In an effort to address a continuing pattern of covenant defaults, Dublin, Ohio-based Dominion Homes has filed a form 8-K with the Securities and Exchange Commission representing its fifth renegotiation with lenders since January 2007.
In the document filed the morning of Oct. 31, 2007, the company requested that "lenders, the senior administrative agent, and the administrative agent amend and modify certain terms in the credit agreement to increase the size of the overadvance limit."
Under the new terms, the credit agreement has been modified to allow the company to "borrow up to the lesser of $11,000,000 in excess of the borrowing base limitation, or an amount equal to $211,000,000 minus the aggregate principal of the company's term loans and revolving loans outstanding under the credit agreement."
According to the document, the defaults that have occurred, and are continuing, are a result of the company's failure to comply with results that occurred during the fiscal quarter ended June 30, 2007, related to profitability and net worth.
The document also stated that "there may be other defaults or events of default of which the agents and the lenders are not currently aware."
Other amendments to the agreement, which was originally dated Dec. 29, 2006, were filed on Jan. 3, 2007; Jan. 29, 2007; March 8, 2007; Sept. 17, 2007; and Sept. 27, 2007.