WAIVER OF SPECIFIC COVENANT DEFAULTS October 23 2007

Exhibit 10.1

 

 

 

October 23 2007

 

Cavalier Homes, Inc.

Cavalier Properties, Inc.

Cavalier Home Builders, LLC

Cavalier Real Estate Co., Inc.

Quality Housing Supply, LLC

CIS Financial Services, Inc.

BRC Components, Inc.

The Home Place, LLC

Ridge Point Manufacturing, LLC

32 Wilson Blvd., Suite 100

Addison, Alabama 35540

 

Re:

Loan and Security Agreement dated as of March 31, 2000, as amended, between First Commercial Bank, as Lender, and Cavalier Homes, Inc., Cavalier Properties, Inc., Cavalier Home Builders, LLC, Cavalier Real Estate Co., Inc., Quality Housing Supply, LLC, CIS Financial Services, Inc., BRC Components, Inc., The Home Place, LLC, and Ridge Point Manufacturing, LLC, as Borrowers (the “Loan Agreement”)

 

Ladies and Gentlemen:

 

Please be informed that First Commercial Bank (“Lender”) agrees to waive noncompliance by the above-referenced Borrower of the Event of Default caused or to be caused by noncompliance by Borrower with the covenant contained in Section 7.3(A)(4) of the Loan Agreement, which requires Borrower to maintain a minimum ratio of Consolidated Cash Flow to Debt Service.  This waiver is effective for the fiscal period ending December 31, 2007.

 

Our waiver applies only to the specific section set forth above for the point in time specified and shall be strictly construed.  No waiver of any future or additional noncompliance should be implied by this action, nor shall this action waive any other financial or other covenant contained in the Loan Agreement.  This waiver shall not act to alter or amend the current Loan Termination Date, which is set for April 15, 2008.

 

If you have questions regarding these matters, please do not hesitate to contact the undersigned.  Please execute below to confirm your acceptance of the terms on which this waiver is made.

 

	Yours very truly,
	FIRST COMMERCIAL BANK
	By:	/s/ JAMES W. BRUNSTAD
	Title:	Senior Vice President

ACKNOWLEDGED AND AGREED TO:
CAVALIER HOMES, INC., a Delaware corporation
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	Vice President
CAVALIER PROPERTIES, INC., a Delaware corporation
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	President
CAVALIER HOME BUILDERS, LLC, a Delaware limited liability company
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	President
CAVALIER REAL ESTATE CO., INC., a Delaware corporation
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	President
QUALITY HOUSING SUPPLY, LLC, a Delaware limited liability company
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	Vice President
CIS FINANCIAL SERVICES, INC., an Alabama corporation
By:	/s/ HEATHER L. YORK
Print Name:	Heather L. York
Title:	Secretary
BRC COMPONENTS, INC., an Alabama corporation
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	Secretary
THE HOME PLACE, LLC, an Alabama limited liability company
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	Vice President
RIDGE POINTE MANUFACTURING, LLC, an Alabama limited liability company
By:	/s/ MICHAEL R. MURPHY
Print Name:	Michael R. Murphy
Title:	Managing Member