Securities and Exchange Commission
Washington D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Period Ended June 30, 2000.
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Transition Period From -_______________ to
________________.
Commission file number 0-22562
CROSSMANN COMMUNITIES, INC.
<TABLE>
<CAPTION>
<S> <C>
INDIANA 35-1880120
---------------------------------------- ---------------------------
(State of incorporation) (I.R.S. Identification No.)
9210 NORTH MERIDIAN STREET
INDIANAPOLIS, IN 46260
---------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
(317) 843-9514
----------------------------------------
(Telephone number)
</TABLE>
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
periods that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days: Yes X No
There were 10,432,045 Common shares outstanding as of August 11, 2000.
<PAGE>
CROSSMANN COMMUNITIES, INC.
FORM 10-Q
INDEX
Part I. Financial Information.
Item 1. Financial Statements.
Consolidated balance sheets as of June 30, 2000 (unaudited) and December 31,
1999.
Consolidated unaudited statements of income for the Three Months Ended June
30, 2000 and 1999, and for the Six Months Ended June 30, 2000 and 1999.
Consolidated unaudited statements of cash flows for the Six Months Ended June
30, 2000 and 1999.
Notes to consolidated unaudited financial statements for the Six Months Ended
June 30, 2000 and1999.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Part II. Other Information
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Signatures.
<PAGE>
PART I. FINANCIAL INFORMATION.
Item 1. Financial Statements
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<S> <C> <C>
JUNE 30, 2000 DECEMBER 31, 1999
--------------- ------------------
(UNAUDITED)
---------------
ASSETS
Cash and cash equivalents $ 13,874,778 $ 13,635,911
Unfunded settlements 7,432,283 1,286,099
Retainages 1,475,872 1,198,342
Real estate inventories 280,642,811 259,995,959
Furniture and equipment, net 4,660,076 4,753,141
Investments in joint ventures 25,954,273 27,669,884
Goodwill, net 16,603,328 17,597,512
Other assets 14,888,591 13,738,257
--------------- ------------------
Total assets $ 365,532,012 $ 339,875,105
=============== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 21,106,221 $ 22,335,253
Accrued expenses and other liabilities 9,277,416 9,101,392
Notes payable 146,524,488 119,959,088
--------------- ------------------
Total liabilities 176,908,125 151,395,733
Commitments and contingencies
Shareholders' equity:
Common shares 49,877,762 63,616,282
Retained earnings 138,746,125 124,863,090
--------------- ------------------
Total shareholders' equity 188,623,887 188,479,372
--------------- ------------------
Total liabilities and shareholders' equity $ 365,532,012 $ 339,875,105
=============== ==================
<FN>
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
<S> <C> <C> <C> <C>
2000 1999 2000 1999
------------- ------------- ------------- -------------
Sales of residential real estate $153,687,292 $136,241,679 $260,213,260 $226,657,752
Cost of residential real estate sold 122,954,294 108,321,213 208,126,040 180,637,503
------------- ------------- ------------- -------------
Gross profit 30,732,998 27,920,466 52,087,220 46,020,249
Selling, general and
administrative 15,177,105 14,419,824 29,514,858 25,886,129
------------- ------------- ------------- -------------
Income from operations 15,555,893 13,500,642 22,572,362 20,134,120
Other income, net 155,988 1,753,825 1,332,526 2,320,092
Interest expense (651,087) (548,108) (1,301,560) (1,023,708)
------------- ------------- ------------- -------------
(495,099) 1,205,717 30,876 1,296,384
------------- ------------- ------------- -------------
Income before income taxes 15,060,794 14,706,359 22,603,238 21,430,504
Income taxes 5,722,719 5,868,107 8,720,203 8,557,931
------------- ------------- ------------- -------------
Net income $ 9,338,075 $ 8,838,252 $ 13,883,035 $ 12,872,573
============= ============= ============= =============
Weighted average number of
common shares outstanding:
Basic 10,758,531 11,568,358 11,049,835 11,556,137
Diluted 10,932,379 11,812,638 11,225,659 11,788,531
============= ============= ============= =============
Net income per common share:
Basic $ .87 $ .76 $ 1.26 $ 1.11
Diluted $ .85 $ .75 $ 1.24 $ 1.09
============= ============= ============= =============
<FN>
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<S> <C> <C>
SIX MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
2000 1999
---------------- ----------------
OPERATING ACTIVITIES:
Net Income $ 13,883,035 $ 12,872,573
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 561,658 676,011
Amortization 971,111 364,603
Equity in earnings of affiliates (561,690) (1,211,170)
Cash provided (used) by changes in:
Retainages (277,530) (737,439)
Amounts due from related parties (324,599)
Real estate inventories (20,646,852) (43,804,306)
Other assets (7,273,445) (2,883,028)
Accounts payable (1,229,032) (2,087,903)
Accrued expenses and other liabilities 176,024 (588,968)
---------------- ----------------
Net cash flows used by operating activities (14,396,721) (35,301,886)
INVESTING ACTIVITIES:
Purchases of furniture and equipment (468,593) (1,410,226)
Investments in joint ventures 2,277,301 (3,382,692)
Business acquisitions -0- (4,363,760)
---------------- ----------------
Net cash provided (used by) investing activities 1,808,708 (9,156,678)
FINANCING ACTIVITIES:
Proceeds from bank borrowing 112,240,000 124,641,879
Principal payments on bank borrowing (85,635,000) (94,817,000)
Payments on notes and long-term debt (39,600) (689,152)
Repurchase of common shares (13,840,810) -0-
Net proceeds from sale of common shares 102,290 350,063
---------------- ----------------
Net cash provided by financing activities 12,826,880 33,485,790
---------------- ----------------
Net increase in cash and cash equivalents 238,867 (13,395,114)
Cash and cash equivalents at beginning of period 13,635,911 18,011,456
---------------- ----------------
Cash and cash equivalents at end of period $ 13,874,778 $ 4,616,342
================ ================
<FN>
See accompanying notes.
</TABLE>
CROSSMANN COMMUNITIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
Crossmann Communities, Inc. ("Crossmann" or the "Company") is engaged
primarily in the development, construction, marketing and sale of new
single-family homes for first-time and first move-up buyers. The Company also
acquires and develops land for construction of such homes and originates
mortgage loans for the buyers. The Company operates in Indianapolis, Ft.
Wayne, Lafayette and Southern Indiana; Cincinnati, Columbus and Dayton, Ohio;
Lexington, Kentucky; Memphis and Nashville, Tennessee; Charlotte and Raleigh,
North Carolina; and in Myrtle Beach, South Carolina. The Company is in the
process of withdrawing from the Louisville, Kentucky market.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the unaudited consolidated financial statements
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of the Company, all adjustments
(consisting of normal recurring accruals) considered necessary to present
fairly the consolidated financial statements have been included.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
Management's discussion and analysis may include certain "forward-looking
statements," as defined in the Private Securities Litigation Reform Act of
1995. Such statements may involve unstated risks, uncertainties and other
factors that may cause actual results to differ materially.
The Company's business and the homebuilding industry in general are subject to
changes in economic conditions, including, but not limited to, employment
levels, interest rates, the availability of credit, and consumer confidence.
The Company's success over the past several years has been influenced by a
variety of factors including favorable economic conditions in its principal
markets, the availability of capital for expansion, and low interest rates.
To the extent these conditions do not continue, the Company's operating
results may be adversely affected.
The Company's business is also subject to weather-related seasonal factors
that can affect quarter-to-quarter results of operations. Adverse weather
conditions during the first and second quarters of the year usually restrict
site development work, and construction limitations generally result in fewer
closings during this period. Results of operations during the first half of
the year also tend to reflect increased costs associated with adverse weather.
Warmer, dryer weather during the second half of the year generally permits
higher closings and greater field efficiency.
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999.
Results of Operation
Sales for the three months ended June 30, 2000 increased approximately $17.4
million, or 12.8%, over the same period in 1999. This increase reflects more
homes closed, 1,260 homes in 2000 compared to 1,165 in 1999. Selling prices
were higher approximately $122,000 per home for the period in 2000, compared
to approximately $117,000 in 1999. The increase resulted from a greater
number of closings in the higher priced markets in Ohio and Raleigh and a
trend among consumers in all markets to purchase more optional items.
Gross profit increased approximately $2.8 million for the three months ended
June 30, 2000, over the same period the year before. Gross profit as a
percentage of sales was 20.0% in 2000 compared to 20.5% in 1999. The
decline in gross margin was due principally to the Company's election to
contribute toward financing assistance for its customers. Under FHA rules,
builders are permitted to contribute up to 6% of the mortgage amount toward
points, closing costs, and other selling concessions. Due to higher mortgage
interest rates for consumers in 2000 compared to 1999, Crossmann contributed
more toward these costs in 2000 than in the same quarter one year ago.
Selling, general and administrative expenses increased approximately $757,300
during the three months ended June 30, 2000 compared to the same period in
1999, due in part to sales commissions on the higher sales. Commissions
account for approximately 3.5% of sales. The balance of selling, general and
administrative expense is relatively fixed. Management moved aggressively
during the second quarter to reduce this fixed spending. For the first
quarter of 2000, spending in this category was approximately $10.6 million;
during the second quarter it was approximately $9.7 million. Selling, general
and administrative expenses decreased as a percentage of sales to 9.9% in 2000
from 10.6% in 1999.
Other income decreased approximately $1.6 million for the three months ended
June 30, 2000 compared to the same period the year before. Trinity Homes LLC
("Trinity"), a homebuilding joint venture in Indianapolis, contributed income
to Crossmann of approximately $173,400, compared to approximately $1.2 million
in 1999. This decline is attributed to margin pressure from competitors at
Trinity's price point and to delays in delivering Trinity's larger homes.
Trinity's contribution to Crossmann's earnings is expected to be depressed in
2000 compared to 1999 levels due to greater competition at its price point.
Income before income taxes for the three months ended June 30, 2000 increased
approximately $354,400, from approximately $14.7 million in 1999 to
approximately $15.1 million in 2000, an increase of 2.4%. This increase is due
principally to higher closing volume combined with lower selling, general and
administrative spending. Crossmann's better performance offset lower income
from its Trinity joint venture investment. Income before income taxes as a
percentage of sales decreased to 9.8% of sales in 2000 compared to 10.8% in
1999.
Net income was approximately $500,000 higher for the second quarter of 2000
than for the second quarter of 1999, an increase of 5.7%. As a percentage of
sales, net income decreased to 6.1 % in the second quarter of 2000 from 6.5%
in 1999.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999.
Results of Operation
Sales increased approximately $33.6 million, or 14.8%, to approximately $260.2
million for the six months ended June 30, 2000 from approximately $226.7
million for the six months ended June 30, 1999. Sales were higher primarily
as a result of increased home closings; 2,102 homes were closed in the six
months ended June 30, 2000, compared to 1,938 homes closed during the six
months ended June 30,1999. Selling prices were also higher, approximately
$123,800 per home for the six months ended June 30, 2000 as compared to
approximately $117,000 during the same period in 1999.
Gross profit increased approximately $6.1 million, or 13.2%, to approximately
$52.1 million. This represents a gross margin of 20.0% of sales in the first
six months of 2000 as compared to 20.3% of sales in the first six months of
1999. The lower margin in 2000 is due in part to increased use of financing
assistance programs in 2000 compared to 1999.
Selling, general and administrative expenses increased approximately $3.6
million , or 14.0% , to approximately $29.5 million. This increase is
principally increased sales commissions on the higher sales volume. Selling,
general and administrative expenses as a percentage of sales declined to 11.3%
in the first six months of 2000, compared to 11.4% in the first six months of
1999
Other income decreased approximately $1.0 million for the six months ended
June 30, 2000 compared to the same period the year before. Trinity Homes LLC
("Trinity"), a homebuilding joint venture in Indianapolis, contributed income
to Crossmann of approximately $561,700, compared to approximately $1.4 million
in 1999.
Income before income taxes increased approximately $1.2 million, or 5.5%, to
approximately $22.6 million. The Company's effective tax rate was 38.6% in
the first six months of 2000 as compared to 39.9% in the first six months of
1999. Net income increased approximately $1.0 million, or 7.8%, to
approximately $13.9 million. Net income as a percentage of sales decreased to
5.3% in 2000, down from 5.7% in 1999.
CHANGES IN FINANCIAL POSITION
Unfunded Settlements
During 2000, Crossmann has expanded its practice of "bundling" loans for sale
to third-party warehouse lenders to improve pricing on those loans. The
balance due on these loans was $7,432,283 at June 30, 2000, compared to
$1,286,099 at December 31, 1999. The expected time outstanding for these
loans is two weeks after loan closing.
Inventory
Real estate inventories increased approximately $20.6 million, or 7.9%, from
their December 31, 1999 level. The expansion in inventory reflects heavy land
acquisition and development activity for the year 2000 and beyond.
Notes Payable
Notes payable increased approximately $26.6 million during the first half of
2000 as borrowings were used to finance real estate inventories, joint venture
investments, and the Company's share repurchase program.
CAPITAL RESOURCES AND LIQUIDITY
At June 30, 2000, the Company had approximately $13.9 million in cash and cash
equivalents.
The Company's primary uses of capital are home construction costs and the
purchase and development of land. Real estate inventories were approximately
$280.6 million, or 76.8% of total assets, at June 30, 2000, compared to $260.0
million or 76.5% of total assets at December 31, 1999. Capital is also used
for the addition and improvement of equipment used in administering the
business, for model home furnishings, and the Company's share repurchase
program.
The Company also used cash in the first two quarters to repurchase 867,800
shares at an average price of $15.95. This program was authorized October 8,
1999 by the Board of Directors. The total authorization was 15% of the total
shares then outstanding or 1.7 million shares. As of June 30, 2000, the
Company has repurchased 1,050,300 shares.
Cash expenditures are financed with cash from operations and with borrowings
on a $110.0 million unsecured line of credit, with Bank One, Indiana, N.A. as
agent. Of the $110.0 million, $10.0 million is temporary availability, put in
place to fund summer construction. This portion will expire on August 17,
2000. The line of credit bears interest at the banks's prime lending rate,
but permits portions of the outstanding balance to be committed for fixed
periods of time at a rate equal to LIBOR plus 1.45%. The credit facility
matures March 31, 2002. At June 30, 2000, $82.6 million was outstanding on
this line.
The Company also has approximately $63.9 million in senior notes outstanding.
Of this total, $13.9 million is payable through 2004 at a fixed interest rate
of 7.625%, payable quarterly. On December 21, 2000, the Company will make a
scheduled reduction in the outstanding principal balance of these notes of
$2,777,778. Crossmann has an additional $50.0 million in notes outstanding,
payable through 2008 at a fixed interest rate of 7.75%, payable quarterly.
Annual principal reductions of $8,333,334 begin June 11, 2003.
The note agreements and the bank line of credit require compliance with
certain financial and operating covenants and place certain limitations on the
Company's investments in land and unconsolidated joint ventures. The
agreements also restrict payments of cash dividends on the common shares by
the Company.
The Company's credit arrangements are expected to provide adequate liquidity
for planned internal growth and capital expenditures. In the event that the
Company seeks to accelerate growth through the acquisition of large parcels of
land or of other homebuilding companies, additional capital may be needed.
The Company believes that such capital could be obtained from banks or other
financing alternatives, from the issuance of additional shares, or from seller
financing; however, there can be no assurances that the Company would be able
to secure the necessary capital.
BACKLOG
A home is included in "backlog" upon execution of a sales contract by the
customer; sales and cost of sales are recognized when the title is transferred
and the home is delivered to the buyer at "closing." The Company generally
builds upon the execution of a sales contract by a customer and after approval
of financing, although it also builds a limited number of homes on
speculation. The standard sales contract used by the Company provides for an
earnest money deposit of $1,000. The contract usually includes a termination
provision under which the earnest money is refunded in the event that mortgage
financing is not available on terms specified in the contract, and may include
other contingencies. Cancellations by buyers with approved financing occur
infrequently.
Backlog at June 30, 2000 was 2,065 homes with an aggregate sales value of
approximately $255.6 million, compared to 3,032 homes with an aggregate sales
value of approximately $359.1 million at June 30, 1999. The decrease in the
number of homes in backlog is approximately 31.9%. Starting backlog was
lower, with 1,496 in backlog at January 1, 2000, compared to 1,744 at January
1, 1999. New orders in the first six months of 2000 were lower as well: 2,671
contracts were written in the first six months of 2000 as compared to 3,226 in
1999, a decrease of 17.2%.
FUTURE TRENDS
Housing permits in all Crossmann's markets have contracted during the first
half of 2000 compared to 1999 levels, due to higher mortgage interest rates.
As this occurs, the Company faces discounting from some competitors as
builders seek to maintain their share of a shrinking housing market.
Crossmann may elect to meet this pricing challenge on a limited basis in order
to move inventory.
Lower closings and margin pressure are likely to generate lower net income in
2000, compared to 1999. However, management is optimistic that, by taking
appropriate action, it can still generate above average returns even at lower
volume level.
The lower backlog at June 30, 2000 compared to June 30, 1999, suggests fewer
closings in the second half of 2000.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not invest in marketable securities, nor does it engage
in hedging activities or foreign currency conversions. A portion of its
revolving debt is carried at floating interest rates, but the exposure to
changes in prime rate related to that debt is not material.
PART II. OTHER INFORMATION
The following items for which provision is made in the applicable regulations
of the Securities and Exchange Commission are not required under the related
explanations or are inapplicable and therefore have been omitted:
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 5. Other Information.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
<TABLE>
<CAPTION>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits
<S> <C>
Exhibit
Number Description of Exhibit
3.1 Amended and restated Articles of Incorporation of Crossmann Communities,
Inc.(Incorporated by reference to Exhibit 3.1 to Form S-1 Registration Statement No.
33-68396.)
3.2 Bylaws of Crossmann Communities, Inc. (Incorporated by reference to Exhibit 3.2
to Form S-1 Registration Statement No. 33-68396.)
4.1 Specimen Share Certificate for Common Shares. (Incorporated by reference to
Exhibit 2.9 to Form S-1 Registration Statement No. 33-68396.)
10.1 1993 Outside Director Stock Option Plan. (Incorporated by reference to Exhibit 10.2
to Form S-1 Registration Statement No. 33-68396.)
10.2 1993 Employee Stock Option Plan, As amended as of May 22, 1996. (Incorporated
by reference to Exhibit 10.3 to Form 10-Q dated August 13, 1996.)
10.37 Note Agreement dated as of December 19, 1995, $25,000,000 7.625% Senior Notes
due December 9, 2004, by Crossmann Communities, Inc., et al. (Incorporated by
reference to Exhibit 10.37 to From 10-K dated March 18, 1996.)
10.38 7.625% Senior Note due December 19, 2004, issued to Combined Insurance
Company by Crossmann Communities, Inc., et al. (Incorporated by reference to
Exhibit 10.38 to Form 10-K dated March 18, 1996.)
10.39 7.625% Senior Note due December 19, 2004, issued to Minnesota Mutual Life
Insurance company by Crossmann Communities, Inc., et al. (Incorporated by
reference to Exhibit 10.39 to Form 10-K dated March 18, 1996.)
10.40 Note Agreement dated as of June 11, 1998, $50,000,000 7.75% Senior Notes due
June 11, 2008, by Crossmann Communities, Inc., et al. (Incorporated by reference
to Exhibit 10.46 to Form 10-Q dated August 14, 1998.)
10.41 Form of 7.75% Senior Note due June 11, 2008, issued to various insurance companies
by Crossmann Communities, Inc. et al. (Incorporated by reference to Exhibit 10.45
to Form 10-Q dated August 14, 1998.)
10.42 Credit Agreement, dated April 1, 1999, among Crossmann Communities, Inc. and
Bank One, Indianapolis N.A. (as "Agent') and the Lenders Parties Thereto.
(Incorporated by reference to Exhibit 10.16 to Form 10-Q dated May 13, 1999)
10.43 First Amendment to Credit Agreement, dated June 11, 1999, among Crossmann
Communities, Inc. and Bank One, Indiana N.A. (As "Agent') and the Lenders Party
Thereto. (Incorporated by reference to Exhibit 10.43 to Form 10-Q dated August 13,
1999.)
10.44 Promissory Note, dated June 11, 1999, in favor of Bank One, Indiana, N.A.
(Incorporated by reference to Exhibit 10.44 to Form 10-Q dated August 13, 1999.)
10.45 Promissory Note, dated June 11, 1999, in favor of Fifth Third Bank, Indiana.
(Incorporated by reference to Exhibit 10.45 to Form 10-Q dated August 13, 1999.)
10.46 Promissory Note, dated June 11, 1999, in favor of Huntington National Bank of
Indiana. (Incorporated by reference to Exhibit 10.46 to Form 10-Q dated August 13,
1999.)
10.47 Promissory Note, dated June 11, 1999, in favor of PNC Bank of Ohio, N.A.
(Incorporated by reference to Exhibit 10.47 to Form 10-Q dated August 13, 1999.)
10.48 Promissory Note, dated June 11, 1999, in favor of KeyBank National Association
(Incorporated by reference to Exhibit 10.48 to Form 10-Q dated August 13, 1999.)
10.49 Asset Purchase Agreement, dated June 18, 1999 by and among Crossmann
Communities, Inc., Crossmann Communities of North Carolina, Inc., Homes by Huff
& Co., Inc., Mitchell T. Huff, Thomas A. Huff and Thomas C. Huff. (Incorporated
by reference to Exhibit 10.49 to Form 10-Q dated August 13, 1999.)
10.50 Employment contract dated June 18, 1999, by and among Crossmann Communities
of North Carolina, Inc., Crossmann Communities, Inc. and Mitchell T. Huff.
(Incorporated by reference to Exhibit 10.50 to Form 10-Q dated August 13, 1999.)
10.51 Second Amendment to Credit Agreement, dated March 31, 2000, among Crossmann
Communities, Inc. and Bank One, Indiana, N.A. (As "Agent") and the Lenders Party
Thereto. (Incorporated by reference to Exhibit 10.51 to Form 10-Q dated May 15, 2000.)
10.52 Third Amendment to Credit Agreement, dated June 19, 2000, among Crossmann
Communities, Inc. and Bank One, Indiana, N.A. (As "Agent") and the Lenders Party
Thereto.
19.1 Lease by and between Pinnacle Properties LLC ("Landlord") and Crossmann
Communities, Inc. (Tenant"), 9202 North Meridian Street, Suite 300, Indianapolis,
Indiana 46260, executed April 18, 1994. (Incorporated by reference to Exhibit 19.1to
Form 10-Q dated August 12, 1994.)
27.1 Financial Data Schedule for the quarter ended June 30, 2000.
</TABLE>
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CROSSMANN COMMUNITIES, INC.
/s/ Jennifer A. Holihen
Jennifer A. Holihen
Director, Chief Financial Officer;
Treasurer; Secretary;
(Principal Financial and Accounting Officer)
Dated: August 11, 2000
EXHIBIT 10.52
THIRD AMENDMENT TO CREDIT AGREEMENT
CROSSMANN COMMUNITIES, INC., an Indiana corporation (the "Borrower"),
BANK ONE, INDIANA, N.A., a national banking association, individually and as
Agent (the "Agent"), and the other Lenders party to that certain Credit
Agreement dated as of April 1, 1999, as amended (collectively, the
"Agreement"), agree to further amend the Agreement by this Third Amendment to
Credit Agreement (this "Amendment") as follows.
RECITALS
WHEREAS, the Aggregate Commitment prior to the effective date of this
Amendment is $100,000,000, and the Borrower has requested that the Lenders
increase the Aggregate Commitment to $110,000,000 from the date of this
Amendment and until August 17, 2000; and
WHEREAS, Bank One has agreed to individually fund the increase in the
Aggregate Commitment in excess of $100,000,000 after the date of this
Amendment and until August 17, 2000.
NOW, THEREFORE, the parties hereto agree as follows.
1. DEFINITIONS. The following definitions of "OverAdvance
Period," "Bank One OverAdvance Commitment," "Additional Aggregate Commitment,"
and "Third Amendment" are hereby added to the Article I of the Agreement, and
the definitions of "Commitment" and "Current Subsidiary" appearing in Article
I are hereby amended and restated in their respective entireties as follows:
"Additional Aggregate Commitment" means the amount by which the
Aggregate Commitment increases during the OverAdvance Period, which amount
shall be $10,000,000.
"Bank One OverAdvance Commitment" means the sum of $35,000,000.
"Commitment" means, for each Lender, the obligation of such Lender
to makeLoans not exceeding the amount set forth opposite its signature on the
Third Amendment or as set forth in any Notice of Assignment relating to any
assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof;
provided, that for purposes of determining the Commitment of Bank One only,
the term "Commitment" shall mean, during the OverAdvance Period,
notwithstanding the dollar amount set forth opposite Bank One's signature on
this Agreement or any amendment to this Agreement, the amount of the Bank One
OverAdvance Commitment, and thereafter the Commitment of Bank One shall be the
sum of $25,000,000 at all times.
"Current Subsidiary" means Deluxe Homes of Lafayette, Inc., an Indiana
corporation, Crossmann Partnership, Merit Realty, Inc., an Indiana
corporation, Crossmann Communities of Ohio, Inc. (formerly known as Deluxe
Homes of Ohio, Inc.), an Ohio corporation, Crossmann Mortgage Corporation, an
Indiana corporation, Deluxe Aviation, Inc., an Indiana corporation, Cutter
Homes, Ltd., a Kentucky corporation, Crossmann Communities of Tennessee, LLC,
a Tennessee limited liability company, Crossmann Investments, Inc., an Indiana
corporation, Crossmann Communities of North Carolina, Inc., a North Carolina
corporation, Pinehurst Builders, LLC, a South Carolina limited liability
company, Crossmann Management, Inc., an Indiana corporation, Deluxe Homes of
Ohio, Inc., an Ohio corporation, and each entity hereafter becoming a Current
Subsidiary in accordance with the procedures set forth in Section 4.3 of this
Agreement.
"OverAdvance Period" means the period commencing on the date of the
Third Amendment and ending on August 17, 2000.
"Third Amendment" means that certain agreement entitled "Third Amendment
to Credit Agreement"entered into among the Borrower, the Lenders, and the
Agent effective as of June 19, 2000.
All other terms defined in the Agreement and used in this Amendment shall
have their respective meanings stated in the Agreement unless otherwise
defined herein.
2. INCREASE IN AGGREGATE COMMITMENT. The Agent and the Lenders
hereby acknowledge receipt of the request of the Borrower to increase the
Aggregate Commitment to $110,000,000.00 during the OverAdvance Period, all
pursuant to the terms of Section 2.26 of the Agreement, and agree that upon
the execution and delivery of this Amendment by all of the parties hereto and
of the replacement Promissory Note payable to Bank One attached hereto as
Exhibit "A" in the principal amount of the Bank One OverAdvance Commitment, as
well as delivery of all other agreements, documents, and instruments required
by this Amendment, all conditions precedent and procedures required by Section
2.26 to so increase the Aggregate Commitment during the OverAdvance Period to
$110,000,000.00 shall be deemed satisfied. At the close of the last day of
the OverAdvance Period, the Aggregate Commitment shall return to the amount of
$100,000,000.
3. RATABLE LOANS. Section 2.3 of the Agreement is hereby amended
and restated in its entirety as follows:
2.3. Ratable Loans. Each Advance made hereunder shall consist of
Loans made from the several Lenders ratably in proportion to the ratio that
their respective Commitments bear to the Aggregate Commitment; provided,
however, that notwithstanding the foregoing, during the OverAdvance Period
only, Loans shall be made ratably by the several Lenders ratably in proportion
to the ratio that their respective Commitments (using for Bank One its Bank
One OverAdvance Commitment) bear to the remainder of the Aggregate Commitment
minus the Additional Aggregate Commitment until the aggregate outstanding
principal balance of the Revolving Loan equals $100,000,000, at which time all
further Loans shall be made by Bank One alone, but in no event shall: (i) the
aggregate outstanding principal amount of all Loans made by Bank One during
the OverAdvance Period exceed the Bank One OverAdvance Commitment; or (ii) the
aggregate outstanding principal amount of the Revolving Loan during the
OverAdvance Period exceed at any time the sum of $110,000,000.
4. UNUSED FEE. The first sentence of Section 2.5 of the
Agreement is hereby amended and restated in its entirety as follows:
2.5. Unused Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender an unused fee of
one-fifth (1/5%) per annum on the daily unused portion of such Lender's
Commitment from the date hereof to and including the Facility Termination
Date, payable on the last Business Day of each calendar quarter hereafter and
on the Facility Termination Date; provided, however, that notwithstanding the
foregoing, during the OverAdvance Period only, the unused fee shall be
distributed to the Lenders based upon the amount of their respective
Commitments, (using in Bank One's case the Bank One Prior Commitment), with
Bank One only receiving the unused fee payable with respect to the Additional
Aggregate Commitment.
5. REPRESENTATIONS AND WARRANTIES. To induce the Lenders to enter
into this Amendment, the Borrower affirms that the representations and
warranties contained in the Agreement are correct as of the date of this
Amendment, except that (i) they shall be deemed also to refer to this
Amendment, as well as all documents named herein, and (ii) Section 5.4 shall
be deemed also to refer to the most recent audited and unaudited financial
statements of the Borrower delivered to the Lenders.
6. EVENTS OF DEFAULT. The Borrower certifies that no Default or
Unmatured Default under the Agreement, as amended by this Amendment, has
occurred and is continuing as of the execution date of this Amendment.
7. CONDITIONS PRECEDENT. As conditions precedent to the
effectiveness of this Amendment, the Agent shall first receive with sufficient
copies for the Lenders the following contemporaneously with the execution and
delivery of this Amendment, each duly executed, dated and in form and
substance satisfactory to the Lenders:
(i) A certified copy of a Resolution of the Board of Directors of the
Borrower authorizing the execution, delivery and performance, respectively, of
this Amendment and the other Loan Documents provided for in this Amendment to
which the Borrower is a party.
(ii) A certificate of the Secretary of the Board of Directors of the
Borrower certifying the names of the officer or officers authorized to sign
this Amendment and the other Loan Documents provided for in this Amendment to
which the Borrower is a party, together with a sample of the true signature of
each such officer.
(iii) A certified copy of a Resolution of General Partner of
Crossmann Communities Partnership, an Indiana general partnership, authorizing
the execution, delivery and performance, respectively, of its Reaffirmation of
Guaranty Agreement and the other Loan Documents provided for in this Amendment
to which Crossmann Communities Partnership is a party.
(iv) A certificate of the General Partner of Crossmann Communities
Partnership certifying the names of the officer or officers authorized to
sign its Reaffirmation of Guaranty Agreement and the other Loan Documents
provided for in this Amendment to which Crossmann Communities Partnership is a
party, together with a sample of the true signature of each such officer.
(v) A certified copy of a Resolution of the Board of Directors of
Deluxe Homes of Lafayette, Inc., an Indiana corporation, authorizing the
execution, delivery and performance, respectively, of its Reaffirmation of
Guaranty Agreement and the other Loan Documents provided for in this Amendment
to which Deluxe Homes of Lafayette, Inc. is a party.
(vi) A certificate of the Secretary of the Board of Directors of
Deluxe Homes of Lafayette, Inc. certifying the names of the officer or
officers authorized to sign its Reaffirmation of Guaranty Agreement and the
other Loan Documents provided for in this Amendment to which Deluxe Homes of
Lafayette, Inc. is a party, together with a sample of the true signature of
each such officer.
(vii) A certified copy of a Resolution of the Board of Directors of
Crossmann Communities of Ohio, Inc., an Ohio corporation, authorizing the
execution, delivery and performance, respectively, of its Reaffirmation of
Guaranty Agreement and the other Loan Documents provided for in this Amendment
to which Crossmann Communities of Ohio, Inc. is a party.
(viii) A certificate of the Secretary of the Board of Directors of
Crossmann Communities of Ohio, Inc. certifying the names of the officer or
officers authorized to sign its Reaffirmation of Guaranty Agreement and the
other Loan Documents provided for in this Amendment to which Crossmann
Communities of Ohio, Inc. is a party, together with a sample of the true
signature of each such officer.
(ix) A certified copy of a Resolution of the Board of Directors of
Merit Realty, Inc., an Indiana corporation, authorizing the execution,
delivery and performance, respectively, of its Reaffirmation of Guaranty
Agreement and the other Loan Documents provided for in this Amendment to which
Merit Realty, Inc. is a party.
(x) A certificate of the Secretary of the Board of Directors of Merit
Realty, Inc. certifying the names of the officer or officers authorized to
sign its Reaffirmation of Guaranty Agreement and the other Loan Documents
provided for in this Amendment to which Merit Realty, Inc. is a party,
together with a sample of the true signature of each such officer.
(xi) A certified copy of a Resolution of the Board of Directors of
Crossmann Mortgage Corporation, an Indiana corporation, authorizing the
execution, delivery and performance, respectively, of its Reaffirmation of
Guaranty Agreement and the other Loan Documents provided for in this Amendment
to which Crossmann Mortgage Corporation is a party.
(xii) A certificate of the Secretary of the Board of Directors of
Crossmann Mortgage Corporation certifying the names of the officer or officers
authorized to sign its Reaffirmation of Guaranty Agreement and the other Loan
Documents provided for in this Amendment to which Crossmann Mortgage
Corporation is a party, together with a sample of the true signature of each
such officer.
(xiii) A certified copy of a Resolution of the Board of Directors of
Deluxe Aviation, Inc., an Indiana corporation, authorizing the execution,
delivery and performance, respectively, of its Reaffirmation of Guaranty
Agreement and the other Loan Documents provided for in this Amendment to which
Deluxe Aviation, Inc. is a party.
(xiv) A certificate of the Secretary of the Board of Directors of
Deluxe Aviation, Inc. certifying the names of the officer or officers
authorized to sign its Reaffirmation of Guaranty Agreement and the other Loan
Documents provided for in this Amendment to which Deluxe Aviation, Inc. is a
party, together with a sample of the true signature of each such officer.
(xv) A certified copy of a Resolution of the Board of Directors of
Cutter Homes, Ltd., a Kentucky corporation, authorizing the execution,
delivery and performance, respectively, of its Reaffirmation of Guaranty
Agreement and the other Loan Documents provided for in this Amendment to which
Cutter Homes, Ltd. is a party.
(xvi) A certificate of the Secretary of the Board of Directors of
Cutter Homes, Ltd. certifying the names of the officer or officers authorized
to sign its Reaffirmation of Guaranty Agreement and the other Loan Documents
provided for in this Amendment to which Cutter Homes, Ltd. is a party,
together with a sample of the true signature of each such officer.
(xvii) A certified copy of a Resolution of the Members of Crossmann
Communities of Tennessee, LLC, a Tennessee limited liability company,
authorizing the execution, delivery and performance, respectively, of its
Reaffirmation of Guaranty Agreement and the other Loan Documents provided for
in this Amendment to which Crossmann Communities of Tennessee, LLC is a party.
(xviii) A certificate of the Managing Member of Crossmann Communities
of Tennessee, LLC certifying the names of the officer or officers authorized
to sign its Reaffirmation of Guaranty Agreement and the other Loan Documents
provided for in this Amendment to which Crossmann Communities of Tennessee,
LLC is a party, together with a sample of the true signature of each such
officer.
(xix) A certified copy of a Resolution of the Board of Directors of
Crossmann Communities of North Carolina, Inc., a North Carolina corporation,
authorizing the execution, delivery and performance, respectively, of its
Reaffirmation of Guaranty Agreement and the other Loan Documents provided for
in this Amendment to which Crossmann Communities of North Carolina, Inc. is a
party.
(xx) A certificate of the Secretary of the Board of Directors of
Crossmann Communities of North Carolina, Inc. certifying the names of the
officer or officers authorized to sign its Reaffirmation of Guaranty Agreement
and the other Loan Documents provided for in this Amendment to which Crossmann
Communities of North Carolina, Inc. is a party, together with a sample of the
true signature of each such officer.
(xxi) A certified copy of a Resolution of the Members of
Pinehurst Builders, LLC, a South Carolina limited liability company,
authorizing the execution, delivery and performance, respectively, of its
Reaffirmation of Guaranty Agreement and the other Loan Documents provided for
in this Amendment to which Pinehurst Builders, LLC is a party.
(xxii) A certificate of the Managing Member of Pinehurst Builders,
LLC certifying the names of the officer or officers authorized to sign its
Reaffirmation of Guaranty Agreement and the other Loan Documents provided for
in this Amendment to which Pinehurst Builders, LLC is a party, together with a
sample of the true signature of each such officer.
(xxiii) A certified copy of a Resolution of the Board of Directors of
Crossmann Management, Inc., an Indiana corporation, authorizing the execution,
delivery and performance, respectively, of its Reaffirmation of Guaranty
Agreement and the other Loan Documents provided for in this Amendment to which
Crossmann Management, Inc. is a party.
(xxiv) A certificate of the Secretary of the Board of Directors of
Crossmann Management, Inc. certifying the names of the officer or officers
authorized to sign its Reaffirmation of Guaranty Agreement and the other Loan
Documents provided for in this Amendment to which Crossmann Management, Inc.
is a party, together with a sample of the true signature of each such officer.
(xxv) A certified copy of a Resolution of the Board of Directors of
Crossmann Investments, Inc., an Indiana corporation, authorizing the
execution, delivery and performance, respectively, of its Reaffirmation of
Guaranty Agreement and the other Loan Documents provided for in this Amendment
to which Crossmann Investments, Inc. is a party.
(xxvi) A certificate of the Secretary of the Board of Directors of
Crossmann Investments, Inc. certifying the names of the officer or officers
authorized to sign its Reaffirmation of Guaranty Agreement and the other Loan
Documents provided for in this Amendment to which Crossmann Investments, Inc.
is a party, together with a sample of the true signature of each such officer.
(xxvii) A certified copy of a Resolution of the Board of Directors of
Deluxe Homes of
Ohio, Inc., an Ohio corporation, authorizing the execution, delivery and
performance, respectively, of its Reaffirmation of Guaranty Agreement and the
other Loan Documents provided for in this Amendment to which Deluxe Homes of
Ohio, Inc. is a party.
(xxviii)A certificate of the Secretary of the Board of Directors of
Deluxe Homes of Ohio,
Inc. certifying the names of the officer or officers authorized to sign its
Reaffirmation of Guaranty Agreement and the other Loan Documents provided for
in this Amendment to which Deluxe Homes of Ohio, Inc. is a party, together
with a sample of the true signature of each such officer.
(xxix) The Promissory Note (Revolving Loan) ($35,000,000.00)
payable to the order of Bank One, Indiana, N.A. in the form attached hereto as
Exhibit "A."
(xxx) Payment of a fee in the amount of $2,500.00 which shall be
payable solely to Bank One in consideration of the Bank One OverAdvance
Commitment.
(xxxi) A Reaffirmation Guaranty Agreement from each Current
Subsidiary in the form of Exhibit "B"attached hereto, duly completed for each
such Current Subsidiary.
(xxxii) All additional fees and expenses of the Agent, including but
not limited to the
Agent's reasonable attorneys' fees incurred in connection with the
drafting, negotiation, and closing of this Amendment or which may remain
unpaid and incurred in connection with prior amendments and matters involving
the Company; and
(xxxiii) Such other instruments, agreements, and documents that the Agent
or any Lender may reasonably require.
8. EFFECT OF AMENDMENT. Except as amended in this Amendment, all of
the terms and conditions of the Agreement shall continue unchanged and in full
force and effect together with this Amendment.
[This Space Left Blank Intentionally]
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders, and the Agent, by their
respective duly authorized officers, have executed and delivered in Indiana
this Third Amendment to Credit Agreement as of June 19, 2000.
CROSSMANN COMMUNITIES, INC., an Indiana corporation
By: /s/ Jennifer A. Holihen
Jennifer A. Holihen, Chief Financial
Officer, Treasurer and Secretary
9210 North Meridian Street
Indianapolis, Indiana 46260
Attention: Jennifer A. Holihen,
Chief Financial Officer, Treasurer and
Secretary
Telephone: (317) 843-9514
Telecopy: (317) 571-2210
E-mail: ___________________________
Commitments
$25,000,000.00 BANK ONE, INDIANA, N.A., a national
banking association, by itself and as Agent
By: /s/ Patrick D. Lease
Patrick D. Lease, First Vice
President
Bank One Center/Circle - Suite 203
111Monument Circle
Indianapolis, Indiana 46277
Attention: Patrick D. Lease, Vice
President
Telephone: (317) 321-3844
Telecopy: (317) 321-7647
E-mail: [email protected]
$18,750,000.00 HUNTINGTON NATIONAL BANK OF INDIANA
By: /s/ Russell R. Swan, Jr.
Russell R. Swan, Jr., Senior Vice
President
Capital Center, Suite 1800
201 North Illinois Street
Indianapolis, Indiana 46204
Attention: Russell R. Swan, Jr.
Vice President
Telephone: (317) 237-2547
Telecopy: (317) 237-2505
E-mail: __________________________
$18,750,000.00 FIFTH THIRD BANK, INDIANA
By: /s/ Erik Miner
Erik Miner, Vice President
Capital Center, North Tower
251 North Illinois Street, Suite 1000
Indianapolis, Indiana 4604
Attention: Erik Miner, Vice President
Telephone: (317) 383-2392
Telecopy: (317) 383-2427
E-mail: __________________________
$18,750,000.00 PNC BANK, N.A.
By: /s/ James A. Harmann
James A. Harmann, Vice President
201 East Fifth Street, Suite 200
Real Estate Finance
Cincinnati, Ohio 45201-1198
Attention: James A. Harmann, Vice
President
Telephone: (513) 651-8988
Telecopy: (513) 651-8931
E-mail: [email protected]
$18,750,000.00 KEYBANK NATIONAL ASSOCIATION
By: /s/ Jeffrey K. Lockhart
Jeffrey K. Lockhart, Vice President
10 West Market Street
Indianapolis, Indiana 46204
Attention: Jeffrey K. Lockhart, Vice
President
Telephone: (317) 464-8320
Telecopy: (317) 464-8301
E-Mail: ___________________________
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" - Promissory Note (Revolving Loan)
($35,000,000.00)(Bank One, Indiana, N.A.)
Exhibit "B" - Reaffirmation of Guaranty Agreement
PROMISSORY NOTE
(Revolving Loan)
Indianapolis, Indiana
$35,000,000.00 Dated: June 19, 2000
Final Maturity: March 31, 2003
On or before March 31, 2003 ("Final Maturity"), CROSSMANN COMMUNITIES,
INC., an Indiana corporation (the "Maker") promises to pay to the order of
BANK ONE, INDIANA, N.A., a national banking association (the "Lender") at the
principal office of BANK ONE, INDIANA, N.A., a national banking association
(the "Agent") in Indianapolis, Indiana, the principal sum of Thirty-Five
Million and 00/100 Dollars ($35,000,000.00) or so much of the principal amount
of the Loan represented by this Note as may be disbursed by the Lender under
the terms of the Credit Agreement described below, and to pay interest on the
unpaid principal balance outstanding from time to time as provided in this
Note.
This Note evidences indebtedness (the "Loan") incurred or to be incurred
by the Maker under a revolving line of credit extended to the Maker by the
Lender under a Credit Agreement dated April 1, 1999 (as amended, the "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and
the other lenders from time to time parties thereto. All references in this
Note to the Credit Agreement shall be construed as references to that
Agreement as it may be amended from time to time. The Loan is referred to in
the Credit Agreement as the "Revolving Loan." Subject to the terms and
conditions of the Credit Agreement, the proceeds of the Loan may be advanced
and repaid and re-advanced until Final Maturity. The principal amount of the
Loan outstanding from time to time shall be determined by reference to the
books and records of the Lender on which all Advances under the Loan and all
payments by the Maker on account of the Loan shall be recorded. Such books
and records shall be deemed prima facie to be correct as to such matters.
The terms "Advance" and "Business Day" are used in this Note as defined
in the Credit Agreement.
Interest on the unpaid principal balance of the Loan outstanding from
time to time prior to and after maturity will accrue at the rate or rates
provided in the Credit Agreement. Prior to maturity, accrued interest shall
be due and payable on the last Business Day of each month commencing on the
last Business Day of the month in which this Note is executed. After
maturity, interest shall be due and payable as accrued and without demand.
Interest will be calculated by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made
to the Credit Agreement for provisions requiring prepayment of principal under
certain circumstances. Principal may be prepaid, but only as provided in the
Credit Agreement.
If any installment of interest due under the terms of this Note is not
paid within two (2) Business Days when due, then the Lender or any subsequent
holder of this Note may, subject to the terms of the Credit Agreement, at its
option and without notice, declare the entire principal amount of the Note and
all accrued interest immediately due and payable. Reference is made to the
Credit Agreement which provides for acceleration of the maturity of this Note
upon the happening of other "Defaults" as defined therein.
All payments on account of this Note shall be applied as provided in the
Credit Agreement.
The Maker and any endorsers severally waive demand, presentment for
payment and notice of nonpayment of this Note, and each of them consents to
any renewals or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note supersedes and replaces that certain Promissory Note dated
March 31, 2000, made by the Maker to the order of the Lender in the principal
amount of $25,000,000.00, with a final maturity date of March 31, 2003.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that
Indiana conflicts of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply.
CROSSMANN COMMUNITIES, INC., an Indiana
corporation
By: /s/ Jennifer A. Holihen
Jennifer A. Holihen, Chief Financial
Officer, Treasurer and Secretary
REAFFIRMATION OF GUARANTY AGREEMENT
The undersigned being a Guarantor under that certain Guaranty Agreement
dated as of _____________________ (the "Guaranty Agreement"), pursuant to
which the undersigned guaranteed the obligations of CROSSMANN COMMUNITIES,
INC., an Indiana corporation (the "Borrower") to BANK ONE, INDIANA, NA, a
national banking association, in its capacity as Agent (the "Agent") for the
ratable benefit of the Lenders ("Lenders") under the terms of that certain
Credit Agreement (the "Agreement") dated April 1, 1999, entered into by and
among the Borrower, the Lenders, and the Agent, hereby consents to the
execution of that certain Third Amendment to Credit Agreement to be entered
into by and among the Company, the Lenders, and the Agent dated as of even
date herewith (the "Third Amendment"), and hereby agrees that the Obligations
(as defined in the Guaranty Agreement) shall include the increase in the
amount of the Aggregate Commitment to $110,000,000.00, on the terms and
conditions as more fully set forth in the Third Amendment.
Further, the Guarantor acknowledges that while it may be the current
practice of the Agent in the past to obtain the undersigned's consent to any
amendment to or waiver of any of the terms and conditions of the Agreement,
the Agent shall not be required to continue any such practice in the future,
and any such discontinuance shall not be construed as a waiver of the Agent's
rights, in its discretion, to enter into any further amendments to or grant
any further waivers of any of the terms and conditions of the Agreement
without the consent of the undersigned, and that the Agent's failure to
request or obtain the consent of the undersigned to any such amendment or
waiver shall not affect the liability of the undersigned to the Lenders and
the Agent under the Guaranty Agreement.
IN WITNESS WHEREOF, the undersigned have signed this Reaffirmation of
Guaranty Agreement as of the 19th day of June, 2000.
____________________________________
By: ______________________________
______________________________
(Printed name and title)
<PAGE>
STATE OF ___________________ )
)SS:
COUNTY OF _________________ )
Before me, a Notary Public in and for the above County and State,
personally appeared , the
of , a
, who as such officer acknowledged the execution of
the foregoing Reaffirmation of Guaranty Agreement for and on behalf of the
_____________ this day of June, 2000.
Signature:
Printed:
Notary Public
My Commission Expires:
My County of Residence:
