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FIRST AMENDMENT TO FOURTH RESTATED REVOLVING CREDIT LOAN,
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SWINGLINE LOAN AND STANDBY LETTER OF CREDIT AGREEMENT
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This First Amendment to Fourth Restated Revolving Credit Loan,
Swingline Loan and Standby Letter Of Credit Agreement (this "Amendment") is made
to be effective as of April 20, 1999, by and among M/I SCHOTTENSTEIN HOMES,
INC., an Ohio corporation ("M/I") and M/I Homes, Inc., an Arizona corporation
and a wholly-owned Subsidiary of M/I ("M/I Homes") (M/I and M/I Homes are,
jointly, severally and jointly and severally, "Borrower"), BANK ONE, NA, a
national banking association ("Bank One"), THE HUNTINGTON NATIONAL BANK, a
national banking association ("HNB"), NATIONAL CITY BANK, a national banking
association ("NCB"), BANKBOSTON, N.A., a national banking association, ("BKB"),
THE FIFTH THIRD BANK OF COLUMBUS, an Ohio banking corporation ("Fifth Third"),
SUNTRUST BANK, CENTRAL FLORIDA, N.A., a national banking association ("STB") and
AMSOUTH BANK, an Alabama corporation ("ASB") (Bank One, HNB, NCB, BKB, Fifth
Third, STB and ASB is each a "Bank" and are, collectively, "Banks"), and BANK
ONE, NA, a national banking association, as agent for Banks ("Agent"). For
valuable consideration, the receipt of which is hereby acknowledged, Borrower,
Banks and Agent, each intending to be legally bound, hereby recite and agree as
follows:
BACKGROUND INFORMATION
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A. Borrower, Bank One, HNB, NCB, BKB, Fifth Third, STB, ASB and
Agent are parties to a certain Fourth Restated Revolving Credit Loan, Swingline
Loan and Standby Letter of Credit Agreement effective as of December 31, 1998
(the "Credit Agreement").
B. Borrower has requested that the Credit Agreement be amended in
certain respects and the Banks and Agent are prepared to do so on and subject to
the terms hereof.
AGREEMENT
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1. Definitions. Except as otherwise defined in this Amendment,
terms defined in the Credit Agreement are used herein as defined therein.
2. Amendments. Subject to the satisfaction of the terms and
conditions of this Amendment and of the Credit Agreement, as amended hereby, the
Credit Agreement shall be amended as follows:
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2.1. The definition of "Borrowing Base" in Subsection 1.1 of the
Credit Agreement is hereby amended to read in its entirety as follows:
"Borrowing Base" shall mean, as of any date of determination, an amount
equal to the sum of:
(a) the amount calculated by multiplying .90 by
the value of Eligible Production Inventory; plus
(b) the amount calculated by multiplying .85 by
the aggregate value of Eligible Model Houses which are not over two (2)
years old (as measured from the date of the completion of construction);
plus
(c) the amount calculated by multiplying .75 by
the aggregate value of Eligible Model Houses which are over two (2)
years old (as measured from the date of the completion of construction);
plus
(d) the amount calculated by multiplying .80 by
the value of Eligible Developed Lots Sold; plus
(e) the amount calculated by multiplying .50 by
the value of Eligible Developed Lots Unsold; plus
(f) the amount calculated by multiplying .25 by
the value of Eligible Raw Land and Land Under Development; plus
(g) the amount calculated by multiplying .25 by
the value of Investments in Joint Ventures;
less the sum of (i) the aggregate amount of Customer Deposits then held
by Borrower and (ii) the aggregate outstanding amount of Liens incurred
by Borrower and permitted by subsection 7.2(i) hereof. In calculating
the "Borrowing Base", the "value" of each component of the Borrowing
Base set forth in clauses (a) through (g) above (and any subcomponent
thereof) shall not exceed the amount thereof permitted under Section 7
of this Agreement (including amounts permitted pursuant to any waiver of
any provision of said Section that is consented to by the Banks in
accordance with Subsection 11.1 of this Agreement)."
2.2. The definition of "Eligible Model Houses" in Subsection 1.1
of the Credit Agreement is hereby amended to read in its entirety as follows:
"Eligible Model Houses" shall mean (a) all completed
detached or attached single family houses (including townhouse
condominiums and condominiums) which are being used by Borrower
or any Subsidiary as sales models, and the lots on
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which such houses are located and (b) detached or attached
(including townhouse condominiums and condominiums) single family
houses for which there has been a Start of Construction which
upon completion will be used by Borrower or any Subsidiary as
sales models, and the lots on which such houses are located. The
value of Eligible Model Houses shall be calculated in accordance
with GAAP and shall include all associated costs required to be
capitalized under GAAP except for the costs of any furnishings,
but shall be reduced by the then outstanding aggregate amount of
Indebtedness secured by any Eligible Model Houses and permitted
by subsection 7.1(d) hereof."
2.3. Subsection 7.8 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"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 Borrower's Subsidiaries to exceed
$32,000,000 at any one time outstanding, of which not more than
$10,000,000 in the aggregate may consist of attached (including
townhouse condominiums and condominiums) single family homes in
the Washington, D.C. Market and in Florida, provided that (i) not
more than $5,000,000 of which may be located in the Washington,
D.C. Market and (ii) not more than $5,000,000 of which may be
located in Florida or (b) Eligible Model Houses owned by Borrower
and Borrower's Subsidiaries to exceed $30,000,000 at any one time
outstanding, of which not more than $6,000,000 in the aggregate
may consist of attached (including townhouse condominiums and
condominiums) single family homes in the Washington, D.C. Market
and in Florida, provided that (i) not more than $3,000,000 of
which may be located in the Washington, D.C. Market and (ii) not
more than $3,000,000 of which may be located in Florida. "
2.4. Subsection 7.10 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"7.10 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 Borrower's Subsidiaries
under all Operating Leases on a consolidated basis, except for
any Operating Lease with respect to the Office Building, would
exceed in any period of 12 consecutive months the aggregate
amount of $5,000,000; 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
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right of renewal is solely at the option of the Borrower or
Borrower's Subsidiaries; or (c) the aggregate rentals payable by
Borrower and all of Borrower's 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
Year of the Operating Lease Rentals Per
--------------------------- Lease Year
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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 Through and $1,303,810.00"
including Lease Year 20
2.5. Subsection 7.17 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"7.17 Limitation on Location of Attached Houses.
Construct or make investments in construction of any attached
(including townhouse condominiums and condominiums) single family
houses in any area outside of the Washington, D.C. Market and
Florida."
3. Representations and Warranties. In order to induce Banks and
Agent to enter into this Amendment, Borrower hereby represents and warrants to
each Bank and to Agent that on the date hereof:
(a) 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;
(b) each of Borrower's Subsidiaries has the corporate or
limited liability company power and authority to make, deliver
and
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perform its Guarantor's Consent and Reaffirmation of Guaranties
attached to this Amendment and has taken all corporate or limited
liability company action necessary to authorize the execution,
delivery and performance of such Guarantor's Consent and
Reaffirmation of Guaranties; and
(c) each of Borrower and Borrower's Subsidiaries (i) is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, as
appropriate, (ii) has the corporate or limited liability company
power and authority to conduct the business in which it is
currently engaged, (iii) is qualified as a foreign corporation or
limited liability company under the laws of any jurisdiction
where the failure to so qualify would have a material adverse
effect on the business of Borrower and Borrower's Subsidiaries
taken as a whole, and (iv) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith
would not, in the aggregate, have a material adverse effect on
the business, operations, property or financial or other
condition of Borrower and Borrower's Subsidiaries taken as a
whole and would not materially and adversely affect the ability
of Borrower to perform its obligations under this Agreement and
the Notes.
4. Full Force and Effect. The Credit Agreement, including without
limitation 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.
5. Conditions Precedent. The obligations of Agent and Banks
pursuant to this Amendment are subject to the satisfaction of the following
conditions precedent prior to the effective date of this Amendment:
5.1. Execution of Amendment. This Amendment shall have
been executed by Borrower, Required Banks and Agent.
5.2. Execution of Guarantor Consents. Each Guarantor's
Consent and Reaffirmation of Guaranties attached to this
Amendment shall have been duly executed and delivered.
5.3. 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.
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6. Miscellaneous. 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 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.
BORROWER
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M/I SCHOTTENSTEIN HOMES, INC.
Executed at Columbus, Ohio By
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Xxxxxx X. Xxxxxxxxxxxxx
Title: President and Assistant
Secretary
M/I HOMES, INC.
Executed at Scottsdale, Arizona By
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Xxxxxx X. Xxxxxxxxxxxxx
Title: Vice Chairman
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BANKS
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BANK ONE, NA,
as Agent and as a Bank
By
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Xxxxxx X. Xxxx
Title: Senior Vice President
THE HUNTINGTON NATIONAL BANK
By
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R. H. Friend
Title: Vice President
NATIONAL CITY BANK
By
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Xxxxx X. Xxxxxxx
Title: Senior Vice President
BANKBOSTON, N.A.
By
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Xxxxxx X. Xxxxxxx
Title: Vice President
THE FIFTH THIRD BANK OF COLUMBUS
By
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Xxxx X. Xxxxxx
Title: Vice President
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SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By
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Title:
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AMSOUTH BANK
By
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Xxxxx Xxxxxxxx
Title: Senior Vice President
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
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The undersigned Guarantor hereby (a) acknowledges that it has
read the foregoing First Amendment to Fourth Restated Revolving Credit Loan,
Swingline Loan and Standby Letter of Credit Agreement, effective as of April 20,
1999 (the "First Amendment"), and (b) agrees that the undersigned Guarantor's
Guaranties dated as of December 31, 1998 of the obligations of M/I Schottenstein
Homes, Inc. and M/I Homes, Inc. pursuant to the Fourth Restated Revolving Credit
Loan, Swingline Loan and Standby Letter of Credit Agreement as amended by the
First Amendment and all representations, warranties and covenants in each of
such Guaranties continue in full force and effect notwithstanding the First
Amendment.
M/I FINANCIAL CORP., an Ohio corporation
By:
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Xxxx X. Xxxxx
President
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
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The undersigned Guarantor hereby (a) acknowledges that it has
read the foregoing First Amendment to Fourth Restated Revolving Credit Loan,
Swingline Loan and Standby Letter of Credit Agreement, effective as of April 20,
1999 (the "First Amendment"), and (b) agrees that the undersigned Guarantor's
Guaranties dated as of December 31, 1998 of the obligations of M/I Schottenstein
Homes, Inc. and M/I Homes, Inc. pursuant to the Fourth Restated Revolving Credit
Loan, Swingline Loan and Standby Letter of Credit Agreement as amended by the
First Amendment and all representations, warranties and covenants in each of
such Guaranties continue in full force and effect notwithstanding the First
Amendment.
M/I HOMES CONSTRUCTION, INC., an
Arizona corporation
Executed at Scottsdale, Arizona By
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Xxxxxx X. Xxxxxxxxxxxxx, Vice Chairman
of M/I Homes Construction, Inc.
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
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Each of the undersigned Guarantors hereby (a) acknowledges that
it has read the foregoing First Amendment to Fourth Restated Revolving Credit
Loan, Swingline Loan and Standby Letter of Credit Agreement, effective as of
April 20, 1999 (the "First Amendment"), and (b) agrees that each of the
undersigned Guarantor's Guaranties dated as of December 31, 1998 of the
obligations of M/I Schottenstein Homes, Inc. and M/I Homes, Inc. pursuant to the
Fourth Restated Revolving Credit Loan, Swingline Loan and Standby Letter of
Credit Agreement as amended by the First Amendment and all representations,
warranties and covenants in each of such Guaranties continue in full force and
effect notwithstanding the First Amendment.
NORTHEAST OFFICE VENTURE LIMITED
LIABILITY COMPANY, a Delaware limited
liability company, by M/I
Schottenstein Homes, Inc., its sole
member
601RS, LLC, an Ohio limited
liability company, by M/I
Schottenstein Homes, Inc., its sole
member
M/I SCHOTTENSTEIN HOMES SERVICE
CORP., an Ohio corporation
Executed at Columbus, Ohio By
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Xxxxxx X. Xxxxxxxxxxxxx
President and Assistant Secretary of
M/I Schottenstein Homes, Inc.
President of M/I Schottenstein Homes
Service Corp.
MHO, LLC, an Arizona limited liability
company, by M/I Homes, Inc., its sole
member
Executed at Scottsdale, Arizona By
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Xxxxxx X. Xxxxxxxxxxxxx
Vice Chairman of M/I Homes, Inc.
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GUARANTOR'S CONSENT AND REAFFIRMATION OF GUARANTIES
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Each of the undersigned Guarantors hereby (a) acknowledges that
it has read the foregoing First Amendment to Fourth Restated Revolving Credit
Loan, Swingline Loan and Standby Letter of Credit Agreement, effective as of
April 20, 1999 (the "First Amendment"), and (b) agrees that each of the
undersigned Guarantor's Guaranties dated as of December 31, 1998 of the
obligations of M/I Schottenstein Homes, Inc. and M/I Homes, Inc. pursuant to the
Fourth Restated Revolving Credit Loan, Swingline Loan and Standby Letter of
Credit Agreement as amended by the First Amendment and all representations,
warranties and covenants in each of such Guaranties continue in full force and
effect notwithstanding the First Amendment.
MANOR ROAD - 1997, L.L.C., a Virginia
limited liability company
CHEVY CHASE VILLAS, L.L.C., a
Virginia limited company, by Xxxxx
Xxxx - 0000, L.L.C., its 99% Member
By
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Xxxx X. Xxxxxx, Manager of Manor
Road - 1997, L.L.C.
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