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EXHIBIT 10.1
THIRD AMENDMENT TO
STOCK PURCHASE AGREEMENT
AND
PLAN OF REORGANIZATION
This Third Amendment to Stock Purchase Agreement and Plan of
Reorganization (the "Third Amendment"), dated as of September 30, 1999, is
entered into by and among R-Anell Custom Homes, Inc., a North Carolina
corporation ("R-Anell"), Gold Medal Homes, Inc., a North Carolina corporation
("GMHI"), Gold Medal Homes of North Carolina, Inc., a North Carolina corporation
("GMHNC") (R-Anell, GMHI and GMHNC are sometimes each referred to herein as a
"Company" and collectively, as the "Companies"), the holders of all of the
outstanding capital stock of the Companies (collectively, the "Shareholders")
(the Companies and the Shareholders are sometimes referred to collectively as
the "Sellers"), and American Homestar Corporation, a Texas corporation
("Purchaser" or "AHC"). Except as otherwise defined herein, capitalized terms
used in this Amendment shall have the meanings assigned to them in the Purchase
Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the parties hereto are parties to that certain Stock Purchase
Agreement and Plan of Reorganization, dated as of May 26, 1998, as amended (the
"Purchase Agreement"); and
WHEREAS, the parties hereto have had disputes concerning the Net Debt
Calculation and the Stock Purchase Price Adjustment, and desire to settle such
disputes by amending the Purchase Agreement to the extent provided below;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
A. AMENDMENTS TO AGREEMENT. The Agreement is hereby amended as
follows:
1. For purposes of Section 1.2(b) of the Agreement, the
adjustment to the Stock Purchase Price as a result of the Net Debt
Calculation shall be $111,518 in favor of the Shareholders, which
amount shall be payable by AHC to the Shareholders of R-Anell and GMHNC
in immediately available funds on October 4, 1999, according to an
allocation to be delivered to AHC on or prior to October 3, 1999.
2. Section 1.3 (a) of the Agreement is hereby amended to read
in its entirety as follows:
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(a) The R-Anell Stock Purchase Price shall be
adjusted (a "Stock Purchase Price Adjustment") as follows:
(i) The R-Anell Stock Purchase Price shall
be increased by $7.5 million, which amount shall be
apportioned among the Shareholders of R-Anell in the
percentages provided in Exhibit C to the Agreement,
and paid to the Shareholders of R-Anell as follows
(with each Shareholder to receive its proportionate
share of the cash, First Note and AHC Preferred Stock
provided below):
(1) $1.5 million in immediately
available funds on or prior to
October 15, 1999;
(2) $1.5 million in a promissory note,
the form of which is attached hereto
as Exhibit 2 (the "First Note"),
which First Note shall be executed
and delivered by AHC to the
Shareholders of R-Anell on the date
hereof; and
(3) 375,000 shares (the "Preferred
Shares") of Series A Convertible
Preferred Stock, no par value per
share, of AHC (the "AHC Preferred
Stock"), the Certificate of the
Designations, Number, Voting Powers,
Preferences and Rights of which are
set forth in Exhibit 3 attached
hereto (the "Certificate of
Designations"), and the certificates
for which shall be delivered to the
Shareholders of R-Anell on the date
hereof.
(ii) For each $1.00 of EBIT in excess of
$4.75 million of EBIT earned during the Second Period
(subject to a maximum of $3 million), AHC shall pay
to the Shareholders of R-Anell an additional $1.00,
which amount shall be payable as follows (with each
Shareholder to receive its proportionate share of the
cash, Second Note and AHC Preferred Stock provided
below):
(1) twenty percent (20%) of which shall
be payable in immediately available
funds within thirty (30) days
following the final and binding
determination of EBIT for the Second
Period as provided for in Section
1.3(d) of the Agreement;
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(2) twenty percent (20%) of which shall
be payable pursuant to a promissory
note, the form of which is attached
hereto as Exhibit 2 (the "Second
Note"), which Second Note shall be
executed and delivered by AHC to the
Shareholders of R-Anell on the date
of delivery of the funds as provided
in subpart (1) above (the "Delivery
Date"); and
(3) sixty percent (60%) of which shall
be deliverable in shares of AHC
Preferred Stock, the certificates
for which shall be delivered to the
Shareholders of R-Anell on the
Delivery Date.
For purposes of the calculating EBIT for the Second
Period, the parties hereto agree that EBIT for the
First Period shall be $4 million.
3. Section 1.3(b) of the Agreement is hereby amended to read
in its entirety as follows:
(b) For purposes of this Agreement, "EBIT" shall mean
earnings of all three of the Companies, before interest and
taxes. EBIT for the period of July 1, 1999 to December 31,
1999 shall be calculated in accordance with the rules and
regulations set forth in Exhibit 3 attached hereto and in
accordance with Section 1.3 (c) of the Agreement.
4. Section 1.3 (f) of the Agreement is hereby terminated in
its entirety.
5. The parties hereto agree that AHC agrees that the
Shareholders, in their sole discretion and determination, may, upon
written notice to AHC, determine the method for calculating earnings
for purposes of the Employee Pool to allow employees to obtain an equal
or greater percentage of the total available Employee Pool as compared
to the Shareholders; provided, however that the size of the Employee
Pool shall not be changed.
6. The parties hereto agree that, at any time during the
period of October 1, 2000, through April 1, 2001, AHC shall have the
right to redeem all or any portion of the shares of AHC Preferred Stock
issued to the Shareholders of R-Anell pursuant to Section 2 above at a
redemption price of $12.00 per share, payable in cash. In order to make
any such redemption, AHC shall give written notice of such redemption
to the Shareholders of R-Anell at least fourteen (14) days prior to the
date of such redemption, and each Shareholder shall have the right,
prior to such stated redemption date, to convert each of its shares of
AHC Preferred Stock into one share of Common Stock of AHC (subject to
adjustment as provided in the Certificate of Designations).
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B. MISCELLANEOUS.
1. AHC hereby represents and warrants to the Shareholders as
follows:
(a) The Series A Stock to be issued hereunder will,
when issued, be duly authorized, validly issued, fully paid
and nonassessable.
(b) Since May 31, 1995, AHC has filed all forms,
documents and reports with the SEC required to be filed by it
pursuant to federal securities laws and the SEC rules and
regulations thereunder (the "SEC Reports"), all of which
complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act. The
SEC Reports do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein to make statements contained therein not misleading.
AHC will take all steps necessary by AHC to enable the
Shareholders to be eligible to sell shares of Common Stock of
AHC underlying the Series A Stock under Rule 144 of the
Securities Act on and after October 1, 2000.
(c) The execution, delivery and performance of this
Third Amendment have been approved and authorized by AHC, and
this Third Amendment is enforceable against AHC in accordance
with its term, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the availability of equitable remedies.
(d) As of May 31, 1999, AHC had authorized (i)
50,000,000 shares of Common Stock, 18,412,900 shares of which
were issued and outstanding; and (ii) 5,000,000 shares of
Preferred Stock, none of which share were issued and
outstanding. Between May 31, 1999 and September 29, 1999, the
Company has not increased its authorized shares of Common
Stock or Preferred Stock, has not issued a material amount of
Common Stock, has not issued any shares of Preferred Stock,
and has authorized the issuance of up to 1,000,000 shares of
Series A Stock.
2. The Shareholders acknowledge and agree that between
December 28, 1998, and the date hereof, the Companies have been
operated in a manner consistent with the terms and provisions of
Section 1.3 (c) of the Agreement.
3. Except as specifically provided herein, the Agreement shall
remain in full force and effect.
4. This Third Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date first above written.
AMERICAN HOMESTAR CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Title: President
R-ANELL CUSTOM HOMES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President
GOLD MEDAL HOMES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President
GOLD MEDAL HOMES OF NORTH
CAROLINA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ RETAINED ANNUITY
TRUST NUMBER ONE
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ RETAINED ANNUITY
TRUST NUMBER TWO
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
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