EXHIBIT 10.28
164
SECOND MODIFICATION OF
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
This Second Modification of Amended and Restated Credit and Security
Agreement ("Agreement") is made this 14th day of May, 1996, among (i) NVR HOMES,
INC. (the "Borrower"), a corporation organized and existing under the laws of
Virginia having its principal place of business at 0000 Xxxxxxxxxxx Xxxx,
XxXxxx, Xxxxxxxx 00000, (ii) NVR, INC., a corporation organized and existing
under the laws of Virginia having its principal place of business at 0000
Xxxxxxxxxxx Xxxx, XxXxxx, Xxxxxxxx 00000 (sometimes hereinafter referred to as
the "Guarantor"), (iii) THE FIRST NATIONAL BANK OF BOSTON ("FNBB"), a national
banking association having its principal place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, (iv) certain other lending institutions
which are signatories hereto (FNBB and such lending institutions are
individually each a "Bank" and, collectively the "Banks"), and (v) THE FIRST
NATIONAL BANK OF BOSTON, as agent (in its capacity as agent, the "Agent") for
itself and the Banks.
W I T N E S S E T H
-------------------
IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned Borrower, Guarantor, FNBB, the Banks and the Agent
hereby covenant and agree and follows:
1. Recitals. The following Recitals are true and correct as of the date
--------
of this Agreement:
A. The Borrower, Guarantor, FNBB, the Banks and the Agent entered
into an Amended and Restated Credit and Security Agreement, dated as of May 5,
1995 ("Credit Agreement").
B. The parties to the Credit Agreement amended and modified the
Credit Agreement in order to increase the credit facility from $50,000,000.00 to
$60,000,000.00 by that certain First Modification of Amended and Restated Credit
and Security Agreement (the "First Modification"), dated as of January 16, 1996
(the Credit Agreement, as amended, is hereinafter referred to as the "Credit
Agreement").
C. The parties to the Credit Agreement wish to further amend and
modify the Credit Agreement as described herein.
D. All terms not otherwise defined herein shall have the same
meaning as in the Credit Agreement.
2. The Credit Agreement is hereby modified as follows:
A. Article 1:
---------
(1) By deleting the following language from the definition of
Business Day: "LIBOR" and by substituting in lieu thereof "Eurodollar" and by
-------------
deleting "London, England and";
(2) By adding the following language to the second line of the
definition of Eurodollar Advance Period after the word "period" "or such other
-------------------------
period which is a minimum of seven days and a maximum of twenty-nine days,";
(3) By deleting the following language from the definition of
Eurodollar Rate starting on the second line of the definition on page 10 "London
---------------
interbank market as reported on Telerate Screen page 3750 at approximately 11.00
a.m. (Boston time)" and by substituting in lieu thereof the following: " New
York interbank eurodollar market"; by deleting the following language from the
last sentence of this definition: "If such rate is not so reported, then"; by
capitalizing the word "such" immediately following the deleted language; and by
deleting the word "other" in the sixth to the last line of this definition.
B. Section 2.1.1: By deleting the reference to "May 31, 1998" in
-------------
the fifth, nineteenth and twenty-sixth lines of Section 2.1.1 on pages 19 and
20, and by substituting in lieu thereof "May 31, 1999."
C. Section 2.1.5
-------------
b. (ii): By deleting the words " at least three (3)" and by
---------
substituting in lieu thereof "two (2)";
-
c. (i): By deleting the words and number "at least three (3)" from the
-------
third line of this Section and by inserting in lieu thereof: "two (2)" and by
inserting after the word telecopy on the fifth line of this section the
following: "provided such notice must be given between the hours of 9:00 a.m.
and 12:00 a.m. Boston time on such second Business Day prior to the proposed
funding,"; and by deleting the penultimate sentence of this section;
165
c. (ii): By deleting the words "At least three (3)" from the first line
--------
of this
section and substituting in lieu thereof "Upon two (2)";
D. Section 2.1.6: (i) By deleting the last sentence in Section
-------------
2.1.6(a), and by substituting in lieu thereof the following:
"Interest shall accrue and be payable on each Base Rate Advance made
with respect to the revolving Credit Loans at the simple per annum
interest rate equal to the Base Rate."
(ii) By deleting the reference to "two and one-half percent (2.50%)"
in the last line of Section 2.1.6(b), and by substituting in lieu thereof
"two percent (2.0%), except for Eurodollar Advances with Eurodollar Advance
Periods of less than thirty (30) days which shall be two and one-tenth
percent (2.1%)."
E. Section 2.2.1: By deleting the reference to "$24,000,000" in
-------------
the seventh line of page 28 (as amended by the First Modification), and by
substituting in lieu thereof "the lesser of $24,000,000 or the amount of
the Commitment of the Agent."
F. Section 4.2: By deleting the reference to "one and one-half
-----------
percent (1.50%)" in the fourth and fifth lines of this Section on page 30,
and by substituting in lieu thereof "one and one-quarter percent (1.25%)"
and by deleting the reference to "one and one-quarter percent (1.25%)" in
the eighteenth and nineteenth line of this Section and by substituting in
lieu thereof "one percent (1.0%)."
G. Section 4.3: By deleting this Section in its entirety and
-----------
substituting in lieu thereof the following:
"(S) 4.3 Facility Fee. Borrower shall pay to the Agent, for the pro
------------
rata benefit of the Banks, a one time facility fee in the amount of
one-quarter percent (.25%) of the Scheduled Commitment Amount (the
"Facility Fee") on the date of the Second Modification of Amended and
Restated Credit and Security Agreement."
H. Section 10.8: By deleting this Section in its entirety and
------------
substituting in lieu thereof the following:
"(S) 10.8 Maximum Consolidated Leverage Ratio. As of the date of the
-----------------------------------
Second Modification of Amended and Restated Credit and Security
Agreement, NVR, Inc. and its Subsidiaries' Maximum Consolidated
Leverage Ratio will be 4.0:1. Thereafter, at all times tested on a
quarterly basis, the Maximum Consolidated Leverage Ratio shall not be
less than 4.0:1 for each quarter of the fiscal year ending December
31, 1996 and 3.0:1 for each quarter of the fiscal year ending December
31, 1997 and thereafter. As used herein, Maximum Consolidated
Leverage Ratio will be tested quarterly and will be determined by
measuring the sum of the outstanding amounts owed on the Senior Notes,
plus the Revolving Credit Loans, plus any other Indebtedness allowed
by (S) 10.5 which is reported on the consolidated balance sheet of
NVR, Inc., all divided by Consolidated Tangible Net Worth as
determined by (S) 10.6."
I. Section 10.14: By adding the following at the end of the
-------------
Section:
"The Borrower is a party to a tax sharing agreement which
has been reviewed and approved by the Agent and the Banks."
J. Section 10.19
-------------
(i): By deleting this Section in its entirety and substituting in
lieu thereof the following:
"(i) The Borrower may make Distributions to NVR, Inc. in amounts
sufficient to pay (i) the income tax liabilities of the Guarantor, and
the Borrower and its Subsidiaries as if the, Borrower and its
Subsidiaries were not the members of a consolidated group for tax
purposes, and"; and
(iv): By deleting this Section in its entirety and substituting in
lieu thereof the following:
"(iv) NVR, Inc. may make Distributions for the purchase, from time to
time, of its common stock, par value $.01 per share and its warrants
to purchase common stock (the common stock together with the warrants,
the "Shares"), or the Senior Notes, to the extent provided for in
(S)10.20. The Borrower may make Distributions to NVR, Inc. to enable
NVR, Inc. to make the Distributions described in this clause (iv)."
K. Section 10.20: by adding the following provision as (S) 10.20
-------------
(p):
-166-
"(p) Shares to the extent of the net proceeds received by NVR, Inc. in
connection with the exercise of warrants to purchase Shares issued in
connection with the plan of reorganization of NVR L.P. The provisions
of this subsection shall be in addition to the Shares permitted to be
purchased in the last two paragraphs of Section 10.20."
3. The undersigned hereby acknowledge and consent to the transfer and
assignment of NVR Bank's portion of the Scheduled Commitment Amount to First
National Bank of Chicago.
4. Except as modified hereby, the undersigned hereby ratify and reaffirm
the terms and conditions of the Credit Agreement.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
-167-
IN WITNESS WHEREOF, the undersigned have caused each of their
corporate seals to be affixed hereto and this Agreement be signed, acknowledged
and delivered in each of their names and on their behalf by each of their
respective duly authorized officers as of the day and year first above written.
NVR HOMES, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President - Finance
Chief Financial Officer and Treasurer
[Corporate Seal]
THE FIRST NATIONAL BANK OF BOSTON
Agent
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
[Corporate Seal]
NVR, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President-Finance,
Chief Financial Officer & Treasurer
[Corporate Seal]
-168-
Banks: THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
BANK ONE
By: /s/ Xxx X. Xxxxxx
-----------------
Name: Xxx X. Xxxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
FIRST BANK, N.A.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned Guarantor hereby ratifies and reaffirms the terms
and conditions of that certain amended and Restated Guaranty of Collection dated
May 5, 1995 by Guarantor in favor of The First National Bank of Boston.
NVR, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President-Finance,
Chief Financial Officer & Treasurer
[Corporate Seal]
-169-
