Document:

Document

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

Key Employee Stock Investment Plan (“KESIP”)
And Handbook

The date of this document is January 1, 2021.

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	Contents	Page
	Title and Purpose of the Plan	3
	Eligibility	3
	Plan Overview	3
	Purchases and Sales	4
		•    Limits on Purchases and Sales	4
		•    Share Pricing	4
		•    Options Granted On Purchase of Shares	5
	Loans	5
		•    Loan Limits	5
		•    Loan Terms	6
		•    Loan Repayment	7
	Procedures for Transactions	8
		•    Purchasing Shares	8
		•    Paying Off the Loan Balance	8
		•    Selling Shares	9
	Responsibilities of Participants and the Plan	9
			
	Other Provisions	10
	Appendix:	13
		•    Form: KESIP Share Purchase	13
		•    Form: KESIP Loan Repayment Form	14
		•    Form: Written Confirmation of Purchase	15
		•    Form: Payroll Deduction Authorization	16
		•    Form: Stock Option Agreement	17
		•    Form: Stock Power	22
		•    Form: Repayment Schedule	23
		•    Form: Promissory Note	24
			
		

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TITLE AND PURPOSE OF THE PLAN
This Cummins Inc. Key Employee Stock Investment Plan (the “Plan” or “KESIP”) is intended to encourage key employees of Cummins Inc. and its subsidiaries (collectively, the “Company”) to own shares of Cummins Inc. common stock, par value $2.50 per share (“Stock” or “Shares”). Through such ownership, the Plan is expected to benefit the Company by attracting and retaining the best available talent and more closely aligning the interests of its key employees with those of its shareholders.
ELIGIBILITY
Eligible employees of the Company are those who meet all three of these criteria:
•On a U.S. payroll and receiving United States taxable income
•In Compensation Class 4 or 5 or its equivalent
•Not officers of the Company
Employees who meet these specified requirements are eligible to participate to the extent permitted by applicable law (such employees who participate, “Participants”).  The KESIP Plan Administrator (as defined below) will notify employees of their eligibility.
A Participant will cease to be eligible to purchase Shares under the Plan if at any time he or she no longer meets all of the requirements described above.  
PLAN OVERVIEW
•Participants may obtain funds (up to the established loan limit) to purchase Stock through a loan from the Company.  Loan proceeds are to be used solely and immediately for the purchase of Stock.
•Participants will receive a non-qualified stock option exercisable for 50 Shares for every even block of 100 KESIP Shares purchased.  
•Participants receive dividends on purchased Shares during the term of the loan and are entitled to vote the Shares.  A Form 1099-DIV will be issued for dividends paid. 
•Subject to Plan limitations, the Participant may sell Shares, in which case the Participant will receive the sale proceeds, reduced by the outstanding loan balance, including accrued interest.  
•The Plan is administered by the Company’s Global Compensation Manager or her delegate (the “KESIP Plan Administrator”).  Participants may use the address and telephone number indicated under the heading “OTHER PROVISIONS” below to obtain additional information about the Plan and its administrator.  

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PURCHASES AND SALES
Limits on Purchases and Sales
•A Participant may purchase Shares immediately upon becoming informed of eligibility (unless a “blackout period” is in effect with respect to the Participant under the Trading in Cummins Securities Policy).
•A Participant will remain eligible to purchase Shares, subject to the conditions and limitations in the Plan, until he or she no longer meets all of the requirements for participation in the Plan.
•A Participant may not sell Shares purchased under the Plan within six months of the purchase.
•A Participant may not purchase Shares under the Plan within six months after selling Shares purchased under the Plan or repaying a loan obtained under the Plan.  
•Any Participant who is subject to “blackout periods” under the Trading in Cummins Securities Policy may not purchase or sell Shares under the Plan during a “blackout period.”  
•Executive Directors are subject to an “automatic blackout period” with respect to the Plan under the Trading in Cummins Securities Policy.  This “automatic blackout period” is in place from the first business day of each quarter through the close of two business days after the day the Company publicly releases its earnings for the quarter. 
•Blackout periods may also occur at the discretion of the Company’s Vice President - General Counsel.  Participants will be notified if a “blackout period” is in effect with respect to them when they request a purchase or sale.
Share Pricing  
•Purchases:
•Purchases are processed by the KESIP Plan Administrator
•Purchases are made at the closing price on the New York Stock Exchange on the last trading day preceding the day on which the Participant’s request to purchase is treated as received. The purchase may be rescinded in the Compensation Committee’s (the “Committee”) discretion, however, if all required paperwork is not subsequently signed and returned as directed.
•If the request to purchase is made on a day on which the New York Stock Exchange is closed, the purchase price will be determined as though the request had been made on the prior trading day.  For example, if the request was received on a Saturday, the price will be set as though the request was received on the prior Friday -- at Thursday’s closing price.
•Requests to purchase are treated as received on a trading day if they are received before midnight Eastern Time on such day.  Requests received at or after midnight on a trading day are treated as received on the following trading day.

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•Sales:
•Sales are administered by the Plan’s third-party broker, Morgan Stanley. 
•Shares are sold at the trading price at the time the trade is initiated. If the request to sell is made on a day on which the New York Stock Exchange is closed, the selling price will be determined by the market opening price on the next trade date. 
•Limit orders may also be established for sales. 
•Form 1099-Bs will be issued for all sales 
Options Granted On Purchase of Shares
•Participants will receive a non-qualified stock option exercisable for 50 Shares for every even block of 100 KESIP Shares purchased (without proration or aggregation for purchases of less than even 100 share increments).  
•The options will be issued pursuant to the Company’s shareholder approved stock option plan, will be evidenced by the Company’s form option award agreement and subject to the terms and conditions (other than vesting) set forth in the option award agreement, will have an exercise price equal to the fair market value (closing sale price on date of KESIP purchase) of the underlying Shares, as determined pursuant to that plan, and will vest immediately.  
•Any excess of the fair market value of the Shares underlying these options over the exercise price per Share at the time of exercise will generally be ordinary income for Federal income tax purposes, and any gain or loss on the subsequent sale of the Shares acquired on exercise will generally be treated as capital gain or loss, as applicable.  Participants should refer to the prospectus for the Company’s registered stock option plan for additional description of the tax treatment of the stock options.
LOANS
Loan Limits
•Each Participant has a maximum loan limit:
•Participants in Compensation Class 4 (salary grades 10, 11, 28, and 29) or its equivalent may borrow up to 25% of their annual base salary (determined as of the time the loan is made).
•Participants in Compensation Class 5 (salary grades 12 and 13) or its equivalent may borrow up to 50% of their annual base salary (determined as of the time the loan is made).
•A Participant may have more than one loan at a time, but the Participant’s total outstanding loans may not exceed his or her maximum loan limit.  

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•If the maximum loan limit is exceeded because of a reduction in annual base salary, the Participant’s loans outstanding at the time will not be affected but the Participant will not be eligible for additional loans above his or her new maximum loan limit.
•Excluding the one-time extension described below, loans may not be “refinanced” to take advantage of lower interest rates.
•Repayment of a loan will trigger a six-month waiting period before any additional Shares may be purchased under the Plan.
Loan Terms
•Loans bear interest at a rate based on IRS guidelines for employee loans, or such other rates as may be selected by the Board of Directors of Cummins Inc. (the “Board of Directors”) or its Committee from time to time.  Current interest rates for KESIP purchases can be obtained by contacting the KESIP Plan Administrator at kesip@cummins.com. 
•Loans have a five-year term.  Subject to certain restrictions, a Participant may extend a loan at the end of the original term for an additional five years, if he or she has not sold the Shares purchased with the loan proceeds.  The interest rate during the second five-year term will be fixed at the beginning of that term.  The maximum total loan period for any purchase is ten years.
•Loans are secured by the Shares purchased with the loan proceeds and are fully recourse against Participants.  The secured Shares will be held as collateral in the custody of the Company or a third-party administrator designated by the Company, and may not be assigned, sold, transferred, hypothecated or otherwise disposed of other than by a sale permitted by the Plan, until the loan is repaid.  If the value of the Shares purchased with the loan proceeds is less than the outstanding loan balance when Shares are sold, the shortfall is the personal responsibility of the Participant at the time the loan is due.
•If the Company pays a stock dividend on, or effects a stock split with respect to, any of its Shares pledged as security pursuant to a loan, the pledge related to the loan will extend to the Shares issued in payment of such stock dividend or to effect such stock split.
•If the Shares held as collateral security pursuant to a loan are changed or reclassified as a result of any charter amendment, recapitalization, reorganization, merger, consolidation, sale of assets or similar transaction, the changed or reclassified Shares or other assets or both received as a result of such transaction will be substituted for the Shares so pledged, and the Participant will deliver promptly to the Company certificates (if any) issued to represent the Shares so changed or reclassified and any such other assets, together with a properly executed stock power.  If rights to subscribe for or purchase stock or other securities are issued with respect to Shares held as collateral security pursuant to a loan, such rights will belong to the Participant free from pledge.
•Notwithstanding anything to the contrary in this Plan, the terms of all loans shall comply with (or, if necessary, be amended to comply with) applicable credit and other regulations, if any, then in effect and issued or enacted by governmental authority having jurisdiction, including 

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Regulation G of the Board of Governors of the Federal Reserve System if such Regulation is then in effect.
Loan Repayment
•Payments are made via payroll deduction. During any period in which a U.S. payroll Participant is on unpaid leave, he or she will make loan payments on a quarterly basis.  
•At the outset of a loan, Participants may choose whether they will pay both principal and interest during the term of the loan or interest only until the loan becomes due and payable in full.  
•Any loan is due and payable in full, with any and all interest to the date of repayment, upon the earliest of (i) the sale of the Shares that were purchased with the loan proceeds, (ii) the expiration of the term of the loan, (iii) the date the Participant’s employment ceases and (iv) the date the Participant is removed from a United States payroll.  The timing of the repayment is determined as follows:
•Payment is due and payable either:
•Immediately upon the sale of the Shares that were purchased with the loan proceeds or upon the expiration of the term of a loan, or
•If the Participant has been removed from a United States payroll, by the end of a 30-day grace period following the date or removal, or
•If the Participant’s employment has terminated, by (1) the end of a 30-day grace period following the termination date, if the Participant is not receiving severance in the form of salary continuation, or (2) 30 days prior to the end of the severance period, in the case of a Participant who receives severance in the form of salary continuation. 
•If the Participant’s employment ceases due to the Participant’s death, the Company in its discretion may permit the Participant’s estate or personal representative to continue repayment of the loan in installments.
•If a loan has not been repaid before it becomes due and payable in full, the Shares purchased with the loan proceeds will be sold, the proceeds of the sale will be applied to repayment of the loan and any shortfall of proceeds to loan balance, including any accrued interest, will be due and payable immediately by the Participant.  If a Participant is receiving severance on a salary continuance basis, and the loan has not been retired by the next to last month of the severance, the Shares will be sold at that time and any shortfall of proceeds to loan balance will be deducted from the last month of severance payment.  (Interest will continue to accrue and be payable on the same basis as when the Participant was active (for example, semimonthly or quarterly).)  If the last month of severance payment is not sufficient to cover the shortfall, the remaining shortfall will be due and payable immediately by the Participant.
•Because this Plan is not available to Company officers, if a Participant becomes an executive (Section 16) officer at the time he or she has a loan outstanding under this Plan, the Participant 

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must repay the loan immediately.  If a Participant becomes a non-executive officer (not a Section 16 officer) at the time he or she has a loan outstanding, the Participant will have six months to repay the loan.  The Company has the authority to take any actions it deems appropriate under this section to ensure that the loans are repaid without a negative financial impact on the Participant.  
•The Company’s Vice President – Human Resources, or another employee designated by the Vice President – Human Resources, will have the authority to modify the preceding loan repayment provisions in individual circumstances as he or she deems appropriate. 
PROCEDURES FOR TRANSACTIONS
Purchasing Shares
•The Participant completes the “KESIP SHARE PURCHASE” form and sends it to the KESIP Plan Administrator at kesip@cummins.com.  The Company will set up payroll deductions to start the next available payroll period. 
•Loan contract documents will be emailed to the Participant for signature.  The Loan contract documents must be signed and returned within ten business days. The Participant will complete any authorizations that the Company determines are appropriate to provide for the collateralization of the Shares.
Paying Off the Loan Balance
•The balance of any outstanding loan must be paid in full, with interest to the date of repayment, when the loan becomes due and payable upon the earliest of the events described above (including upon the sale of the Shares that were purchased with the loan proceeds, in which case the sale proceeds will be applied automatically to repayment of the loan).
•The Participant may voluntarily repay the balance on any or all of his or her outstanding loans at any time (without prepayment charge or penalty, other than accrued interest due).  Each loan must be paid in full.  Repayment of a loan will trigger a six-month waiting period before any additional Shares may be purchased under the Plan.
•The Participant should contact the KESIP Plan Administrator for loan balance details and payoff instructions. The KESIP Plan Administrator will provide the Participant the date the payoff must be received to avoid the accrual of additional interest. 
•The Participant should complete the “KESIP LOAN PAYOFF” form. If the payoff is made via check, the form should accompany payment.  If the Participant is completing the payoff by wire transfer, the form should be emailed to the KESIP Plan Administrator at kesip@cummins.com on the date the wire is initiated.  
•The Participant will make check payable to “Cummins Business Services” and send it to the KESIP Plan Administrator at 2931 Elm Hill Pike, Nashville, Tennessee 37214.  The Participant’s check must be received by the date indicated, or additional interest payments will be due.

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•Upon receipt of payment in full for the entire outstanding loan balance, including all interest accrued to the date of repayment, the KESIP Plan Administrator will release the Shares from collateral and instruct the transfer agent to remove the applicable stop-transfer orders and other restrictions from the book-entry evidencing the Shares (provided that the Shares will not be released sooner than six months after purchase unless the Participant’s eligibility has ended). 
•Loans are otherwise fully recourse against the Participant, which means that, if the value of the Shares purchased with the loan proceeds is less than the outstanding loan balance when Shares are sold, the shortfall is the personal responsibility of the Participant at the time the loan is due.
Selling Shares
•The Participant can initiate a sale by calling Morgan Stanley at 1-312-419-3598. 
•The KESIP Plan Administrator will:
•Apply the proceeds of the sale of the Shares to any outstanding balance, including all interest accrued to the date of repayment, on the loan used to purchase the Shares; and
•Send the Participant a check (or make direct deposit, if applicable), if the Participant is owed money from the transaction, or notify the Participant if he or she owes the Company as a result of the transaction.
RESPONSIBILITIES OF PARTICIPANTS AND THE PLAN
Participants must:
•Submit transaction requests to the KESIP Plan Administrator.
•Sign and return paperwork as directed within ten (10) business days.
•Report gains or losses for tax purposes.
•Make loan payments or repayments on time and as required by the Plan.
•Pay loan balances when he or she ceases to be eligible (terminates, retires or moves off of an eligible payroll) or sells Shares. 
The KESIP Plan Administrator will:
•Acknowledge the receipt of transaction requests by the end of the following business day (or, if the request is received on a holiday or other non-work day, by the end of the second following business day).
•Reflect the date of the transaction request in the purchase price of Shares.
•Send completed paperwork to the Participant for signature.

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OTHER PROVISIONS
•This document serves as the Plan and prospectus.  It amends and restates all prior plan documents and all handbooks relating to the Plan in their entirety and governs all outstanding KESIP loans and all future KESIP transactions. 
•Shares to be offered to Participants may consist, in whole or in part, of authorized but unissued Shares or Shares held in treasury.  An aggregate of 540,000 Shares are reserved for issuance under the Plan (excluding options, which will be issued pursuant to Cummins Inc.’s shareholder approved stock option plan), subject to proportionate adjustment in the event of any change in the Shares by reason of a stock split, stock dividend, combination or reclassification of Shares, recapitalization, split-up, spin-off, dividend other than a regular quarterly cash dividend, separation, reorganization, liquidation, merger, consolidation or similar event, that results in an adjustment in the number of Shares reserved under the Company’s equity incentive or similar plan in place at the time of such change pursuant to the terms of such plan; and provided that Shares that are repurchased by the Company shall again be available for issuance hereunder. 
•The Board of Directors or the Committee at any time may make any changes in the Plan, and in any agreements subsequently entered into hereunder, as they may deem necessary or advisable.  No such amendment may, however (1) reduce the price at which Shares are to be sold to employees under the Plan, or (2) extend the period for the completion of payment for Shares purchased by employees or of loans under the Plan, without shareholder consent.  Amendments to option award agreements entered into with respect to options granted in conjunction with the purchase of Shares hereunder will be governed by the terms of Cummins Inc.’s shareholder approved stock option plan pursuant to which such options are granted.  The Vice President – Human Resources of the Company or any other appropriate officer is authorized to make appropriate amendments to the Plan except to the extent that applicable law, regulation or listing standards require that any such amendment be made only by the Board of Directors or the Committee.  Additionally, and subject to the limits described in the preceding sentences, the Board of Directors, the Committee, the Vice President – Human Resources of the Company or any other authorized officer of the Company may from time to time adopt rules, procedures and guidelines for the interpretation, implementation and operation of the Plan.  Neither the termination of the Plan nor any amendment thereof will materially adversely affect any then existing written arrangement entered into or under the Plan without the consent of the Participant.  
•The Plan became effective on October 15, 2012, the date when it was approved by the Committee.  No employee or other person shall have any rights in or under the Plan except as expressly granted in an agreement entered into pursuant to the terms thereof.  
•The Plan will expire when all Shares reserved for issuance hereunder have been issued or earlier at the option of the Board of Directors or the Committee.  Upon expiration of the Plan, no further Shares may be sold to Participants, but the Plan will continue in effect for the purpose of collecting installments remaining due on Shares previously purchased and allowing Participants to sell Shares previously acquired.  

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•The Company files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).  Anyone may read and copy any reports, statements or other information on file at the SEC’s public reference room in Washington D.C., and may call the SEC at 1 800 SEC 0330 for further information on the public reference room.  The Company’s SEC filings are also available to the public on the SEC’s web site located at http://www.sec.gov.
•The Company has filed a Registration Statement on Form S-8 under the Securities Act of 1933 with the SEC covering the Shares issuable under the Plan.  This document contains some information concerning the Company, the Shares and the Plan, but does not contain all of the information set forth in the Registration Statement and its exhibits.  The Company will provide without charge, upon written or oral request, copies of the documents incorporated by reference in Item 3 of Part II of the Registration Statement, which include the Company’s periodic filings made with the SEC.  The Company incorporates these periodic filings by reference into this document.  The Company will also provide without charge, upon written or oral request, copies of all other documents it is required to deliver under Rule 428(b) under the Securities Act of 1933.  These requests and other requests for additional information regarding the Plan and the Committee should be directed to the KESIP Plan Administrator at 1-877-377-4357 or 2931 Elm Hill Pike, Nashville, Tennessee 37214. 
•The following is a general discussion of the current U.S. federal income tax consequences of purchasing or selling Shares under the Plan, is not intended to be complete and is subject to change.  State and local tax treatment (including tax treatment in countries outside the U.S.) may vary from the U.S. federal income tax treatment discussed below and is not discussed in this summary.  The summary also does not describe the tax consequences associated with the stock options discussed below under the heading “PURCHASES AND SALES – Share Pricing – Purchases,” which are addressed in the prospectus for the Company’s registered stock option plan.  Participants should consult their tax advisors about their particular transactions in connection with the Plan.  
•There will be no tax recognized by the Participant when the Participant obtains the loan and purchases the Shares.
•In general, Participants will have a taxable gain or loss in the year in which they dispose of any of the Shares acquired under the Plan.  A “disposition” generally includes any transfer of legal title, including a transfer by sale, exchange or gift, but may not include a transfer to a Participant’s spouse, a transfer into community property with a Participant’s spouse or a transfer into joint ownership with right of survivorship if the Participant remains one of the joint owners.  Gains or losses resulting from dispositions of Shares acquired under the Plan will generally be treated as capital gains and losses (short- or long-term, depending on the length of time the Participant has held the Shares) to Participants for personal income tax purposes.
•The Company does not intend to withhold any amounts for taxes in connection with purchases or sales of Shares under the Plan.  Participant compensation that is applied to purchase Shares or pay interest via payroll deduction is subject to all taxes normally applicable to Participant compensation, including federal, state and local income taxes and Social Security taxes, and the amounts applied to the loan principal or interest will 

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be after-tax dollars.  The purchase and sale of Shares under the Plan generally has no tax consequences for the Company.
•Participants will receive a Form 1099-B from Morgan Stanley with the details necessary for completing their Schedule D tax form.  
•The Plan is not required to be qualified under Section 401(a) of the Internal Revenue Code of 1986 and is not subject to the provisions of the Employee Retirement Income Security Act of 1974, commonly known as ERISA.
•The Company may, as a condition of accepting any purchase of Shares, require the purchasing Participant to represent to the Company that he or she is purchasing the Shares for investment and not with a view to resale or distribution.
*          *         *
This Restatement of the Cummins Inc. Key Employee Stock Investment Plan has been signed by the duly authorized delegate of the Company’s Vice President – Chief Human Resources Officer named below, acting on behalf of the Company, as of the 1st day of January, 2021.
CUMMINS INC.

By:    /s/ David Weed__________            
Name:    David Weed
Title:    Director – Executive Compensation

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                                                                                               Exhibit 10.1

 

AMENDMENT NO. 4 AND JOINDER TO FOURTH AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT

 

THIS  AMENDMENT  NO. 4  AND  JOINDER  TO  FOURTH  AMENDED  AND

RESTATED CREDIT AND GUARANTY AGREEMENT (this “Amendment”), dated as of October 26, 2020 (the “Amendment No. 4 Effective Date”), is by and among MASTERCRAFT BOAT COMPANY, LLC, a Delaware limited liability company (“MasterCraft”), MASTERCRAFT SERVICES, LLC, a Tennessee limited liability company (“Services”), MASTERCRAFT  INTERNATIONAL  SALES  ADMINISTRATION,  INC.,  a  Delaware

corporation (“Sales Administration”), NAUTIC STAR, LLC, a Mississippi limited liability company (“Nautic”), NS TRANSPORT, LLC, a Mississippi limited liability company (“NS Transport”), CREST MARINE LLC, a Michigan limited liability company (“Crest”), and AVIARA BOATS, LLC, a Tennessee limited liability company (“Aviara”) (collectively, “Borrowers” and, individually, each a “Borrower”), MASTERCRAFT BOAT HOLDINGS, INC., a Delaware corporation (f/k/a MCBC Holdings, Inc., “Holdings”), as a Guarantor, the various institutions named on the signature pages to this Amendment as party to this Amendment, as Lenders (the “Lenders”), and FIFTH THIRD BANK, NATIONAL ASSOCIATION, a national banking association, as Agent and L/C Issuer. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement described below.

 

W I T N E S S E T H

 

WHEREAS, each of the Borrowers (except newly joined Borrower Aviara), Holdings, the Lenders and the Agent are parties to that certain Fourth Amended and Restated Credit and Guaranty Agreement, dated as of October 1, 2018 (as amended by that certain (i) Amendment No. 1 dated as of November 8, 2018, (ii) Amendment No. 2 dated as of July 24, 2019, and (iii) Amendment No. 3 dated May 7, 2020, and as of as may be further amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, Holdings has organized Aviara as a Wholly-Owned Subsidiary of Holdings, and Aviara joins this Agreement as a Borrower as of the Amendment No. 4 Effective Date, and will on purchase certain property located in Merritt Island Florida, and grant to Agent, for the benefit of the Lenders, a Mortgage on such real property; and

 

WHEREAS, the Credit Parties and the Required Lenders desire to amend certain provisions of the Credit Agreement, as set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

AMENDMENT TO CREDIT AGREEMENT

 

1.1Amendment to Section 1.1 (Definitions- Amended). Section 1.1 of the Credit Agreement is hereby amended by amending the following defined terms as follows:

 

VP/#40041634
 

 

 

 

	
 
	
(a)
	
“Borrower(s)” means, individually and collectively, jointly and severally

(a)as of the Original Closing Date, the Restatement Closing Date and the Second Restatement Closing Date, (i) MasterCraft, (ii) Services, (iii) Hydra; and (iv) Sales Administration; (b) as of the Third Restatement Closing Date, (i) MasterCraft, (ii) Services, (iii) Hydra; (iv) Sales Administration, (v) Nautic, (vi) NS Transport, and (vii) Navigator; (c) as of the Fourth Restatement Closing Date, (i) MasterCraft, (ii) Services, (iii) Sales Administration, (iv) Nautic, (v) NS Transport, and (vi) Crest; (d) as of the Amendment No. 4 Effective Date, (i) MasterCraft,

(ii) Services, (iii) Sales Administration, (iv) Nautic, (v) NS Transport, (vi) Crest, and (v) Aviara; and (e) each other Person that becomes a “Borrower” hereunder pursuant to a Joinder Agreement after the Fourth Restatement Closing Date. As provided in Section 6.25 hereof, (x) each of Hydra and Navigator have been or shall be promptly after the Fourth Restatement Closing Date, dissolved in accordance with applicable law and are accordingly not party to this Agreement, and (y) prior to the Fourth Restatement Closing Date, all of the Equity Interests in Services have been transferred from MasterCraft to Sales Administration so that as of the Fourth Restatement Closing Date Services will be a wholly-owned Subsidiary of Sales Administration; and, Services has been converted from a Tennessee corporation to a Tennessee limited liability company.

 

(b)“Mortgages” shall be amended and restated in its entirety to read as follows: “means, collectively, (a) each Mortgage and Security Agreement with Assignment of Rents and Open-End Mortgage or Deed of Trust and Security Agreement with Assignment of Rents between any Credit Party and the Agent relating to such Credit Party’s fee real property, fixtures and interests in real property commonly known as (i) 100 Cherokee Cove Drive, Monroe County, Vonore Tennessee 37885, (ii) 500 Waterway Drive , Amory, MS 38821, (iii) 2170 South M-52, Owosso, Michigan 48867 (formerly covered by a leasehold mortgage prior to the purchase of this real property by Crest in October 2019), and (iv) 1200-1230 Nautical Way, Merritt Island (Brevard County), Florida 32952, and (b) any other mortgages or deeds of trust or leasehold mortgages delivered to the Agent pursuant to Section 4.2 hereof, as the same may be amended, modified, supplemented or restated from time to time.”

 

1.2Amendment to Section 1.1 (Definitions- New). Section 1.1 of the Credit Agreement is hereby amended by adding the following defined terms, in alphabetical order, to such Section:

 

	
 
	
(a)
	
“Aviara Asset Transfer Date” is defined in Section 6.17 hereof.

 

(b)“Amendment No. 4” means that certain Amendment No. 4 and Joinder to this Agreement dated as of the Amendment No. 4 Effective Date”.

 

	
 
	
(c)
	
“Amendment No. 4 Effective Date” means October 26, 2020.

 

(d)“Aviara” means Aviara Boats, LLC, a Tennessee limited liability company, and a Borrower as of the Amendment No. 4 Effective Date.

 

1.3Amendment to Section 4.2(a) (Liens on Real Property). Section 4.2(a) of the Credit Agreement is hereby amended by adding the following at the end of such Section: “Borrowers shall satisfy the Mortgage and other requirements of this Section 4.2(a) with respect to that certain real property commonly known as 19 Sea Ray Drive, Vonore, Tennessee (a/k/a 19

 

 

                                                                                               Exhibit 10.1

 

 

Sea Ray Circle, Vonore, Tennessee), on or before December 26, 2020 as provided in Section 2.2(b)(ii)(2) of Amendment No. 4, notwithstanding that such real property was acquired via lease purchase option in March 2019.”

 

1.4Amendment to Section 6.17 (Limitation of Creation  of  Subsidiaries).  Section 6.17 of the Credit Agreement is hereby amended by adding the following at the end of such Section: “In connection with the organization of Aviara as a Wholly-Owned Subsidiary of Holdings, and it’s joinder as a co-Borrower to this Agreement, after the Amendment No. 4 Effective Date Mastercraft will transfer substantially all of the assets and operations related to the Aviara business to Aviara or, in the case of certain Intellectual Property related to the Aviara business, license to Aviara the right to use such Intellectual Property. Promptly upon, and effective as of, the date of such transfer of assets (“Aviara Asset Transfer Date”), Borrower Representative shall deliver to Agent, (i) true and complete copies of all documents effectuating the transfer by Mastercraft to Aviara of the assets of the Aviara business, and (ii) such Loan Documents as are reasonably request by Agent in respect thereof including, without limitation, Collateral Documents in respect of Intellectual Property of Aviara.”

 

 

ARTICLE II

JOINDER OF NEW BORROWER; CONDITIONS

 

2.1Joinder of Aviara as New Borrower. Aviara is hereby acknowledges, agrees and confirms that, by its execution of this Amendment No. 4, it will be deemed to be a Borrower and Credit Party for all purposes of the Credit Agreement and shall have all of the obligations of a Borrower and Credit Party thereunder as if it had been an original signatory to the Credit Agreement. Aviara hereby ratifies, as of the Amendment No. 4 Effective Date, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Credit Parties set forth in Section 5 of the Credit Agreement, (b) all of the covenants set forth in Section 6 of the Credit Agreement, and (c) all of the guaranty and other obligations set forth in Section 11 of the Credit Agreement. Aviara is, as of the Amendment No. 4 Effective Date, executing and delivering that certain Amendment No. 1 to the Security Agreement, and such other applicable Loan Documents as reasonably requested by the Agent in its Permitted Discretion in accordance with the Credit Agreement.

 

	
 
	
2.2
	
Conditions.

 

(a)Conditions Precedent. This Amendment shall become effective as of the Amendment No. 4 Effective Date, but only upon receipt by Agent of each of the following, each in form and substance satisfactory to Agent:

 

(i)one or more fully executed counterparts of this Amendment from each of the Credit Parties and the Required Lenders;

 

(ii)one or more fully executed counterparts of Amendment No. 1 and Joinder to Security Agreement;

 

VP/#40041634
 

                                                                                               Exhibit 10.1

 

 

(iii)amended and restated Notes (Revolving Notes, Term Notes and Swing Note) issued by all Borrowers (including Aviara as a new Borrower) to each of the Lenders;

 

(iv)that certain Mortgage and related documents with respect to the real property known as 1200-1230 Nautical Way, Merritt Island (Brevard County), Florida 32952; and

 

(v)such other documents, instruments and certificates as may be reasonably required by Agent or any Lender including, without limitation, those documents listed in the Document Checklist prepared by Agent in respect of this Amendment.

 

(b)Conditions Subsequent. Borrowers hereby agree to satisfy each requirement set forth below on or before the dated specified for such requirement or such later date as Agent may permit; and agree that the failure to timely satisfy the following requirements shall be an Event of Default:

 

(i)On or before October 30, 2020, or such later date as approved by the Agent in its sole discretion, Borrowers shall have satisfied the requirements forth in Section 4.2(a) (Liens on Real Property) of the Credit Agreement with respect to Aviara’s fee simple interest in the real property commonly known as 1200-1230 Nautical Way, Merritt Island, Florida and Aviara’s leasehold interest in that certain Lease Agreement (“CPA Lease”) between Canaveral Port Authority, as lessor, and Sea Ray Division of Brunswick Corporation, as lessee, dated April 1, 1998, and recorded in Official Records Book 3830, Page 1252 of the Public Records of Brevard County, Florida, as amended and/or assigned from time to time;

 

(ii)On or before December 29, 2020, or such later date as approved by the Agent in its sole discretion, Borrowers shall have delivered to Agent a Landlord Consent with respect to the CPA Lease executed by Canaveral Port Authority, an independent special taxing district and political subdivision of the State of Florida for the benefit of Aviara and Agent, substantially in the form approved by Agent’s counsel prior to the Amendment No. 4 Effective Date; and

 

(iii)On or before December 29, 2020, or such later date as approved by the Agent in its sole discretion, Borrowers shall have satisfied the requirements forth in Section 4.2(a) of the Credit Agreement with respect to Mastercraft’s fee simple interest in the real property commonly known as 19 Sea Ray Drive, Vonore, Tennessee (a/k/a 19 Sea Ray Circle, Vonore, Tennessee.

 

ARTICLE III MISCELLANEOUS

 

3.1Amended Terms. On and after the Amendment No. 4 Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise

 

VP/#40041634
 

                                                                                               Exhibit 10.1

 

 

agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

 

3.2Representations and Warranties of Credit Parties. Each of the Credit Parties represents and warrants as follows:

 

(a)It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

 

(b)This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(c)No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

 

(d)The representations and warranties set forth in Section 5 of the Credit Agreement are true and correct in all material respects (except those that are qualified by materiality or a Material Adverse Effect, which representations and warranties are true and correct in all respects) as of the date hereof (except for those which expressly relate to an earlier date).

 

(e)After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

(f)The Collateral Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Agent, for the benefit of the Agent and the Lenders, which security interests and Liens are perfected in accordance with the terms of the Collateral Documents and prior to all Liens other than Permitted Liens.

 

	
 
	
3.3
	
Reaffirmation of Obligations.

 

(a)Each Credit Party hereby ratifies the Credit Agreement and all other Loan Documents and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement and all other Loan Documents applicable to it and (b) that it is responsible for the observance and full performance of its respective Obligations.

 

(b)Guarantor hereby acknowledge and consent to all of the terms and conditions of this Amendment and agree that this Amendment does not operate to reduce or discharge the Guarantor’s obligations under the Credit Agreement, as amended hereby, or the other Loan Documents.

 

(c)Each Credit Party further acknowledges and agrees that such Credit Party has no claims, counterclaims, offsets, or defenses to the Loan Documents and the performance of its obligations thereunder or if such Credit Party did have any such claims, counterclaims, offsets

 

VP/#40041634
 

                                                                                               Exhibit 10.1

 

 

or defenses to the Loan Documents or any transaction related to the Loan Documents, the same are hereby waived, relinquished and released in consideration of the Lenders’ execution and delivery of this Amendment.

 

(d)Each Credit Party hereby confirms and agrees that notwithstanding the effectiveness of this Amendment, the Collateral Documents to which each of the undersigned is a party and all of the Collateral described therein do, and shall continue to, secure the payment of all of the Obligations.

 

3.4Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

 

3.5Expenses. The Borrower agrees to pay all reasonable costs and expenses of the Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Agent’s legal counsel.

 

3.6Further Assurances. The Credit Parties agree to promptly take such action, upon the request of the Agent, as is necessary to carry out the intent of this Amendment.

 

3.7Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

	
 
	
3.8
	
Counterparts; Telecopy.

 

(a)This Amendment may be executed in counterparts and by different parties on separate counterpart signature pages, each of which constitutes an original and all of which taken together constitute one and the same document. Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission or in electronic (e.g., “pdf”, “tif”, or other electronic means acceptable to Agent; collectively, an “Electronic Signature”) format shall be effective as delivery of a manually executed counterpart of this Agreement. Electronic records of this Amendment No. 4 and related Loan Documents maintained by the Administrative Agent and any Lender shall deemed to be originals thereof.

 

(b)Electronic Signatures shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper- based recordkeeping system, as the case may be; provided that (i) to the extent Agent has agreed to accept any Electronic Signature, Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrowers or any other Credit Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Borrowers and each Credit Party hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among Agent, the Lenders, and the Borrowers and the Loan Parties, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Amendment and any other Loan Document shall have the same legal

 

VP/#40041634
 

                                                                                               Exhibit 10.1

 

 

effect, validity and enforceability as any paper original, (ii) Agent and each of the Lenders may, at its option, create one or more copies of this Amendment and any other Loan Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Amendment and other Loan Document based solely on the lack of paper original copies of this Amendment and such other Loan Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against Agent or any Lender arising solely from Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including arising as a result of the failure of the Borrowers and/or any Credit Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

 

3.9GOVERNING LAW. THIS AMENDMENT, AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF ILLINOIS.

 

3.10Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

3.11Submission to Jurisdiction; Waiver of Jury Trial. The submission to jurisdiction and waiver of jury trial provisions set forth in Section 10.20 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

VP/#40041634
 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

 

BORROWERS:MASTERCRAFT BOAT COMPANY, LLC, a Delaware limited

liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

MASTERCRAFT SERVICES, LLC, a Tennessee limited liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

MASTERCRAFT INTERNATIONAL SALES

ADMINISTRATION, INC., a Delaware corporation

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

NAUTIC STAR, LLC, a Mississippi limited liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

VP/#40041634
 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

BORROWERS:NS TRANSPORT, LLC, a Mississippi limited liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

CREST MARINE LLC, a Michigan limited liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

AVIARA BOATS, LLC, a Tennessee limited liability company

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

 

HOLDINGS:

MASTERCRAFT BOAT HOLDINGS, INC. (f/k/a MCBC

HOLDINGS, INC.), a Delaware corporation

 

By/s/ Timothy M. Oxley                                    

Timothy M. Oxley

Chief Financial Officer, Treasurer & Secretary 

 

VP/#40041634
 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

AGENT AND LENDER:FIFTH THIRD BANK, NATIONAL

ASSOCIATION, a national banking association, as a Lender, as L/C Issuer , and as Agent

 

By/s/ Jonathan Godfrey

Authorized Signatory

 

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(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

LENDER:BANK OF AMERICA, N.A.,

as a Lender

 

      By/s/ Will Pridgen, SVP

Authorized Signatory

 

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(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)

 

 

 

		
	
LENDER:
	
JPMORGAN CHASE BANK, N.A.,

as a Lender

 

                                   By/s/ Brandon Abney                               

Authorized Signatory              

 

 

 

	
 
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VP/#40041634

 

 

 

 

 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)

 

 

LENDER:TRUIST BANK as successor by merger

to SUNTRUST BANK as a Lender

 

By/s/ James Ford                                    

James Ford

Managing Director

 

VP/#4004163 4
 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

LENDER:REGIONS BANK

as a Lender

 

By/s/ Brand Hosford

Authorized Signatory

 

VP/#40041634.3
 

(Signature Page to Amendment No. 4 to Fourth Amended and Restated Credit and Guaranty Agreement)
 
 

 

 

 

LENDER:UNITED COMMUNITY BANK

as a Lender

 

By/s/ Jeff Wilson                               

Authorized Signatory

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