FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE FINANCING (Finished Goods – Shared Credit Facility)
FIRST
AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE
FINANCING
(Finished
Goods – Shared Credit Facility)
This
First Amendment to Amended and Restated Agreement for Wholesale Financing
(“Amendment”) is made as of this 30 day of June 2005 by and between TEXTRON
FINANCIAL CORPORATION, a Delaware corporation (“Secured ); and Palm Harbor
Homes, Inc., a Florida corporation, Palm Harbor Manufacturing, L.P., a Texas
limited partnership, Palm Harbor Homes I L.P., a Texas limited partnership,
and
Palm Harbor Marketing, Inc., a Nevada corporation (jointly and severally,
individually and collectively, “Borrowers”).
WITNESSETH
THAT:
WHEREAS,
the Secured Party and Borrowers are parties to a certain Amended and Restated
Agreement for Wholesale Financing, Finished Goods – Shared Credit Facility dated
May 25, 2004 (the “Agreement”); and
WHEREAS,
the parties hereto desire to amend certain of the terms of the Agreement;
NOW
THEREFORE, in consideration of the premises and the mutual obligations
hereinafter contained, and for other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree as follows:
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1.
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All
capitalized terms used and not otherwise defined herein shall have
the
same meanings provided therefore in the Agreement.
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2.
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Paragraph
37.1 of the Agreement is hereby amended and restated in its entirety
to
read as follows:
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“37.1
Covenants.
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(a)
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Operating
Cash Flow.
Borrowers covenant that Consolidated Net Cash Provided by Operating
Activities, as determined as of the end of and in respect of each
fiscal
year of the Borrowers (commencing with the fiscal year of the Borrowers
ending on March 31, 2006), will not be less than an amount which
(i) shall
be mutually agreeable among Borrowers and Lenders and (ii) shall
not be
less than (A) negative Fifty Million Dollars (-$50,000,000) for fiscal
year ending March 31, 2006 and (B) negative Twenty Five Million Dollars
(-$25,000,000) for fiscal year ending March 31, 2007 and for every
consecutive fiscal year ending
thereafter.
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(b)
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Minimum
Liquidity.
Borrowers covenant that they will maintain as of that last day of
each
fiscal quarter ending on or after June 30, 2005, a Liquidity Amount
of hot
less than $25,000,000.
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(c)
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Minimum
Profitability.
Borrowers covenant that they will achieve as of the last day of each
fiscal quarter an aggregate consolidated net income after tax for
the
respective periods set forth below, as follows (i) in respect of
the
fiscal quarter ending June 30, 2005, not less than $1,500,000. (ii)
in
respect of the two consecutive fiscal quarters ending September 30,
2005,
not less than $1,750,000. (iii) in respect of the three consecutive
fiscal
quarters ending December 31, 2005, not less than $5,000,000 and (iv)
in
respect of the four consecutive fiscal quarters ending (A) March
31, 2006
and (B) the last day of each fiscal quarter thereafter, not less
than
$7,500,000.
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(d)
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Minimum
Inventory Turn.
Borrowers covenant that they will maintain as of the last day of
each
fiscal quarter ending on or after June 30, 2005, a ratio of (a) Borrowers’
Cost of Goods Sold, to (b) Average Inventory, for such fiscal quarter
and
the prior two point seventy five (2.75) fiscal quarters of not less
than
three to one (2.75:1)
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(e)
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Minimum
Tangible Net Worth.
Borrowers covenant that they will maintain as of the last day of
each
fiscal quarter ending on or after June 30, 2005, a Tangible Net Worth
of
not less than One Hundred Fifty Million Dollars ($150,00,000).
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3.
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The
definition of “Consolidated Net Cash Provided by Operating Activities” in
Paragraph 37.2 of the Agreement is hereby amended and restated in
its
entirety to read as follows:
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“Consolidated
Net Cash Provided by Operating Activities–
means,
with respect to any fiscal year of the Borrowers and on a consolidated basis
for
all Borrowers, the net cash flow provided by operating activities as shown
on
the “Operating Activities” portion of a consolidated statement of cash flows for
such Borrowers prepared in accordance with GAAP as currently applied by
Borrowers (which, for the avoidance of doubt, includes amounts currently
includable by Borrowers under the “Loans originated for investment” and
“Principal payments on loans originated” line items on such consolidated
statement).
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4.
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Except
as amended hereby, the Agreement shall remain in full force and effect,
and is in all respects hereby ratified and affirmed.
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5.
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This
Amendment, and the rights and duties of the parties hereunder, shall
be
governed by and construed in accordance with the internal laws of
the
State of Rhode Island, without regard to such jurisdiction’s principles of
conflicts of laws. If any provision of this Amendment is determined
to be
illegal, invalid or unenforceable, such provision shall be fully
severable
and the remaining provisions shall remain in full force and effect
and
shall be construed without giving effect to the illegal, invalid
or
unenforceable provisions.
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6.
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This
Amendment may be executed in any number of counterparts, each of
which
when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument, and a facsimile
signature shall suffice as original for all purposes.
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IN
WITNESS WHEREOF, the parties hereto have caused this amendment to be executed
by
their duly authorized officer or representative as of the day and year first
above written.
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BORROWERS:
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SECURED
PARTY:
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PALM
HARBOR HOMES, INC.
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TEXTRON
FINANCIAL
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title:
President
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Title:
Sr. VP, Operations and Credit
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PALM
HARBOR HOME I L.P.
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By:
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Palm
Harbor G.P., Inc.
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Its:
General Partner
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
President
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PALM
HARBOR MARKETING, INC.
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
President
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[SIGNATURES
CONTINUED ON NEXT PAGE]
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PALM
HARBOR MANUFACTURING, L.P.
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By:
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Palm
Harbor GenPar, LLC
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Its:
General Partner
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
President
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