Exhibit 10.4
ASSUMPTION AGREEMENT AND
SECOND AMENDMENT TO CREDIT AGREEMENT
among
CHAMPION TRAILER COMPANY, L.P.,
CHAMPION TRAILER, INC.
and
BANK ONE, INDIANA, N.A.
Dated as of June 18, 2001
ASSUMPTION AGREEMENT
AND
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS ASSUMPTION AGREEMENT AND SECOND AMENDMENT TO CREDIT AGREEMENT, dated
as of June 18, 2001, is by and among CHAMPION TRAILER COMPANY, L.P. (the
"Company"), CHAMPION TRAILER, INC. (the "New Borrower") and BANK ONE, INDIANA,
N.A. ("Bank"). The parties agree as follows:
WITNESSETH:
WHEREAS, as of May 2, 2000, the Company and Bank entered into a certain
Credit Agreement, as amended December 31, 2000 (as amended, the "Agreement"),
pursuant to which Bank has established certain secured credit facilities in
favor of the Company;
WHEREAS, the Company proposes to enter into a corporate reorganization
pursuant to which all of its assets encumbered by the Loan Documents (as defined
in the Agreement) will be transferred to the New Borrower;
WHEREAS, the New Borrower desires to assume all of the Company's
obligations under the Loan Documents to Bank;
WHEREAS, the Company has requested that Bank consent to its corporate
reorganization and the assumption by the New Borrower of the Obligations;
WHEREAS, the Company and the New Borrower have further requested that Bank
consent to a transfer following the proposed corporate reorganization to a
transfer of all the outstanding shares of the New Borrower to ▇▇▇▇▇▇
Corporation; and
WHEREAS, Bank is willing to give such consents subject to the terms herein
and subject to the amendment of the Agreement as herein provided;
NOW, THEREFORE, in consideration of the premises, and the mutual promises
herein contained, the parties agree that the Agreement shall be, and it hereby
is, amended as provided herein and the parties further agree as follows:
PART I. CONSENT AND ASSUMPTION
Notwithstanding anything contained to the contrary in the Loan Documents,
subject to satisfaction of Part VI of this Second Amendment, Bank consents to
the Company's corporate reorganization pursuant to which the Company will
transfer all of its property to the New Borrower, subject to Bank's liens
created under the Loan Documents.
The New Borrower hereby assumes and agrees to perform and satisfy all of
the obligations, responsibilities and liabilities of the Company under and
pursuant to the Loan Documents (whether now existing or hereafter arising,
whether fixed or contingent, whether liquidated or unliquidated, whether known
or unknown, and whether matured or unmatured) and agrees to pay or perform when
due each and every representation, warranty, covenant, condition, indemnity or
other undertaking of the Company under the Main Documents. The New Borrower
acknowledges and affirms the existence and validity of the Obligations, and that
Bank has a valid and perfected first security interest in and to the Property,
subject to the Permitted Encumbrances. Nothing herein is intended to affect the
validity or priority of such liens, which shall continue to secure the New
Borrower's full and faithful repayment and performance of the Obligations under
the Loan Documents.
From and. after the date of this Second Amendment, subject to satisfaction
of Part VI of this Second Amendment, the Company shall cease to be a party to
the Agreement.
PART II. AMENDATORY
Section 1. Definitions
1.1. Defined Terms
Section 1.1 of the Agreement is hereby amended by substituting the
following definition in lieu of the like existing definition:
"Borrower" means Champion Trailer, Inc., an Indiana corporation.
Section 2. Credit
2.3. Payments of Principal and Interest.
2.3.1. Facility 1 Line of Credit. Section 2.3.1 of the Agreement
is hereby amended by substituting "January 1, 2002" in lieu of "July
1, 2001" in the last line thereof.
Section 5. Covenants
5.1. Negative Covenants.
5.1.4. Purchase Partnership Interests Section 5.1.4 of the
Agreement is hereby amended by substituting the following new
subsection 5.1.4 in lieu of the existing subsection 5.1.4:
5.1.4. Purchase Stock Purchase, redeem, retire or otherwise
acquire any outstanding shares of its capital stock.
5.1.15. Dividends/Distributions. Section 5.1.15 of the Agreement
is hereby amended by substituting the following new subsection 5.1.15
in lieu of the existing subsection 5.1.15:
5.1.15. Dividends/Distributions. Declare or pay any dividend or
make any distribution on account of Stock, in cash or other property.
5.2. Affirmative Covenants. Section 5.2 of the Agreement is hereby amended
by substituting the following new subsections 5.2.15, 5.2.16 and 5.2.17 in lieu
of the existing subsections 5.2.15, 5.2.16 and 5.2.17, respectively:
5.2.15. Adjusted Net Worth. Maintain its Net Worth plus Subordinated
Debt at not less than Two Million Dollars ($2,000,000) at all times.
5.2.16. Cash Flow Coverage Ratio. Achieve a Cash Flow Coverage Ratio
of not less than 1.0 to 1.0 as of December 31, 2001 and as of each fiscal
year end thereafter.
5.2.17. Total Liabilities to Net Worth Ratio. Maintain its ratio of
Total Liabilities minus Subordinated Debt to Net Worth of not greater than
2.25 to 1.0 as of June 30, 2001 and as of each fiscal month end thereafter.
Section 7. Default
Section 7(j) of the Agreement is hereby amended by substituting the
following new paragraph 7(j) in lieu of the existing paragraph 7(j):
(j) other than a transfer to ▇▇▇▇▇▇ Corporation, if any shareholder of
Borrower sells, assigns, pledges, hypothecates or otherwise transfers
its or his shareholder interest in Borrower without the written
consent of Borrower.
PART III. WAIVER
Bank hereby waives (a) for Borrower' s fiscal periods ending December 31,
2000, January 31, 2001, February 28, 2001, March 31,2001 and April 30,2001,
compliance by Borrower with the provisions of Section 5.2.15 (Adjusted Net
Worth) with the Agreement, (b) for Borrower's fiscal period ending December 31,
2000, compliance by Borrower with the provisions of Section 5.2.16 (Cash Flow
Coverage Ratio) of the Agreement, (c) for Borrower's fiscal periods ending
December 31, 2000 and March 31, 2001, compliance by Borrower with the provisions
of Section 5.2.17 (Funded Debt Ratio) of the Agreement, (d) the time period
required by Section 5.2.1(a) of the Agreement for delivery of the financial
statements for the fiscal year ending December 31, 2000, (e) the time period
required by Section 5.2.1(b) of the Agreement for delivery of the financial
statements for the months ending January 31, 2001, February 28, 2001, March 31,
2001 and April 30, 2001, and (f) the time period required by Section 5.2.1(h) of
the Agreement for delivery of the personal financial statements for the
Guarantors for the calendar year ending December 31, 2000. This waiver shall be
in force and effect solely for the referenced periods, unless otherwise agreed
by Bank in the exercise of its sole discretion.
PART IV. EXHIBITS
The Agreement is hereby amended by substituting Exhibit A hereto in lieu of
Exhibit A to the Agreement.
PART V. CONTINUING EFFECT
All other terms, conditions, representations, warranties and covenants
contained in the Agreement shall remain the same and shall continue in full
force and effect. In consideration hereof, Borrower represents and warrants that
each representation and warranty set forth in the Agreement, as hereby amended,
remains true and correct as of the date hereof, except to the extent that such
representation and warranty is expressly intended to apply solely to an earlier
date and that there presently exists no offsets, counterclaims or defenses to
the performance of the Obligations (such offsets, counterclaims or defenses, if
any, being hereby expressly waived), nor has there occurred any Default or
Unmatured Default thereunder, and no Default or Unmatured Default after giving
effect to the transactions contemplated or otherwise covered by this Second
Amendment, is or shall be occasioned thereby. The representations and warranties
contained in the Agreement originally shall survive this Second Amendment in
their original form, except as expressly herein modified, and shall survive as
continuing representations and warranties of Borrower. Except as expressly
herein provided, the Agreement and this Second Amendment shall be interpreted,
wherever possible, in a manner consistent with one another, but in the event of
any irreconcilable inconsistency, this Second Amendment shall control. The
parties each hereby agree to cooperate in all reasonable requests of each other
party hereto, including, without limitation, the execution of financing
statements and other documents, which the requesting party deems reasonable,
necessary, appropriate or expedient to carry out the intents and purposes of
this Second Amendment. Capitalized terms used herein and not specifically herein
defined shall have the meanings ascribed in the Agreement.
PART VI. CONDITIONS PRECEDENT
Notwithstanding anything contained in this Second Amendment to the
contrary, Bank shall have no obligation under this Second Amendment until each
of the following conditions precedent have been fulfilled to the satisfaction of
Bank:
(a) Each of the representations and warranties set forth in Section 4 of
the Agreement shall be and remain true and correct in all material
respects, except to the extent any such representation or warranty relates
solely to an earlier date and except changes reflecting transactions
permitted by the Agreement;
(b) No Default shall have occurred and be continuing;
(c) Bank shall have received each of the following, in form and substance
satisfactory to Bank:
(i) the Loan Documents, as amended, and such other documents and
financing statements as required by Bank, duly executed in the form
approved by Bank;
(ii) a duly executed certificate of the Secretary or any Assistant
Secretary of Borrower (A) certifying as to attached copies of
Resolutions of the Board of Directors of Borrower authorizing the
execution, delivery and performance of the Loan Documents, as amended,
and any other documents provided for in this Second Amendment to which
Borrower is a party, (B) certifying the names of the officer or
officers authorized to sign, respectively, the Loan Documents, as
amended, and any other documents provided for in this Second Amendment
to which Borrower is a party, and containing a sample of the true
signature of each such officer, and (C) certifying as complete and
correct as to attached copies of the Articles of incorporation and
By-Laws of Borrower;
(iii) Replacement Limited Continuing Guaranties, in the form
prescribed by Bank, shall have been executed and delivered by each of
the Guarantors to Bank;
(iv) a favorable written opinion of counsel to Borrower, dated as of
the date of this Second Amendment, in form and scope acceptable to
Bank;
(v) the documents governing and effecting the Company's proposed
corporate reorganization;
(vi) a $1,000 waiver/amendment fee shall have been paid to Bank;
(vii) a reaffirmation, in the form prescribed by Bank, shall have been
executed and delivered by Markpoint Equity Growth Fund, J.V.,
reaffirming its obligations under its Subordination Agreement;
(viii) a Subordination Agreement in the form prescribed by Bank, shall
have been executed and delivered by Obsidian Capital Partners, LP with
respect to $1,145,845.83 of Subordinated Debt;
(ix) all reasonable expenses of Bank, including, without limitation,
attorneys' fees, shall have been reimbursed by Borrower; and
(d) All legal matters incident to this Second Amendment shall be reasonably
satisfactory to Bank and its counsel.
IN WITNESS WHEREOF, the Company, Borrower and Bank have caused this Second
Amendment to be executed by their respective officers duly authorized as of the
date first above written.
"COMPANY"
CHAMPION TRAILER COMPANY, L.P.
By: Durham ▇▇▇▇▇▇▇▇▇ & Associates, LLC
By: _______________________________
Its: ________________________________
"BORROWER"
CHAMPION TRAILER, INC.
By: _______________________________
Its: _______________________________
"BANK"
BANK ONE, INDIANA, N.A.
By: _______________________________
Title: _______________________________
