UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly
period ended December 31, 1999 or
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 333-30699
RELIANT BUILDING PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1364873
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3010 LBJ Freeway, Suite 400, Dallas, Texas 75234
(Address of principal executive offices) (Zip Code)
(972) 919-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months or for such shorter period as the registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---
Number of shares Common Stock outstanding as of February 10, 2000: 1,000
<PAGE>
RELIANT BUILDING PRODUCTS, INC. AND SUBSIDIARIES
QUARTER ENDED DECEMBER 31, 1999
INDEX
PART I. FINANCIAL INFORMATION
- ----------------------------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
PART II. OTHER INFORMATION
- -------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Signatures
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
RELIANT BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, APRIL 2,
1999 1999
-------------- ----------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 73 $ 851
Accounts receivable, net 28,194 26,331
Inventories (note 4) 26,353 19,220
Deferred tax assets - 2,879
Prepaid expenses and other current assets 1,206 2,001
-------------- ----------
Total current assets 55,826 51,282
Property, plant, and equipment, net 50,775 50,303
Intangible assets, net (note 3) 122,733 131,794
Assets held for sale 604 5,096
Other assets 4,675 5,180
-------------- ----------
Total assets 234,613 243,655
============== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable 26,111 15,399
Accrued expenses 19,237 16,467
Current portion of long-term debt (note 8) 9,346 5,533
Long-term debt currently being restructured (note 8) 191,249 -
-------------- ----------
Total current liabilities 245,943 37,399
Long-term debt, less current portion (note 8) 146 113,877
Deferred income taxes - 3,784
Other liabilities 3,913 3,417
Subordinated debt (note 8) - 70,000
-------------- ----------
Total liabilities. 250,002 228,477
Shareholder's equity (deficit):
Common stock, $1.00 par value:
Authorized shares - 10,000
Issued and outstanding shares - 1,000 1 1
Preferred stock of Holdings, stated at amount contributed 4,583 4,664
Notes receivable - equity securities (100) (475)
Additional paid-in capital 30,570 30,925
Accumulated deficit (50,443) (19,937)
-------------- ----------
Total shareholder's equity (deficit) (15,389) 15,178
-------------- ----------
Total liabilities and shareholder's equity (deficit) $ 234,613 $ 243,655
============== ==========
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
RELIANT BUILDING PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
QUARTER ENDED
--------------------------------------
DECEMBER 31, 1999 JANUARY 1, 1999
------------------- -----------------
<S> <C> <C>
Net sales $ 62,680 $ 65,043
Cost of products sold 52,693 50,429
------------------- -----------------
Gross profit 9,987 14,614
Selling, general and administrative 17,971 13,751
Restructuring charges (note 5) 870 -
------------------- -----------------
Income (loss) from operations (8,854) 863
Interest expense, net 5,567 4,482
------------------- -----------------
Loss before income taxes (14,421) (3,619)
Income tax benefit (526) (492)
------------------- -----------------
Net loss $ (13,895) $ (3,127)
=================== =================
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
RELIANT BUILDING PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
NINE MONTHS ENDED
--------------------------------------
DECEMBER 31, 1999 JANUARY 1, 1999
------------------- -----------------
<S> <C> <C>
Net sales $ 203,535 $ 221,472
Cost of products sold 160,996 167,567
------------------- -----------------
Gross profit 42,539 53,905
Selling, general and administrative 51,071 44,862
Restructuring charges (note 5) 870 -
Goodwill impairment (note 3) 4,829 -
------------------- -----------------
Income (loss) from operations (14,231) 9,043
Interest expense, net 15,326 13,610
Other expenses. 1,041 -
------------------- -----------------
Loss before income taxes (30,598) (4,567)
Income tax expense (benefit) (604) 36
------------------- -----------------
Net loss $ (29,994) $ (4,603)
=================== =================
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
RELIANT BUILDING PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED
-------------------
DECEMBER 31, 1999 JANUARY 1, 1999
------------------- -----------------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (29,994) $ (4,603)
Adjustments to reconcile net loss to net cash
provided by (used in) operations:
Depreciation and amortization 8,860 10,025
Non-cash interest expense 681 680
Deferred income taxes (905) (1,097)
Provision for doubtful accounts 1,473 776
Goodwill impairment 4,829 -
Other 596 48
Changes in operating assets and liabilities:
Accounts receivable (3,336) (740)
Inventories (7,133) (416)
Prepaid expenses and other current assets 795 2,252
Accounts payable and accrued expenses 13,482 (1,979)
Other 1,001 (2,224)
------------------- -----------------
Net cash provided by (used in) operating activities (9,651) 2,722
Investing activities:
Purchases of property, plant and equipment (7,842) (4,788)
Proceeds from sale of property, plant and equipment 4,619 61
------------------- -----------------
Net cash used in investing activities (3,223) (4,727)
Financing activities:
Net proceeds from revolving loan 17,999 4,000
Proceeds from long-term debt 775 528
Principal payments on long-term debt (6,619) (1,932)
Redemption of preferred stock (81) (146)
Payment of debt issue costs - (70)
Preferred stock capital contribution - 147
Proceeds from equity notes 375 -
Payment of dividends to Holdings (353) (630)
Capital contribution from Holdings - 643
------------------- -----------------
Net cash provided by financing activities 12,096 2,540
Increase (decrease) in cash and cash equivalents (778) 535
Cash and cash equivalents at beginning of period 851 737
------------------- -----------------
Cash and cash equivalents at end of period $ 73 $ 1,272
=================== =================
Supplementary Information:
Cash paid for interest $ 11,225 $ 15,526
=================== =================
Cash paid (recovered) for income taxes $ (651) $ (2,008)
=================== =================
</TABLE>
See accompanying notes.
Reliant Building Products, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
1. The Company
Reliant Building Products, Inc. (formerly Redman Building Products, Inc.) and
subsidiaries (the "Company") are primarily engaged in the manufacture of
aluminum and vinyl or nonwood, framed windows primarily for the new
construction, repair and remodel, national home center chains and manufactured
housing markets. The Company has manufacturing facilities in Texas, Georgia,
Tennessee, Washington, New Jersey (see note 5), Michigan, North Carolina and
California, and most of its customers are located throughout the United States.
2. Basis of Presentation
The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting, the instructions to Form 10-Q, and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The balance sheet at April 2, 1999 has been derived from the audited
consolidated financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
The accompanying unaudited consolidated financial statements and related notes
should be read in conjunction with the Company's audited consolidated financial
statements and related notes included in the Form 10-K filed with the Securities
and Exchange Commission on July 1, 1999. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation of the interim financial information have been included.
The results of operations for any interim period are not necessarily indicative
of the results of operations for a full year.
All significant intercompany transactions and balances have been eliminated in
consolidation. The Company utilizes a 52 or 53 week accounting period which
ends on the Friday closest to March 31. The quarters ended December 31, 1999
and January 1, 1999 included 13 weeks.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
<PAGE>
3. Intangible Assets
Intangible assets, consisting of goodwill and other intangible assets, totaled
$122.7 million at December 31, 1999. Through October 31, 1999, goodwill is
being amortized on a straight-line basis over a 40-year period. Commencing
January 1, 2000, the Company has revised the useful life of goodwill to an
aggregate of 20 years, and will amortize the remaining balance of each component
of goodwill over this life on a prospective basis. Other intangible assets
consist primarily of a covenant not to compete and trademarks that are being
amortized over five years.
In the quarter ended October 1, 1999, the Company recorded an impairment charge
of $4.8 million to reduce the carrying value of long-lived assets (including
goodwill) to their fair value. These long-lived assets are included in the North
operating segment. The review for impairment at this location was triggered by
recent operating cash flow losses and forecasted operating cash flows below
those expected at the time the manufacturing facility was acquired. The fair
value of the long-lived assets was determined based upon management's estimate
of future operating cash flows.
The Company's ability to fully recover the carrying amount of goodwill through
undiscounted cash flows assumes that results of operations and cash flows in
future periods will improve from their current levels. In the event that the
market or general economic conditions affecting the Company worsen or if
management is unable to achieve its business objectives, additional impairment
of goodwill may be necessary.
4. Inventories
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1999 APRIL 2, 1999
------------------ --------------
Raw materials $ 18,696 $ 13,205
Finished goods and work-in-process 7,657 6,015
------------------ --------------
$ 26,353 $ 19,220
================== ==============
</TABLE>
5. Restructuring Charges
During the quarter ended December 31, 1999, management committed to a plan to
close its Hackensack, New Jersey manufacturing facility and has recorded a
reserve of approximately $0.9 million for the expected costs of closing the
facility. The costs consist primarily of $0.6 million for the estimated loss on
disposal of equipment and leasehold improvements that will not be transferred to
other manufacturing facilities, and $0.3 million for amounts payable under
non-cancelable lease terms net of probable sub-lease payments (assumes a
sub-lease agreement will be obtained in approximately 6 months), and other
related exit costs. The Company expects to incur an additional $0.9 million of
employee termination costs during the fourth quarter that do not meet the
criteria for accrual as of December 31, 1999 since the employees had not been
notified. As of December 31, 1999, there have been no payments made against the
accrual. All activities associated with the plan are expected to be
substantially complete by the end of the fourth quarter.
6. Segment and Related Information
The Company currently manages its business by operating location and has
identified its reportable segments based primarily upon the geographic region of
the operating locations. The North region consists of three window
manufacturing facilities (see note 5 for information on closing of one plant in
the North segment) and one distribution center. The South region consists of
five window manufacturing facilities, four distribution centers and two
extrusion operations. The Other segment consists primarily of commercial
windows and specialty glass operations, both of which were sold on July 1, 1999.
The North and South regions manufacture and distribute aluminum and vinyl
windows for the new construction, repair and remodel, national home center
chain, and manufactured housing markets. Transactions between operating
segments are either at cost or predetermined mark-up percentages.
<TABLE>
<CAPTION>
(a) Segment Sales
QUARTER ENDED NINE MONTHS ENDED
-------------------------------------- ------------------------------------
DECEMBER 31, 1999 JANUARY 1, 1999 DECEMBER 31, 1999 JANUARY 1, 1999
------------------ ------------------ ------------------ ----------------
Segment net sales
North
<S> <C> <C> <C> <C>
External customers $ 21,997 $ 23,714 $ 72,091 $ 79,211
Intersegment 834 551 2,683 1,754
------------------ ------------------ ------------------ ----------------
Total 22,831 24,265 74,774 80,965
South
External customers 40,683 36,293 126,345 124,135
Intersegment 447 581 1,191 3,706
------------------ ------------------ ------------------ ----------------
Total 41,130 36,874 127,536 127,841
Other
External customers - 5,036 5,099 18,126
Intersegment - 200 336 1,056
------------------ ------------------ ------------------ ----------------
Total - 5,236 5,435 19,182
------------------ ------------------ ------------------ ----------------
Consolidated net sales to
external customers $ 62,680 $ 65,043 $ 203,535 $ 221,472
================== ================== ================== ================
</TABLE>
<TABLE>
<CAPTION>
(b) Segment Profit
Segment profit represents total segment sales less the costs of goods sold.
QUARTER ENDED NINE MONTHS ENDED
---------------------------------------- --------------------------------------
DECEMBER 31, 1999 JANUARY 1, 1999 DECEMBER 31, 1999 JANUARY 1, 1999
------------------- ------------------- ------------------- -----------------
Segment profit
<S> <C> <C> <C> <C>
North $ 3,552 $ 6,090 $ 14,629 $ 21,511
South 6,803 8,593 26,682 29,988
Other 64 908 1,859 3,383
Inter-segment profit
elimination (432) (977) (631) (977)
------------------- ------------------- ------------------- -----------------
Total segment profit 9,987 14,614 42,539 53,905
Selling, general and
administrative expense 17,971 13,751 51,071 44,862
Restructuring charges 870 - 870 -
Goodwill impairment - - 4,829 -
Interest expense, net 5,567 4,482 15,326 13,610
Other, net - - 1,041 -
------------------- ------------------- ------------------- -----------------
Consolidated loss before
income taxes $ (14,421) $ (3,619) $ (30,598) $ (4,567)
=================== =================== =================== =================
</TABLE>
7. Guarantor Subsidiaries
The Company's 10 7/8% senior subordinated notes due May 1, 2004 are jointly and
severally and fully and unconditionally guaranteed on a senior subordinated
basis by all of the Company's wholly-owned subsidiaries. Separate financial
statements and other disclosures concerning such guarantor subsidiaries have not
been presented because management has determined that such information is not
material to investors. The condensed summarized information (in thousands) of
the guarantor subsidiaries is as follows.
<TABLE>
<CAPTION>
DECEMBER 31, APRIL 2,
1999 1999
-------------- ---------
<S> <C> <C>
Cash and cash equivalents $ 44 $ 677
Accounts receivable, net 17,158 15,153
Raw materials 9,304 7,199
Finished product and work in process 4,137 3,142
Other current assets 376 3,074
Property, plant and equipment, net 30,248 33,349
Intangible assets, net 94,909 102,245
-------------- ---------
Total assets $ 156,176 $ 164,839
============== =========
Accounts payable $ 11,192 $ 6,457
Accrued expenses 5,157 4,251
Current portion of long-term debt 110 624
Long-term debt - 400
Other liabilities 390 2,301
Intercompany payable 48,762 41,807
Net equity 90,565 108,999
-------------- ---------
Total liabilities and net equity $ 156,176 $ 164,839
============== =========
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
------------------------------------ ----------------------------
December 31, January 1, December 31, January 1,
1999 1999 1999 1999
--------------- ------------------- -------------- ------------
<S> <C> <C> <C> <C>
Net Sales $ 40,631 $ 40,997 $ 133,802 $ 136,116
Cost of products sold 34,216 33,307 108,765 107,114
Selling, general, and administrative 15,233 10,754 36,532 33,127
Goodwill impairment - - 4,829 -
Interest expense 678 778 2,264 2,323
Income tax expense (benefit) (295) (617) (154) (893)
--------------- ------------------- -------------- ------------
Net loss $ (9,201) $ (3,225) $ (18,434) $ (5,555)
=============== =================== ============== ============
</TABLE>
<TABLE>
<S> <C> <C>
Net cash used by operating activities $ (5,514) $ (3,385)
Net cash provided by (used in) investing activities (656) (3,476)
Net cash provided by financing activities 5,537 7,485
-------------- ------------
Increase (decrease) in cash and cash equivalents $ (633) $ 624
============== ============
</TABLE>
8. Restructuring of Long-term Debt Indebtedness
Long-term indebtedness currently being restructured consists of the following
(in thousands):
December 31, 1999
-----------------
Senior Credit Facility:
Term loan A $ 38,000
Term loan B 59,900
Revolver 32,099
Senior Subordinated Notes 70,000
---------
Total long-term debt being restructured 199,999
Less current portion:
Long-term debt currently being restructured 191,249
Current maturities of long-term debt 8,750
---------
$ -
=========
The Company has reached agreements with its senior secured lenders (the
"Lenders") and with holders (each, a "Noteholder" and collectively, the "Ad Hoc
Committee of Holders") of more than 75% of the principal amount of outstanding
Senior Subordinated Notes due 2004 (the "Old Notes") on the principal terms of a
restructuring of the bank debt and the Old Notes (the "Restructuring"). The
Company and the Ad Hoc Committee of Holders have agreed on the terms of an offer
by the Company to exchange (the "Exchange Offer") all outstanding Old Notes for
(i) up to 40.0% of the common stock of the Company (the "New Stock"), and (ii)
up to $17.5 million of New Senior Subordinated PIK Notes due 2007 (the "New
Notes"). In connection with the Exchange Offer, the Company intends to solicit
(the "Solicitation") consents ("Consents") to certain proposed amendments (the
"Proposed Amendments") to the Old Indenture (as defined below).
The Company's obligation to accept for exchange Old Notes validly tendered
pursuant to the Exchange Offer is conditioned upon, among other things, (i)
receipt by the Company of valid unrevoked tenders from holders of the principal
amount of the Old Notes outstanding (the "Tender Condition"), (ii) execution by
the Company, the Guarantors and the Trustee of a Supplemental Indenture
providing for the Proposed Amendments following receipt of consents from 100% of
the principal amount of Old Notes outstanding (the "Requisite Consents") (the
"Consent Condition"), (iii) the conditions to the effectiveness of Section III
of the Fifth Amendment and Waiver, dated as of February 8, 2000 (the "Fifth
Amendment") to the Credit Agreement, dated as of January 28, 1998, as amended,
supplemented or otherwise modified from time to time thereafter (the "Senior
Secured Credit Facility") having been satisfied in full or having been waived
(the "Credit Agreement Amendment Condition"), (iv) an investment (the
"Investment") of $12.5 million in the Company by Reliant Investors, L.P. (the
"Investor"), a partnership consisting of certain entities related to Reliant
Partners, L.P. and Reliant Partners II, L.P., the current controlling
stockholders of Reliant's parent, RBPI Holding Corporation (the "Investment
Condition"), and (v) certain general conditions to the Exchange Offer and
consent and acceptance solicitations (the "General Conditions"). The Company,
in its sole discretion, may waive any of the conditions to the Exchange Offer,
in whole or in part, at any time and from time to time but only with the consent
of Holders of 75% of the principal amount of Old Notes; however, the obligation
of the Investor to make the investment is conditioned upon the satisfaction of
the Tender Condition, the Consent Condition, the Credit Agreement Amendment
Condition and the General Conditions.
On February 10, 2000, the Company entered into written agreements with members
of the Ad Hoc Committee of Holders, who beneficially own or hold investment
authority over 75% of the principal amount of the Old Notes outstanding (the
"Lockup Agreements"). Pursuant to the Lockup Agreements, members of the Ad Hoc
Committee of Holders have, subject to the Tender Condition, the Consent
Condition, the Credit Agreement Amendment Condition, the Investment Condition
and the General Conditions, agreed to validly tender (and not withdraw) all such
Holders' Old Notes pursuant to the Exchange Offer and to validly Consent (and
not revoke such Consent) to the Proposed Amendments.
The terms of the New Notes will include an initial two-year option for the
Company to either pay interest in kind at 12 7/8% annually or in cash at 10 7/8%
annually, and in cash thereafter commencing with the November 1, 2002 payment at
10 7/8% annually and increasing annually. Amortization payments will be due
annually commencing on May 1, 2004. The New Notes and the New Stock will not be
registered under the Securities Act of 1933 when issued, but will be subject to
registration rights agreements.
Pursuant to the Fifth Amendment, the Lenders waived (i) through March 20, 2000,
interest payment defaults, and (b) through March 31, 2000, as long as no
interest is paid on the Old Notes, certain financial covenant defaults under the
Senior Secured Credit Facility. The Fifth Amendment also provides for certain
amendments to the Senior Secured Credit Facility that will provide the Company
with additional liquidity, including a six-quarter deferral of principal
amortization payments and financial covenant amendments. The Senior Secured
Credit Facility amendments will not become effective until satisfaction of
certain conditions contained in the Fifth Amendment, including consummation of
the Exchange Offer and the Investment.
Because the conditions to effectiveness of the covenant amendments in the Fifth
Amendment have not yet been satisfied and the waiver contained therein expires
in less than one year and the Old Notes are in default as a result of the
Company's failure to make the November 1, 1999 interest payment, in accordance
with current accounting literature regarding classification of debt, the Company
has classified its indebtedness under the Senior Secured Credit Facility and the
Old Notes as current debt. As of December 31, 1999, the long-term debt payable
within one year is $9.3 million and long-term debt that has been classified as
current, due to the Restructuring not yet having been completed is $191.2
million.
The Company reasonably expects the Restructuring to be consummated by March 31,
2000. If the Restructuring is consummated as currently anticipated, the Company
will recognize an extraordinary gain upon consummation equal to the excess of
the carrying value of the Old Notes plus accrued interest over the aggregate of
the fair value of the New Stock issued to the Noteholders and all future cash
payments (including contingent interest in the form of interest in kind) related
to the New Notes issued to the Noteholders. Thereafter, all payments designated
as interest on the New Notes issued to the Noteholders will reduce the carrying
value of the obligation, and accordingly, there will be no interest expense
recognized in future periods related to the New Notes issued to the Noteholders.
The Company believes that completion of the Restructuring will enable adequate
funds to be available to meet the Company's cash requirements for capital
expenditures, working capital and scheduled principal and interest payments.
The Company's ability to satisfy its future capital requirements will depend on
capital expenditure requirements and the Company's future financial performance,
which will be subject to general economic conditions and competitive and other
factors, including factors beyond the Company's control. In the event that the
Tender Condition is not satisfied or waived, the Company may elect to file a
prepackaged, prearranged or pre-negotiated Chapter 11 plan of reorganization
(each a "Prepackaged Plan") containing substantially the same terms as the
Exchange Offer. In that event, the Ad Hoc Committee of Holders has already
agreed, subject to certain conditions, to vote in favor of the Prepackaged Plan.
Failure to consummate the Restructuring could have a material adverse effect on
the Company's financial position, results of operations and liquidity, and could
result in the commencement of a Chapter 11 reorganization case under the
Bankruptcy Code, without the benefit of the Prepackaged Plan.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
THE COMPANY
Reliant Building Products, Inc. (the "Company"), is one of the nation's largest
manufacturers of aluminum and vinyl, or non-wood, framed windows. The Company's
products are marketed under well-recognized brand names including ALENCO,
CARE-FREE, ALPINE WINDOWS, and BUILDERS VIEW. The products are marketed across
all major price points. As a result of the January 28, 1998 acquisition of all
the capital stock of Care-Free Window Group ("Care-Free"), a privately held
vinyl window company, the Company has developed a significant national
manufacturing and marketing presence. Window products include single hung,
double-hung, sliders and casements. Door products include hinge doors, storm
doors and patio doors. All of these products are marketed primarily for use in
new construction, manufactured housing, repair and remodeling and the
do-it-yourself market.
The Company manufactures its products at eight facilities (see note 5 to
Company's unaudited consolidated financial statements) strategically located
throughout the U.S. within two geographic regions, North and South (see note 6
to Company's unaudited consolidated financial statements for more information
regarding its operating segments). The Company distributes its products
nationally through wholesalers and dealers, direct sales to large national home
builders (including manufactured housing), independent contractors, national
home centers and lumber yards. The Company also operates Company owned
distribution facilities in Phoenix, Arizona; Ontario, California; Metairie,
Louisiana; Seattle, Washington and Dallas, Texas.
The Company supplements its window business through the manufacture of related
products such as custom aluminum extrusion and window components ("non-core
products") for the Company's internal needs and for sale to third parties. The
Company believes that its vertically integrated operations provide significant
manufacturing flexibility, a reliable supply of low-cost components and a
reduction in working capital requirements.
RESULTS OF OPERATIONS
Third Quarter Ended December 31, 1999 Compared to Third Quarter Ended January 1,
1999
Net Sales. Net sales decreased $2.3 million, or 3.6%, from $65.0 million in the
quarter ended January 1, 1999 ("Prior Period") to $62.7 million for the quarter
ended December 31, 1999 ("Current Period"). Excluding the sales from the
commercial window and specialty glass operations of the Other segment that were
sold on July 1, 1999, there was an increase in net sales of $2.7 million. Net
sales were positively impacted by revenues generated from sales to a national
home center chain under an exclusive supply contract for stores in Texas and
Oklahoma and by increased sales from Company-owned distribution facilities.
Cost of Products Sold. Cost of products sold increased $2.3 million from $50.4
million for the Prior Period to $52.7 million for the Current Period. Expressed
as a percentage of net sales, cost of products sold increased from 77.5% for the
Prior Period to 84.1% for the Current Period. This increase in cost of products
sold as a percentage of net sales is primarily the result of increasing
commodity prices for aluminum and vinyl raw materials and increased labor costs.
Due to the tight labor market, the Company maintained levels of manufacturing
labor capacity in excess of those required during October and November.
Manufacturing labor capacity has since been adjusted to levels in line with
current production.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $4.2 million from $13.8 million in the Prior
Period to $18.0 million for the Current Period. This increase is primarily due
to comparatively lower bad debt and insurance expenses in the Prior Period and
higher selling costs in the Current Period. The higher Current Period selling
costs are primarily related to store conversion costs incurred in conjunction
with the Company's expansion of its supply agreement with a national home center
chain. Also impacting this unfavorable variance are increased information
technology expenditures relating to Y2K preparedness and converting
manufacturing facilities to the Company's enterprise software.
Restructuring Charges. During the Current Period, management committed to a plan
to close its Hackensack, New Jersey manufacturing facility and has recorded a
reserve of approximately $0.9 million for the expected costs of closing the
facility. The costs consist primarily of $0.6 million for the estimated loss on
disposal of equipment and leasehold improvements that will not be transferred to
other manufacturing facilities, and $0.3 million for amounts payable under
non-cancelable lease terms net of probable sub-lease payments (assumes a
sub-lease agreement will be obtained in approximately 6 months), and other
related exit costs. The Company expects to incur an additional $0.9 million of
employee termination costs during the fourth quarter that do not meet the
criteria for accrual as of December 31, 1999 since the employees had not been
notified. As of December 31, 1999, there have been no payments made against the
accrual. All activities associated with the plan are expected to be
substantially complete by the end of the fourth quarter.
Interest Expense, Net. Interest expense increased $1.1 million from $4.5
million in the Prior Period to $5.6 million for the Current Period. This
increase is due to a higher debt level and interest rates in the Current Period.
Income Tax Expense. The income tax benefit of $0.5 million (State and Federal
combined) is comprised of $0.1 of state tax expense, $0.6 million of state
benefit, $5.0 million of potential deferred Federal income tax benefit, and $5.0
million of valuation allowance established against deferred tax assets. The
valuation allowance was established to reduce deferred taxes, primarily net
operating loss carryforwards, to an amount where realization in future periods
is considered to be more likely than not. The allowance was determined based on
the weight of available evidence which consists primarily of taxable losses in
recent years, the types and amounts of existing temporary differences and the
expiration dates of the operating loss carryforward.
Nine Months Ended December 31, 1999 Compared to Nine Months Ended January 1,
1999
Net Sales. Net sales decreased $18.0 million, or 8.1%, from $221.5 million in
the nine months ended January 1, 1999 ("Prior YTD Period") to $203.5 million for
the nine months ended December 31, 1999 ("Current YTD Period"). Excluding the
sales from the commercial window and specialty glass operations of the Other
segment that were sold on July 1, 1999, the decrease in net sales was $7.9
million. This decrease is partially the result of the Prior YTD Period
including $2.0 million in sales revenue from a major project that did not recur
in the Current YTD Period. Net sales were also affected by the discontinuance
of product lines sold to customers that are not the strategic focus of the
Company and lower than expected sales of a new product line intended to replace
existing lines. Net sales were positively impacted by revenues generated from
sales to a national home center chain under an exclusive supply contract for
stores in Texas and Oklahoma.
Cost of Products Sold. Cost of products sold decreased $6.6 million from $167.6
million for the Prior YTD Period to $161.0 million for the Current YTD Period.
Expressed as a percentage of net sales, cost of products sold increased from
75.7% for the Prior YTD Period to 79.1% for the Current YTD Period. This
increase in cost of products sold as a percentage of net sales is primarily the
result of increasing commodity prices for aluminum and vinyl and increased labor
costs due to the tight labor market. Another factor impacting this increase in
cost of products sold as a percentage of net sales is the result of charges
recorded for the write-down and disposal of raw material used in the production
of discontinued product lines and manufacturing inefficiencies resulting from
the start-up of new products.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $6.2 million from $44.9 million in the Prior
YTD Period to $51.1 million for the Current YTD Period. This increase is
primarily due to higher selling costs in the Current Period primarily related to
store conversion costs incurred in conjunction with the Company's expansion of
its supply agreement with a national home center chain. Also impacting this
unfavorable variance are increased information technology expenditures relating
to Y2K preparedness and converting manufacturing facilities to the Company's
enterprise software. Commencing January 1, 2000, the Company has revised the
useful life of its goodwill to an aggregate of 20 years (from 40 years), and
will amortize the remaining balance of each component of goodwill ($122.7
million in the aggregate) over this useful life on a prospective basis.
Goodwill amortization for the Current YTD Period amounted to $2.6 million.
Restructuring Charges. During the Current YTD Period, management committed to
a plan to close its Hackensack, New Jersey manufacturing facility and has
recorded a reserve of approximately $0.9 million for the expected costs of
closing the facility. The costs consist primarily of $0.6 million for the
estimated loss on disposal of equipment and leasehold improvements that will not
be transferred to other manufacturing facilities, and $0.3 million for amounts
payable under non-cancelable lease terms net of probable sub-lease payments
(assumes a sub-lease agreement will be obtained in approximately 6 months), and
other related exit costs. The Company expects to incur an additional $0.9
million of employee termination costs during the fourth quarter that do not meet
the criteria for accrual as of December 31, 1999 since the employees had not
been notified. As of December 31, 1999, there have been no payments made
against the accrual. All activities associated with the plan are expected to be
substantially complete by the end of the fourth quarter.
Goodwill Impairment. The Company recorded an impairment charge of $4.8 million
to reduce the carrying value of long-lived assets (including goodwill) to their
fair value. These long-lived assets are included in the North operating segment.
The review for impairment at this location was triggered by recent operating
cash flow losses and forecasted operating cash flows below those expected at the
time the manufacturing facility was acquired. The fair value of the long-lived
assets was determined based upon management's estimate of future operating cash
flows.
The Company's ability to fully recover the carrying amount of goodwill through
undiscounted cash flows assumes that results of operations and cash flows in
future periods will improve from their current levels. In the event that the
market or general economic conditions affecting the Company worsen or if
management is unable to achieve its business objectives, additional impairment
of goodwill may be necessary.
Other Expenses, Net. Other expenses, net for the Current YTD Period consists
of an impairment charge of $0.5 million to reduce the carrying amount of an
unutilized building and land that is held for sale to its estimated net
realizable value and a $0.2 million loss recorded upon the sale of a trademark
and associated manufacturing equipment of a non-core business. Also, included
in other expenses, net were losses in the first quarter related to the sale of
the commercial window and specialty glass operations.
Interest Expense, Net. Interest expense increased $1.7 million from $13.6
million in the Prior YTD Period to $15.3 million for the Current YTD Period.
This increase is due to a higher debt level and interest rates in the Current
YTD Period.
Income Tax Expense. The income tax benefit of $0.6 million (State and Federal
combined) is comprised of $0.3 million of state expense, $0.6 million state tax
benefit, $7.9 million of potential deferred Federal income tax benefit, and $7.6
million of valuation allowance established against deferred tax assets. The
valuation allowance was established to reduce deferred taxes, primarily net
operating loss carryforwards, to an amount where realization in future periods
is considered to be more likely than not. The allowance was determined based on
the weight of available evidence which consists primarily of taxable losses in
recent years, the types and amounts of existing temporary differences and the
remaining expiration dates of the operating loss carryforward.
LIQUIDITY AND CAPITAL RESOURCES
Net cash (used in)/provided by operating activities was $(9.7) million for the
Current YTD Period and $2.7 million in the Prior YTD Period. The decrease in
cash provided from operating activities is the result of comparatively lower
results of operations.
Capital expenditures for the Current YTD Period were $7.8 million compared to
$4.8 million for the Prior YTD Period. Investing cash flows also includes the
proceeds from the sale of non-strategic assets at the commercial window facility
in Bryan, Texas and the sale of the specialty glass subsidiary.
Cash flows provided by financing activities in the Current YTD Period were $12.1
million compared to $2.5 million in the Prior YTD Period. Current YTD Period
cash provided by financing activities was used primarily to fund capital
expenditures, interest payments and other working capital requirements.
Interest and principal payments on the Company's Existing Notes (defined below)
and the credit agreement dated as of January 28, 1998 (the "Senior Credit
Facility") represent significant obligations of the Company. The Existing Notes
require semi-annual interest payments in May and November. The Senior Credit
Facility requires quarterly interest payments in April, July, October, and
January. In fiscal year 2000, amounts outstanding under the Senior Credit
Facility will require principal payments of approximately $854,000 in each of
the first three quarters and $187,500 in the fourth quarter. In addition to
its debt service obligations, the Company's remaining liquidity demands relate
to capital expenditures and working capital needs. The Company's working
capital needs are seasonal, and historically have peaked during the second and
third fiscal quarters.
The Company's primary sources of liquidity are funds from operations and
borrowings under the Senior Credit Facility. As of December 31, 1999 there were
no amounts available under the revolving line of credit (the "Revolver"). As of
February 11, 2000, $30.7 million was borrowed and $3.1 million in letters of
credit were outstanding leaving no availability under the Revolver. Interest on
the borrowings under the Revolver, which is currently payable at 9.4%, is at
3.25% over the Eurodollar rate. The Revolver agreement expires on December 31,
2003.
On December 30, 1999 The Company entered into the Third Amendment (the
"Third Amendment") to the Senior Credit Facility. Under terms of the Third
Amendment an over-line facility was made available to provide the Company
interim liquidity during the completion of the Restructuring (defined below).
The Company has borrowed $3.6 million under the over-line. Upon request by the
Company, funds are made available under this facility at the discretion of the
Lenders (defined below) and an entity related to the Stockholders (defined
below). This entity agreed to a Guarantee for all amounts borrowed under the
Third Amendment and to support such Guarantee by cash collateral. Interest on
the borrowings under the over-line facility, which is currently payable at
12.0%, is at 3.25% over the Prime rate. The over-line agreement expires upon
completion of the Restructuring (defined below).
On January 28, 2000, the Company failed to make its scheduled interest payment
of $2.4 million. This default was waived by the Fifth Amendment to the Senior
Credit Facility (the "Fifth Amendment") until March 20, 2000 (see discussion
below).
The Company has reached agreements with its senior secured lenders (the
"Lenders") and with holders (each, a "Noteholder" and collectively, the "Ad Hoc
Committee of Holders") of more than 75% of the principal amount of outstanding
Senior Subordinated Notes due 2004 (the "Old Notes") on the principal terms of a
restructuring of the bank debt and the Old Notes (the "Restructuring"). The
Company and the Ad Hoc Committee of Holders have agreed on the terms of an offer
by the Company to exchange (the "Exchange Offer") all outstanding Old Notes for
(i) up to 40.0% of the common stock of the Company (the "New Stock"), and (ii)
up to $17.5 million of New Senior Subordinated PIK Notes due 2007 (the "New
Notes"). In connection with the Exchange Offer, the Company intends to solicit
(the "Solicitation") consents ("Consents") to certain proposed amendments (the
"Proposed Amendments") to the Old Indenture (as defined below).
The Company's obligation to accept for exchange Old Notes validly tendered
pursuant to the Exchange Offer is conditioned upon, among other things, (i)
receipt by the Company of valid unrevoked tenders from holders of the principal
amount of the Old Notes outstanding (the "Tender Condition"), (ii) execution by
the Company, the Guarantors and the Trustee of a Supplemental Indenture
providing for the Proposed Amendments following receipt of consents from 100% of
the principal amount of Old Notes outstanding (the "Requisite Consents") (the
"Consent Condition"), (iii) the conditions to the effectiveness of Section III
of the Fifth Amendment and Waiver, dated as of February 8, 2000 (the "Fifth
Amendment") to the Credit Agreement, dated as of January 28, 1998, as amended,
supplemented or otherwise modified from time to time thereafter (the "Senior
Secured Credit Facility") having been satisfied in full or having been waived
(the "Credit Agreement Amendment Condition"), (iv) an investment (the
"Investment") of $12.5 million in the Company by Reliant Investors, L.P. (the
"Investor"), a partnership consisting of certain entities related to Reliant
Partners, L.P. and Reliant Partners II, L.P., the current controlling
stockholders of Reliant's parent, RBPI Holding Corporation (the "Investment
Condition"), and (v) certain general conditions to the Exchange Offer and
consent and acceptance solicitations (the "General Conditions"). The Company,
in its sole discretion, may waive any of the conditions to the Exchange Offer,
in whole or in part, at any time and from time to time but only with the consent
of Holders of 75% of the principal amount of Old Notes; however, the obligation
of the Investor to make the investment is conditioned upon the satisfaction of
the Tender Condition, the Consent Condition, the Credit Agreement Amendment
Condition and the General Conditions.
On February 10, 2000, the Company entered into written agreements with members
of the Ad Hoc Committee of Holders, who beneficially own or hold investment
authority over 75% of the principal amount of the Old Notes outstanding (the
"Lockup Agreements"). Pursuant to the Lockup Agreements, members of the Ad Hoc
Committee of Holders have, subject to the Tender Condition, the Consent
Condition, the Credit Agreement Amendment Condition, the Investment Condition
and the General Conditions, agreed to validly tender (and not withdraw) all such
Holders' Old Notes pursuant to the Exchange Offer and to validly Consent (and
not revoke such Consent) to the Proposed Amendments.
The terms of the New Notes will include an initial two-year option for the
Company to either pay interest in kind at 12 7/8% annually (total deferrable to
maturity of $6.4 million) or in cash at 10 7/8% annually, and in cash thereafter
commencing with the November 1, 2002 payment at 10 7/8% annually and increasing
annually. Amortization payments will be due annually commencing on May 1, 2004.
The New Notes and the New Stock will not be registered under the Securities Act
of 1933 when issued, but will be subject to registration rights agreements.
Pursuant to the Fifth Amendment, the Lenders waived (i) through March 20, 2000,
interest payment defaults, and (b) through March 31, 2000, as long as no
interest is paid on the Old Notes, certain financial covenant defaults under the
Senior Secured Credit Facility. The Fifth Amendment also provides for certain
amendments to the Senior Secured Credit Facility that will provide the Company
with additional liquidity, including a six-quarter deferral of principal
amortization payments ($13.0 million) and financial covenant amendments. The
Senior Secured Credit Facility amendments will not become effective until
satisfaction of certain conditions contained in the Fifth Amendment, including
consummation of the Exchange Offer and the Investment.
Because the conditions to effectiveness of the covenant amendments in the Fifth
Amendment have not yet been satisfied and the waiver contained therein expires
in less than one year and the Old Notes are in default as a result of the
Company's failure to make the November 1, 1999 interest payment, in accordance
with current accounting literature regarding classification of debt, the Company
has classified its indebtedness under the Senior Secured Credit Facility and the
Old Notes as current debt. As of December 31, 1999, the long-term debt payable
within one year is $9.3 million and long-term debt that has been classified as
current, due to the Restructuring not yet having been completed is $191.2
million.
The Company reasonably expects the Restructuring to be consummated by March 31,
2000. If the Restructuring is consummated as currently anticipated, the Company
will recognize an extraordinary gain upon consummation equal to the excess of
the carrying value of the Old Notes plus accrued interest over the aggregate of
the fair value of the New Common Stock issued to the Noteholders and all future
cash payments (including contingent interest in the form of interest in kind)
related to the New Notes ($19.6 million) issued to the Noteholders. Thereafter,
all payments designated as interest on the New Notes issued to the Noteholders
will reduce the carrying value of the obligation, and accordingly, there will be
no interest expense recognized in future periods related to the New Notes issued
to the Noteholders. The Company estimates the extraordinary before tax gain to
be $33.4 million provided that 100% of the amount of the Old Notes are
exchanged. In addition, if the Restructuring is consummated, interest expense
will be eliminated to the extent of Old Notes exchanged for New Stock and New
Notes. The Company estimates aggregate interest expense eliminated over the
remaining term of the Old Notes exchanged will be $38.1 million provided that
100% of the amount of Old Notes are exchanged.
The Company believes that completion of the Restructuring will enable adequate
funds to be available to meet the Company's cash requirements for capital
expenditures, working capital and scheduled principal and interest payments.
The Company's ability to satisfy its future capital requirements will depend on
capital expenditure requirements and the Company's future financial performance,
which will be subject to general economic conditions and competitive and other
factors, including factors beyond the Company's control. In the event that the
Tender Condition is not satisfied or waived, the Company may elect to file a
prepackaged, prearranged or pre-negotiated Chapter 11 plan of reorganization
(each a "Prepackaged Plan") containing substantially the same terms as the
Exchange Offer. In that event, the Ad Hoc Committee of Holders has already
agreed, subject to certain conditions, to vote in favor of the Prepackaged Plan.
Failure to consummate the Restructuring could have a material adverse effect on
the Company's financial position, results of operations and liquidity, and could
result in the commencement of a Chapter 11 reorganization case under the
Bankruptcy Code, without the benefit of the Prepackaged Plan.
OTHER DATA - EBITDA
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
----------------------------------- ---------------------------
December 31, January 1, December 31, January 1,
1999 1999 1999 1999
--------------- ------------------ -------------- -----------
<S> <C> <C> <C> <C>
EBITDA (1) $ (5,816) $ 3,935 $ (542) $ 19,067
</TABLE>
(1) The Company defines EBITDA as income from operations before
depreciation, amortization and impairment of long-lived assets including
goodwill. The Company includes information concerning EBITDA because it is used
by certain investors as a measure of the Company's ability to service debt.
EBITDA should not be considered in isolation or as a substitute for net income
or cash flows from operating activities presented in accordance with generally
accepted accounting principles or as a measure of a company's profitability or
liquidity. In addition, EBITDA measures presented may not be comparable to
other similarly titled measures of other companies. The Current and Current YTD
Periods include charges related to costs to position the Company on a
going-forward basis for both manual and technical process improvements, charges
recorded for the write-down of material for discontinued product lines, charges
in connection with the start-up of the supply contract with a national home
center chain, severance charges for a former officer of the Company and
restructuring charges associated with the closure of a window manufacturing
facility.
YEAR 2000 COMPLIANCE
The Company encountered no significant Year 2000 problems. The Company
continues to maintain and assess its Year 2000 contingency plans in the event
that Year 2000 problems occur.
NEW ACCOUNTING PRONOUNCEMENTS
The Company is assessing the reporting and disclosure requirements of Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. This statement establishes accounting and
reporting standards for derivative instruments and hedging activities. This
statement requires that all derivatives be recognized as either assets or
liabilities on the balance sheet and measured at fair value. The accounting for
changes in fair value of a derivative (that is, gains and losses) depends upon
the intended use of the derivative and resulting designation. The statement
amends and supersedes a number of existing Statements of Financial Accounting
Standards, and nullifies or modifies a number of the consensus reached by the
Emerging Issues Task Force. This statement is effective for financial
statements for fiscal years beginning after June 15, 2000. The Company has not
yet determined the impact of adopting SFAS No. 133. The Company currently
intends to adopt the provisions of SFAS No. 133 in the first quarter of fiscal
year 2002.
FORWARD LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All these forward-looking
statements are based on estimates and assumptions made by management of the
Company which, although believed to be reasonable, are inherently uncertain.
Therefore, undue reliance should not be placed upon such estimates and
statements. No assurance can be given that any of such estimates or statements
will be realized and actual results may differ materially from those
contemplated by such forward-looking statements. Factors that may cause such
differences include: (i) increased competition; (ii) increased costs; (iii) loss
or retirement of key members of management; (iv) changes in general economic
conditions in the markets in which the Company may from time to time compete;
(v) effect of discussions of changes to the covenants in the Senior Credit
Facility and the Exchange Offer for the Existing Notes; (vi) and changes in the
number of housing starts in these markets. Many of such factors will be beyond
the control of the Company and its management.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.1 Request for Consent dated as of December 20, 1999, among
Reliant Building Products, Inc. as "Borrower", the
several banks and other financial institutions or
entities from time to time parties to the Credit
Agreement as "Lenders", Chase Securities Inc. as
"Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and Chase Bank of Texas, National
Association as "Administrative Agent".
Exhibit 10.2 Consent and Waiver, dated as of January 1, 2000, to the
Credit Agreement dated January 28, 1998 between
Reliant Building Products, Inc. as "Borrower", Chase
Securities Inc. as "Arranger", Canadian Imperial Bank
Of Commerce as "Documentation Agent", and The Chase
Bank of Texas, National Association as "Administrative
Agent".
.
Exhibit 10.3 Third Amendment, dated as of January 3, 2000, to the
Credit Agreement dated January 28, 1998 (as amended by
the Amendment and Waiver dated as of March 31, 1999)
between Reliant Building Products, Inc. as "Borrower",
the several banks and other financial institutions or
entities from time to time parties to the Credit
Agreement as "Lenders", Chase Securities Inc. as
"Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and The Chase Bank of Texas,
National Association as "Administrative Agent".
Exhibit 10.4 Cash Collateral Agreement dated as of January 3, 2000,
made by Keystone, Inc., a Texas close corporation as
"Pledgor" in favor of Chase Bank of Texas, National
Association, as "Administrative Agent" for the banks
And financial institutions or entities parties to the
Credit Agreement, dated January 28, 1998 between Reliant
Building Products, Inc. as "Borrower", Chase Securities
Inc. as "Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and The Chase Bank of Texas,
National Association as "Administrative Agent".
<PAGE>
Exhibit 10.5 Guarantee, dated as of January 3, 2000, made by Keystone,
Inc. a Texas close corporation as "Guarantor", in
favor of Chase Bank of Texas, National Association, as
"Administrative Agent" for the banks and financial
institutions or entities parties to the Credit Agreement,
dated January 28, 1998 between Reliant Building Products,
Inc. as "Borrower", Chase Securities Inc. as
"Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and The Chase Bank of Texas,
National Association as "Administrative Agent".
Exhibit 10.6 Fourth Amendment and Waiver, dated as of January 31,
2000, to the Credit Agreement dated January 28, 1998
among Reliant Building Products, Inc. as "Borrower",
the several banks and other financial institutions or
entities from time to time parties to the Credit
Agreement as "Lenders", Chase Securities Inc. as
"Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and The Chase Bank of Texas,
National Association as "Administrative Agent".
Exhibit 10.7 Fifth Amendment and Waiver, dated as of February 8, 2000,
to the Credit Agreement, dated as of January 28, 1998,
among Reliant Building Products, Inc. as Borrower", the
several banks and other financial institutions or
entities from time to time parties to the Credit
Agreement as "Lenders", Chase Securities Inc. as
"Arranger", Canadian Imperial Bank of Commerce as
"Documentation Agent", and Chase Bank of Texas,
National Association as "Administrative Agent".
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Reliant Building Products, Inc.
(Registrant)
Date: February 14, 2000 By: /s/ William K. Snyder
--------------------------
William K. Snyder,
Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
RELIANT BUILDING PRODUCTS, INC.
3010 LBJ Freeway, Suite 400
Dallas, Texas 75234-7749
(972) 919-1000
Request for Consent
December 20, 1999
Chase Bank of Texas, National
Association, as Administrative Agent,
and each of the Lenders parties to the
Credit Agreement referred to below
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of January 28, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Reliant Building Products, Inc. (the "Company"), the Lenders
parties thereto, Chase Securities Inc., as advisor and arranger, Canadian
Imperial Bank of Commerce, New York Agency, as documentation agent, and Chase
Bank of Texas, National Association, as administrative agent (in such capacity,
the "Administrative Agent"). Capitalized terms used herein without definition
have the meanings assigned to such terms in the Credit Agreement.
The Company intends to complete a restructuring of its capital structure
(the "Restructuring") to be implemented through certain amendments to the Credit
Agreement, an exchange offer and consent solicitation for its outstanding Senior
Subordinated Notes, and a $10,000,000 equity investment by certain entities
related to the controlling shareholders of the Company's parent, RBPI Holding
Corporation.
The Company hereby requests your consent to the execution and delivery by
the Company and the Administrative Agent of an amendment to the Credit Agreement
and related documentation permitting the Company to borrow from time to time
during the period from the date hereof to March 31, 2000 up to $2,000,000 in the
aggregate or such larger amount as may be acceptable to the Administrative Agent
(any such borrowing, an "Over Advance") in excess of the Total Revolving
Extensions of Credit outstanding as of the date hereof, notwithstanding that the
conditions to borrowing set forth in Section 5.2 of the Credit Agreement,
including the Borrowing Base condition, may not be satisfied as of the date of
any such Over Advance (other than that there be no Event of Default under any of
Section 8(a), (f), (i), (j), (k) or (l) in existence), provided that, each such
Over Advance shall be guaranteed in full by Keystone, Inc. and fully supported
by either cash collateral or a letter of credit, in a manner, and pursuant to
documentation, satisfactory in form and substance to the Administrative Agent.
Such guarantee shall in any event provide that the Over Advances shall not be
deemed to be repaid, and Keystone, Inc. will not be entitled to be subrogated to
the rights and interests of the Administrative Agent and the Lenders under the
Credit Agreement, until all amounts owing to the Lenders under the Credit
Agreement, under any Notes and under all other Loan Documents shall have been
paid in full and the Commitments shall have been terminated. Upon the
successful completion of the Restructuring, such guarantee shall be released in
its entirety and Keystone, Inc. shall have no further obligation thereunder,
provided that the Total Revolving Extensions of Credit are then equal to or less
than the Borrowing Base, and provided further that there be no Default or Event
of Default in existence at such time.
If the foregoing is acceptable to you, please indicate your consent by
executing this letter in the space provided below and returning an executed copy
via facsimile to Olivia Carroll at (212) 455-2502 NO LATER THAN MONDAY, DECEMBER
27, 1999.
<PAGE>
If you have any questions with respect to the foregoing, please call Buddy
Wuthrich of Chase Bank of Texas, National Association at (214) 965-2578. Thank
you for your cooperation.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ C.W. Gilmore
----------------
Title: Treasurer
Agreed to:
Chase Bank of Texas
- -------------------
(Name of Lender)
By: /s/ B.B. Wuthrich
-----------------
Title: Vice President
Agreed to:
Bank Boston, N.A.
- -------------------
(Name of Lender)
By: /s/ C.B. Moore
-----------------
Title: Vice President
Agreed to:
KZH CYPRESSTREE-1 LLC
- -------------------
(Name of Lender)
By: /s/ Peter Chin
-----------------
Title: Authorized Agent
Agreed to:
PARIBAS
- -------------------
(Name of Lender)
By: /s/ Larry Robinson
-----------------
Title: Vice President
Agreed to:
VAN KAMPEN CLO II, LIMITED
- -------------------
(Name of Lender)
By: /s/ Darvin D. Pierce
-----------------
Title: Vice President
Agreed to:
VAN KAMPEN
PRIME RATE INCOME TRUST
By: Van Kampen Investment Advisory Corp.
- -------------------
(Name of Lender)
By: /s/ Darvin D. Pierce
-----------------
Title: Vice President
Agreed to:
CANADIAN IMPERIAL BANK OF COMMERCE
- -------------------
(Name of Lender)
By: /s/
-----------------
Title: Authorized Agent
Agreed to:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
As Investment Advisor
- -------------------
(Name of Lender)
By: /s/ Barbara Campbell
-----------------
Title: Vice President
EXECUTION COPY
CONSENT AND WAIVER, dated as of January 1, 2000 (this "Waiver") to the
Credit Agreement, dated as of January 28, 1998, (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among RELIANT BUILDING PRODUCTS, INC., a Delaware corporation (the "Borrower"),
the several banks and other financial institutions or entities from time to time
parties to the Credit Agreement (the "Lenders"), CHASE SECURITIES INC., as
advisor and arranger (in such capacity, the "Arranger"), CANADIAN IMPERIAL BANK
OF COMMERCE, NEW YORK AGENCY, as documentation agent (in such capacity, the
"Documentation Agent"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as
administrative agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower and the Lenders are parties to the Credit
Agreement; and
WHEREAS, the Borrower and the Lenders are parties to the Consent and
Waiver (the "Consent and Waiver"), dated as of November 15, 1999 to the Second
Amendment and Waiver (the "Second Amendment and Waiver"), dated as of October 1,
1999 to the Credit Agreement; and
WHEREAS, the Borrower requests that the Lenders consent to an
amendment of the terms and conditions of the consent contained in the Consent
and Waiver; and
WHEREAS, the Borrower requests that the Lenders waive compliance with
certain financial covenants contained in the Credit Agreement; and
WHEREAS, the Lenders are willing to give the requested consent and
agree to the requested waiver, but only upon the terms and conditions contained
herein;
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Consent. The Lenders hereby reaffirm their consent in the Consent and
Waiver to the extension of the Waiver Termination Date (as defined in the Second
Amendment and Waiver) to January 31, 2000, notwithstanding that subclause (i) of
the provided further clause of Section II of the Consent and Waiver may not be
satisfied.
II. Waivers to the Credit Agreement
1. Section 7.1(a) (Consolidated Leverage Ratio). The Lenders hereby
waive, for the period from January 1, 2000 to and including January 31, 2000
only, any Default or Event of Default occurring solely because the Borrower
exceeds the maximum Consolidated Leverage Ratio as at the end of the third
fiscal quarter of Fiscal Year 2000 and thereafter to and including January 31,
2000.
2. Section 7.1(b) (Consolidated Interest Coverage Ratio). The
Lenders hereby waive, for the period from January 1, 2000 to and including
January 31, 2000 only, any Default or Event of Default occurring solely because
the Borrower does not meet the minimum Consolidated Interest Coverage Ratio for
the period of four consecutive fiscal quarters ended with the third fiscal
quarter of Fiscal Year 2000.
3. Section 7.1(c) (Maintenance of Minimum EBITDA). The Lenders
hereby waive, for the period from January 1, 2000 to and including January 31,
2000 only, any Default or Event of Default occurring solely because the Borrower
does not meet the minimum Consolidated EBITDA for the period of four consecutive
fiscal quarters ended with the third fiscal quarter of Fiscal Year 2000.
III. General Provisions
1. Representations and Warranties. On and as of the date hereof and
after giving effect to this Waiver, the Borrower hereby confirms, reaffirms and
restates the representations and warranties set forth in Section 4 of the Credit
Agreement mutatis mutandis, and to the extent that such representations and
warranties expressly relate to a specific earlier date in which case the
Borrower hereby confirms, reaffirms and restates such representations and
warranties as of such earlier date, provided that the references to the Credit
Agreement in such representations and warranties shall be deemed to refer to the
Credit Agreement as amended prior to the date hereof and pursuant to this
Waiver.
2. Conditions to Effectiveness. This Waiver shall become effective
as of the date hereof upon receipt by the Administrative Agent of (a)
counterparts of this Waiver, duly executed and delivered by the Borrower and the
Required Lenders; (b) counterparts of the Acknowledgment and Consent hereto,
duly executed and delivered by Keystone, Inc. and each Guarantor under the
Guarantee and Collateral Agreement; and (c) $150,000 from the Borrower to be
deposited by the Administrative Agent in a separate account and to be used
solely for the purpose of reimbursing the Administrative Agent for its
reasonable costs and expenses incurred in connection with the administration of
the Credit Agreement.
3. Continuing Effect; No Other Amendments. Except as expressly
amended or waived hereby, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect. The waivers provided
for herein are limited to the specific subsections of the Credit Agreement
specified herein and shall not constitute an amendment or waiver of, or an
indication of the Lenders' willingness to amend or waive, any other provisions
of the Credit Agreement or the same subsections for any other date or time
period (whether or not such other provisions or compliance with such subsections
for another date or time period are affected by the circumstances addressed in
this Waiver).
4. Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the preparation and delivery of this Waiver, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
5. Counterparts. This Waiver may be executed by one or more of the
parties to this Waiver on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
6. GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Name: William K. Snyder
Title: CFO & Sr. VP
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,
Swing Line Lender, Issuing Lender
and as a Lender
By: /s/ B.B. Wuthrich
Name: B.B. Wuthrich
Title: Vice President
BANKBOSTON, N.A.
By: /s/ CB Moore
Name: CB Moore
Title: Vice President
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
NORTHERN LIFE INSURANCE
COMPANY
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By: /s/ Jeffrey Frost
Name: Jeffrey Frost
Title: Vice President
By: /s/ Perry Forman
Name: Perry Forman
Title: Vice President
CIBC, INC.
By: /s/ Lindsay Gordon
Name: Lindsay Gordon
Title: Executive Director
KEY CORPORATE CAPITAL INC.
By: /s/ Mark R. Hursty
Name: Mark R. Hursty
Title: VP
KZH CYPRESSTREE-1 LLC
By: /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
VAN KAMPEN CLO II, LIMITED
By: VAN KAMPEN MANAGEMENT
INC., as Collateral Manager
By: /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By: Van Kampen Investment Advisory Corp.
By: /s/s Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby consents to the foregoing Consent and Waiver
and hereby confirms, reaffirms and restates that its obligations under or in
respect of the Credit Agreement and the documents related thereto to which it is
a party are and shall remain in full force and effect after giving effect to the
foregoing Amendment:
RBPI HOLDING CORPORATION
By: /s/ William K. Snyder
Title: V.P.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Title: CFO & Sr. V.P.
RBP OF ARIZONA, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP CUSTOM GLASS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP OF TEXAS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP TRANS, INC.
By: /s/ William K. Snyder
Title: V.P.
LEVAN BUILDIERS SUPPLY, INCORPORATED
By: /s/ William K. Snyder
Title: V.P.
TIMBER TECH, INC.
By: /s/ William K. Snyder
Title: V.P.
CFA HOLDING COMPANY
By: /s/ William K. Snyder
Title: V.P.
CARE FREE ALUMINUM PRODUCTS, INC.
By: /s/ William K. Snyder
Title: V.P.
ULTRA BUILDING SYSTEMS, INC.
By: /s/ William K. Snyder
Title: V.P.
ALPINE INDUSTRIES, INC.
By: /s/ William K. Snyder
Title: V.P.
KEYSTONE, INC.
By:
Title:
EXECUTION COPY
THIRD AMENDMENT, dated as of January 3, 2000 (this "Amendment") to the
Credit Agreement, dated as of January 28, 1998, (as amended by the Amendment and
Waiver dated as of March 31, 1999, and the Second Amendment and Waiver dated as
of October 1, 1999, and as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among RELIANT
BUILDING PRODUCTS, INC., a Delaware corporation (the "Borrower"), the several
banks and other financial institutions or entities from time to time parties to
the Credit Agreement (the "Lenders"), CHASE SECURITIES INC., as advisor and
arranger (in such capacity, the "Arranger"), CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as documentation agent (in such capacity, the "Documentation
Agent"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent
(in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower and Lenders are parties to the Credit Agreement;
WHEREAS, the Borrower has requested that the Lenders execute and
deliver a consent (the "Consent") to an amendment of the Credit Agreement and
related documentation permitting the Borrower to borrow from time to time during
the period from the date hereof to March 31, 2000 up to $2,000,000 in the
aggregate or such larger amount as may be acceptable to the Administrative Agent
in excess of the Total Revolving Extensions of Credit outstanding as of the date
hereof;
WHEREAS, the Lenders have provided the Consent; and
WHEREAS, based and in reliance upon the Consent (as contemplated by
Section 10.1(a) of the Credit Agreement and by the Consent), the Administrative
Agent is executing and delivering this Amendment.
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Amendment of Section 1.1 (Definitions) of the Credit Agreement.
Section 1.1 is hereby amended by amending and restating the definition of
"Borrowing Base" as follows:
"'Borrowing Base': at any date, the amount of the then most
recent computation of the Borrowing Base, determined by calculating the amount
equal to:
(a) 85% of the Net Amount of Eligible Receivables at such date;
plus
(b) 50% of the amount of Eligible Inventory at said date, calculated at the
lower of cost (determined on a FIFO basis) or market less the Slow Moving
Reserve then in effect; provided that in no event shall the portion of the
Borrowing Base attributable to Eligible Inventory exceed 50% of the Borrowing
Base;
plus
(c) the Cumulative Incremental Availability at such date;
plus
(d) until the Restructuring (as defined in the Request for Consent dated
December 20, 1999 by the Borrower, the Administrative Agent and the Required
Lenders) is completed, the amount determined by the Administrative Agent from
time to time equal to the value of the collateral on deposit in the Cash
Collateral Account maintained under the Cash Collateral Agreement dated as of
January 3, 2000 by Keystone, Inc. in favor of the Administrative Agent, provided
that such amount shall not be greater than $2,000,000 or such larger amount as
may be acceptable to the Administrative Agent.
The Borrowing Base will be computed hereunder on a monthly basis (based on all
information reasonably available to the Administrative Agent, including without
limitation, the periodic reports and listings delivered to the Administrative
Agent in accordance with Section 6.2(c)), and a monthly Borrowing Base
Certificate from a Responsible Officer of the Borrower presenting the Borrower's
computation of the Borrowing Base will be periodically delivered to the
Administrative Agent in accordance with Section 6.2(d)."
2. Representations and Warranties. On and as of the date hereof and
after giving effect to this Amendment, the Borrower hereby confirms, reaffirms
and restates the representations and warranties set forth in Section 4 of the
Credit Agreement mutatis mutandis, and to the extent that such representations
and warranties expressly relate to a specific earlier date in which case the
Borrower hereby confirms, reaffirms and restates such representations and
warranties as of such earlier date, provided that the references to the Credit
Agreement in such representations and warranties shall be deemed to refer to the
Credit Agreement as amended prior to the date hereof and pursuant to this
Amendment.
3. Continuing Effect; No Other Amendments. Except as expressly
amended hereby, all of the terms and provisions of the Credit Agreement are and
shall remain in full force and effect. The amendment provided for herein is
limited to the specific subsection of the Credit Agreement specified herein and
shall not constitute an amendment of, or an indication of the Lenders'
willingness to amend, any other provisions of the Credit Agreement or the same
subsections for any other date or time period (whether or not such other
provisions or compliance with such subsections for another date or time period
are affected by the circumstances addressed in this Amendment).
4. Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the preparation and delivery of this Amendment, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
5. Counterparts. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyer
Name: William K. Snyder
Title: CFO & Sr. V.P.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
By: /s/ B.B. Wuthrich
Name: B.B. Wuthrich
Title: Vice President
BANKBOSTON, N.A.
By:
Name:
Title:
BALANCED HIGH YIELD FUND I
BY BHF (USA) Capital Corporation acting as
Attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
PARIBAS
By: /s/ Larry Robinson
Name: Larry Robinson
Title: Vice President
By: /s/ Scott Clingan
Name: Scott Clingan
Title: Director
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
NORTHERN LIFE INSURANCE
COMPANY
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
CIBC, INC.
By: /s/ Ihor Zaluckyj
Name: Ihor Zaluckyj
Title: Executive Director
KEY CORPORATE CAPITAL INC.
By: /s/ Alan J. Ronan
Name: Alan J. Ronan
Title: Designated Signer
KZH CYPRESSTREE-1 LLC
By: /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
VAN KAMPEN CLO II, LIMITED
By: VAN KAMPEN MANAGEMENT
INC., as Collateral Manager
By: /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By: Van Kampen Investment Advisory Corp.
By: /s/s Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby consents to the foregoing Consent and Waiver
and hereby confirms, reaffirms and restates that its obligations under or in
respect of the Credit Agreement and the documents related thereto to which it is
a party are and shall remain in full force and effect after giving effect to the
foregoing Amendment:
RBPI HOLDING CORPORATION
By: /s/ William K. Snyder
Title: V.P.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Title: CFO & Sr. V.P.
RBP OF ARIZONA, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP CUSTOM GLASS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP OF TEXAS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP TRANS, INC.
By: /s/ William K. Snyder
Title: V.P.
LEVAN BUILDIERS SUPPLY, INCORPORATED
By: /s/ William K. Snyder
Title: V.P.
TIMBER TECH, INC.
By: /s/ William K. Snyder
Title: V.P.
CFA HOLDING COMPANY
By: /s/ William K. Snyder
Title: V.P.
CARE FREE ALUMINUM PRODUCTS, INC.
By: /s/ William K. Snyder
Title: V.P.
ULTRA BUILDING SYSTEMS, INC.
By: /s/ William K. Snyder
Title: V.P.
ALPINE INDUSTRIES, INC.
By: /s/ William K. Snyder
Title: V.P.
KEYSTONE, INC.
By:
Title:
EXECUTION COPY
CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT dated as of January 3, 2000, made by
Keystone, Inc., a Texas close corporation (the "Pledgor") in favor of Chase Bank
of Texas, National Association, as administrative agent (in such capacity, the
"Administrative Agent") for the banks and financial institutions or entities
(the "Lenders") parties to the Credit Agreement, dated as of January 28, 1998,
as amended, supplemented or otherwise modified from time to time ( the "Credit
Agreement"), among Reliant Building Products, Inc., a Delaware corporation (the
"Borrower"), the Lenders, Chase Securities, Inc., as advisor and arranger,
Canadian Imperial Bank of Commerce, New York Agency, as documentation agent, and
the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrower and the Lenders are parties to the Credit
Agreement;
WHEREAS, the Borrower intends to complete a restructuring of its
capital structure (the "Restructuring") to be implemented through certain
amendments to the Credit Agreement, an exchange offer and consent solicitation
for its outstanding Senior Subordinated Notes, and an equity investment by
certain entities;
WHEREAS, in order to effect the Restructuring, the Borrower requested
that the Lenders execute and deliver a consent (the "Consent") to an amendment
of the Credit Agreement and related documentation permitting the Borrower to
borrow from time to time during the period from the date hereof to March 31,
2000 up to $2,000,000 in the aggregate or such larger amount as may be
acceptable to the Administrative Agent (any such borrowing, an "Over Advance")
in excess of the Total Revolving Extensions of Credit outstanding as of the date
hereof;
WHEREAS, the Lenders have provided the Consent which requires that
each Over Advance be guaranteed by the Pledgor, an affiliate of the Borrower;
WHEREAS, in satisfaction of such requirement, the Pledgor has entered
into a Guarantee of even date herewith (as amended, supplemented or otherwise
modified from time to time, the "Guarantee") for the benefit of the
Administrative Agent and the Lenders; and
WHEREAS, it is a further requirement under the Consent that the
Pledgor shall have executed and delivered this Cash Collateral Agreement to
secure payment and performance of the Pledgor's obligations under the Guarantee.
NOW, THEREFORE, in consideration of the premises, the Pledgor hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as
follows:
. Defined Terms. () Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
() The following terms shall have the following meanings:
"Agreement" shall mean this Cash Collateral Agreement, as the same may
be amended, modified or otherwise supplemented from time to time.
"Cash Collateral" shall mean
(1) all cash, instruments, securities and funds deposited from
time to time in the Cash Collateral Account, including, without limitation, all
cash or other money proceeds of any collateral subject to a security interest
for the benefit of the Administrative Agent under any Security Document;
(2) all investments of funds in the Cash Collateral Account and
all instruments and securities evidencing such investments; and
(3) all interest, dividends, cash, instruments, securities and
other property received in respect of, or as proceeds of, or in substitution or
exchange for, any of the foregoing.
"Cash Collateral Account" shall mean account no. 46108118465
established at the office of Chase Bank of Texas, National Association at 201
Main Street, Fort Worth, Texas 76102, designated "Reliant/Keystone Cash
Collateral Account."
"Code" shall mean the Uniform Commercial Code from time to time in
effect in the State of New York.
"Collateral"" shall mean the Cash Collateral and the Cash Collateral
Account, collectively.
"Permitted Investments" shall mean Cash Equivalents (as defined in the
Credit Agreement) and any other short-term high-quality obligations reasonably
satisfactory to the Administrative Agent, in each case denominated in U.S.
Dollars.
"Secured Obligations" shall mean the Guaranteed Amounts and all
obligations and liabilities of the Pledgor which may arise under or in
connection with the Guarantee or this Agreement or any related document to which
the Pledgor is a party.
() The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
() The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, the Pledgor
hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in the Collateral.
. Maintenance of Cash Collateral Account. () The Cash Collateral
Account shall be maintained until the Secured Obligations have been paid and
performed in full or the Guarantee has been released in accordance with its
terms.
() The Collateral shall be subject to the exclusive dominion and
control of the Administrative Agent, which shall hold the Cash Collateral and
administer the Cash Collateral Account subject to the terms and conditions of
this Agreement. The Pledgor shall have no right of withdrawal from the Cash
Collateral Account nor any other right or power with respect to the Collateral,
except as expressly provided herein.
. Deposit of Funds. The Pledgor may from time to time deposit in
the Cash Collateral Account cash in the form of U.S. Dollars in immediately
available funds.
. Covenants. The Pledgor covenants and agrees with the
Administrative Agent that:
() The Pledgor will not () sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral, or ()
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Collateral, or any interest therein,
except for the security interest created by this Agreement.
() The Pledgor will maintain the security interest created by this
Agreement as a first, perfected security interest and defend the right, title
and interest of the Administrative Agent and the Lenders in and to the
Collateral against the claims and demands of all Persons whomsoever. At any
time and from time to time, upon the written request of the Administrative
Agent, and at the sole expense of the Pledgor, the Pledgor will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as the Administrative Agent reasonably may request for the
purposes of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, of
financing statements under the Uniform Commercial Code.
. Investment of Cash Collateral. () Subject to the provisions of
paragraph 7(b), collected funds on deposit in the Cash Collateral Account shall
be invested by the Administrative Agent from time to time in Permitted
Investments. All investments shall be made in the name of the Administrative
Agent or a nominee of the Administrative Agent and in a manner, determined by
the Administrative Agent in its sole discretion, that preserves the
Administrative Agent's perfected, first priority security interest in such
investments.
() The Administrative Agent shall have no obligation to invest
collected funds during the first night after their collection.
() The Administrative Agent shall have no responsibility to the
Pledgor for any loss or liability arising in respect of such investments of the
Cash Collateral (including, without limitation, as a result of the liquidation
of any thereof before maturity), except to the extent that such loss or
liability arises from the Administrative Agent's gross negligence or willful
misconduct.
() The Pledgor will pay or reimburse the Administrative Agent for
any and all costs, expenses and liabilities of the Administrative Agent incurred
in connection with this Agreement, the maintenance and operation of the Cash
Collateral Account and the investment of the Cash Collateral, including, without
limitation, any investment, brokerage or placement commissions and fees incurred
by the Administrative Agent in connection with the investment or reinvestment of
Cash Collateral.
. Release of Cash Collateral. The Administrative Agent shall have
no obligation to release Cash Collateral (other than to enable the Pledgor to
make payments under the Guarantee pursuant to Section 1(c) of the Guarantee)
unless each of the following conditions is satisfied at the time of such
release:
(a) The Secured Obligations shall have been paid and performed in
full or the Guarantee shall have been released in accordance with its terms; and
(b) Such release shall not require termination of any investment
prior to its maturity.
. Remedies. () Whenever any Guaranteed Amounts are due, the
Administrative Agent may, without notice of any kind, except for notices
required by law which may not be waived, apply the Collateral, after deducting
all reasonable costs and expenses of every kind incurred in respect thereof or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Administrative Agent, to the payment in whole or
in part of the Secured Obligations, in such order as the Administrative Agent in
its sole discretion may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by law, the Pledgor waives presentment,
demand, protest and all notices of any kind and all claims, damages and demands
it may acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder.
() The Pledgor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-112 of the Code. The Pledgor
shall not be liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by the Administrative
Agent or any Lender to collect such deficiency.
. Administrative Agent's Appointment as Attorney-in-Fact. () The
Pledgor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Pledgor and in the name of the
Pledgor or in the Administrative Agent's own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
() The Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
paragraph 10(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to comply with the specific duties and responsibilities set forth
herein. The powers conferred on the Administrative Agent in this Agreement are
solely for the protection of the Administrative Agent's and the Lenders'
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. Neither the
Administrative Agent nor any Lender nor its or their directors, officers,
employees or agents shall be liable for any action lawfully taken or omitted to
be taken by any of them under or in connection with the Collateral or this
Agreement, except for its or their gross negligence or willful misconduct.
. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Pledgor authorizes the Administrative Agent to file financing
statements with respect to the Collateral without the signature of the Pledgor
in such form and in such filing offices as the Administrative Agent reasonably
determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement. A carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
. Authority of Administrative Agent. The Pledgor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as Administrative Agent for the Lenders with
full and valid authority so to act or refrain from acting, and the Pledgor shall
not be under any obligation, or entitlement, to make any inquiry respecting such
authority.
. Notices. All notices, requests and demands to or upon the
Administrative Agent or the Pledgor to be effective shall be in writing (or by
fax or similar electronic transfer confirmed in writing) and shall be deemed to
have been duly given or made () when delivered by hand or () if given by mail,
when deposited in the mails by certified mail, return receipt requested, or ()
if by fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:
() if to the Administrative Agent or the Lenders, as provided in
the Credit Agreement; and
() if to the Pledgor, at its address or transmission number for
notices set forth under its signature below.
The Administrative Agent and the Pledgor may change their addresses and
transmission numbers for notices by notice in the manner provided in this
Section.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent, provided that any provision of this
Agreement may be waived by the Administrative Agent and the Lenders in a letter
or agreement executed by the Administrative Agent or by facsimile transmission
from the Administrative Agent.
(b) Neither the Administrative Agent nor any Lender shall by any
act (except by a written instrument pursuant to paragraph 16(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
17. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
18. Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of the Pledgor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.
19. Governing Law. This Agreement shall in all respects be
construed in accordance with and governed by the law of the State of New York
without giving effect to the conflicts of law principles thereof.
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Administrative Agent have caused
this Cash Collateral Agreement to be duly executed and delivered as of the date
first above written.
KEYSTONE, INC.
By /s/ David G. Brown
Title
Address for Notices:
201 Main Street
Fort Worth, Texas 76102
Attention: Kevin G. Levy
Fax: 817-338-2067
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Administrative Agent have caused
this Cash Collateral Agreement to be duly executed and delivered as of the date
first above written.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, As Administrative Agent
By /s/ B.B. Wuthrich
Title Vice President
EXECUTION COPY
GUARANTEE
GUARANTEE, dated as of January 3, 2000, made by Keystone, Inc., a
Texas close corporation (the "Guarantor"), in favor of Chase Bank of Texas,
National Association, as administrative agent (in such capacity, the
"Administrative Agent") for the banks and financial institutions or entities
(the "Lenders") parties to the Credit Agreement, dated as of January 28, 1998,
as amended, supplemented or otherwise modified from time to time (the "Credit
Agreement") among Reliant Building Products, Inc., a Delaware corporation (the
"Borrower"), the Lenders, Chase Securities, Inc., as advisor and arranger,
Canadian Imperial Bank of Commerce, New York Agency, as documentation agent, and
the Administrative Agent. Terms defined or referenced in the Credit Agreement
and not otherwise defined or referenced herein are used herein as therein
defined or referenced.
W I T N E S S E T H:
WHEREAS, the Borrower and the Lenders are parties to the Credit
Agreement;
WHEREAS, the Borrower intends to complete a restructuring of its
capital structure (the "Restructuring") to be implemented through certain
amendments to the Credit Agreement, an exchange offer and consent solicitation
for its outstanding Senior Subordinated Notes, and an equity investment by
certain entities;
WHEREAS, in order to effect the Restructuring, the Borrower requested
that the Lenders execute and deliver a consent (the "Consent") to an amendment
(the "Third Amendment") of the Credit Agreement and related documentation
permitting the Borrower to borrow from time to time during the period from the
date hereof to March 31, 2000 up to $2,000,000 in the aggregate or such larger
amount as may be acceptable to the Administrative Agent (any such borrowing, an
"Over Advance") in excess of the Total Revolving Extensions of Credit
outstanding as of the date hereof; and
WHEREAS, the Lenders have provided the Consent which requires that
each Over Advance be guaranteed by the Guarantor, which holds an indirect
interest in the Borrower.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the Guarantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:
. Guarantee. () The Guarantor hereby unconditionally and
irrevocably guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of all amounts
(the "Guaranteed Amounts") owing from time to time under the Credit Agreement
and the Notes solely in respect of any and all Over Advances (including
principal thereof and interest thereon, including interest accruing after the
maturity of the Over Advances and after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed therein), provided that in no event shall the
Guaranteed Amounts exceed the value of the collateral on deposit in the Cash
Collateral Account maintained under the Cash Collateral Agreement dated as of
the date hereof (as amended, supplemented or otherwise modified from time to
time, the "Cash Collateral Agreement") by the Guarantor in favor of the
Administrative Agent. At the option of the Administrative Agent, the Guaranteed
Amounts may be declared due for all purposes hereof at any time upon the
occurrence and during the continuance of an Event of Default.
() The Guarantor further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or the
Lenders in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting against, the Guarantor under this Guarantee.
Except as otherwise provided in Section 1(d), this Guarantee shall remain in
full force and effect until all Obligations are paid in full, notwithstanding
that from time to time prior thereto the Borrower may be free from any
Obligations.
(c) The Guarantor agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent, for the benefit
of the Lenders, on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guarantee
for such purpose.
(d) Anything herein to the contrary notwithstanding, this
Guarantee shall be released automatically in its entirety, without any further
action, and the Guarantor shall have no further obligation hereunder upon the
successful completion of the Restructuring, as determined by the Administrative
Agent, provided that the Total Revolving Extensions of Credit are then equal to
or less than the Borrowing Base, and provided further that there is no Default
or Event of Default in existence at such time.
(e) Any determination made by the Administrative Agent as to the
Guaranteed Amounts shall, if made in good faith, be conclusive for all purposes
hereof, absent manifest error. Once made, the Over Advances shall be deemed to
remain outstanding to the extent that this Guarantee has not been satisfied or
released as provided in Section 1(c) or 1(d) and the Total Revolving Extensions
of Credit equal or exceed the Over Advances.
. No Subrogation. Notwithstanding any payment or payments made by
the Guarantor hereunder, or any set-off or application of funds of the Guarantor
by the Administrative Agent or any Lender, the Guarantor shall not be entitled
to be subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or against any collateral security or guarantee or right of
offset held by the Administrative Agent or any Lender for the payment of the
Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower in respect of payments made by
the Guarantor hereunder, until all amounts owing to the Administrative Agent and
each Lender by the Borrower on account of the Obligations are paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of the Guarantor, and shall, forthwith
upon receipt by the Guarantor, be turned over to the Administrative Agent in the
exact form received by the Guarantor (duly indorsed by the Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.
. Amendments, etc. with respect to the Obligations; Waiver of
Rights. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor, and without notice to
or further assent by the Guarantor, any demand for payment of any of the
Guaranteed Amounts made by the Administrative Agent or any Lender may be
rescinded, and any of the Guaranteed Amounts continued, and the Guaranteed
Amounts, or the liability of any other party upon or for any part thereof, or
any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Lenders, and any collateral security, guarantee or right of offset at any
time held by the Lenders for the payment of the Guaranteed Amounts may be sold,
exchanged, waived, surrendered or released. The Lenders and the Administrative
Agent shall not have any obligation to protect, secure, perfect or insure any
lien at any time held by it as security for the Obligations or for this
Guarantee or any property subject thereto or to liquidate the collateral in any
manner, commencing on any date or over any period other than as required by
applicable law. When making any demand hereunder against the Guarantor, the
Administrative Agent or each Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other guarantor, and any failure to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of any Lender against the Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any Guaranteed
Amounts and notice of or proof of reliance by the Administrative Agent and the
Lenders upon this Guarantee or acceptance of this Guarantee; the Guaranteed
Amounts, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings relating to any Guaranteed Amounts between
the Borrower or the Guarantor, on the one hand, and the Lenders and the
Administrative Agent, on the other, shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or the Guarantor with respect to the
Guaranteed Amounts. Except as otherwise provided in Section 1(d), this
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment to the extent provided herein without regard to any
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Guaranteed Amounts, or of
the Guarantor under this Guarantee, in bankruptcy or in any other instance.
Except as otherwise provided in Section 1(d), this Guarantee shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms upon the Guarantor and its successors and assigns thereof, and shall inure
to the benefit of the Administrative Agent and the Lenders and respective
successors, indorsees, transferees and assigns, until all Obligations shall have
been satisfied by payment in full.
. Reinstatement. This Guarantee shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Guaranteed Amounts is rescinded or must otherwise be restored or
returned by the Administrative Agent and the Lenders upon the bankruptcy,
insolvency, liquidation or reorganization of the Borrower or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or any substantial part of its property, or
otherwise, all as though such payments had not been made.
. Payments. The Guarantor hereby agrees that any Guaranteed
Amounts will be paid to the Administrative Agent and the Lenders without set-off
or counterclaim.
. Representations and Warranties. The Guarantor represents and
warrants to the Administrative Agent and the Lenders that:
() the Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
() the Guarantor has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations under, this
Guarantee and the Cash Collateral Agreement, and has taken all necessary
corporate action to authorize its execution, delivery and performance of this
Guarantee and the Cash Collateral Agreement and the grant of the security
interest contemplated by the Cash Collateral Agreement;
() each of this Guarantee and the Cash Collateral Agreement
constitutes a legal, valid and binding obligation of the Guarantor enforceable
in accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, general
equitable principles and an implied covenant of good faith and fair dealing;
() the execution, delivery and performance of this Guarantee and
the Cash Collateral Agreement will not violate any provision of any applicable
law or contractual obligation of the Guarantor; and
() no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or governmental authority and no consent of any
other person (including, without limitation, any stockholder or creditor of the
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee or the Cash Collateral Agreement.
. Notices. All notices, requests and demands to or upon the
Administrative Agent and the Lenders, or the Guarantor to be effective shall be
in writing (or by fax or similar electronic transfer confirmed in writing) and
shall be deemed to have been duly given or made (1) when delivered by hand or
(2) if given by mail, when deposited in the mails by certified mail, return
receipt requested, or (3) if by fax or similar electronic transfer, when sent
and receipt has been confirmed, addressed to the address or transmission number
set forth under the signature of the parts to whom notice is being given.
() if to the Guarantor, at its address or transmission number for
notices set forth with its signature hereto;
() if to the Administrative Agent or the Lenders, as provided in
the Credit Agreement.
Either the Administrative Agent, the Lenders or the Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.
. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
. Integration. This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent and the Lenders relative to the
subject matter hereof not reflected herein.
. Amendments in Writing; No Waiver; Cumulative Remedies. ()
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Administrative Agent, provided that any provision of this
Guarantee may be waived by the Lenders in a letter or agreement executed by the
Administrative Agent or by facsimile transmission from the Administrative Agent.
() The Lenders shall not by any act (except by a written
instrument pursuant to paragraph 11(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or event of default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Lenders, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Lenders of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Lenders would otherwise have
on any future occasion.
() The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
. Section Headings. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
. Successors and Assigns. This Guarantee shall be binding upon
the successors and assigns of the Guarantor and shall inure to the benefit of
the Administrative Agent and the Lenders and their successors and assigns.
. Governing Law; Jurisdiction; Consent to Service of Process. ()
This Guarantee shall in all respects be construed in accordance with and
governed by the law of the State of New York without giving effect to the
conflicts of law principles thereof.
() The Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Guarantee or the Cash Collateral Agreement, or for recognition or
enforcement of any judgment, and the Guarantor hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. The Guarantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Guarantee or the Cash Collateral Agreement
shall affect any right that the Administrative Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Guarantee or the Cash
Collateral Agreement against the Guarantor or its properties in the courts of
any jurisdiction.
() The Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guarantee or the Cash Collateral
Agreement in any court referred to in paragraph (b) of this Section and hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
() The Guarantor irrevocably consents to service of process in the
manner provided for notices to the Guarantor above. Nothing in this Guarantee
or the Cash Collateral Agreement will affect the right of any party to this
Guarantee or the Cash Collateral Agreement to serve process in any other manner
permitted by law.
. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTEE OR THE CASH COLLATERAL AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THE
GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT THE LENDERS HAVE BEEN INDUCED TO MAKE THE LOANS AND OTHER EXTENSIONS OF
CREDIT CONTEMPLATED BY THIS GUARANTEE AND THE CASH COLLATERAL AGREEMENT BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
KEYSTONE, INC.
By /s/ David G. Brown
Title VP CFO
Address for Notices:
201 Main Street
Fort Worth, Texas 76102
Attention: Kevin G. Levy
Fax: 817-338-2067
EXECUTION COPY
FOURTH AMENDMENT AND WAIVER, dated as of January 31, 2000 (this
"Amendment and Waiver") to the Credit Agreement, dated as of January 28, 1998,
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among RELIANT BUILDING PRODUCTS, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to the Credit Agreement (the "Lenders"),
CHASE SECURITIES INC., as advisor and arranger (in such capacity, the
"Arranger"), CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as
documentation agent (in such capacity, the "Documentation Agent"), and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent (in such capacity,
the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower and Lenders are parties to the Credit Agreement;
and
WHEREAS, the Borrower requests that the Lenders waive compliance with
certain financial covenants contained in the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement as set forth herein; and
WHEREAS, the Lenders are willing to agree to the requested amendment
and waivers, but only upon the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement. Unless
otherwise indicated, all Section and subsection references are to the Credit
Agreement.
II. Waivers to the Credit Agreement
1. Section 7.1(a) (Consolidated Leverage Ratio). The Lenders hereby
waive, for the period from February 1, 2000 to and including February 14, 2000
only, any Default or Event of Default occurring solely because the Borrower
exceeds the maximum Consolidated Leverage Ratio as at the end of the second
fiscal quarter of Fiscal Year 2000 and thereafter (including as at the end of
the third fiscal quarter of Fiscal Year 2000 and thereafter) to and including
February 14, 2000; provided, however, that such waiver shall only be effective
for so long as no interest is paid on or after the date hereof by the Borrower
in respect of the Senior Subordinated Notes.
2. Section 7.1(b) (Consolidated Interest Coverage Ratio). The
Lenders hereby waive, for the period from February 1, 2000 to and including
February 14, 2000 only, any Default or Event of Default occurring solely because
the Borrower does not meet the minimum Consolidated Interest Coverage Ratio for
the period of four consecutive fiscal quarters ended with the second fiscal
quarter of Fiscal Year 2000 and for the period of four consecutive fiscal
quarters ended with the third fiscal quarter of Fiscal Year 2000; provided,
however, that such waiver shall only be effective for so long as no interest is
paid on or after the date hereof by the Borrower in respect of the Senior
Subordinated Notes.
3. Section 7.1(c) (Maintenance of Minimum EBITDA). The Lenders
hereby waive, for the period from February 1, 2000 to and including February 14,
2000 only, any Default or Event of Default occurring solely because the Borrower
does not meet the minimum Consolidated EBITDA for the period of four consecutive
fiscal quarters ended with the second fiscal quarter of Fiscal Year 2000 and for
the period of four consecutive fiscal quarters ended with the third fiscal
quarter of Fiscal Year 2000; provided, however, that such waiver shall only be
effective for so long as no interest is paid on or after the date hereof by the
Borrower in respect of the Senior Subordinated Notes.
4. Nonpayment of Interest on Senior Subordinated Notes. The Lenders
hereby waive, for the period from February 1, 2000 to and including February 14,
2000 only, any Default or Event of Default occurring solely due to the
nonpayment of interest by the Borrower with respect to the Senior Subordinated
Notes.
III. Amendment of Subsection 5.2(a) (Representations and Warranties).
Subsection 5.2(a) of the Credit Agreement is hereby amended by inserting the
words "Except as disclosed to the Lenders in the information memorandum dated
January 10, 2000," at the beginning of such subsection.
IV. General Provisions
1. Representations and Warranties. On and as of the date hereof and
after giving effect to this Amendment and Waiver, except as disclosed to the
Lenders in the information memorandum dated January 10, 2000, the Borrower
hereby confirms, reaffirms and restates the representations and warranties set
forth in Section 4 of the Credit Agreement mutatis mutandis, and to the extent
that such representations and warranties expressly relate to a specific earlier
date in which case the Borrower hereby confirms, reaffirms and restates such
representations and warranties as of such earlier date, provided that the
references to the Credit Agreement in such representations and warranties shall
be deemed to refer to the Credit Agreement as amended prior to the date hereof
and pursuant to this Amendment and Waiver.
2. Conditions to Effectiveness. This Amendment and Waiver shall
become effective as of the date hereof upon receipt by the Administrative Agent
of (a) counterparts of this Amendment and Waiver, duly executed and delivered by
the Borrower and the Required Lenders and (b) counterparts of the Acknowledgment
and Consent hereto, duly executed and delivered by Keystone, Inc. and each
Guarantor under the Guarantee and Collateral Agreement.
3. Continuing Effect; No Other Amendments. Except as expressly
amended or waived hereby, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect. The waivers provided
for herein are limited to the specific subsections of the Credit Agreement
specified herein and shall not constitute an amendment or waiver of, or an
indication of the Lenders' willingness to amend or waive, any other provisions
of the Credit Agreement or the same subsections for any other date or time
period (whether or not such other provisions or compliance with such subsections
for another date or time period are affected by the circumstances addressed in
this Amendment and Waiver).
4. Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the preparation and delivery of this Amendment and Waiver,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
5. Counterparts. This Amendment and Waiver may be executed by one or
more of the parties to this Amendment and Waiver on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
6. GOVERNING LAW. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Name: William K. Snyder
Title: CFO & Sr. V.P.
<PAGE>
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,
Swing Line Lender, Issuing Lender
and as a Lender
By: /s/ B.B. Wuthrich
Name: B.B. Wuthrich
Title: Vice President
BANKBOSTON, N.A.
By:
Name:
Title:
BALANCED HIGH YIELD FUND I
BY BHF (USA) Capital Corporation acting as
Attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
PARIBAS
By: /s/ Larry Robinson
Name: Larry Robinson
Title: Vice President
By: /s/ Scott Clingan
Name: Scott Clingan
Title: Director
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
NORTHERN LIFE INSURANCE
COMPANY
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
CIBC, INC.
By: /s/ Ihor Zaluckyj
Name: Ihor Zaluckyj
Title: Executive Director
FLEET BUSINESS CREDIT
CORPORATION
By: /s/ H. Michael Wills
Name: H. Michael Wills
Title: Authorized Officer
KEY CORPORATE CAPITAL INC.
By: /s/ Alan J. Ronan
Name: Alan J. Ronan
Title: Designated Signer
KZH CYPRESSTREE-1 LLC
By: /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
SENIOR DEBT PORTFOLIO
By: Boston Management and Research as
Investment Advisor
By: /s/ Scott H. Page
Name: Scott H. Page
Title: Vice President
VAN KAMPEN CLO II, LIMITED
By: VAN KAMPEN MANAGEMENT
INC., as Collateral Manager
By: /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By: Van Kampen Investment Advisory Corp.
By: /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby consents to the foregoing Consent and Waiver
and hereby confirms, reaffirms and restates that its obligations under or in
respect of the Credit Agreement and the documents related thereto to which it is
a party are and shall remain in full force and effect after giving effect to the
foregoing Amendment:
RBPI HOLDING CORPORATION
By: /s/ William K. Snyder
Title: V.P.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Title: CFO & Sr. V.P.
RBP OF ARIZONA, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP CUSTOM GLASS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP OF TEXAS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP TRANS, INC.
By: /s/ William K. Snyder
Title: V.P.
LEVAN BUILDIERS SUPPLY, INCORPORATED
By: /s/ William K. Snyder
Title: V.P.
TIMBER TECH, INC.
By: /s/ William K. Snyder
Title: V.P.
CFA HOLDING COMPANY
By: /s/ William K. Snyder
Title: V.P.
CARE FREE ALUMINUM PRODUCTS, INC.
By: /s/ William K. Snyder
Title: V.P.
ULTRA BUILDING SYSTEMS, INC.
By: /s/ William K. Snyder
Title: V.P.
ALPINE INDUSTRIES, INC.
By: /s/ William K. Snyder
Title: V.P.
KEYSTONE, INC.
By:
Title:
EXECUTION COPY
FIFTH AMENDMENT AND WAIVER, dated as of February 8, 2000 (this
"Amendment and Waiver") to the Credit Agreement, dated as of January 28, 1998,
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among RELIANT BUILDING PRODUCTS, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to the Credit Agreement (the "Lenders"),
CHASE SECURITIES INC., as advisor and arranger (in such capacity, the
"Arranger"), CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as
documentation agent (in such capacity, the "Documentation Agent"), and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent (in such capacity,
the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower and Lenders are parties to the Credit Agreement;
and
WHEREAS, the Borrower requests that the Lenders waive compliance with
certain financial covenants contained in the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders consent to
amendment of certain financial covenant levels contained in the Credit
Agreement; and
WHEREAS, the Borrower has requested that the Lenders amend certain
other provisions contained in the Credit Agreement; and
WHEREAS, the Lenders are willing to agree to the requested amendments
and waivers, but only upon the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement. Unless
otherwise indicated, all Section and subsection references are to the Credit
Agreement.
II. Waivers to the Credit Agreement
1. Section 2.15 (Interest Rates and Payment Dates). The Lenders
hereby waive, through the earlier of (i) March 20, 2000 and (ii) the Fifth
Amendment Effective Date (as defined below) only, any Default or Event of
Default occurring solely due to the nonpayment of interest due with respect to
the Loans in accordance with the terms of the Credit Agreement; provided,
however, that such waiver shall only be effective for so long as no interest is
paid on or after the date hereof by the Borrower in respect of the Senior
Subordinated Notes.
2. Section 7.1(a) (Consolidated Leverage Ratio). The Lenders hereby
waive, for the period from February 15, 2000 to and including the Waiver
Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower exceeds the maximum Consolidated Leverage
Ratio as at the end of the second fiscal quarter of Fiscal Year 2000 and
thereafter (including as at the end of the third fiscal quarter of Fiscal Year
2000 and thereafter) to and including the Waiver Termination Date; provided,
however, that such waiver shall only be effective for so long as no interest is
paid on or after the date hereof by the Borrower in respect of the Senior
Subordinated Notes.
3. Section 7.1(b) (Consolidated Interest Coverage Ratio). The
Lenders hereby waive, for the period from February 15, 2000 to and including the
Waiver Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower does not meet the minimum Consolidated
Interest Coverage Ratio for the period of four consecutive fiscal quarters ended
with the second fiscal quarter of Fiscal Year 2000 and for the period of four
consecutive fiscal quarters ended with the third fiscal quarter of Fiscal Year
2000; provided, however, that such waiver shall only be effective for so long as
no interest is paid on or after the date hereof by the Borrower in respect of
the Senior Subordinated Notes.
4. Section 7.1(c) (Maintenance of Minimum EBITDA). The Lenders
hereby waive, for the period from February 15, 2000 to and including the Waiver
Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower does not meet the minimum Consolidated
EBITDA for the period of four consecutive fiscal quarters ended with the second
fiscal quarter of Fiscal Year 2000 and for the period of four consecutive fiscal
quarters ended with the third fiscal quarter of Fiscal Year 2000; provided,
however, that such waiver shall only be effective for so long as no interest is
paid on or after the date hereof by the Borrower in respect of the Senior
Subordinated Notes.
5. Nonpayment of Interest on Senior Subordinated Notes. The Lenders
hereby waive, for the period from February 15, 2000 to and including the Waiver
Termination Date only, any Default or Event of Default occurring solely due to
the nonpayment of interest by the Borrower with respect to the Senior
Subordinated Notes.
6. "Waiver Termination Date" means March 31, 2000.
III. Amendments to the Credit Agreement
1. Amendment of Section 1.1 (Definitions). Section 1.1 is hereby
amended as follows:
(a) by amending and restating the following definitions appearing
therein to read in their respective entireties as follows:
"'Borrowing Base': at any date, the amount of the then most recent
computation of the Borrowing Base, determined by calculating the amount equal
to:
(a) 85% of the Net Amount of Eligible Receivables at such date;
plus
(b) 50% of the amount of Eligible Inventory at said date, calculated at the
lower of cost (determined on a FIFO basis) or market less the Slow Moving
Reserve then in effect; provided that in no event shall the portion of the
Borrowing Base attributable to Eligible Inventory exceed 50% of the Borrowing
Base;
plus
(c) until the restructuring of the Senior Subordinated Notes contemplated by
the Fifth Amendment and Waiver, dated as of February 8, 2000, to this Agreement
is completed, the amount determined by the Administrative Agent from time to
time equal to the value of the collateral on deposit in the Cash Collateral
Account maintained under the Cash Collateral Agreement dated as of January 3,
2000 by Keystone, Inc. in favor of the Administrative Agent, provided that such
amount shall not be greater than $2,000,000 or such larger amount as may be
acceptable to the Administrative Agent.
The Borrowing Base will be computed hereunder on a monthly basis (based on all
information reasonably available to the Administrative Agent, including without
limitation, the periodic reports and listings delivered to the Administrative
Agent in accordance with Section 6.2(c)), and a monthly Borrowing Base
Certificate from a Responsible Officer of the Borrower presenting the Borrower's
computation of the Borrowing Base will be periodically delivered to the
Administrative Agent in accordance with Section 6.2(d)."
"'Consolidated EBITDA': for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) to the extent deducted in
determining such Consolidated Net Income, expenses relating to payments pursuant
to the George Group Consulting Agreements, not to exceed $3,500,000, in any
fiscal year of the Borrower, (f) to the extent deducted in determining such
Consolidated Net Income, cash expenses relating to the planned closure and
consolidation referred to in the Confidential Information Memorandum of certain
facilities of the Borrower, not to exceed $3,500,000 in the aggregate, (g) any
extraordinary, unusual or non-recurring expenses or losses (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business), (h) any other non-cash charges, (i) any charge
or expense incurred in connection with the acquisition or start-up of any sales
program at any Lowe's store or group of Lowe's stores,( including, without
limitation, the purchase of remaining inventory of other manufacturers), not to
exceed $6,000,000 in the aggregate, (j) in the case of any period which includes
the second, third or fourth fiscal quarter of Fiscal Year 2000 up to $2,900,000
in product development costs written off in such fiscal quarters in respect of
product development undertaken prior thereto, (k) in the case of any period
which includes the third or fourth fiscal quarter of Fiscal Year 2000, the costs
incurred in connection with the Second Amendment and Waiver to this Agreement
and the transactions contemplated thereby, including costs incurred in
connection with the restructuring of Indebtedness contemplated thereby and (l)
any expenses incurred on or after April 4, 1998 for year 2000 remediation
programs and implementation of management information system proposals made by
J. D. Edwards, not to exceed $4,000,000 in the aggregate, and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business)
and (c) any other non-cash income, all as determined on a consolidated basis."
"'Consolidated Interest Expense': for any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Protection Agreements to the extent such net costs are allocable to such period
in accordance with GAAP) but excluding (a) amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans) and (b) any such
interest expense in respect of the Senior Subordinated Notes that may be payable
and is paid by the issuance of additional Senior Subordinated Notes."
(b) by adding thereto the following definition in the appropriate
alphabetical order:
"'Fifth Amendment Effective Date': as defined in the Fifth Amendment and
Waiver to this Agreement."
2. Amendment of Section 2.3(a) (Repayment of Terms Loans). Section
2.3(a) of the Credit Agreement is hereby amended by deleting the table in such
Section and substituting in lieu thereof the following table:
Installment Principal Amount
June 30, 1999 $666,667
September 30, 1999 666,667
December 31, 1999 666,666
March 31, 2000 0
June 30, 2000 0
September 30, 2000 0
December 31, 2000 0
March 31, 2001 0
June 30, 2001 0
September 30, 2001 2,500,000
December 31, 2001 2,500,000
March 31, 2002 2,500,000
June 30, 2002 3,500,000
September 30, 2002 3,500,000
December 31, 2002 3,500,000
March 31, 2003 3,500,000
June 30, 2003 3,500,000
September 30, 2003 3,500,000
December 31, 2003 9,500,000
3. Amendment of Section 2.11 (Optional Prepayments). Section 2.11
of the Credit Agreement is hereby amended as follows:
(a) by inserting "(a)" at the beginning of such Section;
(b) by inserting the parenthetical "(except as provided in paragraph
(b) of this Section 2.11)" after the phrase "without premium or penalty" in the
first sentence of such Section; and
(c) by adding thereto a new paragraph (b) to read as follows:
"(b) If at any time during any period set forth below the Term Loans shall
be paid or prepaid and the Revolving Credit Commitments optionally or
mandatorily terminated and the Revolving Extensions of Credit paid or prepaid or
otherwise discharged, the Borrower shall pay to each Lender a prepayment premium
equal to the percentage set forth below opposite such period of the sum of the
aggregate principal amount of the Term Loans of such Lender and the Revolving
Credit Commitment of such Lender in each case as in effect on the Fifth
Amendment Effective Date:
Period Percentage
4th Quarter Fiscal Year 2000- 1.0%
4th Quarter Fiscal Year 2002
1st Quarter Fiscal Year 2003- 1.5%
4th Quarter Fiscal Year 2003
1st Quarter Fiscal Year 2004- 2.0%
4th Quarter Fiscal Year 2004
Any such prepayment premium shall be paid to the Administrative Agent for
distribution to such Lender on the date of such payment or prepayment and such
termination."
4. Amendment of Section 5.2 (Representations and Warranties).
Section 5.2 of the Credit Agreement is hereby amended by deleting paragraph (a)
of such Section in its entirety and substituting in lieu thereof the following:
"(a) Representations and Warranties. Except as disclosed to the Lenders in
the information memorandum dated January 10, 2000 and subsequent information
delivered to the Lenders in connection with the January 27, 2000 conference
call, each of the representations and warranties made by any Loan Party in or
pursuant to the Loan Documents shall be true and correct on and as of such date
as if made on and as of such date (and, in the case of such initial extension of
credit, after giving effect to the Acquisition and the financing thereof
pursuant hereto)."
5. Amendment of Section 6.1 (Financial Statements). Section 6.1
of the Credit Agreement is hereby amended as follows:
(a) by deleting the word "and" appearing at the end of paragraph (b)
of such Section;
(b) by deleting paragraph (c) of such Section in its entirety and
substituting in lieu thereof the following:
"(c) as soon as available, but in any event not later than 30 days after
the end of each month occurring during each fiscal year of the Borrower (other
than the third, sixth, ninth and twelfth such month), the unaudited consolidated
balance sheets of the Borrower and its Subsidiaries as at the end of such month
and the related unaudited consolidated statements of income and of cash flows
for such month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form (i) the figures for the previous
year and (ii) the figures for such period contained in the projections provided
by the Borrower pursuant to paragraph (d) of this Section 6.1, in each case
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments). In addition, the
Borrower agrees that it shall, as soon as practicable, but in any event not less
than 5 days after the delivery of the financial statements pursuant to this
paragraph, participate in a telephone call with the Administrative Agent in
order to discuss such financial statements and such other matters regarding the
Borrower's business as the Administrative Agent shall reasonably request; and";
and
(c) by inserting the following new paragraph (d) at the end of such
Section to read as follows:
"(d) as soon as available, but in any event not later than 30 days after
the end of each fiscal year of the Borrower, for each month of the next
succeeding fiscal year of the Borrower, a copy of the projected consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such month
and the related projected consolidated statements of income and of cash flows
for such month."
6. Amendment of Section 7.1(a) (Consolidated Leverage Ratio).
Section 7.1(a) of the Credit Agreement is hereby amended by deleting such
Section in its entirety and substituting in lieu thereof the following:
"(a) Intentionally Omitted."
7. Amendment of Section 7.1(b) (Consolidated Interest Coverage
Ratio). Section 7.1(b) of the Credit Agreement is hereby amended by deleting
such Section in its entirety and substituting in lieu thereof the following:
"(b) Consolidated Interest Coverage Ratio. Permit Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending during any period set forth below to be less than the ratio
set forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
3rd Quarter Fiscal Year 2000- .45:1.0
2nd Quarter Fiscal Year 2001
3rd Quarter Fiscal Year 2001- 1.40:1.0
4th Quarter Fiscal Year 2001
1st Quarter Fiscal Year 2002- 1.60:1.0
2nd Quarter Fiscal Year 2002
3rd Quarter Fiscal Year 2002- 1.80:1.0
4th Quarter Fiscal Year 2002
1st Quarter Fiscal Year 2003- 2.00:1.0
Each Fiscal Quarter Thereafter
8. Amendment of Section 7.1(c) (Maintenance of Minimum EBITDA).
Section 7.1(c) is hereby amended by deleting such Section in its entirety and
substituting in lieu thereof the following:
"(c) Maintenance of Minimum EBITDA. Permit Consolidated EBITDA for
any period of four consecutive fiscal quarters of the Borrower ending during any
period set forth below to be less than the amount set forth below opposite such
period:
Period Consolidated EBITDA
3rd Quarter Fiscal Year 2000- $5,500,000
1st Quarter Fiscal Year 2001
2nd Quarter Fiscal Year 2001 $6,500,000
3rd Quarter Fiscal Year 2001- $16,500,000
4th Quarter Fiscal Year 2001
1st Quarter Fiscal Year 2002- $20,000,000
2nd Quarter Fiscal Year 2002
3rd Quarter Fiscal Year 2002- $22,000,000
4th Quarter Fiscal Year 2002
1st Quarter Fiscal Year 2003- $25,000,000
4th Quarter Fiscal Year 2003
Each Fiscal Quarter Thereafter $28,000,000
9. Amendment of Section 7.2 (Limitation on Indebtedness). Section
7.2 of the Credit Agreement is hereby amended by deleting clause (i) of
paragraph (g) thereof in its entirety and substituting in lieu thereof the
following:
"(i) Indebtedness of the Borrower in respect of the Senior Subordinated
Notes in an aggregate principal amount not to exceed $25,000,000 (including
$7,500,000 held by the Control Group) plus the aggregate amount of interest
expense in respect of the Senior Subordinated Notes which is paid by the
issuance of additional Senior Subordinated Notes through May 1, 2002, in
accordance with the terms of the restructuring of the Senior Subordinated Notes
contemplated by the Fifth Amendment and Waiver, dated as of February 8, 2000"
10. Amendment of Section 7.9 (Limitation on Optional Payments and
Modifications of Debt Instruments, etc.). Section 7.9 of the Credit Agreement
is hereby amended by deleting such Section in its entirety and substituting in
lieu thereof the following:
"7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes or any other Subordinated Indebtedness (other
than scheduled interest payments required to be made in cash and other than
repurchasings or redemptions in exchange for Capital Stock of Holdings), (b)
amend, modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior
Subordinated Notes or any other Subordinated Indebtedness (other than any such
amendment, modification, waiver or other change which (x) (i) would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon and (ii)
involves the payment of a consent fee of no greater than $30 per $1000 of
principal amount of such Indebtedness or (y) is made in connection with the
restructuring thereof contemplated by the Fifth Amendment and Waiver, dated as
of February 8, 2000, to this Agreement), (c) designate any Indebtedness as
"Designated Senior Indebtedness" for the purposes of the Senior Subordinated
Note Indenture or (d) amend its certificate of incorporation in any manner
determined by the Administrative Agent to be adverse to the Lenders without the
prior written consent of the Required Lenders."
11. Amendment of Annex A (Pricing Grid). Annex A is hereby amended
by deleting the Pricing Grid contained therein and replacing it with the Pricing
Grid attached as Schedule I hereto. Interest and commitment fees accrued prior
to the Fifth Amendment Effective Date and payable thereafter shall be payable
for such period based on the Pricing Grid in effect prior to the Fifth Amendment
Effective Date, and interest and commitment fees accrued thereafter shall be
payable based on the Pricing Grid as amended hereby.
III. General Provisions
1. Representations and Warranties. On and as of the date hereof and
after giving effect to this Amendment and Waiver, except as disclosed to the
Lenders in the information memorandum dated January 10, 2000 and subsequent
information delivered to the Lenders in connection with the January 27, 2000
conference call, the Borrower hereby confirms, reaffirms and restates the
representations and warranties set forth in Section 4 of the Credit Agreement
mutatis mutandis, and to the extent that such representations and warranties
expressly relate to a specific earlier date in which case the Borrower hereby
confirms, reaffirms and restates such representations and warranties as of such
earlier date, provided that the references to the Credit Agreement in such
representations and warranties shall be deemed to refer to the Credit Agreement
as amended prior to the date hereof and pursuant to this Amendment and Waiver.
2. Conditions to Effectiveness of Section II of this Amendment and
Waiver. The waivers contained in Section II of this Amendment and Waiver shall
become effective as of the date on which the following conditions precedent have
been satisfied or waived:
(a) The Administrative Agent shall have received counterparts of this
Amendment and Waiver, duly executed and delivered by the Borrower and the
requisite Lenders; and
(b) Keystone, Inc. and each Guarantor under the Guarantee and
Collateral Agreement shall have consented to this Amendment and Waiver.
3. Conditions to Effectiveness of Section III of this Amendment and
Waiver. The amendments contained in Section III of this Amendment and Waiver
shall become effective as of the date (the "Fifth Amendment Effective Date") on
which all of the following conditions precedent have been satisfied or waived:
(a) The Administrative Agent shall have received counterparts of this
Amendment and Waiver, duly executed and delivered by the Borrower and the
requisite Lenders;
(b) Keystone, Inc. and each Guarantor under the Guarantee and
Collateral Agreement shall have consented to this Amendment and Waiver;
(c) The Control Group shall have advanced $12,500,000 to the Borrower
in the form of either equity or debt that is subordinated to the Obligations, in
a manner reasonably satisfactory to the Administrative Agent and the Required
Lenders; and
(d) The Senior Subordinated Notes and Indebtedness of Holdings shall
have been restructured upon terms and conditions reasonably satisfactory to the
Control Group and substantially as set forth in the attached term sheet.
The Lenders parties hereto agree that no mandatory prepayment shall be required
as a result of any of the transactions referred to in paragraphs (c) and (d) of
this Section 3.
4. Continuing Effect; No Other Amendments. (a) Except as expressly
amended or waived hereby, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect. The amendments and
waivers provided for herein are limited to the specific subsections of the
Credit Agreement specified herein and shall not constitute an amendment or
waiver of, or an indication of the Lenders' willingness to amend or waive, any
other provisions of the Credit Agreement or the same subsections for any other
date or time period (whether or not such other provisions or compliance with
such subsections for another date or time period are affected by the
circumstances addressed in this Amendment and Waiver).
(b) The parties hereto acknowledge and agree that to the extent that
any provisions of this Amendment and Waiver are inconsistent with the provisions
of the Second Amendment and Waiver, dated as of October 1, 1999, to the Credit
Agreement, this Amendment and Waiver shall control.
5. Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the preparation and delivery of this Amendment and Waiver,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
6. Counterparts. This Amendment and Waiver may be executed by one or
more of the parties to this Amendment and Waiver on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
<PAGE>
7. GOVERNING LAW. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Name: William K. Snyder
Title: CFO Sr. V.P.
<PAGE>
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,
Swing Line Lender, Issuing Lender
and as a Lender
By: /s/ B.B. Wuthrich
Name: B.B. Wuthrich
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Anthony D. Healey
Name: Anthony D. Healey
Title: Vice President
BALANCED HIGH YIELD FUND I
BY BHF (USA) Capital Corporation acting as
Attorney-in-fact
By: /s/ Jeffrey Frost
Name: Jeffrey Frost
Title: Vice President
By: /s/ Dana L. McDougall
Name: Dana L. McDougall
Title: Vice President
PARIBAS
By: /s/ Larry Robinson
Name: Larry Robinson
Title: Vice President
By: /s/ Scott Clingan
Name: Scott Clingan
Title: Director
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
NORTHERN LIFE INSURANCE
COMPANY
By: ING Capital Advisors, LLC
as Investment Advisor
By: /s/ Kurt Wegleitner
Name: Kurt Wegleitner
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By: /s/ Jeffrey Frost
Name: Jeffrey Frost
Title: Vice President
By: /s/ Dana L. McDougall
Name: Dana L. McDougall
Title: Vice President
CIBC, INC.
By: /s/ Ihor Zaluckyj
Name: Ihor Zaluckyj
Title: Executive Director
FLEET BUSINESS CREDIT
CORPORATION
Dba Sanwa Business Credit Corporation
By: /s/ J. Cameron Terry
Name: J. Cameron Terry
Title: SVP
KEY CORPORATE CAPITAL INC.
By: /s/ Alan J. Ronan
Name: Alan J. Ronan
Title: Designated Signer
KZH CYPRESSTREE-1 LLC
By: /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
SENIOR DEBT PORTFOLIO
By: Boston Management and Research as
Investment Advisor
By: /s/ Payson F. Swaffield
Name: Payson F. Swaffield
Title: Vice President
VAN KAMPEN CLO II, LIMITED
By: VAN KAMPEN MANAGEMENT
INC., as Collateral Manager
By: /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By: Van Kampen Investment Advisory Corp.
By: /s/s Darvin D. Pierce
Name: Darvin D. Pierce
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Richard J. Mikes
Name: Richard J. Mikes
Title: Vice President
<PAGE>
<TABLE>
<CAPTION>
Schedule 1 to the
Fifth Amendment and Waiver
Annex A
PRICING GRID
<S> <C> <C> <C> <C> <C>
Consolidated Leverage Tranche A Tranche A Tranche B Tranche B Commit-
Ratio Term Loan and and Revolving Term Loan Term Loan ment Fee
Revolving Credit Credit Facility Applicable Applicable Rate
Facility Applicable Margin Margin - Bsse
Applicable Margin - Base Eurodollar Rate Loans
Margin - Rate Loans Loans
Eurodollar Loans
- ------------------------------ -----------------------------------------------------------------------------
Greater than 7.5 3.25% 3.25% 3.50% 3.50% .500%
To 1
Less than or 3.00% 3.00% 3.25% 3.25% .500%
equal to 7.5 to 1
but greater than
6.5 to 1
Less than or 2.50% 2.50% 2.75% 2.75% .500%
equal to 6.5 to 1
but greater than
5.5 to 1
Less than or 2.25% 2.25% 2.50% 2.50% .500%
equal to 5.5 to 1
but greater than
4.5 to 1
Less than or 2.00% 2.00% 2.25% 2.25% .500%
equal to 4.5 to 1
but greater than
4.0 to 1
Less than or 1.75% 1.75% 2.00% 2.00% .375%
equal to 4.0 to 1
but greater than
3.5 to 1
Less than or 1.50% 1.50% 2.00% 2.00% .375%
equal to 3.5 to 1
but greater than
3.0 to 1
Less than or 1.25% 1.25% 2.00% 2.00% .250%
equal to 3.0 to 1
============================== =============================================================================
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall
<PAGE>
become effective on the Fifth Amendment Effective Date and shall remain in
effect until the next change to be effected pursuant to this paragraph. The
Consolidated Leverage Ratio immediately in effect is deemed to be greater than
7.5 to 1.0. Satisfactory financial statements must be delivered to the Lenders
pursuant to Section 6.1 not later than the 40th day after the end of each of the
first three quarterly periods of each fiscal year or the 90th day after the end
of each fiscal year. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 7.5 to 1.0. In addition, at all
times while an Event of Default or Default shall have occurred and be
continuing, the Consolidated Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 7.5 to 1.0. Each determination of the
Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
<PAGE>
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby consents to the foregoing Amendment and
Waiver and hereby confirms, reaffirms and restates that its obligations under or
in respect of the Credit Agreement and the documents related thereto to which it
is a party are and shall remain in full force and effect after giving effect to
the foregoing Amendment and Waiver:
RBPI HOLDING CORPORATION
By: /s/ William K. Snyder
Title: V.P.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ William K. Snyder
Title: CFO & Sr. V.P.
RBP OF ARIZONA, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP CUSTOM GLASS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP OF TEXAS, INC.
By: /s/ William K. Snyder
Title: V.P.
RBP TRANS, INC.
By: /s/ William K. Snyder
Title: V.P.
LEVAN BUILDIERS SUPPLY, INCORPORATED
By: /s/ William K. Snyder
Title: V.P.
TIMBER TECH, INC.
By: /s/ William K. Snyder
Title: V.P.
CFA HOLDING COMPANY
By: /s/ William K. Snyder
Title: V.P.
CARE FREE ALUMINUM PRODUCTS, INC.
By: /s/ William K. Snyder
Title: V.P.
ULTRA BUILDING SYSTEMS, INC.
By: /s/ William K. Snyder
Title: V.P.
ALPINE INDUSTRIES, INC.
By: /s/ William K. Snyder
Title: V.P.
KEYSTONE, INC.
By:
Title:
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RELIANT
BUILDING PRODUCTS, INC. AND SUBSIDIARIES' CONSOLIDATED FINANCIAL STATEMENTS FOR
THE QUARTER ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 73
<SECURITIES> 0
<RECEIVABLES> 32,129
<ALLOWANCES> 3,935
<INVENTORY> 26,353
<CURRENT-ASSETS> 55,826
<PP&E> 70,406
<DEPRECIATION> 19,631
<TOTAL-ASSETS> 234,613
<CURRENT-LIABILITIES> 245,943
<BONDS> 200,595
0
4,583
<COMMON> 1
<OTHER-SE> (19,973)
<TOTAL-LIABILITY-AND-EQUITY> 234,613
<SALES> 203,535
<TOTAL-REVENUES> 203,535
<CGS> 160,996
<TOTAL-COSTS> 160,996
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,473
<INTEREST-EXPENSE> 14,799
<INCOME-PRETAX> (30,598)
<INCOME-TAX> (604)
<INCOME-CONTINUING> (29,994)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,994)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
