Exhibits:

Exhibit A                                Form of Letter of Credit

Exhibit B                                Form of Application

Exhibit C                                Reimbursement Agreement

Exhibit D                                Security Agreement

Schedules:

Schedule 4.3                                Schedule of Company Subsidiaries

[SIGNATURE PAGE FOLLOWS]

EXHIBIT  A

Form of Letter of Credit

U.S. BANK NATIONAL ASSOCIATION                                                      SWIFT:   USBKUS44STL

INTERNATIONAL DEPT. SL-MO-L2IL                                                        TELEX:

721 LOCUST STREET                                                                                     TELEPHONE: 314-418-2875

ST. LOUIS, MO 63101                                                                                 FACSIMILE:                                314-418-1376

EXHIBIT B

 

Form of Application

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 4.3

Schedule of Company Subsidiaries

M/I Financial Corp.

M/I Homes Service LLC

MHO, LLC

M/I Properties, LLC

Northeast Office Venture, LLC

TransOhio Residential Title Agency, Ltd.

M/I Homes of Indiana, L.P.

M/I Homes First Indiana LLC

M/I Homes Second Indiana LLC

M/I Homes of Florida LLC

M/I Homes of Tampa, LLC

M/I Homes of Orlando, LLC

M/I Homes of West Palm Beach, LLC

M/I Homes of Central Ohio, LLC

M/I Homes of Cincinnati, LLC

M/I Homes of Raleigh, LLC

M/I Homes of Charlotte, LLC

M/I Homes of DC, LLC

MHO Holdings, LLC

The Fields at Perry Hall, LLC

Wilson Farm, LLC

M/I Homes of Chicago, LLC

M/I Title Agency, Ltd.

Prince Georges Utilities, LLC

M/I Homes of Houston, LLC

Exhibit 10.2

 

 

Continuing Agreement for Standby Letters of Credit

(this “Agreement")

 

In consideration of the issuance by Citibank, N.A. ("Citibank"), in its discretion, from time to time, of one or more irrevocable standby or direct pay letters of credit (each a "Credit") substantially in accordance with the terms and conditions provided by the undersigned (the "Applicant") on the application corresponding hereto (the "Application") or as otherwise requested by Applicant in writing, and as the same may be amended from time to time, Applicant unconditionally agrees with Citibank as follows:

 

1.	Reimbursement.

Applicant will reimburse Citibank, on demand, for the amount of each payment Citibank makes against a corresponding demand under the Credit. Reimbursement shall be due, for demands made by 12:00 Noon Eastern time, on the day on which Citibank makes such payment under the Credit, and, for demands made after 12:00 Noon Eastern time, on the business day immediately following such demand.

 

2.	Commissions, Fees, Charges and Expenses.

Applicant will pay Citibank (a) commissions and fees on the Credit at such rates and times as Applicant and Citibank may agree in writing or, in the absence of such an agreement, in accordance with Citibank's standard commissions and fees then in effect, to cover the full tenor of the Credit without refund for any unused portion of such tenor, and (b) on demand, all expenses which Citibank may pay or incur in connection with the Credit.

 

3.	Payments; Interest on Past Due Amounts; Computations.

All amounts due from Applicant shall be paid to Citibank at 399 Park Avenue, New York, New York 10043 (or such other address notified to Applicant in writing), without defense, set-off, cross-claim or counterclaim of any kind, in U.S. Dollars and in same day funds, provided that if the amount due is based on Citibank's payment in a currency other than U.S. Dollars, Applicant will pay the equivalent of such amount in U.S. Dollars computed at Citibank's selling rate for cable transfers to the place where, and in the currency in which, Citibank paid such amount, or, at Citibank's option, Applicant will pay in such other currency, place, form and manner as Citibank finds reasonably acceptable. Applicant's obligation to make payments in U.S. Dollars shall not be satisfied by any tender, or any recovery by Citibank pursuant to any judgment, which is expressed in or converted into any currency other than U.S. Dollars, except to the extent that such tender or recovery results in the actual receipt by Citibank in New York of the full amount of U.S. Dollars payable under this Agreement. Any amount not paid when due shall bear interest until paid in full at a daily fluctuating interest rate per annum equal to two percent per annum above the rate of interest announced publicly from time to time by Citibank in New York as Citibank's Base Rate. Applicant authorizes Citibank to charge any account of Applicant for any amount when due. Unless otherwise agreed in writing as to the Credit and subject to any other provision of this Agreement, all computations of commissions, fees and interest shall be based on a 360-day year and actual days elapsed.

 

4.	Additional Costs.

If Citibank determines that the introduction or effectiveness of, or any change in, any law or regulation or compliance with any guideline or request from any central bank or other government or quasi-government authority (whether or not having the force of law) affects or would affect the amount of capital or reserves required or expected to be maintained by Citibank or any corporation controlling Citibank and Citibank determines that the amount of such capital or reserve is increased by or based upon the existence of the Credit, then Applicant shall pay Citibank on demand from time to time additional amounts sufficient in Citibank's judgment to compensate for the increase. Citibank's certificate as to amounts due shall be conclusive, in the absence of manifest error.

 

5.

Taxes.

All payments made to Citibank shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges, or with holdings, and all related liabilities, excluding income taxes imposed by the jurisdiction of Citibank's head office or the office issuing the Credit (all non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities are called "Taxes"). If any Taxes shall be required by law to be withheld or deducted from or in respect of any sum payable under this Agreement, (a) the sum payable under this Agreement shall be increased as may be necessary so that after making all required withholdings or deductions Citibank receives an amount equal to the sum Citibank would have received had no such with holdings or deductions been required, (b) Applicant shall be responsible for payment of the amount to the relevant taxing authority, (c) Applicant shall indemnify Citibank on demand for any Taxes paid by Citibank and any liability (including penalties, interest and expenses) arising from such payment or in respect of such Taxes, whether or not such Taxes were correctly or legally asserted, and (d) Applicant shall provide Citibank with the original or a certified copy of the receipt evidencing each Tax payment within 30 days of the tax payment date.

 

6.	Indemnification.

Applicant will indemnify and hold Citibank and its officers, directors, affiliates, employees, attorneys and agents (each, an "Indemnified Party") harmless from and against any and all claims, liabilities, losses, damages, costs and expenses, including reasonable attorneys' fees and disbursements, other dispute resolution expenses (including fees and expenses in preparation for a defense of any investigation, litigation or proceeding) and costs of collection that arise out of or in connection with: (a) the issuance of the Credit, (b) any payment or action taken or omitted to be taken in connection with the Credit (including any action or proceeding seeking (i) to restrain any drawing under the Credit, (ii) to compel or restrain the payment of any amount or the taking of any other action under the Credit, (iii) to compel or restrain the taking of any action under this Agreement, or (iv) to obtain similar relief (including by way of interpleader, declaratory judgment, attachment or otherwise), regardless of who the prevailing party is in any such action or proceeding), (c) the enforcement of this Agreement or (d) any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government authority or any other cause beyond Citibank's control, except in each of (a) through (d) above, to the extent such claim, liability, loss, damage, cost or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. Applicant will pay on demand from time to time all amounts owing under this section.

 

7.	Obligations Absolute.

Applicant's obligations under this Agreement (the "Obligations") shall be unqualified, irrevocable and payable in the manner and method provided for under this Agreement irrespective of: (i) any lack of validity or enforceability of this Agreement, the Credit, or any other agreement, application, amendment, guaranty, document, or instrument relating thereto, (ii) any change in the time, manner or place of payment of or in any other term of all or any of the Obligations of Applicant or the obligations of any person or entity that guarantees the Obligations, (iii) the existence of any claim, set-off, defense or other right that Applicant may have at any time against any beneficiary or any transferee of the Credit (or any person or entity for whom any such beneficiary or transferee may be acting), Citibank or any other person or entity, whether in connection with any transaction contemplated by this Agreement or any unrelated transaction, or any claim by Citibank or Applicant against the beneficiary of the Credit for breach of warranty, (iv) any exchange, release or non-perfection of any collateral or release or amendment or waiver of or consent to departure from the terms of any guarantee or security agreement, for all or any of the Obligations, (v) any draft, or other document presented under the Credit being forged, fraudulent or invalid or any statement therein being untrue or inaccurate, (vi) any failure by Citibank to issue the Credit (or any amendment thereto) in the form requested by or agreed with Applicant, unless Citibank receives written notice from Applicant of such failure within three business days after Applicant shall have received a copy of the Credit (or such amendment) and such failure is material and consequential, (vii) any previous Obligation, whether or not paid, arising from Citibank's payment against any draft, certificate or other document which appeared on its face to be signed or presented by the proper party but was in fact signed or presented by a party posing as the proper party, (viii) payment by Citibank under the Credit against presentation of a draft or other document that does not comply with the terms and conditions of the Credit unless Citibank receives written notice from Applicant of such discrepancy within three business days following Applicant's receipt of such draft or other document, and (ix) any action or inaction taken or suffered by Citibank or any of its affiliates or correspondents in connection with the Credit or any relevant draft, certificate or other document, if taken in Good Faith (as defined in Article 5 of the New York Uniform Commercial Code).

 

8.	Limitations of Liability.

Without limiting any other provision of this Agreement, Citibank: (i) may rely upon any oral, telephonic, telegraphic, facsimile, electronic, written or other communication believed in Good Faith to have been authorized by Applicant, whether or not given or signed by an authorized person, (ii) shall not be responsible for errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document in connection with the Credit, whether transmitted by courier, mail, telex, any other telecommunication, or otherwise, or for errors in interpretation of technical terms or in translation (and Citibank and its correspondents may transmit Credit terms without translating them), (iii) shall not be responsible for the identity or authority of any signer or the form, accuracy, genuineness, falsification or legal effect of any draft, certificate or other document presented under the Credit if such draft, certificate or other document on its face appears to comply with the terms and conditions of the Credit, (iv) shall not be responsible for any acts or omissions by or the solvency of the beneficiary of the Credit, (v) may accept or pay as complying with the terms and conditions of the Credit any draft, certificate or other document appearing on its face (A) substantially to comply with the terms and conditions of the Credit, (6) to be signed or presented by or issued to any successor of the beneficiary or any other person in whose name the Credit requires or authorizes that any draft, certificate or other document be signed, presented or issued, including any administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator, receiver, or successor by merger or consolidation, or any other person or entity purporting to act as the representative of or in place of any of the foregoing, or (C) to have been signed, presented or issued after a change of name of the beneficiary, (vi) may disregard (A) any requirement stated in the Credit that any draft, certificate or other document be presented to it at a particular hour or place and (B) any discrepancies that do not reduce the value of the beneficiary's performance to Applicant in any transaction underlying the Credit, (vii) may accept as a "draft" any written or electronic demand or other request for payment under the Credit, even if such demand or other request is not in the form of a negotiable instrument, (viii) shall not be responsible for the effectiveness or suitability of the Credit for Applicant's purpose, or be regarded as the drafter of the Credit regardless of any assistance that Citibank may, in its discretion, provide to Applicant in preparing the text of the Credit or amendments thereto, (ix) shall not be liable to Applicant for any consequential or special damages, or for any damages resulting from any change in the value of any foreign currency, services or goods or other property covered by the Credit, (x) may assert or waive application of any UCP or ISP (in each case, as defined below) article primarily benefiting bank issuers, (xi) may honor a previously dishonored presentation under the Credit, whether pursuant to court order, to settle or compromise any claim that it wrongfully dishonored or otherwise and shall be entitled to reimbursement to the same extent as if it had initially honored plus reimbursement of any interest paid by it and (xii) is authorized (but shall not be required) to disregard any non-documentary conditions stated in the Credit. None of the circumstances described in this section shall place Citibank or any of its affiliates or correspondents under any resulting liability to Applicant.

 

9.	Independence.

Applicant acknowledges that the rights and obligations of Citibank under the Credit are independent of the existence, performance or nonperformance of any contract or arrangement underlying the Credit, including contracts or arrangements between Citibank and Applicant and between Applicant and the beneficiary of the Credit. Citibank shall have no duty to notify Applicant of its receipt of a demand presented under the Credit or of its decision to honor such demand. Citibank may, without incurring any liability to Applicant or impairing its entitlement to reimbursement under this Agreement, honor the Credit despite notice from Applicant of, and without any duty to inquire into, any defense to payment or any adverse claims or other rights against the beneficiary of the Credit or any other person. Citibank shall have no duty to request or require the presentation of any document, including any default certificate, not required under the terms and conditions of the Credit. Citibank shall have no duty to seek any waiver of discrepancies from Applicant, nor any duty to grant any waiver of discrepancies that Applicant approves or requests. Citibank shall have no duty to extend the expiration date or term of the Credit or to issue a replacement letter of credit on or before the expiration date of the Credit or the end of such term.

 

10.	Transfers.

If, at Applicant's request, the Credit is issued in transferable form, Citibank shall have no duty to determine the proper identity of anyone appearing in any transfer request, draft, or other document as transferor or transferee, nor shall Citibank be responsible for the validity or correctness of any transfer.

 

11.	Extensions and Modifications of the Credit.

This Agreement shall be binding upon Applicant with respect to any extension or modification of the Credit made at Applicant's request or with Applicant's consent. Applicant's Obligations shall not be reduced or impaired in any way by any agreement by Citibank and the beneficiary of the Credit extending Citibank's time to honor or to give notice of discrepancies.

 

12.	Collateral.

If at any time and from time to time Citibank, in its discretion, requires collateral (or additional collateral), Applicant will on demand assign and deliver to Citibank as security for the Obligations, cash collateral of a value satisfactory to Citibank or make such cash payment as Citibank may require.

 

13.	Covenants of Applicant.

Applicant will (a) comply with all U.S. and non-U.S. laws, regulations and rules (including foreign exchange control regulations) now or later applicable to the Credit, transactions related to the Credit, or Applicant's execution, delivery and performance under this Agreement, and deliver to Citibank, upon reasonable request, satisfactory evidence of such compliance, (b) deliver to Citibank, upon reasonable request, independently audited financial statements and other information concerning Applicant's financial condition and business operations, (c) permit Citibank to inspect its books and records on reasonable notice and (d) inform Citibank immediately upon Applicant becoming aware of the occurrence of an Event of Default (as defined below).

 

14.	Representations and Warranties of Applicant.

Applicant represents and warrants that (a) it is validly existing and in good standing under the laws of the jurisdiction in which it is organized, (b) its execution, delivery and performance of this Agreement are within its powers, have been duly authorized, do not contravene any contract binding on or affecting it or any of its properties, do not violate any applicable law or regulation, and do not require any notice, filing or other action to or by any governmental authority, (c) this Agreement is valid and binding upon Applicant, (d) the financial statements most recently received by Citibank from Applicant fairly present its financial condition in accordance with generally accepted accounting principles, and there has been no material adverse change in the business, financial condition or operations of the Applicant and its subsidiaries, taken as a whole, since the date of such financial statements; and (e) there is no pending or threatened action which may materially adversely affect its financial condition or business or which purports to affect the validity or enforceability of this Agreement, the Credit or any transaction related to the Credit. Each request by Applicant for a Credit or any amendment thereto shall constitute its representation and warranty that the foregoing statements are true and correct as if made on the date of such request.

 

15.

Default.

Each of the following shall be an "Event of Default" under this Agreement: (a) Applicant's failure to pay when due any obligation to Citibank or its subsidiaries or affiliates (under this Agreement or otherwise), (b) Applicant's failure to perform or observe any other term or covenant of this Agreement, (c) Applicant's breach of any representation or warranty made in this Agreement or any document delivered by it under this Agreement, (d) Applicant's dissolution or termination, (e) institution by or against Applicant of any proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the appointment of a receiver, trustee, or other similar official for Applicant or for any substantial part of its property and such proceedings are not dismissed within 60 days, (f) any actual or threatened seizure, vesting or intervention by or under authority of a government by which Applicant's management is displaced or its authority or control of its business is curtailed, (g) attachment or restraint of any funds or other property which may be in, or come into, the possession or control of Citibank or of any third party acting on Citibank's behalf, for the account or benefit of Applicant, or the issuance of any order of any court or other legal process against the same, or (h) the occurrence of any of the above events with respect to any person or entity which has heretofore or hereafter guaranteed or provided any collateral security for any of the Obligations.

 

16.

Remedies.

If any Event of Default shall have occurred and be continuing, the amount of the Credit as well as any or all Obligations, whether or not matured or contingent, shall, at Citibank's option, become due and payable immediately without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Applicant; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to Applicant under applicable bankruptcy law, the amount of the Credit and all Obligations shall automatically become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Applicant.

 

17.

Set-off.

If any Event of Default shall occur and be continuing, Citibank may set off and apply any and all deposits pledged by Applicant to Citibank as security for the Credits (the “Collateral”) against any and all of the Obligations, irrespective of whether or not Citibank shall have made any demand under this Agreement and although such Collateral or Obligations may be unmatured or contingent.

 

18.	Waiver of Immunity.

Applicant acknowledges that this Agreement is, and the Credit will be, entered into for commercial purposes and, to the extent that Applicant now or later acquires any immunity from jurisdiction of any court or from any legal process with respect to itself or its property, Applicant now irrevocably waives its immunity with respect to the Obligations.

 

19.	Notices; Co-Applicants; Interpretation; Severability.

Notices shall be effective, if to Applicant, when sent to its address indicated below the signature line and, if to Citibank, when received at 399 Park Avenue, New York, New York 10043, with a copy to Citicorp North America, Inc., 3800 Citibank Center, Tampa FL 33610, or as to either party, such other address as either may notify the other in writing. Notices to the beneficiary of the Credit shall be effective when sent to the address maintained in Citibank's letter of credit records for such beneficiary, and Applicant agrees to hold Citibank harmless with respect to any claim by the beneficiary of non-receipt of such a notice. If this Agreement is signed by two or more entities, (i) each such entity shall be deemed an "Applicant" hereunder, (ii) each Applicant shall be jointly and severally liable for all Obligations and waives any defense that might otherwise be available to a guarantor of such Obligations, and (iii) notices from Citibank in connection with this Agreement or the Credit to any Applicant and notices from, or the consent of, any Applicant in connection with this Agreement or the Credit shall be sufficient to bind all Applicants. Headings are included only for convenience. The term "including" means "including without limitation." If any provision of this Agreement is held illegal or unenforceable, the validity of the remaining provisions shall not be affected.

 

20.	Successors and Assigns.

This Agreement shall be binding upon Applicant and its successors and permitted assigns, and shall inure to the benefit of and be enforceable by Citibank, its successors and assigns. Applicant shall not voluntarily transfer or otherwise assign any of its obligations under this Agreement. Citibank may transfer or otherwise assign its rights and obligations under this Agreement, in whole or in part, and shall be forever relieved from any liability with respect to the portion of Citibank's rights or obligations transferred or assigned. Applicant acknowledges that information pertaining to Applicant as it relates to this Agreement or the Credit may be disclosed to (actual or potential) transferees, assignees, affiliates, contractors or, if required by law, court order or mandate, government authorities. This Agreement shall not be construed to confer any right or benefit upon any person or entity other than Applicant and Citibank and their respective successors and permitted assigns.

 

21.	Modification; No Waiver.

None of the terms of this Agreement may be waived or amended except in a writing signed by the party against whose interest the term is waived or amended. Forbearance, failure or delay by Citibank in the exercise of a remedy shall not constitute a waiver, nor shall any exercise or partial exercise of any remedy preclude any further exercise of that or any other remedy. Any waiver or consent by Citibank shall be effective only in the specific instance and for the specific purpose for which it is given and shall not be deemed, regardless of frequency given, to be a further or continuing waiver or consent.

 

22.	Multiple Role Disclosure.

Citibank and its affiliates offer a wide range of financial services, including back-office letter of credit processing services on behalf of financial institutions and letter of credit beneficiaries. Such services are provided internationally to a wide range of customers, some of whom may be Applicant's counterparties or competitors. Applicant acknowledges and accepts that Citibank may perform more than one role in relation to a particular Credit, including to advise the Credit notwithstanding the selection by Applicant of an additional or alternative advising bank.

 

23.	Entire Agreement; Remedies Cumulative; Delivery by Facsimile.

This Agreement constitutes the entire agreement between the parties concerning Citibank's issuance of the Credit for Applicant's account and supersedes all prior or simultaneous agreements, written or oral. All rights and remedies of Citibank under this Agreement and other documents delivered in connection with this Agreement are cumulative and in addition to any other right or remedy under this Agreement, the Credit or applicable law. Applicant may submit an executed Application for the Credit in original form or it may do so by fax or via a Citibank electronic banking platform such as "CitiDirect", and Applicant will be bound by any instructions so given. Delivery of a signed signature page to this Agreement by facsimile transmission shall be effective as, and shall constitute physical delivery of, a signed original counterpart of this Agreement.

 

24.	Termination; Surviving Provisions.

This is a continuing agreement and shall remain in effect until Citibank's receipt of written notice of termination from Applicant. Termination shall not release Applicant from any liability for Obligations existing on, or resulting from, or incidental to a Credit issued on or before, or issued pursuant to any Citibank commitment existing on, the date on which Citibank receives such notice. Restrictive provisions in this Agreement, such as indemnity, tax, immunity and jurisdiction provisions shall survive termination of this Agreement. If the Credit is issued in favor of any bank, Citibank branch or other entity in support of an undertaking issued by such bank, branch or entity on behalf of Applicant or Citibank, Applicant shall remain liable under this Agreement (even after expiry of the Credit) for amounts paid and expenses incurred by Citibank with respect to the Credit or such undertaking until such time as Citibank or such other bank, branch or entity shall have no further liability, under applicable law, in connection with such undertaking.

 

25.	Governing Law; Governing Rules.

(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF APPLICANT AND CITIBANK HEREUNDER SHALL BE GOVERNED BY AND SUBJECT TO THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE U.S. FEDERAL LAWS.

(b) Applicant agrees that Citibank may issue any Credit subject to the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce ("ICC”) Publication Nos. 500 or 600 (the "VCP") or the International Standby Practices, ICC Publication No. 590 (the "ISP") or, at Citibank's option, such later revision thereof or other ICC rules in effect at the time of issuance of the Credit. Citibank's privileges, rights and remedies under ICC rules shall be in addition to, and not in limitation of, its privileges, rights and remedies expressly provided for herein. The UCP and the ISP (or such later revision of either), shall serve, in the absence of proof to the contrary, as evidence of general banking usage with respect to the subject matter thereof. (c) Applicant agrees that for matters not addressed by the UCP or the ISP, each Credit shall be subject to and governed by the laws of the State of New York and applicable U.S. Federal

laws. If, at Applicant's request, a Credit expressly chooses a state or country law other than New York State law, or is silent with respect to UCP, ISP or governing law, Citibank shall not be liable for any payment, cost, expense or loss resulting from any action or inaction taken by Citibank if such action or inaction is or would be justified under UCP, ISP, New York law, applicable U.S. Federal law or the law governing the Credit.

 

26.	Jurisdiction; Service of Process.

Applicant now irrevocably submits to the non-exclusive jurisdiction of any state or federal court sitting in New York, New York, for itself, and in respect of any of its property and, if a law other than New York State law has been chosen to govern the Credit, Applicant also now irrevocably submits to the non-exclusive jurisdiction of any court sitting in such jurisdiction. Applicant agrees not to bring any action or proceeding against Citibank in any jurisdiction not described in the immediately preceding sentence. Applicant irrevocably waives any objection to venue or any claim of inconvenience. Applicant agrees that any service of process or other notice of legal process may be served upon it by mail or hand delivery if sent to:

at:

 

which Applicant now designates its authorized agent for service of process in relation to the Credit and this Agreement. (If no authorized agent is designated in the space provided above, Applicant agrees that process shall be deemed served if sent to its address given for notices under this Agreement.) Applicant agrees that nothing in this Agreement shall affect Citibank's right to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Applicant in any other jurisdiction. Applicant agrees that final judgment against it in any action or proceeding shall be enforceable in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified copy of which shall be conclusive evidence of the judgment.

 

Global Transaction Services

 

www.transactionservices.citigroup.com

 

©2007 Citibank, N.A. All rights reserved. Citi and Arc Design and CitiDirect are service marks of Citigroup Inc., used and registered throughout the world.

27.	JURY TRIAL WAIVER. APPLICANT AND CITIBANK EACH IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM, COUNTERCLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE CREDIT, OR ANY DEALINGS WITH ONE ANOTHER RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

Applicant:

 

Company Name

By:  Authorized Signer

Print Name

Title

Address

Date

 

Co-Applicant (if any):

 

Company Name

By:  Authorized Signer

Print Name

Title

Address

Date (For Citibank Use Only)

Approvals to Issue

Relationship Manager (Signature & Stamp)

Other required Signature & Stamp

EXHIBIT 10.3

FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT (“this Amendment”) dated as of August 16, 2010 (the “Effective Date”) is entered into by M/I HOMES, INC. , an Ohio corporation (the "Borrower"), and REGIONS BANK , an Alabama banking corporation (the "Lender").

 

Recitals

 

A.           The Borrower and the Lender are parties to a certain Letter of Credit Agreement dated as of July 27, 2009 (the “Credit Agreement”).

 

B.           The Borrower has requested that the Lender amend the Credit Agreement to make certain modifications to the Credit Agreement as set forth herein.

 

C.           The Lender has agreed to make such modifications, provided that the Borrower and the Lender enter into this Amendment.

 

Agreement

 

NOW, THEREFORE , in consideration of the foregoing recitals and in further consideration of the mutual agreements set forth herein, the Borrower and the Lender hereby agree as follows, with such agreements to become effective as of the Effective Date:

 

1.   Rules of Construction .  This Amendment is subject to the rules of construction set forth in the Credit Agreement.

 

2.   Definitions .  Capitalized terms used in this Amendment and not otherwise defined herein have the meanings defined for them in the Credit Agreement.

 

3.   Representations and Warranties of Borrower .  The Borrower represents and warrants to the Lender as follows:

 

(a)   Representations and Warranties in Financing Documents .  All of the representations and warranties set forth in the Financing Documents are true and correct on and as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date.

 

(b)   No Default .  As of the Effective Date, the Borrower is in compliance with all the terms and provisions set forth in the Financing Documents on its part to be observed or performed, and no Event of Default, nor any event that upon notice or lapse of time or both would constitute such an Event of Default, has occurred and is continuing.

 

(c)   Borrower's Organizational Documents .  The Borrower's organizational documents have not been amended since July 27, 2009.

 

4.   Amendments to Credit Agreement .

 

(a)   Recital A of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

A.           Borrower has asked the Bank to issue, at any time and from time to time, irrevocable standby letters of credit (the "Letters of Credit") in favor of the beneficiaries identified by Borrower (the “Beneficiaries”) in a form customarily used or otherwise approved by the Bank in an aggregate amount not to exceed $10,000,000 (the “Commitment”).

 

(b)   The definition of “Minimum Coverage Amount” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“ Minimum Coverage Amount ” shall mean, at any time, 102% of the Letter of Credit Exposure.

 

(c)   The definition of “Syndicated Credit Agreement” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“ Syndicated Credit Agreement ” shall mean that certain Second Amended and Restated Credit Agreement effective as of June 9, 2010, executed by Borrower, the other parties signatory thereto, PNC Bank, National Association, as Administrative Agent for itself and for the lenders and the other lenders signatory thereto, as amended, restated or supplemented from time to time.

 

(d)   The definition of “Termination Date” set forth in Section 1.1 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

“ Termination Date ” shall mean August 31, 2011.

 

(e)   Section 2.1(a)(i) of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

(i)           No Letter of Credit shall be issued that by its terms expires later than the Termination Date; provided, however, if any Letter of Credit does have an expiration date later than the Termination Date, such Letter of Credit may expire by its terms on a date later than the Termination Date (but in no event beyond a date that is twenty-four months from the Termination Date) so long as the Control and Pledge Agreement is in effect and Borrower maintains the Minimum Coverage Amount.

 

(f)   Section 2.1(a)(iv) of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

(iv)           Notwithstanding any other provisions to the contrary set forth herein, Letters of Credit deemed issued hereunder may contain a statement to the effect that such credit is issued for the account of any subsidiary or affiliate of Borrower provided that notwithstanding such statement, Borrower shall be the actual account party for all purposes of this Agreement for such Letters of Credit and such statement shall not affect Borrower’s reimbursement obligations hereunder with respect to such Letters of Credit.

 

(g)   Section 4.4 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

SECTION 4.4                           Minimum Coverage Amount

 

Borrower shall maintain the Minimum Coverage Amount at all times.

 

(h)   The first sentence of Section 5.3 of the Credit Agreement shall be amended to read, in its entirety, as follows:

 

If an Event of Default exists under this Agreement and the Letters of Credit remain outstanding, Borrower agrees to pay to the Bank, promptly upon demand by the Bank therefor, such amount that, when added to the aggregate cash collateral in the Account (as defined in the Control and Pledge Agreement) equals 102% of the maximum amount available to be drawn under the Letters of Credit.

 

(i)   The first sentence of Section 6.11 of the Credit Agreement is hereby amended to read, in its entirety, as follows:

 

Borrower may terminate this Agreement and the Commitment before the Termination Date, in whole but not in part, by giving the Bank 30 days prior written notice; provided , however , no termination by Borrower shall be effective until (a) Lender shall have received cash collateral in an amount that, when added to the aggregate cash collateral in the Account equals 102% of all Obligations which remain contingent and (b) all other Obligations have been fully and finally paid and performed.

 

5.   Fees and Legal Expenses .  The Borrower hereby agrees to pay all reasonable invoiced legal costs and expenses incurred in connection with the review, analysis and preparation of this Amendment.  Such expenses and legal costs shall be payable upon the execution of this Amendment and shall be non-refundable.

 

6.   References in Financing Documents .  All references in the Financing Documents to the "Credit Agreement" shall mean the Credit Agreement as amended by this Amendment.

 

7.   Financing Documents to Remain in Effect .  Except as specifically modified by this Amendment, the Credit Agreement and the other Financing Documents shall remain in full force and effect in accordance with their respective terms.

 

8.   No Novation, etc.   Nothing contained in this Amendment shall be deemed to constitute a novation of the terms of the Financing Documents, nor impair any liens granted to the Lender thereunder, nor release any obligor from liability for any of the Obligations, nor affect any of the rights, powers or remedies of the Lender under the Financing Documents, nor constitute a waiver of any provision thereof, except as specifically set forth in this Amendment.

 

9.   Governing Law, Successors and Assigns, etc.   This Amendment shall be governed by and construed in accordance with the laws of the State of Alabama and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

10.   Headings .  The descriptive headings of the sections of this Amendment are for convenient reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

11.   Entire Agreement .  This Amendment constitutes the entire understanding to date of the parties hereto regarding the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements of the parties thereto with respect to the subject matter hereof.

 

12.   Severability .  If any provision of this Amendment shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

13.   Counterparts .  This Amendment may be executed in any number of counterparts, each of which so executed shall be deemed an original, but all such counterparts shall together constitute but one and the same instrument.

 

14.   No Waiver .  Nothing contained herein shall be construed as a waiver or acknowledgement of, or consent to any breach of or Event of Default under the Credit Agreement and the Financing Documents not specifically mentioned herein, and the waivers and consents granted herein are effective only in the specific instance and for the purposes for which given.

 

15.   Effect of this Amendment .  This Amendment amends and supplements the Credit Agreement and shall be construed as if it were a part thereof for all purposes.  Any representation or warranty contained herein that shall prove to be false or misleading in any material respect at the time made shall constitute an Event of Default under the Credit Agreement and the other Financing Documents in accordance with the Credit Agreement as if such representation or warranty had been contained in the Credit Agreement, and any default by the Borrower in the performance or observance of any provision of this Amendment shall constitute an Event of Default under that section as if such provision had been contained in the Credit Agreement.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF , the Borrower and the Lender have caused this Amendment to be executed and delivered by their duly authorized representatives to be effective as of the Effective Date.

M/I HOMES, INC.

By                                                                 

Title:                                                       

REGIONS BANK

By                                                                            

Its:                                                                 

Exhibit 10.4

AMENDMENT NO. 1 TO CREDIT AGREEMENT

THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “ Amendment ”) is entered into at Columbus, Ohio, as of August 16, 2010 (the “ Amendment Effective Date ”), by and between M/I Homes, Inc. (“ Borrower ”) and The Huntington National Bank   (“ Lender ”). This Amendment amends and modifies a certain Credit Agreement dated as of July 27, 2009 (as amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ”) by and between Borrower and Lender. All capitalized terms used in this Amendment that are not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.

RECITALS:

A.           Borrower and Lender executed the Credit Agreement setting forth the terms of certain extensions of credit to Borrower; and

B.           Borrower has requested that Lender increase the amount of the Letter of Credit Commitment, extend the Maturity Date of the Letter of Credit Commitment, provide for the issuance of any Letter of Credit with an expiration date of up to thirty-six months, and amend and modify terms and covenants in the Credit Agreement accordingly, and Lender is willing to do so upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto for themselves and their successors and assigns do hereby agree, represent and warrant as follows:

1.   The definitions of “ Letter of Credit Commitment ,” “ Letter of Credit Fee, ” “ Master Credit Facility ” and “ Maturity Date ,” set forth in Section 1.1, “ Certain Defined Terms ,” of the Credit Agreement are hereby amended respectively to recite as follows:

“ Letter of Credit Commitment ” means the commitment of such Lender to provide Letter of Credit Exposure in an aggregate amount not to exceed $10,000,000.

“ Letter of Credit Fee ” shall mean quarterly fees equal to one and one-half percent (1.50%) per annum of the average daily Letter of Credit Exposure in effect from time to time, which fees shall be due and payable quarterly in arrears on the first day of January, April, July and October of each year or partial year during the time any Letter of Credit Exposure is outstanding.

“ Master Credit Facility ” means that certain Credit Agreement, dated as of June 9, 2010, by and among Borrower, the lenders party thereto, PNC Bank, National Association, as administrative agent for the lenders party thereto and the other agents party thereto, as amended, restated, supplemented or otherwise modified from time to time.

“ Maturity Date ” means August 31, 2012.

2.   Paragraphs (a), “ Types and Amounts ” and (e) “ Letter of Credit Fees Upon Issuance ” of Section 2.1, “ Letters of Credit ,” of the Credit Agreement are hereby amended respectively to recite as follows:

(a)             Types and Amounts .  Lender shall not have any obligation to and shall not (i) issue (or amend) any Letter of Credit if on the date of issuance (or amendment), before or after giving effect to the Letter of Credit requested hereunder, the aggregate outstanding dollar amount of Letters of Credit Exposure would exceed the Letter of Credit Commitment, calculated as of the date of issuance of any Letter of Credit; or (ii) issue any Letter of Credit which has an expiration date, or amend any Letter of Credit such that it has an expiration date, later than the date that is the earlier of (A) thirty-six (36) months after the date of issuance thereof or (B) August 31, 2015.

(e)             Letter of Credit Fees .  Borrower agrees to pay to Lender: (i) the Letter of Credit Fees, which fees shall be due and payable quarterly in arrears on the first day of January, April, July and October of each year or partial year during the time any Letter of Credit Exposure is outstanding, and (ii) all customary fees and other issuance, amendment, document examination, negotiation and presentment expenses and related charges in connection with the issuance, amendment, presentation of Letter of Credit Drafts, and the like customarily charged by Lender with respect to Letters of Credit, including without limitation, standard commissions with respect to commercial Letters of Credit payable at the time of invoice of such amounts.

3.   Conditions of Effectiveness .  This Amendment shall become effective as of the Amendment Effective Date, upon satisfaction of all of the following conditions precedent:

(a)           Lender shall have received execution and delivery of, by all parties signatory thereto, originals, or completion as the case may be, to the satisfaction of Lender and its counsel, containing such information requested by Lender and its counsel and reflecting the absence of any material fact or issues and in all respect satisfactory to Lender, each of the following Loan Documents:

(i)           Two duly executed originals of this Amendment; and

 

(ii)           A closing certificate in form satisfactory to Lender, with copies of resolutions attached evidencing the authorization the increase in the amount of the Letter of Credit Commitment; and

 

(b)           Lender shall have received a commitment fee in respect of this Amendment in the amount of $15,000;   and

(c)           The representations contained in paragraphs 4 and 5 below shall be true and accurate.

4.   Representations and Warranties .  Borrower represents and warrants to Lender as follows: (a) after giving effect to this Amendment, each representation and warranty made by or on behalf of Borrower in the Credit Agreement and in any other Loan Document is true and correct in all respects on and as of the date hereof as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to a date prior hereto; (b) the execution, delivery and performance by Borrower of this Amendment and each other Loan Document have been duly authorized by all requisite corporate or organizational action on the part of Borrower and will not violate any Requirement of Law applicable to Borrower; (c) this Amendment has been duly executed and delivered by Borrower, and each of this Amendment, the Credit Agreement and each other Loan Document as amended hereby constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with the terms thereof; and (d) no event has occurred and is continuing, and no condition exists, which would constitute an Event of Default or a Pending Default.

5.   Amendment Legal and Authorized .                                                                (a) All necessary corporate action has been taken in order to duly authorize Borrower’s execution and delivery of this Agreement and the other Loan Documents; (b) this Agreement and the other Loan Documents constitute valid and binding obligations enforceable in accordance with their respective terms; (c) the execution of this Amendment and the compliance with all the provisions of the Loan Documents (i) are within the organizational powers of Borrower, and (ii) will not conflict with, result in any breach in any of the provisions of, constitute a default under, or result in the creation of any Lien (other than a Permitted Lien) upon any property of Borrower under the provisions of the Master Credit Facility, including without limitation Section 7.1 thereof, or any other agreement, charter instrument, bylaw, or other instrument to which Borrower is a party or by which it may be bound; and (d) there are no limitations in any indenture, contract, agreement, mortgage, deed of trust or other agreement or instrument to which Borrower is now a party or by which Borrower may be bound with respect to the payment of any Obligations under this Amendment or any other Loan Document, or, to the extent applicable, the ability of Borrower to incur the Indebtedness pursuant to this Amendment or any Loan Document in connection herewith.

6.   Reference to and Effect on the Loan Documents .  (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “Credit Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar import, and each reference in the Loan Documents to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.  (b) Except to the extent amended or modified hereby, all of the representations, warranties, terms, covenants and conditions of the Credit Agreement and the other Loan Documents shall remain as written originally and in full force and effect in accordance with their respective terms and are hereby ratified and confirmed, and nothing herein shall affect, modify, limit or impair any of the rights and powers which Lender may have hereunder or thereunder.  Nothing in this Amendment shall constitute a novation.  The amendments set forth herein shall be limited precisely as provided for herein, and shall not be deemed to be a waiver of, amendment of, consent to or modification of any of Lender’s rights under, or of any other term or provisions of, the Credit Agreement or any other Loan Document, or of any term or provision of any other instrument referred to therein or herein or of any transaction or future action on the part of Borrower which would require the consent of Lender.

7.   No Waiver .  Nothing in this Amendment shall be construed to waive, modify, or cure any default or Event of Default   that exists or may exist under the Credit Agreement or any other Loan Document.

8.   Waiver of Right to Trial by Jury .  EACH PARTY TO THIS AMENDMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AMENDMENT OR ANY LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

9.   Counterparts .  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, and all of which together will constitute one and the same instrument.  Receipt by Lender of a facsimile copy of an executed signature page hereof will constitute receipt by Lender of an executed counterpart of this Amendment.

10.   Costs and Expenses .  Borrower agrees to pay on demand in accordance with the terms of the Credit Agreement all costs and expenses of Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and all other Loan Documents entered into in connection herewith, including the reasonable fees and out-of-pocket expenses of Lender’s counsel with respect thereto.

11.   Governing Law .  This Amendment and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Ohio.

12.   Headings .  Section headings in this Amendment are included herein for convenience of reference only and will not constitute a part of this Amendment for any other purpose.

13.   Patriot Act Notice .  Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L.10756 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Act.

[Signature Page Follows.]

IN WITNESS WHEREOF, Borrower and Lender have hereunto set their hands as of the date first set forth above.

BORROWER:

M/I HOMES, INC.

By:                                                                            

Its:                                                                            

LENDER:

THE HUNTINGTON NATIONAL BANK

By:                                                                            

Its:                                                                            

Exhibit 10.5

 

 

CONTINUING LETTER OF CREDIT AGREEMENT

 

In consideration of the Bank (as defined below) (a) previously having issued (including those listed on Schedule 1 attached hereto), and in its discretion issuing from time to time, letters of credit of any type (including without limitation, documentary or standby) and all amendments thereto (hereinafter each individually, and all collectively called the “Credit”) substantially in accordance with an Application (as defined below) for a Credit tendered to the Bank, and (b) the Bank agreeing to release the participation rights of the lenders under the Credit Agreement (as defined below), the undersigned (hereinafter, individually and collectively, the “Applicant”) agrees:

 

1.   Definitions .  As used herein:  (A) “ Agreement ” means each Application by the Applicant for a Credit and this Continuing Letter of Credit Agreement, as each may be modified; (B) “ Application ” means, if Applicant uses electronic communication facilities to apply for or instruct the Bank as to the contents of a Credit, information sufficient to enable the Bank to prepare and issue or amend a Credit for Applicant’s account transmitted by electronic message (which may, but need not, be computer generated), including facsimile, directed to the Bank by Applicant using such identification codes, passwords, and other security procedures as the Bank and Applicant may agree are commercially reasonable from time to time; or a written and signed application with sufficient information delivered to the Bank to enable it to prepare and issue or amend a Credit for Applicant’s account or any account of a subsidiary of Applicant; (C) “ Bank ” means Wells Fargo Bank, National Association (as successor by merger with Wachovia Bank, National Association) and all of its branches, whether in the United States or foreign and any of Bank’s affiliates that issue letters of credit; Applicant authorizes and directs the Bank to select the branch or affiliate which will issue or process any Credit; and for the purposes of Sections 4, 7 and 9, “Bank” includes correspondents of Bank; (D) “ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks are authorized or required to close at the place where Bank is obligated to honor a presentation or otherwise act under the Credit or this Agreement; (E) “ Collateral ” shall have the meaning ascribed thereto in the Security Agreement; (F) “ Credit Agreement ” means that certain Second Amended and Restated Credit Agreement dated as of October 6, 2006 (as amended, supplemented, modified, amended and restated or replaced from time to time)   among Applicant, Bank and the other lenders party thereto from time to time, and JPMorgan Chase Bank, N.A. as agent; (G)“ Draft ” means any draft (sight or time), receipt, acceptance, cable, SWIFT or other written demand for payment; (H) “ Event of Default ” means (i) failure to pay or perform any of the Obligations when due; (ii) termination of Applicant’s existence; (iii) institution of any proceeding under any law relating to bankruptcy, insolvency or reorganization by or against Applicant, or the appointment of a receiver or similar official for Applicant or any of Applicant’s property; (iv) seizure or forfeiture of Applicant or a material portion of its property; (v) a change in control of Applicant under Section 9(9) of the Credit Agreement or any similar covenant or default under the terms of the Credit Agreement as hereinafter amended, supplemented, modified, amended and restated or replaced with Bank being a party thereto; (vi) attachment or restraint of or other legal process against property in which Applicant has an interest under the Agreement or the Security Agreement in the control of Bank or any third party on behalf of Bank; (vii) any statement to Bank made by Applicant or on its behalf is incorrect or misleading in any material respect; (viii) Applicant’s failure to withhold, collect or pay any material tax when assessed or due; (ix) any other act or circumstance leading Bank in good faith to deem itself insecure with respect to Obligations and the value of the Collateral; (x) a Default or an Event of Default (as defined in the Credit Agreement) shall occur; or (xi) Applicant or any Subsidiary of Applicant shall default under Section 9(6) of the Credit Agreement or any similar covenant or default under the terms of the Credit Agreement as hereinafter amended, supplemented, modified, amended and restated or replaced with Bank being a party thereto; (I) “ Good Faith ” means honesty in fact in the conduct or transaction concerned; (J) “ ISP 98 ” means the International Standby Practices, International Chamber of Commerce (“ICC”) Publication No. 590, or any subsequent revisions or restatement thereof which may be adopted by the ICC and in use by the Bank; (K) “ Jurisdiction ” means the state of North Carolina; (L) “ Obligations ” means all obligations of any, some or all of parties comprising the Applicant to Bank now or hereafter existing under the Agreement, the Security Agreement, or otherwise with respect to any documents related to Credits that have been or will be issued; (M) “ Prime Rate ” means that changing rate of interest announced publicly from time to time by Bank as its Prime Rate; (O) “ Property ” means all present and future inventory, equipment, farm products and other goods, documents, policies and certificates of insurance, securities, securities entitlements, securities accounts, financial assets, investment property, instruments, letters-of-credit and letter-of-credit rights, chattel paper, accounts, general intangibles, money, and any and all other types of property (including, but not limited to, deposit accounts and certificates of deposit), together with all cash and non cash proceeds and products thereof, and all Applicant’s rights thereto and all documents relative thereto; (P) “ Security Agreement ” means that certain Security Agreement by and between Applicant and Bank dated June 4, 2010; and (Q) “ UCP ” means the Uniform Customs and Practice for Documentary Credits, ICC Publication Number 500, or any subsequent revision or restatement thereof adopted by the ICC and in use by the Bank.  Terms not defined herein will, if defined therein, have the same meaning as given in the Uniform Commercial Code as amended from time to time.

 

2.             Applicant’s Reimbursement of Bank :  (A) Applicant shall pay Bank on demand in immediately available funds (in United States currency) (i) the amount of each Draft drawn or purporting to be drawn under the Credit (whether drawn before, on or after the expiry date stated in the Credit); provided that if the Credit provides for acceptance of a time draft or incurrence of a deferred payment obligation, reimbursement shall be due sufficiently in advance of its maturity to enable the Bank to arrange for its cover in same day funds to reach the place where it is payable no later than the date of its maturity; (ii) any amount by which Bank’s cost of payment under the Credit exceeds the amount paid by Applicant; (iii) interest on all amounts not paid when due at a fluctuating rate per annum equal to the Prime Rate plus 2%, but in no event at an interest rate exceeding the highest rate permitted by applicable law.  (B) Foreign Currency .  If the Draft is payable in other than U.S. currency, Applicant will pay Bank the amount in U.S. currency from Bank at Bank’s current selling rate of exchange for delivery to the place of payment in the currency and amount in which such Draft was drawn.  If there is no current selling rate of exchange generally offered by Bank for effecting such payment, Applicant will pay Bank on demand an amount which Bank deems necessary to pay or provide for the payment of the Obligations, and Applicant shall remain liable for any deficiency which may result if such amount in U.S. currency proves to be insufficient to effect full payment or reimbursement to Bank at the time when such rate of exchange shall again be current.  (C) Fees Costs and Expenses .  Applicant will pay Bank (i) fees in respect of the Credit at such rates and times as Applicant and Bank may agree in writing or, in the absence of such an agreement, in accordance with Bank’s standard fees then in effect (including, if applicable, application fees, issuance fees, maintenance fees, amendment fees, drawing fees, discrepancy fees, acceptance or deferred payment obligation fees, transfer fees and assignment of letter of credit proceeds fees); and (ii) on demand, all costs and expenses that Bank incurs in connection with the Credit or this Agreement, including (a) reasonable attorneys’ fees and disbursements and other dispute resolution expenses to protect or enforce Bank’s rights or remedies under or in connection with the Credit, this Agreement or any separate security agreement, guaranty or other agreement or undertaking supporting this Agreement or to respond to any notice of forgery, fraud, abuse or illegality in connection with this Agreement, the Credit, any presentation under the Credit or any transaction underlying the Credit (including an active defense by Bank in any action in which an injunction is sought or obtained against presentation or honor), (b) costs and expenses in connection with any requested amendment to or waiver under the Credit or this Agreement, (c) costs and expenses in complying with any governmental exchange, currency control or other laws, rules or regulations of any country now or hereafter applicable to the purchase or sale of, or dealings in, foreign currency, (d) any stamp taxes, recording taxes, or similar taxes or fees payable in connection with the Credit or this Agreement, and (e) any adviser, confirmer, or other nominated person fees and expenses that are chargeable to Applicant or Bank.  References in this Agreement to attorneys’ fees and disbursements shall include any reasonably allocated costs of internal counsel.  In addition to the foregoing, Applicant will pay Bank with respect to each Credit outstanding the following fees: (1) for any issuance or renewal of a Credit, an amount equal to the greater of (x) $475 and (y) an amount equal to 0.125% per annum times the aggregate face amount of such Credit; (2) for any amendment to a Credit, an amount equal to the greater of (x) $200 and (y) an amount equal to 0.125% per annum times the increased amount of such Credit; (3) an amount equal to 1.250% per annum times the daily applicable amount of such Credit (collectively, the “LC Fees”).  Applicant shall pay the LC Fees (i) in quarterly installments in arrears on the eighteenth (18th) day (or, if such day is not a Business Day, then the next preceding Business Day) following the last day of each quarter ending March, June, September and December for fees earned through the last day of each such quarter then ended, and (ii) on the expiration date of each Credit (including the Expiration described below).  The LC Fees shall be calculated on a basis of a hypothetical year of 360 days for the actual number of days elapsed.  (D) Increased Costs and Taxes .  Applicant shall pay Bank on demand increased costs or Bank’s reduction in yield from any new or changed reserve, capital, special deposit, tax, insurance or other requirement or guideline affecting the Bank’s or its parent’s contingent or absolute rights or obligations under or in connection with this Agreement or any Credit provided the Bank acts reasonably to avoid or minimize the increased costs or reduction in the yield and computes the same on a reasonable basis.  Applicant agrees that all payments hereunder shall be made without withholding, deduction or set-off and shall be made free and clear of taxes other than federal and state income and franchise taxes imposed on the Bank.  Applicant and Bank acknowledge that all letters of credit will be issued from a U.S. location to domestic beneficiaries.  (E) Automatic Debit for Payment .  Applicant authorizes Bank to (i) debit the Account (as defined in the Security Agreement) for any payments due under this Agreement and (ii) if an Event of Default is continuing, to debit any of Applicant’s other accounts at Bank for any payments due under this Agreement, and Applicant further certifies that it holds legitimate ownership of each of these accounts and preauthorizes these debits as part of its ownership rights.  (F)   Expiration .  Applicant agrees that all Credits shall be issued on or before June 1, 2011, and no Credit shall be issued, extended or renewed if it would cause such Credit to expire after June 1, 2012.  All Credits shall expire on or before June 1, 2012.

3.             Independence; Applicant Responsibility .  Applicant is responsible for preparing or approving the text of the Credit as issued by Bank and as received by any Beneficiary, including responsibility for any terms and conditions thereof that are ineffective, ambiguous, inconsistent, unduly complicated, or reasonably impossible to satisfy.  Applicant’s ultimate responsibility for the final text shall not be affected by any assistance Bank may provide such as drafting or recommending text or by Bank’s use or refusal to use text submitted by Applicant.  Bank does not represent or warrant that the Credit will satisfy Applicant’s requirements or intentions.  Applicant is responsible for the suitability of the Credit for Applicant’s purposes.  Applicant will examine the copy of the Credit, and any other documents sent by Bank in connection with the Credit, and shall notify Bank of any non-compliance with Applicant’s instructions, and of any discrepancy in any document under any presentment or other irregularity, within 3 Business Days after Applicant receives or should have received any of such documents (the “Required Time”); provided, however, if the end of the Required Time falls on a weekend or Bank holiday, the deadline shalt be extended to the end of the next Business Day.  Applicant’s failure to give timely and specific notice during the Required Time of objection shall automatically waive Applicant’s objection, authorize or ratify Bank’s action or inaction, and preclude Applicant from raising the objection as a defense or claim against Bank.

 

4.             Claims Against Bank; Waivers; Exculpations; Limitations of Liability, Ratification; Accounting .  (A) Applicant’s Obligations shall be irrevocable and unconditional and performed strictly in accordance with the terms of this Agreement, irrespective of: (i) any change or waiver in the time, manner or place of payment of or any other term of the Obligations (including any release) of any other party who, if applicable, has guaranteed or is jointly and severally liable for any of the Obligations or granted any security therefor; (ii) any exchange, change or release of any Collateral or other collateral (including any failure of Bank to perfect any security interest therein), for any of the Obligations, (iii) any presentation under the Credit being forged, fraudulent or any statement therein being untrue or inaccurate, (iv) any agreement by Bank and any Beneficiary extending or shortening Bank’s time after presentation to examine documents or to honor or give notice of discrepancies.  (B) Without limiting the foregoing, it is expressly agreed that the Obligations of Applicant to reimburse or to pay Bank pursuant to this Agreement will not be excused by ordinary negligence, gross negligence, wrongful conduct or willful misconduct of Bank.  However, the foregoing shall not excuse Bank from liability to Applicant in any independent action or proceeding brought by Applicant against Bank following such reimbursement or payment by Applicant to the extent of any unavoidable direct damages suffered by Applicant that are caused directly by Bank’s gross negligence or willful misconduct; provided that (i) Bank shall be deemed to have acted with due diligence and reasonable care if it acts in accordance with standard letter of credit practice of commercial banks located in the place that the Credit is issued; and (ii) Applicant’s aggregate remedies against Bank for wrongfully honoring a presentation or wrongfully retaining honored documents shall in no event exceed the aggregate amount paid by Applicant to Bank with respect to the honored presentation, plus interest.  (C) Without limiting any other provision of the Agreement, Bank and, as applicable, its correspondents: (i) may rely upon any oral, telephonic, telegraphic, facsimile, electronic, written or other communication believed in good faith to have been authorized by Applicant, whether or not given or signed by an authorized person; (ii) shall not be responsible for any acts or omissions by, or the solvency of, any Beneficiary, any nominated person or any other person; (iii) May honor any presentation or drawing under the Credit that appears on its face substantially to comply with the terms and conditions of the Credit; (iv) (a) may permit partial shipment under the Credit, except as otherwise expressly stated in the Credit, and may honor the relative Drafts without inquiry regardless of any apparent disproportion between the quantity shipped and the amount of the relative Draft and the total amount of the Credit and the total quantity to be shipped under the Credit, and (b) if the Credit specifies shipments in installments within stated periods and the shipper fails to ship in any designated period, shipments of subsequent installments may nevertheless be made in their respective designated periods, and the relative Drafts may be honored; (v) may disregard any requirement of the Credit that presentation be made to it at a particular place or by a particular time of day (but not any requirement for presentation by a particular day) or that notice of dishonor be given in a particular manner, and Bank may amend or specify any such requirement in the Credits; (vi) may accept as a draft any written or electronic demand or request for payment under the Credit, even if nonnegotiable or not in the form of a draft, and may disregard any requirement that such draft, demand or request bear any or adequate reference to the Credit; (vii) may discount or authorize the discount of any accepted draft or deferred payment obligation incurred under any Credit; (viii) may honor, before or after its expiration, a previously dishonored presentation under the Credit, whether pursuant to court order, to settle or compromises any claim that is wrongfully dishonored or otherwise, and shall be entitled to reimbursement to the same extent (if any) as if it had initially honored plus reimbursement of any interest paid by it; (ix) may honor, upon receipt, any drawing that is payable upon presentation of a statement advising negotiation or payment (even if such statement indicates that a draft or other document is being separately delivered) and shall not be liable for any failure of any Draft or document to arrive or to conform with the Draft or document referred to in the statement or any underlying transaction; (x) may retain proceeds of the Credit based on a valid exercise of Bank’s set off rights or an apparently applicable attachment order or blocking regulation; (xi) may select any branch or affiliate of Bank or any other bank to act as advising, transferring, confirming and/or nominated bank under the law and practice of the place where it is located; (xii) shall not be responsible for any other action or inaction taken or suffered by Bank or its correspondents under or in connection with the Credit, with any presentation thereunder or with any Collateral, if required or permitted under any applicable domestic or foreign law or letter of credit practice.  Examples of laws or practice that may be applicable, depending upon the terms of the Credit and where and when it is issued, include the UCC, the Uniform Rules for Demand Guarantees (“URG”) the UCP, the ISP, published rules of practice, applicable standard practice of banks that regularly issue letters of credit, and published statements or interpretations on matters of standard bank practice.  (D) Applicant’s taking control, possession or retention of any documents presented under or in connection with the Credit (whether or not the documents are genuine) or of any Property for which payment is supported by the Credit, shall ratify Bank’s honor of the documents and preclude Applicant from raising a defense, set-off or claim with respect to Bank’s honor of the documents.  (E) Neither Bank nor any of its correspondents shall be liable in contract, tort, or otherwise, for any punitive, exemplary, consequential, indirect or special damages.  Any claim by Applicant under or in connection with this Agreement or the Credit shall be reduced by an amount equal to the sum of (i) the amount (if any) saved by Applicant as a result of the breach or other wrongful conduct complained of; and (ii) the amount (if any) of the loss that would have been avoided had Applicant taken all reasonable steps to mitigate any loss, including by enforcing its rights in the transaction(s) underlying the Credit, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Bank to effect a cure.

 

5.             Security Agreement .  The provisions of this Section shall only supplement, not supersede, provisions of the Security Agreement or any other security agreement in favor of Bank which are inconsistent herewith.  (A) Security Interest .  As security for the payment and performance of the Obligations, Applicant assigns, pledges and grants to Bank a security interest in the Collateral.  The security interest of Bank in Collateral shall continue until all Obligations are repaid, and shall not be invalidated by reason of the delivery or possession of the Property to Applicant or anyone else.  (B) Subrogation .  As additional security for the Obligations, Bank shall be subrogated to the Applicant’s rights in respect of any transaction in any way related to the Credit or any Drafts, including rights against Beneficiary or any collateral.  (C) Actions Regarding Collateral .  Applicant will execute and deliver to Bank any documents, and take any action, which Bank deems necessary or desirable to evidence or perfect any security interest in favor of Bank, to acquire possession of any Property, or to protect Bank’s interests with respect to any Collateral, including, without limitation, transferring or registering Property in the name of Bank; in order to accomplish any of the foregoing, Bank may, at its option, at any time and without notice to Applicant, transfer to, or register in the name of, Bank or its nominees any Collateral; and further, Bank is irrevocably appointed as attorney-in-fact for Applicant and authorized, without notice to Applicant, to execute and deliver all such documents and to take all such actions on behalf of Applicant, including, without limitation, the execution, delivery and/or filing of collateral control agreements, financing statements and trust receipt statements.  This appointment is coupled with an interest.  (D) Care of Property; Modification .  Bank will exercise care in the preservation of Collateral if such Property is in the custody of Bank; provided, however, its standard of care for Property in its custody is the lesser of that required by applicable law or that requested by Applicant in writing.  Applicant shall remain obligated under the terms of the Agreement notwithstanding the release or substitution of any Collateral at any time(s), or any delay, extension of time, renewal, compromise or other indulgence granted by Bank related to any Obligations, or to any promissory note, Draft, bill of exchange or other instrument related to any Obligations.  Applicant waives notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and consents to be bound thereby as fully as if Applicant had expressly agreed thereto in advance.  The proceeds of any Collateral may be applied, in whole or in part, by Bank to pay any matured, or to anticipate the payment of any unmatured, Obligations.

 

6.             Communications.   (A) Internet .  Applicant may electronically initiate the issuance and amendment of any Credit and retrieve or send information about any outstanding Credit by accessing an Internet site maintained by the Bank (the ‘Web Site”) through Applicant’s computer equipment and web browser software.  Applicant is responsible to provide its own computer equipment and web browser software and shall be responsible for all acquisition, installation, repair and maintenance costs associated therewith.  Applicant shall select its own internet service provider.  Applicant shall comply promptly with all instructions on the Web Site governing its use and the security measures to be maintained in connection with its use.  Applicant authorizes the Bank to receive data and act upon Applicant’s requests which Bank receives over the Web Site.  Applicant agrees that Bank may rely on the authenticity and accuracy of messages and information received by Bank on the Web Site purporting to be from the Applicant.  Applicant agrees: (i) to protect all assigned operator identification passwords and accepts full responsibility for any compromise of security; (ii) to limit access to the Web Site to those persons authorized by Applicant through the use of security procedures implemented and enforced by the Applicant; (iii) accurately to input any data fields necessary to initiate, release or cancel any transaction; (iv) to access the Web Site as often as necessary consistent with Applicant’s business activities it conducts on the Web Site, which may be daily, and retrieve and review outstanding Credit detail reports; and (v) to notify the Bank promptly of any error or defect in the report.  Applicant acknowledges and understands that the instructions sent by it through the internet to the Bank and the information retrieved by the Applicant from the Web Site through the internet will be encrypted, but that such encryption is not completely secure and is not free from errors, poor transmissions, interception, forgery, viruses, tampering, destruction, deciphering or other delay or casualty.  The Bank shall not be liable for any loss, claim or liability, cost or expense arising from: (a) any of the foregoing; (b) failure of any internet service provider to provide its services; (c) failure of communications media, legal restrictions; (d) act of God, fire or other catastrophe, computer failure or any other cause or circumstance beyond the Bank’s control; (e) any unauthorized person’s use of or access to the Web Site; or (f) failure of Applicant to report errors or defects promptly.  (B) Electronic Systems .  Applicant may desire to transmit and receive by means of facsimile, open intemet communication, or other unguarded electronic communications (hereinafter collectively the “electronic systems”) Applications and other paper-writings to or from the Bank.  To induce the Bank to accept communication via electronic systems, Applicant shall: i) ensure that its officers, agents and employees, will at all times follow and maintain the integrity of any security established by the Applicant and the Bank; ii) immediately notify the Bank in the event that Applicant should have reason to believe that the security established for electronic systems transmission has been breached or compromised in any manner; iii) ensure that only authorized personnel selected and controlled by the Applicant request action(s) by transmittal of document(s) by electronic systems; iv) ensure that any documents transmitted to the Bank by means of electronic systems shall be a complete and accurate copy and if signed be executed by personnel authorized by the Applicant; and v) maintain its software and equipment and any privacy control device within such software or equipment without any reliance on or responsibility by the Bank.  The Applicant acknowledges and agrees that the Bank shall: i) not be responsible to the Applicant for any loss or damage arising from the use of unguarded electronic systems, including access or misuse of Applicant’s confidential information, transmission of a virus, or failed, incomplete or inaccurate transmission; ii) not be responsible to assure that, its software and equipment for receiving messages or documents from electronic systems will be compatible with that of Applicant or available at all times for Applicant’s use; iii) have absolute discretion but without liability, for any reason whatsoever, not to act upon documentation received by electronic systems; provided, however, that the Bank shall notify the undersigned promptly should it elect to defer action until the original documentation is physically presented to the Bank; iv) without any liability on its part to do so, have the right at its discretion to make further inquiries and demand further verification to determine the validity of any document prior to taking any action; and v) have the right to assume that any reproduction of documentation received by electronic systems constitutes a full, complete and accurate reproduction of the original documentation and that all signatures are authorized and genuine.  (C) Indemnity .  Separate and independent from any other indemnity set forth in this Agreement, the Applicant hereby indemnifies and holds the Bank harmless against any and all loss, liability, damage or expenses of whatever kind and nature arising from Bank’s acceptance and/or delivery of information and Applications over its Web Site or by electronic systems.

 

7.             Multiple Parties Signing Agreement.   If the Agreement or any Application is signed by Applicant and one or more other parties, it shall be the joint and several obligation of each, but Applicant shall have the exclusive right to issue all instructions on any matters relating to the Credit.  Notwithstanding the foregoing, the Applicant agrees that it is liable for the obligations related to any Credit irrespective of whether any Credit is requested or applied for jointly with, or issued for, any of Applicant’s subsidiaries.

 

8.             Event of Default.   On and after any Event of Default: (A) the amount of the Credit, as well as any other Obligations, shall, at Bank’s option, become due and payable immediately without demand or notice to Applicant or if contingent, may be treated by Bank as due and payable for its maximum face amount; (B) Bank may set off and apply any deposits or any other indebtedness at any time owing by Bank to or for Applicant’s credit or account against any matured or unmatured Obligations, irrespective of whether or not Bank shall have made any demand under the Agreement and although such deposits, indebtedness or Obligations may be unmatured or contingent; (C) Bank may exercise all rights and remedies available to it in law or equity; and (D) in respect of any Collateral, Bank may exercise all the rights and remedies of a secured party under the Uniform Commercial Code or any other applicable law and also may, without notice except as required by law, sell such Property or any part thereof in one or more parcels at public or private sale, for cash, on credit or for future delivery, and on such other terms as Bank may deem commercially reasonable.  Written notice mailed or delivered to Applicant at the address specified in the Agreement at least five business days prior to the date of public sale or prior to the date after which private sale is to be made shall be reasonable, adequate notice.  Applicant will pay on demand all costs and expenses (including reasonable attorneys fees and legal expenses, incurred prior to or after a bankruptcy filing) related to the custody, preservation or sale of, or collection from, or realization upon, any of such Property and related to the collections of the Obligations and the enforcement of Bank’s rights against Property.  In the event of sale of or collection from the Collateral, Bank may in its discretion hold the proceeds as Collateral or apply the proceeds as Bank deems appropriate to the payment of costs and expenses or to one or more of the Obligations, whether or not then due.

 

9.             Indemnification .  Applicant will indemnify and hold harmless Bank and its officers, directors, affiliates, employees, attorneys and agents (each, an “Indemnified Party”) from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys’ fees and disbursements and other dispute resolution expenses (including fees and expenses in preparation for a defense of any investigation, litigation or proceeding) and costs of collection) that arise out of or in connection with: (A) the Credit or any pre-advice of its issuance; (B) any payment or action taken or omitted to be taken in connection with the Credit or this Agreement (including any action or proceeding to (i) restrain any presentation, (ii) compel or restrain any payment or the taking of any other action under the Credit, (iii) obtain damages for wrongful dishonor or honor of the Credit or for breach of any other duty arising out of or related to the Credit, (iv) compel or restrain the taking of any action under this Agreement or (v) obtain similar relief (including by way of interpleader, declaratory judgment, attachment or otherwise), regardless of who the prevailing party is in any such action or proceeding); (C) an adviser or a confirmer or other nominated person seeking to be reimbursed, indemnified or compensated, (D) any beneficiary requested to issue its own undertaking seeking to be reimbursed, indemnified or compensated or (E) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of letter of credit proceeds, or holder of an instrument or document; (F) the enforcement of this Agreement or any rights or remedies under or in connection with this Agreement, the Collateral or the Credit; (G) the release by Applicant of any Credit to any third party prior to its issuance by the Bank; or (H) any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (including with respect to any document or property received under this Agreement or the Credit ) or any other cause beyond the Bank’s control, except to the extent such liability, loss, damage, cost or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted directly from such Indemnified party’s gross negligence or willful misconduct.  Applicant will pay on demand from time to time all amounts owing under this section.  If and to the extent that the obligations of Applicant under this section are unenforceable for any reason, Applicant agrees to make the maximum contribution to the payment of such obligation that is permissible under applicable law.

 

10.             Governing Law; UCP, ISP 98 .  The UCP or ISP 98 as applicable to each Credit governs this Agreement and is incorporated herein.  Subject to the other provisions of the Agreement, the Agreement shall be governed by and construed in accordance with the substantive laws of the Jurisdiction, without regard to conflicts of law principles, except to the extent that such law is inconsistent with the UCP or 1SP 98, as applicable.  In the event any provision of the UCP or ISP 98, as applicable, is or is construed to vary from or be in conflict with any provision of any applicable law of the Jurisdiction or the federal law of the United States, to the extent permitted by law, the UCP or the ISP 98, as applicable, shall govern or be read to explain the applicable law.  Unless Applicant specifies otherwise in its application for the Credit, Applicant agrees that Bank may issue the Credit subject to the UCP or ISP 98 or, at Bank’s option, such later revision of either thereof as is in effect at the time of issuance of the Credit.  Bank’s privileges, rights and remedies under the UCP, ISP 98 or such later revision shall be in addition to, and not in limitation of, its privileges, rights, and remedies expressly provided for herein.  The UCP and ISP 98 shall serve, in the absence of proof to the contrary, as evidence of standard practice with respect to the subject matter thereof.

 

11.             Savings Clause .  Whenever possible, each provision of the Agreement shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision of the Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of the Agreement.

 

12.             Bankruptcy and Forfeiture Reinstatement .  If any consideration transferred to Bank in payment of, or as collateral for, or in satisfaction of the Obligations, shall be voided in whole or in part as a result of (A) a subsequent bankruptcy or insolvency proceeding; (B) any forfeiture or in rem seizure action or remedy; (C) any fraudulent transfer or preference action or remedy; or (D) any other criminal or equitable proceeding or remedy, then Bank may at its option recover the Obligations or the consideration so voided from Applicant In such event, Bank’s claim to recover the voided consideration shall be a new and independent claim arising under the Agreement, and shall be jointly and severally due and payable immediately by Applicant.

 

13.             Miscellaneous .   The rights and remedies granted to Bank in the Agreement are in addition to all other rights or remedies afforded to Bank under applicable law, equity or other agreements.  The terms of the Agreement may not be waived or amended, unless the parties consent in writing.  The Agreement shall be binding on Applicant’s heirs, executors, administrators, successors and permitted assigns, and shall inure to the benefit of Bank’s successors and assigns.  Bank can assign this Agreement and its rights to reimbursement regarding any Credit without Applicant’s consent.  Applicant shall not assign any rights or remedies related to the Agreement or the Credit without written consent of the Bank.  Any notice to Applicant, if mailed, shall be deemed given when mailed, postage paid, addressed to Applicant at the address on the Application or such other address furnished by Applicant to Bank.  This Section shall not be deemed to be an exclusive list of each means of notice from one party to the other.  The Agreement will continue in full force and effect until the expiration or cancellation of each Credit and all outstanding Obligations have been satisfied in a manner satisfactory to Bank, and Applicant requests termination in writing.  Applicant will comply with all laws, regulations and customs now or hereafter applicable to the Agreement or to the transaction related to the Credit, and will furnish evidence of compliance as Bank may require.  Applicant shall maintain or cause to be maintained insurance covering any Property for which payment is supported by a Credit in amounts, from insurers, or through parties satisfactory to the Bank and will furnish such evidence of insurance as and when Bank may require.  This Agreement contains the final, complete and exclusive understanding of, and supersedes all prior or contemporaneous, oral or written, agreements, understandings, representations and negotiations between, the parties relating to the subject matter of this Agreement.

 

14.             Consent to Jurisdiction and Venue .  IN ANY PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THE AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, APPLICANT IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN ANY COUNTY IN THE JURISDICTION AND AGREES NOT TO RAISE ANY OBJECTION TO THE JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN THE JURISDICTION.  APPLICANT AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO IT.

 

15.             WAIVER OF JURY TRIAL .  TO THE EXTENT PERMITTED BY APPLICABLE LAW, APPLICANT AND WHEN IT ISSUES A CREDIT, BANK KNOWINGLY AND VOLUNTARILY WAIVE ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON, ARISING OUT OF, OR RELATING TO THE AGREEMENT OR THE CREDIT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT THERETO.  THIS WAIVER IS A MATERIAL INDUCEMENT FOR BANK TO ISSUE THE CREDIT.

 

16.             Effectiveness of Agreement .  Applicant agrees that the terms and conditions of this Continuing Letter of Credit Agreement shall be continuing and shall apply to any Credit currently, or in the future, issued by the Bank on Applicant’s behalf.

 

[signature page follows]

 

 

We, the undersigned parties, hereby agree and authorize this application to be processed as a joint application for credit.  We intend to apply for joint credit and acknowledge your reliance on all of our incomes to repay this obligation.  If any co-applicants are not present or have not signed below, the first party signing below certifies that it has permission from all non-signing co-applicants to apply for credit on behalf of the non-signing co-applicants, including, but not limited to, providing information about the non-signing co-applicants.

 

Very truly yours,

 

M/I Homes, Inc., an Ohio corporation

 

By:                                                                 Date: June 4, 2010

Phillip G. Creek

Its:  Executive Vice President and Chief Financial Officer