8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  July 30, 2009

M/I HOMES, INC.
(Exact name of registrant as specified in its charter)
Ohio	1-12434	31-1210837
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

3 Easton Oval, Suite 500, Columbus, Ohio	43219
(Address of Principal Executive Offices)	(Zip Code)

     (614) 418-8000

(Telephone Number)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 2 – FINANCIAL INFORMATION

ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On July 27, 2009, the Company entered into four separate secured Letter of Credit facilities (“LOC Facilities”).  The letter of credit capacity within each facility is $8.75 million for a total capacity of $35.0 million.  The LOC Facilities mature on dates ranging from August 31, 2010 to September 30, 2010 and do not contain any covenants.  One facility is uncommitted and has no expiration date.  The LOC Facilities contain cash collateral requirements ranging for 100% to 105% and borrowing rates range from 100 to 150 basis points.  Each of these facilities contains cross default provision with our Bank Credit Facility.  The foregoing summary is qualified in its entirety by reference to the related agreements filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this Form 8-K.

ITEM 2.02  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 30, 2008, M/I Homes, Inc. issued a press release reporting financial results for the three and six months ended June 30, 2009.  A copy of this press release, including information concerning forward-looking statements and factors that may affect our future results, is attached hereto as Exhibit 99.1.  The information in Exhibit 99.1 is furnished pursuant to Item 2.02 on Form 8-K.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBIBITS.

(c) Exhibits:

Exhibit No.	Description of Documents
10.1	Master Letter of Credit Facility Agreement by and between U.S. Bank National Association and M/I Homes, Inc. dated July 27, 2009.
10.2	Letter of Credit Pledge by and between Citibank, N.A. (together with its successors and assigns, the “Bank) and M/I Homes, Inc. dated July 27, 2009.
10.3	Letter of Credit Agreement by and between Regions Bank and M/I Homes, Inc. dated July 27, 2009
10.4	Credit Agreement by and between The Huntington National bank and M/I Homes, Inc. dated July 27, 2009.
99.1	Press release dated July 30, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 30, 2009

M/I Homes, Inc.

By:	/s/ Ann Marie W. Hunker
	Ann Marie W. Hunker
	Vice President and Corporate Controller
	(Principal Accounting Officer)

Index to Exhibits

Exhibit No.	Description of Documents
10.1	Master Letter of Credit Facility Agreement by and between U.S. Bank National Association and M/I Homes, Inc. dated July 27, 2009.
10.2	Letter of Credit Pledge by and between Citibank, N.A. (together with its successors and assigns, the “Bank) and M/I Homes, Inc. dated July 27, 2009.
10.3	Letter of Credit Agreement by and between Regions Bank and M/I Homes, Inc. dated July 27, 2009
10.4	Credit Agreement by and between The Huntington National bank and M/I Homes, Inc. dated July 27, 2009.
99.1	Press release dated July 30, 2009.

EX-10.1

Exhibit 10.1

MASTER LETTER OF CREDIT FACILITY AGREEMENT

This Master Letter of Credit Facility Agreement (this "Agreement") is entered into at Columbus, Ohio, as of the 27th day of July, 2009 (the “Effective Date”), by and between U.S. BANK NATIONAL ASSOCIATION, a national banking association (the "Bank"), and M/I HOMES, INC., an Ohio corporation (the "Company").

1.Letter of Credit Facility.

1.1.           Generally.  Subject to the terms and conditions hereof, Bank, upon the proper application by the Company, will issue standby letters of credit in the form of Exhibit "A" attached hereto, or such other form as the Bank may approve from time to time (each, a "Letter of Credit"), provided that the aggregate stated value outstanding at any one time shall in no event exceed $8,750,000.00 (the "Facility"), and provided, further, that all Letters of Credit issued under this Section 1.1 shall expire not later than one (1) year from the date of issuance.  The Company's right to obtain the issuance of Letters of Credit under the Facility shall terminate on September 30, 2010.

Each request for a Letter of Credit submitted by the Company shall, at the option of the Bank, be accompanied by the following materials (collectively, the "LC Application Materials"):

a.   An application (the "Application") in the form of Exhibit "B" attached hereto and made a part hereof, or such other form as the Bank may require from time to time;

b.   An executed reimbursement agreement (the "Reimbursement Agreement") in the form of Exhibit "C" attached hereto and made a part hereof, or such other form as the Bank may require from time to time;

c.   An executed security agreement (the "Security Agreement") in the form of Exhibit "D" attached hereto and made a part hereof, or such other form as the Bank may require from time to time;

d.   Cash (the "Cash Collateral") in an amount equal to not less than 101% of the face amount of the applicable Letter of Credit, which the Bank shall deposit in an Account (hereinafter defined);

e.   Such information as the Bank reasonably requests regarding the intended use of the Letter of Credit;

f.   Such other documents or materials as the Bank may request from time to time.

With respect to each request for the issuance of a Letter of Credit, the Company shall present the LC Application Materials to the Bank not later than noon, Columbus, Ohio time, on a Business Day that is not less than four (4) Business Days prior to the Business Day on which issuance of the Letter of Credit is desired.  "Business Day" means a day which is not a Saturday or Sunday or a legal holiday and on which the Bank is not required by law or other governmental action to close in Ohio.

At the request of the Company, and subject to the terms and conditions of this Agreement, the Bank shall issue Letters of Credit on behalf of one or more Company Subsidiaries (hereinafter defined), provided, however, that the applicable Company Subsidiary(ies) and the Company shall be jointly and severally liable for all obligations pursuant to this Agreement, the applicable Reimbursement Agreement, and the other Loan Documents.

Notwithstanding anything in any Reimbursement Agreement to the contrary, to the extent that any provision of this Agreement or any Security Agreement is inconsistent with any Reimbursement Agreement, the terms of this Agreement and any Security Agreement shall prevail.  Specifically, without limitation, the security interest granted by the Company to the Bank pursuant to any Reimbursement Agreement shall be limited to the Collateral (as defined in any applicable Security Agreement), and the Bank shall not file any financing statement that contains a collateral description that is broader than such definition of Collateral.

1.2           Account(s).  The Bank shall deposit the Cash Collateral in one or more accounts at the Bank specified in the Security Agreement (each, an "Account").  Each Account shall be an interest bearing account (unless the Company requests a non-interest bearing account) satisfactory to the Bank, including as of the Effective Date, without limitation, money market accounts and commercial paper open accounts.  The Cash Collateral applicable to a given Letter of Credit shall be held in the Account until the earlier of (a) the occurrence of a draw pursuant to the Letter of Credit, or (b) the expiration of the Letter of Credit.  Upon the expiration of a Letter of Credit, provided that no draws have been made upon such Letter of Credit, Bank shall remit to the Company an amount equal to the Cash Collateral together with any interest earned thereon.

1.3Letter of Credit Draws.  In the event that the Bank pays any sum (a "LC Draw Amount") drawn by the beneficiary of an outstanding Letter of Credit (a "LC Draw"), interest shall immediately start to accrue on the LC Draw Amount at the Adjusted One Month LIBOR Rate (hereinafter defined), and such interest shall continue to accrue until reimbursement in full to the Bank.  In the event that the LC Draw Amount (together with accrued interest) has not been repaid to Bank within ten (10) Business Days, then the Bank may, without further notice to the Company and at Bank’s sole option, reimburse itself from the Account applicable to the Letter of Credit.  In the event that the funds contained in the Account are not sufficient to reimburse the Bank for the LC Draw Amount plus accrued interest, the Bank shall have the right to declare any remaining funds due and payable by written notice to the Company.  Such funds shall continue to bear interest at the Adjusted One Month LIBOR Rate until fully repaid by the Company.

1.Interest Rate; Fees.

1.1.           Adjusted One Month LIBOR Rate.  As used herein, "Adjusted One Month LIBOR Rate" shall mean an annual rate equal to two and one-half percent (2.50%) plus the greater of:  (a) the One-Month LIBOR Rate, or (b) one and one-half percent (1.50%).  "One Month LIBOR Rate" shall mean the one-month LIBOR rate quoted by the Bank from Reuters Screen LIBOR01 Page or any successor thereto, which shall be that one-month LIBOR rate in effect two New York Banking Days prior to the Reprice Date, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation, such rate rounded up to the nearest one-sixteenth percent and such rate to be reset monthly on each Reprice Date.  The term "New York Banking Day"means any date (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York.  The term "Reprice Date" means the first day of each month.  If an LC Draw occurs other than on the Reprice Date, the initial one-month LIBOR rate shall be that one-month LIBOR rate in effect two New York Banking Days prior to the date of the LC Draw, which rate plus the percentage described above shall be in effect until the next Reprice Date.  Lender’s internal records of applicable interest rates shall be determinative in the absence of manifest error.

1.2.           Fees, Costs, Expenses.  In consideration of the issuance of each Letter of Credit, the Company agrees to pay to the Bank, for the sole benefit of the Bank, Bank's customary letter of credit negotiation and documentation fees (which fees shall not exceed $500.00 for each Letter of Credit), all such fees being due and payable at the time of issuance of such Letter of Credit.

With respect to the period prior to September 30, 2010, the Company also agrees to pay to the Bank a fee (which shall accrue on a daily basis, but be due and payable quarterly in arrears upon the issuance of a statement to the Company by the Bank) equal to the sum of (a) an amount equal to an annualized rate of one and one-half percent (1.50%) on the daily outstanding balance of all Letters of Credit pursuant to the Facility during such calendar quarter; and (b) an amount equal to an annualized rate of one-quarter of one percent (0.25%) on the daily unused portion of the Facility during such calendar quarter (i.e., $8,750,000.00 minus the daily outstanding balance of all Letters of Credit pursuant to the Facility).

With respect to the period following September 30, 2010, the Company shall, in addition, pay to the Bank a variable fee (which shall be due and payable quarterly in arrears upon the issuance of a statement to the Company by the Bank) equal to an annualized rate of one and one-half percent (1.50%) on the average daily outstanding balance of all Letters of Credit pursuant to the Facility during such calendar quarter; such quarterly payments shall continue until a quarter occurs when there are no such outstanding Letters of Credit.

Additionally, the Company agrees to pay on demand by the Bank all other reasonable and actual costs and expenses incidental to or incurred in connection with (a) the Facility and the preparation of this Agreement and the other Loan Documents (as hereinafter defined), and any subsequent amendments or modifications thereof, (b) the enforcement of the rights of the Bank in connection therewith, and (c) any litigation, contest, dispute, proceeding or action in any way relating to the Collateral (as hereinafter defined), this Agreement or the other Loan Documents, whether any of the foregoing are incurred prior to or after maturity, the occurrence of an Event of Default, or the rendering of a judgment.  Such costs and expenses shall include, but not be limited to, reasonable attorneys' fees and out-of-pocket expenses of the Bank.  All indebtedness, debts and liabilities, including, without limitation, principal, interest, indemnification obligations, prepayment fees, late charges, collection costs, attorneys' fees and expenses, of the Company to the Bank arising under or in connection with this Agreement or the other Loan Documents are hereafter referred to collectively as the "Obligations.")

Upon the occurrence of an Event of Default as defined in Section 6.1, the payment of any fees, costs and expenses set forth in this Section 2.2 may be charged (via automatic debit) by the Bank to any Account.

All fees shall be fully earned by the Bank, as applicable, pursuant to the foregoing provisions of this Agreement on the due date thereof and, except as otherwise set forth herein or required by applicable law, shall not be subject to rebate, refund or proration.  All fees provided for in this Section 2.2 shall be deemed to be for compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money.

2.3           Letter of Credit Reserves.  If any change in any law or regulation or in the interpretation or application thereof by any court or other governmental authority charged with the administration thereof shall either (a) impose, modify, deem or make applicable any reserve, special deposit, assessment or similar requirements against Letters of Credit issued by the Bank, or (b) impose on the Bank any other condition regarding this Agreement or the Facility, and the result of any event referred to in clause (a) or (b) above shall be to increase the cost to the Bank of issuing or maintaining any Letter of Credit or the Facility (which increase in cost shall be the result of the Bank's reasonable allocation of the aggregate of such cost increases resulting from such events), then, upon demand by the Bank, the Company shall immediately pay to the Bank additional amounts which shall be sufficient to compensate the Bank for such increased cost, together with interest on each such amount from the date demanded until payment in full thereof at a rate per annum equal to the Adjusted Daily LIBOR Rate. A certificate as to such increased cost incurred by the Bank, submitted by the Bank to the Company, shall be conclusive, absent manifest error, as to the amount thereof.  This provision shall survive the termination of this Agreement and shall remain in full force and effect until there is no existing or future obligation of the Bank under any Letter of Credit.

2.4           Further Assurances.  The Company hereby agrees to do and perform any and all acts and to execute any and all further instruments reasonably requested by the Bank more fully to effect the purposes of this Agreement and the issuance of Letters of Credit hereunder, and further agrees to execute any and all instruments reasonably requested by the Bank in connection with the obtaining and/or maintaining of any insurance coverage applicable to any Letter of Credit.

2.Warranties and Representations.                                                           In order to induce the Bank to enter into this Agreement and to make the Facility available to the Company, the Company warrants and represents to the Bank that each of the following statements is true and correct:

2.1.           Corporate Organization and Authority.  The Company (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio; (b) has all requisite corporate power and authority and all necessary licenses and permits to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted; and (c) is not doing business or conducting any activity in any jurisdiction in which it has not duly qualified and become authorized to do business, except where the failure to so qualify will not have a Material Adverse Effect.  "Material Adverse Effect" means a material adverse effect upon (i) the business (present or future), condition (financial or otherwise), operations, performance or properties of the Company, (ii) the ability of the Company to perform its obligations under this Agreement, any Reimbursement Agreements, Security Agreements and/or the other documents contemplated herein or therein and/or executed in connection herewith or therewith, any mortgage, any guaranty, or any other agreement or instrument (collectively, the "Loan Documents"), or (iii) the rights and remedies of the Bank under the Loan Documents.

2.2.           Borrowing is Legal and Authorized.  (a) The Executive Committee of the Board of Directors of the Company has duly authorized the execution and delivery of the Loan Documents, and the Loan Documents constitute valid and binding obligations of the Company enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights generally; and (b) the execution of the Loan Documents and the compliance by the Company with the applicable provisions thereof (i) are within the corporate powers of the Company, and (ii) are legal and 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 or encumbrance upon any property of the Company under the provisions of, any agreement, charter instrument, bylaw or other instrument to which the Company is a party or by which it is bound.

2.3.           Taxes.  All tax returns required to be filed by the Company in any jurisdiction have in fact been filed, and all taxes, estimated payments, assessments, fees and other governmental charges or levies upon the Company, or upon any of its property or assets or in respect of its franchises, businesses or income, which are due and payable have been paid, except those (a) contested in good faith by the Company, by appropriate proceedings diligently instituted and conducted, and (b) with respect to which any reserve or other appropriate provision, as shall be required in accordance with generally accepted accounting principles consistently applied ("GAAP"), shall have been made therefor.  The Company does not know of any proposed additional tax assessment against it.  The accruals for taxes on the books of the Company for its current fiscal period are adequate.

2.4.           Compliance with Law.  The Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject, except to the extent that such a violation or failure does not have or is not likely to have a Material Adverse Effect.

2.5.           Litigation; Adverse Effects.  There is no action, suit, audit, proceeding, administrative proceeding, investigation or arbitration (or series of related actions, suits, audits, proceedings, investigations or arbitrations) before or by any governmental authority or private arbitrator pending or, to the knowledge of the Company, threatened against the Company or any property of the Company challenging the validity or the enforceability of any of the Loan Documents, or which, if adversely determined, shall have or is reasonably likely to have a Material Adverse Effect.  The Company is not subject to or in default with respect to any final judgment, writ, injunction, restraining order or order of any nature, decree, rule or regulation of any court or governmental authority, in each case which shall have or is likely to have a Material Adverse Effect.

2.6.           No Insolvency.  On the date of this Agreement and after giving effect to all indebtedness of the Company, the Company (a) will be able to pay its obligations as they become due and payable; (b) has assets, the present fair saleable value of which exceeds the amount that will be required to pay its probable liability on its obligations as the same become absolute and matured; (c) has sufficient property, the sum of which at a fair valuation exceeds all of the Company's indebtedness; and (d) will have sufficient capital to engage in its business.  The determination of the foregoing for the Company takes into account all of the Company's properties and liabilities, regardless of whether, or the amount at which, any such property or liability is included on a balance sheet of the Company prepared in accordance with GAAP, including property such as contingent contribution or subrogation rights, business prospects and goodwill.  The determination of the sum of the Company's properties at the present fair salable value has been made on a going concern basis.

2.7.           Government Consent.  Neither the nature of the Company or of its business or properties, nor any relationship between the Company and any other entity or person, nor any circumstance in connection with the execution of this Agreement, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any governmental authority on the part of the Company as a condition to the execution and delivery of the Loan Documents.

2.8.           No Defaults.  No event has occurred and no condition exists which would constitute an Event of Default pursuant to this Agreement.  The Company is not in violation in any respect of any term of any material agreement, charter instrument, bylaw or other material instrument to which it is a party or by which it may be bound, which violation would have a Material Adverse Effect.

2.9.           Warranties and Representations.  On the date of the issuance of any Letter of Credit pursuant to the Facility, the warranties and representations set forth in this Section 3 shall be true and correct on and as of such date with the same effect as though such warranties and representations had been made on and as of such date, except to the extent that such warranties and representations expressly relate to an earlier date.

3.Company Business Covenants.  The Company covenants that on and after the date of this Agreement until terminated pursuant to the terms of this Agreement, or so long as any of the indebtedness provided for herein remains unpaid:

3.1.           Payment of Taxes.  The Company shall pay all taxes, estimated payments, assessments and governmental charges or levies imposed upon it or its property or assets or in respect of any of its franchises, businesses, income or property before any penalty or interest accrues thereon; provided, however, that no such taxes, estimated payments, assessments and governmental charges are required to be paid if being contested in good faith by the Company, by appropriate proceedings diligently instituted and conducted, without any of the same becoming a lien upon the Cash Collateral, and if such reserve or other appropriate provision, if any, as shall be required in accordance with GAAP, shall have been made therefor.

3.2.           Maintenance of Properties and Corporate Existence.  The Company shall do or cause to be done all things necessary (i) to preserve and keep in full force and effect its existence, rights and franchises, and (ii) to maintain its status as a corporation duly organized and existing and in good standing under the laws of the state of its organization.

3.3.Subsidiaries.  Except as disclosed in Schedule 4.3 attached hereto (the "Company Subsidiaries"), the Company has no subsidiaries and conducts business only in the name of the Company.  The Company will promptly notify the Bank upon the creation of any additional Company Subsidiaries.

4.Financial Information and Reporting.  As long as the Company is listed on the New York Stock Exchange, is publicly traded and timely Securities and Exchange Commission filings for the Company are generally available on EDGAR Online, the Company will have no additional financial information or reporting requirements hereunder, but if any of the foregoing shall cease to be true, then at the request of the Bank, the Company shall provide such tax returns and other financial information and reports as the Bank may from time to time reasonably require.

5.Default.

5.1.           Events of Default.  Each of the following shall constitute an "Event of Default" hereunder: (a) the Company fails to make any payment of fees, principal or interest in connection with this Agreement when due; (b) the Company fails to perform or observe any covenant contained in Sections 1, 2, 3, 4 or 5 of this Agreement; (c) the Company fails to comply with any other provision of this Agreement or (subject to any shorter cure period as may be set forth in any of the following agreements) any provision contained in any security agreement, reimbursement agreement or other agreement now or hereafter executed by the Company in connection with the Facility in favor of the Bank, and such failure continues for more than 10 days after such failure shall first become known to any officer of the Company; (d) any warranty, representation or other statement by or on behalf of the Company contained in this Agreement or in any other Loan Document or in any instrument or certificate furnished in compliance with or in reference hereto or thereto is false or misleading in any material respect; (e) the Company becomes insolvent or makes an assignment for the benefit of creditors, or consents to the appointment of a trustee, receiver or liquidator; (f) bankruptcy, reorganization, composition, arrangement, insolvency, dissolution or liquidation proceedings are instituted by the Company, or bankruptcy, reorganization, composition, arrangement, insolvency, dissolution or liquidation proceedings are instituted against the Company which are not stayed or dismissed within 60 days; (g) the default by Company or any Company Subsidiary with respect to any Obligation or indebtedness to the Bank; or (h) a Change of Control of the Company shall have occurred.

For purposes of this Agreement, a "Change of Control" of the Company shall mean any of the following: (a) any Person or group (as that term is understood under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of the Company equal to at least fifty percent (50%); or (b) as of any date a majority of the Board of Directors of the Company consists of individuals who were not either (i) directors of the Company as of the corresponding date of the previous year, (ii) selected or nominated to become directors by the Board of Directors of the Company of which a majority consisted of individuals described in clause (b)(i) above or (iii) selected or nominated to become directors by the Board of Directors of the Company of which a majority consisted of individuals described in clause (b)(i) above and individuals described in clause (b)(ii) above.  For purposes of the definition of “Change of Control,” “Person” shall mean shall mean an individual, a partnership (including without limitation a joint venture), a limited liability company (including without limitation a joint venture), a corporation (including without limitation a joint venture), a business trust, a joint stock company, a trust, an unincorporated association or any other entity of whatever nature (including without limitation a joint venture).

5.2.           Default Remedies.  If an Event of Default exists, the Bank may immediately exercise any right, power or remedy permitted to the Bank by law or any provision of this Agreement and the Security Agreement, provided that any outstanding Letter of Credit for which the Bank has Cash Collateral in accordance with the requirements of this Agreement and the Security Agreement shall remain in full force and effect in accordance with its terms, subject to the Bank’s rights pursuant to this Agreement and the Security Agreement with respect to the Cash Collateral that secures such Letter of Credit.  In addition, following the occurrence of an Event of Default, the Bank shall have no further obligation to issue additional Letters of Credit pursuant to the Facility.

6.Miscellaneous.

6.1.           Notices.

(a)All communications under the Loan Documents shall be in writing and shall be mailed by certified mail, postage prepaid, or sent by commercial overnight courier:

(i)if to the Bank, at the following address, or at such other address as may have been furnished in writing to the Company by the Bank:

U.S. Bank National Association

10 West Broad Street, 12th Floor

Columbus, Ohio  43215

Attn:  Commercial Real Estate

(ii) if to the Company, at the following address, or at such other address as may have been furnished in writing to the Bank by the Company:

M/I Homes, Inc.

3 Easton Oval

Columbus, Ohio 43219

Attn:  Chief Financial Officer

(b)Any notice so addressed and stamped, if mailed by certified mail, shall be deemed to be given on the second business day following the postmark date, or if sent by commercial overnight courier, shall be deemed to be given when delivered.

6.2.           Successors and Assigns.  This Agreement and the Loan Documents shall inure to the benefit of and be binding upon the heirs, successors and assigns of each of the parties.  Notwithstanding the foregoing, the Company shall not have the right to assign its rights or obligations under this Agreement or the Loan Documents.

6.3.           Entire Agreement.

The Loan Documents embody the entire agreement and understanding between the Company and the Bank and supersede all prior agreements and understandings between the Company and the Bank relating to the subject matter thereof.

6.4.           Reinstatement.  Notwithstanding any other provision of this Agreement, all of the rights, claims, interests and authorizations in favor of the Bank under this Agreement shall be reinstated and revived, and all of such rights, claims, interests and authorizations shall be fully enforceable, if at any time any amount paid to the Bank or any of their respective affiliates on account of any Obligation is thereafter required to be restored or returned by the Bank as a result of the bankruptcy, insolvency or reorganization of the Company, or any other person, or as a result of any other fact or circumstance, all as though such amount had not been paid.

6.5.           Amendment and Waiver; Duplicate Originals.  All references to this Agreement and the other Loan Documents shall also include all amendments, extensions, renewals, modifications and substitutions thereto and thereof.  The provisions of this Agreement and the other Loan Documents may be amended, and the observance of any term of this Agreement and the other Loan Documents may be waived, with (and only with) the written consent of the Company and the Bank; provided, however that nothing herein shall change the sole discretion of the Bank (as set forth elsewhere in this Agreement) to make advances, determinations, decisions or to take or refrain from taking other actions.  Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument.

6.6.           Severability; Enforceability; Governing Law; Jurisdiction; Venue; and Service of Process.  Any provision of this Agreement or the other Loan Documents which is prohibited or unenforceable in any jurisdiction, as to such jurisdiction, shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  No delay or failure or other course of conduct by the Bank in the exercise of any power or right shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any other or further exercise thereof, or the exercise of any other power or right.  All of the rights and remedies of the Bank, whether evidenced hereby or by any other agreement or instrument, shall be cumulative and may be exercised singularly or concurrently.

The validity of this Agreement and the other Loan Documents, their construction, interpretation and enforcement, and the rights of the parties hereto and thereto shall be determined under, governed by and construed in accordance with the laws of the State of Ohio (without reference to the choice of law principles thereof), but giving effect to applicable federal laws.  The parties agree that all actions or proceedings arising in connection with this Agreement and the other Loan Documents shall be tried and litigated only in the state and federal courts located in the County of Franklin, State of Ohio.

The Company hereby submits, for itself and in respect of its property, generally and unconditionally, to the jurisdiction of the aforesaid courts and waives, to the extent permitted under applicable law, any right it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 7.6.

The Company hereby waives personal service of the summons, complaint or other process issued in any action or proceeding and agrees that service of such summons, complaint or other process may be made by registered or certified mail addressed to the Company at the address for notices set forth in Section 7.1 of this Agreement and that service so made shall be deemed completed upon the earlier of the Company's actual receipt thereof or 3 days after deposit in the United States mails, proper postage prepaid.

Nothing in this Agreement shall be deemed or operate to affect the right of the Bank to serve legal process in any other manner permitted by law, or to preclude the enforcement by the Bank of any judgment or order obtained in such forum or the taking of any action under this Agreement or the other Loan Documents to enforce same in any other appropriate forum or jurisdiction.

6.7.           No Consequential Damages.                                                      No claim may be made by the Company, or by any of its affiliates, or their respective directors, officers, employees, attorneys or agents, against the Bank, or any of its affiliates, directors, officers, employees, attorneys or agents for any special, indirect or consequential damages in respect of any breach or wrongful conduct (whether the claim therefor is based on contract, tort or duty imposed by law) in connection with, arising out of or in any way related to the transactions contemplated and relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, and the Company hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

6.8.           Indemnity; Assumption of Risk.  The Company agrees to indemnify the Bank, and its affiliates, directors, officers, employees, agents and advisors (each an "Indemnitee"), against, and hold each Indemnitee harmless from, any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, reasonable fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or any other document, agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Letter of Credit or the use of the proceeds therefrom (including any refusal by the Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (iii) any actual or prospective claim, litigation, proceeding or investigation (including, without limitation, any investigation instituted or conducted by any governmental agency or instrumentality) relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

As among the Company and the Bank, the Company assumes all risks of the acts and omissions of, or misuse of Letters of Credit by the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, the Bank shall not be responsible (other than as a result of its gross negligence or willful misconduct):  (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, facsimile transmission or otherwise; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds of any drawing under such Letter of Credit; or (viii) for any consequences arising from causes beyond the control of the Bank including, without limitation, any act or omission, whether rightful or wrongful, of any government, court or other governmental agency or authority.  None of the above shall affect, impair, or prevent the vesting of any of the Bank's rights or powers under this subsection 7.8.

6.9.           WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY HERETO HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP AMONG THE COMPANY AND THE BANK.  THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN ANY OTHER LOAN DOCUMENT.

6.10.Interest Rate Limitation.  Notwithstanding anything in this Agreement to the contrary, if at any time the interest rate applicable to the Facility, together with all fees, charges and other amounts which are treated as interest on the Facility under applicable law (collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Bank in accordance with applicable law, the rate of interest payable in respect of the Facility hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate.

6.11.Important Information About Procedures For Opening A New Account.  To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an Account.  When the Company opens an Account the Bank will ask for the depositor's name, address and other information that will allow the Bank to identify the depositor.  The Bank may also ask to see other documents that substantiate the depositor's identity.

6.12.Definitions, Exhibits and Schedules.

Definitions:

"Account" is defined in Section 1.2.

"Act" is defined in Section 7.11.

"Adjusted One Month LIBOR Rate" is defined in Section 2.1.

"Agreement" is defined in the preamble.

"Application" is defined in Section 1.1.

"Bank" is defined in the preamble.

"Business Day" is defined in Section 1.1.

"Cash Collateral" is defined in Section 1.1.

"Change of Control" is defined in Section 6.1.

"Charges" is defined in Section 7.10.

"Company" is defined in the preamble.

"Company Subsidiaries" is defined in Section 4.3.

"Event of Default" is defined in Section 6.1.

"Facility" is defined in Section 1.1.

"GAAP" is defined in Section 3.3.

"LC Application Materials" is defined in Section 1.1.

"LC Draw" is defined in Section 1.3.

"LC Draw Amount" is defined in Section 1.3.

"Letter of Credit" is defined in Section 1.1.

"Loan Documents" is defined in Section 3.1.

"Material Adverse Effect" is defined in Section 3.1.

"Maximum Rate" is defined in Section 7.10.

"New York Banking Day" is defined in Section 2.1.

"Obligations" is defined in Section 2.2.

"One Month LIBOR Rate" is defined in Section 2.1.

"Reimbursement Agreement" is defined in Section 1.1.

“Person” is defined in Section 6.1.

"Reprice Date" is defined in Section 2.1.

"Security Agreement" is defined in Section 1.1.

Exhibits:

Exhibit A                                Form of Letter of Credit

Exhibit B                                Form of Application

Exhibit C                                Form of Reimbursement Agreement

Exhibit D                                Form of Security Agreement

Schedules:

Schedule 4.3                                Schedule of Company Subsidiaries

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be duly executed as of the Effective Date first written above.

M/I HOMES, INC.,

an Ohio corporation

By:                                                                           

Its:Executive Vice President and Chief Financial Officer

U.S. BANK NATIONAL ASSOCIATION,

a national banking association,

By:                                                                           

Its:                                                                           

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

DATE:

BENEFICIARY:

OUR IRREVOCABLE LETTER OF CREDIT NO. SLCLSTL0XXXX

GENTLEMEN:

WE HEREBY ISSUE OUR IRREVOCABLE LETTER OF CREDIT NO. SLCLSTL0XXXX IN FAVOR OF YOURSELVES FOR THE ACCOUNT OF         UP TO THE AGGREGATE AMOUNT OF USD       (AMOUNT IN WORDS AND 00/100 UNITED STATES DOLLARS) AVAILABLE BY YOUR DRAFT AT SIGHT DRAWN ON U.S. BANK NATIONAL ASSOCIATION, ST. LOUIS, MISSOURI ACCOMPANIED BY:

A DATED AND SIGNED STATEMENT APPEARING ON ITS FACE TO BE EXECUTED BY

BENEFICIARY OR DULY AUTHORIZED AGENT THEREOF CERTIFYING THAT:

 “

          .”

THIS INSTRUMENT MUST BE PRESENTED WITH THE ABOVE REFERENCED DOCUMENTS FOR NEGOTIATION.

DRAFTS MUST BE DRAWN AND PRESENTED AT U.S. BANK NATIONAL ASSOCIATION, INTERNATIONAL DEPT., SL-MO-L2IL, 721 LOCUST STREET, ST. LOUIS, MISSOURI 63101 NOT LATER THAN (EXPIRY DATE).

EACH DRAFT MUST STATE THAT IT IS “DRAWN UNDER U.S. BANK NATIONAL ASSOCIATION, ST. LOUIS, MISSOURI LETTER OF CREDIT NO. SLCLSTL0XXXX DATED (ISSUANCE DATE).”

WE HEREBY ENGAGE WITH THE DRAWERS OF ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS CREDIT, THAT SUCH DRAFTS WILL BE DULY HONORED UPON PRESENTATION TO THE DRAWEE.

CANCELLATION OF LETTER OF CREDIT PRIOR TO EXPIRY: THIS LETTER OF CREDIT AND AMENDMENTS, IF ANY, MUST BE RETURNED TO US FOR CANCELLATION WITH BENEFICIARY’S STATEMENT THAT THE LETTER OF CREDIT IS BEING RETURNED FOR CANCELLATION. IN THE ABSENCE OF BENEFICIARY’S STATEMENT WE WILL CONSIDER THE LETTER OF CREDIT RETURNED FOR CANCELLATION.

THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 REVISION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 600.

VERY TRULY YOURS,

U.S. BANK NATIONAL ASSOCIATION

________________________________

AUTHORIZED SIGNATURE/

EXHIBIT  B

Form of Application

EXHIBIT  C

Form of Reimbursement Agreement

EXHIBIT D

Form of Security Agreement

SECURITY AGREEMENT

(Pledge of Deposit Account)

DEBTOR:                   M/I Homes, Inc.

ADDRESS:                                                                          3 Easton Oval, Columbus, Ohio 43219

DATE:                   July 27, 2009                                                                                             0;                           

The undersigned ("Debtor" whether one or more), for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby jointly and severally grant, pledge and assign to U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Bank"), a security interest in the following deposit account (the "Account") whether Debtor's interest in the Account be now owned or existing or hereafter arising or acquired, together with all substitutions and replacements therefor, all books and records relating thereto, all interest and increases arising therefrom or payable in respect thereto, whether in cash, property or otherwise, and whether now or hereafter earned, paid or made, and all cash and non-cash proceeds thereof including, but not limited to, notes, drafts, checks and instruments:

Account Description                                           Principal Amount of

Name and Address of Depository                                                                                          and Number                           Account Balance Assigned

U.S. Bank National Association__________________                                                                                                ____________________

__________________

__________________

__________________

(all of the foregoing hereinafter sometimes called the "Collateral").

If the Account is less than the entire amount of the deposit account, any reduction of the monies comprising such deposit account shall be deemed first to be a reduction of monies other than those comprising the Account, unless the amount of such reduction is received by Bank.  Nothing set forth in this paragraph shall authorize or be construed to authorize Debtor to spend, withdraw, reduce, pledge, transfer, assign or otherwise dispose of the Collateral except upon the prior written consent of Bank.

The security interest hereby granted is to secure the prompt and full payment and complete performance of all Obligations of Debtor to Bank.  The word "Obligations" means all indebtedness, debts and liabilities (including principal, interest, late charges, collection costs, attorneys' fees to the extent permitted by law and the like) of Debtor to Bank in connection with Letters of Credit issued pursuant to any applicable Reimbursement Agreement(s) (as said terms are defined in the Credit Agreement hereinafter defined), whether now existing or hereafter arising, either created by Debtor alone or together with another or others, primary or secondary, secured or unsecured, absolute or contingent, liquidated or unliquidated, direct or indirect, whether evidenced by note, draft, application for letter of credit, reimbursement agreement or otherwise, and any and all renewals of or substitutes therefor.

1.           General Representations and Covenants.  Debtor represents, warrants and covenants as follows:

(a)           Except for the security interest granted hereby, Debtor is, or as to Collateral arising or to be acquired after the date hereof, shall be, the sole, exclusive and record owner of the Collateral, and the Collateral is and shall remain free from any and all liens, security interests, encumbrances, claims and interests.

(b)           Debtor shall, at Debtor's expense, perform, do, make, procure, execute and deliver all acts, things, certificates, instruments, passbooks, writings and other assurances as Bank may at any time request or require to protect, assure or enforce its interests, rights and remedies created by, provided in or emanating from this agreement.

(c)           If any of the Collateral is not now evidenced by a certificate, instrument, passbook or writing, and if at any time during the term of this agreement, a certificate, instrument, passbook or writing shall be used or issued to evidence Debtor's interest in the Collateral, Debtor shall, immediately upon learning of the same, notify in writing the loan officer who is handling Debtor's Obligations on behalf of Bank that such has occurred, or that such is going to occur, and shall assist Bank in order to ensure that Bank obtains possession of that evidence or otherwise perfects its security interest in the certificate, instrument, passbook or writing evidencing the Collateral.

(d)           Debtor shall not create, permit or suffer to exist, and shall take such action as is necessary to remove, any claim to or interest in or lien or encumbrance upon the Collateral, other than the security interest granted hereby, and shall defend the right, title and interest of Bank in and to the Collateral against all claims and demands of all persons and entities at any time claiming the same or any interest therein.

(e)           Subject to any limitation stated therein or in connection therewith, all information furnished by Debtor concerning the Collateral or otherwise in connection with the Obligations, is or shall be at the time the same is furnished, accurate, correct and complete in all material respects.

(f)           Debtor's legal name, state of organization and chief executive office are as set forth at the beginning of this Agreement.  Unless Bank consents in writing to a change in Debtor's legal name or state of organization prior to such a change, Debtor shall not change its legal name or state of organization.

2.           Preservation and Disposition of Collateral.

(a)           Debtor shall not spend, withdraw, reduce, pledge, transfer, assign or otherwise dispose of the Account or any portion thereof.  Bank shall be entitled to condition withdraws from the Account upon the receipt of such matters as it may reasonably request, including, but not limited to, evidence that Debtor is in full compliance with each of the terms and conditions of, and that no Event of Default exists under that certain Master Letter of Credit Facility Agreement dated as of July 27, 2009 (the "Credit Agreement"), evidencing the Obligations.

(b)           Debtor shall advise Bank promptly, in writing and in reasonable detail, (i) of any material encumbrance upon or claim asserted against any of the Collateral; and (ii) of the occurrence of any event that would have a material effect upon the aggregate value of the Collateral or upon the security interest of Bank.

(c)           At its option, Bank may discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or arising in connection with the Collateral.  Debtor agrees to reimburse Bank upon demand for any payment made or any expense incurred (including reasonable attorneys' fees to the extent permitted by law) by Bank pursuant to the foregoing authorization.  Should Debtor fail to pay said sum to Bank upon demand, interest shall accrue thereon, from the date of demand until paid in full, at the highest rate set forth in any document or instrument evidencing any of the Obligations.

3.           Extensions and Compromises.  With respect to any Collateral held by Bank as security for the Obligations, Debtor assents to all extensions or postponements of the time of payment thereof or any other indulgence in connection therewith, to each substitution, exchange or release of Collateral, to the addition or release of any party primarily or secondarily liable, to the acceptance of partial payments thereon and to the settlement, compromise or adjustment thereof, all in such manner and at such time or times as Bank may deem advisable.  Bank shall have no duty as to the collection or protection of Collateral or any income therefrom, nor as to the preservation of any right pertaining thereto, beyond the safe custody of Collateral in the possession of Bank.

4.           Bank's Authorization.  Debtor hereby irrevocably authorizes Bank and any officer or agent thereof, in the place and stead of Debtor and in the name of Debtor or in Bank's own name, in Bank's discretion, to take any and all appropriate action and to execute, authenticate and deliver any and all documents, instruments and records that may be necessary or desirable to accomplish the purposes of this Agreement.  Without limiting the generality of the foregoing, Debtor hereby authorizes Bank, on behalf of Debtor, without notice to or assent by Debtor:

Debtor hereby ratifies all that the Bank shall lawfully do or cause to be done by virtue hereof.

The authorization granted to Bank hereunder is solely to protect its interests in the Collateral and shall not impose any duty upon Bank to exercise the same.  Bank shall be accountable only for amounts that Bank actually receives as a result of the exercise of such authorization and neither Bank nor any of its officers, directors, employees or agents shall be responsible to Debtor for any act or failure to act, except for Bank's own gross negligence or willful misconduct.

5.           Default.  If any event of default in the payment of any of the Obligations or in the performance of any of the terms, conditions, or provisions of any instrument or document evidencing the Obligations secured by this agreement or in the performance of any covenant contained herein shall occur and be continuing; or if any warranty, representation or statement made or furnished to Bank by Debtor proves to have been false in any material respect when made or furnished; or if Bank shall, in the exercise of commercially reasonable judgment, deem itself insecure as to the prospect of payment of any of the Obligations:

(a)           Bank may, at its option and without notice, declare the unpaid balance of any or all of the Obligations immediately due and payable and this agreement and any or all of the Obligations in default and may immediately apply any or all of the Collateral to the payment of the Obligations; and

(b)           Bank and its nominees shall have the additional rights and remedies of a secured party under this agreement, under any other instrument or agreement securing, evidencing or relating to the Obligations and under the law of the State of Ohio including, but not limited to, the right to demand and receive the Collateral from any of the depositories designated above.  To the extent permitted by applicable law, Debtor waives all claims, damages and demands against Bank arising out of Bank's collection, receipt, retention or disposition of the Collateral including, but not limited to, any claim based upon the early withdrawal or redemption of the Collateral by Bank.  Debtor shall remain liable for any deficiency if the Collateral is insufficient to pay all amounts to which Bank is entitled.  Debtor shall also be liable for the costs of collecting any of the Obligations or otherwise enforcing the terms thereof or of this agreement including reasonable attorneys' fees to the extent permitted by law.

6.           General.  Debtor agrees that if Bank is the depository for any Account, Bank may reduce the rate of interest on such Account, at any time and from time to time, in order to comply with any laws or regulations, including those that require the rate of interest applicable to any Obligation to exceed any rate of interest payable with respect to such Account.  Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Bank shall not be deemed to have waived any of its rights hereunder or under any other agreement, instrument or paper signed by Debtor unless such waiver be in writing and signed by Bank.  No delay or omission on the part of Bank in exercising any right shall operate as a waiver of such right or any other right.  All of Bank's rights and remedies, whether evidenced hereby or by any other agreement, instrument or paper, shall be cumulative and may be exercised singularly or concurrently.  Any written demand upon or written notice to the Debtor shall be given in accordance with the Loan Agreement shall be effective when deposited in the mails addressed to the Debtor at the address shown at the beginning of this Agreement.  This agreement and all rights and obligations hereunder, including matters of construction, validity and performance, shall be governed by the law of the State of Ohio.  The provisions hereof shall, as the case may require, bind or inure to the benefit of, the respective heirs, successors, legal representatives and assigns of Debtor and Bank.

[Remainder of This Page Intentionally Left Blank]

IN WITNESS WHEREOF, Debtor has signed this Agreement as of the date first above written.

DEBTOR:

 M/I HOMES, INC., an Ohio corporation

By:

Print Name:

Its:

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-Majestic Oaks GP, LLC

M/I Homes of Chicago, LLC

M/I Title Agency, Ltd.

EX-10.2

Exhibit 10.2

LETTER OF CREDIT PLEDGE FORM

PLEDGE AGREEMENT

           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.  Representations and Warranties.  The Pledgor represents and warrants as follows:

(a)  The Pledgor is the legal and beneficial owner of the Collateral free and clear of any lien, security interest, option or other charge or encumbrance except for the security interest created by this Agreement.

(b)  The pledge of the Collateral pursuant to this Agreement creates a valid and perfected first priority security interest in the Collateral, securing the payment of the Obligations.

(c)  No consent of any other person or entity and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the Pledgor of the Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Pledgor, (ii) for the perfection or maintenance of the security interest created hereby (including the first priority nature of such security interest) or (iii) for the exercise by the Bank of its rights and remedies hereunder.

(d)  There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

(e)  The Pledgor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

(f)  The execution, delivery and performance by the Pledgor of this Agreement and the transactions contemplated hereby are within the Pledgor's corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene the Pledgor's charter or by-laws, (ii) violate any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or (iii) conflict with or result in the breach of, or constitute a default under, any material contract binding on or affecting the Pledgor or any of its properties.  This Agreement has been duly executed and delivered by the Pledgor.

(g)  This Agreement is the legal, valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its terms.

SECTION 8.  Further Assurances.  (a)  The Pledgor agrees to promptly provide the following to the Bank, each in form and substance satisfactory to the Bank: (i) a counterpart of this Agreement duly executed by the Pledgor and the Bank; (ii) certified copies of the resolutions of the Pledgor’s Board of Directors approving this Agreement, and of all documents evidencing other necessary corporate action and governmental and third party approvals, if any, with respect to this Agreement; and (iii) a certificate of the Pledgor’s Secretary or Assistant Secretary certifying the names and true signatures of the Pledgor’s officers authorized to sign this Agreement and any other documents to be delivered hereunder.

SECTION 9.  Transfers and Other Liens.  The Pledgor agrees that it will not (a) sell, assign (by operation of law or otherwise), or otherwise dispose of, or grant any option with respect to, any of the Collateral, or (b) create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Collateral, except for the security interest under this Agreement, or (c) file, authorize or permit to be on file, in any jurisdiction, any financing statement with respect to the Collateral in which the Bank is not named as the sole secured party.

SECTION 10.  Bank Appointed Attorney-in-Fact.  The Pledgor hereby appoints the Bank the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the Bank's discretion to take any action and to execute any instrument which the Bank may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation, to receive, indorse and collect all instruments made payable to the Pledgor representing any interest payment, dividend or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same.

SECTION 11.  Bank May Perform.  If the Pledgor fails to perform any agreement contained herein, the Bank may itself perform, or cause performance of, such agreement, and the expenses of the Bank incurred in connection therewith shall be payable by the Pledgor under Section 14.

SECTION 12.  The Bank's Duties.  The powers conferred on the Bank hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Bank shall have no duty as to any Collateral, including as to (a) the investment or reinvestment of the Collateral (except as provided in Section 5), (b)ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not the Bank has or is deemed to have knowledge of such matters, or (c) the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral.  The Bank shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Bank accords its own property.

SECTION 13.  Remedies upon Default.  If any Event of Default shall have occurred and be continuing, then the Bank may take one or both of the following actions:

(a)         The Bank may, without notice to the Pledgor except as required by law and at any

time or from time to time, charge, setoff and otherwise apply all or any part of the Account against the Obligations or any part thereof.

(b)        The Bank may exercise in respect of the Collateral, in addition to other rights and

remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Code (whether or not the Code applies to the affected Collateral).

SECTION 14.  Expenses.  The Pledgor will upon demand pay to the Bank the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Bank may incur in connection with (a) the administration of this Agreement, (b) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (c) the exercise, enforcement or preservation of any of the rights of the Bank hereunder or (d) the occurrence of any Event of Default or the failure by the Pledgor to perform or observe any of the provisions hereof.

SECTION 15.  Security Interest Absolute.   All rights of the Bank and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of:

(i)  any lack of validity or enforceability of any Letter of Credit, any Application or any other agreement 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, or any other amendment or waiver of or consent to departure from any Letter of Credit or any Application, including without limitation, any increase in the Obligations resulting from the extension of additional credit to the Pledgor or any of its subsidiaries or otherwise;

(iii)  any taking, exchange, release or non-perfection of any other collateral, or any taking, release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations;

(iv)  any manner of application of collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any collateral for all or any of the Obligations or any other assets of the Pledgor or its subsidiaries;

(v)  any change, restructuring or termination of the corporate structure of the Pledgor  or any of its subsidiaries; or

(vi)  any other circumstance which might otherwise constitute a defense available to, or a discharge of,  the Pledgor.

SECTION 16.  Amendments, Etc.  No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 17.  Addresses for Notices.  All notices and other communications provided for hereunder shall be in writing (including faxes) and mailed, telecopied or delivered to it, if to the Pledgor, at its address at 3 Easton Oval, Columbus, Ohio 43219; Attn:  Phillip G. Creek, and if to the Bank, at its address at Citibank, N.A., 388 Greenwich Street, New York, New York 10013, Attention: Marni McManus, or, as to either party, at such other address as shall be designated by such party in a written notice to the other party.  All such notices and other communications shall, when mailed or faxed, be effective when deposited in the mails or faxed, respectively.

SECTION 18.  Continuing Security Interest.  This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the payment in full of the Obligations and all other amounts payable under this Agreement and the expiry of all Letters of Credit, (b) be binding upon the Pledgor, its successors and assigns, and (c) inure to the benefit of, and be enforceable by, the Bank and its respective successors, transferees and assigns.  Upon the payment in full of the Obligations and all other amounts payable under this Agreement and the expiry of all Letters of Credit, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Pledgor.  Upon any such termination, the Bank will, at the Pledgor's expense, return to the Pledgor such of the Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof and execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination.

SECTION 19.  Governing Law; Terms.  This Agreement shall be governed by and construed in accordance with the law of the State of New York.  Unless otherwise defined herein or in any Application, terms defined in Article 8 and Article 9 of the Code are used herein as therein defined.  The parties agree that New York is the “bank’s jurisdiction” (as defined in Section 9-304 of the Code) and the “securities intermediary’s jurisdiction” (as defined in Section 8-110 of the Code) with respect to the Bank for all purposes under this Agreement and under the Code.

SECTION 20.  Consent to Jurisdiction.   The Pledgor irrevocably and unconditionally (i) submits to the non-exclusive jurisdiction of any New York State or Federal court located in the City of New York over any suit, action or proceeding arising out of or relating to this Agreement, (ii) accepts for itself and in respect of its property the jurisdiction of such courts, (iii) waives any objection to the laying of venue of any such suit, action or proceeding brought in any such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum and (iv) consents to the service of any process, summons, notice or document in any such suit, action or proceeding by registered mail addressed to the Pledgor at its address specified in Section 17.  A final judgment in any such suit, action or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing herein will affect the right of the Bank to serve legal process in any other manner permitted by law or affect the Bank’s right to bring any suit, action or proceeding against the Pledgor or its property in the courts of other jurisdictions.  To the extent that the Pledgor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Pledgor irrevocably waives such immunity in respect of its obligations under this Agreement.

SECTION 21.  WAIVER OF JURY TRIAL.  EACH OF THE PLEDGOR AND THE BANK IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BANK’S ACTIONS IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first written above.

M/I Homes, Inc.

By: ___________________________

                                                                                          Name: Phillip G. Creek

                                                                     Title:   Executive Vice President & CFO

CITIBANK, N.A.

By: ___________________________

                                                                     Name:

                                                                     Title:

SCHEDULE A (as of July 27, 2009)

(of Pledge Agreement dated as of July 27, 2009 between M/I Homes, Inc. and Citibank, N.A.)

    [Letters of Credit]     [Beneficiaries]     [Face Amounts] [Applications and Agreements for Standby Letters of Credit]

EX-10.3

Exhibit 10.3

LETTER OF CREDIT AGREEMENT

A.THIS LETTER OF CREDIT AGREEMENT ("this Agreement") dated as of July 27, 2009 is entered into by M/I HOMES, INC., an Ohio corporation (“Borrower”), and REGIONS BANK, an Alabama banking corporation (the "Bank").

Recitals

B.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 $8,750,000 (the “Commitment”).

C.The Letters of Credit will be issued by the Bank pursuant to this Agreement, whereby Borrower will agree, among other things, to reimburse the Bank for all amounts drawn by the Beneficiaries pursuant to the Letters of Credit.

Agreement

D.NOW, THEREFORE, in consideration of the premises and in order to induce the Bank to issue the Letters of Credit, Borrower and the Bank hereby covenant, agree and bind themselves as follows:

ARTICLE 1

Definitions and Other Provisions

of General Application

SECTION 1.1Definitions

E.Unless otherwise defined herein, terms that are defined in the Syndicated Credit Agreement and used herein shall have the meanings ascribed to them in the Syndicated Credit Agreement and the following terms shall have the following meanings:

F."Bank" shall mean Regions Bank, an Alabama banking corporation, and its successors and assigns.

G."Beneficiaries" shall have the meaning stated in the Recitals.

H.“Borrower" shall mean M/I Homes, Inc., a corporation organized under the laws of Ohio, and its successors and assigns.

I."Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions are required or authorized to close in the city where drawings under the Letters of Credit are to be made.

J."Commitment" shall have the meaning stated in the Recitals.

K.“Control and Pledge Agreement” shall mean that certain Deposit Account Control Agreement and Security Agreement of even date herewith executed by Borrower and the Bank.

L."Credit Agreement" or "this Agreement" shall mean this instrument as originally executed or as it may from time to time be supplemented, modified or amended by one or more instruments entered into pursuant to the applicable provisions hereof.

M."Drawing" shall mean a drawing under the Letters of Credit.

N."Event of Default" shall have the meanings stated in Section 5.1.  An Event of Default shall "exist" if an Event of Default shall have occurred and be continuing.

O.“Fee Letter” shall mean the letter from the Bank to the Borrower dated as of July 27, 2009 relating to certain fees payable by the Borrower in respect of the transactions provided for in this Agreement as it may be amended, modified, restated or supplemented from time to time.

P."Financing Documents" shall mean the Letters of Credit, this Agreement, the Control and Pledge Agreement and all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Bank and including all other pledges, powers of attorney, consents, assignments, contracts, notices, agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of Borrower, or any employee of Borrower (in each case, to the extent relating to the Obligations), and delivered to the Bank in connection with this Agreement or the transactions contemplated thereby.  Any reference in this Agreement or any other Financing Document to a Financing Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Financing Document as the same may be in effect at any and all times such reference becomes operative.

Q."Letter of Credit Exposure" shall mean the sum of (i) the aggregate Stated Amount of all Letters of Credit outstanding at such time and (ii) the aggregate amount of all Reimbursement Obligations related to the Letters of Credit outstanding at such time.

R."Letters of Credit" shall have the meaning stated in the Recitals.

S.“Minimum Coverage Amount” shall mean, at any time, 105% of the Letter of Credit Exposure.

T."Obligations" shall mean (1) all Letters of Credit commissions, fees, charges and costs becoming due and payable under this Agreement in accordance with the terms thereof; (2) all amounts becoming due and payable under this Agreement in accordance with the terms thereof as reimbursement of sums paid by the Bank under the Letters of Credit; (3) all interest becoming due and payable under this Agreement in accordance with the terms thereof; (4) all amounts becoming due and payable under this Agreement in accordance with the terms thereof upon the occurrence and continuance of an Event of Default under this Agreement; (5) all amounts becoming due and payable by Borrower under this Agreement as reimbursement of increased cost to the Bank caused by changes in law or regulations or in the interpretation thereof; (6) all other amounts payable by Borrower under this Agreement or any of the other Financing Documents; and (7) all renewals and extensions of any or all of the Obligations of Borrower described in clauses (1) through (6) above (including without limitation any renewal or extension of, and any substitute for, the Letters of Credit), whether or not any renewal or extension agreement is executed in connection therewith.

U."Prime Rate" shall mean that rate of interest designated by the Bank from time to time as its “prime rate,” it being expressly understood and agreed that the “prime rate” is merely an index rate used by the Bank to establish lending rates and is not necessarily the Bank’s most favorable lending rate and that changes in the “prime rate” are discretionary with the Bank.

V."Reimbursement Obligations" shall have the meaning stated in Section 2.2.

W."Stated Amount" shall mean the maximum amount available to be drawn under the Letters of Credit, as reduced from time to time and reinstated from time to time pursuant to the terms and conditions of the Letters of Credit.

X."Stated Expiration Date" shall mean the date on which the Letters of Credit will expire by their terms unless terminated sooner upon the occurrence of any early termination event specified therein.

Y."Syndicated Credit Agreement" shall mean that certain Second Amended and Restated Credit Agreement effective as of October 6, 2006, executed by Borrower, the other parties signatory thereto, JP Morgan Chase Bank, N.A., as Agent for itself and for the lenders and the other lenders signatory thereto, as amended, restated or supplemented from time to time.

Z."Termination Date" shall mean August 31, 2010.

SECTION 1.2General Rules of Construction

AA.For all purposes of this Agreement, except as otherwise expressly provided, or unless the context otherwise requires:

(a)Defined terms in the singular shall include the plural as well as the singular and vice versa.

(b)The definitions in the recitals are incorporated into this Agreement.

(c)All accounting terms not otherwise defined herein have the meanings assigned to them, and all computations herein provided for shall be made, in accordance with generally accepted accounting principles.  All references herein to "generally accepted accounting principles" refer to such principles as they exist at the date of application thereof.

(d)All references in this instrument to designated "articles", "sections" and other subdivisions are to the designated articles, sections and subdivisions of this instrument as originally executed.

(e)The terms "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular article, section or other subdivision.

(f)All references in this instrument to a separate instrument are to such separate instrument as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.

(g)The term "person" shall include any individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization and any government or any agency or political subdivision thereof.

SECTION 1.3Effect of Headings and Table of Contents

BB.The article and section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 1.4Separability Clause

CC.If any provision in this Agreement 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.

SECTION 1.5Governing Law

DD.This Agreement shall be construed in accordance with and governed by the laws of the State of Alabama.

SECTION 1.6Counterparts

EE.This Agreement 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.

ARTICLE 2

Issuance of Letters of Credit;

Reimbursement and Fees

SECTION 2.1Issuance of Letters of Credit

(a)Subject to and upon the terms and conditions herein set forth, so long as no Event of Default has occurred and is continuing, the Bank will, at any time and from time to time on and after the Closing Date and prior to the Termination Date, and upon request by Borrower in accordance with the provisions of Section 2.1(b) hereof, issue for the account of Borrower the Letters of Credit denominated in U.S. dollars and in a form customarily used or otherwise approved by the Bank.  In no event shall the aggregate Stated Amount of the Letters of Credit exceed the Commitment.  Notwithstanding the foregoing:

(i)No Letter of Credit shall be issued that by its terms expires later than the Termination Date; provided, however, that such Letter of Credit may expire by its terms on a date later than the Termination Date so long as the Control and Pledge Agreement is in effect and Borrower maintains the Minimum Coverage Amount.

(ii)The Bank shall be under no obligation to issue any Letter of Credit if, at the time of such proposed issuance, any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Bank from issuing such Letter of Credit, or any requirement of law applicable to the Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Bank shall prohibit, or request that the Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Bank with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Bank is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense that was not applicable, in effect or known to the Bank as of the Closing Date and that the Bank in good faith deems material to it.  The Bank agrees that, as promptly as practicable as it becomes aware of any circumstances that may prevent the Bank from issuing any Letter of Credit pursuant to this clause (ii), the Bank shall notify Borrower and describe such circumstances in reasonable detail, and the Bank shall, to the extent not inconsistent with the Bank’s internal policies of general application and in accordance with applicable law, use reasonable commercial efforts to take such actions as would allow the Bank to issue Letters of Credit in accordance with this Agreement notwithstanding the existence of any circumstances described in this clause (ii).

(iii)No Letter of Credit shall be issued if the Stated Amount upon issuance, when added to the aggregate Letter of Credit Exposure at such time, would exceed the Commitment.

(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 providing 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.

(b)Whenever Borrower desires the issuance of a Letter of Credit, Borrower will give the Bank written notice not later than 11:00 a.m., Birmingham, Alabama time, three Business Days (or such shorter period as is acceptable to the Bank in any given case) prior to the requested date of issuance thereof.  Each such notice (each, a “Letter of Credit Notice”) shall be irrevocable, shall be given in the form specified by the Bank, and shall specify (i) the requested date of issuance, which shall be a Business Day, (ii) the requested Stated Amount and expiry date of the Letter of Credit, and (iii) the name and address of the requested beneficiary or beneficiaries of the Letter of Credit.  Borrower will also complete any application procedures and documents reasonably required by the Bank in connection with the issuance of any Letter of Credit.  In the event of any conflict between the provisions of any application and the provisions of this Agreement, the provisions of this Agreement shall govern.  The renewal or extension of any outstanding Letter of Credit shall, for purposes of this Section 2.1, be treated in all respects as the issuance of a new Letter of Credit.

SECTION 2.2Reimbursement

Borrower agrees to reimburse the Bank (a "Reimbursement Obligation"), within three (3) Business Days after demand therefor, for all sums paid by the Bank under the Letter of Credit, together with interest thereon during the period from the date of payment thereof by the Bank until receipt by the Bank of reimbursement therefor, at an annual rate equal to the Prime Rate in effect from time to time during such period.

SECTION 2.3Fees for Maintenance of Letters of Credit

(a)For the issuance of the Letters of Credit, Borrower agrees to pay to the Bank such fees set forth in the Fee Letter.

(b)Borrower shall pay to the Bank such commissions, draw fees, transfer fees and other fees and charges incurred in connection with the issuance and administration of each Letter of Credit as are customarily charged from time to time by the Bank for the performance of such services in connection with similar letters of credit, or as may be otherwise agreed to by the Bank (including all courier fees associated with such Letters of Credit), but without duplication of amounts payable under Section 2.3(a).

SECTION 2.4Increased Costs

(a)If, after the date of delivery of this Agreement, any change in any law or regulation or in the interpretation, administration or enforcement thereof by any Governmental Authority charged with the administration thereof or any action by any Governmental Authority (whether or not constituting or resulting from such change) shall either

(i)impose, modify or deem applicable any reserve, assessment, special deposit or similar requirement against letters of credit issued by the Bank or

(ii)impose on the Bank any other condition (including without limitation any capital adequacy requirement) regarding this Agreement or the Letters of Credit,

and the result of any such event shall be to increase the cost to the Bank of issuing or maintaining the Letters of Credit (which increase in cost shall be the result of the Bank's reasonable allocation of the aggregate of such cost increases resulting from such events and shall be calculated without giving effect to any participation granted in the Letters of Credit), then, upon demand by the Bank, Borrower shall immediately pay to the Bank from time to time, as specified by the Bank in writing, additional amounts which shall be sufficient to compensate the Bank for such increased costs.

(b)The Bank shall deliver to Borrower a reasonably detailed certificate showing the basis for such increased costs incurred by the Bank as a result of any event referred to in subsection (a) of this Section, and such certificate shall be presumptive evidence as to the amount thereof provided that such determination is made in good faith.  In making the determination contemplated by such certificate, the Bank may make such reasonable estimates, assumptions, allocations and the like that the Bank deems to be appropriate.  If the Bank claims any amount payable under this Section 2.4, the Bank shall use reasonable commercial efforts (consistent with its internal policy and legal and regulatory restrictions) efforts to minimize such increased costs.

SECTION 2.5Place and Time of Payments

(a)All payments by Borrower to the Bank hereunder shall be made in lawful currency of the United States and in immediately available funds to the Bank at its hand delivery address set forth in Section 6.1 or at such other address within the continental United States as shall be specified by the Bank by notice to Borrower.

(b)All amounts payable by Borrower to the Bank hereunder for which a payment date is expressly set forth herein (including without limitation payments due pursuant to Sections 2.2 and 2.3) shall be payable without notice or written demand by the Bank.  All amounts payable by Borrower to the Bank hereunder for which no payment date is expressly set forth herein shall be payable on written demand by the Bank to Borrower.

(c)The Bank may, at its option, send written notice to Borrower of amounts payable pursuant to Sections 2.2 and 2.3, but the failure to send such notice shall not affect or excuse Borrower's obligation to make payment of the amounts required by such Sections on the due date specified in such Sections.

(d)Payments which are due on a day which is not a Business Day shall be payable on the next succeeding Business Day, and any interest payable thereon shall be payable for such extended time at the specified rate.

SECTION 2.6Late Payments

FF.With respect to all amounts payable to the Bank by Borrower pursuant to this Article (a) which are not paid on the due date, in the case of amounts payable on a specified date, or (b) which are not paid within 3 Business Days of written notice to Borrower, in the case of amounts payable on demand, Borrower agrees to pay to the Bank on demand interest at a variable per annum rate equal to the Prime Rate plus four percent (4%), for each day from the specified date of payment, or the date of written demand for payment, as the case may be, to the date payment is made.

SECTION 2.7Computation of Charges

GG.The interest, fees and charges provided for in this Agreement based upon annual rates shall be computed on the basis of a 360-day year, for actual days elapsed.  All interest rates based upon the Prime Rate shall change when and as the Prime Rate shall change, effective on the opening of business on the date of any such change.

SECTION 2.8Obligations of Borrower Absolute

HH.The obligations of Borrower under this Agreement shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following:

(a)any lack of validity or enforceability of any of the Financing Documents;

(b)any amendment or waiver of or any consent to departure from all or any of the Financing Documents;

(c)the existence of any claim, set-off, defense or other rights which Borrower may have at any time against any person or entity, whether in connection with any of the Financing Documents, or any unrelated transaction;

(d)any statement or any other document presented under the Letters of Credit proves to be forged, fraudulent, invalid or insufficient in any respect or any statement therein proves to be untrue or inaccurate in any respect whatsoever;

(e)payment by the Bank under the Letters of Credit against presentation of a draft or certificate which does not strictly comply with the terms of the Letters of Credit, provided such payment shall not have constituted negligence or willful misconduct by the Bank; and

(f)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided the same shall not have constituted gross negligence or willful misconduct by the Bank.

ARTICLE 3

Conditions Precedent to Issuance

of Letters of Credit

SECTION 3.1Representations and Warranties

II.On and as of the date of issuance of the Letters of Credit, the representations and warranties set forth in Section 4.1 shall be true and correct in all material respects, except to the extent that such representations and warranties expressly relate to an earlier date.

SECTION 3.2No Default

JJ.On and as of the date of issuance of the Letters of Credit, Borrower shall be in compliance with all the terms and provisions set forth in this Agreement 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, shall exist.

SECTION 3.3Conditions Precedent to Issuance of Letters of Credit

KK.The obligation of the Bank to issue the Letters of Credit is subject to the receipt by the Bank of the following, each of which shall be satisfactory to the Bank in form and substance:

(a)Financing Documents.  An executed counterpart of each of the Financing Documents.

(b)Organization of Borrower and Approvals.  A certified copy of the organizational documents of Borrower and all action taken by its governing body approving the Financing Documents and the consummation of the transactions contemplated thereby (including, without limitation, a certificate setting forth the resolutions (if any) of the governing body of Borrower for such purpose).

(c)Certificate of Borrower.  A certificate by Borrower to the effect that, as of the date of delivery of the Letters of Credit and after giving effect thereto:  (1) no Event of Default, as herein defined, shall have occurred and be continuing under this Agreement; (2) no event shall have occurred and be continuing which, with notice or lapse of time or both, would constitute an Event of Default under this Agreement; and (3) the representations and warranties made by Borrower in Section 4.1 of this Agreement shall be true in all material respects on and as of such date with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate to an earlier date.

(d)Deposit.  Evidence that Borrower has deposited cash into the Account (as defined in the Control and Pledge Agreement) in an amount not less than $4,375,000.

(e)Additional Evidence.  Such additional legal opinions, certificates, proceedings, instruments and other documents as the Bank or its counsel may reasonably request to evidence (1) compliance by Borrower with legal requirements, (2) the truth and accuracy, as of the date of delivery of the Letters of Credit, of the respective representations of Borrower contained in the Financing Documents, and (3) the due performance or satisfaction by Borrower, at or prior to the date of delivery of the Letters of Credit, of all agreements then required to be performed and all conditions then required to be satisfied by them pursuant to the Financing Documents.

ARTICLE 4

Representations and Covenants

SECTION 4.1Representations and Warranties

LL.Borrower hereby represents and warrants to the Bank that each representation and warranty contained in Section 4 of the Syndicated Credit Agreement (as in effect on the date hereof) is true and correct in all material respects on the date hereof (except to the extent such representations and warranties relate to an earlier date), and by this reference each such representation and warranty is incorporated herein in its entirety (provided that any changes thereto which are consented to in writing by the Required Lenders shall be deemed incorporated into this provision automatically upon such written consent).  For clarity, defined terms used in Section 4 of the Syndicated Credit Agreement which are also defined in this Agreement, shall have the meaning as set forth in this Agreement.

SECTION 4.2Affirmative Covenants

MM.Borrower hereby covenants and agrees with the Bank that, so long as any of the Obligations remain unpaid, it will perform and comply with each of the covenants and agreements set forth in Section 6 of the Syndicated Credit Agreement (as in effect on the date hereof) as though such covenants were recited herein in their entirety, and by this reference each such covenant and agreement is incorporated herein in its entirety (provided that any changes thereto which are consented to in writing by the Required Lenders shall be deemed incorporated into this provision automatically upon such written consent).  For clarity, (a) where any of the aforementioned covenants require notice to or from a party, or delivery of items or information to or from a party, as incorporated herein such references shall be references to the applicable parties to this Agreement, and (b) defined terms used in Section 6 of the Syndicated Credit Agreement which are also defined in this Agreement shall have the meaning as set forth in this Agreement.

SECTION 4.3Negative Covenants

NN.Borrower hereby covenants and agrees with the Bank that, so long as any of the Obligations remain unpaid, it will perform and comply with each of the covenants and agreements set forth in Section 7 of the Syndicated Credit Agreement (as in effect on the date hereof) as though such covenants and agreements were recited herein in their entirety, and by this reference each such covenant and agreement is incorporated herein in its entirety (provided that any changes thereto which are consented to in writing by the Required Lenders shall be deemed incorporated into this provision automatically upon such written consent).  For clarity, (a) where any of the aforementioned covenants require notice to or from a party, or delivery of items or information to or from a party, as incorporated herein such references shall be references to the applicable parties to this Agreement, and (b) defined terms used in Section 7 of the Syndicated Credit Agreement which are also defined in this Agreement shall have the meaning as set forth in this Agreement.

SECTION 4.4Minimum Coverage Amount

OO.Borrower shall (i) maintain the Minimum Coverage Amount at all times and (ii) deposit the sum of $4,375,000 into the Account (as defined in the Control and Pledge Agreement) on the date the Letter of Credit Exposure exceeds $4,170,000.

ARTICLE 5

Events of Default and Remedies

SECTION 5.1Events of Default

PP.Any one or more of the following shall constitute an event of default (an "Event of Default") under this Agreement (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)any representation or warranty made in this Agreement or in any of the other Financing Documents by Borrower shall prove to be false or misleading in any material respect as of the time made; or

(b)any report, certificate, financial statement or other instrument furnished by Borrower in connection with this Agreement, or the transactions provided for in this Agreement or any of the other Financing Documents, shall prove to be false or misleading in any material respect as of the time made; or

(c)failure to make any payment required under Article 2 as and when the same shall become due and payable; or

(d)default shall be made in the due observance or performance of the covenant set forth in Section 4.4; or

(e)the occurrence of an event of default, as therein defined, under any other Financing Document or the occurrence of any one or more of the events set forth in Section 9 of the Syndicated Credit Agreement (whether or not such Syndicated Credit Agreement is terminated) and the expiration of the applicable grace period, if any, specified therein.

SECTION 5.2Remedies

QQ.If any Event of Default exists, the Bank shall have no obligation to issue any further Letters of Credit and may exercise any of the following remedies:

(a)upon notice to Borrower, declare all amounts, if any, not otherwise immediately due under this Agreement to be, and all such amounts shall thereupon become, due and payable to the Bank, without presentment, demand, protest, or other notice of any kind, all of which are expressly waived, anything in this Agreement to the contrary notwithstanding, provided that any outstanding Letter of Credit for which the Bank has cash collateral in accordance with the requirements of this Agreement and the Control and Pledge Agreement shall remain in full force and effect in accordance with its terms, subject to the Bank’s rights pursuant to this Agreement and the Control and Pledge Agreement with respect to the cash collateral that secures such Letter of Credit; or

(b)exercise its banker's lien or right of set-off; or

(c)proceed to protect its rights by suit in equity, action at law or other appropriate proceedings, whether for the specific performance of any covenant or agreement of Borrower herein contained or in aid of the exercise of any power or remedy granted to the Bank under any other Financing Document.

SECTION 5.3Reserve for Reimbursement

RR.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 105% of the maximum amount available to be drawn under the Letters of Credit.  All amounts so paid to the Bank (or recovered by the Bank by legal or other action in the event Borrower shall fail or refuse to make payment as required by this Section) shall be held by the Bank in reserve as security for reimbursement for any draws the Bank may be required to pay under the Letters of Credit.  The Bank may maintain any reserve held under the terms of this Agreement in any manner the Bank may see fit, and the Bank may invest the same in such investment or investments as the Bank may choose or not invest the same.  So long as no Event of Default exists, the Bank shall be required to pay, and to account to Borrower for, any interest or other earnings on any reserve at any time held by the Bank under this Agreement.  Any income or profits from any investment of such reserve made by the Bank shall not become a part of such reserve and will be paid to Borrower no less frequently than quarterly if no Event of Default exists.

SECTION 5.4No Remedy Exclusive

SS.No remedy herein conferred upon or reserved to the Bank is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute.  No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof but any such right or power may be exercised from time to time and as often as may be deemed expedient.

SECTION 5.5Agreement to Pay Attorneys' Fees

TT.If Borrower should default under any of the provisions of this Agreement and the Bank should employ attorneys or incur other expenses for the collection of any payments due hereunder or the enforcement of performance or observance of any agreement or covenant on the part of Borrower herein contained, Borrower will on demand therefor pay to the Bank the reasonable fees of such attorneys and such other expenses so incurred.

SECTION 5.6No Additional Waiver Implied by One Waiver

UU.If any agreement contained in this Agreement should be breached by Borrower and thereafter waived by the Bank, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

SECTION 5.7Remedies Subject to Applicable Law

VV.All rights, remedies and powers provided by this Article may be exercised only to the extent the exercise thereof does not violate any applicable provision of law in the premises, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of law which may be controlling in the premises and to be limited to the extent necessary so that they will not render this Agreement invalid or unenforceable.

ARTICLE 6

Miscellaneous

SECTION 6.1Notices

(a)Any request, demand, authorization, direction, notice, consent, or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with, Borrower or the Bank must (except as otherwise provided in this Agreement) be in writing and be delivered by one of the following means:  (1) by personal delivery at the hand delivery address specified below, (2) by courier delivery, (3) by first-class, registered or certified mail, postage prepaid and addressed as provided below, or (4) if facsimile transmission facilities for such party are identified below or pursuant to a separate notice from such party, sent by facsimile transmission to the number specified below or in such notice.  The hand delivery or courier delivery address, mailing address and (if applicable) facsimile transmission number for receipt of notice or other documents are as follows:

Borrower

By hand or mail:                                M/I Homes, Inc.

3 Easton Oval

Columbus, Ohio  43219

Attention:                      Chief Financial Officer

Phone:                      (614) 418-8011

Fax:                      (614) 418-8080

With a copy to:                                Vorys, Sater, Seymour and Pease LLP

52 East Gay Street

Columbus, Ohio  443215

Attention:                      Thomas O. Ruby

Phone:                      (614) 464-5698

Fax:                      (614) 719-4934

Bank

By hand:                                1900 5th Avenue North

25th Floor, Regions Center

Birmingham, Alabama  35203

Attention:                      Homebuilder Finance Department

By mail:                                P.O. Box 11077

Birmingham, Alabama 35288

Attention:                      Homebuilder Finance Department

By facsimile:                                (205) 801-0138

With a copy to:                                J. Kris Lowry

Maynard, Cooper and Gale, P.C.

1901 6th Avenue North

2400 Regions/Harbert Plaza

Birmingham, Alabama  35203-2618

1.By facsimile:                                (205) 254-1999

Any of such parties may change the address for receiving any such notice or other document by giving notice of the change to the other parties named in this Section.

(b)Any such notice or other document shall be deemed delivered when actually received by the party to whom directed (or, if such party is not an individual, to an officer, director or other legal representative of the party) at the address or number specified pursuant to this Section, or, if sent by mail, 3 days after such notice or document is deposited in the United States mail, addressed as provided above.

SECTION 6.2Indemnification

WW.Borrower hereby indemnifies and holds harmless the Bank from and against any and all claims, damages, losses, liabilities, reasonable costs or expenses whatsoever which the Bank may incur (or which may be claimed against the Bank by any person or entity whatsoever) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to pay under, the Letters of Credit; provided, that Borrower shall not be required to indemnify the Bank for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (a) the willful misconduct or gross negligence of the Bank in determining whether a draft or certificate presented under the Letters of Credit complied with the terms of the Letters of Credit or (b) the Bank's negligent or willful failure to pay under the Letters of Credit after the presentation to it by the Beneficiary of a draft and certificate strictly complying with the terms and conditions of the Letters of Credit.  Nothing in this Section is intended to limit the reimbursement obligation of Borrower contained in Article 2.

SECTION 6.3Liability of the Bank

XX.For the exclusive benefit of the Bank and as between the Bank and Borrower only, Borrower assumes all risks of the acts or omissions of the Beneficiary and any transferee of the Letters of Credit with respect to its use of the Letters of Credit.  Neither the Bank nor any of its officers or directors shall be liable or responsible for:

(a)the use which may be made of the Letters of Credit or for any acts or omissions of the Beneficiaries and any transferee in connection therewith;

(b)the validity, sufficiency or genuineness of documents, or of any endorsement(s) thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged;

(c)payment by the Bank against presentment of documents which do not strictly comply with the terms of the Letters of Credit, including but not limited to, failure of any documents to bear any reference or adequate reference to the Letters of Credit; or

(d)any other circumstances whatsoever in making or failing to make payment under the Letters of Credit,

except only that Borrower shall have a claim against the Bank, and the Bank shall be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by Borrower which Borrower proves were caused by the Bank's willful misconduct or negligence in determining whether documents presented under the Letters of Credit comply with the terms of the Letters of Credit or the Bank's willful or negligent failure to pay under the Letters of Credit after the presentation to it by the Beneficiary of a draft and certificate strictly complying with the terms and conditions of the Letters of Credit.  In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

SECTION 6.4Continuing Obligation

YY.This Agreement is a continuing obligation and shall (a) be binding upon Borrower and the Bank, their successors and assigns, and (b) inure to the benefit of and be enforceable by Borrower and Bank and their successors and assigns; provided, that Borrower may not assign all or any part of this Agreement without the prior written consent of the Bank.

SECTION 6.5Costs, Expenses and Taxes

ZZ.Borrower shall promptly on demand pay all costs and expenses, including the reasonable fees and disbursements of counsel to the Bank, incurred by the Bank in connection with (a) the issuance of the Letters of Credit and the administration or collection of the Obligations, (b) the negotiation, preparation and review of the Financing Documents, (c) the enforcement of any of the Financing Documents, (d) the exercise by or on behalf of the Bank of any of its rights, powers or remedies under the Financing Documents, and (e) the prosecution or defense of any action or proceeding by or against the Bank, Borrower, or any one or more of them, concerning any matter related to this Agreement or any of the other Financing Documents, or any of the Obligations.  Borrower's obligations under this Section 6.5 shall survive the payment in full of the Obligations and the termination of this Agreement.

SECTION 6.6Submission to Jurisdiction

AAA.Borrower irrevocably (a) acknowledges that this Agreement will be accepted by the Bank and performed by Borrower in the State of Alabama (which is the state in which the Bank’s main office is located) and that the Letter of Credit will be issued in that state; (b) submits to the jurisdiction of each state or federal court sitting in Jefferson County, Alabama (collectively, the “Courts”) over any suit, action or proceeding arising out of or relating to this Agreement (individually, an “Agreement Action”); (c) waives, to the fullest extent permitted by law, any objection or defense that Borrower may now or hereafter have based on improper venue, lack of personal jurisdiction, inconvenience of forum or any similar matter in any Agreement Action brought in any of the Courts; (d) agrees that final judgment in any Agreement Action brought in any of the Courts shall be conclusive and binding upon Borrower and may be enforced in any other court to the jurisdiction of which Borrower is subject, by a suit upon such judgment; (e) consents to the service of process on Borrower in any Agreement Action by the mailing of a copy thereof by registered or certified mail, postage prepaid, to Borrower at the address designated in or pursuant to Section 6.1 hereof; (f) agrees that service in the manner specified in clause (e) next above shall in every respect be effective and binding on Borrower to the same extent as though such service of process were served on Borrower in person by a person duly authorized to serve such process; and (g) AGREES THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE “FAIR WARNING” TO BORROWER THAT THE EXECUTION OF THIS AGREEMENT MAY SUBJECT BORROWER TO THE JURISDICTION OF THE COURTS OF THE STATE OF ALABAMA WITH RESPECT TO ANY AGREEMENT ACTIONS, AND THAT IT IS FORESEEABLE BY BORROWER THAT BORROWER MAY BE SUBJECTED TO THE JURISDICTION OF THE COURTS OF THE STATE OF ALABAMA AND MAY BE SUED IN THAT STATE IN ANY AGREEMENT ACTIONS.  Nothing in this Section 6.6 shall limit or restrict the Bank’s right to serve process or bring Agreement Actions in manners and in courts otherwise than as herein provided.

SECTION 6.7Non Waiver

BBB.No failure or delay on the part of the Bank in exercising any right, power or privilege under this Agreement or under any of the other Financing Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or the exercise of any other right, power or privilege.

SECTION 6.8Modification; etc.

CCC.No modification, amendment or waiver of any provision of this Agreement or any of the other Financing Documents, and no consent to any departure by Borrower therefrom, shall be effective unless the same shall be in writing and signed by an authorized officer of the Bank, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in the same, similar or other circumstances.

SECTION 6.9Set off

DDD.While any Event of Default exists, the Bank is authorized at any time and from time to time, without notice to Borrower (any such notice being expressly waived by Borrower), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Bank to or for the credit or the account of Borrower against any and all of the Obligations, irrespective of whether or not the Bank shall have made any demand under this Agreement and although such Obligations may be unmatured.  The rights of the Bank under this Section are in addition to all other rights and remedies (including other rights of set off or pursuant to any banker’s lien) that the Bank may have.

SECTION 6.10WAIVER OF JURY TRIAL

EEE.BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BANK AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

SECTION 6.11Termination

FFF.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 (as defined in the Control and Pledge Agreement) equals 105% of all Obligations which remain contingent and (b) all other Obligations have been fully and finally paid and performed.  Any notice of termination shall be irrevocable.  The Bank may terminate this Agreement and the Commitment at any time, without notice, during the existence of an Event of Default.

GGG.

HHH.           [Signatures on following page]

III.IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

REGIONS BANK

By:      

Name:

Title:      

M/I HOMES, INC.

By:           

Name:  Phillip G. Creek

Title:     Executive Vice President and Chief   

Financial Officer

LETTER OF CREDIT AGREEMENT

Dated as of July 27, 2009

Between

M/I HOMES, INC.,

and

REGIONS BANK

TABLE OF CONTENTS

Page

Parties 1

Recitals 1

ARTICLE 1 Definitions and Other Provisions of General Application 

SECTION 1.1                         Definitions [

SECTION 1.2                         General Rules of Construction 

SECTION 1.3                         Effect of Headings and Table of Contents 

SECTION 1.4                         Separability Clause 

SECTION 1.5                         Governing Law 

SECTION 1.6                         Counterparts 

ARTICLE 2 Issuance of Letters of Credit; Reimbursement and Fees 

SECTION 2.1                         Issuance of Letters of Credit 

SECTION 2.2                         Reimbursement 

SECTION 2.3                         Fees for Maintenance of Letters of Credit 

SECTION 2.4                         Increased Costs 

SECTION 2.5                         Place and Time of Payments

SECTION 2.6                         Late Payments 

SECTION 2.7                         Computation of Charges 

SECTION 2.8                         Obligations of Borrower Absolute 

ARTICLE 3 Conditions Precedent to Issuance of Letters of Credit 

SECTION 3.1                         Representations and Warranties 

SECTION 3.2                         No Default 

SECTION 3.3                         Conditions Precedent to Issuance of Letters of Credit 

ARTICLE 4 Representations and Covenants 

SECTION 4.1                         Representations and Warranties 

SECTION 4.2                         Affirmative Covenants 

SECTION 4.3                         Negative Covenants 

SECTION 4.4                         Minimum Coverage Amount 

ARTICLE 5 Events of Default and Remedies 

SECTION 5.1                         Events of Default 

SECTION 5.2                         Remedies 

SECTION 5.3                         Reserve for Reimbursement 

SECTION 5.4                         No Remedy Exclusive 

SECTION 5.5                         Agreement to Pay Attorneys' Fees

SECTION 5.6                         No Additional Waiver Implied by One Waiver 

SECTION 5.7                         Remedies Subject to Applicable Law 

ARTICLE 6 Miscellaneous 

SECTION 6.1                         Notices

SECTION 6.2                         Indemnification 

SECTION 6.3                         Liability of the Bank 

SECTION 6.4                         Continuing Obligation 

SECTION 6.5                         Costs, Expenses and Taxes 

SECTION 6.6                         Submission to Jurisdiction 

SECTION 6.7                         Non Waiver 

SECTION 6.8                         Modification; etc. [

SECTION 6.9                         Set off 

SECTION 6.10                       WAIVER OF JURY TRIAL 

SECTION 6.11                       Termination 

Testimonium

EX-10.4

Exhibit 10.4

CREDIT AGREEMENT

dated as of July 27, 2009

BETWEEN

   M/I HOMES, INC.

Borrower

and

THE HUNTINGTON NATIONAL BANK

Lender

Porter, Wright, Morris & Arthur LLP

41 South High Street

Columbus, Ohio 43215

TABLE OF CONTENTS

SECTION                                           HEADING PAGE #

1.               DEFINITIONS.

1.1.        Certain Defined Terms.

1.2.        Other Definitional Provisions and Construction.

2.               THE CREDIT EXTENSIONS AND TERMS OF REPAYMENT.

2.1.        The Letters of Credit.

2.2.        Provisions Applicable to the Credit Extensions and the Letters of Credit.

2.3.        Pending Defaults.

2.4.        Increased Costs and Capital Requirements.

2.5.        Illegality and Impossibility.

2.6.        Survival of Obligations.

3.               FEES.

3.1.        Fees.

3.2.        Method of Payment.

4.               COLLATERAL.

4.1.        Collateral Deposit Account.  All Obligations under this Agreement shall be secured by the Collateral.

5.               CONDITIONS PRECEDENT.

5.1.        Conditions Precedent to Initial Credit Extensions.

5.2.        Conditions Precedent to Subsequent Letter of Credit Issuances.

6.               WARRANTIES AND REPRESENTATIONS.

6.1.        Organization and Authority.

6.2.        Borrowing is Legal and Authorized.

6.3.        Margin Loans and Purchase of Ineligible Securities.

6.4.        Taxes.

6.5.        Compliance with Law.

6.6.        Financial Statements; Full Disclosure.

6.7.        Litigation; Adverse Effects.

6.8.        Solvency.

6.9.        Government Consent.

6.10.            No Liens on Collateral.

6.11.            No Defaults.

7.               BORROWER AFFIRMATIVE AND NEGATIVE COVENANTS.

7.1.        Payment of Taxes and Claims.

7.2.        Place of Business; Books and Records.

7.3.        Proper Books; Collateral.

7.4.        Restriction on Fundamental Changes; Conduct of Business.

7.5.        Negative Pledge.

8.               FINANCIAL INFORMATION AND REPORTING.

9.               DEFAULT.

9.1.        Events of Default.

9.2.        Default Remedies.

10.               GENERAL PROVISIONS.

10.1.            Notices.

10.2.            Costs and Expenses.

10.3.            Survival, Successors and Assigns.

10.4.            Amendment and Waiver.

10.5.            Enforceability and Governing Law.

10.6.            Confidentiality.

10.7.            Section Headings.

10.8.            Interpretation.

10.9.            Severability of Provisions.

10.10.            Counterparts; Facsimile Execution.

10.11.            Revival and Reinstatement of Obligations.

10.12.            Integration.

10.13.            Waiver of Right to Trial by Jury.

10.14.            No Consequential Damages.

10.15.            Indemnity.

10.16.            Patriot Act Notice.

EXHIBITS AND SCHEDULES

Exhibit A                                - Application and Agreement for Letter of Credit

Exhibit B                                - Form of Compliance Certificate

Schedule 5.1                                - Conditions Precedent to Initial Letter of Credit Issuance

CREDIT AGREEMENT

This Credit Agreement (this “Agreement”) is entered into at Columbus, Ohio, between THE HUNTINGTON NATIONAL BANK, a national banking association with a place of business in Columbus, Ohio (“Lender”), and M/I Homes, Inc., an Ohio corporation with its principal place of business in Columbus, Ohio (“Borrower”), as of July 27, 2009.

1.   Definitions.

1.1.Certain Defined Terms.

The following terms used in this Agreement or in the other Loan Documents executed in connection herewith shall have the following meanings, applicable both to the singular and the plural forms of the terms defined.  As used in this Agreement:

“Affiliate” means, as applied to any Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person, or is a family member related by birth or marriage.  For purposes of this definition only, “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of equity interests, by contract, or otherwise; provided, however, that, in any event: (i) any Person which owns directly or indirectly ten percent (10%) or more of the securities having ordinary voting power for the election of directors or other members of the governing body of a Person or ten percent (10%) or more of the partnership, member or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed to control such Person; (ii) each director (or manager) of a Person shall be deemed to be an Affiliate of such Person; and (iii) each partnership or joint venture in which a Person is a partner or joint venturer shall be deemed to be an Affiliate of such Person.

“Agreement” means this Credit Agreement.

“Application and Agreement for Letter of Credit” shall mean an application and agreement for standby letter of credit by, between, and among Borrower and Lender, in a form provided by Lender substantially in the form attached hereto as Exhibit A, either as originally executed or as it may from time to time be supplemented, modified, amended, renewed, or extended.

“Bankruptcy Code” means Title 11 of the United States Code (11 USC, § 101 et seq), as amended from time to time, and any successor statute thereto, including (unless the context requires otherwise) any rules or regulations promulgated thereunder.

“Base Rate” means the rate established by The Huntington National Bank from time to time designated as its prime rate based on its consideration of economic, money market, business and competitive factors, and such rate is not necessarily the most favored rate of such Person.  Each change in the Base Rate shall automatically and immediately change the interest rate on all applicable advances bearing the Base Rate without notice to Borrower, subject to any maximum or minimum interest rate limitation specified by applicable law.

“Borrower” is defined in the preamble.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which national banks are authorized or required to close.

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“Change of Control” means the occurrence of any of the following: (a) any Person or group (as that term is understood under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of Borrower equal to at least fifty percent (50%); or (b) as of any date a majority of the board of Directors of Borrower Parent consists of individuals who were not either (i) directors of Borrower as of the corresponding date of the previous year, (ii) selected or nominated to become directors by the Board of Directors of Borrower of which a majority consisted of individuals described in clause (b)(i) above or (iii) selected or nominated to become directors by the Board of Directors of Borrower of which a majority consisted of individuals described in clause (b)(i) above and individuals described in clause (b)(ii) above.

“Closing Date” means the date of the making of the initial Credit Extension hereunder.

“Collateral” means all now owned or hereafter acquired right, title and interest in property of Borrower in or upon which a first and exclusive security interest or Lien is granted to Lender, under this Agreement, any security agreement or under any of the other Loan Documents and shall include without limitation all right, title and interest in any Deposit Account, monies, funds or other property in the Deposit Collateral Account and all Proceeds thereof.

“Commitment Fee” means a commitment fee equal to 15 basis points (0.15%) of the Letter of Credit Commitment, payable on the date hereof.

“Contingent Obligations” means any agreement, undertaking or arrangement by which any Person assumes, guaranties, endorses, agrees to provide funding, or otherwise becomes or is contingently liable upon the obligation or liability of any other Person.

“Credit Extension” is defined in Section 2.1.

“Customs”is defined in Section 2.1(h)(iv).

“Default Rate” means, at any time, in respect of any Credit Extension, advance, fee or any other amount under this Agreement or any other Loan Document that is not paid when due to Lender (whether at stated maturity, by acceleration or mandatory prepayment or otherwise), a rate per annum during the period from and including the due date to but excluding the date on which such amount is paid in full equal to the sum of (x) four percent (4%) per annum plus (y) the related fixed or variable interest rate or fee otherwise applicable to such Credit Extension, advance, fee or other amount.  In respect of failure to pay any Reimbursement Obligation, the Default Rate shall be five percent (5.00%) per annum in excess of the Base Rate.

“Deposit Accounts” means “deposit accounts” (as defined in the UCC), all deposit accounts, whether general, special, time, demand, provisional, or final, all cash or monies wherever located, any and all deposits or other sums at any time due to such Person, which now or hereafter are at any time in the possession or control of Lender or in the possession of any third party acting in Lender’s behalf, without regard to whether Lender received the same in pledge for safekeeping, as agent for collection or transmission or otherwise, or whether Lender has conditionally released the same.

“Deposit Collateral Account” is defined in Section 2.1(g).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute thereto, including without limitation (unless the context otherwise requires), any rules or regulations promulgated thereunder.

“Event of Default” means an event described in Section 9.1.

“Financial Officer” means the chief executive officer, president, chief financial officer or treasurer of Borrower.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board, the American Institute of Certified Public Accountants and the Financial Accounting Standards Board as in effect from time to time in the United States consistently applied.

“Governmental Acts”is defined in Section 2.1(f).

“Governmental Authority” means any nation or government, any federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established to perform any of such functions.

“Indebtedness” means, at any time, (i) all indebtedness, obligations or other liabilities (other than accounts payable arising in the ordinary course of business payable on terms customary in the trade) which in accordance with GAAP should be classified as liabilities on the balance sheet of such Person, including without limitation, (A) for borrowed money or evidenced by debt securities, debentures, acceptances, notes or other similar instruments, and any accrued interest, fees and charges relating thereto, (B) under profit payment agreements or in respect of obligations to redeem, repurchase or exchange any securities or to pay dividends in respect of any stock, (C) with respect to letters of credit, bankers acceptances, interest rate swaps or other contracts, currency agreement or other financial products, (D) to pay the deferred purchase price of property or services, or (E) in respect of Capital Leases; (ii) all indebtedness, obligations or other liabilities secured by a lien on any property, whether or not such indebtedness, obligations or liabilities are assumed by the owner of the same; and (iii) all Contingent Obligations.

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, receivership, assignment for the benefit of creditors, formal or informal moratorium, forbearance, composition, extension generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

“IRC” means the Internal Revenue Code, as amended from time to time, and any successor statute thereto, including (unless the context requires otherwise) any rules or regulations promulgated thereunder.

“Land” means, in respect of any Person, all present and future plots or parcels of land, whether now owned,  leased or entitled or hereafter acquired (including, in respect of Borrower, as reflected in the most recent financial statements) by such Person.

“Lender” is defined in the preamble and shall include The Huntington National Bank or any of its Affiliates in its capacity as an issuer of Letters of Credit under this Agreement.

“Letter of Credit” and “Letters of Credit” shall mean any letter of credit issued by Lender as issuing bank for the account of Borrower, either as originally issued or as the same may, from time to time, be amended or otherwise modified, extended, or replaced.

“Letter of Credit Commitment” means the commitment of such Lender to provide Letter of Credit Exposure in an aggregate amount not to exceed $8,750,000.

“Letter of Credit Documents” is defined in Section 2.1(b).

“Letter of Credit Draft” means a draft drawn on Lender pursuant to a Letter of Credit.

“Letter of Credit Exposure” shall mean, as of any date of determination, the aggregate undrawn stated amount of all outstanding Letters of Credit plus the aggregate of all amounts drawn under Letters of Credit for which Lender has not yet received payment or reimbursement; provided, however, that the Letter of Credit Exposure shall at no time exceed the aggregate sum of the Letter of Credit Commitment.

“Letter of Credit Fee” shall mean (i) a fee equal to one and one-half percent (1.50%) per annum of the stated amount of each Letter of Credit, due and payable in advance to Lender upon the issuance of each Letter of Credit.

“Letter of Credit Reimbursement Obligation” is defined in Section 2.1(d).

“Lien” means any interest in an asset securing an obligation owed to, or a claim by, any Person other than the owner of the asset, whether such interest shall be based on the common law, statute, or contract, whether such interest shall be recorded or perfected, and whether such interest shall be contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances, including the lien or security interest arising from any mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment (collateral or otherwise), hypothec, deposit arrangement, security agreement, conditional sale, trust receipt, lease, consignment, or bailment for security purposes, judgment, claim encumbrance or statutory trust and also including reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting real property.

“Loan Documents” means this Agreement, each Application and Agreement for Letter of Credit, reimbursement agreements, any security agreement, any guaranties of the Credit Extensions, any cash management agreements, subordination and intercreditor agreements, deposit account control agreements, collateral assignments, pledge agreements, security agreements, mortgages, deeds of trusts and collateral agreements executed in connection with this Agreement, and all other documents, instruments and agreements executed in connection therewith or contemplated thereby, as the same may be amended, restated or otherwise modified and in effect from time to time.

“Master Credit Facility” means that certain Second Amended and Restated Credit Agreement, effective as of October 6, 2006, by and among Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as agent for the lenders party thereto and the other agents party thereto, as amended, restated, supplemented or otherwise modified from time to time.

“Master Credit Facility Default” means a default or event of default by Borrower under the terms of the Master Credit Facility.

“Material Adverse Effect” means, at any time, a material adverse effect in respect of Borrower upon (i) the business, condition (financial or otherwise), operations, performance, properties or prospects of any such Person, (ii) the ability of any such Person to perform its respective obligations under this Agreement, any Loan Document or any document, agreement, guaranty, or instrument executed in connection herewith, or (iii) the ability of Lender to enforce the terms of this Agreement, any other Loan Documents, or any document, agreement, guaranty, or instrument executed in connection herewith.

“Maturity Date” means August 31, 2011.

“Obligations” means all Credit Extensions, advances, Indebtedness, debts, principal, interest (including without limitation any interest that but for the provision of the Bankruptcy Code would have accrued), Contingent Obligations, obligations, fees, charges, costs, expenses, indemnification obligations, lease payments, liabilities, owing, or due or payable or to become due and payable by Borrower to Lender or any affiliate of Lender of any kind or nature, present or future under this Agreement, whether or not evidenced by any Application and Agreement for Letter of Credit, note, draft, letter of credit, guaranty, instrument or other Loan Document, whether direct or indirect, acquired by assignment or otherwise, absolute or contingent, liquidated or unliquidated, due or to become due, now existing or arising hereafter and however acquired or incurred (including principal, interest, late charges, collection costs, attorneys’ fees and other amounts chargeable under this Agreement or under any other Loan Document), and any and all amendments, extensions, modifications, supplements, renewals of or substitutes thereto, thereof and therefor, both prior to and subsequent to any Insolvency Proceeding.

“Pending Default” is defined in Section 2.3.

“Permitted Contest” means the right of Borrower to contest or protest any Lien (other than any such Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (i) a reserve with respect to such obligation is established on Borrower’s books and records in such amount as is required under GAAP, (ii) any such protest is instituted promptly and prosecuted diligently by Borrower in good faith, and (iii) Lender is satisfied in its sole, good faith discretion, that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Lender’s Liens.

“Permitted Liens” means any Lien on the Collateral held by Lender or Affiliates of Lender.

“Person” means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or any other entity of any kind or any government or political subdivision or any agency, department or instrumentality thereof.

“Proceeds” means, “proceeds” (as defined in the UCC), all cash and non-cash proceeds, substitutions, replacements, additions and accessions to any Collateral, all documents, negotiable documents, documents of title, warehouse receipts, storage receipts, dock receipts, dock warrants, express bills, freight bills, airbills, bills of lading, and other documents relating thereto, all products thereof, including but not limited to, notes, drafts, checks, instruments, insurance proceeds, indemnity proceeds, warranty and guaranty proceeds.

“Real Property” means, in respect of any Person, the Land of such Person, together with the right, title and interest of such Person, if any, in and to the streets, the Land lying in the bed of any streets, roads or avenues, opened or proposed, in front of, the air space and development rights pertaining to the Land and the right to use such air space and development rights, all rights of way, privileges, liberties, tenements, hereditaments and appurtenances belonging or in any way appertaining thereto, all fixtures, all easements now or hereafter benefiting the Land and all royalties and rights appertaining to the use and enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil and gas rights, together with all of the buildings and other improvements now or hereafter erected on the Land and any fixtures appurtenant thereto.

“Requirements of Law” means, as to any Person, the charter and by-laws or other organization or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, Americans With Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or permit or environmental, labor, employment, occupational safety or health law, rule or regulation.

“Solvent” means, with respect to any Person, that at the time of determination: (i) the fair market value of its assets is in excess of the total amount of its liabilities (including, without limitation, Contingent Obligations);  (ii) the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; (iii) it is then able and expects to be able to pay its debts (including, without limitation, contingent debts and other commitments) as they mature; and (iv) it has capital sufficient to carry on its business as conducted and as proposed to be conducted,

“Subsidiary” ofa Person means any corporation, partnership, limited liability company or other entity in which such Person directly or indirectly owns or controls the securities or other ownership interests having ordinary voting power to elect a majority of the board of directors, or appoint managers or other persons performing similar functions.

“UCC” means the Ohio Uniform Commercial Code, as in effect from time to time; provided, however, that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of Lender’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Ohio, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“Unused Commitment Fee” means a commitment fee accruing at a rate equal to 15 basis points (0.15%) per annum on the amount by which the Letter of Credit Commitment exceeds the average daily Letter of Credit Exposure in effect from time to time.

“Voidable Transfer” is defined in Section 10.12.

1.2.Other Definitional Provisions and Construction.

(a)           Any terms used in this Agreement or in any Loan Document that are defined in the UCC shall have the meanings given such terms therein, unless otherwise defined herein.

(b)           Any accounting terms used in this Agreement or in any Loan Document and not specifically defined herein shall be construed in accordance with the respective meanings given to such terms under GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto.

(c)           Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, and the term “including” is not limiting, the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be.  Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.

(d)           All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

2.   The Credit Extensions and Terms of Repayment.

2.1.The Letters of Credit.

Lender, as issuing bank, subject to the terms and conditions hereof, will issue Letters of Credit and permit Letter of Credit Exposure for the account of Borrower in the aggregate up to the amount of the Letter of Credit Commitment (the “Credit Extensions”).  At no time shall the aggregate Letter of Credit Exposure exceed the Letter of Credit Commitment.  Borrower unconditionally promises to pay when due the amount of each Letter of Credit Reimbursement Obligation, all unpaid interest and fees accrued thereon and all other Obligations incurred by it, in accordance with the terms of this Agreement and the other Loan Documents.  Each Letter of Credit shall be issued for the account of Borrower through one of Lender’s branches, denominated in U.S. dollars, from time to time during the period commencing on the date hereof and ending on the date ninety-one (91) days prior to the Maturity Date.

(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 twelve (12) months after the date of issuance thereof or the Maturity Date.  No Letters of Credit with expiry dates of one year or longer shall be issued after August 30, 2010.

(b)           Conditions.  In addition to the satisfaction of the conditions contained in Sections 5.1 and 5.2, the obligation of Lender to issue any Letter of Credit is subject to the satisfaction in full of the following conditions: (i) Borrower shall have delivered to the Lender at such times and in such manner as Lender may prescribe, a request for issuance of such Letter of Credit in form acceptable to Lender, a duly executed Application and Agreement for such Letter of Credit, and such other documents, instructions and agreements as may be required pursuant to the terms thereof (all such applications, documents, instructions, and agreements being referred to herein as the “Letter of Credit Documents”), (ii) the proposed Letter of Credit shall be satisfactory to Lender as to form and content; and (iii) as of the date of issuance no order, judgment or decree of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain Lender from issuing such Letter of Credit and no law, rule or regulation applicable to Lender and no request or directive (whether or not having the force of law) from a Governmental Authority with jurisdiction over Lender shall prohibit or request that Lender refrain from the issuance of Letters of Credit generally or the issuance of that Letter of Credit.

(c)           Procedure for Issuance of Letters of Credit.  (i) Subject to the terms and conditions hereof and provided that the applicable conditions set forth in Sections 5.1 and 5.2 hereof have been satisfied, Lender, on the requested date, but no earlier than twenty-four (24) hours after receiving the application for issuance, shall issue a Letter of Credit on behalf of Borrower in accordance with Lender’s usual and customary business practices, and (ii) Lender shall not extend or amend any Letter of Credit unless the requirements of this Section 2.1(c) are met as though a new Letter of Credit was being requested and issued.

(d)           Reimbursement Obligation.  Borrower agrees unconditionally, irrevocably and absolutely to pay immediately to Lender the amount of each advance drawn under or pursuant to a Letter of Credit or an Letter of Credit Draft related thereto (such obligation of Borrower to reimburse Lender for an advance made under a Letter of Credit or Letter of Credit Draft being hereinafter referred to as a “Letter of Credit Reimbursement Obligation”), each such reimbursement to be made by Borrower no later than the Business Day on which Lender makes payment of each such Letter of Credit Draft. If, for any reason, Borrower fails to repay an Letter of Credit Reimbursement Obligation on the day such Letter of Credit Reimbursement Obligation arises, then such Letter of Credit Reimbursement Obligation shall bear interest from and after such day, until paid in full, at the Default Rate.

(e)           Letter of Credit Fees Upon Issuance.  Borrower agrees to pay to Lender: (i) in advance, upon the first day of issuance of each Letter of Credit, a Letter of Credit Fee 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.

(f)           Indemnification; Exoneration.  (i) In addition to amounts payable as elsewhere provided in this Section 2.1, Borrower hereby agrees to protect, indemnify, pay and save harmless Lender from and against any and all liabilities and costs which Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of Credit other than as a result of Lender’s gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, or (B) the failure of Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called “Governmental Acts”).

(ii)           As among Borrower and Lender, Borrower assumes all risks of the acts and omissions of, or misuse of such Letter of Credit by, the beneficiary of any Letters of Credit.  In furtherance and not in limitation of the foregoing, Lender shall not be responsible, in the absence of gross negligence or willful misconduct in connection therewith, as determined by the final judgment of a court of competent jurisdiction, (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of the Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, or other similar form of transmission or otherwise; (v) for errors in interpretation of technical trade terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of Lender, including without limitation, any Governmental Acts.  None of the above shall affect, impair or prevent the vesting of Lender’s rights or powers under this Section 2.1.

(iii)           In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with the Letters of Credit or any related certificates shall not, in the absence of gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, put Lender under any resulting liability to Borrower or relieve Borrower of any of its obligations hereunder to Lender or to any other Person.

(iv)           Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained this Section 2.1 shall survive the payment in full of principal and interest hereunder, the termination of the Letters of Credit and the termination of this Agreement.

(g)           Cash Collateral.  Notwithstanding anything to the contrary herein, in any Application and Agreement for Letter of Credit or other Loan Document, prior to (i) the occurrence of a Master Credit Facility Default or Event of Default hereunder, or (ii) the termination, cancellation, payment in full on or other cessation of the Master Credit Facility, Borrower, not fewer than forty-eight (48) hours prior to any issuance of any Letter of Credit, shall deliver to Lender Collateral having a value, as determined by Lender, such that, when added to the aggregate cash or cash equivalents in the Deposit Collateral Account, such aggregate amount equals not less than one hundred and two percent (102%) of the aggregate Letter of Credit Exposure.  Further, notwithstanding anything to the contrary herein, in any Application and Agreement for Letter of Credit or other Loan Document, after (i) the occurrence of a Master Credit Facility Default or an Event of Default hereunder, or (ii) the termination, cancellation, payment in full on or other cessation of the Master Credit Facility, Borrower, not fewer than forty-eight (48) hours prior to any issuance of any Letter of Credit, shall deliver to Lender Collateral having a value, as determined by Lender, such that, when added to the aggregate cash or cash equivalents in the Deposit Collateral Account, such aggregate amount equals not less than one hundred and five percent (105%) of the aggregate Letter of Credit Exposure.  All such Collateral shall be subject to the first and exclusive Lien of Lender pursuant to an applicable Loan Document and shall be held by Lender in a separate Deposit Account maintained at Lender designated as a cash collateral account pursuant to this Agreement to secure for Borrower’s Obligations in respect of this Agreement (such account herein called “Deposit Collateral Account”).  All increases and interest applicable to the Deposit Collateral Account shall be deposited in the Deposit Collateral Account and shall be applied to reimburse Lender for drawings or payments under or pursuant to Letters of Credit, or if no such reimbursement is required, to payment of such of the other Obligations under this Agreement as Lender shall determine.  Any deposit held by Lender as collateral for the payment and performance of the obligations of Borrower under any outstanding Letter of Credit shall be under Lender’s exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Moneys in such account shall be applied by Lender to reimburse Lender for Letter of Credit Reimbursement Obligations or other disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the Letter of Credit Exposure or any other Obligations of Borrower under this Agreement.

(h)           Evidence of Letters of Credit.

(i)           The Letter of Credit Reimbursement Obligations shall also be evidenced by a an Application and Agreement for Letter of Credit or other reimbursement agreement substantially in the form of Exhibit A attached hereto, completed to the satisfaction of Lender, and, such other certificates, documents and other papers and information as Lender may request.

(ii)           Each Letter of Credit shall, among other things, provide for the payment of sight drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and each Letter of Credit request and each Letter of Credit shall be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 and any amendments or revisions thereof or International Standby Practices (promulgated by the International Chamber of Commerce) in effect as of the time of issuance of such Letter of Credit, and, to the extent not inconsistent therewith, the laws of the State of Ohio.

(iii)           Borrower shall authorize and direct Lender with respect to each Letter of Credit to name Borrower as the “Account Party” therein, shall deliver to Lender all instruments, documents and other writings and property pursuant to the Letter of Credit and shall accept and rely upon Lender’s good faith instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the application therefor.

(iv)           In connection with all Letters of Credit issued or caused to be issued by Lender under this Agreement, Borrower hereby appoints Lender, or its designee, as its attorney, with full power and authority: (i) to sign or endorse Borrower’s name upon any warehouse or other receipts, letter of credit applications and acceptances; (ii) to sign Borrower’s name on bills of lading; (iii) to clear inventory through the United States of America Customs Department (“Customs”) in the name of Borrower or Lender or Lender’s designee, and to sign and deliver to Customs officials powers of attorney in the name of Borrower for such purpose; and (iv) to complete in Borrower’s name, in Lender’s name or in the name of Lender’s designee, any order, sale or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof.  Neither Lender nor its attorneys will be liable for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Lender’s gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction.  This power, being coupled with an interest, is irrevocable so long as any Letters of Credit remain outstanding.

(i)           Purpose of Letters of Credit.  Letters of Credit shall be solely for the account of Borrower and shall be used solely for lawful corporate purposes.

2.2.Provisions Applicable to the Credit Extensions and the Letters of Credit.

(a)           Upon the occurrence of any Event of Default, Lender, at its option, to the extent not prohibited under applicable law, may impose the Default Rate as the applicable rate on all or any portion of the Letter of Credit Exposure, the Letter of Credit Fee and the Unused Commitment Fee.

(b)           Interest, fees, other charges and all Obligations hereunder each shall be calculated on a 360-day year basis and shall be based on the actual number of days that elapse during the interest calculation period.

(c)           In no event whatsoever shall the interest rate and other charges hereunder exceed the highest rate permissible under law that a court of competent jurisdiction, in a final determination, shall deem applicable hereto.  In the event such a court determines that Lender has received interest or other charges hereunder in excess of the highest rate applicable thereto, Lender shall promptly refund such excess amount to Borrower, and the provisions hereof shall be deemed amended to provide for such permissible rate.

2.3.Pending Defaults.

Lender shall have no obligation to issue or renew any Letters of Credit at any time when a set of facts or circumstances exists, which, upon the giving of notice, the lapse of time, or both, would constitute an Event of Default under this Agreement (a “Pending Default”).

2.4.Increased Costs and Capital Requirements.

In the event that any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect, or any interpretation or administration thereof by any Governmental Authority, or compliance by Lender or any Affiliate thereof with any request or directive of any Governmental Authority, shall (a) affect the basis of taxation of payments to Lender of any amounts payable by Borrower for Credit Extensions under the Letters of Credit (other than taxes imposed on or measured by the overall net income of Lender by the Governmental Authority, in which Lender has its principal office), or (b) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Lender, or (c) impose any other condition, requirement or charge with respect to this Agreement or the Credit Extensions (including without limitation any capital adequacy requirement, any requirement that affects the manner in which Lender allocates capital resources to its commitments or any similar requirement), and the result of any of the foregoing is to increase the cost to Lender or any Affiliate thereof of making or maintaining the Credit Extensions or Letters of Credit, to reduce the amount of any sum receivable by Lender thereon, or to reduce the rate of return on Lender’s capital, then Borrower shall pay to Lender, from time to time, upon request of Lender, additional amounts sufficient to compensate Lender for such increased cost, reduced sum receivable or reduced rate of return to the extent Lender is not compensated therefor in the computation of the interest rates applicable to the Letters of Credit.  A detailed statement as to the amount of such increased cost, reduced sum receivable or reduced rate of return, prepared in good faith and submitted by Lender to Borrower, shall be final and conclusive, absent manifest error in computation.

2.5.Illegality and Impossibility.

In the event that any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect, or any interpretation or administration thereof by any Governmental Authority, or compliance by Lender with any request or directive of a Governmental Authority, including without limitation, exchange controls, shall make it unlawful or impossible for Lender to maintain any advance under this Agreement, Borrower shall upon receipt of notice thereof from Lender, immediately repay in full any Obligations owing by Borrower to Lender under this Agreement, together with all accrued interest thereon to the date of payment, as applicable.  This Section 2.5 shall apply only as long as such illegality exists.

2.6.Survival of Obligations.

The provisions of Section 2.4 shall survive the termination of this Agreement and the payment in full of all promissory notes outstanding pursuant hereto.

3.   Fees.

3.1.Fees.

Borrower shall pay to Lender: (a) on the effective date of this Agreement, the Commitment Fee; and

(b) in arrears, beginning on the first day of October, 2009, and continuing on the first day of each calendar quarterthereafter, an Unused Commitment Fee.

3.2.Method of Payment.

All payments of principal, interest, fees and commissions hereunder shall be made, without setoff, deduction or counterclaim, in immediately available funds to Lender at Lender’s address specified in writing by Lender to Borrower, by 2:00 p.m. (Columbus, Ohio time) on the date when due.  Borrower hereby irrevocably authorizes Lender to charge the Deposit Collateral Account and any other account of Borrower maintained with Lender or Affiliate thereof, for any payment of any Letter of Credit Reimbursement Obligation or Letter of Credit Exposure, interest, fees and commissions as it becomes due hereunder.

4.   Collateral.

4.1.Collateral Deposit Account.  All Obligations under this Agreement shall be secured by the Collateral.

5.   Conditions Precedent.

5.1.Conditions Precedent to Initial Credit Extensions.

This Agreement shall become effective, and Lender shall be obligated to make the initial advance hereunder only after Lender shall have received from Borrower each of following items in form and substance satisfactory to Lender: This Agreement, the Application and Agreement for Letter of Credit, and the other Loan Documents, conditions and deliveries described in Schedule 5.1 attached hereto, each duly executed where appropriate and in form and substance satisfactory to Lender; and the fulfillment of all the conditions described thereon and the delivery of such additional documentation as Lender may reasonably request.

5.2.Conditions Precedent to Subsequent Letter of Credit Issuances.

Lender shall not be required to issue any Letters of Credit subsequent to the initial disbursement or initial issuance of a Letter of Credit, unless on the applicable date that each such issuance is to be made:

(a)           The warranties and representations set forth in Article 6 hereof and each of the representations and warranties contained in any Loan Document at any time pursuant to this Agreement shall be true and correct on and as of such date with the same effect as though such warranty or representation had been made on and as of such date, except to the extent that such warranty or representation is stated to expressly relate solely to an earlier date;

(b)           Borrower shall have complied and shall then be in compliance with all the terms, covenants and conditions of this Agreement which are binding upon it, and no Event of Default or Pending Default shall have occurred and be continuing on such date or after giving effect to the advances requested to be made; and

(c)           No Material Adverse Effect shall have occurred.

Each request for Credit Extension hereunder shall constitute a warranty and representation by Borrower making such request that each of the conditions contained in Sections 5.2(a), (b), and (c) have been satisfied.

6.   Warranties and Representations.

In order to induce Lender to enter into this Agreement and to issue Letters of Credit and make the other financial accommodations to Borrower under this Agreement and the other Loan Documents, Borrower represents and warrants to Lender that each of the following statements is true and correct:

6.1.Organization and Authority.

Borrower (a) is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority and all necessary licenses and permits to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted and (c) is not doing business or conducting any activity in any jurisdiction in which it is not duly qualified and authorized to do business, except where the failure to do so will not have a Material Adverse Effect.

6.2.Borrowing is 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 Agreement and the other Loan Documents 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 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 Agreement, or, to the extent applicable, the ability of Borrower to incur the Indebtedness pursuant to this Agreement.

6.3.Margin Loans and Purchase of Ineligible Securities.

None of the transactions contemplated in this Agreement will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulation issued pursuant thereto, including without limitation, Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

6.4.Taxes.

All tax returns and reports required to be filed by Borrower in any jurisdiction have been filed, and all taxes, assessments, fees and other governmental charges upon Borrower and upon any property, assets, income and franchises thereof, which are shown in such returns or reports to be due and payable have been paid, except for Permitted Contests.  Borrower knows of no proposed additional tax assessment against it.  The accruals for taxes on the books of Borrower for the current fiscal period have been determined in accordance with GAAP, consistently applied, subject to year-end and audit adjustments.

6.5.Compliance with Law.

Borrower (a) is not in violation of any Requirements of Law, and (b) has not failed to obtain any licenses, permits, franchises or other governmental or environmental authorizations necessary to the ownership of Borrower’s properties or to the conduct of its business, which violation or failure is reasonably likely to have a Material Adverse Effect.

6.6.Financial Statements; Full Disclosure.

The financial statements of Borrower for the fiscal year ending December 31, 2008, which have been supplied to Lender, have been prepared in accordance with GAAP and fairly represent Borrower’s financial condition as of such date.  The interim financial statements of Borrower for the period ending March 31, 2009, respectively which have been supplied to Lender have been prepared in good faith and accurately represent Borrower’s financial condition as of the dates of such financial information, subject to year-end and audit adjustments.

6.7.Litigation; Adverse Effects.

There is no action, suit, audit, proceeding, investigation or arbitration (or series of related actions, suits, proceedings, investigations or arbitrations) pending before or by any Governmental Authority or private arbitrator or, to the knowledge of Borrower, threatened against Borrower or any property thereof (i) challenging the validity or the enforceability of any provision of this Agreement, or any other Loan Document or (ii) which has had, shall have or is reasonably likely to have a Material Adverse Effect.  Borrower is not subject to or in default with respect to any final judgment, writ, injunction, restraining order or order of any nature, decree, rule or regulation of any court or Governmental Authority, which individually or in the aggregate shall have or is likely to have a Material Adverse Effect.

6.8.Solvency.

After giving effect to all Indebtedness of Borrower on the Closing Date (including without limitation the Credit Extensions and all Contingent Obligations) and such other dates as Letter of Credit issuances are requested, Borrower is Solvent.

6.9.Government Consent.

Neither the nature of Borrower or its business or properties, nor any relationship between Borrower and any other entity or person, nor any circumstance in connection with the execution of this Agreement, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority on the part of Borrower as a condition to the execution and delivery of this Agreement and the other Loan Documents.

6.10.No Liens on Collateral.

Borrower (a) has an indefeasible interest in all Collateral free and clear of any Liens, and (b) has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of the Collateral whether now owned or hereafter acquired to be subject to a Lien.

6.11.No Defaults.

No event has occurred and no condition exists which constitutes a Pending Default or an Event of Default pursuant to this Agreement.  Borrower is not in violation in any material respect of any term of any agreement, charter instrument, bylaw or other instrument to which it is a party or by which it is bound.

7.   Borrower Affirmative and Negative Covenants.

Borrower covenants that on and after the date of this Agreement until terminated pursuant to the terms of this Agreement, or so long as any Indebtedness provided for herein remains unpaid:

7.1.Payment of Taxes and Claims.

Borrower will pay all taxes, estimated payments, assessments and governmental charges or levies imposed upon it or its property or assets or in respect of any of its franchises, businesses, income or property when due; other than for Permitted Contests.

7.2.Place of Business; Books and Records.

Borrower shall (i) maintain the same principal place of business and chief executive office in existence as of the effective date of this Agreement; (ii) deliver to Lender at least thirty (30) days prior to the occurrence of any of the following events, written notice of such impending events: (A) a change in the principal place of business or chief executive office, (B) the opening or closing of any place of business, or (C) a change in name, identity or structure; and (iii) remain organized in the state of its organization as of the effective date of this Agreement.

7.3.Proper Books; Collateral.

(a)           Borrower shall (i) reflect in its financial statements adequate accruals and appropriations to reserves and keep and maintain proper books of record and account in which entries in conformity with GAAP shall be made of all dealings and transactions in relation to its businesses and activities;(ii) do or cause to be done all things reasonably necessary (A) to preserve and keep in full force and effect its existence, rights and franchises, and (B) to maintain its status as duly organized and existing, and in good standing, under the laws of the state of its organization; and (iii) not be in violation of any Requirements of Law, which violation is reasonably likely to have a Material Adverse Effect.

(b)           Borrower shall (i) defend the right, title and interest of Lender in and to the Collateral against all claims and demands of all persons and entities at any time claiming the same or any interest therein; (ii) promptly perform, on request of Lender, such acts as Lender may determine to be reasonably necessary or advisable to create, perfect, maintain, preserve, protect and continue the perfection of any Lien provided for in this Agreement or the Loan Documents or otherwise to carry out the intent of this Agreement; and (iii) advise Lender promptly, in writing and in reasonable detail of any material encumbrance or claim asserted against any of the Collateral, of any material change in the composition of the Collateral, and of the occurrence of any other event that would have a material adverse effect upon the aggregate value of the Collateral or upon the security interest of Lender.

7.4.Restriction on Fundamental Changes; Conduct of Business.

Borrower shall not (a) enter into any merger or consolidation, or liquidate, wind up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or a series of transactions, any substantial portion of Borrower’s business or property, whether now or hereafter acquired.

7.5.Negative Pledge.

Borrower will not cause or permit or permit to exist or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), any of the Collateral, whether now owned or hereafter acquired, to become subject to a Lien.

8.   Financial Information and Reporting.

Borrower shall deliver the following to Lender:

(a)           as soon as available, but in any event within one hundred twenty (120) days after the end of each fiscal year, a copy of the audited consolidated balance sheet of Borrower and its consolidated Subsidiaries as of the end of such year and the related audited consolidated statements of income, of stockholders’ equity and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, together with the opinion of independent certified public accountants of nationally recognized standing, which opinion shall not contain a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, other than a qualification for consistency due to a change in the application of GAAP with which Borrower’s independent certified public accountants concur;

(b)           as soon as available, but in any event within sixty (60) days after the end of each quarterly accounting period (excluding the quarterly accounting period for the last quarter of each fiscal year prior to the Maturity Date), the unaudited consolidated balance sheet of Borrower and its consolidated Subsidiaries and the related unaudited consolidated statements of income and of stockholders’ equity of Borrower and its consolidated Subsidiaries for such quarter and the portion of the fiscal year through such date setting forth in each case in comparative form the figures for the previous year, and including in each case: (i) the relevant figures broken down with respect to each division of Borrower and its Subsidiaries and (ii) a summary of all Land, Land under Contract, Lots, Lots under Development, Finished Lots and Lots under Contract (all as defined in the credit agreement for the Master Credit Facility);

(c)           within sixty (60) days after the end of each fiscal quarter, a compliance certificate, in form acceptable to Lender as attached hereto as Exhibit B, wherein a Financial Officer of Borrower certifies that Borrower is in compliance with all covenants, terms and conditions of the Master Credit Facility; and

(d)           at the request of Lender, such other information as Lender may from time to time reasonably require;

all such financial statements to be complete and correct in all material respects and prepared in reasonable detail and in accordance with GAAP (except, in the case of financial statements referred to in subparagraph (b) of this Section 8, that such financial statements need not contain footnotes and may be subject to year-end audit adjustments).

9.   Default.

9.1.Events of Default.

Each of the following shall constitute an “Event of Default” hereunder:

(a)           Borrower fails to make payment on (i) any Letter of Credit Reimbursement Obligation on or before the date such payment is due or (ii) or any other Obligation under this Agreement on or before five (5) days after the date such payment is due;

(b)           Borrower fails to perform or observe any covenant, agreement or duty contained in Articles 2, 7 or 8 of this Agreement;

           (c)           Borrower fails to comply with any other provision of this Agreement (other than as set forth in this Article 9 of this Agreement) or fails to perform or observe any covenant, agreement or duty contained in any Loan Document, and such failure continues for more than thirty (30) days after the failure described in this Section 9.1(c) shall first become known or reasonably should have become known to any Financial Officer of Borrower, or ten (10) days after notice from Lender, if earlier;

(d)           any warranty, representation or other statement made or deemed to be made in this Agreement or in any Loan Document is false or misleading in any material respect;

(e)           Borrower becomes insolvent or commences any Insolvency Proceeding;

(f)           any Insolvency Proceeding is instituted against Borrower and continues for sixty (60) days undismissed or undischarged;

           (g)           one or more final orders, judgments or arbitration awards for (i) the payment of money aggregating in excess of $5,000,000 is or are outstanding against Borrower, or (ii) nonmonetary relief or remedy which is reasonably likely to have a Material Adverse Effect, and any such order, judgment or award has not been discharged, bonded in full or stayed in all respects;

(h)           the occurrence of any event which allows the acceleration of the maturity of any Indebtedness of Borrower or any of its Subsidiaries to Lender or any of Lender’s affiliates (other than evidenced by this Agreement);

(i)           the occurrence of (A) a Master Credit Facility Default or (B) any event which allows the acceleration of the maturity of any Indebtedness in excess of the amount of $5,000,000 of Borrower or constitutes a default or breach under any material lease or material contract of any such Person, under any indenture, agreement or undertaking, unless waived, extended or otherwise consented to by the holder thereof;

(j)           the dissolution of any insurer or the default by any surety for Borrower with respect to any obligation or liability to Lender or any of Lender’s affiliates;

(k)           a Change of Control of Borrower shall have occurred; or

(l)           Lender, in its sole good faith discretion, determines that a Material Adverse Effect has occurred with respect to Borrower or that a material adverse change has occurred in the financial condition, operations or business of Borrower, in the value of the Collateral or in Lender’s interest in the Collateral.

9.2.Default Remedies.

(a)           Acceleration.  Upon the occurrence and during the continuance of an Event of Default (other than an event described in clause (e) or (f) of Section 9.1 hereof), Lender may (i) terminate all rights, if any, of Borrower to obtain issuances of Letters of Credit hereunder, and thereupon, any such right shall terminate immediately, (ii) declare any or all the Credit Extensions to be due and payable, and thereupon, the Credit Extensions, together with accrued interest thereon and all fees and other Obligations shall become due and payable immediately, (iii) immediately exercise any right, power or remedy permitted to Lender by law or any provision of this Agreement, and (iv) demand that Borrower pay to Lender for deposit in a segregated non interest-bearing cash collateral account, as security for the Obligations, such amount that, when added to the aggregate cash or cash equivalents in the Deposit Collateral Account, equals not less than one hundred and five percent of 105% of the Letters of Credit Exposure then outstanding at the time such notice is given, in each case, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by Borrower; provided, however, prior to presentment of a draft in connection with any irrevocable Letter of Credit or surrender or cancellation by a beneficiary of such Letter of Credit at any time when the aggregate cash or cash equivalents in the Deposit Collateral Account equals not less than one hundred and five percent of 105% of the Letters of Credit Exposure then outstanding, such Letter of Credit will remain in full force and effect in accordance with its terms, subject to the terms of the Loan Documents.  Upon the occurrence of an Event of Default described in clause (e) or (f) of Section 9.1 hereof, all rights, if any, of Borrower to obtain Credit Extensions or advances hereunder shall automatically terminate and all Credit Extensions, together with accrued interest thereon and all fees and other Obligations shall automatically become due and payable without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by Borrower.

(b)           Liquidation of Collateral.  Upon the occurrence and during the continuance of an Event of Default, Lender shall have the rights and remedies of a secured party under this Agreement and the Loan Documents, under any other instrument or agreement securing, evidencing or relating to the Obligations and under the laws of the State in which the Collateral is located or any other applicable state law.  Lender shall apply the net proceeds of any such collection, recovery, receipt, appropriation or realization, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any or all of the Collateral or in any way relating to the rights of Lender hereunder, including reasonable attorneys’ fees and legal expenses, to the payment in whole or in part of the Obligations, in such order as Lender may elect, and only after so paying over such net proceeds and after the payment by Lender of any other amount required by any provision of law, need Lender account for the surplus, if any.  To the extent permitted by applicable law, Borrower waives all claims, damages and demands against Lender arising out of the repossession or retention of the Collateral. Borrower shall remain liable for any deficiency if the proceeds of the Collateral are insufficient to pay all amounts to which Lender is entitled and shall also be liable for the costs of collecting any of the Obligations or otherwise enforcing the terms thereof or of this Agreement, including reasonable attorneys’ fees.

10.   General Provisions.

10.1.Notices.

(a)           All communications under this Agreement or under the notes executed pursuant hereto shall be in writing and shall be sent by facsimile or by a nationally recognized overnight delivery service (i) if to Lender, at the address set forth below Lender’s signature to this Agreement, or at such other address as may have been furnished in writing to Borrower, by Lender; and (ii) if to Borrower, at the address set forth below Borrower’s signature to this Agreement, or at such other address as may have been furnished in writing to Lender by Borrower.

(b)           Any notice so addressed and sent by telecopier shall be deemed to be given when confirmed, and any notice sent by nationally recognized overnight delivery service shall be deemed to be given the next day after the same is delivered to such carrier.

10.2.Costs and Expenses.

Borrower agrees to pay service charges, analysis fees, and all costs and expenses incidental to or in connection with this Agreement, any Loan Document or any service provided by Lender, the enforcement of Lender’s rights in connection with any of the foregoing, any amendment, supplement or modification of this Agreement or any other Loan Document, any sale or attempted sale of any interest herein to a participant or co-lender, any litigation, contest, dispute, proceeding or action in any way relating to the Collateral, to this Agreement or any Loan Document, whether any of the foregoing are incurred prior to or after maturity, the occurrence of an Event of Default, or the rendering of a judgment.  Such costs shall include, but not be limited to, fees and out-of-pocket expenses of Lender’s counsel, recording fees, inspection fees, revenue stamps and note and mortgage taxes.  The provisions of this Section 10.2 shall survive the termination of this Agreement and the Loan Documents.

10.3.Survival, Successors and Assigns.

All warranties, representations, and covenants made by Borrower herein or on any certificate or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by Lender and shall survive the closing of the Credit Extensions regardless of any investigation made by Lender on its behalf.  This Agreement shall inure to the benefit of and be binding upon the heirs, successors and assigns of each of the parties.

10.4.Amendment and Waiver.

All references to this Agreement shall also include all amendments, extensions, renewals, modifications, and substitutions thereto and thereof made in writing and executed by both Borrower and Lender.  This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of Borrower and Lender; provided however that nothing herein shall change Lender’s sole discretion or good faith discretion (as set forth elsewhere in this Agreement) to make advances, determinations, decisions or to take or refrain from taking other actions.  No delay or failure or other course of conduct by Lender in the exercise of any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of the same preclude any other or further exercise thereof, or the exercise of any other power or right.

10.5.Enforceability and Governing Law.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction, as to such jurisdiction, shall be inapplicable or ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  All of Lender’s rights and remedies, whether evidenced hereby or by any other agreement or instrument, shall be cumulative and may be exercised singularly or concurrently.  This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio (without giving effect to the conflict of laws rules thereof). Borrower agrees that any legal suit, action or proceeding arising out of or relating to this Agreement may be instituted in a state or federal court of appropriate subject matter jurisdiction in the State of Ohio, waives any objection which it may have now or hereafter to the venue of any suit, action or proceeding, and irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding.

10.6.Confidentiality.

Lender shall hold all non-public information obtained pursuant to the requirements hereof and identified as such by Borrower in accordance with Lender’scustomary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices, and in any event may make disclosures as required or requested by any governmental authority or any representative thereof, or pursuant to any legal process, or to its accountants, lawyers and other advisors.

10.7.Section Headings.

Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

10.8.Interpretation.

Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

10.9.Severability of Provisions.

Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

10.10.Counterparts; Facsimile Execution.

This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by facsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.

10.11.Revival and Reinstatement of Obligations.

If the incurrence or payment of the Obligations by Borrower or the transfer to Lender of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “Voidable Transfer”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of Lender related thereto, the liability of Borrower automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

10.12.Integration.

This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

10.13.Waiver of Right to Trial by Jury.

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, 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 AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, 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 AGREEMENT 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.

10.14.No Consequential Damages.

No claim may be made by Borrower, or any of its officers, directors, or agents against Lender or its affiliates, directors, officers, employees, attorneys or agents for any special, indirect, punitive, or consequential damages in respect of any breach or wrongful conduct (whether the claim therefor is based in contract, tort or duty imposed by law) in connection with, arising out of or in any way related to the transactions contemplated and relationship established by this Agreement, or any act, omission or event occurring in connection therewith, and Borrower hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

10.15.Indemnity.

Borrower agrees to indemnify Lender, its directors, officers, employees, agents, financial advisors, and consultants from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including without limitation fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against Lender in any litigation, proceeding or investigation instituted or conducted by any governmental agency or instrumentality or any other person or entity with respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, this Agreement or any Loan Document, whether or not Lender is a party thereto, except to the extent that any of the foregoing arises out of the gross negligence or willful misconduct of Lender or such Person, as determined in a final, non-appealable judgment by a court of competent jurisdiction.  The indemnities provided for in this Section 10.15 shall survive the termination of this Agreement and the indefeasible payment of the Credit Extensions in full.

10.16.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 pages follow.]

Each of the parties has signed this Agreement as of the date set forth in the preamble above.

BORROWER:

M/I HOMES, INC.

By:     

Name:  Phillip G. Creek

Title:     Executive Vice President and Chief Financial Officer

Notice Address:

M/I Homes, Inc.

3 Easton Oval

Suite 210

Columbus, Ohio 43219

Fax: (614) 418-8080

with a copy to:

Thomas O. Ruby

Vorys, Sater, Seymour & Pease, LLP

52 East Gay St.

P.O. Box 1008

Columbus, Ohio 43216

Fax: (614) 719-4934

Signature Page to Credit Agreement

LENDER:

THE HUNTINGTON NATIONAL BANK

By:                      

Name:  Jeffrey D. Blendick

Title:           Vice President

Notice Address:

The Huntington National Bank

41 South High St.

HC 0735

Columbus, Ohio 43215

Attention:  Jeffrey D. Blendick

Fax:  (877) 274-8593

with a copy to:

Timothy E. Grady, Esq.

Porter, Wright, Morris & Arthur LLP

41 South High Street

Columbus, Ohio 43215

Fax: (614) 227-2100

Signature Page to Credit Agreement

EXHIBIT A

APPLICATION AND AGREEMENT FOR LETTER OF CREDIT

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

EX-99.1

Exhibit 99.1

M/I Homes Reports

Second Quarter Results

Columbus, Ohio (July 30, 2009) - M/I Homes, Inc. (NYSE:MHO) announced results for the second quarter and six months ended June 30, 2009.  Second quarter results were highlighted by a reduced loss, increased new orders, deliveries and backlog, and ending the quarter with $104 million of cash.

For the second quarter, the Company reported a net loss of $19.9 million, or $1.26 per share, compared to a net loss of $94.1 million, or $6.72 per share during the second quarter of 2008.  The current quarter loss consists of a $9.0 million pre-tax operating loss, $8.0 million of asset impairments, and other non-operating charges totaling $2.9 million primarily for issues related to imported drywall and severance.

The Company reported a net loss of $48.0 million for the first half of 2009, or $3.22 per share, compared to a net loss of $116.3 million, or $8.30 per share for the same period a year ago.

New contracts for 2009’s second quarter were 759, up 43% from 2008’s second quarter of 530.  For the first six months, 2009’s new contracts increased 32% to 1,426 from 1,084 in 2008.  The Company delivered 492 homes in the second quarter compared to 478 in same period of 2008, an increase of 3%.  Homes delivered for the six months ended June 30, 2009 decreased 7% to 886 from 952 in 2008.  The Company had 106 active communities at June 30, 2009 compared to 138 at June 30, 2008.  The sales value of backlog of homes at June 30, 2009 increased to $260 million with backlog units increasing to 1,106 and an average sales price of $235,000.  The backlog of homes at June 30, 2008 had a sales value of $254 million, with backlog units of 880 and an average sales price of $289,000.

Robert H. Schottenstein, Chief Executive Officer and President commented, “We continue to make progress during these challenging times.  During the second quarter of 2009, we recorded our third consecutive quarter of increased new contracts, and second consecutive quarter of higher backlog units.  For the quarter, our new contracts increased 43% and backlog units improved by 26%, despite a 23% decline in active communities.  Also, homes delivered in the quarter increased compared to 2008.  In addition, our gross margin has increased in each of the past three quarters, and we continue to see positive results from our focus on reducing expenses -- as recurring selling, general and administrative expenses declined 22% from prior year levels.  The combination of all these factors resulted in a 24% reduction in our operating loss from the first quarter of 2009.”

Mr. Schottenstein, continued, “We have also made considerable progress in adjusting our product offering and strengthening our line of affordable homes.  Specifically, during the quarter, we successfully launched our eco series, a new line of homes designed to appeal to first time homebuyers and others interested in a more efficient and economical lifestyle.  We are currently selling our eco series in several of our Columbus and Cincinnati communities and initial market reaction has been quite strong.  We plan to offer this series in most of our markets by year end.”

Mr. Schottenstein, concluded, “Looking ahead, we want to build on the momentum generated during the first half of 2009.  At the same time, we are mindful that economic conditions remain difficult and unpredictable.  We therefore, will maintain our predominantly defensive operating strategy.  We ended the quarter with $104 million of cash, zero borrowings under our credit facility and no debt maturing until 2012.  We also have significantly reduced our homebuilding inventory, including our owned lots.  Our net debt to capital ratio stands at 21% at quarter end, one of the lowest levels in our industry.”

The Company will broadcast its earnings conference call today at 4:00 p.m. Eastern Time.  To hear the call, log on to the M/I Homes’ website at mihomes.com, click on the “Investors” section of the site, and select “Listen to the Conference Call.”  The call will continue to be available on our website through July 2010.

M/I Homes, Inc. is one of the nation’s leading builders of single-family homes, having delivered over 74,000 homes.  The Company’s homes are marketed and sold under the trade names M/I Homes and Showcase Homes.  The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Chicago, Illinois; Indianapolis, Indiana; Tampa and Orlando, Florida; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C.

Certain statements in this Press Release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements.  These statements involve a number of risks and uncertainties.  Any forward-looking statements that we make herein and in future reports and statements are not guarantees of future performance, and actual results may differ materially from those in such forward-looking statements as a result of various factors relating to the global, U.S., local and homebuilding economic environments, interest rates, risks associated with owning and developing land, availability of resources, competition, market concentration, lack of geographic diversification, availability of financing resources, terms of our indebtedness and our ability to incur additional indebtedness, outcome of legal claims brought against us, ownership changes that could limit our ability to utilize our net operating loss carryforwards, and various governmental rules and regulations, among other matters, more fully discussed in the Risk Factors section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as updated in the Company’s periodic filings on Form 10-Q.  All forward-looking statements made in this Press Release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Press Release will increase with the passage of time.  The Company undertakes no duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.  However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.

Contact M/I Homes, Inc.

Phillip G. Creek, Executive Vice President, Chief Financial Officer, (614) 418-8011

Ann Marie W. Hunker, Vice President, Corporate Controller, (614) 418-8225

M/I Homes, Inc. and Subsidiaries

Summary Operating Results (unaudited)

(Dollars in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
New contracts		759			530			1,426			1,084
Backlog units								1,106			880
Backlog value							$	260,000		$	254,000
Homes delivered		492			478			886			952
Revenue	$	116,146		$	141,002		$	212,295		$	297,087
Gross margin	$	7,972		$	(21,103	)	$	5,260		$	(17,693	)
Adjusted gross margin(1)	$	15,798		$	18,769		$	28,032		$	43,286
Adjusted gross margin %(1)		13.6	%		13.3	%		13.2	%		14.5	%
Loss from continuing operations
before income taxes	$	(19,883	)	$	(53,429	)	$	(47,843	)	$	(80,187	)
Adjusted Pre-tax operating loss(1)	$	(9,015	)	$	(12,619	)	$	(20,899	)	$	(21,586	)
Deferred tax asset valuation allowance	$	7,608		$	57,568		$	19,328		$	58,011
Net loss to common shareholders	$	(19,902	)	$	(94,101	)	$	(48,031	)	$	(116,308	)
Loss per share	$	(1.26	)	$	(6.72	)	$	(3.22	)	$	(8.30	)
Diluted shares outstanding (000s)		15,790			14,016			14,913			14,012
(1)See non-GAAP reconciliations in Non-GAAP Financial Reconciliations table below.
Non-GAAP Reconciliations
(Dollars in thousands)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2009			2008			2009			2008
Gross margin	$	7,972		$	(21,103	)	$	5,260		$	(17,693	)
Add:  Impairments		6,576			39,872			17,522			60,979
Warranty – Imported Drywall		1,250			-			5,250			-
Adjusted gross margin	$	15,798		$	18,769		$	28,032		$	43,286
Loss from continuing operations
before income taxes	$	(19,883	)	$	(53,429	)	$	(47,843	)	$	(80,187	)
Add:  Impairments and abandonments administrative expense		7,960			39,880			18,938			62,191
Warranty – imported drywall		1,250			-			5,250			-
Other expense (income)		-			-			941			(5,555	)
Restructuring/bad debt expense		1,658			930			1,815			1,995
Adjusted pre-tax loss from operations	$	(9,015	)	$	(12,619	)	$	(20,899	)	$	(21,556	)

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data

(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Revenue	$	116,146		$	141,002		$	212,295		$	297,087
Cost of sales		108,174			162,105			207,035			314,780
Gross margin		7,972			(21,103	)		5,260			(17,693	)
General and administrative expense		16,415			17,133			28,417			34,691
Selling expense		9,629			13,087			18,738			26,813
Operating loss		(18,072	)		(51,323	)		(41,895	)		(79,197	)
Other expense (income)		-			-			941			(5,555	)
Interest expense		1,811			2,106			5,007			6,545
Loss from continuing operations
before income taxes		(19,883	)		(53,429	)		(47,843	)		(80,187	)
Provision for income taxes		19			37,821			188			31,213
Loss from continuing operations,
net of income taxes		(19,902	)		(91,250	)		(48,031	)		(111,400	)
Loss from discontinued operations,
net of income taxes		-			(413	)		-			(33	)
Net loss		(19,902	)		(91,663	)		(48,031	)		(111,433	)
Preferred share dividends		-			2,438			-			4,875
Net loss to common shareholders	$	(19,902	)	$	(94,101	)	$	(48,031	)	$	(116,308	)
Revenue:
Housing revenue	$	112,952		$	126,795		$	205,455		$	257,731
Land revenue		-			10,870			657			23,644
Other		-			166			-			7,131
Total homebuilding revenue	$	112,952		$	137,831		$	206,112		$	288,506
Financial services revenue		3,194			3,171			6,183			8,581
Total revenue	$	116,146		$	141,002		$	212,295		$	297,087
Land, Lot and Investment in
Unconsolidated Subsidiaries
Impairment by Region:
Midwest	$	1,523		$	10,455		$	2,935		$	12,975
Florida		3,942			22,998			10,608			41,491
Mid-Atlantic		1,111			6,419			3,979			6,513
Total	$	6,576		$	39,872		$	17,522		$	60,979
Abandonments by Region:
Midwest	$	520		$	1		$	523		$	25
Florida		-			2			14			133
Mid-Atlantic		864			5			879			1,054
Total	$	1,384		$	8		$	1,416		$	1,212

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data

(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
EBITDA (1)	$	(3,611	)	$	(7,086	)	$	(12,726	)	$	(556	)
Interest incurred - net of fee amortization	$	3,699		$	4,396		$	7,472		$	9,907
Interest amortized to cost of sales	$	3,056		$	2,453		$	4,728		$	5,026
Depreciation and amortization	$	1,910		$	1,921		$	4,412		$	4,701
Non-cash charges	$	9,713		$	40,813		$	21,444		$	63,950
Cash provided by (used in) operating activities activities operating activities	$	(12,788	)	$	10,747		$	40,851		$	109,499
Cash (used in) provided by investing activities	$	(42,374	)	$	(3,678	)	$	(72,356	)	$	4,056
Cash provided by (used in) financing activities financing activities	$	51,535		$	(6,571	)	$	23,987		$	(112,948	)
Financial services pre-tax income	$	1,429		$	1,012		$	2,730		$	4,349
(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is defined, in accordance with our credit facility, as net income, plus interest expense (including interest amortized to land and housing costs), income taxes, depreciation, amortization and non-cash charges, minus interest income.

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data

NEW CONTRACTS
	Three months ended			Six months ended
	June 30,			June 30,
			%			%
Region	2009	2008	Change	2009	2008	Change
Midwest	407	248	64	754	488	55
Florida	113	138	(18)	224	287	(22)
Mid-Atlantic	239	144	66	448	309	45
Total	759	530	43	1,426	1,084	32
HOMES DELIVERED
	Three months ended			Six months ended
	June 30,			June 30,
			%			%
Region	2009	2008	Change	2009	2008	Change
Midwest	240	227	6	416	416	-
Florida	93	110	(15)	195	250	(22)
Mid-Atlantic	159	129	23	275	250	10
Continuing Operations	492	466	6	886	916	(3)
Discontinued Operation	-	12	-	-	36	-
Total	492	478	3	886	952	(7)
BACKLOG
	June 30, 2009			June 30, 2008
		Dollars	Average		Dollars	Average
Region	Units	(millions)	Sales Price	Units	(millions)	Sales Price
Midwest	703	$145	$207,000	463	$124	$267,000
Florida	106	$  23	$217,000	158	$  44	$278,000
Mid-Atlantic	297	$  92	$309,000	259	$ 86	$334,000
Total	1,106	$260	$235,000	880	$254	$289,000

M/I Homes, Inc. and Subsidiaries

Summary Balance Sheet Information (unaudited)

(Dollars in thousands, except per share amounts)

	June 30,
	2009			2008
Assets:
Total cash and cash equivalents	$	104,382		$	9,144
Mortgage loans held for sale		30,509			31,919
Inventory:
Lots, land and land development		293,217			404,992
Land held for sale		2,804			2,739
Homes under construction		175,129			259,851
Other inventory		25,217			31,114
Total Inventory		496,367			698,696
Property and equipment - net		20,097			32,216
Investment in unconsolidated joint ventures		7,432			26,011
Income tax receivable		3,067			31,857
Deferred income taxes		-			7,622
Other assets		18,971			23,091
Total Assets	$	680,825		$	860,556
Liabilities:
Debt –Homebuilding Operations:
Notes payable banks	$	-		$	10,000
Notes payable other		6,304			16,661
Senior notes		199,296			199,040
Total Debt – Homebuilding Operations		205,600			225,701
Note payable bank – financial services operations		19,478			29,640
Total Debt		225,078			255,341
Accounts payable		44,778			55,162
Community development district obligation		9,548			12,153
Obligation for inventory not owned		803			7,093
Other liabilities		61,532			64,724
Total Liabilities		341,739			394,473
Shareholders’ Equity		339,086			466,083
Total Liabilities and Shareholders’ Equity	$	680,825		$	860,556
Book value per common share	$	12.92		$	26.11
Net debt/total capital ratio (1)		21	%		34	%

 (1)  Net debt-to capital is calculated as total debt minus total cash and cash equivalents, divided by the sum of total debt plus shareholders’ equity.

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data

	Land Position Summary
	June 30, 2009			June 30, 2008
		Lots			Lots
	Lots	Under		Lots	Under
	Owned	Contract	Total	Owned	Contract	Total
Midwest region	4,800	855	5,655	6,012	659	6,671
Florida region	1,678	83	1,761	3,452	251	3,703
Mid-Atlantic region	1,254	480	1,734	1,842	804	2,646
Total	7,732	1,418	9,150	11,306	1,714	13,020