As of May 1, 1998
NCI Building Systems, Inc.
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Re: First Amendment to Credit Agreement
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 25, 1998 (the
"CREDIT AGREEMENT"), among NCI Building Systems ("BORROWER"), NationsBank of
Texas, N.A., as Administrative Agent ("AGENT"), NationsBanc Xxxxxxxxxx
Securities LLC, as Syndication Agent, Swiss Bank Corporation, as Documentation
Agent, and the financial institutions named therein (collectively, "LENDERS").
Unless otherwise indicated, all capitalized terms herein are used as defined in
the Credit Agreement.
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Borrower, Guarantors, Agent and Lenders agree as follows:
1. CERTAIN DEFINITIONS.
(a) The definition of "APPLICABLE MARGIN" in SECTION 1.1 of the
Credit Agreement is hereby amended by replacing the table therein with the
following table:
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RATIO OF FUNDED DEBT APPLICABLE MARGIN FOR APPLICABLE
TO EBITDA BASE RATE LOANS MARGIN FOR EURODOLLAR LOANS
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Equal to or greater than 4.0 to 1.0 0.500% 2.000%
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Less than 4.0 to 1.0, but greater than 3.75 to 0.500% 2.000%
1.0 (0.250% if Subordinated Debt (1.750% if Subordinated Debt
equals or exceeds equals or exceeds
$200,000,000) $200,000,000)
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RATIO OF FUNDED DEBT APPLICABLE MARGIN FOR APPLICABLE
TO EBITDA BASE RATE LOANS MARGIN FOR EURODOLLAR LOANS
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Less than or equal to 3.75 to 1.0, but greater 0.250% 1.750%
than 3.25 to 1.0 (0% if Subordinated Debt (1.500% if Subordinated
equals or exceeds Debt equals or exceeds
$200,000,000) $200,000,000)
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Less than or equal to 3.25 to 1.0, but greater 0% 1.375%
than 2.5 to 1.0
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Less than or equal to 2.5 to 1.0, but greater 0% 1.000%
than 2.0 to 1.0
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Less than or equal to 2.0 to 1.0 0% 0.750%
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(b) The definition of "EBITDA" in SECTION 1.1 of the Credit Agreement
is hereby amended to read in its entirety as follows:
EBITDA means, in respect of any period, the following
(calculated on a consolidated basis for the Companies in
accordance with GAAP, and using PRO FORMA combined
information for the Companies and Amatek and its
Subsidiaries for any fiscal period (or portion thereof) of
Borrower prior to the Acquisition, including amounts
expended by Amatek and its Subsidiaries for corporate
overhead and executive employee compensation): the sum of
(a) net income before interest expenses, Taxes, non-cash
operating charges (such as depreciation and amortization
expense), non-cash charges in respect of pension and retiree
benefits, and extraordinary gains and losses; plus (b)
expenses incurred by Borrower in connection with the
Acquisition during the fiscal quarters of Borrower ending on
April 30, 1998, and July 31, 1998, up to an aggregate
maximum amount for both quarters of $5,000,000; plus (c) for
each of the following fiscal periods, the following amounts
(without duplication): $10,000,000 for the four fiscal
quarters of Borrower ending on July 31, 1998; $7,500,000 for
the four fiscal quarters of Borrower ending on October 31, 1998,
$5,000,000 for the four fiscal quarters of Borrower ending on
January 31, 1999; and $2,500,000 for the four fiscal quarters
of Borrower ending on April 30, 1999.
(c) The definition of "GUARANTORS" in SECTION 1.1 of the Credit
Agreement is hereby amended by changing the name "A&S Building Interests,
Inc." to "A&S Business Interests, Inc."
(d) Section 1.1 of the Credit Agreement is hereby further amended by
adding the following new definition (in proper alphabetical order):
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SUBORDINATED DEBT means Funded Debt which is
contractually subordinated or junior in right of payment to
the Obligation on terms satisfactory to Determining Lenders.
2. SECURITY. SECTION 5.2 of the Credit Agreement is hereby amended by
adding the underlined language shown below, so that the entire section shall
read as follows:
5.2 COLLATERAL. Full and complete payment of the
Obligation shall be secured through the execution and delivery of
Pledge Agreements and Assignments of Partnership Interests with
respect to (a) all capital stock, partnership interests or other
equity interests of any Company in any domestic direct or
indirect Subsidiaries, AND (b) THE CAPITAL STOCK, PARTNERSHIP
INTERESTS OR OTHER EQUITY INTERESTS OF ANY COMPANY IN ANY FOREIGN
DIRECT OR INDIRECT SUBSIDIARIES (OTHER THAN BUILDING SYSTEMS DE
MEXICO, S.A. DE C.V.), UP TO A MAXIMUM OF 65% OF TOTAL COMBINED
VOTING POWER OF ALL CLASSES OF EQUITY INTERESTS IN SUCH
SUBSIDIARY WHICH ARE ENTITLED TO VOTE (TOGETHER WITH proceeds
thereof and any additional collateral ever furnished under
SECTIONS 2.3(h), 3.11(b) OR 5.3, the "COLLATERAL").
3. DEBT. SECTION 9.4 of the Credit Agreement is hereby amended by
changing the words "Funded Debt" to "Debt," so that such section shall read as
follows:
9.4 DEBT. No Company may create, incur or suffer to exist
any Debt, OTHER THAN Permitted Debt.
4. DIVIDENDS AND DISTRIBUTIONS. The first sentence of SECTION 9.9 of
the Credit Agreement is hereby amended, so that the entire section shall read as
follows:
9.9 DIVIDENDS AND DISTRIBUTIONS. Borrower may not declare,
make or pay any Distribution, OTHER THAN Distributions declared,
made or paid by Borrower wholly in the form of its capital stock.
No Company shall enter into any arrangement or agreement (OTHER
THAN this Agreement) that prohibits it from paying dividends or
other distributions to its shareholders (OTHER THAN prohibitions
with respect to Borrower contained in the Indenture governing
Borrower's proposed issuance of up to $200,000,000 of
Subordinated Debt).
5. MINIMUM NET WORTH. SECTION 10.1 of the Credit Agreement is hereby
amended by changing the date "October 31, 1998" to "July 31, 1998."
6. MAXIMUM LEVERAGE RATIO. SECTION 10.2 of the Credit Agreement is
hereby amended by inserting the following line at the beginning of the table set
forth therein:
July 31, 1998 4.50 to 1.00
7. MAXIMUM DEBT RATIO. SECTION 10.3 of the Credit Agreement is hereby
amended by inserting the following line at the beginning of the table set forth
therein:
July 31, 1998 4.50 to 1.00
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8. MINIMUM FIXED CHARGE COVERAGE RATIO. SECTION 10.4 of the Credit
Agreement is hereby amended by inserting the following line at the beginning of
the table set forth therein:
July 31, 1998 1.25 to 1.00
9. CONDITIONS PRECEDENT TO FUTURE ADVANCES. Lenders will not be
obligated to make any further Advances, and this instrument shall not become
effective, unless and until Agent receives (a) counterparts of this instrument
executed by Borrower, each Guarantor and each Lender, and (b) such other items
related to the transactions contemplated by this instrument as Agent may
reasonably request.
10. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that
it possesses all requisite power and authority to execute, deliver and comply
with the terms of this instrument, which has been duly authorized and approved
by all necessary corporate action and for which no consent of any person is
required, and agrees to furnish Agent with evidence of such authorization and
approval upon request.
11. FEES AND EXPENSES. Borrower agrees to pay the reasonable fees and
expenses of counsel to Agent for services rendered in connection with the
preparation, negotiation and execution of this instrument.
12. LOAN DOCUMENT; EFFECT. This instrument is a Loan Document and,
therefor, is subject to the applicable provisions of SECTION 14 of the Credit
Agreement, all of which are incorporated herein by reference the same as if set
forth herein verbatim. Except as amended in this instrument, the Loan Documents
are and shall be unchanged and shall remain in full force and effect. In the
event of any inconsistency between the terms of the Credit Agreement as hereby
modified (the "AMENDED AGREEMENT") and any other Loan Documents, the terms of
the Amended Agreement shall control and such other document shall be deemed to
be amended hereby to conform to the terms of the Amended Agreement. Borrower
hereby releases Agent and Lenders from any liability for actions or failures to
act in connection with the Loan Documents prior to the date hereof.
13. NO WAIVER OF DEFAULTS. This instrument does not constitute a waiver
of, or a consent to any present or future violation of or default under, any
provision of the Loan Documents, or a waiver of Lenders' right to insist upon
future compliance with each term, covenant, condition and provision of the Loan
Documents, and the Loan Documents shall continue to be binding upon, and inure
to the benefit of, Borrower, Guarantors, Agent and Lenders and their respective
successors and assigns.
14. FORM. Each agreement, document, instrument or other writing to be
furnished Agent or Lenders under any provision of this instrument must be in
form and substance satisfactory to Agent and its counsel.
15. MULTIPLE COUNTERPARTS. This instrument may be executed in more than
one counterpart, each of which shall be deemed an original, and all of which
constitute, collectively, one instrument; but, in making proof of this
instrument, it shall not be necessary to produce or account for more than one
such counterpart. It shall not be necessary for Borrower, Guarantors, Agent
and all Lenders to execute the same counterpart hereof so long as Borrower, each
Guarantor, Agent and each Lender execute a counterpart hereof.
16. FINAL AGREEMENT. THE LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
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AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
If the foregoing terms and conditions are acceptable to Borrower and
Guarantors, Borrower and Guarantors should indicate its acceptance by signing in
the space provided below, whereupon this letter shall become an agreement
binding upon and inuring to the benefit of Agent, Lenders, Borrower and
Guarantors and their respective successors and assigns.
Very truly yours,
NATIONSBANK OF TEXAS, N.A.
AS ADMINISTRATIVE AGENT AND A LENDER
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
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Title: Vice President
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SWISS BANK CORPORATION,
STAMFORD BRANCH,
AS DOCUMENTATION AGENT AND A LENDER
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Executive Director, Credit Risk Management
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By: /s/ Xxxxxxx XxXxxxxx
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Name: Xxxxxxx XxXxxxxx
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Title: Associate Director Loan Portfolio Support, US
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Accepted and agreed to as of the day and year first set forth in the
foregoing letter.
NCI BUILDING SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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GUARANTORS' CONSENT AND AGREEMENT
As an inducement to Agent and Lenders to execute, and in consideration of
Agent's and Lenders' execution of the foregoing, the undersigned hereby consent
thereto and agree that the same shall in no way release, diminish, impair,
reduce or otherwise adversely affect the respective obligations and liabilities
of each of the undersigned under the Guaranty dated as of May 1, 1998, executed
by the undersigned, or any agreements, documents or instruments executed by any
of the undersigned to create liens, security interests or charges to secure the
Obligation. This consent and agreement shall be binding upon the undersigned,
and the respective successors and assigns of each, and shall inure to the
benefit of Agent and Lenders, and respective successors and assigns of each.
A & S BUSINESS INTERESTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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A & S BUILDING SYSTEMS, L.P.
By: NCI OPERATING CORP.,
as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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NCI BUILDING SYSTEMS, L.P.
By: NCI OPERATING CORP.,
as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
---------------------------------------------
Title: Vice President and Chief Financial Officer
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NCI HOLDING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Treasurer
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NCI OPERATING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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METAL BUILDING COMPONENTS HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Treasurer
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METAL COATERS HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Treasurer
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MBCI OPERATING, L.P.
By: NCI Operating Corp., as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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METAL COATERS OPERATING, L.P.
By: NCI Operating Corp., as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Chief Financial Officer
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