Exhibit 10.1
CONSENT AND
WAIVER
THIS CONSENT AND
WAIVER , dated as of
May 20, 2009 (this “ Consent ”), is by and
among NCI BUILDING SYSTEMS, INC. , a Delaware corporation
(the “ Borrower ”), certain Domestic
Subsidiaries of the Borrower party hereto (the “
Guarantors ”) and WACHOVIA BANK, NATIONAL
ASSOCIATION , as administrative agent for the Lenders (in such
capacity, the “ Administrative Agent
”).
W I T N E S S E T
H
WHEREAS , the Borrower, the Guarantors, the Lenders
party thereto, and the Administrative Agent are parties to that
certain Credit Agreement dated as of June 18, 2004 (as
previously amended and modified and as further amended, modified,
supplemented or restated from time to time, the “ Credit
Agreement ”; capitalized terms used herein shall have the
meanings ascribed thereto in the Credit Agreement unless otherwise
defined herein);
WHEREAS , the Borrower intends to enter into certain
contractual obligations with one or more private investment funds
(“ Investment Funds ”) and/or one or more
holders (the “ Convertible Note Holders ”) of
the Borrower’s 2.125% convertible senior subordinated notes
due 2024 (the “ Convertible Notes ”), in each
case for the issuance of convertible preferred Capital Stock
(“ Preferred Stock ”) and/or common stock (the
“ Common Stock ”; together with the Preferred
Stock, the “ Stock Issuance ”) in exchange for
(a) with respect to the Investment Funds, cash and
(b) with respect to the Convertible Note Holders, the
retirement of the Convertible Notes held by such Convertible Note
Holders;
WHEREAS , the Borrower may not be in compliance with the
financial covenants (the “ Financial Covenants
”) set forth in Section 5.9(a), (b) and (c) of
the Credit Agreement for a period beginning with the fiscal quarter
of the Borrower ended May 3, 2009 and ending on July 15,
2009 (the “ Waiver Period ”);
WHEREAS , the Borrower has requested that the Required
Lenders (a) consent to the execution by the Borrower of
documentation relating to the Stock Issuance, (b) waive any
Default or Event of Default resulting from the execution of such
documentation under (i) the definition of the term
“Change of Control” in Section 1.1 of the Credit
Agreement and (ii) Section 6.1 of the Credit Agreement
(collectively, the “ Potential Defaults ”) and
(c) waive compliance with the Financial Covenants during the
Waiver Period; and
WHEREAS , the Required Lenders are willing to
(a) consent to the execution by the Borrower of documentation
relating to the Stock Issuance, (b) waive the Potential
Defaults and (c) waive compliance with the Financial Covenants
during the Waiver Period, in each case, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, IN
CONSIDERATION of the
premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
CONSENT AND WAIVER
1.1 Consent and Waiver
.
(a) Notwithstanding the provisions
of the Credit Agreement to the contrary, the Required Lenders
hereby (i) consent to the execution by the Borrower of
documentation relating to the Stock Issuance and agree that the
contracting for, and execution of such documentation shall not
(A) result in a “Change of Control” as defined in
Section 1.1 of the Credit Agreement or (B) violate the
provisions of Section 6.1 of the Credit Agreement and
(ii) waive the Potential Defaults resulting from the execution
by the Borrower of documentation relating to the Stock Issuance;
provided that it is acknowledged and agreed that such
consent and waiver shall relate only to the contracting for, and
execution of such documentation and shall not be a consent to, or
waiver of, any Default or Event of Default, any mandatory
prepayment obligation or other requirement that would otherwise
exist or arise from, such Stock Issuance.
(b) Notwithstanding the provisions
of the Credit Agreement to the contrary, the Required Lenders
hereby waive compliance by the Credit Parties with the Financial
Covenants; provided that (i) such waiver shall only be
effective during the Waiver Period and (ii) during the Waiver
Period, the Credit Parties shall continue to provide the financial
information required pursuant to Section 5.1 and 5.2 of the
Credit Agreement (including, without limitation, the compliance
certificate required by Section 5.2(b) setting forth
calculations with respect to the Financial Covenants). Immediately
upon the expiration of the Waiver Period, the Credit Parties will
be subject to the financial covenants set forth in Section 5.9
of the Credit Agreement and compliance with such financial
covenants will be tested based on the financial information
provided pursuant to Sections 5.1 and 5.2 of the Credit Agreement
for the fiscal quarter most recently ended prior to the expiration
of the Waiver Period. For the avoidance of doubt, upon the
expiration of the Waiver Period, if the Credit Parties are not in
compliance with the financial covenants set forth in
Section 5.9 of the Credit Agreement (as calculated in
accordance with the requirements of the foregoing sentence), then
such non-compliance will constitute an Event of Default and the
Lenders shall be immediately entitled to exercise any or all of
their rights and remedies arising in respect thereof. For purposes
of this Section 1.1(b), on July 15, 2009 the Waiver
Period shall be automatically extended until September 15,
2009 to the extent the Administrative Agent has received
satisfactory evidence that the Borrower has entered into a
definitive agreement for the issuance of the Preferred Stock which
is in full force and effect as of such date.
1.2 Effectiveness of Consent
and Waiver . This
Consent shall be effective only to the extent specifically set
forth herein and shall not (a) be construed as a waiver of any
breach or default nor as a waiver of any breach or default of which
the Lenders have not been informed by the Credit Parties,
(b) affect the right of the Lenders to demand compliance by
the Credit Parties with all terms and conditions of the Credit
Agreement, except as specifically consented to pursuant to the
terms hereof, (c) be deemed a waiver of any transaction or
future action on the
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part of the Credit Parties requiring the
Lenders’ or the Required Lenders’ consent or approval
under the Credit Agreement, or (d) except as consented to and
waived hereby, be deemed or construed to be a waiver or release of,
or a limitation upon, the Administrative Agent’s or the
Lenders’ exercise of any rights or remedies under the Credit
Agreement or any other Credit Document, whether arising as a
consequence of any Event of Default which may now exist or
otherwise, all such rights and remedies hereby being expressly
reserved.
1.3 Agreements Regarding
Deposit and Securities Accounts .
(a) Each of the Credit Parties
hereby agrees that, beginning with the date that is thirty
(30) days after the date hereof (or such longer time as agreed
to by the Administrative Agent), each of the Credit Parties will
not open, maintain or otherwise have any checking, savings,
securities or other accounts at any bank or other financial
institution, or any other account where money is or may be
deposited or maintained with any Person, other than
(i) deposit accounts that are subject to a deposit account
control agreement in favor of the Administrative Agent, for the
benefit of the Lenders, on terms and conditions satisfactory to the
Administrative Agent, (ii) securities accounts that are
subject to a securities account control agreement in favor of the
Administrative Agent, for the benefit of the Lenders, on terms and
conditions satisfactory to the Administrative Agent,
(iii) deposit accounts established solely as payroll and other
zero balance accounts and (iv) other accounts, so long as at
any time the balance in any such account does not exceed $100,000
and the aggregate balance in all such accounts does not exceed
$500,000.
(b) Each of the Credit Parties
hereby agrees that, from and after the date hereof, each of the
Credit Parties will not open, maintain or otherwise have any
checking, savings, securities or other accounts at any bank or
other financial institution, or any other account where money is or
may be deposited or maintained with any Person, other than
(i) accounts with a Lender and (ii) other accounts, so
long as at any time the balance in any such account does not exceed
$100,000 and the aggregate balance in all such accounts does not
exceed $500,000.
1.4 Revolver Availability
.
Each of the Borrower, the other
Credit Parties, the Administrative Agent and the Lenders hereby
agrees that from and after the Consent & Waiver Effective
Date, the Borrower shall not request, and the Administrative Agent,
the Swingline Lender, the Issuing Lender and the Lenders shall have
no obligation to make or issue (as applicable), any Revolving Loan,
Swingline Loan or Letter of Credit, in each case to or for the
benefit (as applicable) of the Borrower or any other Credit Parties
(other than Revolving Loans made to reimburse drawings under
Letters of Credit to the extent required by Section 2.3 of the
Credit Agreement).
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1.5 Letters of Credit
.
In anticipation of the expiration of
the letter of credit subfacility in Section 2.3 of the Credit
Agreement on the Revolving Commitment Termination Date, the parties
hereto acknowledge and agree that, notwithstanding the terms of the
Credit Agreement to the contrary, (a) the Credit Parties may
have letters of credit issued or outstanding
