AMENDMENT TO LIMITED CREDIT GUARANTY AGREEMENT
THIS AMENDMENT TO LIMITED CREDIT GUARANTY AGREEMENT (this "Amendment")
is entered into as of March 24, 1999 by and between Cavalier Homes, Inc. (the
"Guarantor")and First Commercial Bank, an Alabama banking corporation (the
"Credit Obligor").
Recitals
A. Hillsboro Manufacturing, L.P. (the "Borrower") and the Credit
Obligor entered into that certain Credit and Security Agreement (as amended by
Amendment of even date herewith and as the same may from time to time hereafter
be amended or restated, the "Credit Agreement") dated as of July 15, 1997.
Pursuant to the Credit Agreement, the Credit Obligor extended a revolving loan
facility to the Borrower which terminated on July 15, 1998.
B. The Guarantor entered into a Limited Credit Guaranty Agreement (the
"Guaranty") dated July 15, 1997 guaranteeing, subject to the limitations
contained therein, the Borrower's obligations under the Credit Agreement. Unless
otherwise defined herein, all terms used herein with their initial letters
capitalized shall have the meanings assigned to them in the Credit Agreement.
C. The Borrower and the Guarantor have requested the Credit Obligor to
extend the Revolving Loan Commitment Termination Date (as defined in the Credit
Agreement) to April 15, 2000, thereby extending the date through which the
Credit Obligor is obligated to make revolving loans under the Credit Agreement
to April 15, 2000. The Credit Obligor has agreed to do so if, among other
things, the Guarantor continues to guarantee the Borrower's obligations under
the Credit Agreement.
D. The Borrower and the Guarantor have requested the Credit Obligor to
make a loan (the "Equipment Loan") to the Borrower in the maximum principal
amount of $450,000 for the purposes of purchasing equipment for the Project (as
defined in the Credit Agreement). The Credit Obligor has agreed to do so on the
terms and conditions set out herein if, but only if, the Guarantor consents
thereto and guarantees the Equipment Loan. The Guarantors has a direct ownership
interest in the Borrower and the Equipment Loan will result in a material
financial benefit to the Guarantor.
E. The Guarantor has requested the Credit Obligor to amend the
Guaranty to delete therefrom Section 2.01(a)(7) and the Credit Obligor has
agreed to do so.
Agreement
NOW, THEREFORE, to induce the Credit Obligor to extend the Revolving
Loan Commitment Termination Date and to make the Equipment Loan, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
1. Guarantor's Request for Equipment Loan and Extension of Revolving
Loan Commitment Termination Date. The Guarantor hereby requests the Credit
Obligor to extend the Revolving Loan Commitment Termination Date on the terms
set out in the Amendment to Credit and Security Agreement of even date herewith
between the Borrower and the Credit Obligor. The Guarantor hereby requests the
Credit Obligor to make the Equipment Loan on the terms and conditions set out in
the Credit Agreement. It is the Guarantor's intention that, subject to the
limitations set out in the Guaranty, the Equipment Loan be guaranteed, and all
Revolving Loans (as defined in the Credit Agreement) continue to be guaranteed,
under and in accordance with the terms of the Guaranty.
2. Amendments to Section 1.01 of the Guaranty. Section 1.01 of the
Guaranty is hereby amended by amending and restating the definition of "Credit
Agreement," "Credit Guaranty," "Credit Obligor Financing Documents," and
"Guarantors" and adding the definition of "Equipment Note", as follows:
"Credit Agreement" shall mean that certain Credit and Security
Agreement dated July 15, 1997 between the Borrower and the Credit
Obligor as amended by that certain First Amendment to Credit and
Security Agreement dated as of March 24, 1999 and as the same may be
modified, amended and restated from time to time hereafter.
"Credit Guaranty" shall mean collectively the Limited Credit
Guaranty Agreements dated as of July 15, 1997 from Southern Energy
Homes, Inc., Patriot Homes, Inc. and the Guarantor to the Credit
Obligor, as amended by Amendment to Limited Credit Guaranty Agreement
dated as of March 24, 1999 and the Limited Credit Guaranty Agreement
dated as of March 24, 1999 from Oakwood Homes Corporation to the Credit
Obligor.
"Credit Obligor Financing Documents" shall mean collectively
the Credit Agreement, the Revolving Note, the Equipment Note and the
Credit Guaranty, and any and all amendments or supplements to any
thereof.
"Equipment Note" shall mean that certain Promissory Note dated
as of March 24, 1999 executed and delivered by the Borrower in favor of
the Credit Obligor in the principal amount of $450,000.
"Guarantors" shall mean collectively the following Persons and
the respective heirs, executors, administrators and assigns thereof:
(i) Patriot Homes, Inc.,
(ii) Southern Energy Homes, Inc.,
(iii) Oakwood Homes Corporation, and
(iv) Cavalier Homes,Inc.
3. Amendment to Section 2.01 of the Guaranty. Section 2.01 (a)
of the Guaranty is hereby amended and restated to read as follows:
(a) Subject to and limited by the provisions of subsection
2.01(d) hereof, the Guarantor hereby absolutely and unconditionally
guarantees the punctual payment when due (whether at stated maturity,
by acceleration or call for redemption or otherwise), in lawful money
of the United States of America, of all of the following (collectively
the "Obligations"):
(1) all commissions, fees, charges and costs becoming
due and payable under the Credit Agreement in accordance with
the terms thereof;
(2) all amounts becoming due and payable under the
Revolving Note and the Equipment Note (including without
limitation principal, interest, late charges, and interest on
overdue amounts);
(3) all amounts becoming due and payable under the
Credit Agreement and all future advances and amounts becoming
due and payable under the Revolving Note and the Equipment
Note;
(4) all late charges and all interest on late
payments becoming due and payable under the Credit Agreement,
the Revolving Note and the Equipment Note;
(5) all amounts becoming due and payable under the
Credit Agreement, the Revolving Note and the Equipment Note
upon the occurrence and continuance of an event of default
under the Credit Agreement;
(6) all other amounts becoming due and payable by the
Borrower under the Credit Agreement, the Revolving Note and
the Equipment Note;
(7) all renewals and extensions of any or all the
obligations of the Borrower described in paragraphs (1)
through (6) above (including without limitation any renewal or
extension of, and any substitute for, the Revolving Note
and/or the Equipment Note), whether or not any renewal or
extension agreement is executed in connection therewith.
4. Representations and Warranties; No Defaults; No Claims; Continuing
Effect; Collateral. The representations and warranties set forth in the Guaranty
shall be true and correct on and as of the date of this Amendment with the same
effect as though such representations and warranties had been made on and as of
such date, except to the extent that such representations and warranties
expressly relate to an earlier date. The Guarantor hereby represents and
warrants that no Events of Default, and no events that with the passage of time
or the giving of notice or both would constitute an Event of Default, have
occurred. The Guarantor represents and warrants that it has no claims against
the Credit Obligor and no defenses, counterclaims, or setoffs to or against the
Obligations for which it is liable under the Guaranty. To the extent that such
claims, defenses, counterclaims or setoffs exist, the same are hereby released
and relinquished. Except as expressly amended hereby, the Guaranty shall remain
in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, this Amendment has been executed as of the day and
year first written above.
CAVALIER HOMES, INC.
By /s/ Xxxxxxx X. Xxxxxx
________________________________________
Name: Xxxxxxx X. Xxxxxx
_____________________________________
Title: Vice President
____________________________________
