Document:

Exhibit 10.1

 

FIRST
AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

AND CONSENT OF GUARANTORS

 

This FIRST AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT AND CONSENT OF AGENT AND LENDERS (this
“Amendment”) is dated as of July 22, 2005, and entered into by and
among FLEETWOOD ENTERPRISES, INC. (“Fleetwood”), FLEETWOOD HOLDINGS INC. (“Holdings”) and its
Subsidiaries listed on the signature pages hereof (collectively, “FMC”),
FLEETWOOD RETAIL CORP. (“Retail”)
and its Subsidiaries listed on the signature pages hereof (collectively, “FRC”),
the banks and other financial institutions signatory hereto that are parties as
Lenders to the Credit Agreement referred to below (the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent and collateral
agent (in such capacity, the “Agent”) for the Lenders.

 

Recitals

 

Whereas, Fleetwood, the
Borrowers, the Lenders, and the Agent have entered into that certain Second Amended
and Restated Credit Agreement dated as of July 1, 2005 (as amended,
amended and restated, extended, supplemented or otherwise modified from time to
time, the “Credit Agreement”).  Any terms defined in the Credit Agreement and
not defined in this Amendment are used herein as defined in the Credit
Agreement;

 

Whereas, the Borrowers have
requested certain amendments to the Credit Agreement; and

 

Whereas, the Majority Lenders and
the Agent are willing to agree to the amendments requested by the Loan Parties,
on the terms and conditions set forth in this Amendment;

 

Now Therefore,
in consideration of the premises and the mutual
agreements set forth herein, Fleetwood, the Borrowers, the Majority Lenders,
and the Agent agree as follows:

 

1.                                       AMENDMENTS TO CREDIT AGREEMENT. 
Subject to the conditions and upon the terms set forth in this Amendment
and in reliance on the representations and warranties of Fleetwood and the
Borrowers set forth in this Amendment, the Credit Agreement is hereby amended
as follows:

 

1.1                                 Amendment to Section 1.8. 
Section 1.8 shall be amended by deleting  the first sentence thereof and
replacing it with following:

 

“All Obligations of Fleetwood under this Agreement and
the other Loan Documents, and all rights of contribution, indemnity,
subrogation and reimbursement relating to the Obligations of any Loan Party
with respect to Fleetwood, are “Senior Indebtedness” under each of the 2003
Subordinated Debentures and the 2005 Subordinated Debentures.”

 

1

 

1.2                                 Amendment to Section 6.29. 
Section 6.29 shall be amended by deleting  the first sentence thereof and
replacing it with following:

 

“All Obligations of Fleetwood under the Loan Documents
are “Senior Indebtedness” under the 2003 Subordinated Debentures and the 2005
Subordinated Debentures.”

 

1.3                                 Amendment to Section 7.10. 
Section 7.10 shall be amended by deleting sub-clause (iv) of clause (a) thereof and replacing it with
the following:

 

“(iv) subject to the subordination provisions
contained in each of the Subordinated Debentures, the New Subordinated
Debentures, the 2003 Subordinated Debentures, and the 2005 Subordinated
Debentures, as applicable, Fleetwood may make payments in respect of the
Subordinated Debentures, the New Subordinated Debentures, the 2003 Subordinated
Debentures and the 2005 Subordinated Debentures, and Fleetwood Trust may make
related Distributions in connection therewith, subject to the limitations of Section 7.29
hereof;”

 

1.4                                 Amendment to Section 7.10. 
Section 7.10 shall be amended by adding the following sub-clause
(xi) to the end of the existing clause (a) thereof:

 

“; and (xi) for the avoidance of doubt, the issuance
of the 2005 Subordinated Debentures, the cancellation of any Trust Securities
(limited to those Trust Securities as defined in clause (a) or (d) of
the definition thereof), the cancellation and/or forgiveness of any
Subordinated Debentures, and the payment of the 2005 Consent Payment and Fractional
Amounts, in each case, in connection with the 2005 Exchange Offer and, in each
case, if and to the extent effected in compliance with Section 7.14
hereof, shall not constitute the direct or indirect declaration or making of
any Distribution otherwise prohibited by this Section 7.10.”

 

1.5                                 Amendment to Section 7.10. 
Section 7.10 shall be amended by adding the following clause
(xi) to the end of the existing clause (c) thereof:

 

“; and (xi) for the avoidance of doubt, Fleetwood may
acquire any Trust Securities (limited to those Trust Securities as defined in
clause (a) or (d) of the definition thereof) in connection the 2005
Exchange Offer, if and to the extent such Trust Securities are acquired and
thereafter cancelled pursuant to the 2005 Exchange Offer effected in compliance
with Section 7.14 hereof.”

 

1.6                                 Amendment to Section 7.13. 
Section 7.13 shall be amended by deleting clause (b) thereof
and replacing it with the following clause (b):

 

“(b) the Subordinated Debt; provided that the
aggregate principal amount of the Subordinated Debentures and the 2005
Subordinated Debentures shall not exceed the aggregate principal amount of the
Subordinated Debentures outstanding immediately prior to commencement of the
2005 Exchange Offer;”

 

2

 

1.7                                 Amendment to Section 7.14. 
Section 7.14 shall be amended by deleting clause (e) thereof
and replacing it with the following clause (e):

 

“and (e) so long as no Default or Event of
Default has occurred and is continuing on the date of the exchange, both before
and after giving effect to the exchange, Fleetwood, or Fleetwood Trust, as
applicable, may, on or prior to December 31, 2005, offer to exchange, and
exchange any and all outstanding shares of Trust Securities (limited to those
Trust Securities as defined in clause (a) or (d) of the definition
thereof) validly tendered and not withdrawn prior to the applicable exchange
offer expiration date, for newly issued 2005 Subordinated Debentures, and may
pay the 2005 Consent Payment and the Fractional Amounts, in each case pursuant
to the 2005 Exchange Offer, provided that no separate payment (in cash
or otherwise) will be made for any deferred distributions to which the holders
of any exchanged Trust Securities may otherwise be entitled pursuant to the
terms thereof; and provided  further that contemporaneously with such
exchange Fleetwood’s obligations under Subordinated Debentures with an
aggregate principal amount equal to or greater than the liquidation amount of
the Trust Securities so exchanged shall be forgiven, cancelled or otherwise
terminated in accordance with the terms thereof.”

 

1.8                                 Amendment to Section 7.15. 
Section 7.15 shall be amended by adding the following
sentence to the end of the existing Section 7.15:

 

“For the avoidance of doubt, the issuance of the 2005
Subordinated Debentures, the cancellation of any Trust Securities (limited to
those Trust Securities as defined in clause (a) or (d) of the
definition thereof), the cancellation and/or forgiveness of any Subordinated
Debentures, and the payment of the 2005 Consent Payment and the Fractional
Amounts, in each case, in connection with the 2005 Exchange Offer and, in each
case, if and to the extent effected in compliance with Section 7.14
hereof, shall not constitute a transaction otherwise prohibited by this Section 7.15.”

 

1.9                                 Amendment to Section 7.29. 
Section 7.29 shall be amended by deleting clause (a) thereof
and replacing it with the following clause (a):

 

“(a)                            Other
than pursuant to or as contemplated by the 2005 Exchange Offer and the 2005
Consent Solicitation, Fleetwood will not, and will not permit any of its
Subsidiaries to, amend, supplement or otherwise modify the terms of the
Subordinated Debentures, the New Subordinated Debentures, the 2003 Subordinated
Debentures, the 2005 Subordinated Debentures or any Guaranty thereof, or the
Trust Securities or any Guaranty thereof or add any Guaranty of any other
Credit Party.”

 

1.10                           Amendment to Section 7.29. 
Section 7.29 shall be amended by adding the following
sentence to the end of the existing clause (b) thereof:

 

“For the avoidance of doubt, the cancellation of any
Trust Securities (limited to those Trust Securities as defined in clause (a) or
(d) of the definition thereof), the cancellation and/or forgiveness of any
Subordinated Debentures, and the payment of the 2005 Consent Payment and the Fractional
Amounts, in each case, in connection with the 2005 Exchange Offer and, in each
case, if and to the extent effected in compliance with Section 7.14
hereof, shall not constitute the making of any payment or prepayment otherwise
prohibited by this Section 7.29.”

 

3

 

1.11                           Amendment to Section 7.29. 
Section 7.29 shall be amended by adding the following clause
(d) to the end of the existing Section 7.29:

 

“(d)                           Fleetwood
will not, and will not permit any of its Subsidiaries to, make any cash
payments or prepayments with respect to the 2005 Subordinated Debentures other
than, subject to the subordination provisions contained therein, (A) mandatory
payments of interest (including any additional amounts on the 2005 Subordinated
Debentures and any Fleetwood common stock issued upon conversion thereof) when
due under the terms of the 2005 Subordinated Debentures (without acceleration),
(B) mandatory payments in respect of fractional shares upon conversion of
2005 Subordinated Debentures, (C) mandatory payments to satisfy repurchase
obligations with respect to 2005 Subordinated Debentures upon a fundamental change
(as defined in the indenture under which the 2005 Subordinated Debentures are
issued), (D) fees, indemnification payments, expense reimbursements and
other customary payments made to any trustee, conversion agent, transfer agent,
exchange agent, paying agent, depositary or custodian for the 2005 Subordinated
Debentures or any agent or counsel for any of the foregoing, (E) payment
of customary fees and expenses related to registering for resale under the
Securities Act of 1933 the 2005 Subordinated Debentures and the Fleetwood
common stock into which such debentures are convertible and (F) any other
mandatory payments of principal and/or interest (including any additional
amounts) or mandatory repurchase payments required under the terms of the
indenture under which the 2005 Subordinated Debentures are issued.”

 

1.12                           Amendments to Annex A to
Credit Agreement (Definitions).  Annex A
will be amended as follows:

 

(a)                                  The definition of “Change of
Control” in Annex A of the Credit Agreement shall be amended by
adding the following clause (v) at the end of such definition:

 

“or (v) a “fundamental
change” as such term is defined in the indenture under which 2005 Subordinated
Debentures are issued.”

 

(b)                                 The definition of “Subordinated
Debt” in Annex A of the Credit Agreement shall be amended by
replacing such definition with the following:

 

““Subordinated Debt” means the unsecured Debt
from time to time outstanding under the Subordinated Debentures, the New
Subordinated Debentures, the 2003 Subordinated Debentures, the 2005
Subordinated Debentures and the maximum liability of Fleetwood on any
subordinated Guaranty of the Trust Securities.”

 

(c)                                  Annex A of the Credit Agreement shall be
amended by adding the following definitions thereto in the appropriate
alphabetical order:

 

““2005 Consent Payment” payments of an
aggregate amount up to $2,000,000 to holders of any Trust Securities (limited
to those Trust Securities as defined in clause (a) or (d) of the
definition thereof) in consideration for the granting of the consents requested
pursuant to the 2005 Consent Solicitation in connection with the 2005 Exchange
Offer.”

 

4

 

 ““2005
Consent Solicitation” means consent solicitation undertaken to effect the
amendments of the Subordinated Debentures, and the underlying documents
governing such Subordinated Debentures or otherwise related thereto, described
in the exchange offer registration statement attached to the First Amendment as
Exhibit A thereto.”

 

““2005 Exchange Offer” means that exchange
offer by Fleetwood pursuant to which Fleetwood shall offer to exchange any and
all outstanding shares of Trust Securities (limited to those Trust Securities
as defined in clause (a) or (d) of the definition thereof) validly
tendered and not withdrawn prior to the exchange offer expiration date, for
newly issued 2005 Subordinated Debentures, subject to the terms and conditions
in the exchange offer registration statement attached to the First Amendment as
Exhibit A thereto.”

 

““2005 Subordinated Debentures” means up to $201,250,000
in aggregate principal amount of unsecured, convertible senior subordinated
debentures to be issued by Fleetwood on or prior to December 31, 2005 on substantially
the terms and conditions set forth in Exhibit A to the First
Amendment.”

 

““First Amendment” means the First Amendment to
this Agreement (and Consent of Guarantors), dated as of July 22, 2005.”

 

““Fractional Amounts” payments of an aggregate
amount up to $2,000,000 to holders of any Trust Securities (limited to those
Trust Securities as defined in clause (a) or (d) of the definition
thereof) in connection with the cashing out of fractional shares allotted to
such holders (and any distribution to the Fleetwood Trust to enable the
foregoing payment to the holders of such Trust Securities) in connection with
the 2005 Exchange Offer, subject to the terms and conditions in the exchange
offer registration statement attached to the First Amendment as Exhibit A.”

 

2.                                       REPRESENTATIONS AND WARRANTIES OF
FLEETWOOD AND THE BORROWERS.  In order to induce the Majority
Lenders and the Agent to enter into this Amendment, each of Fleetwood and each
Borrower represents and warrants to each Lender and
the Agent that the following statements are true, correct and complete:

 

2.1                                 Power and Authority. 
Each of the Loan Parties has all corporate power and authority to enter
into this Amendment and, as applicable, the Consent of Guarantors attached
hereto (the “Consent”), and to carry out the transactions contemplated
by, and to perform its obligations under or in respect of, the Credit
Agreement.

 

2.2                                 Corporate Action. 
The execution and delivery of this Amendment and the Consent and the
performance of the obligations of each Loan Party under or in respect of the
Credit Agreement as amended hereby have been duly authorized by all necessary
corporate action on the part of each of the Loan Parties.

 

2.3                                 No Conflict or Violation
or Required Consent or Approval.  The execution
and delivery of this Amendment and the Consent and the performance of the
obligations of each Credit Party under or in respect of the Credit Agreement as
amended hereby do not and will not conflict with or violate (a) any
provision of the governing documents of any Loan Party or any of its
Subsidiaries, (b) any Requirement of Law, (c) any order, judgment or

 

5

 

decree of any court or
other governmental agency binding on any Loan Party or any of its Subsidiaries,
or (d) any indenture, agreement or instrument to which any Loan Party or
any of its Subsidiaries is a party or by which any Loan Party or any of its
Subsidiaries, or any property of any of them, is bound, and do not and will not
require any consent or approval of any Person.

 

2.4                                 Execution, Delivery and
Enforceability.  This Amendment and the Consent have been duly
executed and delivered by each Loan Party which is a party thereto and are the
legal, valid and binding obligations of such Loan Party, enforceable in
accordance with their terms, except as enforceability may be affected by
applicable bankruptcy, insolvency, and similar proceedings affecting the rights
of creditors generally, and general principles of equity.  The Agent’s Liens in the Collateral continue
to be valid, binding and enforceable first priority Liens which secure the
Obligations.

 

2.5                                 No Default or Event of
Default.  No event has occurred and is continuing or
will result from the execution and delivery of this Amendment or the Consent
that would constitute a Default or an Event of Default.

 

2.6                                 No Material Adverse
Effect.  No event has occurred that has resulted, or
could reasonably be expected to result, in a Material Adverse Effect.

 

2.7                                 Representations and
Warranties.  Each of the representations and warranties
contained in the Loan Documents is and will be true and correct in all material
respects on and as of the date hereof and as of the effective date of this
Amendment, except to the extent that such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects as of such earlier date.

 

3.                                       CONDITIONS TO EFFECTIVENESS OF
THIS AMENDMENT.  This Amendment, and the consents and
approvals contained herein, shall be effective only if and when signed by, and
when counterparts hereof shall have been delivered to the Agent (by hand
delivery, mail or telecopy) by, Fleetwood, the Borrowers and each Lender and
only if and when each of the following conditions is satisfied:

 

3.1                                 Consent of
Guarantors.  Each of the Guarantors shall have
executed and delivered to the Agent the Consent.

 

3.2                                 No Default or Event of
Default; Accuracy of Representations and Warranties. 
No Default or Event of Default shall exist and each of the
representations and warranties made by the Loan Parties herein and in or
pursuant to the Loan Documents shall be true and correct in all material
respects as if made on and as of the date on which this Amendment becomes
effective (except that any such representation or warranty that is expressly
stated as being made only as of a specified earlier date shall be true and
correct as of such earlier date), and the Borrowers shall have delivered to the
Agent a certificate confirming such matters.

 

3.3                                 Delivery of Documents. 
The
Agent shall have received such documents as the Agent may reasonably request in
connection with this Amendment.

 

6

 

3.4                                 Exhibit A.  Attached hereto as Exhibit A
shall be the Form S-4 Registration Statement, dated July 22, 2005,
pursuant to which the 2005 Debentures shall be offered to the holders of the
Subordinated Debentures in exchange for such Subordinated Debentures, subject
to the terms and conditions contained therein (the “Exchange Offer
Registration Statement”), and such Exchange Offer Registration Statement
shall be a true and accurate copy, in all respects, of the Exchange Offer
Registration Statement filed with the Securities and Exchange Commission on
such date.

 

4.                                       EFFECTIVE DATE.  This Amendment shall become effective (the “Effective
Date”) on the date of the satisfaction of the conditions set forth in Section 4.

 

5.                                       EFFECT OF AMENDMENT;
RATIFICATION.  This Amendment is a Loan Document.  From and after the date on which this
Amendment becomes effective, all references in the Loan Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby.  Except as expressly amended hereby or waived
herein, the Credit Agreement and the other Loan Documents, including the Liens
granted thereunder, shall remain in full force and effect, and all terms and
provisions thereof are hereby ratified and confirmed.

 

6.                                       Each of Fleetwood and the Borrowers
confirms that as amended hereby, each of the Loan Documents is in full force
and effect, and that none of the Credit Parties has any defenses, setoffs or
counterclaims to its Obligations.

 

7.                                       APPLICABLE LAW.  THE VALIDITY, INTERPRETATIONS AND ENFORCEMENT OF THIS
AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT,
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY
THE INTERNAL LAWS AND DECISIONS OF THE STATE OF CALIFORNIA; PROVIDED THAT THE
AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

8.                                       NO WAIVER.  The execution, delivery and effectiveness of this Amendment
does not constitute a waiver of any Default or Event of Default, amend or
modify any provision of any Loan Document except as expressly set forth herein
or constitute a course of dealing or any other basis for altering the
Obligations of any Loan Party.

 

9.                                       COMPLETE AGREEMENT.  This Amendment sets forth the complete agreement of
the parties in respect of any amendment to any of the provisions of any Loan Document
or any waiver thereof.  The execution,
delivery and effectiveness of this Amendment do not constitute a waiver of any
Default or Event of Default, amend or modify any provision of any Loan Document
except as expressly set forth herein or constitute a course of dealing or any
other basis for altering the Obligations of any Loan Party.

 

10.                                 CAPTIONS; COUNTERPARTS.  The catchlines and captions herein are intended solely
for convenience of reference and shall not be used to interpret or construe the
provisions hereof.  This Amendment may be
executed by one or more of the parties to this Amendment on any number of
separate counterparts (including by telecopy), all of which taken together
shall constitute but one and the same instrument.

 

[signatures follow; remainder of page intentionally left
blank]

 

7

 

IN
WITNESS WHEREOF, each of the undersigned has duly executed
this Amendment as of the date set forth above.

 

	
  FMC
  BORROWERS

  	
  FLEETWOOD
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF CALIFORNIA,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF IDAHO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF KENTUCKY,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF NORTH

  CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF

  PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TENNESSEE,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TEXAS, L.P.

  
	
   

  	
  By:    FLEETWOOD GENERAL PARTNER

  
	
   

  	
  OF TEXAS, INC., its General
  Partner

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF VIRGINIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF WASHINGTON,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  PENNSYLVANIA, INC.

  

 

 

First Amendment and
Consent of Guarantors

 

S-1

 

	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  OHIO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD FOLDING TRAILERS, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  HAUSER LAKE LUMBER OPERATION,

  INC.

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL LUMBER PRODUCTS,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD GENERAL PARTNER OF

  TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES INVESTMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  

 

 

First Amendment and
Consent of Guarantors

 

S-2

 

	
  FRC BORROWERS

  	
  FLEETWOOD RETAIL CORP.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF IDAHO

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  KENTUCKY

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  MISSISSIPPI

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF NORTH

  CAROLINA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  OREGON

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  VIRGINIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTOR

  	
  FLEETWOOD ENTERPRISES, INC.,
  as the

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  
					

 

 

First Amendment and
Consent of Guarantors

 

S-3

 

IN WITNESS WHEREOF, each of the
undersigned has duly executed this Amendment as of the date set forth above.

 

 

	
   

  	
  BANK OF
  AMERICA, N.A., as the Agent and

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  McNamara

  	
   

  
	
   

  	
  Name:

  	
  John McNamara

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

 

First Amendment and
Consent of Guarantors

 

S-4

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith
  Alexander

  	
   

  
	
   

  	
  Name:

  	
  KEITH ALEXANDER

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  

 

 

First Amendment and
Consent of Guarantors

 

S-5

 

	
   

  	
  WELLS FARGO FOOTHILL, INC., fka

  FOOTHILL CAPITAL CORPORATION, as

  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Juan Barrera

  	
   

  
	
   

  	
  Name:

  	
  JUAN BARRERA

  	
   

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  	
   

  

 

 

First Amendment and
Consent of Guarantors

 

S-6

 

	
   

  	
  THE
  CIT GROUP/BUSINESS CREDIT,

  INC., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas H.
  Hopkins

  	
   

  
	
   

  	
  Name:

  	
  Thomas H.
  Hopkins

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

 

First Amendment and
Consent of Guarantors

 

S-7

 

	
   

  	
  TEXTRON
  FINANCIAL CORPORATION,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ralph J.
  Infante

  	
   

  
	
   

  	
  Name:

  	
  Ralph
  J. Infante

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  

 

 

First Amendment and
Consent of Guarantors

 

S-8

 

CONSENT OF GUARANTORS

 

Each of the undersigned is a Guarantor of the
Obligations of the FMC Borrowers and/or FRC Borrowers under the Credit
Agreement and hereby (a) consents to the foregoing Amendment, (b) acknowledges
that notwithstanding the execution and delivery of the foregoing Amendment, the
obligations of each of the undersigned Guarantors are not impaired or affected
and the Guaranties continue in full force and effect, and (c) ratifies its
Guaranty and each of the Loan Documents to which it is a party.

 

IN WITNESS WHEREOF, each of the undersigned has
executed and delivered this CONSENT OF GUARANTORS as of the 22nd day of July,
2005.

 

	
  FMC BORROWERS

  	
  FLEETWOOD HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF CALIFORNIA,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF IDAHO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF KENTUCKY,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF NORTH

  CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF

  PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TENNESSEE,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TEXAS, L.P.

  
	
   

  	
  By:

  	
  FLEETWOOD GENERAL PARTNER

  
	
   

  	
  OF TEXAS, INC., its General
  Partner

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF VIRGINIA, INC.

  

 

 

First Amendment and
Consent of Guarantors

 

S-9

 

	
   

  	
  FLEETWOOD HOMES OF WASHINGTON,

  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF

  PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  OHIO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF

  TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD FOLDING TRAILERS, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  HAUSER LAKE LUMBER OPERATION,

  INC.

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL LUMBER PRODUCTS,

  INC.

  

 

 

First
Amendment and Consent of Guarantors

 

S-10

 

	
   

  	
   

  
	
   

  	
  FLEETWOOD GENERAL PARTNER OF

  TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES INVESTMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  

 

 

First Amendment and
Consent of Guarantors

 

S-11

 

	
  FRC BORROWERS

  	
  FLEETWOOD RETAIL CORP.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  IDAHO

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  KENTUCKY

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  MISSISSIPPI

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  NORTH CAROLINA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  OREGON

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF

  VIRGINIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  OTHER GUARANTORS

  	
  FLEETWOOD ENTERPRISES, INC.

  
	
   

  	
  FLEETWOOD CANADA LTD.

  
	
   

  	
  FLEETWOOD INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  Financial Officer

  
					

 

 

First Amendment and
Consent of Guarantors

 

S-12Exhibit 10.10

 

Silicon Valley Bank

 

Amendment
to Loan Documents

 

	
  Borrower:

  	
  Unify Corporation

  
	
   

  	
   

  
	
  Date:

  	
  As of June 5, 2005 (the “June 2005
  Amendment Date”)

  

 

THIS AMENDMENT TO LOAN DOCUMENTS
is entered into between Silicon Valley Bank (“Silicon”) and the borrower named
above (“Borrower”).

 

Silicon and Borrower agree to amend the Loan
and Security Agreement between them, dated June 6, 2003 (as otherwise
amended, if at all, the “Loan Agreement”), as follows, effective as of the date
hereof.  (Capitalized terms used, but not
defined, in this Amendment shall have the meanings set forth in the Loan
Agreement.)  The term “June 2005
Amendment Date” as defined above hereby is incorporated into the Loan
Agreement.

 

1.                                      Amendments
to Loan Agreement.

 

(a) Modification of Advance Rate
relative to Eligible Accounts.  The portion of Section 1 of the Schedule to
Loan Agreement that currently reads as follows:

 

1.  Revolving
Loans.  An amount equal to: (A) the
lesser of:  (i) $1,000,000 at any
one time outstanding (the “Maximum Credit Limit”), or (ii) the sum of (a) 75%
(an “Advance Rate”) of the amount of Borrower’s Eligible Accounts (as defined
in Section 8 above) plus (b) 30% (an “Advance Rate”) of the amount of
Borrower’s unrestricted cash in investment accounts maintained at Silicon minus
(B) the Term Loans (as defined below).

 

, hereby is amended and restated in its entirety to read as follows:

 

1.  Revolving
Loans.  Subject to the terms and
conditions of this Agreement, Silicon agrees to make revolving advances
(individually and collectively, “Revolving Loans”) up to an aggregate amount
equal to: (A) the lesser of: (i) $1,000,000 at any one time
outstanding (the “Maximum Credit Limit”), or (ii) the sum of (a) 80%
(an “Advance Rate”) of the amount of Borrower’s Eligible Accounts (as defined
in Section 8 above) plus (b) 30% (an “Advance Rate”) of the amount of
Borrower’s unrestricted cash in investment accounts maintained at Silicon minus
(B) the then aggregate outstanding amount of Term Loans (as defined
below).

 

1

 

(b) Modification of Definition
of Eligible Accounts.  Clause (viii) of the Minimum Eligibility
Requirements set forth in the definition of “Eligible Accounts” in Section 8
of the Loan Agreement, which currently reads as follows:

 

(viii) the Account must
not be owing from an Account Debtor located outside the United States or Canada
(unless pre-approved by Silicon in its discretion in writing, or backed by a
letter of credit satisfactory to Silicon, or FCIA insured satisfactory to
Silicon),

 

, hereby is amended and restated in its entirety to
read as follows:

 

(viii) the Account must
not be owing from an Account Debtor located outside the United States or Canada
(a “Foreign Account”), except for (A) Foreign Accounts in an aggregate
amount (up to $250,000) determined by Silicon in its discretion from time to time,
and (B) any other Foreign Accounts otherwise pre-approved by Silicon in
its discretion in writing, or backed by a letter of credit satisfactory to
Silicon, or FCIA insured satisfactory to Silicon,

 

(c) Modification
of Term Loans (including moving the Term Loan principal amortization provisions
formerly in Section 4 of the Schedule to Section 1 of the
Schedule).  The portion of Section 1 of the Schedule to
Loan Agreement that currently reads as follows:

 

2.  Term
Loans.  An amount equal to the
aggregate unpaid principal balance from time to time outstanding of the Loans (“Term
Loans”) made from time to time by Silicon to Borrower in a total amount not to
exceed $500,000 for the purchase by Borrower of new or used Equipment
acceptable to Silicon in its sole discretion, including computer equipment,
office equipment, lab equipment, test equipment and furnishings.  To evidence each of the Term Loans, Borrower
shall deliver to Silicon, at the time of each Term Loan request, an invoice for
the Equipment (a) to be purchased or (b) which was previously
purchased by the Borrower.  The Loan
request with respect to any particular Equipment must be made within 90 days of
the date such Equipment was purchased.  The
Term Loans shall be used only to (a) purchase Equipment or (b) reimburse
the Borrower for previously purchased Equipment and shall not exceed 100% of
the invoice amount of such Equipment approved from time to time by Silicon.  Subject to and upon the terms and conditions
of this Agreement, Term Loans shall be available through December 31,
2004.  The Term Loans shall be repaid as
provided for herein.  Interest shall
accrue from the date of each Term Loan at the rate provided for herein and is
payable monthly as provided for herein.  Term
Loans shall be made in disbursements of not less than $100,000.

 

2

 

, hereby is amended and restated in its entirety to
read as follows:

 

2. Term Loans. Subject to the terms and
conditions of this Agreement: (a) Silicon previously made the following
term loans (individually and collectively, the “First Tranche Term Loans”): (i) that
certain term loan designated internally by Silicon as Loan #UNI-06, which has
an outstanding principal balance of $16,666.60 as of June 5, 2005; (ii) that
certain term loan designated internally by Silicon as Loan #UNI-07, which has
an outstanding principal balance of $20,833.27 as of June 5, 2005; and (iii) that
certain term loan designated internally by Silicon as Loan #UNI-08, which has
an outstanding principal balance of $68,021.59 as of June 5, 2005; and (b) Silicon
agrees to make additional term loans (individually and collectively, “Second
Tranche Term Loans”), in an aggregate original principal amount not to exceed
the result of (i) $250,000, minus (ii) the aggregate outstanding
principal amount of the First Tranche Term Loans as of the June 2005
Amendment Date; for the purchase by Borrower of new or used Equipment
acceptable to Silicon in its sole discretion, including computer equipment,
office equipment, lab equipment, test equipment and furnishings.  As used herein, the term “Term Loans” means,
individually and collectively, the First Tranche Term Loans and the Second
Tranche Term Loans.  To evidence each of
the Term Loans, Borrower shall deliver to Silicon, at the time of each Term
Loan request, an invoice for the Equipment (a) to be purchased or (b) which
was previously purchased by the Borrower.  The Loan request with respect to any
particular Equipment must be made within 90 days of the date such Equipment was
purchased.  The Term Loans shall be used
only to (a) purchase Equipment or (b) reimburse the Borrower for
previously purchased Equipment and shall not exceed 100% of the invoice amount
of such Equipment approved from time to time by Silicon.  Subject to and upon the terms and conditions
of this Agreement, Second Tranche Term Loans may be made by Silicon during the
period commencing on the June 2005 Amendment Date and ending on December 31,
2005.  The Term Loans shall be repaid as
provided for herein.  Interest shall
accrue from the date of each Term Loan at the rate provided for herein and is
payable monthly as provided for herein.  Term
Loans shall be made in disbursements of not less than $100,000.

 

The outstanding principal balance of each Term Loan
shall be repaid by Borrower to Silicon in twenty-four (24) equal monthly
payments of principal, commencing on the last day of the calendar month in which
the applicable Term Loan is made and continuing on the same day of each
subsequent month until the earlier of

 

3

 

the following dates (with respect to each Term
Loan, the “Term Loan Maturity Date”): (i) the date such Term Loan has been
indefeasibly paid in full; or (ii) the Revolving Loans Maturity Date; or (iii) the
date this Agreement terminates by its terms or is terminated by either party in
accordance with its terms.  With respect
to each Term Loan, on the Term Loan Maturity Date for such Term Loan, the
entire unpaid principal balance of such Term Loan, plus all accrued and unpaid
interest thereon, shall be due and payable.  Interest on each Term Loan shall be payable
monthly as provided in Section 1.2 of this Agreement.

 

(d) Modification of Maturity Date (including moving the Term Loan
principal amortization provisions formerly in Section 4 of the Schedule to
Section 1 of the Schedule).  Section 4 of the Schedule to Loan
Agreement, which currently reads as follows:

 

4.         MATURITY DATE

(Section 6.1):                         June 5, 2005.

 

Notwithstanding the
foregoing, with respect to the Term Loans: The outstanding principal balance of
each Term Loan shall be repaid by Borrower to Silicon in twenty-four (24) equal
monthly payments of principal, commencing on the last day of the calendar month
in which the applicable Term Loan is made and continuing on the same day of
each subsequent month until the earlier of the following dates: (i) the
date such Term Loan has been indefeasibly paid in full, or (ii) the date
the Revolving Loans are terminated, or (iii) the date this Agreement
terminates by its terms or is terminated by either party in accordance with its
terms.  On the earlier to occur of the
foregoing dates, the entire unpaid principal balance of the Term Loans, plus
all accrued and unpaid interest thereon, shall be due and payable.  Interest on each Term Loan shall be payable
monthly as provided in Section 1.2
of this Agreement.

 

, hereby is amended and restated in its entirety to
read as follows:

 

4.         MATURITY DATE

(Section 6.1):         With respect to all Obligations other than
the Term Loan Obligations, June 4, 2006 (the “Revolving Loans Maturity
Date”).

 

4

 

With respect to each Term
Loan and Obligations specifically identified to such Term Loan (collectively, “Term
Loan Obligations”), the Term Loan Maturity Date applicable to such Term Loan as
set forth in Section 1 of this Schedule.

 

(e) Modification of Early
Termination Fee.  The portion of Section 6.2 of the Loan
Agreement that currently reads as follows:

 

If this Agreement is
terminated by Borrower or by Silicon under this Section 6.2, Borrower
shall pay to Silicon a termination fee in an amount equal to one percent (1.0%)
of the Maximum Credit Limit, provided that no termination fee shall be charged
if the credit facility hereunder is replaced with a new facility from another
division of Silicon Valley Bank.

 

, hereby is amended and restated in its entirety to
read as follows:

 

If this Agreement is
terminated by Borrower or by Silicon under this Section 6.2, Borrower
shall pay to Silicon a termination fee in an amount equal to one-half of one
percent (0.5%) of the Maximum Credit Limit, provided that no termination fee
shall be charged if the credit facility hereunder is replaced with a new
facility from another division of Silicon Valley Bank.

 

(f) Modification of Certain
Reporting Requirements.  The portion of Section 6 of the Schedule to
Loan Agreement that currently
reads as follows:

 

2.                                       Monthly accounts receivable agings, aged by
invoice date, within fifteen days after the end of each month.

 

3.                                       Monthly accounts payable agings,
aged by invoice date, and outstanding or held check registers, if any, within
fifteen days after the end of each month.

 

4.                                       Monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, and general
ledger, within fifteen days after the end of each month.

 

, hereby is amended and restated in its entirety to
read as follows:

 

2.                                       Monthly accounts receivable agings, aged by
invoice date, within thirty days after the end of each month.

 

3.                                       Monthly accounts payable agings,
aged by invoice date, and outstanding or held check registers, if any, within
thirty days after the end of each month.

 

5

 

4.                                       Monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, and general
ledger, within thirty days after the end of each month.

 

(g) Modification
of Certain Streamline Provision.  Subsection (2) of Section 8(c) of
the Schedule to Loan Agreement, which currently reads as follows:

 

(2)          In order for a Streamline Period to go into effect, and at all times
during the Streamline Period, no Revolving Loans may be outstanding or made, no
Letters of Credit may be outstanding, the combined amount of the required FX
Reserves and Cash Management Reserves may not exceed $250,000 and the amount of
Obligations outstanding with respect to the Term Loans may not exceed $500,000.

 

, hereby are amended and restated in their
respective entirety to read as follows:

 

(2)          In order for a Streamline Period to go into effect, and at all times
during the Streamline Period, no Revolving Loans may be outstanding or made,
and no Letters of Credit may be outstanding.

 

(h) Modification
of Financial Covenant (including deletion of existing Tangible Net Worth
financial covenant and addition of new Liquidity Covenant).  Section 5 of the Schedule to Loan Agreement, which currently
reads as follows:

 

5.         FINANCIAL COVENANTS

(Section 5.1):                         Borrower shall comply with each of the
following covenants:

 

Minimum Tangible

Net Worth:                               Borrower shall maintain a Tangible Net Worth
of not less than the following amounts as of the end of each of the following
months:

 

	
  As of end of:

  	
   

  	
  Minimum Tangible

  Net Worth

  
	
  May, 2004

  	
   

  	
  $

  	
  2,250,000

  
	
  June, 2004

  	
   

  	
  $

  	
  2,250,000

  
	
  July, 2004

  	
   

  	
  $

  	
  3,000,000

  
	
  August, 2004

  	
   

  	
  $

  	
  2,250,000

  

 

6

 

	
  September, 2004

  	
   

  	
  $

  	
  2,250,000

  
	
  October, 2004

  	
   

  	
  $

  	
  3,000,000

  
	
  November, 2004

  	
   

  	
  $

  	
  2,250,000

  
	
  December, 2004

  	
   

  	
  $

  	
  2,250,000

  
	
  January 2005

  	
   

  	
  $

  	
  2,750,000

  
	
  February 2005

  	
   

  	
  $

  	
  2,250,000

  
	
  March 2005

  	
   

  	
  $

  	
  2,250,000

  
	
  April 2005

  	
   

  	
  $3,000,000; unless on or before March 31, 2005, the
  Minimum Tangible Net Worth Covenant shall be reset, by mutual written
  agreement of Silicon and Borrower in their respective discretion, for April 2005
  and each month thereafter based on Borrower’s projected financial statements
  for such period, such projected financial statements to have been approved by
  the Borrower’s Board of Directors and accepted jointly by Borrower and by
  Silicon in their respective discretion, which projected financial statements
  Borrower hereby covenants and agrees to deliver to Silicon no later than March 15,
  2005.

  
	
  May 2005

  	
   

  	
  $

  	
  2,250,000

  
					

 

Definitions.                                  For purposes of the foregoing financial
covenants, the following term shall have the following meaning:

 

“Tangible Net Worth” shall
mean the excess of total assets over total liabilities, determined in
accordance with GAAP, with the following adjustments:

 

7

 

(A)      there shall be excluded from assets: 
(i) notes, accounts receivable and other obligations owing to
Borrower from its officers or other Affiliates, and (ii) all assets which
would be classified as intangible assets under GAAP, including without
limitation goodwill, licenses, patents, trademarks, trade names, copyrights,
capitalized software and organizational costs, licenses and franchises

 

(B)        there shall be excluded from liabilities: 
all indebtedness which is subordinated to the Obligations under a
subordination agreement in form specified by Silicon or by language in the
instrument evidencing the indebtedness which Silicon agrees in writing is
acceptable to Silicon in its good faith business judgment.

 

, hereby is amended and restated in its entirety to
read as follows:

 

5.         FINANCIAL COVENANTS

(Section 5.1):                         Borrower shall comply with each of the
following covenants:

 

Minimum

Liquidity:                                         During each month, Borrower shall maintain
Liquidity of at least $2,000,000.

 

Definitions.                                                     For purposes of the foregoing financial
covenants, the following term shall have the following meaning:

 

“Liquidity” shall mean, as
of any date of determination, the sum of (a) Borrower’s unrestricted cash
maintained on deposit at Silicon, plus (b) the net amount of all Eligible
Accounts of Borrower.

 

2.                                      Limited Waiver. 
Silicon and Borrower hereby agree that the failure of Borrower to comply
with the Tangible Net Worth financial covenant required under Section 5 of
the Schedule to Loan Agreement (as in effect immediately prior to the
effectiveness of this Amendment) solely for the month ending April 30,
2005 (the “Designated TNW Default”) hereby is waived. It is understood,
however, that the foregoing waiver of the Designated TNW Default does not
constitute a waiver of the aforementioned covenant with respect to any other
date or time period, or of any other provision or term of the Loan Agreement or
any other Loan Document, nor an agreement to waive in the future such covenant
with respect to any other date

 

8

 

or time period or any other provision or term
of the Loan Agreement or any other Loan Document.

 

3.                                      Fee.  In
consideration for Silicon entering into this Amendment, Borrower shall
concurrently pay Silicon a fee in the amount of $15,000.00, which shall be
fully-earned and non-refundable and in addition to all interest and other fees
payable to Silicon under the Loan Documents. 
Silicon is authorized to charge such fee to Borrower’s loan account.

 

4.                                      Representations True.  Borrower
represents and warrants to Silicon that all representations and warranties set
forth in the Loan Agreement, as amended hereby, are
true and correct.

 

5.                                      General Provisions.  This
Amendment, the Loan Agreement, any prior written amendments to the Loan
Agreement signed by Silicon and Borrower, and the other written documents and
agreements between Silicon and Borrower set forth in full all of the
representations and agreements of the parties with respect to the subject
matter hereof and supersede all prior discussions, representations, agreements
and understandings between the parties with respect to the subject hereof.  Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and Borrower shall continue in full force and effect
and the same are hereby ratified and confirmed.

 

[remainder of page intentionally
left blank; signature page follows]

 

9

 

6.                                      Counterparts.  This
Amendment may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same document.  Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment.

 

	
   

  	
  Borrower:

  	
  Silicon:

  
	
   

  	
   

  
	
   

  	
  UNIFY CORPORATION

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Todd E. Wille

  	
   

  	
  By

  	
  /s/ Mark Harris

  	
   

  
	
  President
  or Vice President

  	
  Title

  	
  Relationship Manager

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Todd E. Wille

  	
   

  	
   

  
	
  Secretary
  or Ass’t Secretary

  	
   

  
								

 

10

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