Exhibit 10.1
WAIVER
THIS WAIVER
, dated as of August 21, 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 (a) has entered into that
certain Investment Agreement dated as of August 14, 2009,
between the Borrower, Clayton, Dublier & Rice Fund VIII,
L.P. and their respective successors in interest (the “
Investment Agreement ”), for the issuance of
convertible preferred Capital Stock in exchange for cash (the
“ Convertible Issuance ”) and (b) intends
to enter into certain contractual obligations with one or more
holders (the “ Convertible Note Holders ”) of
the Borrower’s 2.125% convertible senior subordinated notes
due 2024 (the “ Convertible Notes ”), for the
payment of cash and issuance of common stock in exchange for 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
November 6, 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. Notwithstanding the provisions of the Credit Agreement to
the contrary (including, without limitation, the provisions
contained in Sections 6.1 or 6.11), the Required Lenders hereby
waive during the Waiver Period any Default or Event of Default
resulting from the execution of the Investment Agreement by the
Borrower and the launching of the Convertible Issuance;
provided , however, the foregoing shall not operate to waive
any Default or Event of Default arising from the consummation of
the Convertible Issuance or any other repurchase of convertible
preferred Capital Stock.
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.
SECTION 2
CLOSING
CONDITIONS
2.1 Closing Conditions
. This Waiver shall become effective as of the day and year
set forth above (the “ Waiver Closing Date ”)
upon satisfaction (or waiver) of the following
2
conditions (in form and substance reasonably
acceptable to the Administrative Agent) on or prior to
August 20, 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 have received executed lender
consents, in substantially the form of Exhibit A
attached hereto, from the Required Lenders authorizing the
Administrative Agent to enter into this Waiver on their behalf. The
delivery by the Administrative Agent of its signature page to this
Waiver shall constitute conclusive evidence that the consents from
the Required Lenders have been obtained.
(c) Fees and Expenses . The
Administrative Agent shall have received from the Borrower, for the
account of each Lender that executes and delivers a Lender Consent
to the Administrative Agent by 4:00 p.m. (EST) on or before
Thursday, August 20 , 2009 (each such Lender, a “
Consenting Lender ”, and collectively, the “
Consenting Lenders ”), a waiver fee in an amount equal
to 5 basis points on the outstanding principal amount of the
Tranche B Term Loan held by such Consenting Lenders.
(d) Miscellaneous . All other
documents and legal matters in connection with the transactions
contemplated by this Waiver shall be reasonably satisfactory in
form and substance to the Admini
