SECOND AMENDMENT TO
AMENDED AND RESTATED REVOLVING
AND TERM LOAN AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING AND TERM LOAN
AGREEMENT (this "Amendment"), made by and among Cavalier Homes, Inc., a Delaware
corporation ("Cavalier Homes"), Quality Housing Supply, LLC, a Delaware limited
liability company, Cavalier Manufacturing, Inc., a Delaware corporation,
Cavalier Industries, Inc., a Delaware corporation, Delta Homes, Inc., a
Mississippi corporation, Cavalier Enterprises, Inc., a Delaware corporation,
Cavalier Associated Retailers, Inc., a Delaware corporation, Quality Certified
Insurance Services, Inc., an Alabama corporation, Cavalier Asset Management,
Inc., a Delaware corporation, Cavalier Manufacturing Asset Co., Inc., a Delaware
corporation, Cavalier Industries Asset Co., Inc., a Delaware corporation,
Cavalier Enterprises Asset Co., Inc., a Delaware corporation, Cavalier Real
Estate Co., Inc., a Delaware corporation, and CIS Financial Services, Inc., an
Alabama corporation (formerly Cavalier Acceptance Corporation) ("CIS Financial")
(collectively, the "Initial Participating Subsidiaries"; Cavalier Homes and the
Initial Participating Subsidiaries, together with all entities who hereafter
become Participating Subsidiaries or Participating Partnerships, being
hereinafter sometimes collectively referred to as the "Borrowers"), and First
Commercial Bank, an Alabama state banking corporation ("Lender"), is dated as of
the 4th day of May, 2001.
R E C I T A L S :
---------------
WHEREAS, Cavalier Homes, the Initial Participating Subsidiaries and Lender
entered into that certain Amended and Restated Revolving and Term Loan Agreement
dated as of March 31, 2000, as amended by that certain First Amendment to
Amended and Restated Revolving and Term Loan Agreement dated as of September 29,
2000 (as heretofore amended, the "Agreement"), pursuant to which Lender made
available, subject to the terms and conditions thereof, to such Borrowers, a
revolving loan in the maximum principal amount of up to $35,000,000 (the
"Revolving Loan"), and to CIS Financial, a term loan facility of up to
$35,000,000 (the "Term Loans"); provided, however, that the collective
outstanding balances of the Revolving Loan and all of the Term Loans may not
exceed $35,000,000;
WHEREAS, the Agreement amended and restated in its entirety that certain
Revolving, Warehouse and Term Loan Agreement dated as of February 17, 1994, as
amended by that certain First Amendment to Revolving, Warehouse and Term Loan
Agreement dated as of March 14, 1996, as further amended by that certain Second
Amendment to Revolving, Warehouse and Term Loan Agreement dated as of June 1,
1998, by and among Cavalier Homes and certain of the Initial Participating
Subsidiaries;
WHEREAS, the Revolving Loan is currently evidenced by that certain Amended
and Restated Revolving Note in the original principal amount of $35,000,000
dated as of March 31, 2000, as amended by that certain Modification to Amended
and Restated Revolving Note dated as of September 29, 2000 (as heretofore
amended, the "Revolving Note"); and
WHEREAS, Borrowers have requested that Lender agree to amend certain
covenants contained in the Agreement and Lender is willing to do so, but only on
the express condition, among others, that Borrowers enter into this Amendment,
pursuant to which the Agreement shall be amended and modified.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree, each with the other, as follows:
1. Unless otherwise defined herein or unless the context shall expressly
indicate otherwise, all capitalized terms which are used herein shall have their
respective meanings given to them in the Agreement.
2. Section 7.3(A)(2) of the Agreement is hereby amended and restated in its
entirety to read as follows:
"(2) The sum of (A) and (B) below must at all times equal or exceed
$58,000,000:
(A) Consolidated Tangible Net Worth, plus
(B) (i) in fiscal year 2000, the treasury stock
purchased by Cavalier Homes in year 2000, valued at cost, and
(ii) in fiscal year 2001, the treasury stock
purchased by Cavalier Homes in years 2000 and 2001, valued at cost."
3. Schedule I of the Agreement is hereby amended to amend and restate the
definition of "Revolving Loan Commitment" in its entirety as follows:
""Revolving Loan Commitment" means the Lender's commitment to lend to
Borrowers up to the sum of $35,000,000 in principal amount outstanding from time
to time pursuant to Article II of the Agreement, and subject to, the terms of
the Agreement; provided that (i) if at any time the sum of (A) and (B) below is
less than $85,000,000 but greater than $65,000,000, the Revolving Loan
Commitment shall be automatically adjusted to be thirty-five percent (35%) of
the sum of (A) and (B) below; and (ii) if at any time the sum of (A) and (B)
below is equal to or less than $65,000,000, the Revolving Loan Commitment shall
be automatically adjusted to be thirty percent (30%) of the sum of (A) and (B)
below:
(A) Consolidated Tangible Net Worth, plus
(B) (i) in fiscal year 2000, the treasury stock
purchased by Cavalier Homes in year 2000, valued at cost, and
(ii) in fiscal year 2001, the treasury stock
purchased by Cavalier Homes in years 2000 and 2001, valued at cost."
4. Schedule I of the Agreement is amended to amend and restate the
definition of "LIBOR Rate" in its entirety as follows:
"LIBOR Rate" means: (a) so long as the sum of (A) and (B) below exceeds
$77,000,000, the Base LIBOR Rate plus 200 basis points (2.00%); (b) at any time
when the sum of (A) and (B) below is equal to or less than $77,000,000 but
greater than $65,000,000, the Base LIBOR Rate plus 250 basis points (2.50%); and
(iii) at any time when the sum of (A) and (B) below is equal to or less than
$65,000,000, the Base LIBOR Rate plus 275 basis points (2.75%):
(A) Consolidated Tangible Net Worth, plus
(B) (i) in fiscal year 2000, the treasury stock
purchased by Cavalier Homes in year 2000, valued at cost, and
(ii) in fiscal year 2001, the treasury stock
purchased by Cavalier Homes in years 2000 and 2001, valued at cost."
The LIBOR Rate shall be adjusted automatically, upward or downward, as the
case may be, on and as of the effective date of any change in the Base LIBOR
Rate resulting from a change in the Reserve Requirement or, in the case of a
required adjustment based on Consolidated Tangible Net Worth, the LIBOR Rate
shall be adjusted on the first day of the month immediately following receipt by
Lender of the monthly financial reports required by Section 7.2(B) of the
Agreement."
5. Schedule I of the Agreement is hereby amended to amend and restate the
definition of "Revolving Rate" in its entirety as follows:
"Revolving Rate" means, until maturity of the Revolving Note: (a) so long
as the sum of (A) and (B) below exceeds $77,000,000, the per annum rate of
interest equal to one-half of one percent (0.50%) below the Prime Rate in effect
from time to time; (b) at any time when the sum of (A) and (B) below is equal to
or less than $77,000,000 but greater than $65,000,000, the per annum rate of
interest equal to the Prime Rate in effect from time to time; and (c) at any
time when the sum of (A) and (B) below is equal to or less than $65,000,000, the
per annum rate of interest equal to one-quarter of one percent (0.25%) above the
Prime Rate in effect from time to time, and, after maturity of the Revolving
Note, two percent (2.00%) above the Prime Rate in effect from time to time after
maturity of the Revolving Note, whether by demand, acceleration or otherwise:
(A) Consolidated Tangible Net Worth, plus
(B) (i) in fiscal year 2000, the treasury stock
purchased by Cavalier Homes in year 2000, valued at cost, and
(ii) in fiscal year 2001, the treasury stock
purchased by Cavalier Homes in years 2000 and 2001, valued at cost."
Each time the Prime Rate shall change, the Revolving Rate shall change
concurrently with such change in the Prime Rate, or, in the case of a required
adjustment based on Consolidated Tangible Net Worth, the Prime Rate shall be
adjusted on the first day of the month immediately following receipt by Lender
of the monthly financial reports required by Section 7.2(B) of the Agreement."
6. As conditions to the effectiveness of this Amendment, Borrowers shall
have delivered to Lender such documentation as may be requested by Lender, or
its counsel, to satisfy Lender that this Amendment has been duly authorized,
executed and delivered on behalf of each Borrower, constitutes the valid and
binding obligations of each Borrower, and is entitled to the security of the
Agreement and the Security Documents.
7. Notwithstanding the execution of this Amendment, all of the indebtedness
evidenced by each of the Notes shall remain in full force and effect, and any
Collateral described in any agreement providing security for any Obligation of
the Borrowers or any of them so defined to include the Notes, or any of them,
shall remain subject to the liens, pledges, security interests and assignments
of any such agreements as security for the indebtedness evidenced by each of the
Notes, the Obligations, and all other indebtedness described therein; nothing
contained in this Amendment shall be construed to constitute a novation of any
of the indebtedness evidenced by the Notes or to release, satisfy, discharge or
otherwise affect or impair in any manner whatsoever (a) the validity or
enforceability of any of the indebtedness evidenced by the Notes; (b)the liens,
pledges, security interests, assignments and conveyances effected by the
Agreement, the Security Documents and any other agreement securing any of the
Notes, or the priority thereof; (c) the liability of any maker, endorser,
surety, guarantor or other Person that may now or hereafter be liable under or
on account of any of the Notes or any agreement securing any or all of the
Notes; or (d) any other security or instrument now or hereafter held by Lender
as security for or as evidence of any of the above-described indebtedness.
Without in any way limiting the foregoing, (i) each Borrower acknowledges and
agrees that the indebtedness evidenced by each of the Notes is and shall remain
secured by the Collateral described in the Agreement and in the Security
Documents and 13. Cavalier Homes specifically, in its capacity as guarantor
under those certain Continuing Guaranty Agreements dated February 17, 1994,
March 14, 1996, June 1, 1998 and March 31, 2000, by Cavalier Homes in favor of
Lender (the "Guaranty Agreements"), acknowledges and agrees that the
"Liabilities" (as defined in the Guaranty Agreements) of CIS Financial which are
unconditionally guaranteed by Cavalier Homes shall in no way be modified,
altered or impaired by this Amendment.
8. Borrowers, jointly and severally, hereby represent and warrant to Lender
that 15. the officers of each Borrower executing this Amendment have been duly
authorized to do so and such amendment and the Agreement are valid and binding
upon each Borrower which is a party thereto in every respect, enforceable in
accordance with their terms, 16. each and every representation and warranty set
forth in Article VI of the Agreement is true and correct as of the date hereof,
and 17. no Event of Default, nor any event that, upon notice or lapse of time or
both, would constitute an Event of Default, has occurred and is continuing.
9. Unless otherwise expressly modified or amended hereby, all terms and
conditions of the Agreement as heretofore amended shall remain in full force and
effect, and the same, as amended hereby, are hereby ratified and confirmed in
all respects.
10. This Amendment shall inure to and be binding upon and enforceable by
Borrowers and Lender and their respective successors and assigns.
11. This Amendment may be executed in one or more counterparts, each of
which when executed and delivered shall constitute an original. All such
counterparts shall together be deemed to be one and the same instrument. The
parties agree that any facsimile signature of any party on any counterpart
original of this Amendment shall be deemed to be an original signature of such
party for all purposes and shall fully bind the party whose facsimile signature
appears on the counterpart original.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, by and through their respective duly authorized officers, as of the
day and year first above written.
BORROWERS:
CAVALIER HOMES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
QUALITY HOUSING SUPPLY, LLC
By: /s/ Xxxx Xxxxxx [L.S.]
------------------------------------
Its: Secretary
-----------------------------------
CAVALIER MANUFACTURING, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
------------------------------------
Its: Secretary
------------------------------------
CAVALIER INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
-------------------------------------
Its: Secretary
------------------------------------
DELTA HOMES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
-------------------------------------
Its: Secretary
--------------------------------------
CAVALIER ENTERPRISES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
-------------------------------------
CAVALIER ASSOCIATED RETAILERS, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
QUALITY CERTIFIED INSURANCE
SERVICES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
------------------------------------
Its: Secretary
-----------------------------------
CAVALIER ASSET MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
CAVALIER MANUFACTURING ASSET
CO., INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
CAVALIER INDUSTRIES ASSET CO., INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
CAVALIER ENTERPRISES ASSET CO., INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
CAVALIER REAL ESTATE CO., INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
CIS FINANCIAL SERVICES, INC.
By: /s/ Xxxx Xxxxxx [L.S.]
--------------------------------------
Its: Secretary
--------------------------------------
LENDER:
FIRST COMMERCIAL BANK
By: Xxxxx Xxxxxxxx [L.S.]
--------------------------------------
Its President
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