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TERMINATION AGREEMENT
This Termination Agreement (the "Agreement") is made and entered into
as of the 31st day of July, 1997, among the parties to the Xxxxxx and Xxxxxx
Xxxxxxxxxxxxx Family Agreement dated as of October 11, 1993 (as amended on March
17, 1997, the "Family Agreement"), and M/I Schottenstein Homes, Inc., an Ohio
corporation (the "Company").
Capitalized terms used in this Agreement shall have the meanings
assigned thereto in the Family Agreement.
RECITAL
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WHEREAS, the Company has agreed to repurchase an aggregate of 702,439
COMMON SHARES from certain of MEL'S FAMILY SHAREHOLDERS on the date hereof;
WHEREAS, XXXXX, XXXX and Xxx X. Xxxxxxxxxxxxx ("XXX") have agreed
to resign from the Board of Directors of the Company;
WHEREAS, IRVING has agreed to deliver $25,083.75 to XXXXX, $54,164.81
to XXXX, $26,190.00 to XXX and $26,268.75 to Xxxxx X. Xxxx ("XXXXX"), in each
case in next day funds, in consideration for their execution of this Agreement;
and
WHEREAS, the parties hereto desire to terminate the Family Agreement
in its entirety;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
Section 1. PAYMENTS. On the date this Agreement has been signed by each
of the signatories hereto, IRVING shall deliver (i) $25,083.75 to XXXXX, (ii)
$54,164.81 to XXXX, (iii) $26,190.00 to XXX and (iv) $26,268.75 to XXXXX, in
each case in next day funds (collectively, the "Termination Payments").
Section 2. RESIGNATIONS. (a) XXXXX, XXXX and XXX shall deliver
their written resignations as directors of the Company on the date hereof, which
resignations shall become effective immediately upon the termination of the
Family Agreement.
(b) XXXXX, XXXX and XXX, severally and not jointly, represent and
warrant that they are resigning as directors of the Company solely in connection
with the repurchase of the 702,439 COMMON SHARES contemplated hereby and in
connection with the termination of the Family Agreement and that none of XXXXX,
XXXX or XXX has furnished, and none will furnish, a letter to the Company
describing any disagreement with the Company on any matter relating to the
Company's operations, policies or practices and requesting that such matter be
disclosed.
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Section 3. FACILITATION OF COMMON SHARE REPURCHASE. Each of the parties
hereto agree that, notwithstanding anything in the Family Agreement to the
contrary, the Company may repurchase from MEL'S FAMILY SHAREHOLDERS, and MEL'S
FAMILY SHAREHOLDERS may sell to the Company, up to 702,439 COMMON SHARES on or
after the date hereof at a repurchase price of $12.8125 per COMMON SHARE.
Section 4. WAIVER OF RIGHTS OF FIRST AND SECOND REFUSAL. Each of the
parties hereto waives any and all rights of first and second refusal, and notice
thereof, pursuant to Section 6 of the Family Agreement in connection with the
repurchase by the Company of COMMON SHARES from one or more of MEL'S FAMILY
SHAREHOLDERS as contemplated by Section 3 of this Agreement.
Section 5. SECURITIES LAWS COMPLIANCE. (a) It is the intention of the
PARTIES hereto that the repurchase of COMMON SHARES from one or more of MEL'S
FAMILY SHAREHOLDERS contemplated by Section 3 of this Agreement comply with all
applicable federal and state securities laws, and each of the parties hereto,
including for such purpose the Company, agrees to take all actions reasonably
necessary and to cooperate in good faith to ensure such compliance to make any
all filings required under all applicable federal and state securities laws.
(b) The Company will arrange, at its expense, to have Forms 4 prepared
for XXXXX, XXXX and XXX in connection with the repurchase contemplated hereby,
and, upon review of such Forms 4 by counsel to XXXXX, XXXX and XXX, shall cause
such Forms 4 to be filed with the S.E.C. pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(c) It is the intention of the PARTIES hereto that the restrictive
legends on the remaining share certificates of MEL'S FAMILY SHAREHOLDERS be
removed as soon as reasonably practicable and that the COMMON SHARES represented
by such share certificates become eligible to be sold pursuant to Rule 144(k)
under the SECURITIES Act as soon as permitted under the SECURITIES ACT. The
PARTIES hereto acknowledge and agree that Rule 144(k) requires that at the time
of any applicable sale the holder of COMMON SHARES shall not be "an affiliate of
the issuer at the time of the sale and [shall not have] been an affiliate during
the preceding three months" and that "a period of at least two years [shall
have] elapsed since the later of the date the securities were acquired from the
issuer or from an affiliate of the issuer." The PARTIES further acknowledge and
agree that the question of "affiliate" status under the SECURITIES ACT is one of
facts and circumstances that cannot be determined in advance.
(d) Subject to subsection (c) above, as soon as reasonably practicable
after MEL'S FAMILY SHAREHOLDERS have ceased to be affiliates under the
SECURITIES ACT for more than 90 days, and assuming that MEL'S FAMILY
SHAREHOLDERS otherwise satisfy the requirements of Rule 144(k) under the
SECURITIES ACT, the Company will use reasonable efforts to obtain an opinion
from outside counsel, at the Company's expense, to the effect that MEL'S FAMILY
SHAREHOLDERS may rely on Rule 144(k) under the SECURITIES ACT and/or that the
restrictive legends on the remaining share certificates of MEL'S FAMILY
SHAREHOLDERS may be removed. The PARTIES hereto agree to
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provide such outside counsel such documents and certificates as are reasonably
requested by such counsel in connection with such opinion, and such counsel
shall be entitled to rely, as to matters of fact, on any such certificate or
document. The Company makes no representations or warranties as to when, or if,
MEL'S FAMILY SHAREHOLDERS will have ceased to be affiliates under the SECURITIES
ACT for more than 90 days.
Section 6. TERMINATION OF THE FAMILY AGREEMENT. The Family Agreement
shall be terminated in its entirety, and shall be of no further force or effect,
effective immediately upon delivery of the Termination Payments by IRVING.
Section 7. MUTUAL RELEASE. In consideration of the receipt of the
consideration described herein, each of the PARTIES hereto do hereby, on behalf
of themselves, the PARTIES whom they represent, their respective heirs,
administrators, executors, agents, parents, subsidiaries, affiliates, divisions,
officers, directors, stockholders, employees, successors and assigns, forever
release and discharge each other and their respective heirs, administrators,
executors, agents, parents, subsidiaries, affiliates, divisions, officers,
directors, stockholders, employees, successors, and assigns ("Released
Parties"), from any and all charges, claims, demands, judgments, actions, causes
of action, damages, expenses, costs, attorneys' fees, and liabilities of any
kind whatsoever, whether known or unknown, vested or contingent, in law, equity
or otherwise, which any such party has ever had, now has, or may hereafter have
against said Released Parties for or on account of any matter, cause or thing
whatsoever relating to the Company or to Xxxxxx Investment Company which has
occurred prior to the date of this Agreement.
Section 8. INDEMNIFICATION. The Company will, to the fullest extent
permitted under applicable law and the Company's Articles of Incorporation and
Code of Regulations, as currently in effect, indemnify and hold harmless LENORE,
HOLLY, XXXX and XXX against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action suit, proceeding or
investigation (whether arising before or after the date hereof), whether civil,
criminal, administrative or investigative, arising out of or directly pertaining
to any action or omission in their capacity as directors, officers or employees
of the Company occurring on or prior to the date hereof, whether asserted or
claimed prior to, at or after the date hereof, for a period of six years after
the date hereof, in each case to the fullest extent permitted under applicable
law and the Company's Articles of Incorporation and Code of Regulations, as
currently in effect (and shall pay any expenses in advance of the final
disposition of such action or proceeding to such PARTY to the fullest extent
permitted under applicable law and the Company's Articles of Incorporation and
Code of Regulations, as currently in effect, upon receipt from the PARTY to whom
expenses are advanced of an undertaking to repay such advances, which
undertaking is required under applicable law or the Company's Articles of
Incorporation and Code of Regulations, as currently in effect). In the event of
any such claim, action, suit, proceeding or investigation, (i) the Company will
pay the reasonable fees and expenses of counsel selected by such PARTY promptly
after statements therefor are received and (ii) the Company shall cooperate in
the defense of any such matter. In the event that any claim for indemnification
is asserted or made within such six-year period, all rights to indemnification
in respect of such claim shall continue until the final disposition of such
claim.
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Section 9. FURTHER ASSURANCES. Each of the parties hereto agrees, at
any time and from time to time, upon the reasonable request of any other party
hereto, to do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, all such further acts, documents and instruments as
may be required to effect any of the transactions contemplated by this
Agreement.
Section 10. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the PARTIES and their respective heirs, executors
and permitted assigns.
Section 11. JOINT PREPARATION. This Agreement shall be deemed to have
been prepared jointly by the parties hereto, and any uncertainty or ambiguity
existing herein shall not be interpreted against any PARTY, but shall be
interpreted according to the rules for the interpretation of arm's length
agreements.
Section 12. GOVERNING LAW; VENUE. This Agreement shall be construed in
accordance with Ohio law. The PARTIES hereto agree that any action concerning,
relating to, or involving this Agreement must be venued in Franklin County,
Ohio, and the PARTIES hereto irrevocably consent to the jurisdiction of the
courts in Franklin County, Ohio.
Section 13. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, each of the PARTIES has entered into this Agreement
as of the date and year first above written.
/s/ Xxxxxx X. Xxxxxxxxxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxxxxxxx, as Family Representative Xxxxxx X. Xxxxxx, as Family Representative
M/I SCHOTTENSTEIN HOMES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxxxxxxx Xxxxxx X. Xxxxxx, individually and as trustee
/s/ Xxxxxx X. Xxxxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxxx, individually and as trustee Xxxxxxx X. Xxxxxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxxx, individually and as trustee Xxxxxx X. Xxxxxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxxxxx /s/ Xxxx Xxxxxxxxxxxxx
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Xxxxxx Xxxxxxxxxxxxx, individually and as trustee Xxxx Xxxxxxxxxxxxx
/s/ Xxxx X. Xxxxxxxxxxxxx /s/ Xxxxx Xxxxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxxxx, individually and as trustee Xxxxx Xxxxxxxxxxxxx
individually, and as trustee
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, individually and as trustee Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, individually and as trustee Xxxxxxx X. Xxxxxx, individually and as trustee
/s/ Xxxx X. Xxxxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxxxx, individually and as trustee Xxxxxxx X. Xxxxxxxxxxxxx
/s/ Xxx X. Xxxxxxxxxxxxx /s/ Xxxxxx Xxxxxxx
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Xxx X. Xxxxxxxxxxxxx, individually and as trustee Xxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxx /s/ Xxxx Xxxx
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Xxxxx X. Xxxx, individually and as trustee Xxxx Xxxx, individually and as trustee
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, as trustee
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