LIMITED WAIVER AGREEMENT
Exhibit
10.10.2.1
[EXECUTION
COPY]
THIS LIMITED WAIVER
AGREEMENT (this “Waiver”), dated as of
March 11, 2009, is made among (i) BUILDING MATERIALS HOLDING
CORPORATION, a Delaware corporation (“Holdings”), as
borrower, (ii) BMC WEST CORPORATION, a Delaware corporation (the “Company”), and
certain other affiliates of Holdings, as guarantors, (iii) the Lenders
party to the Credit Agreement referenced below, and (iv) XXXXX FARGO BANK,
NATIONAL ASSOCIATION (“Xxxxx Fargo”), as the
L/C Issuer, the
Swingline Lender and the administrative agent for the Lenders (in such
capacity, the “Administrative
Agent”).
A. WHEREAS,
Holdings, the Company and the other Guarantors, the Lenders and the
Administrative Agent are parties to a Second Amended and Restated Credit
Agreement, dated as of November 10, 2006, as amended by that certain First
Amendment to Second Amended and Restated Credit Agreement, dated as of
February 29, 2008, and that certain Second Amendment to Second Amended and
Restated Credit Agreement, dated as of September 30, 2008 (as so amended and as
further amended, restated, supplemented or otherwise modified from time to time,
the “Credit
Agreement”).
B. WHEREAS,
by written notice dated February 26, 2009 (the “Notice Letter”),
Holdings has notified the Administrative Agent of certain potential or actual
Defaults under Section 8.19(b) of the Credit Agreement as more specifically
described in such Notice Letter, a copy of which is attached hereto as Exhibit A (such
Defaults specified in the Notice Letter, the “Specified
Defaults”).
C. WHEREAS,
as a result of such Specified Defaults, (i) Holdings may be unable to request
additional Credit Extensions under the Credit Agreement, inasmuch as Holdings
may be unable to satisfy the conditions precedent to such Credit Extensions
under Section 5.03 of
the Credit Agreement, and (ii) Holdings may be unable to dispose of assets as
may otherwise be permitted under Section 8.02(h) of
the Credit Agreement, inasmuch as clause (i) of such Section 8.02(h)
requires that at the time of any such disposition no Event of Default shall
exist.
D. WHEREAS,
Holdings has requested that the Majority Lenders agree to a limited waiver until
April 15, 2009, of (i) the conditions precedent to additional Credit Extensions
set forth in Sections 5.03(b),
5.03(c) and
5.03(d), so
that, subject to availability under the Borrowing Base, Holdings may continue to
have access to Revolving Loans of up to a maximum aggregate principal amount of
$20,000,000, notwithstanding the existence of the Specified Defaults, and (ii)
the requirement under clause (i) of Section 8.02(h) that
no Event of Default shall exist at the time of any disposition otherwise
permitted under such Section 8.02(h) so
that Holdings may continue to pursue asset sales, notwithstanding the existence
of the Specified Defaults, the proceeds of which shall be applied to prepay the
Term B Loans in accordance with Section 2.08(a)(iii)
of the Credit Agreement, in each case, pending further discussions with the
Administrative Agent and the Lenders regarding the Specified
Defaults.
E. WHEREAS,
the Majority Lenders have agreed to such request, subject to the terms and
conditions hereof.
Accordingly, the
parties hereto agree as follows:
SECTION 1
Definitions;
Interpretation.
(a) Terms Defined in Credit
Agreement. All capitalized terms used in this Waiver
(including in the preamble and recitals hereof) and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.
(b) Interpretation. The
rules of interpretation set forth in Section 1.02 of
the Credit Agreement shall be applicable to this Waiver and are incorporated
herein by this reference.
SECTION 2
Limited
Waiver.
(a) Subject
to the terms and conditions of this Waiver, the Majority Lenders hereby
temporarily waive (i) the requirements of Section 8.02(h)(i) of
the Credit Agreement, (ii) the requirements of Section 8.19(b) of
the Credit Agreement for the month ended February 28, 2009, and the month ending
Xxxxx 00, 0000, (xxx) the requirements of Sections 5.03(b),
5.03(c) and
5.03(d) of the
Credit Agreement with respect to additional Revolving Loans requested by
Holdings on or after the Effective Date (as defined in Section 3 below), (iv)
the certifications required under paragraphs (b) and (c) of any Notice of
Borrowing with respect to additional Revolving Loans requested by Holdings on or
after the Effective Date (as defined in Section 3 below), in the case of each of
the preceding clauses (i), (ii), (iii) and (iv), insofar as such requirements or
certifications cannot be satisfied due solely to the occurrence of the Specified
Defaults, and (v) the right to exercise default remedies pursuant to the Loan
Documents or applicable law arising solely as a result of the existence of the
Specified Defaults; provided, that (1)
such temporary waiver shall terminate on the earlier to occur of (A) the
occurrence of an Event of Default (other than the Specified Defaults) and (B)
5:00 p.m. (Pacific time) on April 15, 2009 (the earliest to occur of (A) and
(B), the “Waiver
Termination Date”), and (2) the Effective Amount of all Revolving Loans
shall not exceed $20,000,000 in the aggregate at any time outstanding, subject
to availability under the Borrowing Base.
(b) References Within Credit
Agreement. Each reference in the Credit Agreement to “this
Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like
import, shall mean and be a reference to the Credit Agreement as supplemented by
this Waiver.
SECTION 3
Conditions of
Effectiveness. The effectiveness of Section 2 of
this Waiver shall be subject to the satisfaction of each of the following
conditions precedent (the date on which such conditions are satisfied, the
“Effective
Date”):
(a) Execution. The
Administrative Agent shall have received (i) from Holdings, the Company and
each other Guarantor a duly executed original of this Waiver (or, if elected by
the Administrative Agent, a facsimile or PDF copy of such executed Waiver), and
(ii) from the Majority Lenders duly executed original written consents to
this Waiver (or, if elected by the Administrative Agent, facsimile or PDF copies
of such executed consents) authorizing the Administrative Agent to execute and
deliver this Waiver on the Majority Lenders’ behalf.
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(b) Fees and
Expenses. Holdings shall have paid (i) the Waiver
Fee referenced below, and (2) all invoiced costs and expenses then due in
accordance with Section 7(d) of
this Waiver.
(c) Additional Closing Documents
and Actions. The Administrative Agent shall have received the
following, in form and substance satisfactory to it: a certificate of a
Responsible Officer of Holdings and the Company, stating that (i) the
representations and warranties contained in Section 4 of
this Waiver are true and correct on and as of the Effective Date, and
(ii) on and as of the Effective Date, no Default shall have occurred and be
continuing other than the Specified Defaults.
(d) Representations and
Warranties; No Default. On the Effective
Date (i) the representations and warranties contained in Section 4 of
this Waiver shall be true and correct on and as of the Effective Date as though
made on and as of such date; and (ii) no Default shall have occurred and be
continuing other than the Specified Defaults.
(e) Additional
Documents. The Administrative Agent shall have received, in
form and substance satisfactory to it, such additional approvals, opinions,
documents and other information as the Administrative Agent or the Majority
Lenders (through the Administrative Agent) may reasonably request.
SECTION 4
Representations and
Warranties. To induce the Lenders to enter into this Waiver,
Holdings, the Company and each other Loan Party hereby represents and warrants
to the Administrative Agent and the Lenders that all representations and
warranties made by each such Person in Article VI of the
Credit Agreement and in the other Loan Documents are true and correct on and as
of the date hereof, except for any inaccuracy of the representations and
warranties in Section
6.06 or Section
6.11(b) resulting from the existence of the Specified
Defaults. For the purposes of this Section 4, (i) each
reference in Article
VI of the Credit Agreement to “this Agreement,” and the words “hereof,”
“herein,” “hereunder,” or words of like import in such Article, shall mean and
be a reference to the Credit Agreement as supplemented by this Waiver, and each
reference in such Article to “the Loan Documents” shall mean and be a reference
to the Loan Documents as supplemented as contemplated hereby, (ii) Section 6.11 of
the Credit Agreement shall be deemed instead to refer to the last day of the
most recent fiscal quarter and fiscal year for which financial statements have
then been delivered, and (iii) any representations and warranties which
relate solely to an earlier date shall not be deemed confirmed and restated as
of the date hereof (provided that such
representations and warranties shall be true and correct as of such earlier
date).
SECTION 5
Waiver
Fee. Holdings shall pay to Administrative Agent, for the
account of each Lender that approves this Waiver, a waiver fee in the amount of
(x) 10 basis points multiplied by
(y) (1) the Revolving Commitment plus (2) the
outstanding principal amount of Term B Loans of each such Lender that approves
this Waiver (the “Waiver
Fee”). Such Waiver Fee shall be fully earned on the Effective
Date and shall be paid only to those Lenders that approve this Waiver by
returning to the Administrative Agent a written consent to this Waiver by no
later than 5:00 p.m. New York time on March 11, 2009.
3
SECTION 6
Reaffirmation of Liens and
Guarantees.
(a) Each
Loan Party hereby reaffirms that the Liens granted to the Administrative Agent,
for itself and on behalf of and for the ratable benefit of the other Secured
Parties, under the Security Agreement and the other Collateral Documents remain
in full force and effect and constitute, and shall constitute on and after the
Effective Date, valid and perfected Liens on the Collateral (subject only to
Permitted Liens) to secure the Secured Obligations. As used herein,
“Secured Parties” and “Secured Obligations” shall have the meanings given to
such terms in the Security Agreement.
(b) Each
of the undersigned Guarantors, in its capacity as a Guarantor, does hereby
consent to this Waiver and to the documents and agreements referred to herein,
and nothing herein shall in any way limit any of the terms or provisions of the
Guaranty of such Guarantor or the Collateral Documents executed by such
Guarantor or any other Loan Document executed by such Guarantor (as the same may
be amended from time to time), all of which are hereby ratified and affirmed in
all respects.
SECTION 7
Miscellaneous.
(a) Notice. Subject
to Section
11.07 of the Credit Agreement, the Administrative Agent shall notify
Holdings, the Company and the Lenders of the occurrence of the Effective Date
and promptly thereafter distribute to Holdings, the Company and the Lenders
copies of all documents delivered under Section 3 of
this Waiver.
(b) Credit Agreement Otherwise
Not Affected. Except as expressly waived pursuant hereto, the
Credit Agreement and the other Loan Documents shall remain unchanged and in full
force and effect and are hereby ratified and confirmed in all
respects. The Lenders’ and the Administrative Agent’s execution and
delivery of, or acceptance of, this Waiver and any other documents and
instruments in connection herewith (collectively, the “Waiver Documents”)
shall not be deemed to create a course of dealing or otherwise create any
express or implied duty by any of them to provide any other or further
amendments, consents or waivers in the future.
(c) No
Reliance. Each of Holdings, the Company and each other
Guarantor hereby acknowledges and confirms to the Administrative Agent and the
Lenders that it is executing this Waiver and the other Waiver Documents on the
basis of its own investigation and for its own reasons without reliance upon any
agreement, representation, understanding or communication by or on behalf of any
other Person.
(d) Costs and
Expenses. Holdings agrees to pay to the Administrative Agent
on demand the reasonable out-of-pocket costs and expenses of the Administrative
Agent, and the reasonable fees and disbursements of counsel to the
Administrative Agent, in connection with the negotiation, preparation, execution
and delivery of this Waiver and any other documents to be delivered in
connection herewith.
(e) Binding
Effect. This Waiver shall be binding upon, inure to the
benefit of and be enforceable by Holdings, the Company and each other Guarantor,
the Administrative Agent and each Lender and their respective successors and
assigns.
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(f)
Governing
Law. THIS
WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA.
(g) Complete Agreement;
Amendments. This Waiver, together with the other Waiver
Documents and the other Loan Documents, contains the entire and exclusive
agreement of the parties hereto and thereto with reference to the matters
discussed herein and therein. This Waiver supersedes all prior
commitments, drafts, communications, discussion and understandings, oral or
written, with respect thereto. This Waiver may not be modified,
amended or otherwise altered except in accordance with the terms of Section 11.01 of
the Credit Agreement.
(h) Severability.
Whenever possible, each provision of this Waiver shall be interpreted in such
manner as to be effective and valid under all applicable laws and
regulations. If, however, any provision of this Waiver shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Waiver, or the validity or effectiveness of such provision in any other
jurisdiction.
(i) Counterparts. This
Waiver may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute but one and
the same instrument.
(j)
Loan
Documents. This Waiver and the other Waiver Documents shall
constitute Loan Documents.
(k) Reservation of
Rights. The Administrative Agent and the Lenders continue to
evaluate their response to the Specified Defaults, and, except as specifically
set forth in Section 2 above, nothing contained in this Waiver is intended to or
shall be construed as a waiver or forbearance of any of the rights, remedies,
and powers of the Administrative Agent or any Lender or against the Borrower,
any Guarantor or the Collateral, or a waiver of any Defaults or Events of
Default, whether specified herein or otherwise, as an agreement to continue to
make Credit Extensions to the Borrower under the Credit Agreement except as
specifically set forth in Section 2 above, or a consent to any departure by the
Borrower or any Guarantor from the express provisions of the Credit Agreement
and the other Loan Documents. The Administrative Agent and each
Lender hereby expressly reserves all of its remedies, powers, rights, and
privileges under the Credit Agreement and the other Loan Documents, at law
(including under the Uniform Commercial Code), in equity, or
otherwise. Please be advised that neither the Administrative Agent
nor the Lenders has any obligation to forbear from enforcing its rights and
remedies with respect to any Default or Event of Default, other than in respect
of the Specified Defaults (but then only until the Waiver Termination
Date). Any forbearance must be in writing and agreed to by the
Administrative Agent and the requisite Lenders.
[Signature
Pages Follow]
5
IN
WITNESS WHEREOF, the parties hereto have duly executed this Waiver, as of the
date first above written.
THE
BORROWER
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BUILDING
MATERIALS HOLDING
CORPORATION
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President &
Chief
Financial Officer
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THE
GUARANTORS
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BMC WEST
CORPORATION
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President &
Chief
Financial Officer
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SELECTBUILD
CONSTRUCTION, INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President &
Chief
Financial Officer
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SELECTBUILD
NORTHERN
CALIFORNIA,
INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
DISTRIBUTION, INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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[SIGNATURE PAGE 1
TO LIMITED WAIVER AGREEMENT]
C
CONSTRUCTION, INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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TWF
CONSTRUCTION, INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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H.N.R.
FRAMING SYSTEMS INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD,
L.P.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
SOUTHERN
CALIFORNIA,
INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
NEVADA, INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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[SIGNATURE
PAGE 2 TO LIMITED WAIVER AGREEMENT]
SELECTBUILD
ARIZONA, LLC
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
MID-ATLANTIC, LLC
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
FLORIDA, LLC
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
TRIM, LLC
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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KBI STUCCO,
INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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[SIGNATURE
PAGE 3 TO LIMITED WAIVER AGREEMENT]
KBI WINDOWS,
INC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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A-1 BUILDING
COMPONENTS, LLC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
MECHANICAL, LLC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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SELECTBUILD
ILLINOIS, LLC.
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By
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/s/ Xxxxxxx
X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: Senior
Vice President
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[SIGNATURE
PAGE 4 TO LIMITED WAIVER AGREEMENT]
THE
ADMINISTRATIVE AGENT
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XXXXX FARGO
BANK, NATIONAL
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ASSOCIATION,
as Administrative Agent
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By
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/s/ Xxxx X.
Xxxxxxx
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Name: Xxxx X.
Xxxxxxx
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Title: Senior
Vice President
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[SIGNATURE
PAGE 5 TO LIMITED WAIVER AGREEMENT]
EXHIBIT
A
Notice
Letter
[Please see
attached]
XXXX
Xxxx Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX
00000
February 26,
2009
Via
Email and Messenger Delivery
Xx. Xxxx Xxxxxxx,
Senior Vice President
Xxxxx Xxxxx
Xxxx
XXX
X0000-000
000 Xxxxxx Xxxxxx,
0xx Xxxxx
Xxx Xxxxxxxxx, XX
00000
Re: SECOND AMENDED
AND RESTATED CREDIT AGREEMENT (as amended to date, the "Credit Agreement"; capitalized terms used herein and
not otherwise defined are used as defined in the Credit Agreement) entered into
as of November 10, 2006, by and among (i) BUILDING MATERIALS HOLDING CORPORATION
("Holdings"), as borrower, (ii) BMC WEST
CORPORATION (the "Company"), and certain other affiliates of
Holdings, as guarantors, (iii) the several financial institutions from time to
time party to the Credit Agreement (individually, a "Lender" and, collectively, the "Lenders"), (iv) XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Xxxxx Fargo"),
as the L/C Issuer, the Swingline Lender, the administrative agent for the
Lenders (in such capacity, the "Administrative Agent")
Dear Xx.
Xxxxxxx:
Reference is made
to Section 8.19(b) of the Credit Agreement (the "Financial Covenant"). At this time, Holdings continues
to finalize the closure of its financial books for the month ended February 28,
2009. In connection therewith it has become apparent to us that when that
closure is completed, Holdings may not be in compliance with the Financial
Covenant for the period ended February 28, 2009. Without conceding that a
Default has occurred at this time, we would like to discuss with you and the
other Lenders the possibility of relief from the Financial Covenant for the
period ended February 28, 2009, as well as certain future periods, all as
described in the presentation transmitted to you contemporaneously herewith. In
addition, notwithstanding any Default that occurs in respect of the Financial
Covenant for the period ended February 28, 2009 or otherwise, we would request
that the Lenders allow Holdings to continue to request and obtain additional
Credit Extensions under the Credit Agreement of up to $20,000,000 in aggregate
principal amount, pending negotiations with the Lenders to amend the Credit
Agreement to reflect current market conditions. In that regard, we propose a
forbearance period through April 15, 2009 during which the Lenders would forbear
from the exercise of default remedies, during which time Holdings would have
access to the above referenced Credit Extensions and negotiations with the
Lenders could be commenced and an amendment documented.
Very truly
yours,
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BUILDING
MATERIALS HOLDING
CORPORATION
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By: | /s/ Xxxxxxx X. Xxxxxx | |||
Name: |
Xxxxxxx X.
Xxxxxx
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Title: |
Senior Vice
President and
Chief
Financial Officer
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