WAIVER AND FORBEARANCE
AGREEMENT
THIS WAIVER AND
FORBEARANCE AGREEMENT (this “ Agreement ”) to
the Credit Agreement (as defined below), dated as of
October 5, 2009, is entered into among CHAMPION HOME BUILDERS
CO., a Michigan corporation (the “ Borrower ”),
CHAMPION ENTERPRISES, INC., a Michigan corporation (the “
Parent ”), certain of the Lenders (such capitalized
term and other capitalized terms used in this preamble and the
recitals below to have the meanings set forth in, or are defined by
reference in Article I below), CREDIT SUISSE, CAYMAN
ISLANDS BRANCH, as the Administrative Agent (in such capacity, the
“ Administrative Agent ”), and, solely for
purposes of Articles VI and VII , each Obligor
signatory hereto.
WHEREAS, the
Borrower, the Parent, the Lenders and the Administrative Agent are
all parties to the Amended and Restated Credit Agreement, dated as
of April 7, 2006 (as amended or otherwise modified prior to
the date hereof, the “ Credit Agreement
”);
WHEREAS, the
Borrower has requested that the Lenders waive certain provisions of
the Credit Agreement;
WHEREAS, the
Borrower has also informed the Lenders and the Administrative Agent
that Events of Default have occurred under Section 9.1.1 of
the Credit Agreement by reason of the Borrower’s failure to
pay principal installments of the Loans, as well as interest with
respect to the Loans and Letter of Credit fees and Commitment Fees
due with respect to the applicable payment dates as of the end of
September 2009 (the “ Specified Events of Default
”), and as a result of the failure by the Borrower to be in
compliance with such requirements of the Credit Agreement, the
Lenders and the Administrative Agent are entitled to exercise at
any time all of their rights and remedies and to commence
enforcement and collection actions under the Credit Agreement, the
other Loan Documents and applicable law;
WHEREAS, the
Borrower has requested that the Required Lenders agree, in lieu of
immediately exercising such rights and remedies and commencing such
actions, to implement a forbearance period during which, among
other things, the Borrower would be afforded an opportunity to
formulate and propose a comprehensive restructuring with respect to
its Obligations; and
WHEREAS, the
Required Lenders have agreed to the requested waiver and
forbearance, but only upon the terms and subject to the conditions
expressly set forth in this Agreement, and without any advance
understanding or agreement by the Required Lenders or any Lender or
the Administrative Agent to consent to, or grant a waiver to
permit, the implementation of any restructuring proposal or the
consummation of any transaction for which such consent or waiver
would be required under the Credit Agreement or the other Loan
Documents (including without limitation, this
Agreement);
NOW THEREFORE, in
consideration of the premises and for other good and valuable
consideration the receipt of which is hereby acknowledged, the
parties hereto hereby covenant and agree as follows:
SECTION 1.1.
Certain Definitions . The following terms when used in this
Agreement shall have the following meanings (such meanings to be
equally applicable to the singular and plural forms
thereof):
“
Agreement ” is defined in the preamble
.
“
Borrower ” is defined in the preamble
.
“ Credit
Agreement ” is defined in the first recital
.
“
Effective Date ” is defined in Article IV
.
“
Enforcement Actions ” means, collectively, all of the
rights, remedies, enforcement actions and collection actions that
the Lenders and/or the Administrative Agent are entitled to
exercise under the Credit Agreement (including, without limitation,
under Sections 9.2 and 9.3 thereof) or the other Loan
Documents or applicable law (including directing the Collateral
Trustee to take any of such actions).
“
Forbearance Period ” means the period from and
including the Effective Date to and including the expiration time
on the Forbearance Period Termination Date.
“
Forbearance Period Termination Date ” means the first
to occur of (a) 2:00 p.m., New York time, on October 30,
2009, (b) the moment any representation or warranty made by
any Obligor in this Agreement shall prove to have been untrue,
inaccurate or incomplete in any material respect on or as of the
date made or deemed made, (c) the moment any Obligor shall
fail in any material respect to perform, as and when required, any
of their respective covenants or other obligations set forth in
this Agreement, (d) the moment any Obligor shall take any
action to challenge (including without limitation, to assert in
writing any challenge to) the validity or enforceability of this
Agreement, the Credit Agreement or any other Loan Documents or any
provision hereof or thereof and (e) the moment any Default or
Event of Default other than a Specified Events of Default shall
occur and be continuing.
“ Lender
Party ” means each Lender, the Administrative Agent, the
Collateral Trustee and any Issuer, and each of their respective
present or former subsidiaries, affiliates, advisors, employees,
attorneys, agents, officers, directors and representatives and
their respective predecessors, successors, transferees and
assigns.
“
Specified Events of Default ” is defined in the
second recital .
-2-
SECTION 1.2.
Other Definitions . Terms for which meanings are provided in
the Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Agreement with such
meanings.
LIMITED WAIVER TO CREDIT
AGREEMENT
Subject to the
occurrence of the Effective Date, certain limited provisions of the
Credit Agreement are hereby waived in accordance with this
Article II. Except as expressly so waived in this
Article II, the Credit Agreement shall continue in full force
and effect.
SECTION 2.1.
Limited Waivers as to Section 8.4(d) and (e) . The
Required Lenders hereby waive, until 2:00 p.m., New York time, on
October 30, 2009, the requirement that the Parent and the
Borrower
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