THIRD AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE FINANCING (Finished Goods — Shared Credit Facility)
THIRD
AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE
FINANCING
(Finished
Goods — Shared Credit Facility)
This
THIRD Amendment to Amended and Restated Agreement for Wholesale Financing
(“Amendment”) is made as of this 29th day of May, 2007, by and between TEXTRON
FINANCIAL CORPORATION, a Delaware corporation (“Secured Party”); and Palm Harbor
Homes, Inc., a Florida corporation, Palm Harbor Manufacturing, L.P., a Texas
limited partnership, Palm Harbor Homes I LP., a Texas limited partnership,
and
Palm Harbor Marketing, Inc., a Nevada corporation (jointly and severally,
individually and collectively, “Borrowers”).
WITNESSETH
THAT;
WHEREAS,
the Secured Party and Borrowers are parties to a certain Amended and Restated
Agreement for Wholesale Financing, Finished Goods - Shared Credit Facility
dated
May 25, 2004, as amended by a certain First Amendment dated as of June 30,
2005
and a certain Second Amendment dated as of January 19, 2006 (as amended, the
“Agreement”); and
WHEREAS,
the parties hereto desire to amend certain of the terms of the
Agreement.
NOW
THEREFORE, in consideration of the premises and the mutual obligations
hereinafter contained, and for other good and valuable consideration the receipt
whereof is hereby acknowledged, the parties hereto agree as
follows:
|
1.
|
All
capitalized terms used and not otherwise defined herein shall have
the
same meanings provided therefore In the
Agreement.
|
|
2.
|
Section
37.1 of the Agreement is hereby amended and restated in its entirety
to
read as follows:
|
“37.1 Covenants.
|
(a)
|
Operating
Cash Flow.
Borrowers covenant that Consolidated Net Cash Provided by Operating
Activities, as determined as of the end of and in respect of each
fiscal
year of the Borrowers (commencing with the fiscal year of the Borrowers
ending on March 31, 2008), will not be less than an amount which
(i) shall
be mutually agreeable among Borrowers and Lenders and (ii) shall
not be
less than (A) negative Seventy Five Million Dollars (-$75,000,000)
for
fiscal year ending March 31, 2008 and for every consecutive fiscal
year
ending thereafter.
|
|
(b)
|
Minimum
Inventory Turn.
Borrowers covenant that they will maintain as of the last day of
each
fiscal quarter ending on or after June 30, 2007, a ratio of (a) Borrowers’
Cost of Goods Sold, to (b) Average Inventory, for such fiscal quarter,
of
not less than two point seventy five to one
(2.75:1).
|
|
(c)
|
Minimum
Tangible Net Worth.
Borrowers covenant that they will maintain a Tangible Net Worth (i)
as of
the fiscal quarter ending on or after June 30, 2007, of not less
than One
Hundred Twenty Five Million Dollars
($125,000,000).
|
-1-
|
(d)
|
Incurrence
of Additional Indebtedness.
Borrowers shall not borrow or incur any liability In respect of borrowed
money indebtedness (including, without limitation, loans, notes,
bonds or
repurchase obligations in respect of any securitizations), financing
leases, liabilities for the deferred purchase price of property (excluding
accounts payable arising in the ordinary course of business but including
all liabilities created or arising under any conditional sale or
other
title retention agreement with respect to any such property), liabilities
in respect of interest rate swamps or similar instruments or any
guaranties in respect of any of the foregoing, in each case unless
the
Majority Lenders shall have (prior to the incurrence thereof) consented
to
the same, in writing (which consent shall not be unreasonably withheld
or
delayed). For the avoidance of doubt, the above restriction (i) does
not
apply to CountryPlace Mortgage, Ltd. or any other party other than
Borrowers and (ii) does not restrict Borrowers’ ability to incur
liabilities in respect of letters of credit or capitalized leases.
In
connection with any request by the Borrowers to Incur additional
Indebtedness otherwise prohibited by this clause (t) and as to which
the
Borrowers request that the Administrative Agent release or subordinate
any
portion of the Collateral in favor of another Lender or other party,
the
Administrative Agent shall not unreasonably withhold or delay the
granting
of such request; provided that (i) no default or Event or Default
has
occurred and is continuing under this Agreement or any other agreement;
(ii) no default or Event of Default would arise under this Agreement
or
any other agreement as a result of such incurrence of additional
indebtedness; and (iii) the Administrative Agent determines, in its
sole
discretion, that, after giving effect to such request, the value
of the
Collateral is to which the Administrative Agent possesses a first
priority
security Interest would be satisfactory to fully support and secure
(including with an adequate collateral cushion as the Administrative
Agent
may determine) the amount of the Total Credit Line end all of the
Borrowers’ covenant requirements and other obligations under this
Agreement and all other
agreements.”
|
Provided
that the Borrowers meet the following two tests, which will be monitored on
a
monthly basis beginning on June 30, 2007, financial covenants “(a)”, “(b)”, and
“(c)’ listed above will not be measured for the applicable fiscal quarter end.
If the Borrowers tall one or more of the tests in the first two months of the
applicable fiscal quarter end, the applicable covenants will be in effect,
calculated, and measured for the prior fiscal quarter end. If the Borrowers
fail
one or more of the tests in the third month of the applicable fiscal quarter
end, the applicable covenants will be in effect, calculated, and measured for
the current fiscal quarter end. The two tests shall be conducted as
follows:
Test
One:
Loan
to Collateral Value.
Borrowers will maintain a Loan to Collateral value of no More than 50%
calculated as TFC Outstandings/Total Finished Goods Inventory.
Test
Two:
Minimum
Liquidity Amount.
Borrowers will maintain as of the last day of each month a Liquidity Amount
of
not less than thirty million dollars ($30,000,000.00).
-2-
|
3.
|
The
definition of “Liquidity Amount” as set forth In Section 37,2 of the
Agreement is hereby amended and restated to read as
follows:
|
Liquidity
Amount — means, as of any date, the sum of (a) cash and cash equivalents as
reflected as current assets on the Borrowers’ consolidated financial statements
(and whose use is for short-term obligations only and not restricted by any
agreement), (b) marketable securities as reflected as current assets on the
Borrowers’ consolidated financial statements (whose disposition is not
restricted by any agreement or by applicable law).
|
4.
|
Except
as amended hereby, the Agreement shall remain In full force and effect
and
is in all respects hereby ratified and
affirmed.
|
|
5.
|
If
any provision of this Amendment is determined to be Illegal, invalid
or
unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect end shall be construed
without giving effect to the illegal, invalid or unenforceable
provisions.
|
|
6.
|
This
Amendment may be executed in any number of counterparts, each of
which
when so executed and delivered shall be an original, but all of which
together shall constitute one and the same Instrument, and a facsimile
signature shall suffice as an original for all
purposes.
|
-3-
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by
their duly authorized officer or representative as of the day and year first
above written.
|
BORROWERS:
|
SECURED
PARTY:
|
|||
|
PALM
HARBOR HOMES, INC.
|
TEXTRON
FINANCIAL
|
|||
|
By:
|
/s/
Xxxxx Xxxxxx
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
|
Name:
Xxxxx Xxxxxx
Title:
President
|
Name:
Xxxxx Xxxxxxxx
Title:
Sr. VP, Operations and Credit
|
|||
|
PALM
HARBOR HOME I L.P.
|
||
|
By:
|
Palm
Harbor G.P., Inc.
|
|
|
|
Its:
General Partner
|
|
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
|
Name:
Xxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
PALM
HARBOR MARKETING, INC.
|
||
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
Name:
Xxxxx Xxxxxx
|
|
|
Title:
President
|
|
|
PALM
HARBOR MANUFACTURING, L.P.
|
||
|
By:
|
Palm
Harbor GenPar, LLC
|
|
|
|
Its:
General Partner
|
|
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
|
Name:
Xxxxx Xxxxxx
|
||
|
Title:
President
|
||
-4-
