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FIRST AMENDMENT TO, AND CONSENT TO ASSIGNMENT TO
THE FIRST NATIONAL BANK OF CHICAGO BY NBD BANK OF
ITS RIGHTS AND INTERESTS UNDER, RESTATED REVOLVING CREDIT
LOAN, SEASONAL LOAN AND STANDBY LETTER OF CREDIT AGREEMENT
This First Amendment to, and Consent to Assignment to The First
National Bank of Chicago by NBD Bank of Its Rights and Interests Under, Restated
Revolving Credit Loan, Seasonal Loan and Standby Letter of Credit Agreement is
made to be effective as of May 7, 1996 ("this Amendment"), by and among M/I
SCHOTTENSTEIN HOMES, INC., an Ohio corporation ("Borrower"), BANK ONE, COLUMBUS,
N.A., a national banking association ("Bank One"), THE HUNTINGTON NATIONAL BANK,
a national banking association ("HNB"), NBD BANK, a Michigan banking
corporation, formerly known as NBD Bank N.A., a national banking association
("NBD"), THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
("First Chicago"), NATIONAL CITY BANK OF COLUMBUS, a national banking
association, formerly known as National City Bank, Columbus, a national banking
association ("NCB"), THE FIRST NATIONAL BANK OF BOSTON, a national banking
association ("BOB") (Bank One, HNB, NBD, First Chicago, NCB and BOB is each a
"Bank" and collectively, "Banks", provided that NBD shall not be a "Bank" from
and after the effective date of this Amendment, and First Chicago is a "Bank"
only from and after the effective date of this Amendment), and BANK ONE,
COLUMBUS, N.A., as agent for Banks ("Agent"). For valuable consideration, the
receipt of which is hereby acknowledged, Borrower, Banks and Agent, intending to
be legally bound, hereby recite and agree as follows:
BACKGROUND INFORMATION
A. Borrower, the Banks (except for First Chicago) and the Agent are
parties to a Restated Revolving Credit Loan, Seasonal Loan and Standby Letter of
Credit Agreement made to be effective as of September 29, 1995 (the "Credit
Agreement").
B. NBD wishes to assign its rights and interests (including all of its
obligations and liabilities), and First Chicago wishes to assume NBD's rights
and interests (including all of NBD's obligations and liabilities), under the
Credit Agreement to First Chicago.
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C. The Credit Agreement requires the consent of each Bank and Borrower
for any Bank to assign its rights and interests under the Credit Agreement.
D. Borrower, the Banks and the Agent wish to amend the Credit Agreement
and to consent to the assignment by NBD, and the assumption by First Chicago, of
NBD's rights and interests (including all of its obligations and liabilities)
under the Credit Agreement as hereinafter stated.
AGREEMENT
1. NBD and First Chicago each represents to Agent, each of the other
Banks and Borrower that (a) all necessary corporate action on the part of each
of NBD and First Chicago has been taken, (b) all assignments and other
documentation between NBD and First Chicago, including without limitation the
Assignment Agreement as of even date herewith between NBD and First Chicago, a
copy of which is attached hereto as Exhibit J (the "Assignment Agreement"), have
been executed, to accomplish the assignment by NBD to First Chicago of all of
NBD's rights and interests, and First Chicago's assumption of such rights and
interests (including all of NBD's obligations and liabilities), under the Credit
Agreement, and (c) subject to the required consent of Agent, Banks and Borrower,
NBD has assigned to First Chicago, and First Chicago has assumed from NBD, all
of NBD's rights and interests (including all of its obligations and liabilities)
under the Credit Agreement.
2. First Chicago represents to Agent, NBD, each of the other Banks and
Borrower that (a) none of the Agent, NBD or any of the other Banks or any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it concerning the
Credit Agreement, Borrower or Borrower's Subsidiaries, (b) it has, independently
and without reliance on Agent or any other Bank, and based on such documents,
including the Credit Agreement and information as it has deemed appropriate,
made its own appraisal 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 be the assignee of NBD, to
enter into this Amendment, to become a party to, and make extensions of credit
under, the Credit Agreement from and after the effective date of this Amendment,
and (c) it will, 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 the Credit Agreement, the Notes and any Guaranties, and
to make such investigation as it deems necessary to inform itself as to the
business, operations,
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property, financial and other condition and creditworthiness of Borrower and
Borrower's Subsidiaries.
3. Subject to the other terms and conditions of this Amendment, Agent,
each Bank and Borrower each hereby consents to NBD's assignment of its rights
and interests (including all of its obligations and liabilities) under the
Credit Agreement to First Chicago and to the release of NBD from all of such
obligations and liabilities, effective as of the effective date of this
Amendment.
4. Agent, Banks and Borrower each agrees that, as of the effective date
of this Amendment and upon satisfaction of the conditions precedent set forth in
numbered paragraph 5 hereof, (a) NBD shall have no obligations or liabilities
under the Credit Agreement and (b) the definition of "Banks" shall not include
NBD, but shall include First Chicago.
5. The assignment by NBD of its rights and interests (including all of
its obligations and liabilities) under the Credit Agreement as amended by this
Amendment, and the consent of Agent, Banks and Borrower to such assignment, are
subject to the satisfaction of the following conditions precedent (in addition,
in the case of such assignment, to the conditions precedent set forth in the
Assignment Agreement, which conditions precedent, NBD and First Chicago hereby
represent and warrant to Borrower, Agent and the other Banks, have been
satisfied) not later than the effective date of this Amendment:
(a) Revolving Credit Notes. The Revolving Credit Note payable
to the order of NBD and evidencing the obligation of Borrower to pay
the unpaid principal amount of the Revolving Credit Loans made by NBD,
with interest thereon as prescribed in subsection 2.8 of the Credit
Agreement, shall be canceled and simultaneously therewith any such
Revolving Credit Loans made by NBD shall be evidenced instead by a
Revolving Credit Note prepared in accordance with subsection 2.2 of the
Credit Agreement and duly executed and delivered by Borrower to be
effective as of the effective date of this Amendment and payable to the
order of The First National Bank of Chicago.
(b) Seasonal Loan Notes. The Seasonal Loan Note payable to the
order of NBD and evidencing the obligation of Borrower to pay the
unpaid principal amount of the Seasonal Loans made by NBD, with
interest thereon as prescribed by subsection 2.8 of the Credit
Agreement, shall be canceled and simultaneously therewith any such
Seasonal Loans made by NBD shall be
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evidenced by a Seasonal Loan Note prepared in accordance with
subsection 2.4 of the Credit Agreement and duly executed and delivered
by Borrower to be effective as of the effective date of this Amendment
and payable to the order of The First National Bank of Chicago.
6. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by deleting the definitions of each of "Business Day," "Guaranties,"
"Interest Payment Date" and "M/I Financial Corp. Loan Agreement" in their
entireties and replacing them, respectively, with the following:
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Columbus, Ohio are authorized or
required by law to close, except that when used in connection with
Eurodollar Rate Loans, "Business Day" shall mean any Business Day on
which dealings in Dollars between banks may be carried on in London,
England and Columbus, Ohio.
"Guaranties" (individually, "Guaranty") shall mean the guaranties of
the Indebtedness evidenced by this Agreement and by all documents
contemplated by this Agreement, including without limitation the Notes,
as this Agreement and such documents may be amended or restated from
time to time, which guaranties are substantially in the form of Exhibit
A attached to this Agreement, executed by M/I Financial Corp. (which as
of the date hereof is Borrower's only Subsidiary) in favor of the
respective Banks and to which Agent shall also be a party, and any
guaranties in favor of Agent and the respective Banks executed by (a)
each other permitted Subsidiary, if any, of Borrower and/or (b) the M/I
Ancillary Businesses that are wholly-owned by the Borrower or by any
Subsidiary.
"Interest Payment Date" shall mean, (a) with respect to any Prime Rate
loan, the last day of each March, June, September and December,
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
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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.
"M/I Financial Corp. Loan Agreement" shall mean the Revolving Credit
Agreement made to be effective as of August 8, 1995, by and among M/I
Financial Corp., Borrower and Bank One, as the same may be, in Bank
One's sole discretion, amended, extended, renewed or replaced from time
to time.
7. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
further amended by adding the following definitions thereto:
"Adjustment Date" shall mean each date that is two Business Days after
February 15, May 15, August 15 and November 15 of each year of the
Commitment, subject to the provisions in the definition of "Applicable
Eurodollar Margin" for a later adjustment in certain circumstances.
"Applicable Eurodollar Margin" shall mean, during the period from May
7, 1996 until the first Adjustment Date, 2.25% per annum. Thereafter,
subject to the other terms and conditions of this Agreement (including
the limitations on the availability of Eurodollar Rate Loans and
including the termination of the Commitment as set forth in Section 8
hereof), the "Applicable Eurodollar Margin" will be adjusted on each
Adjustment Date to the applicable rate per annum that corresponds to
the ratio of EBITDA to Consolidated Interest Incurred, determined from
the financial statements and compliance certificate that relate to the
last month of the fiscal quarter immediately preceding such Adjustment
Date, as set forth below:
If the ratio of EBITDA Applicable Eurodollar
to Consolidated Interest Margin for Eurodollar
Incurred is: Rate Loans is:
- ------------------------ ---------------------
less than 1.75 to 1.0 Eurodollar Rate Loans are
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If the ratio of EBITDA Applicable Eurodollar
to Consolidated Interest Margin for Eurodollar
Incurred is: Rate Loans is:
- ------------------------ ---------------------
not available
equal to or greater
than 1.75 to 1.0 but
less than 2.0 to 1.0 2.50% per annum
equal to or greater
than 2.0 to 1.0 but
less than 2.50 to 1.0 2.25% per annum
equal to or greater
than 2.50 to 1.0 but
less than 3.0 to 1.0 2.00% per annum
equal to or greater
than 3.0 to 1.0 1.75% per annum
If, however, the financial statements required to be delivered pursuant
to subsection 5.1(b) and the related compliance certificate required to
be delivered pursuant to subsection 5.2(a) are not delivered when due,
then:
(a) if such financial statements and compliance certificate
are delivered after the date such financial statements and compliance
certificate were required to be delivered but before the expiration of
any applicable cure period and the Applicable Eurodollar Margin
increases from that previously in effect as a result of a change in the
ratio of EBITDA to Consolidated Interest Incurred as determined from
such financial statements and compliance certificate, then the
Applicable Eurodollar Margin during the period from the date upon which
such financial statements were required to be delivered but before the
expiration of any applicable cure period until the date upon which they
actually are delivered shall be the Applicable Eurodollar Margin as so
increased;
(b) if such financial statements and compliance certificate
are delivered after the date such financial statements and compliance
certificate were required to be delivered but before the expiration of
any applicable cure period and the Applicable Eurodollar Margin
decreases from that previously in effect as a result of a change in the
ratio of EBITDA to
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Consolidated Interest Incurred as determined from such financial
statements and compliance certificate, then such decrease in the
Applicable Eurodollar Margin shall not become applicable until the date
upon which the financial statements and compliance certificates are
actually delivered; and
(c) if such financial statements and certificate are not
delivered prior to the expiration of the applicable cure period, the
Applicable Eurodollar Margin for the period beginning as of the date
upon which such financial statements and compliance certificate were
required to be delivered without regard to any applicable cure period
until two Business Days following the date upon which they actually are
delivered shall be, per annum, one percent (1.0%) plus the Applicable
Eurodollar Margin that was in effect at the time of such expiration (it
being understood that the foregoing shall not limit the rights of the
Agent and the Banks set forth in Section 8).
"Consolidated Interest Expense" shall mean, for any period, interest
expense on Indebted ness of the Borrower and its Subsidiaries for such
period, in each case determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Incurred" shall mean, for any rolling 12 month
period, all interest incurred during such period on outstanding
Indebtedness of Borrower and its Subsidiaries irrespective of whether
such interest is expensed or capitalized by Borrower or its
Subsidiaries, in each case determined on a consolidated basis.
"EBITDA" shall mean, for any rolling 12 month period, on a consolidated
basis for the 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
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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.
"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 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) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate" shall mean, with respect to each day during each
Interest Period, the rate per annum equal to the rate at which Agent is
offered Dollar deposits at or about 10:00 A.M., Columbus, Ohio time,
two Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Rate Loans are
then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Rate Loan to be outstanding
during such Interest Period.
"Eurodollar Rate Loans" shall mean Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"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%):
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Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"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 the Borrower in its notice of borrowing or notice of
conversion, 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 the
Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest Period
with respect thereto;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(3) no Interest Period shall be for less than one month, and
the Borrower shall not select an Interest Period for a Eurodollar
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Rate Loan (a) as a Revolving Credit Loan if the last day of such
Interest Period would be after the last day of the Commitment Period,
or (b) as a Seasonal Loan if the last day of such Interest Period would
be after the earlier of (i) December 31 of the year in which such
Seasonal Loan is made and (ii) the last day of the Commitment Period.
"M/I Ancillary Businesses" shall mean businesses that are corporations,
limited partnerships, limited liability partnerships or limited
liability companies which are engaged solely in activities reasonably
related to the sale of single family housing and in which the Borrower
or any Subsidiary has an investment or other interest, provided that
such investment or other 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.
"Prime Rate Loans" shall mean Loans the rate of interest applicable to
which is based on the Prime Rate.
"Tranche" shall mean the collective reference to those Eurodollar Rate
Loans (whether made as Revolving Credit Loans or Seasonal 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 Loans shall
originally have been made on the same day).
8. Subsection 2.1 (Revolving Credit Loan Commitments) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:
2.1 Revolving Credit Loan Commitments. Subject to the terms and
conditions of this Agreement, each Bank severally agrees to make revolving
credit loans ("Revolving Credit Loans") to Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed that Bank's Revolving Credit Loan Commitment Percentage of
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the lesser of (a) the Borrowing Base (determined as of the most recent month end
or, if Borrower elects to provide an interim Borrowing Base Certificate pursuant
to subsection 5.4 hereof, as of the date stated in such Borrowing Base
Certificate) minus the sum of the (i) aggregate principal amount of undrawn and
drawn Standby L/Cs, exclusive of the amount of Standby L/Cs issued for the
purpose of satisfying bonding requirements, then outstanding, and (ii) the
aggregate principal amount of undrawn and drawn Guaranteed HNB Joint Ventures
Letters of Credit, exclusive of the amount of Guaranteed HNB Joint Ventures
Letters of Credit issued for the purpose of satisfying bonding requirements,
then outstanding, or (b) One Hundred Thirty-Six Million and 00/100 Dollars
($136,000,000.00). During the Commitment Period and as long as no Event of
Default exists, Borrower may use the Revolving Credit Loan Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof; provided,
however, that Borrower may not prepay any Revolving Credit Loan while any
Seasonal Loan remains outstanding, i.e., any prepayments shall be applied first
to the Seasonal Loans until all Seasonal Loans are paid in full before any
prepayments will be applied to the Revolving Credit Loans.
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 Commitment as set forth in Section 8 hereof), the Revolving
Credit Loans may from time to time be (i) Eurodollar Rate Loans, (ii) Prime Rate
Loans, or (iii) a combination thereof, as determined by Borrower and notified to
Agent in accordance with subsection 2.5 hereof, provided (a) that no Revolving
Credit Loan shall be made as a Eurodollar Rate Loan if the ratio of EBITDA to
Consolidated Interest Incurred as of the most recent Adjustment Date, determined
from the financial statements and compliance certificate that relate to the last
month of the fiscal quarter immediately preceding such Adjustment Date, is less
than 1.75 to 1.0, (b) 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 (c) that the maximum number of Tranches that may be
outstanding at any one time as Revolving Credit Loans and Seasonal Loans may not
exceed five in the aggregate.
9. Subsection 2.3 (Seasonal Loan Commitments) of the Credit Agreement
is hereby amended by deleting it in its entirety and replacing it with the
following:
2.3 Seasonal Loan Commitments. Subject to the terms and conditions of
this Agreement, each Seasonal Loan Bank severally agrees to make revolving
credit seasonal loans ("Seasonal Loans") to Borrower during the times more
particularly described in this
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subsection 2.3 during the Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed that Bank's Seasonal Loan Commitment
Percentage of the lesser of (a) the Borrowing Base (determined as of the most
recent month end or, if Borrower elects to provide an interim Borrowing Base
Certificate pursuant to subsection 5.4 hereof, as of the date stated in such
Borrowing Base Certificate) minus the sum of (i) $136,000,000 and (ii) the
aggregate principal amount of undrawn and drawn (A) Standby L/Cs, exclusive of
the amount of Standby L/Cs issued for the purpose of satisfying bonding
requirements, then outstanding plus (B) Guaranteed HNB Joint Ventures Letters of
Credit, exclusive of the amount of Guaranteed HNB Joint Ventures Letters of
Credit issued for the purpose of satisfying bonding requirements, then
outstanding, or (b) $30,000,000. Subject to the terms and conditions of this
Agreement, Seasonal Loans shall be available: (a) in 1995, from the date of this
Agreement until December 31; in each year of the Commitment Period thereafter,
from March 1 until December 31 of such year, provided that in no event shall the
Seasonal Loans be available beyond the last day of the Commitment Period; and
(b) only if the entire $136,000,000 principal amount of the Revolving Credit
Loans has been advanced and no portion thereof has been repaid as of the time of
the request for any Seasonal Loan. All Seasonal Loans must be repaid by December
31 of each year during the Commitment Period, except if the Commitment Period
ends on a date other than December 31, all Seasonal Loans made during the last
year of the Commitment Period shall be due and payable on the last day of the
Commitment Period. In addition to the other requirements for Seasonal Loans, all
Seasonal Loans shall have a zero balance, and no Seasonal Loans shall be
available, from January 1 through and including February 28 (or February 29, if
appropriate) of any year during the Commitment Period. During the times when the
Seasonal Loans are available during the Commitment Period and as long as no
Event of Default exists, Borrower may use the Seasonal Loan Commitments by
borrowing, prepaying the Seasonal Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof.
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 Commitment as set forth in Section 8 hereof), the Seasonal
Loans may from time to time be (i) Eurodollar Rate Loans, (ii) Prime Rate Loans,
or (iii) a combination thereof, as determined by Borrower and notified to Agent
in accordance with subsection 2.5 hereof, provided (a) that no Seasonal Loan
shall be made as a Eurodollar Rate Loan if the ratio of EBITDA to Consolidated
Interest Incurred as of the most recent Adjustment Date, determined from the
financial statements and compliance certificate that relate to the last month of
the fiscal quarter immediately preceding such Adjustment Date, is less
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than 1.75 to 1.0, (b) that no Seasonal Loan shall be made as a Eurodollar Rate
Loan with an Interest Period that would end later than December 31 (or, if the
Commitment Period ends on a date other than December 31, the date during such
last year of the Commitment Period that is the last day of the Commitment
Period) of the year in which such Seasonal Loan is made, and (c) that the number
of Tranches that may be outstanding at any one time as Revolving Credit Loans
and Seasonal Loans may not exceed five in the aggregate.
10. Subsection 2.5 (Procedure for Borrowing) of the Credit Agreement is
hereby amended by deleting it in its entirety and replacing it with the
following:
2.5 Procedure for Borrowing. Borrower may borrow under the Revolving
Credit Loan Commitments and the Seasonal Loan Commitments (subject to the
limitations on the times Seasonal Loans are available during each year and to
the limitations on the availability of Eurodollar Rate Loans), during the
Commitment Period, provided Borrower shall give Agent telephonic or written
notice (the "Notice of Borrowing"), which Notice of Borrowing must be received
(a) prior to 12:00 Noon, Columbus, Ohio time, at least three Business Days prior
to the requested Borrowing Date for that part of the requested borrowing that is
to be Eurodollar Rate Loans, or (b) prior to 11:00 a.m., Columbus, Ohio time on
or before the requested Borrowing Date for that part of the requested borrowing
that is to be Prime Rate Loans which Notice of Borrowing, in the case of Prime
Rate Loan(s), shall be irrevocable. Each Notice of Borrowing shall specify (i)
the Borrowing Date (which shall be a Business Day), (ii) the amount of the
requested borrow ing, (iii) whether the borrowing is to be of Eurodollar Rate
Loans, Prime Rate Loans or a combination thereof and (iv) if the borrowing is to
be entirely or partly of Eurodollar Rate Loans, the amount of each Prime Rate
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 Revolving Credit Loan Commitments and the Seasonal Loan
Commitments, as appropriate, shall be in the principal amount (a) in the case of
Prime Rate Loans, of the lesser of (i) $1,000,000 or any larger amount which is
an even multiple of $100,000, and (ii) the then undrawn Revolving Credit Loan
Commitments or the Seasonal Loan Commitments, as appropriate, and (b) in the
case of Eurodollar Rate Loans, of $10,000,000 or any larger amount which is an
even multiple of $1,000,000 so long as the principal amount of the requested
borrowing is less than the then undrawn Revolving Credit Loan Commitments or the
Seasonal Loan Commitments, as appropriate.
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After the Borrower gives a Notice of Borrowing with respect to
Eurodollar Rate Loans, Agent, by 10:00 a.m., Columbus, Ohio 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 wants Eurodollar Rate Loan(s) on such Borrowing
Date and, if so, the amount(s) and Interest Period(s) of such Eurodollar Rate
Loan(s).
If the Borrower's written confirmation is timely made, the Borrower
shall be deemed to be requesting borrowing(s) of Eurodollar Rate Loan(s) in the
amount(s) and for the Interest Period(s) stated in the confirmation. If the
Borrower's confirmation is not timely made, the Borrower shall be deemed to have
requested a borrowing entirely as a Prime Rate Loan in the aggregate amount and
on the Borrowing Date specified in the Notice of Borrowing.
By 2:00 p.m., Columbus, Ohio time, two Business Days prior to the
requested Borrowing Date, Agent shall give telephonic or written notice to each
Bank of such request, specifying (i) the Borrowing Date (which shall be a
Business Day), (ii) the amount of the requested borrowing, (iii) whether the
borrowing is to be of Eurodollar Rate Loans, Prime Rate Loans or a combination
thereof, and (iv) if the borrowing is to be entirely or partly of Eurodollar
Rate Loans, the amount of each Prime Rate 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 and/or Seasonal Loan Bank, as appropriate, shall
deposit funds with Agent for the account of Borrower by 2:00 p.m. on the
Borrowing Date by wire transfer or other immediately available funds equal to
its Revolving Credit Loan Commitment Percentage of the Revolving Credit Loans
and/or its Seasonal Loan Commitment Percentage of the Seasonal Loans, as
appropriate, 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/or
Seasonal Loan Banks, as appropriate, and in like funds as received by Agent. The
provisions for conversion and continuation of the Loans are set forth in
subsection 2A.1.
11. Subsection 2.8 (Interest; Default Interest) of the Credit Agreement
is hereby amended by deleting it in its entirety and replacing it with the
following:
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2.8 Interest; Default Interest.
(a) Except as provided in subsection 2.8(b) hereof, the Revolving
Credit Loans and, if permitted to be outstanding, the Seasonal Loans shall bear
interest on the unpaid principal amount thereof at a rate per annum equal to (i)
in the case of Prime Rate Loans, the Prime Rate in effect from time to time and
(ii) 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.
(b) If all or a portion of the principal amount of any of the Revolving
Credit Loans or the Seasonal Loans made hereunder (whether as Prime Rate Loans
or Eurodollar Rate Loans or a combination thereof) 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 Seasonal Loan shall,
without limiting any other rights of Banks, bear interest at a rate per annum
which is the sum of one percent (1.0%) plus the Prime Rate in effect from time
to time 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 or any
Seasonal 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 (1.0%) plus
the applicable non-default interest rate (which is the sum of the applicable
Eurodollar Rate and the Applicable Eurodollar Margin) on such Eurodollar Rate
Loan then in effect from the date of such non-payment until the expiration of
the then current Interest Period with respect to such Eurodollar Rate Loan
(before, as well as after, judgment); thereafter, the entire principal amount of
such Eurodollar Rate Loan and, to the extent permitted by applicable law, any
overdue installment of interest on such Eurodollar Rate Loan shall, without
limiting any other rights of Banks, bear interest at a rate per annum which is
the sum of one percent (1.0%) plus the Prime Rate in effect from time to time
until paid in full (before, as well as after, judgment).
(c) Interest shall be payable in arrears and shall be due on each
Interest Payment Date.
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12. Subsection 2.9 (Termination or Reduction of Commitment) of the
Credit Agreement is hereby amended by deleting it in its entirety and replacing
it with the following:
2.9 Termination or Reduction of Commitment. (a) Provided that each Bank
consents in writing, Borrower shall have the right to terminate the Commitment
or, from time to time (and so long as no Default or Event of Default exists),
reduce the amount of the Commitment, upon not less than five Business Days'
written notice to each Bank specifying (i) either a reduction or termination,
(ii) whether any such reduction or termination is of Revolving Credit Loans,
Seasonal Loans or a combination thereof and (iii) in the case of a reduction,
whether any prepayment, if required by this Agreement, shall be of Prime Rate
Loans, Eurodollar Rate Loans or a combination thereof, and, in each case if a
combination thereof, the principal allocable to each.
(b) Any reduction of the Commitment shall be in the amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce
permanently the amount of the Commitment then in effect. Any such reduction
shall be accompanied by prepayment of (i) the Revolving Credit Loans, if the
Revolving Credit Loan Commitments are being reduced, and any outstanding
Seasonal Loans, if the Seasonal Loan Commitments are being reduced, made
hereunder to the extent, if any, that the amount of such Revolving Credit Loans
and/or Seasonal Loans, as appropriate, then outstanding exceeds the amount of
the Revolving Credit Loan Commitments and/or the Seasonal Loan Commitments, as
appropriate, as then reduced, together with accrued interest on the amount so
prepaid to the date of such prepayment, and (ii) if a Revolving Credit Loan or a
Seasonal 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 2A.5, Indemnity. Any such reduction of the L/C Commitment, if the L/C
Commitment is being reduced, shall be accompanied by either (A) return to Agent
of the outstanding Standby L/Cs or (B) payment by Borrower to Agent of cash to
fully collateralize outstanding Standby L/Cs, to the extent, if any, that the
amount of such Standby L/Cs then outstanding exceeds the L/C Commitment portion
of the Commitment as then reduced.
(c) Any such termination of the Commitment shall be accompanied (i) by
prepayment in full of the Revolving Credit Loans and the Seasonal 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; (ii) with respect to Standby L/Cs, by Borrower's compliance with the
terms of subsection 2.16 (b) hereof; and (iii) if a Revolving Credit Loan or a
Seasonal Loan is a Eurodollar Rate Loan that is
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prepaid other than at the end of the Interest Period applicable thereto, by any
amounts payable pursuant to subsection 2A.5, Indemnity.
(d) Any such reduction or termination of the Revolving Credit Loan
Commitments, the Seasonal Loan Commitments and/or L/C Commitments portion(s) of
the Commitment shall be allocated to each Bank ratably in proportion to that
Bank's Revolving Credit Loan Commitment Percentage, Seasonal Loan Commitment
Percentage, and/or L/C Commitment Percentage, as appropriate.
13. Subsection 2.10 (Maturity Date of Commitment; Extension) is hereby
amended by deleting it in its entirety and replacing it with the following:
2.10 Maturity Date of Commitment; Extension. Unless earlier terminated
pursuant to the terms of this Agreement, the Commitment shall terminate on
September 30, 2000, and the unpaid balance of the Revolving Credit Loans and
Seasonal Loans outstanding shall be paid on said date; provided, however, that
once each year during each and every year of the Commitment Period (without
regard to whether or not all Banks elected to extend the Commitment Period in
any preceding year during the Commitment Period) all Banks shall make an
election whether or not, in all Banks' sole discretion, to extend the maturity
date of the Commitment by one year. If all Banks elect to extend the maturity
date of the Commitment by one year, such election shall be made on or before
September 30 of each year (or the first Business Day after September 30 if
September 30 is not a Business Day) by written notice from Agent to Borrower.
Each notice granting an extension shall be attached to each of the Notes and
shall constitute an amendment extending the maturity date of each Note by one
year. If all Banks do not unanimously elect to extend the maturity date of the
Commitment by one year, Agent shall not be required to give notice to Borrower
of such election not to extend. If Borrower has not received notice from Agent
as stated herein that all Banks have elected to extend the maturity date of the
Commitment by one year, the maturity date of the Commitment shall be deemed not
to have been extended.
14. Subsection 2.11 (Computation of Interest and Fees) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:
2.11 Computation of Interest and Fees. Commitment fees on the
Commitment and interest in respect of the Revolving Credit Loans and the
Seasonal 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
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the Prime Rate or the Eurocurrency Reserve Requirements shall become effective
as of the opening of business of the day on which such change in the Prime 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 Prime 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.
15. Subsection 2.12 (Increased Costs) of the Credit Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:
2.12 Increased Costs. In the event that at any time after the date of
this Agreement any law, rule or regulation regarding capital adequacy, or any
change therein or in the interpretation or application thereof or compliance by
any Bank (including Agent) with any request or directive regarding capital
adequacy (whether or not having the force of law) from any central bank or other
Governmental Authority, agency or instrumentality, does or shall have, in the
opinion of such Bank, the effect of reducing the rate of return on the capital
of such Bank or any corporation controlling such Bank as a consequence of such
Bank's obligations hereunder to a level below that which such Bank or any
corporation controlling such Bank could have achieved but for its adoption,
change or compliance (taking into account such Bank's or such corporation's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by such Bank to be material, then, from time to time, after submission by
such Bank to Borrower of a written request therefor, Borrower shall pay to such
Bank additional amount or amounts as will compensate such Bank or such
corporation, as the case may be, for such reduction. Such Bank's written request
to Borrower for compensation 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 Revolving
Credit Loans and Seasonal Loans, until the later of (a) the termination of this
Agreement or (b) the payment in full of all Notes (provided that before
accepting final payment on the Notes, Bank shall calculate any amounts due in
accordance with this subsection 2.12 and give notice to Borrower of such amounts
as stated herein, and Borrower shall include such amounts in its final payment).
This provision shall survive the termination of all Standby L/Cs and, with
respect to Standby L/Cs, shall remain in full force and effect until there is no
existing or future obligation of Agent or any L/C Participant under any Standby
L/C. The provisions of this
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subsection 2.12 shall be supplemented by the provisions of Section 2A hereof.
16. Subsection 2.14 (Pro Rata Treatment and Payments), of the Credit
Agreement is hereby amended by deleting clause (a) thereof in its entirety and
replacing it with the following:
2.14 Pro Rata Treatment and Payments. (a) Each borrowing by Borrower
from Banks hereunder, each payment (including each prepayment) by Borrower on
account of principal of and interest on the Loans, each payment by Borrower on
account of any commitment fee hereunder and any reduction of the Revolving
Credit Loan Commitments, the Seasonal Loan Commitments and/or the L/C
Commitments shall be made pro rata according to the respective Revolving Credit
Loan Commitment Percentage, Seasonal Loan Commitment Percentage and/or L/C
Commitment Percentage, as appropriate, then held by Banks. All payments
(including prepayments) to be made by Borrower hereunder and under the Notes,
whether on account of principal, interest, fees or otherwise, shall be made
without set-off or counterclaim and shall be made prior to 12:00 Noon, Columbus,
Ohio time, on the due date thereof to Agent, for the account of Banks, at
Agent's 100 East Broad Street office in Columbus, Ohio, in Dollars and in
immediately available funds. Agent shall distribute such payments to Banks
promptly upon receipt in like funds as received. If any payment hereunder on a
Prime 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. 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.
17. Subsection 2.18 (Standby L/C Participations) of the Credit
Agreement is hereby amended by deleting clause (b) thereof in its entirety and
replacing it with the following:
(b) If any amount required to be paid by any L/C Participant to Agent
in respect of any unreimbursed portion of any payment made by Agent under any
Standby L/C is not paid to Agent on the date such payment is due but is paid
within three Business Days after such payment is due, such L/C Participant shall
pay to Agent on demand an amount equal to the product of (i) such amount,
multiplied by (ii) the daily average Federal funds rate, as quoted
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by Agent, during the period from and including the date such payment is required
to the date on which such payment is immediately available to Agent, 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 L/C Participant pursuant to this subsection 2.18 is
not paid to Agent by such L/C Participant within three Business Days after the
date such payment is due, Agent shall be entitled to recover from such L/C
Participant, 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 Revolving Credit Loans made as Prime Rate Loans hereunder. A
certificate of Agent submitted to any L/C Participant with respect to any
amounts owing under this subsection 2.18 shall be conclusive in the absence of
manifest error.
18. Subsection 2.19 (Payments) of the Credit Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:
2.19 Payments. Borrower agrees (a) to reimburse Agent, for the pro rata
benefit of the L/C Participants in accordance with each L/C Participant's
respective L/C Commitment Percentage, forthwith upon its demand and otherwise
in accordance with the terms of the Standby L/C Application relating thereto,
for any expenditure or payment made by Agent or L/C Participants under any
Standby 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 Business Day
after the day on which Agent demands reimbursement from Borrower for such
payment if such demand is made prior to 11:00 a.m., Columbus, Ohio time or (B)
two Business Days after the day on which Agent demands reimbursement if such
demand is made at or after 11:00 a.m. Columbus, Ohio time, the rate which would
then be payable on any outstanding Revolving Credit Loan made as a Prime Rate
Loan which is not in default, and (ii) thereafter, the rate which would then be
payable on any outstanding Revolving Credit Loan made as a Prime Rate Loan which
is in default.
19. Subsection 2.21 (Letter of Credit Reserves) of the Credit Agreement
is hereby amended by deleting it in its entirety and replacing it with the
following:
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2.21 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 Agent, or (b) impose
on Agent or any L/C Participant any other condition regarding this Agreement or
any Standby L/C, and the result of any event referred to in clause (a) or (b)
above shall be to increase the cost to Agent or any L/C Participant of issuing
or maintaining any Standby L/C (which increase in cost shall be the result of
Agent's or any L/C Participant's reasonable allocation of the aggregate of such
cost increases resulting from such events), then, upon demand by Agent or any
L/C Participant, Borrower shall immediately pay to Agent, for the pro rata
benefit of such L/C Participant(s), from time to time as specified by Agent or
such L/C Participant(s), additional amounts which shall be sufficient to
compensate Agent or such L/C Participant(s) for such increased cost, together
with interest on each such amount from the date demanded until payment in full
thereof at a rate per annum equal to the then applicable interest rate on the
Revolving Credit Loans made as Prime Rate Loans. A certificate as to such
increased cost incurred by Agent or such L/C Participant(s), submitted by Agent
or such L/C Participant(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 Agent or any L/C Participant under any Standby
L/C.
20. The Credit Agreement is hereby amended by adding the following new
Section 2A:
SECTION 2A. GENERAL PROVISIONS APPLICABLE TO LOANS
2A.1 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert outstanding Seasonal Loans and Revolving
Credit Loans from Eurodollar Rate Loans to Prime Rate Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election, provided
that any such conversion of Eurodollar Rate Loans may only be made on the last
day of an Interest Period with respect thereto. Subject to the limitations on
the availability of Eurodollar Rate Loans, the Borrower may elect from time to
time to convert outstanding Seasonal Loans and Revolving Credit Loans from Prime
Rate Loans to Eurodollar Rate Loans by giving the Agent telephonic or written
notice (the "Notice of Conversion"), which Notice of Conversion must be received
prior to 12:00 Noon, Columbus, Ohio time, at least three Business Days prior to
the requested date for the conversion,
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which Notice of Conversion shall specify (i) the date for the conversion; (ii)
the aggregate amount of Prime Rate Loans to be converted; and (iii) and for each
such Prime Rate Loan to be converted to a Eurodollar Rate Loan, the respective
amount and the respective length of the initial Interest Period. Each conversion
from Prime Rate Loans to 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 the Borrower gives a Notice of Conversion from Prime Rate Loans to
Eurodollar Rate Loans, Agent, by 10:00 a.m., Columbus, Ohio time, two Business
Days prior to the requested date for the conversion, 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 Conversion. Not more
than two hours thereafter, the Borrower shall give Agent written irrevocable
confirmation of whether or not the Borrower wants to convert the Prime Rate
Loans to Eurodollar Rate Loan(s) on such requested date and, if so, the amount
and the Interest Period for each such Eurodollar Rate Loan. If the Borrower's
confirmation is not timely made, the Borrower shall be deemed to have withdrawn
Borrower's Notice of Conversion and the Prime Rate Loans that were the subject
of such Notice of Conversion shall continue as Prime Rate Loans. If the
Borrower's written confirmation is timely made, the Borrower shall be deemed to
be requesting a conversion from Prime Rate Loans to Eurodollar Rate Loan(s) in
the amount(s) and for the Interest Period(s) stated in the confirmation. By 2:00
p.m., Columbus, Ohio time, two Business Days prior to the requested Borrowing
Date, Agent shall give telephonic or written notice to each Bank of Borrower's
request for conversion, specifying (i) the date for the conversion; (ii) the
aggregate amount of Prime Rate Loans to be converted; and (iii) and, for each
such Prime Rate Loan to be converted to a 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 Eurodollar
Rate Loans and Prime Rate Loans may be converted as provided herein, provided
that (i) (unless the Required Banks otherwise consent) no Prime Rate Loan may be
converted into a Eurodollar Rate Loan when any Default or Event of Default has
occurred and is continuing and (ii) no Prime Rate Loan may be converted into a
Eurodollar Rate Loan (A) in the case of conversions of Revolving Credit Loans,
after the date that is one month prior to the last day of the Commitment Period,
and (B) in the case of conversions of Seasonal Loans, if the Interest Period for
such converted Seasonal Loan(s) would end after December 31 (or if the
Commitment Period ends on a date other than December 31, the last day of the
Commitment Period during the last year of the Commitment Period) of the year in
which such Seasonal Loan(s) are made.
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(b) Subject to the limitations on the availability of Eurodollar Rate
Loans, any Eurodollar Rate Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
Agent telephonic or written notice, which notice must be received prior to 12:00
Noon, Columbus, Ohio time, at least three Business Days prior to such last day
of the then current Interest Period, and which notice shall specify the amount
of the Eurodollar Rate Loans to be continued as such and the respective amount
and the respective length of the Interest Period for each Eurodollar Rate Loan.
After the Borrower gives such notice, Agent, by 10:00 a.m. two Business Days
prior to the end of the Interest Period, 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 such notice. Not more than two hours
thereafter, the Borrower shall give Agent written irrevocable confirmation of
whether or not the 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 the Borrower's confirmation is not timely made, the Borrower shall
be deemed to have withdrawn Borrower's notice for a continuation and the
Eurodollar Rate Loans that were the subject of such request shall convert
automatically to a Prime Rate Loan upon the expiration of the then current
Interest Period. If the Borrower's written confirmation is timely made, the
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 such
request for continuation, specifying the aggregate amount of the Eurodollar Rate
Loans to be continued as such and, for each such Eurodollar Rate Loan to be
continued, the respective amount, the respective Eurodollar Rate, and the
respective length of the Interest Period applicable thereto. All or any part of
outstanding Eurodollar Rate Loans may be continued as provided herein, provided
that (i) (unless the Required Banks otherwise consent) no Eurodollar Rate Loan
may be continued when any Default or Event of Default has occurred and is
continuing and (ii) no Eurodollar Rate Loan may be continued as a Eurodollar
Rate Loan (A) in the case of continuations of Revolving Credit Loans, after the
date that is one month prior to the last day of the Commitment Period, and (B)
in the case of continuations of Seasonal Loans, if the Interest Period for such
continued Seasonal Loan(s) would end after December 31 (or if the Commitment
Period ends on a date other than December 31, the last day of the Commitment
Period during the last year of the Commitment Period) of the year in which such
Seasonal Loan(s) are made.
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2A.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 the 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
the 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 Prime Rate 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 Prime
Rate Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Rate Loans shall be made or continued as such, nor shall the Borrower
have the right to convert Prime Rate Loans to Eurodollar Rate Loans.
2A.3 Illegality; Impracticability. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful, or if compliance
by any Bank or its applicable lending office, branch or any affiliate thereof
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority occurring after May 7, 1996 (or, if
later, the date on which such Bank becomes a Bank pursuant to any permitted
assignment) shall make it impracticable, for any Bank, or its applicable lending
office, branch or any affiliate thereof, to make or maintain Eurodollar Rate
Loans as contemplated by this Agreement, (a) such Bank shall promptly give
written notice of such circumstances to the Borrower and the Agent (which notice
shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Bank hereunder to make Eurodollar Rate Loans, continue
Eurodollar Rate Loans as such and convert Prime Rate Loans to Eurodollar Rate
Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Bank to make or maintain Eurodollar Rate Loans, such Bank
shall then have a commitment only to make a Prime Rate Loan when a Eurodollar
Rate Loan is requested and (c) such Bank's Loans then outstanding as Eurodollar
Rate Loans, if any, shall be converted automatically to Prime Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Rate Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Bank such amounts, if any, as may be required pursuant to subsection 2A.5,
Indemnity.
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2A.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 office, branch or any affiliate thereof, or
compliance by any Bank, or its applicable lending office, branch or any
affiliate thereof, 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 May 7, 1996 (or, if later, the date on which such Bank
becomes a Bank pursuant to any permitted assignment):
(a) shall subject such Bank, or its applicable lending office,
branch or any affiliate thereof, 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 change the basis of taxation of payments
to such 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
office, branch, or any affiliate thereof;
(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 which is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Bank, or its applicable lending
office, branch or any affiliate thereof, any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank, or its applicable lending office, branch or any
affiliate thereof, deems to be material, of making, converting into, continuing
or maintaining Eurodollar Rate Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from
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such Bank, through the Agent, in accordance herewith, the Borrower shall
promptly pay such Bank, upon its demand, any additional amounts necessary to
compensate such Bank for such increased cost or reduced amount receivable; in
addition, in any such case, the Borrower may elect to convert the Eurodollar
Rate Loans made by such Bank hereunder to Prime Rate Loans by giving the Agent
at least one Business Day's notice of such election, in which case the Borrower
shall promptly pay to such Bank, upon demand, without duplication, such amounts,
if any, as may be required pursuant to subsection 2A.5. If any Bank becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
provide prompt notice thereof to the Borrower, through the Agent, certifying (x)
that one of the events described in this paragraph (a) 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 the 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.
2A.5 Indemnity. The 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 the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Rate Loans after the Borrower has given Agent
written irrevocable confirmation that Borrower wants such Eurodollar Rate Loans
in accordance with subsection 2.5 or subsection 2A.1, as appropriate, of this
Agreement, (b) default by the Borrower in making any prepayment or conversion of
a Eurodollar Rate Loan after the 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
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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.
21. Subsection 5.1 (Financial Statements) of the Credit Agreement is
hereby amended by deleting clause (b) thereof in its entirety and replacing it
with the following:
5.1 Financial Statements. Furnish to each Bank and Agent:
. . .
(b) as soon as available, but in any event not later than 45 days after
the end of each monthly accounting period (including the monthly
accounting period for the last month 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
month and the related unaudited consolidated statements of income and
of stockholders' equity of Borrower and its consolidated Subsidiaries
for such month 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, (ii) a listing of all residential and commercial lots,
land under development and unsold lots, and (iii) a statement of the
calculation of Borrower's ratio of Consolidated Unsubordinated
Liabilities to the sum of Consolidated Tangible Net Worth and
Subordinated Indebtedness as of the end of such month, all of the
foregoing certified by a Responsible Officer as being fairly stated in
all material respects, subject to year-end audit adjustments;
22. Subsection 5.2 (Certificates; Other Information) of the Credit
Agreement is hereby amended by deleting clause (a) thereof in its entirety and
replacing it with the following:
5.2 Certificates; Other Information. Furnish to each Bank and Agent:
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(a) concurrently with the delivery of each financial statement referred
to in subsection 5.1(a) above and each financial statement referred to in
subsection 5.1(b) above, a summary in form and substance satisfactory to the
Required Banks of the status of the hedging investments described in subsection
6.9(j) hereof, and 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, 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 5.11, 5.12, 5.13, 5.14, 5.15, 6.1(d), 6.3,
6.6, 6.7, 6.8, 6.9(e), 6.9(k), 6.9(l), 6.20 and 6.22 hereof;
23. The Credit Agreement is hereby amended by adding the following new
affirmative covenant as subsection 5.15 thereto:
5.15 Maintenance of EBITDA to Consolidated Interest Incurred Ratio.
Maintain at all times during the Commitment Period a ratio of EBITDA to
Consolidated Interest Incurred of not less than 1.65 to 1.0.
24. The Credit Agreement is hereby amended by adding the following new
affirmative covenant as subsection 5.16 thereto:
5.16 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 the Borrower or by any Subsidiary
and which is not precluded by law from executing a Guaranty to execute a
Guaranty in favor of the Banks and the Agent with respect to the Indebtedness of
the Borrower hereunder.
25. The preamble of Section 6 is hereby amended by deleting it in its
entirety and replacing it with the following:
"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 Standby L/C remains outstanding
that is not fully collateralized with cash in a manner satisfactory to Agent, or
any other amount is owing to Agent or any Bank hereunder, Borrower shall not,
nor shall it permit any of its Subsidiaries or, in the
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case of subsections 6.1, 6.2, 6.3 and 6.21, permit any M/I Ancillary Business
that is wholly-owned by the Borrower or by any Subsidiary to, directly or
indirectly:"
26. Clause (e) of subsection 6.3 of the Credit Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:
(e) other Contingent Obligations of Borrower which do not in the aggregate
at any one time outstanding exceed $2,000,000, subject to the
limitations of subsection 6.9(l) hereof.
27. Subsection 6.9 (Limitation on Investments) of the Credit Agreement
is hereby amended by deleting clauses (j) and (k) thereof in their entirety and
replacing them with the following and adding new clause (l) as follows:
6.9 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:
(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 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 the Office Building Limited Liability Company
specifically for the purpose of constructing, owning and operating the Office
Building in an amount not to exceed $1,200,000 in the aggregate; and
(l) investments in, advances to, and Contingent Obligations related to
the obligations of, the M/I Ancillary Businesses in an amount not to exceed
$25,000 in the aggregate.
28. Subsection 6.10 (Limitation on Operating Leases) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:
6.10. Limitation on Operating Leases. Enter into or renew any Operating
Lease if as a result thereof: (a) the aggregate rentals payable by Borrower and
all of its Subsidiaries
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under all Operating Leases, except for any Operating Lease with respect to the
Office Building, would exceed in any period of 12 consecutive months the
aggregate amount of $4,200,000; or (b) the term of (i) any Operating Lease with
respect to Eligible Model Houses and furnishings for Eligible Model Houses would
exceed three years, and (ii) any other Operating Lease, except for any Operating
Lease with respect to the Office Building, would exceed five years, provided
that so long as the initial term or any renewal of an Operating Lease included
within this clause (b) does not exceed five years or three years, as
appropriate, the aggregate of the initial term and all renewals of such
Operating Lease may exceed five years or three years, as appropriate, if any
right of renewal is solely at the option of the Borrower or its Subsidiaries; or
(c) the aggregate rentals payable by Borrower and all of its Subsidiaries under
all Operating Leases with respect to the Office Building would exceed, for the
periods set forth below, the amounts that correspond to such periods, as set
forth below:
Aggregate Rentals
Year of the Operating Lease Per Lease Year
- ----------------------------------- -----------------
Beginning with Lease Year 1 $1,131,576.00
Through and including Lease Year 5
Beginning with Lease Year 6 $1,217,693.00
Through and including Lease Year 10
Beginning with Lease Year 11 $1,275,104.00
Through and including Lease Year 15
Beginning with Lease Year 16 $1,303,810.00
Through and including Lease Year 20
29. Subsection 6.21 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
6.21 Limitation on Negative Pledges. Enter into any agreement other
than this Agreement which prohibits or limits the ability of Borrower, any of
its 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,
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personal or mixed, tangible or intangible, whether now owned or hereafter
acquired.
30. Section 8 (Defaults, Events of Default; Distribution of Proceeds
after Event of Default) of the Credit Agreement is hereby amended by deleting
numbered paragraph (4) thereof in its entirety and replacing it with the
following:
"(4) Borrower shall default in the observance or performance of any
covenant or agreement contained in (a) subsection 5.3 hereof and such default
remains uncured for five days (notice to Borrower from Agent or any Bank of such
default is not required), (b) subsections 5.2(c), 5.2(d), 5.6, 5.10, 5.11, 5.12,
5.13, 5.14, 5.15, 5.16, 6.1, 6.2, 6.3, 6.6, 6.7, 6.8, 6.9 (other than failure to
comply with the limitations of 6.9(j)), 6.11, 6.15, 6.18, 6.19 or 6.20 hereof
and such default remains uncured ten days after Agent or any Bank notifies
Borrower that such default has occurred, (c) subsection 5.9 hereof and such
default remains uncured for ten days after Agent or any Bank notifies Borrower
that such default has occurred, provided, that for any default under subsection
5.9 for which cure cannot reasonably be accomplished within ten days, if cure is
commenced within such ten-day period, Borrower may have an additional period of
up to 30 days after notice to cure such default before it is an Event of
Default, (d) any one or more of subsections 5.1(b), 5.2(a) or 5.2(b) hereof and
such default remains uncured 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 5.1(a), 5.2(e), 5.7 and 5.8 hereof)
which default shall remain uncured 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".
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31. Subsection 10.2 (Notices) of the Credit Agreement is hereby amended
by deleting the provisions with respect to HNB, NBD and NCB in their entirety
and replacing them with, and by adding with respect to First Chicago, the
following:
HNB: The Huntington National Bank
41 South High Street
8th Floor
Columbus, Ohio 43287
Attention: James R. Willet
Facsimile: (614) 480-3066
NBD: c/o The First National Bank of
Chicago
One First National Plaza
Mail Suite 0315
Chicago, Illinois 60670
Attention: Patricia Leung
Facsimile: (312) 732-1117
NCB: National City Bank of Columbus
155 East Broad Street
3rd Floor
Columbus, Ohio 43251
Attention: Ralph A. Kaparos
Facsimile: (614) 463-6770
First Chicago: The First National Bank of Chicago
One First National Plaza
Mail Suite 0315
Chicago, Illinois 60670
Attention: Patricia Leung
Facsimile: (312) 732-1117
32. The Credit Agreement is hereby amended by deleting the existing
Exhibit F (Certificate of Borrower's Responsible Officer as to Financial
Information) thereto in its entirety and replacing and fully incorporating by
reference therein amended Exhibit F thereto, which amended Exhibit F is attached
hereto.
33. The Borrower hereby represents and warrants to each Bank and the
Agent that it has the corporate power and authority to make, deliver and perform
this Amendment and to borrow under the Credit Agreement as amended by this
Amendment and has taken all corporate action necessary to be taken by it to
authorize the borrowings on the terms and conditions of the Credit Agreement as
amended by this Amendment and to authorize the execution, delivery
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and performance of the Credit Agreement as amended by this Amendment.
34. The Credit Agreement, including without limitation the Borrower's
representations, warranties and covenants, as amended by this Amendment shall
remain in full force and effect in accordance with its terms as amended hereby,
and upon the effective date of this Amendment, the terms "Agreement" and "this
Agreement" shall mean the Credit Agreement as amended by this Amendment.
35. The obligations of the Agent and the Banks pursuant to this
Amendment are subject to the satisfaction of the following conditions precedent
prior to the effective date of this Amendment:
(a) Notes. First Chicago shall have received its Revolving Credit
Note and its Seasonal Loan Note, conforming to the requirements of the
Credit Agreement and duly executed and delivered by a duly authorized
officer of Borrower.
(b) Guaranty. First Chicago shall have received its Guaranty, to
which Agent shall also be a party, conforming to the requirements of
the Credit Agreement and delivered by a duly authorized officer of
Borrower's Subsidiary.
(c) Corporate Proceedings of Borrower. Each Bank and Agent shall
have received a copy of the resolution (in form and substance
satisfactory to each Bank and Agent) of the Executive Committee of the
Board of Directors of Borrower authorizing the execution, delivery and
performance of this Amendment, the Revolving Credit Note and Seasonal
Loan Note payable to the order of First Chicago, certified by the
Secretary or the Assistant Secretary of Borrower as of the date hereof.
Such certificate shall state that the resolution set forth therein has
not been amended, modified, revoked or rescinded as of the effective
date of this Amendment.
(d) Corporate Proceedings of Subsidiary of Borrower. Each Bank and
Agent shall have received a copy of the resolution (in form and
substance satisfactory to each Bank and Agent) of the Sole Shareholder
of the Subsidiary of Borrower authorizing the execution, delivery and
performance of Guarantor's Consent and Reaffirmation of Guaranties and
of the Guaranty in favor of First Chicago and Agent certified by the
Secretary or Assistant Secretary of the
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Subsidiary of Borrower as of the date hereof. Such certificate shall
state that the resolution set forth therein has not been amended,
modified, revoked or rescinded as of the effective date of this
Amendment.
(e) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing under the Credit Agreement as of
the effective date of this Amendment.
(f) No Material Adverse Change. There shall have been no material
adverse change in the consolidated financial condition or business or
operations of Borrower or its Subsidiary from the date of Borrower's
December 31, 1995 audited financial statements to the effective date of
this Amendment.
36. This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment shall become effective upon receipt by Agent and each
Bank of executed counterparts of this Amendment by each of the parties hereto.
37. This Amendment shall be governed by, and construed in accordance
with, the local laws of the State of Ohio.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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
-------------------------------------
Irving E. Schottenstein
Title: President
BANK ONE, COLUMBUS, N.A.,
as Agent and as a Bank
By
-------------------------------------
Thomas D. Igoe
Title: Senior Vice President
THE HUNTINGTON NATIONAL BANK
By
-------------------------------------
James R. Willet
Title: Assistant Vice President
NBD BANK
By
-------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By
-------------------------------------
Patricia Leung
Title:
-------------------------------
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NATIONAL CITY BANK OF COLUMBUS
By
-------------------------------------
Ralph A. Kaparos
Title: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------------------
Kevin C. Hake
Title: Vice President
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
The undersigned Guarantor hereby (a) acknowledges that it has read the
foregoing First Amendment to, and Consent to Assignment to The First National
Bank of Chicago by NBD Bank of Its Rights and Interests Under, Restated
Revolving Credit Loan, Seasonal Loan and Standby Letter of Credit Agreement
effective as of May 7, 1996 (the "Amendment"), and (b) agrees that each of the
undersigned Guarantor's Guaranties dated as of September 29, 1995 of the
obligations of M/I Schottenstein Homes, Inc. pursuant to the Restated Revolving
Credit Loan, Seasonal Loan and Standby Letter of Credit Agreement, as amended by
the Amendment, including without limitation the substitution of The First
National Bank of Chicago for NBD Bank from and after the effective date of the
Amendment (the "Credit Agreement"), and all representations, warranties and
covenants in each of such Guaranties, continue in full force and effect
notwithstanding the Amendment; provided, that the undersigned's Guaranty in
favor of NBD Bank is replaced, as of the effective date of the Amendment, with
the undersigned's Guaranty in favor of The First National Bank of Chicago and
Agent of the obligations of M/I Schottenstein Homes, Inc. pursuant to the Credit
Agreement.
M/I FINANCIAL CORP.
By:
------------------------------------
Print Name:
-------------------------
Title:
------------------------------
Attachments (Amended Exhibit F; Exhibit J)
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