EXHIBIT 10.3
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT to Amended and Restated Credit Agreement (this
"Amendment") is entered into as of the 10th day of June, 2002, by and among (a)
Dominion Homes, Inc. (the `"Company"), (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") as issuing bank and as a Lender, and Huntington in its separate
capacity as administrative agent for the Lenders and the issuing bank (with its
successors in such capacity, the "Administrative Agent").
RECITALS:
A. As of December 31, 2001, the Company, the Lenders, the Administrative
Agent, and Huntington, in its capacity as issuing bank, executed a certain
Amended and Restated Credit Agreement (the "Credit Agreement"), setting
forth the terms of certain extensions of credit to the Company; and
B. As of December 31, 2001, the Company executed and delivered to the
Administrative Agent, inter alia, revolving credit notes in favor of the
Lenders, in the original aggregate principal sum of One Hundred Seventy
Five Million Dollars ($175,000,000) and a swing note in favor of
Huntington in the principal sum of $10,000,000, (hereinafter collectively,
the "Notes"); and
C. In connection with the Credit Agreement and the Notes, the Company and
certain of its Subsidiaries executed and delivered to the Administrative
Agent a standby letter of credit reimbursement agreement, guaranty
agreements, certain other loan documents, consents, 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 Company intends to issue up to 1,712,500 common shares of the
Company's stock, without par value (the "New Issuance"); and
E. The Company has recently established three Subsidiaries, Dominion Homes
Realty, LLC, a Kentucky limited liability company, Alliance Title Agency
of Kentucky, LLC, a Kentucky limited liability company and Resolution
Property Company, LLC, an Ohio limited liability company (collectively,
the "New Subsidiaries"), which the Company desires to designate as
Restricted Subsidiaries under the Credit Agreement.
F. The Company has requested that the Required Lenders and the
Administrative Agent amend and modify certain terms and covenants in the
Credit Agreement to permit the Company to complete the New Issuance, and
to designate the New Subsidiaries as Restricted Subsidiaries, and the
Required Lenders and the Administrative Agent are willing to do so upon
the terms and conditions contained herein.
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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:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement.
2. Section 7.4, "Corporate Information," of the Credit Agreement is hereby
amended to recite in its entirely as follows:
7.4 Corporate Information.
Schedule 7.4 attached to a certain First Amendment to Amended and Restated
Credit Agreement dated as of June 10, 2002 (the "First Amendment"),
accurately represents as of March 31, 2002, the following: (a) the classes
of capital stock or equity interests, as applicable, of the Company and
each Subsidiary and par value of each such class, as applicable, all as
authorized by the Company's or such Subsidiary's Articles of Incorporation
or other Constituent Documents, (b) the number of shares of each such
class of stock or equity interests, as applicable, issued or outstanding,
and (c) the Company's and each Subsidiary's employer tax identification
number. All shares of all classes of capital stock or other equity
interests issued and outstanding are fully paid and nonassessable. As of
the date of the First Amendment, except for options granted pursuant to
the Company's Incentive Stock Plan and common shares to be issued in
connection with the Company's new issuance of up to 1,712,500 common
shares of stock without par value, neither the Company nor any Subsidiary
has outstanding any securities, or any other instrument convertible to a
security of the Company or such Subsidiary, or any commitment,
understanding, agreement or arrangement to issue, sell or have outstanding
any of the foregoing.
3. Notwithstanding Section 8.6, "Contingent Liabilities," of the Credit
Agreement, the Required Lenders hereby consent to the incurrence of
customary indemnification obligations to underwriters, investment bankers
or financial advisors in connection with the New Issuance.
4. The definitions of "Borror Group" and "Change in Control," in Section
14.3 "Defined Terms," of the Credit Agreement are hereby amended, and new
definitions of "Control" and "Constituent Document" are hereby added to
the Credit Agreement in appropriate alphabetical order to recite as
follows:
"Borror Group" means (a) any corporation, partnership, entity or trust in
respect of which Donald A. Borror and/or his lineal descendants directly
or indirectly (i) exercise voting control and (ii) have a majority of the
beneficial interests thereof, (b) any individual shareholder of BRC
Properties Inc. formerly known as Borror
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Realty Company ("BRC") as of the date of this Agreement, (c) any lineal
descendant of Donald A. Borror, or (d) any combination thereof.
"Change in Control" shall mean (a) the replacement of a majority of the
Board of Directors of the Company or BRC from the directors who
constituted the Board of Directors on the date of this Agreement for any
reason other than death or disability, and such replacement shall not have
been approved by the Board of Directors of the Company or of BRC, as the
case may be, as constituted on the date of this Agreement (or as changed
over time with the approval of the Board of Directors of such entity); or
(b) a company, person, entity or group of companies, persons or entities
(other than any of the Borror Group) acting in concert, shall, as a result
of a tender or exchange offer, open market purchases, privately negotiated
purchases, exercise of the stock pledge or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of equity securities of the Company or
BRC representing more than 29% of the combined voting power of the
outstanding securities of the Company or BRC, as applicable, ordinarily
having the right to vote in the election of directors from the beneficial
owners as of the date hereof; or (c) the failure of the Borror Group at
any time to (i) have (on a fully diluted basis) beneficial ownership and
voting control of (A) 30% of the outstanding equity securities of the
Company or (B) the majority of the outstanding equity securities of BRC,
as the case may be, or (ii) Control the Company.
"Control" means the possession, direct or indirect, of the power to cause
the direction of the management and policies of a Person whether through
the ownership of voting securities, by contract or otherwise. A Person
shall be deemed to have "control" of another Person if it is a "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 of the
Securities Exchange Act of 1934, as amended) or a member of a "group" that
is the beneficial owner, directly or indirectly, of 30% or more of the
voting equity securities in such Person.
"Constituent Document" means with respect to any entity, (i) the articles
or certificate of incorporation (or equivalent organizational documents)
of such entity, (ii) the by-laws (or equivalent governing documents) of
such entity and (iii) any document setting forth the designation, amount
or relative rights, limitations and preferences of any class or series of
capital stock, warrants, options or other equity interests.
The remainder of Section 14.3 shall remain as originally written.
5. The Required Lenders and the Administrative Agent hereby consent nunc
pro tunc to the establishment of the New Subsidiaries, the Company's
Investments therein, and any Indebtedness of such Subsidiaries incurred to
the Parent in connection with Section 8.5(f) of the Credit Agreement.
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6. Conditions of Effectiveness. All provisions of this Amendment, other
than paragraph 4 above, shall become effective as of June 10, 2002, upon
satisfaction of all of the following conditions precedent:
(a) The Administrative Agent shall have received nine duly executed
copies of this Amendment, a replacement Schedule 7.4, "Corporate
Information," the loan documents or other requirements referenced on
Exhibit 6(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 representations contained in paragraph 7 below shall be true and
accurate in all respects.
Paragraph 4 of this Amendment shall become effective upon satisfaction of
all of the following conditions precedent: (c) the Company's consummation
of an underwritten public offering with one or more investment advisors
satisfactory to the Administrative Agent; and (d) the representations
contained in paragraph 7 below shall be true and accurate in all respects.
7. Representations. The Company 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 Company 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 Company 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.
8. 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 Company 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 Company ratifies and
confirms each term, provision, condition and covenant set forth in the Credit
Agreement and the Loan Documents and
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acknowledges that the agreements set forth therein continue to be legal, valid
and binding agreements, and enforceable in accordance with their respective
terms.
9. Authority. The Company hereby represents and warrants to the
Administrative Agent and the Lenders that (a) the Company has legal power and
authority to execute and deliver the within Amendment; (b) the officer executing
the within Amendment on behalf of the Company has been duly authorized to
execute and deliver the same and bind the Company with respect to the provisions
provided for herein; (c) the execution and delivery hereof by the Company and
the performance and observance by the Company of the provisions hereof do not
violate or conflict with the articles of incorporation or code of regulations of
the Company or any law applicable to the Company 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 Company; and (d) this Amendment
constitutes a valid and legally binding obligation upon the Company in every
respect.
10. 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.
11. Costs and Expenses. The Company agrees to pay on demand in accordance
with the terms of the Credit Agreement all reasonable 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.
12. Governing Law. This Amendment shall be governed by and construed in
accordance with the law of the State of Ohio.
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IN WITNESS WHEREOF, the Company, the Lenders and the Administrative Agent
have hereunto set their hands as of the date first set forth above.
COMPANY:
DOMINION HOMES, INC.
By: /s/ Peter J. O'Hanlon
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Its: Senior Vice President Finance / CFO
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ADMINISTRATIVE AGENT:
THE HUNTINGTON NATIONAL BANK
By: /s/ William R. Remias
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Its: Vice President
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LENDERS:
THE HUNTINGTON NATIONAL BANK,
as Lender and Issuing Bank
By: /s/ William R. Remias
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Its: Vice President
-----------------------------------------
BANK ONE, NATIONAL ASSOCIATION
By: /s/ David A. DeVictor
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Its: Vice President
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KEYBANK NATIONAL ASSOCIATION
By: /s/ Robert L. Zelina
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Its: Vice President
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NATIONAL CITY BANK
By: /s/ Steven A. Smith
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Its: Senior Vice President
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COMERICA BANK
By: /s/ Charles L. Weddell
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Its: Vice President
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FIRSTAR BANK, N.A.
By: /s/ Marilyn K. Miller
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Its: Vice President
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THE PROVIDENT BANK
By: /s/ Stephen S. Brooks
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Its: Senior Vice President
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FIFTH THIRD BANK (CENTRAL OHIO)
By: /s/ John K. Beardslee
------------------------------------------
Its: Vice President
-----------------------------------------
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