Exhibit 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
     THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
June 20, 2007 (this “Amendment”), to the Existing Credit Agreement (as defined
below) is made by CHAMPION HOME BUILDERS CO., a Michigan corporation (the
“Borrower”), 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) and, solely for
purposes of Article V, each Obligor (other than the Borrower) signatory hereto.
WITNESSETH:
     WHEREAS, the Borrower, the Lenders and Credit Suisse, Cayman Islands
Branch, as 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 has requested that the Lenders amend certain
provisions of the Existing Credit Agreement and the Lenders are willing, on the
terms and subject to the conditions hereinafter set forth, to modify the
Existing Credit Agreement as set forth below;
     NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
     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):
     “Amendment” is defined in the preamble.
     “Borrower” is defined in the preamble.
     “Credit Agreement” is defined in the first recital.
     “Existing Credit Agreement” is defined in the first recital.

 

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     “Second Amendment Effective Date” is defined in Article III.
     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.
ARTICLE II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
     Effective on (and subject to the occurrence of) the Second 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.
     SECTION 2.1. Amendment to Section 1.1.
     SECTION 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in the appropriate alphabetical
order:
     “Second Amendment” means the Second Amendment to Amended and Restated
Credit Agreement, dated as of June 20, 2007, among the Borrower and the Lenders
party thereto.
     “Second Amendment Effective Date” means the Second Amendment Effective Date
as that term is defined in Article III of the Second Amendment.
     SECTION 2.1.2. The definition of “Applicable Margin” in Section 1.1 of the
Existing Credit Agreement is hereby amended by inserting the following new
paragraph at the end thereof:
     “Any term or provision hereof to the contrary notwithstanding, from the
Second Amendment Effective Date until the date following December 31, 2007 on
which the Borrower delivers a new Compliance Certificate pursuant to clause
(c) of Section 7.1 demonstrating that the Leverage Ratio is less than or equal
to 3.00:1, (i) the Applicable Margin for US Term Loans maintained as LIBO Rate
Loans shall be 2.75%, (ii) the Applicable Margin for US Term Loans maintained as
Base Rate Loans shall be 1.75%, (iii) the Applicable Margin for Sterling Term
Loans shall be 2.75%, (iv) the Applicable Margin for Revolving Loans maintained
as LIBO Rate Loans shall be 2.75%, (v) the Applicable Margin for Revolving Loans
maintained as Base Rate Loans shall be 1.75%, and (vi) the Applicable Margin
with respect to Participation Fees shall be 2.75%.
     SECTION 2.2. Amendment to Section 8.4.
          (a) Clause (a) of Section 8.4 of the Existing Credit Agreement is
hereby amended by deleting in its entirety the existing table set forth therein
and inserting the table set forth below in lieu thereof:

 

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      Fiscal Quarter   Leverage Ratio
The fourth Quarter of 2005 and the first and second Fiscal Quarters of 2006
  4.00:1
 
   
The third and fourth Fiscal Quarters of 2006
  3.50:1
 
   
The first, second, third and fourth Fiscal Quarters of 2007
  5.00:1
 
   
Each Fiscal Quarter thereafter
  2.75:1

          (b) Clause (b) of Section 8.4 of the Existing Credit Agreement is
hereby amended by deleting such clause in its entirety and inserting the
following in lieu thereof:
“(b) The Parent and the Borrower will not permit (i) the Interest Coverage Ratio
as of the last day of each of the first, second, third and fourth Fiscal
Quarters of 2007 to be less than 2.25:1, and (ii) the Interest Coverage Ratio as
of the last day of any other Fiscal Quarter to be less than 3.00:1.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
     This Amendment and the amendments contained herein shall become effective
on the date (the “Second Amendment Effective Date”) when each of the conditions
set forth in this Article III shall have been fulfilled to the satisfaction of
the Administrative Agent.
     SECTION 3.1. Counterparts. The Administrative Agent shall have received
counterparts hereof executed on behalf of the Borrower, each other Obligor, and
the Required Lenders.
     SECTION 3.2. Amendment Fee. The Administrative Agent shall have received
for the pro rata account of each Lender (that has delivered its signature page
in a manner and before the time set forth below), based upon such Lender’s
applicable Percentages, an amendment fee in an amount equal to 0.25% of the
Total Exposure Amount as of the Second Amendment Effective Date, but payable
only to each such Lender that has delivered (including by way of facsimile or
other electronic transmission) its executed signature page to this Amendment to
the attention of Shepard Liu at Mayer, Brown, Rowe & Maw, 1675 Broadway, New
York, New York 10019, facsimile number: (212) 849-5628, at or prior to 5:00 p.m.
(New York time) on June 20, 2007.

 

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     SECTION 3.3. Costs and Expenses, etc. The Administrative Agent shall have
received for the account of each Lender, all fees, costs and expenses due and
payable pursuant to Sections 3.3 and 12.3 of the Existing Credit Agreement, if
then invoiced, together with all other fees separately agreed to by the Borrower
and the Administrative Agent (or any of its Affiliates).
     SECTION 3.4. Certificate of Authorized Officer. The Borrower shall have
delivered a certificate of an Authorized Officer, solely in his or her capacity
as an Authorized Officer of the Borrower and not in his or her individual
capacity, certifying that, both immediately before and after giving effect to
the Second Amendment on the Second Amendment Effective Date, the representations
and warranties made in Article IV hereof are true and correct in all material
respects.
     SECTION 3.5. Satisfactory Legal Form. The Administrative Agent and its
counsel shall have received all information, and such counterpart originals or
such certified or other copies of such materials, as the Administrative Agent or
its counsel may reasonably request, and all legal matters incident to the
effectiveness of this Amendment shall be satisfactory to the Administrative
Agent and its counsel. All documents executed or submitted pursuant hereto or in
connection herewith shall be reasonably satisfactory in form and substance to
the Administrative Agent and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     To induce the Lenders to enter into this Amendment, the Borrower represents
and warrants to the Lenders as set forth below.
     SECTION 4.1. Validity, etc. This Amendment constitutes the legal, valid and
binding obligation of the Borrower enforceable in accordance with its terms
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
     SECTION 4.2. Representations and Warranties, etc. Both before and after
giving effect to this Amendment, the statements set forth in clauses (a) and
(b) of Section 5.3.1 of the Existing Credit Agreement are true and correct.

 

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ARTICLE V
REAFFIRMATION
     SECTION 5.1. Guarantees, Security Interest, etc. Each Obligor (other than
the Borrower) hereby reaffirms, as of the Second Amendment Effective Date,
(a) the covenants and agreements made by such Obligor contained in each Loan
Document to which it is a party, (b) with respect to each Obligor party to a
Guaranty, its guarantee of payment of the Obligations pursuant to such Guaranty
and (c) with respect to each Obligor party to the Pledge and Security Agreement
or a Mortgage, its pledges and other grants of Liens in respect of the
Obligations pursuant to any such Loan Document, in each case, as such covenants,
agreements and other provisions may be modified by this Amendment.
     SECTION 5.2. Validity, etc. Each Obligor (other than the Borrower) hereby
represents and warrants, as of the Second Amendment Effective Date, that
immediately after giving effect to the Amendment, each Loan Document, in each
case as modified by this Amendment (where applicable), to which it is a party
continues to be a legal, valid and binding obligation of such Obligor,
enforceable against such party in accordance with its terms subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
     SECTION 5.3. Representations and Warranties, etc. Each Obligor (other than
the Borrower) hereby represents and warrants, as of the Second Amendment
Effective Date, that both before and after giving effect to the Amendment, the
representations and warranties set forth in each Loan Document to which such
Obligor is a party are, in each case, true and correct (i) in the case of
representations and warranties not qualified by references to “materiality” or a
Material Adverse Effect, in all material respects and (ii) otherwise, in all
respects, in each case with the same effect as if then made (unless stated to
relate solely to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date).
ARTICLE VI
MISCELLANEOUS
     SECTION 6.1. Cross-References. References in this Amendment to any Article
or Section are, unless otherwise specified, to such Article or Section of this
Amendment.
     SECTION 6.2. Loan Document Pursuant to Existing Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Existing Credit Agreement
and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with all of the terms and provisions of
the Existing Credit Agreement, as amended hereby, including Article X thereof.
     SECTION 6.3. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

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     SECTION 6.4. Counterparts. This Amendment may be executed by the parties
hereto in several counterparts, each of which when executed and delivered shall
be an original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile (or other electronic transmission) shall be effective as
delivery of a manually executed counterpart of this Amendment.
     SECTION 6.5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
     SECTION 6.6. Full Force and Effect; Limited Amendment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants,
conditions and other provisions of the Existing Credit Agreement and the Loan
Documents shall remain unchanged and shall continue to be, and shall remain, in
full force and effect in accordance with their respective terms. The amendments
set forth herein shall be limited precisely as provided for herein to the
provisions expressly amended herein and shall not be deemed to be an amendment
to, waiver of, consent to or modification of any other term or provision of the
Existing Credit Agreement or any other Loan Document or of any transaction or
further or future action on the part of any Obligor which would require the
consent of the Lenders under the Existing Credit Agreement or any of the Loan
Documents.

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     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.

            CHAMPION HOME BUILDERS CO.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              Solely for
purposes of Article V, each of the
undersigned Obligors:

CHAMPION ENTERPRISES, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              CHAMPION
ENTERPRISES MANAGEMENT CO.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              CHAMPION
RETAIL, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              DUTCH
HOUSING, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              HIGHLAND
ACQUISITION CORP.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO             

Second Amendment

 

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            HIGHLAND MANUFACTURING COMPANY LLC
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              HOMES OF
MERIT, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              MODULINE
INTERNATIONAL, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              NEW ERA
BUILDING SYSTEMS, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              NORTH
AMERICAN HOUSING CORP.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              REDMAN
HOMES, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              REDMAN
INDUSTRIES, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO           

 

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            SAN JOSE ADVANTAGE HOMES, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              STAR
FLEET, INC.
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO              WESTERN
HOMES CORPORATION
      By:   /s/ Phyllis A. Knight         Title: EVP/CFO           

 

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            CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Administrative Agent and as a Lender
      By:   /s/         Title:            By:   /s/         Title:           

 

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            LENDERS
      By:   /s/         Title: