April 30, 1998
Washington Homes, Inc.
Sixth Floor
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xx 00000-4235
Attention: Xxxxxx XxXxxxxxx, President
Re: Consolidated, Amended and Restated Loan Agreement made as of July 31, 1997
(the "Loan Agreement"), by and among, First Union National Bank (formerly known
as First Union National Bank of Maryland), as agent, the Borrower (as defined in
Section 1 of the referenced agreement), and the lenders becoming a party thereto
(each a "Lender" and collectively the "Lenders")
Dear Geaton:
This letter shall confirm the agreement of the Borrower and the Lenders to
modify the Loan Agreement as follows:
1. Section 5.10 (c) is hereby modified to read as follows:
(c) Coverage Ratio. WHI's consolidated Coverage Ratio as of the last
day of each fiscal quarter, commencing with the fiscal quarter
ending April 30, 1998 (in each case using 4 of the last 5
quarters ending on such date), shall not be less than 2.0 to 1.0
2. The definition of Coverage Ratio shall be modified to hereafter mean
the ratio of (i) Income Available for Debt Service, to (ii) Interest
Incurred.
3. The definition of Income Available for Debt Service shall be modified
to hereafter mean, for any period, the sum of (i) Consolidated Net
Income; (ii) income tax expense (benefit); (iii) Interest Expense;
(iv) capitalized interest in cost of goods sold, (v) amortization
and depreciation expense, which shall include financing fees for
any such period, (vi) any other non-cash expenses, and (vii) any
losses arising outside the ordinary course of business which have
been included in determination of Consolidated Net Income, less
interest income
4. The following definition shall be added to Section 1 of the Loan
Agreement:
"Interest Incurred" shall mean for any period , the aggregate amount
(without duplication and determined in each case in accordance with
GAAP) of interest expensed or capitalized whether paid or accrued
during such period, less any interest income.
If the foregoing correctly sets forth our understanding, please below execute
and return a copy of this letter, which shall constitute a formal amendment of
the Loan Agreement
Very truly yours,
First Union National Bank, agent
By:___________________________
Acknowledged and Agreed to:
BORROWER:
Washington Home, Inc., acting on its own
behalf and on behalf of each other Borrower
pursuant to the Power of Attorney contained in
Section 2.15 of the Loan Agreement
By:_______________________________
LENDERS:
AmSouth Bank
By:________________________________
First Union National Bank, formerly known
as First Union National Bank of Maryland
By:_________________________________
