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PURCHASE AGREEMENT

Note Purchase Agreement

PURCHASE AGREEMENT | Document Parties: PLY GEM HOLDINGS INC | CREDIT SUISSE SECURITIES (USA) LLC | UBS Securities LLC | US Bank Trust National Association You are currently viewing:
This Note Purchase Agreement involves

PLY GEM HOLDINGS INC | CREDIT SUISSE SECURITIES (USA) LLC | UBS Securities LLC | US Bank Trust National Association

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Title: PURCHASE AGREEMENT
Governing Law: New York     Date: 8/11/2008
Law Firm: Lathrop Gage;Paul Weiss;Adams Reese;Cravath Swaine    

PURCHASE AGREEMENT, Parties: ply gem holdings inc , credit suisse securities (usa) llc , ubs securities llc , us bank trust national association
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EXECUTION VERSION

 

 

$700,000,000

 

 

PLY GEM INDUSTRIES, INC.

 

11.75% Senior Secured Notes due 2013

 

 

PURCHASE AGREEMENT

 

June 2, 2008

 

 

CREDIT SUISSE SECURITIES (USA) LLC

UBS Securities LLC

 

As Representatives of the Several Initial Purchasers

 

c/o Credit Suisse Securities (USA) LLC (“ Credit Suisse ”)

 

 

Eleven Madison Avenue

 

New York, New York 10010-3629

 

Dear Sirs:

 

1.   Introductory .  Ply Gem Industries, Inc., a Delaware corporation (the “ Issuer ”) proposes, subject to the terms and conditions stated herein, to issue and sell to the several purchasers named in Schedule A hereto (the “ Initial Purchasers ”) U.S. $700,000,000 principal amount of its 11.75% Senior Secured Notes due 2013 (the “ Offered Securities ”).

 

The Offered Securities will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “ Securities Act ”).  The Offered Securities will be issued under an indenture to be dated as of June 9, 2008 (the “ Closing Date ”) (the “ Indenture ”), among the Issuer, the Subsidiary Guarantors (as hereinafter defined), Ply Gem Holdings, Inc. (“ Holdings ”) and US Bank Trust National Association, as trustee (the “ Trustee ”).

 

The Offered Securities will be unconditionally guaranteed (the “ Guarantees ”) on a senior secured basis by Holdings and the Issuer’s subsidiaries listed as such on Schedule B hereto (the “ Subsidiary Guarantors ” and, together with Holdings, the “ Guarantors ”).  The Issuer, the Guarantors, the Trustee and the collateral agent (in such capacity, the “ Notes Collateral Agent ”), will enter into the Collateral Agreement (the “ Collateral Agreement ”).  On the Closing Date, the Issuer will also enter into a credit agreement (the “ Credit Agreement ”) among the Issuer, Holdings, the subsidiaries of the Issuer identified therein as guarantors, the lenders from time to time party thereto and Credit Suisse as administrative agent, that will provide for a new asset-based senior secured revolving credit facility in an aggregate principal amount of up to U.S. $150,000,000 (the “ New Credit Facility ”).  The Offered Securities and the Guarantees will be secured (i) on a first-priority lien basis (subject to certain exceptions and permitted liens) on substantially all the tangible and intangible assets of the Issuer and the Guarantors (other than accounts receivable, inventory, cash, deposit accounts,

 

 

 

 


 

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securities accounts, chattel paper and proceeds and products of the foregoing and certain assets such as contract rights, instruments and documents related thereto in each case held by the Issuer and the Guarantors (the “ Bank Collateral ”)), including all of the capital stock of the Issuer and any material subsidiary held by the Issuer or any guarantor (which, in the case of any foreign subsidiary, will be limited to 100% of the non-voting stock (if any) and 66% of the voting stock of such foreign subsidiary) (the “ Notes Collateral ” and, together with the Bank Collateral, the “ Collateral ”) and (ii) on a second-priority lien basis by the Bank Collateral.  The obligations under the Credit Agreement will be secured by (i) a first-priority lien on and security interest in the Bank Collateral and (ii) a second-priority lien on and security interest in the Notes Collateral.  The Collateral will be more fully described in the Intercreditor Agreement to be dated as of the Closing Date, among the Issuer, the Guarantors, the Bank Collateral Agent, the Trustee and the Notes Collateral Agent (the “ Intercreditor Agreement ”), the Credit Agreement and the Collateral Agreement (the Collateral Agreement together with the Credit Agreement, the Intercreditor Agreement, the Mortgages (as defined below) to the extent executed and delivered pursuant to the Indenture and the Security Documents (as defined below) on the Closing Date, the Copyright, Patent, and Trademark Agreements (as defined in the Collateral Agreement) and each of the other documents executed and delivered securing the whole or any part of the obligations thereunder or confirming the existence of the security interests, the “ Security Documents ”), each to be delivered to the Notes Collateral Agent, granting a security interest in the Collateral subject only to the liens or encumbrances permitted under the Indenture for the benefit of the Trustee, the Notes Collateral Agent and each holder of the Offered Securities and the successors and assigns of the foregoing (collectively, the “ Secured Parties ”).  For purposes of this Agreement, the term “ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage, land charge or other security document granting a lien or encumbrance on any mortgaged property to secure the Obligations (as defined in the Collateral Agreement) of the Issuer and the Guarantors, as applicable.

 

The Initial Purchasers have advised the Issuer that the Initial Purchasers intend, as soon as they deem practicable after this Purchase Agreement (this “ Agreement ”) has been executed and delivered, to resell (the “ Exempt Resales ”) the Securities in private sales exempt from registration under the Act on the terms set forth in the Preliminary Offering Circular (as defined below) and Final Offering Circular (as defined below), as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be “qualified institutional buyers” (“ QIBs ”), as defined in Rule 144A under the Act (“ Rule 144A ”), in accordance with Rule 144A and (ii) other eligible purchasers pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Act (“ Regulation S ”) in accordance with Regulation S (the persons specified in clauses (i) and (ii), the “ Eligible Purchasers ”).

 

Holders (including subsequent transferees) of the Offered Securities will have the registration rights set forth in the registration rights agreement (the “ Registration Rights Agreement ”), among the Issuer, the Guarantors and the Initial Purchasers, to be dated the Closing Date, substantially in the form attached hereto as Exhibit E , for so long as such Offered Securities constitute “ Transfer Restricted Securities ” (as defined in the Registration Rights Agreement).  Pursuant to the Registration Rights Agreement, the

 

 

 

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 Issuer and the Guarantors will agree to (i) file with the Securities and Exchange Commission (the “ Commission ”) under the circumstances set forth therein, (a) a registration statement under the Securities Act (the “ Exchange Offer Registration Statement ”) relating to the Offered Securities in a like aggregate principal amount as the Issuer issued under the Indenture, identical in all material respects to the Offered Securities and registered under the Securities Act (the “ Exchange Securities ”), to be offered in exchange for the Offered Securities (such offer to exchange being referred to as the “ Exchange Offer ”) and (b) if necessary under the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Securities Act (the “ Shelf Registration Statement ” and, together with the Exchange Offer Registration Statement, the “ Registration Statements ”) relating to the resale by certain holders of the Offered Securities (ii) to use its commercially reasonable efforts to cause such Registration Statements to be declared effective and cause such Registration Statements to remain effective and usable for the periods specified in the Registration Rights Agreement and (iii) to use its commercially reasonable efforts to consummate the Exchange Offer.  The Offered Securities and the Exchange Securities are referred to collectively as the “ Securities .”

 

This Agreement, the Guarantees, the Offered Securities, the Indenture and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the “ Operative Documents .”  The issuance and sale of the Offered Securities, the issuance of the Guarantees, the initial borrowings under the Credit Agreement and the use of proceeds therefrom described in the General Disclosure Package (as defined herein) and Final Offering Circular are collectively referred to as the “ Transactions .”

 

The Issuer and each of the Guarantors hereby agree with the several Purchasers as follows:

 

2.   Representations and Warranties of the Issuer, Holdings and the Subsidiary Guarantors.   The Issuer and each of the Guarantors jointly and severally represent and warrant to, and agree with, the several Purchasers that:

 

(a)   A preliminary offering circular (the “ Preliminary Offering Circular ”) relating to the Offered Securities to be offered by the Purchasers and a final offering circular (the “ Final Offering Circular ”) disclosing the offering price and other final terms of the Offered Securities and is dated as of the date of this Agreement (even if finalized and issued subsequent to the date of this Agreement) has been or will be prepared by the Issuer.  “ General Disclosure Package ” means the Preliminary Offering Circular, together with any Issuer Free Writing Communication (as hereinafter defined) existing at the Applicable Time (as hereinafter defined) and the other information, if any, distributed at or prior to the Applicable Time to prospective investors of the Offered Securities, as evidenced by its being specified in Schedule C to this Agreement (including the term sheet listing the final terms of the Offered Securities and their offering, included in Schedule C to this

 

 

 

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Agreement, which is referred to as the “ Terms Communication ”).  “ Applicable Time ” means 3:30 p.m. (New York City time) on the date of this Agreement.  As of the date of this Agreement and as of the Closing Date, the Final Offering Circular does not and will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  At the Applicable Time and as of the Closing Date neither (i) the General Disclosure Package, nor (ii) any individual Supplemental Marketing Material (as hereinafter defined), when considered together with the General Disclosure Package, included or will include any untrue statement of a material fact or omitted or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The preceding two sentences do not apply to statements in or omissions from the Preliminary or Final Offering Circular, the General Disclosure Package or any Supplemental Marketing Material based upon written information furnished to the Issuer by any Purchaser through Credit Suisse specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof.

 

 

 

Subject to the foregoing paragraph, any references herein to the terms “ amend, ” “ amendment ” or “ supplement ” with respect to the Preliminary or Final Offering Circular shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise filed with the Commission, subsequent to the date hereof that is incorporated by reference therein; and all references in this Agreement to financial statements and schedules and other information which are “ contained ,” “ included ,” “ stated ,” “ set forth ” or “ described ” in the Preliminary or Final Offering Circular (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are included in any document filed under the Act or the Exchange Act, as applicable, and incorporated by reference in the Preliminary or Final Offering Circular.

 

 

 

Free Writing Communication ” means a written communication (as such term is defined in Rule 405 under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Offered Securities and is made by means other than the Preliminary Offering Circular or the Final Offering Circular.  “ Issuer Free Writing Communication ” means a Free Writing Communication prepared by or on behalf of the Issuer, used or referred to by the

 

 

 

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Issuer or containing a description of the final terms of the Offered Securities or of their offering, in the form retained in the Issuer’s records.  “ Supplemental Marketing Material ” means any Issuer Free Writing Communication other than any Issuer Free Writing Communication specified in Schedule C to this Agreement, and which is specified in Schedule D to this Agreement.

 

(b)   As of March 29, 2008, the Issuer had the capitalization as set forth under the heading “Capitalization” under the column “Actual” in the Preliminary Offering Circular.  On the Closing Date, all of the issued and outstanding equity interests of the Issuer will have been duly authorized and validly issued, will be fully paid and nonassessable and not have been issued in violation of any preemptive or similar right and will be owned by Holdings free and clear of all liens (other than transfer restrictions imposed by the Act, the securities or Blue Sky laws of certain jurisdictions and security interests granted pursuant to the Security Documents).  Attached as Schedule E is a true and complete list of each entity in which the Issuer has a direct or indirect majority equity or voting interest (each a “ Subsidiary ” and, together, the “ Subsidiaries ”), their jurisdictions of formation or organization, names of their equityholder(s) and percentage held by each equityholder.  All of the issued and outstanding equity interests of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, were not issued in violation of any preemptive or similar right and, except as set forth in the General Disclosure Package, are owned, directly or indirectly through Subsidiaries, by the Issuer free and clear of all liens (other than transfer restrictions imposed by the Act, the securities or Blue Sky laws of certain jurisdictions and security interests granted pursuant to the Security Documents).  Except as set forth in the General Disclosure Package, there are no outstanding options, warrants or other rights to acquire or purchase, or instruments convertible into or exchangeable for, any equity interests of the Issuer or any of the Subsidiaries.  No holder of any securities of the Issuer or any of the Subsidiaries is entitled to have such securities (other than the Securities) registered under any registration statement contemplated by the Registration Rights Agreement.

 

(c)   Each of the Issuer and each Guarantor (i) is a corporation, limited liability company, partnership or other entity duly organized and validly existing under the laws of the jurisdiction of its organization; (ii) has all requisite corporate or other power and authority necessary to own its property and carry on its business as now being conducted and (iii) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it or its ownership of property

 

 

 

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makes such qualification necessary, except where the failure to be so qualified and be in good standing, individually or in the aggregate, could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  A “ Material Adverse Effect ” means (i) a material adverse effect on the business, condition (financial or otherwise), results of operations, assets or liabilities of the Issuer and the Subsidiaries, taken as a whole or (ii) a material adverse effect on the ability to consummate the Transactions on a timely basis.

 

(d)   The Issuer and each of the Guarantors have all requisite corporate or other power and authority to execute, deliver and perform all of their obligations under the Operative Documents to which each is a party and to consummate the transactions contemplated thereby, and, without limitation, the Issuer has all requisite corporate power and authority to issue, sell and deliver and perform its obligations under the Notes.

 

(e)   The Indenture has been duly and validly authorized by the Issuer and the Guarantors and, when duly executed and delivered by the Issuer and the Guarantors (assuming the due authorization, execution and delivery thereof by the Trustee), will be a legally binding and valid obligation of each such Issuer, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity and the discretion of the court before which any proceeding therefor may be brought (the “ Bankruptcy Exceptions ”).  The Indenture, when executed and delivered, will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Circular.

 

(f)   The Offered Securities have been duly and validly authorized for issuance and sale to the Initial Purchasers by the Issuer.  When the Offered Securities are issued by the Issuer, authenticated by the Trustee and delivered by the Issuer against payment therefor by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, the Offered Securities will be legally binding and valid obligations of the Issuer, entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions.  The Offered Securities, when issued, authenticated and delivered, will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Circular.  The Exchange Securities have been, or on or before the Closing Date will be, duly and validly

 

 

 

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authorized for issuance by the Issuer, and when issued by the Issuer, authenticated by the Trustee and delivered by the Issuer in accordance with the terms of the Exchange Offer and the Indenture, the Exchange Securities will be legally binding and valid obligations of the Issuer, entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions.

 

(g)   The Guarantees have been duly and validly authorized by each of the Guarantors and, when the Offered Securities are issued by the Issuer, authenticated by the Trustee and delivered by the Issuer against payment by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except that enforceability thereof may be limited by the Bankruptcy Exceptions and will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Circular.  The guarantees of the Exchange Securities have been, on or before the Closing Date will be, duly and validly authorized by each of the Guarantors and, when the Exchange Securities are issued by the Issuer, authenticated by the Trustee and delivered in accordance with the terms of the Exchange Offer and the Indenture, will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except that enforceability thereof may be limited by the Bankruptcy Exceptions.

 

(h)   Except as disclosed in the General Disclosure Package, there are no contracts, agreements or understandings between the Issuer or Holdings and any person granting such person the right to require Holdings or the Issuer to file a registration statement under the Securities Act with respect to any securities of the Issuer or to require the Issuer to include such securities with the Securities registered pursuant to any Registration Statement.

 

(i)   On the Closing Date, the Indenture, (including the Supplemental Indenture, to the extent applicable), will conform in all material respects to the requirements of the United States Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder.

 

(j)   Except as described in the section entitled “Plan of Distribution” in the General Disclosure Package, there are no contracts, agreements or understandings between the Issuer, Holdings or any other person other than the Initial Purchasers that

 

 

 

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would give rise to a valid claim against the Issuer, any Guarantor or any of the Initial Purchasers for a brokerage commission, finder’s fee or like payment in connection with the issuance, purchase and sale of the Securities.

 

(k)   Except as set forth in the General Disclosure Package and assuming the accuracy of, and compliance with, the representations, warranties and agreements of the Purchasers under Section 4 of this Agreement, no consent, approval, authorization or order of, or filing with, registration, qualification, license or permit of or with, any Governmental Authority (collectively, a “ Consent ”) is required for the consummation of the transactions contemplated by this Agreement and the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities by the Issuer or the issuance of the Guarantees by the Guarantors except (i) for the order (and filings to obtain such order) of the Commission declaring the Exchange Offer Registration Statement or the Shelf Registration Statement effective, (ii) as may be required under the securities or Blue Sky laws of the various states and foreign jurisdictions (iii) such Consents as have been or will be obtained or made on or prior to the Closing Date, (iv) such filings and recordings with Governmental Authorities as may be required to perfect liens under the Security Documents, and (v) where the failure to obtain such Consents could not reasonably be expected to have a Material Adverse Effect.

 

(l)   Except as set forth in the General Disclosure Package, and assuming the accuracy of, and the Initial Purchasers’ compliance with, the representations, warranties and agreements of the Initial Purchasers set forth in Section 4 of this Agreement, and the compliance by the holders of the Securities with the offering and transfer restrictions set forth in the General Disclosure Package, the execution, delivery and performance of the Operative Documents and consummation of the Transactions does not and will not (i) violate the charter, bylaws or other constitutive documents of the Issuer or any Subsidiary of the Issuer or the Guarantors, (ii) constitute a breach of or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), or require consent under, or result in a Repayment Event (as defined below), other than or a Repayment Event that will be satisfied at the Closing Date as contemplated by the General Disclosure Package, or the creation or imposition of a lien, charge or encumbrance on any property or assets of the Issuer or any Subsidiary (other than as created pursuant to the Indenture and the Security Documents) under any of the Agreements and Instruments (as defined below) or (iii) violate any law, statute, rule or regulation, including, without limitation, Regulation T, U or X of the Board of Governors of the

 

 

 

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Federal Reserve System or any judgment, order or decree of any Governmental Authority, except for such violations, breaches, defaults, Repayment Events or liens that, singly or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 4 of this Agreement no Consent is required to be obtained or made by the Issuer or any Subsidiary for the execution, delivery and performance by the Issuer or any Subsidiary of the Operative Documents and the consummation of the Transactions, except (i) such Consents as have been or will be obtained or made on or prior to the Closing Date, (ii) registration of the Exchange Offer or resale of the Notes under the Act pursuant to the Registration Rights Agreement, and qualification of the Indenture under the Trust Indenture Act, in connection with the issuance of the Exchange Securities, (iii) such filings and recordings with Governmental Authorities as may be required to perfect liens under the Security Documents and (iv) where the failure to obtain such consents, approvals, authorizations or orders, filings, registration, qualifications, licenses or permits could not reasonably be expected to have a Material Adverse Effect.  No consents or waivers from any other person or entity are required for the execution, delivery and performance of the Operative Documents and the consummation of the Transactions, (i) other than such consents and waivers as have been obtained or will be obtained on or prior to the Closing Date and will be in full force and effect and (ii) except where the failure to obtain such consents or waivers could not reasonably be expected to have a Material Adverse Effect.  As used herein, a “ Repayment Event ” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Issuer or any Subsidiary.

 

(m)   This Agreement has been duly authorized, executed and delivered by the Issuer and the Guarantors.

 

(n)   The Issuer, Holdings and the Subsidiaries have good and marketable title to all items of owned real property and valid title to all personal property owned by each of them, in each case free and clear of any pledge, lien, encumbrance, security interest or other defect or claim of any third party, except (i) such as do not materially interfere with the use made or proposed to be made of such property by the Issuer, Holdings or such Subsidiary, (ii) as described in the General Disclosure Package, (iii) as created pursuant to the Security Documents or (iv) liens permitted by the Indenture and the Security Documents.  Any real property, personal

 

 

 

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property and buildings held under lease by the Issuer, Holdings or any such Subsidiary are held under valid, subsisting and enforceable leases, with such exceptions as do not materially interfere with the use made or proposed to be made of such property and buildings by the Issuer or such Subsidiary.

 

(o)   The Issuer, Holdings and the Subsidiaries have (i) all licenses, certificates, permits, authorizations, approvals, franchises and other rights from, and have made all declarations and filings with, all applicable Governmental Authorities and all self-regulatory authorities (each, an “ Authorization ”) necessary to engage in the business conducted by them in the manner described in the General Disclosure Package, except where the failure to hold such Authorizations could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, and (i) the Issuer, Holdings and the Subsidiaries have not received written notice from any Governmental Authority or self-regulatory authority threatening to limit, suspend or revoke any such Authorization, except where such limitation, suspension or revocation could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  All such Authorizations are valid and in full force and effect, and the Issuer, Holdings and the Subsidiaries are in compliance in all material respects with the terms and conditions of all such Authorizations and with the rules and regulations of the authorities having jurisdiction with respect to such Authorizations, except for any invalidity, failure to be in full force and effect or noncompliance with any Authorization that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect

 

(p)   Except as could not reasonably be expected to have a Material Adverse Effect, no labor disturbance by the employees of the Issuer, Holdings or any Subsidiary exists or, to the knowledge of the Issuer or the Guarantors, is imminent.

 

(q)   The Issuer, Holdings and each Subsidiary owns, possesses or has the right to employ all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, the “ Intellectual Property Rights ”) necessary to conduct the businesses operated by it as described in the General Disclosure Package, except where the failure to own, possess or have the right to employ such Intellectual Property, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Neither the Issuer, nor Holdings nor any Subsidiary has received any notice of infringement of or

 

 

 

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conflict with asserted rights of others with respect to any of the foregoing that could reasonably be expected to have a Material Adverse Effect.  The use of the Intellectual Property in connection with the business and operations of the Issuer, Holdings and the Subsidiaries does not infringe on the rights of any person, except for such infringement as could not reasonably be expected to have a Material Adverse Effect.

 

(r)   Except as disclosed in the General Disclosure Package  or as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) the Issuer, Holdings and the Subsidiaries are in compliance with and not subject to any pending or threatened liability under applicable Environmental Laws (as defined below), (ii) the Issuer, Holdings and the Subsidiaries have made all filings and provided all notices required under any applicable Environmental Law, and have, and are in compliance with, all permits, licenses or other approvals required under any applicable Environmental Laws for their current operations and each of them is in full force and effect, (iii) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or threatened against the Issuer, Holdings or any Subsidiary under any Environmental Law, (iv) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Issuer or any Subsidiary, (v) neither the Issuer, nor Holdings nor any Subsidiary has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“ CERCLA ”), or any comparable state law and (vi) no property or facility of the Issuer or any Subsidiary is (a) listed or proposed for listing on the National Priorities List under CERCLA or (b) listed on the Comprehensive Environmental Response, Compensation and Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any Governmental Authority.  No facts or circumstances exist and no event or condition is occurring or has occurred with respect to the Issuer, Holdings or any Subsidiary relating to any Environmental Law, any release of any hazardous, toxic or dangerous substance or waste, any chemical, any solid waste, any other pollutant or contaminant, or the Issuer’s, Holdings’ or any Subsidiary’s compliance with current requirements of Environmental Law, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

 

 

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For purposes of this Agreement, “ Environmental Laws ” means the common law and all applicable federal, state, local and foreign laws, regulations, rules, ordinances, codes, orders, decrees, judgments, injunctions or any other legally enforceable requirement issued, promulgated, approved or entered thereunder, relating to pollution, or to protection of public or employee health and safety from hazardous, toxic or dangerous substances or wastes or protection of the environment, including, without limitation, laws relating to:  (i) emissions, discharges, releases or threatened releases of hazardous materials into the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport, arrangement for disposal or transport or handling of hazardous, toxic or dangerous substances or waste, any chemical, any solid waste, or any other pollutant or contaminant, and (iii) underground and aboveground storage tanks and related piping, and emissions, discharges, releases or threatened releases therefrom.

 

(s)   Except as set forth in the General Disclosure Package, there is no action, suit or proceeding before or by any Governmental Authority or arbitrator, now pending or, to the knowledge of the Issuer or Guarantors, threatened, to which the Issuer, Holdings or any Subsidiary is or may be a party or to which the business, assets or property of the Issuer, Holdings or any Subsidiary is or may be subject that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(t)   All tax returns required to be filed by the Issuer, Holdings or any Subsidiary have been filed in all jurisdictions where such returns are required to be filed; and all taxes shown on such returns that are due or claimed to be due from such entities or that are due and payable have been paid, other than those being contested in good faith and for which reserves have been provided in accordance with GAAP or those currently payable without penalty or interest and except where the failure to make such required filings or payments could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(u)   Neither the Issuer, nor Holdings nor any Subsidiary has any liability for any prohibited transaction or accumulated funding deficiency (within the meaning of Section 412 of the Internal Revenue Code) or any complete or partial withdrawal liability with respect to any pension, profit sharing or other plan which is subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), to which the Issuer, Holdings or any

 

 

 

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Subsidiary makes or ever has made a contribution and in which any employee of the Issuer, Holdings or any Subsidiary is or has ever been a participant, except for such liability as could not reasonably be expected to have a Material Adverse Effect.  With respect to such plans, the Issuer, Holdings and each Subsidiary is in compliance with all applicable provisions of ERISA, except for such non-compliance as could not reasonably be expected to have a Material Adverse Effect.

 

(v)   As of the date hereof and as of the Closing Date, immediately prior to and immediately following the consummation of the Transactions, the Issuer and each Guarantor is and will be Solvent.  As used herein, “ Solvent ” shall mean, for any person on a particular date, that on such date (A) the fair value of the assets of such person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such person, (B) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such person on its debts as they become absolute and matured, (C) such person does not intend to, and does not believe that it will, incur debts and liabilities beyond such person’s ability to pay as such debts and liabilities mature, (D) such person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such person’s property would constitute an unreasonably small capital and (E) such person is able to pay its debts as they become due and payable.

 

(w)   The public accountants whose report is included in the General Disclosure Package and Final Offering Circular are independent with respect to the Issuer and Guarantors within the meaning of the Act and the rules of the Public Company Accounting Oversight Board.  The historical financial statements (including the notes thereto) included in the General Disclosure Package and Final Offering Circular present fairly in all material respects the consolidated financial position, results of operations, cash flows and changes in stockholder’s equity of the entities to which they relate at the respective dates and for the respective periods indicated.  All such financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“ GAAP ”) applied on a consistent basis throughout the periods presented (except as disclosed therein) and in compliance with Regulation S-X (“ Regulation S-X ”) under the Exchange Act, except that the interim financial statements do not include full footnote disclosure.  The historical information set forth under the captions “Offering Circular Summary — Summary Historical Financial Information” included in the General Disclosure Package and Final Offering Circular and the “Selected Historical Financial

 

 

 

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Information” incorporated therein by reference have been prepared on a basis consistent with that of the audited financial statements of Holdings.  Since the date as of which information is given in the General Disclosure Package, except as set forth or contemplated in the General Disclosure Package, (i) neither the Issuer nor Holdings nor any Subsidiary has (a) incurred any liabilities or obligations, direct or contingent, that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (b) entered into any material transaction not in the ordinary course of business, (ii) there has not been any event or development in respect of the business or condition (financial or other) of the Issuer, Holdings or any Subsidiary that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (iii) there has been no dividend or distribution of any kind declared, paid or made by the Issuer or Holdings on any of its equity interests and (iv) there has not been any change in the long-term debt of the Issuer, Holdings or any Subsidiary.

 

(x)   [intentionally omitted]

 

(y)   The statistical and market-related data included in the General Disclosure Package and Final Offering Circular, any document incorporated into the Preliminary Offering Circular and Final Offering Circular or any Issuer Free Writing Communication are based on or derived from sources that the Issuer and Guarantors believe to be reliable and accurate in all material respects.  All forward-looking statements included in the General Disclosure Package and Final Offering Circular, except for statistical and market-related data, represent the Issuer’s and Guarantors’ good faith estimates that are made on the basis of data derived from sources they believe to be reliable and accurate in all material respects.  The Issuer has obtained the written consent to the use of such data from such sources to the extent required.

 

(z)   Neither the Issuer, Holdings nor any of the Subsidiary Guarantors is an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the “ Investment Company Act ”); and the Issuer is not, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the General Disclosure Package, an “investment company” as defined in the Investment Company Act.

 

(aa)   There are no securities of the Issuer or Guarantors that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States

 

 

 

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automated interdealer quotation system of the same class, within the meaning of Rule 144A, as the Securities.

 

(bb)   Assuming the accuracy of, and compliance with, the representations, warranties and agreements of the Purchasers in Section 4 of this Agreement and the compliance by the holders of the Offered Securities with the offering and transfer restrictions set forth in the General Disclosure Package and Final Offering Circular, the offer and sale of the Offered Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act; and it is not necessary to qualify an indenture in respect of the Offered Securities under the Trust Indenture Act.

 

(cc)   Neither the Issuer, nor the Guarantors, nor any of its or their affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuer makes no representation) (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S.  The Issuer, the Guarantors, their respective affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuer makes no representation) have complied and will comply with the offering restrictions requirement of Regulation S.  Neither the Issuer nor any Guarantor has entered and neither the Issuer nor any Guarantor will enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement.

 

(dd)   Neither the Issuer, nor Holdings nor any Subsidiary is (i) in violation of its charter, bylaws or other similar constitutive documents, (ii) in default (or, with notice or lapse of time or both, would be in default) in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note, indenture, mortgage, deed of trust, loan or credit agreement, lease, license, franchise agreement, authorization, permit, certificate or other agreement or instrument to which the Issuer, Holding or any Subsidiary is a party or by which any of them is bound or to which any of their assets or properties is subject (collectively, “ Agreements and Instruments ”), or (iii) in violation

 

 

 

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of any law, statute, rule or regulation or any judgment, order or decree of any domestic or foreign court or other governmental or regulatory authority, agency or other body with jurisdiction over any of them or any of their assets or properties (“ Governmental Authority ”), except, in the case of clauses (ii) and (iii), for such defaults or violations as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(ee)   The sale of the Offered Securities pursuant to Regulation S is not part of a plan or scheme to evade the registration process of the Securities Act.

 

(ff)   Neither the Issuer nor Holdings nor any of its Subsidiaries nor any agent (other than the Initial Purchasers, as to whom the Issuer makes no representation) thereof acting on the behalf of them has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Offered Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

 

(gg)   The Registration Rights Agreement has been duly and validly authorized by the Issuer and the Guarantors and, when duly executed and delivered by the Issuer and Guarantors (assuming the due authorization, execution and delivery thereof by the Initial Purchasers), will constitute a valid and legally binding obligation of the Issuer and the Guarantors, enforceable against them in accordance with its terms, except that (i) the enforcement thereof may be limited by the Bankruptcy Exceptions and (ii) any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations.  The Registration Rights Agreement, when executed and delivered, will conform in all material respects to the description thereof in the General Disclosure Package and in the Final Offering Circular.

 

(hh)   No “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Issuer that it is considering imposing) any condition (financial or otherwise) on the Issuer’s retaining any rating assigned to the Issuer, any securities of the Issuer or (ii) has indicated to the Issuer that it is considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (B) any change in the outlook for any rating of the Issuer or any securities of the Issuer.

 

 

 

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(ii)   The Issuer and Holdings maintain disclosure controls and procedures (as defined as Rule 13a-15(e) of the Exchange Act) designed to ensure that information required to be disclosed by Holdings in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported in accordance with the Exchange Act and the rules and regulations thereunder.  Holdings has carried out and will carry out evaluations, under the supervision and with the participation of the management of Holdings and the Issuer, of the effectiveness of the design and operation of the Issuer’s disclosure controls and procedures in accordance with Rule 13a-15 of the Exchange Act.

 

(jj)   The Issuer, Holdings and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance in all material respects that:  (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of their financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for their assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Issuer is not aware of any material weaknesses in its or its subsidiaries’ internal controls.

 

(kk)   Each of the Security Documents has been duly authorized by each of the Issuer and each of the Guarantors party thereto and on the Closing Date will be duly executed and delivered by each of the Issuer and each of the Guarantors party thereto and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of each of the Issuer and each of the Guarantors party thereto enforceable against each of the Issuer and each of the Guarantors party thereto in accordance with its terms, subject to the Bankruptcy Exceptions.

 

(ll)   As of the Closing Date, the Security Documents will represent all of the collateral and guarantee agreements, security agreements and other similar agreements necessary to grant to the holders of the Offered Securities a valid first-priority lien on the Notes Collateral and a valid second-priority lien on the Bank Collateral subject only to the liens or encumbrances permitted under the Indenture on the Collateral, except the deposit account control agreements, security account control agreements and mortgages.

 

 

 

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(mm)   The Security Documents, when duly executed and delivered, will create valid and (when all required filings and recordings with respect to, and deliveries of, Collateral have been made as described in the Security Documents) perfected security interests in the Collateral (subject to the exceptions contemplated or permitted by the Indenture and the Security Documents).

 

(nn)   On and as of the Closing Date:

 

(i) Upon delivery to the Notes Collateral Agent or the Bank Collateral Agent of the certificates or instruments representing or evidencing the Pledged Collateral (as defined in the Collateral Agreement) in accordance with the Credit Agreement and the Collateral Agreement (or in the case of certificates or instruments representing or evidencing Collateral which are then in the possession of the Notes Collateral Agent or the Bank Collateral Agent, upon the execution and delivery of the Intercreditor Agreement) and, in the case of Collateral not constituting certificated securities or instruments, the filing of Uniform Commercial Code (“ UCC ”) financing statements in the appropriate filing office, the Notes Collateral Agent will obtain a valid and perfected first-priority lien in the Notes Collateral and a valid and perfected second-priority lien in the Bank Collateral, subject only to the liens or encumbrances permitted under the Indenture and the Security Documents upon and security interest in all right, title and interest of the applicable pledgor in such other Pledged Collateral as security for the payment and performance of the Obligations (as defined in the Collateral Agreement) to the extent that a security interest in such Collateral may be perfected by such filings.

 

(ii) Upon filing by the Notes Collateral Agent of (A) UCC financing statements, (B) any filings required with the United States Patent and Trademark Office and (C) any filings required with the United States Copyright Office, the security interests granted pursuant to the Collateral Agreement will constitute valid, perfected security interests subject only to the liens or encumbrances permitted under the Indenture and the Security Documents on such Collateral described therein for the ratable benefit of the Secured Parties to the extent that a security interest in such Collateral may be perfected by such filings.

 

(oo)   In connection with the May 23, 2008, amendment of the Issuer’s Fifth Amended and Restated Credit Agreement, dated

 

 

 

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April 5, 2007, affiliates of CI Capital Partners LLC made (i) an $18 million cash investment in Ply Gem Prime Holdings Inc., an indirect parent of the Issuer (“Prime Holdings”) and received 14,518 shares of Prime Holdings’ common stock and 210,482 shares of Prime Holdings’ Class A common stock and (ii) a $12 million cash investment in Ply Gem Investment Holdings Inc., an indirect parent of the Issuer (“Investment Holdings”), and received 12,000 shares of senior preferred stock. Prime Holdings and Investment Holdings then made an aggregate $30 million capital contribution to Holdings, which in turn contributed such amount to the capital of the Issuer on May 23, 2008.

 

Each certificate signed by any officer of the Issuer or any Guarantor and delivered to the Initial Purchasers or counsel for the Initial Purchasers pursuant to, or in connection with, this Agreement shall be deemed to be a representation and warranty by the Issuer and Guarantors to the Initial Purchasers as to the matters covered by such certificate.

 

The Issuer and Guarantors acknowledge that the Initial Purchasers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 7 of this Agreement, counsel to the Issuer and Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and the Issuer and Guarantors hereby consent to such reliance.

 

3.   Purchase, Sale and Delivery of Offered Securities.   On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Issuer agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Issuer, at a purchase price of 96.822% of the principal amount thereof plus accrued interest, if any, from June 2, 2008 to the Closing Date, the principal amount of Offered Securities set forth opposite the names of the several Purchasers in Schedule A hereto.

 

The Issuer will deliver against payment of the purchase price the Offered Securities to be offered and sold by the Purchasers in reliance on Regulation S (the “ Regulation S Securities ”) in the form of one or more permanent global Securities in registered form without interest coupons (the “ Regulation S Global Securities ”) which will be deposited with the Trustee as custodian for The Depository Trust Company (“ DTC ”) and registered in the name of Cede & Co., as nominee for DTC.  The Issuer will deliver against payment of the purchase price the Offered Securities to be purchased by each Purchaser hereunder and to be offered and sold by each Purchaser in reliance on Rule 144A under the Securities Act (the “ 144A Securities ”) in the form of one permanent global security in definitive form without interest coupons (the “ Restricted Global Securities ”) deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC.  The Regulation S Global Securities and the Restricted Global Securities shall be assigned separate CUSIP numbers.  The Restricted Global Securities shall include the legend regarding restrictions on transfer set forth under “Transfer Restrictions” in the Final Offering Circular.  Interests in any

 

 

 

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permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Final Offering Circular.

 

Payment for the Regulation S Securities and the 144A Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account of the Issuer or an account as the Issuer may direct at a bank acceptable to Purchasers, at the office of Paul, Weiss, Rifkind, Wharton & Garrison LLP at 9:00 a.m. (New York time) on June 9, 2008, or at such other time not later than seven full business days thereafter as Initial Purchasers and the Issuer determine, such time being herein referred to as the “ Closing Date, ” against delivery to the Truste


 
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