In an 8-K filed March 14 with the Securities and Exchange Commission, Kimball Hill Homes announced it has reached an extended waiver agreement with its lender group through April 11, 2008. The previous agreement was set to expire today.

During this extension period, Kimball Hill will continue active discussions with its lender group to formulate and implement a long-term solution to reposition the company in light of current challenges facing the industry. "We are engaged in active discussions with our lenders, and we appreciate their support to extend the current waiver agreement to help facilitate a long-term amendment," said CEO Kenneth Love in a statement. "During this period, we continue home building operations as usual."

In addition, the company is prohibited from making payments or taking on debt related to land purchase agreements over $2.5 million. In any other case, takedowns must be approved by the lenders.

Details of the amendment also state that the company may not make any payments over $500,000 related to joint ventures until April 11. In its year-end financial statement, the company noted its involvement in two failing joint ventures in Nevada. In combining the two, Kimball Hill is not only responsible for over $60 million in debt, but takedown arrangements require the builder to buy an additional $59 million in land by May. The company previously stated that it is likely to have insufficient liquidity to meet these obligations.

This latest amendment also reduces the company's revolver by $40 million to $360 million and notes that the lenders "now have a lien on all cash accounts held by the company." A portion of the cash from sales of certain "dispositions," including a sale/leaseback arrangement for the Rolling Meadows corporate headquarters, is being used to fund operations.