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EXHIBIT 4
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR IN AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO MAKER, AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE FOR SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION.
CONVERTIBLE PROMISSORY NOTE
$ June , 2001
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FOR VALUE RECEIVED, CHAMPION ENTERPRISES, INC., a Michigan corporation
("Maker"), promises to pay to ("Holder") the sum of
DOLLARS ($________) in lawful money of the United States.
1. Payments. This Note is payable in cash in thirteen (13) installments in the
amounts and on the dates shown on the payment schedule attached to this Note as
Exhibit A.
2. Conversion. If Maker determines that it will not make any payment in cash as
provided in Section 1 of this Note, Maker shall so notify Holder in writing at
least five (5) days prior to such payment date. Upon such written notice, the
respective payment shall be converted into shares of Maker common stock
("Convertible Common Stock"). In such event, Holder will receive that number of
shares of Convertible Common Stock equal to the quotient of:
(i) the amount of the payment due, divided by
(ii) the weighted average trading price per share of Maker's
Common Stock as quoted on the New York Stock Exchange, for all
transactions during the twenty (20) trading days ending on (and
inclusive of) the business day which is five (5) calendar days
immediately prior to the respective payment date (the "Conversion
Price").
No certificates or script representing less than one share of Convertible Common
Stock shall be issued by Maker. In lieu of any such fractional share, Holder
shall be paid an amount in cash (without interest) determined by multiplying (i)
the Conversion Price by (ii) the fractional interest of Convertible Common Stock
to which Holder would otherwise be entitled.
3. Prepayment. This Note may be prepaid, in whole or in part, at any time prior
to January 3, 2005, without penalty to the Maker. Prepayments under this Section
3 shall be made only in cash.
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4. Event of Default.
(a) If Maker fails to pay any installment of this Note within fifteen
(15) days of when due, Xxxxxx, at his option, may declare the balance of this
Note immediately due and payable. Accelerated payments under this subsection
4(a) shall be made only in cash.
(b) This Note shall become immediately due and payable without notice
or demand upon the occurrence of any of the following events: filing of a
voluntary or involuntary petition by or against Maker under any provisions of
the Bankruptcy Code; application for the appointment of a receiver of Maker;
assignment for the benefit of Maker's creditors; appointment of a committee of
creditors or a liquidating agent for Maker; or an offer of composition or
extension to creditors of Maker. Accelerated payments under this subsection 4(b)
shall be made in cash unless Xxxxxx agrees to accept such payments in
Convertible Common Stock.
(c) In the event Maker receives written confirmation from the New York
Stock Exchange of the commencement of formal proceedings to delist Maker's
common stock from trading on such Exchange, all subsequent payments under this
Note shall be made in cash unless Holder agrees in writing to accept such
payments in Convertible Common Stock. If such proceedings are completed without
Maker's common stock being delisted on the New York Stock Exchange, all
subsequent payments under this Note may be made as provided in Section 2 of this
Note, subject to all of the other terms of this Note.
5. Compliance with Securities Laws. As of the date of this Note and as of the
date of any conversion into Convertible Common Stock, Holder represents and
warrants to Maker that:
(a) Holder has received copies of Maker's Annual Report to Shareholders
for the year ended December 30, 2000, Annual Report on Form 10-K for the year
ended December 30, 2000, Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2001, Current Reports on Form 8-K filed March 20, 2001, April
18, 2001 and May 16, 2001, and definitive Proxy Statement for the May 1, 2001
Annual Meeting of Shareholders.
(b) Holder is knowledgeable and experienced in financial and business
matters and is capable of evaluating the merits and risks of accepting this Note
and any Convertible Common Stock and has evaluated such merits and risks.
(c) Xxxxxx has had the opportunity to ask questions and receive answers
from Maker concerning this Note and the Convertible Common Stock that may be
issued under this Note.
(d) Xxxxxx has had the opportunity, prior to signing this Note, to
engage and consult with counsel of Xxxxxx's own choosing concerning this Note
and the Convertible Common Stock.
(e) This Note was not offered to Holder by means of (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium, or broadcast over television or radio, or
(ii) any other form of general solicitation or advertising.
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6. Rights as Shareholder. Holder shall have no rights as a shareholder of Maker
with respect to any of the shares of Convertible Common Stock that Holder may
receive under this Note until the issuance of a stock certificate or
certificates by Maker to Holder, and then only with respect to such shares
represented by such certificate or certificates.
7. Conditions Precedent to Maker's Obligations. Notwithstanding anything
contained herein to the contrary, it shall be a condition precedent to the
obligation of Maker to make any payment to Holder under this Note that:
(a) Holder not be in breach of the obligations under the Employment
Agreement (the "Employment Agreement") dated June 30, 1998 to which Holder and
A-1 Homes Group, Inc., a Michigan corporation ("A-1 Homes"), are parties, if
any; and
(b) if Holder is an "Executive" (as defined in the Employment
Agreement), that Xxxxxx's employment shall not have been terminated by A-1 Homes
for "Cause" (as defined in the Employment Agreement) prior to July 1, 2002 or by
the Executive for any reason prior to July 1, 2002 (other than as a result of
death or disability as defined in the Employment Agreement).
Notwithstanding anything contained herein to the contrary, the
termination of the Executive's employment or engagement after June 30, 2002 on
account of the Executive's resignation or termination by the Company for
"Cause", shall not limit or affect in any way the right of the Executive to
continue to receive payments under this Note provided that the Executive remains
at all times in full compliance with the Non-Competition provisions of the
Employment Agreement. Termination of the Executive's employment by the Company
without "Cause" shall not limit or affect in any way the right of the Executive
to continue to receive payments under this Note.
8. Representations and Warranties of Maker.
(a) Maker represents and warrants to Holder that the execution,
performance and payment of this Note does not violate or constitute a default
under (i) the Credit Agreement, dated as of May 5, 1998, as amended, by and
among Maker, PNC Bank, National Association, as Administrative Agent, and the
other banks and guarantors named therein, or (ii) any other material financing
agreement for borrowed money.
(b) As of the date of each payment in Convertible Common Stock, Maker
represents and warrants to Holder as follows:
(i) the shares of Convertible Common Stock paid to Holder have been
registered for resale under the Act pursuant to a currently effective
registration statement;
(ii) the registration statement (which includes the information
incorporated by reference therein) does not contain any untrue
statement of a material fact and does not omit to state any material
fact necessary in order to make the statements therein not misleading.
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9. Offset. Subject to the provisions and limitations set forth in the Asset
Purchase Agreement (the "Purchase Agreement") dated June 11, 1998 to which
Holder and A-1 Homes are parties, Maker shall have the right at any time and
from time to time to offset and apply any payments to Holder under this Note
against the amount of any claim A-1 Homes may have against Holder for
indemnification under the Purchase Agreement.
10. Notice. All notices, requests, demands and other communications under this
Note shall be in writing and shall be deemed to have been duly given if
personally delivered, forwarded by overnight express (including but not limited
to United Parcel Service, Federal Express, Airborne or similar service) and
receipted for by the recipient or an agent of the recipient or mailed by
registered or certified United States mail, postage prepaid and return receipt
requested, or sent by facsimile transmission, to the following addresses or
facsimile numbers (or to such other address or facsimile number of a party as
shall have been specified to the other party by notice):
(a) if to the Maker, to:
Champion Enterprises, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: President
Xxxxxxxxx No. (000) 000-0000
(b) if to the Holder, to:
--------------------------------
--------------------------------
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Facsimile No. ( )
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with a copy to:
Xxxx Xxxxxxx
Chairman, ICA Group, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No. (000) 000-0000
11. Amendment. No term, covenant, agreement or condition of this Note may be
amended except by a written agreement executed by both Maker and Xxxxxx.
12. Waiver. Neither Maker nor Holder by any act of commission or omission shall
be deemed to waive any of their respective rights or remedies under this Note
unless such waiver is in writing and signed by the party to be bound by such
waiver, and then only to the extent specifically set forth in such waiver; a
waiver of one event shall not be construed as continuing or as a bar to or
waiver of such right or remedy on a subsequent event. Notwithstanding anything
to the contrary in
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this Section, Maker hereby waives presentment, demand, protest or other notice
of any kind in the collection of this Note and in filing suit hereon.
13. No Assignment. Holder may not assign this Note or any of all of Holder's
rights or interests in this Note without the prior written consent of Maker,
provided, however, that Holder may assign this Note or any of Holder's rights or
interests in this Note without Maker's consent upon the occurrence of any of the
events described in subsection 4(b) of this Note. No assignment may be effected
except in compliance with all applicable securities laws.
14. Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of Michigan (other than conflicts of law principles).
15. Counterparts. This Note may be executed in one or more counterparts, all of
which together shall constitute one and the same instrument.
16. Headings. The headings of the sections of this Note are for convenience and
shall not by themselves determine the interpretation of this Note.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
as of the date above set forth.
CHAMPION ENTERPRISES, INC., a Michigan corporation
By:
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Its:
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Accepted and agreed to by:
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[name]
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EXHIBIT A
Payment Schedule
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Payment Date Payment Amount
(in dollars)
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October 1, 2001
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January 2, 2002
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April 1, 2002 0.00
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July 1, 2002
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October 1, 2002
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January 2, 2003
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April 1, 2003
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July 1, 2003
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October 1, 2003
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January 5, 2004
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April 5, 2004
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July 6, 2004
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October 4, 2004
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January 3, 2005
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