FIRST AMENDMENT TO LOAN AGREEMENT
FIRST
AMENDMENT TO LOAN AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT
(this “Agreement”) is made
and entered into as of April 5, 2010, by and among H.I.G. All American, LLC, a
Delaware corporation (the “Lender”), Coachmen
Industries, Inc., an Indiana corporation (“Coachmen”), All
American Homes, LLC, an Indiana limited liability company, All American Homes of
Colorado, LLC, a Colorado limited liability company, All American Homes of
Georgia, LLC, a Georgia limited liability company, All American Homes of
Indiana, LLC, an Indiana limited liability company, All American Homes of Iowa,
LLC, an Iowa limited liability company, All American Homes of North Carolina,
LLC, a North Carolina limited liability company, All American Homes of Ohio,
LLC, an Ohio limited liability company, All American Building Systems, LLC, an
Indiana limited liability company, All American Specialty Vehicles, LLC, an
Indiana limited liability company, Coachmen Motor Works, LLC, an Indiana limited
liability company, Coachmen Motor Works of Georgia, LLC, a Georgia limited
liability company, Consolidated Building Industries, LLC, an Indiana limited
liability company, Consolidated Leisure Industries, LLC, an Indiana limited
liability company, Coachmen Operations, Inc., an Indiana corporation, Coachmen
Properties, Inc., an Indiana corporation, Mod-U-Kraf Homes, LLC, a Virginia
limited liability company, and Sustainable Designs, LLC, an Indiana limited
liability company (together with Coachmen, collectively, the “Borrowers”). Unless
otherwise specified, all capitalized terms used but not defined herein shall
have the respective meanings ascribed to such terms in the Loan Agreement (as
defined below).
W I T N E S S E T H:
WHEREAS, the Lender and the Borrowers
have executed and delivered that certain Loan Agreement, by and among the
Lender, Coachmen and the other Borrowers, dated October 27, 2009 (as the
same may be amended, restated, supplemented, or otherwise modified from time to
time, the “Loan
Agreement”), pursuant to which the Lender extended a line of credit to
the Borrowers under the Revolving Notes and a term loan under the Tranche B
Notes;
WHEREAS, as of the date hereof, the
Events of Default under terms of the Loan Agreement identified on Exhibit A hereto have
occurred and are continuing (collectively, the “Specified
Defaults”);
WHEREAS, the Borrowers have requested,
and the Lender has agreed, subject to the terms and conditions hereof, to waive
the Specified Defaults and amend certain provisions of the Loan Agreement as set
forth herein; and
WHEREAS, as a material inducement to
the Lender to enter into this Amendment and as a condition precedent to the
effectiveness hereof, (1) the parties have agreed to amend and restate the
Tranche B Notes and the Warrants to have the terms and conditions set forth in
Exhibits C and
D,
respectively, (2) Coachmen has agreed to issue additional Warrants to
purchase 9,557,939 shares of Common Stock to the Lender as well as potentially
additional Warrants in the future (collectively, the “New Warrants” and
together with the existing Warrants, the “Warrants”) and
(3) Coachmen has agreed to amend the Registration Rights Agreement, dated
October 27, 2009, to include the shares of Common Stock issuable upon
exercise of all the New Warrants (the “New Warrant Shares”
and together with the existing Warrant Shares, the “Warrant
Shares”).
NOW, THEREFORE, for and in
consideration of the above premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Lender and the
Borrowers hereby covenant and agree as follows:
SECTION
1. Confirmation by the
Borrowers of Obligations and Specified Defaults.
(a) Each of
the Borrowers acknowledges and agrees that as of the close of business on April
5, 2010, the aggregate balance of the outstanding Obligations under the Loan
Agreement was $10,850,000. The foregoing amount does not include all
of the fees, expenses and other amounts which are chargeable or otherwise
reimbursable under the Loan Agreement and other Transaction
Documents.
(b) Each
Borrower acknowledges and agrees that: (i) each of the Specified Defaults
constitutes a material Event of Default that has occurred and is continuing,
(ii) one or more Specified Default are not subject to any further grace or cure
period, and (iii) except for the Specified Defaults, no other Defaults or Events
of Default have occurred which remain continuing as of the date
hereof. But for the effectiveness of this Amendment, each of the
Specified Defaults, (i) relieves the Lender from any obligation to extend any
Revolving Loans or provide any other financial accommodations under the Loan
Agreement or other Transaction Documents (including consenting to any Borrower’s
use of cash collateral), (ii) is a Triggering Event, and (iii) permits the
Lender to, among other things, (A) suspend or terminate any commitment to
provide Revolving Loans or make other extensions of credit under any or all of
the Loan Agreement and the other Transaction Documents, (B) accelerate all or
any portion of the Obligations, (C) continue to charge, and demand immediate
payment of, interest on any and all of the Obligations, (D) commence any legal
or other action to collect any or all of the Obligations from the Borrowers
and/or any Collateral or any other property as to which any other Person granted
the Lender a security interest therein as security for the Obligations or any
guaranty thereof, (E) foreclose or otherwise realize on any or all of the
Collateral, and/or appropriate, set-off and apply to the payment of any or all
of the Obligations, any or all of the Collateral, and/or (F) take any other
enforcement action or otherwise exercise any or all rights and remedies provided
for by any or all of the Loan Agreement, the other Transaction Documents or
applicable law.
SECTION
2. Limited Waiver of Specified
Defaults. Subject to the terms and conditions set forth
herein, the Lender hereby waives, on a one-time basis, the Specified
Defaults.
SECTION
3. Amendments to Loan
Agreement.
(a) Amendment to Section
1.20. Section 1.20 of the Loan Agreement is hereby amended and
restated so that it reads, in its entirety, as follows:
1.20 “Consolidated Net
Income” shall mean, with respect to any Person for any period, the
aggregate of the net income (loss) of such Person, for such period (excluding to
the extent included therein (a) any extraordinary and/or one time or unusual and
non-recurring gains or other items of income or, including without limitation,
any income associated with accrual reversals or similar accounting gains from
discontinued operations, and (b) any non cash losses acceptable to the Lender)
after deducting all charges which should be deducted before arriving at the net
income (loss) for such period and, without duplication, after deducting the
Provision for Taxes for such period, all as determined in accordance with
GAAP. For the purposes of this definition, net income excludes (a)
any gain, income or non-cash loss, together with any related Provision for Taxes
for such gain, income or non-cash loss, (i) realized upon the sale or other
disposition of any assets that are not sold in the ordinary course of business
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or of any Capital Stock of such Person, or (ii) resulting from
noncash impairment charges attributable to distressed or under utilized assets
and (b) any net income realized or loss incurred as a result of changes in
accounting principles or the application thereof to such Person.
(b) Amendment to Section
1.25. Section 1.25 of the Loan Agreement is hereby amended and
restated so that it reads, in its entirety, as follows:
1.25 “EBITDA” shall mean,
as to any Person, with respect to any period, an amount equal to: (a) the
Consolidated Net Income of such Person for such period, plus (b) depreciation,
amortization and other non-cash charges (including, but not limited to, deferred
non cash compensation) and for such period acceptable to the Lender or
attributable to the Borrowers’ discontinued recreational vehicle operations and
not scheduled to be paid on or before November 1, 2010; plus (c) Interest
Expense for such period; plus (d) the Provision for Taxes for such period; plus
(e) the transaction fees paid pursuant to Section 2.1(e)(ii) hereof or
pursuant to this Amendment plus (f) any consultant’s fees and expenses paid by
the Borrowers to consultants retained by the Lenders pursuant to Section 8.40
(in the case of (b) through (f) to the extent deducted in the computation of
Consolidated Net Income of such Person).
(c) Amendment to Section
1.49. Section 1.49 of the Loan Agreement is hereby amended and
restated so that it reads, in its entirety, as follows:
1.49 “Interest Expense”
shall mean, for any period, as to any Person, as determined in accordance with
GAAP, the total interest expense of such Person, whether paid or accrued during
such period (including the interest component of Capital Leases for such
period), including, without
limitation, interest expense associated with discounts in connection with the
sale of any Accounts, bank fees, commissions, discounts and other fees and
charges owed with respect to letters of credit, banker’s acceptances or similar
instruments, but excluding any non-cash interest expense resulting from
accounting adjustments to the recorded value of the Warrants or the Notes (or
any other securities or property delivered to the Lender by a Borrower in
connection with the Transaction Documents) occurring after the initial Closing
Date.
(d) Addition of Section
3.2(h). A new Section 3.2(h) is hereby added to the Loan
Agreement immediately following the existing Section 3.2(g) of the Loan
Agreement, and reads, in its entirety, as follows:
(h) The
conditions set forth in either (i) or (ii) below, whichever is applicable, are
satisfied as of such subsequent Closing Date.
(i) If on
such subsequent Closing Date, and after giving effect to the Revolving Loan to
be delivered thereon, the outstanding principal balance on the Revolving Notes
is and will be no greater than $3,000,000, then as of such subsequent Closing
Date, the EBITDA of Coachmen and its consolidated Subsidiaries, as calculated at
the end of each calendar month, for a minimum of three or more consecutive
periods specified below, and after achievement of such three period minimum for
each subsequent period thereafter (except for those periods that have not yet
ended as of such subsequent Closing Date), shall not have been less than the
EBITDA set forth below opposite the month shown for each such period below, such
amount to be applicable for the month shown for such period and, with respect to
the periods described in 3.2(h)(i)(I) through (M), for the two months
immediately subsequent to such month, and in all cases calculated for the number
of months specified for such period:
|
(A)
|
For
the one month ended January 31, 2010
($1,000,000);
|
|
(B)
|
For
the two months ended February 28, 2010,
($2,000,000);
|
|
(C)
|
For
the three months ended March 31, 2010,
($2,300,000);
|
|
(D)
|
For
the four months ended April 30, 2010,
($1,850,000);
|
|
(E)
|
For
the five months ended May 31, 2010,
($1,350,000);
|
|
(F)
|
For
the six months ended June 30, 2010,
($1,300,000);
|
|
(G)
|
For
the seven months ended July 31, 2010,
($500,000);
|
|
(H)
|
For
the eight months ended August 31, 2010,
$0;
|
|
(I)
|
For
the nine months ended September 30, 2010,
$600,000;
|
|
(J)
|
For
the twelve months ended December 31, 2010,
$2,625,000;
|
|
(K)
|
For
the twelve months ended March 31, 2011,
$4,425,000;
|
|
(L)
|
For
the twelve months ended June 30, 2011, $5,500,000;
and
|
|
(M)
|
For
the twelve months ended October 30, 2011,
$6,500,000.
|
(ii) If on
such subsequent Closing Date, or after giving effect to the Revolving Loan to be
delivered thereon, the outstanding principal balance on the Revolving Notes is
or will be greater than $3,000,000, then as of such subsequent Closing Date, the
EBITDA of Coachmen and its consolidated Subsidiaries, as calculated at the end
of each calendar month, for the periods specified below (except for those
periods that have not yet ended as of such subsequent Closing Date), shall not
be less than the EBITDA set forth below opposite each such month shown below,
such amount to be applicable for the month shown and for the two months
immediately subsequent to such month, and in all cases calculated for the number
of months specified below:
|
(A)
|
For
the six months ended March 31, 2010,
$1,000,000;
|
|
(B)
|
For
the three months ended March 31, 2010,
$1,675,000;
|
|
(C)
|
For
the six months ended June 30, 2010,
$2,500,000;
|
|
(D)
|
For
the nine months ended September 30, 2010,
$3,550,000;
|
|
(E)
|
For
the twelve months ended December 31, 2010,
$4,725,000;
|
|
(F)
|
For
the twelve months ended March 31, 2011,
$7,110,000;
|
|
(G)
|
For
the twelve months ended June 30, 2011, $9,000,000;
and
|
|
(H)
|
For
the twelve months ended October 30, 2011,
$10,800,000;
|
provided,
that if the Borrowers fail to satisfy Section 3.2(h)(ii)(A), the Borrowers may
subsequently satisfy this condition once Coachmen and its consolidated
Subsidiaries’ cumulative EBITDA since October 1, 2009 exceeds $1,000,000
for the next two consecutive months, and thereafter Section 3.2(h)(ii)(A) shall
be deemed satisfied for purposes of determining satisfaction of this Section
3.2(h).
The
Borrowers and the Lender acknowledge and agree that (a) prior to the date
of this Amendment, the Lender was obligated to purchase and pay for Revolving
Loans only upon the Borrowers’ satisfaction of the higher EBITDA thresholds now
set forth in Section 3.2(h)(ii), regardless of the amount outstanding on the
Revolving Notes at the time of borrowing and (b) after the date of this
Amendment, the Lender’s obligation to purchase and pay for Revolving Loans will
be subject to the applicable financial thresholds of either Section 3.2(h)(i) or
(ii), depending on the outstanding principal balance on the Revolving Notes as
provided above. As an inducement to the Lender to agree to purchase
and pay for up to $3 million of Revolving Loans upon the Borrowers’ satisfaction
of the lower EBITDA thresholds of Section 3.2(h)(i), the Borrowers have agreed
that on each subsequent Closing Date in which they are permitted to borrower
under Section 3.2(h)(i), but would not be permitted to borrow under Section
3.2(h)(ii), Coachmen shall issue to the Lender, contemporaneously with the
funding of such Revolving Loan and for each $1 million funded, additional
Warrants representing two and one-half percent (2.5%) of the outstanding Common
Stock on a Fully-Diluted Basis (calculated without taking into account the
issuance of such Warrants).
(e) Amendment to Section
8.21. Section 8.21 of the Loan Agreement is hereby amended and
restated so that it reads, in its entirety, as follows:
8.21 Financial
Covenants.
(a) EBITDA. The
Borrowers shall not permit EBITDA of Coachmen and its consolidated Subsidiaries,
as calculated at the end of each calendar month, for the periods specified
below, to be less than the EBITDA set forth below opposite each such month shown
below, such amount to be applicable for the month shown and, with respect to
8.21(a)(ix) through (a)(xiii), for the two months immediately subsequent to such
month, and in all cases calculated for the number of months specified
below:
(i) For
the one month ended January 31, 2010 ($1,000,000);
(ii) For
the two months ended February 28, 2010, ($2,000,000);
(iii) For
the three months ended March 31, 2010, ($2,300,000);
(iv) For
the four months ended April 30, 2010, ($1,850,000);
(v) For
the five months ended May 31, 2010, ($1,350,000);
(vi) For
the six months ended June 30, 2010, ($1,300,000);
(vii) For
the seven months ended July 31, 2010, ($500,000);
(viii) For
the eight months ended August 31, 2010, $0;
(ix) For
the nine months ended September 30, 2010, $600,000;
(x) For
the twelve months ended December 31, 2010, $2,625,000;
(xi) For
the twelve months ended March 31, 2011, $4,425,000;
(xii) For
the twelve months ended June 30, 2011, $5,500,000; and
(xiii) For
the twelve months ended October 30, 2011, $6,500,000.
(b) Fixed Charge Coverage
Ratio. The Borrowers shall not permit the Fixed Charge
Coverage Ratio of Coachmen and its consolidated Subsidiaries, as calculated at
the end of each calendar month, for the periods specified below, to be less than
the ratio set forth below opposite each such month shown below, such ratio to be
applicable for the month shown and for the two months immediately subsequent to
such month, and calculated for the number of months specified
below:
(ii) For
the nine months ended September 30, 2010, 0.5 to 1.00;
(iii) For
the twelve months ended December 31, 2010, 1.05 to 1.00;
(iv) For
the twelve months ended March 31, 2011, 1.15 to 1.00;
(v) For
the twelve months ended June 30, 2011, 1.25 to 1.00; and
(vi) For
the twelve months ended October 30, 2011, 1.50 to 1.00.
(c) Leverage
Ratio. The Borrowers shall not permit the Leverage Ratio of
Coachmen and its consolidated Subsidiaries, as calculated at the end of each
calendar month, for any period set forth below, to be greater than the ratio set
forth below opposite each such month shown below, such ratio to be applicable to
the month shown and the two months immediately subsequent to such month and
calculated for the number of months specified below:
(i) For the nine months
ended September 30, 2010, 20 to 1.00;
(ii) For the twelve months
ended December 31, 2010, 4.7 to 1.00;
(iii) For the twelve months
ended March 31, 2011, 2.50 to 1.00;
(iv) For the twelve months
ended June 30, 2011, 2.00 to 1.00; and
(v) For the twelve months
ended October 30, 2011, 1.75 to 1.00.
(f) Addition of Section
8.40. A new Section 8.40 is hereby added to the Loan Agreement
immediately following the existing Section 8.39 of the Loan Agreement, and
reads, in its entirety, as follows:
8.40 Financial
Consultant. The Lender shall have the right to retain a
financial consultant of its choosing for to review the financial performance and
cash usage of the Borrowers, recommend changes to the Borrowers’ policies and
procedures, and perform such other tasks as the Lender shall determine in its
reasonable discretion. The Borrowers shall promptly pay all fees and
expenses of such financial consultant as they become due. Lender agrees that any
amounts paid by the Borrowers hereunder shall be excluded from any EBITDA
calculations reviewed for compliance with the Loan Agreement, as
amended.
(g) Addition of Section
9.5(c). A new Section 9.5(c) is hereby added to the Loan
Agreement immediately following the existing Section 9.5(b) of the Loan
Agreement, and reads, in its entirety, as follows:
(c) Commencing
on the later of (i) June 30, 2010 or (ii) the seventh day after the $3 million
of restricted cash held in connection with the Liberty bond and related letter
of credit is released to the Borrowers in full, and thereafter on each
subsequent September 30, December 31, March 31 and June 30
of each year until the Obligations are paid in full and the Loan Agreement has
been terminated, upon Lender’s written demand the Borrowers shall fund $500,000
into an account under the exclusive control of the Lender and subject to no
Liens other than the first priority Liens of the Lender (the “Sinking
Fund”). The Lender agrees that no interest shall accrue on
that portion of the principal amount of the Tranche B Notes equal to the amount
of the Sinking Fund in such account.
(h) Addition of Section
10.1(o). A new Section 10.1(o) is hereby added to the Loan
Agreement immediately following the existing Section 10.1(0) of the Loan
Agreement, and reads, in its entirety, as follows:
(o) Either
(i) Coachmen shall fail to call a special meeting of its board of directors and
stockholders to amend its articles of incorporation to increase the number of
authorized shares of Common Stock to 100 million shares or more by
August 31, 2010, and if such amendment is not passed at such meeting,
failed to have called a second meeting of its stockholders for the same purpose,
after sixty (60) days notice from the Lender or (ii) at any time after such
increase in authorized shares of common stock, Coachmen shall not have a
sufficient number of authorized and unissued shares of Common Stock to satisfy
in full (A) the exercise of all outstanding Warrants and Warrants required
to be issued to the Lender and (B) the conversion of the Tranche B Notes
into Common Stock.
SECTION
4. Issuance of New
Warrants.
(a) Pursuant
to the Tranche B Note, the Lender was entitled to receive $1.5 million of
additional Common Stock (the “Default Shares”) if
the Borrowers breached Section 8.21(a) of the Loan Agreement prior to the Lender
converting the Tranche B Note into shares of Common Stock. The
Borrowers have breached Section 8.21(a) prior to the date of this
Amendment. The Borrowers and the Lender have agreed that in lieu of
issuing the Default Shares to the Lender, Coachmen shall issue to the Lender a
New Warrant, in the form of Exhibit B hereto, to
purchase 1,071,429 shares of Common Stock. The Lender acknowledges
and agrees that upon issuance of the New Warrant for 1,071,429 shares of Common
Stock to the Lender, Coachmen shall no longer have any obligation to issue any
Default Shares.
(b) The
Borrowers acknowledge and agree that (i) the Tranche B Note had an adjustment to
its conversion price in Section 4(e)(iii) that reduced the conversion price of
the Tranche B Note if Coachmen’s average stock price fell below the then
existing conversion price, and (ii) in exchange for deleting this
conversion price adjustment, Coachmen will issue Additional Warrants to the
Lender. In addition to the foregoing and in exchange for the waiver
of the Specified Defaults and other accommodations herein, Coachmen shall issue
to the Lenders New Warrants for 8,486,510 shares of Common Stock.
(c) The
issuance of the New Warrants has been duly and validly authorized and is not in
violation of any state or federal law or any rights (including without
limitation pre-emptive rights) of any Person. When issued to the Lender the
Conversion Shares and the New Warrant Shares will (i) be duly and validly
authorized, (ii) upon payment of the applicable conversion price or exercise
price, be fully paid and non-assessable and (iii) not have been issued in
violation of any state or federal law or any rights (including without
limitation pre-emptive rights) of any Person. No later than
August 31, 2010, Coachmen shall have authorized and reserved, and shall
thereafter continue to reserve, free of any preemptive rights, liens, security
interests or encumbrances of any kind, a sufficient number of its authorized but
previously unissued shares of Common Stock to satisfy the right of the Lender
(or its transferee) to (i) exercise the New Warrants and any other Warrants
outstanding or issuable to the Lender into shares of the Common Stock and (ii)
convert the Tranche B Notes into shares of the Common Stock.
(d) Each of
the Borrowers hereby acknowledges and agrees (i) that the issuance of the
New Warrants will trigger the anti-dilution protections and other provisions set
forth in Section 4(e) of the Tranche B Notes and Section 3.3 of the existing
Warrant to the same extent as if the issuance of the New Warrants were to a
Person not affiliated with the Lender, (ii) the existing conversion price of the
Tranche B Notes immediately prior to the date hereof was $0.979 and (iii) after
taking into account the aforementioned adjustments, the correct conversion price
is $0.612. Consequently, the parties are amending and restating both
the Tranche B Notes and the existing Warrant to reflect such
adjustments.
SECTION
5. Payment of Closing
Fee. The Borrowers acknowledge and agree that $200,000 of the
Closing Fee owed to the Lender in connection with the initial Closing of the
Loan Agreement remains outstanding and unpaid. As an inducement to
the Lender to enter into and perform this Amendment, the Borrowers have agreed
to pay the remaining $200,000 portion of the Closing Fee immediately upon
receiving demand for payment from the Lender.
SECTION
6. Mortgage
Release. At the closing of the Borrowers’ sale of the real
property located at 00 Xxxxxx Xxxx Xxxxx, Xxxxx Xxxxx, XX 00000, and subject to
the full proceeds of such sale being either (a) applied to the purchase of
replacement property reasonably acceptable to the Lender within 180 days, (b)
used to pay any outstanding fees and expenses due and owing under this Amendment
or (c) placed in an escrow account acceptable to the Lender, the Lender shall
release it mortgage on such property and permit the Borrowers to consummate such
sale.
SECTION
7. Future Breaches of Section
8.21. If after the date hereof the Borrowers are at any time
in breach of any of the financial covenants in Section 8.21 of the Loan
Agreement, but are not at such time in breach of or in Default under any other
provision of any Transaction Document, then the Lender agrees to waive such
breach in the following limited circumstances:
(a) If
the EBITDA Shortfall does not exceed $500,000, then the Borrowers may pay to the
Lender $50,000 each month for a waiver of such Default for such month until such
breach is no longer continuing or has been permanently waived in writing by
Lender.
(b) If
the EBITDA Shortfall is greater than $500,000 but less than $1,000,000, then (i)
the Borrowers may pay to the Lender each month the waiver fee in Section 7(a)
and (ii) Coachmen may issue additional Warrants to the Lender representing
one percent (1%) of the outstanding Common Stock on a Fully-Diluted Basis
(calculated without taking into account the issuance of such shares), for a
waiver of such Default for such month until such breach is no longer continuing
or has been permanently waived in writing by Lender.
(c) If
the EBITDA Shortfall is greater than $1,000,000, or if the Borrowers commit any
other breach of any Transaction Document (or are otherwise in Default
thereunder), the Lender shall be entitled to exercise all remedies available to
it under the Loan Agreement, any other Transaction Document, applicable law or
principles of equity.
For
purposes of this Section 7, “EBITDA Shortfall”
shall mean, with respect to any applicable testing period in Section 8.21, the
amount by which EBITDA of Coachmen and its consolidated Subsidiaries, was less
than the minimum amount of EBITDA required for such period. The
Borrowers acknowledge and agree that EBITDA covenants in Section 8.21 are
cumulative calculations.
SECTION
8. Amendments to Tranche B
Note, Warrant and Registration Rights Agreement. Concurrently
with the execution of this Amendment, the Borrowers and the Lender are (a)
amending and restating the Tranche B Note by entering into an Amended and
Restated 20% Senior Secured Convertible Tranche B Note in the form of Exhibit C hereto, (b)
amending and restating the existing Warrant by entering into an Amended and
Restated Common Stock Purchase Warrant in the form of Exhibit D hereto, and
(c) amending the Registration Rights Agreement by entering into a First
Amendment to Registration Rights Agreement in the form of Exhibit E
hereto.
SECTION
9. Going Concern Qualification;
Project Bonds. The Lender acknowledges and agrees that (a) any
going concern qualification in Coachmen’s audited financial statements for
fiscal 2009 is a Specified Default that is waived on a one-time basis pursuant
to Section 2 of this Amendment, (b) any requirement of increased
collateralization for the Borrowers’ project bonds that results from the going
concern qualification described in (a) above shall not be considered a Default
of Event of Default under any Transaction Document, and (c) it shall use its
reasonable efforts to assist the Borrowers in convincing their bonding company
to maintain its required collateral at twenty-five percent (25%) of its bonded
projects.
SECTION
10. Ownership
Change. The Lender acknowledges and agrees that the Borrowers
make no representation or warranty (whether pursuant to Section 6.25 of the Loan
Agreement or otherwise) as to whether the issuance of the New Warrants (and any
related adjustments to the Tranche B Notes or existing Warrants) will, when
aggregated with the Lender’s ownership of the Tranche B Notes and existing
Warrants, result in an “ownership change” of Coachmen, as defined in Section
382(g) of the Code
SECTION
11. General Release;
Indemnity.
(a) In
consideration of, among other things, the Lender’s execution and delivery of
this Amendment, except for the obligations of the Lender under this Amendment,
each of the Borrowers, on behalf of itself and its successors and assigns
(collectively, “Releasors”), hereby
forever agrees and covenants not to xxx or prosecute against any Releasee (as
defined below), and hereby forever waives, releases and discharges to the
fullest extent permitted by law, each Releasee (as defined below) from any and
all claims (including, without limitation, crossclaims, counterclaims, rights of
set-off and recoupment), actions, causes of action, suits, debts, accounts,
interests, liens, promises, warranties, damages and consequential and punitive
damages, demands, agreements, bonds, bills, specialties, covenants,
controversies, variances, trespasses, judgments, executions, costs, expenses or
claims whatsoever, that such Releasor now has or hereafter may have, of
whatsoever nature and kind, whether known or unknown, whether now existing or
hereafter arising, whether arising at law or in equity, against the Lender (in
any capacity) and its Affiliates, and their respective successors and assigns
and each and all of the officers, directors, employees, consultants, agents,
attorneys and other representatives of each of the foregoing (collectively, the
“Releasees”),
based in whole or in part on facts, whether or not now known, existing on or
before the date hereof, that relate to, arise out of, or otherwise are in
connection with (i) any aspect of the business, operations, assets, properties,
affairs or any other aspect of any of the Borrowers or their Subsidiaries, (ii)
any aspect of the dealings or relationships between or among the Borrowers and
their Affiliates, on the one hand, and the Lender, on the other hand, or (iii)
any or all of the Transaction Documents or any transactions contemplated thereby
or any acts or omissions in connection therewith. The receipt by the
Borrowers of any Revolving Loans or other financial accommodations made by the
Lender on or after the date hereof shall constitute a ratification, adoption,
and confirmation by each of the Borrowers of the foregoing general release of
all Claims against the Releasees which are based in whole or in part on facts,
whether or not now known or unknown, existing on or prior to the date of receipt
of any such Revolving Loans or other financial accommodations. In
entering into this Amendment, the Borrowers consulted with, and have been
represented by, legal counsel, and expressly disclaim any reliance on any
representations, acts or omissions by any of the Releasees and hereby agree and
acknowledge that the validity and effectiveness of the release set forth above
do not depend in any way on any such representations, acts and/or omissions or
the accuracy, completeness or validity hereof. The provisions of this
Section 11 shall survive the termination of this Amendment, the Loan Agreement,
the other Transaction Documents and payment in full of the
Obligations.
(b) In
addition to, and without limiting, their respective indemnification obligations
under the Transaction Documents, each of Borrowers hereby agrees that it shall
be obligated jointly and severally to indemnify and hold harmless the Releasees
with respect to any and all Losses of any kind or nature whatsoever incurred by
the Releasees, or any of them, whether direct, indirect or consequential, as a
result of or arising from or relating to any proceeding by, or on behalf of any
Person, including, without limitation, the respective officers, directors,
agents, trustees, creditors, partners or shareholders of any Borrower, any other
Borrower or any of their Subsidiaries, whether threatened or initiated, in
respect of any claim for legal or equitable remedy under any statue, regulation
or common law principle arising from or in connection with the negotiation,
preparation, execution, delivery, performance, administration and enforcement of
this Amendment or any other document executed in connection herewith; provided, that the
Borrowers shall not have any obligation to indemnify or hold harmless any
Releasee hereunder with respect to liabilities to the extent they: (i) result
from the gross negligence or willful misconduct of that Releasee as finally
determined by a court of competent jurisdiction, or (ii) result from any breach
of this Amendment by the Lender as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, the Borrowers agree to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law. The foregoing indemnity shall survive the termination
of this Amendment, the Loan Agreement, the other Transaction Documents and the
payment in full of the Obligations.
SECTION
12. Conditions
Precedent. This Amendment shall become effective only upon the
later to occur of: (a) execution and delivery of this Amendment and the Amended
and Restated Tranche B Note by the Lender and each of the Borrowers; (b) the
issuances of the Amended and Restated Warrants and the New Warrant; (c) the
Borrowers’ delivery to the Lender of the Perfection Certificate required
pursuant to Section 16 and (d) the Borrowers’ payment of all of the Lender’s
costs and expenses associated with this Amendment (including fees and expenses
of counsel).
SECTION
13. Representations and
Warranties of the Borrowers. To induce the Lender to execute
and deliver this Amendment, each Borrower represents, warrants and covenants
that:
(a) the
execution, delivery and performance by such Borrower and each of the other
Borrowers of this Amendment and all documents and instruments delivered in
connection herewith and the Loan Agreement and all other Transaction Documents
have been duly authorized, and this Amendment and all documents and instruments
delivered in connection herewith and the Loan Agreement and all other
Transaction Documents have been duly executed and delivered and are legal, valid
and binding obligations of the Borrowers party thereto, enforceable against such
Borrowers in accordance with their respective terms, except as the enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
(b) except
with respect to the Specified Defaults, each of the representations and
warranties contained in the Loan Agreement and the other Transaction Documents
is true and correct in all material respects on and as of the date hereof as if
made on the date hereof, except to the extent that such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, and each of the agreements and covenants in
the Loan Agreement and the other Transaction Documents is hereby reaffirmed with
the same force and effect as if each were separately stated herein and made as
of the date hereof;
(c) neither
the execution, delivery and performance of this Amendment and all documents and
instruments delivered in connection herewith, nor the consummation of the
transactions contemplated hereby or thereby, does or shall contravene, result in
a breach of, or violate (i) any provision of any Borrower’s corporate charter,
bylaws, operating agreement, or other governing documents, (ii) any law or
regulation, or any order or decree of any Governmental Authority, or (iii) any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which any Borrower is a party or by which any Borrower or its respective
property is bound;
(d) The
Lender’s security interest in the Collateral continues to be a valid, binding
and enforceable first-priority security interest securing the Obligations
(subject only to Permitted Encumbrances), and no Tax or judgment liens are
currently of record against any Borrower;
(e) The
Perfection Certificate and the schedules thereto that have been delivered by the
Borrowers to the Lender on the date hereof pursuant to Section 16 are true and
correct on and as of the date hereof, and do not contain any untrue statement of
a material fact or omit a material fact necessary to make each statement
contained therein not misleading; and
(f) the
recitals to this Amendment are true and correct.
SECTION
14. Ratification of
Liability. Each Borrower, as a debtor, grantor, pledgor,
guarantor, assignor, or in any other similar capacities in which such Borrower
grants liens or security interests in its properties or otherwise acts as an
accommodation party or guarantor, as the case may be, under the Transaction
Documents, hereby ratifies and reaffirms all of its payment and performance
obligations and obligations to indemnify, contingent or otherwise, under each of
such Transaction Documents to which such Borrower is a party, and each Borrower
hereby ratifies and reaffirms its grant of liens on and security interests in
its properties pursuant to the Transaction Documents to which it is a party as
security for the Obligations, and confirms and agrees that such liens and
security interests hereafter secure all of the Obligations, including, without
limitation, all additional Obligations hereafter arising or incurred pursuant to
or in connection with this Amendment, the Loan Agreement or any other
Transaction Document. Each Borrower further agrees and reaffirms that
each of the Transaction Documents to which it is a party now applies to all
Obligations, as modified by this Amendment (including, without limitation, all
additional Obligations hereafter arising or incurred pursuant to or in
connection with this Amendment, the Loan Agreement or any other Transaction
Document). Each Borrower (a) further acknowledges receipt of a copy
of this Amendment and all other agreements, documents, and instruments executed
in connection herewith, (b) consents to the terms and conditions of same, and
(c) agrees and acknowledges that each of the Transaction Documents, as modified
and effected hereby, remains in full force and effect and is hereby ratified and
confirmed. Except as expressly provided herein, the execution of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Lender, nor constitute a waiver of any provision of any of the Transaction
Documents, nor constitute a novation of any of the Obligations under the Loan
Agreement or the other Transaction Documents.
SECTION
15. Reference to and Effect Upon
the Loan Agreement and the Other Transaction Documents.
(a) Except as
specifically modified hereby, all terms, conditions, covenants, representations
and warranties contained in the Loan Agreement or any other Transaction
Document, and all rights of the Lender and all of the Obligations, shall remain
in full force and effect. Each Borrower hereby confirms that the Loan
Agreement and the other Transaction Documents are in full force and effect and
that no Borrower has any right of setoff, recoupment or other offset or any
defense, claim or counterclaim with respect to any of the Obligations or the
Loan Agreement or any other Transaction Documents.
(b) Except as
expressly set forth herein, the execution, delivery and effectiveness of this
Amendment and any consents set forth herein shall not directly or indirectly (i)
create any obligation to make any further Loans or to continue to defer any
enforcement action after the occurrence of any future Default or Event of
Default, (ii) constitute a consent or waiver of any past, present or future
violations of any provisions of the Loan Agreement or any other Transaction
Documents (other than any Specified Default), (iii) amend, modify or operate as
a waiver of any provision of the Loan Agreement or any other Transaction
Documents or any right, power or remedy of the Lender, as applicable, (iv)
constitute a consent to any action that is otherwise prohibited by the Loan
Agreement or any other Transaction Document, (v) constitute a course of
dealing or other basis for altering any Obligations or any other contract or
instrument. Except as expressly set forth herein, the Lender reserves
all of its rights, powers, and remedies under the Loan Agreement and the other
Transaction Documents and/or applicable law. All of the provisions of
the Loan Agreement and the other Transaction Documents, including, without
limitation, the time is of the essence provisions, are hereby reiterated, and if
ever waived, reinstated.
(c) From and
after the date hereof, (i) the term “Loan Agreement” in the Loan Agreement and
any other Transaction Document shall mean the Loan Agreement, as amended by,
among things, this Amendment, and (ii) the term “Transaction Documents” in the
Loan Agreement and the other Transaction Documents shall include, without
limitation, this Amendment and any agreements, instruments and other documents
executed in connection herewith. The parties hereto further agree
that any breach of any term, condition, covenant, agreement, representation or
warranty contained herein by any Borrower shall constitute an immediate Event of
Default under the Loan Agreement.
SECTION
16. Updated Perfection
Certificate; Perfection of Liens. Concurrently with the
execution of this Amendment, the Borrowers shall deliver to the Lender a
Perfection Certificate in the form of Exhibit F hereto,
which shall have been updated through the date hereof and be true, correct and
complete in all material respects on and as of the date hereof. If
the Lender, in its sole discretion, determines that its security interest in any
Collateral described in such Perfection Certificate is not adequately perfected,
the Borrowers shall, at their own expense, promptly (a) comply with their
obligations in Sections 4.2(a) through (j) of the Loan Agreement with respect to
such Collateral and (b) take any other action reasonably requested by the Lender
to create a first-priority perfected security interest in such Collateral in
favor of the Lender.
SECTION
17. Costs and
Expenses. As provided in the Transaction Documents, the
Borrowers shall reimburse the Lender promptly on demand for all reasonable fees,
costs, charges and expenses, including the fees, costs and expenses of counsel
and other reasonable expenses, incurred in connection with this Amendment and
the other agreements and documents executed in connection herewith, and such
reimbursement obligation shall constitute part of the Obligations.
SECTION
18. Miscellaneous
Terms.
(a) Effect of
Agreement. Except as set forth expressly hereinabove, all
terms of the Loan Agreement and the other Transaction Documents shall be and
remain in full force and effect, and shall constitute the legal, valid, binding,
and enforceable obligations of the Borrowers and the Lender. Except
to the extent otherwise expressly set forth herein, the amendments set forth
herein shall have prospective application only from and after the date of this
Amendment.
(b) No Novation or Mutual
Departure. The Lender and each of the Borrowers expressly
acknowledges and agrees that (i) there has not been, and this Amendment does not
constitute or establish, a novation with respect to the Loan Agreement or any of
the other Transaction Documents, or a mutual departure from the strict terms,
provisions, and conditions thereof, other than with respect to the specific
amendments contained in Section 3 above and (ii) nothing in this Amendment shall
affect or limit the Lender’s right to demand payment of liabilities owing from
the Borrowers (or any of them) to the Lender under, or to demand strict
performance of the terms, provisions, and conditions of, the Loan Agreement and
the other Transaction Documents, to exercise any and all rights, powers and
remedies under the Loan Agreement or the other Transaction Documents or at law
or in equity, or to do any and all of the foregoing.
(c) Ratification. Each
of the Borrowers (i) hereby restates, ratifies, and reaffirms each and every
term, covenant, and condition set forth in the Loan Agreement and the other
Transaction Documents to which it is a party effective as of the date hereof and
(ii) reaffirms that each and every representation and warranty made by it in the
Loan Agreement and the other Transaction Documents is true and correct as though
made on the date hereof (except with respect to representations and warranties
made as of an expressed date, in which case such representations and warranties
shall be true and correct as of such date).
(d) No
Claims. To induce the Lender to enter into this Amendment and
waive the Specified Defaults, each of the Borrowers hereby acknowledges and
agrees that, as of the date hereof, and after giving effect to the terms hereof,
there exists no right of offset, defense, counterclaim, claim, or objection
in favor of any Borrower arising out of or with respect to any of the
Obligations.
(e) Counterparts. This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same instrument.
(f) Fax or Other
Transmission. Delivery by one or more parties hereto of an
executed counterpart of this Amendment via facsimile, telecopy, or other
electronic method of transmission pursuant to which the signature of such party
can be seen (including, without limitation, Adobe Corporation’s Portable
Document Format) shall have the same force and effect as the delivery of an
original executed counterpart of this Amendment.
(g) Further
Assurances. Each Borrower agrees to take such further actions
as the Lender shall reasonably request from time to time to evidence the
amendments set forth herein and the transactions contemplated
hereby.
(h) Governing
Law. This Amendment shall be governed by and construed and
interpreted in accordance with the internal laws of the State of Florida but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of Florida.
[Signature
pages follow]
|
MIAMI
846255 v6 (2K)
|
IN WITNESS WHEREOF, each of the
Borrowers and the Lender has caused this First Amendment to Loan Agreement to be
duly executed as of the day and year first above written.
|
LENDER
H.I.G.
ALL AMERICAN, LLC
By: /s/
Xxxxxx xx Xxxxx
Title: Vice
President
|
BORROWERS
COACHMEN
INDUSTRIES, INC.
By:
/s/ Xxxxxxx X. Xxxxxx
Title: Chief
Executive Officer
|
|
|
ALL
AMERICAN HOMES, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF COLORADO, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF GEORGIA, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF INDIANA, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF IOWA, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF NORTH CAROLINA, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN HOMES OF OHIO, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN BUILDING SYSTEMS, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
ALL
AMERICAN SPECIALTY VEHICLES, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
COACHMEN
MOTOR WORKS, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
COACHMEN
MOTOR WORKS OF GEORGIA, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
CONSOLIDATED
BUILDING INDUSTRIES, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
CONSOLIDATED
LEISURE INDUSTRIES, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
COACHMEN
OPERATIONS, INC.
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
COACHMEN
PROPERTIES, INC.
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
MOD-U-KRAF
HOMES, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
||
|
SUSTAINABLE
DESIGNS, LLC
By:
/s/ Xxxxxx Xxxxxxx
Title: Treasurer
|
|
MIAMI
846255 v6 (2K)
|
Exhibit
A
Specified
Defaults
|
§
|
Section
8.25 of the Loan Agreement dated October 27, 2009, by and among H.I.G. All
American, LLC (“HIG”) and Coachmen Industries, Inc. and certain of its
subsidiaries (the “Loan
Agreement”):
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to receive prior
express permission for the Xxxxxxx Place Apartments in Dubuque, Iowa, a
project estimated at a total of $18 million dollars with a Phase 1 total
of $2.3 million dollars.*
|
|
§
|
Section
8.21 of the Loan Agreement:
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to meet the
criteria of the December 2009 EBITDA
requirements.*
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to meet the
criteria of the January 2010 EBITDA
requirements.
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to meet the
criteria of the February 2010 EBITDA
requirements.
|
|
§
|
Section
8.6(a)(i) of the Loan Agreement:
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to present a
compliance certificate for the month of January
2010.
|
|
o
|
Coachmen
Industries, Inc. and certain of its subsidiaries failed to present a
compliance certificate for the month of February
2010.
|
*
Borrower and Lender disagree as to whether these events are Defaults under the
Loan Agreement. Notwithstanding this disagreement, the parties wish
to resolve all of the above alleged Defaults.
|
MIAMI
846255 v6 (2K)
|
