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EXHIBIT 10.21
FOURTH AMENDMENT TO
RECEIVABLES PURCHASE AGREEMENT
THIS FOURTH AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT, dated as
of
December 10, 2003 (this "Amendment"), is
entered into among ATRIUM FUNDING
CORP., a Delaware corporation, as seller
(the "Seller"), ATRIUM COMPANIES, INC.,
a Delaware corporation, as initial servicer
(in such capacity, together with its
successors and permitted assigns in such
capacity, the "Servicer"), FAIRWAY
FINANCE COMPANY, LLC (as successor to
Fairway Finance Corporation), a Delaware
limited liability company (the
"Purchaser"), and HARRIS NESBITT CORP. (f/k/a BMO
Nesbitt Burns Corp.), a Delaware
corporation as agent for the Purchaser (in such
capacity, together with its successors and
assigns in such capacity, the
"Agent").
BACKGROUND
1. The Seller, the Servicer, the Purchaser and the Agent are
parties to
that certain Receivables Purchase
Agreement, dated as of July 31, 2001 (as
amended through the date hereof, the
"Agreement").
2. The parties hereto desire to amend the Agreement as set
forth
herein.
NOW, THEREFORE, in consideration of the foregoing and other good
and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto hereby
agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment
and
not otherwise defined herein shall have the
meanings assigned thereto in the
Agreement.
SECTION 2. Amendments. The Agreement is hereby amended as
follows:
2.1. Exhibit I to the Agreement is hereby amended by adding thereto
the
following new definitions in appropriate
alphabetical order:
"Account" shall mean any account (as that term is defined in
Section 9-102(a)(2) of the UCC) of Atrium or any of its
subsidiaries
arising from the sale or lease of goods or rendering of
services.
"Contingent Obligation" shall mean, as to any Person, any
direct or indirect liability of such Person, whether or not
contingent,
with or without recourse, (a) with respect to any Debt, lease,
dividend
or other obligation (the "primary obligations") of another Person
(the
"primary obligor"), including any obligation of such Person (i)
to
purchase, repurchase or otherwise acquire such primary obligations
or
any security
therefor, (ii) to advance or provide funds for the payment
or discharge of any such primary obligation, or to maintain
working
capital or equity capital of the primary obligor or otherwise
to
maintain the net worth or solvency or any balance sheet item, level
of
income or financial condition of the primary obligor, (iii) to
purchase
property, securities
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or services primarily for the purpose of assuring the owner of
any
such
primary obligation of the ability of the primary obligor to
make
payment of such primary obligation, or (iv) otherwise to assure
or
hold harmless the holder of any such primary obligation against
loss
in respect thereof (each of (i)-(iv), a "Guaranty Obligation");
(b)
with respect to any Surety Instrument (other than any Letter of
Credit) issued for the account of such Person or as to which
such
Person is otherwise liable for reimbursement of drawings or
payments;
(c) to purchase any materials, supplies or other property from, or
to
obtain the services of, another Person if the relevant contract
or
other related document or obligation requires that payment for
such
materials,
supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies
or
other property is ever made or tendered, or such services are
ever
performed or tendered; or (d) in respect of any Swap Contract;
provided, however, that the term Contingent Obligation shall
not
include endorsements of instruments for deposit or collection
or
standard contractual indemnities entered into, in each case in
the
ordinary course of business. The amount of any Contingent
Obligation
shall (x) in the case of a Guaranty Obligation, be deemed equal to
the
stated or determinable amount of the primary obligation in respect
of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in
respect thereof, and (y) in the case of other Contingent
Obligations,
be equal to the maximum reasonably anticipated liability in
respect
thereof.
"Fixed Charge Coverage Ratio" shall mean, for any Test Date,
the ratio of (x) Consolidated EBITDA for the Measurement Period
ending
on or immediately prior to such Test Date to (y) Fixed Charges for
such
Measurement Period.
"Fixed Charges" shall mean, for any Measurement Period, the
sum of (i) Consolidated Interest Expense for such period, (ii) the
sum
of all scheduled principal payments on any Debt of Atrium and
its
Consolidated Subsidiaries (including, without duplication, any
lease
payments in respect of Capital Leases attributable to the
principal
component thereof for such period), (iii) Capital Expenditures
actually
made during such period and (iv) all income taxes actually paid in
cash
by Atrium and its Subsidiaries during such period.
"Guaranty Obligation" shall have the meaning set forth in the
definition of
"Contingent Obligation" herein.
"Holdings" shall mean Atrium Corporation, a Delaware
corporation.
"Surety Instruments" shall mean all letters of credit
(including standby and commercial), bankers' acceptances, bank
guarantees, surety bonds and similar instruments.
"Transactions" shall have the meaning set forth in the Credit
Agreement.
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2.2. The definition of "Adjusted Net Income" set forth in Exhibit I
to
the Agreement is hereby amended and
restated in its entirety as follows:
"Adjusted Net Income" shall mean, for purposes of the
financial covenants listed in paragraph (s) of Exhibit IV to
the
Agreement only, for any period, the consolidated net income (loss)
for
such period, of Atrium and its Consolidated Subsidiaries, adjusted
by
excluding (to the extent taken into account in the calculation of
such
consolidated net income (loss)) the effect of (a) gains or losses
for
such period from Dispositions not in the ordinary course of
business
and Excluded Dispositions not in the ordinary course of business,
and
the tax
consequences thereof, (b) any non-recurring or extraordinary
items of income or expense for such period and the tax
consequences
thereof (including expenses related to the Transactions or any
Permitted Acquisition); provided that an item will not be
considered
"non-recurring" if it is in the ordinary course of continuing
operations or if such item occurred within the prior two years, (c)
the
portion of net income (loss) of any Person (other than a
Subsidiary) in
which Atrium or any Subsidiary has an ownership interest, except to
the
extent of the amount of cash dividends or other cash
distributions
actually paid to Atrium or (subject to clause (d) below) any
Subsidiary
during such period to the extent not in excess of Atrium's or
such
Subsidiary's proportionate interest in such Person's consolidated
net
income for such period, and (d) the net income of any Subsidiary to
the
extent that the declaration or payment of dividends or similar
distribution by such Subsidiary was not for the relevant period
permitted (without giving effect to any non-permanent waiver),
directly
or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule
or
governmental regulation applicable to such Subsidiary or its
stockholders.
2.3. The definition of "Capital Expenditures" set forth in Exhibit
I to
the Agreement is hereby amended and
restated in its entirety as follows:
"Capital Expenditures" shall mean, for purpose of the
financial covenants listed in clause (s) of Exhibit IV to the
Agreement
only, for any period, any direct or indirect expenditures of Atrium
and
the Subsidiaries which should be capitalized on the
consolidated
balance sheet of Atrium and the Subsidiaries in accordance with
GAAP in
respect of the purchase or other acquisition of fixed or capital
assets
(including, without limitation, securities), excluding (i)
normal
replacement and maintenance programs properly charged to
current
operations, (ii) any expenditure made with the Net Available
Proceeds
of any Disposition to the extent such Net Available Proceeds are
not
required to be applied to the prepayment of the Loans in
accordance
with Section 2.10(a)(iv) of the Credit Agreement, (iii) any
expenditure
made with the proceeds of any Excluded Disposition, (iv)
expenditures
in an amount not to exceed the sum of (x) the Net Available
Proceeds of
any Casualty Event to the extent such Net Available Proceeds are
not
required to be applied to the prepayment of the Loans in
accordance
with Section 2.10(a)(i) of the Credit Agreement and (y) the amount
of
any applicable insurance deductibles with respect to such
Casualty
Event to the extent such amount is applied as set forth in clause
(x)
of Section 2.10(a)(i) of the Credit Agreement within the period
specified therein, (v) expenditures to effect Permitted
Acquisitions,
(vi) the purchase price of equipment to the extent that the
consideration therefor consists of used
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or surplus equipment being traded in at such time or the proceeds
of a
concurrent sale of such used or surplus equipment, in each case in
the
ordinary course of business, (vii) any deposits required to be made
in
connection with the purchase or other acquisition of fixed or
capital
assets; provided, however, that such a deposit shall no longer
be
excluded from Capital Expenditures if used to purchase or
acquire
fixed or capital assets, (viii) option exercise costs to
acquire
Property and the costs of improvements to such Property so long
as
such Property is sold within the same fiscal year, (ix) any
capitalized interest and (x) capital expenditures resulting
from
operating lease conversions pursuant to Section 9.08(k)(ii) of
the
Credit Agreement.
2.4. The definition of "Permitted Holders" set forth in clause (c)
of
the last paragraph of the definition of
"Change in Control" set forth in Exhibit
I to the Agreement is hereby amended and
restated in its entirety as follows:
(c) "Permitted Holders" means (i) ATR Acquisition, LLC and any
other investment entity managed or controlled by Kenner &
Company, Inc.
and/or its Affiliates, (ii) UBS Capital Americas II, LLC and/or
its
Affiliates, (iii) ML IBK Positions, Inc. and/or its Affiliates,
(iv)
any partners, members or investors (either directly or
indirectly
through any investment partnerships or entities) in the
entities
described in clauses (i), (ii) and (iii) above who are distributees
of
investments held by the entities described in clauses (i), (ii)
and
(iii) above, (v) any immediate family members or lineal
descendents, or
trusts or other entities for their benefit in respect of the
Persons
described in clauses (i), (ii), (iii) and (iv) above, and (vi)
any
Affiliates in respect of the Persons described in clauses (i),
(ii),
(iii) and (iv) above.
2.5. The definition of "Consolidated EBITDA" set forth in Exhibit I
to
the Agreement is hereby amended and
restated in its entirety as follows:
"Consolidated EBITDA" shall mean, for any Measurement Period,
the remainder of (A) the sum (without duplication) of the amounts
for
such period of (i) Adjusted Net Income, (ii) income tax expense to
the
extent deducted in determining Adjusted Net Income for such
period,
(iii) the sum of (a) all interest expense to the extent deducted
in
determining Adjusted Net Income for such period, plus (b) an
amount
equal to the interest (or other fees in the nature of interest
or
discount accrued and paid or payable in cash) for such period on
any
Permitted Receivables Transaction, plus (c) other than for purposes
of
the definition of Excess Cash Flow, Permitted Securitization Fees
paid
or payable in cash for such period to the extent deducted in
determining Adjusted Net Income for such period (without
duplication of
any such amounts added back pursuant to any other clause of
this
definition), (iv) depreciation expenses and amortization expense to
the
extent deducted in determining Adjusted Net Income for such period,
(v)
the non-cash component of any item of expense to the extent
deducted in
determining Adjusted Net Income for such period, other than to
the
extent requiring an accrual or reserve for future cash expenses,
(vi)
the amortization or expensing of any asset step-up resulting
from
purchase accounting t
