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EXHIBIT 10
SECOND AMENDMENT TO CREDIT AGREEMENT
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THIS SECOND AMENDMENT to Credit Agreement (this "Amendment") is entered
into as of the 26th day of May, 2000, by and among (a) Dominion Homes, Inc. (the
"Borrower"), (b) the institutions from time to time party to the Credit
Agreement (as defined below) as lenders (individually, a "Lender" and
collectively, the "Lenders"), and (c) The Huntington National Bank
("Huntington"), in its separate capacity as administrative agent for the Lenders
(with its successors in such capacity, the "Administrative Agent").
RECITALS:
A. As of May 29, 1998, the Borrower, the Lenders, the Administrative
Agent, Huntington, in its capacity as Issuing Bank, and Huntington Capital
Corp., in its capacity as Syndication Agent for the Lenders executed a certain
Credit Agreement, which was amended by a certain First Consent Agreement dated
as of August 9, 1999, a certain First Amendment to Credit Agreement dated as of
September 3, 1999, and a certain Second Consent and Modification dated as of
December 30, 1999 (as so amended, the "Credit Agreement"), setting forth the
terms of certain extensions of credit to the Borrower; and
B. As of May 29, 1998, the Borrower executed and delivered to the
Administrative Agent, inter alia, promissory notes in favor of each Lender, in
the original aggregate principal sum of One Hundred Twenty Five Million Dollars
($125,000,000.00) (hereinafter collectively, the "Notes"); and
C. In connection with the Credit Agreement and the Notes, the Borrower
executed and delivered to the Administrative Agent certain other loan documents,
consents, assignments, agreements, and instruments in connection with the
indebtedness referred to in the Credit Agreement (all of the foregoing, together
with the Notes and the Credit Agreement, are hereinafter collectively referred
to as the "Loan Documents"); and
D. The Borrower has requested that the Lenders and the Administrative
Agent amend and modify certain terms and covenants in the Credit Agreement to
extend additional credit to the Borrower and to modify certain financial and
other terms and covenants, and the Lenders and the Administrative Agent are
willing to do so upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto for
themselves and their successors and assigns do hereby agree, represent and
warrant as follows:
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1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.
2. Section 8.3, "SALE OF ASSETS," of the Credit Agreement is hereby
amended to recite in its entirety as follows:
8.3 SALE OF ASSETS.
Neither the Company nor any Subsidiary shall sell, lease,
transfer, assign or otherwise dispose of, any of its assets or
property, whether now owned or hereafter acquired, or any
income or profits therefrom, or enter into any agreement to do
so, except (a) sales, transfers or other distributions of
personal or real property in the ordinary course of business,
including without limitation, the sale of Model Homes, Real
Estate Held for Development, Developed Lots, and Lots Under
Development for consideration not less than fair market value
(but in no event less than the amount advanced to the Company
under the Borrowing Base); (b) the disposition of obsolete
equipment in the ordinary course of business; and (c)
dispositions by the Company which constitute Investments in
Restricted Subsidiaries permitted by Section 8.11 hereof;
provided however that any such disposition or Investment does
not cause the Company and its Subsidiaries to exceed the
Maximum New Market Investment Amount;
3. Section 8.5, "INDEBTEDNESS," of the Credit Agreement is hereby
amended to recite in its entirety as follows:
8.5 INDEBTEDNESS.
Neither the Company nor any of the Subsidiaries shall directly
or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any
Indebtedness (other than Contingent Obligations permitted by
Section 8.6 below), except for (a) the Revolving Credit
Obligations; (b) up to the aggregate sum of $10,000,000.00
outstanding at any time in (i) secured nonrecourse
Indebtedness, and (ii) capital lease or purchase money
Indebtedness incurred to finance the acquisition of capital
assets, provided that such Indebtedness (A) has a scheduled
maturity and is not due on demand, (B) is secured only by the
property being purchased and does not exceed the purchase
price thereof, and (C) does not exceed the aggregate sum of
$3,000,000.00 outstanding at any time, in connection with the
Company's or any Restricted Subsidiaries' business; (c)
additional nonrecourse Indebtedness to sellers of real estate
not to exceed the purchase price of such real estate incurred
in connection with the purchase of such real estate in an
aggregate sum up
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to $5,000,000.00 outstanding at any time (which Indebtedness
shall be termed the "Excess Permitted Nonrecourse Borrowings"
if and to the extent that the Company's and its Subsidiaries'
Indebtedness pursuant to clauses (b) and (c) of this paragraph
exceeds the aggregate sum of $10,000,000.00 outstanding at any
time); (d) unsecured indebtedness subordinated to the
Revolving Credit Commitments, which shall be subordinated in a
manner satisfactory to the Administrative Agent; (e)
Indebtedness evidenced by interest rate agreements in respect
of interest rate, swap, collar, cap or similar agreements
pursuant to which the Company xxxxxx its actual interest rate
exposure pursuant to the terms of this Agreement; and (f)
intercompany Indebtedness incurred by any Restricted
Subsidiary to (i) the Company or to (ii) any Restricted
Subsidiary wholly owning such Restricted Subsidiary; provided,
however, that such Indebtedness constitutes an Investment
permitted by Section 8.11 of this Agreement and does not cause
the Company and its Subsidiaries to exceed the Maximum New
Market Investment Amount.
4. Section 8.7, "OPERATING LEASE RENTALS," of the Credit Agreement is
hereby amended to recite in its entirety as follows:
8.7 OPERATING LEASE RENTALS.
Neither the Company nor any of the Subsidiaries will
enter into: (a) operating leases (excluding Model Home
rentals) providing in the aggregate for annual rentals which
exceed $3,000,000.00, or (b) operating leases for Model Home
rentals providing in the aggregate for annual rentals which
exceed $2,000,000.00.
5. Section 8.14, "LEVERAGE RATIO," of the Credit Agreement is hereby
amended to recite in its entirety as follows:
8.14 LEVERAGE RATIO.
The Company shall maintain at all times a Leverage
Ratio of (a) not greater than 2.50 to 1.00, beginning
September 30, 1999, and continuing through and including April
30, 2000; (b) not greater than 2.75 to 1.00, beginning May 1,
2000, and continuing through and including August 31, 2000;
(c) not greater than 2.50 to 1.00, beginning September 1,
2000, and continuing through and including, April 30, 2001;
(d) not greater than 2.75 to 1.00, beginning May 1, 2001, and
continuing through and including August 31, 2001; (e) not
greater than 2.50 to 1.00, beginning September 1, 2001, and
continuing through and including December 31, 2001; (f) not
greater than 2.25 to 1.00 for the period beginning January 1,
2002, and continuing through and including April 30, 2002; (g)
not greater than 2.50 to 1.00, beginning May 1, 2002, and
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continuing through and including August 31, 2002; (h) not
greater than 2.25 to 1.00, beginning September 1, 2002, and
continuing through and including April 30, 2003, and (i) not
greater than 2.50 to 1.00, beginning May 1, 2003, and
continuing at all times thereafter.
6. The definitions of "MAXIMUM NEW MARKET INVESTMENT AMOUNT,"
"REVOLVING CREDIT COMMITMENT" and "REVOLVING CREDIT COMMITMENTS" in Section
14.3, "DEFINED TERMS," of the Credit Agreement are hereby amended to recite as
follows:
"Maximum New Market Investment Amount" means, with
respect to the Company and its Subsidiaries, (i) the aggregate
amount of (a) each Purchase Price for an Acquisition of a
Person or the assets of a Person whose principal business is
outside Central Ohio or the metropolitan Louisville, Kentucky
area, (b) the aggregate amount of Investments in Restricted
Subsidiaries and in Investments in Joint Ventures, whose
principal operations or property are outside Central Ohio or
the metropolitan Louisville, Kentucky area, and (c) the
aggregate cost of all Uncommitted Land Holdings, Speculative
Homes, Model Homes and all other real or personal property
located outside Central Ohio or the metropolitan Louisville,
Kentucky area, and (ii) for the purposes of Sections 8.3, 8.5,
8.11 and 8.24 of this Agreement, such maximum aggregate amount
of (a), (b) and (c) above shall be $25,000,000, whether such
investment or investments are made prior to, on or after the
date of this Agreement.
"Revolving Credit Commitment" means, with respect to
any Lender, the obligation of such Lender to make Revolving
Loans and to participate in Letters of Credit pursuant to the
terms and conditions hereof, which obligation shall not exceed
the amount set forth opposite the heading Revolving Credit
Commitment under such Lender's name on the signature pages
hereof, the signature pages of any amendment or modification
hereto or the signature page of the Assignment and Acceptance
by which it became a Lender, as modified from time to time
pursuant to the terms hereof or to give effect to any
applicable Assignment and Acceptance.
"Revolving Credit Commitments" means the aggregate
amount of the Revolving Credit Commitments of all the Lenders,
provided that the maximum aggregate principal amount of
Revolving Loans and stated amount of Letters of Credit shall
not exceed $150,000,000, as reduced from time to time pursuant
to the terms hereof.
7. Schedule 7.4 - CORPORATE INFORMATION to the Loan Agreement is hereby
replaced with Schedule 7.4 - CORPORATE INFORMATION attached hereto and made a
part hereof.
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8. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
as of May 26, 2000, upon satisfaction of all of the following conditions
precedent:
(a) The Administrative Agent shall have received seven duly executed
copies of the Second Amendment to Credit Agreement, the loan documents
referenced on Exhibit 8(a) attached hereto, and such other certificates,
instruments, documents, agreements, and opinions of counsel as may be required
by the Administrative Agent, each of which shall be in form and substance
satisfactory to the Administrative Agent and its counsel; and
(b) The Administrative Agent shall have received a fee in respect of
this Amendment in the amount of $62,500, which shall be shared according to each
Lender's Pro Rata Share, and the Borrower shall have paid all other fees owing
to the Administrative Agent; and
(c) The representations contained in paragraph 9 below shall be true
and accurate.
9. REPRESENTATIONS. The Borrower represents and warrants that after
giving effect to this Amendment (a) each and every one of the representations
and warranties made by or on behalf of the Borrower in the Credit Agreement or
the Loan Documents is true and correct in all respects on and as of the date
hereof, except to the extent that any of such representations and warranties
related, by the expressed terms thereof, solely to a date prior hereto; (b) the
Borrower has duly and properly performed, complied with and observed each of its
covenants, agreements and obligations contained in the Credit Agreement and Loan
Documents; and (c) no event has occurred or is continuing, and no condition
exists which would constitute an Event of Default or a Potential Default.
10. AMENDMENT TO CREDIT AGREEMENT. (a) Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to "Credit Agreement,"
"Agreement," the prefix "herein," "hereof," or words of similar import, and each
reference in the Loan Documents to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby. (b) Except as modified
herein, all of the representations, warranties, terms, covenants and conditions
of the Credit Agreement, the Loan Documents and all other agreements executed in
connection therewith shall remain as written originally and in full force and
effect in accordance with their respective terms, and nothing herein shall
affect, modify, limit or impair any of the rights and powers which the Lenders
and the Administrative Agent may have thereunder. The amendment set forth herein
shall be limited precisely as provided for herein, and shall not be deemed to be
a waiver of, amendment of, consent to or modification of any of the rights of
the Lenders or the Administrative Agent under or of any other term or provisions
of the Credit Agreement, any Loan Document, or other agreement executed in
connection therewith, or of any term or provision of any other instrument
referred to therein or herein or of any transaction or future action on the part
of the Borrower which would require the consent of the Lenders and the
Administrative Agent, including, without limitation, waivers of Events of
Default which may exist after giving effect hereto. The Borrower ratifies and
confirms each term, provision, condition and covenant set forth in the Credit
Agreement and the Loan Documents and acknowledges that the agreements set forth
therein continue to be legal, valid and binding agreements, and enforceable in
accordance with their respective terms.
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11. AUTHORITY. The Borrower hereby represents and warrants to the
Administrative Agent and the Lenders that (a) the Borrower has legal power and
authority to execute and deliver the within Amendment; (b) the officer executing
the within Amendment on behalf of the Borrower has been duly authorized to
execute and deliver the same and bind the Borrower with respect to the
provisions provided for herein; (c) the execution and delivery hereof by the
Borrower and the performance and observance by the Borrower of the provisions
hereof do not violate or conflict with the articles of incorporation or code of
regulations of the Borrower or any law applicable to the Borrower or result in
the breach of any provision of or constitute a default under any agreement,
instrument or document binding upon or enforceable against the Borrower; and (d)
this Amendment constitutes a valid and legally binding obligation upon the
Borrower in every respect.
12. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall constitute one and the same document.
Separate counterparts may be executed with the same effect as if all parties had
executed the same counterparts.
13. COSTS AND EXPENSES. The Borrower agrees to pay on demand in
accordance with the terms of the Credit Agreement all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and all other loan documents entered into in
connection herewith, including the reasonable fees and out-of-pocket expenses of
the Administrative Agent's counsel with respect thereto.
14. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the law of the State of Ohio.
IN WITNESS WHEREOF, the Borrower, the Lenders and the
Administrative Agent have hereunto set their hands as of the date first set
forth above.
THE BORROWER:
DOMINION HOMES, INC.
By: /s/ Xxx X. Xxxxxxx
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Its: President and Chief Operating Officer
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THE LENDERS:
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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Revolving Credit Commitment: $42,000,000
BANK ONE, MICHIGAN f/k/a NBD BANK
By: /s/ Xxxxxx X. Xxxx
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Its: First Vice President
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Revolving Credit Commitment: $30,000,000
KEYBANK NATIONAL ASSOCIATION
By: /s/ Lane X. Xxxxxxxx
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Its: Vice President
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Revolving Credit Commitment: $27,000,000
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxx
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Its: Senior Vice President
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Revolving Credit Commitment: $21,000,000
FIRSTAR BANK, N.A. f/k/a STAR BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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Revolving Credit Commitment: $15,000,000
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COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: Vice President
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Revolving Credit Commitment: $15,000,000
ADMINISTRATIVE AGENT:
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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EXHIBIT 8(a)
1. Corporate Resolution authorizing additional extension of Credit
2. Replacement Revolving Credit Note in favor of The Huntington National
Bank
3. Replacement Revolving Credit Note in favor of Bank One, Michigan
4. Replacement Revolving Credit Note in favor of KeyBank National
Association
5. Replacement Revolving Credit Note in favor of National City Bank
6. Replacement Revolving Credit Note in favor of Firstar Bank, N.A.
7. Replacement Revolving Credit Note in favor of Comerica Bank
8. Certificate of Limited Liability Company resolutions authorizing
execution of Guaranty by Dominion Homes of Kentucky GP, LLC
9. Closing Certificate of Dominion Homes of Kentucky GP, LLC
10. Subsidiary Guaranty
11. Opinion of Counsel
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SCHEDULE 7.4 - CORPORATE INFORMATION
As of May ___, 2000, Dominion Homes, Inc. has:
One class of capital stock authorized by the Company's Articles of
Incorporation consisting of 12 million common shares without stated
value. The Company has the following subsidiaries:
1. Dominion Homes of Kentucky GP, LLC ("DHKGPLLC"), which is wholly
owned by the Borrower; and
2. Dominion Homes of Kentucky Ltd, which is 99% owned by the
Borrower and 1% by DHKGPLLC.
3. Dominion Homes Financial Services, Ltd. ("DHFS"), which is wholly
owned by the Borrower.
6,368,470 common shares issued and outstanding.
The Company's federal tax identification number is 00-0000000.
DHKGPLLC's federal tax identification number is 00-0000000.
Dominion Homes of Kentucky Ltd's federal tax identification number is
00-0000000.
DHFS's federal tax identification number is 00-0000000.
