This Loan Agreement involves
Title: EIGHTH AMENDMENT, CONSENT AND DIRECTION TO AMENDED AND RESTATED CREDIT AGREEMENT
Governing Law: New York Date: 11/20/2009
Industry: Construction Services Law Firm: Willkie Farr Sector: Capital Goods
EIGHTH AMENDMENT, CONSENT AND
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT, CONSENT AND DIRECTION AGREEMENT, dated as of November 8, 2009 (this “ Amendment ”), to the Existing Credit Agreement (as defined below) is entered into among CHAMPION HOME BUILDERS CO., a Michigan corporation (the “ Borrower ”), CHAMPION ENTERPRISES, INC., a Michigan corporation (the “ Parent ”), certain of the Lenders (such capitalized term and other capitalized terms used in this preamble and the recitals below to have the meanings set forth in, or are defined by reference in Article I below), CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as the Administrative Agent (in such capacity, the “ Administrative Agent ”), and, solely for purposes of Articles VI and VII , each Obligor signatory hereto.
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent are all parties to the Amended and Restated Credit Agreement, dated as of April 7, 2006 (as amended or otherwise modified prior to the date hereof, the “ Existing Credit Agreement ” and, as amended by this Amendment and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time, the “ Credit Agreement ”);
WHEREAS, the Borrower and certain other Obligors desire to obtain debtor-in-possession financing (the “ DIP Facility ”) in order to fund their operating expenses, capital expenditures, post-petition interest, professional fees and expenses, carve-outs, and similar costs related to a potential filing of petitions for relief (the “ Cases ”) under chapter 11 of title 11 of the United States Code (the “ Bankruptcy Code ”);
WHEREAS, it is a condition precedent to the DIP Facility that certain provisions of the Existing Credit Agreement be amended or otherwise modified, and that certain terms be consented to, all as set forth herein; and
WHEREAS, the Borrower has requested that the Lenders so amend and modify the relevant provisions of the Existing Credit Agreement and grant such consents, and the Lenders are willing, but only on the terms and subject to the conditions hereinafter set forth, to so amend and modify the Existing Credit Agreement and grant such consents, all as set forth below; and
WHEREAS, the Lenders further wish to provide certain directions to the Administrative Agent in connection with the potential filing of the Cases;
NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:
SECTION 1.1. Certain Definitions . The following terms when used in this Amendment shall have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):
“ Administrative Agent ” is defined in the preamble .
“ Amendment ” is defined in the preamble .
“ Authorized Action ” is defined in Section 7.8 .
“ Bankruptcy Code ” is defined in the second recital .
“ Borrower ” is defined in the preamble .
“ Cases ” is defined in the second recital .
“ Credit Agreement ” is defined in the first recital .
“ DIP Facility ” is defined in the second recital .
“ DIP Term Sheet ” is defined in Section 3.1 .
“ Eighth Amendment Fee ” is defined in Section 7.9 .
“ Existing Credit Agreement ” is defined in the first recital .
“ Eighth Amendment Effective Date ” is defined in Article IV .
“ Parent ” is defined in the preamble .
“ Transfer ,” “ Transferee ,” “ Transferee Acknowledgment ,” are each defined in Section 3.2(b) .
SECTION 1.2. Other Definitions . Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendment with such meanings.
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Eighth Amendment Effective Date, the provisions of the Existing Credit Agreement referred to below are hereby amended in accordance with this Article II . Except as expressly so amended, the Existing Credit Agreement shall continue in full force and effect in accordance with its terms.
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SECTION 2.1. Amendments to Section 1.1 . Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the following definitions in the appropriate alphabetical order:
“ Eighth Amendment ” means the Eighth Amendment, Consent and Direction Agreement, dated as of November 8, 2009, among the Borrower, the Parent, certain other Obligors, the Lenders party thereto and the Administrative Agent.
“ Eighth Amendment Effective Date ” means the Eighth Amendment Effective Date as that term is defined in Article IV of the Eighth Amendment.
SECTION 2.2. Amendment to Article II .
SECTION 2.2.1. Sections 2.6.4(a) and (b) of the Existing Credit Agreement are each hereby amended by deleting the first two clauses thereof up until “(i)”, and replacing them with the following:
“Upon notification by the Administrative Agent (acting at the direction of the Required Lenders) to the Borrower of its obligations under this Section, following the occurrence and during the continuation of any Event of Default,”
SECTION 2.2.2. Article II of the Existing Credit Agreement is hereby further amended by inserting the following new section at the end thereof:
“SECTION 2.8. Continuation of Letters of Credit Post-Default and Filing for Protection Under Bankruptcy Code . The Required Lenders, the Revolving Loan Lenders holding a majority in interest of the Revolving Loan Exposure and the Synthetic Lenders holding a majority in interest of the aggregate amount of all Synthetic Deposits hereby agree that, notwithstanding the existence and continuation of any Default, including any Default of the types referred to in Section 9.1.9 hereof, and notwithstanding anything else to the contrary contained in the Credit Agreement, all Letters of Credit that are issued and outstanding under the Credit Agreement as of the Eighth Amendment Effective Date, may remain outstanding and be continued and renewed for a twelve (12) month period from the date of such renewal, but only to the extent not drawn by the respective beneficiaries of such Letters of Credit.”
SECTION 2.3. Amendment to Section 5.3 . Section 5.3 of the Existing Credit Agreement is hereby amended by inserting the following sentence at the end thereof:
“For the avoidance of doubt, the provisions of this Section are subject to Section 2.8 hereof.”
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SECTION 2.4. Amendment to Section 9.2 . Section 9.2 of the Existing Credit Agreement is hereby restated in its entirety as follows:
“SECTION 9.2. Action if Bankruptcy . If any Event of Default described in clauses (a) through (d) of Section 9.1.9 with respect to the Parent or the Borrower shall occur, the outstanding principal amount of all outstanding Loans and all other Obligations (including Reimbursement Obligations), shall, automatically be and become immediately due and payable, without notice or demand to any Person. For the avoidance of doubt, the provisions of this Section are subject to Section 2.8 hereof”
SECTION 2.5. Amendment to Section 9.3 . Section 9.3 of the Existing Credit Agreement is hereby amended by inserting the following sentence at the end thereof:
“For the avoidance of doubt, the provisions of this Section are subject to Section 2.8 hereof.”
CONSENT TO DIP LOAN AND DIRECTION TO CREDIT BID
Subject to the occurrence of the Eighth Amendment Effective Date, certain provisions of the Existing Credit Agreement are hereby modified, certain matters are consented to, and the Administrative Agent is directed to take certain actions, all in accordance with this Article III . Except as expressly so modified herein and in Article II above, the Existing Credit Agreement shall continue in full force and effect.
SECTION 3.1. Consent to DIP Loan . Notwithstanding anything to the contrary in the Credit Agreement or any other Loan Document, the Required Lenders hereby consent to the extension of the DIP Loan Facility, as defined in, and substantially on the principal terms set forth in, the Champion Home Builders Co. Summary of Indicative Terms and Conditions for Possible Debtor-in-Possession Financing attached hereto as Exhibit A (the “ DIP Term Sheet ”), and all other transactions referred to therein, with such changes to the terms and under such documentation as the Requisite Lenders (as defined in the DIP Term Sheet) shall agree to. Without limiting the foregoing, the Required Lenders hereby expressly consent to and permit (a) the lien priority of the New Money Loan, DIP LC’s and the Roll-Up Loan, (b) the incurrence from time to time of the New Money Loan and the issuance of DIP LCs, and (c) the use of cash collateral, in each case, as set forth and/or permitted by the DIP Term Sheet and any documentation executed in connection therewith or relating to the definitive terms thereof. The Lenders and Obligors agree that the Eighth Amendment Fee and all interest and fees with respect to all unpaid amounts under the Credit Agreement shall be paid in kind and accrue notwithstanding any limitations on the amount of the commitments or loans that may otherwise be applicable under the Credit Agreement.
SECTION 3.2. Direction to Credit Bid . (a) The Required Lenders hereby authorize and direct the Administrative Agent to credit bid (or to direct the Collateral Trustee to credit bid) any
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and all Obligations under the Credit Agreement for any and all of the assets of the Debtors to the extent and under such terms and conditions as the Administrative Agent shall deem appropriate as part of the Administrative Agent’s exercise of rights and remedies under and in connection with the various Loan Documents and to take such actions and execute such documents as the Administrative Agent deems appropriate in connection therewith.
(b) It is understood and agreed that action taken by the Lenders as contemplated hereby shall be binding upon all of their successors and assigns and no amendments, waivers or other modifications of this Amendment can be made without the consent of the Administrative Agent. Each Lender party hereto hereby agrees not to sell, transfer, assign, pledge, or otherwise dispose, directly or indirectly (including by creating any subsidiary or affiliate for the sole purpose of acquiring any Obligations), their right, title or interest in respect of the Obligations, in whole or in part, or any interest therein (a “ Transfer ”), unless the recipient of such relevant claim (a “ Transferee ”) agrees in writing (such writing, a “ Transferee Acknowledgment ”), prior to such Transfer, to be bound by this Amendment in its entirety without revisions. Any Transfer that does not comply with this paragraph shall be void ab initio . In the event of a Transfer, the transferor shall, within three (3) business days thereof, provide written notice of such Transfer to the Administrative Agent, together with a copy of the Transferee Acknowledgment in form and substance satisfactory to the Administrative Agent.
(c) It is further understood and agreed that no Lender shall be afforded an opportunity to participate in the DIP Facility contemplated under the DIP Term Sheet unless such Lender has agreed to the terms and conditions hereto and executed and delivered this Amendment or a Transferee Acknowledgement.
(d) Each Lender party hereto represents and warrants, on a several but not joint basis, that, as of the date hereof, it is the legal or beneficial holder of, or holder of investment authority over, the claims identified on its signature page hereto and has the power and authority to execute this Amendment. Each Lender party hereto believes that a DIP Facility consistent with the DIP Term Sheet and the credit bid authorized by this Amendment are in its best interests. Accordingly, each Lender party hereto agrees (in its capacity as a Lender as well as in its capacity as a holder of any other debt or other obligations or equity of the Parent or any of its Subsidiaries) (i) not to authorize any other person to credit bid any Obligations owing to it, nor will it seek to credit bid Obligations on its own behalf, and all such actions shall be taken by the Administrative Agent on behalf of such Lenders, (ii) not to contest, object to, seek to set aside, oppose, challenge, interfere with, delay, impede, appeal or take