FIRST AMENDMENT TO LOAN AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is
entered into as of July 8, 2002, by and among OAKWOOD HOMES CORPORATION, a North
Carolina corporation ("Parent"), and each of Parent's Subsidiaries identified on
the signature pages hereof (such Subsidiaries, together with Parent, are
referred to hereinafter each individually as a "Borrower," and collectively as
the "Borrowers"), the Lenders identified on the signature pages hereto (the
"Lenders"), and FOOTHILL CAPITAL CORPORATION, in its capacity as agent (the
"Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrowers, the Lenders and Agent have entered
into that certain Loan and Security Agreement dated as of January 22, 2002 (as
the same may be further modified, amended, restated or supplemented from time to
time, the "Loan Agreement"), pursuant to which the Lenders have agreed to make
loans and other financial accommodations to the Borrowers from time to time; and
WHEREAS, the Borrowers have requested that the Agent and the
Lenders increase the sublimit applicable to Letters of Credit pursuant to
Section 2.12(a)(ii) to $60,000,000, and the Agent and the Lenders have agreed to
the requested amendment on the terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree that all capitalized terms
not otherwise defined herein shall have the meanings ascribed to such terms in
the Loan Agreement and further agree as follows:
1. Amendment to Section 2.6 of the Loan Agreement. Section 2.6 of the
Loan Agreement, "Interest Rates and Letter of Credit Fee; Rates, Payments and
Calculations" is hereby modified and amended by deleting subsection 2.6(c)(ii)
thereof in its entirety and inserting the following in substitution thereof:
"(ii) the Letter of Credit fee provided for above shall be
increased to 5 percentage points above the per annum rate otherwise applicable
hereunder."
2. Amendment to Section 2.7 of the Loan Agreement. Section 2.7 of the
Loan Agreement, "Cash Management" is hereby modified and amended by deleting
subsection 2.7(b) thereof in its entirety and inserting the following in
substitution thereof:
"(b) Borrowers shall cause each Cash Management Bank to
establish and maintain Cash Management Agreements with Agent and Borrowers, in
form and substance acceptable to Agent. Except for the Depository Account
Agreement, each such Cash Management Agreement shall provide, among other
things, that (i) all items of payment deposited in such Cash Management Account
and proceeds thereof are held by such Cash Management Bank as agent or
bailee-in-possession for Agent, (ii) the Cash Management Bank
has no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) upon instruction
from Agent, such Cash Management Bank shall immediately forward by daily sweep
all amounts in the applicable Cash Management Account to the Agent's Account. At
the election of Agent in its reasonable discretion, Agent may direct Borrowers
and a Cash Management Bank to, and Borrowers agree to, cause a sweep of all
amounts in such Cash Management Accounts into Agent's Account if, (A) as of any
date of determination there are outstanding Advances and Borrowing Base
Availability is less than $20,000,000, (B) there are Advances outstanding for
more than 5 consecutive Business Days, or (C) any Event of Default exists. Any
funds swept to the Agent's Account pursuant to clauses (A) and (B) of the
previous sentence shall be applied to repay the outstanding Advances with any
excess refunded to Borrowers, and any funds swept to Agent's Account pursuant to
clause (C) of the previous sentence shall be applied to Borrowers' Obligations
or refunded to Borrowers as set forth in Section 2.4."
3. Amendment to Section 2.12 of the Loan Agreement. Section 2.12 of the
Loan Agreement, "Letters of Credit" is hereby modified and amended by deleting
the reference to "$45,000,000" in subsection 2.12(a)(ii) thereof in its entirety
and inserting "$60,000,000" in substitution thereof.
4. Amendment to Section 4.6 of the Loan Agreement. Section 4.6 of the
Loan Agreement, "Right to Inspect" is hereby modified and amended by deleting
subsection 4.6 thereof in its entirety and inserting the following in
substitution thereof:
"4.6 Right to Inspect. Agent and each Lender (through any of
their respective officers, employees, or agents) shall have the right, from time
to time hereafter to inspect the Books and to check, test, and appraise the
Collateral in order to verify Borrowers' financial condition or the amount,
quality, value, condition of, or any other matter relating to, the Collateral,
provided, any Lender may accompany Agent or its representatives during any
examination or audit, with the costs thereof reimbursed to such Lender on the
same basis as Agent. Borrowers acknowledge that Agent shall have the right to
(a) conduct updated Inventory appraisals at such times as Agent determines in
its sole discretion, (b) engage Xxxxxxx Guardian, or any other acceptable firm,
to perform test counts of the Inventory for not less than 100% of Borrowers'
inventory locations during a 12 month period, with at least 5% of Borrowers'
"sales centers" tested each month, (c) require appraisals or evaluations as
deemed necessary by Agent, and (d) require audits at such times as Agent
determines in its sole discretion, in each case at Borrowers' expense."
5. No Other Amendments. Except as otherwise expressed herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agent or the Lenders under the Loan
Agreement or any of the other Loan Documents, nor constitute a waiver of any
provision of the Loan Agreement or any of the other Loan Documents. Except for
the amendment set forth above, the text of the Loan Agreement and all other Loan
Documents shall remain unchanged and in full force and effect and each Borrower
hereby ratifies and confirms its obligations thereunder. This Amendment shall
not constitute a modification of the Loan Agreement or a course of dealing with
the Agent or the
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Lenders at variance with the Loan Agreement such as to require further notice by
the Agent or the Lenders to require strict compliance with the terms of the Loan
Agreement and the other Loan Documents in the future, except as expressly set
forth herein. Each Borrower acknowledges and expressly agrees that the Agent and
the Lenders reserve the right to, and do in fact, require strict compliance with
all terms and provisions of the Loan Agreement and the other Loan Documents. The
Borrowers have no knowledge of any challenge to the Agent's or any Lenders'
claims arising under the Loan Documents, or to the effectiveness of the Loan
Documents.
6. Conditions Precedent to Effectiveness. This Amendment shall become
effective as of the date hereof when, and only when, the Agent shall have
received all of the following:
(a) payment of an Agent's amendment fee from the Borrower in
the amount of $25,000 (it being understood that, by execution and delivery of
this Amendment, Borrower authorizes Agent to charge Borrower's Loan Account for
such fee and such amount shall thereafter accrue interest at the rate applicable
to Advances under the Loan Agreement in accordance with Section 2.6 of the Loan
Agreement) payable to the Agent for its sole benefit;
(b) payment of a Lenders' amendment fee from the Borrower in
the amount of $50,000 (it being understood that, by execution and delivery of
this Amendment, Borrower authorizes Agent to charge Borrower's Loan Account for
such fee and such amount shall thereafter accrue interest at the rate applicable
to Advances under the Loan Agreement in accordance with Section 2.6 of the Loan
Agreement) which shall be for the benefit of the Lenders in accordance with each
Lender's Pro Rata Share;
(c) fully executed and delivered counterparts of this
Amendment by the Borrowers, Lenders and Agent;
(d) such other information, documents, instruments or
approvals as the Agent or the Agent's counsel may reasonably require.
7. Representations and Warranties of Borrowers. Each Borrower
represents and warrants to the Agent and the Lenders as follows:
(a) Each Borrower is a corporation, limited liability company,
or limited partnership organized or formed, as the case may be, validly existing
and in good standing under the laws of the jurisdiction indicated on the
signature pages hereto and in all other jurisdictions in which the failure to be
so qualified reasonably could be expected to constitute a Material Adverse
Change;
(b) The execution, delivery, and performance by each Borrower
of this Amendment and the Loan Documents to which it is a party, as amended
hereby, are within such Borrower's corporate, limited liability company, or
partnership authority, have been duly authorized by all necessary corporate,
limited liability company, or partnership action and do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to such Borrower, the Governing Documents of any Borrower, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material
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contractual obligation of any Borrower, (iii) result in or require the creation
or imposition of any Lien of any nature whatsoever upon any properties or assets
of any Borrower, other than Permitted Liens, or (iv) require any approval of any
Borrower's shareholders, partners, or members or any approval or consent of any
Person under any material contractual obligation of any Borrower;
(c) The execution, delivery, and performance by each Borrower
of this Amendment and the Loan Documents to which it is a party, as amended
hereby, do not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Governmental Authority or
other Person;
(d) This Amendment and each other Loan Document to which each
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by each Borrower will be the legally valid and
binding obligations of such Borrower, enforceable against each Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally; and
(e) No Default or Event of Default is existing.
8. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom such
enforcement is sought. Any signatures delivered by a party by facsimile
transmission shall be deemed an original signature hereto.
9. Reference to and Effect on the Loan Documents. Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Loan Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to "the Loan Agreement" "thereunder", "thereof" or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as amended hereby.
10. Costs, Expenses and Taxes. Borrowers agree to pay on demand all
reasonable costs and expenses in connection with the preparation, execution, and
delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities hereunder
and thereunder.
11. Governing Law. This Amendment shall be deemed to be made pursuant
to the laws of the State of Georgia with respect to agreements made and to be
performed wholly in the State of Georgia, and shall be construed, interpreted,
performed and enforced in accordance therewith.
12. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.
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[THE REMAINDER OF THE PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first written above.
BORROWERS:
OAKWOOD HOMES CORPORATION,
a North Carolina corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Executive Vice President
OAKWOOD ACCEPTANCE CORPORATION, LLC,
a Delaware limited liability company
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
OAKWOOD SHARED SERVICES, LLC,
a Delaware limited liability company
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
OAKWOOD MOBILE HOMES, INC.,
a North Carolina corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page 1
CREST CAPITAL LLC, a Nevada limited
liability company
/s/ Xxxxx X. Xxxxxx
------------------------------------
By: Xxxxx X. Xxxxxx
Its: President
FSI FINANCIAL SERVICES, INC.,
a Michigan corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
TRI-STATE INSURANCE AGENCY, INC.,
a Michigan corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
HBOS MANUFACTURING, LP,
a Delaware limited partnership
By: Oakwood Mobile Homes, Inc.,
Its General partner
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page 2
PREFERRED HOUSING SERVICES, LP, a
Delaware limited partnership
By: Oakwood Mobile Homes, Inc.,
Its General partner
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
NEW DIMENSION HOMES, INC.,
a Delaware corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
GOLDEN WEST LEASING, LLC,
a Nevada limited liability company
/s/ Xxxxx X. Xxxxxx
------------------------------------
By: Xxxxx X. Xxxxxx
Its: President
DREAMSTREET COMPANY, LLC,
a Delaware limited liability company
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page 3
HOME SERVICE CONTRACT, INC., a
Michigan corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
SUBURBAN HOME SALES, INC., a
Michigan corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page 4
AGENT:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
/s/ Xxxxx X. Xxxxxxxx
------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: VP
LENDERS:
FOOTHILL CAPITAL CORPORATION,
as Lender and Issuing Bank
/s/ Xxxxx X. Xxxxxxxx
------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: VP
TEXTRON FINANCIAL CORPORATION,
as Lender
/s/ Xxxxxxx X. Xxxxx
------------------------------------
By: Xxxxxxx X. Xxxxx
Title: Senior Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Lender
/s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
By: Xxxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page 5
