LETTER OF CREDIT PLEDGE FORM
PLEDGE
AGREEMENT, dated as of July 27, 2009, between M/I Homes, Inc., a
corporation organized and existing under the laws of the State of
Ohio (together with its successors and permitted assigns, the
“ Pledgor ”), and CITIBANK, N.A. (together with
its successors and assigns, the “Bank”).
PRELIMINARY STATEMENTS:
(1) The Pledgor has deposited the
amount of $1 in a special non-interest bearing cash collateral
account (the “ Account ”) with the Bank at its
office at 399 Park Avenue, New York, New York 10022, Account No.
3685-5852, ABA No. 021-000-089, in the name of the Pledgor but
under the sole control and dominion of the Bank and subject to the
terms of this Agreement.
(2) The Bank has been requested
to issue, and after the date hereof may be requested to issue (it
being understood that any future issuances are at the sole
discretion of the Bank), one or more of its irrevocable letters of
credit listed on Schedule A attached hereto and made a part hereof,
which Schedule A may be amended, supplemented or otherwise modified
from time to time pursuant to the terms hereof (each such letter of
credit, as amended or otherwise modified from time to time, a
“ Letter of Credit ”) for the benefit of the
beneficiaries listed on Schedule A, in the face amounts listed on
Schedule A, and for the account of the Pledgor pursuant
to one or more Applications and Agreements for Standby Letters of
Credit listed on Schedule A (together with any related
instruments and documents, as the same may be amended, supplemented
or otherwise modified from time to time, the “
Applications ”).
(3) It is a condition precedent to
the issuance of the Letters of Credit that the Pledgor shall have
made the pledge contemplated by this Agreement. The
Pledgor will derive substantial direct and indirect benefit from
the transactions contemplated by the Letters of Credit.
NOW THEREFORE, in consideration of the premises
and in order to induce the Bank to issue the Letters of Credit, the
Pledgor hereby agrees as follows:
SECTION 1. Pledge
. The Pledgor hereby pledges to the Bank, and grants to
the Bank a security interest in and express right of setoff
against, all of the right, title and interest of the Pledgor in, to
and under the following property, whether now owned or existing or
hereafter from time to time acquired or coming into existence
(collectively, the “ Collateral ”):
(a) the Account, all funds held
therein or credited thereto, all rights to renew or withdraw the
same, and all certificates and instruments, if any, from time to
time representing or evidencing the Account;
(b) any notes, deposit accounts,
certificates of deposit or instruments evidencing the Account or
any funds held in or credited to the Account or otherwise carried
in the Account;
(c) any financial assets (as defined
in Section 8-102(a)(9) of the Uniform Commercial Code in effect in
the State of New York from time to time (the “Code”))
or investment property arising out of the investment of any funds
held in or credited to the Account or otherwise carried in the
Account and any security entitlement (as defined in Section
8-102(a)(17) of the Code) with respect to such financial assets or
investment property;
(d) any interest, dividends, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of the then existing Collateral; and
(e) all proceeds of any and all of
the foregoing Collateral.
The Pledgor and the Bank agree that the Bank
shall have sole control and dominion over the
Collateral.
SECTION 2. Security for
Obligations . This Agreement secures the payment of
(a) all obligations of the Pledgor now or hereafter existing under
and in connection with each Application, whether for reimbursement
of amounts drawn under any Letter of Credit, interest, fees,
expenses or otherwise, and (b) all obligations of the Pledgor now
or hereafter existing under this Agreement (all such obligations of
the Pledgor being collectively the
“Obligations”).
SECTION 3. Delivery of
Collateral . All certificates or instruments, if
any, representing or evidencing the Collateral or any portion
thereof shall be delivered to and held by or on behalf of the Bank
pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance
satisfactory to the Bank. The Bank shall have the right,
at any time in its discretion and without notice to the Pledgor, to
transfer to or register in the name of the Bank or any of its
nominees any or all of the Collateral. In addition, the
Bank shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates
or instruments of smaller or larger denominations.
SECTION 4. Maintaining the
Account . So long as any Letter of Credit shall
remain outstanding or any amount shall remain unpaid under an
Application, the Pledgor will maintain the Account with the Bank;
and it shall be a term and condition of the Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Account, that:
(a) the Bank will have sole control
and dominion over the Account and any security entitlement relating
to the Collateral;
(b) all financial assets (other than
cash) credited to the Account will be registered in the name of the
Bank, indorsed to the Bank or in blank or credited to a security
account (as defined in Section 8-501 of the Code) maintained in the
name of the Bank, and in no case will any such financial asset be
registered in the Pledgor's name, payable to its order or specially
indorsed to the Pledgor unless further indorsed to the Bank or in
blank;
(c) all interest on the Account,
distributions in respect of any financial assets credited to the
Account and all other proceeds of the Collateral will be deposited
and held in the Account; and
(d) except as otherwise provided by
the provisions of Section 6 and Section 13, no amount (including
interest on the Account or distributions in respect of any
financial assets credited to the Account or other proceeds of any
Collateral) will be paid or released to or for the account of, or
withdrawn by or for the account of, the Pledgor or any other person
or entity from the Account.
The Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of
the Federal Reserve System and of any other appropriate banking or
governmental authority, as may now or hereafter be in
effect. The parties acknowledge and agree that the
Account is a “deposit account” with respect to any cash
credited to the Account and is a “securities account”
with respect to any financial assets (other than cash) credited to
the Account, and that the Bank is a “securities
intermediary” (as defined in Section 8-102(14) of the Code)
with respect to such securities account.
SECTION 5. Investing of Amounts
in the Account . If requested by the Pledgor, the
Bank will, subject to the provisions of Section 6 and Section 13,
from time to time (a) invest amounts on deposit in the Account in
sweep investments offered by the Bank or such deposit accounts,
certificates of deposit, bankers' acceptances, debt instruments,
investment property or financial assets as the Pledgor may select
and the Bank may approve and (b) invest interest paid on the
property referred to in clause (a) above, and reinvest other
proceeds of any such property which may mature or be sold, in each
case in sweep investments offered by the Bank or such deposit
accounts, certificates of deposit, bankers' acceptances, debt
instruments, investment property or financial assets as the Pledgor
may select and the Bank may approve. Interest and
proceeds that are not invested or reinvested as provided above will
be deposited and held in the Account. The Bank and the Pledgor
agree that all property (other than cash) referred to in this
Section 5 and carried in the Account shall be treated as financial
assets under Article 8 of the Code.
SECTION 6. Release of Amounts
. So long as no Event of Default (as defined in any
Application, an “Event of Default”) or event which,
with the giving of notice or the lapse of time, or both, would
become an Event of Default shall have occurred and be continuing,
the Bank will pay and release to the Pledgor or at its order, at
the request of the Pledgor, accrued interest due and payable on the
Account and income in respect of financial assets credited to the
Account (other than income constituting a return of the principal
thereof, whether upon sale, redemption or maturity).
SECTION
7. Re
