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Exhibit 10.1
THIRD AMENDMENT TO SECOND RESTATED REVOLVING CREDIT LOAN AND
STANDBY LETTER OF CREDIT AGREEMENT
This Third Amendment to Second Restated Revolving Credit Loan And
Standby Letter Of Credit Agreement (this "Amendment") is made to be effective
as of September 29, 1997, by and among M/I SCHOTTENSTEIN HOMES, INC., an Ohio
corporation ("Borrower"), BANK ONE, N.A., a national banking association,
formerly known as 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"), BANKBOSTON, N.A., a national banking association, formerly
known as 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, N.A., formerly known as Bank
One, Columbus, N.A., a national banking association, as agent for Banks
("Agent"). For valuable consideration, the receipt of which is hereby
acknowledged, Borrower, Banks and Agent, each intending to be legally bound,
hereby recite and agree as follows:
BACKGROUND INFORMATION
A. Borrower, 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 and by
the Second Amendment thereto effective as of May 7, 1997 (the "Credit
Agreement").
B. Borrower has redeemed certain Subordinated Indebtedness (as defined
in the Credit Agreement) in the principal amount of $25,000,000 created as a
result of the Note Purchase Agreement (as defined in the Credit Agreement), as
amended by the first amendment thereto effective as of March 14, 1997, and
replaced such Subordinated Indebtedness with certain
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other subordinated indebtedness from BankBoston, N.A. in the principal amount
of $50,000,000 issued pursuant to a credit agreement dated August 29, 1997
between Borrower and BankBoston, N.A. (the "BankBoston Agreement").
C. Borrower, Banks and Agent want to amend the Credit Agreement by
deleting therefrom references to the Note Purchase Agreement, by providing
therein for the BankBoston Agreement and by modifying (i) certain definitions
in Section 1, Definitions; (ii) certain obligations of Borrower set forth in
Section 6, Affirmative Covenants; and (iii) certain limitations on Borrower set
forth in Section 7, Negative Covenants.
AGREEMENT
1. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by deleting the definition of "Applicable Eurodollar Margin" in its
entirety and replacing it with the following definition:
"Applicable Eurodollar Margin" shall mean, during the period
from the date hereof until the first Adjustment Date, 1.60% 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 9 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 Margin for Eurodollar
Interest Incurred Rate Loans is:
is: ---------------------
----------------------
less than 1.75 to 1.0 Eurodollar Rate Loans are not
available
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If the ratio of EBITDA Applicable Eurodollar
to Consolidated Margin for Eurodollar
Interest Incurred Rate Loans is:
is: ---------------------
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equal to or greater
than 1.75 to 1.0 but
less than 2.0 to 1.0 2.35% per annum
equal to or greater
than 2.0 to 1.0 but
less than 2.50 to 1.0 2.10% per annum
equal to or greater
than 2.50 to 1.0 but
less than 3.0 to 1.0 1.85% per annum
equal to or greater
than 3.0 to 1.0 1.60% per annum
If, however, the financial statements required to be delivered
pursuant to subsection 6.1(b) and the related compliance certificate
required to be delivered pursuant to subsection 6.2(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
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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
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 9).
2. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by inserting immediately following the definition of "Applicable
Eurodollar Margin" the following definition of "BankBoston Agreement":
"BankBoston Agreement" shall mean the credit agreement dated
August 29, 1997 between Borrower and BankBoston, N.A., in its
capacities as lender and as agent, and any other parties which may
become lenders thereunder, and any subsequent successors or assigns,
which credit agreement governs certain subordinated indebtedness to
BankBoston, N.A. in the principal amount of $50,000,000.
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3. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by deleting therefrom the definition of "Note Purchase Agreement" in
its entirety.
4. Subsection 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by deleting therefrom the definition of "Subordinated Indebtedness" in
its entirety and replacing it with the following definition:
"Subordinated Indebtedness" at any date shall mean (i) the
unsecured Indebtedness of Borrower created as a result of the
BankBoston Agreement, and (ii) all other future unsecured subordinated
Indebtedness of Borrower, the terms and manner (including without
limitation the terms and manner with respect to subordination) of
which are satisfactory to Required Banks in their sole discretion and
approved in writing by Required Banks and which is subordinate to (a)
Borrower's obligations to Banks and Agent under this Agreement and the
Notes and (b) Borrower's obligations, if any, as a guarantor or
otherwise of the obligations of M/I Financial Corp. (including without
limitation the obligations with respect to the M/I Financial Corp.
Loan Agreement).
5. Subsection 6.12 (Maintenance of Debt to Worth) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following subsection 6.12:
6.12 Maintenance of Debt to Worth. Maintain at all times during
the Commitment Period a ratio of Consolidated Unsubordinated
Liabilities to the sum of Consolidated Tangible Net Worth and
Subordinated Indebtedness not in excess of 2.0 to 1.0.
6. Subsection 6.14 (Maintenance of Overall Leverage Ratio) of the
Credit Agreement is hereby amended by deleting it in its entirety and replacing
it with the following subsection 6.14:
6.14 Maintenance of Overall Leverage Ratio. Maintain at all times
during the Commitment Period (a) a ratio of Consolidated Tangible Net
Worth to Subordinated Indebtedness of not less than 1.0 to 1.0, and
(b) a ratio of Consolidated Liabilities to
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Consolidated Tangible Net Worth not in excess of 3.0 to 1.0.
7. Subsection 6.15 (Maintenance of EBITDA to Consolidated Interest
Incurred Ratio) of the Credit Agreement is hereby amended by deleting it in its
entirety and replacing it with the following subsection 6.15:
6.15 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 1.70 to 1.0.
8. Subsection 7.3 (Limitation on Contingent Obligations) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following subsection 7.3:
7.3 Limitation on Contingent Obligations. Agree to or assume,
guarantee, indorse or otherwise in any way be or become responsible or
liable for, directly or indirectly, any Contingent Obligation,
including but not limited to Contingent Obligations incurred as a
general partner in any limited partnership or general partnership,
except:
(a)(i) reimbursement and other obligations under standby
letters of credit (including letters of credit issued for the
purpose of satisfying bonding requirements) issued by Persons
other than Banks; (ii) Contingent Obligations of Borrower as the
guarantor of letters of credit issued for the account of joint
ventures in which Borrower is a partner (including Guaranteed HNB
Joint Ventures Letters of Credit), provided that Borrower's
Contingent Obligation on any such guaranty shall be limited to a
percentage of the amount of that joint venture's letters of credit
equal to Borrower's pro rata equitable ownership interest in such
joint venture, provided further that the sum of the obligations
permitted by clauses (a)(i) and (a)(ii) shall not exceed the
aggregate amount of $7,000,000 at any one time outstanding on a
consolidated basis, which $7,000,000 limitation shall not include
any obligations
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in connection with Standby L/Cs; and (iii) reimbursement
obligations not in excess of $20,000,000 at any one time
outstanding on a consolidated basis under Construction Bonds;
(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);
(c) Contingent Obligations related to Indebtedness of joint
ventures in which Borrower has made Investments in Joint Ventures
as permitted by subsection 7.9(e) hereof and in which Borrower is
a partner, member or shareholder; provided, however, that the
aggregate amount of such Contingent Obligations at any one time
outstanding pursuant to this subsection 7.3(c) shall not exceed
(i) $10,000,000 less (ii) the aggregate amount of secured and
unsecured Indebtedness then outstanding pursuant to subsection
7.1(d) hereof; and
(d) 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 7.9(l) hereof.
9. Subsection 7.13 (Limitation on Payments of Subordinated
Indebtedness and Modification of Subordination Agreements) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following subsection 7.13:
7.13 Limitation on Payments of Subordinated Indebtedness and
Modification of Subordination Agreements.
Without the prior written consent of the Required Banks,
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(a) repay, prepay, purchase, redeem, or otherwise acquire any
of its Subordinated Indebtedness; or
(b) make any other payments, including without limitation
payment of interest, on any Subordinated Indebtedness if an Event
of Default exists or if such payment would cause an Event of
Default to occur; or
(c) permit the modification, waiver or amendment of any of
the terms of any Subordinated Indebtedness; or
(d) permit (whether or not within the control of Borrower or
any of its Subsidiaries) the modification, waiver, or amendment
of, or release of any parties to, any subordination agreement with
respect to any Subordinated Indebtedness;
provided, however, nothing contained in this subsection 7.13 shall
prevent Borrower from making regularly scheduled payments on any
Subordinated Indebtedness if no Event of Default exists and the
payment would not cause an Event of Default to occur. With respect
to the Subordinated Indebtedness pursuant to the BankBoston
Agreement, "regularly scheduled payments" shall mean only (i) on
August 29, 2004, the payment of the principal balance of the Fixed
Rate Senior Subordinated Note made by the Borrower to the order of
BankBoston, N.A. on August 29, 1997 in the principal face amount
of $50,000,000 and each other note executed and delivered by the
Borrower in exchange or replacement for such note pursuant to the
BankBoston Agreement (collectively, the "BankBoston Notes"); and
(ii) on each February 28, May 29, August 29 and November 29 (or
within any applicable cure period) during the term of the
BankBoston Notes beginning with November 29, 1997, interest on the
BankBoston Notes.
The parties hereby agree that this clarification regarding
what payments of Subordinated Indebtedness pursuant to the
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BankBoston Agreement constitute "regularly scheduled payments" is
not intended to modify the rights and obligations of BankBoston,
N.A. (including any of its successors and assigns) and the
Borrower, or the rights of the Banks and the Agent, pursuant to or
arising out of the Subordinated Indebtedness pursuant to the
BankBoston Agreement; provided that nothing herein shall be
construed to be a consent by the Banks (in their capacity as Banks
under this Agreement) and the Agent to any payment of any
Subordinated Indebtedness that is prohibited by this Agreement.
10. 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
September 29, 1997 through and including December 31, 1998, 1.25 to
1.0; and (B) from January 1, 1999 and thereafter, 1.20 to 1.0.
11. 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.
12. 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.
13. The obligations of Agent and Banks pursuant to this Amendment are
subject to the satisfaction of the following
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conditions precedent prior to the effective date of this Amendment:
(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
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Guarantor's Consent and Reaffirmation of Guaranties (in form and
substance satisfactory to Agent).
(b) Corporate Proceedings of Borrower. Each Bank and Agent shall
have received a copy of the resolutions (in form and substance
satisfactory to 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 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.
14. 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 Borrower, Agent
and the Required Banks.
15. 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.
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M/I SCHOTTENSTEIN HOMES, INC.
By_________________________________
Robert H. Schottenstein
Title: President and Assistant Secretary
BANK ONE, 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
BANKBOSTON, N.A.
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 Third Amendment to Second Restated Revolving Credit Loan and Standby
Letter of Credit Agreement, effective as of September 29, 1997 (the "Third
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, by the Second Amendment thereto effective as of May 7, 1997 and
by the Third Amendment, and all representations, warranties and covenants in
each of such Guaranties continue in full force and effect notwithstanding the
Third 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 Third Amendment to Second Restated Revolving Credit Loan and
Standby Letter of Credit Agreement, effective as of September 29, 1997 (the
"Third 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, by the Second Amendment thereto effective as of May 7,
1997 and by the Third Amendment, and all representations, warranties and
covenants in each of such Guaranties continue in full force and effect
notwithstanding the Third 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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September 30, 1997
M/I Schottenstein Homes, Inc.
3 Easton oval
Columbus, Ohio 43219
Attention: Irving E. Schottenstein
With a copy to: Phillip G. Creek
Paul S. Coppel, Esq.
Re: Second Restated Revolving Credit Loan and Standby
Letter of Credit Agreement - Extension of the
Maturity Date of the Commitment
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Pursuant to subsection 2.7 of the Second Restated Revolving Credit
Loan and Standby Letter of Credit Agreement effective as of December 30, 1996,
by and among Borrower, Bank One, HNB, First Chicago, NCB, BOB, Fifth Third and
Agent (each as defined in the Credit Agreement), as amended by the First
Amendment thereto effective as of March 14, 1997, the Second Amendment thereto
effective as of May 7, 1997 and the Third Amendment thereto effective as of
September 29, 1997 (together, the "Credit Agreement"), Bank One, N.A., as
Agent, hereby notifies Borrower that all of the Banks (as defined in the Credit
Agreement) have elected to extend (the "Extension") the maturity date of the
Commitment (as defined in the Credit Agreement) by one year, from September 30,
2001 to September 30, 2002.
Also pursuant to subsection 2.7 of the Credit Agreement, this notice
granting the Extension will be attached to each of the Notes (as defined in the
Credit Agreement) and will constitute an amendment extending the maturity date
of each Note by one year, from September 30, 2001 to September 30, 2002.
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September 30, 1997
Page 2
The Credit Agreement, including without limitation the Borrower's
representations, warranties and covenants, shall remain in full force and
effect in accordance with its terms as amended hereby, and upon September 30,
1997, the terms "Agreement" and "the Agreement" shall mean the Credit Agreement
as amended hereby.
Very truly yours,
/s/ Thomas D. Igoe
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Thomas D. Igoe
cc: James R. Willet, The Huntington National Bank
Gregory A. Gilbert, The First National Bank of Chicago
Ralph A. Kaparos, National City Bank of Columbus
Kevin C. Hake, BankBoston, N.A.
Mark E. Ransom, The Fifth Third Bank of Columbus
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