Exhibit 10.1
WAIVER
THIS WAIVER
, dated as of July 15, 2009
(this “ Waiver ”), 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
August 14, 2009 (the “ Waiver Period
”);
WHEREAS , the Borrower has requested that the Required
Lenders waive compliance with the Financial Covenants during the
Waiver Period; and
WHEREAS , the Required Lenders are willing to 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
WAIVER
1.1 Waiver .
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 which such financial statements have been
delivered. 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, on August 14,
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 Stock Issuance which is in full force
and effect as of such date.
1.2 Effectiveness of
Waiver . This Waiver
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 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 Additional Interest
. Each of the Borrower,
the other Credit Parties, the Administrative Agent and the Lenders
hereby agrees that from and after the Waiver Effective Date, the
principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing under the Credit Agreement or
under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate which is (A) in the case of
principal, the rate that would otherwise be applicable thereto
plus 2% or (B) in the case of interest, fees or other
amounts, the Alternate Base Rate plus the sum of the
Applicable Percentage then in effect for Alternate Base Rate Loans
and 2% (after as well as before judgment).
2
1.4 Real Estate Collateral
. As a condition to
granting the waivers set forth herein, the Administrative Agent and
the Lenders party hereto have required that the Credit Parties
grant the Administrative Agent, on behalf of the Lenders, a
perfected security interest in all material owned real property of
the Credit Parties. Each of the Borrower and the other Credit
Parties hereby agrees that, within forty-five (45) days after
the Waiver Effective Date (or such longer time as agreed to by the
Administrative Agent), each of the Credit Parties shall grant to
the Administrative Agent, for the benefit of the Lenders, a
perfected security interest which shall be evidenced by the filing
of an appropriate mortgage or deed of trust, as applicable, and the
delivery of local counsel opinions with respect to all material
owned real property of the Credit Parties to the extent reasonably
required by the Administrative Agent. On or before
September 15, 2009, such security interests shall be supported
(to the extent reasonably required by the Administrative Agent) by
title reports, title insurance, flood hazard certificates, surveys,
appraisals and other documentation reasonably required by the
Administrative Agent and reasonably necessary in connection with
the perfection of such security interests or as required by
applicable law, in each case in form and scope reasonably
satisfactory to the Administrative Agent. Each of the Borrower and
the other Credit Parties hereby agrees to commence using their
reasonable best efforts to grant the security interests required
pursuant to this Section 1.4 immediately upon the Waiver
Effective Date. The Borrower and the other Credit Parties hereby
agree to reimburse the Administrative Agent, from time to time on
demand, for all reasonable fees and expenses incurred by the
Administrative Agent in pursuing and obtaining the liens and
related rights and documentation contemplated in this
Section 1.4.
SECTION 2
CLOSING
CONDITIONS
2.1 Closing Conditions
. This Waiver shall
become effective as of the day and year set forth above (the
“ Waiver Effective Date ”) upon satisfaction (or
waiver) of the following conditions (in form and substance
reasonably acceptable to the Administrative Agent) on or prior to
July 15, 2009:
(a) Executed Consent . The
Administrative Agent shall have received a copy of this Waiver duly
executed by each of the Credit Parties and the Administrative
Agent, on behalf of the Required Lenders.
(b) Executed Lender Consents
. The Administrative Agent shall h
