRACT" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate insurance arrangement, or any other agreement or arrangement designed to
provide protection against fluctuation in interest rates.
"INVENTORY VALUATION DATE" shall mean (a) the last day of the
most recent fiscal quarter of Borrower with respect to which the Borrower is
required to have delivered a Borrowing Base Certificate pursuant to subsection
6.3 hereof or (b) if Borrower elects, pursuant to subsection 6.4, to deliver a
Borrowing Base Certificate as of a later date, such later date.
"INVESTMENTS" shall have the meaning set forth in subsection
7.6 hereof.
"INVESTMENT IN JOINT VENTURE" shall mean any Investment in a
Joint Venture that is formed for the purpose of acquiring land, the majority of
which land is zoned residential and is to be developed into residential lots for
attached or detached single family housing (including a townhouse condominium
building or condominium building), and/or performing such development. The value
of Investments in Joint Ventures shall be calculated in accordance with GAAP.
"ISSUING BANK" shall mean Bank One (or any Subsidiary or
affiliate of Bank One designated by Bank One) in its capacity as issuer of
Facility L/Cs hereunder, SunTrust in its capacity as issuer of those Existing
L/Cs identified in Schedule 2 hereto as having been issued by SunTrust and any
other Bank that may from time to time be designated as an Issuing Bank in
accordance with the provisions of subsection 2.14 hereof.
"JOINT VENTURE" shall mean any Person (other than a
Subsidiary) in which the Borrower or a Subsidiary holds any stock, partnership
interest, joint venture interest, limited liability company interest or other
equity interest.
"LAND" shall mean land owned by Borrower or a Guarantor, which
land is being developed or is held for future development or sale.
"LENDING INSTALLATION" shall mean with respect to a Bank or
the Agent, the office, branch, subsidiary or affiliate of such Bank or the Agent
identified on the signature pages hereof or otherwise selected by such Bank or
the Agent pursuant to subsection 2.3 hereof.
"LETTER OF CREDIT" of a Person shall mean a letter of credit
or similar instrument which is issued by a financial institution upon the
application of such Person or upon which such Person is an account party or for
which such Person is in any way liable.
"LEVEL" shall mean the level of a Pricing Factor, Applicable
Margin or Applicable Commitment Rate (as applicable) as designated in the Table
set forth in subsection 2.5(b) hereof. The four Levels in such Table are
identified as Levels I through IV, and Level I shall constitute the highest
Level and Level IV shall constitute the lowest Level .
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"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, encumbrance, lien
(statutory or other), preference, priority or other security agreement or
similar preferential arrangement of any kind or nature whatsoever (including
without limitation any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the authorized filing by or against a Person of any financing
statement as debtor under the Uniform Commercial Code or comparable law of any
jurisdiction). A restriction, covenant, easement, right of way, or similar
encumbrance affecting any interest in real property owned by Borrower and which
does not secure an obligation to pay money is not a Lien.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the
Guaranty Agreements and the Facility L/C Applications and all other documents
(if any) from time to time executed and delivered by Borrower or a Guarantor
that evidence, secure or guaranty any of the Obligations.
"LOANS" shall mean the Revolving Credit Loans and the
Swingline Loans.
"LOT CLOSING" shall mean the closing of the sale of a Lot
under Contract by Borrower or a Guarantor to a bona fide purchaser for value
that is not a Subsidiary or Affiliate.
"LOTS" shall mean all Land owned by Borrower or a Guarantor
which is zoned, by the applicable Governmental Authority having jurisdiction,
for construction and use as Housing Units and with respect to which Borrower or
such Guarantor has obtained all necessary approvals for its subdivision for
construction thereon of Housing Units; provided, however, that the term "Lots"
shall not include any Land upon which the Start of Construction has occurred.
The value of Lots shall be calculated in accordance with GAAP and shall include
all associated costs required to be capitalized in accordance with GAAP.
"LOTS UNDER CONTRACT" shall mean all Lots owned by Borrower or
a Guarantor as to which Borrower or such Guarantor has entered into a bona fide
contract of sale with a Person who is not a Subsidiary or Affiliate.
"LOTS UNDER DEVELOPMENT" shall mean all Lots owned by Borrower
or a Guarantor with respect to which construction of streets or other
subdivision improvements has commenced but which are not Finished Lots or Lots
under Contract. The value of Lots under Development shall be calculated in
accordance with GAAP and shall include all associated costs required to be
capitalized in accordance with GAAP.
"MATURITY DATE" shall mean March 5, 2006.
"MAXIMUM SWINGLINE AMOUNT" shall mean $5,000,000.
"MHO, LLC" shall mean MHO, LLC, an Arizona limited liability
company and wholly-owned Subsidiary of M/I Homes and indirect Subsidiary of
Borrower.
"M/I ANCILLARY BUSINESSES" shall mean the businesses listed as
M/I Ancillary Businesses on Schedule 4 hereto and each business in which
investments are made as permitted under subsection 7.6(k) hereof and (unless
already an M/I Ancillary Business) which are at such
14
time designated as an "M/I Ancillary Business" by Borrower, each of which shall
be a corporation, limited partnership, limited liability partnership or limited
liability company which is engaged solely in activities reasonably related to
the sale of single family housing, provided that such investment or other
ownership interest shall be as (a) a shareholder if the business is a
corporation, (b) a limited partner if the business is a limited partnership, (c)
a limited liability partner if the business is a limited liability partnership,
or (d) a limited liability member if the business is a limited liability
company. As used herein, the term "Subsidiary" shall not include any M/I
Ancillary Business.
"M/I FINANCIAL CORP." shall mean M/I Financial Corp., an Ohio
corporation and wholly-owned Subsidiary of Borrower.
"M/I FINANCIAL CORP. LIENS" shall have the meaning set forth
in subsection 7.1 hereof.
"M/I FINANCIAL CORP. LOAN AGREEMENT" shall mean the Revolving
Credit Agreement by and among M/I Financial Corp., Borrower and Guaranty Bank,
effective as of May 3, 2001, as the same may be amended, extended, renewed or
replaced from time to time.
"M/I HOMES" shall mean M/I Homes, Inc., an Arizona
corporation, a wholly-owned Subsidiary of Borrower.
"M/I HOMES CONSTRUCTION, INC." shall mean M/I Homes
Construction, Inc., an Arizona corporation and wholly-owned Subsidiary of
Borrower.
"M/I PROPERTIES LLC" shall mean M/I Properties LLC, an Ohio
limited liability company and wholly-owned Subsidiary of Borrower.
"M/I SERVICE CORP." shall mean M/I Schottenstein Homes Service
Corp., an Ohio corporation and wholly-owned Subsidiary of Borrower.
"MODEL HOUSES" shall mean (a) all Housing Units owned by
Borrower or any Guarantor which are being used as sales models and (b) all
Housing Units owned by Borrower or any Guarantor for which there has been a
Start of Construction which upon completion will be used as sales models.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"MORTGAGE LOAN REPURCHASE OBLIGATIONS" shall mean those
obligations (as more particularly described in this definition) of M/I Financial
Corp. under a Purchase Commitment to repurchase (a) Eligible Mortgage Loans, (b)
first mortgage loans that are not Eligible Mortgage Loans solely because either
(i) the mortgagor did not purchase from Borrower the home subject to such
mortgage loan, or (ii) such mortgage loan is more than sixty (60) days old as
determined by the date of the note which evidences such loan, (c) those second
mortgage loans permitted by subsection 7.6(g) hereof, and (d) those first
mortgage refinancing loans permitted by subsection 7.6(h) hereof; provided, the
obligations to repurchase the mortgage loans described in clauses (a) through
(d) of this definition shall exist only if (A) such mortgage loans do not meet
for any reason the investor guidelines regarding loan origination, loan
processing or loan closing and
15
regarding underwriting criteria for such Purchase Commitment or defects are
noted in origination, processing or closing of mortgage loans by the investor,
(B) M/I Financial Corp. or its employees engage in any fraudulent conduct or
misrepresentation, (C) the mortgagor fails to make timely payment of any of the
first, second, third or fourth installments due under such mortgage loan, and
such delinquency remains uncured for a period of more than 30 days or results in
a foreclosure action, (D) the mortgagor fails to make timely payment of two or
more monthly installments within six months from the date such mortgage loan is
purchased by such secondary market lender, (E) the mortgagor engages in
fraudulent conduct or misrepresentation or (F) with respect to mortgage loans
issued pursuant to the North Carolina Housing Finance Authority bond programs,
the mortgagor fails to make timely payment of the first installment due under
such mortgage loans.
"NEW BANK" shall have the meaning set forth in subsection
2.6(b)(i) hereof.
"NO DEFAULT CERTIFICATE" shall have the meaning set forth in
subsection 6.17 hereof.
"NORTHEAST OFFICE VENTURE" shall mean Northeast Office
Venture, Limited Liability Company, a Delaware limited liability company and
wholly-owned Subsidiary of Borrower.
"NOTE" or "NOTES" shall mean a promissory note or notes
substantially in the form of Exhibit C hereto, executed and delivered by
Borrower payable to the order of a Bank, and delivered pursuant to subsection
2.2, subsection 2.6(b) or subsection 11.7(b) hereof, as the same may be
modified, amended, supplemented or replaced from time to time.
"NOTICE OF BORROWING" shall have the meaning set forth in
subsection 2.3(a) hereof.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning set
forth in subsection 3.1 hereof.
"OBLIGATIONS" shall mean all unpaid principal of and accrued
and unpaid interest on the Loans, all Reimbursement Obligations, all accrued and
unpaid fees and all expenses, reimbursements, indemnities and other obligations
of Borrower to the Banks or to any Bank, Agent, Issuing Bank or any indemnified
party arising under the Loan Documents.
"OFFICE BUILDING" shall mean the office building at 0 Xxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000 in which Borrower is a tenant.
"OPERATING LEASE" shall mean, at any date, any lease other
than a lease which is required to be capitalized in accordance with GAAP,
provided such lease has, as of the date of determination, a remaining term of
twelve (12) months or more, or may at the option of the lessor or lessee be
extended for a term of twelve (12) months or more.
"OTHER TAXES" shall have the meaning set forth in subsection
3.6(b) hereof.
"PARTICIPANTS" shall have the meaning set forth in subsection
11.4 hereof.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"PERFORMANCE LETTER OF CREDIT" shall mean any Letter of Credit
of the Borrower or a Guarantor that is issued for the benefit of a municipality,
other governmental authority, utility, water or sewer authority, or other
similar entity for the purpose of assuring such beneficiary of the Letter of
Credit of the proper and timely completion of construction work.
"PERSON" shall mean an individual, a partnership (including
without limitation a joint venture), a limited liability company (including
without limitation a joint venture), a corporation (including without limitation
a joint venture), a business trust, a joint stock company, a trust, an
unincorporated association, a Governmental Authority or any other entity of
whatever nature (including without limitation a joint venture).
"PLAN" shall mean any pension plan which is covered by Title
IV of ERISA and in respect of which Borrower or a Commonly Controlled Entity is
an "employer" as defined in Section 3(5) of ERISA.
"PRICING FACTOR" shall mean either the Debt/Cap Ratio or the
Senior Debt Rating.
"PRIME RATE" shall mean the rate of interest per annum equal
to the prime rate of interest announced from time to time by Bank One or its
parent (which is not necessarily the lowest rate charged to any customer), with
any change thereto effective as of the opening of business on the day of the
change.
"PROCEEDS AFTER DEFAULT" shall have the meaning set forth in
Section 9 hereof.
"PURCHASE COMMITMENT" shall mean a commitment from a secondary
market lender, pursuant to an agreement with M/I Financial Corp., either with
respect to a particular mortgage loan or with respect to mortgage loans meeting
specified criteria, to purchase such mortgage loan or loans without recourse
(except for Mortgage Loan Repurchase Obligations) for an amount not less than
the difference of (a) the face amount of the note evidencing such mortgage
loan(s), minus (b) the sum of (i) the points agreed upon between M/I Financial
Corp. and such secondary market lender, and (ii) the amount of funds (for
example, without limitation, escrow funds and origination fees), other than
points, received by M/I Financial Corp. at the loan closing from the mortgagor.
"QUARTERLY PAYMENT DATE" shall mean the first day of each
January, April, July and October.
"RATABLE SHARE" shall mean, with respect to any Bank on any
date, the ratio of (a) the amount of the Commitment of such Bank to (b) the
Aggregate Commitment.
"RATING" shall mean, with respect to a Rating Agency, (a) such
Rating Agency's publicly-announced rating of Borrower's senior unsecured bank
credit facility or (b) if such Rating Agency does not publicly announce the
rating described in clause (a) above, such Rating Agency's publicly-announced
rating of Borrower's unsecured long-term debt or (c) if such
17
Rating Agency does not publicly announce either of the ratings described in
clauses (a) or (b) above, such Rating Agency's publicly announced corporate
rating of Borrower.
"RATING AGENCY" shall mean each of Fitch, Moody's or S&P.
"RECEIVABLES" shall mean the net proceeds payable to, but not
yet received by, Borrower or a Guarantor following a Housing Unit Closing or Lot
Closing. "Receivables" shall not include amounts payable to Borrower or a
Guarantor under a mortgage loan.
"REIMBURSEMENT OBLIGATIONS" shall mean Borrower's obligations
to reimburse an Issuing Bank as a result of draws on one or more Facility L/Cs.
"REJECTING BANKS" shall have the meaning set forth in
subsection 2.7(c) hereof.
"REPLACEMENT BANK" shall have the meaning set forth in
subsection 3.10 hereof.
"REPORTABLE EVENT" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"REQUIRED BANKS" shall mean, at any particular time, Banks
having at least 66-2/3% of the aggregate amount of the Revolving Credit Loans
then outstanding or, if no Revolving Credit Loans are then outstanding, Banks
having at least 66-2/3% of the Aggregate Commitment.
"REQUIREMENT OF LAW" shall mean as to any Person, the
Certificate (or Articles) of Incorporation, By-Laws (or Code of Regulations),
Close Corporation Agreement (where applicable) or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination, including without limitation all environmental laws, rules,
regulations and determinations, of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its properly is
subject.
"RESPONSIBLE OFFICER" shall mean as to Borrower or any of
Borrower's Subsidiaries, the Chairman, President, Chief Operating Officer, Chief
Executive Officer, Senior Executive Vice President or a Senior Vice President of
such Person and, with respect to financial matters and matters described in
subsection 3.8 hereof, the Chief Financial Officer, Treasurer or Controller of
such Person, in each case acting in his or her capacity as such.
"REVOLVING CREDIT LOANS" shall mean the revolving credit loans
made pursuant to this Agreement that are more particularly described in
subsection 2.1 hereof.
"S&P" shall mean Standard & Poor's Rating Services.
"S CORPORATION" shall have the meaning set forth in Section
1361(a)(l) of the Code.
"SECURED INDEBTEDNESS" shall mean all Indebtedness of Borrower
or any of its Subsidiaries (excluding Indebtedness owing to Borrower or any of
its Subsidiaries) that is
18
secured by a Lien on assets of Borrower or any of its Subsidiaries (including
without limitation purchase money Indebtedness, non-recourse Indebtedness and
Capital Lease obligations).
"SENIOR DEBT RATING" shall mean (a) at any time at which each
of Xxxxx'x, Fitch and S&P publicly announces a Rating, the second highest of
such three Ratings; (b) at any time at which Moody's and S&P publicly announce
Ratings but Fitch does not, the higher of such Ratings; and (c) at any time at
which Moody's or S&P (but not both) publicly announces a Rating (and regardless
of whether Fitch publicly announces a Rating), the Rating so publicly announced
by Moody's or S&P. At any time at which neither Moody's nor S&P publicly
announces a Rating, no Senior Debt Rating shall be deemed to exist. The Senior
Debt Rating shall change if and when such Rating(s) change, and such change in
the Senior Debt Rating shall have the effect provided for in subsection 2.5 and
elsewhere in this Agreement.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a
Multiemployer Plan (as defined in ERISA).
"SPECULATIVE HOUSING UNIT" shall mean any Housing Unit owned
by the Borrower or a Subsidiary that is not a Housing Unit under Contract and
shall include, without limitation, all Model Houses.
"START OF CONSTRUCTION" shall mean the commencement of the
digging of the foundation or footer for a detached or attached single family
house (including a townhouse condominium building or condominium building) on
Land that immediately prior thereto constituted a Lot hereunder.
"SUBORDINATED INDEBTEDNESS" shall mean, at any date, (i) the
unsecured Indebtedness of Borrower created as a result of the Fleet Agreement
outstanding at such date and (ii) all other future unsecured subordinated
Indebtedness of Borrower, the terms and manner (including without limitation the
terms and manner with respect to subordination) of which are satisfactory to
Required Banks in their sole discretion and approved in writing by Required
Banks and which is subordinate to (a) the Obligations and (b) Borrower's
obligations, if any, as a guarantor or otherwise of the obligations of M/I
Financial Corp. (including without limitation the obligations with respect to
the M/I Financial Corp. Loan Agreement).
"SUBSIDIARY" shall mean, as to any Person, a corporation,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, limited liability company or other entity are at the time
owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by such Person, and with
respect to Borrower shall include all Subsidiaries of Subsidiaries of Borrower.
Unless otherwise specified, "Subsidiary" means a Subsidiary of Borrower
(including Subsidiaries of Subsidiaries); provided that "Subsidiary" shall not
include any M/I Ancillary Business.
"SUNTRUST" shall mean SunTrust Bank.
19
"SUPPLEMENTAL GUARANTY" shall have the meaning set forth in
the Guaranty Agreement.
"SWINGLINE EXPIRY DATE" shall mean the date which is ten (10)
Business Days prior to the Maturity Date.
"SWINGLINE LOAN" shall have the meaning set forth in
subsection 2.12 hereof.
"TAXES" shall mean any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and any and all
liabilities with respect to the foregoing, but excluding Excluded Taxes and
Other Taxes.
"TRANCHE" shall mean the collective reference to those
Eurodollar Rate Loans, the then current Interest Periods with respect to all of
which begin on the same date and end on the same date (whether or not such
Eurodollar Rate Loans shall originally have been made on the same day).
"UNIFORM CUSTOMS" shall mean the Uniform Customs and Practice
for Documentary Credits, 1993 revision, ICC Publication No. 500, or amendment
thereof or successor thereto referenced in Agent's issued letters of credit.
"UNIMPROVED ENTITLED LAND" shall mean all Lots that are
neither Lots under Development, Finished Lots or Lots under Contract.
"UPDATED CERTIFICATE OF DEFAULT" shall have the meaning set
forth in subsection 6.17 hereof.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used herein, in the Notes or in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to Borrower and Borrower's Subsidiaries not defined in subsection 1.1
hereof, to the extent not defined, shall have the respective meanings given to
them under GAAP.
(c) Any reference to "value" of property shall mean the lower
of cost or market value of such property, determined in accordance with GAAP.
(d) The definition of any document or instrument includes all
schedules, attachments and exhibits thereto and all renewals, extensions,
supplements and amendments thereof; terms otherwise defined herein have the same
meanings throughout this Agreement.
(e) "HEREUNDER," "herein," "hereto," "this Agreement" and
words of similar import refer to this entire document; "including" is used by
way of illustration and not by
20
way of limitation, unless the context clearly indicates the contrary; and the
singular includes the plural and conversely.
SECTION 2: AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT LOANS, SWINGLINE
------------------------------------------------------------------
LOANS AND FACILITY L/CS
-----------------------
2.1 COMMITMENTS.
(a) Each Bank severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Credit Loans to the Borrower from time
to time during the Commitment Period, and to purchase undivided interests and
participations in Facility Letters of Credit in accordance with subsection 2.16
hereof, in an aggregate principal amount of Loans made by such Bank and of such
Bank's Ratable Share of the Facility L/C Obligations not to exceed at any time
outstanding the amount set forth in Schedule 1 hereto (such Bank's obligations
to make Revolving Credit Loans and to purchase undivided interests and
participations in Facility L/Cs in accordance with subsection 2.16 hereof in
such amounts, as reduced, increased or otherwise modified from time to time
pursuant to the terms of this Agreement, being herein referred to as such Bank's
"COMMITMENT"), subject to the limitations set forth in subsection 2.1(b) hereof.
(b) The aggregate amount of Borrowing Base Indebtedness at any
one time outstanding may not exceed the Borrowing Base, and no Revolving Credit
Loan (or Swingline Loan) shall be made, nor shall any Facility L/C be issued,
that would have the effect of increasing the then outstanding amount of the
Borrowing Base Indebtedness to an amount exceeding such Borrowing Base, provided
that a Revolving Credit Loan shall not be deemed to have increased the amount of
the Borrowing Base Indebtedness if, and only to the extent that, the proceeds of
such Revolving Credit Loan are immediately used to repay a Swingline Loan.
(c) No Revolving Credit Loans shall be made at any time that
any Swingline Loan is outstanding, except for Revolving Credit Loans that are
used, on the day on which made, to repay in full the outstanding principal
balance of the Swingline Loans. During the Commitment Period and as long as no
Default or Event of Default exists, Borrower may borrow, prepay in whole or in
part and reborrow Revolving Credit Loans, all in accordance with the terms and
conditions hereof.
(d) Subject to the terms and conditions of this Agreement
(including the limitations on the availability of Eurodollar Rate Loans and
including the termination of the Aggregate Commitment as set forth in Section 9
hereof), the Revolving Credit Loans may from time to time be (i) Eurodollar Rate
Loans, (ii) ABR Loans, or (iii) a combination thereof, as determined by Borrower
and notified to Agent in accordance with subsection 2.3 hereof, provided (a)
that no Revolving Credit Loan shall be made as a Eurodollar Rate Loan after the
day that is one month prior to the last day of the Commitment Period, and (b)
that the maximum number of Tranches that may be outstanding at any one time as
Revolving Credit Loans may not exceed eight in the aggregate.
2.2 NOTES. The Revolving Credit Loans made by Banks pursuant hereto
shall be evidenced by Notes, payable to the order of each Bank in the amount of
its Commitment and
21
evidencing the obligation of Borrower to pay the aggregate unpaid principal
amount of the Revolving Credit Loans made by such Bank, with interest thereon as
prescribed in subsection 2.5 hereof. Each Bank is hereby authorized to record
electronically or otherwise the date and amount of each Revolving Credit Loan
disbursement made by such Bank, and the date and amount of each payment or
prepayment of principal thereof, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded; provided,
however, the failure of such Bank to make any such recordation(s) shall not
affect the obligation of Borrower to repay outstanding principal, interest, or
any other Obligation due hereunder or under the Notes in accordance with the
terms hereof and thereof. Each Note shall (a) be dated as of the date hereof,
(b) be stated to mature on the Maturity Date, which Maturity Date may be
extended as provided in subsection 2.7 hereof, and (c) bear interest for the
period from and including the date thereof on the unpaid principal amount
thereof from time to time outstanding at the applicable interest rate per annum
determined as provided in subsection 2.5 hereof. Interest on each Revolving
Credit Loan shall be payable as specified in subsection 2.5 hereof.
2.3 PROCEDURE FOR BORROWING.
(a) Borrower may borrow under the Commitments (subject to the
limitations on the availability of Eurodollar Rate Loans), during the Commitment
Period, provided Borrower shall give Agent written notice (the "NOTICE OF
BORROWING"), which Notice of Borrowing must be received (i) prior to 11:00 a.m.,
Chicago time, at least three (3) Business Days prior to the requested Borrowing
Date for that part of the requested borrowing that is to be Eurodollar Rate
Loans, or (ii) prior to 10:00 a.m., Chicago time on or before the requested
Borrowing Date for that part of the requested borrowing that is to be ABR Loans
which Notice of Borrowing, in the case of ABR Loan(s), shall be irrevocable.
Each Notice of Borrowing shall specify (A) the Borrowing Date (which shall be a
Business Day), (B) the amount of the requested borrowing, (C) whether the
borrowing is to be of Eurodollar Rate Loans, ABR Loans or a combination thereof
and (D) if the borrowing is to be entirely or partly of Eurodollar Rate Loans,
the amount of each ABR Loan, if any, and the respective amounts of each such
Eurodollar Rate Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing pursuant to the Commitments shall be in the principal
amount (1) in the case of ABR Loans, of $1,000,000 or any larger amount which is
an even multiple of $100,000, and (2) in the case of Eurodollar Rate Loans, of
$10,000,000 or any larger amount which is an even multiple of $1,000,000.
(b) After the Borrower gives Notice of Borrowing with respect
to Eurodollar Rate Loans, Agent, by 9:00 a.m., Chicago time, two Business Days
prior to the requested Borrowing Date, shall advise the Borrower of the
applicable interest rate(s) (which is the sum of the applicable Eurodollar
Rate(s) and the Applicable Eurodollar Margin) for the Eurodollar Rate Loan(s)
and Interest Period(s) requested in the Notice of Borrowing. Not more than two
hours thereafter, the Borrower shall give Agent written irrevocable confirmation
of whether or not the Borrower selects Eurodollar Rate Loan(s) on such Borrowing
Date and, if so, the amount(s) and Interest Period(s) of such Eurodollar Rate
Loan(s). If the Borrower's written confirmation is timely made, the Borrower
shall be deemed to be requesting borrowing(s) of Eurodollar Rate Loan(s) in the
amount(s) and for the Interest Period(s) stated in the confirmation. If the
Borrower's confirmation is not timely made, the Borrower shall be deemed
22
to have requested a borrowing entirely as an ABR Loan in the aggregate amount
and on the Borrowing Date specified in the Notice of Borrowing.
(c) By noon, Chicago time, (i) with respect to any ABR Loan,
on the requested Borrowing Date and (ii) with respect to any Eurodollar Rate
Loan, two Business Days prior to the requested Borrowing Date, Agent shall give
notice by facsimile to each Bank of such request, specifying (A) the Borrowing
Date (which shall be a Business Day), (B) the amount of the requested borrowing,
(C) whether the borrowing is to be of Eurodollar Rate Loans, ABR Loans or a
combination thereof, and (D) if the borrowing is to be entirely or partly of
Eurodollar Rate Loans, the amount of each ABR Loan, if any, and the respective
amounts of each such Eurodollar Rate Loan, the applicable Eurodollar Rate for
each such Eurodollar Rate Loan and the respective lengths of the initial
Interest Periods therefor. Subject to satisfaction of the terms and conditions
of this Agreement, each Bank shall deposit funds with Agent for the account of
Borrower by 2:00 p.m. Chicago time on the Borrowing Date by wire transfer or
other immediately available funds equal to its Ratable Share of the Revolving
Credit Loans to be made on the Borrowing Date. The Loan(s) will then be made
available to Borrower by Agent crediting the account of Borrower on the books of
Agent with the aggregate amounts made available to Agent by Banks, and in like
funds as received by Agent.
(d) Each Bank may book its Loans and its participations in
Facility L/Cs at any Lending Installation selected by such Bank and may change
its Lending Installation from time to time. All terms of this Agreement shall
apply to any such Lending Installation and the Loans and the Notes issued
hereunder shall be deemed held by each Bank for the benefit of any such Lending
Installation. Each Bank and Issuing Bank may, by written notice to the Agent and
Borrower in accordance with subsection 11.2 hereof, designate replacement or
additional Lending Installations through which Loans will be made by it or
Facility L/Cs will be issued by it and for whose account Loan payments or a
payment with respect to Facility L/Cs are to be made.
(e) Each ABR Loan shall continue as an ABR Loan unless and
until such ABR Loan is converted into a Eurodollar Rate Loan pursuant to
subsection 3.1 or is repaid in accordance with subsection 2.11. Each Eurodollar
Rate Loan shall continue as a Eurodollar Rate Loan until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Rate Loan
shall be automatically converted into an ABR Loan unless (x) such Eurodollar
Loan is or was repaid in accordance with subsection 2.11 or (y) such Eurodollar
Rate Loan is continued as a Eurodollar Rate Loan in accordance with subsection
3.1.
2.4 COMMITMENT FEE. Borrower agrees to pay to Agent for the benefit of
each Bank a commitment fee for the Commitment Period, computed at the Applicable
Commitment Rate per annum on the average daily unused amount of each Bank's
Commitment during the Commitment Period, payable quarterly in arrears and due on
each Quarterly Payment Date and on the last day of the Commitment Period,
commencing on the first of such dates to occur after the date hereof. For
purposes of determining the unused portion of the Aggregate Commitment and the
unused portion of a Bank's Commitment hereunder, the Aggregate Commitment shall
be deemed used to the extent of the aggregate face amount of the outstanding
Facility L/Cs and such Bank's Commitment shall be deemed used to the extent of
such Bank's Ratable Share of the aggregate face amount of the outstanding
Facility L/Cs.
23
2.5 INTEREST; DEFAULT INTEREST.
(a) Except as provided in subsection 2.5(d) hereof, (i) the
Revolving Credit Loans shall bear interest on the unpaid principal amount
thereof at a rate per annum equal to (y) in the case of ABR Loans, the Alternate
Base Rate in effect from time to time, plus the Applicable ABR Margin in effect
for such day, and (z) in the case of Eurodollar Rate Loans, if permitted
hereunder at such time, the Eurodollar Rate determined for such day, plus the
Applicable Eurodollar Margin in effect for such day, and (ii) the Swingline
Loans shall bear interest on the unpaid principal amount thereof at a rate per
annum equal to the Alternate Base Rate in effect from time to time, plus the
Applicable ABR Margin in effect for such day.
(b) The Applicable Margins and the Applicable Commitment Rate
shall be determined by reference to the Senior Debt Rating and the Debt/Cap
Ratio in accordance with the following table and the provisions of this
subsection 2.5(b):
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
Level Senior Debt Debt/Cap Applicable Applicable ABR Applicable
Rating Ratio Eurodollar Margin Commitment
Margin Rate
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
I BB+/Ba1 Less than 35% 1.50% -0- 0.225%
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
II BB/Ba2 Equal to or more than 1.625% -0- 0.25%
35% and less than 40%
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
III BB-Ba3 Equal to or more than 1.75% 0.125% 0.25%
40% and less than 55%
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
IV B+/B1 & Below 55% or more 2.00% 0.375% 0.375%
---------------- ------------------- ----------------------- ---------------- -------------------- -------------------
The Applicable Margins and Applicable Commitment Rate shall be
determined on the basis of the Levels of the Pricing Factors in accordance with
the following provisions:
(i) At any time at which the Pricing Factors are at the same
Level, the Applicable Margins and Applicable Commitment Rate shall be
at that Level;
(ii) At any time at which the Pricing Factors are at different
Levels, the Applicable Margins and the Applicable Commitment Rate shall
be at the Level that corresponds to (A) the Level of the higher of the
two Pricing Factors (i.e. the lower pricing) whenever the Pricing
Factors differ by one Level and (B) the Level that is one Level lower
than the higher of the two Pricing Factors (i.e., the higher pricing)
whenever the Pricing Factors differ by more than one Level;
(iii) At any time at which there is or is deemed to be no
Senior
24
Debt Rating, the Applicable Margins and the Applicable Commitment Rate
shall be at (A) the Level that is one Level lower (i.e., the higher
pricing) than the Level of the Debt/Cap Ratio or (B) Level IV if the
Debt Cap Ratio is at Level IV; and
(iv) At any time at which (A) Fitch does not publicly announce
a Rating and (B) Xxxxx'x or S&P (but not both) publicly announces a
Rating, the Applicable Margin and Applicable Commitment Rate shall be
determined in accordance with subsections (i) and (ii) above (as
applicable), except that (A) the Applicable Eurodollar Margin set forth
in the Table above shall be increased by 0.075% and (B) the Applicable
Commitment Rate set forth in the Table shall be increased by 0.025%.
(c) The Applicable Margins and the Applicable Commitment Rate
shall be adjusted, from time to time, effective (as applicable) on the first
Business Day after any change in the Senior Debt Ratings that results in any
change in the Applicable Margins or Applicable Commitment Rate or the fifth
(5th) Business Day after the Agent's receipt of the Borrower's quarterly or
annual financial statements evidencing a change in the Debt/Cap Ratio that
results in any change in the Applicable Margins or Applicable Commitment Rates,
PROVIDED, HOWEVER, that (i) if Borrower fails to deliver such financial
statements when required hereunder and such financial statements (when
delivered) evidence a change in the Debt/Cap Ratio that results in an increase
in an Applicable Margin or Applicable Commitment Rate, such increase shall be
effective as of the fifth (5th) Business Day after the date on which such
financial statements were required to be delivered hereunder and (ii) any change
in the Applicable Eurodollar Margin shall only apply to Eurodollar Rate Loans
for Interest Periods commencing after such change in the Applicable Eurodollar
Margin is effective.
(d) As of the date hereof, the Applicable Margins and
Applicable Commitment Rate are at Level III.
(e) If all or a portion of the principal amount of any of the
Revolving Credit Loans made hereunder (whether as ABR Loans or Eurodollar Rate
Loans or a combination thereof) or the Swingline Loans or any installment of
interest on any Revolving Credit Loan or Swingline Loan or any commitment fee of
Facility L/C fees shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), any such overdue principal amount and, to the extent
permitted by applicable law, any overdue installment of interest on any
Revolving Credit Loan or Swingline Loan or any overdue payment of commitment
fees or Facility L/C Fees hereunder shall, without limiting any other rights of
Banks, bear interest at a rate per annum which is the sum of the Alternate Base
Rate in effect from time to time, plus the Applicable ABR Margin, plus one
percent (1%), from the date of such non-payment until paid in full (before, as
well as after, judgment); provided, however, if all or any portion of any
principal on any Revolving Credit Loan made as a Eurodollar Rate Loan hereunder
shall not be paid when due and the then current Interest Period for such
Eurodollar Rate Loan has not yet expired, the entire principal amount of such
Eurodollar Rate Loan and, to the extent permitted by applicable law, any overdue
installment of interest on such Eurodollar Rate Loan shall, without limiting any
other rights of Banks, bear interest at a rate per annum which is the sum of one
percent (1%) plus the applicable non-default interest rate (which is the sum of
the applicable Eurodollar Rate and the Applicable Eurodollar Margin) on such
Eurodollar Rate Loan then in effect from the date of such non-payment until the
expiration of the then
25
current Interest Period with respect to such Eurodollar Rate Loan (before, as
well as after, judgment); thereafter, the entire principal amount of such
Eurodollar Rate Loan and, to the extent permitted by applicable law, any overdue
installment of interest on such Eurodollar Rate Loan shall, without limiting any
other rights of Banks, bear interest at a rate per annum which is the sum of the
Alternate Base Rate in effect from time to time, plus the Applicable ABR Margin,
plus one percent (1%), until paid in full (before, as well as after, judgment).
(f) Interest shall be payable in arrears and shall be due on
each Interest Payment Date.
2.6 TERMINATION, REDUCTION OR INCREASE OF AGGREGATE COMMITMENT.
(a) (i) Borrower shall have the right to terminate the
Aggregate Commitment or, from time to time (and so long as no Default or Event
of Default exists), reduce the amount of the Aggregate Commitment, upon not less
than five (5) Business Days' written notice to each Bank specifying (A) either a
reduction or termination and (B) in the case of a reduction, whether any
prepayment, if required by this Agreement, shall be of ABR Loans, Eurodollar
Rate Loans or a combination thereof, and, in each case if a combination thereof,
the principal allocable to each.
(ii) Any such reduction of the Aggregate Commitment shall be
in the amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof
and shall reduce permanently the amount of the Aggregate Commitment then in
effect. Any such reduction shall be accompanied by (A) prepayment of the
Revolving Credit Loans made hereunder to the extent, if any, that the sum of the
amount of such Revolving Credit Loans and the Facility L/C Obligations then
outstanding exceeds the amount of the Aggregate Commitment, as then reduced,
together with accrued interest on the amount so prepaid to the date of such
prepayment, and (B) if a Revolving Credit Loan is a Eurodollar Rate Loan that is
prepaid other than at the end of the Interest Period applicable thereto, by any
amounts payable pursuant to subsection 3.5 hereof.
(iii) Any such termination of the Commitment shall be
accompanied (A) by prepayment in full of the Revolving Credit Loans then
outstanding hereunder, together with accrued interest thereon to the date of
such prepayment, and the payment of any unpaid commitment fee then accrued
hereunder; (B) with respect to Facility L/Cs, by Borrower's compliance with the
terms of subsection 2.15 hereof; and (C) if a Revolving Credit Loan is a
Eurodollar Rate Loan that is prepaid other than at the end of the Interest
Period applicable thereto, by any amounts payable pursuant to subsection 3.5
hereof.
(iv) Any such reduction or termination of the Aggregate
Commitment shall be allocated to each Bank's Commitment ratably in its Ratable
Share.
(b) (i) Subject to the provisions of this subsection 2.6(b),
Borrower may, at any time and from time to time, request ("FACILITY INCREASE
REQUEST"), by notice to Agent, Agent's approval of an increase of the Aggregate
Commitment within the limitations hereinafter set forth, which Facility Increase
Request shall set forth the amount of such requested increase. Within twenty
(20) days of such Facility Increase Request, Agent shall
26
advise Borrower of its approval or disapproval thereof; failure to so advise
Borrower shall constitute disapproval. Upon approval of Agent, the Aggregate
Commitment may be so increased either by having one or more Eligible Assignees
(other than Banks then holding a Commitment hereunder) approved by Borrower and
Agent (each a "NEW Bank") become Banks hereunder and/or by having any one or
more Banks then holding a Commitment hereunder (at their respective election in
their sole discretion) that have been approved by Borrower and Agent increase
the amount of their Commitments (any such Bank that elects to increase its
Commitment and any New Bank being hereinafter referred to as an "ADDITIONAL
BANK"), provided that (A) unless otherwise agreed by Borrower and Agent, the
Commitment of any New Bank shall not be less than $10,000,000 and (B) unless
otherwise agreed by Borrower and Agent, the increase in the Commitment of any
Bank shall be not less than $5,000,000; (C) the Aggregate Commitment shall not
exceed $375,000,000; (D) Borrower and each Additional Bank shall have executed
and delivered a commitment and acceptance (the "COMMITMENT AND ACCEPTANCE")
substantially in the form of EXHIBIT D hereto and Agent shall have accepted and
executed the same; (E) Borrower shall have executed and delivered to Agent a
Note or Notes payable to the order of each Additional Bank, each such Note to be
in the amount of such Additional Bank's Commitment or increased Commitment (as
applicable); (F) Borrower shall have delivered to Agent an opinion of counsel
(substantially similar to the form of opinion attached hereto as EXHIBIT E,
modified to apply to the increase in the Aggregate Commitment and each Note and
Commitment and Acceptance executed and delivered in connection therewith); (G)
the Guarantors shall have delivered to Agent a written instrument confirming
their consent to the new Commitments or increases in Commitments (as applicable)
and that their Guaranty Agreements continue in full force and effect; and (H)
Borrower and each Additional Bank shall otherwise have executed and delivered
such other instruments and documents as Agent shall have reasonably requested in
connection with such new Commitment or increase in a Commitment (as applicable).
The form and substance of the documents required under clauses (D) through (H)
above shall be fully acceptable to Agent. Agent shall provide written notice to
Banks following any such increase in the Aggregate Commitment hereunder and
shall furnish to Banks copies of the Commitment and Acceptance.
(ii) On the effective date of any increase in the Aggregate
Commitment pursuant to the provisions hereof ("INCREASE DATE"), which Increase
Date shall be mutually agreed upon by Borrower, each Additional Bank and Agent,
each Additional Bank shall make a payment to Agent in an amount sufficient, upon
the application of such payments by all Additional Banks to the reduction of the
outstanding ABR Loans (other than Swingline Loans) held by Banks, to cause the
principal amount outstanding under such ABR Loans made by all Banks (including
any Additional Bank) to be in the proportion of their respective Commitments (as
of such Increase Date). Borrower hereby irrevocably authorizes each Additional
Bank to fund to Agent the payment required to be made pursuant to the
immediately preceding sentence for application to the reduction of the
outstanding ABR Loans held by each Bank, and each such payment shall constitute
a ABR Loan hereunder. Such Additional Bank shall not participate in any
Eurodollar Rate Loans that are outstanding on the Increase Date, but, if
Borrower shall, at any time on or after such Increase Date, convert or continue
any Eurodollar Rate Loans outstanding on such Increase Date, Borrower shall be
deemed to repay such Eurodollar Rate Loans on the date of the conversion or
continuation thereof and then to reborrow as a Eurodollar Rate Loan a like
amount on such date so that each Additional Bank shall make a Eurodollar Rate
Loan on such date in its Ratable Share of such Eurodollar Rate Loans. Each
27
Additional Bank shall also advance its Ratable Share of all Revolving Credit
Loans made on or after such Increase Date and shall otherwise have all of the
rights and obligations of a Bank hereunder on and after such Increase Date.
Notwithstanding the foregoing, upon the occurrence of an Event of Default prior
to the date on which an Additional Bank is holding Revolving Credit Loans equal
to its Ratable Share of all Revolving Credit Loans hereunder, such Additional
Bank shall, upon notice from Agent, on or after the date on which the
Obligations are accelerated or become due following such Event of Default, pay
to Agent (for the account of the other Banks, to which the Agent shall pay their
pro rata shares upon receipt) a sum equal to such Additional Bank's Ratable
Share of each Revolving Credit Loan then outstanding with respect to which such
Additional Bank does not then hold its Ratable Share thereof.
(iii) On the Increase Date and the making of the Loans by an
Additional Bank in accordance with the provisions of the first sentence of
subsection 2.6(b)(ii) hereof, such Additional Bank shall also be deemed to have
irrevocably and unconditionally purchased and received, without recourse or
warranty, from Banks party to this Agreement immediately prior to the Increase
Date, an undivided interest and participation in any Facility L/C then
outstanding, ratably, such that all Banks (including each Additional Bank) hold
participation interests in each such Facility L/C in the proportion of their
respective Commitments (taking into account the increase in the Aggregate
Commitment that is effective on such Increase Date).
(iv) Nothing contained herein shall constitute, or otherwise
be deemed to be, a commitment or agreement on the part of any Bank to increase
its Commitment hereunder at any time or a commitment or agreement on the part of
Borrower or Agent to give or grant any Bank the right to increase its Commitment
hereunder at any time.
2.7 MATURITY DATE OF COMMITMENT; EXTENSION.
(a) Unless earlier terminated pursuant to the terms of this
Agreement, the Aggregate Commitment shall terminate on the Maturity Date, and
the unpaid balance of the Revolving Credit Loans and Swingline Loans outstanding
shall be paid on the Maturity Date.
(b) Not more than once in any fiscal year of Borrower,
Borrower may request an extension of the Maturity Date to the first anniversary
of the then scheduled Maturity Date (but in no event to a date that is later
than the fourth anniversary of the date of such request) by submitting a request
for an extension to Agent not less than 180 days prior to the then scheduled
Maturity Date. Prior to the delivery by Agent to the Banks of such request for
extension, Borrower shall propose to Agent the amount of the fees that Borrower
would agree to pay with respect to such extension if approved by the Banks.
Promptly upon (but not later than five (5) Business Days after) Agent's receipt
and approval of both the extension request and fee proposal (as so approved, the
"EXTENSION REQUEST"), Agent shall deliver to each Bank a copy of, and shall
request each Bank to approve, the Extension Request. Each Bank approving the
Extension Request shall deliver its written approval no later than 60 days after
such Bank's receipt of the Extension Request. Except as otherwise provided in
subsection 2.7(c) below, if and only if the written approval of the Extension
Request by all Banks is received by Agent within such 60-day period, the
Maturity Date shall be extended to the first anniversary of the then scheduled
Maturity Date (as specified in the Extension Request).
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(c) If (i) any Bank or Banks whose pro rata shares (in the
aggregate) of the Aggregate Commitment do not exceed 25% of the Aggregate
Commitment ("REJECTING BANKS") shall not approve an Extension Request, (ii) all
rights and obligations of such Rejecting Banks under this Agreement and under
the other Loan Documents (including, without limitation, their Commitment and
all Loans owing to them) shall have been assigned, within ninety (90) days
following such Extension Request, in accordance with subsection 3.10, to one or
more Replacement Banks who shall have approved in writing such Extension Request
at the time of such assignment, and (iii) no other Bank shall have given written
notice to Agent of such Bank's withdrawal of its approval of the Extension
Request, Agent shall promptly so notify Borrower and each Bank, and the Maturity
Date shall be extended by one (1) year.
(d) Within ten (10) days of Agent's notice to Borrower that
all Banks have approved an Extension Request (whether pursuant to subsection
2.7(b) or 2.7(c)), Borrower shall pay to Agent for the account of the Banks the
applicable extension fees specified in the Extension Request, and Agent shall
promptly remit to each Bank its Ratable Share thereof.
2.8 COMPUTATION OF INTEREST AND FEES. Commitment fees on the Commitment
and interest in respect of the Revolving Credit Loans shall be calculated on the
basis of a 360-day year for the actual days elapsed. Any change in the interest
rate on the Loans and the Notes resulting from a change in the Alternate Base
Rate or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business of the day on which such change in the Alternate Base Rate
or the Eurocurrency Reserve Requirements shall become effective, without notice
to Banks or Borrower. However, Agent shall give Borrower and Banks prompt notice
of all changes in the Alternate Base Rate or the Eurocurrency Reserve
Requirements. Each determination of an interest rate by Agent pursuant to any
provision of this Agreement shall be conclusive and binding on Banks and
Borrower in the absence of manifest error.
2.9 INCREASED COSTS. If a Bank or an Issuing Bank determines that the
amount of capital required or expected to be maintained by such Bank or such
Issuing Bank, any Lending Installation of such Bank or an Issuing Bank, or any
corporation controlling such Bank or Issuing Bank is increased as a result of a
Change, then, within fifteen (15) days of written notice by such Bank or Issuing
Bank (which notice shall be given not later than 180 days after the Change
resulting in such increase), Borrower shall pay such Bank or Issuing Bank the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Bank or Issuing Bank determines is
attributable to this Agreement, its Loans or its issuance of or participation in
Facility L/Cs or its Commitment to make Loans or to issue or to participate in
Facility L/Cs, as the case may be, hereunder (after taking into account such
Bank's or Issuing Bank's policies as to capital adequacy). "Change" means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Bank or Issuing Bank or any Lending Installation or any
corporation controlling any Bank or Issuing Bank. "Risk-Based Capital
Guidelines" means (a) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (b) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and
29
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement. Such
Bank's written notice to Borrower for compensation hereunder shall set forth in
reasonable detail the computation of any additional amounts payable to such Bank
by Borrower, and such request and computation shall be conclusive in the absence
of manifest error. This provision shall remain in full force and effect, with
respect to the Loans until the later of (1) the termination of this Agreement or
(2) the payment in full of all Notes (provided that before accepting final
payment on the Notes, a Bank shall calculate any amounts due it in accordance
with this subsection 2.9 and give notice to Borrower of such amounts as stated
herein, and Borrower shall include such amounts in Borrower's final payment).
This provision shall survive the termination of all Facility L/Cs and, with
respect to Facility L/Cs, shall remain in full force and effect until there is
no existing or future obligation of Agent or any Bank under any Facility L/C.
The provisions of this subsection 2.9 shall be supplemented by the provisions of
Section 3 hereof.
2.10 USE OF PROCEEDS.
(a) The proceeds of the initial Revolving Credit Loans made
hereunder shall be used by Borrower to pay in full the outstanding principal of
and all accrued and unpaid interest on the Revolving Credit Loans and Swingline
Loans (both as defined in the Existing Credit Agreement) under the Existing
Credit Agreement and all accrued and unpaid fees, expenses and other amounts
payable thereunder. Upon Borrower's irrevocable payment in full of such
outstanding amounts under the Existing Credit Agreement, the Existing Credit
Agreement shall be terminated (except as provided in subsection 2.10(b) below in
respect of the Existing L/Cs) and the Banks party thereto shall cancel all
promissory notes and guaranties executed pursuant to the Existing Credit
Agreement. Thereafter, the proceeds of the Revolving Credit Loans made hereunder
shall be used by Borrower for lawful purposes in Borrower's business.
(b) The termination of the Existing Credit Agreement as
provided in subsection 2.10(a) above shall not terminate the Existing L/Cs or
the reimbursement agreements relating thereto, all of which shall remain in full
force and effect. The termination of the Existing Credit Agreement shall
terminate the participation interests in the Existing L/Cs under the Existing
Credit Agreement, and, immediately upon such termination, each Issuing Bank
shall grant and does hereby grant to each Bank hereunder, and each Bank shall
accept and does hereby accept from such Issuing Bank, an undivided interest in
the Existing L/Cs equal to such Bank's Ratable Share of the Existing L/Cs, all
on the terms set forth in subsection 2.16 hereof.
2.11 PAYMENTS; PRO RATA TREATMENT.
(a) Each borrowing by Borrower from Banks hereunder, each
payment (including each prepayment) by Borrower on account of principal of and
interest on the Revolving Credit Loans, each payment by Borrower on account of
any commitment fee hereunder and any reduction of the Commitments shall be made
pro rata according to the respective Banks' Ratable Shares. All payments
(including prepayments) to be made by Borrower hereunder and under the Notes,
whether on account of principal, interest, fees or otherwise, shall be made
without set-off or counterclaim and shall be made prior to 11:00 a.m.,
30
Chicago, Illinois time, on the due date thereof to Agent, for the account of
Banks, at Agent's office at Xxx Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx, in Dollars
and in immediately available funds. Agent shall distribute such payments to
Banks upon receipt in like funds as received, which distributions shall be made
by Agent on the day that it receives such funds if received by 11:00 a.m.
Chicago time and otherwise not later than the next succeeding Business Day. If
the Agent does not distribute such payments to Banks when required, each Bank
shall be entitled to recover from Agent interest on such corresponding amount in
respect of each day from the date such payments were required to be distributed
to such Bank to the date such corresponding amount is actually delivered to such
Bank by Agent, at a rate per annum equal to the Federal Funds Rate for the first
three days and thereafter at the Alternate Base Rate. If any payment hereunder
on an ABR Loan becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment hereunder on a Eurodollar
Rate Loan becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension) unless the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(b) Borrower may from time to time pay, without penalty or
premium, all outstanding ABR Loans, or, in a minimum aggregate amount of
$500,000 or any integral multiple of $100,000 in excess thereof, any portion of
the outstanding ABR Loans upon notice to Agent not later than 11:00 a.m. Chicago
time on the date of payment. Borrower may from time to time pay, subject to the
payment of any funding indemnification amounts required by subsection 3.5 but
without penalty or premium, all outstanding Eurodollar Rate Loans, or, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof, any portion of the outstanding Eurodollar Rate Loans upon notice
to Agent not later than 10:00 a.m. Chicago time on the date of payment.
2.12 SWINGLINE LOANS.
(a) Subject to the terms and conditions of this Agreement,
Bank One in its individual capacity agrees to make at any time and from time to
time after the initial Borrowing Date and prior to the Swingline Expiry Date
swingline loans to Borrower ("SWINGLINE LOANS"), which Swingline Loans (i) shall
be made and maintained as ABR Loans, (ii) shall be denominated in U.S. Dollars,
(iii) may be repaid and reborrowed in accordance with the provisions hereof,
(iv) shall not exceed, in aggregate principal amount at any one time
outstanding, the lesser of (A) the Maximum Swingline Amount and (B) the amount
by which Bank One's Commitment exceeds its share of the sum of all Revolving
Credit Loans and Facility L/C Obligations and (v) shall be subject to the
limitations set forth in subsection 2.1(b) hereof. Bank One will not make a
Swingline Loan after it has received written notice from Borrower or the
Required Banks stating that a Default or an Event of Default exists until such
time as Bank One shall have received a written notice of (i) rescission of such
notice from the party or parties originally delivering the same or (ii) a waiver
of such Default or Event of Default, as required by the Credit Agreement.
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(b) Borrower shall give Bank One irrevocable telephonic or
written notice prior to 2:00 p.m., Chicago time on the requested Borrowing Date
specifying the amount of the requested Swingline Loan which shall be in a
minimum amount of $500,000 or whole multiples of $100,000 in excess thereof. The
Swingline Loans will then be made available to Borrower by Bank One by crediting
the account of Borrower on the books of Bank One.
(c) The Swingline Loans shall be evidenced by the Note held by
Bank One. Bank One is hereby authorized to record electronically or otherwise
the date and amount of each Swingline Loan, and the date and amount of each
payment or prepayment of principal thereof, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided, however, the failure of Bank One to make any such recordation(s) shall
not affect the obligation of Borrower to repay outstanding principal, interest,
or any other amount due hereunder in accordance with the terms hereof and
thereof. The Swingline Loan shall (i) mature on the Swingline Expiry Date, and
(ii) bear interest for the period from and including the date thereof on the
unpaid principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in subsection 2.5 hereof.
Interest on each Swingline Loan shall be payable as specified in subsection 2.5
hereof.
(d) Bank One, at any time and in its sole and absolute
discretion, may (and, not later than three (3) Business Days after the making of
a Swing Line Loan, shall), on behalf of Borrower (which hereby irrevocably
directs Bank One to act on Borrower's behalf), request each Bank, including Bank
One, to make a Revolving Credit Loan (each, a "MANDATORY BORROWING") in an
amount equal to such Bank's Ratable Share of the amount of the Swingline Loans
(provided that each such request shall be deemed to have been automatically
given upon the occurrence of a Default or an Event of Default under Section 9 or
upon the exercise of any of the remedies provided in the last paragraph of
Section 9), in which case each Bank shall make the proceeds of its Revolving
Credit Loan available to Bank One on the immediately succeeding Business Day in
its Ratable Share thereof, and the proceeds thereof shall be applied directly to
repay Bank One for such outstanding Swingline Loans. Each Bank hereby
irrevocably agrees to make ABR Loans upon one Business Day's notice pursuant to
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified by Bank One notwithstanding (i)
that the amount of the Mandatory Borrowing may not comply with the minimum
borrowing amount otherwise required hereunder, (ii) whether any conditions
specified in Section 5 are then satisfied, (iii) whether a Default or an Event
of Default has occurred and is continuing, (iv) the date of such Mandatory
Borrowing, (v) any reduction in the Commitments after any such Swingline Loans
were made, (vi) Borrower's compliance with Borrowing Base requirements, (vii)
any set-off, counterclaim, recoupment, defense or other right which such Bank
may have against Bank One, Borrower or any other Person for any reason
whatsoever, or (viii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code in respect of Borrower), each Bank (other than Bank
One) hereby agrees that it shall forthwith purchase from Bank One (without
recourse or warranty) a participation interest in such outstanding Swingline
Loans as shall be necessary to cause the Banks to hold participation interests
in such Swingline Loans in the proportion of their respective Ratable Shares
thereof, provided that all interest payable on the Swingline Loans shall
32
be for the account of Bank One until the date the Mandatory Borrowing is made,
and, to the extent attributable to the Mandatory Borrowing, shall be payable to
the Bank making such Mandatory Borrowing from and after the date such Mandatory
Borrowing is made.
(e) Whenever, at any time after Bank One has received from any
Bank such Bank's assigned interest in a Swingline Loan and Bank One receives any
payment on account thereof Bank One will distribute to such Bank its assigned
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's assigned
interest was outstanding and funded); provided, however, that in the event that
such payment received by Bank One is required to be returned, such Bank will
return to Bank One any portion thereof previously distributed by Bank One to it.
2.13 THE FACILITY L/CS. So long as no Default or Event of Default
exists, Bank One and each other Bank that is designated as an Issuing Bank in
accordance with subsection 2.14(a) hereof, agree to issue Facility L/Cs, on the
terms and conditions hereof, provided that (a) the aggregate of all Facility L/C
Obligations at any one time outstanding shall not exceed Fifty Million and
00/100 Dollars ($50,000,000) and (b) the sum of the aggregate amount of all
Loans and the aggregate amount of all Facility L/C Obligations at any one time
outstanding shall not exceed the Aggregate Commitment.
2.14 DESIGNATION OR RESIGNATION OF ISSUING BANK.
(a) Upon request by Borrower and approval by Agent, a Bank may
at any time agree to be designated as an Issuing Bank hereunder, which
designation shall be set forth in a written instrument or instruments delivered
by Borrower, Agent and such Bank. Agent shall promptly notify the other Banks of
such designation. From and after such designation and unless and until such Bank
resigns as an Issuing Bank in accordance with subsection 2.14(b) below, such
Bank shall have all of the rights and obligations of an Issuing Bank hereunder.
(b) An Issuing Bank shall continue to be an Issuing Bank
unless and until (i) it shall have given Borrower and Agent notice that it has
elected to resign as Issuing Bank and (ii) unless there is, at the time of such
notice, at least one other Issuing Bank, another Bank shall have agreed to be
the replacement Issuing Bank and shall have been approved in writing by Agent
and Borrower. A resigning Issuing Bank shall continue to have the rights and
obligations of the Issuing Bank hereunder solely with respect to Facility L/Cs
theretofore issued by it, notwithstanding the designation of a replacement
Issuing Bank hereunder, but upon its notice of resignation (or, if at the time
of such notice, there is not at least one other Issuing Bank, then upon such
designation of a replacement Issuing Bank), the resigning Issuing Bank shall not
thereafter issue any Facility L/C (unless it shall again thereafter be
designated as an Issuing Bank in accordance with the provisions of this
subsection 2.14). The assignment of, or grant of a participation interest in,
all or any part of its Commitment or Loans by a Bank that is also an Issuing
Bank shall not constitute an assignment or transfer of any of its rights or
obligations as an Issuing Bank.
2.15 ISSUANCE OF FACILITY L/CS.
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(a) Borrower may request an Issuing Bank to issue a Facility
L/C by delivering to such Issuing Bank (with a copy to Agent if Agent is not the
Issuing Bank), no later than 11:00 a.m. (local time at the Issuing Bank's office
designated herein) two (2) Business Days prior to the date on which issuance of
the Facility L/C is requested by Borrower, a standby letter of credit
application and reimbursement agreement in Issuing Bank's then customary form
(the "FACILITY L/C APPLICATION") completed to the satisfaction of Issuing Bank,
together with the proposed form of such letter of credit (which shall comply
with the applicable requirements of subsection 2.15(b) below) and such other
certificates, documents and other papers and information as Issuing Bank may
reasonably request.
(b) Each Facility L/C issued hereunder shall, among other
things, (i) be in such form requested by Borrower as shall be acceptable to the
Issuing Bank in its sole discretion, and (ii) have an expiry date (taking into
account any automatic renewal provisions thereof) occurring not later than
thirty (30) days prior to the Maturity Date. If the Aggregate Commitment is
terminated (whether by acceleration, demand, or otherwise), then, not later than
simultaneously with such termination, all outstanding Facility L/Cs shall be
returned to the Issuing Bank thereof or Borrower shall cash collateralize all
outstanding Facility L/Cs in accordance with Section 8 hereof. Each Facility L/C
Application and each Facility L/C shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the state in which is
located the Issuing Bank's office from which such Facility L/C is issued.
(c) An Issuing Bank shall not issue, amend or extend, at any
time, any Facility L/C:
(i) if the aggregate maximum amount then
available for drawing under Letters of Credit issued by such
Issuing Bank, after giving effect to the Facility L/C or
amendment or extension thereof requested hereunder, shall
exceed any limit imposed by law or regulation upon such
Issuing Bank;
(ii) if, after giving effect to the
issuance, amendment or extension of the Facility L/C requested
hereunder, the aggregate principal amount of the Facility L/C
Obligations would exceed $50,000,000;
(iii) if, after giving effect to the
issuance, amendment or extension of the Facility L/C requested
hereunder, Borrowing Base Indebtedness would exceed the
Borrowing Base as of the most recent Inventory Valuation Date;
(iv) if, after giving effect to the
issuance, amendment or extension of the Facility L/C requested
hereunder, the sum of (A) the outstanding and unpaid principal
amount of the Loans and (B) the Facility L/C Obligations would
exceed the Aggregate Commitment;
(v) if such Issuing Bank receives written
notice from the Agent at or before 11:00 a.m. Chicago time on
the proposed date of issuance, amendment or extension of such
Facility L/C that one or more of the conditions precedent
contained in subsection 2.15(d) below would not on such date
be
34
satisfied, unless such conditions are thereafter satisfied or
waived and written notice of such satisfaction is given to
such Issuing Bank by the Agent; or
(vi) that is in a currency other than U.S.
Dollars.
(d) The issuance, amendment or extension of any Facility L/C
is subject to the satisfaction in full of the following conditions on the date
of such issuance, amendment or extension:
(i) the conditions of subsection 5.2 hereof
are satisfied; and
(ii) no order, judgment or decree of any
court, arbitrator or governmental authority shall enjoin or
restrain such Issuing Bank from issuing the Facility L/C and
no law, rule or regulation applicable to the Issuing Bank and
no directive from any governmental authority with jurisdiction
over the Issuing Bank shall prohibit such Issuing Bank from
issuing Letters of Credit generally or from issuing that
Facility L/C.
(e) Upon receipt of any Facility L/C Application from
Borrower, the Issuing Bank will process such Facility L/C Application, and the
other certificates, documents and other papers delivered to such Issuing Bank in
connection therewith, in accordance with its customary procedures and, upon
satisfaction of all conditions contained in this Agreement, shall promptly issue
the original of such Facility L/C and deliver it to the beneficiary thereof, or
to Borrower which shall deliver such original Facility L/C to the beneficiary,
and furnish a copy thereof to Borrower. The Issuing Bank shall give Agent
written notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance of a Facility L/C, and Agent shall promptly thereafter so notify
all Banks.
(f) No Issuing Bank shall extend or amend any Facility L/C
unless the requirements of this subsection 2.15 are met as though a new Facility
L/C were being requested and issued.
(g) Any Bank may, but shall not be obligated to, issue to
Borrower or any of its Subsidiaries Letters of Credit (that are not Facility
L/Cs) for its own account, and at its own risk.
2.16 FACILITY L/C PARTICIPATIONS.
(a) Each Issuing Bank irrevocably agrees to grant and hereby
grants to each Bank, and, to induce the Issuing Banks to issue Facility L/Cs
hereunder, each Bank irrevocably agrees to accept and purchase and hereby
accepts and purchases from the applicable Issuing Bank, on the terms and
conditions hereinafter stated, for such Bank's own account and risk, an
undivided interest equal to such Bank's Ratable Share in such Issuing Bank's
obligations and rights under each Facility L/C (including, as provided in
Section 2.10(b) hereof, the Existing L/Cs) and the amount of each draft paid by
such Issuing Bank.
(b) Upon receipt from the beneficiary of any Facility L/C of
any demand for payment under such Facility L/C, the Issuing Bank shall notify
Agent and Agent
35
shall promptly notify Borrower and each other Bank as to the amount to be paid
by such Issuing Bank as a result of such demand and the proposed payment date.
The responsibility of the Issuing Bank to Borrower and each Bank shall be only
to determine that the documents (including each demand for payment) delivered
under each Facility L/C in connection with such presentment shall be in
conformity in all material respects with such Facility L/C. The Issuing Bank
shall exercise the same care in the issuance and administration of the Facility
L/Cs as it does with respect to Letters of Credit in which no participations are
granted, it being understood that, in the absence of any gross negligence or
willful misconduct by the Issuing Bank, each Bank shall be unconditionally and
irrevocably liable without regard to the occurrence of an Event of Default or
any condition precedent whatsoever, to reimburse the Issuing Bank on demand for
(i) such Bank's Ratable Share of the amount of each payment made by the Issuing
Bank on each Facility L/C to the extent such amount is not reimbursed by
Borrower pursuant to subsection 2.17 hereof, plus interest thereon to the extent
provided in subsection 2.16(c) below.
(c) If any amount required to be paid by any Bank to an
Issuing Bank in respect of any unreimbursed portion of any payment made by such
Issuing Bank under any Facility L/C is not paid to such Issuing Bank on the date
such payment is due but is paid within three (3) Business Days after such
payment is due, such Bank shall pay to such Issuing Bank on demand an amount
equal to the product of (i) such amount, multiplied by (ii) the daily average
Federal Funds Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Bank, multiplied by (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any Bank pursuant to this
subsection 2.16 is not paid to such Issuing Bank by such Bank within three (3)
Business Days after the date such payment is due, such Issuing Bank shall be
entitled to recover from such Bank, on demand, such amount with interest thereon
calculated from the fourth Business Day after such due date until paid at the
rate per annum applicable to Loans made as ABR Loans hereunder. A certificate of
such Issuing Bank submitted to any Bank with respect to any amounts owing under
this subsection 2.16 shall be conclusive in the absence of manifest error.
(d) Whenever, at any time after such Issuing Bank has made
payment under any Facility L/C and has received from any Bank its Ratable Share
of such payment, such Issuing Bank receives any payment related to such Facility
L/C (whether directly from Borrower or otherwise, including proceeds of
collateral applied thereto by such Issuing Bank), or any payment of interest on
account thereof, such Issuing Bank will distribute to such Bank its Ratable
Share thereof; provided, however, that in the event that any such payment
received by such Issuing Bank shall be required to be returned by such Issuing
Bank, such Bank shall return to such Issuing Bank the portion thereof previously
distributed by such Issuing Bank to it.
2.17 PAYMENTS. Borrower agrees (a) to reimburse each Issuing Bank, for
the pro rata benefit of the Banks in accordance with each Bank's respective
Ratable Share, forthwith upon its or Agent's demand and otherwise in accordance
with the terms of the L/C Application relating thereto, for any expenditure or
payment made by such Issuing Bank under any Facility L/C, and (b) to pay
interest on any unreimbursed portion of any such payments from the date of such
payment until reimbursement in full thereof at a rate per annum equal to (i)
prior to the date which is (A) one (1) Business Day after the day on which such
Issuing Bank demands reimbursement from Borrower for such payment if such demand
is made prior to 10:00 a.m.,
36
Chicago time or (B) two (2) Business Days after the day on which such Issuing
Bank or Agent demands reimbursement if such demand is made at or after 10:00
a.m. Chicago time, the rate which would then be payable on any outstanding ABR
Loan which is not in default, and (ii) thereafter, the rate which would then be
payable on any outstanding ABR Loan which is in default.
2.18 FACILITY L/C FEES.
(a) In lieu of any letter of credit commissions and fees
provided for in any Facility L/C Application (other than standard issuance,
amendment, negotiation and administration fees and expenses), Borrower agrees to
pay Agent, in the case of each Facility L/C, for the account of the Banks and
Issuing Bank (as hereinafter provided), the Facility L/C Fee therefor, on the
average daily undrawn stated amount under such Facility L/C, such fee to be
payable in arrears on each Quarterly Payment Date and on the Maturity Date
(which payment shall be in the amount of all accrued and unpaid Facility L/C
Fees). Facility L/C Fees shall be calculated, for the period to which such
payment applies, for actual days on which such Facility L/C was outstanding
during such period (excluding, in the case of the Existing L/Cs, the portion of
such period prior to the date of this Agreement), on the basis of a 360-day
year. Agent shall promptly remit such Facility L/C Fees, when paid, as follows:
(i) to each Issuing Bank, solely for its own account, with respect to each
Facility L/C issued by such Issuing Bank, an amount per annum equal to the
product of (A) 0.125% per annum and (B) the face amount of such Facility L/C and
(ii) to all Banks, their Ratable Shares of the balance of such Facility L/C
Fees. In addition, an Issuing Bank may charge and retain for its own account,
and Borrower agrees to pay, such Issuing Bank's usual and customary charges with
respect to the issuance, amendment, negotiation and administration of the
Facility L/C.
(b) In the case of the Facility L/C Fee payable on any
Quarterly Payment Date after the date of this Agreement, the Facility L/C Fee
payable for the account of any Bank that was also party to the Existing Credit
Agreement shall be reduced by the amount of any fees received by such Bank under
the Existing Credit Agreement with respect to the Existing L/Cs, to the extent
such fees are applicable to the calendar quarter immediately preceding such
Quarterly Payment Date (or, in the case of the first Quarterly Payment Date
after the date of this Agreement, applicable to the portion of such immediately
preceding calendar quarter after the date of this Agreement).
2.19 LETTER OF CREDIT RESERVES. If any change in any law or regulation
or in the interpretation or application thereof by any court or other
governmental authority charged with the administration thereof shall either (a)
impose, modify, deem or make applicable any reserve, special deposit, assessment
or similar requirement against letters of credit issued by an Issuing Bank, or
(b) impose on an Issuing Bank or any Bank any other condition regarding this
Agreement or any Facility L/C, and the result of any event referred to in clause
(a) or (b) above shall be to increase the cost to an Issuing Bank or any Bank of
issuing or maintaining any Facility L/C (which increase in cost shall be the
result of an Issuing Bank's or any Bank's reasonable allocation of the aggregate
of such cost increases resulting from such events), then, upon demand by an
Issuing Bank or any Bank, Borrower shall immediately pay to Agent, for the pro
rata benefit of such Bank(s), from time to time as specified by Agent or such
Bank(s), additional amounts which shall be sufficient to compensate Agent or
such Bank(s) for such
37
increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at a rate per annum equal to the then
applicable interest rate on ABR Loans. A certificate as to such increased cost
incurred by an Issuing Bank or such Bank(s), submitted by an Issuing Bank or
such Bank(s) to Borrower, shall be conclusive, absent manifest error, as to the
amount thereof. This provision shall survive the termination of this Agreement
and shall remain in full force and effect until there is no existing or future
obligation of any Issuing Bank or any Bank under any Facility L/C.
2.20 FURTHER ASSURANCES. Borrower hereby agrees to do and perform any
and all acts and to execute any and all further instruments reasonably requested
by Agent or an Issuing Bank more fully to effect the purposes of this Agreement
and the issuance of Facility L/Cs hereunder, and further agrees to execute any
and all instruments reasonably requested by an Issuing Bank in connection with
the obtaining and/or maintaining of any insurance coverage applicable to any
Facility L/C.
2.21 OBLIGATIONS ABSOLUTE.
(a) The obligations of the other Banks to an Issuing Bank with
respect to Facility L/Cs issued by such Issuing Bank, and the Reimbursement
Obligations of Borrower with respect to Facility L/Cs, under this Agreement
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including without
limitation the following:
(i) the existence of any claim, set-off, defense or other
right which Borrower may have at any time against any beneficiary, or
any transferee, of any Facility L/C (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with this Agreement, the
transaction contemplated herein, or any unrelated transaction
(including any underlying transaction between Borrower or any
Subsidiary and the beneficiary of such Facility L/C);
(ii) any draft, certificate, statement or any other document
presented under any Facility L/C proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iii) payment by an Issuing Bank under any Facility L/C
against presentation of a draft or certificate which does not comply
with the terms of such Facility L/C, provided that Issuing Bank has
made such payment to the beneficiary set forth on the face of such
Facility L/C;
(iv) the occurrence or any Default or Event of Default; or
(v) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing.
(b) Each Issuing Bank shall be entitled to rely, and shall be
fully protected in relying, upon any Facility L/C, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or
38
other document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by such
Issuing Bank. Each Issuing Bank shall be fully justified in failing or refusing
to take any action under this Agreement unless it shall first have received such
advice or concurrence of the Required Banks as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take such action. Notwithstanding any other provision
of this subsection 2.21, each Issuing Bank shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement in accordance with
a request of the Required Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Banks and any future
holders of a participation in any Facility L/Cs.
2.22 ISSUING BANK REPORTING REQUIREMENTS. Each Issuing Bank shall, no
later than the tenth day following the last day of each month, provide to Agent
a schedule of the Facility L/Cs issued by it showing the issuance date, account
party, original face amount, amount (if any) paid thereunder, expiration date
and the reference number of each Facility L/C outstanding at any time during
such month and the aggregate amount (if any) payable by the Borrower to such
Issuing Bank during the month pursuant to subsection 2.19 hereof. Copies of such
reports shall be provided promptly to each Bank by the Agent.
2.23 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to amounts payable as elsewhere provided in
this Agreement, Borrower hereby agrees to protect, indemnify, pay and save
Agent, each Issuing Bank and each Bank harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) arising from the claims of third parties
against Agent, any Issuing Bank or any Bank as a consequence, direct or
indirect, of (i) the issuance of any Facility L/C other than, in the case of an
Issuing Bank, as a result of its willful misconduct or gross negligence, or (ii)
the failure of an Issuing Bank to honor a drawing under a Facility L/C Credit as
a result of any act or omission, whether rightful or wrongful, of any court or
other Governmental Authority.
(b) As among Borrower, Banks, Agent and each Issuing Bank,
Borrower assumes all risks of the acts and omissions of, or misuse of Facility
L/Cs by, the respective beneficiaries of such Facility L/Cs. In furtherance and
not in limitation of the foregoing, neither an Issuing Bank nor Agent nor any
Bank shall be responsible (other than, in the case of an Issuing Bank, as a
result of its gross negligence or willful misconduct): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Facility L/Cs, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility L/C or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a Facility
L/C to comply fully with conditions required in order to draw upon such Facility
L/C; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile
transmission or otherwise;
39
(v) for errors in interpretation of technical terms; (vi) for any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under any Facility L/C or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Facility L/C of the proceeds of any
drawing under such Facility L/C; or (viii) for any consequences arising from
causes beyond the control of Agent, such Issuing Bank and the Banks including,
without limitation, any act or omission, whether rightful or wrongful, of any
government, court or other governmental agency or authority. None of the above
shall affect, impair, or prevent the vesting of any of such Issuing Bank's
rights or powers under this subsection 2.23.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by an
Issuing Bank under or in connection with the Facility L/Cs issued by it or any
related certificates, if taken or omitted in good faith, shall not put such
Issuing Bank, Agent or any Bank under any resulting liability to Borrower or
relieve Borrower of any of its Obligations hereunder to any such Person.
(d) Notwithstanding anything to the contrary contained in this
subsection 2.23, Borrower shall have no obligation to indemnify an Issuing Bank
under this subsection 2.23 in respect of any liability incurred by an Issuing
Bank arising out of the wrongful dishonor by such Issuing Bank of a proper
demand for payment made under the Facility L/Cs issued by such Issuing Bank,
unless such dishonor was made at the request of Borrower.
SECTION 3: GENERAL PROVISIONS APPLICABLE TO LOANS
--------------------------------------
3.1 CONVERSION/CONTINUATION OPTIONS. Subject to the limitations on the
availability of Eurodollar Rate Loans, Borrower may elect from time to time to
convert outstanding Revolving Credit Loans from ABR Loans to Eurodollar Rate
Loans or to continue any Eurodollar Rate Loan as such upon the expiration of the
then current Interest Period thereof by giving the Agent telephonic or written
notice (the "NOTICE OF Conversion/Continuation"), which Notice of
Conversion/Continuation must be received prior to 11:00 a.m., Chicago time, at
least three (3) Business Days prior to the requested date for the conversion or
continuation, which notice shall specify (i) the date for the conversion or
continuation (which shall be a Business Day); (ii) the aggregate amount of ABR
Loans to be converted or Eurodollar Rate Loans to be continued; and (iii) for
each such ABR Loan to be converted to a Eurodollar Rate Loan and Eurodollar Rate
Loan to be continued as a Eurodollar Rate Loan, the respective amount and the
respective length of the initial Interest Period. Each conversion from ABR Loans
to Eurodollar Rate Loans and each continuation of Eurodollar Rate Loans shall be
in the principal amount of $10,000,000 or any larger amount which is an even
multiple of $1,000,000. After Borrower gives the Notice of
Conversion/Continuation requesting continuation of a Eurodollar Rate Loan,
Agent, by 9:00 a.m., Chicago time, two Business Days prior to the end of the
Interest Period, shall advise Borrower of the applicable interest rate(s) (which
is the sum of the applicable Eurodollar Rate(s) and the Applicable Eurodollar
Margin) for the Eurodollar Rate Loan(s) and Interest Period(s) requested in such
notice. Not more than two hours thereafter, Borrower shall give Agent written
irrevocable confirmation of whether or not Borrower wants to continue the
Eurodollar Rate Loan(s) as such and, if so, the amount and the Interest Period
for each such Eurodollar Rate Loan. If Borrower's confirmation is not timely
made, Borrower shall be deemed to have withdrawn Borrower's notice for a
continuation and the Eurodollar Rate Loan(s) that were the subject of such
request shall convert automatically to an ABR Loan upon
40
the expiration of the then current Interest Period. If Borrower's written
confirmation is timely made, Borrower shall be deemed to be requesting a
continuation of the Eurodollar Rate Loan(s) in the amount(s) and for the
Interest Period(s) stated in such notice. Agent shall give prompt telephonic or
written notice to each Bank of Borrower's request for conversion or
continuation, specifying (i) the date for the conversion or continuation; (ii)
the aggregate amount of ABR Loans to be converted or Eurodollar Rate Loan to be
continued; and (iii) for each such ABR Loan to be converted to a Eurodollar Rate
Loan and each continuation of any Eurodollar Rate Loan, the respective amount,
the respective Eurodollar Rate, and the respective length of the initial
Interest Period applicable thereto. All or any part of outstanding ABR Loans may
be converted or Eurodollar Rate Loans continued as provided herein, provided
that (i) (unless the Required Banks otherwise consent) no ABR Loan may be
converted into a Eurodollar Rate Loan nor any Eurodollar Rate Loan continued as
a Eurodollar Rate Loan upon the expiration of the current Interest Period
therefor when any Default or Event of Default has occurred and is continuing and
(ii) no ABR Loan may be converted into a Eurodollar Rate Loan nor any Eurodollar
Rate Loan continued as a Eurodollar Rate Loan upon the expiration of the current
Interest Period therefor after the date that is one month prior to the last day
of the Commitment Period.
3.2 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day of
any Interest Period, the Agent or the Required Banks shall have determined
(which determination shall be conclusive and binding upon Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, the Agent shall give telecopy, telephonic or written notice thereof to
Borrower and the Banks as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Rate Loans requested to be made on the first day of
such Interest Period shall be made as ABR Loans and (y) any Loans that were to
have been converted on the first day of such Interest Period to or continued as
Eurodollar Rate Loans shall be converted to or continued as ABR Loans. Until
such notice has been withdrawn by the Agent, no further Eurodollar Rate Loans
shall be made or continued as such, nor shall Borrower have the right to convert
ABR Loans to Eurodollar Rate Loans.
3.3 AVAILABILITY OF EURODOLLAR RATE LOANS. If any Bank determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Banks determine that (i) deposits of
a type and maturity appropriate to match fund Eurodollar Rate Loans are not
available or (ii) the interest rate applicable to Eurodollar Rate Loans does not
accurately reflect the cost of making or maintaining Eurodollar Rate Loans, then
the Agent shall suspend the availability of Eurodollar Rate Loans and require
any affected Eurodollar Rate Loans to be repaid or converted to ABR Loans at the
end of the applicable Interest Period.
3.4 REQUIREMENTS OF LAW. If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Bank, or its applicable Lending Installation, branch or any affiliate
thereof, or any Issuing Bank or compliance by any Bank, or its applicable
Lending Installation, branch or any affiliate thereof, or any Issuing Bank with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority, in each case made subsequent to
the date hereof
41
(or, if later, the date on which such Bank becomes a Bank hereunder pursuant to
any permitted assignment or pursuant to subsection 2.6(b) hereof):
(a) shall subject such Bank, or its applicable Lending
Installation, branch or any affiliate thereof, or any Issuing Bank to any tax of
any kind whatsoever with respect to any Eurodollar Rate Loans made by it or its
obligation to make Eurodollar Rate Loans, or to issue or to participate in
Facility L/Cs, or change the basis of taxation of payments to such Bank or
Issuing Bank in respect thereof and changes in taxes measured by or imposed upon
the overall net income, or franchise taxes, or taxes measured by or imposed upon
overall capital or net worth, or branch taxes (in the case of such capital, net
worth or branch taxes, imposed in lieu of such net income tax), of such Bank or
its applicable Lending Installation, branch, or any affiliate thereof or any
Issuing Bank;
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Bank or any Issuing Bank which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(c) shall impose any other condition the result of which is to
increase the cost to the Bank or any applicable Lending Installation or Issuing
Bank of making, funding or maintaining its Eurodollar Rate Loans or issuing or
participating in Facility L/Cs or shall reduce any amount receivable by any Bank
or any applicable Lending Installation or Issuing Bank in connection with its
Eurodollar Rate Loans or Facility L/Cs or participations therein, or shall
require any Bank or any applicable Lending Installation or Issuing Bank to make
any payment calculated by reference to the amount of Eurodollar Rate Loans or
Facility L/Cs or participations therein held or interest received by it, by an
amount deemed material by such Bank;
and the result of any of the foregoing is to increase the cost to such Bank or
Issuing Bank, by an amount which such Bank or Issuing Bank, or its applicable
Lending Installation, branch or any affiliate thereof, deems to be material, of
making, converting into, continuing or maintaining Eurodollar Rate Loans or its
Commitment or of issuing or participations in any Facility L/Cs or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, upon
notice to Borrower from such Bank, through the Agent, in accordance herewith,
Borrower shall promptly pay such Bank, upon its demand, any additional amounts
necessary to compensate such Bank or Issuing Bank for such increased cost or
reduced amount receivable. If any Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall provide prompt notice thereof to
Borrower, through the Agent, certifying (x) that one of the events described in
this subsection has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount receivable hereunder
resulting from such event and (z) as to the additional amount demanded by such
Bank and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Bank, through the Agent, to Borrower shall be conclusive in
the absence of manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
42
3.5 INDEMNITY. Borrower agrees to indemnify each Bank and to hold each
Bank harmless from any loss or expense which such Bank may sustain or incur
(other than through such Bank's gross negligence or willful misconduct) as a
consequence of (a) default by Borrower in making a borrowing of, conversion into
or continuation of Eurodollar Rate Loans after Borrower has given Agent written
irrevocable confirmation that Borrower selects such Eurodollar Rate Loans in
accordance with subsection 2.3 or subsection 3.1 hereof, as appropriate, of this
Agreement, (b) default by Borrower in making any prepayment or conversion of a
Eurodollar Rate Loan after Borrower has given a notice thereof in accordance
with the provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Rate Loans on a day which is not the last day of an Interest Period
with respect thereto (whether by acceleration, demand or otherwise). Such
indemnification may include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or converted, or not so borrowed, converted or continued, for the
period from the date of such prepayment or conversion or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Rate Loans provided for
herein over (ii) the amount of interest (as reasonably determined by such Bank)
which would have accrued to such Bank on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
3.6 TAXES.
(a) All payments by Borrower to or for the account of any
Bank, any Issuing Bank or Agent hereunder or under any Note or Facility L/C
Application shall be made free and clear of and without deduction for any and
all Taxes. If Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Bank, any Issuing Bank or Agent, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this subsection 3.6) such Bank, Issuing Bank or Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law and (iv) Borrower shall furnish to the Agent the
original copy of a receipt evidencing payment thereof within 30 days after such
payment is made.
(b) In addition, Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Facility L/C Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility L/C
Application ("OTHER TAXES").
(c) Borrower hereby agrees to indemnify each Bank, Issuing
Bank and Agent for the full amount of Taxes or Other Taxes as set forth in
subsections 3.6(a) and (b) (including, without limitation, any Taxes or Other
Taxes imposed on amounts payable under this subsection 3.6) paid by such Bank,
Issuing Bank or Agent and any liability (including penalties,
43
interest and expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within thirty (30) days of the date
such Bank, Issuing Bank or Agent makes demand therefor pursuant to subsection
3.7, which demand shall be made not later than 180 days after such Bank, Agent
or Issuing Bank incurs the Taxes, Other Taxes or other liability so arising.
(d) Each Bank that is not incorporated (or otherwise formed or
established) under the laws of the United States of America or a state thereof
(each a "NON-U.S. BANK") agrees that it will, not more than ten (10) Business
Days after the date of this Agreement or such later date on which it becomes a
party to this Agreement (but in no event later than the first date on which any
payment for the account of such Non-U.S. Bank is made hereunder), (i) deliver to
each of Borrower and Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Bank
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to each
of Borrower and Agent a United States Internal Revenue Form W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption from United States
backup withholding tax. Each Non-U.S. Bank further undertakes to deliver to each
of Borrower and Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by Borrower or Agent. All forms or
amendments described in the preceding sentence shall certify that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred subsequent to the date such Bank became a party to this Agreement but
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Bank from duly
completing and delivering any such form or amendment with respect to it and such
Bank advises the Borrower and Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Bank has failed to
provide the Borrower with an appropriate form pursuant to subsection 3.6(d)
above (unless such failure is due to a change in treaty, law or regulation, or
any change in the interpretation or administration thereof by any Governmental
Authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Bank shall not be entitled to
indemnification under this subsection 3.6 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Bank which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under subsection 3.6(d) above,
Borrower shall take such steps as such Non-U.S. Bank shall reasonably request to
assist such Non-U.S. Bank to recover such Taxes.
(f) Any Bank that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to Borrower (with a copy to Agent), at the time or times prescribed by
applicable law and prior to the date of any applicable payment, such
44
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate of
withholding.
(g) If the U.S. Internal Revenue Service or any other
Governmental Authority of the United States or any other country or any
political subdivision thereof asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or properly completed, because such Bank
failed to notify Agent of a change in circumstances which rendered its exemption
from withholding ineffective, or for any other reason), such Bank shall
indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to Agent under
this subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for Agent, which attorneys may be
employees of Agent). The obligations of the Banks under this subsection 3.6(g)
shall survive the payment of the Obligations and termination of this Agreement.
3.7 BANK STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Bank shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of Borrower to such Bank
under subsections 2.9 and 3.4 or to avoid the unavailability of Eurodollar
Advances under subsection 3.3, so long as such designation is not, in the
judgment of such Bank, disadvantageous to such Bank. Each Bank shall deliver a
written statement of such Bank to Borrower (with a copy to Agent) as to the
amount due, if any, under subsection 2.9, 3.4, 3.5 or 3.6. Such written
statement shall set forth in reasonable detail the calculations upon which such
Bank determined such amount and shall be final, conclusive and binding on
Borrower in the absence of manifest error. Determination of amounts payable
under such subsections in connection with a Eurodollar Rate Loan shall be
calculated as though each Bank funded its Eurodollar Rate Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Bank shall be payable on demand
after receipt by Borrower of such written statement. The obligations of the
Borrower under subsections 2.9, 3.4, 3.5 and 3.6 shall survive payment of the
Obligations and termination of this Agreement.
3.8 TELEPHONIC NOTICES. Borrower hereby authorizes the Banks and Agent
to extend, convert or continue Loans, to effect selections of Eurodollar Rate
Loans and the Interest Period thereof and ABR Loans and to transfer funds, in
each case based on telephonic notices made by any Person or Persons who Agent or
any Bank in good faith believes to be acting on behalf of Borrower, it being
understood that the foregoing authorization is specifically intended to allow
Notices of Borrowing and Notices of Conversion to be given telephonically.
Borrower agrees to deliver promptly to Agent a written confirmation, if such
confirmation is requested by Agent or any Bank, of each telephonic notice signed
by a Responsible Officer. If the written confirmation differs in any material
respect from the action taken by Agent and Banks, the records of Agent and Banks
shall govern, absent manifest error.
3.9 NON-RECEIPT OF FUNDS BY AGENT. Unless Borrower or a Bank, as the
case may be, notifies Agent prior to the date on which it is scheduled to make
payment to Agent of (i)
45
in the case of a Bank, the proceeds of a Loan or (ii) in the case of Borrower, a
payment of principal, interest or fees to Agent for the account of the Banks,
that it does not intend to make such payment, Agent may assume that such payment
has been made. Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Bank or Borrower, as the case may be, has not in fact made such payment to
Agent, the recipient of such payment shall, on demand by Agent, repay to Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by Agent until the date Agent recovers such amount at a rate per annum equal to
(x) in the case of payment by a Bank, the Federal Funds Rate for such day for
the first three days and, thereafter, the interest rate applicable to the
relevant Loan or (y) in the case of payment by Borrower, the interest rate
applicable to the relevant Loan.
3.10 REPLACEMENT OF CERTAIN BANKS. In the event a Bank ("AFFECTED
BANK"): (i) shall have requested compensation from Borrower under subsections
2.9 or 3.4 hereof to recover additional costs incurred by such Bank that are not
being incurred generally by the other Banks, (ii) shall have delivered a notice
pursuant to subsection 3.3 hereof claiming that such Bank is unable to extend
Eurodollar Rate Loans to Borrower for reasons not generally applicable to the
other Banks, (iii) shall have invoked subsection 11.17 hereof or (iv) is a
Rejecting Bank, then, in any such case, Borrower or Agent may make written
demand on such Affected Bank (with a copy to Agent in the case of a demand by
Borrower and a copy to Borrower in the case of a demand by Agent) for the
Affected Bank to assign, and, if a Replacement Bank (as hereinafter defined)
notifies the Affected Bank of its willingness to purchase the Affected Bank's
interest and Agent and Borrower consent thereto in writing, then such Affected
Bank shall assign pursuant to one or more duly executed assignment and
assumption agreements in substantially and in all material respects in the form
and substance of EXHIBIT I five (5) Business Days after the date of such demand,
to one or more Banks or Eligible Assignees that Borrower or Agent, as the case
may be, shall have engaged for such purpose ("REPLACEMENT BANK"), all of such
Affected Bank's rights and obligations (from and after the date of such
assignment) under this Agreement and the other Loan Documents (including,
without limitation, its Commitment and all Loans owing to it) in accordance with
subsection 11.7(b) hereof. As a condition to any such assignment, the Affected
Bank shall concurrently receive in cash or by wire transfer, all amounts due and
owing to the Affected Bank hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Bank, together with accrued interest thereon through the date
of such assignment, amounts payable under subsections 2.9, 3.4, 3.5, 3.6 or 11.6
hereof with respect to such Affected Bank and the fees payable to such Affected
Bank under subsections 2.4 and 2.18 hereof; provided that, upon such Affected
Bank's replacement, such Affected Bank shall cease to be a party hereto but
shall continue to be entitled to the benefits of subsections 2.9, 3.4, 3.5, 3.6,
11.6 and 11.14 hereof, as well as to any other fees accrued for its account
hereunder and not yet paid, and shall continue to be obligated under subsection
10.7 with respect to obligations and liabilities accruing prior to the
replacement of such Affected Bank. If the Affected Bank is an Issuing Bank,
Borrower shall, at the time of or prior to replacement of such Affected Bank
hereunder, cause all Facility L/Cs issued by such Affected Bank to be canceled
and returned to such Affected Bank or, to the extent any one or more of such
Facility L/Cs is not so canceled and returned, provide to such Affected Bank, as
security for the Reimbursement Obligations in respect of such Facility L/Cs,
cash collateral or a Letter of Credit issued by a bank, and in form and
substance, reasonably
46
satisfactory to such Affected Bank. If and for as long as any Facility L/C
issued by an Affected Bank remains outstanding after the replacement of such
Affected Bank, such Affected Bank shall continue to have (but solely with
respect to such outstanding Facility L/Cs issued by it prior to its replacement)
the rights and obligations of an Issuing Bank hereunder (including the right to
receive the portion of the Facility L/C Fees payable to the Issuing Bank in
respect of such Facility L/Cs under subsection 2.18(a)(i) hereof). Any Facility
L/Cs issued by an Affected Bank that is replaced hereunder shall not be
extended, modified or amended (other than to reduce the amount thereof).
SECTION 4: REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Banks, the Issuing Banks and Agent to enter
into this Agreement and to make the Revolving Credit Loans and Swingline Loans
and to issue the Facility L/Cs herein provided for, Borrower hereby covenants,
represents and warrants to each Bank, Issuing Bank and Agent that on the date
hereof:
4.1 FINANCIAL STATEMENTS. Borrower has heretofore furnished to each
Bank (a) the consolidated balance sheet of Borrower and its Subsidiaries as of
December 31, 2000, and the related consolidated statements of income, of
stockholders' equity and of cash flows for the fiscal year of Borrower then
ended, certified by an independent public accountant of recognized national
standing and (b) the consolidated unaudited balance sheet and income statement
of Borrower and its Subsidiaries as of September 30, 2001. Each of the foregoing
financial statements fairly presents, in all material respects, the financial
condition of Borrower and its Subsidiaries as of the date thereof and the
results of the operations of Borrower and its Subsidiaries for the period then
ended (subject, in the case of the September 30, 2001 statements, to year-end
audit adjustments) and, from the respective dates of the foregoing financial
statements to the date hereof, there has been no material adverse change in such
condition.
4.2 EXISTENCE; COMPLIANCE WITH LAW. Each of Borrower and Borrower's
Subsidiaries (a) is duly organized or formed, as appropriate, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
formation or organization, as appropriate, (b) has the requisite corporate,
partnership or limited liability company power and authority to conduct the
business in which it is currently engaged, (c) is qualified as a foreign entity
to do business under the laws of any jurisdiction where the failure to so
qualify would have a material adverse effect on the business of Borrower and
Borrower's Subsidiaries taken as a whole, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of Borrower and Borrower's
Subsidiaries taken as a whole and would not materially adversely affect the
ability of Borrower or the Guarantors to perform their obligations under the
Loan Documents.
4.3 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Borrower and each
Guarantor has the corporate, partnership or limited liability company (as
applicable) power and authority to make, deliver and perform the Loan Documents
to which it is a party and (in the case of Borrower) to borrow hereunder, and
has taken all corporate or other action necessary to be taken by it to authorize
(a) (in the case of Borrower) the borrowings on the terms and conditions of this
Agreement and the Notes, and (b) the execution, delivery and performance of
47
the Loan Documents to which it is a party. No consent, waiver or authorization
of, or filing with any Person (including without limitation any Governmental
Authority) is required to be made or obtained by Borrower in connection with the
borrowings hereunder or by Borrower or any Guarantor in connection with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which it is a party. This Agreement has been, and each Note and
Guaranty Agreement will be, duly executed and delivered on behalf of Borrower or
each Guarantor (as the case may be), and this Agreement constitutes, and each
Note and Guaranty Agreement when executed and delivered hereunder will
constitute, a legal, valid and binding obligation of Borrower or the Guarantors
(as the case may be), enforceable against Borrower or the Guarantors (as the
case may be), in accordance with its terms, subject to the effect, if any, of
bankruptcy, insolvency, reorganization, arrangement or other similar laws
relating to or affecting the rights of creditors generally and the limitations,
if any, imposed by the general principles of equity and public policy.
4.4 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the Notes, the borrowings hereunder and the use of the proceeds
thereof and the execution, delivery and performance by the Guarantors of the
Guaranty Agreement (a) do not and will not violate any Requirement of Law or
Contractual Obligation (including, without limitation, the Fleet Agreement) of
Borrower or any of Borrower's Subsidiaries, (b) do not contravene the articles
of incorporation, charter, bylaws, partnership agreement, articles or
certificate of formation, operating agreement or other organizational documents
of Borrower or any of Borrower's Subsidiaries and (c) do not and will not result
in, or require, the creation or imposition of any Lien on any of its properties
or revenues pursuant to any Requirement of Law or Contractual Obligation.
4.5 NO MATERIAL LITIGATION. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Borrower, threatened by or against Borrower or any of Borrower's
Subsidiaries or against any of their respective properties or revenues (a) with
respect to this Agreement, the Notes or any Guaranty Agreement or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a material adverse effect on the business, operations, property
or financial or other condition of Borrower and Borrower's Subsidiaries taken as
a whole.
4.6 REGULATION U. Neither Borrower nor any of Borrower's Subsidiaries
is engaged, nor will either of them engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any loans hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of the Regulations of such
Board of Governors. If requested by Agent, Borrower and each of Borrower's
Subsidiaries will furnish to Agent a statement in conformity with the
requirements of Federal Reserve Form U-l referred to in said Regulation U to the
foregoing effect.
48
4.7 INVESTMENT COMPANY ACT. Neither Borrower nor any of Borrower's
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
4.8 ERISA. Borrower and Borrower's Subsidiaries are in compliance in
all material respects with ERISA. There has been no Reportable Event with
respect to any Plan. There has been no institution of proceedings or any other
action by PBGC or Borrower or any Commonly Controlled Entity to terminate or
withdraw or partially withdraw from any Plan under any circumstances which could
lead to material liabilities to PBGC or, with respect to a Multiemployer Plan,
the Reorganization or Insolvency (as each such term is defined in ERISA) of the
Plan.
4.9 DISCLOSURE. No representations or warranties made by Borrower in
this Agreement or in any other document furnished from time to time in
connection herewith (as such other documents may be supplemented from time to
time) contains or will contain any untrue statement of a material fact or omits
or will omit to state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
4.10 SUBSIDIARY INFORMATION. Schedule 3 attached hereto contains the
name, principal place of business, all other places of business and percentage
of ownership of all of the Subsidiaries of Borrower.
4.11 M/I ANCILLARY BUSINESSES INFORMATION. Schedule 4 attached hereto
contains the name, principal place of business, all other places of business and
percentage of ownership of all of the M/I Ancillary Businesses.
4.12 SCHEDULES. Each of the Schedules to this Agreement contains true,
complete and correct information in all material respects.
4.13 ENVIRONMENT. Borrower and Borrower's Subsidiaries have been issued
and will maintain all required federal, state, and local permits, licenses,
certificates and approvals relating to (a) emissions; (b) discharges to service
water or groundwater; (c) noise emissions; (d) solid or liquid waste disposal;
(e) the use, generation, storage, transportation or disposal of toxic or
hazardous substances or hazardous wastes; or (f) other environmental, health or
safety matters, except to the extent the failure to have any such permit,
license, certificate or approval would not have a material adverse effect on
Borrower's consolidated operations, business or financial condition. Neither
Borrower nor any of Borrower's Subsidiaries have received notice of, or has
actual knowledge of any material violations of any federal, state or local
environmental, health or safety laws, codes or ordinances or any rules or
regulations promulgated thereunder. Except in accordance with a valid
governmental permit, license, certificate or approval, there has been no
material emission, spill, release or discharge into or upon (i) the air; (ii)
soils; (iii) service water or groundwater; (iv) the sewer, septic system or
waste treatment, storage or disposal system servicing any property of Borrower
or any of its Subsidiaries of any toxic or hazardous substances or hazardous
wastes at or from such property; and accordingly no such property has been
adversely affected, in any material respect, by any toxic or hazardous
substances or wastes. There has been no complaint, order, directive, claim,
49
citation or notice by any Governmental Authority or any person or entity with
respect to material violations of law or damages by reason of Borrower or
Borrower's Subsidiaries (1) air emissions; (2) spills, releases or discharges to
soils or improvements located thereon, surface water, groundwater or the sewer,
septic system or waste treatment, storage or disposal system servicing the
premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) use,
generation, storage, transportation or disposal of toxic or hazardous substances
or hazardous wastes; or (6) other environmental, health or safety matters
affecting Borrower or any of Borrower's Subsidiaries. Neither Borrower nor any
of Borrower's Subsidiaries have any material indebtedness, obligation or
liability, absolute or contingent, matured or unmatured, with respect to the
storage, treatment, cleanup or disposal of any solid waste, hazardous wastes, or
other toxic or hazardous substances. For purposes of this subsection 4.13, a
violation, emission, spill, release, discharge, damage, adverse effect,
indebtedness, obligation or liability shall be deemed material if, and only if,
such violation, emission, spill, release, discharge, damage, adverse effect,
indebtedness, obligation or liability would have a material adverse effect on
Borrower's consolidated operations, business or financial condition.
4.14 FORCE MAJEURE EVENTS. Neither the business nor the properties of
Borrower or any Subsidiary are affected by any fire, explosion, accident,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or
other casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of Borrower and its
Subsidiaries taken as a whole.
4.15 OTHER AGREEMENTS. Neither Borrower nor any Subsidiary is a party
to any indenture, loan, or credit agreement, or to any lease or other agreement
or instrument or subject to any charter, corporate or other restriction which
could have a material adverse effect on the business, properties, assets,
operations, or conditions, financial or otherwise, of Borrower and its
Subsidiaries, taken as a whole, or the ability of Borrower or any Subsidiary to
carry out its obligations under the Loan Documents to which it is a party.
Neither Borrower nor any Subsidiary is in default in any material respect in the
performance, observance, or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument material to the business of
Borrower and its Subsidiaries, taken as a whole.
4.16 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. Except for
judgments with respect to which the liability of Borrower and each Subsidiary
does not exceed $1,000,000 in the aggregate for all such judgments, (a) Borrower
and each Subsidiary have satisfied all unstayed and unappealed judgments, and
(b) neither Borrower nor any Subsidiary is in default with respect to any
judgment, or any material writ, injunction, decree, rule, or regulation of any
court, arbitrator, or federal, state, municipal, or other governmental
authority, commission, board, bureau, agency, or instrumentality, domestic or
foreign applicable to Borrower or any Subsidiary.
4.17 OWNERSHIP AND LIENS. Borrower and each Subsidiary have title to,
or valid leasehold interests in, all of their respective properties and assets,
real and personal, including the properties and assets and leasehold interests
reflected in the financial statements referred to in subsection 4.1 (other than
any properties or assets disposed of in the ordinary course of business), and
none of the properties and assets owned by Borrower or any Subsidiary and none
50
of their leasehold interests is subject to any Lien, except such as may be
permitted pursuant to subsection 7.2 of this Agreement.
4.18 OPERATION OF BUSINESS. Borrower and each Subsidiary possess all
material licenses, permits, franchises, patents, copyrights, trademarks, and
trade names, or rights thereto, required to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted and
neither Borrower nor any of its Subsidiaries is in violation of any valid rights
of others with respect to any of the foregoing where the failure to possess such
licenses, permits, franchises, patents, copyrights, trademarks, trade names or
rights thereto or the violation of the valid rights of others with respect
thereto may, in any one case or in the aggregate, adversely affect in any
material respect the financial condition, operations, properties, or business of
Borrower or any Subsidiary or the ability of Borrower and its Subsidiaries,
taken as a whole, to perform their obligations under the Loan Documents to which
they are a party.
4.19 TAXES. All income tax liabilities or income tax obligations of
Borrower and each Subsidiary (other than those being contested in good faith by
appropriate proceedings) have been paid or have been accrued by or reserved for
by Borrower. Borrower constitutes the parent or an affiliated group of
corporations for filing a consolidated United States federal income tax return.
SECTION 5: CONDITIONS PRECEDENT
--------------------
5.1 CONDITIONS TO INITIAL LOAN(S). The obligation of the Banks to make
the initial Loan(s), of Bank One to make Swingline Loans and of any Issuing Bank
to issue, amend or extend any Facility L/C hereunder on the first Borrowing Date
is subject to the satisfaction of the following conditions precedent on or prior
to such date:
(a) NOTES. Each Bank shall have received its respective Note,
conforming to the requirements hereof and duly executed and delivered by a duly
authorized officer of Borrower.
(b) GUARANTY AGREEMENT. The Guaranty Agreement shall have been
duly executed and delivered by all Guarantors to Agent.
(c) BORROWING BASE COMPLIANCE. Borrower shall have delivered
to each Bank and Agent a Borrowing Base Certificate, certified by a Responsible
Officer of Borrower, which shows compliance with the provisions of subsection
2.1(b) hereof as of December 31, 2001.
(d) LEGAL OPINION OF COUNSEL TO BORROWER. Agent shall have
received an executed legal opinion of Xxxx X. Xxxxxx, Esq., counsel to Borrower
and Borrower's Subsidiaries, dated as of the date hereof and addressed to Banks
and Agent, substantially in the form of Exhibit E attached hereto, and otherwise
in form and substance reasonably satisfactory to each Bank and Agent and
covering such other matters incident to the transactions contemplated hereby as
each Bank and Agent or their respective counsel may reasonably require.
(e) CORPORATE PROCEEDINGS OF BORROWER. Agent shall have
received a copy of the respective resolutions (in form and substance
satisfactory to Agent) of the Board of
51
Directors of Borrower authorizing (i) the execution, delivery and performance,
of this Agreement, (ii) the consummation of the transactions contemplated
hereby, (iii) the borrowings herein provided for, and (iv) the execution,
delivery and performance of the Notes and the other documents provided for in
this Agreement, all certified by the Secretary or the Assistant Secretary of
Borrower as of the date hereof. Such certificate shall state that the
resolutions set forth therein have not been amended, modified, revoked or
rescinded as of the date hereof.
(f) PROCEEDINGS OF GUARANTORS. Agent shall have received a
copy of the resolutions (in form and substance reasonably satisfactory to Agent)
of (i) Borrower, as the sole shareholder of each of M/I Homes, M/I Financial
Corp., M/I Homes Construction, Inc., and M/I Service Corp., and as the sole
member of Northeast Office Venture, 601RS, LLC and M/I Properties LLC, and (ii)
M/I Homes, as the sole member of MHO, LLC, each resolution authorizing the
execution, delivery and performance of the Guaranty Agreement, all certified by
the Secretary (or other person in a comparable position) of the respective
Guarantor as of the date hereof. Such certificate shall state that the
resolutions set forth therein have not been amended, modified, revoked or
rescinded as of the date hereof.
(g) INCUMBENCY CERTIFICATE OF BORROWER. Agent shall have
received a certificate of the Secretary or an Assistant Secretary of Borrower,
dated the date hereof, as to the incumbency and signature of the officer(s) of
each executing this Agreement, the Notes and any certificate or other documents
to be delivered pursuant hereto or thereto.
(h) INCUMBENCY CERTIFICATES OF GUARANTORS. Agent shall have
received a certificate of the Secretary (or other person in a comparable
position) of each of the Guarantors, dated the date hereof, as to the incumbency
and signatures of the officer(s) (or other person(s) in a comparable position)
of each executing the Guaranty Agreement.
(i) ARTICLES OF INCORPORATION OF BORROWER. Agent shall have
received copies of (i) the articles of incorporation of Borrower, together with
all amendments, and a certificate of good standing, all certified by the
appropriate governmental officer in its jurisdiction of incorporation and (ii)
the bylaws or code of regulations of Borrower certified by the Secretary or
Assistant Secretary of Borrower.
(j) ORGANIZATIONAL DOCUMENTS OF GUARANTORS. Agent shall have
received (i) with respect to each Guarantor that is a corporation (A) copies of
its articles or certificates of incorporation, including all amendments thereto,
and a certificate of good standing, all certified by the appropriate
governmental officer in its jurisdiction of incorporation and (B) the bylaws or
code of regulations of such Guarantor certified by the Secretary (or other
person in a comparable position) of each Guarantor, (ii) with respect to any
Guarantor that is a partnership, a true copy of its partnership agreement,
including all amendments thereto, certified by an officer of such partnership or
of its general partner, together with (in the case of any limited partnership)
copies of the certificates of limited partnerships and a certificate of good
standing, all certified by the appropriate governmental officer in its
jurisdiction of organization, and (iii) with respect to each Guarantor that is a
limited liability company, a copy of its operating agreement, including all
amendments thereto, certified by an officer of such limited liability company or
of its managing member, and a copy of its articles or certificate of formation
and a certificate of good standing, all certified by the appropriate officer of
the state of its formation.
52
(k) NO PROCEEDING OR LITIGATION; NO INJUNCTIVE RELIEF. No
action, suit or proceeding before any arbitrator or any Governmental Authority
shall have been commenced, no investigation by any Governmental Authority shall
have been commenced and no action, suit, proceeding or investigation by any
Governmental Authority shall have been threatened, against Borrower or any
Subsidiary of Borrower or any of the officers, directors or managers of Borrower
or any Subsidiary of Borrower, seeking to restrain, prevent or change the
transactions contemplated by this Agreement in whole or in part or questioning
the validity or legality of the transactions contemplated by this Agreement or
seeking damages in connection with such transactions.
(l) CONSENTS, LICENSES, APPROVALS, ETC. Agent shall have
received true copies (certified to be such by Borrower or other appropriate
party) of all consents, licenses and approvals required in accordance with
applicable law in connection with the execution, delivery, performance, validity
and enforceability of the Loan Documents, if the failure to obtain such
consents, licenses or approvals, individually or in the aggregate, would have a
material adverse effect on Borrower and Borrower's Subsidiaries taken as a
whole, or would adversely affect the validity or enforceability of any of the
foregoing documents, and approvals obtained shall be in full force and effect
and be satisfactory in form and substance to Agent.
(m) COMPLIANCE WITH LAW. Neither Borrower nor any of
Borrower's Subsidiaries shall be in violation in any material respect of any
applicable statute, regulation or ordinance, including without limitation
statutes, regulations or ordinances relating to environmental matters, of any
governmental entity, or any agency thereof, in any respect materially and
adversely affecting the business, property, assets, operations or condition,
financial or otherwise, of Borrower and Borrower's Subsidiaries taken as a
whole.
(n) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing hereunder prior to or after giving
effect to the making of the initial Loans (including the issuance of Facility
L/Cs) or the purchase by Lenders of participation interests in the Existing L/Cs
on the first Borrowing Date hereunder.
(o) NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in the consolidated financial condition or business or
operations of Borrower and Borrower's Subsidiaries from the date of Borrower's
September 30, 2001 unaudited consolidated financial statements to the first
Borrowing Date.
(p) FEES. Borrower shall have paid to Agent the fees provided
for in the Agent's Fee Letter (which fees (except for any paid for the account
of Agent or Arranger) shall be paid by the Agent to the Banks).
(q) CONFIRMATION OF SUPERIOR INDEBTEDNESS. Agent shall have
received, for the benefit of each Bank, written confirmation from all of the
lenders party to the Fleet Agreement (or Fleet, as agent thereunder, with the
consent of such lenders) that the Indebtedness evidenced by this Agreement is
Superior Indebtedness (as defined in the Fleet Agreement) under the Fleet
Agreement.
53
(r) FACILITY L/C APPLICATION. If the issuance of any Facility
L/C is part of the initial loan(s), Borrower shall have delivered to the
applicable Issuing Bank a Facility L/C Application in accordance with subsection
2.15 hereof for each Facility L/C that Borrower has requested such Issuing Bank
to issue on the first Borrowing Date.
(s) ADDITIONAL MATTERS. All corporate and other proceedings
and all other documents and legal matters in connection with the transactions
contemplated by the Loan Documents shall be reasonably satisfactory in form and
substance to each Bank and Agent and their respective counsel.
Agent shall furnish to each Bank copies of all documents
received by Agent in satisfaction of the foregoing conditions.
5.2 CONDITIONS TO ALL LOANS. In addition to the other terms and
conditions of this Agreement with respect to the making of Loans and the
issuance of Facility L/Cs, the obligation of each Bank to make any Loan and of
the Issuing Banks to issue, amend or extend any Facility L/C hereunder on any
date (including without limitation the first Borrowing Date) is subject to the
satisfaction of the following conditions precedent as of such date:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Borrower in this Agreement and any representations and
warranties made by Borrower or any Subsidiary of Borrower which are contained in
any certificate, document or financial or other statement furnished at any time
under or in connection herewith or therewith, shall be true and correct in all
material respects on and as of the date of such Loan or issuance of such
Facility L/C as if made on and as of such date unless stated to relate to a
specific earlier date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Loan to be made or Facility L/C to be issued, amended or extended
on such date.
(c) FACILITY L/C APPLICATION. In the case of the issuance,
amendment or extension of any Facility L/C, Borrower shall have delivered to the
applicable Issuing Bank a Facility L/C Application in accordance with subsection
2.15 hereof for each Facility L/C that Borrower has requested such Issuing Bank
to issue, amend or extend.
(d) FLEET AGREEMENT. Each Loan made or Facility L/C issued
hereunder shall constitute Superior Indebtedness (as defined therein) under the
Fleet Agreement.
(e) BORROWING BASE. Such borrowing or the issuance, amendment
or extension of such Facility L/C shall not violate the provisions of subsection
2.1(b) hereof.
Each borrowing by Borrower and each submission of a Facility L/C Application
under this Agreement shall constitute a representation and warranty by Borrower
as of the date of such borrowing or submission of such Facility L/C Application
that the conditions contained in the foregoing paragraphs (a), (b), (c), (d) and
(e) of this subsection 5.2 have been satisfied.
SECTION 6: AFFIRMATIVE COVENANTS
---------------------
54
Borrower hereby agrees that, from the date hereof and so long
as any Commitment remains in effect, any portion of any Note or Reimbursement
Obligation remains outstanding and unpaid, any Facility L/C remains outstanding
that is not fully collateralized with cash in a manner satisfactory to the
Issuing Bank thereof and to Agent, or any other amount is owing to Agent or any
Bank hereunder, Borrower shall, and in the case of subsections 6.6, 6.7, 6.8,
6.9 and 6.16 hereof, shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to Agent (with sufficient copies for
each Bank and which Agent shall promptly furnish to each Bank):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Borrower, a copy of the audited
consolidated balance sheet of Borrower and its consolidated Subsidiaries as of
the end of such year and the related audited consolidated statements of income,
of stockholders' equity and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, together with the
opinion of independent certified public accountants of nationally recognized
standing, which opinion shall not contain a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit or qualification which would affect the computation of financial covenants
contained herein other than a qualification for consistency due to a change in
the application of GAAP with which Borrower's independent certified public
accountants concur; and
(b) as soon as available, but in any event not later than 60
days after the end of each quarterly accounting period (excluding the quarterly
accounting period for the last quarter of each fiscal year of the Commitment
Period), the unaudited consolidated balance sheet of Borrower and its
consolidated Subsidiaries as of the end of each such quarter and the related
unaudited consolidated statements of income and of stockholders' equity of
Borrower and its consolidated Subsidiaries for such quarter and the portion of
the fiscal year through such date setting forth in each case in comparative form
the figures for the previous year, and including in each case: (i) the relevant
figures broken down with respect to each division of Borrower and its
Subsidiaries and (ii) a summary of all commercial lots (both sold and unsold),
and all Land, Lots, Lots under Development, Finished Lots and Lots under
Contract;
all such financial statements to be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP (except,
in the case of the financial statements referred to in subparagraph (b) of this
subsection 6.1, that such financial statements need not contain footnotes and
may be subject to year-end audit adjustments).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Bank and Agent:
(a) concurrently with the delivery of each financial statement
referred to in subsection 6.1 (a) above and each financial statement referred to
in subsection 6.1(b) above, a certificate of a Responsible Officer of Borrower
(in the form of Exhibit F attached hereto or such other form as shall be
reasonably acceptable to each Bank and Agent) stated to have been made after due
examination by such Responsible Officer (i) stating that, to the best of such
officer's knowledge, Borrower and each of its Subsidiaries during such period
has observed or performed in all material respects all of its covenants and
other agreements, and satisfied every condition contained in this Agreement and
the Notes to be observed, performed or satisfied by it,
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and that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, and (ii) showing in detail the
calculations supporting such statement in respect of subsections 6.11, 6.12,
6.13, 7.1, 7.5, 7.6(b), 7.6(e), 7.6(k), 7.6(l), 7.11 and 7.13 hereof;
(b) not later than March 31 of each year, comprehensive
projections for that year, setting forth projected income and cash flow for each
quarter of that year, and the projected balance sheet as of the end of each
quarter of that year, together with a summary of the assumptions upon which such
projections are based and a certificate in the form of Exhibit G hereto of the
chief financial officer or the controller of Borrower with respect to such
projections;
(c) promptly after the same are sent, copies of all financial
statements, reports and notices which Borrower or any of its Subsidiaries sends
to its stockholders as stockholders and, so long as Borrower is a reporting
company under the Securities Exchange Act of 1934, promptly after the same are
filed, copies of all financial statements which Borrower may make to, or file
with, and copies of all material notices v receives from, the Securities and
Exchange Commission or any public body succeeding to any or all of the functions
of the Securities and Exchange Commission;
(d) promptly upon receipt thereof, copies of all final reports
submitted to Borrower by independent certified public accountants in connection
with each annual, interim or special audit of the books of Borrower or any of
its Subsidiaries made by such accountants, including without limitation any
final comment letter submitted by such accountants to management in connection
with their annual audit; and
(e) promptly, on reasonable notice to Borrower, such
additional financial and other information as any Bank may from time to time
reasonably request.
6.3 BORROWING BASE CERTIFICATE. Furnish to Agent as soon as available,
but in any event within twenty-five (25) days after the end of each calendar
month, a Borrowing Base Certificate, certified by the chief financial officer or
the controller of Borrower, showing the calculation of the Borrowing Base as of
the last day of such month (which certificate Agent shall promptly furnish to
the Banks).
6.4 COMPLIANCE WITH BORROWING BASE REQUIREMENTS. At any time any
Borrowing Base Certificate required to be furnished to Agent in accordance with
subsection 6.3 hereof indicates that the Borrower is not in compliance with the
provisions of subsection 2.1(b) hereof, within five (5) calendar days after the
delivery of such Borrowing Base Certificate to Agent, (a) reduce the principal
amount of the Loans and undrawn and drawn Facility L/Cs or other Borrowing Base
Indebtedness then outstanding by an amount sufficient to bring the Borrower in
compliance with the provisions of subsection 2.1(b) hereof, or (b) deliver to
Agent a more current Borrowing Base Certificate that demonstrates that the
Borrower is in compliance with the provisions of subsection 2.1(b) hereof.
6.5 INTEREST RATE PROTECTION. At any time the Eurodollar Base Rate for
an Interest Period of one month shall equal or exceed seven percent (7%) per
annum and Borrower
56
shall not have in effect an Interest Rate Contract or series of Interest Rate
Contracts that provide to Borrower an effective fixed rate of interest on a
total of fifty percent (50%) of the Aggregate Commitment, the Required Banks, by
written notice from the Agent to Borrower, may require Borrower to enter into an
Interest Rate Contract or series of Interest Rate Contracts satisfactory to the
Required Banks that provide to Borrower, when combined with all other Interest
Rate Contracts then in effect, an effective fixed rate of interest on a total of
fifty percent (50%) of the Aggregate Commitment. In such event, Borrower, within
30 days of receipt of such notice from Agent, shall enter into an Interest Rate
Contract or series of Interest Rate Contracts, and provide a copy or copies
thereof to each Bank and Agent, which Interest Rate Contract or series of
Interest Rate Contracts shall, when combined with all other Interest Rate
Contracts then in effect, (i) provide interest rate protection to Borrower on a
total of fifty percent (50%) of the Aggregate Commitment by providing to
Borrower an effective fixed rate of interest on a total of fifty percent (50%)
of the Aggregate Commitment, (ii) be in effect for a period of at least two
years from the later of (A) the date of acquisition of such Interest Rate
Contract or series of Interest Rate Contracts or (B) the date of Agent's notice
to Borrower hereunder (provided that if such period extends beyond the Maturity
Date, the Interest Rate Contract(s) need only be in effect until the Maturity
Date), and (iii) be entered into with (A) any Bank, or (B) a bank or other
financial institution that has unsecured, uninsured and unguaranteed long-term
debt which is rated at least A-3 by Xxxxx'x or at least A- by S&P.
6.6 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other material obligations of whatever nature, except (a)
without prejudice to the effectiveness of paragraph (5) of Section 9 hereof, any
Indebtedness or other obligations (including any obligations for taxes), when
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of Borrower or its Subsidiaries, as the
case may be, and (b) any Indebtedness secured by a mortgage on real estate if
such Indebtedness is, by its terms, non-recourse to Borrower and its
Subsidiaries.
6.7 MAINTENANCE OF EXISTENCE. Except as may be permitted under
subsection 7.3 hereof, preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges, contracts, copyrights, patents, trademarks, trade names and
franchises necessary or desirable in the normal conduct of its business, and
comply with all Contractual Obligations and Requirements of Law except to the
extent that the failure to take such actions or comply with such Contractual
Obligations and Requirements of Law would not, in the aggregate, have a material
adverse effect on the business, operations, property or financial or other
condition of Borrower or of Borrower and its Subsidiaries, taken as a whole.
Borrower and its Subsidiaries have no duty to renew or extend contracts which
expire by their terms.
6.8 MAINTENANCE OF PROPERTY, INSURANCE. Keep all property useful in and
necessary to its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, general liability and business interruption
insurance) as are usually insured against in the same general area by
57
companies engaged in the same or a similar business; and furnish to Agent, upon
written request, full information as to the insurance carried.
6.9 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities, subject in the case
of interim statements to year-end audit adjustments; and permit representatives
of each Bank and Agent to visit and inspect any of its properties, and examine
and make abstracts from any of its books and records at any reasonable time and
as often as may reasonably be requested, and to discuss the business,
operations, properties and financial and other condition of Borrower and its
Subsidiaries with officers and employees of Borrower and its Subsidiaries and,
if notice thereof is given to Borrower prior to the date of such discussions,
with its independent certified public accountants.
6.10 NOTICES. Promptly give notice to Agent (which notice Agent shall
promptly furnish to the Banks):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any loan or
Letter of Credit agreement binding upon Borrower or any of its Subsidiaries,
(ii) default under any other Contractual Obligation that would enable the
obligee of the Contractual Obligations to compel Borrower or any of its
Subsidiaries to immediately pay all amounts owing thereunder or otherwise
accelerate payments thereunder and would have a material adverse effect on
Borrower and its Subsidiaries taken as a whole, or (iii) litigation,
investigation or proceeding which may exist at any time between Borrower or any
Subsidiary and any Governmental Authority, which, if adversely determined, would
have a material adverse effect on the business, operations, property or
financial or other condition of Borrower and its Subsidiaries taken as a whole;
(c) of any litigation or proceeding affecting Borrower or any
of its Subsidiaries (i) (A) in which the amount involved is $1,000,000 or more
and not covered by insurance, or (B) which, in the reasonable opinion of a
Responsible Officer of Borrower, would, if adversely determined, have a material
adverse effect on Borrower and its Subsidiaries taken as a whole, or (ii) in
which injunctive or similar relief is sought and which, in the reasonable
opinion of a Responsible Officer of Borrower, would, if adversely determined,
have a material adverse effect on Borrower and its Subsidiaries taken as a
whole;
(d) of the following events, as soon as possible and in any
event within 30 days after Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan with respect to
which the PBGC has not waived the 30 day reporting requirement, or (ii) the
institution of proceedings or the taking or expected taking of any other action
by PBGC or Borrower or any Commonly Controlled Entity to terminate or withdraw
or partially withdraw from any Plan under circumstances which could lead to
material liability to the PBGC or, with respect to a Multiemployer Plan, the
Reorganization or Insolvency (as each such term is defined in ERISA) of the Plan
and in addition to such notice, deliver to each Bank and Agent whichever of the
following may be applicable: (A) a certificate of a Responsible Officer of
Borrower setting forth details as to such Reportable Event and the action
58
that Borrower or Commonly Controlled Entity proposes to take with respect
thereto, together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by PBGC evidencing
its intent to institute such proceedings or any notice to PBGC that such Plan is
to be terminated, as the case may be; and
(e) of a material adverse change in the business, operations,
property or financial or other condition of Borrower and its Subsidiaries taken
as a whole.
Each notice pursuant to this subsection 6.10 shall be accompanied by a statement
of the chief executive officer or chief financial officer or other Responsible
Officer of Borrower setting forth details of the occurrence referred to therein
and stating what action Borrower proposes to take with respect thereto. For all
purposes of clause (d) of this subsection 6.10, Borrower shall be deemed to have
all knowledge or knowledge of all facts attributable to the administrator of
such Plan if such Plan is a Single Employer Plan.
6.11 MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH. Maintain at all
times during the Commitment Period Consolidated Tangible Net Worth in amounts at
all times equal to or exceeding (i) $214,258,000, plus (ii) fifty percent (50%)
of the Consolidated Earnings for each quarter after September 30, 2001
(excluding any quarter in which Consolidated Earnings are less than zero (0)),
plus (iii) one hundred percent (100%) of the net proceeds or other consideration
received by Borrower for any capital stock issued or sold after September 30,
2001.
6.12 MAINTENANCE OF DEBT TO WORTH. Maintain during the Commitment
Period a ratio of Consolidated Indebtedness to Consolidated Tangible Net Worth
not in excess of (a) 2.25 to 1.0 at all times that Borrower maintains an
Interest Coverage Ratio equal to or exceeding 2.50 to 1.00 and (b) 2.00 to 1.00
at all other times.
6.13 MAINTENANCE OF INTEREST COVERAGE RATIO. Maintain during the
Commitment Period an Interest Coverage Ratio of not less than 2.00 to 1.00 (as
determined on the last day of each fiscal quarter for the four-quarter period
ending on the last day of such fiscal quarter).
6.14 GUARANTIES OF WHOLLY-OWNED M/I ANCILLARY BUSINESSES. Upon the
request of the Agent on behalf of the Required Banks, cause each of the M/I
Ancillary Businesses that is wholly-owned by Borrower or by any Subsidiary, that
has total assets of at least $200,000 and that is not precluded by law from
executing the Guaranty Agreement to become a "Guarantor" by execution and
delivery of a Supplemental Guaranty by such M/I Ancillary Business to Agent, and
to deliver such proof of corporate or other appropriate action, incumbency of
officers, opinions of counsel and other documents delivered by the Guarantors
pursuant to subsection 5.1 hereof or as the Agent shall have requested.
6.15 SUBSIDIARY GUARANTORS. Cause each new wholly-owned Subsidiary of
Borrower or any Subsidiary of Borrower formed or acquired after the date hereof,
to become a "Guarantor" by execution and delivery of a Supplemental Guaranty by
such Subsidiary to Agent, and to deliver such proof of corporate or other
appropriate action, incumbency of officers,
59
opinions of counsel and other documents delivered by the Guarantors pursuant to
subsection 5.1 hereof or as the Agent shall have requested.
6.16 ENVIRONMENT. (a) Comply with all federal, state and local
environmental, health and safety laws, codes and ordinances and all rules and
regulations issued thereunder except to the extent the failure to do so would
not have a material adverse effect on the consolidated operations, business or
financial condition of Borrower and its Subsidiaries; (b) notify the Agent
promptly of any notice of a hazardous discharge or environmental complaint
received from any Governmental Authority or any other Person (and the Agent
shall notify the Banks promptly following its receipt of any such notice) that,
if adversely determined, could have a material adverse effect on the
consolidated operations, business or financial condition of Borrower and its
Subsidiaries; and (c) notify the Agent promptly of any hazardous discharge from
or affecting its premises (and the Agent shall notify the Banks promptly
following its receipt of any such notice) that could have a material adverse
effect on the consolidated operations, business or financial condition of
Borrower and its Subsidiaries. In the case of clauses (b) and (c) above, (i)
promptly contain and remove any such hazardous discharge, in compliance with all
applicable laws; (ii) promptly pay any fine or penalty assessed in connection
therewith; (iii) permit the Agent to inspect the premises, to conduct tests
thereon and to inspect all books, correspondence and records pertaining thereto;
and (iv) at the Agent's request, and at Borrower's expense, provide a report of
a qualified environmental engineer, satisfactory in scope, form and content to
the Required Banks, that the condition has been corrected,
6.17 CERTIFICATE REGARDING AUTHORITY TO MAKE FLEET PAYMENT. If the
Maturity Date is extended to a date on or after the Fleet Payment Date, then, on
July 20, 2006 (and on an updated basis on the dates set forth in the No Default
Certificate), Borrower shall deliver to Agent and each Bank a certificate of a
Responsible Officer of Borrower in the form of Exhibit H attached hereto (a)(i)
stating and demonstrating as of the date of the No Default Certificate and on a
projected basis immediately before the making of the Fleet Payment, that
Borrower has and will have cash, other immediately available liquid assets and
availability of Loans under this Agreement such that, as of such dates, Borrower
has and will have funds available to make the Fleet Payment, (ii) stating that
on a projected basis immediately before and immediately after giving effect to
the Fleet Payment, no Default or Event of Default will exist under this
Agreement, and (iii) showing in detail the calculations supporting the statement
in clause (ii) above in respect of subsections 6.11, 6.12, 6.13, 7.1, 7.5,
7.6(b), 7.6(e), 7.6(k), 7.6(1), 7.11 and 7.13 hereof (the "NO DEFAULT
CERTIFICATE"), or (b) stating that, immediately before or immediately after
giving effect to the Fleet Payment, a Default or Event of Default will exist
under this Agreement, and showing in detail the calculations supporting such
statement (the "CERTIFICATE OF DEFAULT"). In addition to the above requirements,
if the Maturity Date is extended to a date on or after the Fleet Payment Date,
Borrower shall have an ongoing duty from and after July 20, 2006 to provide to
Agent and each Bank written notice of any change to the information and
calculations set forth above which would or could reasonably be expected to
demonstrate that on a projected basis immediately before or immediately after
giving effect to the Fleet Payment a Default or Event of Default will exist
under this Agreement (an "UPDATED CERTIFICATE OF DEFAULT").
SECTION 7: NEGATIVE COVENANTS
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Borrower hereby agrees that, from the date hereof and so long
as the Commitment remains in effect, any portion of any Note or Reimbursement
Obligation remains outstanding and unpaid, any Facility L/C remains outstanding
that is not fully collateralized with cash in accordance with the provision of
Section 8 hereof, or any other amount is owing to Agent, any Issuing Bank or any
Bank hereunder, Borrower shall not, nor shall it permit any of its Subsidiaries
and, in the case of subsections 7.1, 7.2 and 7.3 hereof, permit any M/I
Ancillary Business that is wholly owned by Borrower or any Subsidiary to,
directly or indirectly:
7.1 LIMITATION ON SECURED INDEBTEDNESS. Create, incur or suffer to
exist any Secured Indebtedness exceeding $25,000,000 at any time outstanding,
provided, however, that, for purposes of this subsection 7.1, Secured
Indebtedness shall not include Indebtedness incurred by M/I Financial Corp. to
finance the origination and/or warehousing of residential mortgage loans in the
ordinary course of business and secured by Liens on such mortgage loans ("M/I
FINANCIAL CORP. LIENS") except to the extent that Borrower is an obligor under
or guarantor of such Indebtedness, provided, however, that in the event that the
lender under the M/I Financial Corp. Loan Agreement shall exercise its right to
require M/I Financial Corp. to grant to such lender M/I Financial Corp. Liens as
security for the Indebtedness under the M/I Financial Corp. Loan Agreement and
Borrower is an obligor or guarantor of such Indebtedness, such Indebtedness
shall continue to be excluded from Secured Indebtedness under this subsection
7.1 for a period of sixty (60) days after the lender's exercise of such rights.
7.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether owned or hereafter
acquired, except:
(a) Liens in favor of Agent, for the ratable benefit of Banks;
(b) Liens securing Indebtedness permitted under subsection 7.1
hereof and M/I Financial Corp. Liens;
(c) Liens for taxes and special assessments not yet due or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of Borrower
and Borrower's Subsidiaries in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of Borrower and Borrower's
Subsidiaries in accordance with GAAP;
(e) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(f) (i) deposits to secure the performance of: bids; trade
contracts (other than for borrowed money or the purchase price of property or
services); leases; statutory and other obligations required by law; surety,
appeal and performance bonds (including Construction Bonds); and other
obligations of a like nature incurred in the ordinary course of business; and
(ii) Liens in favor of surety bond companies pursuant to indemnity agreements to
61
secure the reimbursement obligations of Borrower or any Subsidiary on
Construction Bonds, provided (A) the Liens securing Construction Bonds shall be
limited to the assets of, as appropriate, Borrower or such Subsidiary at, and
the rights of, as appropriate, Borrower or such Subsidiary arising out of, the
projects that are the subject of the Construction Bonds, (B) the Liens shall not
attach to any real estate and (C) the aggregate amount of such Liens at any time
shall not exceed the dollar amount of Construction Bonds then outstanding;
(g) Liens of landlords, arising solely by operation of law, on
fixtures and moveable property located on premises leased in the ordinary course
of business; provided, however, that the rental payments secured thereby are not
yet due; and
(h) Liens arising as a result of a judgment or judgments
against Borrower or any of its Subsidiaries which do not in the aggregate exceed
$500,000 at any one time outstanding, which are being diligently contested in
good faith, which are not the subject of any attachment, levy or enforcement
proceeding, and as to which appropriate reserves have been established in
accordance with GAAP.
7.3 LIMITATION ON FUNDAMENTAL CHANGES. Subject to any Investments
permitted pursuant to subsection 7.6(d) hereof, enter into any transaction of
merger, consolidation, amalgamation or reorganization (including without
limitation any election to be taxed as an S Corporation), or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or, except for
the sale of land, lots and houses from inventory in the ordinary course of
business, convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
business or assets, whether now owned or hereafter acquired, or make any
material change in the method by which it conducts business, except any
Subsidiary of Borrower may be (i) merged, amalgamated or consolidated with or
into Borrower or any wholly-owned Subsidiary of Borrower, or (ii) liquidated,
wound up or dissolved into, or all or substantially all of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to Borrower or any
wholly-owned Subsidiary of Borrower; provided, however, that, in the case of
such a merger, liquidation or consolidation, Borrower or such wholly-owned
Subsidiary, as the case may be, shall be the continuing or surviving
corporation.
7.4 LIMITATION ON ACQUISITIONS. Except for the acquisition of land,
lots and houses in the ordinary course of business to the extent not otherwise
prohibited hereunder, enter into any Acquisition without the prior written
consent of the Required Banks.
7.5 LAND INVENTORY. Permit at any time Adjusted Land Value to exceed
the sum of (a) Consolidated Tangible Net Worth plus (b) fifty percent (50%) of
Subordinated Indebtedness.
7.6 LIMITATION ON INVESTMENTS. Make or commit to make any advance,
loan, extension of credit or capital contribution to, or purchase of any stock,
bonds, note, debenture or other security of, or make any other investment in,
any Person (all such transactions being herein called "INVESTMENTS"), except:
(a) Investments in Cash Equivalents;
62
(b) extensions of credit in connection with the sale of land
which do not exceed in the aggregate at any one time outstanding an amount equal
to two and one-half percent (2.5%) of Consolidated Tangible Net Worth, and which
have a maximum maturity of five years;
(c) loans and advances to officers and employees of Borrower
or Borrower's Subsidiaries, to other Persons in the ordinary course of business
or as permitted by the code of regulations of Borrower, which do not exceed in
the aggregate $2,000,000 at any one time outstanding;
(d) any Investments in M/I Financial Corp.; M/I Homes; M/I
Homes Construction, Inc.; Northeast Office Venture; 601RS, LLC; MHO, LLC; M/I
Service Corp., M/I Properties LLC or any other Subsidiary that becomes a
Guarantor in accordance with the terms hereof;
(e) any Investment in Joint Venture, the aggregate cost of
which, as determined in accordance with GAAP excluding, however, Borrower's or
Borrower's Subsidiaries' equity in the undistributed earnings or losses in each
such Joint Venture, does not at any one time outstanding exceed fifteen percent
(15%) of Consolidated Tangible Net Worth; provided, however, that with respect
to each such Joint Venture, Borrower shall have at least a 33 1/3% ownership
interest in such Joint Venture and all decisions with respect to the management
and control of each such Joint Venture's business (other than decisions with
respect to development of undeveloped land owned by such Joint Venture) shall
require the consent and approval of Borrower; and provided, further, however,
that no such Investment may be made if it causes or results (singly or with
other actions or events) in (i) any violation of any other covenant or condition
hereof or (ii) any other Default or Event of Default;
(f) first mortgage loans made in the ordinary course of M/I
Financial Corp.'s business to natural persons for the purchase of residential
real property;
(g) second mortgage loans made in the ordinary course of M/I
Financial Corp.'s business to natural persons for the purchase of residential
real property, provided that such second mortgage loans (i) shall be made only
in connection with a specific financing program to natural persons who have a
first mortgage loan from M/I Financial Corp. with respect to the same real
property, and (ii) shall not in the aggregate exceed $4,000,000 at any one time
outstanding;
(h) first mortgage loans made in the ordinary course of M/I
Financial Corp.'s business to natural persons for the purpose of refinancing an
existing first mortgage loan, provided that the amount of such refinancing
mortgage loans shall not exceed $5,000,000 in the aggregate at any one time
outstanding;
(i) Investments by M/I Financial Corp. in the stock of Xxxxxx
Xxx to the extent required for M/I Financial Corp. to sell mortgages to Xxxxxx
Mae, but the amount of such investments in Xxxxxx Xxx stock shall in no event
exceed $100,000;
(j) Investments by M/I Financial Corp. in the ordinary course
of its business in standard instruments hedging against interest rate risk
incurred in the origination and
63
sale of mortgage loans, in each case matching a hedging instrument or
instruments to specific mortgages or specific groups of mortgages, but in no
event including investments in futures contracts, options contracts or other
derivative investment vehicles acquired as independent investments;
(k) Investments in, advances to, and Contingent Obligations
related to the obligations of, the M/I Ancillary Businesses in an amount not to
exceed $100,000 in the aggregate; and
(l) other Investments directly related to the Borrower's
business, provided that the aggregate amount of such Investments shall not at
any time exceed $2,000,000 in the aggregate.
7.7 TRANSACTIONS WITH AFFILIATES AND OFFICERS.
(a) Except for (i) any consulting agreements or employment
agreements to which Borrower is a party and which were in effect as of August 9,
1994, as amended November 14, 2001, and (ii) compensation arrangements in the
ordinary course of business with the officers, directors, and employees of
Borrower and Borrower's Subsidiaries, enter into any transaction, including
without limitation the purchase, sale or exchange of property or the rendering
of any services, with any Affiliate or any officer or director thereof, or enter
into, assume or suffer to exist any employment or consulting contract with any
Affiliate or an officer or director thereof, except any transaction or contract
which is in the ordinary course of Borrower's or any of Borrower's Subsidiaries'
business and which is upon fair and reasonable terms no less favorable to
Borrower or Borrower's Subsidiaries than it would obtain in a comparable arm's
length transaction with a Person not an Affiliate;
(b) make any advance or loan to any Affiliate or any director
or officer thereof or of Borrower or any Subsidiary of Borrower or to any trust
of which any of the foregoing is a beneficiary, or to any Person on the
guarantee of any of the foregoing, except as expressly permitted by subsection
7.6(c) hereof; or
(c) pay any fees or expenses to, or reimburse or assume any
obligation for the reimbursement of any expenses incurred by, any Affiliate or
any officer or director thereof, except as may be permitted in accordance with
clauses (a) and (b) of this subsection 7.7.
7.8 SALE AND LEASEBACK. Enter into any arrangement with any Person
providing for the leasing by Borrower or any of Borrower's Subsidiaries of real
or personal property which has been or is to be sold or transferred by Borrower
or any of Borrower's Subsidiaries to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of Borrower or any of Borrower's Subsidiaries;
provided, however, that such arrangements shall be permitted with respect to
Model Houses, so long as any such arrangement with respect to Model Houses does
not result in: (a) the creation of a lease which is required to be capitalized
in accordance with GAAP; (b) the initial term of such arrangement plus any
options or renewals exercisable by lessor or lessee exceeding four years; or (c)
the violation of any term, condition or covenant hereof.
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7.9 LIMITATION ON PAYMENTS OF SUBORDINATED INDEBTEDNESS AND
MODIFICATION OF SUBORDINATION AGREEMENTS.
Without the prior written consent of the Required Banks,
(a) repay, prepay, purchase, redeem, or otherwise acquire any
Subordinated Indebtedness; or
(b) make any other payments, including without limitation
payment of interest, on any Subordinated Indebtedness if an Event of Default
exists or if such payment would cause an Event of Default to occur; or
(c) permit the modification, waiver or amendment of any of the
terms of any Subordinated Indebtedness, except for modifications, waivers or
amendments that do not (i) increase the interest rate or change the maturity
date of such Subordinated Indebtedness, (ii) change the subordination provisions
of such Subordinated Indebtedness or (iii) impose upon the Borrower or any
Subsidiary any obligation or limitation that, in the reasonable judgment of the
Agent, is, in any material respect, more burdensome or restrictive than those
currently provided for in the Fleet Agreement; or
(d) permit (whether or not within the control of Borrower or
any of Borrower's Subsidiaries) the modification, waiver, or amendment of, or
release of any parties to, any subordination agreement with respect to any
Subordinated Indebtedness; provided, however, nothing contained in this
subsection 7.9 shall prevent Borrower from making regularly scheduled payments
on any Subordinated Indebtedness if no Event of Default exists and the payment
would not cause an Event of Default to occur. With respect to the Subordinated
Indebtedness pursuant to the Fleet Agreement, "regularly scheduled payments"
shall mean only the following: (i) if the Maturity Date is extended to a date on
or after the Fleet Payment Date, and so long as Borrower has timely delivered
the No Default Certificate and has not delivered (and has not been obligated to
deliver) an Updated Certificate of Default and Borrower is not in Default
immediately before or immediately after giving effect to such payment, the Fleet
Payment; and (ii) on each February 28, May 29, August 29 and November 29 (or
within any applicable cure period) through and including August 29, 2004, and
the first day of each calendar month from and after October 1, 2004 (or within
any applicable cure period) during the term of the Fleet Agreement, interest on
the Fleet Notes.
The parties hereby agree that this clarification regarding
what payments of Subordinated Indebtedness pursuant to the Fleet Agreement
constitute "regularly scheduled payments" is not intended to modify the rights
and obligations of Fleet National Bank (and any of its successors and assigns)
or any of the other lenders party to the Fleet Agreement and Borrower, or the
rights of the Banks and the Agent, pursuant to or arising out of the
Subordinated Indebtedness pursuant to the Fleet Agreement; provided that nothing
herein shall be construed to be a consent by the Banks (in their capacity as
Banks under this Agreement) and the Agent to any payment of any Subordinated
Indebtedness that is prohibited by this Agreement.
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7.10 SALE OF SUBSIDIARY SECURITIES. Sell any security or equity of any
Subsidiary, or permit any Subsidiary to sell or issue any security or equity to
any Person other than security or equity sold or issued to Borrower. The
provisions of this subsection 7.10 shall not restrict the sale of mortgage loans
in the ordinary course of business.
7.11 LIMITATION ON INVESTMENTS IN COMMERCIAL REAL ESTATE. Permit
investments (including investments attributed to Borrower's pro rata share of
land owned by partnerships in which Borrower is a general or limited partner or
by limited liability companies of which Borrower is a member) in commercial real
estate (including land zoned for use as, or developed or intended to be
developed as, commercial real estate but excluding the Office Building),
determined in accordance with GAAP, to exceed $5,000,000 in the aggregate at any
one time outstanding.
7.12 LIMITATION ON NEGATIVE PLEDGES. Enter into any agreement other
than this Agreement which prohibits or limits the ability of Borrower, any of
Borrower's Subsidiaries or any of the M/I Ancillary Businesses that are
wholly-owned by the Borrower or by any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its assets, rights, revenues or property,
real, personal or mixed, tangible or intangible, whether now owned or hereafter
acquired.
7.13 HOUSING INVENTORY. Permit the number of Speculative Housing Units,
as at the end of any fiscal quarter, to exceed the greater of (a) the number of
Housing Unit Closings occurring during the period of twelve (12) months ending
on the last day of such fiscal quarter, multiplied by twenty-five percent (25%)
or (b) the number of Housing Unit Closings occurring during the period of six
(6) months ending on the last day of such fiscal quarter, multiplied by fifty
percent (50%).
SECTION 8: CASH COLLATERAL
---------------
8.1 FACILITY L/C COLLATERAL ACCOUNT. Borrower agrees that it will, upon
the request of Agent or the Required Banks and until the final expiration date
of any Facility L/C and thereafter as long as any amount is payable to any
Issuing Bank or the Banks in respect of any Facility L/C, maintain a special
collateral account pursuant to arrangements satisfactory to Agent (the "FACILITY
L/C COLLATERAL ACCOUNT") at Agent's office in the name of Borrower but under the
sole dominion and control of Agent, for the benefit of the Banks and Issuing
Banks and in which Borrower shall have no interest other than set forth in
subsections 8.2, 8.3 or 8.4 hereof. Borrower hereby pledges, assigns and grants
to Agent, on behalf of and for the ratable benefit of the Banks and Issuing
Banks, a security interest in all of Borrower's right, title and interest in and
to all funds which may from time to time be on deposit in the Facility L/C
Collateral Account to secure the prompt and complete payment and performance of
the Obligations. Agent will invest any funds on deposit from time to time in the
Facility L/C Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding 30 days. Nothing in this subsection 8.1 shall either
require Borrower to deposit any funds in the Facility L/C Collateral Account,
obligate Agent to require Borrower to deposit any funds in the Facility L/C
Collateral Account or limit the right of Agent to release any funds held in the
Facility L/C Collateral Account, in each case other than as required by
subsections 8.2, 8.3 or 8.4 hereof.
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8.2 EVENT OF DEFAULT UNDER PARAGRAPH (5) OF SECTION 9. Upon the
occurrence of an Event of Default specified in paragraph (5) of Section 9,
Borrower will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to Agent an amount in immediately
available funds, which funds shall be held in the Facility L/C Collateral
Account, equal to the difference of (x) the amount of Facility L/C Obligations
at such time, less (y) the amount on deposit in the Facility L/C Collateral
Account at such time which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations (such difference, the
"COLLATERAL SHORTFALL AMOUNT").
8.3 OTHER EVENTS OF DEFAULT. If any Event of Default (other than an
Event of Default specified in paragraph (5) of Section 9) occurs, the Required
Banks (or Agent with the consent of the Required Banks) may, upon notice to
Borrower and in addition to the continuing right to demand payment of all
amounts payable under the Loan Documents, make demand on Borrower to pay, and
Borrower will, forthwith upon such demand and without any further notice or act,
pay to Agent the Collateral Shortfall Amount, which funds shall be deposited in
the Facility L/C Collateral Account.
8.4 CURE; TERMINATION.
(a) If the Event of Default that resulted in the requirement
for deposit of funds in the Facility L/C Collateral Account is cured, and
provided no other Event of Default has occurred that is then continuing, Agent
shall, promptly upon request from Borrower, pay to or as directed by Borrower
the amount on deposit in the Facility L/C Collateral Account. Nothing contained
in this paragraph shall waive, limit or otherwise affect the rights of Agent or
the Banks or the obligations of Borrower under this Section 8 if any other Event
of Default shall occur.
(b) If the Aggregate Commitment is terminated (whether by
acceleration, demand or otherwise), then, not later than simultaneously with
such termination, and without limitation of Agent's and Bank's right to demand
payment of all amounts payable under the Loan Documents, Borrower shall pay to
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility L/C Collateral Account; provided, however, that (i) if all Obligations
of Borrower (other than Facility L/C Obligations in respect of issued and
outstanding Facility L/Cs that have not been drawn upon) have been paid in full,
and (ii) Borrower shall have provided to Agent and the Issuing Banks, as
security for the remaining Facility L/C Obligations, one or more Letters of
Credit, in an aggregate amount at least equal to such remaining Facility L/C
Obligations, issued by a bank or banks, and in form and substance, reasonably
satisfactory to Agent and the Issuing Banks, the foregoing requirement for
deposit of funds in the Facility L/C Collateral Account shall not apply.
SECTION 9: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER
-----------------------------------------------------------
EVENT OF DEFAULT
----------------
Upon the occurrence of any of the following events:
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(1) Borrower shall fail to pay any principal of any Note or
make any reimbursement (including payment of Reimbursement Obligations) in
connection with any Facility L/C when due in accordance with the terms thereof;
or
(2) Borrower shall fail to pay (a) any interest on any Note or
in connection with any Facility L/C, or (b) any fee, charge or other amount
payable hereunder, within three (3) days after Agent or any Bank notifies
Borrower that such interest, fee or amount has become due in accordance with the
terms thereof or hereof and has not been paid; or Borrower shall fail to comply
with the provisions of any one or more of subsections 6.4, 6.5, 6.15, 7.3, 7.4,
7.8, 7.9, 7.10 or 7.12 hereof or the limitations set forth in 7.6(j) hereof; or
(3) any representation or warranty made or deemed made by
Borrower, herein or which is contained in any certificate, document or financial
or other statement furnished at any time under or in connection herewith or
therewith, shall prove to have been incorrect in any material respect on or as
of the date made or deemed made; or
(4) Borrower shall default in the observance or performance of
any covenant or agreement contained in (a) subsection 6.3 hereof and such
default remains uncured for five (5) days (notice to Borrower from Agent or any
Bank of such default is not required), (b) subsections 6.2(c), 6.2(d), 6.6,
6.10, 6.11, 6.12, 6.13, 6.14, 6.16, 7.1, 7.2, 7.6 (other than failure to comply
with the limitations of 7.6(j)), 7.7 or 7.11 hereof and such default remains
uncured ten days after Agent or any Bank notifies Borrower that such default has
occurred, (c) subsection 6.9 hereof and such default remains uncured for ten
(10) days after Agent or any Bank notifies Borrower that such default has
occurred, provided, that for any default under subsection 6.9 hereof for which
cure cannot reasonably be accomplished within ten days, if cure is commenced
within such ten (10)-day period, Borrower may have an additional period of up to
thirty (30) days after notice to cure such default before it is an Event of
Default, (d) any one or more of subsections 6.1(b), 6.2(a) or 6.2(b) hereof and
such default remains uncured fifteen (15) days after Agent or any Bank notifies
Borrower that such default has occurred, or (e) any other provision of this
Agreement (including without limitation subsections 6.1(a), 6.2(e), 6.7 and 6.8
hereof) which default shall remain uncured thirty (30) days after Agent or any
Bank notifies Borrower that such a default has occurred, which notice shall
specify the nature of the default; or
(5) (a) Borrower or any of Borrower's Subsidiaries shall
commence any case, proceeding or other action (i) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
Borrower or any of Borrower's Subsidiaries shall make a general assignment for
the benefit of its creditors; or (b) there shall be commenced against Borrower
or any of Borrower's Subsidiaries any case, proceeding or other action of a
nature referred to in clause (a) above which (i) results in the entry of an
order for relief of any such adjudication or appointment, and (ii) remains
undismissed, undischarged or unbonded for a period of 60 days; or (c) there
shall be commenced against Borrower or any of Borrower's Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or
68
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (d) Borrower or any of Borrower's Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clauses (a), (b) or (c) above; or (e) Borrower
or any of Borrower's Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or
(6) Borrower or any Subsidiary of Borrower shall (a) default
in any payment of principal of or interest on any Indebtedness (other than the
Obligations) or in the payment of any Contingent Obligation beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness or Contingent Obligation was created, and the aggregate principal
amount then outstanding of all such Indebtedness and Contingent Obligations of
Borrower and all Subsidiaries exceeds $1,000,000, or (b) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Contingent Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Contingent Obligation to become payable;
provided, however, that it shall not constitute a Default or Event of Default if
(x) Borrower or any Subsidiary of Borrower defaults on Indebtedness secured by a
mortgage on real estate if such Indebtedness is by its terms non-recourse to
Borrower and Borrower's Subsidiaries, or (y) a draw is made on a standby Letter
of Credit or payment is made on a performance bond, so long as any reimbursement
obligation of Borrower with respect to such Letter of Credit or performance bond
is made within the time required by the document creating the reimbursement
obligation; or
(7) (a) any party in interest (as defined in Section 3(14) of
ERISA) affiliated with Borrower or any of Borrower's Subsidiaries shall engage
in any "prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (c) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings is, in the opinion of the
Required Banks, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, and, in the case of a Reportable Event, the continuance of
such Reportable Event unremedied for thirty (30) days after notice of such
Reportable Event pursuant to Section 4043 (a), (c) or (d) of ERISA is given or,
in the case of institution of proceedings, the continuance of such proceedings
for thirty (30) days after commencement thereof, (d) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, or (e) any other event or
condition shall occur or exist with respect to a Single Employer Plan and in
each case in clauses (a) through (e) above, such event or condition, together
with all other such events or conditions, if any, could subject Borrower or any
of Borrower's Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations,
69
property or financial or other condition of Borrower or of Borrower and
Borrower's Subsidiaries taken as a whole; or
(8) one or more judgments or decrees shall be entered against
Borrower, or any of Borrower's Subsidiaries involving in the aggregate a
liability (not covered by insurance) of $1,000,000 or more and all such
judgments or decrees in excess of $1,000,000 shall not have been vacated,
satisfied, discharged, or stayed or bonded pending appeal within 30 days from
the entry thereof; or
(9) the occurrence of any of the following events: (a) any
Person or group of related Persons (other than Xxxxxx X. Xxxxxxxxxxxxx and the
immediate family of Xxxxxx X. Xxxxxxxxxxxxx) owns or controls more than
thirty-three and one-third percent (33.33%) of the outstanding voting capital
stock of Borrower, or (b) the aggregate amount of outstanding voting capital
stock of Borrower, owned or controlled by (i) Xxxxxx X. Xxxxxxxxxxxxx (including
voting capital stock owned or controlled by his spouse), (ii) Xxxxxx X.
Xxxxxxxxxxxxx (including voting capital stock owned or controlled by his spouse
or his children), (iii) Xxxxxx Xxxxxxxxxxxxx (including voting capital stock
owned or controlled by his spouse or his children), and (iv) trusts for the
benefit of Xxxxxx X. Xxxxxxxxxxxxx or Xxxxxx Xxxxxxxxxxxxx, or the respective
spouse, children or grandchildren of Xxxxxx X. Xxxxxxxxxxxxx or Xxxxxx
Xxxxxxxxxxxxx, shall be less than eighty percent (80%) of the aggregate amount
of the outstanding voting capital stock of Borrower owned or controlled by such
Persons as of the date of this Agreement, provided that any voting capital stock
owned or controlled by Xxxxxx X. Xxxxxxxxxxxxx or his spouse with respect to
trusts for the benefit of Xxxx X. Xxxxxxxxxxxxx or Xxxxx X. Xxxxxx or the
respective spouse, children or grandchildren of Xxxx X. Xxxxxxxxxxxxx or Xxxxx
X. Xxxxxx shall be excluded from any calculation of stock ownership or control
for all purposes of this clause (b); or (c) none of Xxxxxx X. Xxxxxxxxxxxxx,
Xxxxxx Xxxxxxxxxxxxx or Xxxxxx Xxxxxxxxxxxxx shall be Chairman of the Board or
President of Borrower; or
(10) any subordination agreement that evidences any
Subordinated Indebtedness (i) ceases to be the legal, valid and binding
agreement of any Person party thereto, enforceable against such Person in
accordance with its terms or a payment is made by Borrower in violation of any
provision thereof, or (ii) shall be terminated, invalidated or set aside, or be
declared ineffective or inoperative or the Indebtedness related thereto is in
any way not fully subordinate to all of Borrower's Indebtedness and other
liabilities to Banks and Agent under this Agreement and the Notes (subject to
subsection 7.9 hereof) and to Borrower's obligations, if any, as a guarantor or
otherwise of the Indebtedness and other liabilities of M/I Financial Corp.
(including without limitation the obligations with respect to the M/I Financial
Corp. Loan Agreement); or
(11) Borrower shall deliver a Certificate of Default or an
Updated Certificate of Default or shall fail to comply with the requirements of
subsection 6.17 hereof, including by reason of the failure to deliver a No
Default Certificate, Updated Certificate of Default or Certificate of Default or
any required updates thereof; or Banks having at least 75% of the aggregate
amount of the Revolving Credit Loans then outstanding or, if no Revolving Credit
Loans are then outstanding, Banks having at least 75% of the Aggregate
Commitment, shall determine, in their good faith estimation after meeting with
Borrower, that the No Default Certificate (including any update thereof)
delivered by Borrower pursuant to subsection 6.17
70
hereof shall not fairly reflect the financial condition of Borrower and
Borrower's Subsidiaries as of either of (a) the date of the No Default
Certificate, or (b) on a pro forma basis immediately before or immediately after
giving effect to the Fleet Payment, and that as a result thereof a Default or
Event of Default would exist under this Agreement;
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (5) above, the Commitments, if still outstanding, shall
automatically and immediately terminate and all Obligations shall immediately
become due and payable and Borrower shall immediately cash collateralize all
outstanding Facility L/Cs in accordance with Section 8 hereof, and (b) if such
event is any other Event of Default and is continuing, either or both of the
following actions may be taken: (i) with the consent of the Required Banks Agent
may, or upon the request of the Required Banks Agent shall, by notice to
Borrower, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate and, upon demand by Agent, Borrower
shall fully cash collateralize all outstanding Facility L/Cs in accordance with
Section 8 hereof; and (ii) with the consent of the Required Banks Agent may, or
upon the request of the Required Banks Agent shall, by notice of default to
Borrower, declare the full amount of all outstanding Obligations to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section 9, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
Additionally, Agent and each Bank may exercise any and all other rights and
remedies available to Agent and each Bank at law or in equity to the extent not
inconsistent with the rights specifically granted to Agent and each Bank
hereunder.
Notwithstanding any provisions concerning distribution of
payments to the contrary in this Agreement, so long as any Event of Default
exists that has not been waived by all Banks, each Bank shall share in any
payments or proceeds, including proceeds of any collateral, received by Agent or
any Bank made or received at any time from and after any Event of Default
("PROCEEDS AFTER DEFAULT") in an amount equal to such Bank's Ratable Share of
the Proceeds after Default; provided, however, if any one or more of the Bank(s)
has not made any funding when required hereunder, the distribution of Proceeds
after Default shall be adjusted so that each Bank shall receive Proceeds after
Default in an amount equal to (a) the Proceeds after Default multiplied by (b)
the percentage (rounded to five decimal places) of the total amount outstanding
funded by all Banks that such Bank has actually funded (including the amount of
such Bank's participation in outstanding Facility L/Cs). If necessary, Agent and
each Bank shall use the adjustments procedure set forth in subsection 11.8(a)
hereof to make the appropriate distributions to Banks as set forth in this
paragraph of this Section 9.
SECTION 10: THE AGENT
---------
10.1 APPOINTMENT. Each Bank hereby irrevocably designates and appoints
Bank One, as Agent of such Bank under this Agreement and each of the Notes and
the Guaranty Agreement, and each Bank hereby irrevocably authorizes Bank One, as
Agent for such Bank, to take such action on its behalf under the provisions of
this Agreement, the Notes and the Guaranty Agreement and to exercise such powers
and perform such duties as are expressly delegated to Agent by the terms of this
Agreement, the Notes and the Guaranty Agreement, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement or any Note or the Guaranty Agreement,
Agent shall not
71
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any Note or the Guaranty Agreement or otherwise exist against
Agent.
10.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any Note or the Guaranty Agreement
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by Borrower or any of Borrower's Subsidiaries
or any office thereof contained in this Agreement or any Note or the Guaranty
Agreement or in any certificate report, statement or other document referred to
or provided for in, or received by Agent under connection with, this Agreement
or any Note or the Guaranty Agreement or for the value, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the Note Guaranty
Agreement, or for any failure of Borrower or any of Borrower's Subsidiaries its
obligations hereunder or thereunder. Agent shall be under no obligation to any
Bank to inquire as to the observance or performance of any of the agreements or
conditions of, this Agreement, the Notes, or the Guaranty Agreement, or to
inspect books or records of Borrower or any of Borrower's Subsidiaries.
10.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, the Guaranty Agreement, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to
Borrower or any of Borrower's Subsidiaries), independent accountants and other
experts selected by Agent. Agent may deem and treat the payee of any Note as the
owner thereof for all purposes. Agent shall be fully justified in failing or
refusing to take any action under this Agreement, the Notes or the Guaranty
Agreement unless it shall first receive such advice or concurrence of the
Required Banks or, in the case of items set forth in subsection 11.1 hereof that
require written consent of all Banks, all Banks as it deems appropriate or it
shall first be indemnified to its satisfaction by all Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement, the Notes and the
Guaranty Agreement in accordance with a request of the Required Banks or, in the
case of items set forth in subsection 11.1 hereof that require written consent
of all Banks, all Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Banks and all future holders of the
Notes.
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10.5 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder (other
than any failure of Borrower to pay amounts payable under this Agreement or the
other Loan Documents) unless Agent has received notice from any Bank or Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". If Agent receives such a
notice, Agent shall give notice thereof to Banks. Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Banks or, in the case of items set forth in subsection 11.1
hereof that require written consent of all Banks, all Banks; provided that,
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall reasonably deem
advisable in the best interests of Banks.
10.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower and Borrower's Subsidiaries shall be deemed to
constitute any representation or warranty by Agent to any Bank. Each Bank
represents to Agent that it has, independently and without reliance upon Agent
or any other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
Borrower and Borrower's Subsidiaries and made its own decision to make its
extensions of credit hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, the Notes and
the Guaranty Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of Borrower and Borrower's Subsidiaries. Except
for notices, reports and other documents expressly required to be furnished to
the Banks by Agent hereunder, Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of
Borrower or any of Borrower's Subsidiaries which may come into the possession of
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 INDEMNIFICATION. Each Bank agrees to indemnify Agent in its
capacity as such (to the extent not reimbursed by Borrower and any of Borrower's
Subsidiaries and without limiting the obligation of Borrower and Borrower's
Subsidiaries to do so), ratably according to its Ratable Share, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against Agent in
any way relating to or arising out of this Agreement, the Notes, the Guaranty
Agreement or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by Agent under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits,
73
costs, expenses or disbursements resulting solely from Agent's gross negligence
or willful misconduct. The agreements in this subsection shall survive the
payment of the Notes and all other amounts payable hereunder.
10.8 BANK ONE IN ITS INDIVIDUAL CAPACITY. Bank One and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Borrower or any of Borrower's Subsidiaries as though Bank One were
not the Agent hereunder. With respect to its loans made or renewed by it and any
Note issued to it and with respect to any Facility L/C issued by it either as
Bank One or Agent, Bank One shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the Agent,
and the terms "Bank" and "Banks" shall include Bank One in its individual
capacity.
10.9 DELEGATION TO AFFILIATES. Borrower and Banks agree that the Agent
may delegate any of its duties under this Agreement to any of its affiliates.
Any such affiliate (and such affiliate's directors, officers, agents and
employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Sections 10 and 11
hereof. 10.10 SUCCESSOR AGENT. Agent (a) may resign as agent upon 30 days'
notice to the Banks and (b) may be removed at any time with or without cause by
the Required Banks, provided, however, that, as long as no Event of Default has
occurred that is continuing, such removal of the Agent shall be subject to
Borrower's written approval, which shall not be unreasonably withheld. Upon any
such resignation or removal, the Required Banks shall appoint from among the
Banks a successor agent for the Banks, provided, however, that, as long as no
Event of Default has occurred that is continuing, such appointment of a
successor agent shall be subject to Borrower's written approval, which shall not
be unreasonably withheld. Any successor agent appointed as herein provided shall
succeed to the rights, powers and duties of Agent, and the term "Agent" shall
mean such successor agent effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Agent's
resignation hereunder as agent, the provisions of this Section 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
10.11 DOCUMENTATION AGENT AND CO-AGENTS. None of the Banks identified
in this Agreement as a "Documentation Agent" or "Co-Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Banks as such. Without limiting the foregoing, none
of such Banks shall have or be deemed to have a fiduciary relationship with any
Bank. Each Bank hereby makes the same acknowledgements with respect to such
Banks as it makes with respect to the Agent in subsection 10.6.
SECTION 11: MISCELLANEOUS
-------------
11.1 AMENDMENTS AND WAIVERS. Agent and Borrower may, from time to time,
with the written consent of the Required Banks, enter into written amendments,
supplements or modifications for the purpose of adding any provisions to this
Agreement or the Notes or
74
changing in any manner the rights of Banks or Borrower hereunder or thereunder,
and with the consent of the Required Banks, Agent on behalf of Banks may execute
and deliver to Borrower a written instrument waiving, on such terms and
conditions as Agent may specify in such instrument, any of the requirements of
this Agreement, the Notes or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall extend the final maturity of any Note, or
reduce the rate or extend the time of payment of interest or fees thereon or
reduce the principal amount thereof, or change the amount or terms of any Bank's
Revolving Credit Loan or Ratable Share or the amount of any Bank's Commitment
(except for (i) changes resulting from an assignment permitted hereunder or (ii)
as provided in subsection 2.6(b) or 3.10 hereof), or change the Borrowing Base,
or amend, modify, change any provision of the Guaranty Agreement, or release the
guaranties provided under the Guaranty Agreement, or amend, modify, change or
waive any provision of this subsection, or reduce the percentage specified in
the definition of Required Banks, or consent to the assignment or transfer by
Borrower of any of its rights and obligations under this Agreement, or consent
to the modification or termination of any subordination agreement or provisions
that evidence Subordinated Indebtedness (except as otherwise provided in
subsection 7.9), or consent to the release of any collateral, or amend, modify
or change any other provision of this Agreement that requires the consent of all
Banks, in each case without the written consent of all Banks; and provided,
further, that no such waiver and no such amendment, supplement or modification
shall alter in any way Bank One's rights or obligations with respect to
Swingline Loans without the consent of Bank One; and provided, further, that no
such waiver and no such amendment, supplement or modification shall amend,
modify, change or waive any provision relating to the rights or obligations of
Agent without the consent of Agent. Any such waiver and any such amendment,
supplement or modification shall be binding upon Borrower, Agent and each Bank,
and all future holders of the Notes. In the case of any waiver, Borrower, Agent
and each Bank shall be restored to their former position and rights hereunder
and under the outstanding Notes, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or by telecopy or
other electronic facsimile and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or when
deposited in the United States mail, Registered or Certified, Return Receipt
Requested, postage prepaid, or, in the case of telecopy or other electronic
facsimile notice, when receipt confirmed by sender's electronic facsimile
machine, addressed as follows in the case of Borrower and as set forth below on
its signature on the signature pages hereof in the case of Agent and each Bank,
or to such other address as may be hereafter notified by the respective parties
hereto and any future holders of any Note:
75
Borrower: M/I Schottenstein Homes, Inc.
0 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Creek
Facsimile: (000) 000-0000
with a copy to: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of Agent or any Bank, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and, except for rights the exercise of which require
consent of the Required Banks or all Banks, as appropriate, under this
Agreement, not exclusive of any rights, remedies, powers and privileges provided
by law.
11.4 PARTICIPANTS.
(a) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other financial institutions ("PARTICIPANTS") participating
interests in any Revolving Credit Loan owing to such Bank, any Note held by such
Bank, any interest (including any Reimbursement Obligation) in any Facility L/C
with respect to such Bank, any Commitment of such Bank, or any other interest of
such Bank hereunder; provided, however, that upon the sale of any participating
interest the selling Bank shall provide promptly to Borrower and Agent notice of
such sale; and provided further, however, that (except as otherwise provided in
subsection (c) below) no Participant's consent shall be required to approve any
amendments, waivers or other modifications of this Agreement or of any document
contemplated by this Agreement, and no participation agreement shall provide any
Participant with such rights. In the event of any such sale by a Bank of
participating interests to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof, and such Bank
shall remain the holder of any such Note for all purposes under this Agreement,
and, except as provided in the immediately following sentence, Borrower, the
other Banks, and Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement.
However, any Participant that is an affiliate of any Bank shall have the right
to deal directly with any other Bank and Borrower with respect to any matter
that is the subject of this Agreement, and Banks and Borrower agree to deal
directly with such affiliate Participant(s); provided, however, that each Bank
needs to deal only with other Banks (and not such other Banks' affiliate
Participant(s)), in those matters in which the consent of any one or more Banks
is required. The rights set forth in the immediately preceding sentence shall
apply only to Participants that are affiliates of any Bank, and such rights do
not apply to any Participants that are not affiliates of any Bank. Borrower
agrees that if amounts outstanding under this Agreement or the Notes are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of a Default or an Event of Default, each Participant shall be
76
deemed to have the right of set-off provided to Banks in this Agreement in
respect of its participating interest in amounts owing under this Agreement or
any Note or Reimbursement Obligation to the same extent as if the amount of its
participating interests were owing directly to it as a Bank under this
Agreement, any Note or any Facility L/C or participation in any Facility L/C.
(b) Borrower authorizes each Bank and Agent to disclose to any
Participant and any prospective Participant any and all financial information in
such Bank's or Agent's possession concerning Borrower and any of Borrower's
Subsidiaries which has been delivered to such Bank or Agent by Borrower or
Borrower's Subsidiaries pursuant to this Agreement or which has been delivered
to such Bank or Agent by Borrower or Borrower's Subsidiaries in connection with
such Bank's or Agent's credit evaluation of Borrower and Borrower's Subsidiaries
prior to entering into this Agreement. Any Participant or prospective
Participant shall be subject to the confidentiality provisions of this
Agreement.
(c) Each Bank shall with respect to its Participants, if any,
retain the sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives principal,
interest or fees (other than Agent's fees) or reduces the interest rate or fees
(other than Agent's fees) payable with respect to any such Loan or Commitment,
postpones any date fixed for any regularly scheduled payment of principal of, or
interest or fees (other than Agent's fees) on, any such Loan or Commitment or
releases any Guarantor.
(d) Borrower agrees that each Participant shall be deemed to
have the rights of set-off provided in subsection 11.8 hereof in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Bank under the Loan Documents, provided that each Bank shall retain the
right of set-off provided in subsection 11.8 hereof with respect to the amount
of participating interests sold to each Participant. Banks agree to share with
each Participant, and each Participant, by exercising the right of set-off
provided in subsection 11.8 hereof, agrees to share with each Bank, any amount
received pursuant to the exercise of its right of set-off, such amounts to be
shared in accordance with subsection 11.8 hereof as if each Participant were a
Bank.
(e) Except for the sale of participating interests as
described in this subsection 11.4 and the assignments as described in subsection
11.7 hereof, no Bank may sell or assign its rights and interests under this
Agreement without the written consent of each Bank and Borrower, provided that
after the occurrence of a Default or an Event of Default that has not been
waived by all Banks, Borrower's consent to such sale or assignment shall not be
required.
11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes and shall remain in full force and
effect until this Agreement is terminated, all Facility L/Cs are cancelled or
are fully collateralized with cash in accordance with Section 8 hereof and
77
all Obligations (including Facility L/C Obligations that are not fully
collateralized with cash) are paid in full.
11.6 PAYMENT OF EXPENSES AND TAXES. Borrower agrees:
(a) to pay or reimburse Agent and each Bank for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the Notes, the Guaranty Agreement, the Facility L/Cs and any
other documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including without limitation the
reasonable fees and disbursements of counsel to Agent and each Bank; and
(b) to pay or reimburse Agent and each Bank for all its costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the Guaranty Agreement, the Facility
L/Cs and any such other documents, including without limitation the reasonable
fees and disbursements of counsel to Agent and each Bank.
11.7 SUCCESSORS AND ASSIGNS; ASSIGNMENT.
(a) This Agreement shall be binding upon and inure to the
benefit of Borrower, Agent and each Bank, all future holders of the Notes and
their respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of all Banks, which consent may be withheld by any Bank in its
sole discretion; and provided further that the rights of each Bank to transfer
or assign its rights and/or obligations hereunder shall be limited as set forth
below in part (b) of this subsection 11.7. Notwithstanding the above (including
anything set forth in part (b) of this subsection 11.7), nothing herein shall
restrict, prevent or prohibit any Bank from (A) pledging its Loans hereunder to
a Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank, (B) granting assignments in such Bank's Loans and/or
Commitment hereunder to its parent company and/or to any affiliate of such Bank
or to any existing Bank or affiliate thereof and (C) selling participations as
set forth in subsection 11.4 hereof.
(b) In addition to the assignments permitted by subsection
11.7(a) hereof, each Bank may, with the prior written consent of the Borrower
and the Agent (provided that no consent of the Borrower shall be required (i)
during the existence and continuation of an Event of Default or (ii) with
respect to the assignments in connection with the physical settlement of credit
derivative transactions), which consent shall not be unreasonably withheld or
delayed, assign all or a portion of its rights and obligations hereunder
pursuant to an assignment agreement substantially in the form of EXHIBIT I
attached hereto and made a part hereof (the "ASSIGNMENT AGREEMENT") to one or
more Eligible Assignees; provided that (A) any such assignment shall be in a
minimum aggregate amount of the lesser of (1) $5,000,000 or any larger amount
which is an even multiple of $1,000,000 or (2) the remaining amount of the
Commitment held by such Bank, and (B) each such assignment shall be of a
constant, not varying, percentage of all of the assigning Bank's rights and
obligations under the Commitment being assigned. Any assignment under this
subsection 11.7(b) shall be effective upon satisfaction of the conditions set
forth above and delivery to the Agent of a duly executed Assignment Agreement
together with a
78
transfer fee of $4,000 payable to the Agent for its own account. Upon the
effectiveness of any such assignment, the assignee shall become a "Bank" for all
purposes of this Agreement and the other documents contemplated hereby and, to
the extent of such assignment, the assigning Bank shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment components being
assigned. The Borrower agrees that upon notice of any such assignment and
surrender of the appropriate Note, it will promptly provide to the assigning
Bank and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but with
notation thereon that it is given in substitution for and replacement of the
original Note or any replacement notes thereof).
By executing and delivering an Assignment Agreement in
accordance with this subsection 11.7(b), the assigning Bank thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Bank warrants that it is
the legal and beneficial owner of the interest being assigned thereby free and
clear of any adverse claim and the assignee warrants that it is an Eligible
Assignee; (ii) except as set forth in clause (i) above, such assigning Bank
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement, any of the other documents contemplated hereby or any other
instrument or document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any of the other documents contemplated hereby or any other
instrument or document furnished pursuant hereto or thereto or the financial
condition of Borrower or the performance or observance by Borrower of any of its
obligations under this Agreement, any of the other documents contemplated hereby
or any other instrument or document furnished pursuant hereto or thereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment Agreement; (iv) such assignee confirms that it has received
a copy of this Agreement, the other documents contemplated hereby and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment Agreement; (v) such assignee
will independently and without reliance upon the Agent, such assigning Bank or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and other documents contemplated hereby;
(vi) such assignee appoints and authorizes the Agent to take such action on its
behalf and to exercise such powers under this Agreement or any other document
contemplated thereby as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement and the other documents
contemplated hereby are required to be performed by it as a Bank.
11.8 ADJUSTMENTS; SET-OFF.
(a) If any Bank (a "BENEFITED BANK") shall at any time receive
any payment of all or part of its Loans or Reimbursement Obligations owing to
it, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in paragraph (5) of Section 9 hereof, or otherwise) in a
greater proportion than any such payment to any other Bank in respect of such
other Bank's Loans or Reimbursement Obligations owing to it, or interest
thereon, such
79
benefited Bank shall purchase for cash from the other Banks such portion of each
such other Bank's Loans or Reimbursement Obligations owing to it, as shall be
necessary to cause such benefited Bank to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Banks; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Bank, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such recovery,
but without interest. Borrower agrees that each Bank so purchasing a portion of
another Bank's Loans or Reimbursement Obligations owing to it may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Bank were the direct holder of such
portion.
(b) In addition to those rights and remedies of each Bank
provided by law, subject to the terms and conditions of this Agreement, upon the
occurrence of an Event of Default and acceleration of the Obligations, each Bank
shall have the right, without prior notice to Borrower or Borrower's
Subsidiaries, any such notice being expressly waived by Borrower and Borrower's
Subsidiaries to the extent permitted by applicable law, to set-off and apply
against any indebtedness, whether matured or unmatured, of Borrower to such
Bank, any amount held by or owing from such Bank to or for the credit or the
account of Borrower or Borrower's Subsidiaries at, or at any time after, the
happening of any of the above-mentioned events, and the aforesaid right of
set-off may be exercised by each Bank against Borrower and Borrower's
Subsidiaries or against any trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, receiver, custodian or execution,
judgment or attachment creditor of Borrower and Borrower's Subsidiaries, or
against anyone else claiming through or against Borrower and Borrower's
Subsidiaries or such trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, receiver, custodian or execution, judgment or
attachment creditor, notwithstanding the fact that such right of set-off shall
not have been exercised by such Bank prior to the making, filing or issuance of,
or service upon such Bank of, or of notice of, any such petition; assignment for
the benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each Bank agrees
promptly to notify Borrower and, if set-off is made against Borrower's
Subsidiaries, Borrower's Subsidiaries after any such set-off and application
made by such Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
11.9 WAIVER OF JURY TRIAL. EACH BANK AND BORROWER, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THE AGREEMENT OR ANY RELATED INSTRUMENT
OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT OR ANY
COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY OF THEM. NONE OF AGENT, ANY BANK OR BORROWER SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY OF AGENT, ANY BANK OR BORROWER
80
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE BANKS TO PROVIDE THE COMMITMENT HEREUNDER.
11.10 CONFIDENTIALITY. Agent and each Bank shall hold all confidential
information obtained pursuant to the requirements of the Agreement which has
been identified as such by Borrower in accordance with Agent's or such Bank's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to its examiners, affiliates, outside auditors, counsel and other
professional advisors in connection with the Agreement or as reasonably required
by any bona fide Participant or assignee or prospective Participant or assignee
in connection with any contemplated assignment thereof or participation therein
or as required or requested by any governmental agency or representative thereof
or pursuant to legal process. Without limiting the foregoing, it is expressly
understood that such confidential information which, at the time of disclosure
is in the public domain or which, after disclosure, other than disclosure by
Agent or any Bank, becomes part of the public domain or information which is
obtained by Agent or any Bank prior to the time of disclosure and identification
by Borrower under this subsection, or information received by Agent or any Bank
from a third party shall not be subject to the confidentiality requirements of
this subsection 11.10. Nothing in this subsection or otherwise shall prohibit
Agent or any Bank from disclosing any confidential information to any other Bank
in connection with the Loans contemplated by this Agreement or render it liable
in connection with any such disclosure.
11.11 COUNTERPARTS; EFFECTIVE DATE. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement shall become effective
upon the receipt by Agent and each Bank of executed counterparts of this
Agreement by each of the parties hereto.
11.12 GOVERNING LAW. This Agreement, the Notes and the rights and
obligations of the parties under this Agreement and the Notes shall be governed
by, and construed and interpreted in accordance with the internal laws
(including ss.735ILCS 105/5-1 et seq., but otherwise without regard to
principles of conflict of law) of the State of Illinois but giving effect to
federal laws applicable to national banks.
11.13 INTEGRATION. This Agreement (including Borrower's obligation to
pay the fees as provided in the Agent's Fee Letter referred to herein) and the
Loan Documents contain the entire agreement between the parties relating to the
subject matter hereof and supersede all oral statements and prior writings with
respect thereto.
11.14 INDEMNITY. Borrower hereby agrees to defend, indemnify, and hold
Agent, Arranger, each Issuing Bank and each Bank harmless from and against all
claims, damages, judgments, penalties, costs, and expenses (including attorney
fees and court costs now or hereafter arising from the aforesaid enforcement of
this clause) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
any Loan hereunder except to the extent that they are determined in a final
non-appealable
81
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the party seeking indemnification. This
indemnity shall survive the termination of this Agreement.
11.15 SEVERABILITY OF PROVISIONS. Any provision of any Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
11.16 SUBMISSION TO JURISDICTION. Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Northern
District of Illinois and of any Illinois State court sitting in The City of
Chicago for purposes of all legal proceedings which may arise hereunder or under
the Notes. Borrower irrevocably waives to the fullest extent permitted by law,
any objection which it may have or hereafter have to the laying of the venue of
any such proceeding brought in such a court, and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Borrower consents to process being served in any such proceeding by the mailing
of a copy thereof by registered or certified mail, postage prepaid, to its
address specified in subsection 11.2 hereof or in any other manner permitted by
law.
11.17 GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Bank shall be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
11.18 NO FIDUCIARY DUTY. The relationship between Borrower and Banks
and Agent shall be solely that of borrower and lender. Neither Agent nor any
Bank shall have any fiduciary responsibilities to Borrower. Neither Agent nor
any Bank undertakes any responsibility to Borrower to review or inform the
Borrower of any matter in connection with any phase of Borrower's business or
operations.
11.19 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.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
M/I SCHOTTENSTEIN HOMES, INC.
By ________________________
Xxxxxx X. Xxxxxxxxxxxxx
Title: Vice Chairman, President and Assistant Secretary
83
BANKS
-----
BANK ONE, NA,
as Agent and as a Bank
By________________________
Name:________________________
Title:________________________
ADDRESS:
Bank One, NA
1 Bank Xxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: F. Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
THE HUNTINGTON NATIONAL BANK,
as Documentation Agent and as a Bank
By________________________
Xxxxxxxx X. Xxxxxx
Title: Vice President
ADDRESS:
00 Xxxxx Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
84
U.S. BANK, N.A. (formerly known as
Firstar Bank, N.A.), as Co-Agent and as a Bank
By________________________
Xxxxx X. Xxxxxx
Title: Vice President
ADDRESS:
--------
U.S. Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
NATIONAL CITY BANK,
as Co-Agent and as a Bank
By________________________
Xxxxx Xxxxx
Title: Vice President
ADDRESS:
000 Xxxx Xxxxx Xxxxxx 0xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
AMSOUTH BANK,
as Co-Agent and as a Bank
By______________________________
Xxxxx Xxxxxxxx
Title: Senior Vice President
ADDRESS:
Sonat Building, 10th Floor
Residential Construction Lending
0000 Xxxxx Xxxxxx Xxxxx
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
85
SUNTRUST BANK,
as Co-Agent and as a Bank
By________________________
Xxxxxx X. Xxxxxxxx, Xx.
Title: Director
ADDRESS:
SunTrust Bank
Mail Code 1931
000 Xxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Facsimile: (000) 000-0000
COMERICA BANK
By______________________________
Xxxxxxx X. Xxxxxxx
Title: Vice President
ADDRESS:
000 Xxxxxxxx Xxxxxx
XX: 0000 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
FIFTH THIRD BANK, CENTRAL OHIO
By______________________________
Xxxx Xxxxxxxxx
Title: Vice President
ADDRESS:
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
86
PNC BANK, NATIONAL ASSOCIATION
By______________________________
Xxxxx X. Xxxxxxx
Title: Vice President
ADDRESS:
PNC Bank, National Association
Real Estate Finance - 2nd Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
WASHINGTON MUTUAL BANK, FA
By______________________________
Xxxx Xxxxxxx
Title: Vice President
ADDRESS:
--------
Washington Mutual Bank, FA
0000 Xx Xxxxx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
FLEET NATIONAL BANK
By______________________________
Xxxxxx X. Xxxxxxx
Title: Director
ADDRESS:
Fleet National Bank
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
87
GUARANTY BANK
By______________________________
Title:__________________________
ADDRESS:
Guaranty Bank
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
88
SCHEDULE 1
COMMITMENTS
-----------
COMMITMENT RATABLE SHARE
---------- -------------
Bank One, NA $ 47,500,000 15.079365079%
The Huntington National Bank $ 45,000,000 14.285714286%
U.S. Bank, N.A. $ 35,000,000 11.111111111%
National City Bank $ 27,500,000 8.730158730%
AmSouth Bank $ 25,000,000 7.936507937%
SunTrust Bank $ 25,000,000 7.936507937%
Comerica Bank $ 20,000,000 6.349206349%
Fifth Third Bank, Central Ohio $ 20,000,000 6.349206349%
PNC Bank, National Association $ 20,000,000 6.349206349%
Washington Mutual Bank, FA $ 20,000,000 6.349206349%
Fleet National Bank $ 15,000,000 4.761904762%
Guaranty Bank $ 15,000,000 4.761904762%
------------- ----------------
Total $ 315,000,000 100.0%
SCHEDULE 2
EXISTING L/CS
-------------
M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------------
March 05, 2002 BO = BANK ONE
L = PERFORMANCE LC's ST = SUN TRUST
DATE OF LETTER OF
LC CREDIT # DIVISION BENEFICIARY REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
02-06-98 STI02664 LAND COLUMBUS DELAWARE CNTY COMM LAKES OF XXXXXX SECTION 2
------------------------------------------------------------------------------------------------------------------------------------
06-01-98 STI10002 LAND COLUMBUS CITY OF COLUMBUS FIELDS AT NEW ALBANY SEC 1
------------------------------------------------------------------------------------------------------------------------------------
10-05-98 STI10921 LAND TAMPA HILLSBOROUGH CNTY COMM ARBOR LAKES 1B
------------------------------------------------------------------------------------------------------------------------------------
03-08-99 STI13125 CHARLOTTE THE XXXXXXXX GROUP INC XXXXXXX GROVE
------------------------------------------------------------------------------------------------------------------------------------
08-06-99 STI14136 LAND TAMPA HILLSBOROUGH CNTY COMM ARBOR LAKES 3B
------------------------------------------------------------------------------------------------------------------------------------
09-03-99 STI14351 LAND XXXXXXXX XXXXXXX AT BEACON HILL, LLC BEACON HILL
------------------------------------------------------------------------------------------------------------------------------------
09-15-99 STI14415 LAND HORIZON CITY OF COLUMBUS XXXXXX RIDGE OF NEW ALBANY SEC 1
------------------------------------------------------------------------------------------------------------------------------------
09-27-99 STI14507 LAND HORIZON CITY OF COLUMBUS KENSINGTON XXXX SECTION 1
------------------------------------------------------------------------------------------------------------------------------------
10-08-99 STI14589 LAND SHOWCASE XXXXX & SON, INC. WILLOW SPRINGS
------------------------------------------------------------------------------------------------------------------------------------
02-17-00 XXX00000 XXXX XXXXXXXXX XXXXXXXXXXX XXXXXX XXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
03-13-00 STI15536 XXXX XXXX XXXXX,XXXXXXXX,X'XXXXXX XXXXXXXX XXX
------------------------------------------------------------------------------------------------------------------------------------
03-17-00 STI15561 LAND COLUMBUS VILLAGE OF XXXXXX LAKES OF POWELL SECTION 5
------------------------------------------------------------------------------------------------------------------------------------
03-29-00 STI15641 LAND COLUMBUS DELAWARE CNTY COMM LAKES OF XXXXXX OFFSITE FORCEMAIN
------------------------------------------------------------------------------------------------------------------------------------
03-31-00 STI15663 LAND COLUMBUS CITY OF COLUMBUS PRESERVE SECTION 5 PART 2
------------------------------------------------------------------------------------------------------------------------------------
03-31-00 STI15664 CHARLOTTE XXXXX XXXXXXXX & ASSOC XXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
04-20-00 STI15774 LAND HORIZON CITY OF COLUMBUS KENSINGTON XXXX SECTION 3 PART 2
------------------------------------------------------------------------------------------------------------------------------------
04-20-00 STI15775 LAND HORIZON CITY OF COLUMBUS KENSINGTON XXXX SECTION 3 PART 1
------------------------------------------------------------------------------------------------------------------------------------
06-19-00 STI16077 LAND HORIZON CITY OF COLUMBUS EDGEWATER SECTION 1
------------------------------------------------------------------------------------------------------------------------------------
07-19-00 XXX00000 XXXX XXXXXXX XXXXXX XXXXXX, XX AUBURN HILLS
------------------------------------------------------------------------------------------------------------------------------------
07-24-00 STI16294 LAND HORIZON CITY OF COLUMBUS XXXXXX RIDGE SECTION 2 PART 2
------------------------------------------------------------------------------------------------------------------------------------
09-08-00 STI16569 LAND SHOWCASE DELAWARE CNTY COMM BRYN MAWR AT DELAWARE # 2 -2
------------------------------------------------------------------------------------------------------------------------------------
09-12-00 STI16583 LAND XXXXXXXX XXXXXXX & XXXXXX XXXXXXXXX XXXXXX XXXX ROAD
------------------------------------------------------------------------------------------------------------------------------------
10-03-00 STI16703 LAND PHOENIX XXXXXXX XXXXX XXX XXXXXXX XXXXX XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
10-04-00 STI16710 LAND SHOWCASE CITY OF DUBLIN BELVEDERE SECTION 1
------------------------------------------------------------------------------------------------------------------------------------
10-16-00 * STI16781 LAND TAMPA PASCO COUNTY COMMISSIONERS XXXXXX XXXXXX XXXXX 0 A
------------------------------------------------------------------------------------------------------------------------------------
12-06-00 STI17051 INDIANAPOLIS PLATINUM PROPERTIES MILL GROVE
------------------------------------------------------------------------------------------------------------------------------------
01-05-01 STI17206 LAND COLUMBUS XXXXX & SON, INC. WESTPOINT
------------------------------------------------------------------------------------------------------------------------------------
01-19-01 * STI17307 XXXXXXX XXX & XXXXX MOBILLA WINDY WALK LOT # 126
------------------------------------------------------------------------------------------------------------------------------------
01-19-01 STI17308 PHOENIX XXXXXXX & XXXXXX XXXXXXXXX TROON NORTH LOT # 129
------------------------------------------------------------------------------------------------------------------------------------
03-22-01 STI17623 LAND XXXXXXX XXXX XX XXXX XXXXX XXXXXX XXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
03-22-01 STI17630 LAND ORLANDO WINDERWEEDLE,HAINES,XXXX XXXXX PROPERTY
------------------------------------------------------------------------------------------------------------------------------------
04-18-01 STI17739 LAND CINCINNATI THE BRYCO COMPANY
------------------------------------------------------------------------------------------------------------------------------------
05-03-01 * STI17817 LAND VIRGINIA VIRGINIA DEPT OF TRANS CASCADES SECTIONS 18 B & 18 D
------------------------------------------------------------------------------------------------------------------------------------
05-09-01 STI17841 TAMPA BRICKLEMYER,SMOLKER & BOLVES SADDLEBROOK
------------------------------------------------------------------------------------------------------------------------------------
05-30-01 STI17932 INDIANAPOLIS BROOKSTONE PARK OF CARMEL BROOKSTONE PARK OF CARMEL
------------------------------------------------------------------------------------------------------------------------------------
06-08-01 XXX00000 XXXX XXXX XXXX XXXXXX XXXXXXXX & XXXXX BETHESDA
------------------------------------------------------------------------------------------------------------------------------------
06-13-01 * STI18011 LAND RALEIGH TOWN OF CHAPEL HILL PARKSIDE PHASE II
------------------------------------------------------------------------------------------------------------------------------------
06-18-01 * STI18026 LAND VIRGINIA VIRGINIA DEPT OF TRANS CASCADES SECTIONS 18 B & 18 D
------------------------------------------------------------------------------------------------------------------------------------
06-26-01 STI18048 LAND COLUMBUS NEW ALBANY LINKS DEVEL CO NEW ALBANY LINKS
------------------------------------------------------------------------------------------------------------------------------------
07-03-01 STI18098 CHARLOTTE STARWOOD CAROLINA, LLC WEDDINGTON PLACE
------------------------------------------------------------------------------------------------------------------------------------
08-08-01 STI18256 XXXXXXXXX XXXXXXXXXX RIDGE LLC XXXXXXXXXX RIDGE
------------------------------------------------------------------------------------------------------------------------------------
08-14-01 * STI18288 LAND VIRGINIA BD OF SUPERV OF FAIRFAX CNTY XXXX PROPERTY
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18306 LAND HORIZON XXXXXXXXX & XXXX XXXXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18307 LAND HORIZON XXXXXXXX XXXXXXXX TRUST XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18308 LAND HORIZON XXXX XXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-16-01 STI18309 LAND HORIZON XXXXXXX & XXXXX XXXXXXXX XXXXXXXX & SPANNER
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18310 LAND HORIZON CLAY & XXXXX XXXXXXXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18311 LAND HORIZON XXXX XXXXX XXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-15-01 STI18312 LAND HORIZON XXXX & XXXXXX XXXXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-16-01 STI18314 LAND HORIZON XXXX & XXXXXX XXXXXXXX XXXXXXXXX XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
08-16-01 * STI18315 PHOENIX XXX XXXXXXXXX LEGEND TRAIL LOT # 76
------------------------------------------------------------------------------------------------------------------------------------
09-06-01 STI18410 LAND XXXXXXXX XXXX XX XXXXXX XXXXXXXX XXXXXXX 0 XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------------
March 05, 2002 BO = BANK ONE
ST = SUN TRUST
L = PERFORMANCE LC's
LOC EXPIRY
AMOUNT DATE
--------------------------------------
--------------------------------------
$10,000.00 BO 07-31-03
--------------------------------------
$112,406.70 BO 04-30-02
--------------------------------------
$33,940.00 BO 09-14-02
--------------------------------------
$80,000.00 BO 04-04-02
--------------------------------------
$38,440.00 BO 10-14-02
--------------------------------------
$475,000.00 BO 09-07-02
--------------------------------------
$61,128.20 BO 03-31-02
--------------------------------------
$52,486.50 BO 03-31-02
--------------------------------------
$25,000.00 BO 06-30-02
--------------------------------------
$167,410.00 BO 08-18-02
--------------------------------------
$362,250.00 BO 01-31-03
--------------------------------------
$44,481.10 BO 03-31-02
--------------------------------------
$6,372.80 BO 03-31-02
--------------------------------------
$160,105.50 BO 06-30-02
--------------------------------------
$150,000.00 BO 04-01-02
--------------------------------------
$266,231.00 BO 04-30-02
--------------------------------------
$50,550.00 BO 04-30-02
--------------------------------------
$108,238.40 BO 03-31-02
--------------------------------------
$26,935.00 BO 07-20-02
--------------------------------------
$658,158.00 BO 07-31-02
--------------------------------------
$7,042.57 BO 09-30-06
--------------------------------------
$20,000.00 BO 03-31-02
--------------------------------------
$1,590,000.00 BO 06-30-03
--------------------------------------
$8,400.00 BO 06-30-02
--------------------------------------
$43,757.03 BO 05-16-02
--------------------------------------
$100,000.00 BO 12-14-02
--------------------------------------
$25,000.00 BO 07-31-02
--------------------------------------
$325,000.00 BO 01-04-03
--------------------------------------
$150,000.00 BO 08-21-02
--------------------------------------
$803,495.00 BO 09-22-02
--------------------------------------
$10,000.00 BO 03-31-02
--------------------------------------
$20,000.00 BO 04-17-02
--------------------------------------
$9,000.00 BO 05-01-02
--------------------------------------
$44,000.00 BO 05-01-02
--------------------------------------
$100,000.00 BO 05-31-02
--------------------------------------
$90,000.00 BO 06-08-02
--------------------------------------
$1,076,942.00 BO 06-18-02
--------------------------------------
$9,000.00 BO 05-01-02
--------------------------------------
$736,000.00 BO 06-27-02
--------------------------------------
$250,000.00 BO 06-29-02
--------------------------------------
$250,000.00 BO 07-30-02
--------------------------------------
$20,000.00 BO 07-30-02
--------------------------------------
$51,801.09 BO 08-16-02
--------------------------------------
$118,013.44 BO 08-16-02
--------------------------------------
$236,453.44 BO 08-16-02
--------------------------------------
$25,000.00 BO 08-17-02
--------------------------------------
$51,801.10 BO 08-16-02
--------------------------------------
$51,801.09 BO 08-16-02
--------------------------------------
$79,292.07 BO 08-16-02
--------------------------------------
$51,801.09 BO 08-16-02
--------------------------------------
$119,000.00 BO 05-24-03
--------------------------------------
$10,700.00 BO 09-30-02
--------------------------------------
M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------------
March 05, 2002 BO = BANK ONE
L = PERFORMANCE LC's ST = SUN TRUST
DATE OF LETTER OF
LC CREDIT # DIVISION BENEFICIARY REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
09-13-01 STI18451 LAND COLUMBUS CITY OF XXXXXX LAKES OF XXXXXX SECTION 6 PART 2
------------------------------------------------------------------------------------------------------------------------------------
09-13-01 STI18454 LAND HORIZON CITY OF COLUMBUS PRESTWICK GREEN SECTION 2 PART 2
------------------------------------------------------------------------------------------------------------------------------------
09-13-01 STI18455 LAND HORIZON CITY OF COLUMBUS PRESTWICK GREEN SECTION 2 PART 1
------------------------------------------------------------------------------------------------------------------------------------
09-17-01 STI18473 XXXXXXX XXXXXXXXXXXX,XXXXXX,XXXX WEKIVA POINTE
------------------------------------------------------------------------------------------------------------------------------------
09-18-01 STI18479 LAND RALEIGH AUBURN OWNERS ASSOCIATES AUBURN REC FACILITIES
------------------------------------------------------------------------------------------------------------------------------------
09-20-01 * STI18490 LAND CINCINNATI BRANDYWINE, LLC BRANDYWINE
------------------------------------------------------------------------------------------------------------------------------------
09-20-01 STI18491 LAND XXXXXXX X.X.X. DEVELOPMENT COMPANY NEW HOPE
------------------------------------------------------------------------------------------------------------------------------------
09-20-01 STI18492 LAND RALEIGH TRIPLE CREEK ASSOCIATES, LLC VALLEY STREAM PARK
------------------------------------------------------------------------------------------------------------------------------------
09-21-01 STI18501 TAMPA XXXX XXXXX ENTERPRISES, INC FOXWOOD
------------------------------------------------------------------------------------------------------------------------------------
09-21-01 STI18503 LAND VIRGINIA VIRGINIA DEPT OF TRANS CASCADES SECTIONS 18 B & 18 D
------------------------------------------------------------------------------------------------------------------------------------
09-27-01 STI18529 LAND COLUMBUS XXXXXXX GOLF COMMUNITIES, LLC DUBLIN GOLF
------------------------------------------------------------------------------------------------------------------------------------
10-01-01 STI18542 LAND COLUMBUS CITY OF XXXXXX LAKES OF XXXXXX SECTION 6 PART 1
------------------------------------------------------------------------------------------------------------------------------------
10-12-01 STI18580 XXXXXXX XXXXXXXXXXXX,XXXXXX,XXXX WEKIVA POINTE
------------------------------------------------------------------------------------------------------------------------------------
10-16-01 STI18597 LAND HORIZON CITY OF COLUMBUS EDGEWATER SECTION 3
------------------------------------------------------------------------------------------------------------------------------------
10-18-01 STI18614 LAND WEST PALM BROAD AND XXXXXX GABLES
------------------------------------------------------------------------------------------------------------------------------------
10-19-01 STI18619 LAND SHOWCASE CITY OF DUBLIN BELVEDERE SECTION 2
------------------------------------------------------------------------------------------------------------------------------------
10-24-01 STI18633 HORIZON XXXXXXX X XXXXXX POTTERS GROVE
------------------------------------------------------------------------------------------------------------------------------------
10-25-01 STI18636 SHOWCASE XXXXXXX GOLF COMMUNITIES, LLC DUBLIN GOLF
------------------------------------------------------------------------------------------------------------------------------------
10-30-01 XXX00000 XXXX XXXXXXXX XXXX XX XXXXXXXX QUARRY POINTE SECTION 2 PART 1
------------------------------------------------------------------------------------------------------------------------------------
10-30-01 XXX00000 XXXX XXXXXXXX XXXX XX XXXXXXXX QUARRY POINTE SECTION 2 PART 2
------------------------------------------------------------------------------------------------------------------------------------
11-13-01 STI18724 LAND TAMPA BRICKLEMYER,SMOLKER & BOLVES WILDERNESS PRESERVE
------------------------------------------------------------------------------------------------------------------------------------
11-14-01 STI18726 LAND TAMPA U.S. HOME CORPORATION XXXXXXXXXXX XXXXX # 00
------------------------------------------------------------------------------------------------------------------------------------
11-20-01 STI18766 LAND ORLANDO WINDERWEEDLE,HAINES,XXXX XXXXX PROPERTY
------------------------------------------------------------------------------------------------------------------------------------
12-13-01 STI18853 LAND HORIZON CITY OF DELAWARE LANTERN CHASE SECTION 3
------------------------------------------------------------------------------------------------------------------------------------
12-13-01 STI18854 LAND RALEIGH TOWN OF CHAPEL HILL PARKSIDE PHASE II
------------------------------------------------------------------------------------------------------------------------------------
12-13-01 STI18855 VIRGINIA ADC BUILDERS, INC SPRING LAKES
------------------------------------------------------------------------------------------------------------------------------------
01-07-02 STI18962 LAND COLUMBUS XXXXXXXX XXXX XXXX XXXX XXXXXXX XXXXX 0-0 PART B
------------------------------------------------------------------------------------------------------------------------------------
01-07-02 STI18963 LAND SHOWCASE XXXXXXXX XXXX XXXX XXXXXX XXXXXX XXXX 0 XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
01-07-02 STI18964 LAND COLUMBUS XXXXXXXX XXXX XXXX XXXX XXXXXXX XXXXX 0-0 PART A
------------------------------------------------------------------------------------------------------------------------------------
01-11-02 STI18987 LAND COLUMBUS XXXXXXXX XXXX XXXX XXXX @ XXXXXXXX XXXXX XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
01-11-02 STI18988 LAND COLUMBUS DELAWARE CNTY COMM VILLAGES @ ALUM CREEK SECTION 5
------------------------------------------------------------------------------------------------------------------------------------
01-25-02 STI19063 LAND RALEIGH WESTGAGE DURHAM LLC 00 XXXXX XX XXXXXX XXXX
------------------------------------------------------------------------------------------------------------------------------------
02-04-02 STI19107 LAND COLUMBUS JEFFERSON TOWNSHIP BLACKLICK RIDGE SEC 3 PT 2
------------------------------------------------------------------------------------------------------------------------------------
02-04-02 STI19108 LAND COLUMBUS JEFFERSON TOWNSHIP BLACKLICK RIDGE SEC 3 PT 1
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19224 LAND COLUMBUS LAKEWOOD XXXXXX X. AND XXXXX X. BIAGNINI
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19225 LAND COLUMBUS LAKEWOOD XXXXXXX X. AND XXXX X. XXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19226 LAND COLUMBUS LAKEWOOD XXXXXX X. AND XXXXX X. XXXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19227 LAND COLUMBUS LAKEWOOD XXXXXX X. AND XXXXXXXX X. XXXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19228 LAND COLUMBUS LAKEWOOD XXXXXX X. AND XXXXXX X. XXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19229 LAND COLUMBUS LAKEWOOD XXXXX X. AND XXXXXX X. XXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19230 LAND COLUMBUS LAKEWOOD XXXXXX X. AND XXXXX X. XXXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19231 LAND COLUMBUS LAKEWOOD XXXXXXXXX X. XXXXX
------------------------------------------------------------------------------------------------------------------------------------
02-28-02 STI19232 LAND HORIZON JAL REALTY JAL REALTY
------------------------------------------------------------------------------------------------------------------------------------
06-29-94 STR01332 LAND VIRGINIA BD OF SUPERV OF FAIRFAX CNTY FRANKLIN CORNERS
------------------------------------------------------------------------------------------------------------------------------------
01-19-95 STR01539 LAND VIRGINIA BD OF SUPERV OF FAIRFAX CNTY XXXXXXX GATE
------------------------------------------------------------------------------------------------------------------------------------
02-22-95 STR01572 LAND MARYLAND DEVELOPMENT GUARANTY GROUP WILLOWS (FOR PREMIER HOMES)
------------------------------------------------------------------------------------------------------------------------------------
06-30-95 STR01657 LAND VIRGINIA FIRST UNION OF VIRGINIA PL 1992 LC's
------------------------------------------------------------------------------------------------------------------------------------
06-19-97 STR02414 LAND VIRGINIA XX XX XXXX XXXXX XX XXXXXX XXXXXXX XXXXXXX 0X
------------------------------------------------------------------------------------------------------------------------------------
07-22-97 STR02447 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 1 - STREETS
------------------------------------------------------------------------------------------------------------------------------------
07-22-97 STR02449 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 1 - INT SIDEWALKS
------------------------------------------------------------------------------------------------------------------------------------
07-22-97 STR02450 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 1 - ERISION CONTROL
------------------------------------------------------------------------------------------------------------------------------------
07-22-97 STR02451 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 1 - STREET SIGNS
------------------------------------------------------------------------------------------------------------------------------------
M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------
March 05, 2002 BO = BANK ONE
L = PERFORMANCE LC's ST = SUN TRUST
LOC EXPIRY
AMOUNT DATE
---------------------------------------
$16,821.00 BO 02-28-03
---------------------------------------
$253,307.00 BO 09-30-02
---------------------------------------
$489,537.00 BO 09-30-02
---------------------------------------
$10,000.00 BO 06-30-02
---------------------------------------
$83,000.00 BO 08-31-02
---------------------------------------
$10,000.00 BO 09-21-02
---------------------------------------
$25,000.00 BO 09-15-02
---------------------------------------
$40,000.00 BO 09-15-02
---------------------------------------
$100,000.00 BO 09-19-02
---------------------------------------
$9,000.00 BO 05-01-02
---------------------------------------
$55,000.00 BO 07-31-02
---------------------------------------
$29,181.10 BO 09-30-02
---------------------------------------
$45,000.00 BO 06-30-02
---------------------------------------
$538,732.00 BO 10-31-02
---------------------------------------
$525,000.00 BO 06-15-02
---------------------------------------
$93,000.00 BO 01-31-03
---------------------------------------
$50,000.00 BO 10-18-02
---------------------------------------
$108,104.00 BO 09-30-02
---------------------------------------
$311,116.00 BO 10-31-02
---------------------------------------
$281,179.00 BO 10-31-02
---------------------------------------
$54,000.00 BO 11-08-02
---------------------------------------
$50,000.00 BO 03-31-03
---------------------------------------
$15,000.00 BO 12-01-02
---------------------------------------
$144,472.06 BO 12-31-03
---------------------------------------
$54,062.50 BO 06-18-02
---------------------------------------
$250,000.00 BO 10-31-02
---------------------------------------
$84,382.00 BO 01-31-03
---------------------------------------
$5,000.00 BO 01-31-03
---------------------------------------
$68,940.00 BO 01-31-03
---------------------------------------
$8,050.00 BO 05-31-02
---------------------------------------
$8,650.00 BO 05-31-02
---------------------------------------
$50,000.00 BO 04-01-02
---------------------------------------
$10,000.00 BO 02-28-03
---------------------------------------
$10,000.00 BO 02-28-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$5,000.00 BO 03-11-03
---------------------------------------
$50,000.00 BO 09-17-02
---------------------------------------
$141,000.00 BO 07-26-02
---------------------------------------
$106,000.00 BO 10-16-02
---------------------------------------
$100,000.00 BO 02-19-03
---------------------------------------
$295,680.00 BO 06-13-02
---------------------------------------
$76,505.35 BO 06-20-02
---------------------------------------
$80,021.00 BO 07-31-02
---------------------------------------
$21,240.00 BO 07-31-02
---------------------------------------
$14,300.00 BO 07-31-02
---------------------------------------
$2,100.00 BO 07-31-02
---------------------------------------
M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------------
March 05, 2002 BO = BANK ONE
L = PERFORMANCE LC's ST = SUN TRUST
DATE OF LETTER OF
LC CREDIT # DIVISION BENEFICIARY REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
07-22-97 STR02452 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 1 - PER SIDEWALKS
------------------------------------------------------------------------------------------------------------------------------------
07-24-97 STR02458 LAND INDY CITY OF INDIANAPOLIS SPRING LAKE
------------------------------------------------------------------------------------------------------------------------------------
07-24-97 STR02459 LAND INDY CITY OF INDIANAPOLIS SPRING LAKE
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 STR02504 LAND CINCINNATI XXXXXX CO COMMISSIONERS LANDING AT WILLOW PONDS PHASE 1
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 STR02505 LAND CINCINNATI XXXXXX CO COMMISSIONERS LANDING AT WILLOW PONDS PHASE 1
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 * STR02506 LAND XXXXXXXXXX XXXXXX XXXXXX XXXX XXXXXX XXXX XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 STR02507 LAND CINCINNATI XXXXXX CO COMMISSIONERS WILLOW POND BLVD
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 STR02508 LAND CINCINNATI XXXXXX CO COMMISSIONERS WILLOW POND BLVD
------------------------------------------------------------------------------------------------------------------------------------
08-28-97 * XXX00000 XXXX XXXXXXXXXX XXXXXX XXXXXX COMM WILLOW POND BLVD
------------------------------------------------------------------------------------------------------------------------------------
04-06-98 STR02734 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 2 - STREETS
------------------------------------------------------------------------------------------------------------------------------------
04-06-98 STR02735 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 2 - STORM SEWER
------------------------------------------------------------------------------------------------------------------------------------
04-06-98 STR02736 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 2 - INT SIDEWALKS
------------------------------------------------------------------------------------------------------------------------------------
04-06-98 STR02737 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 2 - ERISION CONTROL
------------------------------------------------------------------------------------------------------------------------------------
04-06-98 STR02738 LAND INDY CITY OF INDIANAPOLIS WOOD CREEK SEC 2 - STREET SIGNS
------------------------------------------------------------------------------------------------------------------------------------
06-19-98 XXX00000 XXXX XXXXXXXXXX XXXXXX XXXXXX COMM XXXXXX XXXX XXX 0 - XXXXXXX
------------------------------------------------------------------------------------------------------------------------------------
06-19-98 STR10142 LAND CINCINNATI XXXXXX COUNTY COMM WILLOW POND SEC 2 - SIDEWALKS
------------------------------------------------------------------------------------------------------------------------------------
12-22-98 STR12514 LAND VIRGINIA BD OF CNTY SUPER OF PRINCE PIEDMONT SECTION 1
------------------------------------------------------------------------------------------------------------------------------------
04-01-99 STR13266 LAND VIRGINIA BD OF CNTY SUPER OF PRINCE PIEDMONT SECTION 5
------------------------------------------------------------------------------------------------------------------------------------
04-14-99 STR13353 LAND VIRGINIA BD OF CNTY SUPER OF PRINCE PIEDMONT SECTION 3
------------------------------------------------------------------------------------------------------------------------------------
09-20-99 STR14447 LAND TAMPA HILLSBOROUGH CNTY COMM MEADOWCREEK "K" 1-C
------------------------------------------------------------------------------------------------------------------------------------
02-25-00 STR15435 LAND TAMPA XXXXXXXXXXXX XXXX XXXX XXXXX XXXXX XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
02-25-00 STR15437 LAND TAMPA XXXXXXXXXXXX XXXX XXXX XXXXX XXXXX XXXXX 0
------------------------------------------------------------------------------------------------------------------------------------
04-07-00 STR15704 LAND VIRGINIA BD OF CNTY SUPER OF PRINCE PRINCE XXXXXXX COM PH 2 SEC 8
------------------------------------------------------------------------------------------------------------------------------------
04-07-00 STR15705 LAND TAMPA HILLSBOROUGH CNTY COMM CREEKWOOD "K" PHASE 1 B
------------------------------------------------------------------------------------------------------------------------------------
04-20-00 STR15777 LAND VIRGINIA BD OF CNTY SUPER OF PRINCE PRINCE XXXXXXX COM PH 2 SEC 8
------------------------------------------------------------------------------------------------------------------------------------
11-03-00 STR16891 CORPORATE OLD REPUBLIC INSURANCE INSURANCE
------------------------------------------------------------------------------------------------------------------------------------
11-08-00 STR16915 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K 1D
------------------------------------------------------------------------------------------------------------------------------------
01-19-01 STR17304 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K PHASE 2A
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01-19-01 STR17305 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K PHASE 2A
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01-19-01 STR17306 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K PHASE 2A
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05-01-01 STR17805 LAND TAMPA HILLSBOROUGH CNTY COMM CREEKWOOD "O" PHASE 2 B
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05-01-01 STR17806 LAND TAMPA HILLSBOROUGH CNTY COMM CREEKWOOD "O" PHASE 2 B
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06-14-01 STR17854 LAND ORLANDO SEMINOLE COUNTY COMM XXXXXXXX XXXXX
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01-23-02 STR19045 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K XXXXX 0X
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01-23-02 STR19046 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K XXXXX 0X
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01-23-02 STR19047 LAND TAMPA HILLSBOROUGH CNTY COMM CROSS CREEK PARCEL K XXXXX 0X
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01-24-02 STR19053 LAND TAMPA HILLSBOROUGH CNTY COMM LAKEVIEW VILLAGE SECT M
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01-24-02 STR19054 LAND TAMPA HILLSBOROUGH CNTY COMM LAKEVIEW VILLAGE SECT M
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01-24-02 STR19055 LAND TAMPA HILLSBOROUGH CNTY COMM LAKEVIEW VILLAGE SECT M
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09-25-00 ATL/P601120 LAND ORLANDO ORANGE COUNTY,FL ANDOVER CAY PHASE 4A
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09-25-00 ATL/P601121 LAND ORLANDO ORANGE COUNTY,FL ANDOVER CAY PHASE 4A
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08-17-01 * ATL/P601365 LAND XXXX XXXX XXXX XX XXXX XXXXX XXXXXXX XXXXXXXXXX XXXXX
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09-27-01 ATL/P601381 LAND ORLANDO ORANGE COUNTY,FL ANDOVER CAY PHASE 4 C
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09-27-01 ATL/P601382 LAND ORLANDO ORANGE COUNTY,FL ANDOVER CAY PHASE 4 C
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10-19-01 ATL/P601393 LAND XXXXXXX XXXXX & SHAMS, PA LAKE CHARM ESTATES
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02-28-02 ATL/P601465 LAND - TAMPA MONTREAUX CENTEX HOMES
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M/I SCHOTTENSTEIN HOMES, INC.
OUTSTANDING LETTERS OF CREDIT ISSUING BANKS
-----------------------------------
March 05, 2002 BO = BANK ONE
L = PERFORMANCE LC's ST = SUN TRUST
LOC EXPIRY
AMOUNT DATE
---------------------------------------
$2,040.00 BO 07-31-02
---------------------------------------
$194,158.00 BO 07-31-02
---------------------------------------
$107,881.00 BO 07-31-02
---------------------------------------
$44,210.00 BO 08-31-02
---------------------------------------
$27,678.00 BO 08-31-02
---------------------------------------
$46,150.00 BO 08-31-02
---------------------------------------
$2,800.00 BO 08-31-02
---------------------------------------
$11,500.00 BO 08-31-02
---------------------------------------
$13,485.00 BO 08-31-02
---------------------------------------
$94,741.00 BO 04-30-02
---------------------------------------
$92,606.00 BO 04-30-02
---------------------------------------
$25,020.00 BO 04-30-02
---------------------------------------
$13,000.00 BO 04-30-02
---------------------------------------
$5,250.00 BO 04-30-02
---------------------------------------
$125,508.00 BO 06-19-02
---------------------------------------
$48,900.00 BO 06-19-02
---------------------------------------
$81,506.25 BO 12-11-02
---------------------------------------
$31,572.28 BO 03-30-02
---------------------------------------
$38,058.10 BO 10-12-02
---------------------------------------
$21,240.00 BO 11-21-02
---------------------------------------
$8,380.00 BO 09-14-02
---------------------------------------
$2,750.00 BO 05-25-02
---------------------------------------
$58,524.65 BO 10-07-02
---------------------------------------
$11,400.00 BO 03-28-03
---------------------------------------
$29,972.00 BO 10-21-02
---------------------------------------
$1,500,000.00 BO 10-01-02
---------------------------------------
$8,879.90 BO 07-04-03
---------------------------------------
$31,960.00 BO 04-13-04
---------------------------------------
$351,560.00 BO 04-13-02
---------------------------------------
$8,250.00 BO 04-13-03
---------------------------------------
$5,500.00 BO 07-12-03
---------------------------------------
$79,750.00 BO 07-12-02
---------------------------------------
$25,211.38 BO 01-31-04
---------------------------------------
$359,590.00 BO 04-12-03
---------------------------------------
$4,950.00 BO 04-12-04
---------------------------------------
$15,750.00 BO 09-30-04
---------------------------------------
$530,640.00 BO 04-12-03
---------------------------------------
$48,240.00 BO 09-30-04
---------------------------------------
$9,020.00 BO 04-12-04
---------------------------------------
---------------------------------------
$63,883.35 ST 04-30-02
---------------------------------------
$5,400.00 ST 04-30-02
---------------------------------------
$332,411.20 ST 08-31-02
---------------------------------------
$26,131.61 ST 12-31-02
---------------------------------------
$4,250.00 ST 09-17-02
---------------------------------------
$86,000.00 ST 09-06-02
---------------------------------------
$114,175.00 ST 03-01-03
--------------------------------------------------------------------------------
--------------------
$18,934,695.85
* - INDICATES THAT LC HAS BEEN RETURNED TO ISSUING BANKS FOR CANCELLATION OR
REDUCTION HAS BEEN REQUESTED; AND ISSUING BANKS ARE AWAITING CONFIRMATION
FROM BENEFICIARY(S).
SHADED EXPIRATION DATE INDICATES AUTOMATIC RENEWAL
SCHEDULE 3
----------
SUBSIDIARIES OF BORROWER
------------------------
Name of Subsidiary: M/I FINANCIAL CORP., AN OHIO CORPORATION
Principal Place of Business: 0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
OHIO
----
0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
INDIANA
-------
0000 Xxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
NORTH CAROLINA
--------------
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
FLORIDA
-------
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000
0 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Effective Date: ______________, 2002
SCHEDULE 3
----------
SUBSIDIARIES OF BORROWER
------------------------
Name of Subsidiary: M/I HOMES CONSTRUCTION, INC., AN ARIZONA CORPORATION
Principal Place of Business: 00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Name of Subsidiary: M/I SCHOTTENSTEIN HOMES SERVICE CORP., AN OHIO CORPORATION
Principal Place of Business: 0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Effective Date: ______________, 2002
SCHEDULE 3
----------
SUBSIDIARIES OF BORROWER
------------------------
Name of Subsidiary: M/I HOMES, INC., AN ARIZONA CORPORATION
Principal Place of Business: 00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
100% owned by Subsidiary
------------------------
Name of Subsidiary: MHO, LLC, AN ARIZONA LIMITED LIABILITY COMPANY
14505 North Hayden, Suite 341
Principal Place of Business: Xxxxxxxxxx, Xxxxxxx 00000
Effective Date: ______________, 2002
SCHEDULE 3
----------
SUBSIDIARIES OF BORROWER
------------------------
Name of Subsidiary: 601RS, LLC, AN OHIO LIMITED LIABILITY COMPANY
Principal Place of Business: 0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Name of Subsidiary: M/I PROPERTIES LLC, AN OHIO LIMITED LIABILITY COMPANY
Principal Place of Business: 0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Name of Subsidiary: NORTHEAST OFFICE VENTURE, LLC, A DELAWARE LIMITED LIABILITY COMPANY
Principal Place of Business: 0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Effective Date: ______________, 2002
SCHEDULE 4
----------
M/I ANCILLARY BUSINESSES
------------------------
% OF
LIMITED LIABILITY CORP. PARTNERS OWNERSHIP PRINCIPAL ADDRESS
----------------------- -------- --------- -----------------
TransOhio Residential Title M/I Schottenstein Homes, Inc. 49.9 0 Xxxxxx Xxxx, Xxxxx 000
Agency Ltd. Lawyers Title Insurance Corp. 50.1 Xxxxxxxx, Xxxx 00000
M/I Title Agency Ltd. M/I Schottenstein Homes, Inc. 90 14802 North Xxxx Xxxxx Highway
Lawyers Title Insurance Corp. 10 Xxxxx, Xxxxxxx 00000
Washington/Metro Residential M/I Schottenstein Homes, Inc. 70 0000 Xxxxxxxxx Xxxxxx Xxxxx
Title Agency, LLC Potomac Settlement Services, Inc. 30 Xxxxxxxxxx, Xxxxxxxx 00000
STMI1 Title Agency, LLC M/I Schottenstein Homes, Inc. 49.9 0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Lawyers Title Insurance Corp. 50.1 Xxxxx 000
Xxxxxxxx, Xxxx 00000
LIMITED LIABILITY CORP. BUSINESS CONDUCTED AT ADDRESS
----------------------- -----------------------------
TransOhio Residential Title 0 Xxxxxx Xxxx, Xxxxx 000
Agency Ltd. Xxxxxxxx, Xxxx 00000
M/I Title Agency Ltd. 0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000
Washington/Metro Residential 0000 Xxxxxxxxx Xxxxxx Xxxxx
Title Agency, LLC Xxxxxxxxxx, Xxxxxxxx 00000
STMI1 Title Agency, LLC 0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxx 00000
EXHIBIT A
---------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
---------- --, ----
To: Agent and each Bank
Ladies and Gentlemen:
This letter is to comply with subsection 6.3 of the Credit
Agreement dated March 6, 2002 (the "Credit Agreement"), among M/I Schottenstein
Homes, Inc., as Borrower, the Banks party thereto and Bank One, NA as Agent and
is for the monthly accounting period ended _______ __, ____. Capitalized terms
used but not defined herein have the meanings given to such terms in the Credit
Agreement.
Attached hereto is the calculation of the Borrowing Base. All
figures in this calculation are as at the end of the monthly accounting period
set forth in the first paragraph of this letter. The undersigned certifies that
the calculation set forth herein is true and accurate in all material respects.
Certified by:
----------------------------------
[Chief Financial Officer or Controller] of
M/I Schottenstein Homes, Inc.
Attachment
Attachment to
M/I Schottenstein Homes, Inc.
Borrowing Base Certificate
____________, 200_
Book Value: $ 000'S
-------
Receivables $
Housing Units under Contract and Lots under Contract $
Speculative Housing Units $
Finished Lots $
Lots under Development $
Unimproved Entitled Land $
Total: $_________
Borrowing Base:
Receivables 100%
Housing Units under Contract and Lots under Contract 90%
Speculative Housing Units 75%
Finished Lots 70%
Lots under Development 50%
Unimproved Entitled Land (Maximum $25,000,000) 20%
Borrowing Base Percentages:
Receivables $
Housing Units under Contract and Lots under Contract $
Speculative Housing Units $
Finished Lots $
Lots under Development $
Unimproved Entitled Land $___________
LESS
The amount (if any) by which Finished Lots, Lots under Development and
Unimproved $__________ Entitled Land exceed [50/45]% of Borrowing Base
Maximum Borrowing Base Indebtedness: $__________
Total Borrowing Base Indebtedness (see (i) below) $__________
Additional amount that could be borrowed $__________
Amount borrowed on revolver * $__________
Maximum revolver borrowings allowed* $__________
------------------------------------------------------------------------------
*Includes Revolving Credit Loans, Swingline Loans, Facility L/Cs (excluding
Performance Letters of Credit) and all Reimbursement Obligations.
(i) TOTAL BORROWING BASE INDEBTEDNESS
Amount borrowed on revolver* $
Other Consolidated Indebtedness $__________
$
PLUS
10% of commitment under M/I Financial Corp. Loan Agreement $__________
$
LESS
Secured Indebtedness $__________
Subordinated Indebtedness $__________
M/I Financial Corp. Agreement Indebtedness $__________
Total $__________
------------------------------------------------------------------------------
*Includes Revolving Credit Loans, Swingline Loans, Facility L/Cs (excluding
Performance Letters of Credit) and all Reimbursement Obligations.
EXHIBIT B
---------
GUARANTY AGREEMENT
(GUARANTY, SUBORDINATION AND SUBROGATION AGREEMENT)
---------------------------------------------------
THIS GUARANTY AGREEMENT, effective as of March 6, 2002
between: the corporations and other entities identified under the caption
"GUARANTORS" on the signature pages hereto (the "GUARANTORS") and BANK ONE, NA,
as agent (the "Agent") for the banks or other financial institutions that are
parties as lenders (collectively, the "BANKS"), to the Credit Agreement referred
to below.
RECITALS
--------
A. M/I SCHOTTENSTEIN HOMES, INC. ("Borrower"), the Agent and the Banks are
parties to a Credit Agreement effective as of March 6, 2002 (such
agreement, together with any amendments, supplements or other
modifications thereto from time to time, collectively, the "Credit
Agreement") providing, subject to the terms and conditions thereof, for
extensions of credit (by making of loans and issuing letters of credit)
to be made by the Banks to Borrower in an aggregate principal or face
amount not exceeding $315,000,000 (subject to increases thereof to an
amount not to exceed $375,000,000 as provided in the Credit Agreement).
B. Under and pursuant to the Credit Agreement, Borrower and each Guarantor
desire to utilize their borrowing potential on a consolidated basis to
the same extent possible as if they were to merge into a single
corporate entity.
C. Each of the Guarantors has determined that it will benefit specifically
and materially from the borrowings contemplated by the Credit
Agreement.
D. It is both a condition precedent to the obligations of the Banks to
make the loans and take other actions contemplated by the Credit
Agreement and a desire of each Guarantor that each other Guarantor
execute and deliver to the Agent for the benefit of the Banks a
counterpart of this Guaranty Agreement.
E. Borrower and the Guarantors have requested and bargained for the
structure and terms of the borrowings contemplated by the Credit
Agreement.
Therefore, in consideration of the mutual covenants and
agreements contained in the Credit Agreement and to induce Banks and Agent to
make the extensions of credit thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantors have agreed to enter into this Guaranty Agreement. Accordingly, the
parties hereto agree as follows:
1. INCORPORATION; DEFINITIONS, CONSTRUCTION; TERMS. The Credit
Agreement, including defined terms (unless otherwise defined herein), rules of
construction and terms and conditions, is hereby incorporated herein and made a
part hereof.
2. GUARANTEED OBLIGATIONS. The term "Guaranteed Obligations"
shall mean (i) the unpaid principal of and interest on (including, without
limitation, interest accruing after
1
the maturity of the Loans and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Notes, the
Reimbursement Obligations and all other obligations (including the Obligations)
and liabilities of Borrower to the Banks or Agent, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the Facility L/Cs or any other document made, delivered or
given in connection therewith, whether on account of principal, interest, fees,
indemnities, costs, expenses (including, without limitation, all fees and
expenses of counsel to the Banks and to Agent and all disbursements) or
otherwise and (ii) all amounts from time to time owing to the Banks or the Agent
by any Guarantor hereunder or under the Credit Agreement, the Notes, the
Facility L/Cs or any other document made, delivered or given in connection
therewith.
3. PAYMENT GUARANTY. The Guarantors hereby jointly and
severally unconditionally and absolutely guarantee to each Bank and the Agent,
for the benefit of each Bank, and their successors and assigns, the due and
punctual payment when due (whether at the stated maturity, by acceleration or
otherwise) of the Guaranteed Obligations, without deduction for any claim,
setoff or counterclaim of Borrower or any of the Guarantors or for the loss of
contribution of any Guarantor, and the due and punctual performance and
observance by Borrower of all the terms, covenants and conditions of the Credit
Agreement and the Notes, whether according to the present terms thereof, at any
earlier or accelerated date or dates as provided therein, or pursuant to any
extension of time, whether one or more, or to any change or changes in the
terms, covenants and conditions thereof, now or at any time hereafter made or
granted. The obligations of each of the Guarantors are joint and several,
primary, continuing and absolute and unconditional obligations of payment and
performance, enforceable with or without proceeding against Borrower, any
Guarantor or any security and/or before, after or contemporaneously with
proceeding against Borrower, any Guarantor or any security. This Guaranty
Agreement shall be effective regardless of the solvency or insolvency of
Borrower or any Guarantor at any time, the extension or modification of the
Guaranteed Obligations by operation of law or otherwise, or the subsequent
incorporation, reorganization, merger or consolidation of Borrower or any
Guarantor, or any other change in composition, nature, personnel, ownership or
location of Borrower or any Guarantor.
4. WAIVER, NOTICE, AMENDMENTS TO GUARANTEED OBLIGATIONS. In
regard to any of the Guaranteed Obligations, or any evidence thereof, each of
the Guarantors hereby expressly jointly and severally waive diligence,
presentment, protest, notice of dishonor, demand for payment, extension of time
for payment (whether one or more), notice of acceptance of this Guaranty
Agreement, notice of nonpayment at maturity, notice of indulgences, notice of
Borrower or any Guarantor incurring at any time any additional obligation to the
Banks or Agent which will be guaranteed hereunder, notice of any defaults or
disputes involving Borrower or any Guarantor, of any settlement or adjustment of
such defaults or disputes and of any settlement with or release of any Guarantor
and notices of any other kind, and consents to any and all forbearances and
extensions, whether one or more, of the time for payments set forth in the
Credit Agreement and the Notes, and to any and all changes in the terms,
covenants and conditions thereof hereafter made or granted and to any and all
substitutions, exchanges or releases of any or all collateral therefor. The
Guarantors also hereby jointly and severally
2
consent to and waive notice of any arrangements or settlements made in or out of
court in the event of receivership, liquidation, readjustment, reorganization,
arrangement or assignment for the benefit of creditors of Borrower or any
Guarantor, any proceeding or case under Title 11, U.S.C., as amended (the
"Bankruptcy Code"), or in which a custodian (as defined in the Bankruptcy Code)
is appointed or existing, and anything whatsoever, whether or not herein
specified, which may be done or waived by or between or among Agent, the Banks
and Borrower and/or Agent, the Banks and any Guarantor. Each of the Guarantors
shall remain jointly and severally liable under this Guaranty until all of the
Guaranteed Obligations shall have been fully paid and all of the terms,
covenants and conditions of the Credit Agreement and the Notes shall have been
fully performed and observed by Borrower and the Commitments have terminated,
notwithstanding any act, commission or thing which might otherwise operate as a
legal or equitable discharge of such Guarantor.
5. COLLECTION COSTS. If any of the Guarantors fails to pay any
of the Guaranteed Obligations to Agent for the account and benefit of the Banks
promptly upon demand therefor and any Bank or Agent on behalf of any Bank
subsequently files one or more suits against such Guarantor to collect on and
enforce this Guaranty Agreement, each Guarantor hereby jointly and severally
agrees to pay all of such Bank's and Agent's costs related thereto, including
without limitation all reasonable attorneys' fees, court costs and other legal
expenses. If, by other than the express agreement of the Banks and Agent, the
accrual of fees and/or interest, or the payment thereof by Borrower, as a part
of the Guaranteed Obligations is at any time delayed or precluded as to
Borrower, the Guaranteed Obligations, for purposes of this Guaranty Agreement
and the obligations of each of the Guarantors hereunder, shall be calculated
without regard to such delay or preclusion.
6. NO CONDITIONS TO ENFORCEMENT. The Guarantors agree that
this Guaranty may be enforced by any Bank or Agent for the benefit of the Banks
without first resorting to or exhausting any other security or collateral or
without first having recourse to any property through foreclosure proceedings or
otherwise; however, nothing contained herein shall prevent any Bank or Agent for
the benefit of the Banks from instituting and maintaining suit on, foreclosing
or causing to be foreclosed any lien(s) or from exercising any other rights
thereunder, and if such foreclosure or other remedy is availed of, only the net
proceeds therefrom, after deduction of all charges and expenses of every kind
and nature whatsoever, shall be applied to the reduction of the Guaranteed
Obligations, and no Bank or Agent shall be required to institute or prosecute
proceedings to recover any deficiency as a condition of payment hereunder or of
enforcement hereof. At any sale or other disposition of any or all of any
security or collateral for any or all of the Guaranteed Obligations, whether by
trustee's sale, sale by a court of competent jurisdiction, foreclosure or
otherwise, any Bank or Agent for the benefit of any Bank may at its discretion
purchase all or any part of such collateral so sold or offered for sale or other
disposition for its own account(s) and may apply the amount bid therefor, and
any proceeds of sale or other disposition against the Guaranteed Obligations or
any part(s) thereof in any order(s) or amount(s) as such Bank or Agent for the
benefit of the Banks sees fit in its sole judgment.
7. NO ASSIGNMENT. The obligations of each of the Guarantors
hereunder cannot be assigned or transferred in any manner whatever, directly or
indirectly, by operation of law or otherwise, without the prior written consent
of all of the Banks, which consent may be withheld in any circumstances.
However, each of the Guarantors agrees that this Guaranty shall
3
inure to the benefit of and may be enforced by any Bank and/or Agent for the
benefit of the Banks and by any subsequent holder or assignee of any or all of
the Guaranteed Obligations and shall be binding upon and enforceable against
such Guarantor and upon its legal representatives, successors and permitted
assigns.
8. WAIVER OF SUBROGATION. The Guarantors hereby irrevocably
waive any and all rights they may now or hereafter have under any agreement or
at law or in equity (including without limitation any law subrogating such
Guarantor to the rights of the Banks and/or Agent for the benefit of the Banks)
to assert any claim against or seek contribution, indemnification or any other
form of reimbursement from the Borrower or any other Guarantor for any payment
made by such Guarantor under or in connection with this Guaranty or otherwise.
9. SUBORDINATION. All indebtedness and obligations of Borrower
or any other Guarantor to any of the Guarantors (collectively, the "Claims"),
whether secured or unsecured, now existing or hereafter arising, direct or
indirect, absolute or contingent, are hereby subordinated to the priority of all
of the Guaranteed Obligations. The Guarantors agree that, until all of the
Guaranteed Obligations have been paid and satisfied in full and the Commitments
have terminated, (a) except on behalf of and pursuant to instructions of Agent
for the benefit of the Banks, the Guarantors will not ask, demand, xxx for, take
or receive all or any part of the Claims or any security therefor, whether or
not upon any distribution of assets or readjustment of indebtedness of Borrower
or any Guarantor, and (b) the Guarantors will deliver to Agent for the benefit
of the Banks from time to time such instruments, assignments, evidences of
indebtedness and such other things as, in the judgment of Agent, are necessary
or appropriate to effect the objectives of this Section 9.
10. SUCCESSIVE ACTIONS. Any one or more successive and/or
concurrent actions may be brought hereon against any of the Guarantors, whether
in the same action, if any, brought against Borrower, the then owner of any
collateral securing Borrower's obligations and/or any other party, or in
separate actions, as often as the Banks or Agent for the benefit of the Banks or
the legal holder or holders of or assigns of the Banks or Agent for the benefit
of the Banks in their sole discretion, may deem advisable.
11. ACCELERATION; DEFAULT. All or any part of the Guaranteed
Obligations shall be immediately due and payable, and all liabilities shall
mature immediately, at the option of Agent for the benefit of the Banks and
without notice or demand, upon the occurrence of any one or more of the
following: (a) any Event of Default under the Credit Agreement or the Notes; or
(b) any default by any of the Guarantors hereunder; or (c) any warranty,
representation or statement made or furnished to the Banks or Agent by or on
behalf of any of the Guarantors proves to have been false in any material
respect when made or furnished; or (d) the transfer by any of the Guarantors of
a substantial portion of its property not in the ordinary course of its business
as constituted on the date hereof to any party or entity other than Borrower,
provided that any such transfer to Borrower is not otherwise prohibited by the
provisions of any other document or agreement executed by and binding upon such
Guarantor.
12. LIMITATION ON OBLIGATIONS. (a) The provisions of this
Guaranty are severable, and in any action or proceeding involving any state
corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors
4
generally, if the obligations of any Guarantor under this Guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of such Guarantor's liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the amount
of such liability shall, without any further action by the Guarantors, Agent or
any Bank, be automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding (such highest
amount determined hereunder being the relevant Guarantor's "Maximum Liability").
This Section 12(a) with respect to the Maximum Liability of the Guarantors is
intended solely to preserve the rights of Agent and Banks hereunder to the
maximum extent not subject to avoidance under applicable law, and neither the
Guarantors nor any other Person shall have any right or claim under this Section
12(a) with respect to the Maximum Liability, except to the extent necessary so
that the obligations of the Guarantors hereunder shall not be rendered voidable
under applicable law.
(b) Each of the Guarantors agrees that the Guaranteed
Obligations may at any time and from time to time exceed the Maximum Liability
of each Guarantor, and may exceed the aggregate Maximum Liability of all other
Guarantors, without impairing this Guaranty or affecting the rights and remedies
of the Agent hereunder. Nothing in this Section 12(b) shall be construed to
increase any Guarantor's obligations hereunder beyond its Maximum Liability.
(c) In the event any Guarantor (a "Paying Guarantor") shall
make any payment or payments under this Guaranty or shall suffer any loss as a
result of any realization upon any collateral granted by it to secure its
obligations under this Guaranty, each other Guarantor (each a "Non-Paying
Guarantor") shall contribute to such Paying Guarantor an amount equal to such
Non-Paying Guarantor's "Pro Rata Share" of such payment or payments made, or
losses suffered, by such Paying Guarantor. For the purposes hereof, each
Non-Paying Guarantor's "Pro Rata Share" with respect to any such payment or loss
by a Paying Guarantor shall be determined as of the date on which such payment
or loss was made by reference to the ratio of (i) such Non-Paying Guarantor's
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from Borrower after
the date hereof (whether by loan, capital infusion or by other means) to (ii)
the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Guarantors, the
aggregate amount of all monies received by such Guarantors from Borrower after
the date hereof (whether by loan, capital infusion or by other means). Nothing
in this Section 12(c) shall affect any Guarantor's several liability for the
entire amount of the Guaranteed Obligations (up to such Guarantor's Maximum
Liability). Each of the Guarantors covenants and agrees that its right to
receive any contribution under this Guaranty from a Non-Paying Guarantor shall
be subordinate and junior in right of payment to all the Guaranteed Obligations.
The provisions of this Section 12(c) are for the benefit of both Agent (and
Banks) and the Guarantors and may be enforced by any one, or more, or all of
them in accordance with the terms hereof.
13. RECORDS. Nothing herein shall be construed as an
obligation on any Bank's or Agent's part to continue to extend credit to
Borrower in any manner whatsoever. Each Bank's and Agent's records showing the
account(s) between Borrower and the Banks and/or
5
Agent shall be admissible in evidence in any action or proceeding involving this
Guaranty Agreement, and such records shall be prima facie proof of the items
therein set forth.
14. WARRANTIES. As an inducement for and in consideration of
the Guaranteed Obligations, each of the Guarantors warrants and represents to
the Banks and Agent for the benefit of the Banks, which warranties and
representations shall expressly survive the execution and delivery hereof, that:
(a) the Obligations guaranteed hereby were, and are being, incurred for purposes
permitted by all applicable laws and by the articles, bylaws, code of
regulations and other corporate legislation of such Guarantor; (b) this Guaranty
Agreement has been duly and validly authorized, executed and delivered by such
Guarantor; and (c) this Guaranty Agreement constitutes the valid and binding
obligation of such Guarantor, enforceable in accordance with its terms against
such Guarantor.
15. LAWS; ENTIRE AGREEMENT. Each of the Guarantors agrees that
this Guaranty Agreement shall be governed by, and construed and interpreted in
accordance with the internal laws (including ss.735ILCS 105/5-1 ET SEQ., but
otherwise without regard to principles of conflict of law) of the State of
Illinois but giving effect to federal laws applicable to national banks.
However, if any provision hereof is or becomes invalid or unenforceable under
any law of mandatory application, it is the intent of each of the Guarantors,
the Banks and Agent that such provision shall be deemed severed and omitted
herefrom, the remaining portions hereof to remain in full force and effect as
written. This Guaranty Agreement sets forth the entire agreement of the parties
in regard to the subject matter hereof, and no representations, warranties or
agreements of any kind have been made by the Banks or Agent except as
specifically set forth herein and in the Credit Agreement. No amendment hereto
shall be effective against the Banks and Agent unless in writing, agreed to by
all Banks and signed by all Banks. No express or implied waiver by the Banks or
Agent of any default or the exercise of any right or remedy hereunder shall in
any way be, or be deemed to be, a waiver of any future or subsequent default,
right or remedy, whether similar in kind or otherwise. Any provision hereof
which becomes unenforceable by reason of the commencement of a case under the
Bankruptcy Code shall again be valid and enforceable at the termination of that
case. The rights and remedies provided herein for the Banks and Agent for the
benefit of the Banks are cumulative and may be exercised singly or concurrently
with, and are not exclusive of, any rights or remedies provided at law or in
equity.
16. JURISDICTION; SERVICE. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR THE BANKS AND AGENT TO EXTEND CREDIT GIVING RISE TO THE
GUARANTEED OBLIGATIONS, EACH OF THE GUARANTORS HAS AGREED THAT ANY ACTION, SUIT
OR PROCEEDING IN RESPECT OF OR ARISING FROM OR OUT OF THIS GUARANTY, ITS
VALIDITY OR PERFORMANCE, AT THE SOLE OPTION OF THE BANKS OR AGENT, THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS, SHALL BE INITIATED AND PROSECUTED AS TO ALL
PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT CHICAGO, ILLINOIS. EACH OF THE
BANKS, AGENT AND EACH OF THE GUARANTORS CONSENTS TO AND SUBMITS TO THE EXERCISE
OF JURISDICTION OVER ITS PERSON BY ANY COURT SITUATED AT CHICAGO, ILLINOIS, AND
HAVING JURISDICTION OVER THE SUBJECT MATTER.
6
17. NOTICES. Any notice required or permitted to be given to
or by any of the Guarantors hereunder shall be deemed to have been given (a) to
such Guarantor by the Agent, when addressed to Borrower (whether or not
specifically identifying such Guarantor), and (b) to any Bank and Agent when
given by Borrower (and specifically identifying such Guarantor), and in each
instance delivered in compliance with the Credit Agreement.
18. WAIVER OF JURY TRIAL. THE BANKS, AGENT AND EACH OF THE
GUARANTORS, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
GUARANTY AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS GUARANTY AGREEMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NONE OF
THE BANKS, AGENT OR ANY OF THE GUARANTORS SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY OF THE BANKS, AGENT OR ANY OF THE GUARANTORS EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
19. EFFECTIVENESS. This Guaranty is intended to be made and to
be effective at and only when delivered and accepted at Chicago, Illinois and
shall become effective only upon such delivery and upon acceptance by the Agent
at such time and place. Each of the Guarantors hereby waives notice of such
acceptance.
20. COUNTERPARTS. This Guaranty may be executed by one or more
of the parties on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
21. SUPPLEMENTAL GUARANTIES. Pursuant to Subsections 6.14 and
6.15 of the Credit Agreement, additional Subsidiaries or M/I Ancillary
Businesses shall become obligated as Guarantors hereunder (each as fully as
though an original signatory hereto) by executing and delivering to the Agent a
supplemental guaranty in the form of Exhibit A attached hereto (with blanks
appropriately filled in) (each, a "Supplemental Guaranty"), together with such
additional supporting documentation required pursuant to the Credit Agreement.
7
IN WITNESS WHEREOF, each of the Guarantors has caused these
presents to be executed by its duly authorized representative as of the day and
year first above written.
GUARANTORS
M/I FINANCIAL CORP., an Ohio corporation
By: __________________________________
Xxxxxx Creek
Chief Financial Officer and
Treasurer of M/I Financial Corp.
Executed in Scottsdale, Arizona M/I HOMES CONSTRUCTION, INC., an
Arizona corporation
By: __________________________________
Xxxx Xxxxxxx
Assistant Secretary of M/I Homes
Construction, Inc.
NORTHEAST OFFICE VENTURE LIMITED LIABILITY
COMPANY, a Delaware limited liability
company, by M/I Schottenstein Homes, Inc.,
its sole member
By: __________________________________
Xxxxxx X. Xxxxxxxxxxxxx
Vice Chairman, President and
Assistant Secretary of
M/I Schottenstein Homes, Inc.
601RS, LLC, an Ohio limited liability
company, by M/I Schottenstein
Homes, Inc., its sole member
By: __________________________________
Xxxxxx X. Xxxxxxxxxxxxx
Vice Chairman, President and
Assistant Secretary of
M/I Schottenstein Homes, Inc.
8
M/I SCHOTTENSTEIN HOMES SERVICE
CORP., an Ohio corporation
By: __________________________________
Xxxxxx X. Xxxxxxxxxxxxx
Vice Chairman of the Board of M/I
Schottenstein Homes Service Corp.
Executed in Scottsdale, Arizona MHO, LLC, an Arizona limited liability
company, by M/I Homes, Inc., its sole
member
By: __________________________________
Xxxx Xxxxxxx
Assistant Secretary of M/I Homes,
Inc.
M/I PROPERTIES, LLC, an Ohio limited
liability company, by M/I Schottenstein
Homes, Inc., its sole member
By: __________________________________
Xxxxxx X. Xxxxxxxxxxxxx
Vice Chairman, President and
Assistant Secretary of M/I
Schottenstein Homes, Inc.
Executed in Scottsdale, Arizona M/I HOMES, INC., an Arizona corporation
By: __________________________________
Xxxx Xxxxxxx
Assistant Secretary of M/I Homes,
Inc.
9
EXHIBIT A TO GUARANTY
---------------------
SUPPLEMENTAL GUARANTY
---------------------
___________, 200_
Bank One, NA, as Agent
for the Banks under the Credit Agreement
Ladies and Gentlemen:
Reference is hereby made to (i) that certain Credit Agreement,
dated as of March 6, 2002, among M/I Schottenstein Homes, Inc., the Banks from
time to time party thereto, and Bank One, NA, as agent ("Agent") for the Banks
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") and (ii) that certain Guaranty Agreement, dated as of March
6, 2002 executed and delivered by the Guarantors parties thereto in favor of
Agent, for the benefit of the Banks (as amended, restated, supplemented or
otherwise modified from time to time, the "Guaranty"). Terms not defined herein
which are defined in the Credit Agreement shall have for the purposes hereof the
respective meanings provided therein.
In accordance with subsection [6.14/6.15] of the Credit
Agreement and Section 20 of the Guaranty, the undersigned, __________________, a
corporation [limited partnership/limited liability company] organized under the
laws of _________________, hereby agrees to be a "Guarantor" for all purposes of
the Credit Agreement and the Guaranty, respectively, effective from the date
hereof.
Without limiting the generality of the foregoing, the
undersigned hereby agrees to perform all the obligations of a Guarantor under,
and to be bound in all respects by the terms of, the Guaranty, to the same
extent and with the same force and effect as if the undersigned were a direct
signatory thereto.
This Supplemental Guaranty shall be governed by, in construed
and interpreted in accordance with the internal laws (including ss.735 ILCS
105/5-1 at et seq., but otherwise without regard to principles of conflict of
law) of the State of Illinois but giving effect to federal laws applicable to
national banks.
IN WITNESS WHEREOF, this Supplemental Guaranty has been duly
executed by the undersigned as of the date set forth above.
[GUARANTOR]
By: __________________________________
Name:
Title:
1
EXHIBIT C
---------
NOTE
----
$(1) Chicago, Illinois
_______________, 2002
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to
pay to the order of (2) ("Bank"), at the office of Bank One, NA, as Agent
("Agent") for Bank, at Xxx Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other place as the holder hereof may, from time to time, in writing designate,
the principal sum of (3) Dollars ($(1)), or so much thereof as may be
disbursed to, or for the benefit of, the undersigned and remain unpaid, together
with interest and payable at such interest rates and for such periods and in
such manner, time(s) and place(s) as are specified in the Credit Agreement
hereinafter defined.
This note ("Note") is the Note to Bank identified in the
Credit Agreement dated as of March 6, 2002 (such agreement, together with any
amendments, supplements or other modifications thereto from time to time,
collectively, the "Credit Agreement"), between Borrower, Bank, the other Banks
party thereto, and Agent, as agent for the Banks, as the same may hereafter be
amended, modified, or supplemented from time to time, and said Credit Agreement
is hereby incorporated into this Note and made a part hereof. Capitalized terms
used but not defined herein shall have the meanings set forth in the Credit
Agreement.
Interest and principal shall be calculated and be payable as
set forth in the Credit Agreement, and:
Bank's records of the principal, accrued interest and other
charges due hereunder, as well as applicable interest rates
and periods are, absent manifest error, conclusive as to and
binding upon all Persons.
The entire unpaid principal balance evidenced by this Note
plus any accrued but unpaid interest thereon and any other
indebtedness with respect to Loans owing by Borrower to Bank
under the Credit Agreement shall be paid in full on or before
March 5, 2006, unless such maturity date is extended beyond
March 5, 2006, pursuant to subsection 2.7 of the Credit
Agreement; in which case the maturity date shall be the date
to which maturity of the Obligations is extended pursuant to
subsection 2.7 of the Credit Agreement.
The indebtedness evidenced hereby may be prepaid in whole or
in part without penalty subject to the terms of the Credit Agreement. All
payments (including prepayments) received by Agent for the account of Bank (a)
shall be applied to the payment of all costs and expenses incurred by Bank in
accordance with the Credit Agreement, (b) shall, with respect to scheduled
payments, be applied, first, to accrued interest, and second, to principal; (c)
shall, with respect to prepayment, be applied to principal; (d) shall be in
lawful money of the United States; and (e) shall be credited as of the time
received by Agent for the account of Bank in cash or
1
equivalent or when finally collected. Pursuant to the terms of the Credit
Agreement, repayments of principal shall be eligible for reborrowing by
Borrower. Bank shall not be obligated to extend any credit after the expiration
of the term of this Note or the occurrence of a Default or an Event of Default.
Any part of the indebtedness evidenced by this Note outstanding at March 5,
2006, shall be repaid on that date, unless all Banks, in their sole discretion,
elect to extend the Maturity Date of this Note pursuant to subsection 2.7(b) of
the Credit Agreement.
Upon occurrence of an Event of Default, the whole or any part
of the unpaid indebtedness evidenced hereby shall, at once or at any time
thereafter, at the option of the holder or holders hereof, become due and
payable without notice or demand therefor, the same being expressly waived. A
failure of the holder thereof to insist upon strict compliance with the terms
hereof or to assert any right hereunder shall not be a waiver of any default and
shall not be deemed to constitute a modification of the terms hereof or to
establish any claim or defense.
No delay or omission on the part of the holder in exercising
any right hereunder shall operate as a waiver of such right or of any other
right under this Note. A waiver on any one occasion shall not be construed as a
bar to or waiver of any such right and/or remedy on any future occasion.
All persons now or hereafter liable, primarily or secondarily,
for the payment of the indebtedness evidenced hereby or any part thereof, do
hereby expressly waive presentment for payment, notice of dishonor, protest and
notice of protest, and agree that the time for payment or payments of any part
of the indebtedness evidenced hereby may be extended without releasing or
otherwise affecting their liability hereon.
Borrower agrees that this Note shall be governed by, and
construed and interpreted in accordance with the internal laws (including
ss.735ILCS 105/5-1 et seq., but otherwise without regard to principles of
conflict of law) of the State of Illinois but giving effect to federal laws
applicable to national banks. However, if any provision hereof is or becomes
invalid or unenforceable under any law of mandatory application, it is the
intent of Borrower, Bank and all parties primarily or secondarily liable
hereunder, that such provision will be deemed severed and omitted herefrom, the
remaining portions hereof to remain in full force and effect as written.
To the extent that the terms and provisions of this Note are
inconsistent with the terms and provisions of the Credit Agreement, the terms
and provisions of this Note shall control.
As a specifically bargained inducement for Bank to extend
credit giving rise to the indebtedness evidenced hereby, the undersigned and
Bank agree that: ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING FROM OR
OUT OF THIS NOTE, ITS MAKING, VALIDITY OR PERFORMANCE, AT THE SOLE OPTION OF
BANK OR AGENT FOR THE BENEFIT OF BANK OR LEGAL HOLDER HEREOF, SHALL BE
PROSECUTED AS TO ALL PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT CHICAGO,
ILLINOIS. THE BORROWER, BANK AND AGENT EACH CONSENTS TO AND SUBMITS TO THE
EXERCISE OF JURISDICTION OVER ITS PERSON BY ANY
2
COURT SITUATED AT CHICAGO, ILLINOIS, AND HAVING JURISDICTION OVER THE SUBJECT
MATTER.
BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
THIS NOTE, THE CREDIT AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF BANK. BORROWER SHALL NOT SEEK
TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED
IN ANY RESPECT OR RELINQUISHED BY BANK EXCEPT BY A WRITTEN INSTRUMENT EXECUTED
BY IT AND THE HOLDER OF THE NOTE.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Note
3
as of the day and year first above written at Chicago, Illinois.
M/I SCHOTTENSTEIN HOMES, INC.
By: ___________________________________
Its: ___________________________________
4
EXHIBIT D
---------
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and
Acceptance") dated as of ____________ , 200_, is entered into among the parties
listed on the signature pages hereof. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Credit Agreement dated March
6, 2002 by and among M/I Schottenstein Homes, Inc., Bank One, NA, as Agent, and
the Banks party thereto (as amended, modified, supplemented or restated from
time to time, the "Credit Agreement").
Pursuant to subsection 2.6(b) of the Credit Agreement,
Borrower has requested an increase in the Aggregate Commitment from
$_______________ to $__________________. Such increase in the Aggregate
Commitment is to become effective on _______________ __, ____ (the "Increase
Date").* In connection with such requested increase in the Aggregate Commitment,
Borrower, Agent and _________________ ("Accepting Bank") hereby agree as
follows:
1. ACCEPTING BANK'S COMMITMENT. Effective as of the Increase
Date, [Accepting Bank shall become a party to the Credit Agreement as a Bank,
shall have (subject to the provisions of subsection 2.6(b) of the Credit
Agreement) all of the rights and obligations of a Bank thereunder, shall agree
to be bound by the terms and provisions thereof and shall thereupon have a
Commitment under and for purposes of the Credit Agreement in the] [the
Commitment of Accepting Bank under the Credit Agreement shall be increased from
$___________________ to the] amount set forth opposite Accepting Bank's name on
the signature pages hereof.
2. REPRESENTATIONS AND AGREEMENTS OF ACCEPTING BANK. Accepting
Bank (i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements referred to therein and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment and Acceptance; (ii) agrees
that it will, independently and without reliance upon Agent or any other Bank
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv)
confirms that the execution and delivery of this Commitment and Acceptance by
Accepting Bank is duly authorized, (v) agrees that it will perform in
-------------------------
* This date is to be agreed upon by Borrower, Agent and Accepting Bank. See
subsection 2.6(b)(ii) of the Credit Agreement.
1
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Bank, (vi) agrees that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
and (viii) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that Accepting Bank is entitled to
receive payments under the Loan Documents without deduction or withholding of
any United States federal income taxes.**
3. REPRESENTATIONS OF BORROWER. Borrower hereby represents and
warrants that, as of the date hereof and as of the Increase Date, (a) no event
or condition shall have occurred and then be continuing which constitutes a
Default or Event of Default and (b) the representations and warranties contained
in Section 4 of the Credit Agreement are true and correct in all material
respects (except to the extent any such representation or warranty is stated to
relate solely to an earlier date). **
4. AGENT'S FEE. On or before the Increase Date, Borrower shall
pay to Agent an administrative fee in the amount of $4,000.
5. GOVERNING LAW. This Commitment and Acceptance shall be
governed by the internal laws (includingss.735ILCS 105/5-1 ET SEQ., but
otherwise without regard to principles of conflict of law) of the State of
Illinois but giving effect to federal laws applicable to national banks.
**Paragraph 2 is required only if the Accepting Bank is not
already a party to the Credit Agreement.
2
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date first
above written.
M/I SCHOTTENSTEIN HOMES, INC.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
BANK ONE, NA,
as Agent
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$____________________ [NAME OF ACCEPTING BANK]
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
3
SCHEDULE 1
TO COMMITMENT AND ACCEPTANCE
ADMINISTRATIVE INFORMATION SHEET
--------------------------------
Attach Accepting Bank's Administrative Information Sheet, which must include
notice addresses for Accepting Bank
4
EXHIBIT E
---------
[Letterhead of M/I Schottenstein Homes, Inc.]
March 6, 2002
To the Banks party to the
Credit Agreement referred to below and
Bank One, NA, as Agent for the Banks
Ladies and Gentlemen:
I have acted as counsel to M/I Schottenstein Homes, Inc. ("Borrower"),
M/I Homes, Inc. ("M/I Homes"), M/I Financial Corp. ("Financial"), M/I Homes
Construction, Inc. ("M/I Construction"), Northeast Office Venture Limited
Liability Company ("Northeast"), 601RS, LLC, ("601RS, LLC"), MHO, LLC ("MHO"),
M/I Schottenstein Homes Service Corp. ("M/I Service Corp."), and M/I Properties,
LLC ("M/I Properties") (M/I Homes, Financial, M/I Construction, Northeast,
601RS, LLC, MHO, M/I Service Corp. and M/I Properties is each a "Guarantor" and
are, collectively, the "Guarantors"). The Guarantors and Borrower are
collectively referred to herein as the "Obligors." I have been requested by the
Obligors to give this opinion in connection with the Credit Agreement (the
"Credit Agreement") made to be effective as of March 6, 2002 by and among
Borrower, the Banks party thereto, and Bank One, NA, as agent for the Banks
("Agent"). Pursuant to the Credit Agreement and subject to its terms and
conditions, the Banks have agreed to make available to Borrower Revolving Credit
Loans, and to participate in Facility L/Cs issued or to be issued by Bank One
and other Issuing Banks thereunder in a maximum amount not to exceed
$50,000,000, and Bank One has agreed to make available to Borrower Swingline
Loans in a maximum principal amount not to exceed $5,000,000, which Revolving
Credit Loans, Facility L/C Obligations and Swingline Loans shall be in an
aggregate maximum principal amount at any time outstanding not to exceed
$315,000,000, subject to increase of such maximum principal amount up to
$375,000,000 in accordance with the provisions of the Credit Agreement (the
"Transaction"). Terms defined in the Credit Agreement are used herein as defined
therein. The Transaction is evidenced by the following documents:
1. the Credit Agreement;
2. the Notes; and
3. the Guaranty Agreement.
The documents listed in subparagraphs (1) through (3) above shall be
collectively referred to herein as the "Transaction Documents."
In this connection, I have examined such records, certificates,
corporate or other proceedings and other documents as I have considered
necessary or appropriate for the purposes of rendering this opinion, including
an executed counterpart of each of the Transaction Documents and the
certificates of good standing for each of the Obligors as such certificates are
more particularly described on Schedule I attached hereto (each a "Good Standing
Certificate" and collectively, the "Good Standing Certificates").
1
Please be advised that I have not assumed any responsibility for making
any independent investigation or verification of any factual matters stated in
or represented by any of the foregoing documents or any other factual matters.
Please be advised that, when used in this letter, the phrases
"knowledge" and "to the best of my knowledge" and phrases having equivalent
wording relate only to my conscious awareness of information. Whenever I assert
knowledge in stating facts or expressing an opinion which involves a question of
fact, my knowledge is based solely on the inquiry and review described herein.
I have assumed (i) the genuineness of all signatures on documents
reviewed by me (other than those of the Obligors); (ii) the authenticity of all
documents submitted to me as originals and the conformity to authentic originals
of all documents submitted to me as certified, conformed or photostatic copies,
and that none of such documents has been amended, altered, revoked or otherwise
modified.
Based on such review and upon such further investigation as I
have deemed necessary and such other considerations of law and fact as I believe
to be relevant, I am of the opinion, as of the date hereof or as of the date of
any certificate stated to have been relied on by me, that:
1. Each of the Obligors is duly organized or formed, as
appropriate, validly existing and, based solely on the Good Standing
Certificates, in good standing in the jurisdiction of its incorporation or
formation.
2. Each of the Obligors has all necessary corporate or other
power and authority to execute, deliver and perform the obligations to be
performed by it under the Transaction Documents to which it is a party, to carry
on its business as now conducted and as presently proposed to be conducted and
to own, lease and operate its property.
3. The execution and delivery of, and due performance of its
obligations under, the Transaction Documents to which it is a party have been
duly authorized by all necessary corporate or other action by each of the
Obligors.
4. The Transaction Documents have been duly and validly
executed and delivered by each Obligor party thereto.
5. Each of the Transaction Documents constitute the legal,
valid and binding obligation of each Obligor party thereto in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other similar laws relating to
or affecting the rights of creditors generally and except as the enforceability
of the Transaction Documents is subject to the application of general principles
of equity (regardless of whether considered in a proceeding in equity or at
law), including without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
6. The execution, delivery and compliance by each of the
Obligors with the terms of the Transaction Documents will not conflict with, or
result in a breach of the provisions of, or constitute a default under, the
provisions of their respective constituent documents or any
2
material agreement to which any of the Obligors is a party, and will not
contravene any provision of existing law or regulation applicable to such
Obligor.
7. All licenses, permits, authorizations, consents or
approvals or orders of, or registrations or filings with, any court or
governmental or public agency, authority or body, if any, required of any
Obligor or any of its Subsidiaries in order to enter into and carry out such
Obligor's obligations under the Transaction Documents have been obtained by such
Obligor as of the date hereof and remain in full force and effect.
8. None of the Obligors is an "investment company" or a
company "controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
I hereby confirm to you, that, to the best of my knowledge, there are
no actions or proceedings against the Obligors pending or overtly threatened in
writing before any court, governmental agency or arbitrator which may,
individually or in the aggregate, materially and adversely affect (a) the
properties or financial conditions of such Obligor, or (b) the ability of such
Obligor to perform its obligations under the Transaction Documents to which it
is a party, or (c) the enforceability of the Transaction Documents.
This opinion constitutes my professional opinion as to certain legal
consequences of, and the applicability of certain laws to, the various
documents, instruments and other matters specifically referred to herein. It is
not, however, a guaranty and should not be construed as such. I am qualified to
practice law in the State of and do not purport to express any opinion herein
concerning any law other than the law of the State of Arizona and the federal
laws of the United States of America as of the date of this letter.
This opinion is limited to, and no opinion is implied or may be
inferred beyond, the matters expressly stated herein. This letter is intended
for the benefit of the Banks (including any entity that becomes a "Bank" after
the date hereof), the Agent and any Participant as defined in subsection 11.4 of
the Credit Agreement. No other person or entity is entitled to rely upon
anything contained herein, and no reproduction or further distribution of, and
no reference to or reliance upon this opinion may be made, without my prior
written consent, to or for any person or entity other than the parties to whom
it is addressed. This opinion is rendered as of the date hereof, and I undertake
no, and hereby disclaim any, obligation to advise you of any changes in, or new
developments that might affect, any matters or opinions set forth herein.
Respectfully submitted,
-------------------------------------
Xxxx X. Xxxxxx
President - Land
Operations, General Counsel
and Secretary of M/I
Schottenstein Homes, Inc.
3
SCHEDULE I
----------
GOOD STANDING CERTIFICATES
--------------------------
OBLIGOR STATE OF INCORPORATION OR FORMATION CERTIFICATE DATE
------- ----------------------------------- ----------------
M/I Schottenstein Ohio __________, 2002
Homes, Inc.
M/I Homes, Inc. Arizona __________, 2002
M/I Financial Corp. Ohio __________, 2002
M/I Homes Arizona __________, 2002
Construction, Inc.
Northeast Office Venture Delaware __________, 2002
Limited Liability Company
601RS, LLC Ohio __________, 2002
MHO, LLC Arizona __________, 2002
M/I Schottenstein Homes Ohio __________, 2002
Service Corp.
M/I Properties, LLC Ohio __________, 2002
4
EXHIBIT F
---------
[LETTERHEAD OF M/I SCHOTTENSTEIN HOMES, INC.]
[DATE]
To: Agent and each Bank
Ladies and Gentlemen:
This letter is being sent to you to comply with subsection 6.2
of the Credit Agreement effective as of March 6, 2002 (the "Credit Agreement")
and is being delivered to you for the period of [insert yearly or quarterly
period as appropriate] for which period the undersigned has heretofore
delivered, or is herewith delivering, the financial statements provided for in
subsection 6.1 of the Credit Agreement (the "Financial Statements"). [The
undersigned hereby certifies that such Financial Statements are true and
accurate in all material respects, subject to normal year-end audit adjustments
(Note: only required with delivery of unaudited Financial Statements)].
Capitalized terms used but not defined herein have the meanings given to such
terms in the Credit Agreement.
The undersigned certifies that, after due examination by the
undersigned and to the best of the knowledge of the undersigned, M/I
Schottenstein Homes, Inc. and each of its Subsidiaries during the period stated
above has observed or performed in all material respects all of its covenants
and other agreements, and satisfied every condition, contained in the Credit
Agreement, the Notes and the Guaranty Agreement to be observed, performed or
satisfied by it, and that the undersigned has no knowledge of any Default or
Event of Default except [list any Defaults or Events of Default; if none, end
sentence before "except"].
Additionally, I have enclosed a statement showing in detail
the calculation of ratios and other covenants, in accordance with corresponding
subsections of the Credit Agreement, as required by the Credit Agreement.
Yours very truly,
By: ____________________________________
Printed Name: ______________________________
Title: ____________________________________
Enclosure
1
CONFIDENTIAL
------------
STATEMENT OF CALCULATION OF CERTAIN COVENANTS
---------------------------------------------
[Date]
Subsection No. Covenant
-------------- --------
1. 6.11 - page 59 Maintain Consolidated Tangible Net Worth of: (i) $214,258,000 plus (ii)
fifty percent (50%) of the Consolidated Earnings for each quarter after
September 30, 2001 (excluding any quarter in which Consolidated Earnings
are less than zero (0)) plus (iii) one hundred percent (100%) of the net
proceeds or other consideration received by Borrower for any capital stock
issued or sold after September 30, 2001
(i) above: $214,258,000
Plus (ii) above: $__________
Plus (iii) above: $__________
Minimum Required
Consolidated Tangible
Net Worth: $__________
Consolidated Tangible Net Worth = $__________
2. 6.12 - page 59 Maintain a ratio of (1) Consolidated Indebtedness to (2) Consolidated
Tangible Net Worth not in excess of (a) 2.25 to 1.00 at all times that
Borrower maintains an Interest Coverage Ratio equal to or exceeding 2.50 to
1.00 and (b) 2.00 to 1.00 at all other times.
(1) Consolidated Indebtedness: $__________
(2) Consolidated Tangible Net Worth: $__________
Ratio of (1) to (2) = ________ to 1.00
3. 6.13 - page 59 Maintain an Interest Coverage Ratio of not less than 2.00 to 1.00
EBIDTA: $__________
Consolidated Interest Incurred: $__________
Interest Coverage Ratio = _______ to 1.00
4. 7.1 - page 61 Secured Indebtedness not to exceed $25,000,000
Secured Indebtedness = $_________
1
Subsection No. Covenant
-------------- --------
5. 7.5 - page 62 Adjusted Land Value not to exceed the sum of (a) Consolidated Tangible Net
Worth plus (b) 50% of Subordinated Indebtedness
ADJUSTED LAND VALUE
(i) book value of all Land: $_________
less (ii) the sum of
(a) book value of Lots under Contract: $_________
and (b) lesser of (i) the product of (x) number
of Housing Units contracted for during the last
six months: $_________
And (y) average book value of all Finished Lots and Lots $_________
under Contract:
(ii) 25% of Consolidated Tangible Net Worth: $_________
ADJUSTED LAND VALUE = $_________
-------------------
(a) Consolidated Tangible Net Worth: $_________
Plus (b) 50% of Subordinated Indebtedness: $_________
Total [(a) + (b)] = $_________
6. 7.6(b) - page 63 Limit on extension of credit in connection with the sale $_________
of land of 2.5% of Consolidated Tangible Net Worth
2.5% of Consolidated Tangible Net Worth: $_________
Aggregate amount of extensions of credit in connection $_________
with the sale of land:
Maximum maturity of any such extensions of credit: __________________
7. 7.6(e) - page 63 Limit on Investments in Joint Ventures of fifteen percent (15%) of
Consolidated Tangible Net Worth, provided that Borrower have no less than a
33 1/3% interest in each such joint venture and that management and control
decisions for each such joint venture require Borrower's consent and
approval.
15% of Consolidated Tangible Net Worth: $_________
Investments in Joint Ventures: $_________
2
Subsection No. Covenant
-------------- --------
Lowest percentage interest of Borrower in a joint venture:
________________________%
8. 7.6(k) - page 64 Limit on aggregate amount of investments in, advances to, and Contingent
Obligations related to the obligations of, the M/I Ancillary Businesses of
$100,000 in the aggregate.
Aggregate amount of investments in,
advances to, and Contingent Obligations
related to the obligations of, the M/I
Ancillary Businesses: $_________
9. 7.6(1) - page 64 Limit on aggregate amount of other investments or advances directly related
to the Borrower's business of $2,000,000 in the aggregate.
Aggregate amount of other investments or advancements directly related to
the Borrower's business: $_________
10. 7.11 - page 66 Limit on aggregate investments (including investments attributed to
Borrower's pro rata share of land owned by partnerships in which Borrower
is a general or limited partner or by limited liability companies of which
Borrower is a member) in commercial real estate (including land zoned for
use as, or developed or intended to be developed as, commercial real estate
but excluding the Office Building) at any one time outstanding of
$5,000,000.
Amount of aggregate outstanding investments (including investments
attributed to Borrower's pro rata share of land owned by partnerships in which
Borrower is a general or limited partner or by limited liability
companies of which Borrower is a member) in commercial real estate
(including land zoned for use as, or developed or intended to be developed
as, commercial real estate but excluding the Office Building): $_________
3
Subsection No. Covenant
-------------- --------
11. 7.13 -- page 66 The number of Speculative Housing Units, as at the end of
any fiscal quarter, not to exceed the greater of (a) the
number of Housing Unit Closings occurring during the
period of twelve (12) months ending on the last day of
such fiscal quarter, multiplied by twenty-five percent
(25%) or (b) the number of Housing Unit closings
occurring during the period of six (6) months ending on
the last day of such fiscal quarter, multiplied by fifty
percent (50%).
Speculative Housing Units:
(a) Housing Unit Closings in last 12
months: _________ x 25% =
(b) Housing Unit Closings in last 6 months: _________ x
50% =
4
EXHIBIT G
CERTIFICATE CONCERNING PROJECTIONS
----------------------------------
[Date]
TO: Agent and each Bank
The undersigned certifies to Agent and each Bank, the
following:
The attached financial projections of M/I Schottenstein Homes,
Inc. (the "Company") present, to the best knowledge and belief of the
undersigned, the Company's expected results for the projected periods. The
projections reflect the Company's management's judgment as of the date of the
projections of the expected conditions and expected course of action. The
projections state all of the principal assumptions on which the projections are
predicated, and the projections, in fact, have been made on the basis of the
stated principal assumptions.
The undersigned makes no representation that the Company's
actual results will conform to the projections.
This certificate is provided pursuant to subsection 6.2(b) of
the Credit Agreement effective as of March 6, 2002 among the Company as borrower
and the Banks and Agent defined therein.
------------------------------------------
[Chief Financial Officer or
Controller] of M/I Schottenstein Homes, Inc.
Date:_____________________________________
Attachment (Projections)
EXHIBIT H
---------
[LETTERHEAD OF M/I SCHOTTENSTEIN HOMES, INC.]
July 20, 2006
To: Agent and each Bank
Ladies and Gentlemen:
This letter is being sent to you to comply with subsection
6.17 of the Credit Agreement effective as of March 6, 2002 (the "Credit
Agreement"). Capitalized terms used but not defined herein have the meanings
given to such terms in the Credit Agreement.
The undersigned certifies that, after due examination by the
undersigned and to the best of the knowledge of the undersigned, M/I
Schottenstein Homes, Inc. and each of its Subsidiaries during the period stated
above have observed or performed in all material respects all of their covenants
and other agreements, and satisfied every condition, contained in the Credit
Agreement, the Notes and the Guaranty Agreement to be observed, performed or
satisfied by them, and that (i) as of the date hereof (and each date on which
updated calculations are delivered) and on a projected basis immediately prior
to the making of the Fleet Payment, Borrower has and will have cash, other
immediately available liquid assets and availability of Loans under the Credit
Agreement such that, as of such dates, Borrower has and will have funds
available to make the Fleet Payment and (ii) immediately before and on a
projected basis immediately after Borrower makes the Fleet Payment, no Default
or Event of Default exists or will exist under the Credit Agreement except [list
any Defaults or Events of Default; if none, end sentence before "except"].
Attached hereto is a statement showing in detail calculations
evidencing that the certification in clauses (i) and (ii) in the immediately
preceding paragraph are true and correct in all respects.
Yours very truly,
By __________________________________
Printed
Name
Title ___________________________________
Enclosure
CONFIDENTIAL
------------
STATEMENT OF AVAILABILITY OF FUNDS TO MAKE FLEET
------------------------------------------------
PAYMENT AS OF JULY 20, 2006
---------------------------
---------------------------------------------------------------------------------------------------------
1. Cash and other immediately available liquid assets of
Borrower at noon Eastern time on July 20, 2006 $________________
---------------------------------------------------------------------------------------------------------
2. Availability of Loans under the Credit Agreement at noon Eastern time on $________________
July 20, 2006, determined in accordance with the Borrowing Base
Certificate most recently distributed pursuant to the Credit Agreement
(reflecting net changes in actual Loans outstanding since such date) $________________
--------------------
---------------------------------------------------------------------------------------------------------
3. Total available cash, liquid assets and Loans available under the Credit $________________
Agreement on July 20, 2006 (line 1 plus line 2)
---------------------------------------------------------------------------------------------------------
4. Principal payment amount of the Fleet Payment to be made on the Fleet
Payment Date (which must be less than or equal to line 3) $________________
---------------------------------------------------------------------------------------------------------
[The above information shall be delivered on July 20, 2006 and updated on the
date of delivery of the Borrowing Base Certificate for June 30, 2006 (with, in
each instance, the date of delivery thereof inserted for "July 20,
2006"). Each such update is subject to the certification contained in the
letter to which these calculations are attached.]
STATEMENT OF AVAILABILITY OF FUNDS TO MAKE FLEET
------------------------------------------------
PAYMENT ON A PROJECTED BASIS
----------------------------
---------------------------------------------------------------------------------------------------------
1. Cash and other immediately available liquid assets of Borrower on a
projected basis on the Fleet Payment Date immediately before the making
of the Fleet Payment $________________
---------------------
---------------------------------------------------------------------------------------------------------
2. Availability of Loans under the Credit Agreement on a projected basis
on the Fleet Payment Date immediately before the making of the Fleet
Payment $________________
---------------------
---------------------------------------------------------------------------------------------------------
3. Total available cash, liquid assets and Loans available under the
Credit Agreement on a projected basis on the Fleet Payment Date
immediately before the making of the Fleet Payment (line 1 plus line 2) $________________
---------------------
---------------------------------------------------------------------------------------------------------
4. Principal payment amount of the Fleet Payment to be made on the Fleet $________________
Payment Date (which must be less than or equal to line 3)
---------------------------------------------------------------------------------------------------------
[The above information shall be delivered on July 20, 2006 and updated on the
date of delivery of the Borrowing Base Certificate for June 30, 2006. Each
such update is subject to the certification contained in the letter to
which these calculations are attached.]
CALCULATION OF CERTAIN COVENANTS
--------------------------------
Attached hereto are calculations in the exact form as those attached to
Exhibit H to the Credit Agreement but prepared on a projected basis for the
period ending immediately before and immediately after giving effect to the
making of the Fleet Payment on the Fleet Payment Date.
[Attach calculations in the Form of Exhibit F]
[The above calculations shall be delivered on July 20, 2006 and updated on
the date of delivery (as required pursuant to subsection 6.2(a) of the Credit
Agreement) by Borrower of the certificate in the form of Exhibit F for the
period ending June 30, 2006. Such update is subject to the certification
contained in the letter to which these
calculations are attached.]
EXHIBIT I
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
DATE:_______, ___
Reference is made to the Credit Agreement described in Item 2
of Annex I annexed hereto (as such Credit Agreement may hereafter be further
amended, modified or supplemented from time to time, the "Credit Agreement").
Unless defined in Annex I attached hereto, terms defined in the Credit Agreement
are used herein as therein defined. _________ (the "Assignor") and _________
(the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from
the Assignor, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof which
represents the percentage interest specified in Item 4 of Annex I (the
"Assigned Share") of all of the outstanding rights and obligations
under the Credit Agreement with respect to the Assigned Share of the
Commitment and of any outstanding Revolving Credit Loans, Swingline
Loans and Facility L/Cs.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security
interests; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
any other instrument or document furnished pursuant thereto including
without limitation the Note and the Guaranty Agreement (collectively,
the "Credit Documents") or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents; and (iii) makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or any of its Subsidiaries
or the performance or observance by the Borrower or any of its
Subsidiaries of any of their respective obligations under the Credit
Agreement or the other Credit Documents. Neither the Assignor nor any
of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any
Credit Document, (ii) any representation, warranty or statement made in
or in connection with any of the Credit Documents, (iii) the financial
condition or creditworthiness of Borrower or any Guarantor, (iv) the
performance of or compliance with any of the terms or provisions of any
of the Credit Documents, (v) inspecting any of the property, books or
records of the Borrower or (vi) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the
Credit Documents.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption Agreement; (ii) agrees that it will,
1
independently and without reliance upon the Agent, the Assignor or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints
and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Credit Agreement and the other Credit
Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; (iv) confirms
that the execution and delivery of this Assignment and Assumption
Agreement by the Assignee is duly authorized, (v) agrees that it will
perform in accordance with their terms all of the obligations which by
the terms of the Credit Documents are required to be performed by it as
a Bank, (vi) agrees that its payment instructions and notice
instructions are as set forth Annex 1, (vii) confirms that none of the
funds, monies, assets or other consideration being used to make the
purchase and assumption hereunder are "plan assets" as defined under
ERISA and that its rights, benefits and interests in and under the
Credit Documents will not be "plan assets" under ERISA, (viii) agrees
to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys'
fees) and liabilities incurred by the Assignor in connection with or
arising in any manner from the Assignee's non-performance of the
obligations assumed under this Assignment and Assumption Agreement, and
(ix) if applicable, attaches the forms prescribed by the Internal
Revenue Service of the United States certifying that the Assignee is
entitled to receive payments under the Credit Documents without
deduction or withholding of any United States federal income taxes.
4. Following the execution of this Assignment and Assumption Agreement by
the Assignor and the Assignee, an executed original hereof (together
with all attachments) will be delivered to the Agent. The effective
date of this Assignment and Assumption Agreement shall be the date of
execution hereof by the Assignor and the Assignee, to the extent
required by the Credit Agreement, the receipt of the consent of the
Agent and the receipt by the Agent of the assignment fee referred to in
subsection 11.7(b) of the Credit Agreement, or such later date as
otherwise specified in Item 5 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the Agent, as
of the Settlement Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Assumption Agreement, relinquish
its rights and be released from its obligations under the Credit
Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall be
entitled to (i) all interest on the Assigned Share of the Loans at the
rates specified in Item 6 of Annex I, (y) all commitment fees (if
applicable) on the Assigned Share of the Commitment at the rate
specified in Item 7 of Annex I and (z) all Facility L/C fees (if
applicable) on the Assignee's participation in all Facility L/Cs at the
rate specified in Item 8 of Annex I, which, in each case, accrue on and
after the Settlement Date, such interest and, if applicable, commitment
fees and Facility L/C fees, to be paid by the Agent directly to the
2
Assignee. It is further agreed that all payments of principal made on
the Assigned Share of the Loans which occur on and after the Settlement
Date will be paid directly by the Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount
specified by the Assignor in writing which represents the Assigned
Share of the principal amount of the respective Loans made by the
Assignor pursuant to the Credit Agreement which are outstanding on the
Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to
the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS (INCLUDING
ss.735ILCS 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAW) OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be duly executed and delivered by their
proper and duly authorized officers, as of the day and year first above written.
3
[NAME OF ASSIGNOR],
as Assignor
By: ____________________________________
Print: ____________________________________
Title: ____________________________________
[NAME OF ASSIGNEE],
as Assignee
By: ____________________________________
Print: ____________________________________
Title: ____________________________________
Acknowledged and Agreed:
BANK ONE, NA, as Agent
By: ____________________________________
Print: ____________________________________
Title: ____________________________________
4
ANNEX I
-------
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: M/I SCHOTTENSTEIN HOMES, INC.
2. Name and Date of Credit Agreement:
Credit Agreement dated as of March 6, 2002 (as the same may be amended,
modified, extended or restated from time to time, the "Credit
Agreement") among M/I SCHOTTENSTEIN HOMES, INC., an Ohio corporation
("Borrower"), the Banks party thereto (each a "Bank" and collectively,
the "Banks"), and Bank One, NA, as agent (the "Agent") for the Banks.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Commitment
----------
a. Aggregate Amount for all Banks $_______________
b. Assigned Share _______________%
c. Amount of Assigned Share $_______________
5. Settlement Date:
6. Rate of Interest As set forth in subsection 2.5
to the Assignee: of the Credit Agreement (unless
otherwise agreed to by the
Assignor and the Assignee).(1)
-------------------
(1) The Borrower and the Agent shall direct the entire amount of the interest to
the Assignee at the rate set forth in subsection 2.5 of the Credit Agreement,
with the Assignor and Assignee effecting any agreed upon sharing of interest
through payments by the Assignee to the Assignor.
1
7. Commitment Fee to the Assignee: As set forth in subsection 2.4
of the Credit Agreement (unless
otherwise agreed to by the
Assignor and the Assignee).(2)
8. Facility L/C Fee: As set forth in subsection 2.18 of the Credit
Agreement (unless otherwise agreed to by the
Assignor).(3)
9. Notice:
ASSIGNEE:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:
Telephone:
Facsimile:
Payment Instructions:
ASSIGNEE:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:
Telephone:
Facsimile:
----------------------
(2) The Borrower and the Agent shall direct the entire amount of the
commitment fee to the Assignee at the rate set forth in subsection 2.4
of the Credit Agreement, with the Assignor and the Assignee effecting
any agreed upon sharing of the commitment fee through payment by the
Assignee to the Assignor.
(3) The Borrower and the Agent shall direct the entire amount of the
applicable Facility L/C fee to the Assignee at the rate set forth in
subsection 2.18 of the Credit Agreement, as the case may be, with the
Assignor and the Assignee effecting any agreed upon sharing of such
Facility L/C fee through payment by the Assignee to the Assignor.
2
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
-------------------------- ------------------------------
----------------------------- ---------------------------------
(Print Name and Title) (Print Name and Title)
3
