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SECOND AMENDMENT TO SECOND RESTATED REVOLVING CREDIT LOAN AND
STANDBY LETTER OF CREDIT AGREEMENT
This Second Amendment to Second Restated Revolving Credit Loan And Standby
Letter Of Credit Agreement (this "Amendment") is made to be effective as of May
7, 1997, 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"),
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association ("First
Chicago"), NATIONAL CITY BANK OF COLUMBUS, a national banking association
("NCB"), THE FIRST NATIONAL BANK OF BOSTON, a national banking association
("BOB"), THE FIFTH THIRD BANK OF COLUMBUS, an Ohio banking corporation ("Fifth
Third") (Bank One, HNB, First Chicago, NCB, BOB and Fifth Third is each a
"Bank" and, collectively, "Banks"), 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, each intending to be legally bound,
hereby recite and agree as follows:
BACKGROUND INFORMATION
A. Borrower, Bank One, HNB, First Chicago, NCB, BOB, Fifth Third and Agent
are parties to a certain Second Restated Revolving Credit Loan and Standby
Letter of Credit Agreement effective as of December 30, 1996, as amended by the
First Amendment thereto effective as of March 14, 1997 (the "Credit
Agreement").
B. Borrower, Banks and Agent want to amend the Credit Agreement by
modifying certain obligations of Borrower set forth in Section 6, Affirmative
Covenants, and certain limitations on Borrower set forth in Section 7, Negative
Covenants.
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AGREEMENT
1. Subsection 6.13 (Maintenance of Liquidity Ratio) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following subsection 6.13:
6.13 Maintenance of Liquidity Ratio. Maintain at all times during the
Commitment Period a Liquidity Ratio of (a) from May 7, 1997 through and
including December 31, 1997, not less than 1.0 to 1.0; and (b) from
January 1, 1998 and thereafter, 1.05 to 1.0.
2. Subsection 7.1 (Limitation on Indebtedness) of the Credit Agreement is
hereby amended by deleting subparagraph (b) in its entirety and replacing it
with the following subparagraph (b):
(b) Indebtedness of Borrower and M/I Financial Corp. under the M/I
Financial Corp. Loan Agreement, which shall not exceed the aggregate
principal amount of $30,000,000 at any time;
3. Subsection 7.2 (Limitation on Liens) of the Credit Agreement is hereby
amended by deleting subparagraph (b) in its entirety and replacing it with the
following subparagraph (b):
(b) Liens granted by M/I Financial Corp. on mortgage notes receivable,
which Liens secure Indebtedness permitted under subsection 7.1(b) hereof
not in excess of $30,000,000;
4. Subsection 7.3 (Limitation on Contingent Obligations) of the Credit
Agreement is hereby amended by deleting subparagraph (b) in its entirety and
replacing it with the following subparagraph (b):
(b) Contingent Obligations consisting of (i) guaranties by Borrower
of M/I Financial Corp.'s lease obligations in an amount not to exceed
$1,000,000 in any period of 12 consecutive months, (ii) Borrower's
obligations under the M/I Financial Corp. Loan Agreement in a principal
amount not to exceed $30,000,000, and (iii) guaranties by any Subsidiary
of the obligations of Borrower (including without limitation any guaranty
by M/I Financial Corp. of any obligation of Borrower to Banks);
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5. Subsection 7.7 (Limitation on Certain Real Property Expenditures) of
the Credit Agreement is hereby amended by deleting it in its entirety and
replacing it with the following subsection 7.7:
7.7 Limitation on Certain Real Property Expenditures. Purchase or
acquire any Eligible Raw Land and Land Under Development by the
expenditure of cash, the incurrence of Indebtedness, as a result of
Investment in Joint Venture(s), or otherwise, if as a result of such
purchase or acquisition the aggregate cost of all the foregoing then owned
by Borrower and its Subsidiaries (including their pro rata share of any
undeveloped land that constitutes part of an Investment in Joint Venture)
shall exceed (a) as to undeveloped land only, $55,000,000; and (b) as to
the sum of undeveloped land and land under development,(i) from May 7,
1997 through and including September 30, 1997, $108,000,000, and (ii) from
October 1, 1997 and thereafter, $100,000,000; and, provided further, that
the aggregate cost of any individual tract of land acquired by Borrower or
any of its Subsidiaries, or their pro rata share of any tract that
constitutes part of an Investment in Joint Venture may not exceed
$2,000,000 except for land holdings set forth on Exhibit G attached
hereto. For purposes of this subsection 7.7, the cost of undeveloped land
and land under development shall be determined in accordance with GAAP.
Further, for purposes of this subsection 7.7, any tract of land shall
cease to be classified as undeveloped land after (i) commencement of the
development of such tract into residential lots in good faith and provided
the development thereof is completed over a period of not more than one
year, or (ii) such tract is the subject of a valid, noncontingent contract
of sale with a person who is not an Affiliate or Subsidiary and who is
satisfactory to the Required Banks in their sole discretion, provided the
sale contemplated by such contract is to be completed not more than two
years after the date of the contract. In the event the development of any
tract is discontinued for
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a period of 60 days or longer or not completed within one year, such tract
shall automatically be deemed to be undeveloped land.
6. Subsection 7.8 (Limitation on Speculative Houses and Eligible Model
Houses) of the Credit Agreement is hereby amended by deleting it in its
entirety and replacing it with the following subsection 7.8:
7.8 Limitation on Speculative Houses and Eligible Model Houses.
Permit the aggregate cost, as determined in accordance with GAAP on a
consolidated basis, of (a) Speculative Houses owned by Borrower and its
Subsidiaries to exceed $25,000,000 at any one time outstanding, of which
not more than $5,000,000 may consist of attached (including townhouse
condominiums and condominiums) single family homes, or (b) Eligible Model
Houses owned by Borrower and its Subsidiaries to exceed $30,000,000 at any
one time outstanding, of which not more than $3,000,000 may consist of
attached (including townhouse condominiums and condominiums) single family
homes.
7. Subsection 7.9 (Limitation on Investments) of the Credit Agreement is
hereby amended by deleting subparagraph (e) in its entirety and replacing it
with the following subparagraph (e):
(e) any Investments in Joint Ventures, the aggregate cost of which,
as determined in accordance with GAAP (excluding, however, Borrower's or
its Subsidiaries' equity in the undistributed earnings or losses in each
such joint venture, whether such joint venture is a general or limited
partnership, a limited liability company, a corporation or any other form
of business association), does not at any one time outstanding exceed
$20,000,000; provided, however, that with respect to each such joint
venture, whether such joint venture is a general partnership, a limited
partnership, a limited liability company, a corporation or any other form
of business association, 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
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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 subsection 7.3 hereof or any
other covenant or condition hereof, or (ii) any other Default or Event of
Default;
8. Subsection 7.20 (Limitation on Uncommitted Land) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following subsection 7.20:
7.20 Limitation on Uncommitted Land. Permit the ratio of (a)
Uncommitted Land to (b) the sum of Borrower's (i) Shareholders Equity, and
(ii) Subordinated Indebtedness to exceed at any one time: (A) from May 7,
1997 through and including December 31, 1997, 1.40 to 1.0; (B) from
January 1, 1998 through and including December 31, 1998, 1.35 to 1.0; (C)
from January 1, 1999 through and including December 31, 1999, 1.30 to 1.0;
and (D) from January 1, 2000 and thereafter, 1.25 to 1.0.
9. Borrower hereby represents and warrants to each Bank and to 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 and performance of the
Credit Agreement as amended by this Amendment.
10. 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.
11. 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:
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(a) Guarantor's Consent and Reaffirmation of Guaranties. Each Bank
and Agent shall have received from each of the Subsidiaries of Borrower
(which as of the date of this Amendment are M/I Financial Corp., 601RS,
Inc., M/I Homes, Inc. and M/I Homes Construction, Inc.) an executed copy
of its respective Guarantor's Consent and Reaffirmation of Guaranties (in
form and substance satisfactory to each Bank and Agent).
(b) Corporate Proceedings of Borrower. Each Bank and Agent shall have
received a copy of the resolutions (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, 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 effective date of this Amendment.
(c) Corporate Proceedings of Subsidiaries of Borrower. Each Bank and
Agent shall have received a copy of the resolutions (in form and substance
satisfactory to each Bank and Agent) of the Sole Shareholder of each the
Subsidiaries of Borrower (which as of the date of this Amendment are M/I
Financial Corp., 601RS, Inc., M/I Homes, Inc. and M/I Homes Construction,
Inc.) authorizing the execution, delivery and performance of its
respective Guarantor's Consent and Reaffirmation of Guaranties, each
certified by the Secretary or Assistant Secretary of the respective
Subsidiary of Borrower as of the date of this Amendment. Such certificate
shall state that the resolutions set forth therein have not been amended,
modified, revoked or rescinded as of the effective date of this Amendment.
(d) 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.
12. 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
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executed counterparts of this Amendment by each of Borrower, Agent and the
Required Banks.
13. This Amendment shall be governed by, and construed in accordance with,
the local laws of the State of Ohio.
IN WITNESS WHEREOF, Borrower, Banks and Agent 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_________________________________
Robert H. Schottenstein
Title: President and Assistant Secretary
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: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By_________________________________
Gregory A. Gilbert
Title: Vice President
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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: Director
THE FIFTH THIRD BANK OF COLUMBUS
By_________________________________
Mark E. Ransom
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 Second Amendment to Second Restated Revolving Credit Loan and Standby
Letter of Credit Agreement, effective as of May 7, 1997 (the "Second
Amendment"), and (b) agrees that each of the undersigned Guarantor's Guaranties
dated as of December 30, 1996 of the obligations of M/I Schottenstein Homes,
Inc. pursuant to the Second Restated Revolving Credit Loan and Standby Letter
of Credit Agreement, as amended by the First Amendment thereto effective as of
March 14, 1997 and by the Second Amendment, and all representations, warranties
and covenants in each of such Guaranties, continue in full force and effect
notwithstanding the Second Amendment.
M/I FINANCIAL CORP.
By:________________________________
Print Name:_____________________
Title:__________________________
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
Each of the undersigned Guarantors hereby (a) acknowledges that it has read
the foregoing Second Amendment to Second Restated Revolving Credit Loan and
Standby Letter of Credit Agreement, effective as of May 7, 1997 (the "Second
Amendment"), and (b) agrees that each of the undersigned Guarantor's Guaranties
dated as of March 14, 1997 of the obligations of M/I Schottenstein Homes, Inc.
pursuant to the Second Restated Revolving Credit Loan and Standby Letter of
Credit Agreement, as amended by the First Amendment thereto effective as of
March 14, 1997 and by the Second Amendment, and all representations, warranties
and covenants in each of such Guaranties, continue in full force and effect
notwithstanding the Second Amendment.
601RS, INC.
M/I HOMES, INC.
M/I HOMES CONSTRUCTION, INC.
By:________________________________
Robert H. Schottenstein
President and Assistant Secretary of 601RS, Inc.;
Vice Chairman of M/I Homes, Inc.; and
Vice Chairman of M/I Homes Construction, Inc.
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